Patel v MacLeod - [2018] NZHC 388

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-2712

[2018] NZHC 388

UNDER Section 253 of the Property Law Act 2007 and under Part 19 of the High Court Rules

IN THE MATTER

of an application for relief against forfeiture from unpaid rent and breach of other

covenants

BETWEEN

MANU PATEL, PAMELA PATEL and

VINESH PATEL trading as Greer Corner Applicants

AND

GRANT and JACQUELINE MACLEOD as

trustees of the Macleod Trust Respondents

Hearing: 21 February 2018

Appearances:

C J Pendleton for Applicants K McMullen for Respondents

Judgment:

12 March 2018

JUDGMENT OF LANG J

[on application for relief from forfeiture]

This judgment was delivered by me on 12 March 2018 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

PATEL v MACLEOD [2018] NZHC 388 [12 March 2018]

[1] This proceeding involves the lease of commercial premises situated at 360-362 Lake Road, Takapuna. The applicants, three members of the Patel family (the Patels), are the lessees and the respondent trustees (the trustees) are the owners and lessors of the premises.

[2] On 11 August 2017, the trustees terminated the lease and re-entered the premises after they said the Patels had failed to comply with a notice issued under s 246 of the Property Law Act 2007 (the Act) on 18 July 2017 (the 18 July PLA notice). This required the Patels to rectify alleged breaches of their obligations under the lease by 1 August 2017.

[3] The Patels now seek relief against forfeiture of the lease under ss 253 and 256 of the Property Law Act 2007 (the Act) on the ground that it is just and equitable for relief to be granted. The trustees oppose relief being granted. They say the Patels remain in default of their obligations under the lease, and that there can be no guarantee they will faithfully perform their obligations as lessees in the future.

The deed of lease

[4] The operative deed of lease is dated 5 November 2015. It provides for the Patels jointly to lease the premises for a period of seven years from 1 August 2015 with a right of renewal for a further period of seven years. The lease permitted the premises to be used for the purposes of a fruit and vegetable retail shop and a café.

[5] The initial rental was $80,000 per annum plus GST, together with a share of outgoings. Rental was to be paid monthly in advance on the first day of each month by payments in the sum of $6,666.67 plus GST.

[6] The lease provided for a default interest rate of 14 per cent per annum and also required the lessees to reimburse the lessors for “legal costs (as between solicitor and client) of and incidental to the enforcement of the Landlord’s rights under [the] lease”. Furthermore, a special condition of the lease required the lessees to procure and maintain a guarantee from a major New…

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 Patel v MacLeod

Details

AGLC: Patel v MacLeod [2018] NZHC 388
Case: [2018] NZHC 388
Decision Date: 12 March 2018

CaseChat Overview and Summary

This proceeding involves the lease of commercial premises at 360-362 Lake Road, Takapuna. The applicants, Manu Patel, Pamela Patel, and Vinesh Patel trading as Greer Corner (the Patels), are the lessees and the respondents, Grant and Jacqueline MacLeod as trustees of the MacLeod Trust (the trustees), are the owners and lessors of the premises. The Patels seek relief against forfeiture of the lease on the ground that it is just and equitable for relief to be granted. The trustees oppose relief being granted. They say the Patels remain in default of their obligations under the lease, and that there can be no guarantee they will faithfully perform their obligations as lessees in the future.

The court found that although the purported termination of the lease on 11 August 2017 was invalid and legally ineffective, the trustees were entitled to terminate the lease on 26 August 2017 and did so by retaining possession of the premises.

The court considered the relevant principles and submissions of both parties and found that all of the factors relevant to the court's assessment in the present case are either neutral or militate against relief being granted. It follows that the Patels have failed to establish a case for relief to be granted even if the court had jurisdiction to make the order they seek.

The application for relief against forfeiture is declined. The trustees have succeeded and would ordinarily be entitled to an award of costs against Vinesh and Pamela on a category 2B basis together with disbursements as fixed by the Registrar. If the trustees seek costs on any other basis their counsel should file a concise memorandum within 21 days setting out the trustees' claim for costs.

Orders