WESTWIND PROPERTIES LIMITED v BODY CORPORATE 104724 [2023] NZHC 1767

WESTWIND PROPERTIES LIMITED v BODY CORPORATE 104724 [2023] NZHC 1767 [10 July 2023]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2022-404-2453[2023] NZHC 1767BETWEEN WESTWIND PROPERTIES LIMITEDPlaintiffAND BODY CORPORATE 104724DefendantHearing: 8 June 2023Appearances: K L Wendt for ApplicantC Baker for RespondentJudgment: 10 July 2023JUDGMENT OF ANDERSON JThis judgment was delivered by me on 10 July 2023 at 3.00 pmpursuant to r 11.5 of the High Court Rules 2016.Registrar/Deputy RegistrarSolicitors:Lovegroves Lawyers, AucklandPrice Baker Berridge, AucklandThe application[1] The applicant, Westwind Properties Ltd (Westwind) is one of the owners in acommercial unit title development at 21 Lorien Place, East Tamaki. The respondentis the body corporate for the development (Body Corporate).[2] Westwind was the original developer of the unit title development which nowcomprises two buildings. One building comprises the commercial units owned by sixother unit owners constructed by around 1997 (Units A–I). The other building isWestwind's warehouse building/residential unit that it constructed in around 2004.This later stage of development did not proceed in accordance with the proposed unitdevelopment plan that had been lodged for it under the then Unit Titles Act 1972(UTA 1972).1 No complete unit plan has been deposited.[3] In March 2020, Westwind contracted to sell its interests in the development.The purchaser requires the unit title position to be rectified in order to proceed.Westwind says that the Body Corporate has improperly refused to agree to this.[4] By s 141 of the Unit Titles Act 2010 (UTA 2010) the High Court "may, in itsdiscretion on cause shown" appoint an administrator on the application of any personhaving a registered interest in a unit. Westwind applies for orders appointingTimothy Jones as administrator of the Body Corporate with powers (in substance) toimplement the necessary steps to correct the unit title issues. Westwind has provideddraft terms of the proposed appointment. The Body Corporate opposes theappointment.Statutory context[5] To understand the factual context for the application, it is first necessary todiscuss some aspects of the unit titles regime.[6] The UTA 2010 allows unit title developments to be undertaken on a stagedbasis.2 First, a proposed unit development plan is lodged setting out the proposed1 As amended by the staged development provisions of the Unit Titles Amendment Act 1979.2 Unit Titles Act 2010 (UTA 2010), pt 2, sub-pt 3.principal units, proposed accessory units and common property together with a firststage unit plan.3 As the development progresses, further stage unit plans are depositedwhich show the principal units and accessory units completed to date. With thelodging of a stage unit plan, units that are completed are shown as principal units andowners of those units obtain rights under the UTA 2010 associated with being an ownerof a "principal unit".[7] Each stage unit plan also identifies "future development units" (FDUs).4These are units that are proposed to be developed or subdivided into one or moreprincipal units at a later stage of the development. Although FDUs create titles,5 unlikethe owner of a principal unit, an owner of an FDU is not a member of the bodycorporate except for certain purposes set out in s 76 of the UTA 2010.6 Unlessexpressly stated in the UTA 2010, a body corporate does not owe duties to an ownerof an FDU.7 An FDU, however, is bound by the body corporate operational rules.8[8] Where an FDU is in use as a place of residence or business the owner is "treatedas a member" of the body corporate for certain purposes. This reflects that an FDUowner who has developed the FDU should be subject to certain liabilities such as thepayment of levies9 and also has a legitimate interest in a number of other steps thatmight be undertaken by the body corporate. The owner of an FDU that is in use as aplace of residence or business is treated as a member for the purposes ofredevelopment requiring a new unit plan;10 sale of, or addition to, common property;11and cancellation of a unit plan.123 Sections 24(2)(a) and 25(1).4 Section 24(2)(b) and subss 25(2) and (4).5 Section 27.6 Section 76.7 Section 84(2).8 Section 105(5).9 Sections 40 and 121. By s 122 an owner of an FDU is required to notify the body corporate whenall or any part of it is in use as a place of residence or business or otherwise within 10 workingdays of occupation. As soon as practicable after notice, the body corporate is required to send theowner notice of the amount of levies imposed and how they were calculated10 Section 68 - a special resolution of the Body Corporate is required and owners of units materiallyaffected must consent.11 Sections 56 and 58.12 Section 190. See also ss 177–189.[9] Once all stages of a staged unit title development are complete, the final stepis to lodge a complete unit plan.13 The complete unit plan is required to specify all theunits and common property comprising the development as already erected on theland. Lodging a complete unit plan completes the staged subdivision process andleaves no FDUs remaining. All proposed principal units have been transformed intoprincipal units, and all unit owners are members of the body corporate for all purposes.