Maiden v Body Corporate 46112 - [2018] NZHC 448

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 448

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: 13 March 2018

Appearances:

J Mahuta-Coyle for the applicants A C Gregan self-represented

Judgment:

14 March 2018

JUDGMENT OF CULL J

MAIDEN v BODY CORPORATE 46112 [2018] NZHC 448 [14 March 2018]

The applicants are five owners of unit titles in the first respondent, Body Corporate 46112 (known as FIVE-O Apartments). They have filed an originating application, seeking the appointment of an administrator to the Body Corporate. A formal proof hearing is set down for 11 April 2018 to determine that application.

[1] Two memoranda of counsel have been filed, seeking respectively an urgent hearing date and the appointment of an interim administrator until 11 April 2018. There was no proof of service of the memorandum being served on Mr Gregan, as second respondent, who is self-represented.

[2] Before hearing the matter I sought confirmation from the applicants’ counsel that the urgent memoranda and submissions had been served on Mr Gregan. I also raised with counsel, that in these circumstances, an urgent interlocutory application should have been filed, rather than a memorandum containing the orders sought. I note the form of the orders was amended by way of submission. An application enables any opposition to be filed formally.

[3] Mr Mahuta-Coyle confirmed that all the documents filed had been sent to Mr Gregan by email, as agreed and directed previously.

[4] The applicants seek urgency because the level of dysfunction within the Body Corporate has increased and has created a more urgent need for the appointment of an administrator.

[5] No submissions were filed by the respondents, but Mr Gregan appeared (with his wife), to oppose the interim appointment.

Factual background

[6] FIVE-O Apartments comprises nine principal units and a number of accessory units. The applicants are each the owner of a single principal unit. Mr Gregan is the owner of the remaining four principal units. Although the applicants comprise the majority of the owners, Mr Gregan possesses 53 per cent of the assigned ownership

interest under the unit plan, with the applicants together possessing the other 47 per cent.

[7] The Body Corporate last held a completed AGM in 2010, after which the then chairperson retired. No AGM was held between 2011 and 2013.

[8] On 9 September 2014, an AGM was held, but abandoned before any formal decisions could be made.

[9] Since 2014, attempts have been made severally by the applicants and Mr Gregan, to convene meetings in order to vote on necessary resolutions,…

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 448
Decision Date: 14 March 2018

CaseChat Overview and Summary

This case involves five owners of unit titles in Body Corporate 46112, also known as FIVE-O Apartments, who have applied to the High Court of New Zealand for the appointment of an administrator to the Body Corporate. The applicants seek the appointment of an administrator due to the dysfunctional state of the Body Corporate, which has no governance structure and has failed to maintain the common property and building elements. The second respondent, Mr Gregan, who owns the remaining four principal units, opposes the application. The primary legal issue before the Court was whether an interim administrator should be appointed to the Body Corporate. The Court found that the current state of affairs of the Body Corporate warranted an interim appointment of an administrator, due to the dysfunctionality, lack of governance structure, and critical need for building works. The Court also noted the importance of the administrator remaining independent and impartial.

In reaching its decision, the Court considered the relevant statutory provisions, including s 141 of the Unit Titles Act 2010, which provides the Court with the discretion to appoint an administrator for an indefinite period or for a fixed period on such terms and conditions as it thinks fit. The Court also referred to relevant case law, including Body Corporate 68792 v Memelink, Melview Viaduct Harbour Ltd (in rec) v Body Corporate 384911, and Low v Body Corporate 384911, which provided guidance on the circumstances in which it would be appropriate to appoint an administrator. The Court found that the current situation within the Body Corporate met the threshold test for the appointment of an administrator.

The Court appointed Mr Paul Crew, of The Body Corp Ltd, as administrator of Body Corporate 46112 on an interim basis. The Court also made orders in relation to the administrator's powers, remuneration, and the timetable for the formal proof hearing. The costs of the application were reserved to be resolved at the formal proof hearing.

This case demonstrates the Court's willingness to appoint an administrator to a dysfunctional Body Corporate, in order to protect the interests of the unit title holders and ensure that necessary building works can be carried out. The Court emphasised the importance of the administrator remaining independent and impartial, in order to provide an objective report to the Court. The case also highlights the importance of proper governance within a Body Corporate, and the consequences that can arise from a lack of governance and communication among the unit title holders.

Orders