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High Court of New Zealand Decisions |
Last Updated: 6 March 2018
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IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-Ā-TARA ROHE
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CIV-2016-485-823
[2018] NZHC 214 |
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UNDER
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Section 289 of the Companies Act 1993
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IN THE MATTER
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of an application for putting a company into liquidation
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BETWEEN
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BODY CORPORATE 392619
Plaintiff
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AND
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YEE GOOD FORTUNE INVESTMENTS LIMITED
Defendant
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Hearing:
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31 July 2017
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Counsel:
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J A Dean for the plaintiff
N B Dunning for the defendant
D H Hunt for Body Corporate 81340, a supporting creditor
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Judgment:
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21 February 2018
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JUDGMENT OF ASSOCIATE JUDGE SMITH
Yee 17
Discussion and conclusions 19
The laws relating to liquidation claims and stay applications 19
Relevant sections of the UTA dealing with decision making, including delegation to a body
corporate committee 21
UTA provisions relating to the establishment of bank accounts 22
UTA provisions relating to the raising and recovery of levies 24
Section 138 of the UTA – the Body Corporate’s duty to repair and maintain 25
The application of the law in this case 26
Result 32
[1] Body Corporate 392619 (the Body Corporate) applies for an order putting the defendant, Yee Good Fortune Investments Limited (Yee), into liquidation. Yee applies for an order permanently staying the liquidation proceeding.
Background
[2] The background of the dispute is substantially set out in two judgments of the Court. First, I gave an oral judgment in this proceeding on 15 December 20161 on an application by Yee for an order summarily dismissing the liquidation claim, or in the alternative restraining publication of the advertising which is required by r 31.9 of the High Court Rules, and staying further proceedings in relation to the liquidation. The second judgment is a judgment given by Gordon J on 12 April 2017,2 in a separate proceeding between the parties.
[3] The Body Corporate’s liquidation claim is based on Yee’s failure to comply with a statutory demand served on it on 24 August 2016 (the demand). In the demand, the Body Corporate demanded payment of the sum of $25,497.01, which was substantially comprised of five unpaid instalments of special building levies raised by the Body Corporate in respect of a unit owned by Yee in a Unit Title development on Auckland’s Te Atatu Peninsula known as the Bella Vista Apartments. The demand also sought interest on the unpaid levies at 10 per cent per annum. The levies, raised for the purpose of carrying out substantial repair work on the apartments, were to be paid as follows:
(a) $2,235.60 on 10 February 2013;
(b) $2,235.60, on 10 May 2013;
(c) $3,079.64 on 20 October 2014;
1 Body Corporate 392619 v Yee Good Fortune Investments Ltd [2016] NZHC 3091.
2 Yee Good Fortune Investments Ltd v Body Corporate 392619 [2017] NZHC 723.
(d) $3,079.64 on 13 November 2015; and
(e) $3,079.64, on 18 December 2015.
[4] I will refer in this judgment to the first two of these unpaid instalments as “the 2013 levies”, and the last three of them as the “2014 and 2015 levies”.
[5] In addition to the special levies and the interest accrued on them, the Body Corporate claimed various other costs in the demand, and an adjustment of
$441.60 to reflect a new utility interest said to have been adopted by the Body Corporate at its AGM on 27 August 2014.
[6] At the time it issued the demand the Body Corporate held a judgment for the 2013 levies. On 25 November 2014 the Tenancy Tribunal (the Tribunal) had held that the 2013 levies, totalling $4,471.20, were payable by Yee to the Body Corporate. The Tribunal also made an award of $745.11 for interest and $850 for the filing fee. The total amount awarded in the Tenancy Tribunal was therefore $6,066.31.
[7] Yee filed an appeal to the District Court against the Tenancy Tribunal decision, and that appeal was heard on 25 July 2016. The Court reserved its decision.
[8] On 26 July 2016 Mr Leishman, a director of Boutique Body Corporate Limited (BBCL), a body corporate services company representing the Body Corporate, sent to Yee a copy of the Body Corporate’s ledger, showing additional amounts said to be due and payable by Yee, including $9,238.92 for the 2014 and 2015 levies. An undertaking was sought from Yee by 1 August 2016 that, if it was unsuccessful with its appeal to the District Court, the arrears would be paid in full within five working days of the judgment being given on the appeal. If that undertaking was not provided, Mr Leishman indicated that the Body Corporate would issue further proceedings.
[9] On 5 August 2016 Judge Harrison gave a reserved judgment in the District Court, dismissing Yee’s appeal from the decision of the Tribunal.3
3 Yee Good Fortune Investments Ltd v Body Corporate 392619 [2016] NZDC 14692.
[10] On 11 August 2016 Mr Leishman wrote to Yee’s solicitor advising that unless payment of the Tribunal award was made in full within three working days, a statutory demand would be issued for both the award and for levies and costs incurred subsequently.
[11] When Yee did not give that undertaking, and did not make any payment, the Body Corporate issued the demand.
[12] Yee did not apply to set aside the demand. Instead, on 6 September 2016, it lodged an appeal to this Court against the District Court decision, on a number of points of law.
[13] Yee did not take any steps to obtain a stay of proceedings pending the hearing of its appeal, and the Body Corporate commenced the present liquidation proceeding on 20 October 2016.
[14] Yee then filed an application to have the liquidation claim summarily dismissed. It contended that the amounts claimed in the demand were genuinely disputed, and that that fact was well known to the Body Corporate. It contended that the issue of the demand, and the subsequent filing of the liquidation claim, were abuses of process, justifying the summary dismissal of the liquidation claim.
[15] In my judgment of 15 December 2016 I dismissed Yee’s application for summary dismissal of the liquidation claim. However I continued an interim order which had earlier been made restraining publication of the liquidation claim, conditional upon Yee paying into Court the sum of $15,305.23 by 20 January 2017. The sum of $15,305.23 was the amount of the Tribunal award, together with the total of the 2014 and 2015 levies. I noted in my judgment Mr Dunning’s acknowledgment that the 2014 and 2015 levies were in the same category as the 2013 levies, and if the 2013 levies were validly raised it appeared that the Body Corporate should also be entitled to recover the 2014 and 2015 levies.
[16] Yee did not pay the $15,305.23 into Court, and the restraint on advertising/publication was lifted with effect from 14 February 2017. The
Body Corporate proceeded to advertise the liquidation claim in accordance with the rules.
