Tribunal Rules Jurisdiction Over Mixed-Use Premises

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[2025] NZTT 5158998

TENANCY TRIBUNAL - Wellington | Te Whanganui-a-Tara

APPLICANT: [redacted]

Tenant

RESPONDENT: [redacted]

Landlord

TENANCY ADDRESS: [ADDRESS] 1, Kinleith, RD 1, Tokoroa 3078

ORDER

1. The Tenancy Tribunal declares it has jurisdiction to hear the application filed by [COMPANY].

2. The hearing is adjourned.

3. A further 360 minutes should be allowed for the next hearing of this matter, scheduled before me at this court on the next available date.

4. If either party intends to produce any additional documents at the next hearing, they must email Tribunal at least 5 days before the hearing and cc email the other party at the same time.

5. If the hearing is not needed then [NAME] must advise Tenancy Services as soon as possible.

Reasons:

1. [NAME] and [NAME] attended the hearing.

2. This matter has been set down to decide if there is a residential tenancy for the house attached to the [NAME] at a service station. The parties signed a commercial lease.

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Who are the parties?

3. I accept that [NAME] is a director of [COMPANY] and is the correct respondent.

4. The applicants named a second respondent, [NAME]. [NAME] explained that he and his wife have been running the business and [COMPANY] is their company. [COMPANY] has recently sold its shares to [NAME]. [NAME] currently owns 99% of the shares in [COMPANY] with the final 1% held by a previous director temporarily to allow the supply of goods to the [NAME] to continue. It seems most likely to me that [NAME] is not a respondent. I have removed him as a party but arranged for him to receive a copy of this order.

5. The agreement for the sale and purchase of shares is subject to [COMPANY] consenting in writing to the change. [NAME] does not agree he has consented to the change. This is not really relevant to me because the company exists. I find the correct applicant is the company, [COMPANY], because [COMPANY] is the other party to the commercial lease.

Does the Tenancy Tribunal have jurisdiction?

6. The tenancy premises is the house attached to the [NAME]. The commercial lease commenced in November 2021, with renewal dates in 2026 and 2029. The [NAME] runs in conjunction with the service station and provides office space to the service station operator, and motoring accessories, food and drink and grocery items to the service station and motoring customers.

7. Section 5(1)(a) RTA provides that the Act does not apply where the premises are commercial premises. Section 2(1) RTA defines commercial premises as premises that are not residential. Section 2(3) RTA provides that, where leased premises are used for both residential and commercial purposes, they are deemed to be residential unless it is proved that they were let “principally for purposes other than residential purposes”.

8. When determining whether the Act is excluded, the Tribunal considers the substance of the agreement between the parties rather than the labels they have applied.

9. In determining whether the premises are primarily residential or commercial, relevant factors include: the nature of the premises; any advertising and pre- contractual statements about the intended use of the premises; the terms of the agreement; and whether any chattels provided are more likely for commercial or residential use. Also, the nature of the residential premises (for example, whether the premises contained facilities that one would associate with proper residential purposes); the nature of the commercial use; and the space occupied for commercial use.

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10. In Kahi v Lucas HC AK HC81/96 23 September 1996 the landlord had a lease of commercial premises, where the ground floor was used for a mechanical garage and the top floor was let to a tenant for residential purposes. The High Court held that because premises could include part of any premises the top floor was residential, and the sub lease came within the Act.

11. In the Court of Appeal decision of Main v Main [2007] NZCA 306 the Court found that premises in a commercial building, located in an industrial area, used partly by the applicant as a flat and to operate a [NAME]’ business were let principally for purposes other than residential purposes, and the premises were commercial. [ADDRESS] of Appeal said Kahi was different because in that case the whole of the top floor of the building constituted residential premises, notwithstanding other parts of the building were used for business purposes.

12. Section 10 of the RTA sets out that the onus of establishing that the RTA does not apply rests with the party who is challenging the Tribunal’s jurisdiction. This is [NAME]. The submissions made by [NAME] that the lease is principally commercial include:

• the parties signed a commercial lease which includes both the [NAME] and the house

• GST is payable on the lease

• the house is provided as part of the business of running the [NAME], which is an advantage because the service station is isolated

• there is internal access between the [NAME] and the house

• the security of the [NAME] was key to the running of the service station because of the shared office space.

