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WestCity NZ Pty Ltd v Yu [2019] NZDC 14681

Published 06 October 2021

Summary judgment — five-year lease — guarantor of lease — cancellation of lease — rent arrears — whether lease enforceable — equitable setoff — whether arbitration available — Krukziener v Hanover Finance Ltd [2008] NZCA 187 — Mitre 10 (New Zealand) Ltd v Thistle Dome Holdings Ltd [2015] NZHC 3289 — Southwark London Borough Council v Mills [2001] 1 AC 1 — Grant v NZMC Ltd [1989] 1 NZLR 8 — Property Law Act 2007, s 233 — Arbitration Act 1996, Sch 1 cl 8. The two plaintiffs applied for summary judgment against the defendant, whose business had been a tenant in the plaintiff's shopping centre. The defendant's business fell into rent arrears and its lease was cancelled five months later. The plaintiffs claimed $69,153.23 in rent arrears plus interest, lost rental, and costs for restoring the leased premises and legal representation. The defendant opposed the application, raising four grounds of defence: that the lease was unenforceable; that there was a further agreement that superseded the lease; equitable set-off; and that the matter was subject to arbitration. The first two arguments were based on the defendant's argument that he had signed a new lease when the plaintiffs became the owners of the mall during his term of tenancy. He had no documentary evidence for this argument, and the Court dismissed this claim. The wording of the lease barred the defendant's claim to equitable set-off and also excluded arbitration for this type of dispute. As the defendant's defences failed, judgment was made in favour of the plaintiff . The Court ordered that the defendant pay the plaintiff $69,153.23 for unpaid rent, $33,660 for unpaid rent prior to the reletting of the premises, and 25,346 for the costs of the refit of the premises. Judgment Date: 31 July 2019.

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