Scrapbook Alley Limited v Chow HC Palmerston North CIV-2011-454-141 - [2011] NZHC 1068

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

CIV-2011-454-141

UNDER The Common Law

IN THE MATTER OF a Deed of Lease

BETWEEN SCRAPBOOK ALLEY LIMITED Plaintiff

ANDANN CHOW, FAI CHOW AND DAVID ALAN LEA
Defendants

Hearing: 25 August 2011
(Heard at Palmerston North)

Counsel: G.A. Paine - Counsel for Plaintiff
G. Manktelow - Counsel for Defendant

Judgment: 5 September 2011 at 4:00 PM

JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL

This judgment was delivered by Associate Judge Gendall on 5 September 2011 at
4.00 pm under r 11.5 of the High Court Rules.

Solicitors: Bruce Andrews, Solicitors, PO Box 351, Palmerston North
G & T Manktelow, Barristers & Solicitors, PO Box 12091, Palmerston North

SCRAPBOOK ALLEY LIMITED V A CHOW, F CHOW AND DA LEA HC PMN CIV-2011-454-141 5
September 2011

[1] Before the Court is an application by the defendants for summary judgment

against the plaintiff or alternatively for an order striking out the plaintiff’s claim.

[2] In addition, on 10 August 2011 the defendants filed an amended interlocutory application which included an application for security for costs against the plaintiff. As the plaintiff has had no opportunity to respond to that application or the supporting affidavit of Mr Peter Lindstrom sworn 9 August 2011, the application for security for costs is now adjourned to a call in the List at 10.00 am on 21 September
2011. Depending upon the outcome of the summary judgment and strike-out applications before me, the future of that application can be considered at that time.

[3] At this point I note, however, that the plaintiff takes objection to the Court reading the affidavit of Mr Peter Lindstrom filed in support of the security for costs application on the basis that he is the solicitor who has been acting for the defendants in this matter. That objection is simply noted at this point.

[4] This judgment therefore relates to the applications before me made by the defendants for summary judgment and strike-out. The applications are opposed by the plaintiff.

Background Facts

[5] The defendants are the owners of commercial premises situated at 88 Main Street, Pahiatua (the building). By Deed of Lease dated 17 February 2010 (the Lease) they agreed to lease a portion of these premises to the plaintiff. The plaintiff was to operate its business as a retailer of scrap-booking material from the leased premises.

[6] The lease was for an initial term of 10 years from 1 March 2010 at an initial rental of $5,200.00 plus GST per annum with two further rights of renewal each for
3 years.

[7] In addition, under the Lease, the plaintiff agreed that it would be responsible for payment of twenty per cent of the total insurance premium assessed for the defendants’ building of which the leased premises formed part.

[8] So far as this insurance was concerned, clause 23.1 of the lease provided specifically:

Landlord Shall Insure

23.1 The landlord shall at all times during the term keep and maintain any buildings on…

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

AGLC: Scrapbook Alley Limited v Chow HC Palmerston North CIV-2011-454-141 [2011] NZHC 1068
Case: [2011] NZHC 1068
Decision Date: 5 September 2011

CaseChat Overview and Summary

The High Court of New Zealand at Palmerston North presided over a case between Scrapbook Alley Limited and Ann Chow, Fai Chow, and David Alan Lea. The defendants sought summary judgment against the plaintiff or, in the alternative, an order to strike out the plaintiff's claim. Additionally, the defendants filed an amended interlocutory application for security for costs against the plaintiff, which was adjourned for further consideration. The plaintiff's objection to the court reading an affidavit filed in support of the security for costs application was noted but not addressed in detail.

The court examined the defendants' summary judgment application, which required the defendants to demonstrate that none of the plaintiff's causes of action could succeed. The court found that the plaintiff's claim for damages due to the fire in the leased premises could potentially succeed as the fire originated from an electrical fault within the defendants' control, which did not require prior notice from the plaintiff. Consequently, the court dismissed the defendants' summary judgment application.

The court also reviewed the defendants' strike-out application, which aimed to dismiss the plaintiff's claim if it disclosed no reasonably arguable cause of action or was otherwise an abuse of the court's process. The court determined that the plaintiff's fiduciary duty claim and insurance cover claim were dubious and likely to fail. However, the court opted to adjourn the strike-out application to a directions conference to allow for proper re-pleading by the plaintiff. The defendants' summary judgment application was dismissed, and costs on these matters were reserved for the next call of the case.

Orders