Een v Body Corporate 384911
[2024] NZHC 2556
•6 September 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2024-404-718 [2024] NZHC 2556
UNDER Section 141 of the Unit Titles Act 2010 IN THE MATTER OF
An originating application for the appointment of an administrator
BETWEEN
WONG SUN EEN and others Applicants
AND
BODY CORPORATE 384911
First Respondent
PANDEY VIADUCT QUAYS LIMITED
Second Respondent
PANDEY VIADUCT SUITES LIMITED
Third Respondent
Cont/:
Hearing: 19 August 2024 Appearances:
S V A East and S L Cahill for Applicants S R Carey for First Respondent
Judgment:
6 September 2024
JUDGMENT OF O’GORMAN J
[Application to appoint an interim administrator]
This judgment was delivered by me on 6 September 2024 at 3 pm pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
…………………………………
Solicitors/Counsel:
Bell Gully, Auckland Edmonds Judd, Te Awamutu
S R Carey, Barrister, Auckland
EEN v BODY CORPORATE 384911 [2024] NZHC 2556 [6 September 2024]
…/continued
PANDEY VIADUCT SUITES TWO LIMITED
Fourth Respondent
PANDEY VIADUCT SUITES THREE LIMITED
Fifth Respondent
CUSTOM STREET HOTEL LIMITED
Sixth Respondent
Overview
[1] In this proceeding, the applicants seek the appointment of an administrator under s 141 of the Unit Titles Act 2010 (UTA). This is another chapter in a long running dispute between two factions of unit owners at 21 Viaduct Harbour Avenue, Auckland (the Complex).
[2] The applicants own 80 of the 175 residential units in the Complex (the minority owners). The balance of the residential units and 16 commercial units are owned by companies in the CP Group (the majority owners), controlled by Mr Prakash Pandey and his family. The majority owner companies are named as second to sixth respondents in this proceeding, but they are not participating and abide the decision of the Court. The application is opposed by Body Corporate 384911 (Body Corporate). Presumably the solicitors acting for the Body Corporate have obtained their instructions from the majority owners. Their instructions have not come from the minority owners or any extraordinary general meeting (EGM).
[3] The grounds for appointment of an administrator are grouped into four categories:
(a)lack of effective management, given that there has been no delegation to the Body Corporate Committee (the Committee), and there is an ongoing clash on decision-making between the majority and minority owners;
(b)allegations of financial mismanagement, particularly in respect of a Long Term Maintenance Fund (LTMF) and failure to carry out an investigation and report on those issues in a timely way;
(c)disputes about charging and collection of levies; and
(d)other concerns about repairs, common areas and procedural compliance issues.
[4] The Body Corporate denies that there are any proper grounds for the appointment of an administrator. It says the Body Corporate is not dysfunctional. Rather, the management and decision-making provisions of the UTA are operating democratically as intended, and the minority owners have other avenues for challenging any decisions they regard as unfairly prejudicial. The minority owners are themselves at fault (at least in part) for financial pressures that arise from non-payment of levies, and they chose not to have representation on or delegate powers to the Committee. The appointment of an administrator would not serve any purpose, because the administrator would be bound by the same statutory decision-making provisions. The Body Corporate says there is no basis for allegations of unlawful or deliberately prejudicial conduct.
[5] If the Court were to find grounds for the appointment of an administrator, then the Body Corporate proposes a different administrator with more experience in body corporate matters and a lower charge-out rate. In any event, the Body Corporate says the term of appointment should be six months and not one year.
Background
[6] The Complex was designed as a hotel, with the commercial units being those parts of the building needed to operate at the hotel (including the reception, back-of-house office, kitchens, restaurant, bar and laundry). Construction of the Complex was completed in 2007. Between 2007 and 2010, all units in the development were leased to a company called Lighter Quay Hotel Management Ltd (LQHML), which was part of the CP Group of companies. LQHML engaged an international hotel company to operate a Westin hotel from the premises.
[7] LQHML went in receivership in 2010. Between 2011 and 2020, a company called Viaduct Quays Hotel Ltd (VQHL) was appointed as hotel manager to operate a Sofitel hotel within the Complex, called “Sofitel Auckland Viaduct Harbour”. Most of the residential unit owners leased their units to VQHL for that purpose. On 6 July 2020, VQHL was placed into voluntary liquidation and the liquidators disclaimed the leases and management agreement, putting an end to that hotel business.
[8] A new hotel business then commenced in October 2020, also under the name “Sofitel Auckland Viaduct Harbour”. This hotel business operated using the residential and commercial units owned by the companies in the CP Group. The residential units owned by the minority owners were not included in the new hotel operation. This led to a dispute between the minority and majority owners, including about events that took place at the EGM on 7 September 2020.
[9] At that 2020 EGM, ordinary resolutions were passed amending the Body Corporate rules at the instigation of the majority owners, including imposing a requirement that residential units could not host members of Airbnb or any other similar accommodation operator in their units. The minority owners contended that this was invalid and designed to force them to sell their units cheaply. The minority owners commenced proceedings seeking injunctive relief. Following a hearing on 27 October 2020, the CP Group advised that the Airbnb rule had not been registered and they would not enforce it. Subsequently, the CP Group conceded that those resolutions were ultra vires and void ab initio.
[10] Following the reopening of the Sofitel hotel, a second EGM was held on 12 November 2020. The CP Group proposed and carried an ordinary resolution requiring the Body Corporate to implement and pay for 24/7 security. The minority owners brought a proceeding challenging the lawfulness of the resolution. The Court of Appeal held the resolution was unjust and inequitable for the applicants and therefore the appeal was allowed, and the resolution was set aside.1
[11] The current situation is that the Complex operates with two hotels. The CP Group’s units form part of the Sofitel operation. The minority owners have an agreement with Marsden Viaduct Ltd, which operates the Marsden Viaduct hotel from the units owned by the minority owners.
Recent AGMs
[12] Events at the annual general meetings (AGMs) from 2021 onwards are relevant for the current application.
1 Een v Body Corporate 384911 [2021] NZCA 665, (2021) 22 NZCPR 844.
[13] The 2021 AGM took place on 7 July 2021. At that meeting, Mr Fong was appointed as chairperson. It was also resolved that the Body Corporate appoint a committee with five members. The five appointed committee members were Tan Chee Ling (a minority owner), and four individuals representing the CP Group interests (including Mr Fong). A special resolution was passed under s 108 of the UTA to delegate powers to the Committee. At that meeting, the Body Corporate also passed an ordinary resolution that the Long Term Maintenance Plan (LTMP) prepared in June 2021 be approved and adopted.
