Kennedy v Body Corporate 82981 - [2025] NZHC 388

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2021-485-000749

[2025] NZHC 388

UNDER the Unit Titles Act 2010

IN THE MATTER OF

Breach of Statutory Duty, Negligence and Nuisance

BETWEEN

CY KENNEDY AND KAJSA KARIN ELEONORA BJORS

Plaintiffs

AND

BODY CORPORATE 82981

First Defendant

NEIL DOUGLAS CHARLES COOPER

Second Defendant

ANTONY VOLPICELLI
Third Defendant

LEIGH FRANCIS BURNEY
Fourth Defendant

DIANE FLORENCE BURNEY

Fifth Defendant

Hearing: 21 October 2024

Counsel:

I J Stephenson for Plaintiffs

N S Wood and J P Papps for Defendants

Judgment:

5 March 2025

JUDGMENT OF LA HOOD J

KENNEDY v BODY CORPORATE 82981 [2025] NZHC 388 [5 March 2025]

Table of Contents

A claim against committee members of a unit title body corporate [1]
Background [7]

Legislative framework [10]

Question 1: Do the plaintiffs have standing to bring, on behalf of the Body Corporate, their cause of action against the second, third, fourth and fifth defendants, including under any exception to the rule in Foss v
Harbottle? [13]

Legislative requirements for providing information to unit owners [15] Decisions of the Body Corporate in relation to these proceedings [22] What are common law derivative actions? [46]

Issue (a): Is a derivative action possible under the Unit Titles Act, and if
so, is this the type of claim for which a derivative action can be brought? [51] Issue (b): What is the test for standing to bring a derivative action?  [65] Other legal issues  [76]
Conclusion on whether a derivative action is available  [84]
Issue (c): Does the plaintiffs’ claim meet the test to bring a derivative
action?  [85]

Do the defendants owe the Body Corporate any actionable duties? [85]
The prospects of establishing the claim of improper purpose [90]

The building manager’s report for the 2017 AGM [106]
Events following the 2017 AGM [109]

Overall assessment of prospects of success [115]
Other factors relevant to standing [120]

Overall conclusion on Question 1 [126]

Q2: Ratification [127]
Costs [128]

A claim against committee members of a unit title body corporate

[1] Cy Kennedy and Kajsa Bjors (the plaintiffs), who are husband and wife, own two of 43 units in a unit title development in the Dominion Building on Victoria Street, Wellington (the Body Corporate). Their claim relates to damage caused to their units from leaks in the roof of the building.

[2] The plaintiffs claim the Body Corporate breached its duty to repair and maintain the roof and not interrupt the plaintiffs’ quiet enjoyment of the units. And that the second, third, fourth and fifth defendants, as members of the Body Corporate Committee (the Body Corporate Committee members), breached duties owed to the plaintiffs and the Body Corporate. They are alleged, among other things, to have used their powers for an improper purpose by suppressing information about the leaks and delaying repair of the leaks to advance their own interests (minimising levies and

maintaining the market value of their properties) to the detriment of the Body Corporate.

[3]…

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.

Keep reading for free

Create a free CaseChat account to read Kennedy v Body Corporate 82981 and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2025] NZHC 388
Decision Date: 5 March 2025

CaseChat Overview and Summary

In the case of Kennedy v Body Corporate 82981, the plaintiffs, Cy Kennedy and Kajsa Bjors, sought to bring a derivative action against the defendants, members of the Body Corporate Committee, alleging breaches of duty in relation to the management and repair of the building's roof. The court had to determine whether the plaintiffs had standing to bring such a derivative action on behalf of the Body Corporate. The court found that derivative actions were likely available under the Unit Titles Act 2010, but the plaintiffs did not have standing to bring the action. The court considered several factors, including the low prospects of success on the aspect of the claim for which a derivative action would generally be available, the lack of wrongdoer control over the Body Corporate's decision not to litigate, the high cost of litigating the claim, and the Body Corporate's low interest in the relief sought. The court concluded that no reasonable independent body corporate would bring the derivative action given these factors. Consequently, the court dismissed the plaintiffs' application to bring a derivative action against the defendants. The court also noted that since the plaintiffs did not have standing, it did not need to address the question of ratification. The defendants were awarded costs on a 2B basis with certification for second counsel.

Orders