Stills v McCormack
[2025] NZHC 2023
•22 July 2025
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2024-409-463
[2025] NZHC 2023
BETWEEN ANDREW EDWARD STILLS and MICHAEL FRANCIS STILLS and JULIAN DOUGLAS STILLS
Appellants
AND
ROBERT JAMES LOUIS MCCORMACK and ELIZABETH ROBYN MCCORMACK
Respondents
Hearing: 12 June 2025 Appearances:
G K Riach for Appellants
H A Evans and C S H Hillman for Respondent
Judgment:
22 July 2025
JUDGMENT OF OSBORNE J
Introduction
[1] The appellants, Andrew Stills, Michael Stills and Julian Stills (the Stills) appeal a summary judgment granted by the District Court whereby the Stills were ordered to give up possession of a property and judgment was entered for the plaintiffs in the sum of $60,450 (together with interest) (the Judgment).1
The Property
[2] The Judgment was obtained by Robert and Elizabeth McCormack (the McCormacks), as the owners of a property at 36D Lukes Road, Little Akaloa (the Property). The McCormacks had purchased the Property from Church Property
1 McCormack v Stills [2024] NZDC 18576 [Judgment].
STILLS v MCCORMACK [2025] NZHC 2023 [22 July 2025]
Trustees (CPT), entering the purchase agreement on 11 November 2021 and settling the purchase on 1 February 2022. The McCormacks’ registration of the title was delayed as Andrew Stills lodged a caveat against the Property’s title on 20 December 2021, leading to a proceeding in this Court in 2023 and ultimately a judgment of this Court setting aside Andrew Stills’ caveat (the Caveat Judgment).2
[3] The Property, when purchased by the McCormacks, was subject to a lease in favour of the Stills (the Lease). Members of the Stills’ family had been the lessees since 1975, periodically exercising rights of renewal. The right of renewal, in favour of the Stills, was exercised with effect from 1 April 2001 for a term of 21 years, with that term to expire on 31 March 2022.
[4] On 13 October 2021, the Stills gave CPT notice they intended to renew the Lease. It is common ground in the pleadings filed by the parties that the Stills, at that date, were in default of the terms of the Lease by reason of non-payment of rent.
[5] Before the Property was transferred to the McCormacks, Andrew Stills asserted the Stills had a first right to purchase the Property in the event of a sale, an argument ultimately rejected in August 2023 by the Caveat Judgment. The Stills, as Andrew Stills recorded in an affidavit filed in the District Court in November 2022, do not recognise the McCormacks as the owners and lessors of the Property “because they are not”.
[6] On 28 March 2022, being three days before the expiry of the term of the Lease, the McCormacks by their solicitors, Young Hunter, wrote to the Stills (the YH letter). The YH letter acknowledged that written notice to renew the Lease had been given in October 2021. A registered valuation was attached for the purposes of the rental to be paid under the renewed Lease (Colliers’ Valuation). The YH letter referred to alleged, existing breaches of the Lease, but recorded the solicitors understood all of the required rental had been paid and on time. The YH letter set out the conditions upon which the McCormacks offered a renewal of the Lease to the Stills including rectification of allegedly non-compliant structures (the cost put at $306,000 including GST) and agreement to the new rental in accordance with the Colliers’ Valuation.
2 Stills v McCormack [2023] NZHC 2224 [Caveat Judgment].
[7]The Stills did not engage with the YH letter.
[8] The term of the Lease expired on 31 March 2022. Contrary to the understanding recorded in the YH letter, there were the (since admitted) arrears of rent which remained unpaid through to the expiry of the Lease. The Stills subsequently on 18 May 2022 made payment to CPT of the arrears of rent including those that had been outstanding when the Stills gave their notice to renew the Lease.
[9] The Stills remained in occupation of the Property through 2022 and 2023 as the caveat-lapsing procedures and proceedings took place. The McCormacks were able ultimately (in August 2023) to become the registered owners of the Property.
[10] In the meantime, the McCormacks, in August 2022, commenced their District Court proceeding, applying at the same time for summary judgment. In the form the McCormacks’ claim came before the Judge at the summary judgment hearing (the first amended statement of claim) the McCormacks sought an order for possession of the Property and judgment for the sum of $60,450 representing loss allegedly suffered through the Stills’ trespass since 1 April 2022. The claim was heard in July 2024 and the Judgment issued in August 2024.3
[11] In the period before the District Court hearing the McCormacks, out of abundant caution, served upon the Stills in June 2024 a notice under s 245 of the Property Law Act 2007 (PLA Notice). The notice recorded the McCormacks, as lessor, did not accept the Lease had been validly renewed or that there was currently a Lease of the Property in place, but were issuing the notice in the event a Court found the Lease was validly renewed. The PLA Notice then identified the sum demanded as
$60,510 (including GST). Andrew Stills filed an application (initially without notice) for relief against cancellation of the Lease.
