CITY MART LTD v PROPERTIES & PLEASURECRAFT LTD [2015] NZHC 1160

CITY MART LTD v PROPERTIES & PLEASURECRAFT LTD [2015] NZHC 1160 [27 May 2015]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2015-404-930[2015] NZHC 1160BETWEEN CITY MART LIMITEDPlaintiffAND PROPERTIES & PLEASURECRAFTLIMITEDDefendantHearing: 25 May 2015Appearances: S McAnally for the PlaintiffG Kohler QC and N Taefi for the DefendantJudgment: 27 May 2015JUDGMENT OF WOODHOUSE JThis judgment was delivered by me on 27 May 2015 at 4:30 p.m. pursuant to r 11.5 of the High Court Rules 1985.Registrar/Deputy RegistrarSolicitors / Counsel: Mr S McAnally, Keegan Alexander, Solicitors, AucklandMr G Kohler QC, Barrister, AucklandMs N Taefi, Barrister, AucklandMr D J Clark (defendant's instructing solicitor), Wilson McKay, Solicitors, AucklandIntroduction[1] The plaintiff operates a convenience store, or dairy, in part of a building owned by the defendant. From 2003 until March 2013 the plaintiff occupied the premises under a lease with renewable five year terms. The lease was a single lease of two areas known as tenancy 2 and tenancy 3. The plaintiff's business wasoperated from tenancy 3. Tenancy 2 was sub-let. Since 1 April 2013 the plaintiff has occupied tenancy 3 only and as a monthly tenant. On 10 April 2015 the defendant gave the plaintiff notice to vacate the premises by 13 May 2015. The plaintiff now seeks an interim injunction restraining the defendant from acting on the notice, and from issuing any further notice, until the plaintiff's substantive claim has been determined. The defendant has voluntarily refrained from acting on the notice in the meantime.[2] In its substantive claim the plaintiff advances three causes of action –promissory estoppel, deceit, and misleading or deceptive representations in breach of the Fair Trading Act 1986. The central allegations of fact which underpin all three causes of action arise from a meeting between representatives of the plaintiff and the defendant in February 2013. The plaintiff said it did not intend to renew its lease for another five year term, from 1 April 2013. The plaintiff, through its director Mr Al Quqa, says that the plaintiff was persuaded to remain as a monthly tenant of tenancy 3, and not move to other premises he says were available at the time, as a result of what he was told by one of the defendant's directors, Mr Turner.[3] Mr Al Quqa says that, as best as he "can repeat after two years", Mr Turner said:Don't move out. Make me an offer. You can stay where you are andcontinue paying the rent for your part. I will sort something out for next door [tenancy 2] and we will sort out a new lease for your shop [tenancy 3].[4] The plaintiff contends that the defendant failed to negotiate with it as promised. The plaintiff further contends that, contrary to what is said to be implicit in what was expressly said by Mr Turner, the defendant was not committed to granting a new lease to the plaintiff, because, unknown to the plaintiff, at the same time the defendant was considering whether it wanted a tenant operating aconvenience store, and the defendant was not committed to leasing tenancy 2 separately from tenancy 3.[5] The relief sought by the plaintiff for each of its claims is in the following terms:A permanent injunction restraining the defendant from acting upon its notice to vacate dated 10 April 2015, or giving any other such notice to vacate, pending it taking reasonable steps to negotiate the terms of the lease of those premises at 208 Ponsonby Road, and known as tenancy 3, with the plaintiff.Principles[6] The Court is required to consider, first, whether there is a serious question to be tried and, if so, whether the balance of convenience favours the grant or refusal of the interim injunction sought. Depending on the answer to those two questions, the Court may also be required to consider whether the overall justice of the case favours the grant or refusal of the injunction.1[7] The focus of the submissions for both parties was on whether there is a serious question to be tried. In this case, as Mr McAnally recognised in his written submissions for the plaintiff, what the plaintiff needs to establish is that it is seriously arguable that the plaintiff is entitled to the particular relief it seeks; that is to say, the permanent injunction on the terms set out above. Mr McAnally cited a recent decision of this Court: Quattro Trustees Ltd v Marjo.2 In that case the Court said:[9] There is no dispute regarding the principles that apply in the present context. ... First, it must decide whether the plaintiff has established a serious question to be tried. Relevant for present purposes is the fact that it is not enough to simply show a serious question to be tried in respect of thecause of action relied upon. The "serious question to be tried" criterion mustalso be met in relation to the relief sought.