Wilfred v Gan
[2013] NZCA 457
•4 October 2013 at 10 am
| IN THE COURT OF APPEAL OF NEW ZEALAND |
| CA184/2013 [2013] NZCA 457 |
| BETWEEN | HARMON LYNN WILFRED CAROLYN RUTH DARE-WILFRED ANGELA MAREE SMALLEY LA FAMIA NO 1 LIMITED LA FAMIA NO 4 LIMITED |
| AND | KAIWAN GAN AND JUZHEN YU |
| Hearing: | 25 July 2013 |
Court: | Ellen France, Ronald Young and Cooper JJ |
Counsel: | H L Wilfred in person |
Judgment: | 4 October 2013 at 10 am |
JUDGMENT OF THE COURT
ALeave is granted to adduce the further evidence described below at
[44]–[49] and [56].
BThe appeal is dismissed.
CThe appellants, jointly and severally, must pay the respondents costs for a standard appeal on a band A basis and usual disbursements.
____________________________________________________________________
REASONS OF THE COURT
(Given by Ellen France J)
Table of Contents
Para No
Introduction – an interim order for immediate possession [1]
Facts [5]
The decision in the High Court [17]
Threshold for interim relief [20]
Prospects of relief[25]
Section 269 of the Companies Act [32]
Relief under the Property Law Act [40]
The impact of maintenance issues [55]
The impact on employees and the public interest [58]
Timeframe leading to proceeding in the High Court [60]
Result [63]
Introduction – an interim order for immediate possession
The respondents own a property in Christchurch known as Wigram Manor. In July 2009 they entered into a lease of the premises with a company called La Famia No 2 Ltd (the head lease). Since that time, the Manor has been used for accommodation and as a function centre. Some charitable work has also been done there. Although the head lease prohibited subleasing, the appellants say that La Famia No 2 entered into subleases of parts of the Manor with La Famia No 1 Ltd and La Famia No 4 Ltd, the fourth and fifth appellants. Harmon Wilfred and Carolyn Dare-Wilfred, the first and second appellants, are directors of La Famia Nos 1, 2 and 4. Ms Angela Smalley, the third appellant, is a director of La Famia No 1 and La Famia No 2.
The rental under the head lease fell into arrears. Mr Wilfred then provided a personal guarantee but there was a subsequent default under that guarantee. In February 2013, the No 2 company went into voluntary liquidation. The liquidator disclaimed the head lease as onerous property as provided for under s 269 of the Companies Act 1993. The respondents sought to re-enter. The appellants challenged their right to do so and remained in possession. The respondents sought an interim order for repossession. The matter was heard by Chisholm J. The Judge made an interim order for repossession.[1] The appellants appeal against that decision.
[1]Gan v Wilfred [2013] NZHC 535.
The appeal raises issues about the following matters:
(a)The threshold to be applied for the grant of interim relief.
(b)The strength of the appellants’ case for relief.
(c)The impact of claimed breaches of the head lease in failing to maintain the infrastructure of the building. This aspect is associated with the approach to the balance of convenience.
(d)The assessment of the effect of a decision to allow re-entry on employees and on the public interest in keeping the services and facilities available and the overall interests of justice.
(e)The adequacy of time given to the appellants to prepare for the hearing in the High Court and, in particular, to provide a comprehensive lease proposal.
After setting out the facts and the Judge’s approach, we deal with each of these questions in turn.
Facts
We adopt the description of the background material set out in the High Court judgment.[2]
[2]At [6]–[12].
As we have foreshadowed, on 7 July 2009 the respondents entered into a lease with La Famia No 2 in relation to Wigram Manor. The head lease was for a term of five years with a right of renewal. The annual rental was $150,000 plus GST. The rental was payable by monthly instalments of $12,500 plus GST. The lease specifically stated that there was to be no subletting. There were no personal guarantees.
The appellants say two subleases were entered into in 2011.
The sublease document entered into by La Famia No 2 as landlord and La Famia No 1 as the tenant is dated 25 October 2011. It provided for a two-year tenancy commencing on that date with the opportunity to extend on a month‑by‑month basis. Rental of $4,200 per month plus GST was payable. The premises were described as the central building of the manor including the manager’s office and reception, ball-room, kitchen and scullery, dining area, bar and cafe and store rooms.
The sublease document relating to La Famia No 4 encompassed an office and the chapel. The term of the sublease was one year with an opportunity to extend the term for two additional one year terms. The sublease was to commence on 1 September 2011 with a weekly rental of $400 plus GST.
To put the premises involved in context, the head lease related to the whole of the Manor. The Manor was originally the officers’ mess for the New Zealand Airforce. It is a two-storied building with office and other accommodation and ablutions in two areas at either side of the central kitchen/dining/bar and toilet block. The arrangement with La Famia No 1 meant that company occupied the balance of the premises apart from the chapel and office occupied by La Famia No 4 and the accommodation blocks on either side of the central building.
The respondents did not formally consent to these subleases.
Rental under the head lease began to fall into arrears in mid-2012. The respondents issued a notice of breach in September of that year. Following discussions between the parties Mr Wilfred provided a personal guarantee for $88,000. As the Judge said, this “effectively ring‑fenced the arrears at the time”.[3]
[3]At [8].
There matters rested until, at the beginning of 2013, there was a default under the guarantee. By 19 February 2013 the arrears under the head lease were some $130,000 (including the sum that had been personally guaranteed). As the Judge noted, up to this point in time one of the respondents, Dr Gan, and Mr Wilfred were firm friends. Matters as between them have deteriorated since.
The No 2 company went into voluntary liquidation on 20 February 2013 and the liquidator disclaimed the head lease.
As we have indicated, the respondents sought to re-enter and when the appellants challenged their right to do so, this proceeding was brought.
We need to add that, subsequently, an interim stay was granted suspending the execution of the judgment pending this appeal.[4] That stay was conditional on the ongoing payment of monthly rent. After non-payment of rent, a successful application was made to discharge the stay.[5] The appellants sought a further stay in this Court and in the Supreme Court but these applications were ultimately unsuccessful.[6]
The decision in the High Court
[4]Gan v Wilfred HC Christchurch CIV-2013-409-442, 18 March 2013; 27 March 2013.
[5]Gan v Wilfred [2013] NZHC 1508.
[6]Wilfred v Gan [2013] NZCA 285 [CA stay judgment]; Wilfred v Gan [2013] NZCA 295; Wilfred v Gan [2013] NZSC 75.
In the High Court, Chisholm J concluded that the respondents had a “relatively strong” case for possession and that the appellants “face major problems in obtaining relief”.[7]
[7]Gan v Wilfred, above n 1, at [25]. Here Chisholm J was broadly referring to “relief” that might have been available to the appellants: see below at [25]–[54].
The Judge also considered the balance of convenience favoured interim relief being granted in favour of the respondents. A key factor in that assessment was the appellants’ proposal for a new lease. The appellants proposed a new lease for five years for the whole premises at a rental reflecting approximately 64 per cent of the rental under the head lease. There was no “immediate prospect” of meeting the arrears of rental.[8] The proposal also required maintenance work to be completed by the landlord. The Judge agreed with the respondents that there were problems with the proposal especially given concerns about the appellants’ ability to pay. Finally, Chisholm J concluded the overall justice favoured interim relief.
[8]At [35].
We now consider the issues on appeal. We interpolate here that in our initial decision declining a stay, we said that Mr Wilfred could file written submissions for all appellants but when he appeared in court, he should speak only for himself.[9] We proceeded on that basis. Mr Wilfred was assisted by a McKenzie Friend, Hugh Steadman. We also have taken into account written submissions filed in relation to the appeal from the then solicitors for the appellants.
Threshold for interim relief
[9]CA stay judgment, above n 6, at [36].
The argument for the appellants is that where the interim relief sought disposes of the substantive proceeding the test for the grant of an interim order requires either a serious question to be tried or a prima facie case. The appellants note that the authorities express the test in varying ways but submit that the consensus is that the threshold is higher than that of an arguable case. Chisholm J has therefore erred because, it is submitted, the Judge has applied the arguable case threshold.
As the appellants note, this Court has said that where the grant or refusal of an interlocutory injunction may well “determine the fate of the litigation”, in these circumstances, “the Court should take a more robust attitude than may be suggested by a reading of the decision of the House of Lords in American Cyanamid Co v Ethicon Ltd”.[10]
[10]McKay Electrical (Whangarei) Ltd v Hinton [1996] 1 ERNZ 501 (CA) at 507 citing American Cyanamid Co v Ethicon Ltd [1975] AC 396 (HL); see also NWL Ltd v Woods [1979] 1 WLR 1294 (HL) at 1306–1307; New Zealand Olympic and Commonwealth Games Assn Inc v Telecom New Zealand Ltd (1996) 7 TCLR 167 (HC).
It is necessary to consider the Judge’s approach against that background. Chisholm J noted at the outset that applications for interim relief require the Court to ask three questions:
[13] … [F]irst, whether the plaintiffs have an arguable case for interim relief; secondly, where the balance of convenience lies; and thirdly, (if those first two considerations favour interim relief) whether overall justice might indicate a different outcome.
However, while the Judge refers in this passage to an arguable case, we agree with the respondents’ submissions that the Judge applied a sufficiently robust standard. Two points can be made. First, Chisholm J considered that the respondents’ case was a strong one given there had been default under the head lease, rental arrears by then in the order of $150,000, continuing default and the head lease had been disclaimed by the liquidator. In addition, the Judge said that the appellants had “major problems” in obtaining relief.[11] Secondly, Chisholm J also stood back and considered where the overall balance of convenience lay bearing in mind that the decision to grant interim relief could be determinative. Chisholm J put the question in this way:
[44] The final step is to consider whether interim relief would be in accordance with the concept of justice. One aspect that has troubled me is that in reality it is likely that the decision I make today will also resolve the substantive issue. This is not a particularly unusual situation, and is not one that automatically justifies refusal of relief. At the same time it always causes Judges to hesitate and ask themselves whether this is really a case for interim relief.
[45] Having given this matter due consideration I have concluded that overall justice favours the granting of interim relief. Mr Wilfred, I cannot in all justice refuse the plaintiffs an interim order for possession. I realise that this will come as a further blow on the top of many other setbacks you have had. It is never a pleasant task to deliver decisions in commercial litigation where it is not difficult to see both sides. But that is the responsibility of a Judge, and I am going to make an interim order for possession.
[11]At [25].
Accordingly, we consider Chisholm J took sufficient account of the impact of his decision and applied a standard commensurate with that.
Prospects of relief
The appellants say that the Court did not give the appellants’ position the protection it warranted because of implicit findings that they were unlikely to prevail at trial.
Two aspects to this were considered by the Judge. The first arises from s 269 of the Companies Act which confers power on a liquidator to disclaim onerous property. Chisholm J observed that, as s 269(3)(b) provides, a disclaimer under this section does not “except so far as is necessary to release the company from a liability, affect the rights or liabilities of any other person”. On this aspect, the Judge took the most favourable view for the appellants. He assumed for these purposes that La Famia Nos 1 and 4 were legitimate subtenants. Hence, Chisholm J said:
[16] … I proceed on the basis that [subs] 3(b) means that their rights are not affected by the disclaimer. Thus, they live to fight another day.
The Judge went on to note that under s 269(5) of the Companies Act a person who has suffered loss or damage as a result of a disclaimer may apply to the Court for an order that the disclaimed property be delivered to or vested in that person. The Judge said that this was, in effect, what La Famia Nos 1 and 4 were attempting to do, that is, to have the head lease vested in them subject to some modification.
The second aspect of potential relief considered by Chisholm J relates to ss 258 and 260 of the Property Law Act 2007. Those sections provide for the protection of a sublessee on the cancellation of a superior lease. The appellants in their notice of opposition had indicated that they would be making an application for relief in reliance on these sections.
The Judge noted that s 258 applies if a lessor exercises, or proposes to exercise a right to cancel a lease for breach. The Judge queried whether that had occurred in this case. He saw the respondents’ argument that this had not happened as “pretty formidable”.[12]
[12]At [20].
Further, Chisholm J observed there was an issue as to whether the two companies qualified as sublessees. The question then arose as to whether the respondents were estopped from relying on the prohibition against subleasing in the head lease or had waived that in some way. On the evidence before him, Chisholm J said there was no evidence of an estoppel. The Judge also considered it was difficult to see how waiver could be established. Further the fact that La Famia No 1 and No 4 were subleasing part only of the premises might also present a problem.
We discuss the Judge’s approach to the prospects of relief by discussing each of these two possible avenues.
Section 269 of the Companies Act
Section 269 provides, as we have indicated, that a liquidator may disclaim onerous property. “Onerous property” is defined in s 269(2) and plainly includes leases. Importantly, s 269(5)(b) provides that a person who suffers loss or damage as a result of a disclaimer may, relevantly, “[a]pply to the Court for an order that the disclaimed property be ... vested in that person”.
Section 269(6) provides that a court may make an order under s 269(5)(b) if it is satisfied that it is just that the property should be vested in the applicant.[13]
[13]Compare s 182 of the Insolvency Act 1986 (UK), which permits a sublessee or underlessee to take up the head lease on the terms of the head lease. See discussion in Halsbury’s Laws of England (5th ed, 2011, online ed) vol 17 Company and Partnership Insolvency at [835].
There is some discussion in the New Zealand commentaries on the effect of a disclaimer on the interests arising under a sublease and an associated head lease. The authors of the Laws of New Zealand state that where a head lease is disclaimed:[14]
... a sublessee is freed from his or her covenants to the sublessor but must perform the covenants in the head lease or become liable to cancellation or forfeiture. The head lease is not, therefore, to be regarded as totally extinguished and it is still proper to describe the sublease as a sublease.
[14]Laws of New Zealand Lessor and Lessee (online ed) at [316].
Heath and Whale on Insolvency say in respect of the effect of a disclaimer:[15]
In the case of a lease, a disclaimer operates to determine both the tenant and landlord’s rights and obligations and the leasehold estate therefore ceases to exist. But the rights and liabilities of others, such as guarantors and original tenants remain as though the lease had continued and had not been determined. Similarly a subtenant holds his or her estate on the same terms and subject to the same rights and obligations as will be applicable [if] the tenant’s interests had continued.
[15]Paul Heath and Michael Whale (eds) Heath and Whale on Insolvency (online looseleaf ed, LexisNexis) at [22.18(e)].
In the United Kingdom there is some debate about the status of the lease and sublease in the interim period between disclaimer and any order vesting the head lease in the sublessee, particularly where there are sublessees of different parts of the leased premises. The debate is captured by the observation of Uthwatt J in Re Thompson and Cottrell’s Contract that, in this interim period, the lease is there “to a certain extent, as something like a dormant volcano. It may break out into active operation at any time”.[16]
[16]Re Thompson and Cottrell’s Contract [1943] Ch 97 at 100; see the discussion in Ian Fletcher The Law of Insolvency (4th ed, Sweet & Maxwell, London, 2009) at [8-133]; and contrast Re A E Realisations (1985) Ltd [1988] 1 WLR 200 (Ch) at 212–213.
We do not need to develop this point further because there are three good reasons why it is unlikely that s 269(5)(b) will assist the appellants. The first reason we identify is that no application has been made under s 269(5) and none has been signalled.
Secondly, there is authority that suggests that a sublessee in this situation is put to an election to take up the head lease on the terms of that lease.[17] However, the appellants do not wish to apply for an order that the whole of the head lease be vested in them on the original terms. That is not and never has been the appellants’ proposal. Instead, as we shall discuss, the appellants’ proposal is effectively a rewriting of the original head lease. We accept that the position may not be as clear cut where there is a sublease for a part of the premises[18] but, subject to that possible caveat, the obligation to elect in this way is a further barrier to the application of s 269(5) in this case.
[17]Re A E Realisations, above n 16, at 211.
[18]Re Thompson, above n 16, at 99.
Finally, on the information we have, it is unlikely that a court would conclude that it was just to make a vesting order. The head lease is for the whole property whilst the subleases, if they exist, are confined to two parts that do not make up the entirety of the Manor. It is difficult to see any vesting order being made that would involve the head lease as a whole vesting in the sublessees. Assuming for these purposes that there is a power to make an order vesting part of the premises,[19] it is equally difficult to see that it would be just to make an order which would in practice leave the respondents with a part of the building that would have limited use. On the latter scenario, the sublessees would occupy parts of the building with some key facilities leaving the landlord to try to lease the accommodation blocks but without some key amenities. That is a situation the landlord would not have agreed to and it would be an odd outcome in the context of contractual arrangements giving the landlord powers to control subletting. These factors are all likely to militate against relief under s 269(5)(b).
Relief under the Property Law Act
[19]Ibid.
Section 258 of the Property Law Act provides protection for a sublessee when the head lease is cancelled. Section 258(1) states that:
If a lessor exercises, or is proposing to exercise, a right to cancel a lease because of a breach by the lessee of a covenant or condition of the lease, any interested person may apply to a court for relief in—
(a)a proceeding brought by the lessor for an order for possession of the land; or
(b)a proceeding brought by the interested person for the purpose of seeking the relief.
There are time limits on bringing a proceeding under s 258(1)(b).[20]
[20]Section 258(2).
The protection afforded by s 258(1) is available to “interested persons”. In ss 258–260, “interested person” relevantly means the sublessee.[21]
[21]Section 258(4).
Section 260 then deals with the court’s powers on an application for relief by a sublessee. Section 260 reads as follows:
(1)On an application for relief made under section 258, the court may order the lessor to enter into a lease of the whole or any part of the land with the interested person.
(2) An order under subsection (1)—
(a) may specify a lease for a term—
(i)beginning on a date not earlier than the date on which the lessor peaceably re-entered the land or the date on which the cancellation of the lease took effect under an order for possession of the land in favour of the lessor; and
(ii)expiring on or before a date not later than the date on which the original sublease would have expired; and
(b)may be made on any conditions (if any) as to the execution of any instrument, payment of rent, expenses, damages, compensation, or the giving of security, or any other relevant matters, that the court thinks fit.
(3)An order may be made under subsection (1) even though the lessee is not a party to the proceeding.
The first problem identified by Chisholm J in relation to reliance on s 258 is that there has been no cancellation of the lease. The appellants say that the respondents are exercising or purporting to exercise a right to cancel. That is not the factual position given the liquidator’s decision to disclaim.[22]
[22]In the notice of appeal it was suggested that the respondents had cancelled the lease in correspondence prior to the disclaimer. This point was not pursued on the appeal and we were not directed to any correspondence to this effect.
Secondly, there is a question as to whether La Famia Nos 1 and 4 are sublessees. We have had some further evidence on this point following the Court’s earlier indication that new evidence could be filed and we grant leave to adduce that evidence.[23] Mr Wilfred explains the situation that emerged as a response to the emergency demands of the Christchurch earthquake of 22 February 2011. Essentially, he says, everyone rallied around to meet the emergency demand for accommodation, for example, Meridian Energy, Housing New Zealand and the Inland Revenue Department were accommodated at the Manor. Mr Wilfred says the respondents had full knowledge of and indeed welcomed these developments. Dr Gan and others associated with the respondents were regular visitors to the Manor for functions and paid bills for those functions to La Famia No 1.
[23]Wilfred v Gan CA184/2013, 14 May 2013.
Mr Steadman in his affidavit filed on behalf of the appellants put it in this way:
Since Mr Wilfred first took on the lease of Wigram Manor and throughout our company’s prolonged subsequent dealings with La Famia No 1 Ltd, it has never entered our thoughts that La Famia No 1 was anything other than a legitimate tenant located at Wigram Manor. At the time of my lunch with Dr Gan, it was apparent and made clear to all sitting around the table that La Famia No 1, a 50% shareholder in The Prenzel Distilling Company, was a separate company based in and operating out of Wigram Manor.
For his part, Dr Gan for the respondents denies any knowledge of any formal subleasing arrangements.
Dr Gan accepts he was aware Mr Wilfred had a number of businesses which traded from and/or used different parts of the Manor. He also says he was aware that on occasions Mr Wilfred rented out parts of the premises to other organisations. The email exchanges before us suggest Dr Gan was aware of various organisations, like the Inland Revenue Department, taking up occupancy at various points in time. That did not concern him but, Dr Gan deposes, he wanted to deal with one single tenant. He did not consent to another body taking over the responsibility for any part of the lease.
We have more evidence on this aspect than was before Chisholm J. As was the case before the Judge, this evidence is limited by the fact it is not tested. Nonetheless we can say that we do not see the overall picture as particularly strong for the appellants. It is plain the respondents were never presented with any formal written sublease. The only written document presented was a short term room occupancy agreement between La Famia No 2 and Gough, Gough & Hamer Investments Ltd.
Further, there is other formal documentation that does not, at least at first blush, support the appellants’ case. Mr Wilfred says that both sublessees paid rent and the bank statements show that. Obviously, we could not resolve the point even if we had bank statements. But the liquidator of La Famia No 2 in his report states that none of the entries of money going from La Famia No 1 to La Famia No 2 relate to rent. Further, the annual report and financial statements for La Famia No 4 are before us and do not show anything that could account for rental payments to La Famia No 2 under a sublease.
In any event, assuming the appellants could establish there were subleases, relief is discretionary. We agree with Chisholm J that the terms of the proposal from the appellants for a new lease are critical.
The appellants’ proposal is for a five year lease commencing on 20 February 2013 with an option to extend the lease through to 6 July 2019. Rental for the first year would be $7,820 per calendar month (inclusive of GST). Rental for the second to fifth years would be increased by five per cent per year plus GST. Mr Wilfred and Mrs Dare-Wilfred would provide personal guarantees.
The lease proposal is contingent on all deferred maintenance as advanced by La Famia No 1 in the proceeding being completed within 120 days. There is no proposal for the payment of arrears. Further, with a credit for the lesser rate of rental due to the impact of the deferred maintenance, the proposal records a rental credit to 6 June 2013 of over $14,500.
Significantly, there is still no proposal for the payment of arrears; the proposal is conditional on significant maintenance being undertaken by the respondents and the appellants propose a lower rental for the whole of the premises. Those deficiencies would tell against relief under s 258.
In these circumstances we agree with Chisholm J that the appellants “face major problems” in obtaining relief.[24]
The impact of maintenance issues
[24]Gan v Wilfred, above n 1, at [25].
The appellants argue under this head that the respondents are in breach of the lease by failing to properly maintain the infrastructure of the building. Accordingly, the appellants say the respondents do not come with clean hands and are in breach of the lease.
We have had further evidence about the maintenance issues which relate to matters such as the heating and electrical systems. There is a conflict in the evidence in that Dr Gan suggests that these maintenance issues only became an issue after La Famia No 2 had fallen into serious arrears of rent. Mr Wilfred says the concerns are long-standing. We do not have to resolve this issue because we do not see it as altering the balance in terms of interim relief. The relevant obligations relate to the head lease. Further, the head lease makes it plain some of the items are the lessee’s responsibility. The head lease also records that the lessee took the premises as they were. In any event, as the Judge discussed, other balance of convenience factors weighed in favour of the grant of interim relief.
We interpolate here that we see no merit in the challenge to the approach to the balance of convenience. This is another way of challenging the test applied by the Judge on the basis that relief would effectively resolve the proceeding. The approach adopted was apt. It is still helpful to assess where the balance of convenience lies and we agree with the Judge’s conclusions on this, especially given the financial difficulties facing the appellants. Again, the inadequacies in the appellants’ proposal for a new lease are a critical factor.
The impact on employees and the public interest
The appellants say that Chisholm J failed to give sufficient or any weight to the fact that the employees of the sublessees would lose their employment; and to the public interest in keeping the services and facilities available for those who had made reservations at the property. The Judge was aware of the impact of the decision on the appellants’ business and in particular on the existing bookings and took that into account. However, he considered there were other factors weighing against the appellants. Chisholm J said a realistic approach had to be adopted. He noted that “despite the best will in the world by Mr Wilfred” and the other appellants, “there is a very real prospect” the situation would only deteriorate further and ultimately the appellants would not be in a position to meet an award of damages.[25]
[25]At [29].
We see no merit in the challenge to the approach to these matters and nor to the Judge’s assessment of the overall justice of the situation.
Timeframe leading to proceeding in the High Court
The appellants say that the High Court allowed insufficient time for them to provide a comprehensive lease proposal, to make further proposals for the payment of rent, and to provide evidence of assets to enable them to meet any potential claim for damages.
In developing the submissions on this point, Mr Wilfred says the appellants were served with the notice of proceeding on Thursday 8 March 2013 and of the hearing on Tuesday 12 March 2013. They were required to file an answer by noon on 12 March 2013. On 12 March, the Judge ordered the appellants to present any proposal within 24 hours. Then, late in the piece, the appellants’ counsel withdrew and Mr Wilfred presented the appellants’ case at the hearing on 15 March.
We are not satisfied that the timeframe, albeit tight, was insufficient. The key points that the appellants sought to make were before the Judge. But, in any event, considerable time has now elapsed since the High Court hearing. Even with that further time the lease proposal before us does not advance matters, the new evidence does not alter the balance and there has been no evidence of assets to show that any damages award could be met. Unfortunately also, the appellants did not meet the condition of the stay requiring ongoing payment of the rental. Following the discharge of the stay the respondents have re-entered the premises.
Result
In these circumstances, essentially for the reasons given by Chisholm J, we agree with the Judge’s approach. The appeal is dismissed.
Costs should follow the event. Accordingly, the appellants, jointly and severally, shall pay the respondents costs for a standard appeal on a band A basis and usual disbursements.
Solicitors:
Duncan Cotterill, Christchurch for Respondents
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