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…

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: [2015] NZHC 3284
Decision Date: 18 December 2015

CaseChat Overview and Summary

This case involves an application by Body Corporate 44426 for the cancellation of the unit title plan for the Phoenix Timeshare Resort in Taupo under the Unit Titles Act 2010. The Phoenix Resort consists of 612 unit owners, with approximately 90% of those who voted at the annual general meeting supporting a motion to sell the resort. Twenty-four unit holders could not be located, and despite reasonable efforts to do so, they have not notified the body corporate of changes in their information as required by the Act. An agreement to sell the resort is in place, contingent upon the court's decision. The application has been publicly advertised, and no objections have been raised.

The legal issues before the court were whether the prerequisites for granting the application under s 187 of the Act had been met and, if so, whether it was just and equitable to grant the application. The court found that all prerequisites were satisfied, including proper notification to all relevant parties. The affidavits provided by the applicant indicated that the resort was no longer used as frequently as it once was, there was a steady increase in unit owners who were not using the units or paying their dues and levies, and the resort's buildings were aging with increasing maintenance costs. A significant majority of the unit owners wished to sell the resort and recover their investments. With no opposition and the application motivated by appropriate reasons, the court found it to be just and equitable to grant the application.

The court granted the application to cancel the unit title plan for the Phoenix Resort, in line with the draft order provided in support of the application. This decision allows the resort to be sold and the unit owners to recover their investments, subject to the terms of the sale agreement. The court's decision was based on the significant majority of unit owners supporting the sale, the aging and costly maintenance of the resort, and the lack of any opposition to the application.

Orders