Wheeldon and Ors v Body Corporate 342525

JurisdictionNew Zealand
CourtCourt of Appeal
JudgeCourtney J)
Judgment Date07 Jun 2016
Neutral Citation[2016] NZCA 247
Docket NumberCA290/2015

[2016] NZCA 247

IN THE COURT OF APPEAL OF NEW ZEALAND

Court:

Winkelmann, Courtney and Clifford JJ

CA290/2015

BETWEEN
Derek Peter Wheeldon and Carol Ann Wheeldon, Anthony John Butcher and Ruth Barbara Rogers, Larry Lawrence Small and Km Trustee Services Limited, Ivor Anthony Millington And Neville Eade
Appellants
and
Body Corporate 342525
Respondent
Counsel:

C Baker and B E Brill for Appellants

T J G Allan and T J P Gavigan for Respondent

Appeal against a High Court decision which refused to grant declarations and injunctive relief to prevent proposed remedial building work holding that a body corporate's duty to repair under s138(1)(d) Unit Titles Act 2010 (“UTA”) (Body corporate duties of repair and maintenance) prevailed over the obligations of unit owners under s80(1)(g) UTA (responsibilities of owners of principal units — must repair and maintain the unit — the appellant's owned units with weather — tightness issues — the respondent body corporate considered that they were significant issues and proposed substantial remedial work at an estimated cost of about $3,000,000 — the appellants (owners of five of the units) claimed that targeted repairs at less cost would be sufficient — whether s138(1)(d) authorised the respondent body corporate to undertake the work that related to more than one unit — whether a body corporate's duty under s138(1)(d) UTA prevailed over the obligation on unit owners under s80(1)(g) UTA to repair and maintain their units — whether the HC erred in the interpretation of s138(1)(d) UTA (any building elements and infrastructure that relate to or serve more than 1 unit) by reading additional words into the section and by misinterpreting the words “relate to” — whether the respondent's resolution to approve the work was invalid because it had purported to delegate to a consultant, the decision making in relation to the remedial work in breach of s109(2) UTA (body corporate committee must not delegate any of its delegated duties or powers).

The issues were: whether s138(1)(d) UTA authorised the BC to undertake the work that related to more than one unit; whether a body corporate's duty under s138(1)(d) UTA prevailed over the obligation on unit owners under s80(1)(g) UTA to repair and maintain their units; whether the HC erred in the interpretation of s138(1)(d) UTA by reading additional words into the section and by misinterpreting the words “relate to”; and whether the BC had delegated its duties in breach of s109 UTA.

Held: The scheme of the UTA was that the body corporate had the responsibility not only to repair and maintain common property but also to repair and maintain building elements (whether they formed part of the common property or were found within a unit) and infrastructure (again, whether on common property or in an individual unit servicing that unit). While unit owners enjoyed some rights, a right to undertake repairs and maintenance was not among them and the rights conferred by s79(d) UTA (rights of owners of principal units — quiet enjoyment) and s79(e) UTA (may make any alterations, additions, or improvements to his or her unit so long as these are within the unit boundary and did not materially affect any other unit or common property) were limited. The right under s79(e) UTA was also limited as it was subject to s80(1)(h) UTA (notification required to the body corporate) and s80(1)(i) UTA (prohibits any additions or alterations to the unit “that materially affect any other unit or the common property without the written consent of the body corporate”). The unqualified right to improve or alter components only existed in relation to those that did not fall within s138(1)(d) UTA. In all other circumstances, s79(e) UTA effectively excluded any right for a unit owner to alter, add to or improve building elements other than those authorised by the body corporate.

The fact that the words of s138(1)(d) UTA did not exactly mirror the words in s80(1)(a)(ii) UTA did not affect the correct interpretation of the UTA or the comprehensive repair and maintenance obligations the UTA placed on bodies corporate. The provisions performed different functions; the role of s80(1)(a) UTA was not to describe the body corporate's responsibilities but, rather, the circumstances in which the owner of a principal unit must permit entry. The obligation on bodies corporate in relation to building elements that related to more than one unit prevailed and the obligation on unit owners was subordinate to it.

Section 138(1) UTA gave the necessary authority for the BC to undertake the work, as it was work necessary to maintain the “common property”. The work therefore fell within s138(1)(a) UTA. It had not been necessary to read any words into the provision to reach that point.

The engagement of s138(1)(d) UTA did not turn on questions of remoteness or materiality. Building elements, by definition, were necessary to the structural integrity of the building, its exterior aesthetics and the health and safety of its occupants. Whether a building element related to or serveed more than one unit was a question of fact. The appointment by the BC Committee of a lead consultant to manage the building process had not amounted to a delegation of the Committee's powers.

The appeal was dismissed.

  • A The application to adduce fresh evidence is declined.

  • B The appeal is dismissed.

  • C The appellants must pay the respondent costs for a standard appeal on a band A basis and usual disbursements.

