Lease Renewal: Creative Edge Food v. Hunza Corporate

  

Hunza’s Andrew Cunningham seized on a tenant’s delay in requesting a lease renewal as grounds to clear the tenancy; a move blocked by the High Court allowing a lease renewal, ruling past niggles between landlord and tenant were in part Hunza Corporate’s fault as landlord.

The High Court was told Hunza Corporate Trustee Ltd in 2023 bought out the then landlord’s interest over a commercial property on Elizabeth Knox Place in Auckland suburb St Johns.

This purchase included a sitting tenant: Creative Edge Food Company Ltd controlled by Farhan Sittar, with a long-term lease potentially running to 2031.

Creative Edge operates a commercial bakery.      

Evidence was given of Hunza Corporate offering Creative Edge $80,000 to surrender its lease and leave; an offer later withdrawn.

Hunza instead looked to push Creative Edge out.

Threats to cancel the lease on grounds that the site was not being kept tidy and that one invoiced payment was late came to nothing after Creative Edge promptly complied.

A rent increase imposed by Hunza was challenged, with an arbitrator later reducing the claimed increased rent to an assessed market rate some five per cent below what Hunza was claiming. 

Creative Edge’s lease has three-year rolling rights of renewal expiring in 2031.

The High Court was told Mr Sittar inadvertently failed to give formal notice before July 2025 seeking a further three year rollover.  Hunza immediately claimed the lease was at an end, suing for possession when Creative Edge refused to leave.

Justice O’Gorman allowed Creative Edge’s Property Law Act application, requiring Hunza Corporate to allow a renewal.

There was no evidence that Creative Edge would be unable to meet continuing lease commitments on a lease renewal, she ruled.

To date, monthly rent had been paid on time.  Late payments had centred on sundry disputes over Creative Edge’s contribution to landlord’s costs for general rates, water rates and body corporate expenses.

Hunza also owns the neighbouring property.

Creative Edge claims allocation of landlord expenses between the two properties is being wrongly allocated.  It also disputes liability on some billed invoices with evidence Hunza was wrongly billing extra GST to Creative Edge on what were GST inclusive landlord costs.     

Hunza Corporate was ordered to allow Creative Edge a new three year lease on same terms as the previous lease.

Creative Edge Food Company Ltd v. Hunza Corporate Trustee Ltd – High Court (1.04.26)

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Franchise Renewal: Cleanco Truck Wash v. Waikato Truck Wash

  

With no agreement on renewal of a franchise agreement, franchisor Cleanco Truck Wash failed in attempts to stop former franchise holder Waikato Truck Wash carrying on business in Hamilton as an independent operator, contrary to their agreed restraint of trade.  If it is proved Waikato Truck is in the wrong, damages are an adequate remedy Justice Robinson ruled in the High Court.

Their 2014 ten-year franchise agreement required Waikato Truck Wash pay royalties calculated at five per cent of gross sales.  For the period 2021-23 royalty payments had been between $58,000 and $69,000 the High Court was told.

Evidence was given of a falling out when the franchise came up for renewal in 2024.

Richard Vincent is sole director and his family trust shareholder of franchisor Cleanco Truck Wash Systems Ltd.

In 2024, Gregory McQuaid’s Waikato Truck Wash Ltd gave written notice renewing its Cleanco franchise for a further ten years.

Nothing was finalised.  Waikato Truck claims renewal terms are unacceptable; in breach of their original franchise agreement stating that any renewal would not make any fundamental changes, Mr McQuaid claims.

After fruitless negotiations, the franchise was terminated.  Cleanco sued to enforce a restraint of trade prohibiting Waikato Trust from continuing in business from its Hamilton site for a two year period.

Gloves came off in the High Court.  

Mr McQuaid argued the franchise agreement was no more than a licensing arrangement allowing use of Cleanco’s name and logo.  Waikato Truck is free to operate as an independent business on removal of the signage, he argues.

Cleanco claims the 110 page contract signed by Waikato Truck sets out in detail the business system owned by Cleanco and used by Waikato Truck.  The two year restraint of trade is a reasonable protection of its intellectual property rights, it claims.

In the High Court, Justice Robinson declined to immediately enforce the restraint.

Yet to be resolved is their legal dispute over validity of terms offered for a further renewal of the Cleanco franchise; a legal question of whether Cleanco or Waikato Truck were in the wrong.

If there is a final ruling against Waikato Truck, damages are an adequate remedy Justice Robinson ruled.  Calculation is not difficult; five per cent of ongoing gross revenue.

Separately, Cleanco sued to block Waikato Truck’s Crawford Street site being used as a truck wash.

This was dismissed.

The site is owned by G-Field Properties Ltd, also controlled by Waikato Truck’s Mr McQuaid.

G-Field did not sign any franchise agreement.

Evidence was given of Mr McQuaid’s G-Field buying Crawford Street from interests associated with Mr Vincent back in 2014 when their franchise agreement was first signed.

This contract gave Mr Vincent right of first refusal to buy back Crawford Street from G-Field during the next ten years.

The court was told Mr McQuaid offered to sell the site back to Mr Vincent some three months before making his written request to renew the franchise.

Mr Vincent did not take up the offer.  The option has since lapsed.

Cleanco Truck Wash Systems Ltd v. Waikato Truck Wash Ltd – High Court (1.04.26)

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Mortgage Fraud: Song v. Merchant Finance

  

An Auckland $1.8 million mortgage fraud was blocked at the last moment with Westpac freezing funds.  Since the fraudster had vanished without a trace, a High Court order was needed to return funds to Merchant Finance Ltd as the rightful owner.

The High Court was told Merchant Finance approved a $1.8 million dollar loan in May 2025 to be secured over Shenquing Song’s property in Auckland suburb Glendowie.

Ms Song had never applied for a loan.

A fraudster claiming to be Ms Song used a forged passport to fox a mortgage broker, Merchant Finance and sundry lawyers into thinking they were dealing with the real Shenquin Song.

The fraud almost succeeded.  Funds were advanced by Merchant Finance, lawyers innocently acting for the fraudster registered a mortgage in favour of Merchant Finance over the Glendowie property and the funds passed through the lawyers’ trust account into a Westpac account nominated by the supposed Ms Song.

Only then did suspicions of fraud surface.

Westpac froze the funds.

The Registrar-General of Land registered a caveat on title to the Glendowie property, to block further fraudulent activity.

Westpac subsequently transferred the money back into the trust account of lawyers Chan & Co Legal Ltd.  It was now the lawyers’ problem.

It was more than a legal problem for Chan & Co; it was also a practical problem.

Lawyers owe ethical and contractual duties to their clients.

Chan & Co did not where their client was or who she is, other than her not being the real Shenquin Song.

As things stood, Chan & Co were holding funds on behalf of an unknown client as an unsecured $1.8 million loan from Merchant Finance.

To break the impasse, Chan & Co supported a High Court application under Contract and Commercial Law Act declaring the original loan and subsequent mortgage be set aside on grounds of mistake: Merchant Finance thought it was dealing with the real Shenquin Song; the fraudster knew this was untrue and took advantage of this mistake.

Cancellation of the loan contract allowed Chan & Co to return stolen funds to Merchant Finance.

The court was told Merchant Finance said it would release its mortgage after receiving repayment, with the Registrar-General of Land agreeing to then remove the caveat over Ms Song’s Glendowie property.

Song v. Merchant Finance Ltd – High Court (1.04.26)

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