HK Barbecue Ltd v Steamboat Nominees Ltd HC Wellington CIV-2011-485-77

[2011] NZHC 1235

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2011-485-77

BETWEEN  HK BARBECUE LTD Plaintiff

ANDSTEAMBOAT NOMINESS LTD Defendant

Hearing:         28 February 2011 (Heard at Wellington)

Judgment:      28 February 2011

JUDGMENT OF JOSEPH WILLIAMS J

In accordance with r 11.5, I direct the Registrar to endorse this judgment with the delivery time of 4.30pm on the 28th February 2011.

[1]      On 21 January 2011, Wild J made interim orders preventing Steamboat Nominees Ltd (Steamboat) denying HK Barbecue Ltd (Barbecue) access to Steamboat’s  premises.    He  was  satisfied  that  there  was  an  arguable  case  that Barbecue was not in default on its rental obligations and that the balance of convenience lay with preserving Barbecue’s access to its restaurant premises.

[2]      Wild J directed that Barbecue file and serve a memorandum or affidavit covering its ability to pay in the event that the defendant succeeds and the amount that it is able to pay into court.  When memoranda from both sides were received on this issue the matter came back before McKenzie J who directed Barbecue to pay the sum of $31,735.06 into court and this was duly done.

[3]      Steamboat now says when Barbecue offered that sum it grossly undervalued the possible rent arrears.   According to Steamboat, Barbecue excluded fit-out and

HK BARBECUE LTD V STEAMBOAT NOMINESS LTD HC WN CIV-2011-485-77 28 February 2011

chattels  from  the  valuation  of its  premises  leading to  a shortfall  of $22,496  in

Barbecue’s valuation figure.  Steamboat says its actual claims are:

(a)       rental of $91,290 + GST;

(b)      interim rent at $77,885 + GST;

(c)       rent arrears of $55,305.32 + GST.

[4]      Steamboat says that the amount of the rent arrears (updated to 8 February equalling $64,602.45 GST inclusive) should be paid in not the $31,735.06 that was paid in.

[5]      Steamboat also wants an order directing the plaintiff’s accountant to file an

affidavit as to whether Barbecue can pay the amounts listed above.

[6]      The only issue of relevance at this stage is what Barbecue should be required to pay in to cover the rent arrears claim.   The difference between $64,000 and

$31,000 is to be found in the value attributed to fit-out and chattels.   Steamboat’s valuer values the fit-out at $83.55 per square metre covering 269.22 square metres. Annual rental on this basis is claimed to be $22,496.

[7]      The plaintiff provided no expert evidence in reply but made two arguments. First, a number of chattels had been removed by the landlord after the plaintiff took possession.  Second, the fit-out, it says, is massively overvalued.  Even adopting an unrealistic 10% return on value, the fit-out would be worth $220,000.   That, the plaintiff says, cannot be right.

[8]      Mr Matsis replies that if the plaintiff was seriously pursuing that argument it would have called evidence but it has not.

[9]      For  completeness,  I note  that  Mr  Upton  QC  has  filed  a  letter  from  the Barbecue’s accountant Wendy Chan who confirms that Mr Cheung a director and guarantor has “more than sufficient assets” to meet a commitment of $40,000.

[10]     There is no scientific answer to this conundrum.  If I require a larger payment in, this may be unfair because Barbecue may well be right that the fit-out and chattels valuation is too great.   If I leave matters where they lie and Steamboat is correct, that company may be insufficiently protected.

[11]     I propose a rough and ready compromise.  The plaintiff is directed to increase the current payment in to a total of $45,000.  That is Barbecue is to pay a further

$13,264.94.  Such payment to be made to the High Court Registry in Wellington by

12 noon on 4 March 2011.

[12]     Mr Kim Ming Cheung is to provide an undertaking as to damages by the same date and time.  If he is not a director of the company then a further undertaking is also to be provided by a director of the company and at the same time.

[13]     The costs in relation to today’s hearing are reserved.

Joseph Williams J

Solicitors:

Paul Cheng & Co, PO Box 27088, Wellington

Gault Mitchell Law, PO Box 645, Wellington