[17] Following the advertisement, Body Corporate 81340 filed a notice of intention to appear in support of the liquidation claim, under r 31.18 of the High Court Rules. Body Corporate 81340 claimed to be a creditor of Yee for the sum of $151,688.27.
[18] Yee’s appeal from the District Court judgment duly came on for hearing before Gordon J on 15 February 2017. Her Honour reserved her decision.
[19] The Body Corporate’s liquidation claim was called again in the liquidation list on 23 May 2017. By then, Gordon J had given her judgment on Yee’s appeal, and the result was that three of six questions of law raised by Yee in its Notice of Appeal were referred back to the Tribunal for determination of various questions of fact. Mr Dunning then renewed his application for a stay of the liquidation proceeding. In light of the judgment of Gordon J on the appeal, he contended that the liquidation claim could not possibly succeed. I gave directions for the filing of submissions and any further affidavits, and set Yee’s renewed stay application down for a defended hearing, with the Body Corporate’s liquidation claim.
Yee’s amended statement of defence
[20] Yee admits that it was served with the demand on 24 August 2016, and that it did not comply with the demand. However, it denies that it is indebted at all to the Body Corporate. It says that the Body Corporate did not enter into an agreement with Yee for payment of the sums in the demand, and it did not have power or authority under the Unit Titles Act 2010 (the UTA) to claim the special levies. In the alternative, it asserts that, if the Body Corporate did have the authority or power under the UTA to claim the special levies, they were not lawfully imposed on Yee.
[21] Yee further claims that the Body Corporate may only recover reasonable costs in collecting the relevant levies, and aside from the interest charges, the charges claimed by the Body Corporate in the demand are not costs reasonably incurred in collecting the special levies. Yee’s liability is disputed, and it asserts that the Body Corporate was at all material times aware of the dispute. It contends that the Body
Corporate has abused the process of the Court in issuing the demand and subsequently pursuing the liquidation claim.
[22] Yee’s other defence is that the demand was in any event defective, as it purported to claim as debts payable to the Body Corporate sums not previously brought to Yee’s attention.
The issues
[23] The judgments of Judge Harrison in the District Court and Gordon J in the High Court were concerned only with the 2013 levies. As the result of the judgment of Gordon J was that Yee might have a defence or defences to the demand for the 2013 levies (depending on the further findings of fact to be made by the Tribunal on the three issues remitted to it by Gordon J for further consideration), Mr Dean did not seek to support the demand and the liquidation claim by relying on the 2013 levies. As the matter was argued, the issues were limited to the following:
(a) Does Yee have a genuine and substantial argument that the Body Corporate did not validly delegate to the Body Corporate Committee (the Committee) the power to raise the 2014 and 2015 levies?
(b) If the answer to issue (a) is “yes”, does Yee have a genuine and substantial argument that decisions of the Committee raising the 2014 and 2015 levies were never validly ratified by the members of the Body Corporate?
(c) Does s 121(1) of the UTA require that levies raised by a body corporate can be raised only for the purpose of payment into one or more of the funds described at ss 115, 117, 118 or 119 of the UTA? If so, did the Body Corporate establish and maintain one or more of those funds (a) into which the 2014 and 2015 levies were to be paid and (b) from which the Body Corporate was entitled to pay for the repair work?
(d) Is the Body Corporate entitled to a liquidation order because Yee has failed to produce sufficient evidence rebutting the presumption of insolvency created by its failure to comply with the demand?
The documents relied upon by the Body Corporate
[24] The Body Corporate relies in particular on an agenda for its AGM of 27 August 2014, the list of resolutions sent to members in advance of that AGM, and the AGM minutes themselves.
[25] The agenda for the 27 August 2014 AGM contained the following:
4) Financial
A copy of the financial accounts and notes for the year will be distributed with the agenda.
...
b. Long Term Maintenance Fund
The needs of the building remediation have exhausted the funds in the Long Term Maintenance (LTM) Fund. Until such time as the building remediation is complete, it is suggested funds first be applied to the building repairs with the LTM fund to be re-established once repairs are completed.
Special Motion:
“The expenditure of LTM funds on building remediation costs to date be approved and ratified and the LTM fund be disestablished until such time as the building remediation is complete when an updated LTM Plan can be developed recognising the impact of the remediation on future LTM requirements, and the LTM fund be re-established at that point.”
...
7) Committee
...
Special Motion:
“The Committee is delegated the full powers and authority of the Body Corporate, subject to any prior direction given at any General Meeting of the Body Corporate or prohibition as contained in Section 108(2) of the Act.”
...
...
Building Levy
Prior to the meeting owners will be provided with spreadsheets containing:
Ordinary Motion:
“The meeting raise a building remediation levy of such amount and for payment at such time(s) as it deems necessary to take the Body Corporate through to when the remedial works are anticipated to commence.”
...
[26] The form sent out to members in advance of the 27 August 2014 AGM set out the text of each resolution which would be put to the meeting. Beside each resolution, the form stated whether the required resolution was an ordinary resolution (which could be carried by a simple majority of those members present and voting), or a special resolution (which would require the votes of 75 per cent of those members present and voting). A column on the right hand side of the form provided for a member giving a proxy direction or making a postal vote to check whether the member was “for” or “against” the motion.
[27] The proxy direction/postal vote form for the 27 August 2014 AGM included the following resolutions:
...
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“The meeting agrees all building remedial costs (excluding soft
furnishings, window dressings and floor coverings) are to be
apportioned on the
basis of the QS forecast of each units share of private property costs and
their percentage of common
property costs to create a % forecast formula, which formula shall be
adopted as a utility interest to be
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Special
Designated
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applied to all building remedial costs and levies be
raised based upon the utility interest.”
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“In the event the preceding motion is passed and the necessary
designated resolution process is not successfully challenged
then the Secretary
will carry out a reconciliation of all building remediation costs incurred to
date and an adjustment shall be
made in regards to each units share of building
remediation costs incurred to date to reflect the new utility
interest.”
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Special
Designated
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“The meeting raise a building remediation levy of such amount and
for payment at such time(s) as it deems necessary to take
the Body Corporate
through to when the remedial works are anticipated
to commence.”
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Ordinary
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...
[28] The minutes of the 27 August 2014 AGM included the following:
6.0 LONG TERM MAINTENANCE FUND
As the funds had been exhausted it was resolved to disestablish the fund in the meantime and to re-establish this upon completion of the building works.
