BODY CORPORATE NUMBER 203780 v BELL [2020] NZCA 665

BODY CORPORATE NUMBER 203780 v BELL [2020] NZCA 665 [18 December 2020]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA165/2020[2020] NZCA 665BETWEEN BODY CORPORATE NUMBER 203780AppellantAND ROBERT JOHN BELL and JUDITHSYLVIA BELLRespondentHearing: 2 November 2020Court: Goddard, Duffy and Nation JJCounsel: T J G Allan and K M Wakelin for the AppellantT J Herbert for the RespondentJudgment: 18 December 2020 at 3.00 pmJUDGMENT OF THE COURTA The appeal is allowed.B The declaration made in the High Court that the appellant's resolution of9 June 2017 was ultra vires and invalid, and the order quashing thatresolution, are set aside.C The costs order made in the High Court is set aside.D The respondent must pay the appellant costs for a standard appeal ona band A basis, with usual disbursements.____________________________________________________________________REASONS OF THE COURTIntroduction[1] In Kingsland, Auckland, there is a townhouse development that wasconstructed in the mid-1990s. The units are held under unit titles issued pursuant tothe Unit Titles Act 2010 (the Act). The appellant, Body Corporate Number 203780(the Body Corporate), is responsible for the management and administration of thedevelopment in accordance with the Act and the Body Corporate's operational rules.[2] The development is on a sloping site. It comprises a single building withfive contiguous units. Apart from variations due to the sloping site, including entrancestairways of different heights and the presence of vehicle garages beneath several ofthe units, the exterior appearance of the development is that of five otherwise identicalunits with their windows, doors and balconies in the same positions. The balconiesare on the upper level at the front of each unit.[3] At the Body Corporate's Annual General Meeting (AGM) in 2012, referencewas made to a water leak at Unit D in the area of the balcony. After that, problemswith water leaks at the development became progressively worse.[4] In 2014, a licenced building inspector identified that the cladding was in theprocess of failing substantially at all junctions and joins. Water was entering whereverthis was occurring, accelerating cracking and buckling to the cladding and allowingmore water to penetrate. This was resulting in damage to linings, joinery lines andskirting boards in the interior of all units. The balconies were identified as being ina state of disrepair that the building inspector considered was highly likely to causetheir collapse under normal loading conditions.[5] It was recognised by all unit owners that remedial work including recladdingwas required to deal with the design issues with the development. However there weredifferences of view about whether the balconies should be removed or replaced in thecourse of carrying out the remedial work.[6] The balcony of each unit is wholly within the boundary of that unit.The balconies are not common property. Four unit owners want to remove theirbalconies in the course of recladding the units. The respondent (the Bells) want toretain the balcony on their unit. Their ability to do so is not in issue. But the Bellsobject to the balconies being removed from the other units. They want all the balconiesrepaired or rebuilt in order to maintain the appearance of the development as a whole.[7] A quantity surveyor gave uncontested expert evidence that the estimated costof remediating the weathertightness issues associated with removal and restoration ofthe balconies was $223,100 (including GST) per unit. The estimated cost ofremediation with the balconies removed was $185,150 (including GST) per unit.[8] The Body Corporate called expert valuation evidence that removal of a unit'sbalcony would not reduce the value of that unit. The Bells called expert valuationevidence that the value of a unit, if its balcony was removed, would be reduced in theregion of $5,000 to $10,000. The valuers agreed that, if one or more of the balconieswere removed, that would be unlikely to cause a significant change in the value of theunits that retained their balconies, provided the unit(s) where balconies were removedwere altered to cope with that removal in a way which was not "garish".[9] At the Body Corporate's AGM on 9 June 2017, a resolution was passed by fourvotes to one "[t]hat the Body Corporate consents be granted to the units who wouldlike to remove their balconies in the building re-clad subject to a building consentbeing obtained" (the 2017 Resolution).[10] The Bells brought proceedings in the High Court challenging the validity ofthe 2017 Resolution. Their challenge was successful. Davison J made a declarationthat the Body Corporate's 2017 Resolution was ultra vires and invalid.1The Body Corporate appeals from that judgment.[11] In broad terms, the issue before us is whether a body corporate can, by specialresolution, permit one or more unit owners to decide that alterations will be made totheir units in a way that materially alters the exterior appearance of the development,1 Bell v Body Corporate Number 203780 [2020] NZHC 333 [High Court judgment] at [73].in the context of a remedial works project that will be carried out by thebody corporate. We have framed this issue in a way that distinguishes between twodifferent decisions:(a) a decision by the body corporate approving the remedial work that itwill carry out to address the weathertightness defects in thedevelopment; and(b) a decision by the body corporate to allow each unit owner to have thebalcony of their unit removed, if they wish to do so, with that removalto be implemented in the context of the remedial work to be carried outby the body corporate.