Auckland International Airport v Kiwibond Ltd (in rec and in liq) HC Auckland CIV 2008-404-3579
[2010] NZHC 2154
•1 December 2010
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2008-404-003579
BETWEEN AUCKLAND INTERNATIONAL AIRPORT
Plaintiff
ANDKIWIBOND LTD (IN RECEIVERSHIP AND LIQUIDATION)
First Defendant
ANDA R BEMELMAN Second Defendant
Counsel: M R Crotty for Plaintiff (On the papers) Judgment: 1 December 2010 at 3:00 pm
JUDGMENT OF ASSOCIATE JUDGE BELL
Solicitors/Counsel:
Russell McVeagh, PO Box 8, Auckland
Copy to:
A R Bemelman, Second Defendant , c/o 281 Old Toowoomba Road, Gatton, Queensland; or
PO Box 643, Gatton, Queensland 4343, Australia
AUCKLAND INTERNATIONAL AIRPORT V KIWIBOND LTD (IN RECEIVERSHIP AND LIQUIDATION) AND ANOR HC AK CIV-2008-404-003579 1 December 2010
[1] On 3 November 2010, I made an order debarring Mr Bemelman from defending this proceeding, because of his continuing failure to comply with case management directions. I gave a direction that the plaintiff may file a memorandum setting out the amounts for which it seeks judgment.
[2] I have now received such a memorandum from the plaintiff. I also gave directions that Mr Bemelman would have three weeks in which to respond. Mr Bemelman has written to the Court. His letter dated 19 November 2010 was received on 26 November 2010. His letter concludes:
The address at 281 Old Toowoomba Road is no longer available. The person there has moved out. The PO Box number will be closed immediately and I am moving interstate to another area.
[3] He has given no forwarding address. I infer that he is not interested in maintaining contact with the Court. I see no need to delay in giving judgment.
[4] His letter addresses the merits of the dispute between the plaintiff and Kiwi Bond Ltd, but does not address the quantum of the plaintiff’s claim. The merits of the dispute might be available to him if he were still able to defend the proceeding, but cannot be relevant now that he is no longer able to defend.
[5] Kiwibond Ltd leased premises at 4 Percival Gull Place, Auckland International Airport, under an agreement to lease dated 30 July 2004. Mr Bemelman, a director of Kiwibond Ltd, guaranteed Kiwibond’s obligations under the agreement to lease.
[6] On 15 May 2008, the plaintiff served on Kiwibond a notice of intention to cancel the lease for non-payment of rent, then amounting to $484,217.67, including GST.
[7] On 3 June 2008, the plaintiff tried to re-enter peaceably, but Kiwibond resisted. However, it later understood that the plaintiff would begin proceedings to obtain vacant possession. Kiwibond vacated the premises on 17 July 2008. I have taken that date as the date of re-entry.
[8] The plaintiff calculated rent due at 12 June 2008 as $512,733.80. But there is no evidence of re-entry on that date. The additional rent, from 12 June 2008 to 17
July 2008, is $50,101.10.
[9] The premises were vacant from 18 July until 29 August 2008 while the plaintiff tried to arrange replacement tenants. The plaintiff has calculated that loss at $61,552.74, but that calculation seems to be inclusive of GST. As this amount is compensation for the absence of rental income, there is no relevant taxable supply under the Goods & Services Tax Act. There should therefore be an adjustment as there will be no GST payable on this sum. The adjusted figure is $54,713.54.
[10] The plaintiff arranged replacement short-term tenancies which began on
30 August 2008. It calculates the shortfall on income from 30 August 2008 to
18 November 2008 at $65,901.03. Again, this appears to be a GST inclusive figure. With a deduction for GST, the amount is $58,578.69.
[11] The plaintiff has claimed damages of $354,160.13 for the cost of making good the interior and exterior of the premises to a clean order, repair and condition under s 7.1, Schedule 3 of the lease.
[12] In February 2008, Building Intelligence Group, building surveyors, had made an inspection of the premises and reported on damage. As part of their report, they provided a cost analysis of remedial repairs, allocating part of those costs to the lessee. They fixed the likely costs of repairs attributable to the lessee at
$354,160.13. Building Intelligence Group made a further report in August 2008 after inspecting the premises following Kiwibond Ltd’s departure. That report says that some repairs had been carried out but says that they were generally sub- standard. The report says that the premises are generally in a worse condition than the inspection in February 2008 had disclosed.
[13] The damages are claimed on the basis of the estimated costs to put the premises into good repair, following Joyner v Weeks [1891] 2 QB 31 (CA) and Maori Trustee v Rogross Farms Ltd [1994] 3 NZLR 410 (CA).
[14] In a case such as this, calculating damages cannot be exact. In its calculations, Building Intelligence Group has allocated some costs between the lessor and the lessee. Such apportionments may be open to debate. Similarly, it is not clear that Building Intelligence Group has made due allowance for fair wear and tear, as allowed under clause 7.2 of the Third Schedule of the lease. However, given that Building Intelligence Group says that the condition of the premises after the lessee had vacated was worse than shown in the inspection of February 2008 (with the repairs costed on the basis of the earlier visit), I accept that the sum of
$354,160.13 is a reasonable estimate of the costs of putting the premises into good condition as required under the lease.
[15] The plaintiff says it waives any claims for interest costs and additional damages.
[16] Accordingly, I give judgment for the plaintiff against the second defendant for his liabilities under the guarantee, as follows:
Unpaid rent at 17 July 2008 (GST inclusive) : $562,834.90
Damages for reduced rental income between 18 July
2008 and 18 November 2008 (not subject to GST): $113,292.23
Damages for costs of putting premises in good
condition: $354,160.13
Total: $1,030,287.26
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R M Bell
Associate Judge
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