RESOLVED (SPECIAL):
“The expenditure of LTM funds on building remediation costs to date be approved and ratified and the LTM fund be disestablished until such time as the building remediation is complete when an updated LTM Plan can be developed recognising the impact of the remediation on future LTM requirements, and the LTM fund be re-established at that point.”
Moved: S Sanders
Opposed:4 S Brewer
CARRIED UNANIMOUSLY
...
9.0 COMMITTEE
...
Committee Powers RESOLVED (SPECIAL)
“The Committee is delegated the full powers and authority of the Body Corporate, subject to any prior direction given at any General Meeting of the Body Corporate or prohibition as contained in Section 108(2) of the Act”
Moved: G Cleave
Opposed: J Riddell
CARRIED UNANIMOUSLY
12.0 BUILDING REMEDIATON COSTS
...
RESOLVED (SPECIAL):
Moved: D Greig Opposed: C Riddell
CARRIED (without opposition)
13.0 BUILDING LEVY
...
RESOLVED (ORDINARY):
“The Committee be authorised to review the building remediation cashflow needs after adjustment for the cost apportionment as referred to in Motion 12 and be authorised to raise such further levies as it deems necessary to take the Body Corporate through to when the remedial works are anticipated to be commenced.”
Moved: D Greig
Opposed: B Brewer
CARRIED
[29] The minutes of a Committee meeting held on 2 September 2014 record the following:
With works now scheduled for the New Year the BC will need to raise a levy for the building account before the main levy will be due. Currently we have creditors of $52k CK, $11.5K, Quantum, $3.5K BBCL, $6.5K BCA, 50% of CK will need to be paid once documents are approved and presented for building consent and the balance falling due once consent is achieved. It was agreed to adopt [BBCL’s] recommendation to raise a levy in the region of
$100K for payment in October. [BBCL] have suggested the legal account will require a levy to be raised for payment of Grimshaw and litigation consultants in January 2015 Suggested levy $1 – 2K per owner. We do sympathize with owners that another levy is needed, but at the same time we are trying to give owners as much notice as possible. [BBCL] to raise levy invoices.
[30] In an affidavit sworn for the Body Corporate in support of the liquidation claim, Mr Leishman stated that the committee did in fact raise the $100,000 levy as referred to in the minutes of its 2 September 2014 meeting, and included within that
$100,000 was the first of the levies of $3,079.64 which is claimed from Yee in the statutory demand.
[31] The Body Corporate’s 2015 AGM was held on 1 September 2015. The minutes of the meeting record that the following special resolution was carried unopposed:
The Committee is delegated the full powers and authority of the Body Corporate subject to any prior direction given at any General Meeting of the Body Corporate or prohibition as contained in Section 108(2) of the Act.
[32] The Committee then met on 8 September 2015. The minutes of this meeting record the following:
4. A special building levy (approximately $5500 per unit) will need to be raised to fund consultants, engineers, etc. through to the end of 2015. Suggest we split this into two payments. [BBCL] will send notices out next week to give owners as much notice as possible. A scheme needs to be developed for this, based on unit title percentages as agreed on previously.
[33] Mr Leishman says in his affidavit that the levies referred to in this part of the minutes of the 8 September 2015 Committee meeting correspond with the second and third of the 2014 and 2015 levies of $3,079.64 raised in respect of Yee’s unit.
The judgment of Gordon J on Yee’s appeal
[34] The right of appeal from the decision of the District Court was limited to questions of law only,5 so Gordon J was not able to consider issues of disputed fact on the appeal.
[35] The questions of law which Gordon J dealt with by remitting the case back to the Tribunal for various factual determination, all of them concerned with the validity of the February 2013 levies, were:
(a) Did the Judge err in finding that the power to impose the levy had been properly delegated to the Body Corporate Committee?
...
(c) Did the Judge err in finding that the Committee had the power to impose the levy that it did, for the purpose that it did?
...
(e) Did the Judge err in finding that the Body Corporate was able, as a matter of law, to ratify and confirm the contested resolutions?
...
[36] On question (a), Gordon J determined that the Tribunal’s original finding of fact that the resolution delegating powers to the Committee had “probably been passed as a special resolution” was not a finding available to it on the evidence, and had wrongly been upheld by the District Court Judge. In referring this issue back to the Tribunal, Gordon J said the Tribunal should reconsider whether the delegation was made in accordance with s 108(1) of the UTA, and that in doing so it should consider any fresh evidence from those present at the meeting who may attest to whether the delegation resolution was passed by special resolution.6
5 Residential Tenancies Act 1986, s 119.
6 Yee Good Fortune Investments Ltd v Body Corporate 392619, above n 2, at [27]–[38].
[37] On question (c), Gordon J noted that the effect of s 121(1) of the UTA is that a body corporate that wishes to raise levies in order to fund repairs and maintenance work must ensure the levies are raised in respect of one of the funds described in ss 115, 117, 118 or 119 of the UTA. Her Honour considered the Committee was entitled to establish a contingency fund pursuant to s 118 for the purposes of carrying out remediation works, and to impose levies for that fund. However, her Honour considered the District Court Judge erred in law when he held that the coding of payments to a building ledger was sufficient to establish a contingency fund pursuant to s 118. The establishment of a fund requires a “deliberate decision, made in accordance with standard decision-making procedures”.7 Thus, the District Court Judge erred in finding the Committee had the power to impose the levy that it did, for the purpose that it did.
[38] On question (e), Her Honour determined that the District Court Judge was correct to find that the Body Corporate could ratify the Committee’s resolution imposing a special levy on the members of the Body Corporate. However, the District Court Judge erred in not turning his mind to the question of whether the ratification resolution had been passed by appropriate means, pursuant to the procedural requirements of s 108 of the UTA. As that determination turned on a question of fact, it was necessary to remit the matter back to the Tribunal for further consideration.8
[39] Yee now contends that her Honour’s judgment of 12 April 2017 on three of the six questions of law which were put to her makes it clear that the resolutions relevant to all of the levies claimed in the demand were not validly raised.
[40] The Body Corporate disagrees. It does not seek to rely on the February 2013 levies which were the subject of the proceeding in the Tribunal (and the appeals to the District Court and then to this Court), but says that there is nothing in the judgment of Gordon J which called into question the validity of the resolutions which raised the 2014 and 2015 levies. The demand and the subsequent liquidation claim can be supported on the basis that the 2014 and 2015 levies have not been paid. Yee has failed
7 At [94].
8 At [100]–[110].
to rebut the presumption of insolvency arising from its failure to comply with the demand.
