Singh v Hadford Holdings Limited

[2015] NZHC 671

IN THE HIGH COURTOF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-000614 [2015] NZHC 671

UNDER

Sections 253 and 256 Property Law Act

2007

IN THE MATTER OF

an application for relief against cancellation of a lease

BETWEEN

NAVJOT SINGH Applicant

AND

HADFORD HOLDINGS LIMITED First Respondent

SATHNESH KUMAR Second Respondent

Hearing:	1 April 2015
Appearances:	G A Keene for Applicant S Singh for Respondents
Judgment:	1 April 2015

ORAL JUDGMENT OF VENNING J

Solicitors:           Varma Legal, Auckland

Shean Singh, Auckland

Copy to:            G A Keene, Auckland

SINGH v HADFORD HOLDINGS LTD & ANOR [2015] NZHC 671 [1 April 2015]

Introduction

[1]      The matter before the Court this afternoon is an application by Mr Singh for interim orders:

(a)      restoring him to possession of premises at 266 Great South Road, Papatoetoe, immediately;  or

(b)alternatively an order that the first and second respondents refrain from putting any new tenants into possession of the premises and related orders.

[2]      The first  and  second  respondents  are Hadford  Holdings  Limited  and  Mr

Kumar, a director of that company.

Background

[3]      Mr Singh says in a meeting at around 1 December 2013 with Mr Kumar and a former tenant of the premises, Mr Kumar and he agreed that he would take over the premises as part of a new lease between Mr Kumar and himself.  He says the terms were that there would be a monthly rental of $1,126.67, inclusive GST payable monthly in advance and for a period of seven to eight years on the basis that it could carry on indefinitely thereafter.  He says there was no other discussion at the time.

[4]      Mr Singh then moved in and took possession.  He also says that during the course of the lease he carried out repairs and improvements to the property.   Mr Singh has conducted an IT business from the premises.  The rental was increased to

$1,200 per month, inclusive GST in July 2004 and in December 2014 Mr Singh says

Mr Kumar increased the rental to $1,500 per month.

[5]      On  Mr  Singh’s  evidence  problems  between  the  parties  arose  when  the February rental, which was due on 1 February, was not paid.  Mr Singh says it was available in cash but Mr Kumar declined to collect it and that on the evening of 3

February or the early hours of 4 February, his premises were broken into and the rental cash of $1,500 was stolen.  Subsequently Mr Kumar pressed for payment of

the February rental.  Mr Singh says it was paid on the evening of 2 March by bank transfer but on the same day someone acting on the instructions of Mr Kumar entered the premises and changed the locks.

[6]      Mr Singh has taken legal advice and has brought this application before the Court.   Although there is a substantive proceedings by way of an originating application for orders under the Property Law Act 2007 for relief the application to pursue this afternoon before the Court is the application for interim injunction for the orders noted above.

[7]      In response to the application Mr Kumar has sworn an affidavit.   In it he paints a very different picture to that painted by Mr Singh.  Essentially Mr Kumar’s position is that the property is owned by Hadford Holdings Limited, not him.  Mr Singh should have known Hadford was the owner of the property, Mr Singh had fallen into rental arrears previously and in fact a notice under the Property Law Act was served on him on 17 January by Mr Kumar personally at his address of 8B Hill Road, Papatoetoe.

[8]      Mr Kumar takes the view the agreement between the parties led to no more than a monthly tenancy which has been determined by notice under the Property Law Act.  Following termination and the re-entry of taking possession Hadford has entered a lease with an alternate tenant, which was due to commence on 10 March.

[9]      On receipt of that evidence Mr Singh filed an affidavit in reply.   In it he denies actually receiving the Property Law Act notice and says he has not lived at the address of 8B Hill Road, Papatoetoe for more than two years.

[10]     Mr Singh has also arranged for affidavits to be sworn by two employees.  Mr Sahnan says he recalls in September 2014 Mr Kumar collected the rental of $1,200 in cash.  Ms Kaur says that she thought in October or November, she believes late November, Mr Kumar uplifted $1,200 in cash, for rental and also a similar payment by way of cash was made in December 2014.

[11]     Ms Kaur also confirms that she has personal knowledge that Mr Singh has been living at 16 Freyberg Avenue since approximately December 2014.

[12]     The conflicts in the evidence cannot be resolved although there are aspects of the evidence of both parties that are of some concern to the Court.   Mr Singh’s evidence, for instance, attaches a copy of a bank statement showing rental payments from December 2013 to August 2014.  However the statement appears to be page one of two but the second page is not disclosed.  It is also unusual that if payments have regularly been made by way of deduction and direct payment to a bank account that the arrangement changed to cash and that that matter was not referred to in Mr Singh’s first affidavit.   I also note that the bank account, which appears to have a printout or reference date of 18 March 2015, is addressed to Mr Singh at 8B Hill Road, Papatoetoe, Auckland 2025.  I also note that in his initial affidavit Mr Singh referred to receiving an email from Mr Kumar’s solicitor on 5 March in which the solicitor claimed notice of intention to cancel the lease had been served but Mr Singh does not go on to say in that first affidavit that he did not receive any such notice. Mr Kumar has annexed a copy of the notice to his affidavit and it seems unusual or stretching the matter to suggest that the notice has been prepared solely for the purposes of today’s hearing.   If it had been prepared it seems likely that it would have been served.

