Yang v Cheung

[2013] NZHC 868

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-1193 [2013] NZHC 868

BETWEEN  JIAN YANG Applicant

ANDYIN CHUN CHEUNG Respondent

Hearing:         22 April 2013

Counsel:         DK Wilson for Applicant

No appearance by or for Respondent

Judgment:      23 April 2013

JUDGMENT OF KEANE J

This judgment was delivered by  on  23 April 2013 at 4.30pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Date:

Solicitors:

Phillip Wong & Ben Bong, Auckland: [email protected]
Yin Chun Cheung, Auckland: [email protected]

Counsel:

D K Wilson: [email protected]

JIAN YANG V YIN CHUN CHEUNG HC AK CIV-2013-404-1193 [23 April 2013]

[1]      Jian Yang owns a lunch bar in East Tamaki, Auckland which Yin Chung Cheung has held as lessee under an assigned lease since at least 2009.   The lease expires finally on 5 April 2014.

[2]      On 6 March 2013, Ms Yang applied for an order for possession and for rent and outgoings due on the ground that Ms Cheung was materially in arrears; and had not complied with notices to cancel, dated 14 December 2012 and 13 February 2013. On 18 March 2013, Ms Cheung applied for relief against cancellation and in excess of $200,000 damages.

[3]      On 12 September 2009, Ms Cheung alleges, she entered into an agreement to sell the business but Ms Yang unreasonably withheld consent.   In December 2012

Ms Yang offered her no more than $50,000.  The damages she now claims by way of set-off or counterclaim are the measure of her loss.

[4]      On 20 March 2013, Andrews J allocated a half-day fixture to these cross applications, and allowed Ms Cheung 14 days within which to file further evidence. She directed that Ms Yang's submissions be filed and served no later than ten days before the fixture and those for Ms Cheung no later than five days before.   She advised  Ms Cheung to  take legal  advice.    Ms Cheung was  then relying on  her husband to speak on her behalf.

[5]      On 14 April 2013, Ms Cheung applied for an adjournment on the ground that she had applied for legal aid.  On 16 April 2013, Winkelmann J, after reviewing the papers, declined the application.   As she said, 'An adjournment will cause unreasonable delay to the proceedings in circumstances where it is not disputed rental has been outstanding for over six months'.

[6]      Ms Cheung was then allowed until Friday, 19 April 2013 to file and serve her submissions. She did not comply.   At the fixture allocated before me she did not appear.  The Registrar telephoned her.  He was told, as it appears by her husband, that she would not be appearing.

[7]      I am invited to make the orders applied for unopposed and I do so on that basis and also because I am satisfied that they are merited.

[8]      As at the date of hearing, it was undisputed on the papers, Ms Cheung owed

Ms Yang  under  the  lease  $31,557.76  rent  and  $17,479.22  outgoings,  in  all

$49,036.98.   She was in clear breach of her most fundamental liability under the lease.

[9]      Under  the  lease,  Ms  Cheung  was  obliged  to  pay  rent  calendar-monthly

'without any deduction'.[1] As to that, the lease is clear:[2]

The lessee is not entitled to withhold the payment of Rent or deduct from payment of Rent or other monies payable under the Lease any amount by way of set-off whether in law or in equity or in pursuance of any counterclaim.

[1] Deed of Lease, 26 April 1993, Schedule B, cl 1.1(a)(c).

[2] Clause 1.1(d).

[10]     This failure to pay rent and other monies due, furthermore, was 'a breach going to the essence of lessee's obligations under the lease'.[3] Any such failure to pay rent within 14 days after any monthly rent payment was due gave Ms Yang the right to re-enter.[4]

[3] Clause 34.1.

[4] Clause 32.1.

[11]     On 13 December 2012 Ms Yang, as she was entitled to do, gave Ms Cheung notices under s 245 of the Property Law Act 2007, that unless she met the rent outstanding, $13,074.07, and the outstanding outgoings, $15,508.99, Ms Yang would apply, as she has, for orders cancelling the lease, permitting her to re-enter, and requiring Ms Cheung to pay the arrears. Ms Yang issued two further such notices on

13 February 2013.

[12]     Ms Cheung has not, since the service of those notices, paid the rent or the outgoings due and, absent any ground for relief against cancellation, Ms Yang is

entitled to the orders she seeks under s 251 of the Property Law Act 2007.

[13]     Ms Cheung's application for relief against cancellation, under s 253, rests on her claimed counterclaim or setoff but that claim, however categorised, does not excuse her from paying the rent and outgoings due. The clause in the lease, which I have set out in para [9], rules that out. She must pursue her claim or setoff by independent action.

[14]     The ordinary rule, moreover, is that while relief from cancellation will be granted almost presumptively where arrears are paid in full, it will usually be denied where, as is the case here, arrears have not been paid and there is no prospect that they will be, especially where the lessee is insolvent.[5]

[5] Grant v Hannay & Tapper CIV-2009-404-007248, 17 March 2010 at [41] - [43]; Mulholland v

Waimarie Industries Ltd HC Christchurch, CIV-2009-409-707, 15 May 2009.

[15]     Ms Cheung herself says in her affidavits that she is in significant debt and that her only present means to meet her liabilities is to succeed in her claim for damages. She may well then be insolvent. But whether she is or not, she has not suggested that she is either willing or able to pay the rent and outgoings outstanding. She has no basis, therefore, for relief.

[16]     I make an order, under s 251 of the Property Law Act 2007, cancelling the lease and granting to Ms Yang possession of the leased unit.  This order is to take effect seven days after the day on which a sealed copy of this order is served.

[17]     I make a further order that Ms Cheung is to pay Mr Yang the rent and outgoings outstanding as at the day of hearing, $49,036.98; and I order her to pay

costs at scale 2B and disbursements as fixed by the Registrar.

P.J. Keane J