OXFORD HOLDINGS LIMITED V Q T HOSPITALITY LIMITED HC INV CIV 2007-425-000467

OXFORD HOLDINGS LIMITED V Q T HOSPITALITY LIMITED HC INV CIV 2007-425-000467 28 September 2007IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY CIV 2007-425-000467BETWEEN OXFORD HOLDINGS LIMITED Plaintiff AND Q T HOSPITALITY LIMITED Defendant Hearing: 27 September 2007 Counsel: D M Lester for Plaintiff N A Till QC for Defendant Judgment: 28 September 2007ORAL JUDGMENT OF PANCKHURST J Application for relief against forfeiture[1] Yesterday I heard extensive argument with reference to this matter. Oxford Holdings Limited owns premises in central Queenstown. As of July it leased those premises to Q T Hospitality Limited, which company ran a bar and associated facilities from the premises under a lease which has about six years left to run. [2] There has been a history of late payment of rent under that lease. The most recent example of this was in July. Rent was due to be paid on the 1st of the month. No payment was made that day. In terms of the lease, upon the expiry of 14 days after the due date for payment, a right of re-entry accrued. Oxford exercised that right on Monday, 16 July. Whether its re-entry was valid is the first issue in this proceeding. [3] In a sense this decision is a sequel to a judgment delivered by Asher J (INV HC CIV 2007-425-178) concerning the same parties on 11 May 2007. Thatcase related to a previous default in payment of rent. Rent was not paid for the month of March 2007. Oxford re-entered on 31 March and gave notice of termination of the lease. Q T obtained an injunction which enabled it to resume possession of the premises while an application for relief against forfeiture was heard. In the event, of course, Asher J granted relief. His decision needs to be read alongside this one. Deliberately I will not seek to cover the same ground as he did. [4] I have already identified as the first issue whether Oxford's re-entry was valid. This hinges upon whether payment of the outstanding rent was made before midnight on 15 July, but that question involves a number of sub-issues to which I will turn shortly. In addition, in its statement of defence Q T has raised a positive defence, variously described, but perhaps it is sufficient for present purposes to identify it as accord and satisfaction. It maintains that when payment of the July rent was tendered, and accepted by Oxford, an accord and satisfaction arose. Thereby it is said the right to terminate the lease was lost. [5] Finally, assuming the re-entry is upheld and the positive defence does not avail Q T, it will be necessary to consider Q T's further application for relief against forfeiture.The relevant events in June/July[6] Mr Ian Hamilton is the principal of Oxford. He has filed two affidavits in the proceeding. Max and Nicole Roberts are the principals of Q T. They likewise have filed affidavits in the proceeding. [7] Returning to May of this year, the rent for that month was brought up to date, as it needed to be in the context of the hearing before Asher J. Rent was due to be paid again on 1 June. The sum of $24,863 was due. It was not paid on time. On Wednesday, 13 June Nicole Roberts sent an email to Mr Hamilton saying that she would effect payment that day. In fact a sum of $17,000 was paid to the BNZ (Mr Hamilton's bank) at two minutes past six that evening. The following day, Thursday 14 July, Nicole Roberts sent a further email which indicated that thebalance due would be paid in the course of the day. It was. A further personal cheque for $7,863 was deposited into the BNZ account. [8] Moving onto July, the amount due on the 1 st of the month was $26,046. Payment was not made on the due date. On 2 July Oxford's solicitors wrote to the solicitors acting for Q T. The letter began with a demand for payment of certain costs and disbursements which were outstanding and consequent upon the earlier hearing. The letter then continued on to note that rent for July had not been paid, that accordingly Q T was again in default and that legal costs were running against the company. [9] On 5 July Q T's solicitors wrote to Oxford's solicitors concerning prospective purchasers of the business. These persons were identified by name and a request was made for Mr Hamilton to consider certain variations to the lease as sought by the intended purchasers. The next day Oxford's solicitor replied saying simply that given the ongoing default with reference to payment of July rent it was not appropriate to consider the issue of variations to the lease. [10] The solicitors wrote again on 10 July pointing out that there had still been no response with reference to the arrears. The letter, however, then asked for some financial information concerning the prospective purchasers of Q T's business. It was not until