Conqra Asbestos Solutions Ltd v Warehouse World Ltd - [2022] NZHC 321

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-1619

[2022] NZHC 321

UNDER Part 19 of the High Court Rules & Part 4, Subpart 6 of the Property Law Act 2007.

IN THE MATTER OF

A notice of intention to cancel lease (s 246 Property Law Act), and notice of cancelation of lease, both dated 3 August 2021

BETWEEN

CONQRA ASBESTOS SOLUTIONS LTD

Applicant

AND

WAREHOUSE WORLD LTD

Respondent

Hearing: On the papers at Auckland

Appearances:

D G Collecutt for the Applicant I H Miller for the Respondent

Judgment:

1 March 2022

JUDGMENT OF L HARVEY J

This judgment was delivered by me on 1 March 2022 at 10 am pursuant to R 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors/Counsel:Simpson Dowsett Mackie, 2 Enfield Street, Mt Eden Anderson Lloyd, P O Box 399, Shortland Street, Auckland
D G Collecutt, P O Box 106-564, Auckland

CONQRA ASBESTOS SOLUTIONS LTD v WAREHOUSE WORLD LTD [2022] NZHC 321 [1 March 2022]

Introduction

[1] Conqra Asbestos Solutions Ltd entered into a lease of premises with Warehouse World Ltd, effective from 1 April 2021. A dispute developed over car parks and claims of threatening behaviour. On 3 August, Warehouse World issued a notice of intention to cancel, giving Conqra five days to vacate the premises. On 9 August, Conqra filed an application for relief against forfeiture, including evidence that it intended to move to new premises before the end of September. A COVID-19 Alert Level 4 lockdown then came into effect. Warehouse World filed a notice of opposition with supporting evidence while negotiating with a replacement tenant.

[2] On 13 September, Wylie J set the application down for a one-day hearing to be held on 15 November.1 Effective from 20 September, Conqra found new premises. Warehouse World had also secured a new tenant with a commencement date of 1 September. Following exchanges between counsel, including efforts to negotiate a resolution, by minute dated 4 November, Wylie J recorded that it was accepted that the proceedings were “now otiose”.2 Timetable orders were then issued for the filing of costs submissions to be dealt with on the papers.3

[3] Counsel for Conqra seeks an award of costs and disbursements of $10,100.00 against Warehouse World, who in turn have applied for solicitor-client costs of
$40,220.41 and disbursements of $98.74 (as well as any further costs and disbursements up to the point the proceeding is formally discontinued), citing clause
6.1 of the lease in support of its claim.

[4] The issue for determination is who is entitled to costs? If the defendant is entitled, then should costs be awarded under the lease on an indemnity basis?

1 Conqra Asbestos Solutions Ltd v Warehouse World Limited HC Auckland CIV-2020-404-001619, 13 September 2021.
2 Conqra Asbestos Solutions Ltd v Warehouse World Ltd HC Auckland CIV-2021-404-001619, 4 November 2021.
3 At [4].

Background

[5] On 17 May 2021, Conqra Asbestos entered into a lease of premises at Unit…

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.

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Details

Case: [2022] NZHC 321
Decision Date: 1 March 2022

CaseChat Overview and Summary

In Conqra Asbestos Solutions Ltd v Warehouse World Ltd, the High Court of New Zealand was tasked with determining the entitlement to costs between Conqra Asbestos Solutions Ltd (the applicant) and Warehouse World Ltd (the respondent) in a lease dispute. The lease between the parties, dated 1 April 2021, was for a term of four years, but the relationship deteriorated over issues regarding car parks and mutual claims of threatening behaviour. Warehouse World issued a notice of intention to cancel the lease on 3 August 2021, which Conqra sought to prevent by filing an application for relief against forfeiture. The proceedings were complicated by a COVID-19 lockdown and negotiations for a new tenant. Ultimately, both parties secured alternative arrangements and the proceedings became otiose.

The central legal issue was whether either party was entitled to costs, and if so, whether the respondent was entitled to indemnity costs under the terms of the lease. The applicant argued for costs against the respondent, while the respondent sought indemnity costs under clause 6.1 of the lease. The Court found that neither party was entitled to costs as both had achieved their desired outcomes and the proceedings had effectively ended. The Court held that the circumstances did not justify awarding indemnity costs under the lease, as there had been no determination in either party's favour and the costs claimed were not objectively reasonable.

Ultimately, the Court dismissed both parties' applications for costs, finding that costs should lie where they fell. This decision highlights the Court's discretion in awarding costs and the importance of the circumstances in which proceedings are brought to the final outcome.

Orders