PARKHURST v BISHT [2021] NZHC 2888

PARKHURST v BISHT [2021] NZHC 2888 [29 October 2021]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2021-404-000948[2021] NZHC 2888BETWEEN PARKHURST CORPORATION LIMITEDAppellantAND MADHAN SINGH BISHTRespondentHearing: 10 August 2021Appearances: A Shinkarenko and T Zaseev for the AppellantS Raju for the RespondentJudgment: 29 October 2021JUDGMENT OF WALKER JThis judgment was delivered by me on 29 October 2021 at 10 amPursuant to Rule 11.5 High Court RulesRegistrar/Deputy RegistrarIntroduction[1] This appeal concerns damages awarded for 'loss of a chance' following alandlord's unlawful entry of commercial premises. The landlord-tenant relationshipbetween the appellant, Parkhurst Corporation Limited (Parkhurst) and therespondent Madhan Singh Bisht foundered in early 2017. Mr Bisht's company, ImaxxCafé & Bistro Ltd, was running a restaurant from the leased premises. Parkhurst hadbecome frustrated by Mr Bisht's consistently late and/or deficient payment of rent andoutgoings. It made various demands for the sums due. On 14 February 2017,Parkhurst re-entered and took possession of the leased premises by changing the locks.It had not served a valid notice upon Mr Bisht prior to re-entering but contended thatMr Bisht had given up possession of the premises.1[2] Mr Bisht issued proceedings in the District Court against Parkhurst for breachof the lease.2 He was largely successful although, for reasons which will emerge, noton his principal claim to damages. The Judge delivered an interim judgment in whichshe found the re-entry unlawful and liability for breach. She dismissed all theconventional claims for damages but allowed for supplementary submissions ondamages for loss of a chance. Ultimately, Mr Bisht was awarded $66,360.93 plusinterest and costs under that measure.[3] Parkhurst accepts that the re-entry was unlawful but argues on appeal that theJudge erred in two main respects: first in her assessment of loss of a chance andsecondly, by rejecting Parkhurst's affirmative defence that Mr Bisht failed to mitigatehis losses.Background[4] On 11 May 2015, Parkhurst and Mr Bisht signed a formal Deed of Lease (thelease) for premises at 167 Parkhurst Road, Parakai (the premises). The material termswere:(a) The lease was to commence on 11 August 2015.1 Relying on s 245(2) of the Property Law Act 2007.2 See Bisht v Parkhurst Corp Ltd [2021] NZDC 7242 [District Court decision].(b) It was for a term of 18 years with rights of renewal exercisable everytwo years: the first two year term was to end on 11 August 2017 and thefinal expiry date was 11 August 2033.(c) The monthly rental was $2,383.33 plus GST ($2,740.83 includingGST) payable on the 11th day of each month.(d) Under clause 3.1, Mr Bisht was required to pay a fair proportion ofoutgoings as agreed or determined by arbitration.(e) Mr Bisht received a 12 week "rent holiday"; the first monthly rentalpayment was due on 11 September 2015.(f) There were two special conditions in the sixth schedule:(i) The first read "[t]he lease will contain a standard demolitionclause: i.e in the case of a total purchase of Parkhurst Property".(ii) The second read "[t]he lease's [sic] will spend up to and from$80,000–$100,000 on renovations to upgrade the premise".[5] Mr Bisht took possession of the premises in May 2015 and began renovations.3They took longer than he anticipated. He estimated that he spent in excess of$180,000, including chattels for the restaurant's operation. The renovation cost wasvigorously contested at trial. Based on the notes of evidence, most of thesupplementary evidence and cross-examination dwelt on invoices purporting torepresent the renovation cost.[6] Rent was paid late from the commencement of the lease. Mr Bisht accepts thathe fell behind on payments under the lease as they began to fall due on 11 September2015 due to the expense of the unexpectedly prolonged renovations. He claimed tobe experiencing cashflow problems. For the first eight months of the lease, Mr Bisht3 This appears to be during the 'rent holiday' although the formal term had not commenced.did not pay the GST portion of the rent (paying $2,383.33 instead of $2,740.83 permonth).[7] The Judge determined that Mr Bisht failed to pay any money towardsoutgoings for the entire 21 month duration of the lease, other than a one-off paymentof $1,800 following a meeting in November 2016 to discuss the arrears. The Judgewas satisfied from the evidence that the outgoings were payable and not objected tountil the proceedings were issued.4[8] The issues came to a head. The directors of Parkhurst asserted that demandsto clear the arrears were sent to Mr Bisht on 7 June 2016, 21 September 2016 and18 November 2016. An invoice dated 14 February 2017 for arrears of $21,129.67 wasissued. Mr Bisht denied receiving the letters of demand.[9] On the night of 13 February 2017, witnesses observed what they thought wereMr Bisht's "agent(s) and/or employee(s)" loading furniture and stock out of thepremises. The directors of Parkhurst concluded that Mr Bisht was abandoning thepremises.[10] On 14 February 2017, after taking legal advice, Parkhurst re-entered thepremises. They took the view that equipment was missing and that Mr Bisht was"gutting the place". They arranged for a lock-smith to change the locks. At the time,the restaurant was not operating. It had not been open since December 2016. Rentfor December and January had been paid but rent due on 11 February 2017 had notbeen paid.