Reefshare, Ltd. v. Nagata

• Decision Date: 06 October 1988
• Docket Number: No. 12522,12522
• Parties: REEFSHARE, LTD., a Hawaii corporation; and Association of Apartment Owners of Kona Reef, by its Board of Directors, Plaintiffs-Appellants, v. Russel S. NAGATA, in his capacity as former Director of the Department of Commerce and Consumer Affairs of the State of Hawaii; Evan Clair Hoogs, Mike Lovernich, Mary Lovernich, Joseph Curtis Tyler, Jr., Thelma Weeks Tyler, William Hall, Martin Sherman, Janet Louise Sherman, John Does 7-10, Jane Does 8-10; Doe Partnerships 1-10; Doe Unincorporated Associations 1-10; Doe Corporations 1-10; Doe Non-Profit Corporations 1-10; and Doe Governmental Agencies 1-10, Defendants-Appellees.
• Court: Hawaii Supreme Court

Page 169

762 P.2d 169

70 Haw. 93

REEFSHARE, LTD., a Hawaii corporation; and Association of

Apartment Owners of Kona Reef, by its Board of

Directors, Plaintiffs-Appellants, v. Russel S. NAGATA, in his capacity as former Director of the

Department of Commerce and Consumer Affairs of the State of

Hawaii; Evan Clair Hoogs, Mike Lovernich, Mary Lovernich,

Joseph Curtis Tyler, Jr., Thelma Weeks Tyler, William Hall,

Martin Sherman, Janet Louise Sherman, John Does 7-10, Jane

Does 8-10; Doe Partnerships 1-10; Doe Unincorporated

Associations 1-10; Doe Corporations 1-10; Doe Non-Profit

Corporations 1-10; and Doe Governmental Agencies 1-10,

Defendants-Appellees.

No. 12522.

Supreme Court of Hawai'i.

Oct. 6, 1988.

Syllabus by the Court

1. The general rule is that repeals by implication are not favored and that if effect can reasonably be given to two statutes, it is proper to presume that the earlier statute is to remain in force and that the latter statute did not repeal it.

2. The unanimous consent requirement of § 514E-6(b) does not conflict with the provisions of § 514A-11(11), since the latter statute does not prohibit the establishment of more stringent voting requirements in approving amendments to a project's declaration. HRS § 514A-11(11) merely establishes a minimum approval requirement of a 75 per cent vote.

3. Courts will not presume an oversight on the part of the legislature in the enactment of an amendatory statute where such presumption is avoidable.

4. Where there is no ambiguity in the language of a statute, and the literal application of the language would not produce an absurd or unjust result, clearly inconsistent with the purposes and policies of the statute, there is no room for judicial construction and interpretation, and the statute must be given effect according to its plain and obvious meaning.

5. HRS § 514E-6(b), requiring unanimous vote to amend declaration to permit time sharing, only operates prospectively since it only requires time share plans established after its effective date to comply with its voting requirement, unless such use is explicitly and prominently authorized by the project instruments.

6. Our primary duty in interpreting and applying statutes is to ascertain the intention of the legislature and to implement that intention to the fullest degree.

7. The requirement in § 514E-6(b) that a time sharing use be "explicitly and prominently authorized" in the declaration was intended by the legislature to ensure that the declaration give unequivocal notice to the project unit owners of the authorization for such use.

8. Where the purpose of § 514E-6(b) is to protect the project owner's residential lifestyle, and the statute demands explicit notice as to a time sharing use, we will construe the project's declaration strictly so as to fully effectuate the protective intent of the legislature.

9. The term "temporary residence" contained in the use provision of a declaration does not "explicitly and prominently authorize" a time share use within the meaning of HRS § 514E-6(b).

A. Bernard Bays (Carl H. Osaki with him on the briefs, Bays, Deaver, Hiatt, Kawachika & Lezak, of counsel), Honolulu, for plaintiffs-appellants.

Paul T. Tsukiyama, Deputy Atty. Gen., Honolulu, for defendant-appellee Nagata.

Kenneth A. Ross (Goodsill, Anderson, Quinn & Stifel, of counsel), Kailua-Kona, for defendants-appellees Lovernich, et al.

Before LUM, C.J., and NAKAMURA, PADGETT, HAYOSHI and WAKATSUKI, JJ.

LUM, Chief Justice.

I.

The United States District Court for the District of Hawaii has certified three questions of law to this court based upon the following certified facts:

Plaintiff Reefshare, Ltd. ("Reefshare") seeks to be the developer of a time share ownership plan at the Kona Reef Condominium Project ("the Project"), consisting of 130 units, located in Kailua-Kona on the island of Hawaii. Reefshare owns one condominium unit at the project and also serves as the agent for certain other unit owners who intend to transfer their ownership interests to a time share program called the Reefshare Ownership Plan.