[12] It is helpful to keep these two matters separate. Some confusion was causedby the way in which the parties ran the two matters together before the High Court andin their submissions in this Court.The statutory framework[13] The purpose of the Act is set out in s 3:3 PurposeThe purpose of this Act is to provide a legal framework for the ownership andmanagement of land and associated buildings and facilities on a socially andeconomically sustainable basis by communities of individual owners and,in particular,—(a) to allow for the subdivision of land and buildings into unit titledevelopments comprising units that are owned in stratum estate infreehold or stratum estate in leasehold or licence by unit owners, andcommon property that is owned by the body corporate on behalf ofthe unit owners; and(b) to create bodies corporate, which comprise all unit owners ina development, to operate and manage unit title developments; and(c) to establish a flexible and responsive regime for the governance ofunit title developments; and(d) to protect the integrity of the development as a whole.[14] A body corporate may do anything authorised by the Act, or by any other Act.2It may do so only for the purpose of performing its duties or exercising its powers.3[15] Sections 79 and 80 are at the heart of this appeal:79 Rights of owners of principal unitsAn owner of a principal unit—(a) has all the rights derived from being registered as the owner of thestratum estate in a unit under this Act:(b) holds a share in the common property in accordance with section54(2):(c) is entitled as a body corporate member to exercise a vote in respect ofhis or her unit, subject to section 96 and any other requirements in theregulations:(d) is entitled to have quiet enjoyment of his or her unit withoutinterruption by other unit owners or occupiers, or the body corporateor its agents, except as authorised by this Act or the regulations:(e) subject to section 80(1)(h) and (i), may make any alterations,additions, or improvements to his or her unit so long as these arewithin the unit boundary and do not materially affect any other unit orcommon property:(f) has the right to have any dispute resolved in the manner set out insubpart 1 of Part 4:(g) has the right to enforce the body corporate operational rules:(h) has the right to attend the general meetings of the body corporate.80 Responsibilities of owners of principal units(1) An owner of a principal unit—(a) must permit the body corporate (or its agents) to enter the unitat any time in an emergency and at all reasonable hours, andafter giving reasonable notice, for any of the followingpurposes:(i) to view the condition of the unit for the purpose ofascertaining compliance with the principal unitowners' or occupiers' obligations under this Act:2 Unit Titles Act 2010, s 77(1).3 Section 78.(ii) to maintain, repair, or renew any infrastructure forservices and utilities that serve more than 1 unit andany building elements that affect more than 1 unit orthe common property, or both:(iii) to maintain, repair, or renew any common property:(iv) to ensure the body corporate operational rules arebeing complied with:(b) must do all things necessary to give effect to decisions of thebody corporate:(c) must consult with his or her mortgagee, if required to do so,before exercising a vote under section 97 or 98:(d) must comply with all laws and legal requirements relating tothe use, occupation, or enjoyment of the unit:(e) must carry out, without delay, all work that may be orderedby a territorial authority or public body in respect of the unitto the satisfaction of that authority or body:(f) must pay all rates, taxes, charges, body corporate levies, andother outgoings that are from time to time payable in respectof the unit:(g) must repair and maintain the unit and keep it in good order toensure that no damage or harm, whether physical, economic,or otherwise, is, or has the potential to be, caused to thecommon property, any building element, any infrastructure,or any other unit in the building:(h) must notify the body corporate of his or her intention to carryout any additions or structural alterations before thecommencement of any work:(i) must not make any additions or structural alterations to theunit that materially affect any other unit or the commonproperty without the written consent of the body corporate:(j) must comply with the body corporate operational rules:(k) must not do anything that breaches or in any way underminesany policy of insurance in the name of the body corporate.The ability of a unit owner to make alterations to their unit[16] Under s 79(e), the owner of a unit is able to make alterations to their unitprovided that the alterations are within the unit boundary and do not materially affectany other unit or common property. Notice of proposed additions or structuralalterations must be given to the body corporate (s 80(1)(h)). If an alteration within theunit boundary would materially affect other units or common property, the unit ownercan only carry out the alteration after obtaining written approval from thebody corporate (s 80(1)(i)).