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Synergy Enterprises Limited v Memelink

Synergy Enterprises Limited v Memelink

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Case Copied 8 July 2020 36 min read

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IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2017-485-1048

[2020] NZHC 1615

UNDER sections 187 and 188 of the Unit Titles Act 2010 and section 339 of the Property Law Act 2007

IN THE MATTER

of an originating application for order dissolving Body Corporate 68792,

cancellation of the unit plan and sale and division of the underlying title

BETWEEN

SYNERGY ENTERPRISES LIMITED, INTERCHANGE PROPERTIES LIMITED, JAMES AND CAROLINE MCKERNAN

Applicants

AND

HARRY MEMELINK

First Respondent

LYNX TRUSTEES LIMITED
Second Respondent

LUXE ONE LIMITED
Third Respondent

SPIDER PROPERTIES LIMITED

Fourth Respondent

On the papers

Counsel:

S M O’Sullivan for Applicants H Memelink in Person

K Morrison and H L Hui for Second Respondent

Judgment:

8 July 2020

JUDGMENT OF THOMAS J (COSTS)

SYNERGY ENTERPRISES LIMITED v MEMELINK [2020] NZHC 1615 [8 July 2020]

Table of contents

Introduction [1]

Issues [10]

Background [11]

Related Proceedings [24]

The 202 Proceedings [25]

The 962 Proceedings [31]

The 173 Proceedings [34]

Bankruptcy Proceedings [35]

The 315 Proceedings [39]

The 95/162 Proceedings [42]

Does Mr Memelink have the authority to act on behalf of the Trust? [44]

Is Lynx a trustee of the Trust? [48]

Should the Costs Application against Lynx be stayed? [64]

Does Mr Memelink’s bankruptcy affect his role a trustee? [69]
Should costs be awarded to the Trust? [73]

The law [75]

Discussion [77]

Should costs be awarded to the applicants? [92]

The law [93]

Discussion [98]

Result [107]

Introduction

[1] This decision concerns an application for costs by the first respondent, Harry Memelink (the Costs Application), relating to an application (the Substantive Application) seeking orders for the dissolution of Body Corporate 68792 (the Body Corporate), the cancellation of the underlying unit plan and the sale and division of the underlying title.1 The Substantive Application arose from the dysfunction of the Body Corporate of a unit title development on the corner of Wakefield Street and Hutt Road, Wellington which comprises of fourteen2 principal units (the Development).3

1      Unit Titles Act 2010, ss 187 and 188; Property Law Act 2007, s 339.
2      There were initially 16 units. Two were acquired by the Crown pursuant to the Public Works Act 1981.
3      Body Corporate 68792 v Memelink [2020] NZHC 594 at [8].

[2] After almost two years of delays against a backdrop of conflict between members of the Body Corporate, the applicants discontinued the Substantive Application on 30 October 2019.

[3] The applicants, Synergy Enterprises Limited (SEL), Interchange Properties Limited (IPL) and Caroline and James McKernan (the McKernans), all own units in the Development.

[4] Link Trust No 1 (the Trust)4 owns six of the units in the Development.5 Mr Memelink, one of the trustees of the Trust, is the first respondent. Mr Memelink, purportedly on behalf of the Trust, seeks costs against the applicants under r 15.23 of the High Court Rules 2016 (the Rules).

[5] The applicants oppose Mr Memelink’s application for costs and submit that costs should instead be awarded to…

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: [2020] NZHC 1615
Decision Date: 8 July 2020

CaseChat Overview and Summary

This case concerns an application for costs by the first respondent, Harry Memelink, relating to an application seeking orders for the dissolution of Body Corporate 68792, the cancellation of the underlying unit plan and the sale and division of the underlying title. The applicants, Synergy Enterprises Limited, Interchange Properties Limited and Caroline and James McKernan, discontinued the substantive application on 30 October 2019. The applicants opposed Mr Memelink’s application for costs and submitted that costs should instead be awarded to the applicants against Mr Memelink and the “other trustee of Link Trust No 1”, with a “substantial uplift”. The Court found that Mr Memelink did not have the authority to act on behalf of the Trust in seeking costs against the applicants. The Court also found that the Costs Application against Lynx should not be stayed. The Court found that Mr Memelink’s bankruptcy did not affect his role as trustee. The Court found that the Trust was not entitled to any costs or disbursements against the applicants. The Court found that the applicants were not entitled to costs but that costs should lie where they fall.

Orders