[10] No stage unit plan and no complete unit plan may be deposited unless acertificate given under s 32(2)(a) includes a statement from the territorial authoritythat the plan is consistent with the proposed unit development plan.14 During a stageddevelopment, the body corporate can make alterations to what is proposed. However,this requires a substituted proposed unit development plan to be deposited which inturn requires a special resolution (75 per cent) of the body corporate15 and a designatedresolution process.16[11] Under the designated resolution process,17 if the special resolution passes, thebody corporate must give notice to all unit owners, and persons with a registeredinterest/caveators or those with a notice of claim over any unit. Any of these personscan then object to the resolution. In that event, within the time period for objection,they must apply for relief with the High Court18 or the notice has no effect. TheHigh Court has power to confirm or can overturn the resolution if satisfied that it isjust and equitable to do so. This process acts as a mechanism for minority or interestedperson relief for certain major decisions affecting the body corporate.[12] For resolutions that are not designated resolutions, s 210 entitles a member ofthe body corporate who has voted against a resolution passed by the body corporate toseek relief from the Court on the grounds that its effect would be "unjust or13 Sections 24(2)(c) and s 25(3).14 Section 25(5).15 Section 30(2).16 Section 30(4).17 Sections 212–216.18 The High Court is the "appropriate decision maker" for title issues under UTA 2010, s 215.inequitable".19 Section 210 will not usually apply to an FDU owner because they arenot usually entitled to vote on a resolution.20[13] The UTA 2010 permits body corporates to allow redevelopment to adjust theboundaries on a unit plan provided the adjustment does not: affect the commonproperty; materially affect the use, enjoyment, or ownership interests of any unit ofwhich the boundary is not being adjusted; or change the number of units.21Redevelopments other than these can also be made but require a new unit plan to bedeposited.22 These more complex redevelopments require a special resolution andengage the designated resolution process. Redevelopments are a mechanism by whichthe UTA 2010 ensures the social and economic sustainability of unit titledevelopments.23 They also provide body corporates with flexibility – providedprocedural requirements set out in the UTA 2010 are met.24 Relevantly for this case,redevelopments include the enlargement of one unit by the amalgamation of that unitwith units with which it shares a boundary.25[14] When the buildings were constructed for the development, the UTA 1972 asamended by the Unit Titles Amendment Act 1979 applied. The then regime had somesignificant differences including that deposit of a new proposed unit development planor a complex redevelopment required unanimity of all unit owners affected by it,although there was provision to apply to force through decisions supported by80 per cent of those entitled to vote.Background facts[15] The current unit plans deposited for the development in 1997 are a substitutedproposed unit development plan and a fifth stage unit plan. Units A–I had been19 The standard is a "high threshold of material unfairness or injustice": Tremont Holdings Ltd vBody Corporate 401803 [2015] NZCA 314, (2015) 16 NZCPR 509 at [19]. The requirement tohave voted against a resolution emphasises that minority relief is concerned with having a decisionset aside and with frustrating the views of the majority, rather than the minority being able to forcethrough an alternative proposal.20 It may be that they are eligible for minority relief when treated as a member of the body corporatefor special resolutions in the matters where they are "treated as members".21 UTA 2010, s 65.22 UTA 2010, s 6.23 See s 3.24 Part 2, sub-pt 10.25 Section 8(1)(b).completed by this time and are shown as principal units. The balance of the site isshown as four proposed principal units, and several proposed accessory units(carparks) with a further accessory unit making up the rest of Westwind's area. Thisreflected the then intention for four commercial units to be constructed on the balanceof the site. There are equivalent FDUs marked on the fifth stage unit plan.[16] Westwind did not complete the development in accordance with the aboveplan. Instead, Westwind's building straddles several of the proposed units noted onthe plan, albeit all within the boundary of the FDUs Westwind owns.[17] The 1997 fifth stage unit plan currently deposited is set out below:[18] Below is the as-built construction as set out in the proposed complete unit plan:[19] Westwind acknowledges that in building as it did, it failed to comply with theUTA 1972 and now does not comply with the UTA 2010. As outlined above, theUTA 2010 requires building in accordance with the deposited proposed unitdevelopment plan. To be compliant, a further substituted proposed unit developmentplan ought to have been lodged prior to construction showing different proposedprincipal units. A revised stage plan ought to have been lodged showing the FDUs ina position reflecting the substituted proposed unit development plan. At the time ofconstruction under the UTA 1972 this would have required unanimous agreement ofthe Body Corporate members, or agreement by 80 per cent and an application forrelief.[20] Westwind contracted to sell its interests in the development by agreement dated5 March 2020. Mr Barwell, Westwind's managing director, says that it is in the contextof issues raised by the purchaser that he appreciated that the steps required back whenthe building was constructed had not been undertaken. It is apparent from materialfrom the property file produced by the Body Corporate that Westwind's consultantshad been conscious of the unit title requirements for the building back in thedevelopment period. Mr Barwell says that he himself was either not aware at the time,or that now some 16 years later he cannot recall whether it was raised. Either way, hesays he never fully grasped the technicalities of the process and Westwind did notinstigate the steps required.