[14] The minority and majority owners have adduced conflicting evidence about how Mr Tan was treated in terms of his participation on the Committee during the 2021/2022 period.
(a)Mr Fong, on behalf of the Body Corporate, says that Mr Tan refused to engage with him, or participate on the Committee.
(b)Mr Lip, on behalf of the minority owners, says that Mr Tan was excluded from effective participation on the Committee.
(c)Mr Tan has summarised instances when he actively engaged, particularly if any input was sought from him. He says he was only consulted on issues when it suited the other members, but he was not involved in operational matters and was only given selective information. He also notes that his participation in meetings conducted by Zoom during COVID-19 restrictions was inhibited because English is not his first language, and the other participants spoke quickly.
[15] At the 2022 AGM held on 28 July 2022, the minority owners nominated Eric Seah for the Committee. The CP Group owners voted against Mr Seah, so his nomination was unsuccessful. Instead, five individuals all representing the CP Group owners were appointed to the Committee. This triggered the minority owners voting against any delegation to the Committee under s 108 of the UTA. The reasons for this are recorded in the AGM minutes. Mr Fong queried why the minority owners voted against delegation. They said the decision to exclude Mr Seah meant that the minority
owners would have very little oversight of the decisions made by the Committee on behalf of the Body Corporate, if a delegation was granted. Therefore, the minority owners preferred that any Body Corporate decisions going forward would need to be made by the Body Corporate as a whole (via EGMs or postal votes). Their discussion made it clear that, if they allowed Mr Seah to be appointed to the Committee, then the minority owners would reconsider approving a delegation. Without that change, they would not vote in favour of delegation. No changes were made, so as from 28 July 2022, there has been no delegation to the Committee under s 108 of the UTA.
[16] The 2023 AGM took place on 20 October 2023. At this AGM, the minority owners did not nominate anyone for the Committee. The majority owners specifically invited them to do so (saying such nominee would be approved), but the minority owners refused, because they no longer had confidence that decision-making by the Committee would be fair for them, even if they had a single representative. Accordingly, from the AGM on 20 October 2023, there have only been four members of the Committee, all of them CP Group representatives. The minority owners voted against any delegation to the Committee under s 108 of the UTA, for the same reasons why they did not nominate anyone to the Committee.
[17] Another item discussed at that 2023 AGM was approval of payment of creditor invoices. The Body Corporate passed an ordinary resolution that the Body Corporate manager be authorised to pay “line items in the budget” as and when they fall due but refer to the Body Corporate for approval for expenditure that is over or outside of what is set out in the budget.
Legal principles
[18] Section 141(1) of the UTA provides “[…] any person having a registered interest in a unit, may apply to the High Court for the appointment of an administrator.”
[19]Section 141(3) states:
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.
[20] The Court’s discretion under s 141 of the UTA is one that should not be fettered and is, overall, an exercise that turns on the facts of each particular case.2 The courts have sought to provide guidance as to when an administrator could be appointed. However, the circumstances in which the appointment of an administrator may be appropriate are not closed.3
[21] In Gibson v Body Corporate 384911, this Court stated that an administrator could be appointed when any of the following could be shown:4
(a)the existence of any undemocratic or ultra vires decisions; or
(b)the existence of any dysfunctionality or deadlock; or
(c)the existence of any majority decisions that:
(i)have been brought by the improper influence of a third party; and
(ii)deliberately and/or unnecessarily harm the interests of the minority.
[22] More recently, Grice J in Parkinson v Body Corporate 62124 set out a list of factors that may be relevant:5
(a)the extent of dysfunctionality in the body corporate between the unit owner members;
(b)the duration of such dysfunction;
(c)the apparent willingness or otherwise of the parties to cooperate to resolve the dysfunction;
(d)previous attempts at resolving the issues in dispute, and the expected likelihood of such resolution occurring in the future;
(e)the existence of any previous court or tribunal determinations, any relevant comments made in those decisions, and the subsequent
2 Low v Body Corporate 384911 (2010) 12 NZCPR 142 (HC) at [37].
3 Westwind Properties Ltd v Body Corporate 104724 [2023] NZHC 1767 at [56].
4 Gibson v Body Corporate 384911 [2012] 1 NZLR 84 (HC) at [71].
5 Parkinson v Body Corporate 62124 [2023] NZHC 2022, (2023) 16 TCLR 659 at [69].
compliance or otherwise with the orders made in those determinations;
(f)the nature and seriousness of the issues in dispute;
(g)any relevant professional evidence in relation to the issues in dispute;
(h)whether the issues in dispute mean the body corporate is in breach of the unit titles legislation, and the extent and duration of any such breach;
(i)the presence of any third parties affected by the dysfunction, and the effect, including any risk posed to them, of the dysfunction on them;
(j)the operational and financial organisational structures currently in place, the extent of dysfunction in respect of those structures, and the ability or otherwise of the body corporate to operate functionally;
(k)the size of the body corporate, and its ability to meet the costs of an appointed administrator; and
(l)any other relevant matter.
[23] There have been two prior sets of proceedings seeking orders under s 141 for this very Complex.6 The first is Low v Body Corporate 384911.7 By 2020, LQHML had been placed into liquidation and its entitlement to use any of the rooms had come to an end (following cancellation of the subleases). The Body Corporate owed ground rent to the landlord, and a Property Law Act notice had been issued. In addition, the Body Corporate was in arrears on insurance. The reason why those sums could not be paid was that many of the owners had paid their levies into a solicitor’s trust account rather than to the Body Corporate, pending determination of disputed issues. Those owners sought the appointment of an administrator on the grounds of dysfunction.