Terms of the Lease
[12]The term of the Lease was to expire on 31 March 2022.
3 Judgment, above n 1.
[13]Clause 16 of Schedule B to the Lease provided a right of renewal:
… in the event of the Lessee giving to the Lessor … notice in writing of the desire of the Lessee to take a new lease for a further term as hereinafter mentioned and of the Lessee duly and punctually paying the rent hereby reserved and well and faithfully observing and performing the covenants and conditions on the part of the Lessee contained and implied herein up to the expiration of this demise …
[14]Clause 16 provided for the rent to then be fixed:
… by valuation of the land only without regarding the value of any buildings or improvements thereon in the manner appearing in the next clause hereof but if no such notice be given then in the event of the Lessee giving to the Lessor not earlier than six calendar months nor later than three calendar months prior to the expiration of this demise notice in writing of his desire that a new lease for a further term of Twenty-One (21) years shall be put to public auction as hereinafter mentioned and of the Lessee duly, punctually and faithfully paying, observing and performing the rent hereby reserved and the covenants and conditions on the part of the Lessee herein contained and implied up to the expiration of this demise then the Lessor shall and will put up to public auction at the upset price of the annual value of the land only hereby demised (to be fixed by valuation as aforesaid) without regarding the value of any buildings or improvements thereon a new lease of the hereby demised premises for a further term of Twenty-One (21) years … subject to a condition that in the event of any person other than the Lessee becoming entitled to a new lease then such person shall before being let into possession pay to the Lessee the whole of the then value of such buildings and improvements whether erected or made by the Lessee or any former Lessee
…
[15]Clause 17 provided for the fixing of the rent for a new Lease:
17. THE valuation for the fixing of the rent for a new lease of Twenty-one
(21) years as mentioned in the preceding clause hereof shall be made by a valuer appointed by the Lessor if the valuation so made shall be accepted by the Lessee and in the event of such valuation not being accepted by the Lessee then by two disinterested persons as arbitrators one of whom shall be appointed by the Lessor and the other by the Lessee or an umpire appointed by such arbitrators in writing before entering upon the business of the reference and a valuation shall be made at the same time and in like manner of the buildings and improvements on the said demised land and such reference and the award made thereunder shall have all the incidents and consequences of an arbitration and award under “The Arbitration Act 1908” and any statutory modification or re-enactment statutory modification or re- enactment thereof for the time being subsisting.
[16] Accordingly, the Lease recognised the “Lessee” as the owner of “any buildings or improvements thereon”. Counsel have referred me to the record of submissions at the District Court hearing in which it was recognised the McCormacks, as and when
they enter into possession, are to pay to the Stills the value of such buildings and improvements as erected by the current or former lessees.
The issues in the District Court
[17]The McCormacks’ relevant pleading is their amended statement of claim.
[18] The McCormacks pleaded two causes of action. First, they pleaded the Lease had lapsed on 1 April 2022, through the Stills being in default under the Lease for non- payment of rent at the date their notice of renewal was given. The McCormacks sued in trespass and sought an order for possession of the Property and judgment for
$60,450 representing mesne profits.4 Secondly, and in the alternative, they sued for breach of Lease should the Court determine the Lease had been validly renewed (which the McCormacks denied) and sought the same relief as under the first cause of action.
[19] By their amended application for summary judgment, the McCormacks sought judgment on the basis of the claims in their amended statement of claim.
[20] The Stills filed opposition to the summary judgment application. As summarised by the Judge, their grounds of opposition included that:5
(a)the McCormacks are not the registered owners of the Property;
(b)any sale of the Property required the Anglican church and CPT to act in accordance with the Anglican (Diocese of Christchurch) Church Property Trust Act 2003 and they have not done so;
(c)under the Anglican (Diocese of Christchurch) Church Property Act 2003, the Anglican church and CPT were required to comply with ecclesiastic and canon law as well as common law; and
(d)the McCormacks and their lawyers, and CPT and their lawyers, “have colluded together to deceive and defraud the Stills family of their access to their five-decade-long house and home and interest in and on the land-only-property, and of their equity in it”.
