Maiden v Body Corporate 46112 - [2018] NZHC 1219

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2017-485-960

[2018] NZHC 1219

IN THE MATTER of an originating application to appoint an administrator

UNDER

section 141 of the Unit Titles Act 2010

BETWEEN

KELLY ROCHELLE MAIDEN

First applicant

PHIL JOHN JAMESON AND XIAO HUA XU
Second Applicants

GAEL MARIA BAGSHAW AND WILLIAM LESLIE CAMERON BRIERLEY

Third Applicants

SAMUEL DENNIS MARMENT AND ERIC ELMER NEMRAVA

Fourth Applicants

COLIN STEVEN MARSHALL
Fifth Applicant

AND

BODY CORPORATE 46112

First Respondent

ALAN CLAUDE GREGAN

Second Respondent

Hearing: 22 May 2018

Counsel:

J K Mahuta-Coyle for Applicants A C Gregan in Person

Judgment:

28 May 2018

KELLY ROCHELLE MAIDEN v BODY CORPORATE 46112 [2018] NZHC 1219 [28 May 2018]

JUDGMENT OF THOMAS J

Table of contents

Factual background................................................................................................ [2]
The proceedings..................................................................................................... [25]
Interim appointment............................................................................................ [27]
Report of interim administrator dated 9 April 2018........................................... [35]
Applicants’ position............................................................................................. [41]
Mr Gregan........................................................................................................... [44]

Application for order appointing administrator................................................. [51]

Costs........................................................................................................................ [56]
The law................................................................................................................ [57]
Submissions......................................................................................................... [62]
Costs against both respondents or solely against Mr Gregan?.......................... [69]
Level of costs....................................................................................................... [79]
Result...................................................................................................................... [85]

[1] The FIVE-O Apartments in Buckley Road, Wellington is a unit title development in respect of which little or no maintenance has taken place since its development around 40 years ago. Building works to the common property and building elements of the three buildings owned by the Body Corporate is now critical. The Body Corporate is, however, dysfunctional. There is no Body Corporate committee. No annual general meeting (AGM) has been held since 2014 and there is no operative governance structure. An administrator was appointed on an interim basis in March 2018. This decision confirms the appointment of an administrator for a 12 month period. It also addresses the costs of these proceedings.

Factual background

[2] There are two issues before the Court, that is the appointment of an administrator and costs on an increased basis which the applicants seek against the second respondent, Alan Gregan. In order to deal with them both, it is necessary to traverse the troubled background of the relationships between the parties in some detail.

[3] FIVE-O Apartments comprises nine principal units and a number of accessory units. There are two blocks of apartments comprising Units A–H. The applicants own

Units A, B, C, E and H. Mr Gregan owns Units D, F and G, and Unit I. Unit I, somewhat strangely, is part of the unit title development but is a stand-alone house, physically separated by some distance from the apartment blocks. Although the applicants comprise the majority of owners, Mr Gregan holds 59.9 per cent of the unit entitlement.

[4] Mr Gregan’s family undertook the original development, a factor which might well have contributed to the current problems.

[5] Because of the somewhat anomalous makeup of the unit title development, the Body Corporate’s decision-making up until 2010 tended to concern Units A–H only. Mr Gregan separately insured and maintained Unit I.

[6] The last time any determinative governance action…

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: [2018] NZHC 1219
Decision Date: 28 May 2018

CaseChat Overview and Summary

In the matter of an originating application to appoint an administrator under section 141 of the Unit Titles Act 2010, the applicants, who own the majority of units in the FIVE-O Apartments, sought the appointment of an administrator due to the Body Corporate's dysfunctionality and failure to carry out necessary maintenance works. The second respondent, Alan Gregan, who owned 59.9% of the unit entitlement, was accused of obstructing the Body Corporate's governance and preventing the necessary repairs from being carried out. The court was required to decide whether an administrator should be appointed and, if so, for how long, and whether costs should be awarded against the respondents on an increased basis. The court found that the Body Corporate was indeed dysfunctional and that the appointment of an administrator was necessary to ensure the maintenance works could be carried out. The court granted the application for the appointment of an administrator for a fixed term of 12 months and ordered that costs be awarded against the second respondent on a category 2B basis with a 50% uplift. The court found that Mr Gregan's behaviour had contributed to the Body Corporate's dysfunction and failure to comply with its statutory obligations, and that he had failed to comply with court directions and behaved in a way that compelled the applicants to apply for the interim orders.

Orders