Wendco (NZ) Limited v Wiri Licensing Trust
[2014] NZHC 820
•16 April 2014
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2014-404-00585 [2014] NZHC 820
BETWEEN WENDCO (NZ) LIMITED
Plaintiff
AND
WIRI LICENSING TRUST Defendant
Hearing: 14 and 16 April 2014 Appearances:
S Mills QC, R J Hollyman and S J Maloney for plaintiff
G J Kohler QC and K Glover for defendantJudgment:
16 April 2014
(ORAL) JUDGMENT OF LANG J [on application for interim injunction]
WENDCO (NZ) LIMITED v WIRI LICENSING TRUST [2014] NZHC 820 [16 April 2014]
[1] This proceeding concerns a dispute between Wendco (NZ) Ltd (“Wendco”) and the Wiri Licensing Trust (“the Trust”). Wendco operates the well known Wendys chain of fast food restaurants. One of these is situated on a site that it leases in a commercial complex on the corner of Great South Road and Ronwood Avenue, Manukau. The Trust is the owner of that complex.
[2] The background to the dispute is set out in an earlier judgment in which I declined an application by Wendco for an urgent interim injunction.1 I do not propose to repeat that background here, and take the reader to be familiar with my earlier judgment.
[3] The proceeding is before the Court again today for determination of two issues:
(a) Whether the Court should make orders providing Wendco’s customers with access through Lot A to the traffic lights at the northeastern corner of that lot.
(b)Whether the Court should make orders in respect of the Trust’s proposed reconstruction of the existing accessway that passes through Lot B and exits onto Great South Road.
[4] I record that prior to the hearing today, counsel and I visited the site and were able to view the areas over which the proposed new accessway is to travel. This gave me a greater appreciation of the likely shape of the end result.
[5] I record also that work is currently proceeding according to plan. The Trust remains confident that, provided there are no future delays, it will be able to complete the reconstruction of Lot A no later than July 2014. It has obvious concerns, however, that any future delays may result in the completion date being
extended beyond that date.
1 Wendco (NZ) Ltd v Wiri Licensing Trust [2014] NZHC 485.
A. Accesss through Lot A to the traffic lights at the northeastern corner of
Lot A
[6] This was the focus of the earlier hearing. At that time Wendco sought an order requiring the Trust to construct a new roadway on the western boundary of Lot A so as to provide its drive-through customers with access through Lot A by that route to the traffic lights at the northeastern corner of Lot A.
[7] Since the earlier hearing, the Trust has endeavoured to meet Wendco’s concern by constructing a temporary roadway along the eastern boundary of Lot A that runs parallel to Great South Road. There are currently some shortcomings with this, because the temporary route is not readily visible to customers who exit the Wendys’ drive-through. In addition, motorists are required to take a very sharp left hand turn in order to access the route.
[8] The parties have now reached agreement regarding the manner in which these issues can best be overcome. This includes retraction of the corner of the fence so that the temporary access route is more readily visible to those exiting the Wendys’ drive-through. In addition, the parties have reached agreement regarding appropriate signage advising Wendys’ customers of the existence of the route.
[9] The orders that the parties propose include an order that an existing site office be removed from the grass berm to the north of the exit, together with removal of associated temporary fencing. The orders record that this will be achieved as soon as practicable. The understanding, however, is that the site office will be moved no later than tomorrow. Counsel for the Trust advises me that arrangements have been made for the office to be moved at 9 am tomorrow.
[10] In addition, the orders contemplate that the Trust will move the fence along the western side of the entry road from Ronwood Avenue. This will push the fence further back so that the roadway becomes a dual lane passageway, rather than a single lane road as is presently the case. The words “as soon as practicable” are also contained in that order. Again, the parties envisage that this work will be completed by the close of business tomorrow.
[11] The draft orders that counsel have provided to the Court are attached as an Appendix to this judgment. They effectively deal with outstanding issues in relation to the access through Lot A to the traffic lights at the northeastern corner of Lot A. It is not necessary for me to make any further orders in that regard.
B. The proposed reconstruction of the accessway passing through Lot B and exiting onto Great South Road
[12] This issue has been the focus of the present hearing. Wendco has a concern, expressed through its traffic expert, that the proposed reconstruction will result in considerable difficulties for Wendy’s drive-through customers. The expert is of the view that the new configuration is likely to lead to increased congestion around all three exits leading onto Great South Road. For that reason, Wendco resists the Trust embarking on Stages 2, 3 and 4 of the reconstruction. These will see removal of the existing berm, reconfiguration of the exit curbing a significant distance to the south, and the construction of approximately eight carparks in an area roughly opposite the exit to the Wendys’ drive-through lane. It seeks an interim injunction preventing the Trust from commencing this work.