[21] To rectify the position, Westwind wants the Body Corporate to now deposit asubstituted proposed unit development plan and a complete unit plan for thedevelopment. The proposed plan substitutes the present configuration with oneproposed principal unit, J1, across all of Westwind's current FDUs. The proposed unitoccupies the same quadrilateral space as Westwind's FDU's in the 1997 plan butcreates one FDU in place of several. No specific carparking units are retained at thetop of the plan. The proposed complete unit plan is included at [18] above.Reassessment of ownership interests is required to be lodged with the new plans.26 Itappears to be common ground that Westwind's proposal would remedy the unit titleposition.[22] In submissions the parties appeared to agree that the deposit of a substitutedproposed unit plan and complete unit plan in these particular circumstances would alsoengage the redevelopment provisions in s 68 of the UTA 2010. The relevantredevelopment is an amalgamation of Westwind's units. I will describe the above stepsas "the redevelopment".[23] The redevelopment requires special resolutions of the Body Corporate andtriggers the designated resolution procedure. Although not discussed in argument,Westwind also wants the Body Corporate to consent to an easement creating a right toconvey water and a right of way in favour of Council over parts of the commonproperty. It appears this is simply a firefighting main and new hydrant connected offthe public water main that was installed some time ago. That is, it is an existing facility26 UTA 2010, s 38.and access is needed for the Council to maintain it.27 This also requires a specialresolution.[24] Westwind's application for appointment of an administrator is to enableimplementation of the above steps in circumstances where it has been endeavouringto obtain the necessary Body Corporate resolutions since 2021.[25] The current owners of the other units are Hitech Systems Ltd (Unit A);B & S Securities Ltd (Units B, C, F and G); Alan Cattle (Unit D); Southern CrossMarine Ltd (Unit E); Ian Steens, Chew Bee Goh and Goh Stevens Trustees Ltd(Unit H); and THR Holdings Ltd (Unit I). The principals of B & S Securities Ltd areSue and Barry Martin. Before the Court was part of the property file for thedevelopment which included the certificates of title as at 11 July 2003. As best as Ican tell from the names on these titles, Alan Cattle has owned his unit since at least2003, with the other unit holders acquiring theirs subsequently.Steps leading to Westwind's application[26] In 2021, Westwind arranged for its lawyers and consultants to prepare thedocumentation to implement the redevelopment and the associated steps at its cost,including paying the Body Corporate's associated legal fees. There was a series ofexchanges between the parties' solicitors, addressing various queries from theBody Corporate with Westwind's solicitors endeavouring to move things along. Byaround the end of July 2021 it appeared that the Body Corporate's solicitors weregoing to move to call an Extraordinary General Meeting (EGM) to vote on the requiredresolutions.[27] At the end of July 2021, a meeting was held of the Body Corporate members.The Body Corporate's solicitors reported back that this was not an EGM to vote butan informal meeting to go over some queries the owners had before they would agreeto vote on any proposal put forward.27 This is the explanation provided by Westwind's solicitors in July 2021 when this aspect wasqueried by the Body Corporate's solicitors. It does not then seem to have been raised in any furthercorrespondence, at least not in any correspondence that was before the Court.[28] In early August 2021, in an exchange between the Body Corporate's solicitorsand the Body Corporate members (ie, not Westwind), the Body Corporate's solicitorsprovided members with an updated reassessment of ownership interests fromWestwind's valuers addressing an issue that had been raised by the Body Corporate.In the covering email, the Body Corporate's solicitors advised that they were alsosatisfied with the answer received to an outstanding surveying query. The emailcontinued:That being the case, before we can return to [Westwind's] lawyers we need toknow what matters the BC wants to bind [Westwind] to as part of anyagreement to consent to the redevelopment proposal. You'll also recall thatthe idea was floated to not proceed on any redevelopment but require[Westwind] to undertake a subdivision to separate from the BC entirely. Asnoted in our last email, this would be a major additional endeavour for[Westwind].We look forward to hearing from the BC regarding the above so we can returnto [Westwind's] lawyers.[29] Sue Martin replied to all (on behalf of B & S Securities) setting out certainconditions it wanted Westwind to meet. These were matters relating to paving,guttering and driveway maintenance, responsibility for keeping a retaining wall ingood order, keeping up with shared costs of maintenance and outstanding levy issues.[30] The email then said:Absolutely NO transactions are to take place unless all conditions are fulfilled.NO exceptions!We welcome any input from other unit owners.[31] The Body Corporate's solicitors responded to all:Once we have a list of outstanding items, we can look at options to bind[Westwind] and future owners to comply.[32] This was forwarded by Ms Martin to Westwind's selling agent.[33] On 17 August 2021, Westwind's solicitors asked for an update on progress withthe Body Corporate. The solicitors responded that:I'm just waiting on confirmation from the owners as to matters they wantattended before they will agree to move forward with the same.