4 Where the tenant has remained in premises upon the expiry of their legal right of occupation, the landlord may recover as mesne profits the value of the premises to the tenant for the period of the tenant’s wrongful occupation: Halsbury’s Laws of England (2022, online ed) vol 62(7) Landlord and Tenant at [302].
5 Judgment, above n 1, at [25].
[21] Andrew Stills, on behalf of the defendants, elected (although not required) to file a statement of defence (subsequently amended). The Judge summarised the Stills’ defence as follows:6
[20] In essence, the Stills say that in 1990 CPT and the McCormacks colluded to remove a right of way access on neighbouring land in favour of the Property as the benefitted land (as well as a water easement) which ultimately gave the McCormacks control of the Stills’ access and water to the Property.
[21] The Stills also deny that the McCormacks are the legitimate lessors of the Property.
[22] The Stills also say that the valuation the McCormacks obtained did not take into account that CPT removed the right of way to the leased land.
[23] In addition, the Stills say that if the McCormacks are the legitimate lessors of the Property, in 2023 they breached their legal obligations by trespassing onto the Property and chopping down trees and hedges.
[22] Andrew Stills pleaded the Colliers’ Valuation was “corrupt or grossly negligent”. In his November 2022 affidavit, Andrew Stills stated the valuation “corruptly or negligently omits” reference to the provision in cl 16 of the Lease as to the value of buildings and improvements (above at [16]).
[23] The Stills included at the end of their statement of defence a set of prayers for relief which, as summarised by the Judge, were:7
(a)the McCormacks’ demand for rent be struck out;
(b)damages of $60,000.00 for replacement of trees and other damage;
(c)exemplary damages of $90,000.00 or such other sum that seems just for “fraudulent conduct, and criminal cartel-rigged “bidding” terms, abuse of the justice system, and for harm for the over 4 years of this bullying conduct”;
(d)an order for possession of the fee-simple under their house for which they say that they have acquired the occupancy rights through to 2099 by the renewed and renewable lease; and
(e)costs.
6 Judgment, above n 1.
7 Judgment, above n 1, at [24].
[24] Although by their nature the prayers for relief would be connected with a counterclaim, the document filed by Andrew Stills was not identified as a counterclaim. And subsequently, Mr Stills deposed the defendants were not counterclaiming. Accordingly, the prayers for relief did not call for consideration.
[25] In my view, the Judge’s summary of pleadings and of the summary judgment application and opposition clearly identified the key issues. What the Judge’s summary arguably did not reflect was the full extent to which the Stills had made allegations in the nature of fraudulent or unethical behaviour on the part of the McCormacks and people associated with them. Those allegations included that the McCormacks had engaged in “colluded fraud, …with CPT personnel”; the Colliers’ Valuation had “corruptly or negligently” omitted details of the Lease; “corrupt documentation” had been provided to Land Information New Zealand; there had been collusion between the McCormacks, their lawyers, CPT personnel and their lawyers, to defraud the Akaroa Parish of the right of way enjoyed by the Property over neighbouring lots; the McCormacks had engaged in “Lies, Deceit, Extortion, Threats, Bribes, Bullying and Intimidation with Imbalance of Power and Wealth to Pervert the Court System”; and the McCormacks, their lawyers, CPT personnel and their lawyers had “Colluded to Design Terms of Sale to Cheat the Stills”. As I will come to, all such obligations on Andrew Stills’ part were based at best on unsustainable inferences he was seeking to draw from background facts.
The Judgment
[26] The Judge identified the summary judgment jurisdiction under r 12.2 District Court 2014. He referred to the well-settled principles relating to the exercise of the jurisdiction.8
[27] The Judge then referred to the relevant terms of the Lease. He summarised the submissions made by Mr Evans for the McCormacks and by Mr Stills on behalf of the defendants.
8 Krukziener v Hanover Finance Ltd [2008] NZCA 187; [2010] NZAR 307 at [26]; and Gidden v IAG New Zealand Limited [2016] NZHC 948 at [60]–[61].
[28] The Judge accepted Mr Evans’ submission that the numerous allegations made by the Stills in opposition and in defence did not answer the trespass cause of action. Under the Lease, rent was payable without demand. The Stills had admitted that at the date (13 October 2021) they gave notice to renew the Lease they were in default of their obligation to pay rent. There was accordingly no automatic renewal and the Lease was not renewed. There was no lease in favour of the Stills after 31 March 2022.
[29] The McCormacks, upon becoming the registered proprietors of the property, were entitled to re-enter the Property.
