Re Body Corporate 44426

[2015] NZHC 3284

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

CIV-2015-441-000062 [2015] NZHC 3284

IN THE MATTER

of the Unit Titles Act 2010

AND

IN THE MATTER

of an application by BODY CORPORATE

44426

Hearing:	18 December 2015
Counsel:	M E M Macfarlane for Applicant
Judgment:	18 December 2015

JUDGMENT OF COLLINS J

Introduction

[1]      This judgment explains why I am granting an application under s 188(2) of the Unit Titles Act 2010 (the Act) to cancel the unit title plan for a complex known as the Phoenix Timeshare Resort in Taupo (the Phoenix Resort).

Phoenix Resort

[2]      The Phoenix Resort comprises 612 unit owners.

[3]      At the body corporate annual general meeting held on 18 April 2015, approximately 90 per cent of the unit owners who voted supported a motion to sell the Phoenix Resort.

[4]      Twenty-four unit holders have not been able to be located.  Every reasonable effort has been made to try and locate those unit owners.  The application has been

publicly advertised.   None of the 24 unit owners who have not been able to be

BODY CORPORATE 44426 [2015] NZHC 3284 [18 December 2015]

located have complied with their obligations under s 85(2) of the Act, which requires unit title owners to notify the body corporate of changes in information about each unit.

[5]      There is now an agreement to sell the Phoenix Resort.   That agreement is subject to the Court granting the application.

Jurisdiction

[6]      Sections 187 and 188 of the Act provide:

187     Application to High Court for order of cancellation of unit plan

(1)      Any 1 or more of the following persons may apply to the High Court for the cancellation of the unit plan:

(a)       the body corporate for the unit title development to which the unit plan relates, after a special resolution to do so; or

(b)      an administrator; or

(c)      1 or more unit owners.

(2)      The applicant must serve a notice of any application made under subsection (1) on—

(a)      every unit owner; and

(b)       if a principal unit in the unit title development is a subsidiary unit title development, the body corporate of that subsidiary unit title development; and

(c)      if the unit title development is a subsidiary unit title development, the body corporate of its parent unit title development; and

(d)       any person having an interest in any easement or covenant of a kind referred to in section 60 or 62; and

(e)       every other person who has a registered interest in, or caveat or notice of claim entered on the register over, any unit, the common property, or the base land; and

(f)       any insurer who has effected insurance on the buildings or other improvements comprised in any unit or on the base land or any part of the base land; and

(g)      the Registrar.

(3)      The Registrar must enter on the supplementary record sheet a notification that the application has been made.

(4)       Any notification entered under subsection (3) must be cancelled by the Registrar if the applicant lodges a notice in the prescribed form with the Registrar that—

(a)      the application to the High Court is not proceeding; or

(b)      the High Court has refused to make the declaration sought.

188     Cancellation of unit plan by High Court

(1)      The persons described in paragraphs (a)  to  (f) of section 187(2)

have the right to appear and be heard.

(2)      The High Court may authorise that the unit plan be cancelled if—

(a)       the High Court is satisfied that it is just and equitable that the  body  corporate  be  dissolved  and  the  plan  cancelled having regard to—

(i)       the rights and interests of any creditor of the body corporate; and

(ii)      the rights and interests of every person who has any interest in any unit or in the base land or in any part of the base land; and

(b)       no principal unit in the unit title development to which the plan relates contains a subsidiary unit title development.

(3)       If the High Court makes a declaration authorising the cancellation of a  unit  plan  under  subsection  (2),  the  High  Court  may  by  order impose any conditions and give any directions as it thinks fit, for the purpose of giving effect to the declaration, including—

(a)       directions  for  the  payment  of  money  by  or  to  the  body corporate; or

(b)      the distribution of the assets of the body corporate; or

(c)       a direction to modify or extinguish, in whole or in part, any registered interest or caveat or notice of claim entered on the register in relation to any unit, the common property, or the base land.

…

Analysis

[7]      All pre-requisites to granting the application set out in s 187 of the Act have been satisfied.

[8]      The ultimate question is whether it is “just and equitable” for me to grant the

application.

[9]      The affidavits in support of the application satisfy me:

(1)       the units are no longer used as frequently as they once were;

(2)there has been a steady increase in the number of unit owners no longer use the units or pay their dues and levies;

(3)the reduction in payment of dues and levies transfers the cost of maintenance and management to fewer active unit owners;

(4)increasingly, unit owners have less contact with the resort and each other;

(5)the  buildings  at  the  Phoenix  Resort  are  aging  and  the  costs  of maintenance are increasing;

(6)       a significant majority of the unit owners wish to sell the Phoenix

Resort and recover their money.

[10]     In the absence of any opposition, and on the basis that I am satisfied that the application is motivated by appropriate reasons, I am satisfied that it is just and equitable for the application to be granted.

Conclusion

[11]     The application is granted in terms of the draft order, which has been filed in support of the application.

D B Collins J

Solicitors:

Sainsbury Logan & Williams, Napier for Applicant