[34] On 20 September, the Body Corporate's solicitors advised that followingdiscussion and correspondence with the other owners, the Body Corporate had somesignificant concerns relating to Westwind that they "require to be addressed beforethey would be agreeable to voting in favour of [Westwind's] proposedredevelopment".[35] In summary the matters raised were:(a) An invoice Westwind charged to the Body Corporate for works whichit was said should not be covered by the Body Corporate and requiringthe debt to be cleared.(b) Requiring paving to be undertaken.(c) Maintenance concerns with a retaining wall to be undertaken to theBody Corporate's satisfaction.(d) Issues around rubbish on common property.(e) Requiring consent to a land covenant to address adequate maintenanceof downpipes, guttering and drainage of Unit J1 to bind subsequentowners.(f) That there were concerns as to Westwind's use of certain commonproperty (a driveway) and an asserted lack of trust between Westwindand the other Body Corporate members. Westwind was advised thatthe Body Corporate members required that this common property beconverted to an accessory unit to be owned in equal shares by the otherunit owners to prevent argument as to use by Westwind, but would beagreeable to a right of way easement being granted to Westwind overthat area.[36] On 11 October 2021, the Body Corporate solicitors issued Westwind'ssolicitors an account for $8,305 plus GST and disbursements for work relating to theredevelopment proposal. They noted that there had not been any response to the20 September proposal.[37] A Body Corporate AGM was held on 21 October 2021. Westwind was notrepresented at it. No resolutions to implement the redevelopment were put to themeeting.[38] There followed legal exchanges including without prejudice communications.The open correspondence included a response from Westwind's solicitors to the20 September list of requirements, sent on 26 November 2021 and subsequentexchanges on these. In large part the issues raised were queried or disputed. Therewere also requests by Westwind that an EGM be called for the purposes of consideringthe redevelopment resolutions. Westwind ultimately filed this application inDecember 2022. No EGM had been called to address the resolutions.[39] After the application was filed, in late January 2023, the Body Corporate heldan "emergency" EGM to "bring all owners coordinated, keeping them informed anddiscussing the action plan from [the] Body Corporate's perspective". On 23 May theBody Corporate circulated the redevelopment resolutions for owners to vote on bypostal vote by 26 May 2023, advising that "[i]f you are against the resolution, youshould not sign it or return it". No owners responded so the resolutions did not pass.Submissions for Westwind[40] Westwind says in summary that:(a) The construction of Westwind's building was completed in or about2004 and since then the Body Corporate and other units have notopposed or taken any steps in respect to the structure.(b) There is no material impact or prejudice to other owners by theredevelopment, and the failure to pass the resolutions is improper andin bad faith. Westwind contends that, as a statutory entity, theBody Corporate cannot make decisions irrationally or in bad faith andthat accordingly, an individual owner cannot simply vote (or not vote)on the special resolutions in whatever manner they consider fit.28(c) The Body Corporate has used Westwind's predicament as leverage totry to obtain consent to collateral issues. Westwind suggests that theresult of the vote derives from owners seeking to apply that leverage. Itreflects a relationship breakdown with Mr Barwell, although for someowners it may be due to apathy.[41] Westwind seeks the appointment of an administrator to resolve what itdescribes as the "current impasse".[42] Westwind say there is cause shown to appoint an administrator to implementthe redevelopment. The terms proposed for appointment include the administratorexercising the powers and duties of the Body Corporate to apply for and deposit thesubstituted proposed unit development plan and complete unit plan; to sign thenecessary authority and instruction to grant the easement in favour of Council; anddispensing with the requirement for designated resolutions.Submissions for the Body Corporate[43] On behalf of the Body Corporate, Mr Baker took me through the powers andduties of the body corporate and principal unit owners to submit that within the schemeof the UTA 2010, there is no basis for the Body Corporate owing any duties to anowner of FDUs. In particular, he said that the Body Corporate owes no obligation toWestwind in the present context. He emphasised that Westwind does not have thebenefit of the minority relief regime.[44] Mr Baker submitted that in exercising their right to vote on special resolutions,members of the Body Corporate are not constrained and can act in their own self-interest. He rejects any administrative law type overlay over body corporate decision-making or owner voting as contended for by Westwind.28 Westwind relies on an article relating to the UTA 1972: Thomas Gibbons "Body Corporate Rules:Tensions" (2008) 16 WLR 167.[45] While Mr Baker accepted that the owner of an FDU has standing to make anapplication for appointment of an administrator, he submitted there would be verylimited circumstances in which such an application would have any merit. It wouldbe limited to any of the particular requirements of a Body Corporate vis-a-vis an ownerof an FDU, for example, to lodge any complete unit plan that was in accordance withthe proposed unit development plan.