[30] The Judge considered the various allegations made by the Stills. Andrew Stills had given evidence of an arrangement between CPT and the Stills whereby CPT would issue invoices and the Stills would make payment. He referred to invoices having gone astray through inappropriate addressing. The fact remained that, whatever custom or arrangement may have existed as to the issuing of invoices, the Stills acknowledged they were in arrears at the material time.
[31] Because the Stills had replied to the McCormacks’ alternative cause of action for rent under a new Lease, the Judge also discussed the arguments on that issue. He found that, because the Stills had not responded to the Colliers’ Valuation, it followed from the terms of the Lease that the new rent was fixed at the Colliers’ Valuation figure. I interpolate this conclusion was in error as cl 17 of the Lease (above at [15]) provided for the Lessor’s valuation figure to become the fixed rent only if it was “accepted by the Lessee”. It is common ground it was not so accepted.
[32] The Judge noted the Stills’ dual explanation for not having paid any rent since 1 April 2022, namely they did not recognise the McCormacks as the Lessor of the Property and, alternatively, on the Stills’ analysis of valuation issues, the rent ought to be “zero.”
[33] The Judge rejected both of those explanations as not credible, first because the Caveat Judgment established the Stills did not have an arguable case for a caveatable
interest in the Property and the McCormacks were the registered proprietors; and secondly because the Stills had not disputed the Colliers’ Valuation.
[34] The Judge then noted Mr Stills at the hearing had submitted the Stills’ defence is one of fraud. The Judge referred to the heavy duty that rests on those who allege fraud as reflected in the Court of Appeal’s explanation in Schmidt v Pepper New Zealand (Custodians) Ltd (Schmidt):9
Allegations of fraud or dishonesty are very serious. They must be pleaded with care and particularity. As the authors of Bullen & Leake & Jacobs Precedents of Pleadings emphasise, counsel must not draft any originating process or pleading containing an allegation of fraud unless they have reasonably credible material which, as it stands, establishes a prima facie case of fraud — that is, material of such a character which would lead to the conclusion that serious allegations could properly be based upon it. Fraud cannot be left to be inferred from the facts — fraudulent conduct must be distinctly alleged and as distinctly proved. General allegations, however strong the words may be appear to be, are insufficient to amount to a proper allegation of fraud.
[35] The Judge also cited the judgment of the Supreme Court in Commissioner of Inland Revenue v Redcliffe Forestry Venture Ltd where the Court said, in relation to a party’s claim of fraud, that it “must be one that is fully and precisely pleaded and particularised and of sufficient apparent cogency that it should go to trial”.10 There must be an evidential foundation amounting to a prima facie case of fraud.11
[36] As the Stills’ central proposition of fraud was there had been some fraudulent collusion between the McCormacks and CPT around 1990, the Judge directly addressed that issue:12
Insofar as the Stills consider that they lost their right of way in 1990 as the result of some sort of dishonestly between CPT and the McCormacks, or that the sale was somehow the result of collusion between the McCormacks and CPT, the evidence is insufficient to support that. I am not satisfied that the Stills have presented reasonably credible material of such character so as to establish a prima facie case of fraud involving the McCormacks.
9 Schmidt v Pepper New Zealand (Custodians) Ltd [2012] NZCA 565 [Schmidt] at [15] (footnotes omitted).
10 Commissioner of Inland Revenue v Redcliffe Forestry Venture Ltd [2012] NZSC 94 [2013] 1 NZLR 804 at [33].
11 At [33].
12 Judgment, above n 1, at [69].
[37] As the issue of the right of way was the central focus of Mr Stills’ submissions, the Judge concluded this affirmative defence of fraud had not been made out and that the Stills had no defence to the McCormacks’ claim in debt.
Grounds of appeal
[38] As the Stills’ grounds of appeal were extensive, covering a range of matters, I will reproduce them verbatim before considering the grounds under headings I consider most helpful for discussion:
(a)The learned Judge incorrectly held that the Appellants did not have an arguable defence to the Respondents’ claim;
(b)The learned Judge incorrectly applied the principles applicable to summary judgment applications by:
(i)Failing to have regard to evidence which proved that the Appellants had an arguable defence which ought to be heard at a full trial;
(ii)Failing to have due regard to the positive allegations in the Appellants’ Statement of Defence which had not been replied to by the Respondents and therefore, pursuant to District Court Rule 5.65(2), were at the hearing to be treated as admitted.
