Smith v Paros Property Trust Limited - [2022] NZCA 447

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA562/2021
[2022] NZCA 447

BETWEEN	TIMOTHY ERIC BRUCE SMITH Appellant
AND	PAROS PROPERTY TRUST LIMITED Respondent

Hearing:	23 March 2022
Court:	Goddard, Simon France and Hinton JJ
Counsel:	Appellant in person L McEntegart and A J Steel for Respondent
Judgment:	21 September 2022 at 11.00 am

JUDGMENT OF THE COURT

AThe appeal against the entry of judgment on the respondent’s claim for rent is allowed. The High Court judgment on that claim is set aside. The claim is remitted to the High Court to determine the amount of rent payable.
BThe appeal in relation to the dismissal of the appellant’s counterclaims is dismissed.
C Costs in this Court are reserved. If either party seeks costs, they may file a memorandum not exceeding five pages within 10 working days of the date of this judgment. The other party may file any memorandum in response (not exceeding five pages) within 10 working days. Costs will be determined on the papers.
DThe costs order in the High Court is set aside. Costs in the High Court will be determined by that Court in light of the outcome before this Court, and on remittal to the High Court.
EThe application for leave to adduce further evidence on appeal is declined.

____________________________________________________________________

REASONS OF THE COURT

(Given by Goddard J)

Table of contents

Para no

Introduction

The disputes between the parties
Summary of result on appeal

Background

The property and the lease
The parties
The 2018 rent review and the attempt to freehold – an overview
Declaration proceedings
Rent review notice re-issued

The current proceedings

High Court judgment

The appeal

Issue 1: Interpretation of cl 23 of the lease

The issue
High Court judgment
Submissions of Mr Smith on appeal

Analysis

Issue 2: Was the cl 23 process varied by agreement?

The issue
High Court judgment
Submissions of Mr Smith on appeal

Analysis

Issue 3: Was the lease validly cancelled?

The issue
High Court judgment
Submissions of Mr Smith on appeal

Analysis

Issue 4: Rent payable under the lease

The issue
High Court judgment
Submissions of Mr Smith on appeal
Submissions of Paros
Further submissions following the hearing

Analysis
Rent review notice a breach or repudiation?

Application to adduce further evidence

Costs

Result

Introduction

The disputes between the parties

Mr Smith, the appellant, lives in a townhouse at 54 Napier Street, Freemans Bay in Auckland (the property). The respondent, Paros Property Trust Ltd (Paros), owns the fee simple title to the property. In August 2015, Mr Smith and his former partner Ms Toni Shaw purchased the leasehold interest in the property (the lease).
In 2018 Mr Smith sought to exercise a right under the lease of the property to acquire the freehold. He considered that he had given a valid notice to trigger the freeholding process set out in cl 23 of the lease. Paros disagreed. Each party was firmly persuaded of the correctness of its position.
Mr Smith says…

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] NZCA 447
Decision Date: 21 September 2022 at 11.00 am

CaseChat Overview and Summary

Timothy Smith appeals against a decision of the High Court of New Zealand which held that the lease under which he held a property in Freemans Bay, Auckland, remained valid, and that he was liable to pay rent in accordance with a rent review notice given by the respondent Paros Property Trust Ltd. Mr Smith argues that Paros' conduct in relation to a freehold process set out in cl 23 of the lease amounted to a breach of the lease which entitled him to cancel the lease. He also argues that the rent review notice was not valid and that he is therefore liable to pay only the rent that was payable prior to the review. The appeal is allowed in part. The appeal court holds that the lease remains valid and that Paros did not breach the lease by giving the rent review notice. However, the appeal court finds that the process set out in the rent review notice was not valid, and that the amount of rent payable remains at the level that applied prior to the review. The parties will return to the High Court to determine the amount of rent payable under the lease. The appeal court dismisses Mr Smith's counterclaim that the lease had been cancelled, and declines an application to adduce further evidence.

Orders