Hortiventure Limited v Alpine Sun Limited
[2016] NZHC 2130
•8 September 2016
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
CIV-2014-409-000866 [2016] NZHC 2130
UNDER the Property Law Act 2007 BETWEEN
HORTIVENTURE LIMITED Applicant/Respondent
AND
ALPINE SUN LIMITED Respondent/Applicant
Hearing: 8 September 2016 Counsel:
A J Summerlee for Applicant/Respondent
S S R Meares for Respondent/ApplicantJudgment:
8 September 2016
JUDGMENT OF COLLINS J
Introduction
[1] This judgment explains why I am granting an application by Hortiventure Ltd (Hortiventure) to strike out an application for early possession commenced by Alpine Sun Ltd (Alpine Sun). I am also awarding costs to Hortiventure in relation to the early possession application.
Background
[2] This litigation has had a protracted history. It is sufficient for present purposes to briefly summarise the background. A more detailed explanation of the history of this proceeding can be found in the judgment of Brown J delivered on
25 February 2015.1
1 Alpine Sun Ltd v Horitventure Ltd [2015] NZHC 278.
[3] On 25 July 2012, Alpine Sun and Hortiventure executed a lease whereby Hortiventure agreed to lease a property at 777 Halkett Road in Christchurch comprising close to 30 hectares (the property). The property included irrigated land and a house. The lease agreement provided that it would come to an end on
30 November 2015.
[4] A dispute arose about Hortiventure’s compliance with the terms of the lease.
That dispute led to the parties taking the following steps:
(1) Hortiventure filed a claim in the Disputes Tribunal on 17 October
2014.
(2)On 20 October 2014, Alpine Sun served on Hortiventure a notice under s 246 of the Property Law Act 2007 seeking to cancel the lease.
(3)On 3 December 2014, Alpine Sun commenced this proceeding seeking orders for possession of the property pursuant to s 244 of the Property Law Act.
(4) On 4 December 2014, Hortiventure served a trespass notice on
Mr Yang, a director of Alpine Sun.
(5) On 15 December 2014, Hortiventure filed an “appearance under protest to jurisdiction” and a notice of opposition. The protest to jurisdiction was based on the proposition that Alpine Sun had failed to follow the dispute resolution process set out in cl 15 of the lease. Hortiventure sought a stay of Alpine Sun’s application for early possession of the property pending referral of the dispute to arbitration pursuant to cl 15.
[5] In his judgment Brown J held cl 15 of the lease required the parties to refer
their dispute to arbitration. Brown J therefore stayed Alpine Sun’s application for
early possession pending the outcome of the arbitration.2
2 Alpine Sun Ltd v Hortiventure Ltd, above n 1, at [41]; Arbitration Act 1996, schedule 1, art 8(1).
[6] On 23 April 2015 Brown J awarded costs of $8,606.75 to Hortiventure, in respect of the stay application.3
[7] Hortiventure also sought costs in relation to Alpine Sun’s early possession application but Brown J said that costs should not be awarded on that application because it “remained alive and [would] be the subject of the hearing before the appointed arbitrator”.4
[8] Hortiventure nominated its arbitrator. There is a dispute about why Alpine Sun did not take steps to progress the arbitration. Alpine Sun says that after Brown J delivered his judgment it thought Hortiventure should be given a reasonable opportunity to remedy its alleged breaches of the lease and that it was appropriate for Alpine Sun to take an holistic approach to the dispute between the parties. Alpine Sun says that although it did not nominate an arbitrator prior to the lease coming to an end it is now willing to proceed to arbitration to resolve the ongoing dispute about Hortiventure’s alleged failure to comply with the terms of the lease. Hortiventure says that the dispute concerning its alleged breaches of the terms of the lease cannot be referred to arbitration because of the passage of time.
[9] I am not able to determine on the papers why the dispute was not referred to arbitration as envisaged by Brown J. It is clear, however, the issue of early possession was not arbitrated and when the lease came to an end Alpine Sun resumed possession of the property.
[10] On 5 July 2016, Hortiventure applied to strike out Alpine Sun’s early
possession application. The strike-out application is opposed on four grounds:
(1)Brown J stayed the proceeding, therefore it is not necessary to strike out the application for early possession.
(2)Brown J declined to award costs in relation to the application for early possession.
3 Alpine Sun Ltd v Hortiventure Ltd [2015] NZHC 819.
4 Alpine Sun Ltd v Hortiventure Ltd Minute of Brown J, 17 March 2015 at [4].
(3)The strike-out application is an abuse of process because it is a veiled attempt to seek costs which have already been declined.
(4)The arbitration is still “alive”. Alpine Sun says the alleged breaches of the terms of the lease by Hortiventure have still to be resolved by arbitration.
Analysis
Strike-out
[11] When Brown J described the application for early possession as still being
“alive” he did so in the context that the parties’ dispute was to be arbitrated.
[12] Circumstances have now changed in two material respects:
(1)There has not been an arbitration to determine the claim for early possession by Alpine Sun. Subject to an arbitrator determining the limitation issues raised by Hortiventure, there may still be an arbitration to determine Hortiventure’s alleged breaches of the terms of the lease.
(2) More significantly, Alpine Sun now has possession of the property.
[13] The application for early possession is therefore now otiose and no longer “alive”. This conclusion does not impact on whether or not the arbitration remains “alive”. As previously noted, the arbitration may still be able to be pursued as a means of resolving any alleged breaches of the lease by Hortiventure provided the arbitrator has jurisdiction to hear and determine those issues.
[14] Alpine Sun could have discontinued its proceeding in which it seeks early possession and limited this hearing to one for costs. It chose not to do so and cannot now successfully assert that the application to strike out is an abuse of process. When pressed on this point, Ms Meares, counsel for Alpine Sun, suggested that her client might be willing to now discontinue its application for early possession
provided no order for costs was made against Alpine Sun. That offer was, understandably, politely declined by Mr Summerlee, counsel for Hortiventure.
[15] Hortiventure’s application to strike out is properly brought because there is no prospect Alpine Sun’s claim for early possession can succeed.5
[16] The application for early possession is therefore struck out.
Costs
[17] Alpine Sun opposes any award of costs on the grounds Brown J declined to award costs in relation to the early possession application.
[18] Alpine Sun’s position in relation to costs is misconceived. The early possession application was not resolved at the time Brown J declined to make any costs order in relation to that application. The early possession application is now struck out. There is nothing to prevent me exercising my discretion to make a costs order in relation to the application for early possession.
[19] Hortiventure is entitled to costs on a scale 2B basis in relation to the now struck out application for early possession. This order does not prevent any arbitrator making an order in favour of Alpine Sun if its claim that Hortiventure has breached the terms of the lease is determined in favour of Alpine Sun by the arbitrator.
Conclusion
[20] The application for early possession brought by Alpine Sun is struck out. Hortiventure is entitled to costs on a scale 2B basis in relation to the now struck out
early possession application.
5 Grovit v Doctor [1997] 2 All ER 417 (HL); Tau v Durie alt cit Te Runanga O Ngai Tahu Ltd v
Durie [1998] 2 NZLR 103 (HC).
D B Collins J
Solicitors:
Wynn Williams, Christchurch for Applicant
Parry Field Lawyers, Christchurch for Respondent
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