A tenancy tribunal document said a landlord was paying $33,000 but did not explain why. The landlord, however, was recognisable.
It was East Coast Holdings Otago Ltd and its bosses are Kerrie and Brent Matthews.
A fire killed a man in a boarding house owned by them two years ago, prompting agencies to swoop in and investigate standards at their properties.
While no criminal charges were brought in connection with the fire, the case before the tenancy tribunal and its findings would ordinarily have hit the headlines.
They didn’t. Instead the details went unpublicised this year, following a settlement between Mr and Mrs Matthews and the government department that had led the investigation, the Ministry of Business, Innovation and Employment (MBIE).
The tribunal document, prepared by the tenancy adjudicator, was spotted by the Otago Daily Times in a long list of reports about tribunal decisions. It said that, by consent, the landlord had agreed to pay the $33,000 for "exemplary damages and costs".
The Matthewses were also ordered, again by consent, not to breach section 66I (1) (bb) of the Residential Tenancies Act (RTA) for six years.
Anyone looking up that section of the RTA would find it relates to landlords’ obligations to comply with healthy homes standards. The standards have been compulsory in boarding houses since 2021.
The tenancy adjudicator said, in the document, that the MBIE and the landlord had "agreed to attend mediation. The parties have reached a settlement and have asked the tribunal to issue consent orders based on a joint signed memorandum of counsel".
The consent orders were "in full and final settlement of all matters raised by the MBIE in the five applications against the respondent" and the MBIE "undertakes that it will not make any proactive media releases about the settlement".
Reports on tribunal decisions often go on to provide colourful details of law breaches by landlords.
This short document did not.
MBIE head of tenancy Kat Watson has previously said the MBIE wants to publicise tribunal decisions as much as possible to promote voluntary compliance through awareness-raising. A different decision was taken in this case and it was puzzling. Information about enforcement success against a boarding house landlord, particularly after a fatal fire, is in the public interest.
Another fatal fire, in a Wellington boarding house in May last year, had hit the news even more and sparked a government investigation that flagged the criticality of councils auditing boarding house standards. There had also been an outpouring of concern about homeless people living in Dunedin boarding houses after the ODT exposed terrible standards in some of them in its Houses of Horror investigation.
During the ODT’s investigation, Mr Matthews had told the paper he was stopping running boarding houses and refused to say where his properties were. The paper had found one of his properties and forwarded its details to the MBIE and the Dunedin City Council (DCC), along with other landlords’ properties.
Both the MBIE and DCC had replied that the couple’s property was one of several on their radar. The MBIE said it was under investigation. A year on, why would the MBIE agree not to comment proactively about the results of enforcement against Mr and Mrs Matthews?
East Coast Holdings Otago’s director, with 90% of shares, is Mrs Matthews, but Mr Matthews, the minority shareholder, has been known to deal with tenants. The ODT rang him to ask about the tribunal’s order and his buildings.
He said: "No comment. F...ing leave us alone ... I don’t have any boarding houses".
Using the Official Information Act, the ODT now has a longer document obtained from the MBIE that laid out, before the tribunal, the MBIE’s case against the couple and their company.
It alleged the MBIE’s enforcement officers found serious breaches of healthy homes standards in relation to 33 tenancies in five Dunedin properties the Matthewses owned.
The alleged breaches related to heating, ventilation, drainage and draught prevention. Examples were boarded-up windows, rotten cladding and no heating in communal areas. More unlawful acts were identified but not considered, the document said, due to factors including the impact that proceedings could have on the respondents (Mrs and Mr Matthews) and therefore the tenants.
The document also revealed the MBIE had asked the tribunal to consider up to $7200 damages for each breached tenancy, which could have led to an order to pay more than $200,000, seven times higher than the order to pay $33,000, agreed between the landlords and the government.
The document included the MBIE commentary that "the respondents [Mr and Mrs Matthews and their company] appear motivated by their own financial position in their failure to meet compliance deadlines".
The rents the Matthewses charged are unknown, but homeless people in other boarding houses have reported paying rents as high as $290 a week.
The ODT asked the MBIE why it had agreed not to publicise the tribunal findings. The MBIE’s Kat Watson said "a decision to undertake proactive media will depend on the circumstances".
We asked again, using the Official Information Act. National manager of investigations Brett Wilson said there were "sensitive points" and "ongoing matters". He said there were no mediation minutes.
We then asked whether the MBIE wanted to comment on the lower level of damages agreed in settlement compared with the amount the MBIE had sought. Mr Wilson said both parties (the Matthewses and the MBIE) had "agreed to the final outcome".
We asked if the much lower damages were because the Matthewses had contested any of the alleged breaches. Mr Wilson said he couldn’t comment due to the mediation being confidential.
The document that was obtained from the MBIE by the ODT shows the MBIE had argued that the landlord’s conduct, if it went unaddressed, "risks undermining public confidence" in the RTA. Was there perhaps was a bigger shame MBIE wanted to keep quiet about — homelessness in boarding houses?
An enduring crisis
Dunedin social leaders have often flagged the city’s boarding houses as being a grave symptom of a failure to provide homes with appropriate help for homeless people with challenges such as mental illness, addictions and rehabilitation after prison time.
Housing First, a government-funded, charity-run scheme that organises proper homes and wraparound support, has not made it south. A spokesperson from the Ministry of Housing and Urban Development says there is no current intention to offer it in Dunedin.
Mayor Jules Radich’s plan to open former holiday park Aaron Lodge with wraparound support has not happened. A DCC spokesperson said this was unfortunate.
Tents at the Oval park, which had homeless people sleeping in them, have gone, but people are still in vehicles and bushes elsewhere.
