Nicol v Ali - [2022] NZHC 2414

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2022-404-000555

[2022] NZHC 2414

BETWEEN
PERCIVAL ARTHUR BRIAN NICOL

Plaintiff

AND

BRETT ALI

Defendant

Hearing: 12 September 2022

Appearances:

NLK Stone & V Kumar for the Plaintiff Mr Ali (Defendant) in person

Judgment:

20 September 2022

JUDGMENT OF TAHANA J

[Application to cancel a lease]

This judgment was delivered by me on 20 September 2022 at 3.30pm Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Solicitors/Counsel:
Snedden & Associates, Auckland Doug Cowan Barrister, Auckland Copy to: Defendant

NICOL v ALI [Application to cancel a lease] [2022] NZHC 2414 [20 September 2022]

Introduction

[1] Mr Nicol is the owner and lessor of a property at 12 Weymouth Road, Manurewa, Auckland (the Property). On 1 August 2007, Mr Nicol entered into a lease with himself (the Lease) to enable him to sell the leasehold in the Property. The Lease provided for annual rent of $5,000 and for the lessee to pay the rates for the Property.

[2] Mr Nicol then sold the leasehold interest to Mr Ali for $49,000 pursuant to a sale and purchase agreement dated 6 February 2008 (the Agreement). While Mr Ali made some rate payments until 2015, a significant amount remained unpaid.

[3] The Auckland Council then issued proceedings against Mr Nicol for payment of the outstanding rates. Mr Nicol paid the outstanding rates and sought to recover this amount from Mr Ali, who, as at the date of the hearing, has still not paid any of the rates’ arrears.

[4] The Lease also provided for triennial rent reviews on the anniversary of the Lease. Mr Nicol sought to increase the rent from 1 August 2021 to $45,000 per annum. Mr Ali has not paid the increased rent.

[5] Mr Nicol now seeks to cancel the Lease; recover unpaid rates and rent (with interest and costs); and regain possession of the Property.

Background

[6] Despite swearing a detailed affidavit setting out the background to, and the terms of, the Lease, Mr Nicol failed to mention the Agreement which required Mr Ali to pay $49,000 to Mr Nicol (of which, $27,000 was financed by Mr Nicol who registered a mortgage on the leasehold title). Mr Nicol gave no explanation as to why the Agreement was not provided to the Court.

[7] Mr Ali provided the Court with a copy of the Agreement at the hearing. He said he did not see the terms of the Lease nor did he receive any legal advice when he signed the Agreement. While Mr Ali says he did not receive a copy of the Lease, he

did pay rates sporadically and he does accept that Mr Nicol is entitled to a rent review. Mr Ali says the review must be seven per cent of the land value (based on the government valuation) and not seven-and-a-half per cent of the land value as valued by a private valuer.

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.

Continue reading Nicol v Ali

Details

AGLC: Nicol v Ali [2022] NZHC 2414
Case: [2022] NZHC 2414
Decision Date: 20 September 2022

CaseChat Overview and Summary

The case of Nicol v Ali, heard in the High Court of New Zealand, involved a dispute between Percival Arthur Brian Nicol, the lessor, and Brett Ali, the lessee, regarding a property located at 12 Weymouth Road, Manurewa, Auckland. Mr. Nicol sought to cancel the lease, recover unpaid rates and rent, and regain possession of the property. The primary legal issues were whether Mr. Ali's failure to pay rates and his refusal to accept a rent increase justified the cancellation of the lease, and if Mr. Nicol was entitled to possession of the property and recovery of costs. The court held that Mr. Ali's non-payment of rates, despite numerous notices and the clear terms of the lease, justified the cancellation of the lease under section 246 of the Property Law Act 2007. The court also found that the rent review notices were premature and thus invalid. Consequently, the court ordered the cancellation of the lease, Mr. Ali's delivery of possession of the property, and payment of the unpaid rates, interest, and costs by Mr. Ali to Mr. Nicol. The court reserved the determination of the quantum of costs for a later date.

Orders