18 June 2020

Mrs Isabella Campbell
C/- Alandale Lifecare Limited
1199 River Road
Flagstaff
Hamilton

By e-mail: cc: Christina@xtra.co.nz

The Board
Alandale Lifecare Limited
1199 River Road
Flagstaff
Hamilton

By e-mail: david@alandale.co.nz

Dear Isabella and family and the Alandale board and management;
Recommendation of a way forward - Complaint
Covenant Trustee Services Limited (“Covenant”) acknowledges receipt of a formal
complaint from Isabella Campbell (“Isabella”) and family on 8 May 2020, which was
escalated to Covenant after the complaint was not able to be satisfactorily resolved by
Alandale Lifecare Limited (“Alandale” or “the Operator”). We acknowledge and thank the
parties for their patience while we worked though the depth and breadth of the complaint
and issues.
Our role under the Retirement Villages Code of Practice (“COP”) formal complaints facility
procedure is to independently review the complaint and recommend a way forward to both
parties. To achieve this, we have reviewed the background to the complaint, relevant
documents and other information provided and have completed discussions with Alandale,
Isabella and family.
Covenant has also sought external legal advice to complement its internal review and
considerations, which review has included the occupation right agreement (“ORA”),
Retirement Village Act (“RVA”), Regulations, Unit Title Act (“UTA”) and the COP.
The complaints have been considered and separate recommendations made for each.
Level 6, 191 Queen Street, Auckland, New Zealand
PO Box 4243, Shortland Street, Auckland 1140, New Zealand
T: +64 9 302 0638 F: +64 9 302 1037 W : www.covenant.co.nz
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 Background
Alandale is the operator of Alandale Village, an established village located in Hamilton.
Alandale Foundation Board (a registered charitable trust) is the sole shareholder of the
Operator.
The village is a unit title village and was built in stages and therefore comprises a number of
body corporates. The powers and duties of the body corporates are exercised by a
manager appointed by the Alandale Foundation Board. The current manager is the
Operator.
Residents of the village hold a freehold unit title issued under the UTA for their unit and enter
into an ORA with the Operator, the terms of which include the resident’s right to occupy the
unit and use the common facilities. Upon sale of the unit, residents retain the sale price,
including any capital gain but less a deferred management fee (which is a maximum of 25%
of the sale price of the unit).
Isabella resides in the village’s apartment block. We understand that the apartment block
consists of 15 apartments, of which some are owned by residents and others by the Operator
(some are rented to residents and others used for other purposes such as a gym and craft
room). The apartment block operates under its own unit title and body corporate structure
known as “the Alandale Estate”.
(a)

The residents of the apartment block are being asked to meet:
(i)

The cost of having the fire wardens on site ($550 plus GST per week per
resident). The complaint records that this cost is being split between the
residents only, rather than by the total number of apartments of the
apartment block (some of which are owned by the Operator); and

(ii)

A proportion of the cost to repair the apartment block, the price of
which has been quoted as $919,336 plus GST (“Repair Cost”).

(b)

The Operator has, in the alternative, offered the residents an option to sell their
units to the Operator at a fair market price, less the DMF at a discounted rate
and also with the purchase price to exclude any discount for remediation
costs.

(c)

The Operator received formal complaints from Christina Campbell, on behalf
of Isabella (Apartment 208) in relation to the relocation from, and conditions of
return to, the apartment block. The complaint alleges breaches of rights 1-8 of
the Code of Resident’s Rights, among various other matters.

(d)

The Operator has been unable to resolve the complaint to the resident’s
satisfaction, and Covenant (as statutory supervisory of the village) has been

 asked to work with the parties to provide an impartial perspective and
recommend a way forward.
Core issues arising from the complaint:
There appear to be three core issues arising from the complaint, which are set out below:
a) Did the Operator have the legal right to compel residents to move out of the
apartment block?
In our view, the Operator does not have the legal right to compel residents to
move out of the apartment block. If the Operator recommended that
residents find alternative accommodation as a result of legitimate safety
concerns, then we consider the Operator was acting prudently and in
accordance with its obligations under the relevant occupation right
agreements (ORAs) and retirement village legislation.
If, however, the residents were compelled to leave the Apartment Block
against their will or without their consent, then we consider the Operator was
unlikely to be acting in accordance with its legal rights under the ORA,
retirement villages’ legislation and Unit Titles Act 2010 (UTA).
b) Who is responsible for the Fire Warden Costs?
Isabella’s occupation right agreement dated 22 August 2017 contains a
provision stating “The Resident will not be liable for any loss or inconvenience
suffered by the Resident from any defect or want of repair to the Residential
Unit”.
As the fire warden costs directly relate to a defect or want of repair to the
Residential Unit (which definition includes both the apartment itself as well as
Isabella’s share in the common property, we consider that Isabella could be
entitled to rely on this provision in declining to meet her share of the fire
warden cost.
c) Who is responsible to meet the Repair Costs?
As stated above, Isabella’s ORA provides that Isabella will not be liable for any
loss or inconvenience suffered by her from any defect or want of repair to the
residential unit.
Based on this, we consider that Isabella could rely on this provision in refusing to
meet her share of the repair costs.

