HARDLEY V FATUPAITO AND MCCLOY AS LIQUIDATORS OF NORMANBY PROJECT LIMITED (IN LIQUIDATION) HC AK CIV-2008-404-8585

HARDLEY V FATUPAITO AND MCCLOY AS LIQUIDATORS OF NORMANBY PROJECT LIMITED (IN LIQUIDATION) HC AK CIV-2008-404-8585

The court held that requiring payment of outstanding rent and outgoings as a condition of consenting to assignment did not contravene s 227(1)(a)(i) because the obligation was a pre-existing contractual debt not an additional rent, premium or fine extracted as the price for consent; withholding consent until arrears were remedied was not unreasonable; and payment to enable sale as a going concern did not breach Companies Act principles as it facilitated asset realisation for creditors generally.

Citation
openlaw-09bdc704_98f0_4c7f_9f6d_e43ce1d62e12.pdf
Parties
Applicant / Landlord: Timothy Drummond Hardley; Applicant / Landlord: Keith Sharples Hardley; Applicant / Landlord: Coralie Hardley; Respondents / Liquidators: Vivian Fatuapaito and Colin McCloy (as Liquidators of Normanby Project Limited (in liquidation)); Former Lessee / Tenant: Normanby Project Limited (in liquidation)
Court
High Court
Jurisdiction
New Zealand
Judgment Date
30 June 2009
Procedural Posture
Declaratory Judgment Under Declaratory Judgements Act 1908 / Judgment (final)
Outcome
Declarations granted in favour of the lessors; lessors entitled to require payment of outstanding arrears and outgoings before consenting to assignment; no order as to costs.
Legal Topics
Assignment of Lease, Consent to Assignment, Unreasonably Withheld Consent, Statutory Prohibition on Fines/premiums, Preferential Payments, Liquidator Powers, Disclaimer of Onerous Property, Voidable Transactions
Property Law Company Law Insolvency Law Contract / Lease Law Assignment of Lease Consent to Assignment Unreasonably Withheld Consent Statutory Prohibition on Fines/premiums +4 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Legal principles 4 Authorities cited 13 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

Timothy Drummond Hardley

Applicant / Landlord

Keith Sharples Hardley

Applicant / Landlord

Coralie Hardley

Applicant / Landlord

Vivian Fatuapaito and Colin McCloy (as Liquidators of Normanby Project Limited (in liquidation))

Respondents / Liquidators

Normanby Project Limited (in liquidation)

Former Lessee / Tenant

Procedural Posture

Declaratory Judgment Under Declaratory Judgements Act 1908 / Judgment (final)

Legal Issues

  1. 1 Whether requiring payment of outstanding arrears as a condition of consenting to assignment contravenes s 227(1)(a)(i) Property Law Act 2007
  2. 2 Whether the lessors unreasonably withheld consent to the proposed assignment
  3. 3 Whether the condition to pay arrears would amount to an unlawful preference under the Companies Act 1993

Ratio Decidendi

The court held that requiring payment of outstanding rent and outgoings as a condition of consenting to assignment did not contravene s 227(1)(a)(i) because the obligation was a pre-existing contractual debt not an additional rent, premium or fine extracted as the price for consent; withholding consent until arrears were remedied was not unreasonable; and payment to enable sale as a going concern did not breach Companies Act principles as it facilitated asset realisation for creditors generally.

Court Disposition

Declarations granted in favour of the lessors; lessors entitled to require payment of outstanding arrears and outgoings before consenting to assignment; no order as to costs.

Orders

  • Declarations in paragraphs 1–4 of the originating application dated 23 December 2008 are made in favour of the applicants
  • No order as to costs