[11] Mr Bisht arrived to find the locks changed. A series of letters between theparties' respective legal advisors followed. There was no resolution.[12] On 31 August 2017, Mr Bisht issued proceedings in the District Court.4 District Court decision, above n 2, at [112].District Court decision[13] Judge P A Cunningham issued an interim judgment on 15 February 2021 andthe final judgment on 27 April 2021. For present purposes, it is the final judgmentwhich is at issue.[14] The Judge found that although the landlord had grounds to issue Mr Bisht witha notice under s 245 of the Property Law Act 2007 (the Act), it plainly failed to do so.The directors of Parkhurst had no reasonable grounds on which to believe thatMr Bisht had already given up possession of the premises.5 The re-entry was thereforeunlawful.6[15] Mr Bisht's statement of claim sought damages of $190,033.98 said to representthe cost of renovating and upgrading the premises. He also sought damages for theloss of his business/loss of opportunity and for the stress, shame and embarrassmentcaused by the sudden closure of his business, interest and costs.[16] The Judge noted that the focus at trial was on compensation for the cost ofrenovating the premises. She referred to 140 pages of invoices, credit notes andstatements said to relate to expenditure on the renovation and fit out of the restaurant.Those invoices were variously made out to Imaxx Café & Bistro, Imaxx Café & BistroLtd, Curry Leaf (Mr Bisht's other restaurant) as well as businesses associated withMr Bisht's brother (Kajol Cuisine Ltd).7[17] During the hearing, with leave of the Judge, the invoices were organised intoa schedule and produced as an exhibit. This involved recalculation of expenses. Iinterpolate here that Mr Shinkarenko mounted a strenuous opposition to this duringthe trial, having sought source documents and financial documents for the claimedexpenses over the course of the proceedings. He submitted that parties who do notdisclose documents relevant to a transaction leave themselves vulnerable to an adverse5 See District Court decision, above n 2, at [29] and [42]. The Judge observed that the wording ofs 245(2) requires that the lessor believe the lessee has actually given up possession, and it is notenough that they thought the lessee was in the process of doing so.6 At [42].7 At [50].finding on the facts at the hearing.8 The Judge nonetheless ruled to allow Mr Bisht tolead oral evidence, including in relation to nine invoices on the basis that if anyembarrassment or difficulty was caused to Parkhurst leading to adjournment of thetrial, Mr Bisht could expect an award of costs against him.[18] The schedule totalled over $190,000 but there was proof of payment of only$59,934.04. The Judge concluded that it was unknown whether the produced invoiceshad been paid by Mr Bisht personally from his own finances or through another legalentity, or a mixture of the two. Some amounts were also paid for by Mr Bisht's brotheror a company associated with him, as he held active accounts with suppliers. BothMr Bisht and his brother gave evidence that Mr Bisht repaid him later but were at oddsas to how much had been repaid.9[19] The unsatisfactory state of the evidence created problems for the damagesclaim. While Mr Bisht was the lessee and the plaintiff, he did not own the Imaxx Café& Bistro business. A company bearing that name, Imaxx Café & Bistro Ltd, ownedthe business. Although Mr Bisht is the sole shareholder and director, the problem wasaccordingly one of legal personalities. The Judge held that the claimant should beImaxx Café & Bistro Ltd which was not a party to the proceeding.10[20] The Judge identified other issues with this head of claim. Mr Bisht had beencontractually bound to spend at least $80,000 and up to $100,000. He had alsoreceived some benefit from this expenditure by trading for just over a year from thepremises. Further, the total amount spent by Mr Bisht (or his entities) included thecost of chattels which should not have formed part of the claim and for which therewas no evidence of value.[21] The first head of damages failed for lack of proof and because the properclaimant was the company owning the business rather than Mr Bisht personally.8 See Mo v Tamaki Homes Ltd [2019] NZHC 3032 at [31]–[32].9 Mr Bisht's brother, Mr Gulab Bisht, thought the amount he was repaid was around $70,000.Mr Madhan Bisht thought it was less, $45,000 or $50,000.10 At [51].[22] The damages claim for loss of the restaurant business faced the same obstacles.There was no valuation evidence and no other reference points such as an offer oroffers indicating how much potential purchasers were prepared to pay for the business.This claim also failed.[23] Faced with inadequate evidence and a lack of submission on the loss ofopportunity damages, the Judge asked for further submissions, limited to this aspectof the claim. These were duly filed.[24] Mr Raju's further submissions relied on Benton v Miller & Poulgrain (a firm)and Ingram v Patcroft Properties Ltd.11 Mr Raju urged the Judge to take a broadassessment. He submitted that the loss of opportunity was:(a) Loss of a chance to recover the renovation cost over the term of thelease.(b) Loss of a chance to 'sell' the remainder of the lease (with or without therestaurant business).