Re Body Corporate 46051 - [2019] NZHC 922

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE

CIV 2018-441-104

[2019] NZHC 922

IN THE MATTER of the Unit Titles Act 2010

IN THE MATTER

of an application by Body Corporate 46051

Hearing: On Papers

Counsel:

M Macfarlane for Applicant

Judgment:

30 April 2019

JUDGMENT OF ELLIS J

[1] Body Corporate 46051 is the Body Corporate of a unit titled property known as the Village Resort, in Taupo (the Resort). The Resort consists of 22 units which are leased for 51 weeks of the year to individual timeshare week owners (the owners). Some owners are entitled to occupy their unit for a fixed week each year. Others own a “floating”, or changeable, week. Some own more than one week.

[2] The Body Corporate has applied under s 187 of the Unit Titles Act 2010 (the Act) to cancel the unit plan with a view to selling the property (land, building and chattels) on the open market, and dissolving the Body Corporate. Ancillary directions are also sought. The Body Corporate says a sale is desirable because many owners have formed the view that the annual cost of their timeshare weeks outweigh the benefits of ownership. Some no longer have the need for timeshare accommodation and others can no longer afford to pay the annual maintenance fees. Some owners cannot be contacted at all. The costs of maintaining the Resort are only increasing over time, with the result that fees will similarly increase.

BODY CORPORATE 46051 [2019] NZHC 922 [30 April 2019]

[3] The only opposition to the application comes from Mr Keith and Mrs Jean Chapman who, together, are the owners of two floating timeshare weeks.

[4] But before turning to consider the merits of the application, and the Chapmans’ opposition to it, it is necessary to say something about the relevant legal context.

Legal context

[5] Under s 177 of the Act, the Body Corporate can resolve to cancel the plan and apply to the Registrar-General of Land to effect cancellation. The default effect of cancelling a unit plan includes that:1

(a)the fee simple or (as the case may be) the estate as lessee or licensee, vests in the former unit owners in shares proportional to their ownership interests;2

(b)where two or more persons were the owners of any unit, whether as joint tenants or tenants in common, the share in the unit that vests in them under ss 180 or 182, as between themselves, vests in them as joint tenants or as tenants in common as the case may be;3 and

(c)the relevant Body Corporate is dissolved.4

[6] But in more complex cases such as the present, where additional directions are required, cancellation may need first to be authorised by the High Court. Those cases are governed by the application process under ss 187 and 188 of the Act, which relevantly provide that:

1 Unit Titles Act 2010, ss 180 – 182 and 185 [the Act]. Where an application is…

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.

Continue reading Re Body Corporate 46051

Details

AGLC: Re Body Corporate 46051 [2019] NZHC 922
Case: [2019] NZHC 922
Decision Date: 30 April 2019

CaseChat Overview and Summary

Body Corporate 46051 applied to the Court for the cancellation of the unit plan for the Village Resort, a unit titled property in Taupo. The application was made after a special resolution was passed to do so. The application was supported by a clear majority of owners. The only opposition came from Mr and Mrs Chapman, who are owners of two floating timeshare weeks. The Court had to consider whether the cancellation of the unit plan and the dissolution of the Body Corporate would be just and equitable, having regard to the rights and interests of all relevant persons. The Court held that the application should be granted and the Chapmans' opposition dismissed. The Court found that the interests of the owners were best served by the sale of the Resort and the cancellation of the unit plan. The Chapmans had not raised any issue that could shift the balance of justice and equity in a way that would militate against the making of the orders sought.

Orders