Friday, 13 July that Mr Hamilton was contacted by the Roberts concerning the arrears. That day Nicole Roberts sent an email which said "rent will be paid today and I will fax a remit". [11] At 5.47 pm a personal cheque for $26,046 was paid into the relevant account at the BNZ. Despite the contents of the email no advice was given to Mr Hamilton concerning the fact of that deposit. Throughout the weekend of 14-15 July Mr Hamilton checked his account to see whether there was any credit recorded in relation to the rental payment. None was, and first thing on Monday, 16 July, Oxford effected re-entry into the premises. The locks were changed, the company's solicitor wrote to Q T's solicitor advising that re-entry had been effected and that the lease was terminated.[12] Q T's solicitor challenged the validity of the re-entry by reference to the Supreme Court's decision in Otago Station Estates Limited v Parker [2002] 2 NZLR 734. I shall have occasion to return to that case shortly. [13] The next day, Tuesday 17 July, the cheque appeared as a credit to Mr Hamilton's account. That day his solicitor wrote to Q T's solicitor and asserted that the case of Otago Station Estates was of no relevance to the issues of payment. [14] On 18 July Mr and Mrs Roberts forcefully gained entry back into the premises. When this came to Mr Hamilton's attention something in the nature of a stand-off developed between the parties. Fortunately their solicitors became involved. The solicitors were engaged in discussions in the late afternoon of 18 July and into the evening. In the end result they concluded an arrangement to cover the situation until the present hearing. [15] On a without prejudice basis Q T was allowed to continue in occupation of the premises. It was, of course, to pay rent as it fell due and this proceeding was to be filed in order to clarify the issues between the parties. I commend both solicitors for the approach which they adopted that day. It seems to me on the basis of the affidavit evidence that there was a real risk that matters could have got completely out of hand, without the timely intervention of advisors who, through a measure of give and take, brokered an interim arrangement.Was Oxford's re-entry valid?[16] This overarching question involves a number of sub-issues. The convenient course is to deal with each of those issues in turn and then to come to the answer of the more general question.Was legal tender required?[17] Mr Lester adopted as a "basic argument" that Q T was obliged to pay the rental in either cash, or by a bank cheque, unless Oxford had waived the entitlement to receive legal tender. His argument continued that there had been no waiver.Accordingly, he submitted, legal tender being a requirement, there could be no question but that payment was not effected by the 15 July deadline. [18] The case relied upon in support of this argument is Otago Station Estates. Both the Court of Appeal and the Supreme Court confirmed the decision of the High Court that legal tender was required in the circumstances of that case. The payment at issue was a deposit required in terms of an agreement for sale and purchase of land. The deposit was not paid on the due date. The vendor gave notice of cancellation to become effective if payment was not made within three working days. At 4.32 pm on the third day a fax was sent by the purchaser's solicitors to the vendor's solicitors confirming that a deposit had been made into the trust account of the vendor's solicitor. A photocopy of the relevant cheque and of the stamped deposit slip was also provided. However, this cheque was a personal cheque and the issue in the case became whether payment in that form, or mode, was sufficient. All courts found that it was not. [19] The essential reasoning of the Supreme Court is captured in paragraph [27] of the judgment delivered by Blanchard J:The law relating to the mode of payment of deposits is well understood and workable in practice. It was undoubtedly known to those who prepared the seventh edition of the standard form that a contractual requirement for the making of a payment must, as a matter of law, be performed by means of legal tender, bank cheque or other cleared funds unless the payee by words or conduct indicates a preparedness to accept a personal cheque. A vendor who takes a personal cheque or knowingly allows his or her agent to do so, without objecting specifically to the form of tender of payment as soon as he or she is aware of it, must expect to be taken to have dispensed with the need for payment through legal tender or its equivalent. The vendor would then be estopped from asserting that the mode of payment did not comply with the contractual requirement. Where the sale is at an auction or occurs outside banking hours, vendors who enter into the sale (or allow an agent, the auctioneer, to do so on their behalf), and who then indicate an unwillingness to accept the purchaser's personal cheque, might now find, if the matter ever came to Court, that it would be held against them that, in circumstances where a bank cheque was not immediately obtainable and the deposit was of a size that a purchaser was unlikely to be carrying sufficient cash, it was implicit that a personal cheque could and would be used. That is not, however, a matter on which we need express more than a tentative view.