Midland Properties (NZ) Limited v Dawson - [2021] NZHC 295

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2019-409-724

[2021] NZHC 295

BETWEEN
MIDLAND PROPERTIES (NZ) LIMITED

Plaintiff

AND

ROBERT PETER JOHN DAWSON

Defendant

Hearing: 19 February 2021

Appearances:

A D Marsh for Plaintiff

D M Woodbridge for Defendant

Judgment:

26 February 2021

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 26 February 2021 at 3.15pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 26 February 2021

MIDLAND PROPERTIES (NZ) LIMITED v DAWSON [2021] NZHC 295 [26 February 2021]

[1] The defendant seeks an order setting aside a judgment by default entered against him by the Registrar on 23 July 2020.

[2] The defendant says the judgment was irregularly obtained for two reasons. Firstly, the defendant claims judgment was entered for a sum in excess of the amount claimed in the statement of claim, contrary to r 15.7 of the High Court Rules 2016. Secondly, the defendant says r 15.4 required an affidavit verifying the statement of claim to be filed before a judgment by default could be entered because the proceedings were served by substituted service. As no such affidavit was filed, the defendant says the plaintiff was not entitled to have judgment sealed.

[3] In the alternative, if the judgment was regularly obtained, the defendant relies on r 15.10 to have the judgment set aside. He does so on the basis it would be a miscarriage of justice if the defendant was not able to rely on the defences he says he has to the claim.

Background

[4] The statement of claim dated 19 December 2019 sought judgment against the defendant as alleged guarantor of the lease obligations of a company which was the tenant of a commercial building in Christchurch. The premises were leased under an Agreement to Lease which the defendant signed as guarantor, agreeing:

THE GUARANTOR (and if more than one jointly and severally), in consideration of the Landlord entering into this Agreement at the Guarantor’s request, agrees with the Landlord to guarantee to the Landlord the obligations of the Tenant and to sign the Lease as a guarantor.

[5] The Agreement to Lease was on the Auckland District Law Society Inc Fifth Edition form. The lease the defendant agreed to sign under the above clause as guarantor was “the current Auckland District Law Society Inc Deed of Lease form amended in accordance with the provisions of this Agreement”.

[6] The Agreement to Lease does not contain any amendments relevant to the guarantee obligations save that under the name of the guarantor it is stated:

Personal guarantor to be limited to a maximum of Two (2) years of the then current Rental and Outgoings + GST from the date that the Tenant is in default of any Rent and or Outgoings payments.

[7] The statement of claim records the appointment of liquidators to the tenant company on 14 May 2019 and that the liquidators disclaimed the lease in or…

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 295
Decision Date: 26 February 2021

CaseChat Overview and Summary

Midland Properties (NZ) Limited, the plaintiff, filed an action against Robert Peter John Dawson, the defendant, seeking to recover money owed under a guarantee of a lease agreement. The defendant sought to set aside a judgment by default entered against him on the basis that the judgment was irregularly obtained. The defendant claimed that the amount for which judgment was entered exceeded the amount claimed in the statement of claim and that an affidavit verifying the statement of claim was not filed before the judgment was sealed, as required by r 15.4 of the High Court Rules 2016. The defendant argued that the judgment should be set aside as it was irregularly obtained or, alternatively, under r 15.10 because it would be a miscarriage of justice if he was not able to rely on defences he had to the claim. The court held that the judgment was irregularly obtained. The amount for which judgment was entered exceeded the amount claimed in the statement of claim. The court noted that the inclusion of a claim for general relief in the prayer for relief did not permit a claim for an amount in excess of that pleaded. Additionally, the court found that the plaintiff failed to file an affidavit verifying the statement of claim before the judgment was sealed, as required by r 15.4. The court held that it was not appropriate to vary the judgment. The court found that there was a reasonable argument that the defendant had a defence to the claim and, therefore, the judgment should be set aside in its entirety. The court ordered the plaintiff to amend its statement of claim to address the quantum issue within 15 working days and for the defendant to file his defence to the amended claim within a further 15 working days. Costs were reserved.

Orders