What was Tenancy Tribunal case 5226791 about?

The tribunal order states: An application for suppression has been made in this case, and the Tribunal

How much money was awarded in case 5226791?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 5226791?

The primary dispute was Rent arrears.

Where can I read the official tribunal order for case 5226791?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/12152974-Tribunal_Order_Redacted.pdf.

What was Tenancy Tribunal case 5226791 about?

The tribunal order states: An application for suppression has been made in this case, and the Tribunal

How much money was awarded in case 5226791?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 5226791?

The primary dispute was Rent arrears.

Where can I read the official tribunal order for case 5226791?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/12152974-Tribunal_Order_Redacted.pdf.

532 Te Ngae Road, Owhata, Rotorua 3010 Tenancy Tribunal Case 5226791 — Rent arrears

Order

An application for suppression has been made in this case, and the Tribunal orders suppression of both parties’ names and identifying details.
[The landlord/s] for possession of the premises at 532 Te Ngae Road, Owhata, Rotorua 3010

Reasons

Both parties attended the hearing. Both were represented by Counsel. Both provided affirmed evidence after making the RTA sanctioned promise to tell the truth.
The subject of this claim is the premises at 532 Te Ngae Road, Owhata, Rotorua (‘the Premises’) which are owned (she is the owner registered on the certificate of title) by the applicant. How her ownership came about is relevant and explained below.
The respondent’s evidence was that he knew the previous owners of the premises, through mutual friends. He knew the premises had been the subject of break ins and the owners, who lived out of town, might be interested in selling.
The respondent had been living with and caring for his mother in her home and she had recently died. The home where they had lived together, was to be sold in accordance with her Will. He was a beneficiary under her Will but unable to buy her house. He needed somewhere else to live once it sold.
He approached the owners of the premises and advised them he was interested in buying. They said they wanted to sell it. On “a handshake” they agreed basic terms including a purchase price of $260,000.
The respondent began to move in to the premises shortly after this, around December 2019 and also started to attend to repairs that were needed to secure the premises and make them liveable. He replaced a door and repaired windows and began to remove the possessions the owners had left. He was also attending to maintenance and repairs at his mother’s house to prepare that for sale.
The executors of his mother’s estate agreed to advance $30,000 of the inheritance money owing to the respondent, to pay the deposit required to purchase Te Ngae Road.
The vendors of Te Ngae Road suggested that the respondent use their lawyers as there was another solicitor in that legal firm that had indicated he could act for him.
A sale and purchase agreement was then drawn up, confirming the purchase price of $260,000, that a $30,000 deposit would be paid, and settlement would occur on 19 February 2020.
The respondent then ran into difficulties with settling by the agreed date, as the granting of probate on his mother’s estate took longer than expected. He asked family members to act as guarantors, but they were unable to.
The parties were in a relationship at this time.
The respondent said he explained the situation to the applicant, and he said she offered to help by seeing if she could organise a loan through her bank to secure the funds to purchase the property.
The applicant says the respondent asked her if she would be interested in purchasing the property, as he had exhausted all avenues to secure the funds required to settle. She considered this and decided it was a prudent property investment.
The applicant’s bank agreed to advance her the balance of the purchase price, but as a condition of the loan, required the title to be in the applicant’s name so a mortgage could be registered against it
The solicitor acting for the respondent acted for the applicant as well and approached the vendors to see if they would agree to having a new sale and purchase agreement prepared and executed. A second sale and purchase agreement was drawn up, this time recording the applicant as purchaser.
The applicant’s bank also required the respondent to sign a document saying that the $30,000 deposit he had paid was a gift to her. He did this without obtaining independent legal advice and the parties agree that despite that document the $30,000 was never intended as a gift to the applicant.
The vendors of the premises have confirmed in an affidavit, that they never had any direct contact with the applicant and understood the change to the sale and purchase agreement was simply so the respondent could obtain the finance he needed to buy the premises.
The applicant’s mortgage payments were to be around $1,200 per month on a floating rate and the respondent agreed to reimburse her this amount each month. The applicant agreed to pay the rates and insurance as the title was in her name. The financial statement provided indicates that the $1,200 payment each month covered the outgoings and the mortgage for the following two years.
The respondent said he envisaged the arrangement would only be for 6 months or so until the rest of his inheritance came through and he would have a “square up” with the applicant and reimburse her for any costs she had incurred and then have the title transferred back to his name.
The applicant said that she was asked to help and did so both to help the respondent but also as a prudent property investment.
The applicant paid the legal fees of $2,000 and an additional $10,000 as deposit money.
The settlement occurred as anticipated.
The parties moved into the property together as the first of the Covid lockdowns also occurred at this time.
The respondent paid the $1,200 payments he had agreed to. He continued to renovate the premises and the applicant assisted.
In December 2020 the respondent received the balance of his inheritance and was able to settle. He offered to pay the applicant $233,000 in March 2021. He said this was the original purchase price, less the $30,000 deposit and another $3,000 which was his estimation of the rates and insurance and other costs she had incurred.
The applicant rejected this outright, noting that it would need to be substantially higher.
The value of the property increased substantially in the period after March 2020.
Subsequently the parties have been unable to agree a fair price for the transfer of the property to the respondent.
The relationship between the parties has deteriorated.
The applicant wants the respondent to move from the property. He does not believe he should have to do that. He wants to settle with her, have the property transferred to his name as anticipated and remain living there as the owner.
Family Court proceedings have confirmed that the property is not “relationship property”.
The applicant’s attempt to have the respondent removed by the Police by enforcement of a trespass order have been unsuccessful.
The respondent has registered a caveat on the title to the property. The Tribunal application
The applicant has now applied to the Tenancy Tribunal for a possession order. The written application was made based on significant rent arrears, as the respondent had stopped paying the $1,200 payments.
The parties now agree there is not a tenancy. The application was orally amended at a case conference.
The applicant has now clarified that the application is to have the respondent evicted under s 65 as a trespasser as he has no lawful authority to remain living there.
The respondent has subsequently filed proceedings in the High Court for a declaration of a constructive or resulting trust.
At the time of the hearing no further steps had been taken in relation to the removal of the caveat. Relevant law
Section 65 Residential Tenancies Act 1986 (‘RTA’) provides: (1) Where, on the application of any person entitled to possession of any residential premises, the Tribunal is satisfied that any other person is in possession of the premises as a squatter or trespasser, or otherwise than pursuant to any right of occupation granted to that person by any person having lawful authority to grant that right to that other person, the Tribunal shall make a possession order granting possession of the premises to the applicant. (2) ... (3) To avoid doubt, the Tribunal has jurisdiction under this section even though the premises are not subject to a tenancy agreement.

