Gan v Wilfred - [2013] NZHC 535

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2013-409-000442 [2013] NZHC 535

BETWEEN KAIWAN GAN AND JUZHEN YU Plaintiffs

ANDHARMON LYNN WILFRD First Defendant

ANDCAROLYN RUTH DARE-WILFRED Second Defendant

ANDANGELA MAREE SMALLEY Third Defendant

ANDLA FAMIA NO. 1 LIMITED Fourth Defendant

ANDLA FAMIA NO. 4 LIMITED Fifth Defendant

Hearing: 12 and 15 March 2013

Appearances: H C Matthews for Plaintiffs
MAJ Elliott for Defendants on 12 March 2013
H L Wilfred in Person with B Dudley as McKenzie Friend on
15 March 2013

Judgment: 15 March 2013

ORAL JUDGMENT OF CHISHOLM J

[1] This application for interim relief is brought by the plaintiffs who are the owners of a Christchurch property known as Wigram Manor. That property is used for accommodation, as a function centre, and for various other purposes. The plaintiffs seek an order for immediate possession. The defendants remain in
possession.

GAN V WILFRD HC CHCH CIV-2013-409-000442 [15 March 2013]

[2] When this proceeding was filed last week interim orders were sought on a without notice basis. By minute I directed that the proceedings be served forthwith. I also scheduled an interlocutory hearing for 12 March 2013 and timetabled the steps that were to be taken in the meantime.

[3] On 12 March 2013 Mr Elliott appeared for the defendants and sought an adjournment on the basis that the defendants wanted to provide further information. The proceeding was adjourned until today. Two further affidavits have been filed by the defendant and one by the plaintiffs. A payment of $10,000 that the defendants had agreed to make was duly made.

[4] Today Mr Wilfred has appeared in person for the defendants. He was assisted by the defendants’ accountant, Mr Dudley, as a McKenzie Friend. Understandably Mr Wilfred has found this a somewhat difficult situation and I have done my best to accommodate him and explain the process. He has conducted the case on behalf of the defendants with dignity and sincerity. I might also add that Mr Matthews has also presented the plaintiffs’ case with skill.

[5] Given the manner in which this proceeding has evolved Mr Matthews sought an order joining La Famia No. 1 Limited and La Family No. 4 Limited as fourth and fifth defendants respectively. Joinder of those defendants is appropriate and there will be an order accordingly.

Background

[6] On 7 July 2009 the plaintiffs entered into a lease with La Famia No. 2

Limited. I will call that company “the No. 2 company” and I will describe the lease as the “head lease”. It was for a term of five years with a right of renewal. The annual rental was $150,000 per annum plus GST payable by monthly payments of
$12,500 plus GST. The lease specifically provided that there was to be no sub- letting. There were no personal guarantees.

[7] The first and third defendants are directors of the No. 2 company. They are also directors of the fourth and fifth defendants who are “sub-lessees” (I use that

expression in a…

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 Gan v Wilfred

Details

AGLC: Gan v Wilfred [2013] NZHC 535
Case: [2013] NZHC 535
Decision Date: 15 March 2013

CaseChat Overview and Summary

The case of Gan v Wilfred involves the plaintiffs, Kaiwan Gan and Juzhen Yu, seeking an order for immediate possession of a property in Christchurch known as Wigram Manor. The defendants, including Harmon Lynn Wilfred, Carolyn Ruth Dare-Wilfred, Angela Maree Smalley, La Famia No. 1 Limited, and La Famia No. 4 Limited, remain in possession despite the plaintiffs' ownership. The legal issues centre around whether the plaintiffs have an arguable case for interim relief, the balance of convenience, and whether overall justice indicates a different outcome.

The court considered whether the plaintiffs had an arguable case for interim relief, focusing on the default under the lease and the disclaimer by the liquidator under the Companies Act 1993. The court found that the plaintiffs indeed had an arguable case, given the substantial arrears and the end of the head lease. However, the sub-lessees' rights under section 269 of the Companies Act and their potential relief under sections 258 and 259 of the Property Law Act 2007 posed significant challenges. The sub-lessees' lack of formal consent and the prohibition of sub-leasing in the head lease complicated their case for relief.

In assessing the balance of convenience, the court weighed the adequacy of damages as a remedy, the plaintiffs' undertaking as to damages, and the defendants' proposal. The court concluded that damages were unlikely to be an adequate remedy for the plaintiffs due to the defendants' inability to meet the arrears and potential future payments. However, the plaintiffs' ability to meet any awarded damages provided adequate protection. The court also noted that the defendants' proposal for a new lease at a reduced rental and the plaintiffs' concerns about maintenance and long-term rental value were significant factors. Ultimately, the balance of convenience favoured granting interim relief.

Considering overall justice, the court concluded that interim relief would be in accordance with the concept of justice. Despite the potential for the interim decision to resolve the substantive issue, the court determined that it was not a case for refusing relief. The court granted an interim order for possession, allowing the defendants until 5 p.m. on Monday, 18 March 2013, to vacate. The court also ordered costs to the plaintiffs on the 2B scale and reserved leave for any party to apply further if necessary.

Orders