St Johns College Trust Board v Body Corporate 187230
[2013] NZHC 2381
•12 September 2013
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2009-404-003025 [2013] NZHC 2381
IN THE MATTER OF 186-202 Queen Street BETWEEN
ST JOHNS COLLEGE TRUST BOARD
Applicant
AND
BODY CORPORATE 187230 and OTHERS
First and Other Respondents
| Hearing: | 10 September 2013 [Telephone Conference and on the Papers] |
Counsel: | B W Morley for the Applicant D R Bigio for the Hayden Tate (Second to Twenty-Fourth, Twenty-Sixth to Thirtieth and Thirty-Second to Thirty-Fourth) Respondents T J G Allan for the Grove Darlow |
Judgment: | 12 September 2013 |
JUDGMENT OF DUFFY J
This judgment was delivered by Justice Duffy on 12 September 2013 at 12.00 pm, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
Counsel: D R Bigio, Auckland Solicitors: Hesketh Henry, Auckland
Grove Darlow and Partners, Auckland
ST JOHNS COLLEGE TRUST BOARD v BODY CORPORATE 187230 and ORS [2013] NZHC 2381
[12 September 2013]
[1] Following the delivery of my judgment in this proceeding (see St Johns College Trust Board v Body Corporate 197230 and Ors [2012] NZHC 827, the parties were given the opportunity to settle on the particular terms of a scheme under s 48 of the Unit Titles Act 1972. The parties have now had a reasonable opportunity to conclude such a scheme.
[2] On 30 August 2013, I issued a Minute in response to memoranda received from the four active groups of participants in this proceeding; they are commonly known as: St Johns College Trust Board, Hayden Tate respondents, Gilbert Walker respondents, and Grove Darlow respondents. It was clear to me from memoranda filed by those parties that whilst there was a substantial measure of agreement on the terms of a s 48 scheme, there were minor outstanding matters in relation to the proposed scheme. I requested they file a joint memorandum identifying the issues that were still in dispute. I also sought confirmation from them that there were no remaining unit holders who were not represented by any of the named groups but who, nonetheless, might be entitled to be heard in the final aspects of settling a s 48 scheme.
[3] The parties provided me with a joint memorandum, dated 6 September 2013, identifying the outstanding matters in dispute, and in that memorandum confirmed that there were no other unit holders that were entitled to be heard. In this regard, I record that those unit holders who have not participated actively through any of the named groups have taken no steps in the proceeding for some time, if at all. Accordingly, I consider that they are now in the position where they must abide the decision of this Court on the outstanding issues.
[4] At a telephone conference on 10 September 2013, I discussed with counsel the competing views regarding the remaining issues in dispute. These issues are:
(a)The wording of Recital E to the proposed scheme; and
(b)The wording of Clause 5.1.
[5] In all other respects, the parties are agreed on the terms of the proposed s 48 scheme. All counsel were of the view that the outstanding issues could be resolved on the papers, insofar as I might choose one of the two competing versions of Recital E and Clause 5.1 for inclusion in the proposed scheme. The parties requested that if I came up with a third alternative that they have an opportunity to comment on it before it was made final, which I considered to be a sensible approach.
[6] As matters have turned out, I find that after carefully considering the competing versions of the proposed clauses, I have reached a view that favours one of those versions. Thus, there is no need for me to consult with the parties.
[7] It is clear from the judgment I issued that I found that the costs of repairing the subject properties should be borne in a way that saw all unit title holders contributing to the repair costs of common property in proportion to their unit entitlement, and all costs of repair of private unit property were to be borne by the affected individual unit holder.
[8] The dispute between the parties appears to concern how that finding is to be expressed in a s 48 scheme.
[9] The St Johns College, Gilbert Walker and Grove Darlow respondents favour a version of Recital E and 5.1 that are set out in memoranda of 2 August 2013 and 20 August 2013.
[10] The Hayden Tate respondents favour a different version of Recital E and Clause 5.1, which is set out in their memoranda dated 9 August 2013 and 27 August 2013.
[11] There was some discussion regarding whether the owners of the upper floors might as between themselves re-apportion the costs, perhaps as a means of avoiding the difficult task of assessing where common property ended and private unit property began. This is referred to in their memorandum of 27 August 2013. However, they have now abandoned that approach. Costs of repairs are, therefore, to be apportioned in accordance with the judgment I delivered in this proceeding.
[12] A key difference between the two versions is that the first version attempts to identify the proportionate split of the repair costs between the repair of common property and private unit property (75 per cent/25 per cent respectively), whereas the second version does not. Each version contemplates that ultimately the split between the two sets of repair costs will be assessed by a quantity surveyor, who will make the final calculations of the repair costs.
[13] The core finding in the judgment I delivered was that costs of repair for common property should be borne in accordance with each unit owner’s unit entitlement. I considered that where private unit property required repair, that should be borne by the particular unit owner. It was always understood that determining how costs would be allocated as between common and unit property might be a difficult task. All the parties are of the view that the task should be undertaken by a quantity surveyor working from plans and specifications for the repairs, those plans having been prepared by the contractor engaged to perform the work.
[14] During the hearing of the proceeding, there was evidence which suggested that the likely split between common property and private unit property repair costs would be approximately 75 per cent towards common property, and 25 per cent towards private unit property. However, that percentage split was never a precise figure; nor did I make any determination in this regard. The inclusion of the anticipated split between each group of repair costs may have been helpful in providing an approximate guide to all the unit owners, but its lack of precision warrants it being excluded from the terms of the scheme. Those who would seek to have it included in the scheme have acknowledged its lack of precision because they have included a proviso that makes it clear that should the quantity surveyor arrive at a different apportionment of costs, this will be what is applied.
[15] I find the version of Recital E and Clause 5.1 of the proposed scheme that is advanced by the Hayden Tate respondents to be preferable. It simply sets out the means by which the costs are to be apportioned. It makes no attempt at anticipating what the apportionment might be. I consider that it presents a clearer, more straightforward version of what Recital E and Clause 5.1 are intended to achieve. It is less likely to lead to confusion and further dispute from disappointed unit holders
who may later find that the split as assessed by the quantity surveyor comes out differently from the anticipated 75 per cent/25 per cent. To leave the matter open with clear directions as to how the apportionment is to be made is, in my view, the better approach. Accordingly, I find that Recital E and Clause 5.1 of the proposed scheme should read as follows:
E.Once work is commenced and internal aspects of the Buildings presently concealed are exposed, further damage may be discovered that requires repair. The term Repairs as defined herein refers to all repairs regardless of the time damage is identified.
5.Cost Allocation:
5.1Costs shall be raised by levying contributes from Owners in the following manner:
a.Costs in relation to Common Property shall be allocated to all Owners in accordance with the Unit Entitlement of their respective Unit;
b.Costs in relation to Unit Property shall be allocated to affected individual Unit Owners;
The allocation of Costs as between Common and Unit Property, and as between owners of affected Units in respect of Unit Property, shall be undertaken by a Quantity Surveyor and shall be based upon the plans and specifications for the Repairs as reviewed and accepted by the Body Corporate’s preferred building contractor for the Repairs.
[16] The finding I have made in respect of Recital E and Clause 5.1 means that the entire proposed s 48 scheme for the subject property can be approved by the Court and put into effect. I order accordingly. For completeness, the copy of the version of the scheme that I have approved is attached to this judgment.
[17] Leave is reserved to the parties to come back to Court on any further matter relating to the implementation of the s 48 scheme, should the need to do so arise.
[18] Leave is reserved to the parties to file memoranda on costs, should any party wish to pursue an award of costs.
Duffy J
Appendix 1
0
1
0