[24] Heath J observed that the rules of a Body Corporate were designed to create a “democratic framework” within which the affairs of a Body Corporate are managed.8 That model is designed to enable proprietors to make collective decisions. A distinction is drawn between some decisions that need unanimous consent (such as amending the rules set out in sch 2) and those that can be made by ordinary resolution (such as amending the rules set out in sch 3). On the facts, Heath J was not satisfied
6 The equivalent provision for the appointment of an administrator in the Unit Titles 1972 was s 40.
7 Low v Body Corporate 384911 (2010) 12 NZCPR 142 (HC).
8 At [34].
that the affairs of the Body Corporate had been conducted in a dysfunctional manner.9 It could not be said that the Body Corporate decisions had been made irrationally. Furthermore, it was inappropriate for the applicants to criticise the committee for failing to pay ground rent and insurance when they lacked the money to do so. The role of the Body Corporate in a development of this type is limited.10 The only potential reason for appointing an administrator to take over the functions of the Body Corporate was the level of distrust between the two owner factions. However, it was still possible for the parties to exercise their democratic rights to safeguard their respective positions in the upcoming AGM, so Heath J adjourned the application to a date to be set after the AGM.11
[25] A second application to appoint administrators for the same Complex was heard in July 2011. In Gibson v Body Corporate 384911, Ellis J recorded that the battle for negotiating supremacy had continued largely unabated since Heath J’s decision in 2010, but the balance of power had shifted.12 At an EGM on 6 April 2011, a resolution was passed appointing Beswick as a second hotel operator within the Complex. A further EGM was called for 25 May 2011 and a resolution passed to enable access to the units owned by the cancelling owners. On 1 July 2011, the second hotel began operating using rooms owned by the cancelling owners. The receivers applied for the appointment of an administrator on the grounds that the Body Corporate was dysfunctional because it was being controlled by and operated in the interests of and for the benefit of the cancelling owners, in a manner adverse to the other unit owners. Ellis J dismissed the application on the grounds that failures of the kind identified would not be cured simply by putting someone else in charge.13 Rather, substratum failure might warrant liquidation, in which case the appropriate application would be one brought under s 46,14 not s 40. The circumstances giving rise to the application were, at their root, of the applicants’ own making. The actions of LQHML led to the destruction of the common commercial purpose. Had that purpose not been destroyed, there would have been no rival hotel operation within the Complex.
9 At [38].
10 At [43].
11 At [50].
12 Gibson v Body Corporate 384911, above n 4, at [16].
13 At [62].
14 Cancellation of plan, now provided for in ss 187 and 188 of the Unit Titles Act.
[26] The requirement that a Body Corporate acts democratically (by majority rule) exists precisely because it may not be possible for a body charged with governing a group of people with potentially disparate interests to exercise its functions in a way that will further those interests equally.15 A Body Corporate is not rendered ripe for the appointment of an administrator simply because it has failed to act in the interests of a certain group of unit holders. There is an additional requirement that its failure to do so be in some way “improper”.16 On the facts, the complaint was the Body Corporate was acting democratically (by majority rule). If a decision made democratically is inequitable to minority unit holders, then s 43 is the appropriate means to address that problem.17 Otherwise, there was no basis for alleging any acts were unlawful or ultra vires. While it may be the usual expectation that day-to-day decisions would be made by the committee, decisions made by a majority vote at a properly convened EGM must surely have more, if not equal, legal authority.18 The appointment of an administrator would not put an end to the commercial wishes and legal entitlements being pursued by the cancelling owners. An administrator is required to act “within the four corners of the UTA and the Body Corporate rules”.
The administrator would not be entitled to ignore the will of the majority.19
[27]The parties also referred to following additional cases about s 141.
[28] In Maiden v Body Corporate 46112, Cull J appointed an interim administrator to the Body Corporate in circumstances where no AGM had been held for almost four years and there was no operative governance structure. Disagreement between the unit holders had prevented the Body Corporate from undertaking necessary building works and the two blocks of flats had fallen into disrepair and reached a point where works were both necessary and critical.20
15 Gibson v Body Corporate 384911, above n 4, at [67].
16 At [67].
17 At [75]. Equivalent relief for the effect of a resolution being inequitable to the minority is now provided for in s 210 of the Unit Titles Act.
18 At [76].
19 At [96].
20 Maiden v Body Corporate 46112 [2018] NZHC 448.
[29] In Body Corporate 201036 v Whai Rawa Railways Lands LP,21 the Court of Appeal dismissed an appeal from a decision of the High Court appointing administrators to the Body Corporate. The Body Corporate was the lessee of a townhouse development in central Auckland known as Parnell Terraces. Whai Rawa Railways Lands LP (Whai Rawa) was the lessor. There were two broad issues pursued on appeal:
(a)Whether s 87(2) of the UTA required the Body Corporate to pay ground rent from “any levies collected from the unit owners before making any other payments”. The Body Corporate contended that this applied only to levies collected specifically for the purpose of paying ground rent.
(b)Whether there had been an appropriate exercise of discretion in making the appointment because the Body Corporate contended that an undertaking made those orders unnecessary or inappropriate.
[30] In 2008, serious building defects were discovered in the development, requiring costly remedial works. Some unit owners were unable to meet the levies for those works, so the Body Corporate brought debt collection proceedings and two unit holders were bankrupted. Then in August 2018, a rental review resulted in the annual ground rent nearly doubling, and a number of unit holders fell into arrears. An EGM was eventually convened on 29 September 2020 to discuss the increased ground rent and the inability of some owners to pay. The Body Corporate then took steps to place pressure on the landlord to review the rent, by saying that it would no longer collect ground rental payments, and it would apply to have the rent review provisions in the lease declared harsh and unconscionable. The Body Corporate backed away from this position after the owners resolved in August 2021 that the Body Corporate should resume levying for ground rental and taking debt collection steps against defaulting owners. In the meantime, the landlord applied for the appointment of administrators, based on the Body Corporate’s earlier tactical decision to stop collecting ground rental. The Body Corporate opposed the application, saying that the level of default was relatively low, the Body Corporate was now able and
21 Body Corporate 201036 v Whai Rawa Railways Lands LP [2024] NZCA 151.
willing to actively collect ground rental, and administrators would be in no better position than the Body Corporate to do so. It accepted that its earlier decision to stop levying owners was tactical, but it did not accept that the Body Corporate was dysfunctional.22
[31] The Body Corporate contended that s 87(2) did not require other operational levies to be applied to ground rental, so paying unit owners could decide not to meet any shortfall, leaving the lessor to pursue those debtors directly under the implied guarantee in s 163. The Court of Appeal rejected those arguments:
(a)Part 3 of the UTA creates a statutory scheme under which the body corporate has the primary liability for ground rental and the unit owners are treated as guarantors only of the body corporate’s liability.23 The unit owner is only ever a guarantor, with no other direct rights against or obligations to the lessor. Treating the unit owners as entitled to choose whether to pay their proportion of the ground rental directly to the lessor or to the body corporate would run counter to the statutory scheme.24
(b)Under subpt 13 of pt 2, a body corporate must establish and maintain an operating account for the purposes of meeting specified expenses (including ground rent),25 and it must also establish and maintain a long-term maintenance plan and a long-term maintenance fund.26 The Court of Appeal found that the obligation under s 87(2) to pay ground rent from the operating account had priority over the obligation in ss 115 and 117 to pay monies “into the long-term maintenance fund”.27 The Court of Appeal endorsed the High Court’s finding that the restriction in s 117(2) is to be read as a subordinate priority or restriction “to be applied to funds once they have been deposited in the long-term