The parties’ submissions
[41] Mr Dean submits that Yee has failed to provide any evidence proving that it is solvent. Therefore, it has failed to rebut the presumption created by s 287(a) of the Act that it is unable to pay its debts.
[42] Any “misgivings” expressed by Gordon J in respect of the Tenancy Tribunal determinations do not apply to the 2014 and 2015 levies. Accordingly Mr Dean submits that Yee has failed to raise a genuine and substantial dispute in respect of part of the demand, being a claim for levies exceeding $9,000.
[43] In respect of the 2014 and 2015 levies, Mr Dean submits that the evidence shows that there was an appropriate special resolution delegating to the Committee the power to raise levies from members for the repair work. As a consequence, Yee can have no reasonable argument over the 2014 and 2015 levies, and its failure to pay those sums, coupled with its failure to comply with the demand and the absence of any significant evidence from Yee that it is solvent, justify the making of the liquidation order sought.
[44] Mr Dean submits that the Committee was fully authorised by the resolutions carried at the 27 August 2014 AGM to raise the 2014 and 2015 levies. The subsequent minutes of committee meetings, with Mr Leishman’s evidence, show that the 2014 and 2015 levies were validly raised by the Committee, acting under the authority delegated to the Committee at the August 2014 AGM.
[45] Mr Dean addressed in his submissions an issue raised by Gordon J in her judgment of 12 April 2017 relating to the provision in s 121(1) of the UTA that a body corporate may impose levies to “establish and maintain a fund”. Gordon J noted in her judgment that:9
9 At [62].
The effect of this provision is that a body corporate that wishes to raise levies in order to fund repairs and maintenance work must ensure the levy is raised in respect of one of the funds set out in ss 115, 117, 118 or 119 of the UTA.
[46] Gordon J concluded that the District Court Judge erred in finding on the evidence before him that the Committee had the power to impose the levy that it did, for the purpose that it did. Her Honour stated:10
The Committee was in theory entitled to establish a contingency fund for the purposes of carrying out the repairs and to impose levies for that fund. However, in order to establish such a fund, the Body Corporate was required to make a deliberate decision in accordance with standard decision-making procedures. It was not sufficient, as Judge Harrison held, for the Body Corporate manager to simply code payments to a building ledger.
[47] Mr Dean submits that the agenda and the minutes of the AGM of 27 August 2014 dealt with the disestablishment of the long term maintenance fund, and implicitly authorised proceeding with a contingency fund (complying with s 118 of the UTA), by way of special resolution. The long term maintenance fund then became a contingency fund, available for payment of the cost of repairs.
[48] Mr Dean submits that, in the case of the 2014 and 2015 levies, there is sufficient evidence that a new fund was “established”. There was more than mere “coding payments to a building ledger” (to adopt the wording used by Gordon J in her judgment). The 27 August 2014 special resolution disestablishing the long term maintenance fund, together with the “recommissioning” of that fund as a contingency fund, and the references to a long term maintenance fund in the Body Corporate’s statements of financial position for the year ended 30 June 2013 (and the reference to a “contingency fund” in the 30 June 2016 financial statements), were together sufficient to “establish” any new contingency fund which may have been required by ss 121 and 118 of the UTA. The statements of financial position make it clear that the Body Corporate has been keeping the contributions to this “contingency fund” separate, with each contribution identified as having been made by a particular unit owner. The position in respect of the 2014 and 2015 levies can therefore be distinguished from the facts with which Gordon J was concerned in giving her judgment on 12 April 2017.
10 At [94].
[49] In his oral submissions, Mr Dean made the alternative submission that s 138 of the UTA provided sufficient authority itself for the Body Corporate to levy its members (through the Committee) for the funds necessary to carry out the repairs. He submitted that s 115 of the UTA, while stipulating that a body corporate’s operating account may be used to meet the expenses described in s 115(2), contains nothing to prevent the operating account being used for payment of other expenses which have been approved for payment by the Body Corporate or the Committee.
Yee
[50] For Yee, Mr Dunning submits that the Body Corporate has commenced the liquidation claim for the purpose of gaining procedural advantages over Yee, instead of pursuing a dispute which it knew would have to be resolved elsewhere in an appropriate forum (Tenancy Tribunal or District Court). He submits that the decision of Gordon J has caught the Body Corporate out: at best, the demand and the liquidation claim have been exposed as premature. He submits that the Body Corporate’s purpose in issuing the statutory demand, and then the litigation claim, was to intimidate Yee.
[51] Mr Dunning refers to Nikau Enterprises Ltd v R,11 a case in which a statutory demand was set aside and it was suggested that a fresh notice should be given, where liability was being litigated in another case. He submits that something akin to that situation is happening in this case, but it is too late to set the demand aside.
[52] Mr Dunning submits that the onus is on Body Corporate to prove that Yee is unable to pay its debts, and that it has failed to do so. In the light of the judgment of Gordon J given on 12 April 2017, the Body Corporate may no longer rely on the presumption in s 287.
[53] Mr Dunning refers to Yan,12 and to South Waikato Precision Engineering Ltd v Ahu Developments Ltd, in support of the following proposition:13
11 Nikau Enterprises Ltd v R HC Tauranga M40/906, M42/96, 17 September 1996.
(b) In such circumstances, the dispute, if genuine and substantially disputed, should be resolved through action commenced in the ordinary way and not in the Companies Court.
...
[54] In this case matters have gone well beyond the kinds of situations with which the Court was concerned in South Waikato Precision Engineering Ltd, Grant v Lotus Gardens Ltd, and Yan.14
[55] Mr Dunning submits that the decision of Gordon J, while not necessarily final, has essentially resolved the question of “genuine and substantial dispute” in Yee’s favour. Yee was awarded costs on the appeal in a subsequent judgment delivered by Gordon J, and Mr Dunning notes that the effect of her judgment on the appeal is that the Tenancy Tribunal order, originally made on 25 November 2014, has now been set aside. It cannot be resurrected in its original form.
[56] Further, Mr Dunning refers to written submissions which Mr Leishman made on the appeal to the District Court, in which Mr Leishman said:
[23] It is [the Body Corporate’s] view the “building levies” were raised within the operating account under s 115(2)(a) and (b) to meet the costs agreed to be incurred at its 2012 AGM ...
[24] A professional investigation of the maintenance needs of a Body Corporate clearly relates to the fulfilment of the management and governance obligations under s 115(2)(a) and the engagement of Covekinloch to deliver professional services for the benefit of the unit title development fits squarely within s 115(2)(b).