JUDGMENT OF THE COURT
REASONS OF THE COURT

(Given by Courtney J)

Courtney J)
Introduction
1

The Bridgewater Bay apartment complex in Paihia has weather-tightness issues. Its Body Corporate considers that they are significant and proposes substantial remedial work at an estimated cost of about $3,000,000. The owners 1 of five of the units do not accept that the water-tightness issues require this response. They say that targeted repairs at less cost would be sufficient. These unit owners applied unsuccessfully for declarations and injunctive relief to prevent the proposed work proceeding. They appeal against Muir J's decision. 2

2

The appeal raises questions about the nature of the scheme provided under the Unit Titles Act 2010 (UTA 2010) for repairs and maintenance. Central to these issues is the interpretation of s 138(1)(d), which confers on bodies corporate the obligation to repair and maintain building elements that relate to more than one unit. The unit owners do not accept that s 138(1)(d) authorises the Body Corporate to undertake the work proposed to wall panel frames that form part of the northern façade of the building, or to the decks at levels two and three. 3 Their central proposition is that they have the primary obligation (and right) to repair and maintain their units, including building elements, such as decks, located within the units. On the appellants' case, the Body Corporate's obligation to repair and maintain building elements is limited to:

  • (a) cases where the unit holder defaults in his or her primary obligation; and

  • (b) cases where repairs and maintenance are required to infrastructure or common property that can only be accessed through another unit holder's unit.

3

The appellants say that if the Body Corporate is to act, it bears the onus of showing that the proposed work is necessary and that it falls within s 138(1)(d).

This Body Corporate has failed to discharge that onus. They also say that the Body Corporate has not been properly authorised by the unit owners to undertake the work.
4

The appellants say that the Judge erred in: 4

  • (a) finding that a body corporate's duty under s 138(1)(d) prevails over the obligation on unit owners under s 80(1)(g) to repair and maintain their units; 5

  • (b) his interpretation of s 138(1)(d) by reading additional words into the section and by misinterpreting the words “relate to”; 6

  • (c) finding that s 138(1)(d) was engaged in relation to the wall panels and the level two and three decks; 7

  • (d) holding that the appellants bore the onus of proving that s 138(1)(d) was not engaged, 8 with the result that the appellants were wrongly precluded from adducing expert evidence;

  • (e) finding that a resolution passed at the emergency general meeting (EGM) on 9 November 2014 was a valid instruction to the Body Corporate Committee to undertake the proposed work; 9 and

  • (f) finding that the proposed work was not a betterment. 10

Background to the proceedings
The building
5

The apartment complex was built in 2003. At ground level, which is level one of the complex, there is a carpark that is common property. There are 10 units on level two, 10 on level three and two on level four. The complex is what is commonly known as a “wedding cake” style, with each floor set back from the one below; the decks of the level two apartments form the roof of the carpark, the decks of the level three apartments form the roofs of the level two apartments, and the decks of the level four apartments form the roofs of the level three apartments.

6

The base of each level is constructed from a single concrete slab. These slabs extend for the whole length and width of the levels and form both the inside floor and the outside deck of each apartment. Each apartment has its own individual deck. The individual tiled decks are separated by vertically-placed concrete block dividing walls erected at intervals along the slab. The tiles were laid over an acoustic cork mat sandwiched between liquid membranes. The membrane did not extend up the inter-tenancy dividing walls. It now appears that the membrane may not have been waterproof, contrary to what was previously thought.

7

The northern façade of the building at levels two and three is almost entirely glazed, save for timber framed “Titan board” panels in 16 of the 20 level two and three units.

8

The storm water reticulation system is largely internal. The level two and three decks...

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4 cases
  • Body Corporate 199380 v Cook and Another
    • New Zealand
    • High Court
    • 30 May 2018
    ...was later merged into an amended s 138(1) by the Unit Titles Amendment Act 2013. The Court of Appeal in Wheeldon v Body Corporate 342525 [2016] NZCA 247, (2016) NZCPR 353 at [42] has confirmed that the obligation on bodies corporate under s 138(1) prevails over the obligation of unit owners......
  • Bathurst Resources Ltd v L&M Coal Holdings Ltd
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    ...on mutuality, in Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] NZSC 5, [2010] 2 NZLR 444 at [30]. 50 Wheeldon v Body Corporate 342525 [2016] NZCA 247, (2016) 17 NZCPR 353 at [95]. 51 Jeremy Finn, Stephen Todd and Matthew Barber Burrows, Finn and Todd on the Law of Contract in New Zealand......
  • Body Corporate S73368 v Rosalind Kay Otway (Now Rosalind Kay Wright) and Olphert Sandford Trustee Service Company Ltd
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    • Court of Appeal
    • 19 December 2018
    ...34 UTA 1972, s 15(1)(f). 35 UTA 2010, s 138(1). 36 Section 5(1), definition of “building elements”. 37 Wheeldon v Body Corporate 342525 [2016] NZCA 247, (2016) 17 NZCPR 353 at [35]. 38 UTA 2010, s 80(1)(a). 39 Sections 80(1)(i) and s 79(e). See also Wheeldon, above n 37, at [37]. 40 (30 Mar......
  • Singh v Boutique Body Corporates Ltd
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    ...(1877) 6 Ch D 70 at 75–76. 38 Wheeldon v Body Corporate 324525 [2015] NZHC 884, (2015) 16 NZCPR 829 at [76], upheld on appeal, [2016] NZCA 247 and [2016] NZSC 125. 39 Body Corporate 324525 v Stent [2017] NZHC 2857 at [183]–[192]. 40 Dental Council of New Zealand v Gibson (2010) 19 NZCPR 900......