Midland Properties (NZ) Limited v A - [2021] NZHC 1791

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2019-409-724

[2021] NZHC 1791

BETWEEN
MIDLAND PROPERTIES (NZ) LIMITED

Plaintiff

AND

[A]

Defendant

Hearing: 5 July 2021

Appearances:

A D Marsh for Plaintiff

D M Woodbridge for Defendant

Judgment:

15 July 2021

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 15 July 2021 at 4.00 pm Pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 15 July 2021

MIDLAND PROPERTIES (NZ) LIMITED v [A] [2021] NZHC 1791 [15 July 2021]

[1] The plaintiff seeks leave, which is opposed, to bring an application for summary judgment in this proceeding.

[2] A statement of claim was filed in December 2019 and served by way of substituted service in March 2020.

[3] As the defendant took no steps, in July 2020 the plaintiff sought entry of judgment by default and judgment was entered against the defendant by the Registrar. The plaintiff then lodged charging orders against the defendant’s property which prompted the defendant to apply to have the judgment set aside.

[4] The application to have the default judgment set aside was heard by me on 19 February 2021. In a judgment dated 26 February 2021 (subsequently re-issued in a redacted form on 29 March 2021), the default judgment was set aside on the grounds that it was irregularly obtained.1

[5] The plaintiff seeks judgment against the defendant as the guarantor of the lease obligations of a company which was the tenant of a commercial building in Christchurch. The tenant company went into liquidation on 14 May 2019. The liquidators disclaimed the lease in August 2019 with the liquidators keeping the rent current through to disclaimer. As noted, these proceedings were commenced at the end of 2019.

[6] The default judgment was set aside as judgment was entered for a sum greater than the amount claimed in the statement of claim contrary to r 15.7 of the High Court Rules 2016 (the Rules). Rental arrears had continued to accrue for which the plaintiff sought judgment but for which no such claim was made in the statement of claim.

[7] In early May 2021, the plaintiff filed an application for summary judgment but overlooked the need to first apply for leave pursuant to r 12.4(2). The application for leave was duly filed.

1 Midland Properties (NZ) Ltd v [A] [2021] NZHC 295.

Relevant principles

[8] Mr Marsh, counsel for the plaintiff, refers to Tip Top Ice Cream Co Ltd v Polarland Ltd, where the Court noted there are no specific guidelines in relation to an application for leave to bring a summary judgment application.2 In Tip Top, three factors were identified as assisting in the consideration of a discretion:3

(a)Has the delay been satisfactorily explained?

(b)Are the merits of the applicant’s case for relief particularly strong so as to justify determination at a summary judgment hearing?

(c)Is there any risk of miscarriage of justice by determining the application…

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: [2021] NZHC 1791
Decision Date: 15 July 2021

CaseChat Overview and Summary

The case before the court involved Midland Properties (NZ) Limited, the plaintiff, seeking leave to bring an application for summary judgment against [A], the defendant. The plaintiff sought judgment as the guarantor of the lease obligations of a company, which was the tenant of a commercial building in Christchurch, and had gone into liquidation. The court was required to determine whether leave should be granted to the plaintiff to bring the summary judgment application, considering factors such as the explanation for delay, the merits of the plaintiff's case, and the risk of miscarriage of justice. The court found that the delay was satisfactorily explained, the merits of the plaintiff's case were strong enough to warrant a summary judgment hearing, and there was no risk of miscarriage of justice. Consequently, the court granted leave to the plaintiff to bring the summary judgment application.

The court based its decision on three key factors. Firstly, the court found that the delay in filing the application for summary judgment was satisfactorily explained by the defendant's failure to file a defence and the subsequent application to set aside the default judgment. Secondly, the court considered the merits of the plaintiff's case for relief, finding that the claim was for damages and not accrued rental, and that the plaintiff's evidence on mitigation of damages could be tested at a summary judgment hearing. Lastly, the court assessed the risk of miscarriage of justice and found no significant risk, as the defendant would still have the opportunity to present their case at the summary judgment hearing.

The court granted leave to the plaintiff to bring an application for summary judgment and set a hearing date for 14 September 2021. The plaintiff was required to file any reply affidavits within 15 working days, and submissions were to be filed 10 and 5 working days prior to the hearing for the plaintiff and defendant, respectively. The plaintiff was responsible for preparing a common bundle, and costs on the application were reserved.

Orders