Wendco (NZ) Limited v Wiri Licensing Trust [2014] NZHC 485 (17 March 2014)

Last Updated: 27 March 2014

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-00585 [2014] NZHC 485

BETWEEN WENDCO (NZ) LIMITED Plaintiff

AND WIRI LICENSING TRUST Defendant

Hearing: 17 March 2014

Appearances: S Mills QC and R J Hollyman for Plaintiff

G J Kohler QC and K Glover for Defendant

N M H Whittington for Restaurant Brands

Judgment: 17 March 2014

(ORAL) JUDGMENT OF LANG J [on application for interim injunction]

WENDCO (NZ) LIMITED v WIRI LICENSING TRUST [2014] NZHC 485 [17 March 2014]

[1] The plaintiff, Wendco (NZ) Limited, (“Wendco”) operates the well-known Wendys chain of fast food restaurants. One of these is situated in a commercial complex on the corner of Great South Road and Ronwood Avenue, Manukau. The defendant, Wiri Licensing Trust, (“the Trust”) is the owner of that complex.

[2] Wendco occupies the site under a Memorandum of Lease dated 8 October

2010. Wendco and the Trust entered into that Memorandum after earlier signing an Agreement to Lease on 10 April 2001. For present purposes the terms of the Agreement to Lease and Memorandum of Lease are identical.

[3] Under both documents, Wendco and its customers had the right to use several means of entry and egress to that part of the complex on which the Wendys restaurant is situated. One of these was across an area of land formerly occupied by a Mobil service station. This gave Wendys’ drive through customers the ability to exit the complex onto Great South Road at the northeastern end of the complex. The advantage of this arrangement was that customers could thereby take advantage of the traffic lights situated at the exit. As a result, they were able to turn both left and right into Great South Road, and also travel straight ahead. That is not the case with other exits, which become subject to severe traffic flows at peak periods.

[4] The Mobil site is now being extensively redeveloped. The service station has been demolished and decontaminated. Earthworks are now being undertaken in preparation for the construction of a new fast food restaurant on the site. This will be operated by one of Wendco’s competitors.

[5] On or about 24 February 2014, the contractor undertaking the construction works installed a tall fence around the perimeter of the construction site. This has prevented Wendys’ drive through customers from exiting onto Great South Road using the north eastern exit.

[6] In this proceeding, Wendco seeks an injunction restraining the Trust and its agents from blocking the exit onto Great South Road. The Trust intends to oppose Wendco’s substantive application, which Wendco only filed on 14 March 2014. It also intends to oppose Wendco’s application for interim relief. Wendco now asks the

Court to grant urgent interim injunctive relief pending determination of the defended application for an interim injunction.

Relevant principles

[7] There is no dispute regarding the principles that apply in the present context. The Court must first determine whether Wendco has raised a serious question to be tried. If so, the Court must decide whether the balance of convenience favours the granting of the interim relief sought.

Serious question to be tried

[8] Annexed to the Memorandum of Lease was a plan that divided the complex into distinctive areas, each of which was named with a letter of the alphabet. The “Definitions” section of the Memorandum then provided that, where the Memorandum referred to an alphabetically lettered Area, that was to be a reference to the same alphabetically lettered Lot in the plan annexed to the agreement. By way of example, Area A in the Memorandum was a reference to Lot A in the plan. It is common ground that Area A and Lot A both refer to the construction site that is the subject of this proceeding. The Wendco site, on the other hand, is Lot W on the plan. For ease of reference a copy of the plan is annexed as an Appendix to this judgment.

[9] Clause 46.3 of the Memorandum of Lease dealt with the issue of access to and from the Area to be occupied by Wendco under the lease. It provides as follows:

Accessways

46.3 The Lessor and its lessees, agents, employees, invitees and customers shall have the right (in common with the Lessee and its agents, employees and invitees) at all times by day and by night to go, pass and repass, with or without vehicles, machinery, and implements of any kind, over and along the accessways located on the Land and the Lessee and its customers shall have the right (in common with the Lessor and its lessees, agents, employees and invitees) at all times by day and by night to go, pass and repass, with or without vehicles, machinery, and implements of any kind, over and along the access ways located on Area A, Area B, Area D and Area G.

[10] The net result of clause 46.3 is that Wendco and its customers are entitled to gain access to and from the Wendys’ restaurant over the accessways in Lots A, B, D and G in the plan annexed to the Memorandum. The whole of Lot A, or Area A in the Memorandum of Lease, is now blocked off by the fence that the Trust’s contractors have erected.

[11] I am satisfied that the fact that Wendco’s customers can no longer use Lot A as a means of entry and egress to and from the restaurant means that the Trust is now arguably in breach of Clause 46.3. Wendco has accordingly established a serious issue to be tried.

