Tenancy Tribunal Adjourns Hearing Over Financial and Management Disputes

OUTCOME: Other

__________________________________________________________________________________ 9055264 1

[2025] NZTT Masterton 9055264

TENANCY TRIBUNAL AT Masterton

APPLICANT: [redacted] Owner of a principal unit

RESPONDENT: [redacted]

[NAME_5] Owner of a principal unit

UNIT ADDRESS: Unit/[ADDRESS], [POSTCODE], [ADDRESS] OF THE TRIBUNAL

1. The hearing is adjourned.

REASONS

2. The Tribunal has before it, an application filed by one unit owner, against another. However, at the hearing in Masterton today, the parties agreed that the application should be amended so that it was in fact, an application against the [NAME_3]. Given the claims, I am certain that the correct respondent is the [NAME_3].

3. However, the [NAME_3] comprises 27 principal units. Of those 27 units, 16 are owned by [NAME_4], and 11 are owned by [NAME_1].1 As I understand matters, most of those principal units are affectively bare land, but there are houses

1 This is based on what I was told at the hearing, I have not seen the titles for these properties.

__________________________________________________________________________________ 9055264 2

on principal units, 23 and 24, one of those principal units is owned by [NAME_4], the other [NAME_1].

4. But in terms of utility interest (previously known as unit entitlement), [NAME_4]’s units comprise 58.4% of the utility interest, and [NAME_1]’s, 41.6%.

5. What that means, is that if there is a resolution, [NAME_4] would win the resolution based, either on the usual counting of one vote per principal unit, or if a poll was called.

6. In any event, it is plain that things have not gone well at this [NAME_3] over the past few years. A range of conflicts have arisen between the parties, which has seen the [NAME_3] bank account frozen, and various allegations passed between the unit owners. There have also been issues with paying for repairs to infrastructure (a septic tank system), and the funding of power to run the infrastructure systems. [NAME_4] states that he has paid the power from the monthly levy payments for his units, in order to ensure that water and sanitation is available to the tenants of the houses on the property. In any event, that has created further problems in that [NAME_1] and [NAME_6] consider the levy payments for [NAME_4] are not up today.

7. [NAME_1] has filed this application with the Tribunal, and I convened a hearing today at which [NAME_1] and [NAME_6] was present, as was [NAME_4]. At the hearing the parties, agreed that the focus should be on moving the [NAME_3] forward. While we discussed, the five claims from the applicant, other, various matters were discussed with the intention of developing a plan to move ghe governance forward in a sustainable way.

8. I will begin by addressing the five claims confirmed by the applicant at the hearing.

Appointment of a [NAME_3] manager

9. The applicant seeks the Tribunal require that a [NAME_3] manager be appointed. I confirmed I could not make that order. If the applicant wishes to have a [NAME_3] manager appointed, that needs to be a resolution put to the [NAME_3], and it would be a decision the [NAME_3] would need to make. Perhaps, if the applicants put forward such a resolution, and it was unsuccessful, they could apply to the Tribunal seeking an order of minority relief, but that would be a matter for the future, and it would be by no means certain that the tribunal would make such an order.

An order that [NAME_4] not be appointed as [NAME_3] chair

10.This is not an order that the Tribunal could make. If [NAME_4] is a unit owner, he is entitled to be chair, or any other role in the [NAME_3]. There are some

__________________________________________________________________________________ 9055264 3

limited circumstances where a person cannot be chair again, such as if they are removed from that role, but that is not the situation here.

An order that loans be repaid

11. It is the case that concerns arose over money being withdrawn from the bank account. Clearly, both parties have differing assessments on what went on, but what is not disputed is that the bank accounts have been frozen following a request from [NAME_1] and [NAME_6]. That then had significant consequences for the payment of work on the complex. As an example, there is a septic tank that supplies both of the dwelling units, and so would be deemed infrastructure under the Unit Titles Act (UTA). The system was leaking and both parties have paid for plumbers to undertake work on that system. The cost for Ms [NAME_1] and [NAME_6] was just under $5,000 that they paid directly. Following discussion, the parties accepted that this work would be the responsibility of the [NAME_3], and that [NAME_1] and [NAME_6] should be reimbursed what they paid. It was agreed that following the hearing both parties would contact the bank to have the account unfrozen, and that [NAME_1] and [NAME_6] should be refunded the plumbing cost immediately. That is a very sensible way forward.

12.Beyond that, and AGM is now overdue. We discussed that normally a set of accounts is produced for the AGM, and that will show what funds have gone in and out of the [NAME_3] bank account, and if there are any further concerns, the AGM would be the time to raise it.