[10] Thus in Ezypay NZ Ltd v YKC Ltd the Court held that where an interim injunction is sought to preserve the plaintiff's position pending trial in respect of the remedy of specific performance of a contract, it is not enough for the plaintiff to establish that there is a serious question to be tried on the question of breach of contract alone.3 Rather, the Court must also be satisfied there is a serious question to be tried in respect of the cause of1 Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 129 (CA).2 Quattro Trustees Ltd v Marjo [2014] NZHC 3396, [2015] NZAR 186.3 Ezypay NZ Ltd v YKC Ltd HC Wellington CIV-2007-485-1496, 23 July 2007 at [7].action relied upon (that question being whether specific performance would be an appropriate remedy in the circumstances of the case).[8] The threshold for establishing a serious question to be tried, which here amounts to a seriously arguable case as a whole, is not unduly high. This is the test applied in the discussion which follows. In that regard it is also relevant to note that the extent to which the court will assess this issue will depend, in part, on whether relevant matters of fact are in issue to any material extent.The facts and factual contentionsThe February 2013 statement[9] In December 2012 the defendant, through its solicitors, wrote to the plaintiff enquiring whether it wished to renew the lease of tenancies 2 and 3 for a further five years from 1 April 2013 at a new rent of $161,953 (plus GST and outgoings).[10] Mr Al Quqa says there was a meeting in February 2013 at the shop. Also present were Mr Turner, the defendant's director, the plaintiff's shop manager, Mr Alnathem, who was also Mr Al Quqa's business partner, and the manager of the plaintiff's sub-lessee. Mr Al Quqa deposes that Mr Turner said that the defendant would not reduce the rent and that, as a consequence of this, the sub-lessee'smanager made clear that it would not be paying its share of the increase sought, he walked out of the meeting and the sub-lessee had no further involvement. Mr Al Quqa says that he told Mr Turner that the plaintiff could not afford to pay rent for the entire premises and, therefore, would also be moving out. Mr Al Quqa says that, before the meeting, he had investigated the possibility of leasing other premises for the business and had found at least two available premises nearby. Mr Al Quqa says that it was in these circumstances that Mr Turner made the statement quoted above at[3].[11] Mr Turner says that it is not correct that he told Mr Al Quqa that he could remain in one half of the tenancy and that the defendant would negotiate a new lease with him. He continues in his affidavit:The 'meeting' was a general discussion that occurred in the City Mart convenience store in the area in front of the till. The tone of the discussion was quite informal. I do not remember exactly what was said, but I do know I was quite happy to negotiate with City Mart and that I may have well invited Mr Al Quqa to make an offer.[12] Exactly what was said by Mr Turner is not something that can be determined on this interlocutory application, but for reasons I come to this does not assist the plaintiff. The following matters, central to the present application, are clear:(a) The plaintiff elected not to renew the lease.(b) From 1 April 2013 the plaintiff occupied the tenancy 3 area as a monthly tenant.(c) The defendant was free to deal with the tenancy 2 area as it saw fit.(d) From April 2013 the plaintiff has paid for tenancy 3 approximately $1,200 less per month for rent than a reasonable pro-rata calculation of the net amount it had been paying after allowing for the rent received from the sub-tenant. And it has not paid any operating expenses which had been payable under the lease.April to June 2013[13] Mr Turner says that, after the February 2013 meeting, he instructed his solicitor to market tenancy 2 and tenancy 3 through an agency. He said:[M]y preference was for one tenant in the space. However, I was open to negotiating with City Mart and tenanting Tenancy 2 and Tenancy 3 separately.[14] On 9 April 2013 the defendant's solicitor instructed a letting agent to beginmarketing both tenancies. It is apparent that, as a consequence of this, the letting agent put up a sign on the building advertising the availability of both premises for lease. Mr Al Quqa says that he was not aware that the agent had been instructed to"find a tenant generally, rather than just to negotiate the lease with us". It is notpossible to reach a firm conclusion on this, but it does seem likely that Mr Al Quqais mistaken in his recollection. There is an email from the letting agent to Mr Andrews on 17 April 2013 saying that the plaintiff was not happy with the sign. Mr Al Quqa does say later in his evidence that in April or May 2014 he was advised by Mr Alnathem that an agent had put a sign up on the building advertising both shops, that he spoke to the agent, and a few days later the sign was changed to say there was only one shop to lease. It can be determined on the evidence that either this was in fact the April 2013 incident (which seems more likely), or the sign went up twice. Whichever it is, this does not assist the plaintiff.