Body Corporate Budgets and Levies – what you need to know

Stephens LAlan Henwood-002awyers Director Alan Henwood has wide experience of the Unit Titles Act 2010 and in this article outlines what you need to know about setting Body Corporate budgets and levies.
A recent series of High Court cases has accentuated the need for care in preparing budgets and raising levies.

There are four designated funds that the Unit Titles Act 2010 contemplates that levies can be raised for:

  1. the operating account,
  2. the long-term maintenance fund,
  3. contingency funds, and
  4. capital improvements.

These recent court cases have clarified that those four funds are the only ‘funds’ for which levies can be raised.  They have also determined that the operating account can only be used for annually recurring expenses and the long-term maintenance fund can only be used for costs identified in the long-term maintenance plan. And while you can operate the various funds through a single bank account, it is not sufficient to have just separately coded or identified the funds: the funds or categories must have been individually established by resolution.

So, what happens if you have a major one–off repair project such as seismic strengthening or recladding?  According to the High Court, you cannot use the operating account (its purpose is annually recurring expenditure), nor can you use the long-term maintenance fund or funds in the long-term maintenance fund.  You also cannot use a capital improvement fund as there is a long-established distinction in law between repair and improvement.  You must establish a contingency fund for the works, inapt as that sounds.

Many body corporates prepare a single annual budget which includes operating expenses, long-term maintenance fund contributions and project expenses, and raise a composite levy.  It seems that this is permissible but when it comes to receipt of levies and actual expenditure, the necessary funds must exist to which transactions are credited/debited.  Where there is a major project our recommendation is that, for transparency, there is a separate budget and separate levies.

Many body corporates also allow for operating contingencies as a budget item. However, the proportion of levies raised for contingencies still needs to be credited to a contingency fund, not the operating account. And if there is no contingency fund the law is anyway that an unbudgeted expense must not make the body corporate insolvent or exceed 10% of the operating account budget.

Associated with challenges to levies, there have also been challenges to process. The courts are requiring clear evidence that due process has been followed.  Minutes that simply state that a resolution has been passed (or the word of the chairperson) are not being accepted. Evidence in minutes of eligible voters, proxies, postal votes, a quorum and votes for and against resolutions are becoming the evidential standard.

This is not making administration of body corporates any easier.  But there is good news.  Provided that a body corporate is acting within its powers, the courts are making it clear that where there is majority support for a proposal, they will not subject it to pedantic analysis.  Challenges to individual expenses and claims that there were better (read ‘cheaper’) ways to carry out a project are being routinely rejected.  A point of judicial exasperation appears to have been reached, with some judges going so far as to suggest that owners who want to challenge everything should possibly think about whether community living is for them.

The message is actually quite simple.  Get your processes right and the courts will support you.  Who knows, the disaffected minority (and there is a saying that “every body corporate has one”) may even come to realise that there is no point in challenging majority decisions.  Then again, pigs may fly……..

Alan Henwood, Stephens Lawyers
DDI:     04 915 9589
M:        029 924 3402




Theatrical Market Statistics 2016

MPAA_Cover_2016-230x300The Motion Picture Association of America (MPAA) has released its 2016 Theatrical Market Statistics. The report finds that, in 2016, the global box office for all films released in each country around the world reached $38.6 billion, up one percent from 2015.

The domestic (U.S. & Canada) box office was $11.4 billion, which grew two percent, while the international box office was $27.2 billion in U.S. dollars, the same as 2015, despite the increased strength of the U.S. dollar and slower growth in China. The international box office now comprises 71 percent of the global box office.

The number of cinema screens increased by eight percent worldwide in 2016 to nearly 164,000, due in large part to continued double-digit growth in the Asia-Pacific region (+18%).

The number of digital screens (+17%) and Premium Large Format screens (+11%) also saw double-digit growth globally. The number of digital screens in the United States has now increased to 98 percent of all U.S. screens. Ninety-five percent of the world’s cinema screens are now digital.

The highest grossing U.S. & Canada box office films in 2016 were as follows:

  1. Finding Dory (Disney): $486.3
  2. Rogue One: A Star Wars Story (Disney): $408.2
  3. Captain America: Civil War (Disney): $408.1
  4. The Secret Life of Pets (Universal): $368.4
  5. The Jungle Book (Disney): $364.0

In 2016, the U.S. & Canada box office was $11.4 billion, up two percent from $11.1 billion in 2015. Tickets sold (1.32 billion) held steady compared to 2015. Three of the top five grossing films in 2016 attracted majority-female audiences. Finding Dory drew the largest proportion of females, with 55 percent of its box office coming from women. The Jungle Book drew the most ethnically diverse audience, followed by Finding Dory and Captain America: Civil War.

