Hum Hospitality's Rosie Armitage fails in appeal to keep property, must pay rent arrears

Hum community group founder Rosie Armitage, pictured last year, has lost her bid in the Court of Appeal to stall repayment of rent arrears to her landlord. Photo / Dean Purcell

An embattled Auckland community house founder has lost her bid to stay proceedings ordering her to repay outstanding money owed to her landlord.

Hum Hospitality director Rosie Armitage was served an eviction notice on March 16 last year from the Grafton Rd property she was renting after a protracted legal battle.

Landlord Stylo Medical Services initially took Armitage to court for rent arrears of around $150,000.

Armitage told the Herald in April last year that residents had been "under siege" from the landlord's tactics "in the cover of darkness" after being issued the eviction notice.

She alleged the landlord had tried to contact their power company to say the premises were not occupied and given permission for trees to be cut down, destroying Armitage's son's playhouse, without their knowledge.

"This illustrates the position Hum is in, in pursuing an appeal while in some ways under siege from tactics from the landlord," Hum's lawyer Morgan Powell said.

Barrister Ray Parmenter, representing Stylo, said the landlord was exercising his right to protect the heritage property.

Although the $150,000 was paid, Armitage had continued unsuccessfully with various applications to stay proceedings to pay another $106,000 outstanding.

By November last year, Justice Jonathon Downs made an order for Armitage's arrest for contempt of court - however, the order was to lie in court until February 8, in case she agreed to move out.

Armitage eventually moved out on February 24, when Stylo took over possession of the property.

Hum was no longer in operation but Armitage had tried to get the court to wipe the final $106,000 she owed Stylo.

Despite Hum being insolvent with liabilities of almost $2.5 million, Armitage told the court: "I am creative and resourceful. If matters were stayed I could bring Hum back to life."

Police and bailiff officers talk with Hum community group leader Rosie Armitage at the villa on Grafton Rd last year. Photo / Dean Purcell

However, after the Court of Appeal examined her books it appeared the company's liabilities "far exceed its assets".

"Draft accounts submitted by Ms Armitage in support of Hum's application for a waiver of the $1100 filing fee disclose that it traded at a loss of $158,896 in the year to March 31, 2021 and had negative equity of $519,443 taking account of current liabilities at that date of $2,466,803," the Court of Appeal ruling said.

Not only is money owed to Stylo, but the Court of Appeal's decision from Justices Murray Gilbert and Cameron Mander noted Auckland Council was pursuing liquidation proceedings against Hum.

"On the information available to us, Hum is plainly insolvent," the Court of Appeal ruling said.

"Success on this appeal would not change that and it may well be that the company should be wound up. Moreover, if there is any merit in the appeal, which we doubt, the liquidator would be able to pursue it."

Mander and Gilbert said Armitage had been accorded considerable indulgence in being permitted to file documents and appear on behalf of Hum.

"We do not consider this should be allowed to continue. There appear to be good reasons why control of Hum should now be placed in the hands of an independent liquidator."

The justices accepted that Stylo was "extremely unlikely to recover the amount due under
the judgment" and said there was no good reason why it should be prevented from appearing alongside the council as a creditor or issue its own bankruptcy proceedings.

Parmenter, on behalf of Stylo, did not seek an order for costs on the current court proceedings as "there is no reasonable prospect of any costs award being recovered".

'It has been tortuous'

Parmenter told Open Justice this afternoon that Stylo had joined the council in its liquidation proceedings which would next be heard on July 8.

He said this whole saga had taken a toll on the landlord, both "emotionally and financially" and was now considering whether to keep it, sell it or lease it out again.

"All the damage that has been done is not going to be rectified by the end of Hum Hospitality Ltd," Parmenter said.

"There are scars everywhere. It would be good to see an end to the litigation but it has been tortuous."

He added that as well as the $106,000 outstanding, there was also a sealed costs order of $22,000 as well as $1100 owed to council.