[15] Mr Al Quqa provides reasonably detailed evidence of negotiations and other communications from April to June 2013, and for this purpose provided copies of numbers of written communications, including draft leases. It is unnecessary to go into the detail. But one fact of some importance is that the first step in relation to a possible new lease for the tenancy 3 area was an offer from the defendant. It will be noted that Mr Al Quqa's recollection is that Mr Turner said to Mr Al Quqa "make me an offer". The defendant in fact made the first offer. On 17 April 2013 the defendant, through a letting agent, sent a draft lease agreement to the plaintiff'smanager. The covering email has not been fully reproduced, but one part that is clear states:If you are happy with this, can you please sign and [presumably the sentence concludes "return it"].[16] In the email from the letting agent to the defendant's solicitor of 17 April, noted above in relation to the sign, the agent said that the plaintiff would offer to stay in the building at the required amount. The agent said:I will get a full offer from him and we can then decide at a later date if he is right for the building.[17] There was a counter offer from the plaintiff at a figure less than the rent sought by the defendant. The plaintiff also sought some other changes from what was contained in the draft lease sent by the defendant's agent. Without going into any of the detail it may be noted that this was followed by a new offer from the defendant, a counter offer to that from the plaintiff, and some further negotiations which, in broad terms, indicated that they were possibly getting closer.[18] This stage of the dealings came to an end in June 2013. As summarised inMr McAnally's submissions:On 27 June 2013 the defendant's agent confirmed that the 'deal' was 'basically agreed' and that the defendant was just 'waiting on getting an agreement for next door'.January-March 2014[19] There is no evidence of anything of consequence occurring between the parties from June 2013 to January 2014.[20] In January 2014 there were discussions between the defendant's solicitor, Mr Andrews, Mr Al Quqa and Mr Alnathem. Both Mr Al Quqa and Mr Andrews gave evidence in respect of some of these discussions. (There were some separate discussions solely between Mr Andrews and Mr Alnathem which Mr Andrews outlines in his evidence). The discussions were directed to the possibility of a new lease for tenancy 3. There is some difference of emphasis between what Mr Al Quqa and Mr Andrews say on one point: Mr Al Quqa says, in effect, that Mr Andrews was not negotiating, but simply listening to what Mr Al Quqa was proposing; Mr Andrews says that no agreement was reached. Nothing turns on this difference. Mr Al Quqa said that the proposal he put to Mr Andrews "more or less reflected the document that had been put to the landlord in May 2013" (emphasis added). Thatwas one of the series of counter offers on both sides, with this one resulting in another counter offer from the defendant.[21] On 31 March 2014 Mr Andrews wrote to the solicitors who at that time were acting for the plaintiff, Kiwi Lawyers. This provides a close to contemporaneous record of a range of matters unresolved at the January 2014 meeting. Mr Andrews'letter (through his firm) includes the following:We understand from [the letting agent] that various offers made by yourclient for the lease of tenancy 3 were submitted for our client's considerationbut none of those offers have ever been accepted by your client. Therefore, your client is holding over under the Property Law Act as a monthly tenantThe writer subsequently met on a without prejudice basis with representatives of City Convenience Store [sic] on 26 January 2014 at which time issues concerning the proposed new rental; rent reviews; tenanciesupstairs accessing tenancy 3 for the purpose of installing certain services, carparking, the state and use of toilets; income from the ATM; contributions from the landlord towards air conditioning and a rent holiday were discussed. The writer advised that those matters would be referred to ourclient for instructions Our client has yet to make any final determination as to the leasing of thepremises to your client. Once we have their instructions, we will be in touch with you.[22] Kiwi Lawyers responded in a brief letter as follows:Thank you for your letter of even date and outlining the position and clarifying matters.I understand.I will see my client's instructions as I have also only been instructed not toolong ago since my attempts to contact you. I note the monthly tenancy in the meantime.I will revert.There was no further letter from Kiwi Lawyers, or any other lawyer for the plaintiffs, or directly from the plaintiff.Following the 31 March 2014 letters[23] Apart from Mr Al Quqa's evidence about the letting agent's sign, there is noevidence of anything of consequence following Kiwi Lawyers' letter of 31 March2014 until notice to vacate the premises was issued by the defendant in March 2015, with a replacement notice issued on 14 April 2015. This application, and the substantive proceeding, followed soon after.Evaluation: seriously arguable case[24] There are no issues relating to the current legal relationship between the parties. The essential features of this present real difficulties for the plaintiff in establishing that there is a seriously arguable case in respect of the substantive claim. The important aspects of the current legal relationship between the parties are the following:(a) The only contractual rights of the plaintiff are those of a monthly tenant. The plaintiff does not contend that it has any contractual rights beyond those of a monthly tenant. This is not disputed.