What was the outcome of Tenancy Tribunal case 9049084?

The tribunal order states: The application for minority relief is declined, as the application is out of time.

How much money was awarded in case 9049084?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 9049084?

The primary dispute was Unit Titles.

Where can I read the official tribunal order for case 9049084?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/11084360-Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 9049084?

The tribunal order states: The application for minority relief is declined, as the application is out of time.

How much money was awarded in case 9049084?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 9049084?

The primary dispute was Unit Titles.

Where can I read the official tribunal order for case 9049084?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/11084360-Tribunal_Order.pdf.

Auckland Centrral, Auckland City Tenancy Tribunal Case 9049084 — Unit Titles

Order

The application for minority relief is declined, as the application is out of time.
Timetabling has been set for any claim for costs and respective submissions.

Reasons

The claim in this case relates to issues taken by a principal unit owner against a second principal unit owner and the Body Corporate.
The premises in question are known as the Victoria Park Markets.
What is very unusual about these premises, is that while the units are individually titled and owned, from a practical perspective there is no common property. The complex has extensive passageways and paths leading to the units as shown in the below plan, but those passageways are also a principal unit owned by the first respondent VPM PU1000 Limited (which I will refer to for brevity as PU1000B). I say this is unusual because invariably, those sorts of facilities would be common property, so in effect owned and managed by the body corporate for the benefit of all unit owners.
The wider owners in the complex have a licence to access PU1000B under a land covenant. That licence also extends to members of the public using PU1000B to access the other units in the complex.
It is the case that the owners of PU1000B decided to build a restaurant on their unit – which prior would have been an open area used by the other unit owners, their staff, visitors and members of the public.
An EGM was convened on 9 October 2023. One of the resolutions considered, was an application for Body Corporate approval of ‘Milenta’. This resolution was passed, with the minutes recording:
Approval of Milenta Structure (Ordinary Resolution) Resolved that the Body Corporate approves the Milenta structure, noting this is subject to council consent. BC levies are to be paid on Milenta from the date of resource consent approval. Formula to calculate: average rate of BC levies for units 36a and 37a/m2 x m2 of Milenta, less insurance premium (as insurance is paid independently).
According to the minutes, 11 votes were against the resolution, but the majority supported the resolution so it was passed.
I also note that the minutes record that: a. One of the unit owners opposed the passing of the resolution because it was contrary to an encumbrance on the title for the land; and b. One owner asked about minority relief. The minutes record that any “owners have 28 days to make an application”, and further the minutes included a clickable link to section 210 of the Unit Titles Act 2010 on the Legislation website, which is the minority relief provision, as I will discuss shortly.
On 9 November 2023 the Applicant filed this application with the Tribunal, being an application for minority relief, the reasons as set out on the application being: The company that owns Principle Unit PU1000B used their majority ownership within the center at an EGM to pass a motion that the Body Corp agreed to the construction of a *permanent structure (*therefore illegal, also non-consented in terms of Resource Consent and Building Consent) within that Principle Unit, PU1000B (that essentially comprises all the open external space within the Victoria Park Market complex). The structure is a substantial, tenanted restaurant including a commercial extracted kitchen, bar, fitted and loose furniture. Due to the fact that they own a majority of the PU's within the center (44 PU's out of 81 PU's) they were able to pass irrespective of the opposing votes of other Unit Holders, including ourselves as evidenced in the meeting minutes of the EGM. It is our belief that the Body Corp never agreed to this structure in current format, that has now been erected for a period of years. This is primarily because there is not allowed to be a permanent structure built on PU1000B under the 'rules' that the Victoria Park Market complex operates in accordance with. Secondly it eliminates our right to access the exterior space within the center that should be available to all units.
On 11 July 2024 the second respondent (the Body Corporate) applied to strike out the application for minority relief, as the application was out of time.

