Dwan v Trufa Aotearoa Limited
[2025] NZHC 1175
•15 May 2025
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2025-409-145
[2025] NZHC 1175
BETWEEN CATHERINE KAREN DWAN AND
MATTHEW STEPHEN DWAN as trustees of the Valiant Pistoleros Trust
Applicants
AND
TRUFA AOTEAROA LIMITED
Respondent
Hearing: 29 April 2025 Appearances:
S D Campbell and J Muirson for Applicants M D W King and A Gantumur for Respondent
Judgment:
15 May 2025
JUDGMENT OF MANDER J
This judgment was delivered by me on 15 May 2025 at 3 pm pursuant to Rule 11.5 of the High Court Rules 2016
Registrar/Deputy Registrar Date: .
DWAN v TRUFA AOTEAROA LIMITED [2025] NZHC 1175 [15 May 2025]
[1] The applicants, Catherine and Matthew Dwan (the Dwans), in their capacity as trustees of the Valiant Pistoleros Trust (the landlord), seek an interim injunction to prevent the removal of items by the respondent, Trufa Aotearoa Ltd (the corporate lessee), following the termination of a lease. The parties are in dispute about the ownership of various assets situated at a horticultural nursery in Rangiora. An urgent without notice interim injunction was granted by Eaton J to prevent the corporate lessee removing or continuing to remove the disputed items.1 The lessee opposes the continuation of the injunction and has further applied for it to be set aside on the grounds of material non-disclosure.
Background
[2] The corporate lessee was originally incorporated by the Dwans under the name “the New Zealand Truffle Company Limited” (NZTC) for the purpose of developing a truffle nursery on land owned by the Dwans’ trust. NZTC later changed its name to Trufa Aotearoa Ltd.
[3] In 2021, the Dwans were introduced to Mr Albrecht Eingaertner and, in March the following year, they agreed a heads of agreement which provided for Mr Eingaertner’s company to purchase a minority shareholding in the corporate lessee, that was used as the vehicle for a joint venture between the Dwans and Mr Eingaertner. In January 2023, the landlord and the corporate lessee entered into a lease in respect of the premises which was the site of the truffle nursery operation. The lease, which was for a five-year period with no rights of renewal, was backdated to commence on 1 April 2022.
[4] Earlier, in July 2022, Mr Eingaertner (via his company, the corporate lessee) and the Dwans (by way of a corporate trustee) had entered into a shareholders agreement that recorded details regarding the ownership and operation of the corporate lessee and the relationship between the shareholders (the shareholders agreement). The business of the lessee was defined in that agreement as the development of a general horticultural business, including the growing, marketing and sale of truffles.
1 Dwan v Trufa Aotearoa Ltd [2025] NZHC 756.
[5] A dispute arose, essentially between the Dwans and Mr Eingaertner, about the shareholders agreement. This was resolved by agreement on 20 February 2024, to which the corporate lessee, Mr Eingaertner, and the Dwans were parties (the settlement agreement). As a result of the settlement agreement, Mr Eingaertner’s company became the sole shareholder of the corporate lessee by purchasing the Dwans’ interests in that company. On 27 December 2024, the lessee gave notice of termination of the lease, effective on 30 June 2025.
[6] The leased premises are located adjacent to the Dwans’ residence. In February 2025, the Dwans developed concerns about items that were being removed from the property, as part of the process of vacating the premises, by the corporate lessee. The landlord wrote to the lessee in the following month, advising of the assets it considered it owned which should remain onsite at the end of the tenancy. This included items which were considered by the landlord to be part of the site’s permanent infrastructure. The lessee responded by disputing the landlords entitlement to certain assets, which the lessee claimed belonged to it. By this stage, the parties had engaged solicitors. In further correspondence, the landlord disputed many of the lessee’s claims to ownership of particular assets, and reserved the right to seek injunctive relief should the lessee continue to remove anything further from the premises in the absence of the dispute being resolved.
[7] Because removal work was not discontinued, an application was filed without notice for an order preventing the lessee from continuing to remove items that arguably constituted fixtures. The application was served on a Pickwick basis, but at very short notice to the lessee. After a telephone conference on 2 April 2025, an interim injunction was made, essentially for 48 hours, to preserve the position pending further argument. After the allocation of an urgent fixture set down for hearing at the end of the month, the interim injunction has been permitted to continue to allow the application for interim relief to be fully argued.
The landlord’s allegations in support of injunctive relief
[8] The landlord has filed evidence in support of its claim that the disputed assets are its property and that an injunction is necessary to protect its position and prevent
the corporate lessee from causing further significant damage to its premises and infrastructure.
[9] It is the landlord’s case that the Dwans began planning to create a truffle nursery operation at the property in 2020. It was envisaged this would include a greenhouse and smaller external buildings built into the greenhouse, known as hubs. Presently, it is said there are hubs connected to the greenhouse by “bio-hallways”. They are described by the landlord as being permanent structures with both running water and electricity that are used for processing tasks, the largest of which is approximately some 55 m2. The greenhouse is described as being divided into three zones (zones A, B and C).
[10] What is described by the landlord as further infrastructure has been added to the greenhouse and hubs. This included electrical works comprising wiring, lighting, heat pumps, temperature controls and fans. The hubs’ layouts are described as including adjoining and permanently connected floors and roofing components, and are connected to electrical services, including switchboards and plumbing. Shade houses erected near the greenhouse are also described by the landlord as being permanent structures. They were built using large wooden posts rammed into pre- compacted base layers around 1.5 metres deep. The posts, at their base, are encased in concrete. Evidence has been provided by the landlord that many of the items in dispute between the parties were installed by the Dwans during their initial development of the site, and that it was intended by them they would remain there permanently.
[11] The landlord says the assets in question belong to it because they are permanent fixtures affixed to its property. Further, and in the alternative, the landlord relies on the description of “landlord fixtures and fittings” contained in the lease, which include “light fixtures and fittings”, “greenhouse frames and structure”, and “tin shed” (apparently known as the pump shed), and other assets, including “underground/above ground services to structures”, “the full pre-wire” and “the full pre-plumb”, as being permanent fixtures that belong to it. It is not necessary to go into any further detail regarding the respective disputed assets because the corporate lessee has identified the
remaining items it maintains it is entitled to remove as its property. A description of those items is set out at [13].
[12] The landlord maintains the corporate lessee has removed a significant amount of otherwise permanent infrastructure from the premises which the landlord contends is its property. Further, in doing so, it claims the corporate lessee has caused extensive damage to the premises. It cites, for example, the severing of cables and wires, including the mains power cable running into zone C of the greenhouse. For its part, the corporate lessee rejects it has caused unnecessary or unreasonable damage to the premises, or that it would do so when removing the assets that it says are its property. It submits it is well aware of its “make good” obligations under the lease and intends to honour it.
Assets in dispute
[13]Eight categories of assets are at the centre of the dispute:
(a)Humidity controller, including sensors—this item is described as being bolted to the back wall of the pump shed.
(b)Nine Mitsubishi PLA140 cassette heat pumps—these items are described as having been bolted to custom made heat pump frames and hardwired into switchboards connected to the greenhouse frames. The landlord’s position is that their removal will cause significant damage.
(c)Three Mitsubishi heat pumps located in the hubs—they are described as having been bolted to a wall, hardwired into each of the hubs’ independent switchboards and not easily removable. Again, it is the landlord’s position that the heat pumps cannot be disconnected and made safe without significant electrical work.
(d)50 MAT LED lights in the greenhouse—the landlord acknowledges these lights can be removed without causing significant damage, but its position is that they are specified in the lease as belonging to the
landlord. It is reported that the lights in both zones B and C have already been removed by the lessee.
(e)57 MAT weatherproof plugs—these are described as electrical plugs that had been hardwired to the greenhouse frames. The landlord says they are firmly affixed and cannot be easily removed. Further, that their removal will be complicated and cause damage to the permanent infrastructure.
(f)Eight hubs and three MAT hepa filter units—the landlord alleges the hubs are permanent structures which have been constructed on concrete foundations and cannot be removed via a one-piece lift. They are described as being hardwired, connected to electrical switchboards and to the water supply. The landlord notes that electrical cables to two of the hubs have already been severed by the lessee. The hubs are described as being securely bolted to the greenhouse, and that it would be a complicated process to uninstall and remove the hubs. It is alleged that significant damage to the premises would be caused by the removal which would require extensive make good works.
(g)EM50 and EM36 fans—there are seven large cooling system fans which regulate the greenhouse temperature. It is reported that the cabling in relation to fans in zone C of the greenhouse has been severed. The landlord’s position is that these are permanent fixtures which have been hardwired into conduits, saddle clamped into the interior of the greenhouse, and connected to the main switchboard. They are distinguished by the landlord from “plugged in” chattels. It is submitted on behalf of the landlord that their removal will be very difficult, and remediation would require recladding the whole east side of the wall of the greenhouse.
(h)Two shade houses—these structures occupy a combined area of 420 m2. They are described as having been constructed by ramming 45 large wooden posts approximately 1.4 metres into the ground and concreted
in place. The landlord’s position is that their removal would be difficult and cause significant damage to their premises. It is said that remedial work would require the replacement of a significant amount of soil and gravel.
The lessee’s case
[14] The corporate lessee’s position is that it is entitled to remove the disputed assets based on a plain reading of the lease and the documentary record which preceded the lease being agreed. As noted earlier, it acknowledges its obligation to make good any damage caused in the course of removing its assets, but it disputes any damage caused to the property to date is of significance. Reliance is also placed on documentary evidence that the disputed items were purchased by the corporate lessee “for its trade and business”, and the treatment of those costs in its financial statements that shows the corporate lessee paid for these assets and their installation. It says there is an inherent inconsistency in the claim to these items when compared with their past categorisation, which matches the Dwans’ changed circumstances as a result of no longer having any interest in the corporate lessee.
[15] It is acknowledged, as is perhaps self-evident, that there is a live dispute between the parties regarding the landlord’s claim that these items, which were purchased and installed prior to the signing of the lease, were intended to be permanently affixed to the premises, or to be the lessor’s fixtures as claimed. Similarly, as to the nature and the extent of any damage (existing or necessary in the future) associated with their removal. These issues cannot, nor should be, conclusively determined in the context of hearing an interim injunction application. However, it is the corporate lessee’s position that on the available documentary evidence, including the lease and associated correspondence, it is sufficiently clear that the parties agreed that the corporate lessee would retain ownership of these assets and that they do not form part of the lessor’s fixtures.2
[16] The corporate lessee also argues in relation to its opposition to the continuation of interim relief, that essentially what the landlord is seeking is the retention of chattels
2 Citing Fisk v Fargher Construction Ltd (In liq) [2018] NZHC 2252.
or fixtures its trustees and principal beneficiaries (the Dwans) have already been paid for, albeit in a different capacity. It is alleged that when the Dwans exited the corporate lessee in 2024, they received approximately $1.8 million for the company’s assets through the sale of their shares, and that this consideration included the value of the respondent’s business and assets. Reliance is placed on a note prepared by Mr Dwan, titled “NZTC visit” which lists various items of interest for the valuers charged with determining the value of the Dwans’ shares. The note directs their attention to the various hubs and zones of the greenhouse and other areas of the premises, including the “container dome” and the “shade houses”.
The lease
[17]The lease relevantly provides at clause 47.1(f):
“premises” includes all the Landlord’s fixtures and fittings provided by the Landlord and those set out in the Fifth Schedule”.
The landlord’s fixtures and fittings in the fifth schedule to the lease provides as follows:
LANDLORD’S FIXTURES AND FITTINGS
(Subclause 47.1(f))
4 Bay barn/office space/workshop Fridge
Internal walls, doors and cavity sliding doors. (The cavity sliders and additional walls scheduled for install January 2023 at landlords’ cost).
Bathroom and kitchen fittings and Hot water cylinder Light fixtures and fittings
Floor coverings Fencing
Patios and pathways
Black CubeX container within the leased land area used for NZTC storage (purchased by landowner 2018 originally for EQ house repair storage). DERU2400792.22G1.
Black 25000L water tank Tin shed
Greenhouse frames and structure
Outdoor furniture and stone garden gabions
T.V in meeting room.
[18] The corporate lessee submitted that none of the disputed assets are included in the fifth schedule to the lease and that it is not claiming any of the items listed in the schedule, save and except for the “light fixtures and fittings”. It says those fixtures
and fittings should be a reference to the light fixtures and fittings of the office only. Its position is that at the time the lease was signed the disputed assets were already in situ, and that the parties agreed the corporate lessee owned them.
[19] It was emphasised that the best evidence of what was agreed between the parties is the documentary record and, in particular, the terms of the lease. In that regard, it is argued the disputed assets have not been included in the fifth schedule as being subject to the lease. It is suggested this is unsurprising given they had, by that time, already been purchased and installed by the corporate lessee. Further, it is noted that Mr Dwan, as director of the corporate lessee at that time, signed financial statements that listed these items as company assets (including the hubs), and claimed depreciation in respect of many of them on its behalf.
[20] Further reliance is placed on subsequent email correspondence exchanged between Mr Dwan and Mr Eingaertner before signing the lease, which, it is submitted, makes clear that the lease was to cover only the land, the greenhouse shell and the office. It is argued that the schedule to the lease was drafted on the basis of that understanding and reflects that position. This email correspondence and what is said to be Mr Dwan’s intentions that the disputed assets were meant to be permanent fixtures are discussed later in the judgment.
Application to rescind injunction
[21] In addition to its opposition to a continuation of the interim injunction, the corporate lessee has applied to have the interim order rescinded. This is on the basis there was material non-disclosure by the landlord which breached the applicants’ duty to act with the utmost good faith when seeking an injunction on an urgent basis without notice to the respondent.
[22] The corporate lessee maintains a copy of the settlement agreement of February 2024, in accordance with which the Dwans received (via their corporate and trust structures) payment of their shareholding in the corporate lessee, should have been provided to the Court when applying for injunctive relief. It was submitted the Dwans received payment for their shares in the company, which took into account the disputed assets, and that the Court was entitled to be informed about the terms of the settlement
agreement and the money the Dwans had received for their shares, which, it is submitted, took into account the disputed assets.
[23] It is further submitted there was a failure to disclose all prior correspondence between the parties on what had been agreed to be the lessee’s assets and the property that was to be the subject of the lease. It was argued that disclosure to the Court of only three recent letters between the parties created since notice of the termination of the lease had been given, only one of which was from the respondent, provided inadequate background to the issues the Court had to determine. The corporate lessee submits this failure was in breach of the certification provided by the solicitors acting for the landlord confirming the application contained all relevant information.
[24] As a result of those failures, it was submitted it was open to this Court to consider whether the landlord had failed to act in good faith when seeking an ex-parte order for interim relief and breached its obligations to make full and frank disclosure.
Applicable legal principles
An interim injunction
[25] This court’s power to grant interim relief is well-established. The intended object of granting an interim injunction was described by the Court of Appeal in the following terms:3
[35] The object of an interim injunction is to protect the plaintiff from harm occasioned by any breach of rights, that is the subject of current litigation, for which the plaintiff might not be adequately compensated by an award of damages by the court, if successful at the trial. Against that object it is necessary to weigh the consequences to defendants of preventing them from acting in ways which the trial may determine are in accordance with their rights. …
[26] Although there is no need for an applicant to have specifically sought a permanent injunction in its statement of claim,4 to support such an application the proceeding must be capable of supporting a claim for a perpetual injunction (or other sufficient equitable relief) whether or not there is also an accompanying claim for
3 Roseneath Holdings Ltd v Grieve [2004] 2 NZLR 168 (CA) at [35].
4 High Court Rules 2016, r 7.53(1).
damages.5 The corporate lessee sought to argue that, because the landlord would not be seeking a permanent injunction on the yet to be commenced substantive proceeding, it was, and remains, disqualified from seeking interim relief because the proceeding must be capable of supporting a claim for a perpetual injunction, and it is argued the applicant cannot be placed in a better position pending trial than it could achieve following trial.
[27] I reject the proposition that the type of interlocutory relief sought by the applicant, as a matter of law, is not available in the type of circumstances to which this case gives rise. I accept that once a Court has adjudicated on the status of the disputed assets and their ownership determined, an order preventing their removal may not be required. However, should the landlord be successful, any such determination may be accompanied by mandatory injunctive directions. Even if the corporate lessee is successful, there may remain the possibility of orders preventing removal pending payment of compensation for inevitable damage done, or preventing the removal of assets until a bond has been paid in contemplation of the need for compensation for damage caused by their removal.
[28] Insofar as it is suggested that a disqualifying factor for interim relief is a requirement that any injunction granted following trial would necessarily be subject to temporal limitations, that is not an uncommon situation when regard is had to the enforcement of contractual obligations arising out of employment or franchise agreements. I do not consider the term “perpetual” requires any final order to have practical application in perpetuity, as appears is being suggested.
[29] It is uncontroversial that the grant of an interim injunction involves the principled exercise of the Court’s discretion6 after assessment of the following considerations:7
5 Muzz Buzz Franchising Pty Ltd v JB Holdings (2010) Ltd [2012] NZHC 2490 at [10]; and Mayall v Weal [1982] 2 NZLR 385 (HC).
6 NZ Tax Refunds Ltd v Brooks Homes Ltd [2013] NZCA 90, [2013] 13 TCLR 531 at [12]–[13].
7 American Cyanamid Co v Ethicon Ltd [1975] AC 396, [1975] 1 All ER 504 (HL); Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 129 (CA) at 142; Roseneath Holdings Ltd v Grieve, above n 3, at [35]; and Commerce Commission v Viagogo AG [2019] NZCA 472, [2019] 3 NZLR 559 at [30].
(a)The Court must first inquire whether there is a serious question to be tried.
(b)If so, the Court must move to consider whether the balance of convenience favours granting or refusing relief.
(c)It must then stand back and assess the overall justice of the case after having analysed the first two issues.
Approach to setting aside for non-disclosure
[30] A party bringing a without notice application owes the Court a duty of the utmost good faith and candour, and is required to make the fullest disclosure of all relevant facts.8 That duty extends to disclosure of any known defence to the application and all matters relevant to it, regardless of whether the applicant considers them important.9 It is not necessary to demonstrate that any non-disclosure was intentional or amounted to an attempt to deceive the Court, but nor will non-disclosure automatically lead to recission of the earlier order.10 It is at the Court’s discretion whether a breach should lead to such an outcome even where there has been proof of material non-disclosure.11
[31] In Brink’s Mat Ltd v Elcombe, the Court of Appeal of England and Wales, while emphasising the importance of the duty of full and frank disclosure, held that while the applicant had failed to disclose all relevant information, and had consequently placed the ex-parte injunction in jeopardy, recission of the order was not appropriate.12 In doing so, it was noted that even had the omitted material been disclosed the injunction would still have been granted.
[32] More recently, the New Zealand Court of Appeal has provided guidance regarding the considerations to be taken into account when assessing whether non-
8 High Court Rules, r 7.23(2)(b); and Wadsworth Norton Solicitors Nominee Co Ltd v Bruns (1992) 5 PRNZ 481.
9 McPherson v Bergers Securities Ltd HC Auckland CIV-2003-404-2752, 12 June 2003 at [2]; and
Lala v Preliminary Proceedings Committee (1993) 7 PRNZ 101 (HC).
10 Leaders Hawkes Bay Ltd v Pienaar [2021] NZHC 1925 at [64].
11 Brink’s Mat Ltd v Elcombe [1988] 1 WLR 1350 (CA).
12 At 1361.
disclosure on an ex-parte application should result in an ex-parte order being discharged. In Rae v Commissioner of Police, relevant factors were identified as being whether the applicant had acted in good faith or otherwise, and the significance of the missing information. While omitted material may be relevant, it may make no difference to the outcome of the application had it been disclosed.13 The Court also referred to the need to take into account the interests protected and promoted by the duty of candour and, as was particularly relevant in the context of that case involving, as it did, proceedings to recover criminal proceeds, the public interest.14 In deciding to uphold a decision not to discharge a restraining order, the Court of Appeal noted the applicant had acted in good faith and that, while the omitted information was important, it would not have changed the outcome of the application had it been known.
[33] It has been recognised that the circumstances in which the interim injunction was sought also have to be taken into account. Such applications are often made in circumstances of urgency, and it has been accepted that some oversights are excusable. The interests of justice will not be met by the discharge of interim injunctions simply because there has been non-disclosure of information that strictly should have been made available to the Court dealing with the ex-parte application.15
Recission of earlier interim order
[34] The corporate lessee’s application for recission for material non-disclosure centres on a failure to disclose the settlement agreement. Pursuant to that agreement, the Dwans received payment for their shareholding in the corporate lessee. It is argued that, as a result, there was a failure to inform the Court that the Dwans had received payment for their shares in the company, which included on the respondent’s case the disputed assets, and that the Judge hearing the urgent application was entitled to be told about the terms of the settlement and the money the Dwans had received.
13 Rae v Commissioner of Police [2023] NZCA 4, [2023] NZAR 17 at [47(a)] and [(b)].
14 At [47(e)].
15 Tucker v News Media Ownership Ltd [1986] 2 NZLR 716 (HC) at 730; and Agam v Moon [2024] NZHC 3907 at [46].
[35] It was also argued that the prior correspondence between the parties that is alleged to have exhibited the parties’ agreement as to what had been agreed to be the corporate lessee’s assets also confirmed the extent of the property that was to be the subject of the lease. It is submitted this was relevant information central to the dispute between the parties about which the Court should have been informed. The failure to provide this material, it is argued, amounted to a breach of the duty to act in good faith and to provide the Court on an ex-parte application with full and frank disclosure
[36] The landlord does not accept that it breached its obligations when applying for urgent relief without notice. It submitted the settlement agreement was referred to and discussed by Mr Dwan in his affidavit filed in support of the application, in the context of setting out potential defences. It reads:
(a)Settlement agreement: That this proceeding has already been settled by a settlement agreement entered into between the parties. However, that settlement agreement related to an earlier shareholding dispute (a company directed by Catherine and I was formerly a shareholder in the respondent). The Landlord Trustee was not a party to that settlement agreement so I do not believe it can be relevant. If the Court orders me to produce it, I will do so. I hesitate only because it contains confidentiality obligations.
[37] It is further submitted, on behalf of the landlord, that the settlement agreement contained a confidentiality provision which required its content to be kept strictly confidential between the parties and their advisors except in limited circumstances, including “to the extent required by law”. Mr Dwan considered he was not under any obligation to disclose a copy of the settlement agreement or divulge its content beyond his statement in his affidavit. Alternatively, it is argued that adducing a copy of the agreement as part of the application would not have prevented the Court from granting the interim injunction. In that regard, it was argued the document was not relevant to the question of whether certain assets belonged to the corporate lessee or the landlord.
[38] I consider the settlement agreement formed an important part of the narrative leading up to the dispute between the parties which, given the history of the interactions between their principals, goes further than an ordinary dispute between lessor and a lessee. The duty to make full disclosure on an ex-parte application which extends to an obligation to ensure the Court is fully informed of all the circumstances
pertaining to the issue before it, including potential defences the respondent may have, required the content of the settlement agreement to be disclosed. I reject the submission the details of the settlement agreement were not “relevant”. That is plainly not the case. I also consider the qualification to the confidentiality obligation that permits disclosure “to the extent required by law” extends to the requirement to make full disclosure to the Court on the making of an ex-parte application. The landlord was therefore in breach of that obligation.
[39] Turning to the second basis upon which the allegation of non-disclosure is advanced (and opposed), the landlord disputes that the correspondence between Messrs Dwan and Eingaertner, which led to their short-lived joint venture and the execution of the lease, was relevant material for the purposes of the interim application, or to the current dispute regarding entitlement to the disputed assets upon the corporate lessee quitting the property. It was argued that this material provides no assistance in respect of that issue. Furthermore, it is submitted that a clause of the shareholders agreement also renders that correspondence irrelevant.
[40] The shareholders agreement provides that it will prevail over any other “agreement or contract or document or discussions between the Shareholders relating to the [corporate lessee]…”. Because the documents identified by Mr Eingaertner predate the shareholders agreement, it is argued they are not relevant and that any issues traversed in that material were superseded by and/or reflected in the terms of the shareholders agreement.
[41] The landlord submitted that had these documents been put before the Court at the time of the making of the original interim order, they would not have had any impact on the outcome of the application and the injunction would still have been granted. It was additionally argued that, in any event, the email correspondence in question was sent to the Dwans at the corporate lessee’s email addresses and that Mr Dwan had only limited access to such “historical” information because the settlement agreement required the Dwans to delete communications they had regarding the company, and the revocation of their access to email accounts.
[42] The corporate lessee questions the correctness of the Dwans’ access to the earlier email correspondence by reference to other proceedings involving the parties or related parties which canvas some of the same material. However, I do not consider the failure to introduce the past email correspondence for the purposes of the ex-parte application gives rise to a breach of the applicant’s obligations. Having regard to the urgency which is often required in the circumstances of seeking ex-parte relief, there has to be some limitations on the depth of the material required to be put before the Court.
[43] The corporate lessee’s position is that the email correspondence assists its interpretation of the property that was governed by the lease. That may prove to be the case, but currently that is disputed by Mr Dwan, who places a different interpretation on both the lease and these documentary records. I accept that cannot be an answer to the duty to disclose relevant material on an ex-parte application, but it is less clear how the Court may have been assisted, particularly having regard to the limited time available to review the application and interrogate its merits in depth. For the purposes of the present argument, it is not open to me on the available evidence to make any conclusive determination as to whether either the correspondence in question was available to the landlord to exhibit as part of its application, nor what its ultimate significance may be. I am therefore reluctant to make any determination that the failure to disclose this particular material amounted to a breach of the duty of candour and the obligation to disclose relevant information on an ex-parte application.
[44] The corporate lessee, in its written submissions, referenced previous allegations made against Mr Dwan regarding misleading conduct in the context of other litigation. It is not apparent that these allegations have been accepted or proven, and, in the absence of the corporate lessee being able to draw on formal recorded findings of this or other courts, I am obliged to put them to one side. While the bona fides of the person the subject of the alleged breach is a relevant consideration, in the absence of such determinations, it is not open to me, as it appears I was being invited to do, to conclude that Mr Dwan has a propensity or proclivity to provide incomplete information or omit relevant material that may result in the Court being misled.
[45] I accept the failure to disclose the shareholders agreement is troubling. However, while that information is relevant and of some significance, it is now before the Court. Moreover, the landlord’s application is effectively being heard de novo notwithstanding the earlier interim order which was clearly made because of the exigencies of the situation at that time. The application has been brought on for a full hearing on notice within a matter of weeks of the making of the earlier order. In those circumstances, the application for recission has largely been superseded by my consideration of the merits of granting interim relief. It is to that issue I now turn.
Should the interim injunction be continued?
Is there is a serious question to be tried?
[46] It is necessary for the landlord, as the applicant, to establish the threshold question that there is “a serious question to be tried”. Following a reasonable examination of the legal and factual basis of the applicant’s case, the Court must assess whether it is sufficiently strong enough to warrant the exceptional remedy of injunctive relief before trial.16 There needs to be sufficient factual evidence to satisfy the Court the applicant has a real prospect of succeeding on their claim in the substantive action.17 However, it is not the Court’s function on such an application to attempt to resolve conflicts of evidence upon which the parties’ claims may ultimately depend, or decide difficult questions of law which call for detailed argument and “mature consideration”.18
[47] The dispute centres on the application and interpretation of s 266 of the Property Law Act 2007:
266 Removal of fixtures by lessee
(1)A lessee may remove any trade, ornamental, or agricultural fixture (except a lessor’s fixture) that the lessee has affixed to any leased premises, but may only do so either—
(a)while the lessee is in lawful possession of the premises; or
16 Andrew Barker “Interim Injunctions” in Blanchard (ed) Civil Remedies in New Zealand (2nd ed, Thomson Reuters, Wellington, 2011) at [6.2].
17 Re Lord Cable (dec’d) [1976] All ER 417 (CH) at 431.
18 American Cyanamid Co v Ethicon Ltd, above n 7, quoted in Villa Maria Wines Ltd v Montana Wines Ltd [1984] 2 NZLR 422 (CA) at 425; and Health Club Brands Ltd v Colven Botany Ltd [2013] NZHC 428 at [9].
(b)during a reasonable period after the lessee ceases to be in lawful possession of the premises or that part of the premises to which the fixture is affixed.
(2)Subsection (1) applies unless, in relation to a lease, the lessor and lessee agree otherwise.
(3)A lessee who exercises a right to remove a fixture must—
(a)cause as little damage as possible to the leased premises; and
(b)make good any damage caused; and
(c)compensate the lessor for any damage caused and not made good; and
(d)compensate the lessor for any other loss caused to the lessor (including indemnifying the lessor against all claims and expenses for the removal or damage made or incurred by the lessor under any superior lease).
(4)A lessee who has ceased to be in lawful possession of the premises is entitled, during the reasonable period referred to in subsection (1)(b), to have access to the premises that is reasonable and necessary for the purpose of—
(a)exercising any right to remove a fixture; or
(b)carrying out any duty to make good any damage caused.
(5)In this section, lessor’s fixture means a chattel that has been affixed to the premises (for example, a fence erected on the land), in such a manner that it becomes part of the structure of a building or otherwise becomes integral to the land, by—
(a)the lessee; or
(b)a former lessee of the premises whose leasehold estate or interest was acquired by the lessee; or
(c)a sublessee whose right to remove the fixture has expired.
[48] The landlord submits there is a serious question to be tried as to whether each of the disputed items can be classified as a fixture or a chattel and, moreover, insofar as the former is concerned, whether it is a tenant’s or landlord’s fixture. In large part, the landlord’s case rests, although by no means exclusively, on the degree to which the disputed items are affixed to the landlord’s land and/or existing infrastructure, and that the identity of the entity which may have purchased or installed them is of only secondary consideration. By reference to what the landlord alleges has been significant damage caused by the corporate lessee’s unauthorised removal of items to
date, it argues that they demonstrably do not constitute fixtures which the corporate lessee is entitled to remove.
[49] The landlord argues the assets in question belong to it because they are either referenced as landlord fixtures and fittings in the lease, or are permanent fixtures firmly affixed to the landlord’s other fixtures and fittings. Conversely, it is the corporate lessee’s case that the documentary evidence, including correspondence between the parties, financial statements signed by the Dwans, and the lease itself, clearly establishes that the parties agreed the disputed items it acquired would remain the corporate lessee’s assets which it could take possession of once the lease ended. It maintains the landlord has no real prospect of success in any substantive action to claim the assets as its own.
[50] In the context of the present application, it is not appropriate for me to come to any firm findings regarding the dispute between the parties. However, while it is clear there is a triable question, there are questions as to the strength of the landlord’s case which raise doubt as to whether the exceptional remedy of injunctive relief prior to trial is appropriate. Mr Dwan, in his evidence, places considerable reliance on his pleaded intentions that, at the time the assets were acquired and installed, they were intended to be part of the premises and therefore the landlord’s property, but, in the circumstances, such an assertion does not greatly advance his position. The lease will no doubt be the starting point for the examination of the question of the classification of the disputed assets and much focus will be upon the definition of the term “premises”, which “includes all the landlord’s fixtures and fittings provided by the landlord and those set out in the fifth schedule” (emphasis added).
[51] The corporate lessee has placed much emphasis on the fifth schedule to the lease, which it submits lists exhaustively the assets that were intended to be categorised as the landlord’s fixtures and fittings, but that argument tends to overlook the other part of the definition which references “landlord’s fixtures and fittings provided by the landlord”. No doubt the corporate lessee will counter that the items in dispute, insofar as they constitute “fixtures and fittings”, were purchased and installed by it. It relies on the documentary record (the email exchanges) prior to the
signing of the lease, generated, on Mr Eingaertner’s evidence, in anticipation of such an issue, in support of its case.
[52] The corporate lessee submits this record makes it clear the lease applied only to the land, the “greenhouse shell” and the office. Further, it says the inclusion of these disputed items as part of the assets of the company when the settlement agreement was entered into, which formed part of the value of the shares acquired by Mr Eingaertner’s interests, has not been satisfactorily or, at least, convincingly addressed by Mr Dwan.
[53] As referenced earlier, the corporate lessee also points to a financial report for the 2020 tax year in which some of the disputed assets are included in the depreciation schedule for the company and were represented for tax purposes as being owned by the corporate lessee. The position documented in that report appears inconsistent with the stance now sought to be taken by Mr Dwan in relation to the same assets. The corporate lessee also points to other documents, including its operations plan and “greenhouse site summary” for 2022 which, it is submitted, references various assets including the hubs as having been fitted out by the company, and other assets said to be integral to the corporate lessee’s operation, including extraction fans, heaters, irrigation, lighting and environmental controlling systems.
[54] It follows from this brief review that there appears reasonably strong evidence available to the corporate lessee that, whatever the nature or way in which the disputed items are affixed to the land or structures (such as the greenhouse frame) that might, as a result, ordinarily be otherwise considered to be landlord’s fixtures, the parties had intended and agreed these items to be assets of the corporate lessee.
Balance of convenience
[55] The balance of convenience has been described as an inquiry into whether the granting of an injunction or its refusal is the course which, after the issues between the parties have been determined at trial, would best allow the adjustment of the rights of the parties in a way that accords with fairness and justice.19 A range of considerations
19 Congoleum Corporation Ltd v Poly-Flor Products (NZ) Ltd [1979] 2 NZLR 560 (CA) at 571.
can be taken into account in making this assessment which is not constrained by any ridged or inflexible rules.20 I address a number of those factors as they arise in the circumstances of this case as follows:
Whether damages would be an adequate remedy
[56] It is well-established that ordinarily a Court will not grant an injunction where damages would provide an adequate remedy. If a plaintiff’s interest is largely economic and the value of their loss easily calculated, damages will usually be found as an adequate remedy and injunctive relief declined.21
[57] The landlord placed reliance on a number of exhibited photographs in support of a submission that substantial and gratuitous damage had already been caused to its premises by the removal of items claimed by the corporate lessee. In particular, the removal of various pieces of infrastructure from some of the zones of the greenhouse and the cutting of underground power mains to two of three hubs were highlighted in support of a submission that the further removal of equipment by the corporate lessee will result in more damage to the premises and the land. It is argued that not only is this damage indicative of the “permanence” of the disputed items, but that the most prudent and practical course in the interim, while the dispute is determined, is to order the items to remain in place in the meantime.
[58] For its part, the corporate lessee rejects that its approach to the removal of the disputed items has to date, or would in the future, cause avoidable or excessive damage to the landlord’s property. It submits the value of the assets removed (or to be removed) are readily identifiable, and that any consequential damage that results can similarly be quantified and the landlord compensated. It is noted that the obligation to make good damage caused by the removal of a lessee’s assets is commonplace upon the termination of the lease, and that the process it has adopted is unremarkable in the circumstances. It argues that the value of any required remedial work is readily
20 Factortame Ltd v Secretary of State for Transport (No 2) [1991] 1 All ER 70 at 118.
21 Andrew Barker, above n 16, at [5.2.2(1)]; American Cyanamid Co v Ethicon Ltd, above n 7, at 408; and Jessica Gorman and others McGechan on Procedure (online ed, Thomson Reuters) at [HR7.53.07(2)–(3)].
quantifiable and that, accordingly, an award of damages would provide an adequate remedy.
[59] The corporate lessee submits any consequential damage caused by the removal of the disputed items, their ownership and their value, only give rise to potential economic losses that are readily quantifiable. Similar is said as regards the costs of reinstatement, should the landlord be successful at trial. Against that, the corporate lessee points to its own needs or intentions to continue its truffle operation at a different site, and the difficulty of assessing the economic loss should it be vindicated at trial, in terms of the loss of business opportunity and related costs from putting its business on hold indefinitely.
Maintenance of status quo
[60] Where the relevant considerations appear evenly balanced, it is recognised the most prudent course for a court may be to adopt an approach best calculated to preserve the status quo.22 However, a difficulty that often arises is the accurate identification of the status quo. In the present case, the lease has been terminated and is coming to an end. The corporate lessee is entitled to remove its own property and to remain in occupation until 30 June 2025. Thereafter, it seeks to continue with its operations by using plant and equipment it maintains are its property. As against those considerations, the landlord maintains the remaining disputed items should be preserved in situ pending any final determination of the issues, particularly given the extent of the work required to remove these assets. Contrary to the corporate lessee’s position, it claims removal of these assets is far from simple and will almost certainly cause significant consequential loss.
Conduct of the parties
[61] The landlord considers it has acted reasonably throughout the exit process and responded appropriately to the corporate lessee’s actions. It maintains it only resorted to court action when the corporate lessee refused to stop removing items from its premises and that it was, in the circumstances, forced to take injunctive proceedings
22 American Cyanamid Co v Ethicon Ltd, above n 7, at 408; and Maurice Casey Laws of New Zealand
Injunctions (online ed) at [12] (online ed) at [12].
on an urgent basis to protect its position. In contrast, it argues the other party’s conduct has been “disturbing”. It argues that, despite being put on notice of potential injunctive relief, the corporate lessee continued its conduct, removing items which caused further damage, including the severing of wires and cables. It has expressed a concern that its assets and infrastructure will not be safe if the injunction is not extended.
[62] The corporate lessee argues that, as I have held, the landlord, in its application for ex-parte injunctive relief, breached its duty to act in good faith by failing to candidly provide complete information to the Court. Further, it submits the landlord has acted in a “high handed” manner in the way it “threatened” injunctive relief unless it agreed not to remove “anything” from the premises, despite the lease having come to an end and its indisputable entitlement to remove assets that could not be contested or the subject of any genuine claim. It argues the landlord’s conduct is designed or motivated to hamper the corporate lessee from continuing with its operations at a different site by redeploying its own assets.
[63] I do not consider these competing allegations made by the parties against each other materially advance their respective positions. I have found the landlord did breach its disclosure obligations in failing to provide a copy of the settlement agreement to the Court when making its ex-parte application. However, that ought not be allowed to unduly affect the assessment of the merits of the application to continue the interim injunction now that both parties have had the opportunity to fully put forward their respective positions, and there has been argument based upon complete disclosure, albeit necessarily limited given the setting of an interlocutory application for interim relief.
Overall justice
[64] The final overarching matter to which I must have regard is where the overall interests of justice lie in the circumstances of the case. The grant of an interim injunction requires the exercise of discretion. This requires the Court to stand back and assess whether granting pre-trial relief before any determinative examination of the merits of the parties’ respective positions is necessary in order to do justice between them. In making that assessment, regard must be had to whether the impact of the
decision to grant an injunction would disproportionately affect one party over another, or whether, in the context of what is essentially a commercial dispute between two entitles whose economic interests can be quantified and met by damages, such a step is strictly necessary.
Decision
[65] I have reviewed the nature of the dispute between the parties; the relative strengths of the respective cases insofar as they can be assessed in the context of an application for interim relief; and the fact the stakes clearly reflect economic interests, in respect of which I am satisfied damages can provide adequate compensation to the successful party. Having carried out that review, I consider the landlord has largely fallen short of persuading me the Court should intervene by exercising its discretion to impose an interim injunction on the corporate lessee to prevent it from removing the disputed assets.
[66] The process of removal has and may continue to result in consequential damage to the landlord’s property. However, on the whole, I have not been convinced that any such consequential loss cannot be appropriately assessed and remediated, particularly in light of the corporate lessee’s acknowledgment of its responsibility to do so. I am not satisfied on the information currently available to me that the process adopted by the corporate lessee has caused gratuitous damage or can be appropriately undertaken in a less intrusive manner. No other alternative method has been suggested.
[67] However, as will be apparent from the way I have qualified my findings in reaching my decision, I consider the balance of convenience considerations favour two categories of assets remaining in situ for the time being. Because of the nature of some of the structures and the manner of their fixation to the landlord’s property, I am satisfied injunctive relief should issue to prevent the removal of the structures listed earlier in this judgment at [12(f)] and [(h)], namely the “hubs” described as structures attached to the greenhouse and constructed on concrete foundations, and the two shade houses described as having been built on wooden piles that have been concreted in place. I appreciate that, in respect of the other disputed items, the strengths of the
parties’ claims may vary (for example, in respect of light fixtures and fittings) but the value of such equipment, expensive as it may be, is readily ascertainable, as is the cost of its installation or reinstatement.
Result
[68] The interim injunction granted by Eaton J on 2 April 2025 is modified to prevent only the removal of the hubs constructed on concrete foundations and the two shade houses built on wooden posts that have been concreted in place. In respect of the balance of the disputed items listed at [12], the interim injunction is otherwise discharged.
[69] I understand the dispute is now the subject of arbitration. The modified interim injunction preventing the removal of the identified disputed items is to remain in place pending further order of the Court. However, the matter is to be set down for call in four weeks’ time in the expectation that counsel will file a joint memorandum updating the Court as to the state of the dispute and, if still required, advising the period of time the interim relief will need to remain in place for the purpose of completing the arbitration process.
Costs
[70] Both parties can claim some measure of success. The question of costs is reserved for the time being in anticipation they can be agreed or will be subsumed in any resolution reached as a result of the process in which the parties are presently engaged. If, ultimately, memoranda are required to be exchanged and filed, they should not exceed three pages.
Solicitors:
Wynn Williams, Christchurch Lane Neave, Christchurch
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