Is the applicant entitled to an order for possession under section 65 RTA?

In the context of this application for possession under section 65 RTA, I find that the applicant is not entitled to possession of the premises, at least until the High Court determines that issue.
The applicant’s submission that the Tribunal must make the possession order, as she owns the property and does not want the respondent living there any longer, and has revoked his license to occupy the premises, is what must be considered.
As legal owner of the premises, the applicant is prima facie entitled to possession of the premises.
The onus then shifts onto the respondent to satisfy the Tribunal that he is in possession of the premises pursuant to a right of occupation granted by the applicant who is the legal owner of the premises, that has not been lawfully rescinded.
It is not in dispute that the applicant has from the date of settlement, when she became the lawful owner, accorded the respondent a licence to occupy the premises.
The applicant asserts that that licence has since been revoked by her lawyers when the trespass notice was issued.
The respondent’s contention is that it would be premature of the Tribunal to make the possession order sought, as he nevertheless retains a right to continue to occupy the premises because he has a beneficial or equitable interest in the premises. That is the issue that will now be determined by the High Court.

What have the Courts held in similar circumstances?

In Sergeant v Nigro [2019] NZHC 328 Gordon J held that undetermined claims in separate proceedings challenging an applicant’s entitlement to possession and asserting a right to occupation or other interest in the property are not relevant to the Tenancy Tribunal in considering an application for an order under s65 RTA.
The High Court in Sergeant held at [83] there was evidence before the Tribunal that the applicant held legal title to the property. There was also evidence that they had not given the respondent any right to occupy. On the contrary, there was evidence that they had given him notice that he was required to vacate the property.
At [84] counsel for the respondent had asked the Tribunal or District Court to examine an extant claim in the High Court to decide if it had some merit, in other words that it was not speculative, and then determine the very issues that are awaiting determination in the High Court.
In Sergeant, the respondent had filed a claim in the High Court against the executors/trustees of his former partner’s estate challenging the validity of a 2001 Relationship Property Agreement. The respondent Mr Sergeant pleaded that if the agreement was invalid, then the transfer of the property to the trust was equally invalid, and the trustees had no right to demand possession of the property. He also pleaded that he had an interest in the property under a constructive trust.
Mr Sergeant sought orders including setting aside the Relationship Property Agreement, transferring the property from the trust to Mrs Tapsell’s estate and declaring that the trustees held an equal share of the property as trustees on his behalf.
After the hearing in the Tenancy Tribunal, Mr Sergeant filed a further amended statement of claim which included a pleading that he had a reasonable expectation of an interest in the property including, but not limited to, a right to occupy the property for the remainder of his life.
As part of the amended relief, Mr Sergeant sought a declaration that he was entitled to remain in the property for the remainder of his life or such time as his health allowed him to remain in the property.
Mr Sergeant’s claim was yet to be heard in the High Court at the time the Tribunal heard the trustees’ claim for a possession order under section 65 RTA.
Mr Sergeant deposed that the trustees had attempted to evict him from the property after Mrs Tapsell died. He says he resisted the eviction by registering a caveat to protect his interest in the property.
Ultimately, the High Court held: [91] The wording of s 65 requires the Tribunal to be satisfied that the applicant is “entitled” to possession. The fact that there is an extant claim challenging that entitlement does not change the present position. Similarly, Mr Sergeant’s undetermined claim as to his rights in respect of the property does not change the position that the legal owners have given him notice to vacate. [94] It is not open to the Tribunal to consider the fact of a claim or the contents of the claim in another court when deciding if the trustees were entitled to possession and/or if Mr Sergeant was in possession as a squatter or trespasser or otherwise than pursuant to any right of occupation granted to him. [104]... As noted, once the statutory pre-requisites under s 65 are satisfied, it is mandatory for the Tribunal to make an order. Accordingly, the existence of alternative remedies is irrelevant.
[106] ...the Judge was correct to determine that the Tribunal cannot consider claims made by the appellant in another proceeding when deciding if the applicant for an order for possession has proven the pre-condition for an order under s 65. That is the correct position even employing s 85 RTA. That section does not have such a wide ambit so as to allow a consideration of Mr Sergeant’s claim in those other (undetermined) proceedings. Parties’ submissions regarding applicability of this case
The applicant submits that in a similar way I cannot inquire into the merit or otherwise of the extant Hight Court proceedings filed by the respondent in this case.
The applicant says that when dealing with her application for a possession order under section 65 RTA, I cannot consider the respondent’s claims in those other undetermined proceedings in the High Court.
