Newhaven Waldorf Management Ltd v Allen

JurisdictionNew Zealand
JudgeWoodhouse J
Judgment Date09 November 2015
Neutral Citation[2015] NZHC 2770
Docket NumberCIV-2014-404-678
CourtHigh Court
Date09 November 2015

IN THE MATTER OF the Declaratory Judgments Act 1908

And

IN THE MATTER OF “Newhaven”

Body Corporate 355923 (Kauri), Body Corporate 342656 (Parkside), Body Corporate 346225 (Rimu), and Body Corporate 352635 (Waterview)

BETWEEN
Newhaven Waldorf Management Limited
Plaintiff
and
Geoffrey Robert Allen
First Defendant

[2015] NZHC 2770

CIV-2014-404-678

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

Applications for declarations under the Declaratory Judgments Act 1908 as to the meaning of the encumbrances which were registered over residential properties in an estate known as “Newhaven” — several of the properties were unit tile complexes — said to form part of the “Newhaven Community”, the encumbrances were related to the appearance and upkeep of the units, the ability to call meetings, and a requirement that all owners had to pay for the common facilities and managing — the plaintiff also had the exclusive right to provide the business of renting the owner's property — the definition of “Newhaven” in all of the encumbrances, referred to the units on an attached plan — the plan showed three sections of housing were shaded but one tot the complexes was not shaded — whether, the fourth defendant body corporate was not part of the encumbrance because the complex was not shaded on the plan whereas the others were — whether some provisions in the encumbrances were restraints of trade and unenforceable — whether the covenants in the encumbrances were invalid because they were in conflict with the Unit Titles Act 2010 — whether the body corporate committees were required to provide an up-to-date list of members to the plaintiff at periods of not less than six months

Appearances:

N Campbell QC, M O'Brien, H Macfarlane for the Plaintiff

T Rainey and J Wood for the Defendants

JUDGMENT OF Woodhouse J

Introduction
1

The plaintiff (Waldorf) is the encumbrancee under encumbrances that are registered over 176 residential properties in an estate known as “Newhaven”. The material terms of the encumbrances are identical.

2

The encumbrances include provisions which, amongst other things: create covenants designed to maintain the appearance and condition of each property, with aspects of this subject to direction or approval of Waldorf as encumbrancee; entitle the owners to use recreational facilities owned by Waldorf; entitle Waldorf to levy the owners for the costs of the operating expenses of the recreational facilities and “managing Newhaven”; make provisions for meetings of owners and occupiers of the residential properties, referred to as the “Newhaven Community”; and require establishment of a committee of the members of the Newhaven Community to liaise with the encumbrancee and to attend to other matters.

3

The first defendant, Mr Allen, is one of the owners and is the chairperson of the committee.

4

Disputes have arisen between Waldorf and the committee, and some other owners, as to the meaning of the encumbrances. Waldorf brought this proceeding against Mr Allen seeking declarations under the Declaratory Judgments Act 1908 as to the meaning of the encumbrances.

5

The four second defendants are four Newhaven bodies corporate. The second defendants were joined on an application of Mr Allen.

The issues
6

Waldorf seeks five declarations related to three main issues, all of which concern interpretation of the encumbrances. These issues, in summary, and in the order I will address them, are as follows:

  • (a) The scope of clause 7(i) in relation to the committee's obligations to supply Waldorf with an up-to-date list of members. This issue was

    resolved by agreement reached towards the end of the hearing. The terms of the agreement are recorded below.
  • (b) The scope of Waldorf's power to levy for “managing Newhaven” under clause 7(h).

  • (c) The scope of Waldorf's powers or rights under clause 7(c) of the encumbrance to call a meeting of property owners.

7

The defendants pleaded what are described as five affirmative defences, but only three in the end were advanced. These are as follows:

  • (a) What properties are included in “Newhaven”, and who are the owners and occupiers included in the “Newhaven Community”, being defined terms in the encumbrance? The defendants' essential proposition is that the owners and occupiers of properties in a fifth body corporate, known as Jarrah, are not members of the Newhaven Community.

  • (b) Are there provisions in the encumbrances which are a restraint of trade and, as such, unenforceable?

