What was the outcome of Tenancy Tribunal case 9041004?

The tribunal order states: The application for a declaration that the respondent is in breach of New Zealand

How much money was awarded in case 9041004?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 9041004?

The primary dispute was Unit Titles.

Where can I read the official tribunal order for case 9041004?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9650018-UTA_Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 9041004?

The tribunal order states: The application for a declaration that the respondent is in breach of New Zealand

How much money was awarded in case 9041004?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 9041004?

The primary dispute was Unit Titles.

Where can I read the official tribunal order for case 9041004?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9650018-UTA_Tribunal_Order.pdf.

Akaroa, Akaroa Tenancy Tribunal Case 9041004 — Unit Titles

Order

The application for a declaration that the respondent is in breach of New Zealand tax legislation is struck out for want of jurisdiction.
The applicant’s remaining claims are dismissed.

Reasons

Mr Angus attended the hearing for the applicant company. Ms Bain attended for the respondent. Ms Bain is the chair of the Body Corporate.
The applicant is the registered owner of one of 14 units (Unit 79A) at La Voyageur Apartments in Akaroa. The respondent is the body corporate for the unit title development.
The applicant’s claims are set out in my order dated 18 July 2023. They are repeated below: i.A declaration that the passing, or the not passing, of the following resolutions are invalid because they were required to be passed, or not passed, by way of special resolution: •Resolution at the 15 November 2020 EGM to establish a long-term maintenance fund (LTMF) (passed by ordinary resolution) •Resolution at the 12 September 2021 AGM to fund and implement the LTMF, including the raising of levies and transfer of funds from the operating account to the LTMF account (passed by ordinary resolution) •Resolution at the 2022 AGM to appoint a Body Corporate Manager (passed by ordinary resolution) •Resolution at the 2 March 2023 EGM to opt out of having a LTMF (not passed by special resolution) •Resolution at the 2 March 2023 EGM to revoke the delegated authority of the Body Corporate Committee (not passed by special resolution) •Resolution at the 2 March 2022 EGM to not have a Body Corporate Manager (not passed by special resolution) ii.A declaration that the applicant, and the unit owners for whom the applicant held proxies, did not owe any levies to the Body Corporate at the time of the 15 December 2022 EGM and therefore the denying of votes of the applicant and the proxies was wrong; and an order(s) that the resolutions should reflect the voting as if the denied votes had not been counted. iii.A declaration that the Body Corporate Committee owed the applicant a fiduciary duty and the Committee breached that duty by making payments to third parties when it had no authority from the Body Corporate to do so. iv.A declaration that the Body Corporate and/or the Committee breached its legal obligations when it made honorarium payments and payments to service providers without first deducting tax.
Both parties filed comprehensive written submissions which I can assure the parties I have considered in full, even if I have not specifically referred to them in this decision. Is the resolution passed at the 15 November 2020 EGM to establish a long-term maintenance fund (LTMF) invalid?
At an EGM held on 15 November 2020 the Body Corporate passed a resolution by ordinary majority (seven votes for and five votes against) that the Body Corporate endorse the LTMP and empower the Body Corporate to implement it and fund it by raising a special levy and with provision for a bank loan.
Mr Angus and his company challenged the resolution in the Tribunal claiming that the resolution empowering the Body Corporate to implement the LTMF should have been passed by special resolution and therefore the funding option resolutions are null and void. In a decision dated 23 August 2021 (under application number 9027121), the Tribunal notes (at paragraph 35) that Ms Bain acknowledged that the resolution empowering the Body Corporate to implement and fund the LTMF “was probably invalid” and the Tribunal considered that “it probably was”. The Tribunal ordered the Body Corporate to vote again on the implementation and funding of the LTMP.
Thus, the Tribunal has already made a determination on the issue of whether the resolution passed at the 15 November 2020 EGM to establish and fund a LTMP. This means that the applicant cannot proceed with a second claim on the same issue due to the principle known as res judicata or issue estoppel.
The application for a declaration that the resolution at the 15 November 2020 EGM to establish and fund a LTMF is invalid is dismissed. Is the resolution at the 12 September 2021 AGM to fund and implement the LTMP, including the raising of levies and transfer of funds from the operating account to the

LTMF account invalid?

