Grindlay v Memelink
[2015] NZHC 1135
•26 May 2015
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV 2014-485-11497 [2015] NZHC 1135
BETWEEN MALCOLM GRINDLAY AND
ROBYN GRINDLAY Appellants
AND
HARRY MEMELINK AND
NEILL HAMILTON AS TRUSTEES OF THE LINK TRUST NO 1
Respondents
Hearing: 25 May 2015 Counsel:
K I Jefferies for Appellants
Respondent (Mr Memelink) in Person (together with K Terpstra as McKenzie Friend)
Judgment:
26 May 2015
JUDGMENT OF SIMON FRANCE J
[1] The respondents obtained a default judgment in respect of claim brought for non payment of rent owed by the appellants pursuant to a lease agreement. The appellants applied to have the default judgment set aside. They succeeded, but the conditions imposed required part of the judgment sum to be paid to the defendants
by a certain date, and the balance to be paid into court by the same date.1 The
appellants appeal the conditions.
1 Memelink v M and R Grindlay CIV 2013-096-000520 DC Hutt Valley, 3 November 2014, per
Judge Touhy.
GRINDLAY v MEMELINK [2015] NZHC 1135 [26 May 2015]
Background facts
[2] The appellants purchased a scrap metal business from the respondents.2 At the same time they entered into a lease of premises in Seaview Road, Lower Hutt. That agreement was to take effect from 1 May 2013, although Mr and Mrs Grindlay were already in possession. Mr and Mrs Grindlay remained in possession until they left on 17 November 2013, having cancelled the lease. It is common ground that
$2,600, covering the period of occupation prior to 1 May, was paid.
[3] The statement of claim on which the default judgment was based claimed no payments were thereafter made under the lease which ran from 1 May. The plaintiffs claimed the outstanding rental payments. No defence was filed and the plaintiffs sought judgment by default. This was granted but was limited to the appellants’ period of occupation. The Judge declined to grant judgment for any amounts said to be owing subsequent to the appellants’ purported cancellation of the lease.
Judgment under appeal
[4] Mr and Mrs Grindlay applied to have the default judgment set aside.
[5] Concerning the reason for no defence having been filed, an affidavit from their lawyer was provided. The lawyer accepted responsibility for overlooking the filing of the defence.
[6] Concerning possible defences, Mr Grindlay filed an affidavit. In it he claimed:
(a) to have made cash payments of $17,980;
(b)to have valid grievances about the landlord’s compliance with its responsibilities under the lease;
(c) that Mrs Grindlay was not a signatory to the lease and could not be held responsible.
2 The parties are not exactly the same but the description suffices for present purposes.
[7] The District Court noted there were grounds for scepticism over the claim to having paid $17,980, but placed weight on the fact that Mr Grindlay had sworn an affidavit asserting payment. (Mr Memelink had done likewise, denying receipt). His Honour noted that no viable defence had, however, been identified concerning the balance of the money due under the lease, and considered there was no reason to not require payment of that. Accordingly, the default judgment would be set aside but only if certain conditions were met within 21 days:
(a) the sum of $17,980 was to be paid into Court;
(b)the balance of $27,315 was to be paid to the respondents. This figure included the costs figure entered at the time of the default judgment.
If these conditions were not met, the application to set aside would be declined, and the default judgment would remain in force. Mr and Mrs Grindlay appeal. No cross-appeal was filed against the conditions.
Decision
[8] The outcome of the application was somewhat of a pyrrhic victory. The appellants were able to set aside a default judgment, but only by paying across all the money within 21 days. Of that money some would go to the plaintiff and some be paid into court, but the practical consequence was having to come up with the entire sum in 21 days. It is questionable whether the applicants were left in a better position for their apparent success.
[9] I consider it preferable to first consider the underlying merits of the application to set the default judgment aside before determining what is the appropriate appellate response.
[10] First, looking at the reasons why no defence was filed, the evidence is not compelling. The affidavit filed by the lawyer is vague as to dates, and instructions concerning a defence. No fuller information is provided in Mr Grindlay’s affidavit.
[11] Next, looking at the possible defences, the material was not adequate in my view to establish a possible defence of actual payment of part of the money claimed. Mr Grindlay said the payments had been made in cash but provided no detail of when and where they were made, and to whom. Extraordinarily, no receipts had apparently been issued or requested in response to the payments. So there was little by way of documentary support. Mr Grindlay sought to overcome this by attaching to his affidavit a bank statement, and what were said to be till reconciliations. These were meant to be evidence of cash withdrawals, and of allocations of cash to rent. However, the bank statement has significant deficits on the face of the document, not the least of which is that the period purported to be covered by the statement header is different from the dates of the transactions covered in the body of the document. Further, the header period relates to dates outside the lease period in dispute.
[12] The till reconciliations mean nothing on their face without explanation as to who prepared them and when. Each attributes a figure to “Rent” which bears no obvious relationship to sums that might be owing under the lease. There is no supporting professional information provided by an accountant, nor any company records. Accordingly, in my view the material filed did not provide a basis for asserting this defence.
[13] The matters raised concerning the quality of the tenancy do not go to non-payment of the rent, and on the appellants’ own case, rent was being paid despite these disputed flaws.
[14] There is no evidence of irreparable harm to the appellants if the judgment debt is not set aside. Accordingly, in terms of the usual inquiries made when assessing an application to set aside a default judgment, I consider none of the tests were satisfied by the appellant. The nature of the conditions set by the District Court, which in effect required payment by the appellants of the entire claimed amounts, reflect a similar underlying conclusion.
[15] There is one caveat. In his affidavit, said to be sworn on his wife’s behalf, Mr Grindlay notes that she is not a signatory to the lease. This is correct. While I accept the respondents’ point that there is available evidence suggesting she was a
party to the lease, I consider the application to set aside should have succeeded in relation to Mrs Grindlay. Her defence point is at least plainly arguable. It is true that hers is a defence not filed in time, and not personally advanced by her, but it is sufficiently apparent from the lease document itself to be given credence.
[16] That qualification aside, my assessment of the merits is that the default judgment should have been left in place. I therefore reject the appellants’ submission that only the conditions should be removed, and the judgment totally set aside. Although if free to act as I consider appropriate, I would simply reinstate the default judgment, in the absence of any cross-appeal by the respondents against the conditions, I consider this is not an available option. Accordingly, the appropriate outcome given my view of the merits is that I retain the conditions, with an adjusted period of 14 days from the date of the judgment to meet them. If Mr Grindlay chooses not to meet them, the original default judgment issued against him will remain in place.
Conclusion
[17] The appeal by Mrs Grindlay is allowed, and the default judgment against her is set aside. However, in the circumstances of the case no alteration to the value of the cost judgments in the lower court is required, although they will be payable only by Mr Grindlay. The conduct of the proceedings by the defendants/appellants means that no costs order should be made in favour of Mrs Grindlay.
[18] The appeal by Mr Grindlay is dismissed. The judgment under appeal is, however, varied so that the time for meeting the conditions is now 14 days from the date of this judgment.
[19] The respondents are self-represented and are not entitled to an award of costs.
Reasonable disbursements, to be fixed by the Registrar, may be claimed.
Simon France J
Solicitors:
Jefferies Law, Wellington
0
0