BBC Excavation Limited v Cook Strait Properties Limited
[2019] NZHC 3369
•17 December 2019
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2019-442-72
[2019] NZHC 3369
BETWEEN BBC EXCAVATION LIMITED
Applicant
AND
COOK STRAIT PROPERTIES LIMITED
Respondent
Hearing: 17 December 2019 Appearances:
G Praat for the applicant
E Gartrell for the respondent
Judgment:
17 December 2019
EX TEMPORE JUDGMENT OF ASSOCIATE JUDGE JOHNSTON
[1] This is an application pursuant to s 290 of the Companies Act 1993 by BBC Excavations Ltd for an order setting aside a statutory demand dated 4 October 2019 served on that company by Cook Strait Properties Ltd.
[2] BBC says that there is a genuine dispute as to whether or not the amount claimed by Cook Strait Properties in its statutory demand is due.
[3] The background revolves around arrangements for the lease by Cook Strait Properties of premises owned by it in Lower Hutt. It is common ground that on 17 July 2017 Cook Strait Properties and BBC executed an agreement to lease. The affidavit evidence of Mr Blair Colligan, BBC’s shareholder and director, and his partner, Ms Gillian Bearman, the shareholder and director of a company by the name of Urban Wolfire Ltd, the role of which company will become clear, is to the effect that the parties to the agreement to lease contemplated that a deed of lease would follow,
BBC EXCAVATION LIMITED v COOK STRAIT PROPERTIES LIMITED [2019] NZHC 3369
[17 December 2019]
but that that never happened and the agreement was superseded by new arrangements between different parties.
[4] Mr Colligan says that during November 2017, a deed of lease was prepared. This nominated the tenant as Urban Wolfire. This draft had Mr Colligan and Ms Bearman giving personal guarantees, something they say they had not agreed to. An email from the solicitors acting for BBC and Urban Wolfire to Cook Strait Properties’ solicitors dated 24 November 2017 confirms this. Cook Strait Properties’ solicitors then prepared a second deed of lease. Again, this deed was between Cook Strait Properties as landlord and Urban Wolfire as tenant, but this time the guarantor was BBC. The copy of that deed exhibited to Mr Colligan’s affidavit confirms that it was signed on behalf of Urban Wolfire by Ms Bearman and himself on behalf of BBC. But there is no indication that it was executed by Cook Strait Properties. There is correspondence between the solicitors acting for Urban Wolfire and BBC acting for Cook Strait Properties suggesting that the deed of lease was returned for execution by Cook Strait Properties on 19 January 2018, which is the date on which Mr Colligan and Ms Bearman say they signed it.
[5] Mr Colligan says that rather than simply execute the deed Cook Strait Properties then sought to renegotiate aspects of the arrangements. Again, this is supported by contemporaneous correspondence between the solicitors, though it would appear that, it was not so much a matter of renegotiating the terms of the deed of lease, as seeking additional security. And, in due course Cook Strait Properties did obtain additional security over property owned by BBC.
[6] In the meantime, the parties were, as far as I can see, acting as if the deed of lease in its existing form was binding on them. Urban Wolfire took possession of the premises prior to 19 January 2018 and began making alterations.
[7] Cook Strait Properties did execute the lease in its original form. The copy executed by it was returned to the solicitors acting for Urban Wolfire and BBC by Cook Strait Properties’ solicitors on 19 June 2019. Cook Strait Properties had dated the document 23 January 2018.
[8]At paragraph 21 of his affidavit Mr Colligan says:
A true copy of the Deed of Lease that was returned is annexed hereto and marked “BMC14”. I could not understand how 18 months after it was submitted, and well after all the objections were raised and all the requests were made for changes to the lease for the extra guarantees and “opt in” provision for the franchisor, which we rejected, CSPL could just sign it and return it in June 2019 and date it 23 January 2018.
[9] One answer to the rhetorical question posed in that paragraph may be that the parties had originally reached agreement on the terms of the deed of lease in late 2017 or early 2018; that they had since effectively performed the lease in all respects; that Cook Strait Properties had over the following 18 months sought to improve the position and succeeded in doing so insofar as security was concerned, but when Urban Wolfire and BBC steadfastly refused to agree to any other changes to the terms of the deed, Cook Strait Properties had relented and executed it in the agreed form, albeit some months later.
[10] This is essentially what Cook Strait Properties property manager, Ms Lynette Sinding, says in her affidavit evidence in reply.
[11] The issue for determination today is whether BBC has been able to demonstrate that there is an arguable issue as to whether or not it is liable on the guarantee it gave in the deed of lease, and therefore a genuine dispute as to the amount claimed in the statutory demand.
[12]In my judgment there is no real dispute here.
[13] The parties negotiated the terms of the lease as recorded in the agreement to lease. These were reduced to the form of a deed of lease. This was executed on behalf of the tenant, Urban Wolfire, and the guarantor, BBC, on 19 January 2018. For it to be enforceable at the suit of Cook Strait Properties in terms of the Statute of Frauds (now sub-pt 2 of pt 2 of the Property Law Act 2007) that was all that was necessary, especially as there is also evidence of, not so much a part as complete performance.
[14] The position might be different had Cook Strait Properties’ attempts to re-negotiate resulted in Urban Wolfire or BBC purporting to cancel for repudiation or something of that sort, but neither did.
[15] In my view, BBC is bound by the terms of its guarantee, and nothing in the evidence suggests to me that there is any real dispute about that.
[16]For those reasons:
(a)BBC Excavation Ltd’s application is dismissed;
(b)Cook Strait Properties is entitled to its costs on a 2B basis together with such disbursements as may be allowed by the Registrar.
(c)Pursuant to s 291(1)(a) of the Companies Act 1993 I order that BBC pay to Cook Strait Properties Ltd the amount identified in its statutory demand, together with costs and disbursements as ordered in (b) above within five working days of the date of this judgment. Failure to do so will entitle Cook Strait Properties to commence liquidation proceedings in the usual way.
Associate Judge Johnston
Solicitors:
Knapps Lawyers, Nelson for applicant E W Gatrell, Wellington for respondent
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