Mineral Park Limited v Monaghan

[2019] NZHC 2413

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-1333

[2019] NZHC 2413

UNDER

the Property Law Act 2007

IN THE MATTER OF

a claim for recovery of land following termination of lease for arrears of rent

BETWEEN

MINERAL PARK LIMITED

First Plaintiff

ERIC YIN CHIC LIU and DAISY FANGYUE LIU
Second Plaintiffs

AND

COLIN MONAGHAN and MARIA BROWN

Defendants

Hearing:	19 September 2019
Counsel:	B Murray for the Plaintiffs
Judgment:	19 September 2019

ORAL JUDGMENT OF MUIR J

Solicitors:

B Murray, Vallant Hooker & Partners, Auckland

MINERAL PARK LIMITED v MONAGHAN [2019] NZHC 2413 [19 September 2019]

Introduction

[1]    This is a summary judgment application by the plaintiffs. They seek an order for possession of property described as the Mineral Park Hotel at Parakai Avenue, Parakai.

[2]    On 5 February 2015 the first plaintiff entered into what is described as a lease of the motel to the defendants, Mr Monaghan and Ms Brown. The second plaintiffs are the directors and shareholders of the first plaintiff and are the registered owners of the property. The application for summary judgment is in favour of the first and second plaintiffs jointly and severally.

[3]    What is described as the lease is not in standard form. It is a one-page document referring to a six year term and setting out rental payments which escalate over time. It describes the respective parties as lessor and lessee but in its terms (para

4) appears to contemplate the later execution of a formal document. Significantly, cl 6 states that:

If the lessee fails to pay rents or outgoings on time, or is otherwise in breach of the lease the lessor may, in accordance with the law and the terms of the lease terminate the lease.

[4]    Whether the document is properly described as a lease or an agreement to a lease is not, in my view, of any legal moment. Equity treats as done what ought to be done. If properly described as an agreement to lease, the case represents a classic application of the principles established in Walsh v Lonsdale.1

[5]    Under  what  I will  hereafter refer to  as  the lease the relevant  rental  from  1 February 2019 was $110,000 net per annum. Monthly instalments were $10,541.66 including GST.

Default

[6]    The plaintiffs depose that rental invoices for March and April 2009 were unpaid by the defendants and that on 2 and 3 May 2019 they were respectively served

1      Walsh v Lonsdale (1882) 21ChD 9 at 14-15.

with notices of intention to cancel the lease. The plaintiffs further depose that no rental has since been received.

[7]    In the absence of a response to the notice of intention to cancel, the first plaintiff in turn served a cancellation notice on 5 June 2019. Later the same day the defendant Mr Monaghan wrote to the first defendant’s director Mr Liu acknowledging the arrears of rent and suggesting that, if given an opportunity, he and Ms Brown could still “make this work”.

[8]    The present position is (apparently) that the defendants remain in possession of the premises.

[9]They have taken no steps in relation to the proceedings.

Discussion

[10]   I am satisfied by reference to the affidavit evidence and attached exhibits that the first plaintiff has met all the relevant statutory requirements in ss 243-251 of the Property Law Act and that the Court may accordingly make an order for possession of the premises. I am satisfied there is no bona fide defence to such claim.

[11]   The plaintiff also seeks judgment for rental arrears. The claim is from 1 March 2019 to today’s date.   However, the evidence is that the lease was cancelled as at     5 June 2019. A claim for rental cannot be sustained after that date. In the context of the plaintiffs’ substantive proceedings (whether maintained in this Court or transferred to the District Court as appears to be intended), further relief in the nature of damages can, if considered appropriate, be pursued in due course.2

[12]   In the circumstances, therefore, summary judgment is appropriately limited to the following claims:

(a)Rental arrears for the period 1 March 2019 to 31 May 2019, three months at $10,541.66 – $31,624.98.

2      Contracts and Commercial Law Act 2017, ss 42 and 49.

(b)Rental arrears for the period 1 June to 4 June 2019, four days at $346.57 per day – $1,386.28.

[13]   No claim for interest is made in the statement of claim. The plaintiff acknowledges that pursuant to s 5(1) of the Interest on Money Claims Act 2016 such claim is therefore precluded.

[14]   Neither do I identify any contractual basis for recovery of agent’s fees for service of the notice of intention to cancel or the notice of cancellation. I therefore decline to enter summary judgment for that aspect of the claim. It may be pursued, if considered appropriate, in the context of the substantive proceedings.

Result

[15]   I make an order for possession of the premises described as the Mineral Park Motel at Parakai Avenue, Parakai.

[16]   I give judgment to the first and second plaintiffs (jointly and severally) in the amount of $33,011.26.

[17]   I award costs and disbursements to the plaintiffs in the amount of $8,489.20 in accordance with the Schedule contained in para 4 of the plaintiffs’ third memorandum dated 19 September 2019.

[18]   In respect of the substantive proceedings, I direct that they be allocated a case management conference on the first available date after 31 October 2019. If, as a result of the summary judgment entered today, the plaintiffs see fit not to further pursue their substantive claim, Mr Murray undertakes to notify the Court promptly and the conference may be vacated.

Muir J