(c) Loss of a chance to continue with or derive the full benefit from theremainder of the lease.(d) Loss of a chance to sell the business.[25] Mr Shinkarenko's submissions in response highlighted pleading and evidentialdeficiencies in the claim for loss of a chance damages. He submitted:Having failed in establishing causation and quantum of losses using [a]traditional approach, the plaintiff invites the Court to disregard the constraintsidentified and already ruled on by Your Honour in the interim judgment,circumvent the orthodox approach to proving losses and instead award a morebeneficial measure of damages on a purely speculative and hypothetical basis.[26] The final judgment identified five key issues:1211 Benton v Miller & Poulgrain (a firm) [2005] 1 NZLR 66 (CA); and Ingram v Patcroft PropertiesLtd (2009) 10 NZCPR 426 (HC).12 District Court decision, above n 2, at [86].(a) Did Mr Bisht suffer loss because of the unlawful entry by Parkhurst?This had two components:(i) Can Mr Bisht prove he suffered loss?(ii) Did Parkhurst cause that loss?(b) Was Mr Bisht under a duty to mitigate his losses by applying for reliefagainst forfeiture?(c) Can Mr Bisht claim losses incurred by Imaxx Café & Bistro Ltd as hisown losses?(d) What is the value of Mr Bisht's loss?(e) Is Parkhurst entitled to judgment in respect of the arrears of$22,129.67?[27] The Judge accepted that Mr Bisht was either going to sell the restaurantbusiness (including the lease) or continue to operate it but change the menu to a"fusion" style. As he was prevented from carrying out either option due to theunlawful re-entry, the Judge considered causation "well and truly established".13 Shefound that Mr Bisht had lost the chance to sell the lease (with or without the business).[28] The Judge rejected Parkhurst's arguments that the requirement for consent toan assignment of the lease was a contingency to be factored in and that he may nothave renewed the lease in August 2017. Neither were hurdles to the claim sinceParkhurst was not entitled to refuse consent unreasonably and the lease required thelandlord to renew the lease so long as certain conditions were met.14[29] The Judge observed that she could not be sure whether Mr Bisht would havemade the business profitable if he had continued, noting that no expert witness was13 At [88].14 This included that the tenant give three months' notice that they wished to renew the lease andwas subject to the right of the landlord to review the rent.called to give valuation evidence of either the business or the value of the lease.15 Inview of the gap in the evidence, she assessed loss broadly on the basis that the valueof the lease lay in the fact it had over 16 years yet to run (given the renewal provisions)and came with a high class restaurant fitout. Mr Bisht had lost the opportunity to eithersell or benefit from that value:16The premises are currently operated by directors of Parkhurst as a restaurantand café. There was no evidence as to how well or otherwise the business isdoing, except to say that as at the hearing date, this restaurant business hadbeen operating for two years and two months. That fact alone infers it is aworthwhile [sic] running it as a restaurant. My impression of Mr Peter andMr Robin Williams was that they are both successful businessmen, they wouldhave done all they could to ensure this restaurant runs well. They were ableto set up in premises renovated and fitted out to a high standard.[30] This loss was "real" and "not speculative" in the Judge's assessment. As it hadcome about through Parkhurst's wrongful re-entry of the premises, the Judge foundthat Parkhurst caused Mr Bisht's loss.[31] With respect to Mr Bisht's failure to mitigate his losses, the essential argumentfrom Parkhurst was that Mr Bisht failed to meet with the landlord and failed to applyfor relief against forfeiture. The Judge was unpersuaded by any of the mitigationarguments. She found that Mr Bisht was plainly upset following Parkhurst's re-entryto the premises; his initial reaction was that the lease had been determined and that hewould sue; his request for the return of the chattels inside the restaurant was unlawfullyrefused by Parkhurst, and he commenced proceedings only six and a half months later.For these reasons there was no failure to mitigate.[32] As to the value of the lost chance, the Judge referred to the principle that:17 to avoid an injustice a court may disregard the separate legal personalitiesof different companies or those of a company and its shareholders/managingdirectors where the separate legal entities were immaterial to the party thatmight otherwise be liable for damages, relying on Esso Petroleum Co Ltd vMardon.15 At [91].16 At [95] (emphasis added).17 At [62] and [103] citing Ingram v Patcroft Properties Ltd (2009) 10 NZCPR 426 (HC) at [82] inturn citing Esso Petroleum Co Ltd v Mardon [1976] QB 801 (CA). The Judge noted that Esso hadnot been referenced before the further submissions had been provided.[33] The Judge was satisfied that any losses the company sustained as a result ofthe wrongful re-entry were in effect losses suffered by Mr Bisht given he was the soleshareholder.