Douglas v Body Corporate 102029 - [2025] NZHC 983

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-002182

[2025] NZHC 983

UNDER Section 141 of the Unit Titles Act 2010

IN THE MATTER

of an appointment of an administrator

BETWEEN

ANDREW ALEXANDER DOUGLAS, IAN STUART PETRY, LEONARD

ELLSWORTH KURPUIS and JOHN FRANCIS MATHER
Applicants

AND

BODY CORPORATE 102029

First Respondent

Continued overleaf

On the papers

Counsel:

P Spring, H Cheng for Applicants J Wood for First Respondent

S E Wroe Second, Third, Fourth and Fifth Respondents

Date:

30 April 2025

JUDGMENT OF ANDERSON J

[Final orders]

This judgment was delivered by me on 30 April 2025 at 3.00 pm pursuant to r 11.5 of the High Court Rules 2016.

………………………………
Registrar/Deputy Registrar

Solicitors: Lane Neave, Auckland
Court One, Auckland
Alexander Dorrington Limited, Auckland

DOUGLAS v BODY CORPORATE 102029 [2025] NZHC 983 [30 April 2025]

MAUD JOHNS LIMITED
Second Respondent

JOANNE LEE UNDERDOWN
Third Respondent

VEER CHARAN
Fourth Respondent

LE MANS PROPERTY LIMITED
Fifth Respondent

[1] By my interim judgment of 6 November 2024 (the Interim Judgment),1 I made an order under s 189 of the Unit Titles Act 2010 (the Act) cancelling the unit plan of the Napier Street Body Corporate (the Body Corporate), on application by owners representing the majority of the ownership interest (the majority owners) under s 187 of the Act. I made an associated order sought by the majority owners for sale of the land formerly owned by the Body Corporate under s 339 of the Property Law Act 2007. The orders were opposed by the owners representing the minority of the ownership interest (the minority owners). I left the parties to agree final orders giving effect to this judgment.

[2] The parties have been able to agree all aspects of the final orders with two exceptions. They remain in dispute over whether the Court should direct that no reassessment of ownership interest be undertaken on cancellation of the unit plan. They also disagree on costs, which I will address in a separate judgment.

[3] Under s 188(2) of the Act, on application by a unit owner under s 187, the Court can make a declaration authorising the cancellation of the unit plan if it is just and equitable to do so, having regard to the relevant interests. Section 188(3) provides that when the Court makes such a declaration, it may by order impose any conditions or make such directions it thinks fit for the purposes of giving effect to the declaration. Certain non-exhaustive examples are given. These include orders as to the distribution of the body corporate’s assets. The Court may vary or modify such conditions at any time before the unit plan is cancelled.2

[4] Section 189 applies where the Court has made a declaration under s 188 authorising cancellation of the unit plan and all conditions and directions imposed or given by the Court have been complied with.3 In that event, the applicant for cancellation or its successor in title may apply…

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: [2025] NZHC 983
Decision Date: 30 April 2025

CaseChat Overview and Summary

The case of Douglas v Body Corporate 102029 involved applicants seeking the cancellation of a unit plan and the sale of the land owned by the Napier Street Body Corporate. The applicants, representing the majority of ownership interests, argued that it was just and equitable to cancel the unit plan under the Unit Titles Act 2010. They sought a direction from the court that no reassessment of ownership interests should be undertaken upon the cancellation of the unit plan. The minority owners opposed this, arguing that a reassessment was necessary and consistent with the Act. The legal issue before the court was whether the High Court should direct that no reassessment of ownership interests be undertaken on the cancellation of the unit plan.

The court considered the statutory provisions under the Unit Titles Act 2010 and previous case law. The court noted that the default position under the Act is that a reassessment of ownership interests should occur upon cancellation of a unit plan. However, the court held that the same 'just and equitable' test should apply to the directions or conditions imposed under s 188(3) when a plan is cancelled. The court found that in the present case, reassessment of ownership interests was not appropriate. The court accepted the applicants' arguments that reassessment was not necessary as the units were beyond repair and their value was in the base land. Furthermore, the court found that maintaining the current ownership interests was justified because past costs had been allocated on the current interests.

The court made a direction under s 189(5)(aa) of the Unit Titles Act 2010 that any application to the Registrar to cancel the unit plan did not need to be accompanied by a certificate from a registered valuer showing the ownership interests and proposed ownership interests reassessed for all units in the unit title development. The court also made final orders dissolving the Body Corporate and ordering the sale of the base land and distribution of the proceeds according to the current ownership interests. The implementation of the final orders was stayed pending appeal against the interim judgment. The direction dispensing with reassessment would be stayed in the event of (and pending) any appeal against this decision but would otherwise take effect if the appeal against the interim judgment was dismissed.

Orders