Stylo Medical Services Ltd v Hum Hospitality Ltd

[2021] NZHC 772

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-365

[2021] NZHC 772

UNDER

s 244 Property Law Act 2007

IN THE MATTER

of an application for cancellation of Deed of Lease dated 22 January 2011 and possession

BETWEEN

STYLO MEDICAL SERVICES LTD

Applicant

AND

HUM HOSPITALITY LTD

Respondent

Hearing:	12 April 2021
Counsel:	R O Parmenter for Applicant M A Powell for Respondent
Judgment:	13 April 2021

JUDGMENT OF BREWER J

This judgment was delivered by me on 13 April 2021 at 12 noon pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Winston Wang & Associates (Auckland) for Applicant Bell Gully (Auckland) for Respondent

STYLO MEDICAL SERVICES LTD v HUM HOSPITALITY LTD [2021] NZHC 772 [13 April 2021]

[1]                 The respondent (“Hum”) has filed an application in the Court of Appeal for extension of time to appeal my Judgment of 11 November 2020.1 Hum has filed in this Court an application to stay enforcement of the orders I made on 11 February 2021 regarding the cancellation of the lease and the granting of possession of the premises to the applicant (“Stylo”),2 pending determination of any appeal.

[2]                 This is the latest stay application. The previous applications have been refused. I will decide this application on the basis it raises fresh points not previously determined against Hum. Mr Parmenter, for Stylo, accepts that I have jurisdiction.

[3]                 By memorandum of 11 April 2021, Mr Parmenter recognises that it is inevitable I will order a stay. If I do not, and Stylo exercises its right to gain possession, then any appeal by Hum would be rendered nugatory and Hum’s position would be damaged irrevocably. The contest between the parties at the hearing on 12 April 2021 was over the conditions which should attach to the stay.

[4]                 As I said to the parties at the hearing, I will grant a stay which will permit Hum to retain possession of the premises pending the determination by the Court of Appeal of Hum’s application for extension of time to appeal. If the application is granted, it will be up to the Court of Appeal to decide whether the stay should continue and, if so, on what terms.

[5]                 Fairness dictates that the granting of the stay not be at Stylo’s expense. Presently, the lease is cancelled and Stylo is entitled to possession of the premises. I have a discretion as to whether I grant a stay, and as to the terms on which I grant it.  I will make the grant of stay conditional on Hum making the payments which it would be obliged to do, under my Judgment, if the lease were still in force. If I do not, Hum might simply continue to occupy the premises without paying Stylo anything. Hum does not have a record of making rent payments on time.

[6]                 Mr Powell for Hum submitted that if a condition is imposed then any breach by Hum should not result in the lifting of the stay unless the breach endured for

1      Stylo Medical Services Ltd v Hum Hospitality Ltd [2020] NZHC 2969.

2      Stylo Medical Services Ltd v Hum Hospitality Ltd HC Auckland CIV-2019-404-365, 11 February 2021 (Minute).

30 working days. This is the period, he submits, currently provided under the Property Law Act 2007. However, I am not concerned with the Property Law Act because I am simply stipulating a condition to the exercise of my discretion to grant a stay. In my Judgment I stipulated a period of 10 working days for the remedying of any default. For consistency, I will adopt that period now.

[7]                 Hum also seeks a stay of enforcement of a statutory demand which requires payment of the two previous costs orders I made. Mr Powell, before me, abandoned the application in respect of the costs award of $3,396 on the previous application for a stay. However, he submits I should stay the statutory demand insofar as it relates to

$24,430.87, being the costs awarded to Stylo for the proceeding culminating in my Judgment.

[8]                 I have decided not to stay enforcement of the statutory demand. It is open to Hum to oppose enforcement on the basis there is a substantial dispute as evidenced by the application for an extension of time to appeal my Judgment.

Orders

[9]                 I order that enforcement of Stylo’s right to possession of the premises be stayed pending the Court of Appeal’s decision on Hum’s application for an extension of time to appeal my Judgment of 11 November 2020. The stay shall lapse if the Court of Appeal refuses the application. If the Court of Appeal grants the application then it will be for the Court of Appeal to decide whether there should be a further stay, and the stay I have ordered will end upon the date the Court of Appeal delivers its decision on that matter.

[10]              I direct that the stay is conditional on Hum making payments to Stylo as follows:

(a)The sum of $11,500 (including GST) on the first of every month (the due date for rental, were the lease in existence).

(b)The payment of $11,500 (including GST) for the “rental” which would have been payable on  1 April  2021,  by  5 pm  Wednesday 21 April 2021.

(c)The payment of the rates bill  for  $2,484.83  by 5  pm Wednesday  21 April 2021.

(d)The payment of the outstanding water rates account of $4,343.98 by 5 pm Wednesday 21 April 2021.

(e)Payment of any future Stylo invoices for rates within five working days of delivery by email to Hum.

[11]              If Hum defaults on any of the above payments, and the default continues for 10 working days, then the stay will cease to have effect without further application by Stylo.

Brewer J