Meredith v Global Metal Solutions Limited
[2020] NZHC 2482
•23 September 2020
IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY
I TE KŌTI MATUA O AOTEAROA NGĀMOTU ROHE
CIV-2019-443-73
[2020] NZHC 2482
BETWEEN GRAHAM JOHN MEREDITH and
LW NOMINEES LIMITED, as trustees of the MEREDITH FAMILY TRUST
First Plaintiffs
AND
G J MEREDITH LIMITED (previously MEREDITH SCRAP METALS LIMITED)
Second Plaintiff
AND
GLOBAL METAL SOLUTIONS LIMITED
Defendant
Hearing: 9 September 2020 (by VMR) Appearances:
S W Hughes QC for First and Second Plaintiffs P V Cornegé for Defendant
Judgment:
23 September 2020
JUDGMENT OF ASSOCIATE JUDGE LESTER
This judgment was delivered by me on 23 September 2020 at 12.30pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar 23 September 2020
MEREDITH v GLOBAL METAL SOLUTIONS LIMITED [2020] NZHC 2482 [23 September 2020]
Introduction
[1] The first plaintiff, the trustees of the Meredith Family Trust (the Landlord), brings this summary judgment application seeking an order for vacant possession of a commercial site located on De Havilland Drive, Bell Block, New Plymouth. The site was leased to the defendant, Global Metal Solutions Ltd (Global), under a lease for one year on the 6th edition Auckland District Law Society lease form dated 7 September 2018 (the De Havilland Drive Lease).
[2] Global asserts the De Havilland Drive Lease is subject to the terms of a Collateral Agreement it reached with Mr Graham Meredith (Mr Meredith), a trustee of the Landlord and a director of the second plaintiff, Meredith Scrap Metals Ltd (now known as G J Meredith Ltd) (MSM).
[3] Global says breaches of the Collateral Agreement entitle it to remain in possession of the De Havilland Drive site the Collateral Agreement has been performed.
[4] Initially, MSM sought summary judgment in relation to property it said was being unlawfully detained by Global. MSM did not pursue that application and it was not addressed by other counsel in their written submissions. I record MSM’s application as being withdrawn.
Context
[5] MSM owned a scrap metal business operated from 7 Catalina Place, New Plymouth (Catalina Place). Catalina Place is owned by the Landlord. The Landlord also owns the De Havilland Drive property which neighbours Catalina Place.
[6] In early 2018, Global was looking to expand. On 16 July 2018, having undertaken research with the approval of MSM, it presented MSM with what amounted to an enquiry as to whether MSM would sell its business based on the proposed terms. The “offer” recorded that it did not:
…. constitute a legally binding or enforceable commitment of the parties hereto and is subject to amongst other things the execution of a definitive sale agreement and satisfaction of various conditions referred to in this letter.
[7] Described as a “key assumption” in the letter was that all rubbish, including tyres located on the Catalina Place site were to be removed by the vendor within a time frame to be agreed between Mr Meredith of the plaintiffs and Mr Tuhoro of Global. Another key assumption was that leases for Catalina Place and De Havilland Drive would be available on satisfactory terms to Global.
[8] Following submission of the “offer”, Global determined it did not require a lease of the De Havilland Drive site.
[9] MSM, by its solicitor, replied to the offer on 24 July 2018 advising that subject to a few points, Global’s proposals was acceptable to MSM. The solicitor for MSM noted a lease of De Havilland Drive was not required but stated:
Our client Company will need some time to remove all of the items from the Catalina Place premises. During that period, they are happy for your Company to use the De Havilland Drive property at no cost.
[10]Global’s response to this issue, in its letter of 25 July 2018, was:
We note that clause 4 offers a free period for the use of the De Havilland Drive property while items are being cleared from Catalina Place to make it useable. We would like to include the right to take up a lease within a 12 month period from settlement with a first Right of Refusal on purchase of the property should it become available for sale.
