Road Runner 2012 Limited v Memelink - [2022] NZHC 346

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2021-485-548

[2022] NZHC 346

UNDER the District Court Act 2016

IN THE MATTER OF

an appeal against a decision of the District Court at Hutt Valley

BETWEEN

ROAD RUNNER 2012 LIMITED

First Appellant

SUNTHIR NGUON
Second Appellant

AND

HARRY MEMELINK and CISCA

FORSTER as trustees of the Link Trust No. 1

Respondents

Hearing (by VMR): 24 February 2022

Counsel:

J J Pietras and S D Balloch for the Appellants D G Livingston for the Respondents

Judgment:

2 March 2022

JUDGMENT OF GWYN J

[1]This is an appeal from a decision of the District Court on 27 August 2021.1

[2] The case arises out of the lease of a café at Unit 3, 408 Wakefield Street, Lower Hutt (the premises). Road Runner 2012 Limited (the first appellant) was the tenant at the property and Sunthir Nguon (the second appellant) is the sole director and shareholder of Road Runner and was a guarantor under the deed of lease of the

1 Memelink and Cisca Forster as trustees of the Link Trust No. 1 v Road Runner 2012 Limited
[2021] NZDC 17246.

ROAD RUNNER 2012 LIMITED v MEMELINK [2022] NZHC 346 [2 March 2022]

premises. The respondents are the current trustees of the Link Trust No. 1, the registered proprietors of the premises. The premises are one of six units owned by Mr Memelink in the 14-unit building.

Background

[3] The appellants rented the premises from 14 June 2014 until 22 December 2019 under a deed of lease (a standard ADLS commercial lease) (the Lease).

[4] The Lease stated that the initial term would be for six months, and the parties would have further discussions about a possible extension or renewal. After negotiation, the parties agreed to fix the rent at $360.00 plus GST per week.

[5] The appellants say that in around late 2017, Mr Memelink, for the respondents, began to demand that they pay increased rent and repay outgoings at $180.00 plus GST per month from the commencement of the lease. The appellants denied they were liable for any increased rent or outgoings and a complete breakdown of the landlord-tenant relationship resulted.

[6] On 14 August 2019, the respondents filed a Notice of Claim in the Disputes Tribunal, seeking compensation of $10,471.13 for alleged rental arrears and outgoings.

[7] On 16 November 2019, the appellants gave one month’s notice to terminate the periodic tenancy and vacated the premises on 22 December 2019.

[8] On 23 January 2020, the respondents elected to increase their claim beyond the monetary jurisdiction of the Disputes Tribunal. The claim was then transferred to the Hutt Valley District Court.

[9] On 3 July 2020, the respondents filed a Statement of Claim in the District Court seeking, amongst other things, outgoings in the sum of $12,411.00.

[10] On 14 July 2020, the appellants filed a statement of defence and subsequently filed a dual application for strike-out/summary judgment.

[11] On 22…

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.

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Details

Case: [2022] NZHC 346
Decision Date: 2 March 2022

CaseChat Overview and Summary

The appeal before this Court is from a decision of Judge Tuohy of the District Court at Hutt Valley. The appeal arises out of a dispute between the appellants and the respondents over the lease of a café at Unit 3, 408 Wakefield Street, Lower Hutt. The dispute centres on the outgoings payable under the lease and the amount of outstanding rent. The respondents, who are the current trustees of the Link Trust No. 1, the registered proprietors of the premises, brought a claim against the appellants, the tenants of the premises, for outstanding rent and outgoings. The respondents' claim was initially struck out by the District Court but was subsequently amended and heard. The District Court issued a final judgment for the respondents in respect of outstanding rent and invited the respondents to re-litigate the issue of outgoings. The appellants appealed against that aspect of the judgment. The primary issue before this Court is whether the District Court judgment was final or interim and, if final, whether the doctrine of res judicata precludes the respondents from continuing with their claim in relation to outgoings. The appellants submitted that the judgment was final and that the doctrine of res judicata applies. The respondents argued that the judgment was interim and that the District Court had jurisdiction to order a split trial on the issue of outgoings. This Court found that the District Court judgment was final. The judgment was not clearly labelled as interim and, in any event, the District Court had no jurisdiction to order a split trial on the issue of outgoings. To allow the respondents to re-litigate the claim in relation to outgoings would be contrary to the rule in Henderson v Henderson and the doctrine of res judicata. The appeal is upheld. Costs should lie where they fall.

Orders