[20] Mr Till, however, submitted that the present case fell within the exception recognised by Blanchard J in the passage just quoted. He further relied upon anumber of Australian authorities, in particular the decision of the High Court of Australia in George v Cluning (1979) 28 ALR 57 in which Mason J said at 62-3:The practice of giving and accepting personal cheques in payment of debts and liabilities is now so widespread that there is a general expectation on the part of persons making payments that a personal cheque, given in payment of a debt or liability, will be accepted unless the payee objects before or at the time of receipt that the cheque does not constitute legal tender. To my mind the law was correctly stated in the two Canadian cases [Wexelman v Dale (1917) 35 DLR 557 and Laidlaw v Rehill (1943) 4 DKR 429) where it was decided that a personal cheque, though not legal tender, was a sufficient payment if not objected to on that account.[21] The position reached in Australia was summarised in Stirling Properties Limited v Yerba Proprietary Limited (1987) 74 ACTR 1 where at 7 Miles CJ said this:George v Cluning (1979) 28 ALR 57 illustrates that, in modern conditions and without specific provision in the contract, parties to a commercial transaction may expect to pay and to be paid by cheque, but that the entitlement to pay by cheque and the obligation to receive payment by cheque is not absolute. The payee may waive the right to be paid in cash and if the payee accepts tender of a cheque without objection to its form the payee is deemed in the language of the old law to have 'waived' the right to payment in cash. Similarly if the payee rejects the tender of the cheque for a reason other than the form of the tender the payee is deemed, in the terms of the modern law, to have declined to exercise his or her right to object to payment in that form and hence to have waived the right to payment in cash.[22] In light of these various authorities I am not persuaded that legal tender was required in this instance. As is self-evident this is a case which concerns recurring periodic payments of rent. I do not regard the reasoning in Otago Station Estates as decisive in a context such as the present. [23] No doubt a landlord may require payment of rent by way of legal tender, and if he does so the tenant must comply. But here, in my view, the landlord did not require legal tender. I consider there is a clear course of conduct which evidences a waiver of the strict requirement. This may hardly seem surprising. It is afterall commonplace that periodic rental payments are paid by personal cheque and without the formality which attends the payment of a deposit or settlement of a property sale. However, this conclusion that legal tender was not required does not answer the further question whether the 11 th hour deposit of a personal cheque to the BNZ account achieved payment before the 15 July deadline. That is the next sub-issue.Was payment in fact made before midnight on 15 July?[24] Mr Till submitted that payment between the parties was habitually made by the deposit of a personal cheque to the BNZ account. No issue was taken by Oxford to this mode of payment. Counsel acknowledged that a personal cheque is a conditional payment. There is no payment at all until the cheque is cleared. But, submitted Mr Till, the need for legal tender having been waived, the deposit of the cheque became the operative event. Moreover, he argued, payment occurred at the point of the deposit, regardless that the cheque was not credited to Mr Hamilton's account, let alone cleared until after 15 July. [25] Mr Till posed two rhetorical questions. He said if payment of the cheque had been made direct to Mr Hamilton on either the Saturday or the Sunday would this have been a timely payment? Unsurprisingly Mr Till answered his own question in the affirmative. He then posed the question, was there any difference where the cheque was paid to the BNZ, Mr Hamilton's bank, on Friday, and answered this question in the negative. [26] I am afraid I do not find this argument persuasive. To my mind it underestimates the significance of two different situations. One is the general situation in relation to payments made from time to time under the lease on the one