[34] Describing the assessment of the value or amount of the loss as a difficult issue,the Judge rejected the business appraisal as no more than Mr Bisht's subjectiveassessment of the value of the business.18 She estimated the value of the wrongfullyretained chattels relying on the book value of chattels in the Imaxx company accountsfor the year ended 31 March 2017. These exceeded the amounts owed to the landlordunder the lease.19 The net difference was $11,360.93. This sum was therefore owedby Parkhurst to Mr Bisht.[35] The Judge relied upon the following matters which she described as "reliablefacts and figures":(a) The lease (with two-yearly renewals) had over 16 years to run.(b) The renovation and fitout was to a high standard.(c) The directors of Parkhurst were able to walk in and run anotherrestaurant from the same premises since August 2018.(d) The cost to renovate the premises was in excess of $100,000.(e) Mr Bisht's current account in Imaxx Café & Bistro Ltd was $62,878as at 31 March 2017 and $111,591 in 2018.(f) The book value for the physical assets of the Imaxx Café & Bistro Ltdwas $33,490 as at [31] March 2017.20[36] She started with the sum owed in the accounts to Mr Bisht from Imaxx Café &Bistro Ltd, less $7,878 to account for the fact that Mr Bisht ran the restaurant businessfor just over a year and had the use of the premises for 18 months. This came to$55,000 which, with the sum in [34] above, resulted in judgment in favour of Mr Bishtfor $66,360.93 plus interest and costs.18 District Court decision, above n 2, at [106].19 At [108].20 The judgment refers to a date of 3 March 2017 which I assume is a typographical error.SubmissionsParkhurst's case[37] Broadly, Parkhurst advances its appeal on two grounds. First, it argues that theJudge erred in her application of the relevant test for loss of a chance damages whichit submits were never properly pleaded, quantified or supported by evidence.21Secondly, it contends that the Judge erred in relying on the distinguishable Court ofAppeal decision in Governors Ltd v Anderson to reject the mitigation defence.22[38] In support of those broad propositions, Mr Shinkarenko submitted:(a) four types of lost opportunity were argued for the first time insupplementary submissions after conclusion of the evidence;(b) the Judge conflated the three distinct types of lost chance;(c) there was no proper evaluation of the possibilities and contingenciesbefore concluding that the chance to sell the lease was "real";(d) the Judge engaged in a speculative assessment without evidence ofquantum and value of the lost chance to either sell the lease and/or thebusiness or continuing to trade;(e) there was no evidence as to quantum to enable the Judge to make a safeassessment; and(f) the affirmative defence was not adequately assessed as the legalprinciples were not correctly applied.21 Referring to the decisions in Powerbeat Canada Ltd v Powerbeat International Ltd [2002] 1NZLR 820 (HC) at [196] and McLean v Marshall [2014] NZHC 1624, [2014] NZCCLR 31 at[47].22 Governors Ltd v Anderson CA94/04, 16 August 2005 at [24].Mr Bisht's case[39] Mr Bisht supports the judgment and argues that the Judge's approach wascorrect in substance. His counsel, Mr Raju, submits that having found causation welland truly established and then assessing the "intrinsically linked" contingencies, theJudge correctly accepted that all of the contingent circumstances were withinMr Bisht's control meaning his loss was real and substantial. Further, Mr Raju submitsthat it was justifiable to use the company accounts as a starting point.[40] With respect to mitigation, Mr Bisht argues that the Judge was correct todismiss Parkhurst's affirmative defence; that the duty to mitigate could not haverequired Mr Bisht to comply with Parkhurst's conditions to meet or require him toapply for relief against forfeiture before making a claim for damages.Legal principles[41] There is a general right of appeal under s 124 of the District Court Act 2016.On a general appeal the appellate court has the responsibility of arriving at anassessment of the merits of the case however the appellant has the onus of satisfyingthe court that it should differ from the original decision.23[42] This appeal concerns only the remedial aspects of the judgment. The Court ofAppeal in Geostel Vision Ltd v Oraka Technologies Ltd referred to the orthodoxy that,because determining damages is essentially a question of fact, a trial judge' assessmentwill only be disturbed on appeal if there has been some error of principle or the amountof the damages awarded was so high or so small as to make it, in the court's judgment,an erroneous assessment.24 While Oraka involved the assessment of a reasonablelicence fee for breach of copyright by way of damages, it stands for the broaderproposition that the approach in Austin, Nichols & Co Inc v Stichting Lodestar doesnot permit the appellate court to conduct the damages assessment "afresh".23 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [5].24 See Geostel Vision Ltd v Oraka Technologies Ltd [2020] NZCA 256, (2020) 152 IPR 500 at [78]–[83].AnalysisLoss of a chance damages[43] Loss of a chance is a well-recognised head of damage involving an inherentlydifficult evaluation. The fact that an assessment is difficult because of the nature ofthe damage is not a reason for awarding no damages.25 Loss of a chance was expressedin these terms by Richmond P in Schilling v Kidd Garrett Ltd:26Since Chaplin v Hicks, the loss of an opportunity, to which a person is entitledby contract, to obtain or retain employment or some profitable connection isrecognized as a proper head of damage for breach of contract.