Having Social Development as a motel’s sole customer using motel units to temporarily accommodate beneficiaries did not change the site’s use as a motel. It remained a motel, albeit with idiosyncratic features, ruled Justice Downs. Attempts to cancel the motel operator’s lease was blocked.
Hyun Sook Cho owns a six-unit motel on her Walmsley Road property in Mangere, South Auckland. The motel is currently operated on a long-term lease until 2044 by Rajesh Sachdeva through his company, Annie Enterprises Ltd. Ms Cho alleged Annie Enterprises was in breach of its lease; the site was no longer being used as a motel. Mr Sachdeva says Ms Cho wants him out only because his business is now profitable. Notice of cancellation is a tactic to force renegotiation of lease rentals, he alleges.
The High Court was told Ministry of Social Development agreed with Annie Enterprises in 2017 for exclusive use of all six units as temporary accommodation. Social Development pays a daily tariff. It can cancel the arrangement on thirty days’ notice. Occupancy by beneficiaries runs at about 80 per cent. Social Development pays a daily rate regardless of occupancy levels.
Justice Downs ruled the ‘exclusive use’ arrangement with Social Development was not grounds for cancellation. Auckland City accepted the new arrangement satisfied resource consents for the property’s use as ‘travellers accommodation’. Beneficiaries were in occupation for varying lengths of time, but were not living there. It made no difference that the motel no longer advertised itself as available for bookings. Until such time as Social Development gives notice, the motel is fully booked.
Annie Enterprises Ltd v. Cho – High Court (16.11.18)
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