[13] In addition, the Trust needs to undertake significant drainage works. These involve the construction of a manhole at the intersection of a drain leading from Lot A to Lot B. That drain will then proceed in a westerly direction to the main outlet.
[14] Wendco has a concern that, in the immediate future, the installation of the manhole is likely to cause considerable disruption to traffic using the drive-through. This is because the Trust will need to extend the existing temporary fencing further towards the Wendys’ drive-through exit in order to provide a barrier protecting the works to be carried out in relation to the manhole.
[15] Counsel for Wendco puts forward three alternatives in this context. First, he submits that it would be feasible for the manhole to be shifted further west to a point behind the existing fencing. This would mean that there would be no need to extend the fencing and thereby further disrupt the traffic flow in the accessway leading to the exit through Lot B.
[16] This submission is based largely on comments made during the site visit this morning by Mr Daniel Lenditch. He is not a deponent in this proceeding, but he is evidently a person with significant engineering experience. He was of the view that he could obtain the necessary consents to achieve the relocation of the manhole from the Auckland Council within a 24 hour period.
[17] On its face, this proposal has an obvious attraction because it would mean that the fence would not need to be moved further into the existing accessway. I consider, however, that Mr Lenditch’s view of matters is likely to be overly optimistic. First, I have no doubt that the Council would need to approve revised drainage plans reflecting the proposed relocation of the drain and manhole. Secondly, I cannot be sure that the relocation of the drain through Lot A is the only aspect of the drainage work that this proposal would affect.
[18] If I was to accede to the proposal it would run the very real risk of further delay, particularly given the fact that the Easter break is about to commence. For that reason, I am not prepared to make any orders along the lines of the proposal suggested by Mr Lenditch.
[19] Counsel for Wendco submits next that disruption to Wendys’ customers could be minimised if the proposed work was carried out during early morning hours when the Wendys’ restaurant is not open. This would involve the installation of metal plates over trench works during daylight hours. I have two concerns about this proposal. First, it would require a variation of the existing resource consent in respect of the proposed work. This would inevitably delay matters further. Secondly, there is a motel complex situated at the northern end of Lot A. The proprietors and guests of that complex may well take a dim view of machinery working through the early morning hours to complete the drainage work.
[20] Those factors persuade me that this proposal is not a practical alternative in the circumstances.
[21] Finally, counsel for Wendco submits that the proposed fence could be moved to a position just to the east of the manhole works. The existing berm could then be
shortened and traffic could be diverted between the western boundary of the fence and the end of the berm into the existing accessway leading to Great South Road. This would have the benefit of retaining most of the existing berm and also the present kerbing and existing exit routes.
[22] This proposal has some merit, if only because it would enable the parties to endeavour to reach agreement regarding the final outcome. Regrettably, however, they cannot reach agreement in relation to the interim proposal, so I am required to determine it according to established principles.
The test
[23] The Court is required to answer two questions in the present circumstances. First, the Court must determine whether there is a serious issue to be tried. Secondly, it must determine where the balance of convenience lies.2
The arguments
[24] Wendco places considerable emphasis on the fact that it enjoys a contractual right3 to use existing accessways across Lot B to the Great South Road exit. It submits that it should not be required to give these up for the Trust’s convenience in carrying out its reconstructive work. In particular, Wendco submits that it will ultimately be detrimentally affected as a result of the issues that its traffic expert raises. Wendco therefore submits that its legal rights under the lease will be significantly curtailed if the Court does not grant injunctive relief at this point.
[25] Secondly, Wendco submits that the balance of convenience favours the maintenance of the status quo so far as possible. This means that the Court should endeavour to ensure that the existing berm remains intact or substantially intact. Similarly, the Court should not permit the kerbing on either side of the Lot B exit to be altered until the parties have had an opportunity to discuss the matter further and,
if they do not reach agreement, the Court has had an opportunity to rule on it.
2 Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 129.
3 In the form of an equitable easement or contractual licence.
[26] The Trust takes the view that throughout the reconstructive works it will be providing Wendco with workable access through Lot B to the Great South Road exit. It also points to the fact that any significant delay of the project is likely to lead to dire results. These include the possible withdrawal of funding by its financier, and difficulties with proposed tenants who will be anxious to ensure that the project remains on track for completion in July.
Decision
[27] In determining whether there is a serious question to be tried, I propose to have regard to several principles. First, I acknowledge that Wendco has a contractual right to the use the accessway across Lot B to the Great South Road exit. That right should not lightly be curtailed or trammelled. Second, the right to use the accessway should not unreasonably prevent the Trust from developing its land. Third, the balancing of these rights means that, during the reconstruction process, some trammelling of Wendco’s rights may be unavoidable. Fourth, the Court must ensure that, as a minimum standard, disruption to the use of the accessways during this period should be kept to a minimum. At the very least, Wendco’s customers should be entitled to continue to have workable use of the Lot B accessway leading to the Great South Road exit.