(b) The plaintiff does not contend that the discussion in February 2013 resulted in a process contract. That possibility was expressly disavowed by Mr McAnally on behalf of the plaintiff.(c) In the absence of some equitable right, enforceable by the plaintiff against the defendant, the defendant is entitled to terminate themonthly tenancy by giving one month's notice.[25] Whether the plaintiff has a seriously arguable case to obtain the permanent injunction it seeks therefore turns on whether there is some other recognised equitable right which could result in the permanent injunction. The only cause of action which could provide a basis for this is the claim of promissory estoppel. The deceit and Fair Trading Act claims, even if they were to be made out, would not takethe substance of the plaintiff's claim beyond the estoppel argument. The deceit andFair Trading Act claims are, in effect, adjuncts to the estoppel claim. The deceit and Fair Trading Act claims are founded on the contention that the defendant failed to disclose a possible unwillingness to continue to have a convenience store as a lessee, and failed to disclose an intention to lease tenancy 3 as well as tenancy 2 to third parties. If the plaintiff is able to establish these matters, that would simply be part ofthe determination of the full scope of the defendant's alleged promise, which is thefactual foundation for the promissory estoppel cause of action.[26] In my judgment the promissory estoppel claim, with the promise assumed for present purposes to contain all of the positive and negative elements the plaintiff asserts, could not lead to the permanent injunction sought by the plaintiff, or to any other substantive relief.[27] The principal reason for this conclusion is that, if the plaintiff makes out the promise, what it is seeking is an order to enforce an agreement to endeavour to reachan agreement. It is elementary that the court will not make such an order. The position is discussed in Law of Contract in New Zealand as follows:4This principle may be seen in its most striking form in the rule that the courtswill not accept as valid a contract to make a contract or to "negotiate" a lateragreement.5 The law was reviewed and discussed in the important case ofWellington City Council v Body Corporate 51702 (Wellington),6 where:The council, as lessor of land, entered into an agreement to"negotiate in good faith" with the lessee. Negotiations took place but broke down without an agreement for sale being concluded. Thelessee sought damages for breach of an alleged "process" contract,claiming the council had not negotiated in good faith.The Court of Appeal, reversing the decision of the High Court, held therewas no binding "process" contract. Principle required that the agreement bebinding only if it could be said the parties intended the Court to resolve any failure to agree on their part, and they had provided some objective criterion which could be used if intervention was needed. However, the Courtregarded the concept of "negotiating in good faith" — with no other guidelines — as so subjective a matter as not to be justiciable.7 Since the Courts could not substitute their own judgment for the subjective views of the parties, there was insufficient certainty and no contract.[28] As stated in Law of Contract in New Zealand, there may be additional circumstances which, if established, may provide grounds for a court order.8 No additional circumstances are made out on the evidence as being seriously arguable.In coming to this conclusion I have taken full account of the plaintiff's further written submissions and Mr McAnally's oral development of all submissions.[29] There are two further reasons why I consider the claim to the substantive relief is not seriously arguable, or two further considerations which support the primary conclusions just discussed.4 Burrows Finn and Todd Law of Contract in New Zealand (4th ed, LexisNexis, Wellington, 2012) at [3.7.3].5 Courtney and Fairbaim Ltd v Tolaini Bros (Hotels) Ltd [1975] 1 All ER 716, 1 WLR 297 (CA);Walford v Miles [1992] 2 AC 128, 1 All ER 453. However, while an agreement between A and B to make a contract at some future time is ineffective, there may be a valid contract between Aand B that B will use B's best endeavours to bring about a contract between A and C: Lambert v HTV Cymru (Wales) Ltd [1998] EMLR 629 at 637–638 (CA).6 Wellington City Council v Body Corporate 51702 (Wellington) [2002] 3 NZLR 486 (CA).7 For a trenchant critique of this reasoning see McLauchlan (2003) 20 NZULR 265. However a similar result was reached in Jobern Pty Ltd v BreakFree Resorts (Victoria) Pty Ltd (2008) Aust Contract R 90–269, [2007] FCA 1066.8 See the general discussion in Burrow Finn and Todd, above n 4, at [3.7] and in particular [3.7.2.]