Mu v Body Corporate 312431 [2012] NZHC 3474 (18 December 2012)

Last Updated: 8 January 2013

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-494-004768 [2012] NZHC 3474

BETWEEN DANNI MU Plaintiff

AND BODY CORPORATE 312431

First Defendant

AND ABOUT BODY CORPORATES LIMITED Second Defendant

AND SHARRON WYNN O'SULLIVAN Third Defendant

AND GRAHAM BELL Fourth Defendant

Hearing: (On the papers)

Counsel: G M Illingworth QC for Plaintiff

T J Herbert for First Defendant

Judgment: 18 December 2012

_{COSTS JUDGMENT OF VENNING J}

This judgment was delivered by me on 18 December 2012 at 11.30 am, pursuant to Rule 11.5 of the

_{High Court Rules.}

Registrar/Deputy Registrar

Date...............

Solicitors: Carter & Partners, Auckland (B O’Callahan)

Adina Thorn Lawyers, Auckland

Copy to: G M Illingworth QC, Auckland

T J Herbert, Auckland

MU V BODY CORPORATE 312431 HC AK CIV-2011-494-004768 [18 December 2012]

Introduction

[1] On 16 November 2012 the Court made the following orders on the basis of a consent memorandum filed by the plaintiff and first defendant:

(a) That at the extraordinary general meeting of the members of the first defendant held on 26 October 2010, the resolution that the first defendant should continue with the Rockcote system as detailed by Brown Day and approved by Auckland City Council did not authorise either the first defendant or its committee to use the Rockcote system to replace the existing cladding.

(b) That instead the resolution confirmed only that the first defendant’s committee was entitled to continue its planning and strategy as to the replacement of the existing cladding on the basis that the Rockcote system would be used, rather than any alternative system.

(c) That no binding decision as to the type of cladding eventually to be used was made by the first defendant or its members on 26 October

2010.

[2] The consent memorandum noted that the plaintiff had agreed to discontinue its claims on the basis of the declarations and that the first defendant was prepared to agree to the discontinuance. The memorandum went on to record that the only outstanding matter was costs. Both parties considered they were entitled to costs and agreed the Court should consider all issues as to costs.

[3] The parties have now exchanged memoranda as to costs. The plaintiff seeks costs on a 2B basis. The defendant seeks costs on an indemnity or increased costs basis.

[4] The second and third defendants were joined to the proceedings because the second defendant (ABC) was secretary of the first defendant. The third defendant was a director of ABC and the fourth defendant was a member of the management

committee of the first defendant. The second to fourth defendants have filed a defence but have taken no other steps. They have not filed any memoranda in relation to costs. The proceedings have been actively conducted between the plaintiff and first defendant throughout.

Brief background

[5] The plaintiff is the owner of one of 48 units in a residential development at Normanby Road, Mount Eden, Auckland. The first defendant is the body corporate for the complex. The exterior cladding of the upper levels of the complex is of monolithic plasterboard construction. It is not weathertight and needs to be replaced. The cladding could be replaced with another plasterboard system or with a weatherboard system. The plaintiff has throughout opposed the suggestion of replacement with another plaster board system. She supports a weatherboard system replacement.

[6] In October 2009 the first defendant Body Corporate had resolved:

[t]hat the Body Corporate supported both systems [Nuplex and Rockcote] presented and that the authority for the final decision on which system would lie with Brown Day Group after determining price advantage, warranties and support.

[7] Both the Nuplex and Rockcote systems are plaster systems. An extraordinary general meeting was called on 26 October 2010 to discuss, inter alia, the plaintiff’s concerns with Brown Day’s choice of the Rockcote system and to discuss a resolution proposed by the plaintiff that there be a change from the Rockcote system to a weatherboard system. Although the plaintiff had a number of proxies supporting her position, the resolution she proposed was not supported. Instead the following resolution was passed:

It was resolved to continue with Rockcote system as detailed by Brown Day and approved by Auckland City Council.

_{[8] The plaintiff then issued these proceedings seeking, inter alia:}

a declaration that the purported decision was invalid;