 Associated Issues of Complaint
There are also 12 associated issues arising from the complaint and each of these is dealt with
below:
1. Proposal regarding purchase of apartments by Alandale:
 That Alandale advised that the offer to purchase the apartment would be below
market value due to it being non-compliant. Alandale had offered Isabella
$115,000 less DMF when the apartment had been originally purchased for
$130,000. Net amount would be $82,250.


That Isabella had been placed in an untenable position due to the jurisdiction
failures by Alandale and that no recognition or compensation has been offered
for this.

Recommendation of a way forward
Covenant recommends that Alandale continue negotiations with Isabella and family
over the option to buy back her apartment, along with other options that may be
available such as alternative accommodation within the village or at another village.
If Alandale did suggest to the resident that any purchase would be below market
value due to the non-compliance issue, then it is recommended that Alandale
apologise for any misunderstanding that has occurred. It is understood that a revised
buy-back offer has since been made by Alandale.
2. Zoom meeting 24 April 2020:
 The items on the agenda for the zoom meeting between Alandale and the
affected residents had not been adequately addressed and that no follow up by
Alandale to the residents for outstanding questions. The complaint had six
questions that needed to be answered by Alandale.
Recommendation of a way forward
That Alandale communicate with the resident to answer any questions that remain
unanswered or are still unclear.
3. Reclassification of status of all residents, including Isabella, from “independent” to
“disabled” or “nearly disabled”:
 Alandale has allegedly changed the resident status from independent living
residents to disabled, because of the resident’s ages.
 Isabella’s medical records held by Alandale have been used to classify her as
disabled in her absence and without notification to her. Accusation made that
this information was shared with a third party, unduly influencing the
recommendation reports from FENZ/Onsite/Hamilton City Council and Alandale
did not challenge these assessments.

 Recommendation of a way forward
It is recommended that Alandale confirm to Isabella that she is an independent living
resident and was not considered to be disabled and to further apologise for any
misunderstanding that may have occurred.
It is further recommended that Alandale respond to Isabella about the alleged use of
medical records and sharing with third parties.
4. Conditions of return of apartment residents at COVID 19 Level 3
 That Alandale requires Isabella to pay an extra $632.50 (including GST) per week
towards the cost of the two permanent fire wardens. This is over and above the
normal ORA weekly fee. The annual cost of the two fire wardens is $263,000 per
annum;
 That Alandale has not investigated alternative options to the proposed private
agency cost.
 That the fire warden cost has been allocated to only the occupying residents,
albeit Alandale itself owns the other vacant apartments.
 That Alandale did not exercise a reasonable duty of care that has led to the extra
costs and that Isabella had trusted her voting rights to the operator.
 That the consultation over the urgent evacuation was not held as per COP
resident’s rights – clause 2.
Recommendation of a way forward
These issues are related to the core complaints, which have also been discussed
above under “core issues arising from the complaint”.
Alandale has confirmed that with only two residents residing in the apartment block,
FENZ has agreed that only one fire warden is required. However, this could change if
more residents return. Alandale has also confirmed that other alternatives to the
agency have been considered but have been ruled out because they were either
not considered practical or offered no material savings.
It is recommended that Alandale communicate with the complainants about the
alternatives that were considered and the reasons they were not considered
acceptable.
Alandale has also confirmed that a building warrant of fitness for the apartment
block was in place with the last certificate being issued in December 2019 for a
period of 12 months. It is assumed that building consents had been obtained and
complied with, where required. It is suggested that Alandale seek a response from
the issuer of the building warrant of fitness (BWOF) as to why the BWOF was issued but
yet a few months later the fire report identified material concerns.
Covenant is satisfied that the operator had fully consulted with the residents and
families over the unexpected building issues prior to the evacuation and had made