hand, as compared to this particular situation when in light of the previous hearing in this Court and subsequent correspondence from solicitors, Q T was undoubtedly on notice that late payment would not be tolerated. [27] I need to explain this distinction. I begin with a reference back to the Supreme Court decision in Otago Station Estates:[26] A person entitled to payment of a deposit is entitled to what Somers J called the certainty of actual receipt. The entitlement is to more than a conditional payment with the need to await clearance of the cheque in order to know that payment has actually occurred, and with the right to sue for the debt suspended in the meantime. The editors of Brindle and Cox would go even further. They express the view that there is in fact no payment at all until the cheque is honoured. The cheque is then treated as having been paid from the time when it was delivered.Mr Till focused upon the last sentence of this quotation, namely that once a cheque is honoured it is to be treated as paid from the time when it was delivered (or in this case deposited). [28] Counsel also placed some reliance upon affidavit evidence given by Nicole Roberts. Her evidence was to the effect that she had regularly banked cheques with the BNZ in Queenstown after 4.30 pm. Moreover, the affidavit continued, her experience was that in these circumstances a credit for the payment would appear in the payee's account the following day. With reference to this aspect Exhibit B to her affidavit referred to five examples, where she had banked cheques after the close of the normal banking day, yet the credit had appeared one day later. I note that the schedule showed five payments, all of which occurred between Monday and Thursday, that is none were made on the Friday. [29] What is more, there is evidence in the form of Exhibit H to Mr Hamilton's affidavit, a letter from the BNZ dated 16 July 2007, which evidences the normal practice of the bank:On Friday 13 July 2007, a deposit of $26,046.00 for credit of the above company was accepted by the Queenstown Branch of the Bank of New Zealand, after our same day processing cut-off time of 4.30pm. As is standard banking practice, this deposit was held for processing on the following business day, which in this case is Monday 16 July 2007. I confirm that the deposit of $26,046.00 IS NOT held in the account of Oxford Holdings Limited as at Monday 16 th July 2007.[30] It follows in my view that there was no basis to expect that the cheque would be credited to the account before midnight on 15 July. In any event whether the appearance of that credit would have been enough to effect payment may well be open to argument. However the fact is that there was not a credit by the end of the day on 15 July. It follows that nor was there any notice of payment to Mr Hamilton, which brings me to the next issue.Was notice a necessary incident of payment?[31] To recap Nicole Roberts said in her email of 13 July "I will fax a remit". Mr Lester submitted that her failure to do so, or to give any form of notice toMr Hamilton that the deposit had been made, was necessarily fatal. He was left in the lurch in that there was no basis upon which he could order his affairs. He did what he could by checking over the weekend, only to find that there was no credit to the account. The deadline of midnight 15 July came and went. He was entitled to either physical payment of the cheque, or at the very least notification that a deposit to the relevant account had been made. He got neither. [32] By reference to Larsen v Rick Dees Limited [2007] NZSC 39, Mr Lester submitted that non-notification to Mr Hamilton was fatal. That was a case concerning remote settlement of a property transaction. The relevant deadline was at 5.00 pm. The purchaser's solicitors were required to provide by that deadline an undertaking that a bank cheque had been paid to the vendor's solicitor's account, and confirmation of the deposit by providing a faxed copy of the cheque and of the stamped deposit slip. In fact the obligation to bank the cheque was achieved before 5.00 pm, but for various reasons the faxed advice confirming such banking did not occur until 5.07 pm. In the meantime, at 5.03 pm, the vendor gave notice of cancellation of the agreement. [33] A majority in the Supreme Court held that the failure to give timely notification of the banking of the cheque meant that there had been no completed payment and the cancellation was therefore valid. The reasoning of the majority is to be found in the judgment of Blanchard J delivered on behalf of himself and McGrath and Gault JJ:[33] In the present case the purchaser failed timeously to evidence to the vendor that payments of cleared funds had been made and therefore did not comply with the requirements of the settlement