Boyko v Body Corporate no.205963 HC Auckland CIV 2008-404-5583

[2010] NZHC 1106

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2008-404-005583

BETWEEN  LARISA BOYKO Appellant

AND  BODY CORPORATE NO. 205963

Respondent

Hearing:         12 March 2009

Counsel:         A D Sharp for the Appellant

M A E Sullivan for the Respondent

Judgment:      4 May 2010

JUDGMENT OF JOSEPH WILLIAMS J

In accordance with r 11.5, I direct the Registrar to endorse this judgment with the delivery time of 2.00pm on 4th May 2010.

[1]      This is an appeal against a decision of the District Court dated 27 February

2008 in which the court granted summary judgment against the appellant for the recovery of the appellant’s contribution to rehabilitative work required in respect of an apartment block.  The complex was suffering from “leaky building syndrome”.

[2]      The respondent is the relevant body corporate under the Unit Titles Act 1972. The appellant owns Unit 112 in that block of apartments.

[3]      The  leaky building  problem  was  discovered  in  2006  and  the  respondent subsequently passed a resolution at its AGM to raise a levy of $2.5 million from the apartment  owners  to  pay  for  the  necessary  repairs.    The  appellant  refused  to

contribute.

BOYKO V BODY CORPORATE NO. 205963 HC AK CIV-2008-404-005583  4 May 2010

[4]      On 15 August 2008, Judge Cunningham allowed the respondent’s claim in the sum of $28,500 plus interest, together with costs of $10,910.84.

[5]      On appeal, the primary argument was that Rule 2.2(c) of the respondent’s rules was ultra vires and the respondent therefore could not in law raise a levy against the appellant for the expenses of individual unit proprietors.  This argument was not raised in the District Court, the appellant having appeared on her own behalf in that court.  It was further argued on appeal that the Judge should have declined summary judgment because there were conflicting assessor consultant reports before the court as to the type of damage to the building and cost of repairs, and that it was at least reasonably arguable that the respondent’s negligence by failing to carry out any maintenance of the building contributed to the overall failure of the building.

[6]      The respondent did not oppose the appeal.  In a memorandum dated 2 March

2009,  the  parties  requested  “by  consent  that  the  appellant’s  appeal  against  the District Court judgment be granted, and that the District Court judgment be vacated”. On 4 March 2009, Courtney J rightly pointed out that there is no power in the High Court to allow an appeal by consent, and the appeal must be heard.  When the matter came before me, I agreed to deal with the matter on the papers as they were before me, and asked for memoranda as to costs.

[7]      On the leading argument in this case – the question of vires – there are conflicting authorities.  See for example Body Corporate 173459 v Fai Dunn[1], which supported the appellant’s argument here and Body Corporate 188529 v North Shore City Council[2].  On the other hand, see the decision of Harrison J in Young v Body Corporate No. 120066[3].

[1] HC AK CIV-2007-404-26645, 17 August 2007

[2] [2008] 3 NZLR 479

[3] HC AK CIV-2007-404-0023756, December 2007

[8]      Given the stance taken by the respondent this seems an inappropriate case for me to resolve the differing lines of authority here.  In all the circumstances it must be accepted  that  there  was  at  least  an  arguable  defence.    The  appeal  is  therefore allowed.

[9]      Having allowed the appeal without contest, I do not think it appropriate to award costs.  The appellant’s primary argument was not raised at first instance (as to which see the Pioneer Insurance Company Limited v White Heron Motor Lodge Limited[4]).  What is more, it is clear that the respondent has elected not to pursue the appeal because the appellant (now legally aided) is essentially impecunious and it would be throwing good money after bad.  That decision is entirely understandable

and it would in my view be quite inappropriate for the respondent to be further penalised in this instance.

[4] [2008] NZCA 450

[10]     Costs will lie where they fall in this court and the District Court.

“Joseph Williams J”

Solicitors:

Ashley Sharp, Barrister, PO Box 106210, Auckland 1143, [email protected]

Jackson Russell Lawyers, PO Box 3451, Auckland