The total number of films released theatrically was 718, which was an increase of one percent from 2015. MPAA members, which are the major studios, released 139 films, down five percent in 2016 compared to 2015. Independents continued to release the most films domestically with 579 films, up three percent from 2015.

For further information, see:


Stephens Lawyers congratulates Mark Litwak, 2017 Southern California Super Lawyer

Litwak2Our good friend Mark Litwak, film and entertainment attorney based in Los Angeles, has once again been recognised on the Southern Californian Super Lawyers list as one of the top attorneys in Southern California for 2017.

This is the eighth time Mark has earned this distinction.

Super Lawyers, a Thomson Reuters business, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a rigorous process that includes a statewide survey of lawyers, an independent research evaluation of candidates, and peer reviews by practice area.

For more information, see:

Why you need a Will – what you need to know


Stephens92454_024 Lawyer’s Senior Associate Claire Maddocks shares her knowledge on why you need a Will and the issues you need to be aware of.

When we talk to people about their will, they often say:

  • “I’m not old enough to need a will”
  • “I don’t have anything”
  • “It all goes to my family”.

However, if you’re are adult and have assets, then yes you need a will.  Having assets, doesn’t necessarily mean owning your own home. If you die and have assets exceeding $15,000 in total, then a formal grant of administration from the High Court is required before they can be dealt with or bills paid.

While we might not like to think about what will happen to our belongings when we die, making a will ensures that your wishes will be carried out, including:

  • Who you want to be in charge of dealing with your assets – i.e. ‘executors & trustees’
  • Who will receive or benefit from your assets – i.e. ‘beneficiaries’
  • Any specific instructions regarding organ donation, your funeral, and cremation or burial
  • Any specific gifts of personal items or money that you would like to make?

Very specific rules apply to the administration of Estates.  If you die without a will and are ‘intestate’ then the Administration Act states who can and cannot apply for administration and who is to benefit from your Estate. This may not be the people you intended to appoint or wished to benefit.

For example, if you are married and have children but are intestate (you don’t have a will) when you die, the Administration Act 1969 says:

  • Your spouse is ‘first in line’ to apply for administration of your estate;
  • Your spouse is entitled to receive your personal chattels (i.e. anything that can be moved including vehicles, boats, aircraft. horses, equipment for them, furniture, household effects, clothing, jewellery and watches), a payment of $155,000.00 (with interest – which accrues from date of death until time funds are actually paid out) and 1/3 of anything that remains after that;
  • Your children receive the remaining 2/3 share of your assets after allowing for the above.

The Act also covers what happens if you are unmarried, have no surviving children or other descendants but have siblings or grandparents, or aunts and uncles surviving you.   If you have no surviving family members at all, your assets pass to the State.
You may have a will but the named executors may have died before you, you named your spouse but have since formally dissolved your marriage, or perhaps the person named does not wish to apply and has renounced their right to deal with your estate.  Back we go again to the Administration Act to see who is next in line to apply for administration.

The Act also specifies the people that you have a ‘moral’ obligation to provide for under your will. We will advise you further regarding these obligations if need be.

 What do you need to do?

Provide information to us including: assets and liabilities, your family position, who you want to appoint to handle your estate and who you wish to benefit on your death.  A will can then be drafted for your consideration.

  • Any jointly owned assets pass to the surviving owner.
  • Any assets which belong to a family trust (even if you are a Trustee of the Trust) are dealt with in accordance with the terms of the Trust Deed, not your will.


  • Getting married revokes any will you may have, unless you make in in contemplation of marrying that same person;
  • Formal dissolution of marriage does not revoke your will, but your will is read as if that person had died before you so any entitlement they may have had lapses.

Don’t just sign your will and forget about it. Your will needs to be reviewed from time to time to make sure that it continues to meet your wishes and family circumstances and is appropriate.

Claire Maddocks, Stephens Lawyers
DDI: 04 915 9586


Retirement Villages – what you need to know

92454_024We’re often approached by clients who
are thinking about moving into a retirement
village or who have parents who are
considering making such a move.

Stephens Lawyer’s Senior Associate Claire
Maddocksshares her knowledge on the subject
and the issues you need to be aware of.

When reviewing client’s Wills, Enduring Powers of Attorney or Family Trusts Claire’s frequently told, “I’d never live in a retirement home/village”. However, as people are living longer, they are not always able to manage the upkeep on the family home or find their home far too big for their needs, it can make sense to consider moving to a smaller, lower maintenance property or a retirement village.

Traditional ‘retirement homes’ are fast being replaced by retirement villages offering a variety of levels of care on site. You will have seen advertisements for ‘lifestyle’ villages run by retirement village operators such as Ryman Healthcare, Summerset, Metlifecare, and others.

