Openyd Ltd v Lawrence

[2019] NZHC 46

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2018-485-446

[2019] NZHC 46

UNDER

section 261 of the Property Law Act 2007, Part 19 of the High Court Rules 2016

IN THE MATTER OF

an application for an order that the lessors renew the lease granted by Deed made on 5 April 2011

BETWEEN

OPENYD LIMITED

Applicant

AND

GARY JOHN LAWRENCE, DIANE SHERYL LAWRENCE, KERRY MARK TRUBSHOE AND JASON PETER SILK

Respondents

Hearing:

21 November 2018

Appearances:

C J Griggs for Applicant

A C Skelton for Respondents

Judgment:

31 January 2019

JUDGMENT OF CLARK J

Pursuant to r 11.5 of the High Court Rules I direct the delivery time of this judgment is

11:00 am 31 January 2019

OPENYD LIMITED v LAWRENCE, LAWRENCE, TRUBSHOE AND SILK [2019] NZHC 46 [31 January 2019]

Introduction

[1]    Openyd holds the lease over premises from which several dentists practice at Raumati Beach. The practice is known as the Raumati Dental Centre. The landlord  is the respondent, the Lawrence Family Trust (the Trust). In response to the Trust’s refusal to renew the lease Openyd has filed this proceeding (the underlying proceeding). Openyd seeks an order requiring the Trust to renew the lease granted by deed on 5 April 2011.1

[2]    The Trust says an arbitration clause in the lease operates  to  exclude  the High Court’s jurisdiction to hear and determine the underlying proceeding. The Trust has filed an interlocutory application for an order dismissing or staying the underlying proceeding to enable arbitration to take place. Openyd opposes the interlocutory application. Openyd says the arbitration clause is inoperative as the Trust waived compliance. Therefore, the High Court has jurisdiction to hear and determine the underlying proceeding.

[3]The contested interlocutory application gives rise to two primary issues:

(a)Did the Trust waive compliance with the arbitration agreement thereby rendering the agreement inoperative in terms of art 8(1) of sch 1 of the Arbitration Act 1996?

(b)If “yes” does the High Court have jurisdiction to hear and determine the underlying proceeding?

Background in overview

[4]    This is the fourth proceeding filed in the past 12 months concerning disputes between dental practices operating as the Raumati Dental Centre at Raumati Beach. A brief description of the relevant background is all that is required in the context of

1      The Deed of Lease  was  executed on 5 April 2011 but under  the Deed the  lease  commenced   8 January 2011.

this judgment. The narrative that follows is taken largely from the three previous decisions of the High Court.2

[5]    Dr Gary Lawrence is a director of G J Lawrence Dental Ltd (Lawrence Dental). Dr Lawrence established a dental practice at Raumati Beach in 1980. In 1996, he sold a third of the practice to each of two other dentists. Since that time the three-party arrangement has operated as the Raumati Dental Centre.

[6]Simon France J summarised the position:

[2]        The operation model has generally been three individual entities with an association agreement between…