[13]     However, the Court cannot resolve those factual issues today.  Approaching the matter on the basis that has been advanced, namely, as to whether an interim injunction should be granted, the issues are whether there is a seriously arguable case and the balance of convenience then, standing back and considering the overall interests of justice.

Seriously arguable case

[14]     The principal issue is what interest Mr Singh may have in the premises.

[15]     On Mr Singh’s evidence this was an oral agreement to lease.  A short term lease is provided for by s 207 of the Property Law Act and may be made orally or in writing.  However, a short term lease can only be for a period of a year or less.  A legal lease, other than a short term lease, can only be created by the registration of a

lease instrument as required by s 115 of the Land Transfer Act 1952.  An agreement to lease, other than a short term lease, is a contract for the disposition of land which must, prima facie, comply with the requirements of s 24 of the Property Law Act

2007, namely it must be in writing and signed. An exception to that of course will be where there has been part performance.  Section 26 of the Property Law Act 2007 preserves the law relating to part performance and the equitable doctrine of part performance applies to agreements to lease.

[16]     In Fleming v Beevers1  Tipping J in the Court of Appeal confirmed that the

Court would look for the following features in relation to part performance:2

1.Was  there  a  sufficient  oral  agreement  such  as  would  have  been enforceable but for … [now, s 24 of the Property Law Act 2007]?

2.Has there been part performance of that oral agreement by the doing of something which:

(a)       clearly amounts to a step in the performance of a contractual obligation or the exercise of a contractual right under the oral contract; and

(b)       when viewed independently of the oral contract was, on the probabilities, done on the footing that a contract relating to the land [consistent with that alleged] … was in existence.

3.Do the circumstances in which that part performance took place make it unconscionable …for the defendant to rely on the Act?

[17]     I apprehend Mr Keene relies on the doctrine of part performance to overcome the difficulty with the unwritten agreement to lease, which is as high as the plaintiff Mr Singh can put his claim to an interest as lessee in this case.

[18]     The difficulty that Mr Singh faces, however, is whether there was a sufficient oral  agreement  such  as  would  otherwise  have  been  enforceable  in  the  terms advanced.

[19]     Leases of land in these circumstances, even oral agreements to lease, require certainty as to a number of features, including term and parties.   On Mr Singh’s

evidence I am not satisfied that those certainties are sufficiently present.   On Mr

1      Fleming v Beevers [1994] 1 NZLR 385 (CA).

2      T A Dellaca Ltd v PDL Industries Ltd [1992] 3 NZLR 88 at 109.

Singh’s own evidence he considers that he was contracting with Mr Kumar, rather than Hadford Holdings Ltd, the registered proprietor.  More importantly, in a lease of this nature, it is not adequate or sufficient for Mr Singh to say, as he does in his affidavit, that he considered agreement had been reached for a term of seven to eight years,  and  that  on  the  basis  that  after  that  period  the  lease  would  carry  on indefinitely.  There must be certainty as to term.

[20]     Further, there are other uncertainties about the supposed provisions of the lease, including outgoings.  It is clear from the evidence that Mr Kumar and Hadford Holdings seek to claim outgoings.   Mr Singh takes the view that outgoings were included in the rental but in part justifies that on the basis that he was responsible for repairs and refers to a discussion that took place after the lease was entered in relation to that issue.

[21]     I am not satisfied on the evidence before the Court that the plaintiff Mr Singh can establish an agreement to lease for a period of at least seven years as Mr Keene argued for.  At most this is effectively a short term lease under s 210 of the Property Law Act which would be terminable on 20 working days’ notice.

Balance of convenience

[22]     It is relevant that, while the current actions of Mr Kumar and Hadford in retaking possession may not ultimately have been justified, although that cannot be confirmed conclusively today, Hadford would still be entitled to issue a 20 working day notice immediately and thereafter terminate Mr Singh’s tenancy of the premises. The injunction would achieve little.

[23]     Mr Keene properly drew the Court’s attention to the interests of third parties and in particular one of Mr Singh’s employees.  That is a consideration, but balanced equally  against  that  is  the  consideration  of  the  position  of  the  new  tenant  that Hadford has agreed to let into the premises.

[24]     A major factor when considering the balance of convenience is whether, if the injunction is granted, the applicant would be able to meet the undertaking as to damages that is required and if the injunction is not granted, whether the respondents

will be able to meet any claim for damages.    In this case, Mr Keene properly acknowledged that while the applicant Mr Singh has given an undertaking he personally has no assets to support that undertaking.  Against that, Hadford owns the property in issue and on the face of it would be able to meet any proper claim for damages that Mr Singh may have for any wrongful actions by Hadford.

Consideration

[25]     Standing back and looking at the overall interests of justice the injunction sought is not meritorious.

[26]     I am not satisfied that the applicant Mr Singh makes out his case for an interim injunction on the material before the Court.

Result

[27]     The  application  for  interim  injunction  is  dismissed  with  costs  to  the respondents on a 2B basis together with disbursements as fixed by the Registrar.

Venning J