[17] These provisions are designed to strike a balance between the goals ofprotecting the integrity of the development as a whole and establishing a flexible andresponsive regime for governance of unit title developments. The Act permits changesto be made to individual units subject to certain safeguards, including the safeguardsset out in s 80(1)(h) and (i).[18] Another relevant safeguard is set out in s 210, which enables a minority tochallenge a body corporate decision that is unjust or inequitable:210 General relief for minority where resolution required(1) In any case where this Act requires a resolution and the resolution ispassed, any person who voted against the resolution may apply to theappropriate decision-maker for relief on the grounds that the effect ofthe resolution would be unjust or inequitable for the minority.4(1A) Subsection (1) does not apply if the resolution is a designatedresolution.(2) An application for relief under subsection (1) must be made within28 days of the passing of the resolution.Repairs to unit title developments[19] Each unit owner has a responsibility to repair and maintain their unit in a waythat (among other things) avoids damage or harm to building elements, other units andcommon property (s 80(1)(g)).4 With the issue currently before this Court, the appropriate decision-maker would be eitherthe Tenancy Tribunal if the resolution required expenditure of less than $50,000 (s 171),the District Court if the effect of the resolution was to require a person or body corporate to incurexpenditure in excess or $50,000 but not more than $350,000 (s 172), or the High Court if theexpenditure was to be more than $350,000 (s 173).[20] The body corporate also has duties to repair and maintain certain componentsof the development, including common property and — of particular relevance in thiscase — any building elements that relate to or serve more than one unit. Section 138provides:138 Body corporate duties of repair and maintenance(1) The body corporate must repair and maintain—(a) the common property; and(b) any assets designed for use in connection with the commonproperty; and(c) any other assets owned by the body corporate; and(d) any building elements and infrastructure that relate to or servemore than 1 unit.(3) The body corporate may access at all reasonable hours anyunit to enable it to carry out repairs and maintenance underthis section.(4) Any costs incurred by the body corporate that relate to repairsto or maintenance of building elements and infrastructurecontained in a principal unit are recoverable by the bodycorporate from the owner of that unit as a debt due to the bodycorporate (less any amount already paid) by the person whowas the unit owner at the time the expense was incurred or bythe person who is the unit owner at the time the proceedingsare instituted.[21] As this Court said in relation to this provision in Body Corporate S73368v Otway:5In addressing the mischief to which this enactment was directed, thelegislature sought to address difficulties that had arisen when defects withina unit affected other units or the common property. It did so by assigning tobodies corporate responsibility for building elements and infrastructure foundwithin units and limiting owners' rights and obligations accordingly.5 Body Corporate S73368 v Otway [2018] NZCA 612, [2019] 3 NZLR 759 at [45](footnote omitted).[22] The term "building element" that appears in ss 80 and 138 is defined in s 5(1):building elements includes the external and internal components of any partof a building or land on a unit plan that are necessary to the structural integrityof the building, the exterior aesthetics of the building, or the health and safetyof persons who occupy or use the building and including, without limitation,the roof, balconies, decks, cladding systems, foundations systems (includingall horizontal slab structures between adjoining units or underneath the lowestlevel of the building), retaining walls, and any other walls or other features forthe support of the building.[23] It was common ground before us that the balcony of each unit is a buildingelement for the purposes of ss 80 and 138. So the Body Corporate has the power andthe duty to repair and maintain those balconies, if they "relate to" more than one unit.[24] The High Court held that each balcony does relate to the development asa whole, as a matter of design and appearance.6 That also was not in dispute beforeus. Where a body corporate carries out repair work on a unit under s 138, the cost ofthat work is recoverable from the relevant unit owner: s 138(4). So a unit owner hasa strong interest in that work being done in a cost-effective manner.[25] The mechanisms set out in the Act for decision-making by unit owners will inmost cases be adequate to resolve issues that arise in relation to repairs and alterationsto units, and to the unit development as a whole. But where any building orimprovement in a unit or on the base land of a development has been damaged ordestroyed, s 74 allows the body corporate or individual owners to apply to theHigh Court to seek approval of a scheme to deal with that damage or destruction.In circumstances where it is difficult or impractical to make decisions about remedialwork using the normal mechanisms, s 74 enables the High Court to determine howa dispute between unit owners, or between certain unit owners and a body corporate,can best be resolved with all relevant information put before the court, appropriatelyscrutinised and assessed.6 High