[46] The Body Corporate's submissions emphasised the significance under theUTA 2010 and UTA 1972 of the unit title development proceeding in accordance withthe unit plans as lodged. Mr Baker rejected Westwind's characterisation of the stepsproposed as simply fixing up an administrative matter. Instead, he submitted that it isa matter of substance, underlined by the fact that the redevelopment requires a 75 percent resolution and there is the accompanying designation/objection process. He saidit would be inconsistent with the statutory regime to appoint an administrator toimplement these steps where an owner has proceeded to erect structures on its FDUsother than in accordance with the plan and where the necessary resolution has notpassed. He also referred to the position existing under the previous regime under theUTA 1972 which required unanimous consent.[47] Mr Baker raised that the terms and conditions of appointment of theadministrator proposed by Westwind included a term precluding unit owners andinterested persons from objecting under the designated resolution process. Hesubmitted that if an administrator was appointed, this was not an appropriate orpermissible term.Appointment of administrator[48] Section 141 of the UTA 2010 provides:(1) The body corporate, a creditor of the body corporate, or anyperson having a registered interest in a unit, may apply to theHigh Court for the appointment of an administrator.(3) The High Court may, in its discretion on cause shown, appointan administrator for an indefinite period or for a fixed periodon such terms and conditions as to remuneration or otherwiseas it thinks fit.(5) The administrator, to the exclusion of the body corporate andthe body corporate committee, has and may exercise thepowers of the body corporate and the committee, and issubject to the duties of the body corporate and the committee,or such of those powers and duties as the High Court orders.[49] Westwind has standing to apply as a person with a registered interest in a unit.[50] The jurisdiction to appoint an administrator has been described as "open-textured".29 In Gibson v Body Corporate 384911 Ellis J stated:30 even if an act done or decision taken has the principal purpose or effect offurthering the legitimate interests of the majority, it might nonetheless beimproper if it also causes unnecessary or gratuitous injury to minorityproprietors. (Emphasis added)[51] Ellis J provided a summary of suggested circumstances where cause for theappointment of an administrator may be shown:31(a) the existence of any undemocratic or ultra vires decisions;(b) the existence of any dysfunctionality or deadlock; and(c) the existence of any majority decisions that:(i) have been brought about by the improper influence of a thirdparty; and(ii) deliberately and/or unnecessarily harm the interests of theminority.29 Low v Body Corporate 384911 (2010) 12 NZCPR 142 (HC) at [33].30 Gibson v Body Corporate 384911 [2012] 1 NZLR 84 (HC) at [70].31 At [71].[52] The existence of one or more of these circumstances does not automaticallyrequire the appointment of an administrator and the reasons for their existence and anyalternative remedies is relevant.32 Nor are these matters exhaustive.[53] The Courts have held that "cause" within s 141 has broad application allowinga flexible response which in appropriate circumstances can go beyond misconduct orimpropriety on the part of the body corporate.33 In particular, the Court has said:34 the fact that no legal breaches can be made out does not necessarily requirethat the application to appoint an administrator cannot succeed, given thediscretionary nature of that assessment.[54] The appointment can be on the basis that the administrator takes control of allthe body corporate's affairs or only a particular aspect. Examples of the latter areappointment in relation to remedial work35 and appointment in relation to raising andcollecting levies and payment of ground rental.36AnalysisWestwind's position in the context of the statutory regime[55] The present position is as follows:(a) The unit title development cannot currently proceed to a complete unitplan, being the last stage in the staged subdivision process. That isbecause the unit title development will never be in accordance with theproposed unit development plan lodged for it. The complete unit planneeds to reflect the proposed unit development plan.(b) Westwind acknowledges that its non-compliance with the UTA andimperative to rectify are problems of its own making. Extracts fromthe Council property file shows its consultants knew that a new32 At [72].33 May v Body Corporate 329331 [2019] NZHC 3 at [37].34 Tao v Strata Title Administration Ltd [2016] NZHC 814, (2016) 17 NZCPR 312 at [109].35 May v Body Corporate 329331, above n 33, at [44].36 Whai Rawa Railway Lands LP v Body Corporate 201036 [2021] NZHC 2893, (2021) 22 NZCPR776 at [124].proposed unit development plan would need to be lodged. Mr Barwellsays that he never fully grasped the technicalities of the process.Having said that, Westwind must at least have been aware that it ownsonly FDUs and that it is not a member of the Body Corporate. It willnot have been involved in Body Corporate decision-making andmeetings.(c) As it currently stands, Westwind (and successors) will never be able tobecome the owner of a principal unit and hence will always only be amember of the Body Corporate for limited purposes. It will alwaysremain the owner of FDUs, and the FDUs it owns will not reflect theas-built construction. Any purchaser prepared to acquire its interest inthe development will be in the same position.