 suggestions or recommendations in writing over temporary relocating from the village
and that the evacuation was prudent for the resident’s safety and well-being.
5. Lack of representation on the Alandale Residents Committee:
 That the apartment residents no longer have a representative checking on them
each week and this was changed without consultation. Residents are now
required to take any issue to the village manager or nurse. This has caused the
residents to feel isolated.
 That the chairman of Alandale Residents Committee has refused to hear their
concerns about the current situation.
Recommendation of a way forward
It is recommended that Alandale resume the weekly checks and continue them if
they are an ORA contracted service or undertake consultation with the resident if this
service is to be withdrawn.
In terms of the issues with the Alandale Residents Committee, we do not have
jurisdiction to deal with residents committee issues can only encourage the
committee to engage with Isabella and her family through this recommendation.
6. Evacuation of Residents prior to Covid-19 Level 4 lockdown:
 Alandale’s decision to vacate Isabella for her wellbeing, with the reasons being
that they might not be able to provide care to residents if they became sick or
that fire wardens may be unable to provide services under lockdown should they
become sick.
 When Isabella was exited she went from a lower risk, lower density situation to
being in the broader community and subject to higher risks of Covid-19. Isabella
relocated to family, whereas other residents went to rest home facilities.
Recommendation of a way forward
These issues have been addressed in 4 above.
7. Cost of expected remedial work in relation to fire safety:
 Dispute the incomplete estimate from NZ Fire and Compliance Limited for
$919,366 ex GST for the remediation works.
 That Alandale was responsible for past fire hazard and building works in past years
and that it is their cost to rectify and not the residents.
 Expectations are that the sinking fund is used towards remediation.
Recommendation of a way forward
It is noted that Alandale does not operate a sinking fund but runs a budget for village
operational costs, repairs and maintenance, which is funded by weekly fees from the
village.

 As described above, Isabella’s ORA contains a provision stating “The Resident will not
be liable for any loss or inconvenience suffered by the Resident from any defect or
want of repair to the Residential Unit”. Isabella could seek to rely on this provision in
refusing to meet her share of the Repair Cost.”
8. FENZ and OnFire reports:
 That there are key differences in the reports from FENZ and the OnFire reports.
 FENZ recommended only completing works to the building ceiling of the
apartments, where wires and fixtures have intruded walls and ceilings, whereas
On Fire report in some instances appear extreme and extensive.
Recommendation of a way forward
Our recommendation is that Alandale puts this question to the specialist providers of
the fire reports and once a response is provided that this is shared with the
complainants.
9. Closure of Alandale by HCC:
 Disputes comments from Alandale that the Hamilton City Council could force
Alandale to immediately repair the apartments and shut it down.
Recommendation of a way forward
It is recommended that Alandale clarify this alleged comment to the complainants.
10. Concerns about Alandale motives:
 That Alandale is intentionally seeking to force the apartment residents out in order
to repurpose the building for another use; or
 To simplify the implications of upcoming legal challenges to how trusts are run
(applicable from 30 January 2021).
Recommendation of a way forward
We understand from communications with Alandale that they do not intend to
repurpose the building for any other use at this time.
It is recommended that Alandale respond in writing to the residents on both of these
allegations.
11. Communication with the Alandale Board:
 The inability to contact the Alandale board chairperson or other member directly
with concerns or questions (due to dissatisfaction with management responses) or
attend board meetings
Recommendation of a way forward
It is recommended that Alandale advise the complainant of the established policy and
the roles and responsibilities of the Alandale governance and management and whether
a board member will now meet with the resident/s or family.

 12. Code of Residents Rights:
 That the Code of Residents rights of items through 1 to 8 have been breached by
Alandale.
Suggested recommendation of a way forward
No specifics have been provided on how these rights were allegedly breached. In
our view, the overall consultation and communications to the residents over the
building issues along with the suggestions and recommendations for the temporary
relocation was satisfactory.
We do not see any other material breaches of the Code of Residents Rights and
have no recommendation to make regarding these alleged breaches.
We acknowledge that the circumstances for Isabella and family, other apartment residents,
families and Alandale management/staff were and are difficult and distressing and
heightened due to the country’s health issues around Covid–19 and Government lockdowns.
We understand that the residents were invited to return to their units when the Government
lockdown level reduced, albeit that the issues with the building remain to be resolved.
Recommendation of a way forward – Summary
While we have reviewed and responded to individual issues and complaints, this does not
resolve the broader issues relating to the building remediation and or the need to continue
with fire wardens, albeit we are of the view that Isabella is not liable to pay for the fire
warden costs and or building remediation.
Other factors will still apply that will impact both parties, such as the inability to sell the unit
until fire compliance is attained after any building remediation and the further
inconvenience during any building works. This requires a specific solution for the parties.
The Code of Practice formal complaints process includes the option of mediation and we
suggest that the parties move to this option if negotiations over a long term solution cannot
be reached.
We wish both parties all the best and do hope that these recommendations lead to a
mutually acceptable agreement.
Yours sincerely

Malcolm T Gray
Manager