Court judgment, above n 1, at [51].Operational rules[26] A body corporate must have operational rules.7 For the sake of completeness,we note that r 15 of the Body Corporate's operational rules parallels s 80(l)(g) and (i):15. Exterior of the buildingAn Owner musta) Repair and maintain the exterior of the unit (if required by theBody Corporate) and keep it in sufficiently good order, repair andcondition to ensure that no damage, harm, or diminution in valueoccurs to the common property [or] any other unit.b) Make no alteration or structural alterations to the unit or in any wayalter the elevation or external appearance of the unit without thewritten consent of the Body Corporate.f) Maintain any deck, balcony or courtyard forming part of the unit in aneat and tidy condition and not place any item other than outdoorfurniture and plants on the deck or balcony without the written priorapproval of the Body Corporate or its Agents, the Secretary or theBuilding Manager.The issue that arose in this case[27] It has throughout been clear that the development requires remedial work toaddress weathertightness issues, including recladding. The practical issue that arosein this case was whether a unit owner could choose to have their balcony removed inthe context of that remedial work, in order to reduce the cost of the work in relation totheir unit (which they would be required to meet: s 138(4)), and in order to avoid anyfuture risks and maintenance costs associated with having a balcony.[28] In order to instruct a designer to prepare plans for remedial work and seekbuilding consent for that work, the Body Corporate needed to be able to tell thedesigner whether the balconies would be removed, retained or replaced in the courseof carrying out that work. The Body Corporate could not decide that a balcony ofa unit should be removed without the consent of the unit owner: as explained belowat [55], that would be outside its powers. Some unit owners wanted to remove theirbalconies and were willing to agree to the work proceeding on that basis. But because7 Unit Titles Act 2010, s 105(1).removing a balcony from a unit would have an effect on the appearance of thedevelopment as a whole, and thus on other units, the Body Corporate's advisersformed the view that body corporate consent under s 80(1)(i) was required to enablebalcony removal to occur.[29] The 2017 Resolution was intended to resolve this practical issue by enablingunit owners to make firm decisions about whether their balcony would be removedwhen the remedial work was carried out. The remedial work could then be designed,approved by the Body Corporate, and implemented.The High Court judgment[30] After traversing the background to the impasse between the owners and thesubmissions presented for the parties, the Judge said "[t]he key issue is whether theBody Corporate's 2017 resolution, permitting the removal of the balconies by thoseowners who wished to do so, was ultra vires".8[31] The Judge found the damage caused by water ingress around the balconies wasextensive. The cost of the damage was reflected in the estimated cost of remediatingthe balconies and by the proposal that they be removed altogether and replaced bycladding to achieve a more reliable watertight repair.9[32] The Judge held that s 138 of the Act applied. In particular, he referred to theBody Corporate's obligation under s 138(1)(d) to repair and maintain any buildingelements and infrastructure that relate to or serve more than one unit.10 As noted aboveat [23]–[24], he held that the balconies were building elements as defined in s 5(1) ofthe Act and that they served more than one unit.11 It followed that the Body Corporatehad a duty to repair and maintain the balconies in the interests of all Body Corporatemembers.128 High Court judgment, above n 1, at [47].9 At [55].10 At [48].11 At [49] and [51].12 At [52].[33] The Judge considered that the Body Corporate could not discharge its duty torepair and maintain building elements that relate to or serve more than one unit byemploying the operational rules to authorise individual unit owners to undertakerepairs and maintenance the Body Corporate must itself do.13 Adopting the approachof Muir J in Wheeldon v Body Corporate 342525,14 the Judge held the duty of anindividual unit owner to repair and maintain building elements that serve more thanone unit is subject to the Body Corporate's s 138 duty to repair and maintain.15Accordingly, the duties and responsibilities of the Body Corporate could not bedelegated other than pursuant to ss 108 and 109 of the Act.16[34] The Judge held the proposed remedial measure of removing four of the fivebalconies of the development would result in a significant alteration to the aestheticappearance of the development and so affect the integrity of the development.17[35] The Judge said the purposes of the Act included the protection of the integrityof the development as a whole.18 He held the 2017 Resolution did not require thebalconies to be removed, did not stipulate what the removed balconies should bereplaced with and said nothing to require remedial work to be carried out to the samestandard using the same materials to achieve a uniform aesthetic outcome.19[36] The Judge held the Body Corporate had erroneously treated the proposedremoval of the balconies as being outside the scope of its s 138(1)(d) duty to repairand maintain, and as a matter falling within the scope of its operational rules dealingwith approvals for the alteration of the exterior of the development.2013 At [60].14 At [58], citing Wheeldon v Body Corporate 342525 [2015] NZHC 884, (2015) 16 NZCPR 829at [47]−[48].15 High Court judgment, above n 1, at [60].16 At [61]. It has never been suggested that ss 108 and 109 of the Unit Titles Act permitted delegationin the circumstances of this case.17 At [63].18 At [66].19 At [64].20 At [69].