As ordered by the Tribunal the Body Corporate voted again on the implementation and funding of the LTMF at the AGM held on 12 September 2021. The resolution passed at the meeting by ordinary resolution (seven votes in favour and 5 against) was as follows: “Ordinary Resolution: Propose that the Body Corporate implement and fund the Long Term Maintenance Plan and the Body Corporate Committee to raise the required levies from owners and transfer funds to the nominated Long Term Maintenance Account and to implement the plan according to the Unit Titles Act 2010 Section 116”
Mr Angus claims that this resolution is invalid because it required a special resolution (75% majority) to pass.
Section 101(1) and (2) of the Unit Titles Act 2010 (the Act) provides that a matter to be decided by the body corporate must be decided by ordinary resolution at a general meeting unless the Act provides for the matter to be decided by special resolution.
Sections 116 and 177 of the Act require a body corporate to establish and maintain a long-term maintenance plan (LTMP) and a LTMF. This means that the body corporate does not need to vote on the establishment and implementation of either the plan or the fund but any decisions made on matters regarding either can be passed by ordinary resolution.
Of particular relevance here is section 117 of the Act which provides: “117 Long-term maintenance fund (1) A body corporate must establish and maintain a long-term maintenance fund unless the body corporate, by special resolution, decides not to establish a long- term maintenance fund. (2) The fund may only be applied towards spending relating to the long-term maintenance plan. (3) The body corporate must, by special resolution, approve any amount to be spent on any 1 maintenance item if the amount exceeds the amount specified for that item in the long-term maintenance plan by more than 10%.”
There is no requirement in section 117 that matters regarding the establishment or funding arrangements for the LTMF to be decided by special resolution other than a decision to opt out of having a LTMF and approval of any amount that exceeds 10% of the amount in the LTMP for an item.
I accept that there may have been some confusion caused by the 21 August 2021 Tribunal decision regarding the voting requirements. While the Tribunal did not specifically state why the voting was “probably invalid”, it was the applicant’s claim that it was invalid because it was not passed by 75% majority. However, sections 101 and 117 of the Act are clear that a special resolution is not required to pass the resolutions regarding the implementation and funding of the LTMF.
Mr Angus also claims that the resolution is invalid because the resolution only refers to the LTMP not the LTMF. However, it is clear by the wording of the resolution, in particular the phrase “implement and fund” (my emphasis) the LTMP and to adopt one of the two proposed options to fund it, that the resolution was intended to refer to both the LTMP and the LTMF. In any event, section 117 of the Act requires the Body Corporate to have a LTMF and therefore there is no requirement on a body corporate to vote to implement and maintain one.
I therefore find that the applicant has not established that the resolution passed at the 12 September 2021 AGM to fund and implement the LTMF is invalid and his application for a declaration is dismissed. Is the resolution passed at the 2022 AGM to appoint a Body Corporate Manager invalid?
Mr Angus claims that the resolution to appoint a Body Corporate manager at the AGM held on 25 September 2022 is invalid because it required a special resolution to pass.
However, it is clear from the minutes of the meeting that no resolution was passed to appoint a Management Company and did not need to be passed because it had become mandatory for all body corporates with more than 10 units to have a Manager unless the body corporate resolves, by special resolution, to not have one: section 157B Unit Titles (Strengthening of Body Corporate Governance and Other Matters) Amendment Act 2022.
The Body Corporate has appointed Strata Management to manage the Body Corporate. A resolution to opt out of the requirement to have a Management Company was put to the meeting and the Minutes of the meeting record that “[a]ll owner’s present agreed that our body corporate should have a Management Company. Votes to OPT out 0.”
The applicant’s claim under this head is therefore dismissed. Are the resolutions passed at the 2 March 2023 EGM to opt out of having a LTMF, to revoke the delegated authority of the Body Corporate Committee, or to not have a

Body Corporate Manager invalid?

