Butcher v Body Corporate 342525 - [2018] NZCA 19

IN THE COURT OF APPEAL OF NEW ZEALAND

CA42/2017
[2018] NZCA 19

BETWEEN	ANTHONY JOHN BUTCHER AND RUTH BARBARA BUTCHER, LARRY LAWRENCE SMALL AND KM TRUSTEE SERVICES LIMITED, IVOR ANTHONY MILLINGTON, NEVILLE EADE, ROBYN KATHLEEN STENT Appellants
AND	BODY CORPORATE 342525 Respondent

Hearing:	20 September 2017
Court:	Kós P, Cooper and Gilbert JJ
Counsel:	B E Brill for Appellants T J G Allan and S F Powrie for Respondent
Judgment:	20 September 2017 at 3.00 pm
Reasons:	21 February 2018 at 2.30 pm

JUDGMENT OF THE COURT

AThe appeal is dismissed.
BThe appellants must pay the respondent costs for a standard appeal on a band A basis with a 50 per cent uplift and usual disbursements. We certify for second counsel.

____________________________________________________________________

REASONS OF THE COURT

(Given by Gilbert J)
Table of Contents

Introduction	[1]
Background
Bridgewater Bay Apartments	[7]
Weathertightness issues Origin report	[8] [11]
Negligence proceedings issued against Council and others	[13]
Resolution to proceed with remedial works	[14]
Minority group formed	[15]
Special levy — SL 1	[16]
Litigation
Round 1	[17]
Round 2	[21]
Round 3	[23]
Round 4	[24]
Grounds of appeal	[42]
Ground 1 — abuse of process/issue estoppel	[43]
Fifth requirement — same question	[45]
Third requirement — jurisdiction	[54]
Fourth requirement — final decision on the merits	[56]
Ground 2 — relevance of Butcher consent	[63]
Ground 3 — disenfranchisement	[67]
Ground 4 — was a special resolution required at the EEGM to enter into the building contract?	[73]
Costs	[82]
Result	[84]

Introduction

This appeal (Butcher) was heard together with the related appeal in Wheeldon v Body Corporate (CA112/2017) (Wheeldon). Both appeals arise out of a long‑running dispute between the owners of apartments concerning the scope of works required to address weathertightness issues in their building. The appellants, who represent the minority, consider that targeted repairs would have sufficed whereas the Body Corporate, supported by the majority, maintains that comprehensive remedial works as recommended by an independent expert were required to overcome the weathertightness problems. The remedial works have been carried out by the Body Corporate and the contest now centres on how the costs should be met.
The appellants in both proceedings own five of the 22 apartments in the building. Derek and Carol Wheeldon sold their apartment to Robyn Stent (who is the wife of counsel for the appellants, Mr Brill) in March 2014 with the transfer being registered on 31 July 2014. This appears to be why Mr and Mrs Wheeldon were named as plaintiffs in the Wheeldon proceedings issued on 30 July 2014 but were replaced by Ms Stent in the Butcher proceedings issued on 7 July 2015.
At the conclusion of the hearing, we dismissed both appeals with reasons to follow.[1] These are our reasons for dismissing the Butcher appeal. Our reasons for dismissing the Wheeldon appeal are delivered contemporaneously with this judgment. The judgments should be read together.
[1]Butcher v Body Corporate 342525 [2017] NZCA 423; and Wheeldon v…

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: [2018] NZCA 19
Decision Date: 20 September 2017 at 3.00 pm

CaseChat Overview and Summary

In this case, the appellants, who own five of the 22 apartments in the Bridgewater Bay Apartments, sought to challenge the Body Corporate's decision to carry out extensive remedial works to address weathertightness issues. The dispute had been ongoing for several years, with multiple rounds of litigation. The court was required to decide whether the appellants were precluded from re-litigating the issue of whether the remedial works were necessary and within the scope of the Body Corporate's powers under the Unit Titles Act 2010. The court also had to determine whether the appellants were lawfully disenfranchised from voting at the annual general meeting due to their failure to pay levies they disputed.

The court found that the doctrine of issue estoppel precluded the appellants from re-litigating the issue of whether the remedial works were necessary and within the Body Corporate's powers. The court held that the issue had been finally determined in earlier rounds of litigation and the appellants, who were also parties to those proceedings, were bound by that determination. The court also rejected the argument that the appellants were unlawfully disenfranchised from voting because they had not paid levies they disputed. The court found that the statutory provisions clearly required payment of all levies before voting and there was no basis to interpret the legislation otherwise.

The appeal was dismissed, and the appellants were ordered to pay the respondent's costs for the appeal with a 50% uplift due to the appellants pursuing arguments that lacked merit and failing to accept a legal argument without reasonable justification.

Orders