(d) Conceivably, Westwind or a successor could alter or demolish thepresent building and then rebuild or redevelop four commercial unitsas proposed on the present plan. The unit title development could thenproceed to a complete unit plan. While this possibility is noted in theBody Corporate's notice of opposition as an avenue for Westwind, inoral argument Mr Baker stepped back from suggesting that this is acourse that it is suggesting could or should occur. In answer to aquestion from me as to what the Body Corporate considers Westwindshould do in the position it finds itself in, Mr Baker's proposition waseffectively that Westwind should do whatever it takes to obtain thepositive votes of the Body Corporate members to enable theredevelopment it seeks.(e) Neither party could identify to me any means of correcting the unit planother than through the process proposed. Nor was there a suggestionof an alternative legal route other than through appointment of anadministrator that could be used to implement the redevelopment in theface of the Body Corporate not to agree to it.(f) In the meantime, since Westwind first used its building as a place ofbusiness in or about 2004, it has been paying contributions levied bythe Body Corporate and has been entitled to be treated for limitedpurposes. The parties were unable to tell me the precise basis on whichWestwind's levies were originally set.Should an administrator be appointed?[56] This case does not have parallels with other cases where an administrator hasbeen appointed. However, that of itself should not count against making theappointment. The cases referred to earlier emphasise that the s 141 jurisdiction is abroad one, albeit it is not one to be exercised lightly, and should be exercised on aprincipled basis.[57] On the face of it, it is objectionable to contemplate the appointment of anadministrator to, in substance, rectify the title of an FDU owner who has not built inaccordance with the deposited plans. This is particularly so given the statutory regimeprovides careful special resolution and designated resolution processes to implementchange. It will be rare where the facts of a case would justify overriding that. I agreewith Mr Baker's submission that the necessary deposit of the new plans is not simplyan administrative exercise but a matter of significance.[58] I also accept Mr Baker's submission that the statutory scheme leaves an FDUowner with little status as regards conduct of a body corporate. I have taken this, aswell as the careful staged development and redevelopment schemes of the UTA 2010into account in assessing whether nonetheless this is a situation in which there is"cause" to appoint an administrator.[59] However, I reject that just because the powers and duties of a body corporateare not owed to FDU owners unless expressly provided,37 that appointment cannot beappropriate. As the case law outlined at [48]-[54] confirms, a breach of legal duty isnot a prerequisite for the appointment of an administrator. Rather the focus is on"cause". The UTA 2010 empowers a body corporate to undertake a range of actions37 Section 84(2).that may affect an FDU owner. If these powers are exercised in a manner which, whilenot contrary to a legal duty, give rise to "cause", in my view an administrator can beappointed to exercise any power of the body corporate in appropriate circumstances.38[60] Most of the cases regarding appointment of an administrator involve actions ofa Body Corporate under powers delegated to its Body Corporate Committee. Theprimary "action" of the Body Corporate in this case, or more appropriately "inaction"is that it does not agree to deposit the necessary plans to enable the staged developmentto be completed on the basis of the longstanding as-built position. The decision toagree (or not) is a decision of the Body Corporate that is not delegated to theCommittee. It is a decision of the Body Corporate made through the Body Corporatepassing, or not passing, a special resolution of its members.39[61] The Body Corporate says that this vote by its members is entirely unfettered.There is reference in the relevant texts to the potential application of administrativelaw principles, or fraud on a power as it relates to body corporate conduct.40 Forpresent purposes however I do not need to determine whether conceptually there issuch an administrative overlay or whether fraud on a power is applicable. That isbecause I am entitled to examine the circumstances to decide whether cause can beshown which does not require a breach of legal duty or principle.[62] In assessing whether there is "cause" my enquiry is into the conduct of theBody Corporate's human agents. The Body Corporate decision by special resolutionof its members not to agree to a course of action can constitute cause to appoint anadministrator. In this case the Body Corporate is also acting through its members indealing with the requests by Westwind prior to the resolution.[63] In the present circumstances I have decided that there is cause to appoint anadministrator for the limited purposes of giving effect to the redevelopment. The38 See s 141(5) which gives to the administrator, to the exclusion of the body corporate, all powersof the body corporate and the body corporate committee.39 UTA 2010, s 101(2).40 See D W McMorland and Thomas Gibbon McMorland and Gibbons on Unit Titles and Cross-Leases (2nd ed, LexisNexis, Wellington, 2020) at [14.040] and [14.054]; Rod Thomas BrookersUnit Titles Handbook 2011 (Thomson Reuters, 2011) at 5.1(12)(e). See also Velich v BodyCorporate No 164980 (2005) 5 NZ ConvC 194,138 at [48].combination of the particular circumstances here, have led me to the view that it isappropriate to do so.