[11] There followed a “Key Terms Sheet” dated 31 July 2018 prepared by Global. It set out the terms sought by Global for a new lease of Catalina Place, and in respect of De Havilland Drive stated:
In addition, the Landlord indicated above will enter into a simple side agreement to allow 12 months interest-free use by GMS of their adjoining Premises at De Havilland Drive, Bell Block (Lot 1 Deposited Plan 341109 CT 168990) during the Vendor’s removal of surplus and waste items at Catalina Place. The agreement will also offer GMS first right of refusal should the Landlord consider selling or leasing the De Havilland Drive premises.
[12] The Key Terms Sheet went on to conclude, notwithstanding it contemplated both parties would sign it, that:
Binding Terms With the exception of the terms as to Confidentiality
and Exclusivity (which shall be binding on both parties), the parties acknowledge that this key terms document is otherwise non-binding.
[13] The removal of items owned by MSM from Catalina Place was referred to in its solicitor’s letter dated 27 August 2018 as follows:
There are some small amounts of steel that our client would like to retain. He proposes to mark those with yellow fluro during the meeting tomorrow so that there is no dispute in terms of those items. It may take a little time after settlement for that identified stock to be removed.
[14]As to the tyres, the 27 August 2018 letter said:
Removal of Tyres
There are some tyres at the back of the property which our client will remove but will take some time. Whilst they remain on the property, there will be no disturbance to your client’s business.
If we could clarify these final matters together with the matters raised in our earlier email then hopefully we will be in a position to have a final Agreement for Sale and Purchase signed and establish a mutual acceptable date for settlement.
[15] On 29 August 2018, Global’s solicitor replied and said in relation to the tyres: “Our client agrees to this and will arrange the removal of the tyres directly with your client.”
[16] Matters proceeded apace. An Agreement for Sale and Purchase of a Business dated 31 August 2018 was executed with settlement to occur five working days thereafter, on 7 September 2018 (the Agreement).
[17] In the Special Conditions of the Agreement were a number of conditions precedent including in relation to De Havilland Drive, as follows:
22.CONDITIONS PRECEDENT
…
22.1(b) The Purchaser negotiating mutually acceptable terms with the Trust, providing the Purchaser with:
(i)The right to use the Trust’s property at De Havilland Drive, Bell Block (being Lot 1 Deposited Plan 341109, CT 168990) for a period of 12 months, at no cost, to remove the Vendor’s surplus and waste items from the Premises; and
(ii)A first right of refusal to purchase and/or lease the Trust’s property, as the case may be, should the Trust decide to sell or lease the Trust’s property.
[18] There was a separate condition precedent in respect of Global’s lease of Catalina Place.
[19] Separate leases on the 6th edition ADLS form were entered into between the Landlord and Global in respect of the two sites, both dated 7 September 2018.
The De Havilland Drive Lease
[20] The De Havilland Drive Lease is for one year without a right of renewal, such being deleted. The final expiry is described in the First Schedule as being “September 2019” – the exact date has not been filled in and it is also absent from the commencement date. The business use is described as “Ancillary Yard to Scrap Metal Dealer and Processor”.
[21] The De Havilland Drive Lease contained further terms including a first right of refusal to lease or purchase. The rental for the year is $1.00.
[22] Global’s purchase of the business settled and it took possession of both the Catalina Place and De Havilland Drive premises. Unfortunately, the relationship between Mr Tuhoro and Mr Meredith broke down. The tyres and other materials have not been removed from Catalina Place. Global says the terms of the Collateral Agreement mean it is entitled to remain in occupation of De Havilland Drive until the tyres are removed and other terms of the Collateral Agreement are complied with.
The Collateral Agreement
[23] Mr Tuhoro, in his affidavit sworn 25 June 2020, describes the Special Condition in the Agreement concerning the De Havilland Drive Lease as follows:
24. The Agreement provided, at clause 22.1(b), a condition requiring terms to be agreed for our occupation of de Havilland and the removal of Scrap Metals “surplus and waste items” from Catalina.
