Khyber Automotive European Specialist Limited v Gray

[2019] NZHC 2178

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-290

2019 NZHC 2178

BETWEEN

KHYBER AUTOMOTIVE EUROPEAN SPECIALIST LIMITED
Applicant

AND

NORMAN DAVID GRAY, ELEANOR ANNE GRAY and D.G. TRUSTEE COMPANY (2012) LIMITED

Respondents

Hearing:	29 August 2019
Appearances:	No appearance for and on behalf of the Applicant J A Rafiei for the Respondents
Judgment:	2 September 2019

JUDGMENT OF WALKER J

This judgment was delivered by me on 2 September 2019 at 4.00 pm Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

KHYBER AUTOMOTIVE EUROPEAN SPECIALIST LIMITED v GRAY & ORS 2019 NZHC 2178

[2 September 2019]

[1]                The applicant, Khyber Automotive European Specialist Limited (Khyber), is or was the lessee of a property at 20–22 Mt Eden Road, Auckland. The property is owned by the trustees of the Gray Family Trust.

[2]                The lease arrangement has been vexed from the perspective of the landlord. It is unnecessary to traverse the history in great detail. Suffice it to say that matters came to a head in respect of unpaid rent and the landlord served a notice of intention to cancel the lease on 22 January 2019, and a notice of cancellation on 9 February 2019.

[3]                The notice of cancellation sparked this application by Khyber seeking relief from cancellation under s 253 of the Property Law Act 2007 (the Act).

[4]                At that stage, and apparently at all stages up to 21 August 2019, Khyber was represented by Mr Nicholls from Nicholls Law Limited.

[5]                The grounds for the application were that funds representing the accrued unpaid rent were in the solicitor’s trust account to satisfy the default and the debt collection agency’s recovery costs.

[6]Despite this, the rent liability remained unpaid for a period.

[7]                On 23 July 2019, a firm fixture to dispose of the application was allocated. It is clear to me that notice of the firm fixture was properly provided to the applicant’s address for service. In a Minute dated 21 August 2019, Mr Nicholls withdrew as solicitor for the applicant. He was permitted to do so expressly on the basis that his office was to remain as the address for service pending filing of a notice of change of address. No notice of change of address for service has been filed.

[8]                Khyber did not appear on the hearing of the application today. Mr Rafiei, on behalf of the respondents, sought to have the application dismissed with costs; and also sought an order for possession.

[9]                In circumstances where the rental arrears which were the basis of a notice of cancellation have since been paid, it is unclear to me whether there remains an entitlement to cancel based on that notice. On the one hand, it is arguable that there

has been a waiver of the breach on the basis that the breach has been remedied. On the other hand, where future rent goes unpaid, it might be viewed as a continuous default, such that the notice remains operative. It is unnecessary to resolve this. The pragmatic answer in the circumstances of this case is to issue a new notice of cancellation, with the ability to take possession within the statutory period. For that reason, Mr Rafiei proposes to take that route. He also indicated that the trustees of the Trust would seek to enforce the rent obligation through a statutory demand.

[10]            Accordingly, I dismiss the application for relief from the cancellation of the lease and make an order for costs in favour of the respondents. I invite the respondents to file a brief memorandum whether and on what basis scale costs or solicitor/client costs under the terms of the lease (or the High Court Rules) are sought.

................................................

Walker J