Shelf Company no.5 Limited v Frema Properties Limited

[2020] NZHC 3001

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-002669

[2020] NZHC 3001

BETWEEN

SHELF COMPANY NO. 5 LIMITED

Intended First Appellant

SHANE GALPIN and BALLU KHAN
Intended Second Appellants

AND

FREMA PROPERTIES LIMITED

Intended Respondent

Hearing:	[On the Papers]
Appearances:	K F Gould for Intended First and Second Appellants V T S Purusram for Intended Respondent
Judgment:	12 November 2020

JUDGMENT OF EDWARDS J

[re Leave to Appeal]

This judgment was delivered by me on 12 November 2020 at3.30 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Counsel:     K F Gould, Auckland

Solicitors:    DMG Solicitors, Auckland

Victorian Lawyers, Auckland

SHELF COMPANY NO. 5 LTD v FREMA PROPERTIES LTD [2020] NZHC 3001 [12 November 2020]

[1]    In  my  judgment  dated  10 August 2020,  I  allowed   an   appeal   by   Frema Properties Ltd  (Frema) from  a decision of  the District Court.1  I found that   s 233(1) of the Property Law Act 2007 did not prevent Frema from suing for unpaid rent and outgoings pursuant to the terms of a lease. I subsequently remitted the proceeding back to the District Court to make the necessary factual findings regarding the outstanding quantum of rent and outgoings.2

[2]    Shelf Company No. 5 Ltd (Shelf) seeks leave to appeal the decision under s 60 of the Senior Courts Act 2016. For leave to be granted, the appeal must raise some question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal.3

[3]By consent, the application for leave has been dealt with on the papers.

Should leave be granted?

[4]    The proposed grounds of appeal set out in the notice of appeal differ in some respects to those canvassed in the submissions filed in support. The focus of this judgment is on those set out in the submissions.

[5]    The first intended appeal ground relates to my finding that the lease had been surrendered by operation of law. Shelf says that there is no evidence to support the conclusion that Shelf surrendered the lease by abandoning the premises, and that any conclusions that Frema may have reached (via the sole director, Ms Free) were not shared or communicated to Shelf.

[6]    I am not persuaded that this ground of appeal raises a bona fide or serious argument involving a sufficiently important interest to outweigh the cost and delay of a further appeal. The fact that Shelf vacated the premises on or about 13 June 2012

1      Frema Properties Ltd v Shelf Company No. 5 Ltd [2020] NZHC 1994.

2      Frema Properties Ltd v Shelf Company No. 5 Ltd [2020] NZHC 2390.

3      Waller v Hider [1998] 1 NZLR 412 (CA) at 413–414; Snee v Snee (1999) 13 PRNZ 609 (CA) at [15].

was admitted by Shelf in its statement of defence. This was not a factual dispute requiring resolution and there was no evidence before the Court putting it in issue.

[7]    Furthermore, the question to be answered in deciding whether there had been a surrender was not whether Frema communicated its intention to Shelf, but whether Frema accepted Shelf’s abandonment of the premises as bringing the lease to an end. I found that the engagement of a real estate agent to find another tenant, and the sale of the property with vacant possession, meant that Frema accepted Shelf’s abandonment of the premises as bringing the lease to an end.4 Shelf does not raise any argument to suggest that this conclusion was wrong.

[8]    The next ground of appeal challenges my findings regarding the scope of s 233 of the Property Law Act 2007. That section applies unless a “contrary intention appears from the lease or from another circumstance”. I found that the sale of the property with vacant possession evidenced a contrary intention.5

[9]    Shelf says that there is no evidence before the Court from the purchaser of the property. Accordingly, it says that I was wrong to find that there was a contrary intention as between Frema and the purchaser.

[10]   I do not consider this argument to be seriously arguable. There is no dispute that the property was sold with vacant possession. That is enough to infer a contrary intention. There is no need to call evidence from the purchaser to simply confirm that which is not disputed. But if I am wrong about that, then the error does not raise a matter of public or private interest which would meet the necessary threshold for leave to be granted.

[11]   There is a final point weighing against granting leave to appeal. Shelf vacated the property in 2013. Proceedings were issued in 2017. The sole director and shareholder of Frema is a lady approaching her eighties. The issues in dispute have been back and forth between the District Court and High Court and are currently back before the District Court awaiting final determination. The amount in issue is in the

4      Frema Properties Ltd v Shelf Company No. 5 Ltd, above n 1, at [21].

5 At [24].

region of $118,000. The merits of the appeal are not so strong that additional costs and delay in arguing about this sum on appeal can be justified.

[12]   For these reasons, I do not consider that the interests of justice will be served by granting leave. The application for leave to appeal is declined.

Result

[13]The application for leave to appeal is declined.

Edwards J