The respondent says that the decision in Sergeant v Nigro [2019] NZHC 328 is materially distinct from his case in a number of important ways.
Firstly, that he and the applicant had an oral agreement that she would hold the property on trust for him pending the receipt of his inheritance at which point she would transfer the property to him and he would pay the mortgage and any other expenses she had met.
The applicant has not applied for or had the caveat on the title removed.
Mr Sergent’s interests were by way of constructive trust, which is materially different to a resulting trust, which is his primary cause of his action in the High Court. The resulting trust is pleaded on the basis that he has been the beneficial owner, and therefore a lawful occupant, from the outset. High Court Decision granting leave to appeal and subsequent relevant case law.
In declining to make the possession order sought I have also considered the subsequent decision of the High Court, granting Mr Sergeant leave to appeal the Court’s earlier finding that the possession order must be made regardless of whether there maybe merits in his alternate proceedings. In essence whether it would always be fair to grant the possession order, irrespective of the merits and before the alternative claims could be heard; Sergeant v Nigro [2019] NZHC 902 (26 April 2019).
The decision granting leave to appeal says: “I accept that my decision may have application beyond the parties in this case, so that a party may use s 65 to determine a claim that the opposing party may have in another proceeding. [40] The very nature of the Tenancy Tribunal is that it is cost effective and easy to access. I accept that, for example, s 65 may be used to dispossess a party who has a relationship property claim to a property which may include a claim to a right of occupation and other claims under the Property (Relationships) Act 1976 before those claims have been heard. The consequence of this, is that s 65 operates to provide possession in circumstances where the party’s “right” of possession is actively being challenged and may subsequently be successfully challenged. [41] There is an available argument as to whether this was Parliament’s intent when amending s 65 of the Act in 2010. [42] I accept that, while the threshold for leave is high, Mr Sergeant has identified an arguable error of law in my decision, and that issue has general importance beyond the parties in this case.
Unfortunately, the Appeal was not pursued so the Court of Appeal did not issue a decision on the “arguable error of law” regarding the directive that the Tribunal must make the possession order once the applicants right to possession was established, so limited weight can be given to the decision granting leave.
The High Court decision of Willigers v Churchill Fishing International Limited [2020] NZHC 2212 is also relevant in two ways. The Court confirmed that any claim for a resulting trust is for the High Court to consider, before it would be relevant for a defence to a possession order in Tribunal (Paragraph 14).
The Court was also considering the general law around applications for a stay. In essence the balancing the right of the winning party to the fruits of their victory, with factors that would support a stay being ordered, which has similar practical implications for the parties to this dispute. The Court said; [11] There are three factors in favour of the stay being granted in the present case. The first is that Mr Willigers will be required to leave the place he lives in if the stay is not granted. This will involve a very significant disruption to him. The second factor is that his present partner and her baby presently live with him. There will accordingly be similar significant impact on third parties if the stay is not granted. Thirdly, the absence of a stay may well render the appeal nugatory or at least make it very much less significant. Those three factors suggest that a stay for a short period until the appeal is heard could well be appropriate. [12] But there are several other factors that mean the stay is not appropriate in the present case in my view. [13] First the appeal before the Court is a second appeal. There have already been two decisions of the Tenancy Tribunal and one decision of the District Court on the merits of Mr Willigers’ right of occupation and the requirement for him to leave. In terms of the Tribunal, its function is to make the practical assessments of the rights of tenants and landlords and the rights to possession in a prompt way, and it has done so in the present case. Its function in this respect should be respected. The application for a stay cuts across the scheme of the access to the Tribunal under the Residential Tenancies Act 1986. [14] Second, the reason why the Tribunal and the District Court are wrong has not been persuasively set out to this Court. Ms Haszard argued that the Tribunal was wrong not to consider the evidence that Mr Willigers had an interest by way of resulting trust in the property. But even if this is established I am unclear why that would give rise to right of possession to the property, certainly possession in the nature of a tenancy. Any claim to an equitable interest will need to be established in the High Court first before the question of equitable remedy is addressed, and I note that only a percentage interest is sought by Mr Willigers. Effective relief could still be granted even if the present claims in relation to possession fail. It is also relevant that a caveat is presently in place and this exists to protect Mr Willigers’ claims to an equitable interest. [15] The third factor is that there is no tenancy agreement in place and never has been. The reality is that Mr Willigers is not paying rent. In those circumstances it is difficult to see why he should be granted what is effectively a right to continue to occupy the house at no cost as a consequence of a stay entered by the Court. [16] The fourth point is that in Mr Brown’s evidence there is a suggestion that the house is not in a state fit for occupation. The photographs taken in October 2019 suggest that, although it is not accepted that they show the present state the property. In addition Mr Brown’s evidence to the effect that testing has been undertaken at the property and the presence of methamphetamine is very high suggesting that the house has been used for methamphetamine manufacture, if true, is concerning. It is also reasonably well-established that the property is not insured. It may be inappropriate for the property to be presently occupied. I make no findings to that effect but I recognise that these are important factors to be taken into account. [17] Finally, the claims that Mr Willigers makes are that there should be a resulting trust in his favour. But they do not appear to be strong. They are based on an alleged agreement to purchase a share in the property. It is only a claim to an equitable interest of a certain percentage. It does not seem to me that that gives him a right of occupation. That distinguishes the case from the other cases such as Sergeant v Nigro.
If successful in the High Court proceedings to grant the possession order may prevent the respondent being entitled to the fruits of its judgment. An appellant who seeks to stop this must make an application and show why the usual consequences of a judgment should not follow. The court will need to balance the competing rights of the party who has obtained judgment against the need to preserve the appellant’s position in the event of the appeal succeeding. ...
In essence, while acknowledging that the usual position will be that the Tribunal must make the possession order sought, as prima facie, the s65 requirements are met, it is also necessary to carefully weigh the competing factors in the balance between the right of the respondent to have the fruits of a successful appeal to the High Court including the need to preserve his position in case the appeal is successful. Findings
The first consideration is whether the claims that the respondent is making that there should be a resulting trust in his favour, appear to be sufficiently strong?
The evidence confirms that it was always intended that the respondent would purchase and own the property, he had negotiated the deal and in reality, the respondent assisted him with obtaining finance to complete the transaction. The finance was envisaged to be provided on a temporary basis until his inheritance money was available.
The fact he negotiated the terms of the sale, paid the $30,000 deposit and then all mortgage payments until they disagreed about the amount of the payment he must make to settle the transfer of the property back to him means that in reality the only outstanding issue is how much he must now pay to settle with the applicant.
His High Court claim to an equitable interest is not therefore that he is only entitled to a certain percentage of the ownership. His claim is that he is entitled to a continued right of occupation as an equitable owner.
He has been in occupation for a long period of time (since December 2019) and said he has nowhere else to live. He has renovated and improved the property and has a more obvious connection with the property than the applicant who said she does not want possession so she can live there herself. She is not in mortgage arrears and does not need to sell the property, but said she would likely rent it to family members if the possession order were granted.
The respondent confirmed that he has recommenced the $1,200 monthly payments he agreed to make back in March 2020 and he also said he will continue to make the payments until the High Court determines the claims he has filed. This is not therefore a case where he is expecting to stay without making those agreed payments.
There is no suggestion he is causing any damage to the property, his evidence is that, quite to the contrary, and in anticipation that the property will be transferred to him, once the price is agreed, he has continued to make improvements.
He has a registered caveat preventing the applicant disposing of the property until the issues are resolved one way or other, so the applicant cannot sell the property until the caveat is removed.
In conclusion, I find that the applicant is entitled to possession of the premises by virtue of being the registered owner, on the legal title, and no longer wanting the respondent to occupy it. However, I am not satisfied that the evidence is sufficiently clear that the respondent is in possession of the premises as a squatter or trespasser, or otherwise than pursuant to any right of occupation granted to him by the applicant.
While she has attempted to revoke the license to occupy the premises ( that has arisen by virtue of his equitable right to possession), she granted him, at the time she became the owner, in the context of these proceedings, the exact terms of the respondents right of occupation/ownership is not yet specified and is now properly dealt with by the High Court.
The High Court proceedings to resolve the issue, are on foot and until an answer is issued the Tribunal cannot be satisfied the Respondent has no lawful authority to possession and consequently cannot make the possession order sought.