Repayment of arrears

13.As I have indicated above, [NAME_4] states that he has withheld some of the levy payments, to cover the power costs that he has paid for. Given the [NAME_3] bank account has been frozen, I can understand why that payment has been made directly by [NAME_4], as an offset from the levy payments. In any event, as the [NAME_3] has a responsibility to pay for the power charges for the infrastructure, the [NAME_3] would need to pay the power bill, one way, or the other, but again that can be accounted for when the accounts are produced for the next AGM.

14. I note here the parties agreed that a separate power supply (account) should be arranged where the contracting party is the [NAME_3], that is very sensible.

Withdrawal of bank account funds

15.Plainly the financial management at the complex is a significant bone of contention between the parties. Again each party has a different perspective of things, but it

__________________________________________________________________________________ 9055264 4

was the concern around the funds that led to the applicants seeking to have the account frozen.

16.At the last AGM, there was a resolution passed to the effect that neither party could withdraw from the bank account, more than $200 without the necessary [NAME_3] consent. That seems very sensible, it would mean that low-value incidentals such as purchasing petrol for the lawnmower, etc, could be paid for in a simple way, and accounted for ultimately in the [NAME_3] accounts. But beyond $200, then they will need to be [NAME_3] approval.

17.Again, this may be a very sensible resolution to carry forward at the next AGM, but it would ultimately answer the applicant’s question about the authority to withdraw account funds moving forward.

Further matters

18.Ultimately, the focus at the hearing today was in moving things forward for both parties, to get the [NAME_3]’s operation effective and compliant with the Unit Titles Act 2010.

19. I encourage the parties to spend time at reviewing the UTA. The UTA provides strict obligations for unit owners, and the [NAME_3], around the operation and funding of the [NAME_3] complex. That legislation can be found at the following address:

https://www.legislation.govt.nz/act/public/2010/0022/latest/DLM1160440.html

20.The UTA sets out the requirements around AGMs, and how they are held. That includes a requirement an AGM be convened, no more than 15 months after the prior AGM (section 89). In reality, there is some work to be completed before the next AGM, around, unfreezing the bank accounts, and sorting out the accounts, but given the AGM is now overdue, that should occur with urgency.

Hearing adjourned

21.Again, the focus of the hearing was getting things heading in the right direction for the [NAME_3]. As can be seen, I have not made formal orders, because I am sure that the issues that arise can be resolved between the parties directly. However, I have adjourned the hearing, and in the event the Tribunal can assist with any further problems or impasse that arises, then the parties can request a further hearing, and we can schedule a hearing then so I can assist at that time.

22. I wish the party as well with the further work needed at the complex, and the next AGM.

__________________________________________________________________________________ 9055264 5

R Woodhouse 11 April 2025

__________________________________________________________________________________ 9055264 6

Please read carefully:

SHOULD YOU REQUIRE ANY HELP OR INFORMATION REGARDING THIS [COMPANY_7] [PHONE].

MEHEMA HE PĀTAI TĀU E PĀ ANA KI TENEI TAKE, PĀTAI ATU KI TE [COMPANY_7] [PHONE].

AFAI E TE MANA’OMIA SE FESOASOANI E UIGA I LENEI MATAUPU FA’AMOLEMOLE IA FA’AFESO’OTAI’I LOA LE OFISA O LE [COMPANY_7] [PHONE].

Rehearings:

You may make an application to the Tenancy Tribunal for a rehearing. Such an application must be made within five working days of the order and must be lodged at the Court where the dispute was heard.

The only ground for a rehearing of an application is that a substantial wrong or miscarriage of justice has or may have occurred or is likely to occur. Being unhappy or dissatisfied with the decision is not a ground for a rehearing. (See ‘Right of Appeal’ below).

Right of Appeal:

If you are dissatisfied with the decision of the Tenancy Tribunal, you may appeal to the District Court. You only have 10 working days after the date of the decision to lodge a notice of appeal.

However, you may not appeal to the District Court:

1. Against an interim order made by the Tribunal. 2. Against an order, or the failure to make an order, for the payment of money where the

amount that would be in dispute on appeal is less than $1,000. 3. Against a work order, or the failure to make a work order, where the value of the work

that would be in dispute on appeal is less than $1,000.

There is a $200.00 filing fee payable at the time of filing the appeal.

Enforcement:

Where the Tribunal made an order that needs to be enforced then the party seeking enforcement should contact the Collections Office of the District Court on [PHONE] or go to www.justice.govt.nz/fines/civil-debt for forms and information.

Notice to a party ordered to pay money or vacate premises, etc:

Failure to comply with any order may result in substantial additional costs for enforcement. It may also involve being ordered to appear in the District Court for an examination of your means or seizure of your property.

http://www.justice.govt.nz/fines/civil-debt