Wheeldon v Body Corporate 342525 - [2017] NZHC 87

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

CIV-2014-488-0122 [2017] NZHC 87

BETWEEN
DEREK PETER WHEELDON AND

CAROL ANN WHEELDON, ANTHONY JOHN BUTCHER AND RUTH BARBARA ROGERS, LARRY LAWRENCE SMALL AND KM TRUSTEE SERVICES LTD, IVOR ANTHONY MILLINGTON AND NEVILLE EADE

Plaintiffs

AND

BODY CORPORATE 342525
Defendant

ROBYN KATHLEEN STENT Counterclaim Defendant

Hearing: 2-6, and 10-11 March 2015

Appearances:

B E Brill for the Plaintiffs
TJG Allan TJP Gavigan for the Defendant

Judgment:

7 February 2017

(FINAL) JUDGMENT OF MUIR J

This judgment was delivered by me on 7 February 2017 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date:………………………….

Counsel/Solicitors:
B E Brill, B E Brill Ltd, Paihia
TJG Allan, Grove Darlow & Partners, Auckland
TJP Gavigan, Grove Darlow & Partners, Auckland

WHEELDON v BODY CORPORATE 342525 [2017] NZHC 87 [7 February 2017]

Introduction

[1] In April 2015 I issued an interim judgment relating to the first cause of action in these proceedings.1 That pleading challenged the vires of the Body Corporate’s intended remediation plan. I found for the defendant and dismissed the claims for declarations and injunctions sought in paras A – E of the plaintiffs’ prayer for relief.2
I did so on the basis that, in my view, the Body Corporate was entitled to proceed with its remediation plan. My decision was upheld by the Court of Appeal.3 An application for leave to appeal to the Supreme Court was declined.4

[2] The interim judgment was released at the defendant’s request, with a view to clearing the way for a timely commencement of the works.5 I also observed:

[24] Moreover if (as I find) the Body Corporate’s intended plans are lawful and if such judgment is either accepted or ultimately upheld on appeal, I consider there to be a high probability that the many subsidiary issues relating to the propriety of individual payments and levies will be self- resolving. For example, if the development is indeed to be fully remediated to current code standards, arguments as to whether existing consultant payments were properly made from what the plaintiffs claim is a long term maintenance fund within the terms of [Unit Titles Act] 2010 (but which the defendant denies was ever constituted as such) are likely to be academic. Likewise, if a comprehensive repair is to take place, there are likely to be higher priorities than whether the procedural requirements associated with an existing levy have been satisfied.

[3] Unfortunately, my assumptions proved optimistic. Further proceedings were filed by the plaintiffs resulting in a second trial in September 2016, my decision in which has now been released.6 Summary judgment proceedings are now before the Court as a result of the refusal of the plaintiffs (and counterclaim defendant) to pay the levies raised for the remediation project (which itself is now complete). Despite the periodic assurances of counsel for the plaintiffs that his clients were substantially
focused on the “big picture” issues – vires in the Wheeldon proceedings and the significance of what…

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 Wheeldon v Body Corporate 342525

Details

AGLC: Wheeldon v Body Corporate 342525 [2017] NZHC 87
Case: [2017] NZHC 87
Decision Date: 7 February 2017

CaseChat Overview and Summary

Derek Peter Wheeldon and Carol Ann Wheeldon, along with other plaintiffs, sued the Body Corporate 342525 in the High Court of New Zealand. The plaintiffs alleged that the Body Corporate had breached its obligations under the Unit Titles Act 2010 by misappropriating funds from the long-term maintenance fund (LTMF). They sought declarations and injunctions, as well as costs. The Body Corporate counterclaimed for payment of a special levy, interest, and costs. The court had to decide whether the Body Corporate had breached s 117 of the Unit Titles Act 2010, whether payments from the LTMF were lawful, and whether the special levy was lawfully raised. The court found that the Body Corporate had not breached s 117 of the Act as it had a special resolution to step outside the regime. The payments from the LTMF were lawful as the Body Corporate had the authority to delegate its powers and duties to the committee, and the committee had the authority to raise and spend levies on consultants and related costs. The court also found that the special levy was lawfully raised as the committee was entitled to reach decisions based on an exchange of views by email, and any procedural irregularity was capable of ratification. The plaintiffs' second cause of action was dismissed, and judgment was given on the counterclaim in favour of the Body Corporate. Costs were awarded to the defendant on a solicitor/client basis.

Orders