June 13, 2023
The High Court has recently released a judgment regarding high profile litigation against a New Zealand law firm in relation to advice it provided to a Body Corporate. David Bigio KC appeared on behalf of the successful Body Corporate.
The case involved the Spencer on Byron Building in Takapuna, which had been subject to long running weathertightness defect proceedings. The claims settled and, on its lawyer’s advice, the Body Corporate and the second plaintiff unit owners had entered into a conduct and distribution agreement to determine how the settlement proceeds would be distributed. Before the claims settled, however, the Unit Titles Act 2010 had come into force, vesting ownership of common property in the Body Corporate, rather than in the unit owners.
The Body Corporate subsequently claimed that Grimshaws had breached its duty of care in failing to advise the Body Corporate and second plaintiff unit owners of issues with the conduct and distribution agreement arising out of the introduction of the Unit Titles Act 2010. The High Court has held that the law firm owed the Body Corporate a duty of care and that it breached this in failing to consider the Unit Titles Act 2010 and the issues this gave rise to in respect of the conduct and distribution agreement (particularly in respect of non -plaintiff unit owners on behalf of whom claims in relation to damage to common property were being pursued in the High Court).