22 At [24].
23 At [35].
24 At [39].
25 Unit Titles Act 2010, s 115.
26 Sections 116 and 117.
27 Body Corporate 201036 v Whai Rawa Railways Lands LP, above n 21, at [55].
maintenance fund”.28 The Court of Appeal observed that such priority “would reflect the obviously greater importance of ensuring the payment of ground rental over long-term maintenance, given the necessity of the former to the ongoing viability of the unit development.”29
[32] In the light of the above findings, the Court of Appeal dismissed the appeal — there were no grounds to interfere with the Judge’s exercise of discretion to appoint administrators because the Body Corporate had acted tactically and improperly.30
[33] In Westwind Properties Ltd v Body Corporate 104724,31 Westwind Properties Ltd (Westwind) was the original developer of a two-building unit title development in East Tamaki. The second building did not proceed in accordance with the proposed unit development plan, so no complete unit plan had been deposited. Westwind wanted to sell its interests. In order to do so, it needed to rectify the unit title position, but the body corporate refused to take the required steps. Anderson J granted orders for the appointment of an administrator in those quite unique circumstances. The Court found that the steps taken by the majority unnecessarily or gratuitously injured Westwind,32 even though the body corporate was not dysfunctional as such.33 The Court noted that the appointment could not give the administrator greater powers than the body corporate.34
[34] In Parkinson v Body Corporate 62124,35 Grice J made orders appointing an administrator in circumstances where the last body corporate meeting had been some two years prior, the members could not agree on the appointment of a chair, the members were at a deadlock (2–2), and the body corporate was dysfunctional in a way seriously affecting its governance, including addressing problems with a retaining wall that was jeopardising the integrity of the development as a whole.
28 At [53], [55] and [57].
29 At [55].
30 At [91]–[98]
31 Westwind Properties Ltd v Body Corporate 104724 , above n 3.
32 At [66].
33 At [67].
34 At [78].
35 Parkinson v Body Corporate 62124 [2023] NZHC 2022, (2023) 16 TCLR 659.
Statutory scheme
[35] The powers and duties of a body corporate are set out in s 84(1) of the UTA. This includes the obligation to pay ground rental to a lessor, as provided for in s 87.36 Section 87(2) provides that the body corporate must pay the lessor the ground rental from any levies collected from the unit owners before making any other payments.
[36] Financial and property management is dealt with in subpt 13 of pt 2 of the UTA:
(a)Section 115 requires a body corporate to establish and maintain an operating account for the purpose of meeting various expenses, including any ground rental and regular maintenance costs.
(b)Section 116 requires a body corporate to establish and regularly maintain an LTMP. Pursuant to s 116(3), the purpose of a LTMP includes to identify future maintenance requirements and estimated costs and support the establishment and management of the funds.
(c)Section 117 requires a body corporate to establish and maintain an LTMF unless the Body Corporate decides by special resolution it will not do so. Under s 117(2), an LTMF “may only be applied towards spending relating to the [LTMP]”.
(d)Section 118 provides that a body corporate may establish and maintain one or more optional contingency funds.
(e)Section 119 provides that a body corporate may establish and maintain an optional capital improvement fund.
(f)Section 120 requires that:
The body corporate must establish, in accordance with any regulations, either—
36 Unit Titles Act, s 84(1)(e).
(a)separate bank accounts for each of the funds; or
(b)a single bank account in which the respective funds are kept entirely separate and are able to be identified.
[37] In the case of the operating account, the LTMF and any contingency fund, levies are required to be calculated in proportion to each unit owner’s utility interest:
(a)A utility interest is assigned to every principal unit and every accessory unit. A utility interest is used to determine a range of matters including “the extent of the obligation of the owner of the principal unit in respect of contributions levied by the body corporate under section 121 in respect of the [LTMF], the optional contingency fund and the operating account”.37
(b)The default position is that the utility interest is the same as an ownership interest.38 An ownership interest is assessed by a registered valuer on the basis of the value of the unit relative to each other unit.39 An ownership interest is also used to determine a range of matters, including “the extent of the obligation of the owner of the principal unit for payment of ground rental under section 87”.40
[38] Any unpaid levy, together with the reasonable costs of collection, is recoverable as a debt due to the body corporate by the person who is the unit owner at the time the levy became payable or who is the unit owner at the time the proceedings are instituted.41
[39] Under s 101(1), a matter to be decided by a body corporate must be decided by ordinary resolution at a general meeting, unless:42
(a)the UTA provides for the matter to be decided by the body corporate by special resolution; or
37 Section 39(3)(a).
38 Section 39(2).
39 Section 38(2).
40 Section 38(3)(g).
41 Section 124(2).
42 Section 101(2).
(b)the body corporate committee exercises a delegated authority to decide the matter. Such a delegation is made under ss 108 and 109.
[40] In addition to the ability to seek the appointment of an administrator under s 141, s 210 provides a different potential avenue for minority owners affected by prejudicial conduct. In any case where the UTA requires a resolution and the resolution is passed, any person who voted against the resolution may apply to the appropriate decision-maker for relief on the grounds that the effect of the resolution would be unjust or inequitable for the minority. “Appropriate decision-maker” is defined in s 5 to mean the Tenancy Tribunal or a court with relevant jurisdiction.43
[41]In 2022, changes were made to the UTA to:44
(a)improve the information disclosure regime to prospective buyers of units;
(b)strengthen the governance arrangements in relation to the body corporate;
(c)increase the professionalism and standards of body corporate managers; and
(d)ensure that planning and funding of long-term maintenance projects is adequate and proportionate to the size of the complex concerned.
