BODY CORPORATE 191652 & ORS v COMOMBIE AND ELDER & ORS [2017] NZHC 1874

BODY CORPORATE 191652 & ORS v COMOMBIE AND ELDER & ORS [2017] NZHC 1874 [8 August 2017]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2017-404-000747[2017] NZHC 1874BETWEEN BODY CORPORATE 191652First ApplicantGEOFFREY ROBERT BONNER andANDREWA MICHELLE SUTHERLANDSecond ApplicantsAND DOMINIQUE JEAN-PAUL COLOMBIEAND CELIA CHRISTINE ELDERFirst RespondentsGRACE GREGORY LTDSecond RespondentALIM MOHAMMED and SAKINABANO MOHAMMEDThird Respondentscont/2Hearing: 8 August 2017Appearances: T M Bates for ApplicantsNo appearance for or on behalf of RespondentsJudgment: 8 August 2017ORAL JUDGMENT OF JAGOSE JSolicitor:Legal Vision, Auckland2/THIRTY SEVEN SOUTH PROPERTIES LTDFourth RespondentBRYDIE CARLOTTE CANHAMFifth RespondentILANA JANE TOBIASSixth RespondentMARTIN DIETER WOODTLISeventh RespondentMATTHEW CAMERON CHILDS and NICHOLAS JOHN BRADSHAWEighth RespondentSUHEI YOSHIDANinth RespondentGREAT EXPECTATIONS INVESTMENTS LTDTenth RespondentJANUARY CEZANNE WICKHAMEleventh RespondentCIRCLE HOLDINGS LIMITEDTwelfth RespondentTAITUA INVESTMENTS LTDThirteenth RespondentRONALD JOHN BURNS BANNERMAN and YVONNE CHRISTINE BANNERMAN and MICHAEL JOHN MILLARDFourteenth RespondentRICHARD JAMES LOWFifteenth RespondentCLUNY INVESTMENTS LTDSixteenth RespondentPAUL DAVID DIMOCK and CATHERINE JAME DIMOCKSeventeen Respondent3/MCLAREN PARK PROPERTIES LtdEighteenth RespondentDEAN BENJAMIN DUNFORDNineteenth RespondentROGER ANTHONY SLEE and JOHN CHARLES KILPATRICKTwentieth RespondentsDIMITAR MIHAJLOVSKITwenty First RespondentGERARD PATRICK HALLTwenty Second RespondentFUNDAMENTALFLEX LTDTwenty Third RespondentCAROLYN ANN ARMSTRONG and ROBERT THOMAS ARMSTRONG and BAY INDEPENDENT TRUSTEES LTDTwenty Fourth RespondentJASON ROBERT DUNNTwenty Fifth RespondentBANK OF NEW ZEALANDTwenty Sixth RespondentANZ BANK NEW ZEALAND LTDTwenty Seventh RespondentWESTPAC NEW ZEALAND LTDTwenty Eighth RespondentASB BANK LTDTwenty Ninth RespondentIAG NEW ZEALAND LTDThirtieth RespondentTHE REGISTRAR GENERAL OF LANDThirty First Respondent[1] The applicants seek orders settling a remediation scheme under s 74 of theUnit Titles Act 2010 (the "Act") for the multi-unit development known as VictoriaPark Terraces on Auckland's Halsey and Dock Streets.[2] The units, which are commercial at ground level and residential above, have serious weathertightness issues. Remedying those requires addressing a complex mix of common and private property within the units. There are also complexities arising from the different construction methods used at ground level and above, and from unit holder and body corporate remedial obligations, including an overlay of territorial authority requirements to address the construction as a whole.[3] The Body Corporate wishes to conduct a complete re-clad of the timber- framed portions of the buildings in a single project, addressing both private and common affected property. Opportunity will be taken at the same time to address discovered passive fire issues. Levies will be differentially raised on commercial and residential unit holders, primarily to reflect the distinct direct repair costs of the two.[4] The Body Corporate engaged advisers to prepare a remediation scheme. Extensive consultation on the proposed scheme has been conducted by the Body Corporate with unit holders, whose support has been strong (although on occasion less than unanimous). The present application has been served on all entitled to service under s 74(6) of the Act, and is not opposed.[5] I include in that service, service on substituted parties. I make the following orders under r 4.56 of the High Court Rules in that respect:(a) striking out the first-named eighth respondent, Suzanne Lorraine Bradshaw, and substituting her with Matthew Cameron Childs; and(b) striking out the twelfth respondent, Donald Alexander Harrison, and substituting him with Circle Holdings Limited.These substituted respondents have filed affidavits confirming their receipt of service in this proceeding.[6] The Court of Appeal has set out a three-step process for considering an application to settle such a scheme.1 In accordance with those steps:(a) I am satisfied Victoria Park Terraces has been damaged. The expert evidence of Peter Stephen Moore, with wide experience in the area of project management of building failures caused by leaky building syndrome, is of "widespread moisture ingress resulting in decay of structural framing elements";(b) I consider a scheme is appropriate in the circumstances to address the construction and levy issues I have identified above. The proposed scheme Mr Bates advises is consistent with others settled in similar circumstances; and(c) I approve the terms of the proposed reinstatement scheme – being necessary, appropriately detailed, providing for a single and universal plan of remedial works, and only significantly departing from the scheme of the Act in the establishment of a levy formula to reflect differential unit holder benefit – as achieving the outcome fairest to all unit holders in the circumstances.[7] I order the settling of the scheme of repairs sought by the applicants.Jagose J1 Tisch v Body Corporate 318596 & Ors [2011] NZCA 420, [2011] 3 NZLR 697 at [35].