[64] Westwind's building was constructed in 2004 with no owner raising any issuesregarding construction otherwise in accordance with the plans.41 The owner of Unit Dwas a member while construction occurred. The other unit owners appear to have allacquired their units after the building was constructed and where the proposed unitdevelopment plan did not match the as-built construction. Until Westwind sought torectify the position in the context of a sale, no unit owner raised any issue.[65] In combination with this are the steps taken by the Body Corporate. AlthoughWestwind invites me to find bad faith in the conduct of the other owners, I do not gothat far. However, the exchanges I referred to earlier and the correspondence from theBody Corporate solicitors demonstrate that the other Body Corporate owners haveused Westwind's predicament as a form of leverage to seek to obtain advantagescollateral to issues raised by the changes to the plans and unrelated to the merits of theproposal.42 In doing so the communications and minutes show a co-ordination of theBody Corporate members, with the Body Corporate communicating through itssolicitors with Westwind. While several meetings were called, the Body Corporatedeferred any vote until a postal vote on 26 May 2023 with three days' notice. TheBody Corporate did not agree to deposit the plan.[66] It is correct, as Mr Baker submitted, that there is no visibility into the precisereasons for the resolution failing to pass. However, I infer from the communicationsthat the basis lies primarily in an attempt at leverage, although I accept that apathy bysome cannot be excluded. Either way, in my view the steps taken by the majorityunnecessarily or gratuitously injure Westwind, which has a significant interest inimplementing the redevelopment. The communications in which the Body Corporateset out its collateral requirements, were on behalf of the Body Corporate and itsmembers as a whole, not individual owners. These are actions by the Body Corporatethrough its members.41 Compare Duncan v Taylor (2010) 12 NZCPR 235 (HC) at [28]-[29].42 See [28]-[38] above.[67] Westwind invited me to characterise the present position of the Body Corporateas one of "dysfunction" as to its redevelopment decision-making. I do not accept thatsubmission. It is correct that dysfunction need not relate to the activities of theBody Corporate generally. In Whai Rawa, the Body Corporate was held to bedysfunctional and an administrator was appointed when it deliberately stopped raisinglevies and paying ground rental even though its other activities were unaffected.However, in that case the Court held that the Body Corporate was knowingly in breachof its core statutory function under s 87 of the UTA 2010 to pay the lessor ground rentfrom levies collected. There is no breach of statutory duty here, as Mr Bakeremphasised.[68] I have had regard to whether any prejudice to other owners is caused by whatWestwind proposes. I consider there is no relevant or sufficient prejudice.[69] There is no change in the total overall unit area owned by Westwind. The totalarea is the same as the combined area of the present FDUs. There will be a 12 per centincrease in ownership interest for the combined Unit J1 arising from the newreassessment in comparison to the combined interests for the existing FDUs. This willresult in Westwind or its successor being responsible for a greater share of operationalexpenses, relative to other unit owners, than is presently the case. As theBody Corporate accepted, this is a benefit of what is proposed.[70] Westwind confirmed it has met or will meet all of the costs of theredevelopment process. This includes Westwind meeting the cost of theBody Corporate's legal costs in respect to the redevelopment.[71] The only potential prejudice raised by the Body Corporate was identified forthe first time in submissions in opposition. It was said that the new plan does not allowfor specific accessory units such as carparks at the north of the plan as the depositedplan had done. However, since its construction, Westwind's building appears to havetaken up space at the top of the site where these carparks are in any event. There isavailable space on the site for carparking.[72] It was further said that the change in ownership interests resulting from areassessment means that on becoming a principal member, Westwind's Unit J1 willhave a vote on a poll that in circumstances of a poll would thwart s 211(1) relief soughtby a minority.43 There was an associated issue that passing ordinary resolutions willbe difficult unless a full complement of other owners is present.[73] Again, this had not been raised previously. It is an issue that arises due toreassessment of ownership interests upon the deposit of the new plans. Ownershipinterests are assigned for principal units and accessory units and proposed principalunits and proposed accessory units.44 They are fixed based on the relative marketvalue of the unit in relation to each of the other units.45[74] As Ms Wendt submitted, had the structure been built as proposed under thepresent plans, the four principal units created would command some 30 per cent (4/13)of the vote on a resolution as compared to only one vote (1/13) for the one principalunit that Westwind will now have under the plans proposed to be deposited. Only if aresolution passes can it go to a poll based on ownership interest.46 For any specialresolution, under the present deposited plans (if they proceeded to complete unit plans)Westwind could have blocked the matter going to a poll at all due to its number ofunits.[75] Moreover, ownership interest is calculated dependent on relative marketvalues. The overall area of Westwind's interests is the same as it was under theprevious plans. The reassessment has provided an updated and accurate assessmentof ownership interest replacing an outdated assessment. Notably, Westwind'spercentage of ownership interest may potentially have been higher if four commercialunits had been constructed in accordance with the proposed unit development plan.