[42] At the third reading, the purpose of the amendments was described as follows:45
The bill ensures that unit title developments adequately plan for and fund long-term maintenance plans. It adds in a requirement that bodies corporate have to have to produce a long-term maintenance plan that includes detailed cost estimations for the first 10 years and high-level
43 Sections 171–175 specify the respective jurisdictions of the Tenancy Tribunal, the District Court and the High Court.
44 Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Bill 2020
(306—1), Explanatory Note.
45 (4 May 2022) (Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Bill — Third Reading, Nicola Willis).
projections for the 20 years after that, so that going in to purchase an apartment, you can know what is the condition of this building today, how much work is going to be required on it in the future, and what costs might I expect to face. It requires the creation of long-term maintenance funds for large and mediumdevelopments, but does, I think, strike a good balance by allowing people to opt out if they decide that that is not the way they wish their assets to be managed.
[43] Following these changes, when units are being bought and sold, the LTMP and amount of funds held in the LTMF are critical pieces of information.46
Analysis
[44] I begin by analysing the four categories of grounds for seeking the appointment of an administrator.
Lack of effective management
[45] The applicants submit that there is a lack of effective management for the Body Corporate, given that there has been no delegation to the Committee since 2022, and it is unclear how decisions have been made for the Body Corporate since then, given that there have been no EGMs (other than one held in respect of the chillers, in which no resolutions were successfully passed). The applicants refer to Boyce v Body Corporate 70841,47 in which the Court appointed an administrator because there was no functional Body Corporate committee, and the owners were incapable of acting in a cooperative fashion.
[46] The first respondent says there is no dysfunction because delegation under s 108 is discretionary and it is perfectly valid for a Body Corporate to make its decision in other ways:
(a)by voting at an AGM or EGM;
46 Unit Titles Act, s 146(2). Pre-contract disclosure is prescribed in reg 33 of the Unit Titles Regulations 2011. Regulation 33(j) requires disclosure of the LTMP and r 33(i) requires disclosure of the balance of every fund or bank account held or operated by or on behalf of the body corporate at the date of the last financial statement.
47 Boyce v Body Corporate 70841 [2013] NZHC 3427, (2013) 14 NZCPR 770.
(b)by the chairperson under reg 11 of the Unit Titles Regulations 2011,48 or by exercising other powers set out in the UTA, such as the power to call an AGM under s 90; and
(c)to urgently enter into an obligation in order to avoid serious damage to property or to prevent injury under reg 17(2) of the Unit Titles Regulations.
[47] The respondent’s position is that all decisions since 2022 have been made validly through one of the above means. A decision to repair a seawall crack was made by owners’ postal vote. A decision not to approve a quote for chiller repair was made at an EGM. A decision to undertake flood damage repair was made under urgency in accordance with reg 17(2) of the Unit Titles Regulations. Payment of ordinary invoices has occurred under the framework of a budget approved at each AGM.
[48] The Body Corporate has asked the applicants to identify any specific powers or decisions that the applicants consider have been improperly exercised. The only example provided in response was the repair work carried out for the damage caused by the Auckland floods in early 2023. The Body Corporate considers that this was properly undertaken under reg 17(2) without any owner vote because urgent steps were required to avoid damage to property. Even if the scope of reg 17(2) could be disputed, this was a one-off, good faith response to a highly unusual and urgent event. The decision did not ignore or unnecessarily harm the interests of the minority owners. The action was taken to protect the building and common areas rather than to deliberately harm the minority owners. The expenses were almost entirely met by insurance cover. As for the allegation by Mr Lip that the money spent on repairs could lead to an increase in the Body Corporate’s insurance premium, that is a consequence of the underlying risks and commercial realities rather than any evidence of dysfunction.
48 These duties are administrative in nature, such as maintaining unit owner registers, preparing meeting agendas, chairing meetings, recording resolutions, keeping financial account and records, and any other duties relating to the administration of the body corporate that by ordinary resolution have been conferred on the chairperson.
[49] I accept the submissions of the first respondent that a lack of consultation on the repair work following the Auckland floods would not on its own justify the appointment of an administrator. Given that the remedial works were covered by insurance and required in some form, it is understandable that the chairman would have taken the view that these fell within the scope of reg 17(2). While the minority owners might have preferred to be informed of these issues in advance, I accept there was no intention to disadvantage them, and I do not consider the Body Corporate’s actions were improper in any sense relevant for s 141 of the UTA. The suggestion that decision-making about these repairs should have been conducted at an EGM raises the prospect that the repair work could have been blocked by disagreement, whereas it seems clear that the repair work was necessary, consistent with the insurers approving and paying those costs.
[50] I also accept that no dysfunction arises from the mere choice not to delegate to the Committee under s 108 of the UTA. Just as the minority owners cannot be criticised for their decision not to nominate a Committee member or agree to delegation if they lack confidence in that method of decision-making, making decisions by an AGM or EGM is perfectly democratic, lawful, and functional. Furthermore, the appointment of an administrator would not override those voting entitlements.49
[51] The allegations about spending exceeding the budget were addressed in the second category of financial mismanagement, which I consider next.
Financial mismanagement
[52] As referred to at [17] above, the Body Corporate passed a resolution at the 2023 AGM that the Body Corporate manager be authorised to pay line items in the budget as and when they fall due but refer to the Body Corporate for approval for expenditure that is over or outside of what is set out in the budget.
[53] At the hearing, I was handed up a table that compares 26 line items, with a budgeted total of $3,250,101, compared with an actual total expenditure of
49 See [26] above.
$3,363,915. The difference between these two figures is $113,814 (a 3.5 per cent net overspend). An amount was budgeted for every actual expenditure incurred. Some of the actual expenditures came in under budget. The items that came in over budget were:
(a)fire protection — system maintenance;
(b)cleaning;
(c)ground rent;
(d)other professional fees, including legal;
(e)air conditioning maintenance;
(f)lift — contract;
(g)repairs and maintenance — general;
(h)electricity;
(i)gas; and
(j)water and waste.
