My House My Castle? Maybe Not If It Is A Unit Title

The recently issued High Court judgment of Lake Hayes Property Holdings Limited v Petherbridge [2014] NZHC 1673 concerned a property in Lake Hayes where a company owned eight of nine units in a former motel complex.  The other unit was owned by Ms Petherbridge. The company wanted to acquire Ms Petherbridge’s unit so that it could sell the entire site for redevelopment. Ms Petherbridge did not want to sell her unit, nor did she want to buy all the other units.

The judgment recorded that the company:

• wanted to sell its property for redevelopment but could not find a buyer given Ms Petherbridge’s ownership  of one unit;
• could not convince Ms Petherbridge to sell her unit to the company;
• sought dissolution of the body corporate and cancellation of the unit plan under the Unit Titles Act 2010;
• sought further orders requiring the sale of Ms Petherbridge’s unit to itself under the provisions of the Property  Law Act 2007.

The High Court made the orders under the Unit Titles Act 2010 on the basis that it was “just and equitable” to do so.  It also ordered the sale of Ms Petherbridge’s unit to the company. One of the reasons given for the orders was that Ms Petherbridge spent very little time at the property. It would have been interesting to know if the outcome would have been different if the property had been Ms Petherbridge’s principal residence.

The Court accepted that imposing orders which defeated Ms Petherbridge’s property rights should not be made lightly.  We expect, however, that this is cold comfort to Ms Petherbridge, having being forced to sell her unit essentially so that the company could sell its interest in the property.

Please contact Jeremy Hucker for further information.