Body corporate managers owe no general legal duties to individual apartment owners. If they have stuffed up, it is for the body corporate itself to sue its manager, the High Court ruled.
Sheryl Sitara Singh has been bankrupted following what proved to be a quixotic legal campaign against Boutique Body Corporates Ltd and body corporate committee members with her dispute over levies imposed for a $13 million remediation contract at Richmond Terraces, Flat Bush south Auckland.
Angered over increased levies imposed for remedial weather-tightness work at Richmond Terraces, Ms Singh sued Boutique Body Corporates, the body corporate secretary, and individual body corporate committee members alleging they failed to properly manage the project and failed to provide sufficiently detailed reports on the work being carried out.
Associate judge Bell ruled body corporates operating under the Unit Titles Act are like corporates created under the Companies Act. Shareholders of a corporate cannot sue for wrongs done to the company; the company itself must sue. Similarly, apartment owners in a body corporate cannot sue as individuals for any wrong suffered by their body corporate; it is for the body corporate to sue. Judge Bell struck out her legal claim against Boutique Body Corporates. The fact a majority of unit owners voted in favour of the remediation levies imposed, indicated the body corporate itself (represented by its members at a general meeting voting for the levies) did not consider it had suffered any legal injury.
Part of Ms Singh’s claim against individual body corporate committee members (as representatives of the body corporate) was left open. The body corporate had promised to keep apartment owners informed about remediation work. Ms Singh complains she was not kept informed. Since Ms Singh is bankrupt, it is for Insolvency Service exercising her legal rights to decide whether there is any economic merit in continuing with this claim.
Singh v. Boutique Body Corporates Ltd – High Court (19.07.19)
19.131