(iii)Rejecting, at the summary judgment stage, without due regard to the evidence, the defence of the Appellants as to fraud (equitable or actual) that accompanied the purchase by the Respondents of the land at 36D Lukes Road, Little Akaloa which was the subject of at registered Lease in favour of the Appellants and which, if proven would affect the Respondent’s status as registered proprietors of the land;
(iv)Rejecting, at the summary judgment stage without due regard to the evidence, the defence of the Appellants that the valuation upon which the rent sought by the Respondents was based, was invalid and incorrect as it did not properly take into account:
(1)the fact that the property had had its only practical access, which had been protected by a legal right of way and a water easement, removed from the fee simple and leasehold titles by the prior owners without knowledge of the Appellants as lessees.
(2)The fact that the dwelling and associated infrastructure had been purchased and further improved by the Appellants (who retained a legal and/or equitable interest in those improvements and
any incoming lessee would, pursuant to the lease or otherwise, be required to purchase these improvements from the Appellants).
(v)Wrongly holding that the lease had not been validly renewed by the Appellants in circumstances where:
(1)The Appellants had given written notice of their intention to renew which had been confirmed as accepted by the prior owners of the property, without at that time advising of any arrears;
(2)The prior owners had, contrary to their normal (and requested) practice over many years, directed their 6- monthly invoice for rental by email to a different Appellant than normal who has the onset of dementia and did not see it;
(3)Upon learning of the omission, the Appellants immediately paid the arrears (having already paid a later 6-monthly invoice) and this rent was accepted by the Lessors, thereby affirming the lease;
(4)The Appellants were not in default of the lease at the time the renewal took effect;
(5)The Respondents as new lessors (assuming that to be their legal status) in their solicitor’s letter dated 28 March 2022 acknowledged the previous written notice of renewal by the Appellants and its acceptance by the previous owners and offered to honour that renewal of the lease but only on conditions, inter alia, that the Respondents’ new rental level be accepted unconditionally and that the Appellants carry out repairs to their fully consented and certified code compliant dwelling costed by the Respondent’s agents at $306,000.
(vi)Denying the Appellants the opportunity to support their defences and positive allegations with documents obtained by discovery which would have been available in the normal course if the matter had proceeded by ordinary action.
(c)The learned Judge failed to deal with or decide the application by the Appellants for relief against cancellation that had been directed to be considered by the Judge at the summary judgment hearing as to whether or not it should be determined then. That application was subsequently (and wrongly) dismissed by the Registrar, such dismissal being communicated to the Appellants by email dated 23 August 2024.
(d)To allow the summary judgment to stand would amount to a substantial miscarriage of justice.
The pleading issue
[39] The McCormacks did not file a reply to positive allegations contained in the Stills’ statement of defence. The Stills therefore asserted, pursuant to r 5.65(2) District Court Rules, their positive allegations were to be treated as admitted for the purposes of the summary judgment hearing.
[40]Mr Riach submitted the provisions of the rule are clear and unambiguous.
[41] I accept the provisions of the rule are clear as to their effect. But Mr Riach’s submission would incorrectly apply the rule in an interlocutory context to which the rule is not intended to apply.
[42] The rule exists to assist with the definition and narrowing of the issues for trial, through the exchange of pleadings.
[43] The purpose of a plaintiffs’ summary judgment application is to have the Court determine the plaintiff’s claim without the attendant costs of later interlocutory steps and preparation for trial. Hence, the lack of requirement for a statement of defence when a summary judgment application is served. Where a defendant elects to file a statement of defence, it cannot create an expectation that the plaintiff will reply at that point, as at the heart of the summary judgment procedure is efficiency and avoidance of unnecessary cost.
[44] Accordingly, the McCormacks did not, in this case, make any admissions through not filing a reply. The evidence as to the parties’ respective positions on the facts was to be taken from their application and opposition respectively, as supported (or not) by their affidavit evidence.
A fraudulent purchase of the Property?
The varying allegations of fraud
[45] As Mr Riach accurately described it in his submissions, the Stills’ statement of defence (prepared without legal input) had contained many wide-ranging positive allegations. These included allegations of covert and deliberate action on the part of
CPT in removing the Property’s right of way easement over neighbouring land when creating a new title in 1990 and subsequently, in 2003, not including the right of way in the Stills’ leasehold interest. I will refer to these together as the “alleged 1990/2003 fraud”.
[46] I note the alleged 1990/2003 fraud—relating to the removal of the right of way easement—was not identified in the Stills’ grounds of appeal where the fraud allegation (at [38(b)(iii)] above) related only to the McCormacks’ November 2021 purchase of the Property.
[47] In the Stills’ grounds of appeal, the removal of the right of way easement was relied on solely as an aspect of the ground of appeal ([38(b)(iv)] above) whereby the Stills asserted the Colliers’ Valuation was invalid and incorrect, partly because it did not take the removal of the right of way easement into account. I will refer to this as the “Colliers’ Valuation invalidity issue”.
