Hearing:	25 July 2013
Court:	Ellen France, Ronald Young and Cooper JJ
Counsel:	H L Wilfred in person S Caradus and B D A Collins for Respondents
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…

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 Wilfred v Gan

Details

AGLC: Wilfred v Gan [2013] NZCA 457
Case: [2013] NZCA 457
Decision Date: 4 October 2013 at 10 am

CaseChat Overview and Summary

The Court of Appeal of New Zealand considered an appeal by Harmon Lynn Wilfred, Carolyn Ruth Dare-Wilfred, Angela Maree Smalley, La Famia No 1 Limited, and La Famia No 4 Limited (the appellants) against a decision of Chisholm J that granted interim possession to Kaiwan Gan and Juzhen Yu (the respondents). The respondents owned a property known as Wigram Manor in Christchurch, which they leased to La Famia No 2 Ltd (the head lease). The appellants are either directors or shareholders of La Famia No 1 Ltd and La Famia No 4 Ltd, which subleased parts of the premises from La Famia No 2 Ltd. The rental under the head lease fell into arrears, and the appellants provided a personal guarantee that subsequently defaulted. In February 2013, La Famia No 2 Ltd went into voluntary liquidation, and the liquidator disclaimed the head lease as onerous property under the Companies Act 1993. The respondents sought to re-enter the property, and the appellants challenged their right to do so. The respondents sought an interim order for repossession, which was granted by Chisholm J. The appellants appealed the decision.

The appeal raised several issues, including the threshold for interim relief, the strength of the appellants' case for relief, the impact of maintenance issues, the assessment of the effect of a decision to allow re-entry on employees and the public interest, and the adequacy of time given to the appellants to prepare for the hearing in the High Court. The Court of Appeal found that Chisholm J applied a sufficiently robust standard in granting interim relief and that the appellants' prospects of relief were weak due to the likelihood of the disclaimer of the head lease and the inadequacy of their lease proposal. The Court also found that the balance of convenience and overall justice favoured the grant of interim relief. The appeal was dismissed, and the appellants were ordered to pay the respondents' costs for a standard appeal on a band A basis and usual disbursements.

Orders