In the recent High Court decision Saddik v University of Auckland the University’s refusal to extend a kebab shop owner’s lease at the University food court has brought to light the importance of having agreements in writing and may have invoked debate as to whether students prefer kebabs or sushi.
Mr Saddik leased premises at the University of Auckland’s food court for the operation of a kebab shop called “Unikebab”. On the expiration of the lease in 2015, the University advised Mr Saddik that they could not offer him a new lease or extend his lease as they were proposing to redevelop their food court, but did not yet have any details of this development. In the meantime, the University wrote to Mr Saddik explaining that he could continue to lease the premises on a monthly basis.
Earlier this year, following market research into the food that University students like to eat, the University decided to offer the premises to an Asian food retailer instead, pending the development of the food court – students must prefer sushi to kebabs! The University subsequently gave notice to Mr Saddik that his tenancy would terminate two months later.
Mr Saddik claims that the University had made representations to him that arrangements would be made to ensure that Unikebab could continue to operate during the development and that the University would negotiate a lease for Unikebab to be part of the new food court. The University denies that they made these representations.
The decision issued on 29 August related to Mr Saddik’s application for an interim injunction to allow him to continue leasing the premises prior to the substantive court hearing. Interim injunctions are useful tools in court proceedings to force parties to do something or refrain from doing something in the interim until the eventual hearing. Court proceedings can take years and people often suffer hardship during this period prior to the hearing. Courts may grant an interim injunction as a form of temporary relief before making its final decision down the track. In deciding whether to grant an injunction, the court must consider whether there is a serious issue to be tried and where the balance of convenience lies.
To determine where the balance of convenience lies, the court must weigh up who would be worse off if the court grants the injunction. In this case, the Court decided that the balance of convenience favours the University. It would be easier to quantify Mr Saddik’s losses with monetary damages if his claim succeeds. It is difficult to quantify the University’s loss because their loss relates to harming the student experience (presumably through providing the wrong kind of food to students), suffering reputational harm, and severing ties with the new prospective Asian food retailer.
The Court considered that there is a serious issue to be tried, but that Mr Saddik’s case was weak. The ongoing extension of the lease was only a temporary measure until the University had decided whether to extend it.
For these reasons, the Court declined to grant an interim injunction. Mr Saddik’s lease will terminate and he will have to wait until the substantive Court hearing for relief.
This case highlights the importance of having all commercial arrangements and agreements in writing, so that each party’s expectations are clearly recorded and understood. A verbal arrangement can be more difficult to rely on and there is a greater risk of misunderstanding. Even where there is a high degree of trust, it is always better to be safe than sorry, particularly when the commercial arrangement relates to your livelihood.
Rosie Clark and Sarah Lister