Wrongfully locked out of premises set up as Imaxx Café & Bistro at Parakai near Helensville, Madhan Bisht’s claim to some $66,000 damages was reduced to $11,300 by the High Court. The opportunity lost of his onselling the restaurant business at any value was speculative given that the restaurant had never traded profitably.
Mr Bisht signed an eighteen year lease in 2015 giving him access to commercial premises on Parkhurst Road. The High Court was told rent was paid late consistently from the outset. Outgoings required to be paid under the lease were never paid. The landlord heard in February 2017 of furniture and stock being taken from the restaurant in the dead of night. The restaurant business had been shuttered since the previous December. Assuming Mr Bisht had abandoned the premises, the landlord changed the locks, retaking possession. The District Court was to later rule that Mr Bisht had not abandoned the lease; the landlord had unlawfully locked him out. Mr Bisht was entitled to damages for breach of contract.
Damages for breach of a commercial lease can include damages for lost opportunity; the possibility otherwise lost of selling the business as a going concern along with rights to occupy the leased premises. Damages for lost opportunity awarded by the District Court were overturned on appeal.
There was no evidence as to what the restaurant business was worth or whether the landlord would have consented to a replacement tenant, Justice Walker said. The fact that the business had never traded profitability and had been closed for some months before locks were changed meant any potential sale price was highly speculative.
Justice Walker stated the landlord did have the right to recover possession of the premises for non-payment of rent, if only it had followed the correct Property Law Act procedure first giving notice. Had this been done, Mr Bisht would have had no grounds to sue.
Damages of $11,300 payable to Mr Bisht were confirmed; the value of chattels wrongly seized by the landlord less rent arrears.
Parkhurst Corporation Ltd v. Bisht – High Court (29.10.21)
21.176