Tribunal Claim, are my properties protected?

[propertybuyingNZ]

Hi Guys,

I am looking forward to a tribunal case and the claimant sent me a border line blackmailing/threatening email stating that because I own properties in NZ, if He won, he will use this information against me. Basically if I dont pay up, he will go after my properties...

I have a property on family trust, as far as I know, this can not be touched.
Then I have 1 other property owned by my LLC.

I have no property on my sole name only, and the court case is against me personally.

Question, lets say he wins, how much my properties are protected?
what can he do against them? Forcing a sale? put charge on it? Can the LLC co owning the one property (totally unrelated entity to the case) be forced to cover the money owned?

Further to this, I am living abroad permanently now, and such I have no employment in NZ, no residence. I have bank accounts though.

Thanks much,
Pete

[Rosco]

Hi Pete,

I can give some general information.

1) Just because a property is in a Trust, doesn't mean it is protected
- if Trust was recently set up to deliberately hide property or assets from creditors, then would probably be looked through
- If the Trust owes you money, then this part isn't protected. This is very common and an example is you set up a Trust. You transferred your personal house to it for $500,000 and you had a $100,000 mortgage which the Trust has taken over. So the Trust owes you $400,000. If this $400,000 has not been gifted, then the Trust still owes this to you, and it forms part of your assets

2) LLC = maybe an LTC?
If you own the shares personally, then this forms part of your assets. So in a worst case scenario if you owned someone personally, they could bankrupt you long term, and then the official assignee would take control of the company shares, and ultimately the company. The company assets could be sold, the funds then flow to the official assignee to pay your debts.

3) Are there any loans from you to LTC or Trust? If so these are your assets, and Official Assignee in worst case could force the LTC or Trust to repay them, unless there are really good loan documents saying for example that loans can't be demanded for X years

4) Are there current accounts within LTC or Trust, that the LTC or Trust owe you? If so these are your assets, and Official Assignee in worst case could force the LTC or Trust to repay them.

Also do you really want to get bankrupted? This can affect bank applications etc in the future. I'm not sure about travel?

Ross

[Keys]

Debt collecting for this instance would be an interesting scenario. How much would you be up for if you lost?

[propertybuyingNZ]

Thanks very much Ross, some great points I need to investigate:

1, the trust is 3 years old, was not set up for this occasion. It owes me money I guess based on your example.
2, How does making someone bankrupt work in NZ? it would be about $5k, not more, does it depend on the sum?
3, There are no loans to LTC or Trust.
4, Yes, it is also the case.

Bankruptcy was not on my mind at all actually. I am just looking into options how much shall I negotiate before the hearing, how much grip they have on me, how much to offer if I want to get rid of this head ache. Thanks much!

[propertybuyingNZ]

Hi Keys,

if I lost would be about $5k, maybe a bit more.
a property sale turned sour and the new buyer want me to pay for an item he believes was faulty and I did not tell him.
(It was in working order on settlement day, but shortly after stopped working, he can not tell exactly when (was away from the property) but had to be replaced.
Now the buyer has legal background and he does it for living, suing people for these kind of issues. I am pretty sure I acted by the books, but not sure I have a chance to prove it, especially from abroad. Estate Agents said I was 100% right.

Thanks!

[Perry]

So this matter is going to a Disputes Tribunal?

[propertybuyingNZ]

So this matter is going to a Disputes Tribunal?

Yes, it is scheduled in a few weeks.

[John the builder]

send email to the tribunal and ask for their comment?

do you have affidavit from witnesses such as agent?

[Perry]

Earlier, you said: "I am living abroad permanently now."

Are you still a NZ citizen?

JTB's advice seems prudent.

Check with the court registrar where the DT Hearing is to take place.

[propertybuyingNZ]

yes, I am living abroad, NZ citizen but no longer resident, not planning to return for 10 years at least.
I have email conversation from the agents.

I am also emailing the tribunal clerk, but he forwards my emails to the claimant what I found rather strange. Anyhow, they suggested I could call them. I am in Europe, 12 hrs ahead, also, not sure how effective a deffence over the phone, from the other side of the world, so I would skip this if possible.

So, the way I see it, I am most likely will lose out , I am pretty sure I did nothing wrong but the odds are not in my favor. Hence I was wondering what happens if I simply dont pay?

[Keys]

Do you have anyone in NZ who knows the situation and can be your agent?

[Wayne]

So, the way I see it, I am most likely will lose out , I am pretty sure I did nothing wrong but the odds are not in my favor. Hence I was wondering what happens if I simply dont pay?

If you just didn't pay then they would have to recover the debt.
Yes they could initiate bankruptcy proceedings but you'd pay the bill before it went very far - wouldn't you?
$5k really isn't that much. Maybe agree before hand to split it and call it quits?

[Rosco]

Can you appoint a friend or another person to act for you in a small claims dispute?

I agree that would be better to have someone there in person.

Who sold the property? If it is your company and not you, then I would really try to argue this part well. That way if you lose, the person would be chasing your company and not you! Could make a big difference.

[SimonW]

I would contact the REAA and ask them what their opinion is with this scenario. If the item was working on settlement day, then I believe the buyer would probably not a case in my opinion only.

When I was selling my mother's house on behalf of her estate, the buyer pointed out that the handle on the dishwasher door was broken at the pre-purchase inspection. This was only two days before settlement, so in the interests of time, I chose to buy a second hand dishwasher and swap it out with the broken one, and the buyer accepted this offer. I installed it and ran it through a full cycle the night before settlement so I knew it was working. Then a week after settlement the vendor contacted me to say the dishwasher had stopped working. I politely advised that it was working on settlement day and that it was no longer my responsibility. I never heard from him again.

As above, ask the REAA or even a good real estate agent to give you their thoughts on your scenario. Unless it was a new or recently new house, a buyer should expect that appliances etc could fail at any time.

[EDIT: more info added below]

http://www.bakermac.co.nz/law/articles/defective-chattels-in-your-new-house.html

In a dispute, the starting point is the terms of the agreement. In the commonly used ADLS agreement, the vendor warrants that on settlement, the chattels are in the ‘state of repair’ as at the date of the agreement (fair wear and tear excepted).

In order for the vendor to have breached that warranty, the purchaser will need to be able to show that the ‘state of repair’ of the chattels on the date of settlement is worse than the ‘state of repair’ of the chattels at the date the agreement was signed. Very few purchasers go through a property and test each element, dishwasher, garage door opener, wall heater, and ceiling fan before they sign the agreement. If the purchaser cannot show that the goods have deteriorated since signing, then the vendor needs only to assert that the chattels are in the same state of repair (on the settlement date) as at the date of signing, and the purchaser can take no action.

[John the builder]

appoint someone as your agent?