[28] I consider it likely that the Trust will ultimately need to place Wendco in a situation where its rights to use that accessway are of no lesser quality than those Wendco previously enjoyed. For present purposes, however, the objective is to ensure that Wendco’s customers continue to have workable access across Lot B to the Great South Road exit. This means that I must balance the proposal involving the retention of the berm against the Trust’s proposal that the berm and kerbing be demolished or altered now, and arguments about their reinstatement saved for later.
[29] The issue is relatively finely balanced, but I have come to the view that it would not be appropriate to prolong the uncertainty any further. I consider that the project should be permitted to proceed in its present form. This will see the demolition of the berm and the construction of the new entrance way. This will release a large amount of space that is currently occupied by carparks that do not
form part of Wendco’s lease. This will enable Wendco’s customers to continue to enter and leave the site using the Lot B accessway. They will therefore continue to have workable access to the Lot B exit.
[30] I am conscious that Wendco’s principal concern is that this will create difficulties in relation to traffic flow. To guard against that possibility, I direct that the Trust is to install at its own cost such temporary barriers or kerbing as may be necessary to satisfy Wendco’s traffic expert that risks to traffic flow are minimised. In the event that the Trust and Wendco’s expert cannot reach agreement regarding this issue, leave is reserved to return to the Court.
[31] I expressly record, however, that I make these directions without prejudice to the final rights and obligations of the parties as they may ultimately be determined to be. The Trust is therefore on notice that, in demolishing the kerbing and the berm, it may ultimately be required by the Court to reinstate them in the event that the fears of Wendco’s traffic expert are borne out.
[32] For present purposes, however,4 I decline to issue any injunctive relief preventing the Trust from continuing further with Stages 2, 3 and 4 of the reconstruction work.
Next event
[33] This judgment determines the most pressing issues presently facing the parties. They now need time to reflect on the decision and to determine whether to proceed in accordance with the arbitration clause in the lease. For that reason the proceeding is now to be listed for mention in the Duty Judge List on 22 May 2014 at
10 am.
[34] I reserve leave to the parties to return to the Court should any issue arise as to the implementation of the orders that have been agreed by consent.
4 And subject to the direction made in [30].
Costs
[35] At this stage, costs are reserved.
Lang J
Solicitors:
Davenports West, Henderson Kemps Weir Lawyers, Auckland Meredith Connell, Auckland
Lee Salmon Long, Auckland
Counsel:
S Mills QC, Auckland
R J Hollyman, Auckland
APPENDIX
1.Site office to be relocated inside the fence line on the temporary accessway as soon as practicable. Site office fencing and private property signage to be removed once the site office has been relocated.
2.Such signage to be agreed and paid for by Wendy’s (save for existing signs to be made available) to properly indicate that Wendy’s is open and where the accessways to it are located are to be put in place following consultation with with Stephen Wilkinson, on behalf of the Trust, and any approval from Mr Wilkinson is only to be withheld in the event that there are safety issues.
3. Fencing opposite the north western corner of Wendy’s building, marked “C”
on the plan is to be relocated to previous kerbing as soon as practicable.
4. Fencing along the eastwards side of corner “C” to be moved back as far as
practicable as soon as drainage work is complete.
5. In respect of the temporary accessway, the following steps are to be taken:
(a) Wendy’s is entitled to arrange for tarsealing of the temporary
accessway;
(b)Any resealing required as a result of the laying of the telecom cables and/or the required drainage is to be carried out by Wendy’s at its expense;
(c) The timing of the tarsealing is to be agreed in consultation with James Noad, but with the intent that this work be carried out as soon as possible;
(d)The Trust will make its best endeavours to ensure that the timing of the trenching required for the drainage works is, if possible, to be carried out urgently so that it can be done prior to the initial tarsealing of the temporary accessway;
(e) When the Trust advises Wendy’s that the works are ready for the final tarsealing of the finished site works Wendy’s will, at its expense, remove the tarsealing from the temporary accessway;
(f) The works that the Trust has advised it needs to carry out at the north eastern corner of the temporary accessway is to be carried out in a way that does not disrupt access along, and out of, the temporary accessway;
(g)The fence at the left hand entrance of the temporary accessway is to be relocated as far as is reasonably practicable in order to ensure that the corner is, as far as practicable, open to sight lines and physical access to the temporary accessway.
6.Stage two trenching for power is to commence at 1 am and access along the accessway is to be reinstated (compacted and tarsealed) no later than 7 am, with the remainder of the trenching (across grass to transformer) to be completed by no later than 10 am the same day. Times to be strictly observed.
7.All steps are agreed to be a temporary solution to permit construction to proceed and are without prejudice to both parties’ rights and positions, including costs of any of the above.
Dated: 16 April 2014