[44] Loss of a chance in the quantification of damages is different from loss of achance as a form of identifiable head of loss. In the latter, the law treats the loss of achance of a favourable outcome as damage which is compensated for in itself.27 Itcomes into play before the court reaches the compensation stage. In the former, theloss of a chance doctrine is not engaged at all.28 In quantification, assessment ofchances involves matters of evaluation rather than determinations of fact.[45] I am not persuaded that the losses claimed by Mr Bisht under this head areproperly characterised as loss of a chance damages. If I am wrong on that, I considerthat the elements required for loss of a chance damages were not made out and thatthe Judge fell into error because of the way in which the case proceeded. I set out myreasons.[46] Loss of the value of the business and/or recovery of the reliance expenditureincurred are orthodox remedial responses in these circumstances. Mr Bisht wasunsuccessful on both measures in the interim judgment for lack of proof and as theshareholder of the company which owned the business.29 Mr Bisht's remaining claimfor damages after the issue of the interim judgment was argued solely on the basis itwas a claim for loss of a chance or opportunity.25 James Edelman (ed) McGregor on Damages (21st ed, Sweet & Maxwell, London, 2021) at [10-002] citing Chaplin v Hicks [1911] 2 KB 786 (CA).26 Schilling v Kidd Garrett Ltd [1977] 1 NZLR 243 (CA) at 248–249 (citations omitted).27 Barker v Corus UK Ltd [2006] UKHL 20, [2006] 2 AC 572 at [36] per Lord Hoffman.28 Edelman, above n 25, at [10.48].29 There was no cross-appeal.[47] An alternative head of claim in circumstances of wrongful cancellation of alease is damages for the value of the unexpired term. This was not pleaded. It isgenerally calculated as the rental value of the premises less the contractual rent underthe lease.30 It is not a loss of chance head of damages because it is not prospective orhypothetical; the event triggering a remedial response, namely cancellation of thelease, has occurred. There may however be uncertainty about quantum because offuture contingencies. Recovery requires evidence of the rental value. None wasavailable. This was one of a number of evidential problems which beset theproceedings.[48] Nonetheless, in reaching a conclusion that "the chance lost by Mr Bisht wasreal", the Judge assumed value in the unexpired term based on the number of renewalsand the fitout. I infer that the conclusion as to quality of fitout was based on theJudge's own assessment of photographs in evidence and Peter William'sacknowledgement of improvements made by Mr Bisht.31 She also took into accountthe operation of a restaurant from the premises by Parkhurst's directors since August2018, inferring from this that it was worthwhile running the premises as a restaurant.This was after the first term of the lease would have expired and the premises remainedvacant for the period from February 2017 to August 2018. This could have been seenas indicative of a lack of value in the lease but was not explored in the evidence. Therewas no evidence about the restaurant run by Parkhurst interests and no evidence aboutattempts to re-tenant the property in the intervening period because those matters werenot relevant to the pleaded case.[49] The focus of the trial was on recouping the renovation expenditure. It was notapparent by the pleading that there was a claim for loss of a chance as a stand-alonehead of damage. The prayer for relief in the statement of claim was expressed in theseterms:(a) Judgment in the sum of $190,033.98 being the actual loss suffered by theplaintiff in renovating and upgrading the premises at his expense foregonefollowing the defendant's breach;3230 Edelman, above n 25, at [28-015].31 District Court decision, above n 2, at [95]. Mr Williams is a director of Parkhurst.32 This was later reduced in Mr Bisht's brief of evidence to $183,122.04.(b) Damages for the loss of the plaintiff's business/loss of opportunity as theCourt deems fit;[50] This informed the approach at trial. Parkhurst was entitled to rely on thepleaded case. The Court of Appeal emphasises the importance of pleadings in Yan vMainzeal Property and Construction Ltd (In Liq).33 Parkhurst has been disadvantagedby the evolution of the case.[51] Supplementary submissions on Mr Bisht's behalf claimed four lost chances inthe alternative but, in reality, they are variations on a common theme. In my view, theloss of a chance to recover the renovation costs is another way of describing a loss ofprofits claim. The loss of a chance to sell the remainder of the lease is another way ofclaiming the value of the lease. The loss of a chance to sell the business similarlydescribes a claim to the value of the business. And, all of these are illustrations of aninability to derive the full benefit from the remainder of the lease.[52] Recasting these damages as loss of a chance damages strikes me as aningenious attempt to resurrect the heads of damages which failed for want of proofand avoid the evidential deficiencies in the case by diluting the level of proof required.The contracted for benefit in a lease is not the chance or opportunity to profit in thefuture but the present entitlement of quiet enjoyment of the premises.