-[3.7.3].[30] The first is that the courts are unlikely to make an order requiring continuing court supervision. The injunction sought is such an order. The permanent injunction sought by the plaintiff is expressed as an order of restraint. The substance, however, is mandatory: an order directing the defendant to negotiate the terms of a lease with the plaintiff. The prohibitory form of the permanent injunction as pleaded relates only to restraint on the defendant giving effect to the notice to vacate the premises. But, in order fully to satisfy the order, positive action is required from the defendant– "reasonable negotiation". It would also require reasonable negotiation on the part of the plaintiff.[31] In this regard the permanent order sought is essentially the same as an order for specific performance.9 Indeed, some of the plaintiff's submissions come close to a proposition that the defendant is bound to conclude an agreement with the plaintiff.This is not tenable. Although the similarity between injunction and specificperformance may be subject to qualification or refinement, when comparing the legalfoundation of each, I am satisfied that there are principles governing an order forspecific performance which are appropriately taken into account when consideringwhether the plaintiff has a seriously arguable case for the permanent injunctionsought. The court's resistance to orders requiring supervision is one such principle.Also of relevance in this context is the principle, bearing on exercise of the Court'sdiscretion, that a permanent injunction (or other order) will not be made if it wouldbe futile or would not of itself give the plaintiff the real benefit that the plaintiffseeks.10[32] The second consideration is that the plaintiff's evidence in support of thepromissory estoppel claim, taken at its best, does not appear sufficiently to make out the essential elements of such a claim. The essential elements were summarised by the Court of Appeal in Krukziener v Hanover Finance Ltd as follows:119 See Peter Blanchard (consulting ed) Civil Remedies in New Zealand (2nd ed, Brookers Ltd, Wellington, 2011) at 236.10 At 249.11 Krukziener v Hanover Finance Ltd [2008] NZCA 187, (2008) 19 PRNZ 162 (CA) at [37]-[38].[37] Promissory estoppel was traditionally concerned with promises to refrain from exercising pre-existing contractual rights. The promise had to be clear and unequivocal. The legal rights were suspended, and might be resumed on giving notice, so long as the promisee could resume its former position.(citations omitted)[38] Following the decisions of the High Court of Australia in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 and The Commonwealth of Australia v Verwayen (1990) 170 CLR 394, promissory estoppel is no longer confined to promises affecting pre-existing rights. However, the departure from a voluntary promise is not unconscionable in itself, even if detriment results. Rather, equity responds to the defendant creating or encouraging an assumption in the plaintiff, and its knowledge that the plaintiff will rely on the assumption to its detriment. The plaintiff must have been led to believe that the promise would affect or result in legal relations; thus a promise made in negotiations that are subject to contract will not lead to an estoppel: Waltons Stores at 406 and 422. Lastly, equity does not intervene to satisfy the promise, but to avoid the detriment. These requirements in the current authorities, as the High Court recognised, are seen as necessary to preserve the law of contract as the principal mechanism for the enforcement of promises.[33] The only clear and unequivocal part of the promise relied on by the plaintiff as seriously arguable is a promise to negotiate a possible lease of tenancy 3. That happened. The qualifications noted by the Court of Appeal at [38] also indicate thatthe plaintiff's claim is not seriously arguable: the plaintiff cannot seriously argue thatit was led to believe that the promise, even on all of the terms it contends for, would affect or result in legal relations; that was simply a hope. The plaintiff also faces the difficulty noted by the Court of Appeal – departure from a voluntary promise is not unconscionable in itself, even if detriment results.Evaluation: balance of convenience: strength of the case[34] The strength of the plaintiff's case is one matter often assessed whenconsidering the balance of convenience. This is dealt with separately from other balance of convenience considerations because I consider that, if I am wrong in my conclusion that the plaintiff does not have a seriously arguable case, the plaintiff'scase is weak: it is unlikely to be made out on the facts; and this largely tips the balance in favour of the defendant.[35] I will note a number of considerations indicating the weakness of theplaintiff's claim. I do so in a fairly summary way given the conclusion already reached on the arguable case.