Pandora Trustees Limited v P R Contracting Limited

[2022] NZHC 2855

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-1751

[2022] NZHC 2855

BETWEEN

PANDORA TRUSTEES LIMITED

Applicant

AND

P R CONTRACTING LIMITED

First Respondent

UNKNOWN OCCUPIERS

Second Respondents

Hearing:

2 November 2022

Appearances:

M D Pascariu for Applicant

No appearance for Respondents

Judgment:

2 November 2022

JUDGMENT OF LANG J

[on application for order cancelling lease and granting vacant possession of property]

This judgment was delivered by me on 2 November 2022 at 3 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

Solicitors: Anderson Creagh Lai Ltd, Auckland

PANDORA TRUSTEES LTD v P R CONTRACTING LTD [2022] NZHC 2855 [2 November 2022]

[1]     In this proceeding the applicant, Pandora Trustees Limited (Pandora), seeks an order under s 251(1) of the Property Law Act 2007 (the Act) cancelling the lease of a property situated at 1/751 (Units C and D) Beach Road, Browns Bay, Auckland. It also seeks an order under s granting it vacant possession of that property.

Background

[2]     On 27 August 2018 Pandora entered into an agreement to lease the property to P R Contracting Ltd. Mr Douglas Herbert was the director of that company and guaranteed its obligations under the lease. Through oversight a formal lease was never executed. The agreement to lease is therefore the operative document for present purposes.

[3]     Pandora subsequently discovered the property was being used for activities associated with a motorcycle gang. Efforts to reach agreement on an early termination of the lease were unsuccessful.

[4]     P R Contracting was removed from the Companies Register on 21 September 2020. Its assets then vested in the Crown by virtue of s 324(1) of the Companies Act 1993.

[5]     By July 2022, arrears of rental in the sum of $3,156.04 had accrued. In addition, Pandora became aware the property had been modified without its consent. It has also been sub-let without Pandora’s consent and is now occupied by unknown persons who are associated with the motorcycle gang.

[6]     On 18 July 2022, Pandora’s solicitors served notice of its intention to cancel the lease by email sent to the Secretary to the New Zealand Treasury and by post to Mr Herbert’s last known address.

[7]     By 3 September 2022, the arrears of rental and outgoings had increased to a sum of $3,970. Pandora then issued the present proceeding in which it seeks cancellation of the lease and an order granting it vacant possession of the property.

[8]     The proceeding was served on the Secretary to the Treasury on 5 October 2022. On 26 October 2022 the Secretary advised that the Crown did not oppose Pandora’s application and would abide by the Court’s decision.

[9]     On 6 October 2022 Pandora arranged for the proceeding to be served on the persons currently occupying the property. They have not taken any steps to oppose the present application.

Decision

[10]    I am satisfied that Pandora has the right to cancel the lease under s 245(1) of the Act because the arrears of rental have now been outstanding for considerably more than ten working days. The appropriate notice has been served on both the Secretary to the Treasury and the current occupants of the address. To date the breaches have not been remedied.

[11]    Section 251(1) of the Act permits the Court to make an order cancelling a lease where the statutory requirements have been met. I am satisfied those requirements have been met in the present case and that it is appropriate to make the orders Pandora seeks. I therefore make an order under s 251(1) of the Act cancelling the agreement to lease dated 27 August 2018.

[12]    When the Court makes an order cancelling a lease it also has the power under s 251(1) to make an order granting possession of the land. It is appropriate to make such an order in the present case given the fact that unknown persons are now occupying the property that was formerly subject to the lease. I therefore make a further order that Pandora will be entitled to possession of the property at the expiration of five working days after service of these orders on the current occupiers of the property.

Lang J