Relief Against Cancellation of Commercial Lease - Tenant (s 253 PLA 2007) - Landlord - Enforcing Lease Cancellation and Opposing Relief Application

How does a landlord oppose a tenant's application for relief against cancellation?: The landlord files a notice of opposition and supporting affidavit in the High Court proceedings addressing the just and equitable factors against the grant of relief: the tenant's history of breaches, the absence of genuine remorse or capacity to comply, the landlord's legitimate interest in a reliable income stream, and any prejudice caused by the tenant's occupation during the proceedings. The landlord may also claim mesne profits for the period of occupation after cancellation if relief is ultimately refused.

Jurisdiction: This fork is written for the High Court of New Zealand. A landlord who cancels by court order applies to a court for an order for possession (s 244(1)(a) of the Property Law Act 2007). The District Court can hear a proceeding to recover land in the situations listed in s 79(2) of the District Court Act 2016 (which include a lessor entitled to re-enter for non-payment of rent) where the annual rent does not exceed $62,500 or the value of the land does not exceed $500,000. In the High Court the proper registry is the one nearest to the residence or principal place of business of the defendant (rule 5.1 of the High Court Rules 2016).

The Process at a Glance: The landlord's practitioner reviews the lease and the breach, issues a valid s 245 notice, monitors the remedy period, and then effects cancellation if the breach is not remedied. If the tenant applies for relief under s 253, the landlord files a notice of opposition and supporting affidavits addressing the just and equitable factors. The landlord's solicitor also quantifies mesne profits for the period of occupation after cancellation and prepares evidence of the landlord's re-letting losses. If the court grants relief on terms, the landlord monitors compliance and retains the right to re-cancel on any further breach.

Key Legislation and Case Law: Property Law Act 2007 (NZ) - s 244 (cancellation by order for possession or peaceable re-entry); s 245 (notice of intention to cancel for unpaid rent); s 246 (notice of intention to cancel for other breaches); s 249 (copy of notice to mortgagees, receivers and sublessees); s 250 (acceptance of rent after notice is not a waiver); s 251 (powers of court in making an order for possession, including rent to the date possession is given up and reasonable compensation); s 253 (tenant's right to apply for relief); s 256 (court powers and conditions on relief); s 257 (effect of an order granting relief).

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