[36] The defendant did in fact negotiate with the plaintiff and did so in a substantial way. This occurred over an extended period of time, and including thedefendant's active re-engagement in negotiations between January and March 2014.The plaintiff's contention that the defendant was not happy with a convenience storeas a tenant is unlikely to be made out on the evidence. The foundation for this is the email of 17 April 2013 from the letting agent. The statement by the letting agent goes no further than saying, in a fairly conventional sort of shorthand, that once they had an offer they would see whether it was good enough. That is exactly what the promise contended for by the plaintiff necessarily contemplated, on both sides.There is the plaintiff's further argument that there was an implicit representation thatthe defendant would not take steps to lease tenancy 3 to a third party. The evidence about the sign at least indicates that that was certainly not in the mind of Mr Turner, and it in any event demonstrates that, at a very early stage the plaintiff was aware ofthe defendant's view of the informal arrangement. This also illustrates another point. The plaintiff's argument as to the scope of the promise in substantial measureignores commercial realities, and commercial realities are bound to be taken into account. The defendant must have been entitled to explore all possibilities while it was negotiating with the plaintiff and, in particular in this context, at least the possibility of leasing tenancy 3 to a different tenant, or leasing both tenancies to a single tenant. The defendant must have been entitled to do that even if it was at the same time bound to negotiate with the plaintiff. Commercial reality also involves the elementary proposition that negotiations can result in changed positions on both sides. The extensive list of matters in issue at the January 2014 meeting between Mr Al Quqa and Mr Andrews illustrates this. It may very well be that any commitment of the defendant which would have been enforced on equitable principles was met when the defendant made the first offer and this was rejected by the plaintiff. The defendant was not bound to go on negotiating forever.Evaluation: balance of convenience: other considerations[37] Mr McAnally submitted that one matter weighs heavily in favour of theplaintiff. This was said to be that "the very survival of the business" of the plaintiffdepends on whether or not an interim injunction is granted. The proposition was that, if the plaintiff is required to vacate the premises, it will not be able to go to any other premises in the same area, with a further proposition that as a result the business will be at an end. These may be theoretical possibilities. But there is no evidential foundation for propositions related to this plaintiff presently operating in Ponsonby Road, Auckland. Mr Al Quqa did refer to the investigations he made in or about February 2013 and when he found that there were two or three other premises nearby which were available for lease. There is no evidence that there are now noother premises available and suitable for the plaintiff's business. In any event, thereare other possibilities which could lead to the survival of the plaintiff which could be postulated and, the propositions for the plaintiff are in essence postulations. These observations are not intended to convey any suggestion that it is unreasonable for the plaintiff to want to try to stay where it is or, if that is not possible, that it is unreasonable for the plaintiff to then want to move to somewhere nearby. The point is founded on an absence of evidence. I do not ignore the plaintiff's point, but I do not agree with the plaintiff's submission that on this matter the balance of convenience weighs heavily in its favour.[38] There is a question whether, if the interim injunction now sought is refused, damages would be an adequate remedy for the plaintiff. Associated with this is a question whether damages are in fact the appropriate remedy in respect of mattersunderlying the plaintiff's claims, rather than a permanent injunction. I am satisfiedthat the balance of convenience tends to favour the defendant. If an injunction is refused and the plaintiff is required to vacate the premises, and if the plaintiff is then unable to find any suitable premises, and if, as a consequence of these matters, the value of the business is lost or there is other substantial financial loss, these are matters readily calculable in money terms. And I am satisfied that is sonotwithstanding Mr McAnally's submission that some aspects of this, such asgoodwill of the business, may be difficult to calculate. With respect, those are matters commonly argued before and decided by the courts.[39] There is no direct evidence from the plaintiff that it has sufficient financial resources to meet its undertaking to pay damages to the defendant. Mr McAnally submitted that it might be inferred from the fact that the plaintiff has not defaulted in rent payments is an indication of financial substance. This may be taken as an indication that the plaintiff is solvent. But the evidence about rental payments is, atbest from the plaintiff's point of view, neutral. This is because there is also theplaintiff's own evidence that it was not prepared to pay the increased and market rental sought by the defendant, and that it has in fact, on the face of it, reduced the amount of the net rent that it was actually paying until April 2013. A straightforward and common means of providing some evidence in support of an undertaking as to damages is to provide current financial statements. This has not been done.