It was a chapter of errors: Christchurch dealer Devin Inch was unaware his car yard lease had rolled over automatically for another four years; landlord’s agent David Alexander wanted him out because he had a new tenant, then changed his mind; and then a rent review was miscalculated, with too much rent charged.
It all came to a head with landlord Avon City Auctions Ltd attempting to put Inch’s car dealership, Inch Quality European Ltd, into liquidation for supposedly unpaid rent.
In the High Court, Associate Judge Lester ruled that the disputed lease was still live and that Inch Quality owed rent, but further legal action was put on hold whilst calculation of overpaid rent was sorted out.
The court was told Inch Quality signed a lease in 2021 for commercial premises on Ferry Road in Christchurch; a two year lease with one four year right of renewal.
Unusually for a commercial lease, Inch Quality did not have to give notice of an intention to take up the four year extension; terms of the lease stated a four year extension happened automatically unless Inch Quality gave notice otherwise.
It didn’t.
Early in the new four year term, Inch Quality vacated its Ferry Road car yard, refusing to pay any more rent. The old lease was at an end, it claimed.
Judge Lester ruled the lease remained current.
Inch Quality was bound by the four year roll-over, even if owner Devin Inch had not properly understood the lease.
The court was told Avon City had taken steps previously to have Inch Quality surrender its lease, with a new tenant in prospect willing to pay a higher rent. Nothing was formalised; the lease was not surrendered, leaving Inch Quality remaining liable as tenant.
Avon City subsequently did not cancel Inch Quality’s lease by posting a ‘For Lease’ sign at the site, seeking a new tenant on Inch Quality’s departure, Judge Lester ruled.
Cancellation would have had the effect of removing Inch Quality’s liability for ongoing rent.
Avon City Auctions Ltd v. Inch Quality European Ltd – High Court (24.02.26)
26.086