  • (c) Are the covenants in the encumbrances invalid because they are in conflict with the Unit Titles Act 2010?

8

It will be convenient, and in some ways more appropriate, to consider the three defences before considering the declarations sought by Waldorf which remain in issue.

The agreement on the clause 7(i) issue
9

The fifth declaration sought by Waldorf was that, under clause 7(i), the committee is required to provide an up-to-date list of members to Waldorf at periods of not less than six months.

10

Clause 7(i) provides that:

The Committee will keep a register of all members and any occupants or tenants of the Land together with a contact address for the service of notices. The Convenantor [sic] shall provide all such details to the Committee upon becoming a member of the Newhaven Community and upon any change of the occupancy of the Land. The Committee shall provide an up to date copy of the register of members to the Encumbrancee at intervals of not less than six months. The Encumbrancee shall be entitled to refuse entry to the Encumbrancee's Land to any person not named on the register of members.

11

Mr Campbell QC, in his submissions in reply for Waldorf, in response to a question from me, said that the declaration was sought because of contentions for the defendants, now contained in a statement of defence, and there is practical utility in seeking the declaration because, as a matter of fact, the committee has failed to supply any list, as Mr Allen confirmed. In respect of evidence from Mr Allen that details were not provided by owners, Mr Campbell said that it was not Waldorf's case that the committee was bound to pursue owners, or occupiers, who did not provide information for compilation of an up-to-date register of members and any occupants or tenants. What Waldorf was seeking, and what Mr Campbell submitted Waldorf was entitled to, was provision of whatever particulars the committee had in the register at six monthly intervals. Mr Rainey, counsel for the defendants, intervened at this point, a discussion followed, and this led to the agreement earlier noted.

12

The agreement was as follows:

The defendants agree to a declaration as sought in paragraph (e) of the second amended statement of claim, at page 8. Waldorf accepts that the committee is not required to pursue any owner or occupier who fails to provide information. 1

13

There is a declaration in those terms.

Factual background
14

There was no material dispute about the relevant background facts. To the extent that there were issues of fact I am satisfied these do not bear on the questions

of interpretation which are at the heart of this case. There is the issue raised by the defendants as to whether owners of units in the Jarrah complex are members of the “Newhaven Community”, which is a term defined in the same way in all of the encumbrances. For reasons I will come to I am satisfied that the Jarrah owners are members of the Newhaven Community. The factual narrative that follows proceeds on that basis
15

Properties owned by members of the Newhaven Community are in one of six residential complexes, in a residential development undertaken in South Auckland some years ago. The six complexes have different legal structures and forms of ownership. There are five complexes which are unit title developments, known as Parkside, Waterview, Rimu, Kauri and Jarrah. The first four are the second defendants. Each of these complexes has its own body corporate. There is a total of 164 unit titles in these five complexes. There is a sixth complex, known as Courtside, which consists of 12 fee simple titles. There is, therefore, a total of 176 properties. All the titles, fee simple and unit, are subject to encumbrances in favour of Waldorf.

16

The encumbrances are not registered against the common property of any of the bodies corporate.

17

The encumbrance instrument for the fee simple and unit title properties in the Parkside, Waterview, Rimu, Kauri and Courtside complexes is the same and is conveniently referred to as “the main encumbrance”. The main encumbrance was registered on 22 September 2004 against a single estate in fee simple. The individual fee simple and unit titles in the Parkside, Waterview, Rimu, Kauri and Courtside complexes all derive from that title. The main encumbrance was brought down on to the individual fee simple and unit titles. In consequence the covenants binding on every property are in identical terms.

18

The unit titles in the Jarrah complex have separately numbered encumbrance instruments because separate instruments were registered against the title of each unit after creation. The definition of “Land” in each of these encumbrances therefore differs from the definition of “Land” in the main encumbrance, but this has no bearing on the relevant issues. The relevant provisions of each of the Jarrah encumbrances are identical to those of the main encumbrance.

The encumbrances
19

Each of the 176 properties is subject to a rentcharge, which is contained in the first operative provision of the encumbrances. The defendants expressly acknowledged, in Mr Rainey's submissions, that they “cannot and do not seek to challenge the effectiveness of the rentcharge device”. As Mr Campbell noted...

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