[40] There is evidence of material delay and inactivity by the plaintiff which weighs against relief, even interim relief, being granted to the plaintiff at this stage. I am not here referring to any delay in the making of the present application. The present application was made with commendable expedition. I am referring to the failure of the plaintiff to take any steps for an extended period to hold the defendant to the promise the plaintiff contends the defendant made. In considerable measure the plaintiff did nothing from June 2013 down to the present time. There were enquiries leading to the meeting with Mr Andrews in January 2014. But this does not significantly assist the plaintiff on matters of delay given the exchange of letters between the lawyers on 31 March 2014 and the silence from Kiwi Lawyers, or from any other lawyer on behalf of the plaintiff, or directly from the plaintiff, after that date.Result on the plaintiff's application for an interim injunction[41] For these reasons the plaintiff's application is dismissed.[42] The defendant is entitled to costs on the plaintiff's application on a 2B basistogether with reasonable disbursements.The defendant's interlocutory application for a mandatory injunction[43] The defendant, in response to the plaintiff's application, has sought amandatory injunction for an order that the plaintiff vacate the premises "immediately or within such time as the Court thinks fit". The basis for this application will beapparent from the factual background provided for the plaintiff's application: theplaintiff is a monthly tenant; the defendant has served the plaintiff with a noticerequiring it to vacate the premises; the one month's notice has now expired. Theplaintiff does not contend that there is any invalidity in the notice in a technicalsense.[44] Mr McAnally submitted that the defendant's application should not begranted because, if it is granted, it "will have the effect of determining the plaintiff'sclaim, in its entirety, and that part of the defendant's counterclaim concerned withpossession of the premises". Mr McAnally cited cases discussing the need forcaution in such circumstances.12 In reliance on these authorities, and in particularCayne v Global Natural Resources plc,13 Mr McAnally submitted that the balance ofconvenience has less significance and the primary objective is to ensure that there isno injustice, here to the plaintiff.[45] The broad principles relied on by Mr McAnally are not in issue. However,they do not appear to be relevant to the circumstances of this case given theconclusion I have already reached on the plaintiff's application. I have concluded, insubstance, that the plaintiff is not entitled to an order from the Court enabling theplaintiff to remain in occupation. In addition, grant of the injunction sought by thedefendant does not mean the plaintiff cannot pursue a claim for damages against thedefendant.[46] Although the practical effect of the dismissal of the plaintiff's application isthat the defendant may now act on its notice, and that provides strong grounds forgranting the mandatory injunction sought by the defendant, the Court still retains a12 Cayne v Global Natural Resources plc [1984] 1 All ER 225 (CA); Telecom New Zealand Ltd v Clear Communications Ltd (1997) 6 NZBLC 102,325 (HC); Acernus Aero Ltd v Vincent Aviation Ltd [2012] NZHC 295.13 Cayne v Global Natural Resources plc, above n 12.discretion to decline to make the order. However, if that occurs, an alternative for the defendant, if it does not have a formal Court order, is to re-enter.[47] In considering the exercise of the Court's discretion I consider that theappropriate approach is to make the order sought. It is a more satisfactory way for possession to be brought to an end than will be the case if the defendant seeks to re-enter the premises. This point is substantially reinforced by the defendant'svolunteering, at the commencement of its submissions, that it would not oppose theCourt's giving the plaintiff three months to vacate the premises. Given some of theconclusions I have reached on the plaintiff's application, I consider that amounts to areasonably substantial concession by the defendant. It certainly provides the plaintiffwith reasonable time to seek to re-organise its affairs and, hopefully, find alternativepremises.Conclusion on the defendant's application[48] There is an order that the plaintiff vacate the premises occupied by it at 208 Ponsonby Road, Auckland, no later than 4:00 pm on Friday, 28 August 2015.[49] The defendant is entitled to costs on a 2B basis for preparation of its notice ofinterlocutory application for a mandatory injunction dated 13 May 2015, and anyrelated documents, together with any filing fee in that regard.__________________________________ Woodhouse J