Restaurant Brands Ltd v QST Ltd - [2021] NZHC 971

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-1957

[2021] NZHC 971

UNDER Cl 5(1)(c) of Schedule 2 of the Arbitration Act 1996

IN THE MATTER

of an application for leave to appeal against an arbitral award

BETWEEN

RESTAURANT BRANDS LIMITED

Plaintiff

AND

QST LIMITED

Defendant

Hearing: 11 February 2021

Appearances:

M Davies and P Comrie-Thomson for the Plaintiff L McEntegart and A Steel for the Defendant

Judgment:

4 May 2021

JUDGMENT OF HARLAND J

This judgment was delivered by me on 4 May 2021 at 2:30 pm Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar Date………………………….

Counsel/Solicitors:
Meredith Connell, Auckland
L McEntegart, Barrister, Auckland A J Steel, Barrister, Auckland
Thompson Blackie Biddles, Auckland

RESTAURANT BRANDS LIMITED v QST LIMITED [2021] NZHC 971 [4 May 2021]

Introduction

[1] The plaintiff and the defendant disagree about the proper interpretation of a rent review clause in a sublease between the defendant as landlord and the plaintiff as tenant and how this might apply to a valuation for rent review purposes. The dispute is the subject of arbitration. An interim award dated 16 September 2020 was made by the Arbitral Tribunal following its adoption of an expert opinion provided by the Honourable Rhys Harrison QC,1 which found for the defendant.

[2]The plaintiff applies for leave to appeal the interim award.

[3]The defendant opposes the application for leave.

[4] I have concluded that the plaintiff’s application for leave to appeal should be dismissed. This judgment contains the reasons for that decision.

Legal principles

[5] Under cl 5(1)(c) of Sch 2 to the Arbitration Act 1996, the plaintiff requires leave to appeal the interim award, which can only be granted if a question of law arises from it.

[6] The threshold test to be applied by the Court is outlined in cl 5(2) of Sch 2 which provides:

The High Court shall not grant leave under subclause (1)(c) unless it considers that, having regard to all the circumstances, the determination of the question of law concerned could substantially affect the rights of 1 or more of the parties.

[7] If the statutory threshold is met, the Court retains a discretion as to whether or not to grant leave.

1 Appointed under cl 26 of Sch 1 to the Arbitration Act 1996.

[8] The leading case is Gold and Resource Developments (NZ) Ltd v Doug Hood Ltd in which the Court of Appeal listed the factors (referred as guidelines) to be considered on such an application.2 They are:3

(a)the strength of the challenge/nature of point of law (to be considered in a preliminary way, but described as the most important guideline);

(b)how the question arose before the arbitrator;

(c)the qualifications of the arbitrator;

(d)the importance of the dispute to the parties;

(e)the amount of money involved;

(f)the amount of delay involved in going through the Courts;

(g)whether the contract provides for the arbitral award to be final and binding; and

(h)whether the dispute before 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.

Keep reading for free

Create a free CaseChat account to read Restaurant Brands Ltd v QST Ltd and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2021] NZHC 971
Decision Date: 4 May 2021

CaseChat Overview and Summary

Restaurant Brands Limited has applied for leave to appeal an interim award of the Arbitral Tribunal in its dispute with QST Limited about the proper interpretation of a rent review clause in a sublease between QST Limited and Restaurant Brands Limited. The defendant opposes the application for leave. Harland J concluded that the plaintiff's application for leave to appeal should be dismissed. The plaintiff's strongest argument was that cl 4.2 of the sublease requires a valuation of the "current freehold market undeveloped block of value" (as defined in the headlease) of "the Land" in accordance with the contractual definition of that term as contained in the First Schedule of the sublease. The court observed that the expert considered the sublease to be "part" of the headlease land. The challenge by the plaintiff was that where a term is clearly defined, that is the ordinary meaning that should be applied, and that meaning should prevail over recitals to a contract and other extrinsic materials. However, the court found that the plaintiff's arguments were fully rehearsed before the expert, and the expert favoured the more "orthodox" approach advanced by the defendant over the "ingenuity" of the argument advanced by the plaintiff. The court was not persuaded that there was real doubt that the expert was wrong and that the appeal points, even if arguable, were not strongly arguable.

Orders