[37] Having found the Body Corporate's s 138(1)(d) duty to repair and maintaincould not be discharged other than by the Body Corporate itself, the Judge found the2017 Resolution, purporting to authorise individual unit owners to carry out workrequired to repair the water damage by removing the decks and balconies of theirrespective units and not replacing them, was ultra vires and unlawful.21[38] In the absence of unanimity amongst the unit owners concerning removal ofthe balconies, the Judge considered the appropriate mechanism for the Body Corporateto progress and resolve matters was by way of an application to the High Court,pursuant to s 74, for the approval of a settlement of a scheme which would set out thedetails of the proposed repairs to the development required to remedy the waterdamage in and around the balconies.22[39] The Judge made a declaration that the 2017 Resolution was ultra vires andinvalid. He made an order quashing the resolution.23Submissions for the Body Corporate[40] The Body Corporate accepted the balconies are within the boundaries of eachunit title and are building elements as that term is used in the Act.[41] In its notice of appeal, the Body Corporate acknowledged it hada non-delegable duty under s 138 to repair and maintain building elements. It couldnot delegate that duty to individual owners. It asserted the real effect of the 2017Resolution was to reflect the formal consent of the Body Corporate to removal of thebalconies and replacement with cladding and joinery, where desired by the particularunit owner. The 2017 Resolution was not intended to delegate responsibility forcarrying out the remedial work to individual unit owners and did not purport to do so.21 At [70].22 At [71].23 At [73].[42] The Body Corporate submitted:(a) The Judge made a number of specific errors in deciding thata body corporate, under s 138, could not, by a majority decision, adopta method of repair involving inter alia replacement of balconies withcladding and joinery and thus must apply for a scheme under s 74 ofthe Act.(b) The Judge had misdirected himself in holding that decisions of bodiescorporate as to repair methodology under s 138 require unanimity ofdecision-making. Decisions about repair methodology require no morethan an ordinary resolution.(c) To the extent an owner objected to the repair methodology proposed orresolved to be adopted by a body corporate, the remedy was to exercisetheir rights under s 210 of the Act.24(d) Consistent with the purposes of the Act, it should be for thebody corporate and the unit owners, not the courts, to determine whatrepair plan owners should adopt for the purpose of discharging abody corporate's duty to act under s 138.(e) Once the duty to act under s 138 had been triggered, the Judge erred indetermining that, where the repair required the removal of a buildingelement (in this instance balconies), the element could not be replacedwith a different type or category of building element.(f) Adopting the purposive approach mandated by s 3, a more flexibleapproach to how repairs might be carried out should have beenrecognised.24 Section 210 permits a unit owner to seek relief from the Court from the effects of a body corporatedecision on the grounds of oppression, see [18] of this judgment.[43] In its notice of appeal, the Body Corporate sought declarations that theBody Corporate was entitled to carry out repairs to the building elements of thebuilding under s 138 without having to resort to any other provisions in the Act and,in particular, without having to resort to s 74 of the Act.Submissions for the Bells[44] The Bells submitted that the Body Corporate's arguments on appeal requiredthe Court to be able to interpret the resolution as not delegating what theBody Corporate admits is a non-delegable duty, and as authorising not just removal ofa building element but removal and replacement with something completely different.Counsel said that at no time was it suggested in the High Court that the resolution didnot include a delegation to unit owners. Nor was it suggested the resolution authorisednot just removal of a building element, but removal and replacement with somethingcompletely different.[45] The Bells submitted the resolution could not properly be interpreted as anagreement to both the removal of the balconies and their replacement with claddingand joinery as contended by the Body Corporate. Accordingly, the resolution did notauthorise the Body Corporate to do what it now says it is authorised to do.[46] The Bells also submitted:(a) Even if the resolution could be interpreted in the way the BodyCorporate contends, it would be unlawful for the Body Corporate to actin accordance with the resolution because the Body Corporate wouldbe removing the balconies and replacing them with another element,the cladding and joinery. This would be outside the Body Corporate'spowers, limited by s 138. The obligation under s 138(1) is to repair andmaintain, consistent with an obligation to preserve. Consistent withthis, s 138(5) states the s 138 duty includes duties to keep in a goodstate of repair and renew where necessary, the concepts of keeping andrenewal also being about preservation.