Seaglass Holdings Limited v Giacon - [2023] NZHC 3552

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-000740

[2023] NZHC 3552

BETWEEN
SEAGLASS HOLDINGS LIMITED

Plaintiff

AND

ANDREW GIOVANNI GIACON

First Defendant

ADRIENNE GIACON

Second Defendant

Hearing:
6 to 8 November 2023

Further submissions on 17 November 2023

Appearances:

S Eden and R Katsui for the Plaintiff

E St John and S Maloney for the Defendants

Judgment:

7 December 2023

JUDGMENT OF GORDON J

This judgment was delivered by me
on 7 December 2023 at 3 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors/Counsel:
Gaze Burt, Auckland Ewart & Ewart, Auckland
E St John, Barrister, Auckland S Maloney, Barrister, Auckland

SEAGLASS HOLDINGS LTD v GIACON [2023] NZHC 3552 [7 December 2023]

TABLE OF CONTENTS

Background [3]

The lease [15]

Claim by Seaglass [19]

Summary of defences and Seaglass’ responses [23]

Issues [37]

Issue one: what is the amount of the debt and interest on the debt? [38]

Issue two: Limitation Act 2010 [49]

Issue three: was there a variation of the Lease regarding outgoings
between 11 August 2011 and 12 January 2015? [88]

Issue four: were rent arrears forgiven up to the end of March 2013? [110]

Issue five: was the rent reduced to $7,500 per month plus GST
indefinitely from 1 June 2014? [125]

Issue six: estoppel [159]

Issue seven: should the Court make a declaration that the Giacons
hold an option to purchase the Premises and a right of first refusal? [161]

Result/orders [194]

Costs [198]

[1] The plaintiff, Seaglass Holdings Ltd (Seaglass) seeks judgment against the defendants, husband and wife, Andrew and Adrienne Giacon (together, the Giacons) for what Seaglass says are arrears of rent and outgoings pursuant to the Giacons’ guarantees of performance of a lease between Seaglass, as lessor, and the Giacons’ (now liquidated) company Terrazzo & Stoneworks NZ Ltd (Terrazzo), as lessee.

[2] The Giacons say that no arrears are owing. They raise a number of affirmative defences and a counterclaim.

Background

[3] As will become apparent from this summary of the background and later discussion, commercial and family interests became intertwined.

[4]I will start by identifying the individuals involved and their companies.

[5] Wayne Young1 is described by his son Gary Young as an experienced businessman and property investor. Wayne was a licensed real estate agent and was the principal of a real estate company which sold hotels. As a property investor Wayne owned a large number of hotels over the years through his various companies. Wayne died suddenly on 19 December 2014.

[6] Gary and his sister Cherie Hancock are the children of Wayne’s first marriage to Patricia.

[7] Wayne met Lorraine Hill2 in 1973 and they commenced a relationship. In 1974 Lorraine moved to Russell (where Wayne lived) and the two began living together. Lorraine had two young children, Adrienne (now Mrs Giacon) and Steven (Hill). Mrs Giacon was aged eight at the time. The two children lived with their mother and Wayne and…

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: [2023] NZHC 3552
Decision Date: 7 December 2023

CaseChat Overview and Summary

Seaglass Holdings Limited initiated legal proceedings against Andrew and Adrienne Giacon, who had guaranteed the obligations of their company, Terrazzo & Stoneworks NZ Ltd, under a lease agreement for a factory in Swanson. Seaglass claimed that Terrazzo was in arrears for rent and outgoings upon the lease's conclusion. The Giacons denied these claims and raised several defences, including statute-barred debts, alleged variations to the lease terms, and estoppel. They also filed a counterclaim seeking a declaration regarding an option to purchase and a right of first refusal for the property. The court had to decide on the amount of the debt and interest, the applicability of the Limitation Act, the validity of alleged lease variations, and the estoppel claim. The Giacons' counterclaim sought clarification on their rights under a codicil to Wayne Young's will and an assignment agreement.

The court found that Seaglass's calculations regarding the debt were reliable, despite the Giacons' arguments about inconsistencies and the lack of underlying records. The court also determined that Seaglass's claim for amounts due prior to May 2016 was statute-barred under the Limitation Act. Regarding the lease variations, the court concluded that there was no valid variation regarding outgoings for the specified period, and any agreement was merely a temporary deferral. The estoppel claim was rejected as the requirements for estoppel were not met. The Giacons' counterclaim was successful, and the court declared that they held an option to purchase and a right of first refusal for the property under specific terms. Costs were reserved for further consideration by the parties.

Orders