RIA PVT Limited v Boatshed 15 Limited
[2025] NZHC 2091
•29 July 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2025-404-1875
[2025] NZHC 2091
UNDER Section 253 of the Property Law Act 2007 and Rule 7.53 of the High Court Rules 2016 IN THE MATTER OF
Relief as to cancellation of lease for the property located at 17/15 Clearwater Cove, Hobsonville Marina, West Harbour, Auckland
BETWEEN
RIA PVT LIMITED
Plaintiff
AND
BOATSHED 15 LIMITED
Defendant
Hearing: 28 July 2025 Appearances:
A R Govind and K Ringrose for Applicant K R Lydiard for Defendant
Judgment:
29 July 2025
JUDGMENT OF O’GORMAN J
This judgment was delivered by me on 29 July 2025 at 12 pm pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
…………………………………
Solicitors:
Resolute Lawyers, Auckland Burley Castle Hawkins, Tauranga K R Lydiard, Auckland
RIA PVT LTD v BOATSHED 15 LTD [2025] NZHC 2091 [29 July 2025]
Introduction
[1] This proceeding concerns a dispute between RIA PVT Ltd (the tenant) and Boatshed 15 Ltd (the landlord) regarding the cancellation of a commercial lease for premises at 17/15 Clearwater Cove, Hobsonville Marina, West Harbour, Auckland.
[2] The tenant seeks relief against the cancellation of the lease under s 253 of the Property Law Act 2007 (PLA). Meanwhile the tenant applied for an urgent interim injunction to prevent the landlord from evicting the tenant and re-letting the property to a third party, pending determination of the relief application.
[3] This matter was referred to me as Duty Judge on 24 July 2025 and allocated an urgent hearing on 28 July 2025.
Party submissions
[4] The tenant seeks an urgent interim injunction to require the landlord to allow re-entry and access to the premises. The tenant argues as follows:
(a)The landlord’s cancellation was based on a notice under s 245 of the PLA, which relates only to unpaid rent, but the notice also included claims for unpaid operating expenses (OPEX) and other alleged breaches, making the notice invalid for those purposes.
(b)The tenant disputes that any rent was owing for the periods in question, asserting there was a verbal agreement for rent abatement due to issues with the premises.
(c)The tenant has paid all other rent, has deposited the disputed amounts (including OPEX) into its solicitor’s trust account, and is willing and able to pay any sums found to be due if relief is granted.
(d)The tenant claims to be suffering significant ongoing losses, including business interruption, risk to its gaming licence and loss of fit-out investment as a result of being locked out.
(e)The tenant contends that the landlord’s notice was not properly served in accordance with the lease and statutory requirements.
(f)The tenant submits that the balance of convenience and the interests of justice favour the grant of an interim injunction, as damages would not be an adequate remedy and the business faces irreparable harm.
[5] The landlord argues that the balance of convenience and the overall justice of the case do not support granting the interim injunction, and that the application should be dismissed with costs. In particular:
(a)The landlord argues that the tenant failed to pay rent and outgoings as required by the lease, and did not remedy these breaches after being served with a PLA notice. As a result, the lease was lawfully cancelled and the landlord re-entered the property. The landlord also notes that the tenant failed to obtain council approval for fit-out works and could not provide invoices for all works carried out.
(b)The landlord submits that the threshold for a mandatory interim injunction is high, especially where the order would effectively grant the ultimate relief sought in the substantive proceedings. The landlord argues that such orders should only be made in clear cases with special circumstances, which are not present here.
(c)The landlord contends that the tenant can be adequately compensated by damages if successful at trial, whereas granting the injunction would cause irreparable harm to the landlord, who has already entered into a new lease with a third party. The landlord argues that it would be difficult to undo the consequences if the injunction is granted but the tenant ultimately loses.
(d)The landlord asserts that the status quo at the time of the application is that the lease has been cancelled, the landlord has re-entered and a new
tenant is in place. Granting the injunction would disrupt this status quo and adversely affect the new tenant, a third party.
(e)The landlord says the tenant has not provided sufficient information to support its undertaking as to damages, especially given the tenant’s own admission of financial difficulties. This weighs against granting the injunction.
