Feng v Magnum Hospitality Limited [2018] NZHC 3008 (20 November 2018)

Last Updated: 23 November 2018

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-2343 [2018] NZHC 3008

IN THE MATTER	of the Property Law Act 2007, s 251
AND IN THE MATTER	of an application for an order for possession of land
BETWEEN	XIONG FENG and DANHONG ZOU Applicants
AND	MAGNUM HOSPITALITY LIMITED Respondent

Hearing:	7 November 2018
Appearances:	D K Wilson for the applicants No appearance by or for the respondent
Judgment:	20 November 2018

JUDGMENT OF JAGOSE J

This judgment was delivered by me on 20 November 2018 at 2:00 p.m. pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

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Counsel / Solicitors:

Mr D K Wilson, Barrister, Auckland

Mr L Divers, Churton Hart & Divers, Solicitors, Auckland

FENG and ZOU v MAGNUM HOSPITALITY LTD [2018] NZHC 3008 [20 November 2018]

[1] The applicants are the registered proprietors of Unit H in the Selwyn Centre, at 182 Great South Road in Auckland’s Papakura (the “property”).

[2] The property was leased to the respondent – for use as a restaurant, styled Boodles Café – for a term of six years, expiring on 28 February 2018. The respondent continued in possession of the property after expiry, without agreement with the applicants as to the duration of that continued possession.

[3] By reason of s 210 of the Property Law Act 2007, the respondent accordingly leases the property on a lease terminable at will, by the applicants giving not less than 20 working days’ written notice of termination to the respondent. The applicants gave such notice on 31 August 2018.¹ The notice expired on 28 September 2018.

[4] The applicants sought through agents to re-enter and take possession of the property on 1 October 2018. That was not successful. The applicants’ counsel, David Wilson, observed to me that is not surprising, given the difficulties inherent in retaking possession of a restaurant’s premises. Mr Wilson expressly referred to “food”; I infer the business is a going concern, rather than the defendant has abandoned the property.

[5] The present proceeding accordingly was issued, as an originating application for exercise of the Court’s powers under s 251 of the Property Law Act 2007, to order the applicants’ possession of the land and to cancel the lease. Unpaid rent also is claimed, but not pursued before me. The application includes within its prayer for relief permission for the proceeding to be commenced by way of originating application under Part 19 of the High Court Rules.

[6] The application was served on the respondent on 24 October 2018. But the respondent did not respond to that notice of call of the proceeding in the Duty Judge’s List before me on 7 November 2018. In the List, Mr Wilson sought judgment by default on the applicants’ claim for possession and cancellation. In my minute of that date, I observed “[s]o far as that goes, it appears the lease was validly terminated, and the [applicants] thus entitled to possession of the land.”

1. The notice refers to the lease expiring on 1 March 2018. That is not correct but, as an error in the respondent’s favour (by one day), it is not fatal to the notice’s legitimacy.

[7] However, applications under s 251 may not be made by originating application as of right (despite such right obtaining to applications made under s 244, “for possession of land for the purpose of cancelling a lease” on the lessee’s breach of a covenant or conditions of the lease).² HCR 19.5 entitles any other proceeding to be commenced by originating application if the Court permits, on (optionally, without notice) application to be filed with the proposed originating application.

[8] While the applicants’ rolled-up application may have been of commendable economy, it was undermined by HCR 19.7(1), which provides the substantive proceeding only is commenced “when the court gives permission”. The materiality of the timing of that commencement is in the Rules’ requirements for subsequent service.³ The consequence was the respondent’s entitlement thus to disregard earlier service of the rolled-up application as informal.

[9] In circumstances particularly of the respondent’s assumed continued operation from the premises subject to the lease, my minute of 7 November 2018:

(a) granted the applicants permission to commence the proceeding by way of originating application;

(b) under HCR 1.9, deemed the originating application served on the respondent as established by the affidavit of Michael Steven Holt sworn 6 November 2018;

(c) indicated I would grant the orders sought unless the respondent filed opposition by 12 noon on Friday, 16 November 2018; and

(d) directed the applicants to serve a copy of this minute on the respondent and file proof of service.

Proof of such service on 9 November 2018 is established by the affidavit of Michael Steven Holt sworn 13 November 2018. No opposition is filed by the respondent.

[10] I therefore order:

² HCR 19.2(s).

³ HCR 19.10(1)(d).

(a) the applicants are to have possession of the property;

(b) the lease of the property to the respondent is cancelled; and

(c) the respondent is to pay the applicants indemnity costs in terms of HCR 14.6(4)(e) and clause 6.1 of the lease.




—Jagose J