Cornwall Park Trust Board Inc v Chen - [2014] NZHC 665

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-0008 [2014] NZHC 665

BETWEEN
THE CORNWALL PARK TRUST

BOARD INC Plaintiff

AND

YONG XIN CHEN Defendant

Hearing: 31 March 2014

Appearances:

ME Casey QC and JGH Hannan for Plaintiff/Applicant
JA Wickes for Defendant/Respondent

Judgment:

3 April 2014

JUDGMENT OF TOOGOOD J

This judgment was delivered by me on 3 April 2014 at 4:30 pm
Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

THE CORNWALL PARK TRUST BOARD INC v CHEN [2014] NZHC 665 [3 April 2014]

Background

[1] This proceeding concerns a dispute between the plaintiff as lessor and the defendant as former lessee of a residential property in Maungakiekie Road adjoining Cornwall Park, Epsom (the Maungakiekie property). It is before the Court at present because the plaintiff wishes the Court to extend a freezing order against the defendant’s assets made on 5 March 2015. The Maungakiekie property, owned by the plaintiff, is the subject of a long-term ground lease (known as a “Glasgow” lease) to the defendant of 21 years renewable in perpetuity with rent calculated as a percentage of a sum established pursuant to stipulated valuation exercises. The lease expired on 29 March 2009. After approximately 18 months a new rental was fixed according to the arbitration procedure set out in the terms of the lease. The defendant elected not to renew the lease at the significantly higher rental than that which she had previously been paying and eventually vacated the property on 16
November 2011.

[2] The plaintiff applied for summary judgment, alleging three distinct causes of action:

(a) First, a claim for the sum of $173,323.64 for rent allegedly due for the period 30 March 2009 to 16 November 2011, being the upset rental sum said to be due after the rent-fixing arbitration conducted in terms of the lease.

(b) Second, a claim for $7,557.63, being the costs of marketing and auctioning the property, and $11,184.25, being the legal costs associated with preparing the property for auction after the defendant notified the plaintiff that she would not take a renewal of the lease.

(c) Third, a claim for $167,404 for the cost of repairs to reinstate the property and the cost of the report obtained for that purpose.

[3] In respect of all claims, the plaintiff relied on specific provisions of the lease.

[4] The summary judgment application was partially successful in respect of the second cause of action. In a judgment dated 13 May 2013, Associate Judge Faire (as he then was) entered summary judgment for the plaintiff in the sum of $18,741.88 but declined the summary judgment application in respect of the first and third causes of action.1 The defendant was ordered to file a statement of defence and the proceeding went to a case management conference conducted by Lang J on
20 June 2013. Timetable and other orders were made following that conference dealing with the usual interlocutory matters including discovery.

[5] On 28 June 2013, the plaintiff obtained a charging order…

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: [2014] NZHC 665
Decision Date: 3 April 2014

CaseChat Overview and Summary

The case of Cornwall Park Trust Board Inc v Chen involves a dispute between the plaintiff, the Cornwall Park Trust Board Inc, as the lessor, and the defendant, Yong Xin Chen, as the former lessee, of a residential property in Maungakiekie Road adjoining Cornwall Park, Epsom. The plaintiff sought to extend a freezing order against the defendant’s assets that was made without notice on 5 March 2015. The defendant had vacated the property after the lease expired on 29 March 2009 and had not renewed it at the significantly higher rental fixed by arbitration. The plaintiff had already obtained a charging order over a property at 2 Titai Street, Orakei, owned by the defendant. The plaintiff applied for summary judgment on three causes of action, of which only the second was partially successful. The substantive proceeding was set for a five-day trial beginning on 19 May 2014. The plaintiff then made a without notice application for a freezing order and an ancillary order requiring the defendant to disclose certain information concerning her assets. Keane J made the freezing order on 5 March 2014, and since the order was made without notice, it was to have no effect after one month unless continued or renewed. The ancillary order required the defendant to make disclosure of certain information concerning her assets. The plaintiff sought an extension of the freezing order, and the defendant opposed it. The defendant explained that she and her husband had been trying to sell the Orakei property since 2011, before the litigation with the plaintiff was commenced, and that the property had been actively marketed during that time. They had finally succeeded in selling the property but had a long settlement date to enable them to purchase a replacement property in New Zealand for themselves and their family. The defendant explained that they were using different solicitors to do the conveyancing for the sale of the Orakei property as those solicitors were suggested by the agent and she thought they would try them out. The plaintiff asserted, however, that the defendant’s explanations were not complete and did not provide supporting documentation. The defendant denied being evasive in her dealings with the plaintiff and alleged that it was the plaintiff who had misled her, claiming that the plaintiff made misrepresentations and engaged in misleading conduct in its dealings with her.

The court considered that the plaintiff was seeking some form of security for a contingent judgment debt rather than having a genuine, well-founded concern about dissipation. However, the ancillary order made on 5 March 2014 required the defendant to disclose “the full nature, extent and value” of all of her real or personal assets, identifying in detail the nature of all such assets, their whereabouts, whether they are held in her individual name or jointly with any other party or nominee or otherwise in any way on her behalf. The defendant had not complied fully with those directions. The court considered that the defendant was entitled to a further period within which to satisfy the Court that there is no risk that assets will be dissipated. The freezing order made on 5 March 2014 would be extended to expire on Wednesday, 16 April 2014. The defendant would have an opportunity to file an affidavit providing information in full compliance with the directions contained in the ancillary order made by Keane J on 5 March 2014. If the plaintiff wished the Court to extend the freezing order beyond 16 April 2014, counsel for the plaintiff shall file and serve a memorandum to that effect no later than 4:00 pm on Friday, 11 April 2014.

Orders