[53] This distinguishes the line of cases beginning with the seminal case of Chaplinv Hicks.34 There the claimant bargained for the chance to be chosen in a competition.In cases such as Benton, a loss of a chance analysis was adopted in respect of theuncertainty of how a third party would have acted in a case of negligent advice.35Neither line of authority has any factual similarity.[54] Notwithstanding that, I turn to the loss of chance analysis.33 Yan v Mainzeal Property and Construction Ltd (In Liq) [2021] NZCA 99 at [494].34 Chaplin, above n 25.35 Benton, above n 11.[55] I accept that the Judge did not precisely follow the methodology adopted byauthorities such as McLean v Marshall. In that case, the Court summarised therelevant principles in the following terms:36(i) the innocent plaintiff must establish that it did, or would have, soughtthe claimed lost opportunity.(ii) as a result of the breach the plaintiff lost a real and substantial, and notmerely a speculative chance of obtaining the opportunity which wouldhave conferred a benefit.(iii) the plaintiff suffered loss (which can be measured in monetary terms).[56] However, the Judge's approach was not a departure of substance. With respectto the first limb the Judge made a factual finding that "Mr Bisht was either going tosell the restaurant business (including the lease), or he was going to continue to operateit but change the menu to a fusion style".37 I read this as a statement of Mr Bisht'sintention rather than indicating achievement of that intention. It is a finding whichaccords with common sense. The Judge determined that Mr Bisht had already spent aconsiderable amount of money renovating the premises to a "high standard".38 Thatis a finding of fact which I am not inclined to re-examine. The precise expenditurewas not established, but the Judge accepted that Mr Bisht (or a party associated withhim) spent "far more" than the $80,000 to $100,000 he was contractually obliged tospend under the agreement.39 She also accepted Mr Bisht's evidence that he had beentrying to sell the business and that Mr Peter Williams, a director of Parkhurst, wasaware of that plan.40 I do not disturb the Judge's conclusion that the first limb of thetest is met.[57] The Judge then addressed the second and third limbs, whether the lostopportunity to do either was "real and substantial" and whether Mr Bisht sufferedloss.41 I find no material error therefore in the structure of the approach to a claimbased on loss of a chance.36 McLean, above n 21, at [47] referring to Powerbeat, above n 21, at [196].37 District Court decision, above n 2, at [88].38 At [96].39 At [37].40 At [34].41 At [88]–[97] and [103]–[111].[58] But, even on a loss of a chance analysis, finding that Mr Bisht had the right toassign the lease, was trying to find a buyer and that re-entry caused loss is only thebeginning of the matter. The crux is whether Mr Bisht was denied a "real andsubstantial" opportunity by Parkhurst's re-entry. This means, a real and substantialchance of successfully negotiating an assignment of the lease or sale of the businesswhich would confer a benefit on him. To discharge this onus Mr Bisht must prove:42 a chain of causation that continues up to the point when there is asubstantial prospect of acquiring the benefit sought by the plaintiff. Up to thatpoint, the plaintiff must establish both the historical facts and any necessaryhypothesis on the balance of probabilities.[59] Here I respectfully depart from the Judge's evaluation.[60] Relevant contingencies plainly reduce the value of a lost opportunity, andhence warrant discussion when assessing quantum.43 But they also have a role to playin establishing whether the opportunity is real and substantial. If the opportunityallegedly lost was contingent upon a number of variables, particularly where thosevariables were not within the plaintiff's control, the "real and substantial" thresholdmay not be met.44 I accept that the Judge did not directly engage with the relevantcontingencies before concluding that the opportunity lost by Mr Bisht to sell therestaurant, assign the lease or rebrand was real and substantial.[61] Those contingencies were:(a) Parkhurst could have re-entered lawfully for non-payment of the leaseand would have been justified in doing so. In such circumstancesMr Bisht would have had no say in terms of recovery of any of themoney spent on renovations;(b) but for the re-entry, the restaurant business may have been put intoliquidation and there was a proper evidential basis to treat this as a very42 Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 at 368 as cited in Sutcliffe v Tarr (No 2)[2018] NZCA 135, [2018] NZAR 696 at [34].43 Powerbeat, above n 21, at [199].44 See, for example, the identification of contingencies in McLean, above n 21, at [49(c)].real possibility. The business stopped trading and Mr Bisht closed therestaurant some two or three months before the re-entry;(c) the business was unprofitable and running at a loss from the outset andlong before the eviction;(d) the business could have been deemed insolvent under s 4 of theCompanies Act 1993;(e) Mr Bisht may or may not have renewed the lease and no evidence wasled on this issue;45(f) the landlords may or may not have given their consent to any of theproposed assignees on any proposed sale; and(g) the business may have been sold in a year's time or in a month. It mayhave been sold for profit or for loss. But in the absence of propervaluation evidence the Court was asked to speculate on the timing ofthe sale and/or the outcome of such a sale.