[54] The applicants argue that the AGM resolution required the Body Corporate manager not to meet any line item expense that went over budget, without an EGM approval. I do not accept that this is what was necessarily contemplated by the wording of the resolution. For example, it does not seem reasonable to expect that the Body Corporate manager would stop paying invoices for electricity, gas, water, and waste, particularly in circumstances where the units were being used for hotel purposes. An EGM might reasonably be required for material expenses not contemplated by the budget, or for material unfunded overruns, but the Body Corporate manager would not always know in advance when the cumulative costs for any given line item exceeds the budgeted amount (e.g. if invoices are received
retrospectively). In this case, the overall outcome was only 3.5 per cent over budget, which is not particularly material. I accept that there is no evidence that any of these expenses were improperly incurred, or that any decision to pay the invoices was unfairly disadvantageous or improper from the perspective of the minority owners. I therefore do not regard this issue as relevant for the purposes of an application under s 141.
[55] The concern raised by the applicants in respect of the LTMF is much more significant. The key issue in dispute between the applicants on the one hand and the Body Corporate on the other, is the effect of the Court of Appeal’s decision in Whai Rawa Railways Lands LP. The Body Corporate contends that the findings referred to at [31](b) above mean that the obligation to pay ground rental under s 87(2) always supersedes the restriction in s 117(2) about how the LTMF may be applied. I accept the submissions of the applicants that this is not a fair reading of the High Court or the Court of Appeal decisions.
[56] In Whai Rawa Railways Lands LP, the issue did not concern the application of funds already deposited into or allocated to the LTMF. Those provisions were analysed by analogy, to assess whether other operational levies could be applied to pay ground rental, or whether each levy was notionally siloed even before payment/allocation. Both the High Court and Court of Appeal found that funds levied in any given year could not be paid out or allocated without first fulfilling the statutory obligation in s 87(2) to pay the ground rental. However, neither the High Court nor the Court of Appeal suggested any overriding entitlement to withdraw and redeploy funds previously deposited or allocated into the LTMF (e.g. in previous years). If the priority afforded to ground rental under s 87(2) authorised a Body Corporate to dip into the LTMF in breach of s 117(2) at any time (including from prior allocations), this would totally undermine the purpose of establishing a separate fund for those purposes. Having such a discretion would also undermine the disclosure regime introduced in 2022. The purpose of a LTMF is to smooth the burden of maintenance across the owners of units over time. A discretion to use funds already allocated in that way for purposes not permitted by s 117(2) would likely have unfair consequences for particular unit holders.
[57] If the Body Corporate wished to have that type of flexibility, then it could have resolved not to establish an LTMF and instead to set up a more flexible fund not subject to the strict requirements of s 117(2). To the contrary, the Body Corporate resolved to establish a LTMF in 2018. The LTMF was held in the same bank account as the Body Corporate’s operating account, but with “separate recording”, which I take to mean a separate identifiable fund in terms of s 120(b).
[58] It is common ground that the LTMF should contain $915,843, but it presently has only $38,000. This is a shortfall of $877,843. This is related to the Body Corporate’s decision not to enforce payment of overdue levies. As at 12 August 2024, outstanding levies were:
(a)for units owned by particular majority owners, $604,255; and
(b)for units owned by particular minority owners, $643,630.
[59] Rather than addressing the shortfall by taking enforcement steps, it seems the Body Corporate decided to use the LTMF to pay ground rental. Contrary to the Body Corporate’s submissions on how ss 87(2) and 117(2) interrelate, I find that this infringed s 117(2) to the extent that funds had already been allocated to the LTMF after compliance with s 87(2) at the time.
[60] There seems to be a disputed factual question about the extent to which payments were allocated to the LTMF, or alternatively left in the operating account as unallocated because of cashflow problems. The applicants understand that most levies were paid up prior to the 2023 AGM.50 The audited financial statements attached to the agenda for the 2023 AGM stated that the LTMF (an equity amount) stood at
$979,104. This suggests an allocation had been made to the LTMF in terms of s 120(b), albeit there was no separate bank account prior to December 2023. Otherwise, the different allocation of those payments towards ground rental should have been disclosed to all unit owners, and an accurate amount recorded for the LTMF (as required for the disclosure regime). The strongest ground for the appointment of
50 Under s 96(3), to be an eligible voter, a unit owner must be up to date with levies. At the 2023 AGM, the applicants had 63 eligible votes (meaning 63 eligible units), and the CP Group had 77 votes (out of a possible 109). This meant that 140 of the 175 units had fully paid their levies.
an administrator is a lack of clarity on this issue. At the 2023 AGM, held on 20 October 2023, it was resolved that the Body Corporate: (i) establish a separate and segregated LTMF; and (ii) investigate and account for all LTMF monies previously approved at AGMs and levied on unit owners, restoring such funds (subject to availability). This has still not been completed 10 months after it was agreed.
[61] The Body Corporate says that the statutory interpretational issues are largely irrelevant for s 141 purposes, because if all outstanding levies are collected, then the LTMF will be able to be reimbursed to its proper position and then maintenance can be resumed as envisaged in the LTMP. The Body Corporate explains that it was reluctant to take enforcement action against owners following the impacts of COVID-19 and the 2023 Auckland floods, both inhibiting the capacity to earn income from the units. The Body Corporate is now willing to pursue enforcement action if an administrator is not appointed. As held in Tao v Strata Title Administration Ltd,51 any unit holders who refuse to pay can be taken to the Tenancy Tribunal without requiring an administrator to be appointed. The Body Corporate has obtained estimates from solicitors for that purpose and will proceed with taking enforcement action, subject to all necessary decision-making procedures (the members voted at the 2023 AGM to authorise the Body Corporate manager to take enforcement action to collect all outstanding levies, with interest charged at five per cent).
[62] Meanwhile, the first respondent says that it is disingenuous of the applicants to blame the Body Corporate for the lack of funds in the LTMF, when a large part of the reason for that is non-payment of levies by some of the minority owners. The applicants themselves could go a long way to remedying the situation if they ensured that all of their own levies were paid up to date. They rely on Low v Body Corporate 384911, to say that it is inappropriate for the applicants to criticise the Body Corporate’s for funding deficits that they themselves contributed to.52
[63] I accept there is some merit in the first respondent’s arguments that the Body Corporate (without an administrator) could undertake enforcement action to collect all outstanding levies, and certain owners within both the majority and minority
51 Tao v Strata Title Administration Ltd [2016] NZHC 814, (2016) 17 NZCPR 312 at [110].
52 Low v Body Corporate 384911, above n 2, at [37].
factions have caused the funding shortfall. However, the concern about potential unlawful use of the LTMF raises this beyond mere creditor prioritisation, and the Body Corporate has already had 10 months to take enforcement steps and provide further information as directed at the 2023 AGM. Its delay is unexplained. Conflict of interest issues arise with any potential criticism of these LTMF payment decisions, which exacerbate existing levels of distrust between the two factions. In the circumstances, I am satisfied that the appointment of an administrator is warranted on this issue, and to review the related situation with maintenance and repairs (addressed in [70]–[75] below).
