Manukau City Centre Limited v Sudhakar - [2023] NZHC 3820

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-001551

[2023] NZHC 3820

UNDER Part 12 of the High Court Rules 2016

BETWEEN

MANUKAU CITY CENTRE LIMITED

Plaintiff

AND

SHANEEL KUMAR SUDHAKAR

First Defendant

THE DREDGE LIMITED
Second Defendant

ANIL DATT SHARMA

Third Defendant

Hearing: 14 December 2023

Appearances:

A Patutama for the Plaintiff

S Sharma for the First Defendant

Judgment:

20 December 2023

JUDGMENT OF ASSOCIATE JUDGE GARDINER

This judgment was delivered by me on 20 December 2023 at 4.00 p.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date.......................................

Solicitors:

Patel Nand, Auckland Simpson Grierson, Auckland

MANUKAU CITY CENTRE LTD v SUDHAKAR [2023] NZHC 3820 [20 December 2023]

Introduction

[1] In 2008 the plaintiff (MCCL) leased Shop S260 at Westfield Manukau City to Hospitality HQ Limited.1 In 2012 the lease was assigned to the second defendant (Dredge).2 The third defendant (Mr Sharma) guaranteed Dredge’s obligations to MCCL under the lease.3 Dredge renewed the lease in 2016,4 and in 2019 assigned the lease to AVS Investments 108 Limited (in liquidation) (AVS).⁵ The first defendant (Mr Sudhakar) guaranteed AVS’s obligations to MCCL under the lease.6

[2] AVS did not pay rent to MCCL for 23 months of the lease, beginning in February 2020. On 15 November 2022, MCCL served on AVS a notice of intention to cancel the lease.7 The notice expired unremedied on 9 January 2023. On 27 January 2023, AVS was placed into liquidation by special shareholders’ resolution. On 7 February 2023, MCCL cancelled the lease.

[3] MCCL seeks summary judgment against Mr Sudhakar in terms of its statement of claim for $1,286,858.68, being money owing by AVS for rent arrears, damages for lost rental, damages for failure to de-fit and reinstate the premises, and legal costs.

[4]On 17 October 2023, Venning J entered judgment in the sum of

$1,286,858.68 against Dredge and Mr Sharma. No payment has been made by Dredge or Mr Sharma.

[5] Mr Sudhakar opposes MCCL’s application on these grounds set out in his notice of opposition:8

(a)MCCL breached the terms of the lease;

(b)MCCL breached COVID-19 regulations and directions; and

1      Deed of Lease, dated 9 May 2008.
2      Deed of Assignment of Lease dated 23 August 2012 [First Deed of Assignment].
3      First Deed of Assignment, Third sch, cls 1 and 2.
4      Deed of Renewal of Lease, dated 26 August 2015.
5      Deed of Assignment of Lease, dated 12 December 2019 [Second Deed of Assignment].
6      Second Deed of Assignment, Third sch, cls 1 and 2.
7      Property Law Act 2007, ss 245, 246 and 253.
8      Notice of Opposition, dated 27 October 2023.

(c)the quantum is inaccurate.

[6]In written submissions Mr Sudhakar raises these further “grounds”:

(a)a proper trial is required with witnesses and cross-examination;

(b)inquiries need to be made into whether Mr Sudhakar received independent legal advice; and

(c)there is no prejudice to MCCL if summary judgment is refused.

[7]…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] NZHC 3820
Decision Date: 20 December 2023

CaseChat Overview and Summary

The High Court of New Zealand considered Manukau City Centre Limited's application for summary judgment against Shaneel Kumar Sudhakar, the guarantor of AVS Investments 108 Limited's lease obligations. The plaintiff sought $1,286,858.68 for unpaid rent, damages for lost rental, de-fitting, and reinstatement costs, and legal costs. The court had to determine if any of the defendant's grounds for opposition constituted an arguable defence that would warrant denying the plaintiff's application.

The court first reviewed the defendant's claim that the plaintiff breached the lease terms. The defendant alleged issues such as maintenance problems and inadequate notice of operational changes. However, the court found the plaintiff's responses adequate and noted that the lease precluded set-off or counterclaims. Therefore, these claims did not provide a basis for denying summary judgment.

Secondly, the court assessed the defendant's assertion that the plaintiff breached COVID-19 regulations by not sufficiently reducing rent. The court found that the plaintiff had provided substantial rent relief during relevant lockdowns and that the defendant's claims were not sufficiently detailed to establish a breach.

The court also considered the defendant's claim that the quantum of damages was inaccurate. The defendant alleged costs incurred from renovating the premises and that the plaintiff did not sufficiently mitigate its losses. The court found the plaintiff's evidence of attempts to re-let the premises and the state of disrepair left by AVS to be credible.

Finally, the court addressed the defendant's additional grounds, including the need for a trial, inquiries into legal advice received, and the lack of prejudice to the plaintiff if summary judgment was refused. The court found these arguments unconvincing as the defendant had not established a tenable defence.

The court granted the plaintiff's application for summary judgment and ordered the defendant to pay the full amount claimed, interest, and costs.

Orders