Depending on which village you are looking at, facilities and care levels will differ. Options for accommodation include serviced apartments with shared communal spaces i.e. swimming pool/garden, independent townhouses or apartments, rest home care or hospital care.

If you are considering moving to a village, take the time to visit several different villages to see what they offer and what will suit your needs best.

Rather than receiving a ‘title’ to your chosen residence at a village, you enter into an Occupation Right Agreement which sets out the terms of your purchase, village rules that apply, contributions for services at the village and what happens if you need to move from say an independent apartment to rest home care.

Buying into a retirement village is a lifestyle choice as opposed to an investment. There are significant costs involved at the time of purchase and, when you leave your chosen residence at the village, your residence reverts to the village operator.

You need to be aware of those costs and balance them against the lifestyle associated with living in a retirement village. While living in a retirement village doesn’t suit everyone, many regard the trade-off as being worthwhile.

We recommend that you discuss any proposed purchase at a retirement village with us to ensure it meets your requirements and you fully understand what you are buying, and whether it best suits your circumstances.

For further information, see ‘Planning for living in a retirement village – a check list:


Claire Maddocks, Stephens Lawyers

DDI: 04 915 9586



The Outlook for Someday film challenge

Lukas Wolfgram,  winner of the 'Stephens Lawyers Media Empowerment Award' with Outlook for Someday 2016 Awards Presenters, Ms Frankie Adams & Ms Kati Wolfe, & Michael Stephens

Lukas Wolfgram, winner of the ‘Stephens Lawyers Media Empowerment Award’ with Outlook for Someday 2016 Awards Presenters, Ms Frankie Adams & Ms Kati Wolfe, & Michael Stephens

Stephens Lawyers principal Michael Stephens had the pleasure of attending the The Someday Awards red-carpet ceremony on 8 December 2016 at the Aotea Centre in Auckland. This year’s Someday Challenge attracted 115 entries from which 39 were shortlisted, and 20 of which received awards.

Two strongly personal family tribute films scooped 2016’s top honours in The Outlook for Someday film challenge.

The Body Shop Standout Winner, ‘Dog Island Motu Piu’, a film by 15-year-old Sarah Ridsdale celebrates her uncle’s role in creating a haven for New Zealand’s native flora and fauna that is also an eco-tourism destination. In ‘Dog Island Motu Piu’ two young tuatara hear from their grandfather about how Peter Ridsdale, who died in June this year, founded the Dog Island Motu Piu Charitable Trust to preserve and promote the sustainability of the island. The 5-minute film has also won the Department of Conservation Big Picture Award.’

The winner of the online vote for the New Zealand On Air Audience Favourite ‘Our Superheroes’ is another heartfelt tribute to the memory of a beloved family member. In ‘Our Superheroes’ 12-year-old Luka Wolfgram shares his family’s journey alongside his younger brother Kosta who endured cancer leading to his death in March this year. The 5-minute documentary, which also features other child cancer heroes, has attracted international media attention and thousands of online views, prompting donations to child cancer charities.

Robyn Kiddle, Chief Executive of the Child Cancer Foundation, said: “Luka has captured with such honesty and love an experience that no child, parent or sibling should have to go through.

“I know ‘Our Superheroes’ hit home for many of our families and the Child Cancer Foundation team. We are so proud of him for having the bravery to share this tribute to his little brother Kosta.”

Luka’s film has also won the Stephens Lawyers Media Empowerment Award.

Michael Stephens, Managing Director of Stephens Lawyers, said: “Luka has done an amazing job of bravely sharing a very poignant story. For a 12-year-old film-maker he is to be congratulated. We are proud to be part of supporting him and all the film-makers involved in The Outlook for Someday.”

For more information on this year’s winning films can be found here:

Crossing Rachmaninoff, a feature documentary by Rebecca Tansley

Stephens Lawyers congratulates New Zealand film maker Rebecca Tansley whose feature documentary ‘Crossing Rachmaninoff’ has won selection to this year’s NZ International Film Festival.

Filmed in Auckland and southern Italy, ‘Crossing Rachmaninoff’ is the story of pianist Flavio Villani and his preparation of Rachmaninoff’s Piano Concerto No.2 for his first ever performance with an orchestra.

For more information see:

For information about the Auckland and Wellington screenings, dates and locations, see:


Directors won’t ‘corporate manslaughter’ charges under proposed H&S Legislation

Hon Amy Adams, Minister of Justice, has reportedly said that individual company directors will not face ‘corporate manslaughter charges under the Government’s proposed Health & Safety law reforms.

Minister Adams says the term “corporate manslaughter” would not be using in the new legislation, if it went ahead. “I’ve made it clear my expectation is that it’s liability for the corporation not for individual directors,” she said.

“I’ve made it clear my expectation is that it’s liability for the corporation not for individual directors,” she said.

For further information, see: