Turrall v Jackson - [2018] NZHC 381

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2017-404-857 [2018] NZHC 381

BETWEEN
JOHN GRAHAM TURRALL and PETER

WILLIAM BUTLER Plaintiffs

AND

BRYAN LEE JACKSON First Defendant

KAREN LETICA Second Defendant

MAEGAN JANE FOX Third Defendant

DONALD ANDREW FOX Fourth Defendant

BRIAN GRAHAM BLUETT and TODD GRAHAM BRUCE BLUETT

Third Parties

Hearing: 22 February 2018

Appearances:

C M Fry for Plaintiff
R J Hollyman and A J Peat for First and Second Defendants
A Steel for Third and Fourth Defendants
G E Schumacher for Fifth and Sixth Defendants

Judgment:

12 March 2018

JUDGMENT OF VAN BOHEMEN J

This judgment was delivered by me on 12 March 2018 at 10.00am pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

TURRALL and BUTLER v JACKSON [2018] NZHC 381 [12 March 2018]

Introduction

[1] The main proceeding, which was commended by statement of claim dated 1

May 2017, concerns liability for payment of arrears and related costs under a registered lease (registered lease instrument C872767.1) in respect of a property at 384
Ellerslie-Panmure Highway, Auckland. It has been set down for hearing on 21 June

2018. This judgment deals with the liability of the third parties to the first to fourth defendants under the lease.

Background

[2] The plaintiffs, as trustees of the Flo-Ter Trust, were owners and landlords of the property until July 2016. Between 19 April 1995 and July 2016, the property was leased to a succession of lessees, including the first to fourth defendants and the third parties, under the lease granted originally to RJ and CI Duncan Ltd and then assigned to subsequent lessees:

(a) On 9 July 1995, the first and second defendants took an assignment of the lease;

(b)On 14 June 2004, the first and second defendants assigned the lease to the third and fourth defendants;

(c) On 3 September 2007, the third and fourth defendants assigned the lease to the third parties.

[3] In taking their assignments of the lease, the first and second defendants and the third and fourth defendants covenanted with the plaintiffs to pay the rental and other outgoings “now and into the future” and to perform the covenants and conditions, both express and implied, in the lease.

[4] In a judgment dated 3 February 2016,1 Toogood J gave judgment in favour of the plaintiffs against the third parties for various defaults while the third parties were
the assignees under the lease and:

1 Turall v Bluett [2016] NZHC 64.

(a) Made orders granting the plaintiffs possession of the land and cancelling the lease;

(b)Required the third parties to pay to the plaintiffs rental and outgoings totalling $979,796.70, being the amount owing at the date of judgment, together with unpaid rental, penalties and interest between the date of judgment and the date the plaintiffs actually took possession of the land; and

(c) Ordered that the third parties should pay costs and disbursements to the plaintiffs in accordance with the…

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.

Continue reading Turrall v Jackson

Details

AGLC: Turrall v Jackson [2018] NZHC 381
Case: [2018] NZHC 381
Decision Date: 12 March 2018

CaseChat Overview and Summary

The case of Turrall v Jackson involved a dispute over the liability for payment of arrears and related costs under a registered lease in respect of a property at 384 Ellerslie-Panmure Highway, Auckland. The plaintiffs, as trustees of the Flo-Ter Trust, sought to recover outstanding rent, insurance premiums, interest, and costs from the first to fourth defendants, who had previously held the lease, and from the fifth and sixth defendants, who had guaranteed the lease. The first to fourth defendants sought indemnity from the third parties, who had also held the lease, under the covenant implied by section 98 of the Land Transfer Act 1952, which was repealed by the Property Law Act 2007 but continued to operate for leases that came into effect before the repeal. The court had to determine whether the first to fourth defendants were entitled to indemnity from the third parties and, if so, in what amount. The court found that the first to fourth defendants were entitled to indemnity from the third parties for any liability owed to the plaintiffs and for expenses incurred in defending the plaintiffs' claims. The court ordered the third parties to pay the first to fourth defendants $30,632.21 and $10,499.60, respectively, and granted leave to apply for any further amounts payable by way of indemnity. The third parties were also ordered to pay the first to fourth defendants' costs on an indemnity basis.

The legal issues in this case were whether the first to fourth defendants were entitled to indemnity from the third parties under the covenant implied by section 98 of the Land Transfer Act 1952, which was repealed by the Property Law Act 2007 but continued to operate for leases that came into effect before the repeal, and if so, in what amount. The court found that the first to fourth defendants were entitled to indemnity from the third parties for any liability owed to the plaintiffs and for expenses incurred in defending the plaintiffs' claims. The court also found that the third parties were to be taken as having admitted the liability claimed by the first to fourth defendants by defaulting in filing a statement of defence to the first to fourth defendants’ statement of claim. The court ordered the third parties to pay the first to fourth defendants $30,632.21 and $10,499.60, respectively, and granted leave to apply for any further amounts payable by way of indemnity. The third parties were also ordered to pay the first to fourth defendants' costs on an indemnity basis. The court relied on the common law principle that an assignee indemnifies the previous assignors of the lease for the consequences of any breach of covenant in the lease, including any damages and costs incurred as a result of the breach. The court also relied on the covenant implied by section 98 of the Land Transfer Act 1952, which was repealed by the Property Law Act 2007 but continued to operate for leases that came into effect before the repeal.

Orders