notices. It was not good enough for a purchaser to do so within some reasonable, but necessarily indefinite, time after the settlement notice deadline had passed. That would introduce a most undesirable element of uncertainty for vendors and provide room for much argument about how long after the deadline was acceptable as being close enough. Nor are we persuaded that the contract terms themselves provide for some flexibility because of the imposition of an additional day's interest if settlement is after 4.00 pm. That would not compensate a vendor into whose bank account cleared funds had been transferred before 4.00 pm without notice of the payment being given. We are unpersuaded also by the suggestion that because payment could be made at 5.00 pm some breathing space for subsequent advice to the vendor must be allowed for. In our view what the contract requires by 5.00 pm is a payment of cleared funds of which the vendor is aware. Purchasers who choose a remote settlement must pay in sufficient time to allow for providingthe vendor with knowledge of the making of the payment in cleared funds before the deadline passes.[34] I accept this argument. Mr Till submitted that there was no requirement for notice in the present context. He stressed that it was not a property settlement and contended that the course of conduct between the parties absolved Mrs Roberts from any need to give notification, despite the terms of her email that Friday morning. I disagree, particularly in the circumstances which prevailed as at 13 July. In my view notice in some shape or form to Mr Hamilton was essential. There had already been one re-entry into the premises. With reference to the July rental the Roberts were on notice of their default. Nicole Roberts gave advice that she would fax a copy of the remit, an action which is simply at odds with there being no need for identification. [35] Perhaps if the credit to Mr Hamilton's account had occurred before the end of 15 July, this would have been enough, but of course it didn't and he was left with no way of knowing whether even the deposit of a personal cheque had occurred. I therefore find that an essential incident of payment was absent. For these reasons I also conclude that there was no payment made before the midnight deadline.Waiver / Estoppel / Accord and Satisfaction[36] These doctrines or principles were pleaded by way of positive defence in Q T's statement of defence:7. The cheques referred to in paragraph 2 hereof were tendered on the condition that they were in payment of the rental and OPEX [operating expenses] for July 2007. 8. By applying the funds to its use, the plaintiff accepted such condition of the tender inconsistently with the purported forfeiture such that it has waived such right as it had to forfeit or is alternatively estopped from asserting that the lease is thereby at an end and/or such right as it had to forfeit is merged by accord and satisfaction.[37] In submissions yesterday Mr Till placed reliance on election as well. Whichever head is adopted I think the gist of the argument was the same. Mr Till submitted that the cheque which was deposited was tendered on the basis it comprised the July rental of $26,046. He continued that upon receipt of that sum Oxford could accept it on the basis upon which it had been tendered, in which casethe right to forfeit had been waived. Alternatively, Oxford may have elected not to accept the cheque in which case it could, of course, terminate the lease. [38] At most, it was submitted, Oxford may have been entitled to retain rental for the days that were outstanding to 15 July. In fact Oxford's solicitor wrote to Q T's solicitor on 17 July explaining how the cheque had been treated. The letter indicated that a sum of $13,440 had been applied to meet the rental for the relevant days in July. The balance of about $12,600 was described as "lodged in [our] trust account and held on account of the court costs and other sums owing by your client to ours". [39] I note as well that the previous day Oxford's solicitor had already written the letter stating that payment had not been received within time and that the landlord had "re-entered the premises this morning and the lease has been terminated". Hence Mr Lester's primary response to the so-called positive defences was that re- entry and termination had occurred on 16 July. He drew attention to clause 30.1 of the lease. It provides that non-payment of rent amounts to an essential breach of the lessee's obligations. The landlord, in light of the breach, is entitled to damages. That entitlement subsists notwithstanding determination of the lease and is in addition to any other available remedy. Because the lease was at an end on Monday, Mr Lester submitted there was simply no scope for any of the asserted defences to avail