At the request of the applicant and the owner of five other units (Mr Freeman), the Body Corporate was asked to vote on the following resolutions: i.That the Body Corporate does not have a LTMF. ii.That the Body Corporate revoke all delegations to the Body Corporate Committee. iii.That the Body Corporate does not have a Body Corporate Manager.
Mr Angus said that he held a total of six votes (proxy votes for the five units owned by Mr Freeman plus his own). However, two of Mr Freeman’s votes were disallowed (units 63 and 67) for outstanding levies. The minutes of the meeting record that there were seven votes against each of the three resolutions.
Mr Angus claims that the three resolutions required votes of 75% or more in favour of having a LTMF, retaining the delegation of authority to the Committee, and having a Body Corporate Manager otherwise the Body Corporate will no longer have a LTMF, the delegated authority of the Committee will be revoked and the Body Corporate will no longer employ a Manager.
Mr Angus’s understanding is misguided. The resolutions to not have a LTMF and to not have a Body Corporate Manager are essentially resolutions to opt out of the legal requirement to have both. As mentioned above, 75% of all eligible voters must vote in favour of opting out. Thus, even if all of the six votes held by Mr Angus were counted as being in favour of opting out, this would still be well short of the 75% majority required.
Similarly, while the Act requires a special resolution to delegate authority to the Body Corporate Committee, the Act does not require a special resolution to retain that delegated authority. Again, what Mr Angus is essentially proposing is that the delegated authority given to the Committee (by special resolution at the 25 September 2022 AGM) be revoked. The Body Corporate can revoke the delegated authority by ordinary resolution. Again even if all six of the votes held by Mr Angus were counted that is still two votes short of a majority.
The three resolutions are therefore not invalid and the application for a declaration that they are is dismissed. Were the votes of the applicant and the proxy votes held by Mr Angus wrongly denied by the Body Corporate at the EGM held on 15 December 2022?
The applicant’s vote and the proxy votes Mr Angus held for the five units owned by Mr Freeman were disallowed at the EGM held on 15 December 2022.
Section 96(3) of the Act provides that an eligible voter may not vote unless all body corporate levies and other amounts that are payable to the body corporate in respect of his or her unit have been paid. Section 96(6) provides that the unit owner may pay outstanding levies or other amounts due solely for the purpose of entitling the unit owner to vote and payment does not affect the right to dispute the payment.
Mr Angus does not deny that the applicant and Mr Freeman owed levies at the time of the 15 December meeting. He said that both he and Mr Freeman were disputing the levies.
The applicant claims that he and Mr Freeman were entitled to rely on updated invoices issued by Stata Management on 12 December 2022 which he claims state that there were no outstanding levies as at that date. The invoices start with an “Opening balance arrears” and then list additional levies with a due date of 20 December 2022. The total to pay is recorded at the bottom of the invoices with the statement Total levies due in month”. Mr Angus therefore claims that this meant that the applicant and Mr Freeman were not required to pay the arrears until after the 15 December meeting. He said he therefore had no reason to think that he would have to make a “section 96(6)” payment to enable him to vote at the meeting.
I do not accept Mr Angus’s argument and in my view he is rather disingenuously using a minor technicality to attempt to overturn decisions made by the Body Corporate that he disagrees with.
Clearly the applicant and Mr Freeman did owe levies before the December EGM and they knew that they did. Mr Angus was also aware that having outstanding levies, even if disputed, would prevent them from voting at meetings. Mr Angus was also very aware that the levies could be paid to enable him to vote and this would not prevent him or Mr Freeman from continuing their dispute regarding the levies. In particular, Mr Angus accepts that he received an email from Ms Bain before the September 2022 AGM explaining that the applicant’s vote will be disallowed because it has outstanding levies unless the levies were paid before the meeting. He said that he did not pay the levies before that meeting because he did not want to take part in the AGM. I note too that the applicant paid the levies owed and Mr Freeman also paid some of the levies he owed before the March EGM, despite still disputing them, to enable their votes to be counted.