Charging of levies
[64] Putting increases to cover ground rental to one side, there have been significant increases in the budgeted costs incurred by the Body Corporate between the 2020 and 2024 financial years. The applicants’ expert, Mr Wright, considers these increases are well over and above expected inflationary impacts.
[65] The applicants have raised a particular concern about how utility costs are calculated. While this is done in accordance with the default statutory provisions (in proportion to the unit owner’s ownership interest), the applicants consider this is not fair when 16 commercial units use significantly more utilities (electricity and gas, rubbish, etc) than the applicants’ residential units. The applicants consider it unfair that they should be subsidising the running costs of the commercial units supporting the Sofitel operation from which they enjoy no benefit. The applicants have attempted to address this by proposing a resolution at the 2022 AGM that all costs attributed to each business should be borne by the hotel operators and not the unit owners. That resolution was not passed. A different proposed solution at the 2023 AGM was for individual utility meters to be installed for the commercial units, with the majority owners responsible for paying those utility charges. This resolution was also voted down.
[66] I accept the first respondent’s submissions that this is not relevant for the application under s 141. The Body Corporate has little to no control over the commercial reality of increases in external costs, and these are not indicative of fault
or Body Corporate dysfunction. Levies are based on the Body Corporate’s annual budget, which is tabled and approved at each AGM. If the minority disagree with any budget item approved by resolution, then the appropriate avenue for challenge is to seek relief under s 210 of the UTA (relief for an unjust or inequitable effect on the minority). The s 210 procedure was adopted successfully in the historic dispute about 24/7 security costs.
[67] Similarly, the method for levying of utilities is the default regime provided for under the UTA. It is open to the applicants to seek a reassessment under s 41 of the UTA if they wish.53 The appointment of an administrator would not change this position.
[68] The applicants have also complained about the on-charging of legal costs by the Body Corporate, including for the proceedings in which the Body Corporate was unsuccessful (i.e. the 24/7 security proceeding in which the Court of Appeal found against the Body Corporate and awarded costs54). On this issue, the first respondent responds that legal costs have been on-charged as required under s 121 of the UTA.
(a)It is mandatory under s 121(2)(a) to apply the operating account levy “in proportion to each unit owner’s utility interest”.
(b)The effect is that unit holders may be required to contribute a proportionate share for the costs of proceedings brought against them unsuccessfully. This has been recognised as inherently unfair.55 To address that problem, it is open to the Court to exercise its costs discretion to rectify any unfairness,56 such as by grossing up an award to reimburse the successful party’s contribution liability.57
53 Unit Titles Act, s 41(5A) provides that a reassessment of the utility interests may be made “by the body corporate on a fair and equitable basis, having regard to the relevant benefits and the costs to units”. Section 41(6) requires special resolution to approve the assignment of utility interests other than on the basis of relative unit value.
54 The award of costs made in favour of the Body Corporate by the High Court was repaid after the decision was set aside by the Court of Appeal in Een v Body Corporate 384911, above n 1.
55 Body Corporate 198900 Ltd v Bhana Investments Ltd [2015] NZHC 2787 at [13], referencing
Tremont Holdings Ltd v Body Corporate 401803 [2015] NZCA 314 (2015) 16 NZCPR 509 at [25].
56 Under r 14.1 of the High Court Rules 2016.
57 Body Corporate 198900 Ltd v Bhana Investments Ltd, above n 55, at [13] and [14], referencing
Tremont Holdings Ltd v Body Corporate 401803 , above n 55, at [25].
(c)The jurisdiction under s 127 of the UTA is narrow,58 namely the jurisdiction to charge an expense to a wilful or negligent unit owner (or his or her tenant, lessee, licensee, or invitee) for their breach of the Act, rules or regulations. That is inapplicable on the facts.
[69] I accept that these cost issues were open to being addressed at the time. There is no residual jurisdiction to revisit those issues now. Such cost arguments are irrelevant for the purposes of the present application seeking the appointment of an administrator.
Repair and maintenance issues
[70] The applicants refer to two significant issues concerning the state of repair and maintenance of the Complex and a lack of transparency in the Body Corporate’s explanations.
[71] The first relates to the air conditioning units (or “chillers”). The chillers are covered in the LTMP, which allocated $387,600 to their replacement. At the 2023 AGM, it was resolved that a sub-committee was to review the proposals for upgrading the chillers and would pass on its recommendations at an EGM.
[72] The Body Corporate scheduled an EGM to discuss the chillers on 2 July 2024. This first attempt to convene an EGM was abandoned when there were problems with the readability of notice attachments. On 11 July 2024, a further EGM was convened to consider and vote on the proposed replacement of the chillers. However, at the EGM, it was disclosed that the Body Corporate would need to raise a new levy to pay for the replacement chillers, due to there being insufficient funds in the LTMF. As this had not been proposed in the materials notifying of the meeting, a further EGM would have been required to address this. The minority owners object to a new levy being issued to cover the costs of the replacement of the chillers, because their position is that funds should already be set aside and available in the LTMF for this planned repair
58 At [15]; and Hart v Body Corporate 180455 HC Auckland CIV-2005-404-1429, 23 June 2005 at [28], in respect of s 34 of the Unit Titles Act 1972, being similar to s 127 of the Unit Titles Act 2010.
and maintenance work. Given the impasse on this issue, no further steps have been taken to progress approval of a new levy to complete this work.
[73] The second issue is one of water ingression in the basement due to a crack in the seawall.
(a)A problem of this nature was identified in 2012.
(b)At an AGM on 23 June 2016, Mr Hong gave a report about the water ingression issue, including reference to various consultancy/technical reports that suggested remedial costs would be in the order of
$1-2 million. The reason for this was that the water may have rusted steel in the floors and walls. As these are structural elements, it was essential to address the issue as soon as possible.
