Holdaway v Shay Solutions Limited [2014] NZHC 468 (14 March 2014)

Last Updated: 16 April 2014

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-4035 [2014] NZHC 468

UNDER	the Unit Titles Act 2010
IN THE MATTER	of an application under s 141 for an appointment of a Body Corporate Administrator
BETWEEN	RABBUL NISHA HOLDAWAY (commonly known as Neshia Holdaway) Plaintiff
AND	SHAY SOLUTIONS LIMITED First Defendant SHAY STRATA SOLUTIONS LIMITED Second Defendant

Hearing:	12 March 2014
Appearances:	Plaintiff in person J Armstrong for the Defendants
Judgment:	14 March 2014

_{JUDGMENT OF WOODHOUSE J}

This judgment was delivered by me on 14 March 2014 at 12:30 p.m. pursuant to r 11.5 of the High Court Rules 1985.

Registrar/Deputy Registrar

..........................................

Solicitors / Counsel:

Ms N R Holdaway, Norwest City Law Ltd, Solicitors, Waimauku, Auckland

Mr J Armstrong, Armstrong Murray, Solicitors, Takapuna, Auckland

HOLDAWAY v SHAY SOLUTIONS LIMITED [2014] NZHC 468 [14 March 2014]

[1] This proceeding was in the Duty Judge list on 12 March in accordance with the direction of Lang J recorded in his minute of 26 February 2014. For convenience I reproduce part of that minute:

As I have endeavoured to make clear to the plaintiff during the hearing, this proceeding in its current form is now effectively at an end. In order to bring finality to it, I direct that the defendants are to file an affidavit no later than 5

March 2014 advising whether or not they hold any further documents on behalf of the body corporate. If they do not, and no amended pleading is filed by 11 March 2014, the proceeding will be struck out when it is next called.

[2] The applicant did file an amended application and two further affidavits at around 4:00 pm on 11 March. The critical question is whether the proceeding should be struck out. Because it became apparent in the course of submissions that I should review the file and consider the position before making any final orders, I reserved my decision.

[3] On 4 March 2014 an affidavit on behalf of the defendants was filed. This addresses the first part of Lang J’s direction. The affidavit is from Susan Hay, a director of the two defendant companies. She deposed, in summary:

(a) The defendants were advised on or about 6 December 2013 that Body Corporate Specialists Ltd (BCS) had been appointed manager of the Body Corporate in place of the second defendant and, from around that date, the defendants began handing over records to BSC.

(b) On 20 December 2013 a director of BSC came to the defendants’

offices and uplifted all of the relevant files and documents.

(c) In late January 2014 some further documents were handed over, being documents subsequently received or located at the defendants’ offices.

(d) Mrs Hay said in conclusion:

All relevant electronic records have been provided to BSC and we have deleted all remaining copies from our server. The hard copy files handed over to BSC hold copies of these now deleted electronic records.

To the best of my knowledge and belief neither of the defendants any longer holds any further documents on behalf of or relating to the Body Corporate.

[4] In the amended application filed on 11 March the first and second defendants remain as defendants. The formal orders sought are that an administrator be appointed for the Body Corporate and that the administrator investigate and report to a general meeting of the Body Corporate on various matters relating to financial affairs. The grounds on which the application for these orders is made include contentions to the broad effect that financial affairs of the Body Corporate were not properly managed by the first and second defendants. However, no relief is sought against the first and second defendants. The relief sought, as recorded above, is the appointment of an administrator. It may be inferred that Ms Holdaway, as the applicant, is hopeful that an administrator may take action against one or both of the defendants, but such action is not, and could not be, the subject matter of an amendment of the originating application.

[5] There is an affidavit from Mr Yovich, a director of BSC. This states that the records received from the defendants are incomplete in certain respects. Ms Holdaway, in her affidavit filed on 11 March, and in submissions to me, contended, in effect, that this means that one or both of the defendants still have documents. That does not follow. It may be that some of the missing documents were never received by either of the defendants during the period of that defendant’s Body Corporate management. Or documents may have been received and since misplaced, or delivered back to the Body Corporate. I am not expressing any views as to what may have happened to documents. But I am not persuaded that there is any proper basis, from the evidence before the Court, for concluding that the statement on oath by Ms Hay, that the defendants to the best of her knowledge no longer hold any documents, is wrong.

[6] In addition, Mr Armstrong gave an undertaking, on behalf of the defendants, that the defendants will co-operate in relation to any further requests that may be made to them by the present Body Corporate manager. Since this was an undertaking given in Court, and in response to an enquiry from me, it is proper to modify the undertaking to an undertaking to co-operate in relation to any further

reasonable requests that may be made by a properly appointed manager of the Body

Corporate.

[7] Although, as noted above, Ms Holdaway contends, in effect, that financial affairs of the Body Corporate were not properly handled by one or other of the defendants, those are not matters which can be the subject of this originating application. Such claims would have to be brought by the Body Corporate, or an administrator, not by Ms Holdaway. And they would have to be brought as a conventional proceeding with a statement of claim.

[8] The originating application has therefore not been amended in any way that enables this proceeding to remain on foot. Ms Holdaway was given ample opportunity to amend it in a way which would enable the originating application to

_{continue for the purpose of determining whether an administrator should be}

_appointed.¹

_{That is an application that can be made by Ms Holdaway as a unit owner}

(although it appears Ms Holdaway has a partial interest only in a unit). But it is an application that would have to be brought against the Body Corporate as defendant, or against all of the other unit owners as defendants, or both. It is not an application

_{to be brought against the current defendants.}

_Result

[9] The proceeding is struck out.

[10] The defendants are entitled to costs. If costs cannot be agreed a memorandum for the defendants should be filed and served in three weeks and any

_{response for the applicant in a further two weeks.}

_{Woodhouse J}

1. Ms Holdaway had first been given this opportunity in a minute issued on 11 December 2013 requiring any amended application to be filed by 31 January 2014. It was not.