BODY CORPORATE 346799 v VARIOUS UNIT OWNERS [2022] NZHC 2039

BODY CORPORATE 346799 v VARIOUS UNIT OWNERS [2022] NZHC 2039IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2012-404-7730[2022] NZHC 2039UNDER The Unit Titles ActBETWEEN BODY CORPORATE 346799ApplicantAND VARIOUS UNIT OWNERSRespondentsHearing: On the papersAppearances: C Baker for Body Corporate 346799T Bates for RespondentsJudgment: 17 August 2022JUDGMENT OF LANG J[on costs]Solicitors:Price Baker Verridge, AucklandTM Bates & Co, Auckland[1] This proceeding involves the Victopia apartment complex, a 14 storey buildingsituated in the central city. Like so many others in this region, the Victopia complexencountered weathertightness issues. In 2013 the body corporate obtained this Court'sapproval under s 74 of the Unit Titles Act 2010 (the Act) to undertake a scheme ofrepairs to address these issues. The estimated cost of repairs subsequently increasedfrom $5 million to $41 million. Not surprisingly, this led to unit owners raisingconcerns about the cost of the remedial project. These intensified as the bodycorporate imposed levies on unit owners to cover the cost of the project.[2] Several unit owners then sought further management and financial informationfrom the body corporate relating to the cost of the remediation. They were not satisfiedwith the body corporate's response. They then filed an application seeking orders thatthe body corporate deliver up four specified classes of information.[3] The application was listed for mention on several occasions as the bodycorporate produced much of the information the unit owners sought. A fixture wasallocated for 28 July 2022. This was ultimately not required as the unit ownerswithdrew their application after having received a considerable amount of informationfrom the body corporate.[4] The parties have been unable to reach agreement regarding costs and I am nowrequired to determine costs on the basis of the submissions the parties have filed.The arguments[5] The body corporate seeks an award of costs because it considers it was thesuccessful party given the unit owners withdrew their application. The body corporatealso explains that it was not a simple process for it to locate and supply the documentsthe unit owners were seeking. It was necessary for the body corporate to engage theassistance of managerial staff to undertake the task. The body corporate says that itwas "an unavoidable fact" that it would take a considerable amount of time to supplyinformation that spanned many years. It says that it has never sought to obfuscate orprevent unit owners from accessing information to satisfy themselves that transactionshave been carried out properly. In addition, the body corporate points out that itsnotice of opposition only objected to two of the classes of information sought by theunit owners. It believes its stance in relation to these categories of information wasultimately accepted by the unit owners.[6] The unit owners say they were the successful party because they obtained mostof the financial information they had sought in their application. The unit owners alsoseek an uplift on scale to reflect the casual approach they say the body corporatedisplayed towards its obligations to provide them with financial information.Decision[7] I consider the most useful authority in the present context to be that of SybeemHoldings Ltd v Body Corporate 187087.1 In that case Associate Judge Matthewsobserved:2Rule 15.23 provides that unless the defendant otherwise agrees or the Courtotherwise orders, a plaintiff who discontinues a proceeding against thedefendant must pay costs to the defendant, up to and including thediscontinuance. It is clear, however, that a different costs outcome may beordered if it is just and equitable to do so. The Court is not to speculate on themerits of a case which it has not heard though in exceptional cases, where themerits are clear, they may influence the Court's costs decision on adiscontinuance. On the other hand, the reasonableness of the stance of bothparties has to be considered. See, generally, Kroma Colour Prints vTridonicatco NZ Ltd (2008) 18 PRNZ 973 and McGechan at paragraph15.23.01.[8] In Sybeem a unit owner in an apartment complex had issued a proceedingseeking financial and management information from the body corporate responsiblefor managing the affairs of the complex. The body corporate ultimately handed overmost of the documentation the applicant sought and the applicant withdrew itsapplication. The applicant obtained an award of costs in its favour.[9] The Associate Judge in Sybeem based his decision on his assessment of thereasonableness of the steps taken by the parties. He considered it was reasonable forthe applicant to bring the proceeding to obtain access to material to which it wasentitled under the Act. Three months had also passed between the original request forthe information and the proceeding being filed. It then took a further period of eight1 Sybeem Holdings Ltd v Body Corporate 187087 HC Auckland CIV-2009-404-7806, 3 May 2011.2 At [9].months for the body corporate to provide the material the applicant sought. The Courtconsidered a more prompt response was required. In addition, the unit owner hadlargely achieved the outcome it sought in the proceeding even though it had also askedthe Court to deal with other issues relating to levies the body corporate had imposedin relation to the plaintiff's unit. The approach taken in Sybeem was subsequentlydiscussed and approved by Associate Judge Osborne in O'Connor v O'Connor.3[10] In the present case I have no doubt that the unit owners were entitled to theinformation they sought under both clause 15 of the scheme of repairs approved bythe Court and under s 132 of the Act. Furthermore, once the unit owners filed theapplication the body corporate provided virtually all the information the unit ownerssought. This process took approximately four months and was not completed until 25July 2022, just three days before the fixture scheduled for 28 July 2022.[11] I accept the unit owners' argument that it should not have been necessary forthem to apply to the Court to obtain the information they sought. The body corporateought to have provided the information earlier than it did. I also note that the bodycorporate initially resisted the application on the basis that it would cost approximately$22,000 plus GST to provide the information the unit owners sought. The unit ownersdid not accept that argument and there is nothing to suggest the body corporate hasbeen obliged to expend that sum to provide the information.[12] Having said that, once the proceeding was issued I consider the body corporateprovided the information within a time frame that was reasonable given the fact that itspanned several years. Taking these factors into account I am satisfied the unit ownersare entitled to an award of costs in their favour but I do not consider there is anyjustification to make an increased award of costs.[13] The unit owners are entitled to a single award of costs against the bodycorporate. Costs are to be calculated on a Category 2B basis. The unit owners arealso entitled to disbursements as fixed by the Registrar.Lang J3 O'Connor v O'Connor HC Dunedin CIV-2010-412-402, 6 October 2011.