In Body Corporate 204299 & Sayer v Whyte & Ors [2016] NZHC 1164 (PDF) the High Court held that where the division of property between private and common property in a body corporate complex are ‘skewed’ in favour of some owners, the court will not intervene to ameliorate its effect on other owners when the complex is being repaired, as to do so would disturb the contractual rights which the owners acquired when buying into a unit title development.

The facts are again common to leaky complexes. The Burton Street complex of 85 two storey units in 14 separate blocks sought the court’s approval for a scheme of repair pursuant to s 74 of the Unit Titles Act 2010. The scheme was opposed. The issue related to the allocation of costs for 20 common property walls. As only some unit owners had walls which adjoined common property areas, it was argued by the body corporate that it was unfair on them to bear the cost of repairing that common property, as if it was a part of their unit property. A fairer approach was for the cost of repairing the common property to be shared amongst all of the owners.

The court, applying leading authority on s 74 schemes (the Court of Appeal decision in Tisch v Body Corporate 318596 [2011] NZCA 420), said the terms of the scheme ought to depart from the scheme of the Act and the body corporate rules no more than is "reasonably necessary to achieve what it is fair between unit owners and the circumstances". Ameliorating the fact that the common property walls were treated unevenly in the unit title development was a departure more than reasonably necessary for the purposes of repairing the complex (Tisch), so the court declined to approve the scheme.


The decision seems fair; owners faced with the extra burden of repairing the common walls presumably purchased their units knowing, or having had the opportunity to discover, the physical makeup of their units. To allow them to rewrite the basis upon which the unit title of the complex was established would be unfair on other owners, who had also presumably purchased knowing that their units did not face this extra burden. (1)


(1) As Burton Street was one of the first leaky building complexes to come to court, it is sincerely hoped that resolution of this challenge to the scheme occurs soon, to enable the complex finally to be repaired.