What happens next?

I considered adjourning the applicant’s claim until the High Court issues a decision on the proceedings currently before it.
However, the applicant’s Tribunal claim was lodged as a request for the Tribunal to make a possession/eviction order because the respondent had failed to pay rent (on the basis there was an implied or oral residential tenancy agreement) and the respondent was in significant breach.
At the first hearing the applicant requested that the claim be amended to a request for a possession order under s 65 and this was noted in the first adjournment order.
That is a less than ideal basis for an adjournment and in my view, it is therefore preferable for a new claim to be lodged setting out the correct basis for the possession order, if that becomes necessary.
In other words, this order does not prevent the applicant from lodging a new claim for possession under s 65. As noted, that should now occur only once the High Court has determined the real issue, which is the ownership of the premises.
For the above reasons, this application for possession under section 65 RTA is declined.

Should costs be awarded?

Both parties requested costs.
The usual presumption in the Tribunal is that costs are to be met by parties themselves.
In this case the Tribunal does not consider there are grounds to direct that one party pay the other costs.
There are no grounds to find that the proceedings are frivolous, vexatious or ought not to have been brought.
The issues are complex and the decision declining to issue the possession order is one made by the finest of margins, given the High Court directions about how the Tribunal is to exercise its discretion in a s 65 possession order claim.
The Tribunal is charged with resolving disputes in a fair and expeditious manner. Legal representation is the exception and not the norm. It is imperative that it functions in a manner that produces fair results while remaining both cost effective and easy to access.
There is therefore no cost award made.
I note finally that I regret the delay in issuing this decision. That is partly because it has involved consideration of a number of complex principles which I have endeavoured to set out and explain and partly because of unforeseen external factors that have also contributed.

Tenancy Tribunal case 5226791 — Rent arrears at 532 Te Ngae Road, Owhata, Rotorua 3010

At a glance

Tenancy Tribunal case 5226791 — Rent arrears at 532 Te Ngae Road, Owhata, Rotorua 3010

At a glance

Claims & awards

Order

Reasons

Is the applicant entitled to an order for possession under section 65 RTA?

What have the Courts held in similar circumstances?

What happens next?

Should costs be awarded?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions

Claims & awards

Order

Reasons

Is the applicant entitled to an order for possession under section 65 RTA?

What have the Courts held in similar circumstances?

What happens next?

Should costs be awarded?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions