Oceanic Palms Ltd v Kiwi Rail Ltd

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-200 [2018] NZHC 679

BETWEEN

OCEANIC PALMS LIMITED

Plaintiff

AND

KIWI RAIL LIMITED Defendant

Hearing:	16 April 2018
Appearances:	H Haynes and B Hubbard for Plaintiff M L Campbell and S J Thomson for Defendant
Judgment:	16 April 2018
Reissued:	18 April 2018

ORAL JUDGMENT OF JAGOSE J

Solicitors:

Russell McVeagh, Wellington

Party:

Plaintiff

OCEANIC PALMS LTD v KIWI RAIL LTD [2018] NZHC 679 [16 April 2018]

Introduction

[1]      The applicant (“Oceanic Palms”) seeks interim orders under s 15 of the

Judicial Review Procedure Act 2016 (the “Act”):1

(a)to prevent the respondent (“KiwiRail”) from removing any of Oceanic Palms’ property from premises formerly leased by Oceanic Palms from KiwiRail (the “premises”);

(b)to require KiwiRail to permit Oceanic Palms access to the premises for four or five hours once or twice a week to care for its property on the premises, and to remove its property from the premises; and

(c)      to stay KiwiRail’s proceeding to put Oceanic Palms into liquidation.

Background

[2]      Oceanic  Palms  grows  and  transplants  mature  palm  trees.  It  did  so  from premises leased from KiwiRail since 1 March 2010, initially at an annual (and expressly concessionary) rent of $34,000 per annum. Under the lease, on its renewal by Oceanic Palms, KiwiRail was entitled to review the rent to market rates. KiwiRail took up that entitlement, to review the rent to $123,200 per annum from 1 March 2015, which Oceanic Palms was required to pay until a new rent was determined or agreed.

[3]      Oceanic Palms did not agree with that rent, or to joint valuers’ recommended rent of $100,000 per annum (at which rate KiwiRail invoiced Oceanic Palms, despite its entitlement to levy rent at the higher figure), and continued to pay the original rent. Oceanic Palms was not prepared to engage in arbitration, because it doubted that process would result in an acceptably low rent, bearing the view that arbitrations tended to benefit the landlord.  Despite arbitration being the contractual process for

determination of rent, and that rent contractually defined as “the current market rent

1      This judgment, issued previously on 16 April 2018, was recalled to amend errors at paras [20] and [27] referring to the dismissal of Oceanic Palms’ ‘application for review’ rather than ‘application for interim orders’. Only the latter was before me for decision, and was dismissed.

of the Leased Land, based on the highest and best use of the Leased Land, as at the

Rent Review Date”.

[4]      In late 2015, KiwiRail gave notice of its intention to cancel the lease unless Oceanic Palms paid the outstanding rent. Oceanic Palms sought relief from forfeiture of its lease, which was refused by Justice Fogarty in the High Court on 20 May 2016.2

Oceanic Palms appealed the Judge’s decision, both substantively and by way of judicial review. The latter challenge relied on grounds of KiwiRail’s contended…