Tiniroto Trust Company Limited v Best Choice Limited

[2022] NZHC 827

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-201

[2022] NZHC 827

BETWEEN

TINIROTO TRUST COMPANY LIMITED

being the trustee of the TINIROTO TRUST Plaintiff

AND

BEST CHOICE LIMITED

First Defendant

JINGLI DONG (otherwise known as CINDY DONG)

Second Defendant

Hearing:

On the papers

Appearances:

S C Dench for Plaintiff

No appearance for Defendants

Judgment:

27 April 2022

JUDGMENT OF LANG J

[on application for possession of leased property]

This judgment was delivered by me on 27 April 2022 at 11.30 am.

Registrar/Deputy Registrar Date……………

Solicitors:

Raymond S Walker, Auckland S C Dench, Auckland

TINIROTO TRUST COMPANY LTD v BEST CHOICE LTD [2022] NZHC 827 [27 April 2022]

[1]     The plaintiff, Tiniroto Trust Company Limited (Tiniroto), is the registered proprietor of a commercial property situated at 166A Harris Road, East Tamaki. The property is subject to a lease to the first defendant, Best Choice Limited (Best Choice). The second defendant Ms Jingli Dong (otherwise known as Cindy Dong) has guaranteed the obligations of Best Choice under the lease.

[2]     In this proceeding the plaintiff seeks orders under ss 244 and 251 of the Property Law Act 2007 granting it possession of the property and cancelling the lease because of past defaults by the defendants. The plaintiff also originally sought monetary relief against the defendants. This related to the recovery of outstanding rental and legal costs. These sums have now been paid and no monetary relief is sought.

Background

[3]     When the proceeding was filed on 14 February 2022 Best Choice was in default of its obligations under the lease because it had not paid rental for the preceding eight months. It then failed to pay the rent due for the months of February and March 2022. Arrears of rental amounted to more than $60,000. Best Choice had also failed to pay legal costs of $2,825.

[4]     Shortly before the matter was first called on 16 March 2022 the outstanding rental and legal costs were paid in full. Notwithstanding these payments the plaintiff seeks to proceed with its applications because of the perceived risk of further defaults in the future. Attempts to resolve matters on a negotiated basis have not been successful. The defendants have taken no steps to defend the proceeding even though their solicitor has been in communication with counsel for the plaintiff on a regular basis.

Decision

[5]     The lease document is dated 6 May 2016. It was assigned to Best Choice on 7 November 2016. Clause 28.1(a) of the Second Schedule to the lease gives the lessor, in this case Tiniroto, the right to cancel the lease for non-payment of rent. On 10 December 2021 Tiniroto gave the defendants the required notice of its intention to cancel the lease under s 245 of the Property Law Act 2007 (the Act).

[6]     Section 245(1) of the Act permits a lessor to cancel a lease where rental has been in arrears for more than ten days and the lessee has failed to comply with a notice

requiring it to remedy the default. Those requirements were plainly satisfied when Tiniroto filed the present proceeding. Acceptance of rental paid after notice of intention to cancel the lease has been given does not operate as a waiver of the lessor’s right to an order for possession.1 I am therefore satisfied Tiniroto remains entitled to proceed with its applications despite the fact that the rental and legal costs have now been paid.

[7]     On an application for possession of land comprised in a lease the Court has the power to cancel the lease.2 Best Choice has not sought relief against cancellation as it was entitled to do under s 253 of the Act.

[8]     Given the fact that the defendants have not filed documents in opposition to the plaintiff’s claim, I make an order under s 251(1) of the Act granting Tiniroto possession of the property at 166A Harris Road, East Tamaki and cancelling the lease dated 6 May 2017.

[9]     The plaintiff seeks no other relief and Mr Dench advises me that the plaintiff is content for costs to lie where they fall. I therefore make no order as to costs.

Lang J

1      Property Law Act 2007, s 250.

2      Section 251(1).