Linco Properties Limited v Townhouse Motel Limited
[2020] NZHC 3354
•16 December 2020
IN THE HIGH COURT OF NEW ZEALAND TIMARU REGISTRY
I TE KŌTI MATUA O AOTEAROA TE TIHI-O-MARU ROHE
CIV-2020-476-000016
[2020] NZHC 3354
UNDER the Property Law Act 2007 BETWEEN
LINCO PROPERTIES LIMITED
Plaintiff
AND
TOWNHOUSE MOTEL LIMITED
First Defendant
AND
ESTATE OF BARRY MERVYN HILL
Second Defendant
AND
LISA MARGARET HILL
Third Defendant
Hearing: 23 October 2020 Counsel:
A N Riches for the Plaintiff
Judgment:
16 December 2020
JUDGMENT OF NATION J
[1]In these proceedings filed on 22 May 2020, the plaintiff sought:
(a)orders against all defendants cancelling a lease between the plaintiff and the first defendant;
(b)an order for the plaintiff to have possession of the leased premises;
(c)orders requiring all defendants to pay all rental arrears, interest on all rent arrears, and recovery costs up to the date of cancellation or any later date on which the defendants yielded possession; and
LINCO PROPERTIES LTD v TOWNHOUSE MOTEL LTD [2020] NZHC 3354 [16 December 2020]
(d)costs in favour of the plaintiff on a 2B basis together with reasonable disbursements fixed by the Registrar.
[2] In related proceedings involving the same parties and also filed on 22 May 2020, the plaintiff sought summary judgment against all defendants for arrears of rent and other outgoings, interest and costs. That application was made for judgment as against Townhouse Motel Ltd as the lessee and against the first and second defendants as guarantors of the first defendant’s lease obligations.
[3] After the hearing over the application for summary judgment, Associate Judge Paulsen drew the parties’ attention to the fact the second defendant had been named as the estate of Barry Mervyn Hill when he would have expected the trustees and executors of Mr Hill’s estate to be named as the second defendants. Associate Judge Paulsen gave directions in a minute to Mr Jackson, who had appeared as counsel for all defendants, to provide information which would have enabled the plaintiff and the Court to identify the person or legal entity that should have been named as the second defendant. By memoranda, Mr Jackson said he was unable to prove that information, giving somewhat conflicting explanations. At a certain point, he said he no longer had instructions to act as counsel for the second defendant and sought leave to withdraw. He said he had inadvertently appeared as counsel for the second defendant. He said, essentially, he was acting only for the first defendant, and for him to provide the information as requested by the Court, he would have to breach obligations of confidentiality he had to a client.
[4] In a minute of 16 September 2020 in related proceedings, Associate Judge Paulsen said he was not giving leave to Mr Jackson to withdraw as counsel for the second defendant on the basis of the request that had been made for this by memorandum.
[5] In his judgment of 16 September 2020, Associate Judge Paulsen gave judgment in favour of the plaintiff against the first and third defendants in the sum of $51,593.99 for arrears of rent, outstanding rates and water rates due under the lease for the period to 20 May 2020, and interest as claimed in the statement of claim.1 That claim was for interest at 18.9 per cent on the judgment sum from the due date of each respective
1 Linco Properties Ltd v Townhouse Motel Ltd [2020] NZHC 2404.
rental payment to the date of judgment and at the contractual rate of 18.9 per cent per annum on the judgment sum from the date of judgment until date of payment in full. The Judge also ordered the first and third defendants to pay costs on a 2B basis as fixed by the Registrar.
[6] The application for summary judgment against the second defendant was to be adjourned to be brought on for hearing on two days’ notice.
[7] The plaintiff had separately applied to liquidate the first defendant Townhouse Motel Ltd. Associate Judge Paulsen granted an order for liquidation of Townhouse Motel Ltd on 17 September 2020.
[8] The liquidators of Townhouse Motel Ltd took possession of the plaintiff’s premises on 27 September 2020 and disclaimed the lease.