[76] The ownership reassessment that was undertaken for the plans proposed to belodged was circulated in 2021 and the only issues raised with it then by the43 UTA 2010, s 111(2) provides that where a special resolution is not passed but 65% of eligiblevoters vote in favour of it, an eligible voter who voted for the resolution may apply for relief.44 UTA 2010, s 38(1).45 Section 38(2).46 Sections 97-100.Body Corporate members were addressed at that time by Westwind's valuers. Thevaluers responded that there had been Council-consented alterations to some of theUnits A-I that affected their ownership assessment relativity. I do not consider that onthe information before me there is substance in the issue raised by the Body Corporate.What I can say is that it was only raised at the last minute in submissions rather thanbeing a matter of concern raised in the correspondence.[77] I have considered whether an administrator should be appointed given that thisis a predicament of Westwind's making and when the previous UTA required aunanimous resolution. Mr Barwell was not required to attend for cross-examinationbut I accept his evidence that he had not appreciated that the necessary technicalitieswere not complied with. That being the case, this is not, nor do I infer it to be, a casewhere the owner has sought to manipulate the situation. Nor should it be taken frommy decision to appoint an administrator here that this is a refuge for any defect in unittitle. Rather this is an appointment I am prepared to make on the facts of this case forlimited purposes so that the staged development can be completed.Terms of appointment[78] Appointment of an administrator gives that person the ability to act in place ofthe body corporate. The appointment cannot give the administrator greater powersthan the body corporate. A body corporate cannot dispense with the designatedresolution process. Therefore, I agree with Mr Baker that the terms of appointmentshould not include a term sought by Westwind that would exclude that procedure as itapplies to owners of registered units.[79] The procedure gives owners of registered units in that capacity the right toobject. It is of a different character to the action of the Body Corporate to agree or notagree to do something by resolution, which is an exercise of corporate power. Inprinciple, through the designated resolution procedure, individual members could stillobject to the deposit of the plans and apply to the High Court for relief on the basisthat it is just and equitable. The existence of that procedure is not grounds to refuseto appoint an administrator when the circumstances justify an appointment. Whether,despite this view, there would be a basis for an individual owner to object is not forme to assess.[80] I am satisfied Timothy Jones is an appropriate appointment. The terms ofappointment are set out below.[81] Westwind has been successful, and costs should usually follow the event. Iwould expect costs on a 2B basis to be appropriate. In the event that the parties cannotagree on costs, I direct memoranda for Westwind to be filed within 14 days from thedate of this judgment and from the Body Corporate within another 14 days.Anderson JAppendix – Appointment terms[1] The administrator may exercise all the powers of the Body Corporate to theexclusion of the Body Corporate, Body Corporate Committee for the limited purposesof implementing the steps below, and subject to all the duties of the Body Corporate.[2] The administrator is to minimise administration overheads where practicable,including by delegating the management to the existing persons undertaking thoseday-to-day administrative processes on behalf of the Body Corporate where theadministrator is satisfied it is appropriate to do so.[3] Notwithstanding the ability to delegate, the administrator is to have overallcontrol over any steps required to have the Substituted Proposed Unit Plan andComplete Unit Development Plan (the Plans) deposited.[4] The administrator's powers include the following:(a) Signing the authority and instruction form to grant on behalf of theBody Corporate any easement in favour of Auckland Council overareas A and C necessary for the deposit of the Plans.(b) Signing any application form required by Land InformationNew Zealand (LINZ) on behalf of the Body Corporate for the depositof the Plans.(c) Signing any authority and instruction form on behalf of theBody Corporate necessary for the deposit of the plans with LINZ.(d) Giving such notices and obtaining such consents and certificates as arerequired to comply with the Act for the deposit of the Plans includingthe designated resolution procedure under s 216.(e) Obtaining the consent of mortgagees or encumbrancers (if any).(f) Signing any documents required under the Act necessary to complywith the requirements of the Act for the deposit of the Plans.[5] The administrator is to report back to the Court and the parties regarding theBody Corporate's compliance with its obligations within six months of the date of thisjudgment.[6] The administrator's appointment is to continue until further order of the Courtbut with the parties and the administrator having leave to apply or vary or end theadministration within or after the six month reporting date.[7] The administrator is entitled to be remunerated by the Body Corporate for hisreasonable attendances at a rate of $420 per hour plus GST and reasonabledisbursements.[8] The administrator is to have access to any relevant records.[9] Leave is granted to the administrator to seek directions from the Court relatingto remuneration and any other matters arising from the administration.