Backwash
from the Blue Chip collapse continues with owners of an Auckland investment managed
by Blue Chip unable to recover $89,000 in lost rentals because no steps were
taken to resume possession.
Through a company called BEMA Property
Investments Ltd, Berkie Kapa and Aneta Heke bought into a student apartment
block in Whitaker Place, Auckland, with management of the apartment leased to a
Blue Chip company: Auckland Residential Tenancies Ltd. Another Blue Chip company arranged student
lets, paid costs and sent the net balance monthly to BEMA. Blue Chip managed about 200 units in the 300
unit apartment.
The High Court was told BEMA received no
further rentals from late 2007 after companies in the Blue Chip group came
tumbling down. With Auckland Residential
in liquidation, the building’s manager Theta Management offered BEMA a replacement
management lease; a lease which gave Theta the right to vote on BEMA’s behalf
at Body Corporate meetings. BEMA did not
sign. Several years of intermittent contact
followed between Theta Management and Mr Kapa with Mr Kapa seeking to get
electronic card access to BEMA’s apartment so he could arrange replacement
tenants. Theta Management stalled,
demanding that its new lease be signed.
Over five years passed without Mr Kapa having access. He then learnt that other apartment owners in
the building, who were not part of the Blue Chip controlled scheme, had fought
all the way to the Supreme Court successfully suing Theta Management for trespass
in denying them access to their apartments.
Mr Kapa decided to follow the same route
and sue both the Body Corporate and Theta Management for 68 months of rentals,
agreed to be $89,026, for the period BEMA was unable to access its apartment.
Justice Wylie ruled against BEMA’s claim
for past rentals. It was not in the same
position as the earlier successful apartment owners. They had a proved right of possession to
their apartments. BEMA had leased management
of its apartment to a Blue Chip company: Auckland Residential, now in
liquidation. The liquidator had never disclaimed
the lease. It was still a Blue Chip
asset. BEMA had taken no steps to go
into possession or otherwise end the management lease after Auckland
Residential’s liquidation. With no
proved right to possession BEMA had no claim in trespass for the value of
unpaid rentals.
The Court was told BEMA has eventually
gained access to its apartment, receiving rentals from January 2015.
BEMA
Property v. Body Corporate 366611 – High Court (29.06.16)
16.099