Balance of convenience

[12] With the consent of both parties, I visited the complex prior to the hearing so that I could gain an appreciation of what is now happening from the perspective of both parties. That was a valuable exercise, because I was able to observe both the current state of the development and the manner in which Wendys’ drive through customers are entering and leaving the restaurant.

[13] It was immediately apparent to me that there is no realistic prospect of Lot A, or Area A, being available as a means of entry and egress in the immediate future without significant works being done. The scale and extent of the earthworks that are now underway is such that the interests of Wendy’s customers would not be served by simply opening the fence to allow access to the site as was previously the case. Rather, any realistic remedy from Wendco’s perspective would require the existing fence-line to be moved back and a new roadway to be constructed along the perimeter of Lot A to the north eastern exit of that lot. This factor has a significant influence on the alternatives that are open to this Court at this point.

[14] Counsel have agreed that they will proceed immediately to a defended hearing of the application for an interim injunction. That will be heard in this Court on 14 April 2014 at 11 am. The issue now is whether I should make interim orders to regulate the position in the three week period leading up to the defended hearing.

[15] Counsel have made submissions to me today regarding the effect of delay on the part of Wendco, and on the issue of whether or not damages would be an adequate remedy for either party. I find it impossible on the state of the evidence to embark upon a meaningful consideration of those particular issues. The Trust has only just been served with Wendco’s application, and has only had extremely limited time within which to respond. I do not consider that these issues should properly be the subject of consideration until such time as both parties have had an adequate opportunity to place evidence before the Court.

[16] The issue that principally concerns me is that, to be meaningful, an order of the type necessary to provide effective relief to Wendco would amount to a mandatory injunction requiring the Trust both to take down the fence and to construct a roadway re-establishing access to the northeastern exit for Weny’s customers. If the Court was to make that order, it would do so in the absence of any evidence regarding the effect that that would have on the Trust’s plans for redevelopment of Lot A.

[17] The affidavit tendered by counsel for the Trust at the beginning of the hearing confirms that, when the redevelopment is completed in July 2014, it will re-establish access by Wendy’s customers to the northeastern exit. The affidavit does not, however, indicate the route that such access will take. For all I know, the restaurant to be constructed on the site may be located along the boundary of Lots A and B. Access to the northeastern exit for Wendys’ customers may well be through the middle of Lot A, rather than along the border of Lot A and Lot B as was previously the case.

[18] The Court is always hesitant to grant a mandatory injunction. Caution should be more readily exercised in circumstances where the Court is not appraised of the full extent to which its orders may affect the parties involved. I therefore consider that it would be premature to make an order that would effectively require the Trust to move the fence and construct a new roadway in the manner suggested by Wendco. That issue should properly be the subject of further consideration once the parties have filed their evidence.

Result

[19] For that reason, I decline to grant the urgent interim relief that Wendco seeks. That issue will be reconsidered in the light of the evidence then available at the hearing on 14 April 2014.

[20] In anticipation of that hearing, I now make the following directions by consent:

(a) Wendco shall file and serve any further evidence no later than Friday

21 March 2014.

(b) The Trust shall file and serve its evidence in opposition to the application no later than 31 March 2014.

(c) Any reply evidence is to be filed and served by 7 April 2014.

(d) A synopsis of Wendco’s submissions is to be filed and served no later

than 2 pm on 9 April 2014.

(e) A synopsis of submissions for the Trust is to be filed and served no later than 2 pm on Friday 11 April 2014.

Costs

[21] I will be the Judge who determines the application for an interim injunction. At this stage, I would prefer to leave costs in relation to today’s hearing for consideration once the substantive application for an interim injunction has been determined. Costs at this stage are therefore reserved.

The position of Restaurant Brands

[22] Counsel for Restaurant Brands, the party who proposes to operate the fast food restaurant to be built on Lot A, has appeared today on a watching brief. At the conclusion of the hearing, counsel for Restaurant Brands sought an order that his client be served with copies of the proceeding. He did not go so far as to say that his

client ought to be added as a party to the proceeding, although that issue may need to be considered in the future.

[23] At this stage, I will leave it to counsel to liaise regarding service of documents on this party. Counsel for Wendco advises me that he has already provided counsel for Restaurant Brands with a copy of the documents to date as a courtesy. I leave it open to counsel for Restaurant Brands to file a memorandum seeking an order that his client be joined as a party to the proceeding should that be

_{considered necessary.}

Lang J

Solicitors:

Davenports West, Henderson

Kemps Weir Lawyers, Auckland

Meredith Connell, Auckland

Counsel:

S Mills QC, Auckland

R J Hollyman, Auckland