Boyce v Body Corporate 70841 - [2013] NZHC 3427

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV 2013-470-605 [2013] NZHC 3427

BETWEEN MICHAEL JOHN BOYCE and CHRISTOPHER WIGHT DEBROTHERTON MORGAN as trustees of the HILTON JONES FAMILY TRUST Applicants

AND BODY CORPORATE 70841
First Respondent
JOHN SPOONER PROPERTY CONSULTANTS LTD
Second Respondent

Hearing: 16 December 2013

Counsel: D J O'Connor for Applicants
T S Richardson for First Respondent
E M Eggleston for Second Respondent

Judgment: 17 December 2013

JUDGMENT OF HEATH J

This judgment was delivered by me on 17 December 2013 at 2.30pm pursuant to
Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar

Solicitors:
Lunn & Associates, Napier
Evan Turbott Law Office, Tauranga
Holland Beckett, Tauranga
Counsel:
D O’Connor, Napier
T S Richardson, Tauranga

BOYCE and MORGAN as trustees of the HILTON JONES FAMILY TRUST v BODY CORPORATE 70841 [2013] NZHC 3427 [17 December 2013]

The application

[1] Messrs Boyce and Morgan, as trustees of the Hilton Jones Family Trust, own six commercial shops in Tower One, Oceanside Twin Towers (Tower One), in Marine Parade, Mt Maunganui. Tower One is a mixed-use unit title development, consisting of six retail shops and 40 apartments. Some of the individual units are occupied by owners, some are rented, and others are used as holiday homes.

[2] Body Corporate 70841 (the Body Corporate) has responsibility for management and maintenance of all common property and infrastructure relating to or serving more than one unit.1 A number of the Body Corporate’s functions were
delegated to a Body Corporate Committee.2 While the evidence does not reveal the

number of members on a committee to constitute a quorum, I was told that approximately nine people are required.

[3] At present, for reasons I shall develop later,3 there is no functioning Committee. That has led Messrs Boyce and Morgan, supported by a number of other owners, to apply for an order appointing Mr David Shea as administrator of the Body Corporate.4 The application is opposed by the chair of the Committee (Mr Kusabs) and by John Spooner Property Consultants Ltd, a company that purports to have a building management agreement with the Body Corporate.

Appointment of an administrator

[4] Section 141 of the Unit Titles Act 2010 (the Act) provides:

141 Appointment of administrator

(1) The body corporate, a creditor of the body corporate, or any person having a registered interest in a unit, may apply to the High Court for the appointment of an administrator.

...

1      Unit Titles Act 2010, s 138(1) and (2).
2      Ibid, s 108.
3      See paras [6]–[8] below.
4      Unit Titles Act 2010, s 141(1).

(3) The High Court may, in its discretion on cause shown, appoint an administrator for an indefinite period or for a fixed period on such terms and conditions as to remuneration or otherwise as it thinks fit.

...

(5) The administrator, to the exclusion of the body corporate and the body corporate committee, has and may exercise the powers of the body corporate and the committee, and is subject to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] NZHC 3427
Decision Date: 17 December 2013

CaseChat Overview and Summary

The case of Boyce v Body Corporate 70841 was brought before the High Court of New Zealand, Tauranga Registry, concerning a dispute over the management and maintenance of common property in a unit title development. The applicants, Michael John Boyce and Christopher Wight DeBrotherton Morgan, acting as trustees of the Hilton Jones Family Trust, own six commercial shops in Tower One, Oceanside Twin Towers, a mixed-use unit title development in Marine Parade, Mt Maunganui. They sought the appointment of an administrator for the Body Corporate 70841, which has responsibility for managing and maintaining the common property and infrastructure of the development. The applicants claimed there was an imminent danger to the public due to structural concerns about the verandah area and a dysfunctional relationship among the members of the Body Corporate. The application was opposed by the chair of the Body Corporate Committee, Mr Kusabs, and John Spooner Property Consultants Ltd, a company that claims to have a building management agreement with the Body Corporate.

The legal issues the court needed to decide were whether there was sufficient cause to appoint an administrator under Section 141 of the Unit Titles Act 2010 and whether the proposed administrator, Mr David Shea, was suitable for the role. The applicants argued that there was an imminent threat to public safety and that the Body Corporate was dysfunctional, while the respondents argued that there was no imminent threat to public safety and that the management of the building should not be placed in the hands of an independent administrator pending an Extraordinary General Meeting.

The court found that there was sufficient cause to appoint an administrator due to concerns about public safety and the dysfunctional relationship among the members of the Body Corporate. The court was satisfied that Mr Shea was qualified to undertake the role and made the following orders: David Anthony Shea was appointed as administrator of Body Corporate 70841 from 17 December 2013 until 4 February 2014, when his appointment would be reconsidered by the court; his remuneration would be calculated according to the Consent to Act filed on 16 December 2013, with an invoice for his remuneration to be paid out of the Body Corporate's operating account; he would chair the Extraordinary General Meeting of the Body Corporate on 24 January 2014 and report to the court as directed; he would file and provide to all owners of units in Tower One a report confirming the steps he had taken as administrator, reporting on the outcome of the Extraordinary General Meeting, and identifying any further issues that needed to be addressed; he was authorised to seek insurance cover for an amount of no more than $3 million, to protect him in relation to the office he holds, for the duration of his initial appointment; and the cost of obtaining the insurance and any premiums would be met out of the Body Corporate's operating account. Costs were reserved.

Orders