The recent Court of Appeal decision Body Corporate S73368 v Otway creates significant financial uncertainty for apartment owners, who could now be liable for repair costs to units other than their own. In Otway, the repair works to a few units was determined to affect the overall weathertightness of the whole apartment complex, meaning those costs were shared amongst all owners. Otway concerned tower two of the Oceanside Apartments, a 12-storey commercial and residential building on the Mount Maunganui beachfront. The first floor apartments have large decks that serve as roofs for ground floor retail units and the pedestrian walkway below. By 2009, the waterproof membrane on the decks had failed, causing them to leak. The Body Corporate maintained the three first floor apartments owned the decks (Deck Owners) and were therefore responsible to repair them. The Deck Owners refused. Under the old Unit Titles Act 1972, the Body Corporate was not empowered to repair the decks as they were contained within the Deck Owners’ units. With the commencement of the Unit Titles Act 2010 (Act), the Body Corporate was able to carry out repairs to the decks and then levy the Deck Owners for that work under s138(4). In 2014, the Body Corporate carried out a range of repairs to Oceanside, including replacing the membrane on the Deck Owners’ decks and select joinery. Some allocation of costs was uncontested (for example, the drainage). When it came to the decks and joinery, however, the Body Corporate argued that the Deck Owners should foot the bill for those repairs. Round one: the High Court The Deck Owners refused to pay, so the Body Corporate sought recovery in the High Court on three alternative bases: 1. The Deck Owners owned their decks and were wilful and negligent in their failure to repair and maintain them (allowing recovery under s127); 2. The Deck Owners owned their decks, but the decks were building elements that served or related to more than one unit (allowing recovery under s138(4)); or 3. The repair works benefitted the Deck Owners substantially more than the other units in the apartment block (allowing recovery under s126). The High Court agreed with the Body Corporate that some of the joinery work benefitted the Deck Owners. However the High Court refused to award the costs relating to the replacement of the membrane because: 1. The Deck Owners were not wilful or negligent; the repairs were due to failures in the construction process (so the Body Corporate could not recover under s127); 2. The Deck Owners owned their decks but the decks formed part of the overall stormwater system (so s138(4) did not apply); and 3. The repair works did not benefit the Deck Owners substantially more than other owners as the repairs related to the stormwater system of the entire building (so s126 did not apply).