Monaghan v Mineral Park Limited - [2021] NZHC 1407

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV2020-404-1316

CIV-2019-404-1333 [2021] NZHC 1407

BETWEEN
COLIN JOHN MONAGHAN and MARIA TE RANGIMARIA BROWN

Plaintiffs

AND

MINERAL PARK LIMITED

First Defendant

AND

ERIC YIN CHIC LIU and DAISY FANGYUE LIU

Second Defendants

Hearing: 21 April 2021

Appearances:

MC Josephson for the Plaintiff B Murray for the Defendants

Judgment:

15 June 2021

JUDGMENT OF FITZGERALD J

This judgment was delivered by me on 15 June 2021 at 3.00pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors: T M Bates & Co, Auckland
Vallant Hooker & Partners, Auckland

To: M Josephson, Auckland

MONAGHAN v MINERAL PARK LIMITED [2021] NZHC 1407 [15 June 2021]

Introduction

[1] In February 2015, Mineral Park Limited (Mineral Park) leased Mr Monaghan and Ms Brown a motel (known as the Mineral Park Motel) and a lodge (known as the Parakai Springs Lodge).1 Eric and Daisy Liu are the directors and shareholders of Mineral Park and at the time of the lease, were the registered owners of the properties on which the Motel and Lodge are located.

[2] The (one page) lease was not in a standard form, though it envisaged the later execution of a more formal document. For whatever reason, that formal document was never executed. There is no dispute, however, that the less formal and non- standard lease document operated as a binding lease between the parties.

[3] The lease was for a period of six years, renewable at the option of Mineral Park. Unsurprisingly, it contained provisions concerning the rent to be paid, the amount of which escalated over time. It also contained a provision that so long as Mr Monaghan and Ms Brown were paying the rent and other outgoings on time, and were not otherwise in default of the lease, they would have a first right of refusal to purchase either the Lodge or the Motel if they were to be sold separately or jointly.

[4] In late 2018, the Lius sold the Lodge to a third party (with vacant possession), with settlement taking place on 25 October 2018. There is a dispute as to whether Mr Monaghan and Ms Brown were given the opportunity to exercise their right of first refusal before the Lodge was sold.

[5] Following the sale of the Lodge, the lease of the Motel continued. By early 2019, the monthly rent payable was $10,541.66 inclusive of GST. Invoices for the rent due for March to June 2019 went unpaid.

[6] On 5 June 2019, Mineral Park gave notice of cancellation of the lease. Mr Monaghan and Ms Brown nevertheless remained in possession.

1 For ease of reference, I will refer to each in this judgment as “the Motel” and “the Lodge”.

[7] In July 2019, Mineral Park and the Lius applied to this Court for summary judgment (CIV-2019-404-1333) and sought:

(a)an order for vacant possession of the Motel; and

(b)judgment in the sum of $33,011.26,…

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 1407
Decision Date: 15 June 2021

CaseChat Overview and Summary

This case involved a dispute between Mineral Park Limited and Mr Monaghan and Ms Brown, the lessees of two motel properties. The case was heard by the High Court of New Zealand. The legal issues that the court was required to decide included whether the judgment obtained by Mineral Park and the Lius was irregularly obtained, whether there was a substantial ground of defence, and whether the judgment should be set aside or stayed. The court also had to determine whether security for costs should be ordered in the counterclaim proceedings.

The court found that there was no irregularity in the judgment, nor was there a substantial ground of defence that warranted setting aside the judgment. However, the court concluded that it was appropriate to stay the enforcement of the judgment for the unpaid rent on conditions relating to the prompt and efficient prosecution of the counterclaim proceedings. The court also found that security for costs should be ordered in the counterclaim proceedings to protect Mineral Park and the Lius from a potential barren costs order. The court ordered that Mr Monaghan and Ms Brown pay $15,000 by way of security for costs within 20 working days of the date of the judgment.

The final orders of the court were that enforcement of the rental aspect of Muir J’s judgment dated 19 September 2019 (including the costs award) is stayed, on the conditions set out in the judgment. Mr Monaghan and Ms Brown are to pay $15,000 by way of security for costs in the counterclaim proceedings. The counterclaim proceedings are stayed pending payment of the security for costs. Should security for costs not be paid in accordance with the judgment, the stay of enforcement of Muir J’s judgment will lapse. Costs on the applications were to lie where they fell.

Orders