Authors: James Mahuta-Coyle
Published: 11 August 2021
Pages: 23

Introduction

This paper provides an update in relation to the law as it concerns the ability of body corporates to tackle serious damage, defects, and other problems that afflict body corporates from time to time on a complex-wide basis. The starting point for this discussion is the paper delivered by John Greenwood, in his 2019 seminar to an Auckland CPD conference titled “Unit Titles Act 2010: Improving Unit Title Clarity in New Zealand in a Growing Market”. That paper traced the major decisions of the courts to date in tackling multi-unit remedial work or projects, cost allocation, and body corporate dysfunction. This paper considers the cases that have arisen since that time and reflects on the insights that are to be gained from those decisions for body corporates grappling with similar problems now. It also outlines the reserve option for body corporates when ordinary democratic decision-making breaks down: the appointment of an administrator. This tool, a power reserved to the Court to deploy in certain circumstances, can be used to break deadlock and dysfunction and enable tough decisions to be made an implemented.
This paper concludes by mentioning some of the relevant regulatory changes proposed by the Unit Titles (Strengthening in Body Corporates Governance and Other Matters) Amendment Bill, presently before Parliament and being deliberated on by the Finance and Expenditure Select Committee, and comments on whether the Bill is likely to improve the ability of body corporates to respond to complex problems.

Content outline

• The two available pathways
• How the courts are dealing with schemes
• Appointment of administrator
• Examples where administrator appointed
• Strengths and weaknesses of administration
• Legislative change on the horizon