[62] There was no independent valuation evidence. The Judge rightly put to oneside the business appraisal presented by Mr Bisht as an unreliable document, havingbeen created by him for a specific unrelated purpose. The evidence of prospectivepurchasers for the business was general and vague. There was no evidence of an offer,merely evidence from Mr Bisht of inquiry and early discussions with prospectivepurchasers. There was no evidence of discussion about price.[63] There are further complications as well. Even if a prospective purchaser hadbeen inclined to make an offer, Parkhurst was still required to consent to assignmentof the lease. Although clause 33.1 of the lease provides that the landlord's consent toassignment cannot be unreasonably withheld, there were potentially valid groundsupon which Parkhurst could have withheld consent from one of the two parties referred45 I do not accept however that in the event that he chose not to renew the lease past its first term,then he would have been required to strip the premises under the demolition clause. That clauseis only engaged if Parkhurst sold the whole property/complex.to by Mr Bisht. The Judge expressly acknowledged this. She noted that because oneprospective purchaser wanted to turn the premises into an Irish pub, and Parkhurst (oran entity associated with its directors) already ran a bar only a few doors down, theymay have been entitled to refuse consent on this basis. While this objection plainlywould not apply to every prospective purchaser, it nevertheless presented a hurdle toone of the two purchasers that in fact appeared to be interested. Parkhurst argues, andI accept, that it was equally open to the Court and entirely plausible to view the leaseas a liability to Mr Bisht or a negative obligation.[64] As to the lost opportunity to recover the cost of renovations, this claim mustfail for the same evidential reasons that the Judge dismissed the first head of damages.Mr Bisht was contractually bound to spend at least $80,000 and up to $100,000. Theprecise figure he spent over that threshold is disputed by the parties. The Judgeaccepted that it was "far more" than $100,000.46 However, the evidence supportingthat expenditure was fragmented with invoices variously made out to Imaxx Café &Bistro, Imaxx Café & Bistro Ltd, Curry Leaf (Mr Bisht's other restaurant) as well asbusinesses associated with Mr Bisht's brother (Kajol Cuisine Ltd).47 It was unknownwhether the invoices had been paid by Mr Bisht personally from his own finances orby another legal entity, or a mixture of the two. Certain amounts were also said tohave been paid for by Mr Bisht's brother or a company associated with him, withMr Bisht repaying him later.48 It seems to me that precise evidence must have beenobtainable but it was not before the Court. There is simply not enough evidence uponwhich to establish the requisite causation let alone an assessment of quantum.[65] With respect to Mr Bisht losing the opportunity to derive full benefit from thelease, the Judge noted that clause 32.1 required the landlord to renew the lease so longas certain conditions were met.49 Likewise, she observed that Mr Bisht's experiencein running restaurants and financial support from his brother weighed in his favourshould he wish to do so.50 However, no clear evidence was produced at the hearing to46 District Court decision, above n 2, at [37].47 At [50].48 The precise amount he was repaid is unclear, perhaps between $45,000 and $50,000 all the wayup to $70,000.49 At [90].50 At [107].show that Mr Bisht actually intended to renew the lease. By contrast, the Judge foundthat in fact Mr Bisht's primary aim prior to re-entry was to sell the business, not tocontinue with the lease.51[66] The Judge found that Parkhurst had valid grounds to issue Mr Bisht noticeunder s 245 for non-payment of rent.52 That eventuality was very real given thatMr Bisht had been late in paying rent since the very commencement of the lease andentirely deficient in his payment of outgoings.[67] Accordingly, I consider the Judge erred in determining that Mr Bisht wasdeprived of a "real and substantial" chance to derive full benefit from the lease incircumstances where there was no evidence of the value of the lease; slim evidence ofinterest by prospective purchasers and the evidence which was presented showed thatthe business was not only not flourishing but running at a loss. Indeed, had there beensuch a real and substantial chance of selling the business, one might have expectedMr Bisht to seek relief against cancellation to preserve that opportunity.[68] I also consider there is an error of principle in that the financial records areneither a logical nor a reliable starting point to assess loss of a chance damages evenon a broad brush approach. Resorting to the shareholder advances to anchor thequantum assessment illustrates the fundamental problem with the damages claim.While the Court may resolve evidential uncertainties in a manner which is generousto a claimant when the defendant's wrongdoing created the uncertainty, there is nological connection between those advances and the loss of a chance claimed byMr Bisht.53[69] I do not accept Mr Raju's submission that Parkhurst is not entitled to argue theunreliability of the accounts because of the manner in which the accounts were put toMr Bisht at trial. The thrust of Mr Shinkarenko's cross-examination was directed atthe unreliability of the invoices produced in support of the renovation cost claimbecause that was the focus of the pleaded case. The company accounts for Imaxx Café51 At [91].52 At [37].53 See One Step (Support) Ltd v Morris-Garner [2018] UKSC 20, [2019] AC 649.