Q T the following day. [40] To my mind the submissions made with reference to this aspect did not analyse the ingredients of the various heads of defence in any detail. I am not persuaded that any of the four suggested defences avail Q T. I can record my reasons for that conclusion quite briefly. [41] The elements of estoppel are some form of encouragement, or holding out (for example that a contractual right will not be strictly enforced), followed by reliance by the other party on that encouragement and detriment flowing from that reliance. To my mind any suggestion of estoppel in this instance fails at the first hurdle. There was no element of concessionary behaviour on the part of Oxford, much less reliance or detriment which accrued to Q T.[42] Waiver connotes non-insistence upon performance of a contractual term or obligation. I can see no basis in the evidence for the operation of waiver here. An election concerns the choice which an innocent party to a contract may have to make to either take advantage of, or overlook, an essential breach of the relevant contract. That party may cancel the agreement, or affirm it. Here, on the basis of my finding as to payment, Oxford had a choice, an election to make on Monday, 16 July. It could have chosen to affirm the lease and ignore the breach, or it could terminate. It, of course, elected to re-enter and terminate and gave due notice of that decision. Again, therefore, I see no basis for a defence based on election. [43] Accord and satisfaction is perhaps more in point. In New Zealand there is a line of cases since Homeguard Products New Zealand Ltd v Kiwi Packaging Ltd[1981] 2 NZLR 322 (HC) concerning the tender of a cheque in full settlement of a disputed debt. Typically the cases concern instances where a cheque is tendered on terms that it is in full and final settlement. The principles which underlie this line of cases remain controversial. However I need not explore the various authorities. In my view the present situation is not within the Homeguard category. Firstly there was no disputed debt, in the sense that the quantum of the debt was in doubt. Nor was there a tender on terms that the cheque was paid in full and final settlement. Nor do I find that there is any basis to impute to Oxford an agreement to accept that part of the amount tendered, in lieu of the whole. [44] It simply wasn't a situation of that kind. To the contrary, Oxford received a payment of rent, applied it to meet rent to the date of determination and said so in the letter written by its solicitor on 17 July. These actions were the very antithesis of accord and satisfaction. Whether Oxford was entitled to retain the excess may be open to question. Assuming it was not entitled to do so, does not, however, provide a basis for an accord and satisfaction in my view. [45] For all these reasons I am satisfied that there was no payment by the 15 July deadline. Therefore I accept that Oxford is entitled to the declaration it seeks, namely that its re-entry on Monday, 16 July was lawful. But it remains to consider Q T's application for relief against forfeiture.Is relief against forfeiture appropriate?[46] Asher J expressed his conclusions in May in these terms:Conclusion[30] QT Hospitality has undoubtedly been unable to meet its debts as they have fallen due, and it is only the intervention of its shareholders utilising family resources which has enabled it to bring the rent up to date. The rent payment record has been abysmal. However, the prospects of future rent being paid are not abysmal. The shareholders have made a substantial investment in the business, which they are trying to sell. They now have the support of an apparently wealthy family, which has already contributed significant funds to bring the rent up to date. Logic indicates that the support will continue, at least in the short term while efforts are made to sell. The financial situation in that sense is far from hopeless or abysmal. [31] Returning to the test that I have referred to, I am not satisfied that there will be further major defaults in paying rent if relief is granted. I consider on balance that there is a reasonable prospect, at least in the short term, that the rent will be paid. [32] I consider that this is an appropriate case to grant relief against forfeiture, and I so order. If there is further default, QT Hospitality will face the prospect of another re-entry, with a very different reception from the Courts if further indulgences are sought.