[24] I do not think this is an accurate summary of cl 22.1(b) which concerned giving Global the right to use De Havilland Drive for 12 months and during that period the waste items would be removed from Catalina Place. To the extent that Mr Tuhoro’s evidence is aimed at suggesting settlement was conditional upon there being an agreement as to the terms of removal, I do not accept that proposition.
[25] Mr Tuhoro, in his affidavit, goes on to say there were items that could not be checked in relation to the purchase because the Catalina Place site was, in his words, “an absolute shamble.” He says:
27.Mr Meredith and I had agreed that it would not be possible to document all of our understandings in the relevant contracts, otherwise matters would be going backwards and forwards between the lawyers indefinitely. As such, we agreed that issues such as our use of de Havilland and the removal of Scrap Metal’s tyres and other assets would be subject to a “side agreement”, as referred to in the Term Sheet and progressed by oral agreement.
28.In my view, a clear agreement was reached, consistent with the prior correspondence referred to above, that we would have the use of de Havilland, at no cost, while Scrap Metal and the Landlord arranged:
(a)The removal of Scrap Metal’s surplus assets;
(b)The removal of Scrap Metal’s tyres;
(c)The fencing of Catalina; and
(d)Appropriate drainage of Catalina (“the Collateral Agreement”),
in consideration for the likely interruption to our quiet enjoyment of Catalina caused by these issues.
[26] Mr Tuhoro does not give details as to exactly when he alleges this “clear agreement” was reached or the precise terms of the agreement. From his affidavit, it must have been reached prior to 31 August 2018, as he says:
30.Given the matters outlined above, I was somewhat surprised that a formal lease was provided for de Havilland on 31 August 2018. However, given the Collateral Agreement reached with Mr Meredith and the time pressures arising from settlement on 7 September 2018, [he] agreed to sign the lease for de Havilland as presented…
[27] The notice of opposition describes the De Havilland Drive Lease as subject to the Collateral Agreement. It recites the presence of waste tyres and other assets at Catalina Place and says:
3. (a) …
(ii)The First Plaintiff (“the Landlord”) and Scrap Metal acknowledged that it would take some time to remove the Assets from Catalina and that having the Assets at Catalina would interfere with the Defendant’s quiet enjoyment of Catalina;
(iii)The Landlord and Scrap Metal offered the Defendant use of the First Plaintiff’s property at De Havilland Drive (“de Havilland”) for a token cost to compensate the Defendant for the interference with the quiet enjoyment while the Assets remained at Catalina;
[28] The notice of opposition recites it was intended that MSM would remove the tyres and other items from Catalina Place and relocate them onto De Havilland Drive. Further, it was intended that action would be completed within 12 months. In addition the Landlord would complete the fencing of the Catalina Place property and:
(a) …
(vii)The Defendant entered into the lease of de Havilland as part of this collateral agreement reached with the Landlord and Scrap Metal regarding the removal of the Assets from Catalina over time and the fencing of Catalina (“the Collateral Agreement).
[29] It is said the Landlord and MSM have breached the Collateral Agreement because MSM has failed to remove the tyres and other items from Catalina Place and
the Landlord has failed to complete the fencing required, as agreed. Further, it is said that issues have arisen in respect of the drainage of Catalina Place.
[30]The notice of opposition concludes:
3.(c) The lease of de Havilland is subject to the terms of the Collateral Agreement and, as a consequence of the breach of the Collateral Agreement, the Defendant is entitled to remain in possession of de Havilland until the Collateral Agreement has been performed.
[31] In substance, Global must be submitting that the terms of the Collateral Agreement mean its occupation of De Havilland Drive was not for a 12 month term, but was for 12 months or until the Collateral Agreement was satisfied, whichever was the longer.
