Portofino restaurant in Wellington was in a court dispute with its landlord, NZX-listed Stride Property.
Portofino restaurant in Wellington was in a court dispute with its landlord, NZX-listed Stride Property.
Italian-style Wellington waterfront restaurant Portofino sued landlord Stride Property over its occupancy of the waterfront premises.
Portofino Wellington Waterfront wanted to extend its lease in Stride’s premises.
But Associate Justice Dale Lester ruled against it and in favour of the listed landlord which has a market capitalisation of$659 million and is headed by Philip Littlewood.
“I am satisfied that neither of Portofino’s causes of action can succeed,” the judge wrote after a May 2 hearing and a June 21 decision.
Portofino went to court after it said it was entitled to a new lease and was seeking extensions to the existing lease but it also wanted to negotiate on rental payments or abatements following the pandemic.
“At its most basic, Portofino’s case is that Stride led it to believe that a new lease would be forthcoming. As a result of Stride having created what Portofino says was its reasonably held belief in that regard, Portofino seeks an order declaring it is entitled to a new lease commencing December 1, 2020 or from whatever date the court determines to be reasonable,” the judge summarised.
The lease expired in September 2022 with no right of renewal, according to a previous decision from the High Court at Auckland from Associate Justice Clive Taylor. The lease was for nine years, commencing in September 2013 ending in September 2022.
The restaurant in the central city has an outdoor seating area and says it was established in 1980 but took action under the Fair Trading Act alleging misrepresentation.
Portofino had relied on verbal discussions as well as an email in 2020.
“The issue for the court is whether Stride has demonstrated that Portofino’s claims cannot succeed. I am satisfied that it has,” the judge wrote.
There were two main streams of correspondence between Portofino and Stride:
The granting of a new lease. That stream of correspondence was relatively limited;
Portofino’s request for a rent rebate due to the Covid-19 lockdowns and the linking of a rebate to an extension of the then-existing lease.
Portofino director Mario Dimitrijoski had travelled to Auckland in 2020 to meet Stride and talk about extending the lease. He made it clear that the restaurant wanted a three-year plus three-year lease. All up, that would be a six-year lease with a further right of renewal.
Stride emailed him afterwards saying the best approach would be to surrender the current lease and put together a new lease on the terms discussed.
Philip Littlewood, chief executive of Stride.
The surrender would be subject to signing a new lease and his account being settled before the surrender, Stride emailed him.
The plan was for him to get his new six-year lease, paying $185,000/year plus GST. But that email stressed the deal was indicative only and not intended to be legally binding.
Stride’s position is that Portofino never responded to that email about the new lease and much of the subsequent correspondence concerned various possibilities for a rent abatement linked to an extension of the existing lease.
Dimitrijoski was originally from Macedonia and moved to New Zealand in 2000 to start a new life.
He filed a 14-page narrative affidavit.
In his affidavit, he says: “English is not my first language, although now I am able to communicate adequately with restaurant clients and socially. My understanding of written English is not as good as my ability to speak the language.
“For that reason, I still prefer to meet people face to face and to discuss business matters with them in this way. I think it is fair to say that this is also typical of the way that I have tried to deal with our landlords throughout Portofino’s relationship with them.”
He accepted the email from 2020 accurately recorded the discussion.
Dimitrijoski had lived in New Zealand for nearly 25 years. His affidavit shows him to be quite fluent in English, the decision said.
Portofino also pleaded that Stride had advice from engineers relating to the seismic status of the building, or the ground on which it stands.
“Portofino’s position is Stride learning of the earthquake issues was the prompt or was at least a factor that led Stride to resile from what Portofino says were assurances a new long term lease would be granted,” the decision summarised.
But the judge said the seismic issue did not assist Portofino in its claim.
That follows a decision reported in February this year from Associate Justice Clive Taylor.
Portofino had made an interlocutory application for discovery of documents from Stride, seeking:
Board minutes of Stride;
Communications to and from the Stride board;
Communications between members of Stride staff;
Communications between Stride and other third parties about the negotiation of rent abatement referred to in Portofino’s statement of claim;
Communications and negotiations that occurred in relation to the offering up of a renewal of lease to Portofino.
On January 30, Stride opposed Portofino’s application for discovery of those documents.
So the matter went for the fuller hearing in May and last month’s decision.
Stride was entitled to costs in the case, Justice Lester said.
Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.
