Union House Limited and Union House Lease Limited v Auckland City Council

Union House Limited and Union House Lease Limited, as applicants, appealed against the Auckland City Council, the respondent, in a case that was heard in the Supreme Court of New Zealand. The applicants sought leave to appeal against the Court of Appeal's decision, which had dismissed their appeal against the Council's decision to refuse to accept an assignment of a lease from Union Steamship Company Limited to the applicants. The applicants argued that the lease was assignable without the consent of the Council, while the Council contended that the assignment was invalid because it breached a confidentiality clause in the original lease agreement between Union Steamship and the Council.

The primary legal issues that the court had to decide were whether the existence of the confidentiality clause in the contract between Union Steamship and the Auckland City Council implied that the contract was not assignable without the consent of the Council, and if so, whether such an implication was absolute or conditional on whether the assignment could be done without breaching the confidentiality clause. Another issue was whether the Court of Appeal had properly found that there had been a breach of the confidentiality clause by Union Steamship.

The court found that the confidentiality clause in the original lease agreement did not necessarily imply that the contract was not assignable without the consent of the Council. However, the court also found that the assignment was ineffective because it breached the confidentiality clause. The court held that the breach of the confidentiality clause was material and significant, and that the assignment was invalid as a result. The court further held that the Court of Appeal had properly found that there had been a breach of the confidentiality clause by Union Steamship.

The Supreme Court of New Zealand allowed the applicants' appeal and dismissed the Council's cross-appeal. The court set aside the decision of the Court of Appeal and remitted the matter to that court for further consideration in light of the Supreme Court's decision. The applicants were ordered to pay security for costs in the sum of $7,500.00.