Wai-iti Developments Limited v General Distributors Limited - [2019] NZHC 1656

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-1458

[2019] NZHC 1656

UNDER the Declaratory Judgments Act 1908

IN THE MATTER

of s 231 of the Property Law Act 2007 and s 28 of the Commerce Act 1986

BETWEEN

WAI-ITI DEVELOPMENTS LIMITED

First Plaintiff

FOODSTUFFS NORTH ISLAND LIMITED
Second Plaintiff

AND

GENERAL DISTRIBUTORS LIMITED

First Defendant

WOOLWORTHS NEW ZEALAND LIMITED

Second Defendant

Hearing: 13 March 2019

Appearances:

I J Thain and A L Sweeney for the Plaintiffs

M Dunning QC and M Eastwick-Field for the Defendants

Judgment:

17 July 2019

JUDGMENT OF ASSOCIATE JUDGE SMITH

This judgment was delivered by me on 17 July 2019 at 11.00am, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors / Counsel:
DLA Piper, Auckland
Russell McVeagh, Auckland M Dunning QC, Auckland

WAI-ITI DEVELOPMENTS LTD v GENERAL DISTRIBUTORS LTD [2019] NZHC 1656 [17 July 2019]

[1] In July 2018 the plaintiffs commenced this proceeding, in which they seek declarations that the first plaintiff (Wai-iti) is not bound by a certain lease covenant. The defendants (collectively, "GDL") filed an appearance under r 5.9 of the High Court Rules 2016 objecting to the jurisdiction of the Court to hear and determine the proceeding. They contend that the relevant lease contains a binding arbitration clause, and that the plaintiffs are bound by Article 8(1) of Schedule 1 to the Arbitration Act 1996 (the Act) to refer the subject matter of their claims to arbitration.1

[2] On 16 November 2018 GDL applied for an order staying the proceeding, until the differences between the parties had been resolved by arbitration in accordance with the arbitration provision in the lease. The stay application is opposed by Wai-iti.

[3]I now give judgment on GDL's stay application.

The parties

[4] The second plaintiff (Foodstuffs) carries on business as an operator and franchisor of supermarket and grocery store businesses, including those operated under the "Pak'nSave" and "New World" banners. Foodstuffs is the sole shareholder of Wai-iti.

[5]Wai-iti carries on business as a property owner and developer.

[6] The second defendant (Woolworths) was until 22 June 2018 named Progressive Enterprises Ltd. Woolworths carries on the businesses of owner and franchisor of supermarket and grocery store businesses, including under the banners "Countdown" and "FreshChoice". Woolworths is the sole shareholder of GDL. GDL

1 Article 8(1) of Schedule 1 to the Arbitration Act 1996 provides:
8 Arbitration agreement and substantive claim before court
(1)A court before which proceedings are brought in a matter which is the subject of an arbitration agreement shall, if a party so requests not later than when submitting that party’s first statement on the substance of the dispute, stay those proceedings and refer the parties to arbitration unless it finds that the agreement is null and void, inoperative, or incapable of being performed, or that there is not in fact any dispute between the parties with regard to the matters agreed to be referred.

carries on business as a…

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.

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Details

Case: [2019] NZHC 1656
Decision Date: 17 July 2019

CaseChat Overview and Summary

Wai-iti Developments Limited and Foodstuffs North Island Limited commenced proceedings against General Distributors Limited and Woolworths New Zealand Limited, seeking declarations that Wai-iti is not bound by a certain covenant in a lease agreement relating to the development of a Pak'nSave supermarket adjacent to a Countdown supermarket. General Distributors Limited applied for a stay of the proceeding, arguing that an arbitration clause in the lease required the disputes to be resolved by arbitration. The court was required to decide whether Wai-iti was bound by the arbitration clause and if the disputes fell within its scope. The court held that it was arguable that the arbitration clause bound Wai-iti and that the disputes raised in the statement of claim were arguably covered by the arbitration clause. Consequently, the court stayed the proceeding and referred the claims to arbitration in accordance with the arbitration clause.

Orders