There is a waiting list for Kainga Ora social housing, which doesn’t come with wrap-around support. Regional director Kerrie Young has agreed, in response to the mayor’s hopes for Aaron Lodge, that tackling homelessness is not as simple as giving a person a bed.
Part of the document obtained from the MBIE by the ODT had words redacted: "... the Applicant [MBIE] recognises the inherent vulnerability of this group of tenants. They are connected to the respondents [Mrs and Mr Matthews and their company] via [name of agency or agencies or persons redacted] and would otherwise have had little to no other options available for appropriate housing".
The ODT exposed last year that the government was pointing homeless people to Dunedin boarding house landlords, including the Matthewses, through a Dunedin Accommodation Guide produced by the Ministry of Social Development.
The Matthewses’ company, East Coast Holdings Otago Ltd, was described in the MSD guide as having various addresses.
The MSD revised its guide to include only one boarding house, a property not run by the Matthewses.
It remains unknown what agency or individuals were discussed in the tribunal as connecting tenants to the Matthewses and their buildings.
When is a boarding house not a boarding house?
The MBIE’s Ms Watson has told the ODT the enforcement efforts have stopped Matthewses’ boarding houses.
"As a result of the investigation and combined regulatory approach, the landlord no longer has any boarding houses within their portfolio."
This month, the ODT revisited two multi-occupancy buildings it flagged to authorities during its boarding house investigation. Both showed signs of disrepair. The DCC confirmed one was still owned by the Matthewses but said that it was not defined as a boarding house because it "consists of individual household units".
A DCC spokesperson said: "We don’t believe that in its current use the building could be deemed dangerous or insanitary in accordance with the Building Act".
From the outside, the building looks like an abandoned motel, with a broken balcony rail and some rotting window frames. About a dozen doors lead into small bedrooms. Those entered by the ODT had tiny kitchen spaces and shower rooms.
Last year, one room we entered had an ill-fitting door and no fixed heating source and was occupied by a released prisoner who had committed a violent crime.
Today, the building appears to be in various stages of repair or decay and still has occupants who are vulnerable people. A man who answered one door was visibly shaking and couldn’t make eye contact.
The ODT asked if he was ill. He replied he was "sick in the head", "mental". He said he had schizophrenia, was an alcoholic and had been in the room for 10 years. He said he had tried to get a state home years ago, but not managed it. Another place had evicted him.
His room appeared filthy and had a strong, mouldy smell. There was no fixed heating source. He had a bar heater but said he didn’t use it — he stayed in bed. A window frame appeared rotten and broken.
The ODT asked the Ministry of Social Development questions about the property and payment of state benefits to fund people’s accommodation there.
MSD acting regional director Trinity McMahon said: "People make their own decision about whether accommodation is suitable. The relationship is between the client and the landlord ... There is a well-established framework of regulation and requirements around rental accommodation, administered by local authorities and the MBIE."
The MBIE was contacted. It said its investigation into the building was "not yet concluded". Tenants had a variety of tenancy agreements that had been seen but "on this occasion, in consultation with our regulatory partners, TCIT [tenancy compliance and investigations team] treated the rooms as separate tenancies, rather than the whole as a boarding house."
The MBIE said that the tenancy tribunal was the "only entity with the power to decide definitively whether a property is a boarding house".
The paper asked Mr Matthews what he called his building. He did not respond.
Timeline
The fire-fuelled investigation of five Matthews buildings
April 2022: Fatal fire at 3 Phillips St, a Dunedin boarding house owned by the Matthewses.
May 2022: MBIE’s tenancy compliance and investigations team (TCIT) lead a check at 3 Phillips St with Dunedin City Council (DCC) and Fire and Emergency New Zealand (Fenz). Finds no heating in the communal area, some boarded-up windows, ineffective spouting and rotten cladding.
June 2022: Mrs Matthews interviewed by TCIT investigators, who say she admits not taking steps to check if her boarding houses are compliant with healthy homes standards.
July 2022: TCIT checks another boarding house of the Matthewses, saying they found a communal area with no fixed heating, broken and boarded-up windows, broken spouting and a missing hallway ceiling.
October 2022: Multi-agency check by the TCIT, DCC and Fenz visits three more of the Matthewses’ boarding houses. The investigators say fixes observed, but other issues are outstanding. Investigators say they were told by Mrs Matthews that one of her five boarding houses was going to continue, two would be let on single-tenancy agreements, one had been leased to someone and the fifth — presumably 3 Phillips St — would be demolished and the land sold.
August 2023: ODT investigates many Dunedin boarding houses, finding broken windows, holes in ceilings and walls, ancient fittings, stench, dirt and damp. Homeless people inside were frequently without support needed but their rents were paid by the Ministry of Social Development directly to landlords. The ODT sends details of a building run by the Matthewses to MBIE and DCC, along with details of other landlords’ buildings.
September 2023: WorkSafe stops demolition workers at 3 Phillips St, due to safety concerns.
October 2023: 3 Phillips St destroyed in a second fire. A 58-year-old man held in custody, charged with setting fire to property. He is scheduled to appear in Dunedin District Court on March 10, 2025. DCC and MBIE investigate the Matthewses’ building that was flagged by ODT.
February 2024: After MBIE makes five applications to the tenancy tribunal about the Matthewses’ investigated boarding houses, a tenancy tribunal order requires the Matthewses to pay $33,000 in exemplary damages and costs. The order follows a mediation with MBIE and an agreed settlement which included agreement to no media releases.
October 2024: MBIE investigation into the Matthewses’ building that was flagged by ODT continues.
- Source of enforcement information: MBIE document presented to the tenancy tribunal