(b) A swap of elements, as proposed by the Body Corporate, would beunfair on the Bells. The balconies are within the boundaries of eachunit title. When a party buys a unit under the Act, it buys with it certainproperty rights. While a unit owner's property rights are tempered bythe Act, if a Body Corporate is to carry out repairs, it must do so asmuch as possible without affecting the status quo. This means the BodyCorporate can do no more than repair and maintain the balconies.(c) If the Body Corporate was able to act as it contends, this could havea drastic and unfair effect on the value of a unit and create a risk forothers, such as a mortgagee or an insurer of the development, withoutsuch parties being given notice of the work or the way it might affecttheir interests.(d) A purposive interpretation must be taken of how the Act is to be appliedand that purpose can relate to social aspects of what is proposed, notjust economic aspects. In that way, the value a unit owner might attachto the "look" of their unit and the development needs to be weighed inthe balance. Allowing an existing element to be replaced withsomething completely different would not be striking a balancebetween the economic and social interests unit owners have in their unitand the development as a whole.(e) If a balancing of interests is required to determine how an existingelement might be replaced, that could only fairly happen with certaintyas to what the replacement is to be. That certainty was not provided inthe 2017 Resolution.[47] It was submitted for the Bells that, under s 80(1)(g) and (h), the primaryobligation of unit owners is to repair and maintain the essential elements of their unit.Thus, to the extent s 80(1)(i) might be seen as potentially permitting a unit owner tomake structural alterations, that must be interpreted to mean a body corporate canapprove such alterations only if they do not result in the removal of the existingelements of a development. The Bells also submitted that the obligation of a unitowner to repair and maintain their unit, as set out in s 80(1)(g), limits the power ofa unit owner to make alterations, as referred to in s 80(1)(h) and (i). They submittedthe Act should be applied in that way to reflect the related obligation which theBody Corporate has to repair and maintain elements of the development as referred toin s 138.DiscussionThe meaning and effect of the 2017 Resolution[48] We begin by determining what the Body Corporate decided in the2017 Resolution. The resolution must be interpreted by applying the normal principlesof contractual interpretation, as this Court explained in Wheeldon v Body Corporate342525:25[92] Although not a contract, the delegation of authority by a bodycorporate to a body corporate committee is amenable to the acceptedprinciples of contractual interpretation. The application of these principles toinstruments beyond a typical contract was recognised by the Privy Council inAttorney General of Belize v Belize Telecom Ltd:The court has no power to improve upon the instrument which it iscalled upon to construe, whether it be a contract, a statute or articlesof association. It cannot introduce terms to make it fairer or morereasonable. It is concerned only to discover what the instrumentmeans. However, that meaning is not necessarily or always what theauthors or parties to the document would have intended. It is themeaning which the instrument would convey to a reasonable personhaving all the background knowledge which would reasonably beavailable to the audience to whom the instrument is addressed:see Investors Compensation Scheme Ltd v West Bromwich BuildingSociety [1998] 1 WLR 896, 912–913. It is this objective meaningwhich is conveniently called the intention of the parties, or theintention of Parliament, or the intention of whatever person or bodywas or is deemed to have been the author of the instrument.[93] The interpretation of the resolution was, therefore, to be approachedon the basis of the well-settled principles summarised by the Supreme Courtin Firm PI 1 Ltd v Zurich Australian Insurance Ltd:It is sufficient to say that the proper approach is an objective one, theaim being to ascertain "the meaning which the document wouldconvey to a reasonable person having all the background knowledgewhich would reasonably have been available to the parties in thesituation in which they were at the time of the contract". Thisobjective meaning is taken to be that which the parties intended.25 Wheeldon v Body Corporate 342525 [2016] NZCA 247, (2016) 17 NZCPR 353 (footnotesomitted).While there is no conceptual limit on what can be regarded as"background", it has to be background that a reasonable person wouldregard as relevant. Accordingly, the context provided by the contractas a whole and any relevant background informs meaning.The requirement that the reasonable person have all the backgroundknowledge known or reasonably available to the parties is a reflectionof the fact that contractual language, like all language, must beinterpreted within its overall context, broadly viewed. Contextualinterpretation of contract has a significant history in New Zealand,although for many years it was restricted to situations of ambiguity.More recently, however, it has been confirmed that a purposive orcontextual interpretation is not dependent on there being an ambiguityin the contractual language.