Patcroft Properties Ltd v Ingram - [2010] NZCA 275

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IN THE COURT OF APPEAL OF NEW ZEALAND
CA462/2009
[2010] NZCA 275
BETWEENPATCROFT PROPERTIES LIMITED
Appellant

ANDGRAEME JOHN INGRAM AND ELIZABETH KNEE
First Respondents
ANDKIP INVESTMENTS LIMITED
Second Respondent

Hearing:18 May 2010

Court:O'Regan, Priestley and Ronald Young JJ
Counsel:D G Collecutt for Appellant
D W Grove for Respondents

Judgment:29 June 2010 at 3 pm

JUDGMENT OF THE COURT

A The appeal is allowed.
BThe awards of damages of $100,000 and interest in favour of the first respondent and $162,935.04 and interest in favour of the second respondent are set aside.
CThe award of damages of $36,597.55 and interest in favour of the first respondent is confirmed.
DThe award of damages in favour of the appellant of $84,906.53 and interest is confirmed.
EThe respondent must pay the appellant costs for a standard appeal on a band A basis and usual disbursements.
FLeave is reserved to either party to apply to this Court for a ruling that costs and disbursements in the High Court should be awarded on a basis other than as indicated at [67] of the Reasons of the Court.

____________________________________________________________________
REASONS
O’Regan and Ronald Young JJ [1]
Priestley J (dissenting) [68]
Table of Contents
Para No

Introduction  [1]
Right to re-enter and determine lease on 14 June 2005  [8]
Clauses 26 and 27 of the lease  [21]
Was the lease validly cancelled on 15 June 2005?  [37]
Damages claims  [58]
Other grounds of appeal  [62]
Summary  [63]
Costs and interest  [66]
Introduction
[1]       This appeal concerns the lease of a backpackers hostel and bar in Lorne Street, Auckland. Patcroft Properties Ltd (Patcroft) is the owner of the building. It let the backpackers portion of the property to Mr Ingram and Ms Knee (the first respondents and head tenants) and the basement of the building to KIP Investments Ltd (KIP) (the second respondent and sub‑tenant) who operated it as a bar called the Embargo Bar.
[2]       On 14 June 2005 the appellant, Patcroft, through Mr O’Donnell, a director, re‑entered under the lease alleging both tenants owed rent. It shut both tenants out of the building and distrained for the unpaid rent. The tenants’ businesses then failed.
[3]       Mr Ingram, Ms Knee and KIP said the re-entry and distraint was illegal and later issued proceedings for damages said to have arisen as a result of Patcroft’s actions. Patcroft counterclaimed for money it said was owing by both tenants pursuant to the lease.
[4]       In his judgment Allan J concluded:[1]
[1]Ingram v Patcroft Properties Ltd (2009) 10 NZCPR 426 (HC).
(a)the tenants owed Patcroft unpaid rent and operating expenses for June;

(b)       no set‑off against the rent owing was available to the tenants;
(c)       Patcroft had not waived its right to re-enter;
(d)       Patcroft’s purported distraint on 14 June was unlawful;
(e)       Patcroft’s re-entry was illegal being one day early;
(f)       the re-entry did not become lawful by effluxion of time;
(g)the tenants were not obliged to mitigate their loss…

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 Patcroft Properties Ltd v Ingram

Details

AGLC: Patcroft Properties Ltd v Ingram [2010] NZCA 275
Case: [2010] NZCA 275
Decision Date: 29 June 2010

CaseChat Overview and Summary

Patcroft Properties Limited, the owner of a backpackers hostel and bar in Lorne Street, Auckland, entered into a lease with Graeme John Ingram and Elizabeth Knee (the first respondents) for the backpackers portion of the property and with KIP Investments Limited (the second respondent) for the basement of the building. On 14 June 2005, Patcroft re-entered the premises alleging that both tenants owed rent. It shut both tenants out of the building and distrained for the unpaid rent. The tenants' businesses then failed. Ingram, Knee and KIP sued Patcroft for damages arising from Patcroft's actions. Patcroft counterclaimed for money it said was owing by both tenants pursuant to the lease. In his judgment Allan J concluded that Patcroft's re-entry was unlawful, and awarded damages to the tenants for the loss of value of their businesses. Patcroft appealed this decision. The appeal centred on the validity of Patcroft's re-entry and the tenants' entitlement to damages. The court rejected Patcroft's argument that it could re-enter the premises on 14 June, one day early, as it was not entitled to do so under the lease terms. The court also held that Patcroft's re-entry on 14 June did not constitute a repudiation of the lease, and that the tenants did not cancel the lease on that date. The court found that Patcroft lawfully cancelled the lease on 15 June, and as a result, the tenants' claims for damages for the loss of value of their businesses were set aside. The court confirmed the awards for the reimbursement of overpayment of lift maintenance and Patcroft's counterclaim. The appeal was allowed, and the respondents were ordered to pay Patcroft's costs for a standard appeal on a band A basis and usual disbursements.

Orders