POSITION OF THE PARTIES

At the hearing, the parties presented submissions on both the application to strike out as the application was late, and the substance of the request for minority relief. I will record the parties positions as follows: Applicants position
In relation to the application for minority relief being filed late, the Applicant submits that they are not professionals in terms of unit title law, and explained that they mistakenly believed that the requirement was one calendar month, not 28 days.
The applicants seek minority relief on the ground that the resolution on 9 October 2023 was unjust or inequitable to the unit owners who voted against the resolution. In the course of the hearing, various arguments were made by the unit owners. That included: a. The Body Corporate should not have approved a resolution for a structure that offended the council-controlled requirements. b. More should have been done to prohibit Milenta from trading given it is without the necessary council approvals. c. The application for consent filed with the council has wrongly indicated that the Body Corporate gave consent. d. There has been a reduction in the value of the units owned by the minority. e. Reducing access to their units, offend the land covenant, and their right of access to the common areas. f. There has been an increase in insurance costs because of the Milenta restaurant, the insurance costs have doubled. Respondents position
Ms Toan submitted that the application for minority relief is out of time, as it was not filed within the required 28 days of the passing of the resolution. It was submitted that the timing was directive and prescriptive, and the application is therefore 2 days late so it should be dismissed.
In terms of the substance of the application for minority relief, Ms Toan submitted that the Body Corporate opposes the application given: a. The resolution addresses the absence of council consent in making the approval conditional on council approval being granted. b. It was accepted that the wording around the levies was technically incorrect. c. In order to grant minority relief, the threshold is high, and account must be taken of all owners. d. The Tribunal could not consider any rights arising under the land covenant as that would relate to title, being a matter within the Jurisdiction of the High Court.
Ms Toan accepted that consent from the Body Corporate was required for the building of the Milenta restaurant.

ANALYSIS

The application before the Tribunal is an application seeking minority relief, being an application under section 210 of the UTA: 210 General relief for minority where resolution required (1) In any case where this Act requires a resolution and the resolution is passed, any person who voted against the resolution may apply to the appropriate decision-maker for relief on the grounds that the effect of the resolution would be unjust or inequitable for the minority. (1A) Subsection (1) does not apply if the resolution is a designated resolution. (2) An application for relief under subsection (1) must be made within 28 days of the passing of the resolution.
Assuming that all of the procedural requirements are met, it is normally the case that when a majority of a body corporate pass a resolution, it is binding on all members of the body corporate. But there is an ameliorating provision, section 210, which provides some ability for a minority to challenge a resolution when an injustice may otherwise arise. But in order to obtain minority relief, there are three requirements, which I summarise as follows: a. The application for minority relief must be applied for within 28 days of the resolution; and b. The application must be made by a person who voted against the resolution; and c. The effect of the resolution must be unjust or inequitable for the minority. I note that the Courts have confirmed this means it must be unjust or inequitable for all of the minority who voted against the resolution.
The Court of Appeal has confirmed in Tremont Holdings Limited v Body Corporate 401803 [2015] NZCA 314, that the threshold for establishing that any resolution is unjust or inequitable for the minority is a high threshold. The courts have consistently emphasised the weight that should be given to decisions made by Body Corporates and confirmed that it is only in limited circumstances will the majority decision will be interfered with.
In this case the application fails on the first requirement, that is the application was filed late. The resolution in question, was passed around midday on 9 October 2023, but the application to the Tribunal was filed on the morning of 9 November 2023, being 31 days after the resolution was passed. The problem for the Applicant is that there is no ability for the Tribunal to extend the 28 day period, and the application must accordingly be deemed as out of time. That means the Tribunal cannot proceed to consider whether minority relief should be granted, and the application on that basis must be dismissed.
I do observe however, that Ms Toan has accepted that the resolution as to the calculation of levies was flawed, and I agree that is the case. Levies for principal units are determined under the formula found in the Unit Titles Act 2010, based on utility interest. Certainly a Body Corporate can resolve to reassess utility interest under section 41, but that requires a special resolution and it is not relevant in the matter before me.
But as far as the application for minority relief is concerned, because it is out of time, the application is dismissed.

COSTS

If costs for this proceeding are sought by any party, I will consider that application on the papers (in writing), based on the following timetabling. a. Any application for costs is to be filed within 10 working days of the date of this order. b. Any response to the application for costs is then to be filed within 20 work days of the date of this order.
I will then consider the request and issue a separate costs order following.

Tenancy Tribunal case 9049084 — Unit Titles in Auckland Centrral, Auckland City

At a glance

Tenancy Tribunal case 9049084 — Unit Titles in Auckland Centrral, Auckland City

At a glance

Claims & awards

Order

Reasons

POSITION OF THE PARTIES

ANALYSIS

COSTS

Topics & place

Residential Tenancies Act sections

Key findings

Property management

Frequently asked questions

Claims & awards

Order

Reasons

POSITION OF THE PARTIES

ANALYSIS

COSTS

Topics & place

Residential Tenancies Act sections

Key findings

Property management

Frequently asked questions