Having guaranteed lease obligations of his company Retyred (2020) Ltd, director Warren Sinclair was ordered to pay $1.6 million anticipated costs of removing tyres stacked across some seven hectares of a south Auckland commercial site.
The High Court was told Retyred leased a commercial site on Dominion Road at Red Hill for what was described as ‘recycling tyres and [as] a show home display yard for modular house business.’ Landlord Sahar Ehsani Investment Ltd ran an auto parts business from an adjoining site. There was little neighbourly love.
Sahar grew concerned about the ever-increasing stack of tyres dumped next door with little evidence of recycling operations commencing. A trespass notice was issued after Retyred trucks persistently encroached on Sahar’s driveway when delivering tyres. Retyred stopped paying rent.
Retyred ignored a court order that the volume of tyres on site be limited to one hundred cubic metres. Sued for damages, Retyred and Mr Sinclair did nothing until the case was set down for an undefended hearing. Justice Campbell refused their application for late filing of their defence; the case went ahead without them.
Evidence was given that it would cost about $1.7 million to remove all tyres and remediate the site. Terms of the lease gave landlord Sahar the right to carry out repairs should the lessee default and to recover all expenses as a debt.
Rules governing damages for breach of a lease come from English land law, measuring damages as a reduction in the property’s value should the lease run its full term. Retyred’s lease has less than four years to run. It was possible that Retyred might remove the tyres before its lease ended. The current cost of reinstatement was discounted to $1.64 million.
Separately, Retyred was ordered to pay damages of $5000 for its persistent trespass on Sahar’s neighbouring driveway plus another $20,000 exemplary damages for actions of its employees in ignoring a trespass notice and then cutting a chain installed to prevent continued trespass.
Sahar Ehsani Investment Ltd v. Retyred (2020) Ltd – High Court (2.12.22 & 21.8.23)
23.140