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Cornwall Park Trust Board Inc v Chen

Cornwall Park Trust Board Inc v Chen

Case [2016] NZCA 65 14 March 2016

Contract Formation

Breach of Contract

Unconscionable Conduct

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA645/2014
[2016] NZCA 65

BETWEEN	THE CORNWALL PARK TRUST BOARD INC Appellant
AND	YONG XIN CHEN Respondent

Hearing:	11 February 2016
Court:	Ellen France P, Randerson and Stevens JJ
Counsel:	M G Ring QC and J G H Hannan for Appellant R J Hollyman, J A Wickes and T F Cleary for Respondent
Judgment:	14 March 2016 at 9:30 am

JUDGMENT OF THE COURT

A    The application for leave to adduce further evidence on appeal is granted.
BThe appeal is allowed.
C    The respondent is liable to pay the upset rent from the date of expiry of the lease until she vacated the property.
DThe cross-appeal is dismissed.
EThe respondent must pay the appellant costs for a standard appeal on a band A basis with usual disbursements. We certify for two counsel.
F     Costs in the High Court are to be fixed in that Court.

____________________________________________________________________

REASONS OF THE COURT

(Given by Randerson J)

Table of Contents

Para No

Introduction
The terms of the lease
The interpretation of clause 13(t)

The Judge’s approach
Counsel’s arguments
Our assessment

Is the Board estopped from claiming the upset rent?
Did the Judge correctly identify Mrs Chen’s repair obligations under the lease and the quantum of damages?

The Judge’s findings
Mrs Chen’s submissions
The Property Law Act 1952 issues
The scope of the repair obligations under the lease
The alleged failure of the Board to prove its case because there was no evidence of the condition of the property in 1988
The status of the rule in Joyner v Weeks and the proper measure of damages
Did the Judge wrongly allow the Board to recover the cost of certain items?

Was the Judge right to reject Mrs Chen’s defence of waiver or

estoppel in relation to the Board’s claim for repair costs?
Result

[1]
[13]
[23]
[23]
[32]
[35]
[61]

[68]
[70]
[77]
[79]
[90]

[91]

[97]

[102]

[107]
[110]

Introduction

The appellant Board owns and administers Cornwall Park in Auckland. For many years it has leased adjoining land to provide income to maintain the park for the benefit of the public.
The form of lease utilised by the Board is known as a Glasgow lease. Key features of the lease are:
(a)It is a ground lease only.
(b)The term is for 21 years.
(c)The ground rent is fixed at the commencement of the term and remains payable at the same rate throughout the 21 year term.
(d)The lease is perpetually renewable so long as the lessee complies with the terms of the lease and is willing to pay the new ground rent established at the expiry of the 21 year term. (The new rent is described in the lease at issue as the “upset rent”.)
(e)If the lessee does not renew or the lease is not taken up by a purchaser at auction, any improvements on the land revert to the Board without compensation…

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 Cornwall Park Trust Board Inc v Chen

Details

AGLC: Cornwall Park Trust Board Inc v Chen [2016] NZCA 65
Case: [2016] NZCA 65
Decision Date: 14 March 2016 at 9:30 am

CaseChat Overview and Summary

Cornwall Park Trust Board Inc, the owner of Cornwall Park in Auckland, leased land adjoining the park to Yong Xin Chen under a Glasgow lease. The lease expired on 29 March 2009. Mrs Chen remained in possession until November 2011. The upset rent for the new lease was established by the process under the lease at $73,750 per annum. The Board brought proceedings in the High Court to recover ground rent at the upset rate and costs incurred in repairing the property. Ellis J rejected the Board’s claim for ground rent but found in favour of the Board on its claim for repair costs. Mrs Chen appealed and cross-appealed. The Court allowed the appeal and dismissed the cross-appeal. The Board is entitled to recover ground rent at the upset rate from the date of expiry of the lease until Mrs Chen vacated the property. The Board’s claim for repair costs is upheld. The Court considered the terms of the lease and held the lease was intended to be comprehensive. The Court found the Board’s interpretation of clause 13(t) of the lease was correct. The Court found Mrs Chen was liable to pay the upset rent. The Court found the Board’s interpretation of the repair covenants was correct and dismissed Mrs Chen’s arguments as to the proper measure of damages. The Court found the Board was not estopped from claiming the upset rent or the repair costs.

Orders