(f)The landlord notes that the tenant did not object to the cancellation until two weeks after the notice period expired and after the landlord had re-entered and leased the property to a new tenant.
Facts
[6] In December 2023, RIA PVT Ltd and Boatshed 15 Ltd entered into a six-year lease for the premises at 17/15 Clearwater Cove, with a commencement date of 1 March 2024. The lease provided for the tenant to undertake significant fit-out works (with rent relief for a defined period).
[7] The tenant says that it spent approximately $80,000 on the renovations and fit-out works. It says the works were completed around March 2024, but there have been delays in obtaining final compliance sign-off due to issues with previous works at the premises.
[8] During the tenancy, the tenant says there were other problems with the premises, including a leaking roof, chiller issues, and a kitchen power outage. The tenant alleges it undertook remedial works and that the landlord agreed to rent abatement for April 2024 and January 2025 due to these issues. The landlord denies these allegations of agreed abatement, and says the chiller was not for the leased premises.
[9] On 6 June 2025, the landlord issued a notice under s 245 of the PLA by email, alleging unpaid rent and OPEX, and other breaches, and requiring payment of
$14,373.96 by 23 June 2025. The tenant disputes the validity of this notice, both as to
substance (disputed amounts and inclusion of OPEX) and service (by email rather than as required by the lease and statute).
[10] The tenant says it attempted to contact the landlord to resolve the matter and offered to pay the disputed sum into its solicitor’s trust account pending reinstatement of the lease. There is a dispute between the parties about why this did not result in any meeting or discussion seeking to resolve matters.
[11] On 4 July 2025, the landlord signed an agreement to lease with a third party. That new lease has a commencement date of 1 September 2025. That document contains the following clause:
9 Termination of Prior Lease
9.1 This Agreement is conditional upon the surrender or cancellation of the existing lease currently in effect with respect to 17/15 Clearwater Cove, on terms and conditions satisfactory to the Landlord, and the present tenant vacating the premises at 17/15 Clearwater Cove on or before the Commencement Date.
[12] On 7 July 2025, the landlord sent an email saying its lawyers were terminating the lease. The tenant was locked out of the premises that same day (on a Monday, when it does not normally open to customers).
[13] On 9 July 2025, the landlord’s solicitors issued the letter of termination. It said in para 6 “… please take this letter as formal notice that the Lease is terminated, effective 7 July 2025”. In para 7, it demanded the tenant “to vacate the premises and return all keys, access cards and electronic opening devices”.
[14] The tenant claims ongoing losses of $7,000–$8,000 per week, continued wage liabilities, risk to its gaming licence, and loss of perishable goods and business opportunity. It says it has employees from overseas that it could no longer employ if not permitted to continue trading from the premises.
Legal principles
Lease cancellation and relief
[15] A lease may only be cancelled in accordance with ss 244–252 of the PLA.1 A lessor may cancel a lease because of a breach of the covenant to pay rent, provided that the requisite notice of intention to cancel is given and the breach is not remedied within the specified time.2
[16] A lessee may apply to the Court for relief against cancellation under s 253 of the PLA. Under s 256(1), the Court may grant relief on any conditions that it thinks fit concerning expenses, damages, compensation, or any other relevant matters. If the lessor has peaceably re-entered the land (as opposed to applying to Court for an order for possession), the lessee must seek relief in a proceeding brought for that purpose “not later than 3 months after the date on which the lessor peaceably re-entered the land”.3
[17] The period between re-entry and determination of the application for relief has been described as a “twilight period” or “period of limbo”.4 Until then, the status of the lease is yet to be determined:5
There are, of course, curiosities in the status of a forfeited lease which is the subject of an application for relief against forfeiture. Until the application has been decided, it will not be known whether the lease will remain forfeited or whether it will be restored as if it had never been forfeited. But there are many other instances of such uncertainties. When the validity of a notice to quit is in dispute, until that issue is resolved it will not be known whether the tenancy has ended or whether it still exists. The tenancy has a trance-like existence pendente lite; none can assert with assurance whether it is alive or dead.
