Young v Body Corporate 85659 - [2018] NZHC 849

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2017-485-698

[2018] NZHC 849

UNDER The Judicial Review Procedure Act 2016 and Part 30 of the High Court Rules 2016, and section 210 of the Unit Titles Act 2010

BETWEEN

LESLIE YOUNG AND SUZANNE LEE YOUNG

Applicants

AND

BODY CORPORATE 85659

Respondent

Hearing: 19 February 2018

Counsel:

E J Watt and D W Ballinger for Applicants A J Knowsley and D Hunt for Respondent

Judgment:

30 April 2018

JUDGMENT OF CHURCHMAN J

Table of Contents

Introduction.......................................................................................................... [1]

Windows............................................................................................................... [9]

The proceedings................................................................................................. [81]

Discussion of legal issues................................................................................... [84]
Unit title ownership  [84]
Rights and responsibilities of unit owners  [89] Financial and property management of a unit title development           [91] First cause of action         [95]
Do the applicants have standing under s 210?  [96] Were the actions of the Body Corporate such as to create an estoppel? [100] Were the resolutions unjust and inequitable?  [109]
Was replacement of the podium floor windows necessary?  [110]
Was the quote excessive?  [117]

YOUNG v BODY CORPORATE 85659 [2018] NZHC 849 [30 April 2018]

Was the Body Corporate under an obligation to (a) get competitive quotes and (b) verify Armstrong Downes’ quote with an independent
quantity surveyor?  [125]
Is s 126 of the UTA applicable?  [134]
Did the Body Corporate consider the counter-proposal?  [140]
Conclusion  [148]

Second cause of action..................................................................................... [149]

Duty to obtain comparative quotes and seek verification of costs                [152]
Delay costs  [153]
Access to the applicants’ units  [155]
The Body Corporate’s motivations in deciding to pass the resolutions         [158]
Third cause of action....................................................................................... [160] Breach of Regulation 17 of the Unit Titles Regulations 2011             [161] Breach of legitimate expectation  [166]
Breach of natural justice  [181]
Improper purpose  [192]
Summary.......................................................................................................... [195]

Introduction

[1] Richard Pearse House (“RPH”) is a building located in Willis Street, Wellington. The lower portion of it, the podium, consisting of street level shops with two floors of accommodation above, dates from the 1960s.

[2] Like many Wellington fringe CBD buildings, it has been “repurposed” over the years.

[3]Initially, the podium accommodated the offices of the Ministry of Transport.

[4] Some 20 years ago, the building underwent a major transformation. A tower block consisting of levels three to eight was added. The building was also unit titled into 100 separate unit titles. Apart from street level retail activity, the rest of the building is used for accommodation purposes. Units in the podium level have, in recent times, predominantly been contracted to a short-stay accommodation operator and the upper levels have mainly been used for longer term accommodation.

[5] This case focuses on issues arising from windows in the building and, in particular, the apportionment of costs incurred by the Body Corporate in addressing problems with the windows.

[6] Both the podium and tower components of RPH contained steel framed windows. The steel framed windows in the podium date from its original construction some 50 years ago and the windows in the tower are…

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: [2018] NZHC 849
Decision Date: 30 April 2018

CaseChat Overview and Summary

Leslie Young and Suzanne Lee Young brought judicial review proceedings against the Body Corporate 85659, the body corporate for the unit title development, Richard Pearse House, which comprises units 1 to 100. The applicants sought relief under s 210 of the Unit Titles Act 2010 and judicial review of the Body Corporate’s resolutions passed on 1 August 2017. They sought a declaration that the resolutions were unjust and inequitable, an order setting aside the resolutions, and an order that the agreement between the Body Corporate and Armstrong Downes was invalid and of no effect. They also sought review of the Body Corporate’s decision to complete the Works. The applicants alleged that the resolutions were unjust and inequitable because they authorised the Body Corporate to enter into an agreement with Armstrong Downes to complete the Works at a cost of $418,760 and the cost of replacing the windows in each podium floor unit was almost identical to the cost of replacing the windows in each upper floor unit. The Body Corporate argued that the resolutions were not unjust and inequitable. The applicants also alleged that the Body Corporate breached Regulation 17 of the Unit Titles Regulations 2011, breached their legitimate expectation, breached natural justice, and acted for an improper purpose. The Body Corporate denied all of these claims. The Court found that the applicants were not eligible to vote against the resolutions and therefore did not have standing to seek relief under s 210 of the UTA. Even if they had been, the resolutions were not unjust or inequitable. The Body Corporate’s decision to pass the resolutions was not in accordance with the statutory purpose of the UTA as it failed to obtain comparative quotes and seek verification of the costs, but this did not result in the resolutions being unjust or inequitable. The Body Corporate did not breach Regulation 17, did not breach the applicants’ legitimate expectation, did not breach natural justice, and did not act for an improper purpose. The proceedings were dismissed and the parties were invited to settle costs between themselves.

Orders