Examination of Lease and Contractual Issues

Question One

Please include your name and student ID as a header or footer to your completed assessment. QUESTION ONE(a)Examine fully whether the lease comes to an end in the following circumstance – MAL has difficulties raising the finance to install the lift and that, at the end of May 2020, the building consent application* has only just been lodged with the Council. It is clear to DCP at that point that the lift will not be installed by 31 July 2020. On 1 June DCP finds more suitable alternative premises and wants to get out of the agreement.*You can assume that an application for a building consent on average takes around three weeks to be approvedAssume for this part of the question that the time for installation of the lift is not of the essence.  Explain briefly whether the lease comes to an end in the following circumstance – On 25 March 2020 New Zealand is moved to Alert Level 4 because of COVID-19 and stays in lockdown until 27 April. During that time no work takes place on the installation of the lift.  On 1 August the installation of the lift is at least a month away from being completed.  Having discovered that more suitable – and much less expensive – alternative accommodation is now available as a result of the impact of COVID-19 on the commercial rental market, DCP advises MAL that it considers the agreement to be terminated on the basis of frustration.QUESTION TWO Assume for the purposes of this question that a second lift is installed as promised. Assume also that DCP has spent $300,000 on an extensive refit. DCP discovers that the lift is programmed to stop at all levels at all times and DCP’s customers experience long waiting times for the lift. MAL refuses to adjust the settings to provide an express lift to the 6th floor at the critical times. MAL points out that it needs to provide an efficient lift service for all its tenants and that the agreement only requires a second lift to be provided. DCP says that the agreement requires MAL to provide dedicated lift access to the 6th floor at peak times and wants the lift’s programme settings to be changed to achieve this outcome.  Required:(a)Examine fully, with reference to the authorities, the interpretation arguments of DCP and MAL respectively.
Please include your name and student ID as a header or footer to your completed assessment. (b)Assuming that the court finds in favour of DCP, is it likely to make the order which DCP wants? ExplainQUESTION THREE Part (a)Assume for the purposes of this question that the advertisement in The Commercial Property Press describes the premises as “modern, state of the art amenities . . . spacious, light and airy” and states that the premises have a floor area of “approximately 200 square metres”. During the site visit in June Maria asks about the other tenants in the building. Hemi replies, “We have very desirable tenants including a design company, a barristers’ chambers, and a coffee salon”. When DCP takes possession of the premises it discovers the following –•The large sky lights cause the space to be unbearably hot during the afternoon in summer when the sun is higher. The air-conditioning system is not able to cope.•The floor area is only 180 square metres which will mean that DCP will be limited to 65 children under the Ministry of Education regulations.•Three weeks after Maria makes her site visit,  Hemi finalises an agreement to lease space on the fifth floor to Maison Close an upmarket brothel following two months of intense negotiation.  The brothel opens for business in December 2018. The presence of the brothel causes some parents to make alternative child care arrangements.Required:Examine fully which, if any,  of the statements made prior to the lease being signed are actionable. Note that for the purposes of this question you are not required to consider whether cancellation is possible under the CCLA.Part (b)(5 marks)Assume that the lease contains the following clause 7 –“The Agreement contains all of the terms made between the parties with respect to its subject matter and supersedes all prior discussions and agreements relating thereto.”Required:Explain fully what impact, if any, this clause would have on your discussion above.
Please include your name and student ID as a header or footer to your completed assessment. QUESTION FOURAs part of the fit out of the premises, DCP puts in a new kitchen. Maria contacts her usual plumber, Faucet and Tapp Ltd (F & T), to install some new appliances. Maria has dealt with F & T over a period of some 10 years in her personal capacity and on three occasions over this same period has called in F & T to deal with plumbing issues at DCP’s previous premises.  F & T agrees to supply and install a gas oven, a commercial fridge freezer and a water filter system.  Unfortunately, due to the carelessness of one of F & T’s employees,  the joints on the water filtration unit fails,  causing major flooding overnight.  The water seriously damages the newly laid hardwood floor and seeps through to the brothel below.  The total cost of the damage is $70,000.The clause below appears on the reverse of the invoice which F & T’s employee left on the bench once the installation was completed.  “The extent of the Company’s liability under this agreement is limited to the cost of repair or replacement of faulty products. The Company shall not be liable for any losses, damages,  costs or expenses whatsoever which may be suffered by the customer or any other person”Required:(a)F & T seeks to rely on the clause and claims that its only liability is the cost of installing a new filter system – around $1200. Explain fully the arguments that it will make in support of this contention.  b)Assume for this part of the question that the clause is part of the agreement between F & T and DCP. DCP claims that the wording of the clause does not exclude liability for negligence. Explain fully whether you consider that DCP is cor