[32] It must be inherent in Global’s case that the Collateral Agreement in some way amends the term of the De Havilland Drive Lease. I say that, as if it were otherwise, then breach of the obligation to remove the tyres would only give Global its usual rights in respect of a breach of contract. Such would not include the court denying the Landlord vacant possession on the basis Global retained a right to occupy.
Summary judgment principles
[33] The Landlord points to the expiry of the one year term under the De Havilland Drive Lease and says it follows that Global’s right to occupy has ended. If the facts ended there, the Landlord would succeed. “Where the plaintiff’s unchallenged evidence is sufficient to convince the Court that there is no defence, the defendant will obviously have to respond in order to defeat the application.”1
[34] Once a plaintiff has put forward sufficient evidence for the court to be confident that there is no defence:2
It is then for the defendant to provide some evidential foundation for a bona fide defence, otherwise the plaintiff’s evidence ought to be accepted unless it is patently wrong: Doyles Trading Co Ltd v West End Services Ltd [1989]
1 Andrew Becks (ed) McGechan on Procedure (online ed, Thomson Reuters) at [HR12.2.05] referring to MacLean v Stewart (1997) 11 PRNZ 66 (CA).
2 Matthew Casey (ed) Sim’s Court Practice (looseleaf ed, LexisNexis) at [HCRPart 12.1].
1 NZLR 38 (CA) and Australian Guarantee Corporation (NZ) Ltd v McBeth
[1992] 3 NZLR 54 (CA).
[35] If the defence raises questions of fact upon which the case may turn, summary judgment will not be appropriate. Here, the real issue is whether Global’s evidence raises such a question of fact in relation to the existence of the Collateral Agreement.
Evidence of the Collateral Agreement
[36] Mr Tuhoro’s evidence concerning when he and Mr Meredith reached agreement, and in respect of the exact terms of the Collateral Agreement, is lacking. It is necessary to review in detail Mr Tuhoro’s evidence in respect of the Collateral Agreement.
[37] The tenor of Mr Tuhoro’s evidence is that Global had an expectation that it could use the De Havilland Drive property pending the removal of the tyres and other material, which Mr Tuhoro expected would be completed within 12 months. However, Mr Tuhoro does not actually describe such an agreement being made.
[38] Mr Tuhoro’s narrative refers to the 24 July 2018 letter, referred to at [9] above, offering the use of the De Havilland Drive property pending removal of the tyres. He recounts Global taking up that proposal and, in doing so, raising the issue of fencing and drainage. The Key Terms Sheet followed with the clause set out at [11] above. He recounts the exchange of correspondence set out at [13-15] above.
[39] Mr Tuhoro’s evidence refers to the passage in Global’s solicitor’s letter of 29 August 2018 recording that the issue of the surplus tyres would be addressed separately between Mr Tuhoro and Mr Meredith (at [15] above). Mr Tuhoro’s affidavit then moves to paras 27 and 28, set out at [25] above, which assume that the Collateral Agreement has been made.
[40] Mr Cornegé, counsel for Global, submitted para 28 was sufficient evidence that an agreement was reached. I do not accept that submission. It was incumbent on Mr Tuhoro, faced with an expired written lease, to provide basic details in respect of the agreement upon which Global’s defence was wholly dependent.
[41] At no point in his narrative of the events does Mr Tuhoro describe a meeting or discussion with Mr Meredith where the terms of the Collateral Agreement were discussed, let alone agreed. If part of the Key Terms Sheet was to form part of the Collateral Agreement with Mr Meredith, Mr Tuhoro would have needed to raise the provision he was relying on so that Mr Meredith could agree with it, given the default position was that the Key Terms Sheet was not binding (para [12] above). Again, Mr Tuhoro claims the Collateral Agreement was struck prior to 31 August 2018, as described at [26] above.
