Shanks v Media 1 Ltd - [2008] NZCA 77

IN THE COURT OF APPEAL OF NEW ZEALAND
CA495/07
[2008] NZCA 77

BETWEENN W SHANKS & WILSON MCKAY TRUSTEE CO LIMITED AS TRUSTEES OF THE SHANKS FAMILY TRUST AND R J BRADY & WILSON MCKAY TRUSTEE CO LIMITED AS TRUSTEES OF THE BRADY FAMILY TRUST

Appellants

ANDMEDIA 1 LIMITED

Respondent

Hearing:12 March 2008

Court:Chambers, John Hansen and Heath JJ
Counsel:M G Ring QC and P R Rzepecky for Appellants

M A Gilbert and P A Paterson for Respondent

Judgment:8 April 2008 at 3.30 pm

JUDGMENT OF THE COURT

A The appeal is allowed.
BThe declaration made in the High Court is quashed and, in its place, a declaration is made that the lease dated 25 July 2005 was validly terminated.
CAny costs order in the High Court is quashed. An order is made that the respondent must pay in respect of the appellants’ costs in the High Court the appellants’ reasonable costs calculated in accordance with clause 21.2 of the lease.
DAn order is made that the respondent must pay in respect of the appellants’ costs in this Court the appellants’ reasonable costs calculated in accordance with clause 21.2 of the lease.

E        Liberty to apply to this Court in respect of any costs dispute.
REASONS OF THE COURT
(Given by John Hansen J)
[1]       In a reserved decision dated 11 September 2007 Lang J declared that the appellant trustees had not validly terminated a lease dated 25 July 2005 in respect of two billboard sites situated at 112 Newton Road, Auckland: Media 1 Ltd v Shanks & Others HC AK CIV 2007-404-4648. The trustees appeal.
Background
[2]       By deed of lease dated 25 July 2005, Mr A J Davies leased to Honk Limited two billboard sites at an annual rental of $42,500. For present purposes it is enough to say that ultimately the trustees became lessors and Media 1 the lessee.
[3]       At the beginning of July 2007 Media 1 owed arrears of rent totalling $4635.33. On 3 July 2007 the trustees’ solicitor wrote to Media 1 making demands in the following terms:
RE LEASE 112 NEWTON RD
Notification of the rent review was made by fax and post on 30 April 2007.
Despite several phone calls you have not responded to our client.
We have been instructed by your Landlord to recover the outstanding rental, legal costs plus executed Deed Fixing Rental sent to you on 7^th June 2007.
The sum outstanding totals $4635.33 made as per the attached statement.
If we have not received payment for this sum by 5pm 4^th July 2007 our client intends to terminate the lease pursuant to its rights.

[4] The trustees heard nothing from Media 1, and on 17 July 2007 their solicitor wrote in the following terms:
RE LEASE 112 NEWTON RD
We refer to our letter of 3 July to which we have had no response.
Accordingly we now formally advise that the Lease is terminated.
This is without prejudice to our client’s rights under the lease…

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 Shanks v Media 1 Ltd

Details

AGLC: Shanks v Media 1 Ltd [2008] NZCA 77
Case: [2008] NZCA 77
Decision Date: 8 April 2008

CaseChat Overview and Summary

In this case, the appellants, trustees of two family trusts, were the lessors of two billboard sites located at 112 Newton Road, Auckland. The respondent, Media 1 Limited, was the lessee of these sites. The dispute arose when the appellants sought to terminate the lease due to the respondent's failure to pay outstanding rent. The appellants maintained that they had validly terminated the lease, while the respondent argued that the termination was invalid. The High Court initially found in favour of the respondent, but the appellants appealed this decision.

The primary legal issue before the Court of Appeal was whether the notice of termination sent by the appellants to the respondent was clear and unambiguous. The Court had to determine if the notice satisfied the legal requirements for a valid termination of the lease, specifically if it complied with clause 10.1 of the lease, which required 12 days' written notice before termination could occur. The appellants argued that the notice was clear and unambiguous, while the respondent contended that the notice could be interpreted in multiple ways, rendering it ambiguous.

The Court of Appeal held that the notice of termination was indeed clear and unambiguous when viewed in its context and in accordance with the terms of the lease. The Court found that the notice explicitly stated the conditions for termination and the consequences of non-compliance, which was consistent with the lease's requirements. The Court rejected the respondent's contention that the notice could be interpreted in multiple ways, stating that the notice must be read objectively and in the context of the lease agreement. The Court concluded that the appellants had validly terminated the lease, and thus, the appeal was allowed. The declaration made by the High Court was quashed, and a new declaration was made that the lease had been validly terminated. The Court also ordered that the respondent pay the appellants' costs in both the High Court and the Court of Appeal, as stipulated in clause 21.2 of the lease. The Court reserved the right to consider any disputes over the quantum of costs if the parties could not agree on them.

Orders