& Bistro Ltd were not relied on by Mr Bisht at trial. They were not referred to in hisbrief of evidence. Mr Shinkarenko submitted that the accounts were only disclosedfollowing a request for particular discovery. Mr Raju did not challenge thissubmission. The accounts were put to Mr Bisht in cross-examination to challenge hisassertion of profitability, to challenge the purported renovation costs and to show thatthe turnover figures in the business appraisal were inflated. This is not the same thingas accepting the accuracy or reliability of the financial accounts; rather the gist washighlighting inconsistencies.[70] There was no reason, on the pleaded case, to cross-examine Mr Bisht on theshareholder advances in the accounts as these formed no part of Mr Bisht's case attrial. Mr Shinkarenko submits that they were not even referred to in support of theclaim for lost opportunity in the supplementary submissions filed.[71] There is therefore no evidence upon which the Court could reliably anchor itsassessment of the quantum of Mr Bisht's claim. By contrast, in Powerbeat CanadaLtd v Powerbeat International Ltd, for example, both parties tendered valuationevidence from expert witnesses in support of their respective positions.54 While proofis not required on the balance of probabilities, the Court is required to undertake an"informed estimation" of the loss.55 That was not possible on the evidence before theCourt although the Judge did the best she could to address what she perceived as theinequities of the situation.[72] On this basis, damages for loss of a chance, as advanced on Mr Bisht's behalf,are not available. The allegedly lost opportunities are too speculative to allow a moneyvalue to be placed on them. I allow the appeal.Failure to mitigate[73] Given my finding above, it is not necessary to deal with the arguments aboutfailure to mitigate losses. However, I record for completeness that I consider this issueto be more nuanced than it appears at first sight.54 See Powerbeat, above n 21, at [213]–[216] and [219]–[222].55 At [197]. See also Sellars, above n 42, at 368.[74] It is not a universal proposition that there is no reason why a wronged party inan unlawful re-entry case should seek injunctive relief before claiming damages. I donot read Governors Ltd v Anderson as suggesting otherwise.56 The contraryproposition is also not valid—that it is imperative that a plaintiff should first endeavourto obtain relief before claiming damages. Rather, it is a question of fact and degree inthe total circumstances of each case.57 As stated in Burrows, Finn & Todd on the Lawof Contract in New Zealand:58The law does not allow a plaintiff to recover damages to compensate for losswhich would not have been suffered if he or she had taken reasonable steps tomitigate the loss. Whether the plaintiff has failed to take a reasonableopportunity of mitigation is a question of fact dependent upon the particularcircumstances of each case. The burden of proving such failure rests upon thedefendant.[75] However, where the claim is for the loss of an opportunity or chance ratherthan one of the more orthodox heads of damages, it is quite possible that a failure toseek relief against forfeiture is particularly important since it preserves the very'opportunity' sought to be compensated for and removes the uncertainty element.Other sums held due to Mr Bisht[76] No argument was directed at the Judge's finding as to the sum owed byMr Bisht to Parkhurst for outgoings and the sum owed by Parkhurst to Mr Bisht forthe wrongful retention of chattels. I am not prepared to disturb the Judge's finding inthis regard.Result[77] The appeal is allowed against the award of damages for loss of a chance.56 See Anderson, above n 22, at [23]. The factual circumstances in that case were not on all fours.The tenant had applied to the Court for injunctive relief on two prior occasions and it was thedelay in commencing a claim for damages on which attention was focused. The Court held thatthe High Court was in error in determining that the landlords were not responsible (on mitigationprinciples) for any damage arising after the expiry of one month from the time of the second re-entry.57 At [23].58 Jeremy Finn, Stephen Todd and Matthew Barber Burrows Finn & Todd on the Law of Contract inNew Zealand (6th ed, LexisNexis, Wellington, 2018) at [21.2.4(a)] (footnotes omitted).[78] I quash the judgment of $66,360.93 awarded in the District Court.[79] I substitute an award to Mr Bisht against Parkhurst in the sum of $11,360.93.[80] The appellant is entitled to 2B costs and disbursements in this Court. Mr Bishtremains the successful party in the District Court albeit for a reduced sum so myprovisional view is that he remains entitled to costs in that Court. However, I remitthe question of costs to the District Court in case there are matters of which I amunaware such as offers made on a without prejudice save as to costs basis.............................................................Walker J