[25] Yee’s contention ... that a separate fund needs to be established to raise a levy is, it is submitted, both illogical and contrary to [the UTA].
[57] Mr Dunning rejects any contention that s 138 of the UTA provides sufficient authority for a body corporate to establish a new fund for repair work. Sections 115 to 119 clearly set out the different funds a body corporate may establish and maintain,
14 South Waikato Precision Engineering Ltd v Ahu Development Ltd, above n 13; Grant v Lotus Gardens Ltd [2013] NZHC 135, [2013] NZCCLR 16; Yan v Mainzeal Property and Construction Ltd (in receivership and in liquidation), above n 12.
and s 121(1) then provides that a body corporate may “determine from time to time the amounts to be raised for each fund and impose levies on the owners of principal units to establish and maintain each fund” (emphasis added). The levy-raising function, then, is governed by s 121(1), and it is expressly linked to each particular fund.
[58] In this case, Mr Dunning submits that it is clear that the Body Corporate never properly established an optional contingency fund under s 118 (in accordance with the decision-making requirements of UTA for so doing), and the submissions made by Mr Leishman on the appeal to the District Court confirm that that is so. Those submissions made it clear that no such fund was ever established – the Body Corporate simply paid the amounts received on the levies into its operating account, and purported to apply them to the purposes identified at s 115(2)(a) and (b) of the UTA (which Gordon J held do not include payment of repair work of the kind for which all of the special levies were raised). The Body Corporate failed to make a deliberate decision, in accordance with standard decision-making procedures, to establish the only kind of fund which Gordon J considered would be available to meet repair costs of the kind the Body Corporate had to pay in this case.15
[59] Mr Dunning also challenges the validity of the 2012 resolution of the Body Corporate which delegated levying powers to the Committee. He referred to the judgment of Gordon J, where the Judge found that there was no evidential basis upon which a decision-maker could conclude that the delegation resolution was passed in accordance with the UTA. In those circumstances, the resolution was presumed to be invalid and, as at 28 November 2012, the Committee did not have authority to impose a special levy upon the members of the Body Corporate.16
Discussion and conclusions
The laws relating to liquidation claims and stay applications
[60] The Body Corporate’s liquidation claim is made pursuant to s 241 of the Companies Act 1993 (the Act) and r 31.3 of the High Court Rules. A liquidation order
15 Yee Good Fortune Investments Ltd v Body Corporate 392619, above n 2, at [94].
16 At [102].
may be made if the Court is satisfied that the defendant company is unable to pay its debts. Pursuant to s 287 of the Act, a company will be presumed to be unable to pay its debts if “the company has failed to comply with a statutory demand”, unless the contrary is proved.
[61] If (as in this case) the company does not comply with a statutory demand served on it by a creditor, and does not apply to set aside the statutory demand under s 290 of the Act, the onus falls on the company to establish that there is a genuine and substantial dispute as to liability to pay. “Cogent evidence, short of actual proof that the debt is not payable, is required”.17
[62] The fact that the debtor may not have applied to set aside the creditor’s statutory demand is not determinative. In Yan v Mainzeal Property and Construction Ltd (in receivership and in liquidation) the Court of Appeal said:18
A company is not prevented from showing that indebtedness is disputed, even if it has failed to apply to set aside a statutory demand under s 290. In such if a case, the failure of the debtor to apply to set aside a statutory demand the creditor is entitled to rely on the presumption of insolvency under s 287(a) of the Act and the onus falls on the debtor to establish that there is a genuine and substantial dispute as to its liability to pay ... Cogent evidence, short of actual proof that the debt is not payable, is required.
...
It must also be kept firmly in mind that the Court will not generally make a liquidation order if the debts relied upon are found to be in substantial dispute and not suitable for resolution in the liquidation list. That is so whether or not the disputed debts are the subject of the statutory demand.
[63] The jurisdiction to stay a liquidation proceeding is to be found in r 31.11 of the High Court Rules and in the Court’s inherent jurisdiction. Rule 31.11 materially provides:
31.11 Power to stay liquidation proceedings
(1) If an application for putting a company into liquidation is made under rule 31.3, the defendant company, or, with the leave of the court, any creditor or shareholder of that company or the Registrar of Companies, may, within 5 working days after the date of the service
17 Duffill Watts Ltd v Mogans Homes Ltd [2009] NZHC 635; [2010] NZCCLR 1 (HC) at [28].
of the statement of claim on the defendant company, apply to the court
–
...
(b) for an order staying any further proceedings in relation to the liquidation.
(2) The court must treat an application under subclause (1) as if it were an application for an interim injunction and, if it makes the orders sought, it may do so on whatever terms the court thinks just.
(3) The inherent jurisdiction of the court is not limited by this rule.
[64] In Nemisis Holdings Ltd v North Harbour Industrial Holdings Ltd, Wallace J provided the following summary of the relevant principles:19
It is a serious matter to stay winding-up proceedings, so the decision to do so is never made lightly. The onus is on the applicant and it is normally necessary to demonstrate “something more” than the balance of convenience considerations which are usually considered on an application for interim injunction. If the defendant company has had an opportunity to file appropriate affidavits, such defendant is required to establish a strong prima facie case of the existence of a genuine dispute on substantial grounds, or show that there are clear and persuasive grounds for a stay.
Relevant sections of the UTA dealing with decision making, including delegation to a body corporate committee
[65] The UTA provides:
101 How matters at general meeting of body corporate decided
(1) Any matters at a general meeting of a body corporate relating to an exercise of a duty or power that may not be delegated under section 108(2), or that have not been delegated to the body corporate committee, must be decided by special resolution.
(2) Except as otherwise provided in this Act, all other matters to be decided by the body corporate at a general meeting must be decided by ordinary resolution.
(3) Any matter that is not on the agenda for a general meeting may be discussed at the meeting but, unless all the eligible voters are present at the meeting, no resolution may be voted on and made in respect of that matter except to include that matter on the agenda for a subsequent general meeting.
(4) Every resolution must be recorded in writing.
19 Nemisis Holdings Ltd v North Harbour Industrial Holdings Ltd (1989) 1 PRNZ 379 at 385.
108 Delegation of duties and powers
(1) Except as provided in subsection (2), a body corporate may delegate any of its duties or powers, either generally or specifically, to the body corporate committee by special resolution and written notice.
