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Injunction order to prevent business being sold

Southland reporters

A man has successfully been granted an injunction order to stop the business he leases in Invercargill being sold out from underneath him.

Wanlin Tu, the applicant, filed in the High Court at Invercargill against respondents Songwen Zhang and Xiyuan Wu without notice, an interim injunction restraining them from selling the Brown Street Discount Invercargill and restraining them from evicting him from re-entering or taking possession of the business premises 70 Brown St.

Tu has run the business since buying it in 2017 for $405,000.

Justice J Nation, in a decision released in November, says Tu had the benefit of a lease for five years beginning on March 15, 1994 with three rights of renewal of five years.

Through a deed of assignment of lease dated July 11, 2017, Tu and Zhang and Wu agreed there were four rights of renewal of five years each, with the final expiry for the lease of March 13, 2039, and an annual rent of $17,114.96 plus GST. The deed of assignment of lease is consistent with it having been due for renewal on March 13, 2019.

Tu says he was not aware he needed to give formal notice to renew the lease and presumed it would run through to 2039 by default.

On March 14, 2019, the respondents wrote to Tu and said the rent would be increased to $1689.39 per month inclusive of GST.

The respondent said nothing about needing to renew the lease at that time. The applicant has paid rent accordingly, Justice Nation says.

On September 4, 2021, the respondent told Tu there was no lease because it had not been renewed in 2019, and give him the choices of: sign a new deed of lease with the rent increased to $52,000 inclusive of GST per annum, $4,333.33 per month inclusive of GST; terminate the lease as from December 1, 2021; buy the business premises at the price of $600,000.

Tu obtained a valuation showing fair current market rental to be $23,850 per annum and the market value of the premises to be $350,000. He declined the options put to him.

Tu wishes to renew his lease and exercise rights of renewal.

Justice Nation was satisfied Tu’s claim was not frivolous or vexatious and granted an interim injunction to restrain the respondent’s from selling the business and prevent the respondent’s from evicting Tu.

Tu must file a statement of claim to obtain relief under Property Law Act and seek an injunction restraining the respondents from terminating the lease or in any other way proceeding as if the lease had not been renewed for five years in 2019.

They had to be filed by November 26. A further hearing has been scheduled for November 29.

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en-nz

2021-11-27T08:00:00.0000000Z

2021-11-27T08:00:00.0000000Z

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