Knight v Body Corporate 81340 - [2020] NZHC 1111

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2020-485-18

[2020] NZHC 1111

BETWEEN
ZENA RENEE KNIGHT

First Appellant

TENUS LIMITED
Second Appellant

AND

BODY CORPORATE 81340

Respondent

Hearing: 11 May 2020

Appearances:

N Dunning for the Appellants

A J Knowsley and B R J Ruback for the Respondent

Judgment:

25 May 2020

JUDGMENT OF CULL J

[1] This is an appeal from a summary judgment in the District Court where judgment was entered against the appellants for two Body Corporate special levies imposed in 2015 and 2016. 1 The appellants are the owners of a unit in an apartment complex known as “the Links”.

[2] The Links is a 14-storey unit title complex, which suffers from weathertightness issues. From around 2010, the Body Corporate has attempted to deal with these issues. The complex is owned by the Body Corporate and the owners of its constituent units under the Unit Titles Act 2010 (the Act). For the relevant dates, the first appellant, Ms Knight, was either jointly (with Ms Pethybridge) or solely the

1 Body Corporate 81340 v Knight [2019] NZDC 24452 (Decision Under Appeal).

KNIGHT v BODY CORPORATE 81340 [2020] NZHC 1111 [25 May 2020].

owner of unit 5D and its associated accessory units.2 In December 2018, Ms Knight transferred ownership of unit 5D to Tenus Ltd, the second appellant. Ms Knight is the sole director and shareholder of that company.

[3] The District Court summary judgment concerned two Body Corporate levies which were imposed on the owners of unit titles at two extraordinary general meetings of the Body Corporate in 2015 and 2016. The levies are special levies, raised to fund building repairs, remediation and construction in the Links. These special levies have been held in an earlier decision by the District Court to be arguably invalid.3 In the decision under appeal, the Judge held that the Body Corporate’s Scheme, as approved by this Court under s 74 of the Act,4 was intended to retrospectively validate these remediation-related levies.5 Accordingly, he granted the summary judgment.

[4] The appellants contend that the approved Scheme was not intended to retrospectively validate the special levies and, they say, the levies are not enforceable under the Scheme. They say the grant of summary judgment on that basis therefore is in error.

Background and procedural history

[5] The history and structure of the Links is succinctly described in the judgment of Thomas J, who approved the Body Corporate’s Scheme under s 74 of the Act. It is unnecessary to repeat the detail for this appeal but by way of context, the Links has weathertight issues and leaks. 6 The leaks are through the glazed curtain wall forming the tower faces of the Links, the quality of which is unsuitable, through the decks of the penthouse apartments at least one cause of which was the installation of abseil anchors on the decks which allowed water ingress, and through the level one decks which…

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: [2020] NZHC 1111
Decision Date: 25 May 2020

CaseChat Overview and Summary

Knight and Tenus Ltd, the owners of a unit in the Links apartment complex, appealed against a summary judgment entered in favour of the Body Corporate in the District Court. The Body Corporate had imposed two special levies, in 2015 and 2016, to fund remediation work on the Links. The appellants contended that the levies were invalid and that the approved s 74 Scheme did not retrospectively validate the levies or make them enforceable. They further argued that, in any event, the Body Corporate had no cause of action for the levies. The Body Corporate submitted that the Scheme had retrospective effect and that it had a right to recover the levies, interest, and costs. The High Court considered the arguments and found that the Scheme did retrospectively validate the special levies. The Court held that the levies were authorised by the Scheme and that the Body Corporate was entitled to seek judgment for the unpaid levies. The Court also found that the appellants were liable for interest on the unpaid levies and that the Body Corporate was entitled to recover its costs of collection. The appeal was dismissed and costs were awarded to the Body Corporate.

Orders