[42] So, the Collateral Agreement, if reached, would have been made between the letters of 29 August 2018 and 31 August 2018. Given the existence of the Collateral Agreement is critical to the opposition to the summary judgment, I would have expected it to have been particularised in Mr Tuhoro’s evidence. Paragraphs 27 and 28 of Mr Tuhoro’s affidavit are no more than a bare assertion of an agreement. In fact, para 27 refers to an agreement to have a “side agreement” – not that the “side agreement” was made – para 28 does no more than assert an agreement.
[43] Mr Tuhoro is critical that Mr Meredith has not sworn an affidavit – the Landlord’s evidence coming from Mr Franklin, the plaintiffs’ solicitor. That criticism would carry more weight if Mr Tuhoro had described communications with Mr Meredith that required a response from Mr Meredith. Mr Tuhoro says Mr Franklin was not party to the discussions or agreements reached between himself and Mr Meredith. That may be true but no agreement other than those in writing, is described in Mr Tuhoro’s evidence, so Mr Franklin is able to give evidence in respect of his involvement in those agreements.
[44] Following the agreement, Mr Tuhoro’s conduct reinforces my conclusion that his evidence of the Collateral Agreement is lacking. For example, within six months of settlement of the transaction, Global had written to the solicitors acting for both plaintiffs. This occurred at a time when the relationship had broken down between Mr Tuhoro and Mr Meredith. The letter dated 20 February 2019, gave 60 days’ notice for removal of the tyres and to address other issues. If, under the terms of the Collateral Agreement the removal of the tyres was linked to the 12 month term of the De Havilland Drive Lease, it would not have been open to Global to attempt to
give a 60 days ultimatum. Nor does the letter refer to the Collateral Agreement. The letter was written when it is clear Global was frustrated with Mr Meredith. That is the very time I would have expected Global to have relied on the Collateral Agreement. Instead, before Global raised the points of concern (including the tyres), the letter said:
Pursuant to our Sale and Purchase Agreement … and our discussion on 4/12/2018 we write to request that the following be completed within 60 days of this letter.
[45] The Collateral Agreement is not mentioned in the subsequent correspondence between the parties’ solicitors. There is merit in Ms Hughes’ submission that contemporaneous records are of more value than how events are described in the pleadings.
[46] The closest Global’s solicitor gets to referring to there being agreements reached between the plaintiffs and Global is para 2 of the letter of 31 May 2019. In the previous month, the plaintiffs’ solicitors had expressly referred to De Havilland Drive reverting to the Landlord at the end of the one year term. In the letter of 31 May 2019, Global’s solicitor says the agreement reached included the Landlord providing security and fencing for Catalina Place, servicing the business equipment, and providing Global with an option to lease the De Havilland Drive site at the end of the 12 month term. The letter goes on to discuss each of those claimed agreements. The detailed letter makes no mention of the Collateral Agreement.
[47] It seems from the letter Global believed the Landlord had agreed to allow it to extend the lease on De Havilland Drive after the initial 12 month term. The letter says the Landlord was reneging on that agreement. Global understood, indeed claimed in its solicitor’s letter, it was “adamant” the Landlord had agreed to allow Global to extend the term of the De Havilland Drive Lease. The right to extend, as asserted in the letter, is not easy to reconcile with the Collateral Agreement being in effect a default extension in the event of a breach of the Collateral Agreement.
[48] The letter of 29 July 2019 from Global’s solicitor, refers to representations said to have been made prior to purchase by one or other of the plaintiffs, but does not refer to a Collateral Agreement.
[49] Again, on 6 August 2019, the Landlord’s solicitor referred to the De Havilland Drive Lease expiring on 7 September 2019. The letter referred to the Landlord wishing to arrange an inspection of the premises. The response from Global’s solicitor referred to Mr Meredith being subject to a trespass notice as regards to the site, however, invited Mr Meredith’s representative to arrange site access. Again, this cannot be reconciled with the Collateral Agreement as at the time the tyres and other items remained on the Catalina site.