1 Property Law Act 2007, s 243(1).
2 Section 245.
3 Section 253(4)(b).
4 DW McMorland and others Hinde McMorland and Sim Land Law in New Zealand (looseleaf ed, LexisNexis) at [11.245].
5 Meadows v Clerical Medical and General Life Assurance Society [1981] Ch 70 at 75; [1980] 1 All ER 454 at 457.
[18] Traditionally, there has been a distinction drawn between relief when the breach concerns non-payment of rent, as opposed to breaches of any other covenant.6 The following principles apply for a breach of the covenant to pay rent:7
(1) Where the breach consists solely of a failure to pay rent, there is a presumptive right to relief on payment of the arrears and costs. It is only in exceptional circumstances that relief is to be denied if the debt is paid in full.
(2) This is because it is inequitable that the benefit of the lease should be lost to a tenant who has restored to the landlord all that the landlord is entitled to under the lease. The ability to forfeit the lease and take possession is regarded by the Court as security for payment.
(3) Where, however, it is clear the tenant is hopelessly insolvent, the Court will not grant relief as a general rule.
(4) Mere suspicion of insolvency is not enough to outweigh the presumptive right to relief on payment of rental and costs.
[19]In QT Hospitality Ltd v Oxford Holdings Ltd, Asher J held that:8
[I]t will only be in the most extraordinary circumstances that relief against forfeiture will be refused in the event of non-payment of rent when the rent has been brought up to date or can with certainty be brought up to date.
[20] This principle was reaffirmed in Wood Bay Enterprises Ltd v Wise, where Gilbert J said that:9
It has long been established that the right of forfeiture for non-payment of rent is security for the payment of rent. In all but exceptional circumstances, for example where a tenant is hopelessly insolvent, a tenant will be entitled to relief against forfeiture or cancellation of a lease upon payment of the rent.
Interim injunction pending relief hearing
[21] In Palmerston North Cosmopolitan Club v Palmerston North Squash Club Inc, the High Court stated that in circumstances such as this the usual principles of an interim injunction would apply.10 Orders sought would usually be in the form of
6 Pike River Coal Ltd (in rec) v O’Malley Farming Ltd HC Wellington CIV-2011-485-66, 14 October 2011 at [41]–[43].
7 Mulholland v Waimarie Industries Ltd (2009) 10 NZCPR 590 at [23] (citations omitted).
8 QT Hospitality Ltd v Oxford Holdings Ltd (2007) 8 NZCPR 817 at [16].
9 Wood Bay Enterprises Ltd v Wise [2012] NZHC 1136 at [22].
10 Palmerston North Cosmopolitan Club v Palmerston North Squash Club Inc [2012] NZHC 1526 at [42].
an interim injunction for possession, preventing the landlord from acting inconsistently with the lease.11
[22] The general principles for determining an application for interim relief are well-settled. The Court must consider:12
(a)whether there is a serious question to be tried;
(b)the balance of convenience; and
(c)the overall justice of granting, or not granting, an interim injunction.
[23] However, in some cases interim relief has been granted pursuant to s 256 of the PLA. In Riccarton Club Incorporated v Majestic Investments Ltd,13 the Court granted an interim order pursuant to s 253 and s 256 of the PLA granting the plaintiff relief against the defendant’s cancellation of the lease, requiring the defendant is to immediately allow the plaintiff to resume occupancy of the leased premises.
Analysis
Serious issue to be tried
[24] I accept the plaintiff has established there is a serious issue to be tried in terms of whether the tenant is entitled to relief from cancellation.
(a)There are factual issues in dispute that cannot be determined at this time about whether there was any verbal agreement for rent abatement due to issues with the premises.
(b)In any event, I accept there are arguable issues about the validity of the PLA notices, including questions of service and whether they validly extended to including operating expenses.
11 At [36].
12 Intellihub v Genesis Energy Ltd [2020] NZCA 344, [2020] NZCCLR 29 at [23]; and Jessica Gorman and others McGechan on Procedure (online ed, Thomson Reuters) at [HR7.53.04].
