District Court Judge David Holderness has found the Queenstown Lakes District Council had proven all charges against the Wanaka Gym Ltd and its director, Dr Fiona Graham.
In his written decision, released yesterday, Judge Holderness said he had reached "a clear view" no defence had been made out and the informant [QLDC] had proven all charges to the required standard.
Judge Holderness also sought for declarations including full disclosure of income, assets and liabilities in respect of both Wanaka Gym Ltd and Graham, to be made available to the court.
Counsel for both parties were invited to file memorandums, or a joint memorandum, setting out their views as to an appropriate process for sentencing submissions, which would be held in Queenstown on a date to be arranged.
Hearings were held in the Queenstown District Court by Judge Holderness between November 2 and 6 and on December 8 last year.
The Wanaka Gym faced five charges, while Graham faced nine charges all under the Building Act 2004.
Charges related to Wanaka Gym using the former gymnasium as backpacker-style accommodation, when it was not safe in the event of fire, for unapproved changes to the building consent and for failure to correct the changes.
Four charges against Graham mirrored charges against Wanaka Gym and the fifth charge was she willfully removed the council's dangerous building notice from the property.
During the criminal hearing, Graham said the property was a "single-household unit" and not visitor accommodation.
Council inspectors were aware handymen were scheduled to fix the property to meet consent requirements, but had not specified to her clearly what needed to be remedied and had decided to "evict" her tenants with the notices and injunction, she told the court last year.
In March Graham was permitted to use the property at 155 Tenby St, Wanaka, as a residence following a civil hearing in Queenstown.
Judge Paul Kellar varied the 2008 injunction, which meant subject to the building complying in terms of consents, occupants could be allowed in.
A spokesman for Graham said she was in Japan.