[49] We set the 2017 Resolution out again for ease of reference:That the Body Corporate consents be granted to the units who wouldlike to remove their balconies in the building re-clad subject to abuilding consent being obtained.[50] We make six points about the interpretation of the 2017 Resolution:(a) First, the resolution does not on its face purport to delegateresponsibility for carrying out remedial work to unit owners.The Body Corporate says, and we accept, that it was at all times clearthat the Body Corporate would be responsible for the design andimplementation of the remedial work to be carried out on thedevelopment.(b) Second, the resolution does not require any unit owner to remove theirbalcony if they do not wish to do so.(c) Third, the resolution does not give each unit owner permission toremove the balcony themselves, as and when they choose to do so.It only authorises removal of a balcony "in the building reclad".(d) Fourth, the resolution does not purport to approve any recladding work.As we read it, it proceeds on the tacit assumption that there will needto be a separate decision in the future approving the remedial work(described in shorthand as the "reclad"). Unit owners will have anotheropportunity to make a decision about the precise nature and details ofthat remedial work — including, importantly, what will replace thebalconies.(e) Fifth — a related point — the approval is given subject to a buildingconsent being obtained. So any removal of a balcony must meetbuilding legislation requirements.(f) Sixth, the resolution is silent on what will replace the balconies. That isleft to be dealt with in the context of decisions about the remedial workto be carried out by the Body Corporate.[51] Against that backdrop, we consider the reasons identified by the High Courtand the Bells for the conclusion that the 2017 Resolution was invalid.No impermissible delegation[52] We agree with the Judge that the Body Corporate has a duty to carry out theremedial work under s 138. We also agree that if there is a conflict between the dutyof a unit owner to carry out remedial work under s 80(1)(g), and the duty of theBody Corporate to carry out remedial work under s 138, s 138 will prevail.The Body Corporate cannot simply leave the unit owners to do the work.[53] However the Bells' argument that the 2017 Resolution involvesan impermissible delegation of remedial work to unit owners is based on an incorrectpremise. There is nothing in the 2017 Resolution that provides for a delegation of theremedial work that the Body Corporate is required to carry out, and intends to carryout.[54] We need not therefore consider the restrictions in the Act on delegation bya body corporate: they are not engaged. Rather, the question is whether the2017 Resolution is a valid exercise of the Body Corporate's power under s 80(1)(i) toconsent to the removal of a balcony if the unit owner wishes to do so, with that removalto be effected by the Body Corporate in the course of the remedial work to be carriedout by the Body Corporate.Approval of unit owner decision to have balcony removed[55] Section 138 does not empower the Body Corporate to require a unit owner toremove their balcony as part of a repair strategy. But it does not follow that theBody Corporate cannot incorporate the removal of one or more balconies in the scopeof remedial work, if the unit owner has consented to that removal, and subject tos 80(1)(h) and (i) and the other safeguards set out in the Act in relation to suchalterations.[56] If there was no need for repairs to the building, it seems clear that a unit ownercould decide to remove their balcony subject to obtaining the Body Corporate's writtenconsent under s 80(1)(i). We do not accept the Bells' argument that the requirementsof ss 80 and 138 in relation to repair and maintenance of certain building elementsprevent a unit owner making changes to those building elements. The Act does notrequire building elements and infrastructure that relate to or serve more than one unitto be kept in their original form in perpetuity.26[57] Unless and until a decision is made to remove a relevant building element,it must be repaired and maintained. But the obligations of repair and maintenancemust, as a matter of statutory interpretation and common sense, be read subject to theability of a unit owner to make alterations to a unit, with consent of the body corporatewhere required by ss 79(e) and 80(1)(i). Section 79(e) is not expressed to be subjectto any provision other than s 80(1)(h) and (i). Nor do we consider that there is anyimplicit limit of the kind contended for by the Bells. The interpretation contended forby the Bells would preclude a wide range of alterations to a unit of the kindcontemplated by s 80(1)(i): the operation of that provision would be severelyconstrained in a manner that would be inconsistent with the broader scheme of the Act.26 There are many other provisions that enable alterations to be made to a unit development overtime. Subject to certain restrictions, the Body Corporate can, by special resolution, resolve toacquire an interest in land and add it to the common property (s 58). Similarly, the Body Corporatemay, after a special resolution, agree to vary, surrender or assign any easement or revoke anycovenant affecting the land on which the development is situated (s 61). Likewise, the owner ofa unit may, for the benefit of their unit, deal with an easement or covenant affecting their land but,before doing so, must obtain the consent by special resolution and in writing of theBody Corporate (s 63). The owners of adjoining units can make changes to the boundary betweenunits as shown on the unit plan but the Body Corporate must certify that the proposed changes donot affect the common property or materially affect the use, enjoyment or ownership interests ofthe units (s 65).As noted above, the provisions of the Act seek to strike a balance between the s 3 goalsof flexibility and responsiveness, and maintenance of the integrity of the development.The approach set out above is consistent with that balance.