(c)At the AGM that took place on 14 November 2019, these water ingress issues were discussed under “other general business”. At that stage, the estimated remedial cost to address the waterproofing issue in the basement was $604,000 plus GST. A property consultancy firm called AS Jacobs prepared reports dated November 2018 and May 2019 to update the Body Corporate on investigations carried out in relation to the water ingress problems and recommending next steps required to facilitate remedial repairs. This proposed the preparation of a scope of works and identifying a suitable contractor to price and undertake the remedial repairs.
(d)The minutes of the AGM held on 7 July 2021 record that, after an engineer’s report had been obtained some years ago on repairing the seawall, estimated cost ran into several hundreds of thousands of dollars which the Body Corporate could not fund. Now that the Body Corporate was in a better financial position, an updated engineer’s report would be obtained for the damage and the recommended remedial strategy and cost.
(e)At the AGM on 28 July 2022, the chairperson’s report refers to water ingression resulting in damage to the basement. It states that at some stage the basement wall must be demolished, and the rusted pipes replaced, but there is no point in doing any work on the wall at this stage until the overall water ingression problem has been properly rectified. It says the Body Corporate is endeavouring to comply with the LTMP, but there are difficulties getting contractors and service providers to carry out the LTMP work, even to the extent that many of them will only provide proposals for the work if the Body Corporate pays for the proposal, whether or not it is accepted.
[74] The applicants rely on the above material to substantiate their concern that there are expensive repairs that still need to be made to the seawall and basement structure, but these repairs have not been done and are not presently funded. They are concerned that this raises risks of structural collapse and danger to the public.
[75] In response to these issues, the first respondent simply says that all “necessary” repairs have been carried out. This includes sewage/wastewater work done in 2022 of around $50,000, and $30,000 for different work on the seawall (as approved by members in a postal vote), which is almost complete. The Body Corporate’s response is vague as to whether the larger concerns discussed in the AGMs from 2016 to 2022 remain but are unaddressed for financial reasons. Counsel for the first respondent could not elaborate on this when questioned at the hearing. I accept the applicants’ concerns that this lack of transparency is unacceptable for issues that are potentially serious.
Other concerns
[76]The applicants also raised concerns about:
(a)the even-handedness of access to and use of common property;
(b)the slow removal of Sofitel signage on an area of common property, prohibited in para 7 of the Body Corporate rules; and
(c)the inability of minority owners to use service lifts that are only accessible from units owned by the CP Group.
[77] I do not regard any of those matters as demonstrating dysfunction or justifying the appointment of an administrator.
Conclusion
[78] In summary, many of the applicants’ complaints do not justify appointing an administrator. Although there is an ongoing clash of views, the provisions of the UTA are designed to deal with those issues in a democratic way. Non-delegation to the Committee does not itself mean dysfunction.
[79] However, in my view the concerns about potential unlawful use of the LTMF and related shortfalls for required repair and maintenance warrant the appointment of an administrator. Conflict of interest issues arise with any potential criticism of these LTMF payment decisions, which exacerbate existing levels of distrust between the two groups. The appointment of an administrator will ensure that these issues are reviewed independently with the appropriate level of scrutiny and expertise, and the Body Corporate is put back on track in terms of its funding and carrying out repairs and maintenance in a timely way.
Administrator selection and duration
[80] The Body Corporate proposes a different administrator on the grounds that he has more experience in Body Corporate matters and a lower charge-out rate.
[81] I accept that the applicants’ proposed administrators have suitable body corporate expertise, with their most recent appointment involving managing a body corporate’s funds; working with the owners, the body corporate chair and/or committee, and the body corporate administration company; and monitoring the collection of operational and special levies. They also have a wealth of experience in similar types of appointment, but in the context of restructuring, turn around and insolvency assignments. They have all the appropriate skills and experience to perform the role, as does Mr McCullagh.
[82] While the charge out rate of Mr Webb and Mr Campbell would be higher than Mr McCullagh’s (the first respondent’s proposed alternative), they intend to delegate to supervised team members with lower charge out rates where appropriate. Also, higher charge out rates do not necessarily correlate with higher overall costs since efficiency is also a factor.
[83] In my view, the most important consideration in this case is that the applicants have confidence in the administrators, given they are the ones at an information disadvantage. This justifies Mr Webb and Mr Campbell’s appointments, unless other factors undermine their suitability. I find that the first respondent’s arguments about body corporate experience and charge out rates do not meet that threshold.
[84] The Body Corporate says the term of appointment should be six months and not one year. I accept that this should be sufficient time to undertake their initial investigations and put fthe body corporate back on track in terms of its funding and carrying out repairs and maintenance in a timely way. This may not be enough time to complete enforcement actions or specific repair and maintenance work, but within a six-month period an assessment can be made whether an extension is necessary.
Result
[85]I make orders:
(a)appointing David Sean Webb and Robert Edward Campbell as administrators to the first respondent, Body Corporate 384911 (the Body Corporate) for a period of six months from the date of these orders;
(b)that the administrators’ charge out rates as set out in Mr Webb’s affidavit dated 22 March 2024 are approved;
(c)that the administrators’ renumeration and expenses are to be met out of the Body Corporate’s operating account;
(d)that the administrators, to the exclusion of the Body Corporate and the Body Corporate Committee (the Committee), have and may exercise the powers of the Body Corporate and the Committee available under the Unit Titles Act 2010, the Unit Titles Regulations 2011 and the Body Corporate operational rules (including, but not limited to, the power to control the Body Corporate’s bank account(s)), and are subject to the duties of the Body Corporate and the Committee;
(e)that the administrators may, in writing, delegate any of the powers vested in them and may revoke any delegation at any time;
(f)that the administrators are to issue a report to the owners four weeks prior to the end of their six-month appointment, summarising their findings and recommendations about the LTMF and LTMP, outstanding levies and progress with debt collection, the situation with repairs and maintenance, and any other matters they consider appropriate arising from their appointment and investigations; and
(g)leave is reserved for the applicants to apply to extend David Sean Webb and Robert Edward Campbell’s period of appointment under these orders, or to seek further directions.
[86] A copy of the sealed orders should be lodged with the Registrar General of Land and served on all those having a registered interest in any unit in Deposited Plan 384911. If directions for service are necessary, then these should be sought separately.
O’Gorman J
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