Singh v Body Corporate 207650

[2017] NZHC 2031

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2016-404-2950 [2017] NZHC 2031

BETWEEN

CHERYL SITARA SINGH

First Plaintiff

ESTHA SHAILESHNI SIMPSON and EDWARD CHRIS SYLVESTER CHAN STANLEY SIMPSON

Second Plaintiffs

AND

BODY CORPORATE 207650

Defendant

Hearing:	On the papers
Appearances:	J McBride for Plaintiffs T J G Allan and S F Powrie for Defendant
Judgment:	23 August 2017

JUDGMENT OF LANG J [on costs]

This judgment was delivered by me on 23 August 2017 at 4.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

SINGH v BODY CORPORATE 207650 [2017] NZHC 2031 [23 August 2017]

[1]      This proceeding has now been resolved other than in relation to the issue of costs.  It has been referred to me for determination of that issue on the basis of the submissions filed by counsel.

Background

[2]      The proceeding was filed as a result of issues that arose when the defendant, the body corporate responsible for administering the affairs of the “Richmond Terraces” complex of apartments, was arranging for work to be carried out to the complex to rectify weathertightness issues.  The cost of the work increased markedly from that originally anticipated, and it was necessary for the body corporate to meet the increased cost of repairs by imposing levies on unit owners.

[3]      The first attempt to do this was by way of a resolution passed in June 2015 by the Committee appointed by the body corporate to oversee the repair work.   That resolution was legally ineffective because the Committee did not have power to impose levies.   That power rested in the body corporate by resolution passed at a general meeting.

[4]      The body corporate held an Extraordinary General Meeting on 25 October

2016.   Those present voted in favour of the proposed levies.   The plaintiffs were excluded from voting at this meeting because they had not paid the levies imposed by  the  earlier  resolution  of  the  Committee.    They  filed  this  proceeding  on  15

November 2016 in order to challenge the resolution passed by the Committee and also that passed by the body corporate at the Extraordinary General Meeting on

25 October 2016.  They also sought a declaration that they were entitled to vote at any general meeting of the body corporate.

[5]      The  body  corporate  subsequently  held   another  Extraordinary  General Meeting on 5 December 2016 at which the plaintiffs were permitted to vote.  The unit owners who attended this meeting again approved the imposition of the levies.

The arguments

[6]      The plaintiffs contend that the present proceeding served its purpose because it forced the body corporate to act in accordance with proper procedure.  It says the body corporate erred when it purported to impose levies via the Committee, and then erred again when it prevented them from voting at the first Extraordinary General Meeting.  The plaintiffs say they should receive an award of costs on a Category 2B basis as a result.

[7]      The  body  corporate  disagrees.     It  points  out  that,  even  if  there  were irregularities in respect of the first two meetings, those irregularities were cured by the meeting held on 5 December 2016.   The body corporate also argues that the proceeding was unnecessary and futile because it must have been clear to the plaintiffs that the fact that they could not vote at the meeting on 25 October 2016 was irrelevant to the outcome, because the unit owners present at that meeting voted overwhelmingly in favour of the proposal.  For that reason the plaintiffs submit that it is unlikely the Court would have granted relief even if it held that the first two meetings proceeded on an irregular basis.

Decision

[8]      I uphold the submission for the plaintiffs in part.  They were entitled to seek the Court’s assistance in having the resolution passed by the Committee declared invalid, and they were also entitled to seek a declaration  regarding their voting status.  Both of those claims stood a good chance of success.  I accept, however, that the Court may not have granted any substantive relief in respect of the resolution passed at the Extraordinary General Meeting on 25 October 2016 because it was passed by a wide margin.  For that reason the outcome would have been the same even if the plaintiffs had been entitled to vote against it.

[9]      Taking those factors into account I grant the plaintiffs costs on a category 2B basis but reduced by 50 per cent.  The plaintiffs are also entitled to costs as fixed by the Registrar.

[10]     The issue of costs having been resolved, this proceeding is now at an end.  I

therefore grant leave to the plaintiffs to discontinue the proceeding.

Lang J

Solicitors:

Doug Cowan, Titirangi, Auckland
Grove Darlow & Patners, Auckland

Counsel:

J McBride, Auckland