During October 1985, the Reefshare owners requested, through the plaintiff Association of Apartment Owners of Kona Reef ("plaintiff Association"), that the Project's Declaration of Horizonal Property Regime of the Kona Reef ("the Declaration") and attached By-Laws dated May 22, 1979, be amended to expressly permit and authorize time sharing at the Project.

A duly authorized meeting of the plaintiff Association was held on November 24, 1985, and continued to December 23, 1985. On December 23, 1985, the members of the plaintiff Association voted on the time sharing issue with the following results:

                                      No. Units  % Units  % Common Interests
                For time sharing            105    80.88               79.44
                Against time sharing          8     6.15                6.89
                Did not vote                 16    12.30               10.63
                Vote undetermined             1      .77                0.74
                

The Project's Declaration provided, and continues to provide, that any amendment thereto required the approval of the owners of not less than 75 per cent of the Project's common interest. In contrast, Hawaii Revised Statutes ("HRS") § 514E-6(b) required, and continues to require, with various exceptions discussed below, that time sharing can occur in a condominium project only upon an unanimous vote of the project's unit owners.

Time share activities in the State of Hawaii are regulated by the Department of Commerce and Consumer Affairs ("defendant Department") pursuant to Hawaii's Time Share Law Act of 1980, Chapter 186, section 1, as amended, codified at HRS § 514E-1 et seq. The developer of a time share plan must register with the Department in order to implement the Plan. See HRS § 514E-10.

Plaintiff Reefshare submitted its application for time share developer registration to the Department during June 1986, pursuant to HRS §§ 514E-9, -10. By letter dated November 5, 1986, defendant Russel S. Nagata, the former Director of the Department of Commerce and Consumer Affairs, informed plaintiff Reefshare that its application for time share registration was denied. The denial was based solely upon HRS § 514E-6(b). This lawsuit arises out of that denial.

II.

The certified questions as posed to this court read:

1. Was HRS § 514E-6(b) repealed by implication by the enactment of HRS § 514A-11(11) during 1982?

2. Is HRS § 514E-6(b) inapplicable to the present case because:

(a) if the statute applies to the Kona Reef condominium project, it is being applied retroactively because it alters, at least with respect to time sharing, voting requirements previously established in the project declaration and sanctioned by HRS § 514A-82(11); and

(b) such retrospective application was not "otherwise expressed or obviously intended" within the meaning of HRS § 1-3?

3. Until it was amended during December 1985, to expressly, or perhaps more expressly, authorize time sharing, the Kona Reef declaration provided USE. Except for the Resident Manager's Unit each apartment shall be occupied and used as a permanent or temporary residence and for no other purpose.

(Emphasis added). Does said section of the prior Kona Reef declaration satisfy the provision of HRS § 514E-6(b) that time share use may be created if, but not only if, "such use is explicitly and prominently authorized by the project instruments?"

III.

We answer the first question in the negative. HRS §§ 514E-1, et seq. codifies Hawaii's Time Share Law, Act of 1980, Chapter 186, § 1, as amended, specifically governing time sharing in condominiums, cooperatives and planned use developments. HRS § 514E-6(b), enacted in 1980, provides that:

If the project in which the time share unit or time share plan is to be created is not a hotel and does not contain time share units or a time share plan, then such use may be created only if such use is explicitly and prominently authorized by the project instruments, or the project instruments are amended by unanimous vote of the unit owners to explicitly and prominently authorize time sharing. (Emphasis added).

In contrast, HRS §§ 514A-1 et seq. codifies Hawaii's Horizontal Property Regime Law, Act of 1977, Chapter 98, section 2, as amended, generally governing condominiums in Hawaii. HRS § 514A-11(11), enacted in 1982, provides that:

The method by which the declaration may be amended, consistent with this chapter, provided that an amendment to the declaration shall require a vote or written consent of not less than seventy-five per cent of all apartment owners, except as otherwise provided in this chapter. (Emphasis added).

Reefshare argues that the unanimous vote requirement in HRS § 514E-6(b) was repealed by implication by the 75 per cent vote requirement subsequently enacted in 1982 in HRS § 514A-11(11). In support of its argument, Reefshare contends that because the legislature must have been aware of the unanimous vote requirement in § 514E-6(b) when it amended § 514A-11(11) requiring the 75 per cent vote, the amendment must necessarily embrace the entire law on the subject of amendments to condominium declarations and therefore impliedly repealed the § 514E-6(b) voting requirement. Reefshare further argues that the exception to HRS § 514A-11(11), that it shall apply "except as otherwise provided in this chapter," is limited to HRS § 514A.

The general rule is that repeals by implication are not favored and that if effect can reasonably be given to two statutes, it is proper to presume that the earlier statute is to remain in force and that the later statute did not repeal it. State v. Pacariem, 67 Haw. 46, 48, 677 P.2d 463, 465 (1984); Costa Minors v. Flintkote Co., 42 Haw. 518, 529 (1958). Here, HRS § 514E-6(b) can be given full force and effect without contradicting or impairing the express provisions of HRS § 514A-11(11). The unanimous consent requirement of § 514E-6(b) does not...