13. The submissions made by [NAME] and [NAME] in reply include:

• GST is payable on the [NAME] lease only

• the house has its own entrance separate from the [NAME]

• the people running the [NAME] do not need to access the house in order to run the [NAME]

• the [NAME] has the kitchen space it needs and toilet facilities

• the door between the [NAME] and the house can be locked

• the house has been rented out separately to the business for two years recently

• the house is a self contained residential dwelling.

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14. I also note that:

• the house is described as “Residential premises for residential use” in the lease

• the lease splits out the rent to be paid for the house and to the [NAME]

• the diagram attached to the lease shows the house and the [NAME] share one wall and the house is larger in area than the [NAME].

15. It seems most likely to me the [NAME] and service station are principally used as a commercial venture and the house is used principally as a home. There is a clear demarcation between the house and the [NAME] even though the parties signed a commercial lease for the use of both.

16. I find the landlord has not discharged the onus of establishing that part of the premises was let principally for purposes other than residential purposes. The premises are not excluded under section 5(1)(a) RTA and the Tribunal has jurisdiction to determine the substantive issues claimed by the tenant.

What happens next?

17. I have set the application filed by [NAME] down for another hearing. This will be before a different adjudicator.

18. The parties will be notified in writing by Tenancy Services of the date and time of the next hearing.

19. If either party intends to produce any additional documents at the next hearing, they must email Tribunal at least 5 days before the hearing and cc email the other party at the same time.

20. I note [NAME]’ submission that he has never consented to [NAME] running the business. If [NAME] are no longer operating the [NAME] they must let Tenancy Services know as soon as possible that they no longer have a claim against [COMPANY].

[NAME]

24 February 2025

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Please read carefully: Visit justice.govt.nz/tribunals/tenancy/rehearings-appeals for more information on rehearings and appeals.

Rehearings You can apply for a rehearing if you believe that a substantial wrong or miscarriage of justice has happened. For example: • you did not get the letter telling you the date of the hearing, or • the adjudicator improperly admitted or rejected evidence, or • new evidence, relating to the original application, has become available.

You must give reasons and evidence to support your application for a rehearing. A rehearing will not be granted just because you disagree with the decision. You must apply within five working days of the decision using the Application for Rehearing form: justice.govt.nz/assets/Documents/Forms/TT-Application-for-rehearing.pdf

Right of Appeal Both the landlord and the tenant can file an appeal. You should file your appeal at the District Court where the original hearing took place. The cost for an appeal is $260. You must apply within 10 working days after the decision is issued using this Appeal to the District Court form: justice.govt.nz/tribunals/tenancy/rehearings-appeals

Grounds for an appeal You can appeal if you think the decision was wrong, but not because you don’t like the decision. For some cases, there’ll be no right to appeal. For example, you can’t appeal: • against an interim order • a final order for the payment of less than $1000 • a final order to undertake work worth less than $1000.

Enforcement Where the Tribunal made an order about money or property this is called a civil debt. The Ministry of Justice Collections Team can assist with enforcing civil debt. You can contact the collections team on [PHONE] or go to 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.

If you require further help or information regarding this matter, visit tenancy.govt.nz/disputes/enforcing- decisions or phone Tenancy Services on [PHONE].

Mēna ka hiahia koe ki ētahi atu awhina, kōrero ranei mo tēnei take, haere ki tenei ipurangi tenancy.govt.nz/disputes/enforcing-decisions, waea atu ki Ratonga Takirua ma runga [PHONE] ranei.

https://www.justice.govt.nz/tribunals/tenancy/rehearings-appeals https://www.justice.govt.nz/assets/Documents/Forms/TT-Application-for-rehearing.pdf https://www.justice.govt.nz/tribunals/tenancy/rehearings-appeals/ https://www.justice.govt.nz/fines/about-civil-debt/ https://www.tenancy.govt.nz/disputes/enforcing-decisions https://www.tenancy.govt.nz/disputes/enforcing-decisions http://www.tenancy.govt.nz/disputes/enforcing-decisions/

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A manaomia nisi faamatalaga poo se fesoasoani, e uiga i lau mataupu, asiasi ifo le matou aupega tafailagi: tenancy.govt.nz/disputes/enforcing-decisions, pe fesootai mai le Tenancy Services i le numera [PHONE].

Reasons: