Devgnz Limited v The Depths LP - [2021] NZHC 3398

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE

CIV-2021-442-56

[2021] NZHC 3398

IN THE MATTER of breach of Contract by the Defendant

BETWEEN

DEVGNZ LIMITED

First Plaintiff

AJIT KAUR
Second Plaintiff

SEERAT SINGH
Third Plaintiff

AND

THE DEPTHS LP

Defendant

Hearing: 7 December 2021

Appearances:

A Singh for Plaintiffs (via AVL)

S D Campbell and M L Rhodes for Defendant

Judgment:

10 December 2021

JUDGMENT OF ISAC J

[Application for interim injunction]

Introduction

[1] The plaintiffs seek an urgent interim injunction staying termination of a contract.

[2] The application was filed without notice to the respondent and came before Cull J on 26 November 2021. Her Honour directed service on a Pickwick basis on the defendant and convened an urgent teleconference on 26 November 2021.

DEVGNZ LIMITED v THE DEPTHS LP [2021] NZHC 3398 [10 December 2021]

[3] As a full-day hearing was available on 7 December 2021, her Honour made an interim order staying the defendant’s notice of termination until determination of the plaintiff’s application for interim relief.1 Cull J also made timetabling directions to ready the application for hearing. Part of those orders called for an application by the defendant to rescind the interim injunction. While the parties prepared and presented their arguments before me on the basis of both applications, as I noted at the hearing it seemed to me that given Cull J’s interim order was expressed to expire following judgment on the plaintiffs’ application, there would be nothing to rescind on theissue of this judgment. So, I have proceeded on the basis that this is an application by the plaintiff to continue the interim injunction beyond 7 December.

[4] Given the importance of the matter to all parties, and the urgent need for clarity on their respective positions, this judgment contains the pith of my reasons.

[5] DEVGNZ Ltd (DEV), and the second and third plaintiffs, its directors, own and operate the Richmond Hell Pizza franchise under a franchise agreement from the defendant, The Depths LP (The Depths).

[6] At the centre of the dispute is a “delivery promise time” that Hell Pizza store operators, including the plaintiffs, provide to their customers. When ordering a pizza on-line, the store (or franchisee) supplying the pizza will promise delivery within a specified time. That is because people do not like to wait for their home delivery pizza any more than they must.

[7] DEV contends The Depths has fraudulently manipulated data about home deliveries in the Hell Pizza online portal — known as MyHellHole — as part of The Depths’ efforts to terminate the franchise agreement.

[8] In response, The Depths says that an extensive investigation into data irregularities at the Richmond Hell’s Pizza shop leads to the clear conclusion that the third plaintiff, Mr Seerat Singh (also referred to in the evidence as Sam Singh), has altered delivery data over an extended period of time. It says he has likely done so

1 That order required the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Devgnz Limited v The Depths LP

Details

AGLC: Devgnz Limited v The Depths LP [2021] NZHC 3398
Case: [2021] NZHC 3398
Decision Date: 10 December 2021

CaseChat Overview and Summary

The plaintiffs in this case, Devgnz Limited, Ajit Kaur, and Seerat Singh, sought an urgent interim injunction to stay the termination of a franchise agreement with the defendant, The Depths LP. The plaintiffs accused The Depths of fraudulently manipulating data to provide false grounds for terminating the franchise agreement and orchestrating an incident to intimidate them. The defendant denied all allegations, claiming that the plaintiffs were responsible for the data manipulation. The court considered whether there was a serious question to be tried and where the balance of convenience lay. The court found that the plaintiffs had not provided sufficient evidence to support their allegations, and the defendant's case was stronger. The court also considered the adequacy of damages, the relative strength of each party's case, and the effect on innocent third parties. The court found that damages would be an adequate remedy for the plaintiffs, and the harm to the defendant and other franchisees from an interim injunction would be significant. The court declined to grant the plaintiffs' application for an ongoing interim injunction and reserved costs.

Orders