BODY CORPORATE 384911 v WONG SUN EEN AND ORS [2022] NZSC 59

BODY CORPORATE 384911 v WONG SUN EEN AND ORS [2022] NZSC 59 [11 May 2022]IN THE SUPREME COURT OF NEW ZEALANDI TE KŌTI MANA NUI O AOTEAROASC 13/2022[2022] NZSC 59BETWEEN BODY CORPORATE 384911ApplicantAND WONG SUN EEN AND ORSRespondentsCourt: O'Regan, Ellen France and Williams JJCounsel: S R Carey for ApplicantP L Rice for RespondentsJudgment: 11 May 2022JUDGMENT OF THE COURTA The application for leave to appeal is dismissed.B The applicant must pay the respondents costs of $2,500.____________________________________________________________________REASONS[1] Body Corporate 384911 applies for leave to appeal against a decision of theCourt of Appeal.1 In that decision, the Court of Appeal allowed an appeal against adecision of the High Court dealing with aspects of a dispute between unit holders in aunit title complex.2[2] The applicant is the Body Corporate for a unit title complex comprising 191units. Sixteen of these are commercial, the remainder are residential. The residential1 Een v Body Corporate 384911 [2021] NZCA 665 (Miller, Katz and Downs JJ) [CA judgment].2 Een v Body Corporate 384911 [2021] NZHC 729 (Gordon J).units are hotel-style rooms rather than apartments. The unit title complex wasdesigned as a hotel and operated as the Westin Hotel for some years.[3] The owners of the majority of the units now operate a Sofitel Hotel from theunits they control, while the units of the respondents (who own 81 of the residentialunits) are not involved in the Sofitel operation.3 The litigation leading to the presentcase is a part of a wider dispute between the owners of the majority of the units andthe respondents.[4] In November 2020, an extraordinary general meeting of the Body Corporatewas convened. Two resolutions were proposed. The first was a special resolution,proposing that the Body Corporate approve the manning of the concierge's desk forsecurity and health and safety reasons. This was to be at the cost of the hotel, not theBody Corporate. This special resolution failed because the respondents voted againstit. The second resolution was an ordinary resolution, which proposed that theBody Corporate be authorised to contract with a security company to provide 24/7security services for the Body Corporate and to levy members for the cost. The secondresolution was passed, but the respondents voted against it.[5] The respondents applied to the High Court for relief under s 210 of theUnit Titles Act 2010, which provides that a person who voted against a resolution mayapply for relief on the grounds that the effect of the resolution would be unjust orinequitable for the minority. The thrust of the minority's argument in the High Courtwas that the cost of security should be borne by the majority's hotel, which is thebeneficiary of that security, rather than by the Body Corporate.[6] In allowing the appeal and upholding the minority's claim, the Court of Appealgave the following reasons:4(a) the minority did not want or need security of this nature (because it wasrequired for the hotel rather than for the whole complex);3 The majority owners were the second to fifth respondents in the Courts below but took no activerole as the Body Corporate's interest and theirs were effectively the same. The minority formerlyowned 85 of the residential units, but four previous members have since sold their units.4 CA judgment, above n 1, at [35].(b) the security would not be needed if there was no hotel at the complex;(c) conventional security for the Body Corporate would cost about $25,000per annum as opposed to $348,000 per annum for hotel security; and(d) the outcome is that the minority are subsidising the cost which wouldordinarily be borne by the hotel to the extent of over $150,000 perannum.[7] The applicant wishes to challenge, if leave to appeal is granted, all of theCourt of Appeal's reasons. For the most part, this involves challenges to essentiallyfactual findings in a case of a unit title complex which is far from typical of suchcomplexes. Counsel for the applicant argues that a matter of general or publicimportance arises because the Court of Appeal decision creates a bad precedent, whichwill apply to the numerous unit title developments in New Zealand.5 In particular, heargues that it is not a proper ground for relief under s 210 that the minority does not"want" something. However, we do not read the Court of Appeal as saying that it is.We consider that the points raised by the proposed appeal are all essentially factualand there is no matter of general or public importance arising. Nor do we considerthere is any risk of a miscarriage of justice, given the limited scope of that concept inthe civil context.6[8] Just prior to the intended delivery of this judgment, the applicant adduced anaffidavit from the chair of the Body Corporate, recounting an incident involvingdisorderly behaviour by guests in rooms belonging to members of the minority thathad occurred after the delivery of the Court of Appeal's judgment. We gave therespondents an opportunity to respond to this and have now received an affidavit inreply. The objective of the applicant's new evidence was to show that the level ofsecurity proposed by the applicant was required. We do not consider that one isolatedincident does this.5 Senior Courts Act 2016, s 74(2)(a).6 Section 74(2)(b); and Junior Farms Ltd v Hampton Securities Ltd (in liq) [2006] NZSC 60,(2006) 18 PRNZ 369.[9] The application for leave to appeal is dismissed. The applicant must pay therespondents costs of $2,500.Solicitors:Edmonds Judd, Te Awamutu for ApplicantHaigh Lyon, Auckland for Respondents