Burns Group 2018 Limited v Roberts

[2021] NZHC 3093

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE

CIV-2021-412-108

[2021] NZHC 3093

UNDER

The Property Law Act 2007

IN THE MATTER OF

An application for an Interim Injunction

BETWEEN

BURNS GROUP 2018 LIMITED

Applicant

AND

JEFFERY PHILIP ROBERTS, ROSSLYN VALERIE ROBERTS and COOK ALLAN GIBSON TRUSTEE COMPANY LIMITED

Respondents

Hearing:	16 November 2021 (by telephone conference)
Appearances:	C M Hanafin for Applicant J W Cowan for Respondents
Judgment:	17 November 2021

JUDGMENT OF OSBORNE J

(Interlocutory injunction)

This judgment was delivered by me on 17 November 2021 at 3.30 pm Pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date

BURNS GROUP 2018 LTD v ROBERTS & ORS [2021] NZHC 3093 [17 November 2021]

[1]The applicant applies without notice for an interim injunction.

[2]        The matter came before me urgently as Duty Judge. I directed that the solicitor for the respondents be served and requested his appearance at a telephone hearing on a Pickwick basis.1 The without notice hearing occurred yesterday.

Order

[3]        In order to preserve the status quo until an on-notice hearing can take place, I order:

(a)until further order of the Court the respondents are restrained from cancelling the lease over the property situated at 20 Sinclair Road, North Taieri, Otago (Certificate of Title 14D/18, Otago Registry, being Lot 1 on Deposited Plan 22497) or otherwise re-entering the property;

(b)the respondents may apply to set aside the order on five working days’ notice;

(c)leave is reserved to both parties to apply further;

(d)the costs and disbursements of the application to date are reserved; and

(e)this order is conditional upon the applicant, during the term of the order, paying on the due date all payments due to the respondents in terms of the agreement to lease date of 25 October 2018, and in particular the payments required under cls 3.1–3.3.

Background and brief reasoning

[4]        The applicant and the respondents are lessee and lessor respectively under the lease referred to in the order. The respondents on 4 October 2021 served four notices under  the  Property  Law Act  2007  requiring  the  applicant  to  remedy  breaches

1      Pickwick International Inc (GB) Ltd v Multiple Sound Distributors Ltd [1972] 1 WLR 1213 (ch).

(including payment of rent and outgoings), with the notices to expire on 16 November 2021.

[5]        The applicant on 15 November 2021 commenced this substantive proceeding. The substantive relief sought is against cancellation of the lease.

[6]        The applicant’s interlocutory application was supported by the evidence of its director, Malcolm Burns. He referred to a range of disputes between the applicant and respondents. He asserted that the applicant has cross-claims against the respondents. He explained, in relation to the non-payment of rent and other sums, that the lease does not include a “no set-off” clause.

[7]        On receipt of the papers on 15 November 2021, I convened a conference with Ms Hanafin, counsel for the applicant, at which I indicated that I would convene an immediate hearing on a Pickwick basis. I informed Ms Hanafin that there were a number of issues with the application including:

(a)the applicant’s undertaking as to damages was unsupported by any adequate information; and

(b)the terms of the lease indicated that the applicant’s understanding as to there being “no set-off” clause was incorrect.

[8]        In the time before the hearing the parties managed to file urgently two affidavits. Mr Burns produced further evidence to support the undertaking. Mr Cowan provided an affidavit of one of the respondents, Jeffery Roberts, in which he takes issue with key aspects of the evidence provided by the applicant. Another development before the hearing was that the applicant paid to the respondents a sum representing overdue rent, certain outgoings and expenses, and default interest.

[9]        It is clear the Court may grant relief in the form of an interim injunction pending resolution of substantive proceedings for relief.2

2      See Palmerston North Cosmopolitan Club v Palmerston North Squash Club Inc [2012] NZHC 1526, at [36].

[10]      I am satisfied, on the limited state of evidence before me, the applicant has an arguable case for relief. The respondents’ re-entry into the premises (which are the applicant’s business premises) would be greatly disruptive for the applicant. Given that the interim injunction now ordered will endure for a relatively short time (until the applicant’s application can be heard on an on-notice basis), the balance of convenience favours the granting of relief. Issues raised by Mr Roberts as to the adequacy of the applicant’s undertaking as to damages are moderated by the limited life of the “without notice” injunction.

Observation as to delay

[11]      It is of fundamental importance, and a matter which the Court may and properly should take into account in the exercise of the discretion to grant interim relief, that an applicant for interim relief acts with utmost diligence and brings the proceeding before the Court as soon as the proper evidence to support the application can reasonably be assembled. The practice of the Court recognises that in some particularly urgent cases that may necessitate initial reliance on unsworn evidence in support of the application.

[12]      An applicant should not avoidably allow a situation to develop where the late filing of an application means the applicant needs to proceed on a without notice basis and the respondent is left without the time it would otherwise have had to fully respond to the application.

[13]      In this case the applicant, having been served with the Property Law Act notices on 4 October 2021, took until 15 November 2021 to file its application. That was the day before the Property Law Act notices were to expire and the respondents would otherwise have had the ability to re-enter.

[14]      In a situation such as this the reason for the late filing, and therefore proceeding on a without notice basis ought to have been properly explained either in the supporting affidavit or in counsel’s memorandum. The supporting evidence was not of overwhelming length (running to 82 short paragraphs plus exhibits). Counsel for the applicant was unable to provide any satisfactory explanation for such late filing,

other than to indicate that Mr Burns was very thorough in preparing the factual information for inclusion in his affidavit.

[15]      The late filing of an application such as this has a significant impact on others. Timeliness and prior notice of filing given to the Court means that the Registry staff can ensure that judicial time is available. Importantly, as between the parties, a respondent is not inappropriately deprived of the opportunity to respond to the interim application and to do so in a way which cuts across the duplication involved through the application proceeding first without notice (on a Pickwick basis if appropriate) and subsequently on an on-notice basis.

[16]      For these reasons, while I have reserved the costs of the application to date, the applicant will appreciate that the probable outcome is that there will be a costs award in favour of the respondents to take account of the consequences of the late filing.

Osborne J

Solicitor:

Anderson Lloyd, Dunedin Guest Hambleton, Dunedin Barrister:

Cecil Hanafin Barrister, Christchurch