[9] The plaintiff took possession of the premises from the liquidators on 13 October 2020.
[10] Insofar as the plaintiff in these proceedings sought an order for the plaintiff to have possession of the premises, the application is now superfluous. The plaintiff continued with the proceedings and sought a declaration that the memorandum of lease dated 20 November 2002 had been cancelled and sought, as against the second and third defendants, judgment for further accrued and outstanding rental arrears, interest on rent arrears in terms of the lease, recovery costs and rates up to the date of cancellation, and costs.
[11] The proceedings came on for hearing on 22 October 2020. The Court still had no information as to who the trustees and executors were in the estate of Barry Mervyn Hill or who was otherwise responsible for the administration of his estate.
[12] The plaintiff changed the intituling for these proceedings by describing the second defendant as “the Trustees and Executors of the Estate of Barry Mervyn Hill” but did not identify who such people were.
[13] Mr Loh, who appeared for the third defendant Lisa Margaret Hill, advised the Court that he and the firm who had previously represented the defendants as solicitors no longer had instructions to act. He sought and was granted leave to withdraw.
[14] The plaintiff had applied to the Court for an order of possession of the leased property for the purpose of cancelling the lease because of the lessee’s breach of the lease in paying rent and rates due under the lease.
[15] The director of the plaintiff company swore an affidavit on 15 October 2020 setting out rent and rates that had continued to accrue under the lease until 27 September 2020.
[16] The plaintiff’s application sought interest on outstanding arrears in accordance with the lease.
[17]Clause 3.04 of the lease states:
IF any rent or other moneys payable by the Lessee under this Lease remain unpaid for seven (7) days after their due date then the Lessee shall pay to the Lessor interest on those moneys at the annual rate from time to time equal to the Lessor’s banks best customer overdraft rate plus a margin of two (2) cents per centum calculated from the due date to the date of payment and the Lessor will be entitled to recover those moneys and/or that interest as if the same were rent in arrears.
[18]The ANZ overdraft rate from 1 April 2020 has been 18.9 per cent.
[19] The undisputed evidence before the Court is that the third defendant was a covenantor and guarantor of the lease.
[20] When the defendants were represented by counsel, the second and third defendants did not file any notice of opposition to the application on the basis they were only covenantors and guarantors of the lease.
[21] With Linco Properties Ltd now in liquidation, the proceedings against that company are effectively stayed.
[22] The administrator or trustee of the second defendant has not been named. In these circumstances, the application for orders as against that defendant are adjourned and will be called in the list on 12 April 2021.
[23]As against the third defendant, the Court makes the following orders:
(a) an order cancelling the memorandum of lease dated 20 November 2002;
(b) an order the plaintiff is to have possession of all the land contained in certificate of title CB33K/535 (Canterbury Registry) being Lot 1 Deposited Plan 49139 (Townhouse Motel 29 Evans Street, Timaru); and
(c) an order the third defendant is to pay rental arrears, outgoings and interest from 21 May 2020 to 27 September 2020 as follows:
Rental Arrears:
Rental June 2020 due 20 June 2020
$7,943.15
Rental July 2020 due 20 July 2020 $7,943.15 Rental September 2020 due 20 September 2020 $7,943.15 Total: $23,829.45 Outgoings:
Rates due as at 21 September 2020 minus Judgment for rates as at 13 May 2020 ($16,110.51 - $11,676.48)
$4,434.03
Water rates due as at 25 June 2020 $689.04 Total: $5,123.07 Interest:
Rental due Days to 27/9/2020
Interest at 18.9%/day
20June2020 99 days $406.99 20July2020 69 days $283.59 20September2020 7 days $4.11 Total: $694.69 Total Rental, Rates, Interest Outstanding:
$29,647.21
[24] The plaintiff is also entitled to an order for costs on a 2B basis with reasonable disbursements as fixed by the Registrar.
Solicitors:
Saunders & Co., Christchurch.
Copy to:
L M Hill, Third Defendant.
0
1
0