Pascoe Properties Limited v Attorney-General - [2012] NZHC 2671

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV 2011-485-1588 [2012] NZHC 2671

BETWEEN PASCOE PROPERTIES LIMITED Plaintiff

ANDTHE ATTORNEY GENERAL Defendant

Hearing: 27 August 2012

Counsel: K B Johnston and A V Abeygoonesekera for Plaintiff
M J Andrews and C I J Fleming for Defendant

Judgment: 23 October 2012

JUDGMENT OF SIMON FRANCE J

Introduction

[1] This case concerns a dispute as to whether a right of renewal of lease was exercised. The landlord, Pascoe Properties Limited, says it was and sues for unpaid rent. The tenant, the Ministry of Economic Development, denies there was an agreement to renew.

Facts

[2] In 2003 the plaintiff purchased a commercial building in Lower Hutt. The Ministry of Economic Development was an existing tenant. Its occupancy had commenced in 1997, and been renewed for a further three years in 2003, a few
months prior to Pascoe Properties purchasing the building.

PASCOE PROPERTIES LIMITED V THE ATTORNEY GENERAL HC WN CIV 2011-485-1588 [23 October
2012]

[3] The Ministry had two further rights of renewal. The first renewal date would be 1 August 2006, and in order to exercise the renewal, the Ministry would need to be in good standing and give three months’ notice. However, in 2005, Mr Thompson, the principal of Pascoe Properties, raised the issue with the Ministry. He was hoping for an early commitment. Mr Thompson spoke at the time with a Mr Grindey of the Ministry. He referred Mr Thompson to Mr Benjamin, a property consultant.

[4] Mr Benjamin had a long-standing arrangement to act as the Ministry’s property agent. He describes the arrangement as having started about 20 years earlier. He knew the now Deputy Secretary of the Ministry, Mr Harris, well, and would assist with viewing potential premises for leasing opportunities.

[5] From the time in October 2005 when Mr Thompson was referred to Mr Benjamin, until the time when the tenancy ended in February 2007, the relevant relationship and dealings were between Mr Thompson and Mr Benjamin. There is evidence that Mr Benjamin kept relevant persons in the Ministry informed, but he was the point of contact for Pascoe Properties.

[6] Over this period there were two live issues:

(a) the building leaked and the Ministry wanted these problems fixed; (b) the renewal.

[7] The two matters ran on a parallel basis, but inevitably became intermingled, since Mr Benjamin was under pressure from his client to get the leaks fixed. Mr Thompson’s view, which is disputed, is that he was trying to have them fixed but it was not straight forward.

[8]      Concerning the renewal Mr Benjamin was keen to achieve four things: (a)    a revised security system;
(b)      a comprehensive lift maintenance contract; (c) a $50,000 contribution to recarpeting;
(d)repairs to walls and columns.    This issue was associated with the leaks.

[9] In February 2006 these four propositions were put to Mr Thompson. He replied, essentially agreeing but qualifying the suggestions in terms of the dates by when things would be done.

[10] Mr…

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 Pascoe Properties Limited v Attorney-General

Details

AGLC: Pascoe Properties Limited v Attorney-General [2012] NZHC 2671
Case: [2012] NZHC 2671
Decision Date: 23 October 2012

CaseChat Overview and Summary

Pascoe Properties Limited brought an action against the Attorney General, acting on behalf of the Ministry of Economic Development, seeking unpaid rent for a commercial building in Lower Hutt. The dispute centred on whether the Ministry exercised its right of renewal for the lease, which would have obligated it to pay increased rent. Pascoe Properties claimed that an agreement to renew was reached through correspondence with Mr Benjamin, an agent for the Ministry. The Ministry denied that any binding agreement was made and argued that any agreement was subject to formal approval and execution of a lease variation document.

The primary legal issue was whether a binding agreement to renew the lease was reached. This hinged on whether Mr Benjamin had the authority to bind the Ministry to such an agreement. The court examined whether Mr Benjamin had actual authority, ostensible authority, or if there was a binding agreement formed through the exchange of correspondence. Pascoe Properties argued that Mr Benjamin had ostensible authority, meaning that the Ministry's conduct led them to reasonably believe that Mr Benjamin had the authority to conclude the agreement. The Ministry contended that Mr Benjamin did not have actual or ostensible authority to bind them to a lease renewal.

The court found that Mr Benjamin did not have actual authority to bind the Ministry to a lease renewal. It also found that there was no ostensible authority conferred upon Mr Benjamin by the Ministry. The court reasoned that the Ministry did not make any clear and unequivocal representation that Mr Benjamin could bind them to a lease renewal. Furthermore, the court held that the correspondence between the parties did not constitute a binding agreement to renew the lease, as it made clear that a formal variation document was required. Consequently, the court dismissed Pascoe Properties' claim, finding no basis for a renewal of the lease.

The court awarded costs to the Ministry, the defendant. The precise amount of costs was to be determined through memoranda if the parties could not agree.

Orders