Maydanoz NZ Limited v Poppelwell HC Auckland CIV-2011-404-8144

[2011] NZHC 2029

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-8144

IN THE MATTER OF     s 253 Property Law Act 2007

BETWEEN  MAYDANOZ NZ LIMITED Plaintiff

ANDIAN RONALD POPPELWELL AND DOROTHY GILLIAN POPPELWELL TRADING AS THE POPPELWELL PARTNERSHIP

Defendants

Hearing:         21 December 2011

Appearances: D L Schnauer for Plaintiff

S H N Chan for Defendants

Judgment:      22 December 2011 at 4:30 PM

JUDGMENT OF PETERS J

This judgment was delivered by Justice Peters on 22 December 2011 at 4:30 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date: ...................................

Solicitors:           Schnauer & Co, P O Box 31 272, Milford, Auckland 0741 email: [email protected]

McVeagh Fleming, P O Box 4099, Auckland 1140 email: [email protected]

MAYDANOZ NZ LIMITED V POPPELWELL HC AK CIV-2011-404-8144 22 December 2011

[1]      This is an application for interim injunction which has been treated with particular urgency given the time of year.

[2]      The orders sought are:

A.       Interim relief (until further order of the Court) be granted to the plaintiff against the proposed cancellation of its lease of Unit B2,

145 Oceanview Road, Waiheke; and

B.       That an ex parte interim injunction issue restraining the defendants or either of them from:

(i)       excluding the plaintiff from the premises at Unit B2, 145

Oceanview Road, Waiheke; and

(ii)       issuing any trespass notices preventing the plaintiff and its officers  from access  to  any  parts  of  the  building  at  145

Oceanview  Road,  Waiheke,  that  is  entitled  to  enter  into

including the area leased exclusively to the plaintiff under the lease and also all common areas of the building; and

(iii)      this ex parte interim injunction is subject to being reviewed and reconsidered on 1 day’s notice given to the Court by the defendants.

[3]      There is a statement of claim on file, together with the application for interim injunction, an affidavit of I A Ramadan, who is the sole shareholder of the plaintiff company and guarantor of the lease to which I am about to refer, and an undertaking in damages.

[4]      Although intended as an ex parte application, the proceedings were filed and served and counsel for the defendants filed a notice of opposition and made available draft affidavits for each of the defendants.  The defendants have had to respond to matters at very short notice.

Background

[5]      Pursuant to a deed of lease dated 25 January 2010 (“lease”), the plaintiff is the lessee of premises situated on Ocean View Road, Oneroa, Waiheke Island.  The premises are in the Oneroa shopping village.  The defendants are the lessors under

the lease.  The lease commenced on 1 July 2010 and is for a term of three years, with two further rights of renewal, each of three years.

[6]      Until recently the plaintiff has conducted a takeaway shop from the premises.

[7]      As best as I can ascertain at present, on 13 December 2011 the defendants cancelled the lease and re-entered the premises.  The plaintiff and its staff have been excluded from the premises since.   Summer, and the Christmas holiday period in particular, is a busy trading time for the plaintiff and the plaintiff wishes to re-enter the premises and trade as a matter of urgency.

[8]      The defendants have served notices pursuant to s 246 Property Law Act 2007 (“the Act”).   Section 246(1) allows a lessor to exercise a right to cancel a lease because of a breach of covenant or condition of the lease if, amongst other things, the lessor has served on the lessee a notice of intention to cancel the lease.  Section

246(2) provides as to the matters which the notice is required to contain.

[9]      The first notice was served on or about 21 November 2011.   That notice concerned an alleged breach of the lease by reason of the lack of a fire extinguisher on  the  premises  which  met  the  requirements  of  the  defendants’ insurer.    As  I understand it, there was a fire extinguisher but not the one specified by the insurer.

[10]     I have reservations as to whether this first notice meets the requirements of s 246.  The copy before me does not appear to have been signed, is undated and does not refer to the plaintiff’s rights to apply for relief under s 253 of the Act.[1]

[1] Property Law Act 2007, s 246(2)(e).

[11]     The  second  notice  was  served  on  or  about  25  November  2011.    This document is signed and no point is taken at present that it does not comply with s 246 of the Act.  This notice concerns a failure to pay operating expenses due and owing from the plaintiff under the lease.  The amount in issue is $2,805.41.  There is a dispute between the parties as to precisely how much of the outgoings claimed are

properly due from the plaintiff under the lease.

[12]     Mr Ramadan’s evidence is that he forwarded the notices to his then legal advisers shortly after the notices were served.   The legal  advisers wrote to the defendants by letter dated 5 December 2011.  The draft affidavit I have seen for one of the defendants says that the letter was not sent to the correct address.   It is not clear, however, whether the defendants saw the letter prior to 13 December 2011.

Cancellation

[13]     Mr Ramadan’s evidence is that he was absent from the shop on 13 December

2011 for the purposes of buying the correct fire extinguisher and when he returned to the premises, having bought the fire extinguisher, found himself locked out.

[14]     Accordingly, the present position is that the plaintiff has the required fire extinguisher and is ready to install it forthwith.

[15]     The plaintiff also has funds in hand with which to pay the outgoings.  Given the dispute that exists as to the amount which is owed, I propose to order the plaintiff to pay to the trust account of the solicitors for the defendants a lesser amount than the full sum claimed.

[16]     I am satisfied that there is a serious question to be tried in this matter.  I am not satisfied that there was any right to cancel on 13 December 2011 in relation to the alleged breach regarding the fire extinguisher and a dispute has been raised as to the outgoings.   I am also satisfied that the balance of convenience lies with the plaintiff.  This is an extremely busy trading period and counsel for the defendants informed me that he is not aware that any other tenant is waiting to go into the premises.

[17]     It is clear that there is disharmony between the principals of the plaintiff and the defendants.  It is not possible, however, to form any view of the conduct of either party at the present stage, and in my view it is not necessary to do so.  Counsel for the defendants submits that the nature of the relationship between lessor and lessee may affect  whether relief should  be granted.   That  may be correct  and  can  be considered when there is greater opportunity to do so.

[18]     I advised the parties at the hearing on 21 December 2011 as to the orders I

proposed to make.  I record that I granted the orders referred to in paragraph 1A and

1B (i) and (ii) of the application for interim injunction dated 16 December 2011 as referred to above.  Pending further order of the Court the plaintiff is to occupy the premises on the terms set out in the lease.

[19]     The plaintiff is to install the required fire extinguisher forthwith on resuming possession of the premises.  By 12 pm, 22 December 2011, the plaintiff’s solicitors are to pay to the trust account of the defendant’s solicitors, the sum of $2,000.00. The sum is to be applied by the defendants on account of outgoings said to be due from the plaintiff under the lease.

[20]     I reserve leave to apply to each party.  The defendants may seek to set aside

these orders on no less than three working days’ notice to the plaintiff.

[21]     The  proceeding  is  to  be  listed  for  mention  in  the  Duty  Judge’s  list  on

9 February 2012 at 10 am.  The parties are each to file a memorandum at least three days before then, or a consent memorandum if possible, setting out a proposed timetable for further steps in this proceeding and advising of any further interim orders which may be sought or required.

[22]     Costs are reserved.

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

PETERS J