(2) The body corporate must not delegate any of the powers or duties set out in—
(a) subsection (1) (which is the general power of delegation):
(b) section 41 (which provides for the reassessment of ownership interests and utility interests):
(c) section 105(4) (which requires the body corporate to comply with the body corporate operational rules):
(d) section 136(4) (which relates to the application of insurance monies in or towards reinstatement of the development).
109 Delegated duties and powers of body corporate committee
(1) A body corporate committee to which any duties or powers are delegated under section 108(1) may, unless the delegation provides otherwise, perform the duties and exercise the powers in the same manner, subject to the same restrictions, and with the same effect as if it were the body corporate.
(2) The body corporate committee must not delegate any of its delegated duties or powers.
(3) The body corporate committee, when purporting to perform a duty or exercise a power under a delegation,—
(a) is, in the absence of proof to the contrary, presumed to do so in accordance with the terms of that delegation; and
(b) must produce evidence of the body corporate committee’s
authority to do so, if reasonably requested.
113 Decision-making of body corporate committee
Any matters at a meeting of a body corporate committee must be decided by a simple majority of votes.
UTA provisions relating to the establishment of bank accounts
[66] The UTA provides:
(1) A body corporate must establish and maintain an operating account for the purpose of meeting the expenses described in subsection (2).
(2) The expenses are—
(a) those relating to the management and governance of a unit title development:
(b) those relating to provision of services and amenities for the benefit of the unit title development:
(c) costs associated with statutory or regulatory compliance:
(d) any ground rental or licence fees relating to the base land:
(e) those incurred at least once a year relating to the maintenance of the unit title development.
(3) The body corporate must establish a current account at a bank and may, by special resolution, nominate a person or persons who may operate the account and specify the manner in which it may be operated.
(1) A body corporate must establish and regularly maintain a long-term maintenance plan.
(2) A long-term maintenance plan must cover a period of at least 10 years from the date of the plan or the last review of the plan.
(3) The purpose of a long-term maintenance plan is to—
(a) identify future maintenance requirements and estimate the costs involved; and
(b) support the establishment and management of the funds; and
(c) provide a basis for the levying of owners of principal units; and
(d) provide ongoing guidance to the body corporate to assist it in making its annual maintenance decisions.
(1) A body corporate must establish and maintain a long-term maintenance fund unless the body corporate, by special resolution, decides not to establish a long-term maintenance fund.
(2) The fund may only be applied towards spending relating to the long- term maintenance plan.
(3) The body corporate must, by special resolution, approve any amount to be spent on any 1 maintenance item if the amount exceeds the amount specified for that item in the long-term maintenance plan by more than 10%.
A body corporate may establish and maintain 1 or more contingency funds to provide for unbudgeted expenditure.
A body corporate may establish and maintain a capital improvement fund to provide for spending that adds to or upgrades the unit title development if that spending is not provided for in the long-term maintenance plan.
The body corporate must establish, in accordance with any regulations, either—
(a) separate bank accounts for each of the funds; or
(b) a single bank account in which the respective funds are kept entirely separate and are able to be identified.
UTA provisions relating to the raising and recovery of levies
[67] The UTA provides:
(1) A body corporate may determine from time to time the amounts to be raised for each fund and impose levies on the owners of principal units to establish and maintain each fund.
(2) The levies must be calculated as follows:
(a) in the case of the operating account, long-term maintenance fund, and any contingency fund, in proportion to each unit owner’s utility interest; and
(b) in the case of any capital improvement fund, in proportion to each unit owner’s ownership interest.
(3) The owner of a future development unit is liable to pay contributions levied by the body corporate under this section from the date that the future development unit is first in use as a place of residence or business or otherwise and from that date that future development unit is to be treated as a principal unit for the purposes of this section.
(4) Any levies imposed by a subsidiary body corporate must be sufficient to pay any levies raised under subsection (1) by the head body corporate, its parent body corporate, or any other parent body corporate located between the subsidiary body corporate and its head body corporate.
124 Recovery of levy
(1) A body corporate must fix the date on or before which payments of levies are due.
(2) The amount of any unpaid levy, together with any reasonable costs incurred in collecting the levy, is recoverable as a debt due to the body corporate by the person who was the unit owner at the time the levy became payable or by the person who is the unit owner at the time the proceedings are instituted.
Section 138 of the UTA – the Body Corporate’s duty to repair and maintain
[68] The section provides:
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 common property; and
(c) any other assets owned by the body corporate; and
(d) any building elements and infrastructure that relate to or serve more than 1 unit.
...
(3) The body corporate may access at all reasonable hours any unit to enable it to carry out repairs and maintenance under this section.
(4) Any costs incurred by the body corporate that relate to repairs to or maintenance of building elements and infrastructure contained in a principal unit are recoverable by the body corporate from the owner of that unit as a debt due to the body corporate (less any amount already paid) by the person who was the unit owner at the time the expense was incurred or by the person who is the unit owner at the time the proceedings are instituted.
(5) For the purposes of this section,—
(a) a subsidiary body corporate is to be treated as the unit owner of the principal unit that was subdivided to create the subsidiary unit title development; and
(b) a reference in subsection (4) to a principal unit includes the common property and units of that subsidiary unit title development; and
(c) the duty to repair and maintain includes (without limitation) a duty to manage (for the purpose of repair and maintenance),
to keep in a good state of repair, and to renew where necessary.
The application of the law in this case
[69] Mr Dean made two submissions that I can address quite shortly. First, I do not think Yee’s failure to respond to the Body Corporate’s statutory demand, or its failure to corroborate “by appropriate supporting documents” Ms Yee’s assertion that Yee is solvent, whether considered separately or together, are enough to justify the making of a liquidation order. (This was issue (d) at para [23] of this judgment.)
[70] Even if a company has failed to apply to set aside a statutory demand it is not prevented from showing in a subsequent liquidation claim that the indebtedness is disputed.20 While the creditor in such case is entitled to rely on the presumption of insolvency created by s 287(a) of the Act, it will be sufficient to defeat the liquidation claim if the debtor establishes by cogent evidence, short of actual proof, that the debt is not payable. If there is a genuine and substantial dispute as to the defendant’s ability to pay, the matter is not likely to be suitable for resolution in the liquidation list.21
[71] The question on the liquidation claim, then, is whether Yee has shown that there is genuine and substantial dispute over its liability to pay the 2014 and 2015 levies.22 If Yee satisfies that evidential threshold, the liquidation claim should be stayed or dismissed.
