Maori Trustee v King - [2017] NZHC 1083

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

[2017] NZHC 1083

UNDER the Property Law Act 2007

BETWEEN

MĀORI TRUSTEE
Applicant

AND

D L KING Respondent

Hearing: 23 March 2017; 4 May 2017

Counsel:

JA McMillan and RA Monigatti for Applicant
PT Harmon for Respondent

Judgment:

23 May 2017

JUDGMENT OF TOOGOOD J

This judgment was delivered by me on 23 May 2017 at 4.00 pm
Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

MĀORI TRUSTEE v KING [2017] NZHC 1083 [23 May 2017]

[1] The Māori Trustee has made an originating application for orders under the

Property Law Act 2007.

[2] The applicant is the registered proprietor of a property at 8 Constitution Hill, Auckland. The property is subject to a lease between the Māori Trustee and the respondent, Mr DL King, who is a prisoner serving a sentence of preventive detention in the Northland Region Corrections Facility at Ngawha. The essential terms of the lease of the property are comprised in:

(a) A Memorandum of Lease dated 26 June 1959, as varied by a Deed of

Covenant dated 18 March 1977; and

(b) A Memorandum of Extension of Lease dated 25 November 2003.

[3] The lease was originally entered into in 1977 and then extended in 1980 for a period of 21 years. It was further extended for 21 years from 1 July 2001. The respondent paid rent until 1 May 2013 but then fell into default.

[4] On 26 September 2014 the applicant obtained judgment against Mr King in the sum of $32,261.91 for rent arrears from 1 May 2013 to 16 May 2014 and rates arrears for the period from 1 May 2013 to 30 June 2014. Nothing has been paid since judgment was entered, with the result that additional rent and rates are payable for the period since 1 July 2014 to date. It is clear that Mr King is egregiously in arrears for rent and rates and in serious breach of his obligations under the lease.

[5] Notices of intention to cancel the lease were served on Mr King on

26 October 2016 and he was required to remedy the breaches by 25 November 2016. He failed to do so and has still taken no step to remedy the breaches.

[6] The Māori Trustee, therefore, seeks orders granting vacant possession, a cancellation of the lease and orders for payment of arrears and interest, together with costs and disbursements.

[7] Mr King opposes the applications, arguing that damage to an internal gutter in the property has caused water damage leading to loss of income which ought to be set-off against his obligation to pay rates and rent. Although Mr King has provided a lengthy detailed statement setting out his concerns about the leak and the effect on the property, including hazardous effects on the electrical wiring system, he has taken no formal step to pursue any claim against the applicant in this regard. It is by no means clear, either, that the applicant…

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.

Continue reading Maori Trustee v King

Details

AGLC: Maori Trustee v King [2017] NZHC 1083
Case: [2017] NZHC 1083
Decision Date: 23 May 2017

CaseChat Overview and Summary

The Māori Trustee, as the registered proprietor of a property at 8 Constitution Hill, Auckland, has applied to the High Court for orders under the Property Law Act 2007. The property is subject to a lease between the Māori Trustee and the respondent, Mr DL King, who is a prisoner serving a sentence of preventive detention in Northland. The lease has been extended multiple times, with the most recent extension occurring in 2003 for a period of 21 years. However, Mr King has fallen into default by not paying rent since May 2013, resulting in arrears amounting to $32,261.91. The Māori Trustee seeks orders granting vacant possession, cancelling the lease, and ordering payment of arrears, interest, costs, and disbursements.

The court had to determine whether the Māori Trustee was entitled to exercise its statutory rights to recover the property due to the clear breaches of the lease by Mr King. The court also had to consider whether Mr King had a genuine defence or a reasonable prospect of a set-off that would justify depriving the applicant of the exercise of its rights. The court had to determine whether Mr King's claim for damages due to water damage caused by a damaged internal gutter could be set off against his obligation to pay rates and rent. The court had to consider whether the judge should recuse himself from hearing the application due to his involvement in Mr King's criminal trial and sentencing.

The court found that there was no proper basis for the judge to disqualify himself from making a determination of the issues that arise. The court found that there was no genuine defence or reasonable prospect of a set-off that would justify depriving the Māori Trustee of the exercise of its rights. The court found that the Māori Trustee was entitled to exercise the statutory rights available to it to recover the property in view of the undeniable breaches of the lease. The court found that the mere prospect that Mr King might obtain a substantial sum by way of damages sometime in the future would not be sufficient to hold up the proper exercise of the Māori Trustee's rights.

The court made orders granting vacant possession of the property to the Māori Trustee, cancelling the lease, and ordering Mr King to pay all unpaid rent and rates up to the date of cancellation or such later date as Mr King yields up possession. The court also ordered Mr King to pay interest on the outstanding rent and rates at a rate of five per cent per annum until payment is made in full. The court also ordered Mr King to pay the Māori Trustee's reasonable costs and disbursements incurred in relation to the issuing of notices and this proceeding on a solicitor/client basis in a sum to be approved by the Court.

Orders