The 1990/2003 fraud issue
[48] As this was not an issue pursued in the Stills’ grounds of appeal it does not strictly require further discussion. I refer to it because Mr Riach referred to it in his submissions on appeal briefly. He referred to correspondence in December 2019 which indicated the McCormacks were then aware the right of way easement had not been incorporated in the renewed Lease in 2003. Mr Riach submitted:
Quite how they found out about that omission has not been explained but could provide support for an inference of collusion of some nature with the CPT who were still owners and lessors of [the servient Property] at that time.
[49] The “inference of collusion of some nature” between the McCormacks and CPT at the time of CPT’s dealings with the Property was unsupported by the evidence before the District Court. The allegation did not rest on the “reasonably credible material” which the Court of Appeal identified in Schmidt (above at [34]) is required to establish a prima facie case of fraud.13
13 Schmidt, above n 9, at [15].
[50] The Judge was accordingly correct to reject as a tenable ground of defence the Stills’ central proposition of fraudulent collusion between the McCormacks and CPT in relation to the omission of the right of way easement.
The Colliers’ Valuation invalidity issue
[51] The Colliers’ Valuation invalidity issue identified in the Stills’ grounds of appeal was that the valuation did not properly take into account that:
(a)the Property, because of the removal of the right of way easement, had no practical access; and
(b)the Stills owned the dwelling and associated infrastructure, which an incoming lessee would be required to purchase.
[52] Before discussing further this ground of defence, I note it would, if successful, affect not the primary relief obtained by the McCormacks (the order for possession of the Property) but the Judge’s calculation of mesne profits at $60,450.
[53] Mr Riach responsibly did not seek to advance any submission of collusion (as pursued by the Stills in the District Court) in relation to the Colliers’ Valuation. He focused instead on the proposition that the valuation was at least arguably unreliable by failing to account for the two matters identified at [51] above.
The lack of a registered easement
[54] The evidence of current valuation adduced in the District Court was the Colliers’ Valuation produced by the McCormacks.
[55] It was common ground that the Property lacked a registered and legal enforceable right of way where there had been until 2003 such a registered easement. After recognising this, on the next page of the report, under a heading “Site Dimensions & Area” it is recorded (among other items):
Roadway Easement Access from Lukes Road Frontage Approximately 20.60 metres
Below that, under a heading “Site Features”, dealing first with “Shape” and then “Contour”, it is recorded:
Access to the project is off the right of way leading off Lukes Road over the property at 36A Lukes Road. Vehicular drive-on access to the property is not currently possible.
[56] In the Colliers’ Valuation, under a heading “Easements and Encumbrances”, the details of the term of the Lease were set out and then it was recorded:
Interestingly there is no registered easement over the adjoining property at 36A Lukes Road providing access for the subject property.
[57] In relation to the lack of a registered easement creating legal right of way, Mr Riach emphasised this apparent inconsistency within the Colliers’ Valuation through the recorded details as summarised at [51] above.
[58] This was not the alleged omission in the Colliers’ Valuation identified by Mr Stills in his affidavit as suggesting a “corrupt or negligent” omission, which expressly related to clause 16 of the Lease. That said, it was a matter identified in the Stills’ grounds of appeal and falls for consideration. The consideration must have regard to the fact the Colliers’ Valuation was the only current valuation evidence before the District Court in relation to this aspect of the case, the Stills having elected not to call valuation evidence to challenge Colliers’ assessment.
[59] Nothing on the face of the Colliers’ Valuation indicates a failure by the registered valuer, in reaching his valuation opinion, to take the absence of a registered easement into account. The valuer expressly recorded there was not a registered easement providing access for the Property. The valuer’s subsequent references to access being “off the right of way” and to “roadway easement access” have to be read alongside the express recognition that no registered easement existed.
[60] Had the Stills in the District Court advanced a defence based on the valuer’s failure to take account of the lack of a legal right of way, it would have correctly been adjudged there was no arguable defence to the McCormacks’ claim on that basis.
The purchase of buildings and improvements
[61] Under a heading “Lease Summary” the valuation set out a page of “pertinent Lease details”, including a summary of the provisions of clause 16 of the Lease (above at [14]) by which a subsequent lessee would be required to pay to the previous lessee the whole of the then value of the buildings and improvements on the Property.
[62] The Stills’ second complaint on appeal, in relation to the Colliers’ Valuation, is that it did not take into account the Stills’ rights in the buildings or improvements on the Property, pursuant to clause 16 of the Lease.
