Memelink v Body Corporate 68792 - [2021] NZCA 640

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA281/2021
[2021] NZCA 640

BETWEEN	HARRY MEMELINK AND CISCA FORSTER AS TRUSTEES OF THE LINK TRUST NO 1 Appellants
AND	BODY CORPORATE 68792 Respondent

Hearing:	9 November 2021
Court:	Collins, Duffy and Dunningham JJ
Counsel:	D G O Livingston for Appellants A O’Connor for Respondent
Judgment:	2 December 2021 at 9.30 am

JUDGMENT OF THE COURT

AThe appeal is dismissed.
BThe appellants are ordered to pay costs to the respondent for a standard appeal on a Band A basis plus usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Dunningham J)

On 1 March 2016, Mr Harry Memelink, as trustee of a trust which owned six units in a unit title development managed by Body Corporate 68792 (the Body Corporate), filed a claim against four other defendants who had roles in the Body Corporate’s management. He alleged there had been mismanagement by the Body Corporate, in particular, in the use of special levies paid by unit owners. He also claimed that, through a vote taken at an extraordinary general meeting (EGM) which he convened, he was now the chairman of the Body Corporate and should be recognised as such.
The statement of claim has been variously amended since then but, at its heart, it retains a grievance about whether special levies paid to the Body Corporate were properly authorised and used and, if not, whether the unit owners should be reimbursed those sums.
In September 2017 the proceedings were, according to Mr Memelink, placed on hold while the consulting firm Deloitte prepared a report on the disputed levies. In August 2018, shortly before the report was produced, Mr Memelink was adjudicated bankrupt. No steps were taken in these proceedings until 28 September 2020 when Mr Memelink sought to revive them. Shortly afterwards, the Body Corporate, which was now named as the sole defendant, applied to strike the proceedings out for want of prosecution and on the ground they were an abuse of process. The Body Corporate’s application to strike the proceedings out was granted by Cooke J in April 2021.[1]
[1]Memelink v Body Corporate 68792 [2021] NZHC 835.
The current plaintiffs, Mr Memelink and Cisca Forster, in their capacities as trustees of the Link Trust No. 1 (the Trust), which owns approximately half the units in the development, appeal that decision, saying the Judge failed to take into account relevant matters, took account of irrelevant matters, or was plainly wrong when determining the threshold test for dismissing proceedings for want of prosecution had been met.
At issue is whether the Judge erred in exercising his discretion to strike the proceedings out.

Background

All parties acknowledge there is a complex history to this matter. The proceedings have their genesis in complaints raised concerning the amounts levied against the unit titles in a unit title complex located in Lower Hutt. Mr Memelink says there was a decision made by the Body Corporate to build up a…

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: [2021] NZCA 640
Decision Date: 2 December 2021 at 9.30 am

CaseChat Overview and Summary

In this appeal, the Court of Appeal considered the dismissal of proceedings by the High Court against Body Corporate 68792, brought by Mr Harry Memelink and Cisca Forster as trustees of the Link Trust No 1, which own approximately half of the units in a unit title complex located in Lower Hutt. The appeal was dismissed. The Court found that the Judge was correct to conclude there was inexcusable delay, serious prejudice, and that dismissing the claim was in the interests of justice. The Court also noted that the purported allegation of fraud did not add anything to the claim and that the concern that Mr Memelink would be unable to challenge the Body Corporate levies currently owing was misplaced. The appellants were ordered to pay costs to the respondent for a standard appeal on a Band A basis plus usual disbursements.

Orders