Chan v Body Corporate 105164 - [2015] NZHC 2491

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-003347 [2015] NZHC 2491

IN THE MATTER OF
the Eden Heights Apartments

94 Dominion Road, Mt Eden

AND

IN THE MATTER OF

the Declaratory Judgments Act 1908 and the Unit Titles Act 2010

BETWEEN

WAI KAM CHAN Plaintiff

AND

BODY CORPORATE 105164

Defendant

Hearing: 17 August 2015

Counsel:

P H Johnson for the Plaintiff
J G H Hannan for the Defendant

Judgment:

12 October 2015

JUDGMENT OF EDWARDS J

This judgment was delivered by Justice Edwards on 12 October 2015 at 4.00 pm, pursuant to
r 11.5 of the High Court Rules

Registrar/Deputy Registrar
Date:

Counsel: P H Johnson, Auckland

Solicitors: Clearwater and Associates, Auckland
DLA Piper, Auckland

CHAN v BODY CORPORATE 105164 [2015] NZHC 2491 [12 October 2015]

Introduction

[1] The plaintiff owns a unit in the Eden Heights apartment complex at

94 Dominion Road, Mt Eden. She applies for eight separate declarations pursuant to s 3 of the Declaratory Judgments Act 1908 (Act) concerning the alleged infringement of the Unit Titles Act 2010 (UTA) by the defendant Body Corporate.

[2] The defendant defends the claims on the basis that there is no jurisdiction to grant many of the orders sought, or that the Court should otherwise decline to grant the declarations in the exercise of its discretion.

Background

[3] The Eden Heights apartment complex comprises 67 units and has a mixture of both residential and retail uses. The plaintiff has owned a unit in the apartment complex since 2004.

[4] Until very recently, the defendant’s affairs were managed by Body Corporate Solutions NZ Limited (BCS). Mr Cotton is the sole director of BCS and has been the chairman of the Body Corporate for the last 20 years.

[5] At an extraordinary general meeting held on 27 July 2015, the defendant passed a resolution appointing Crockers Property Managers Ltd (Crockers) as the defendant’s property managers. The defendant says this appointment will relieve any concerns that the plaintiff has about the future management of body corporate affairs.

[6] Proceedings were commenced on 23 December 2014 pursuant to Part 18 of the High Court Rules. Affidavit evidence was filed by the plaintiff, and by Mr Cotton on behalf of the defendant. Mr Mahmood Dean, an accountant, also provided an affidavit on behalf of the defendant. As explained below, the plaintiff was cross-examined on her affidavit evidence at the hearing.

Submissions

[7] The plaintiff alleges that the defendant has breached the UTA and/or the

UnitTitles Act Regulations 2011 (Regulations) in relation to the following: (a)        the notices sent for the 2014 AGM;
(b)      the audit of the financial accounts for year ending March 2014; (c)    the method of contracting with BCS;
(d)      the delegation of powers and duties to the Body Corporate

Committee;

(e) the long term maintenance plan and long term maintenance fund; (f) the defendant’s bank accounts;
(g) the Register of Owners;

(h) the levies raised for earthquake strengthening.

[8] The plaintiff is concerned that the affairs of the…

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: [2015] NZHC 2491
Decision Date: 12 October 2015

CaseChat Overview and Summary

The plaintiff, Wai Kam Chan, sought eight separate declarations pursuant to s 3 of the Declaratory Judgments Act 1908, concerning alleged infringements of the Unit Titles Act 2010 by the defendant Body Corporate 105164. The plaintiff alleged that the defendant's management of its affairs had not been transparent and did not comply with the legislative framework. The defendant defended the claims, asserting that there was no jurisdiction to grant many of the orders sought, or that the Court should decline to grant the declarations in the exercise of its discretion.

The Court found that there was no jurisdiction to make mandatory orders under s 3 of the Declaratory Judgments Act 1908, and declined to grant the declarations sought. The Court held that the irregularities in the 2014 AGM had been effectively ratified at the 2015 AGM, and that there was little utility in declaring the 2014 AGM to be invalid in all the circumstances. The Court also found that the financial statements had been reviewed by an independent accountant, and that there was no need to pass a special resolution to comply with s 132(2) of the Unit Titles Act 2010.

The Court declined to grant the declarations concerning the contracts with Body Corporate Solutions NZ Ltd, stating that there was insufficient evidence to conclusively determine whether the contracts were entered into unlawfully. The Court found that the lack of delegation of powers and duties to the Body Corporate Committee was remedied at the 2015 AGM, and that the appointment of Crockers as Body Corporate manager should assist with the development of the long term maintenance plan and fund going forwards.

The Court declined to grant the declaration concerning the Body Corporate bank accounts, stating that it called for a factual enquiry into the conduct of the defendant's bank accounts, and such a factual enquiry was not appropriate in declaratory proceedings. The Court held that the right to search the register of owners also includes the right to take a copy, and that the dispute underlying the claim for relief was now moot.

Finally, the Court declined to grant the declaration concerning the earthquake strengthening levy, stating that the revised levy may still be invalid if it was set by the Body Corporate Committee, and that Committee had no delegated authority to do so. However, the Court found that the fact that the levy was discussed at the 2015 AGM, that it now appeared to be calculated on the correct basis, and appeared to have been approved of at the 2015 AGM, weighed against the grant of a declaration in this case.

In conclusion, the Court declined the plaintiff's claim for declaratory relief on all eight causes of action. The plaintiff has been unsuccessful in her claim, and whilst costs usually follow the event, the Court considered that the particular circumstances of this case would warrant leaving costs to lie where they fall.

Orders