Described as an opportunistic attempt by Auckland landlord Morar Trust to pass increased Watercare capital levies onto a commercial tenant by refusing a lease renewal, the High Court ordered renewal of a laundromat lease.
The High Court was told Johnlee Kuoch signed up in 2018 for lease of premises used as a laundromat in Chartwell Avenue, Glenfield. Unbeknown to Mr Kuoch, landlord Morar Trust had recently received a Watercare notice advising capital charges of $103,780 were being levied as a consequence of increased water use on site following installation of the laundromat; what Watercare called an infrastructure growth charge, a contribution towards upgrading its network.
Over the next three years Morar trustees just ignored the Watercare notice, springing into action only after receiving Watercare’s $103,000 invoice. They first tried to push the full cost onto Mr Kuoch, later retreating when asked why he should be responsible for a levy imposed before he took up the lease. When Mr Kuoch inadvertently overlooked giving formal notice seeking a 2021 renewal of his lease, Morar Trust seized the opportunity to demand payment towards the Watercare levy as a pre-condition for renewal.
Mr Kuoch sued under the Property Law Act, asking the High Court exercise its discretion to order renewal. Justice Powell said Mr Kuoch was a good tenant who had simply overlooked the requirement to give notice. Loss of his lease would result in loss of his business. Justice Powell ordered renewal of the lease, allowing Mr Kuoch to remain in business, but made it clear it was still for the two parties to negotiate terms of the continuing lease.
Kuoch v. Morar Family Trust – High Court (14.03.22)
22.057