[63] The difficulty with this ground of appeal is that the Colliers’ Valuation expressly identifies as one of the “pertinent lease details” the provisions of clause 16 of the Lease. The report accurately summarises the effect of those provisions in relation to buildings and improvements.
[64] The valuer in the report expressly excluded all improvements from the ground rent valuation.
[65]Mr Riach’s succinct written submission on this issue reads as follows:
… although the valuation … refers to the ground rent valuation as excluding all improvements, nevertheless it ascribes a market rent return of 6.5% on the assessed bare land value. Quite how this return (equating to $581 per week on the assessed figures) could have been earned on the bare land (without a residence to occupy) is not explained—and again it is submitted it cannot be correct.
[66] Mr Riach’s submission, when analysed, involves an expression of his opinion. The fundamental difficulty for the Stills is they elected to call no current valuation evidence in response. A valuation obtained by the Stills from Trish Lowe Limited, dated 22 August 2018 (and produced by Mr McCormack for completeness), provided an opinion as to the market valuation of the lessee’s interest as at 24 July 2018 (showing the Property then had, in Ms Lowe’s opinion, a value significantly above the “zero” that Andrew Stills had been asserting). Responsibly, Mr Riach did not in his submissions refer to this report as being relevant. His submissions on this issue were limited to a critique of suggested flaws in the Colliers’ Valuation.
[67] In the aspect of the Judgment which I have found (above at [31]) to be flawed (the finding that the Stills had become bound by the Colliers’ Valuation through not responding to it at the time), the Judge did not engage directly with the proposition that the Colliers’ Valuation involved a “collusive or negligent” failure to consider the provisions of clause 16.
[68] It is clear, even with the benefit of Mr Riach’s more focused submissions than Andrew Stills presented in the District Court, that the Colliers’ Valuation did not fail to take account of the provisions of clause 16. The Stills provided no evidential basis upon which the Judge would have been able to find the Colliers’ Valuation assessed a valuation which is arguably incorrect. There was simply no evidential basis for that contention.
The non-renewal of the Lease
[69] Given the Stills’ admission through their pleadings, Mr Riach did not pursue the ground of appeal suggesting the Stills were not in default of the Lease at the time they gave notice of renewal.
[70] Mr Riach, in his submissions, similarly did not develop the first two aspects of the Stills’ grounds of appeal (at [38(b)(v)(1) and (2)] above) on this point. Those were that CPT as the prior owner of the Property had not advised the Stills of any arrears at the time of the notice of renewal and that CPT had sent six-monthly invoices to an allegedly incorrect addressee. Neither of those points, even assuming them to be correct, could cut across a failure by the Stills to duly and punctually pay their rent— the obligation to pay rent on due date was always upon the Stills, without demand from the lessor.
[71] In speaking to this ground of appeal, Mr Riach submitted the Stills’ failure to punctually and faithfully pay the rent was “effectively waived or, more correctly, neither the landlord nor the lessee was apparently aware of it until after the renewal date”. Mr Riach submitted the later discovery of the omission could not subsequently be called in aid by the McCormacks to say the notice of intention to renew was invalid and that the Lease could not be renewed on account of this breach. Mr Riach referred
to the fact the Stills, upon discovering there was overdue rent from 2022, made the payment to CPT (no longer the lessor) and CPT accepted the rent.
[72] Nothing in these submissions affects the fact the Stills failed to meet their rental obligations under the Lease at the time they gave their notice of renewal. This was a non-performance of lease obligations that continued to the expiry of the term of the Lease. Any lack of appreciation of that non-performance, whether on the part of the Stills, CPT, or the McCormacks, does not alter the facts of failure to make due payment and of continuing non-performance thereafter during the term of the Lease. The Stills have not pointed to any conduct on the part of the lessor (for the time being) that amounted to a knowing waiver—indeed, this was implicit in Mr Riach’s submissions when he referred to neither party being “apparently aware” of the breach.
Discovery considerations
[73] As a further ground of appeal, the Stills asserted (at [38(b)(vi)] above) that the District Court had denied them the opportunity to support their defences and positive allegations with documents obtained by discovery, which would have been available through an ordinary proceeding.
