STRONG & ANORS v HURUNUI HOTEL (2004) LTD [2015] NZHC 869

STRONG & ANORS v HURUNUI HOTEL (2004) LTD [2015] NZHC 869 [29 April 2015]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYCIV-2015-409-113[2015] NZHC 869RODGER EDMOND STRONGNOLA ANN STRONGAMELIA LYNETTE SPENCE SIMPSONAS TRUSTEES OF THE R & N STRONG INVESTMENT TRUST,CHRISTCHURCHAPPLICANTvHURUNUI HOTEL (2004) LIMITEDRESPONDENTHearing: 28 April 2015Appearances: A N Riches for the ApplicantJ Moss for the RespondentJudgment: 29 April 2015JUDGMENT OF NATION J[1] On 3 March 2015 the applicant filed an originating application for possession of hotel premises and cancellation of a lease. The application was made on the grounds that the respondent had failed to comply with the terms of a mandatory injunction issued as part of an arbitration award dated 15 September 2014.[2] The application was called in Court on 15 April 2015.[3] On 14 April 2014 the respondent filed a notice of opposition and an application for leave to file that notice out of time but without any supportingaffidavit explaining why the notice of opposition was not filed within time. On 15 April 2015 Dunningham J directed that an affidavit in support of the application to file a notice of opposition out of time be filed within seven days. Such an affidavit was filed on 22 April 2015.[4] The proceedings were called before me in the list on 28 April 2015.[5] The application for leave to file out of time was opposed by Mr Riches for the applicant on the basis that the opposition was without merit because:(a) There was no dispute that redecoration of the hotel premises, required by the arbitration decision, had not been carried out and the respondent had not provided till receipts as required by the arbitration award.(b) The respondent was in continuing significant default under the lease in that it had not paid any rent for the period from 2 March 2015 and, given the financial constraints the respondent was under, it was most unlikely the respondent would pay approximately $11,000 in insurance premiums.[6] Mr Moss for the respondent submitted:(a) The delay had been explained and, in the context of the proceedings, was not inordinate.(b) There was no significant prejudice because, had a notice of opposition been filed when required, the proceedings would still have been adjourned from 15 April 2015 to an appropriate date for hearing.(c) The respondent ought to be given an opportunity to oppose the application given the potential cost to the respondent of its lease being terminated when it would otherwise have seven years to run.[7] Mr Moss said there was a dispute as to whether the redecoration needed to be done now, given a claim in the affidavits that the applicant ought to carry out certain repairs to the exterior before this was done but he acknowledge that this propositionhad not been advanced during arbitration. Mr Moss said that $6,634.60 would be paid immediately to pay all but two weeks of the rent which is currently due and that rent would be brought completely up to date by 11 May 2015.[8] Both counsel confirmed that there are currently proceedings before the Court to put the respondent company into liquidation. Those proceedings are due for hearing on 16 May 2015.[9] Mr Moss suggested that a day will be required to deal with the originating application on a defended basis and that there is likely to be some cross examination. He also suggested that, if the application is ultimately unsuccessful, the Court may nevertheless be required to set out precisely what redecoration might be required, given that this had not been specified in the arbitration award.[10] In these circumstances, I make the following orders:1. Leave is granted to the respondent to file its notice of opposition out of time but conditional on the respondent paying $6,634.60 in cleared funds to the applicant by 4 May 2015 and by 11 May 2015 paying all rent due under the lease to that date.2. The respondent is to give the applicant reasonable opportunity to inspect the leased premises before 11 May 2015 for the purpose of establishing what redecoration work has been carried out.3. Leave is given to the applicant to file a further affidavit setting out precisely what further redecoration work it requires the respondent to carry out if they consider this is necessary. Such an affidavit is to be filed 14 days before these proceedings are to be heard and any affidavit in response is to be filed within a further 7 days.[11] The Court is to set these proceedings down for hearing on the first available date after 16 May 2015, with an estimated hearing time of one day.Solicitors:Saunders & Co., ChristchurchJai Moss, Christchurch