[50] It is only on 6 September 2019 that Global’s solicitor links the end of the De Havilland Drive Lease to the issue of the tyres. The letter of 6 September refers to a request made on 21 August 2019 that the tyres be removed by 1 September 2019 and says:
To date your client has not attended to the above. When does he intend on addressing these matters? It is our client’s position that the above items need to be attended to as a matter of urgency before the handover of the site can occur.
[51] Again, this is the very time I would have expected the existence of the Collateral Agreement to have been emphasised.
[52] On 12 September 2019, when there was some heat coming into the issue between the parties, Global’s solicitor wrote to the Landlord’s solicitor in relation to the removal of the tyres and said:
Without our client having the benefit of the lease of the De Havilland site, on what basis does your client think he is entitled to store his tyres on our client’s Catalina Place site? Whilst our client has the lease of the De Havilland site it is tolerable that the tyres remained on the Catalina site, however, if your client is claiming repossession of the De Havilland site then he must make arrangements (and advise our client of them) to move the tyres.
[53]Later in that letter, Global’s solicitor says:
It is our client’s view that his purchase of the business encompassed the leases for both sites. Consequently, the issues that he has raised effect both sites. This is particularly evident in relation to the fencing, drainage and tyres. He does not see the issues he has raised in relation to the leases as being independent to each lease, as suggested.
[54] In a letter of 10 October 2019 from the Landlord’s solicitor to Global’s solicitor, the solicitor referred to the De Havilland Drive Lease being at an end and said; “[y]ou have not indicated any legal basis that gives your clients the right to continue in possession of a lease which has expired.”
[55] The reply from Global was “The basis upon which our client continues to occupy the De Havilland Drive site has been set out to you in our previous correspondence.”
[56] At the risk of labouring the point, that correspondence did not refer to the Collateral Agreement.
[57] The Collateral Agreement is mentioned for the first time, on my review of the evidence, in the notice of opposition.
[58] Mr Cornegé, counsel for Global, said little could be read into Global’s solicitor not referring to the legal basis of its continued occupation of De Havilland Drive. That submission may have been persuasive if the correspondence had referred to the matters subject to the Collateral Agreement and only failed to characterise its legal status. It is the failure to refer to the agreement at all which is telling.
[59] The absence of any mention of the Collateral Agreement when agreements other than the one now asserted were being referred to, reinforces my conclusion that Mr Tuhoro’s evidence as to the existence of the Collateral Agreement is lacking. I find Global has not raised an arguable case in relation to its claim that there was a Collateral Agreement.
[60] I do not need to go into issues as to the admissibility of contractual negotiations or the admissibility of oral statements that may contradict written agreements. The short point is that Mr Tuhoro’s narrative does not describe an agreement with Mr Meredith containing the terms of the Collateral Agreement. I can understand from Mr Tuhoro’s narrative why he may have had that expectation, but such does not amount to the Collateral Agreement.
Would the Collateral Agreement have been consistent with the De Havilland Drive Lease?
[61]In Kennedy-Grant and Weatherall on Construction Law, the authors note:3
There is no difficulty in the concept of a collateral contract that is merely supplemental to the main contract, but there is some difficulty in the concept of a collateral contract the terms of which are inconsistent with or contradictory of the main contract. This problem was considered by the Court of Appeal in Fletcher Bernard-Smith v Shell BP and Todd Oil Services Ltd4 and again in AM Bisley & Co Ltd v Thompson.5 Although the Court did not express a final view on either occasion, it did state that there was a strong argument that the principle that a collateral contract cannot be inconsistent with or contradictory of the main contract does not extend beyond the special situation where the alleged collateral contract is in direct conflict with the main object of the main contract.