[74] In the documents filed for this appeal, the Stills did not include any formal documents relating to discovery in the District Court. It was unclear in the submissions Mr Riach filed whether discovery had formally been sought. I reserved leave to Mr Riach to clarify this following the hearing. He did so, by explaining in a Memorandum that there had indeed been a formal application. I will consider this ground on the basis the Stills made a formal application for discovery. In an “updating affidavit” filed by Andrew Stills before the summary judgment hearing, he deposed the Stills had “irrefutable evidence of … collusion between the [McCormacks] and CPT personnel and their lawyers working together” and that discovery was “important for a fair hearing and to [establish] the full extent of the collusion and dishonesty”. That was the apparent basis of the Stills’ discovery application.
[75] It appears the District Court Judge, when the summary judgment and interlocutory application came before him, either was unaware of the undetermined
interlocutory application or considered it appropriate to deal with the summary judgment application first.
[76] Mr Riach did not particularly develop submissions in relation to the discovery ground of appeal, other than to submit discovery might have “elucidated” the Stills’ allegation that the Stills’ failure to make due payment of rent had been waived. I observe that possibility was not the basis upon which Andrew Stills had in his affidavit (above at [74]) explained the reason for seeking discovery.
[77] I do not consider any error has been identified through the District Court not determining the discovery application in the context of the hearing of the McCormacks’ summary judgment application. The discouragement of discovery in a summary judgment context is well-settled and for good reason.14 At the summary judgment hearing, the Judge was well-placed to consider whether there was any realistic line of defence on any of the numerous matters raised by the Stills, including Andrew Stills’ proposition that discovery would be important to establishing his allegation of “collusion and dishonesty”. The Stills had not provided any evidential basis to support this allegation. A fishing expedition by way of discovery could not be justified.
The Stills’ application for relief against cancellation
[78] As I have noted (above at [11]), Andrew Stills in June 2024 filed an application for relief against cancellation of the Lease. The McCormacks filed their opposition after Judge Gilbert directed the application proceed on notice. The Judge also directed that the application “be set down alongside the summary judgment application”. He recorded that it could be determined by the Judge (implicitly the Judge who heard the summary judgment application) whether or not the relief application could be heard at the same time.15
[79] Judge Kelly determined he would make a decision on the summary judgment application, with the relief application adjourned at the conclusion of the summary
14 See the commentary in Jessica Gorman and others McGechan on Procedure (online ed, Thomson Reuters) at [HR12.9.20].
15 Stills v McCormack DC Christchurch CIV-2024-009-1834, 24 June 2024 (Minute).
judgment hearing for submissions to be filed and a decision made on the papers in relation to that application.
[80] As identified in the Stills’ ground of appeal (c) (above at [38]), it transpired that, following the delivery of the Judgment on 8 August 2024, a court registry officer notified the parties on 23 August 2024 that, because summary judgment had been granted, the relief application could not continue, so had been dismissed.
[81] Mr Riach referred to the circumstances leading to the “dismissal” of the relief application. He submitted the application for relief against cancellation is still before the District Court and needs to be dealt with. Mr Riach submitted the application may properly be dealt with only after that part of the Judgment relating to “unpaid rent” has been set aside. Mr Riach submitted this is so because the McCormacks were granted an order for possession on the basis of “unpaid rent at the level the Judge wrongly concluded had been set”.
[82] There is no merit in this ground of appeal. The argument advanced by the Stills mischaracterises the basis on which an order for possession of the Property was made. It was made, not because of a failure to pay rent as such during the continuation of a Lease, but because the Stills’ right to renew the Lease never came to fruition. By reason of their failure of payment on the due date, their continued occupation of the Property was as trespassers. There was legally no failure to pay the “rent” that would have been due to the McCormacks after 1 April 2022 had the lease been renewed. The Stills’ wrong-doing involved a trespass which sounded in damages. The concept of relief against forfeiture did not arise. The belated payment of long-overdue rent to CPT relating the term of the Lease ending on 31 March 2022 could not resuscitate the Leasehold interest. The Lease had ceased to exist on the expiry of that term.
A substantial miscarriage of justice?
[83] As a catch-all, the Stills’ final ground of appeal (above at [38(d)]) was that a substantial miscarriage of justice would ensue if the Judgment were to stand. Mr Riach did not suggest this ground had a separate life of its own. It clearly depended for success on the Stills establishing one or more of their more particular grounds.
[84] I am satisfied no miscarriage of justice resulted from the entry of summary judgment.
Outcome
[85]The appeal will be dismissed.
[86]Costs must follow the event.
Result
[87]I order:
(a)the appeal is dismissed; and
(b)the appellants are to pay to the respondents the costs of the appeal (without a certificate for second counsel) together with the respondents’ reasonable disbursements to be fixed by the Registrar.
Osborne J
Solicitors:
G K Riach, Barrister, Christchurch H A Evans, Barrister, Christchurch
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