[58] Nor do we consider that the repair context precludes a unit owner from seeking,and obtaining, consent to make such an alteration, on the basis that the alteration willbe carried out as an integral (lower cost) method of carrying out the remedial workthat will be undertaken by the Body Corporate.[59] Allowing s 80 to be used in this manner will not prejudice the interests of thirdparties such as mortgagees or insurers. Their interests will continue to be protected inthe normal way by requiring mortgagors and insureds to inform them of any changesto their property that might affect its value.[60] The interests of other unit owners are protected by the s 80(1)(i) approvalmechanism, and by their ability to apply to the High Court under s 210 if an approvalgiven under s 80(1)(i) is unjust or inequitable for the minority that voted against theapproval.[61] There is no need to invoke s 74 of the Act and apply to the High Court fora scheme if the relevant decisions are capable of being made by the Body Corporateusing other mechanisms such as s 80(1)(i). It would be unfortunate for all owners tohave to be involved in the costs, delays and other exigencies of s 74 proceedings if theAct provides an alternative workable decision-making procedure, as we consider itdoes.[62] We therefore conclude that the 2017 Resolution was a valid resolution adoptedby the Body Corporate under s 80(1)(i). The Bells did not challenge the resolution inthe manner permitted by s 210.27 It is now too late for them to do so.27 An issue on which it appears they received advice from their lawyer at the time.Next steps[63] There is no dispute that this development has serious weathertightness issues.There has been substantial damage to the development through water ingress.Appropriate steps need to be taken to rectify the original design and construction faultsthat led to these problems. With further delay, there will be further damage to thedetriment of all owners. The owners of four of the five units, 80 per cent of eligiblevoters, supported a resolution that, if requested by a particular unit owner, a balconycould be removed and the necessary area re-clad to deal with those problems.That resolution has not been challenged under s 210. The Body Corporate should nowbe permitted to proceed with the design and implementation of the remedial work,with that work incorporating removal of balconies where requested by the relevantunit owner as authorised by the 2017 Resolution.[64] The balcony removals will, as noted above, have to form part of the proposedremedial work. The Body Corporate will need to approve that remedial work.The details of how the work will be carried out will be decided at that time.The remedial work, including removal of some of the balconies, will also be subjectto obtaining a building consent, thus ensuring it complies with relevant building laws.[65] Affected parties may be entitled to seek relief in accordance with s 210 if theyare aggrieved by a decision made by the Body Corporate about the remedial work.But that is not an opportunity to revisit the question of removal of balconies: that issuehas been determined by the 2017 Resolution, the validity of which we have upheld.Conclusion[66] The appeal is allowed.[67] The declaration made in the High Court is set aside.[68] In its submissions the Body Corporate asked this Court to make variousdeclarations as to the validity of the 2017 Resolution and what it was permitted to doconsequent to that Resolution. The declarations were however largely framed withreference to s 138 and the way the Body Corporate had contended it should be applied.Our judgment relates primarily to the interpretation of s 80(1)(i). In the High Court,the Body Corporate did not, in its statement of defence, seek a declaration in thealternative to that sought by the Bells. We do not consider that such a declaration isnecessary or appropriate.Costs[69] Costs in the High Court should be determined by that Court in light of theoutcome in this Court, if they cannot be agreed by the parties.[70] Costs in this Court should follow the event in the usual way.The Body Corporate is entitled to costs for a standard appeal on a band A basis, withusual disbursements. We do not certify for second counsel.Result[71] The appeal is allowed.[72] The declaration made in the High Court that the appellant's resolution of9 June 2017 was ultra vires and invalid, and the order quashing that resolution, are setaside.[73] The costs order in the High Court is set aside.[74] The respondent must pay the appellant costs for a standard appeal on a band Abasis, with usual disbursements.Solicitors:Grove Darlow & Partners, Auckland for AppellantDaniel Overton & Goulding, Auckland for Respondent