I therefore find that the votes of the applicant and the proxy votes held by Mr Angus were not wrongly denied by the Body Corporate at the EGM held on 15 December 2022. Did the Body Corporate Committee owe the applicant a fiduciary duty and, if so, did the Committee breach that duty by making payments to third parties?
The applicant claims that the Committee owes it a fiduciary duty and it breached that duty when it made payments to third parties without the authority of the Body Corporate.
Some of the matters Mr Angus raised under this head relate to the findings of the Tribunal in application 9027121 where the Tribunal held that, despite the Committee’s delegated authority expiring on 15 August 2020, there was no breach because all issues had been put to the Body Corporate to be voted on. Mr Angus believes that finding is wrong. However, the Tribunal has made a final determination on the issue and the principle of res judicata prevents the issue being litigated again.
A resolution delegating authority to the Committee was passed by special resolution at the 25 September 2022 AGM. Mr Angus referred to three payments made by the Committee to RVG Law between May 2022 and 25 September 2022, which he claims were made without the delegated authority to do so. Ms Bain explained that these were payments for costs incurred for a claim in the Tribunal.
The applicant has brought this claim against the Body Corporate, not the Committee or individual members of the Committee. In any event, members of a Body Corporate Committee owe duties to the Body Corporate. The Committee (or its members) do not owe any duties to individual unit owners: Singh v Boutique Body Corporates Ltd [2019] NZHC 1707.
Mr Angus refers to the duties imposed on directors in the Companies Act 1993 and suggests that chairpersons of a body corporate are subject to these same duties. However, the Companies Act duties apply only to directors of a company that is incorporated under Part 2 of the Companies Act and registered with the Companies Office. They do not apply to members of a body corporate of a unit title development.
Even if the Committee did owe the applicant a fiduciary (or any other legal duty of care) there is no evidence to support that the Committee made or authorised the disputed payments. Ms Bain and another unit owner have authority from the Body Corporate to make payments to third parties on behalf of the Body Corporate (Ms Bain and the other unit owner are also two of the three members of the Committee). Ms Bain said, and I accept her evidence, that all payments made were authorised by the Body Corporate. Mr Angus did not provide evidence to support his belief that they were not.
The applicant’s claim under this head is also therefore dismissed. Did the Body Corporate and/or the Committee breach its legal obligations when it made honorarium payments and payments to service providers without first deducting tax?
The applicant is essentially asking the Tribunal to make a determination that the Body Corporate or the Committee are in breach of New Zealand tax laws. The Tribunal does not have jurisdiction to make such a determination.
This claim is therefore struck out for want of jurisdiction. General comment
It is apparent that Mr Angus has difficulty in accepting the democratic decisions made by the Body Corporate and tends to look for fault or defects in process in his attempts to void decisions made that he does not agree with. It is also clear that the continual challenging of decisions made are causing frustration among some of the other unit owners and are affecting the smooth running of the Body Corporate. In this regard I endorse the comments made by the Tribunal in paragraphs 58 to 61 in application 9027121. In particular, the following comments: “Repeated applications to the Tribunal are not the answer in cases like this. Co- operation, transparent process and an acceptance of the democratic nature of BC administration and decision making are needed.”
I encourage Mr Angus to take heed of these comments.

Tenancy Tribunal case 9041004 — Unit Titles in Akaroa, Akaroa

At a glance

Tenancy Tribunal case 9041004 — Unit Titles in Akaroa, Akaroa

At a glance

Claims & awards

Order

Reasons

LTMF account invalid?

Body Corporate Manager invalid?

Topics & place

Residential Tenancies Act sections

Key findings

Property management

Frequently asked questions

Claims & awards

Order

Reasons

LTMF account invalid?

Body Corporate Manager invalid?

Topics & place

Residential Tenancies Act sections

Key findings

Property management

Frequently asked questions