Minority investors in Christchurch’s Parkview on Hagley successfully challenged moves by VR Group to corral hotel common area for its own benefit.
Based in Auckland, VR Group controls self-catering accommodation at venues throughout New Zealand. Its website boasts over one thousand rooms being available. At Parkview on Hagley, situated on Riccarton Road in Christchurch, it controls through associate company Travellers Inn Ltd 28 of the 40 apartments available for short-term accommodation. VR Group also controls two commercial units forming part of Parkview, manages the hotel business and has its representative Arvinda Saluja chair Parkview’s Body Corporate. Mr Saluja describes his role as ‘revenue manager’ for Parkview.
The High Court was told Parkview apartment owners were advised in early 2020 of a proposed Body Corporate resolution: eight car parks forming part of Parkview’s common property were to be leased to VR Group at a rate of fifty dollars per week per car park. This was described as benefitting guests checking in, enabling them to park closer to reception.
Two unit owners requested further information, asking for: a valuation of the parking spaces; details of the proposed lease; a report on how the changes would affect unit owners use of the site and advice on whether Council resource consent was required. Without responding, VR Group through Travellers Inn pushed through the Body Corporate resolution, using its majority control: 28 votes out of 40.
Minority owners banded together; objecting to the resolution, issuing a section 213 notice on the Body Corporate under the Unit Titles Act. The Body Corporate had favoured the interests of one owner, they said. In effect, VR Group had granted a lease to itself of what was common area intended for use of all unit owners.
In the High Court, Justice Osborne struck down the lease resolution as not being ‘just and equitable.’
Foreshore Equities Ltd v. Body Corporate 396688 – High Court (16.03.21)
21.054