[62] If there had been evidence of the alleged Collateral Agreement, would it have been in direct conflict with the main object of the main contract, that is the formal De Havilland Drive Lease? In my view, it would have been. An essential characteristic of a lease is that its term must be certain or capable of being rendered certain before the lease takes effect.6 While it is possible for there to be a valid equitable lease under s 212 of the Property Law Act 2007 if a lease is described as terminating on the occurrence of a future event, but that does not mean the uncertainty of term in the alleged Collateral Agreement is not inconsistent with the fixed term of the De Havilland Drive Lease. The main contract, that is the De Havilland Drive Lease, fixes its term with certainty. Here, the alleged Collateral Agreement, in my view, is inconsistent with that definite term as it would mean the term was no longer absolute, but shifts from a term of one year to whenever there is compliance with the Collateral Agreement, whichever is the latter.
[63] Mr Cornegé submitted the Collateral Agreement may operate to vary the term of the De Havilland Drive Lease. I am not sure how that could be. Mr Tuhoro was unaware that there was to be a written lease for De Havilland Drive, so he cannot have intended the Collateral Agreement to amend the subsequent written lease. In the alternative, Mr Cornegé submitted the De Havilland Drive Lease could be seen as the
3 Tómas Kennedy-Grant and Weatherall on Construction Law (online ed, LexisNexis) at [51,710].
4 Fletcher Bernard-Smith v Shell BP and Todd Oil Services Ltd CA/7B, 14 December 1978. See also Lysnar v National Bank of New Zealand Ltd [1935] NZLR 129 (PC) at 140.
5 AM Bisley & Co Ltd v Thompson [1982] 2 NZLR 696 (CA).
6 Harvey v Pratt [1965] 1 WLR C025.
initial manifestation of the Collateral Agreement, leaving the Collateral Agreement to run on after the 12 month term expired. This would be to find the terms of the Collateral Agreement were more complex than claimed. It would be to treat the Collateral Agreement as akin to an agreement to lease, leading to the De Havilland Drive Lease continuing to have life so as to spring up after the expiry of the 12 month term if its terms had not been complied with. Finally, it was suggested the effect of the Collateral Agreement was that it required the execution of a new lease over De Havilland Drive. This last possibility would be inconsistent with the De Havilland Drive Lease being for a fixed term without a right of renewal.
[64] Accordingly, if I had considered there was a reasonably arguable evidentiary basis for the Collateral Agreement, I would have held the Collateral Agreement was in direct conflict with the main object of the main contract:7
Oral evidence that a written or unwritten contract was intended by the parties to be collateral to a written agreement is admissible, but the collateral agreement must be consistent with the main agreement.
(footnote omitted)
[65] On Mr Tuhoro’s evidence, the alleged Collateral Agreement cannot have been intended to be collateral to the De Havilland Drive Lease as his evidence is that the tendering of the De Havilland Drive Lease came as a surprise to him – he was not expecting a further “main” agreement.
[66] It follows the plaintiffs are entitled to judgment in respect of their application for vacant possession.
Orders
[67]I make the following orders:
(1)Global Metal Solutions Ltd is ordered to vacate the De Havilland Drive property (legally described as Lot 1, DP 341109) within 10 working days of this judgment.
7 Mathew Downs (ed) Cross on Evidence (looseleaf ed, LexisNexis) at [5.13].
(2)Leave is reserved to apply for any necessary consequential orders.
(3)The first plaintiff is entitled to costs and if such can not be agreed, the first plaintiff is to file costs submissions within five working days of the date of this judgment, and with the defendant to reply within a further five working days.
[68] That leaves MSM’s cause of action in relation to its plant. Counsel are to consider whether that claim should remain in this Court or be transferred to the District Court. There also remains the underlying disputes. I would urge both parties to take a commercial approach and attend a mediation to resolve all remaining issues.
Associate Judge Lester
Solicitors:
Govett Quilliam, New Plymouth Nielsen Law, Hamilton
Copy to counsel:
S W Hughes QC, Barrister, New Plymouth
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