[72] The second submission for the Body Corporate that I can put on one side is Mr Dean’s alternative submission that s 138 of the UTA provided sufficient authority itself for the Body Corporate to levy its members (through the Committee) for the funds necessary to carry out the repairs. I do not think this submission assists the Body Corporate. In her judgment on the appeal from the District Court, Gordon J concluded that, while large scale repairs such as those to which the Body Corporate has
20 Yan v Mainzeal Property & Construction Limited (in receivership and in liquidation), above n 12.
21 See Yan, South Waikato Precision Engineering Ltd v Ahu Developments Ltd, above n 13, and
Ezipaint Ltd (in liquidation) v Peters Holdings Trustee Ltd [2017] NZHC 3139.
22 The balance of the items claimed in the Body Corporate’s liquidation claim have either not been relied upon by the Body Corporate (the February 2013 levies), or consist substantially of items (eg the claims for interest and costs) which will stand or fall with the Body Corporate’s entitlement to the 2014 and 2015 levies.
committed in this case are within the scope of s 138 of the UTA, if a body corporate wishes to raise levies to fund works under s 138 it may do so, but the levies must be raised in accordance with s 121 of the UTA.23
[73] That is what the Body Corporate has done in this case — it has elected to pay for the relevant works by raising levies. Having made that election, the issue is whether the levies have been validly raised.
[74] The first issue raised by Mr Dunning in his challenge to the validity of the 2014 and 2015 levies is that the Body Corporate did not validly delegate to the Body Corporate Committee the power to raise the 2014 and 2015 levies. If Mr Dunning succeeds with that argument, there is a further question as to whether the raising of the 2014 and 2015 levies by the Committee was validly ratified by members of the Body Corporate.24
[75] The issue over the validity of the 2012 resolution, with which Gordon J was concerned in her decision, was whether or not the resolution had been passed as a special resolution, as required by s 108(1) of the UTA, or whether the resolution was only passed as an ordinary resolution (which would have been ineffective to validly delegate the Body Corporate’s powers to the Committee). There appears to be no similar issue in respect of the 2014 and 2015 levies. At the 27 August 2014 AGM the members of the Body Corporate resolved, as a special resolution, that the “full powers and authority of the Body Corporate” be delegated to the Committee, subject to any prior direction given at any General Meeting of the Body Corporate or prohibition as contained in s 108(2) of the UTA.25
[76] A further special resolution, passed at the same AGM, resolved that all building remedial costs (with certain exceptions) were to be apportioned on the basis of the quantity surveyors’ forecast of each unit’s share of private property costs, to create a percentage forecast formula. That formula would be adopted as a utility interest to be
23 Yee Good Fortune Investments Ltd v Body Corporate 392619, above n 2, at [59], referring to the decision to the Court of Appeal in Body Corporate 162791 v Gilbert [2015] NZCA 185, [2015] 3 NZLR 601 at 57.
24 These are the issues at [23] (a) and (b) of this judgment.
25 Minutes of 27 August 2018 AGM, para 9, at [28] of this judgment.
applied to all building remedial costs, with levies to be raised based upon the utility interest.26 The members at the 27 August 2014 AGM went on to authorise the Committee to “review the building remediation cashflow needs after adjustment for the cost apportionment as referred to in [the motion which resulted in the resolution just referred to].”27 The Committee was then authorised to raise such further levies as it deemed necessary to take the Body Corporate through to when the remedial works were anticipated to be commenced.
[77] It appears that the Committee was sufficiently authorised to raise levies for the first part of the repair work, by the resolutions passed at the 27 August 2014 AGM. The minutes of the Committee meeting held on 2 September 2014 show that the Committee agreed to raise a levy in the region of $100,000 for payment in October 2014, and Mr Leishman stated in his evidence that the first of the 2014 and 2015 levies charged to Yee (that is, the first of the tranches of $3,079.64 set out at [3] above) was included within the $100,000 referred to in the minutes of the Committee meeting of 2 September 2014.
[78] A further special resolution delegating the full powers and authority of the Body Corporate to the Committee, subject to the same provisos as the corresponding special resolution passed at the August 2014 AGM, was passed at the AGM of 1 September 2015. The minutes of the Committee meeting held on 8 September 2015 show that the Committee acted on that delegated authority, agreeing upon a further levy of approximately $5,500 per unit, to be split into two payments. Mr Leishman says that these two payments, as charged to Yee, are the second and third of the 2014 and 2015 levies set out at [3] above.
[79] Before I leave the question of the validity of the Body Corporate’s delegation of the power to levy to the Committee, I mention one further argument raised (faintly) by Mr Dunning in his submissions. The argument was that the raising of the levies by the Committee required a special resolution (presumably passed by the members of the Committee). I do not think that argument could be correct, as s 113 of the UTA
26 At para 12.
27 At para 13.
expressly provides that any matters at a meeting of a body corporate committee are to be decided by a simple majority of votes.
[80] In my view there is no genuine and substantial issue over the validity of the Body Corporate’s special resolutions delegating all powers and authority to the Committee (subject only to the qualification that the Body Corporate could not delegate to the Committee powers that it did not have itself).
[81] It follows that, with that same qualification, there is no need to consider the issue of ratification referred to at [23](b) above.
[82] Mr Dunning is on stronger ground on the third of the issues listed at [23] above. Gordon J considered that the levies for the repair work could only be raised for the express purpose of payment into an optional contingency fund established under s 118 of the UTA. The learned judge expressed the view that a body corporate must establish such a fund to pay for major repairs such as those with which I am concerned in this case. Her Honour considered that the s 115 operating account could not be used for such a purpose, and nor could the long term maintenance fund provided for by s 117, or the optional capital improvement fund provided for by s 119. Levies raised by a body corporate had to be raised for one or more of the particular funds described at ss 115–119: it was not open to a body corporate to raise funds for some other fund or account.
[83] Gordon J considered that the “establishment of a fund” under s 121 of the UTA requires a deliberate decision by the body corporate, made in accordance with the decision-making procedures set out in the UTA, or otherwise in accordance with the body corporate’s operational rules. Her Honour referred in particular to reg 31 of the Unit Titles Regulations 2011, which provides that a body corporate must resolve by ordinary resolution any matter relating to:
(a) the establishment of a bank account; or
(b) the addition of a fund to an existing bank account.