[47] Despite his decision that relief against forfeiture was appropriate, costs were awarded against Q T. The judgment contains a detailed analysis of the relevant principles, an analysis tailored to the very circumstances of this case. Both counsel adopted it as an accurate statement of the law relevant to relief against forfeiture. I gratefully do likewise. I need not repeat the discussion (see paragraphs [18] – [19] of the judgment). [48] In a forceful argument Mr Lester marshalled a chronicle of factors which in his submission told against further relief. The list included: [a] The fact of late payments in both June and July with Q T treating the 14 days grace period before re-entry was available to the landlord, as extra time within which to pay the rent. [b] The timing of the payment at 5.47 pm on 13 July being a payment at the 11th hour to the foreign exchange desk at theBNZ after the close of normal banking hours and when Q T was on notice of its obligations, both as a result of the earlier judgment and subsequent correspondence received from Oxford's solicitor. [c] The circumstance that against an established previous history of defaults, rather than that history being remedied, it had continued when Q T was on a warning that "a very different reception" was likely from this Court in the event of any further default and an application for relief. [d] The failure to provide financial information, particularly to verify the availability of money from family sources in Australia, which was such as to call in question whether the lynchpin of the previous decision (payment of rent was assured, at least in the short term) was in reality a given. [e] That viewed in the round the performance of Mr and Mrs Roberts had reached the point where they could no longer return to this Court with clean hands and that this was therefore an exceptional case where relief should not be extended on a further occasion. [49] Mr Till wisely did not seek to defend his client's methods. In effect he accepted that there had been a cavalier attitude to timely payments which was extraordinary given the background to which I have already referred. He stressed, of course, that rental for July (and for subsequent months) has in fact been paid. Absent formal financial information with reference to Q T's present trading position or with reference to the family monies in Australia, Mr Till drew attention to a letter annexed to one of the affidavits. It is dated 4 September and it pledges ongoing parental support to a son, being Max Roberts. Indeed Mr Till invited me to infer that not only had support been offered but that it had in all probability been given in order for payments to be kept up to date in recent times.[50] Counsel adopted as his major focus a candid submission based on an evaluation of the commercial realities of the present situation. Mr Till acknowledged that this was a business venture in which Mr and Mrs Roberts had become involved by virtue of a very significant financial investment. As the recent history demonstrates, their business has not succeeded. As their affidavits verify their present aim is to sell the business to best advantage. Mr Till argued it was significant that buyers are available and indeed that steps have been taken with reference to at least one prospective buyer who, as I noted earlier, sought certain variations to the terms of lease. In short, said Mr Till, it is a situation where Mr and Mrs Roberts are dependent on an orderly transition out of their present business situation if they are to recover any substantial part of the capital which they have committed. [51] With reference to the July breach of payment, despite its audacity, Mr Till argued that it should not be characterised as a major default. Full payment was actually wending its way through the banking system at the point of default, the deadline of midnight, 15 July. [52] After some reflection I am of the view that a focus on the commercial imperatives is appropriate in this case. The affidavit evidence demonstrates that both parties have prospective replacement tenants in the wings. On the basis of all the evidence I am left with the clear impression that the re-entry on 16 July was effected more to secure a commercial advantage than to obtain protection against a defaulting tenant. [53] It is noteworthy that Oxford moved immediately on Monday, 16 July to re- enter. No further inquiry was made concerning payment, not that there was any obligation to make inquiry. But the evidence indicates to me that there was a desire to terminate and that payment of the rental was very much a secondary consideration. If only by a narrow margin I am therefore persuaded that relief against forfeiture should be granted. I order accordingly. [54] That leaves the issue of costs (discussion with counsel). In light of Mr Lester's preference costs are reserved. If needed, memoranda may be filed._________________________________________________________________________________ Solicitors: Cruickshank Pryde, Queenstown for Plaintiff (Counsel – D M Lester) H M Associates, Queenstown for Defendant (Counsel – N A Till QC)