13 Riccarton Club Inc v Majestic Investments Ltd HC Christchurch CIV-2011-409-1553, 16 August 2011.
(c)Apart from the merits of those issues, the tenant has paid the disputed rent and OPEX amounts into its solicitor’s trust account, substantiating that the tenant is financially able to meet those liabilities if the disputed issues are determined in the landlord’s favour. There is a strong presumption that relief against forfeiture will be available where such payments can, with certainty, be brought up to date.
[25] The landlord has referred to a comment in correspondence for the tenant that “trading has been a challenge in this economic climate”. That is far from substantiating the plaintiff’s insolvency. To the contrary, counsel for the defendant advises that it owns another bar in Ōtāhuhu that has been trading for 15 years. Furthermore, it has additional assets in the premises to which the defendant cannot currently gain access (including money in a safe), in addition to fit-out assets.
Balance of convenience and overall justice
[26] One of the major considerations relied on by the landlord is prejudice to itself and the third party, because they have signed a new lease of units 17 and 18 at 15 Clearwater Cove, with a planned commencement date of 1 September 2025.
[27] While the interests of third parties can be important considerations, in this case cl 9 makes it clear that the new lease is conditional on cancellation of the plaintiff’s existing lease and the present tenant vacating the premises on or before the commencement date. This shows the third party was likely aware that cancellation might be disputed, in which case the legal “twilight period” uncertainties referred to at para 17 above are well-established. Until any disputes about cancellation (including relief) are determined, neither the landlord nor the new lessee could reasonably assume that the new interests would prevail. Furthermore, the new lease document was signed prior to the landlord purported to terminate the plaintiff’s lease.
[28] I do not accept the landlord’s submissions that the relevant “status quo” is now an assumption that the lease has been cancelled and that a new tenant is in place. The statutory provisions and well-established principles governing relief (including the presumptions) cannot be circumvented that way.
[29]I find the factors relied on by the plaintiff more compelling. In particular:
(a)Not only does the tenant stand to lose its leasehold interest in land, but it has also made substantial investments (renovations and fit-out) far exceeding the disputed rent and OPEX payments, and those investments are disproportionate to the term of occupation it has already enjoyed.
(b)Exclusion of access puts the plaintiff at risk in respect of its gaming licences, not only at Clearwater Cove but also elsewhere.
(c)An abrupt lockout of this nature has implications for business interruption and its trading reputation.
(d)The plaintiff’s employees will be adversely affected if relief is not granted.
[30] I do not accept that there has been any material delay by the tenant in seeking relief from forfeiture. The tenant expressly notified of its intention to do so in a letter dated 9 July 2025 and has since been seeking to resolve matters without the necessity of court proceedings. It commenced its application well within the 3-month statutory time frame.
[31] The earliest available fixture for a hearing of the application for relief from cancellation is 13 August 2025 at 11.45 am. That will be prior to the commencement date under the third party’s new lease, so there remains a possibility that the condition in cl 9.1 could still be satisfied if the landlord is successful at that hearing.
[32] For these reasons, I am satisfied that it is appropriate to grant interim relief in the terms sought.
Result
[33] Until further order of the Court, I make an interim order requiring the defendant to give the plaintiff access and allow re-entry to the premises located at
17/15 Clearwater Cove, Hobsonville Marina, West Harbour, Auckland that are subject to the lease dated December 2023 between the plaintiff as the tenant and the defendant as the landlord. During the interim period I also order the defendant not to act inconsistently with the terms of that lease.
[34] The above orders are made pending determination of the originating application for relief, for which I allocate a one-hour hearing at 11.45 am on 13 August 2025.
[35]I give the following directions for that opposed application:
(a)The plaintiff is to file and serve any further affidavit evidence by 5 pm on 1 August 2025.
(b)The defendant is to file and serve any further affidavit evidence by 5 pm on 6 August 2025.
(c)If the third party (the purported new lessee) wishes to file evidence or be heard independently, then that is permitted subject to the same timetable deadlines as the defendant.
(d)The plaintiff is to file and serve any evidence strictly in reply, along with its legal submissions and hearing bundles, by 5 pm on 8 August 2025.
(e)The defendant is to file and serve written submissions and any further bundle of authorities by 12 pm on 12 August 2025.
[36]Costs are reserved.
O’Gorman J
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