[84] Her Honour considered that the “establishment” of a fund requires something more than merely coding payments to a building ledger;28 there must be a “deliberate decision” by a body corporate to establish any new fund (in this case an optional contingency fund). Her Honour concluded that if the Body Corporate or the Committee did not establish an optional contingency fund under s 118, the raising of the levies would have been ultra vires. If that was so, any later purported ratification would have been ineffective.29
[85] Turning to issue (c) at [23], it appears that, at least up until the time of the AGM in August 2014, the Body Corporate had been using the long term maintenance fund to meet the repair costs. By 27 August 2014 that fund had been exhausted. The relevant resolution30 passed at the August 2014 AGM provided that the long term maintenance fund would be disestablished until such time as the building remediation was complete, when an updated LTM Plan could be developed, recognising the impact of the remediation on future LTM requirements. The LTM fund would be re- established at that point.
[86] In my view there was nothing in that special resolution which could have amounted to a deliberate decision by the Body Corporate to establish an optional contingency fund. Consistent with that view, Mr Leishman stated in a memorandum dated 4 May 2016 filed in the District Court that the “building levies” were raised within the operating account under s 115(2)(a)(b) to meet the costs agreed to be incurred at the 2012 AGM. In that memorandum, Mr Leishman rejected Yee’s contention that a separate fund needed to be established to raise a levy for the building work.
[87] The financial statements for the Body Corporate as at 31 July 2013 did not show any funds in an optional contingency fund. The 2013 financial statements did show the existence of an “administrative fund”, which contained $9,479.91 in “receivables” – proprietor, debtor levies (special). The Body Corporate’s statement of financial position as at 31 July 2016 also showed no funds in a “contingency fund”,
28 Yee Good Fortune Ltd v Body Corporate 392619, above n 2, at [91].
29 At [107].
30 See [28] above.
but the long term maintenance fund was now described as a “contingency fund” (with a zero balance). The same zero balance was shown in the comparative figures for the July 2015 year end.
[88] I consider it arguable for Yee that the resolution passed at the 27 August 2014 AGM to “disestablish” the long term maintenance fund did not, implicitly or otherwise, “establish” an optional contingency fund under s 118 of the UTA. In reaching that view I have in mind particularly the requirement of reg 31 of the Unit Titles Regulations 2011 that the establishment of any new bank account or fund requires an ordinary resolution of a body corporate. There appears to have been no such ordinary resolution in this case,31 and Mr Leishman’s submissions to the District Court tend to confirm that special building levies paid by other unit owners were paid into the Body Corporate’s operating account, established under s 115 of the UTA. While the long term maintenance fund was “re-labelled” as a “contingency fund” in the Body Corporate’s July 2016 financial statements, it is not clear that such a fund existed when the 2014 and 2015 levies were raised.
[89] In the absence of any ordinary resolution for the establishment of a new fund, I think there must be a substantial and genuine dispute over whether any optional contingency fund was ever established. If it was not, the effect of the judgment of Gordon J would be that the 2014 and 2015 levies were invalid, and the resolutions on which those levies were based could not be saved by any form of ratification.
[90] It may be that there are arguments for the Body Corporate that Gordon J was incorrect in her view that the costs of repairs effected by a body corporate under s 138 can only be paid from a s 118 optional contingency fund. There appears to be very little authority on the point, and I note that under the Unit Titles Act 1972 a body corporate was entitled to pay for necessary repairs from the same fund that it was required to establish for the purpose of paying general administrative expenses.32 If repairs could be met from the general operating account under the 1972 Act, there is a
31 Unlike the situation in Butcher v Body Corporate 342525 [2016] NZHC 3128, where one of the relevant resolutions confirmed “that the fund styled “long term maintenance fund” is and always has been an optional contingency fund for the purposes of s 118 of the UTA” (see [99] (8) of the judgment).
32 Unit Titles Act 1972, s 15(2)(a).
question as to why a separate fund would have been considered necessary for the payment of repair costs under the UTA.
[91] There might also be arguments for the Body Corporate that the distinction between very minor repairs carried out by a body corporate under s 138 (which would arguably qualify as “the provision of services” under s 115(2)(b) of the UTA) and major repair work of the kind with which this case is concerned, is difficult to justify. At what point would a repair job carried out by a body corporate under s 138 become sufficiently “serious”, or “substantial”, that it could no longer be regarded as a s115(2)(b) “service”?
[92] Those may be arguable matters for the Body Corporate, but they do not in my view diminish the fact that Yee’s position on this point is supported by the authority of Gordon J’s judgment. I note also that in Butcher v Body Corporate 342525, the body corporate used a contingency fund to pay expenses associated with large scale remediation works.33 In those circumstances I am satisfied that this is not an issue which is suitable for resolution in the context of a liquidation proceeding. On any view of it, Yee has raised a genuine and substantial dispute over the validity of the levies, based on the apparent failure of the Body Corporate to establish a relevant fund into which the relevant levies were to be paid.
[93] The finding that there is a genuine and substantial dispute over liability for the 2014 and 2015 levies effectively means that the liquidation claim must be stayed or dismissed. The Body Corporate disclaimed any reliance on the 2013 levies in this liquidation proceeding, and the remaining claims made by the Body Corporate in its statutory demand and subsequent liquidation proceeding are very substantially “parasitic” on the claims for the levies.
Result
[94] But for the position of the supporting creditor, the appropriate course would be to dismiss the liquidation claim. There may well be further appeals from the Tribunal’s decision on the issues that have been referred back to it, and there could be substantial
33 Butcher v Body Corporate 342525, above n 31.
further delays before all issues over the 2013 levies have been resolved. It is better that the Body Corporate’s liquidation claim be brought to an end now. Against that, the right of the supporting creditor to make any application it might wish to make to be substituted as a plaintiff in the proceeding, needs to be considered. There will need to be a valid liquidation claim still on foot when any such substitution application is made (if it is made).
[95] In those circumstances the appropriate course is to order, as I do, that the Body Corporate’s liquidation claim is stayed, with the proceeding adjourned to the list on 20 March 2018 to deal with any application by the Body Corporate 81340 for substitution as a plaintiff.
[96] Counsel may file memoranda on costs if they cannot agree. Any memorandum for Yee is to be filed and served within 20 working days. Any reply memorandum by the Body Corporate is to be filed within 15 workings days of its receipt of the Body Corporate’s memorandum.
Associate Judge Smith
Solicitors:
John Dean Law Office, Wellington for the plaintiff Nat Dunning Law, Wellington for the defendant
Rainey Collins, Wellington for Body Corporate 81340, a supporting creditor
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