Cancelling apartment leases for non-payment of rent is not easy, as lessor of an apartment in central Auckland high-rise apartment Scene Three found. The High Court gave lessee Warren Sinclair further time to pay overdue rent totalling more than $86,000 despite a history of repeated failure to pay rent on time with two previous instances of arrears paid more than one year late.
The High Court heard evidence of Mr Sinclair being a man commercially living on the edge.
He currently faces 68 criminal charges filed by Inland Revenue.
In 2023, he was ordered to pay $1.6 million damages as guarantor of company called Retyred (2020) Ltd found liable for breaching its lease of a seven hectare commercial site supposedly recycling tyres but instead used for storage of used tyres.
He regularly left rent unpaid for his Scene Three apartment, making a $67,000 payment in April 2021 making good on arrears of up to eighteen months and a further late payment of $56,800 in August 2022 for arrears of up to fifteen months.
Lessor James Ward Trustee Ltd told the High Court that not only have further Scene Three arrears now reached $86,100 but it faces a real risk of any payment, when received, being later clawed back should Mr Sinclair be bankrupted.
Ward Trustee wants to put as much time as possible between any recovery of rent arrears and Mr Sinclair’s possible bankruptcy. Insolvency law sets out different rules for clawback of pre-bankruptcy payments depending upon how many months or years prior to bankruptcy a particular payment was received.
Ward Trustee made a High Court Property Law Act application for Mr Sinclair to be evicted from his Scene Three apartment, with his lease cancelled.
Courts generally are sympathetic to lessees late with rent; as long as all arrears are made good promptly.
Justice O’Gorman gave Mr Sinclair one last chance.
Payment of all arrears are required within four weeks. Failing that, Ward Trustee can retake possession of the Scene Three apartment and cancel Mr Sinclair’s lease.
James Ward Trustee Co Ltd v. Sinclair – High Court (19.06.24)
24.154