Audio Essentials Limited v Tripathi - [2019] NZHC 311

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2016-004-616

[2019] NZHC 311

BETWEEN
AUDIO ESSENTIALS LIMITED

Plaintiff

AND

URMANG TRIPATHI

First Defendant

VARUN CHAWALA
Second Defendant

VIKAS ROHILLA

Third Defendant

Hearing: On the papers

Judgment:

1 March 2019

COSTS JUDGMENT OF DUFFY J

This judgment was delivered by me on 1 March 2019 at 1.30 pm pursuant to
Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Solicitors/Counsel:
Shieff Angland, Auckland Kidd Legal, Auckland

AUDIO ESSENTIALS LIMITED v TRIPATHI & ORS Costs [2019] NZHC 311 [1 March 2019]

[1] Following delivery of my judgment on 20 December 2018 leave was granted to the parties to file memoranda on costs.1 The successful party (Audio Essentials) has filed a memorandum seeking solicitor client costs including GST and disbursements up to judgment date for the total sum of $60,299.96 against the first defendant Urmang Tripathi. On 21 January 2019 Audio Essentials filed a notice of discontinuance against the second defendant, Varun Chawala, on the basis there was no issue as to costs. The notice of discontinuance also recorded that Audio Essentials had been unable to locate the third defendant, Vikas Rohilla. On 25 January 2019 Davison J granted Audio Essentials leave to discontinue against the second defendant.2 Accordingly, Audio Essentials is now focused on recovering costs from Mr Tripathi.

[2] This proceeding was brought by Audio Essentials against the defendants, who were sued on guarantees they had provided for the payment of rent of a leased property at 340 Ponsonby Road, Auckland. Audio Essentials was the lessee of the property (the premises). Associate Judge Christiansen found Mr Tripathi was liable under the guarantees.3

[3] Christiansen AJ upheld Audio Essentials’ calculation of debt for unpaid rent or costs incurred until the premises were rented again. At [28] of Christiansen AJ’s decision he records that key terms of the lease included all rent was to be paid without deduction and interest would be payable on monies owing in default. Further, the tenants would pay the landlord’s solicitor client costs of and incidental to the enforcement of the landlord’s rights, remedies and powers. On the evidence before Christiansen AJ in the summary judgment application he concluded:4
No reliable evidence undermines [Audio Essentials’] calculation of debt for unpaid rent or for costs incurred until the premises was rented again.

[4] At [85] of the judgment Christiansen AJ entered summary judgment on Audio Essentials’ claim against Mr Tripathi and ordered he pay the costs and disbursements on Audio Essentials’ application.

1      Audio Essentials Ltd v Tripathi [2018] NZHC 3425 [20 December 2018].
2      Minute of Davison J dated 25 January 2019.
3      Above n 1.
4 At [84].

[5] Given the findings of Christiansen AJ it follows that Mr Tripathi as the guarantor of the lease is obliged to pay all that is owing under this lease, which includes the legal costs associated with this proceeding.

[6] Audio Essentials has filed an affidavit of Collette Fenton…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Audio Essentials Limited v Tripathi

Details

AGLC: Audio Essentials Limited v Tripathi [2019] NZHC 311
Case: [2019] NZHC 311
Decision Date: 1 March 2019

CaseChat Overview and Summary

The case of Audio Essentials Limited v Tripathi concerns the recovery of unpaid rent and associated costs by Audio Essentials Limited against its guarantors, Urmang Tripathi, Varun Chawala, and Vikas Rohilla. The matter was heard in the High Court of New Zealand at Auckland and resulted in a judgment on costs. Audio Essentials, the lessee of a property at 340 Ponsonby Road, Auckland, sought to enforce the terms of the lease, which included provisions for the payment of solicitor client costs by the tenants in the event of default. Following a summary judgment in favour of Audio Essentials, the court was required to determine the quantum of costs to be awarded to Audio Essentials, as well as interest up to a certain date.

The court's task was to evaluate the reasonableness of the costs claimed by Audio Essentials and to decide if these should be awarded to Audio Essentials under the terms of the lease agreement. The lease explicitly provided for the payment of such costs by the tenant in the event of default, and Audio Essentials sought costs and disbursements up to the judgment date, amounting to $60,299.96. The court had to determine if these costs were indeed incurred as a result of the enforcement of Audio Essentials' rights under the lease, and if they were reasonable in amount. Additionally, the court needed to consider whether Audio Essentials was entitled to interest on the unpaid rent and other costs until the premises were re-rented.

In delivering the judgment, the court noted that there was no reliable evidence to challenge Audio Essentials' calculation of debt for unpaid rent or for costs incurred until the premises were rented again. The court found that the sum sought by Audio Essentials was reasonable and consistent with the trouble incurred to recover what was owed under the lease. The court also acknowledged that Mr Tripathi, as a guarantor, was liable for the costs and disbursements as per the lease agreement. Consequently, the court awarded Audio Essentials costs in the sum of $60,299.96, inclusive of GST and disbursements up to the judgment date. The court also left open the possibility for Audio Essentials to seek further orders if needed to recover interest to which it is entitled under the lease.

Orders