Aerospace Developments Limited v Altitude Aerospace Interiors Limited - [2013] NZHC 1337

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2012-404-2676 [2013] NZHC 1337

BETWEEN AEROSPACE DEVELOPMENTS LIMITED
Plaintiff

ANDALTITUDE AEROSPACE INTERIORS LIMITED
Defendant

Hearing: 28 May 2013

Appearances: C R Carruthers QC and L C A Farmer for plaintiff
N S Gedye QC for defendant

Judgment: 6 June 2013

JUDGMENT NO.2 OF ALLAN J

In accordance with r 11.5 I direct that the Registrar endorse this judgment with the delivery time of 4.00 pm on Thursday 6 June 2013.

Solicitors/counsel :
Meredith Connell, Auckland
Nathan Gedye, Auckland

AEROSPACE DEVELOPMENTS LIMITED v ALTITUDE AEROSPACE INTERIORS LIMITED [2013] NZHC 1337 [6 June 2013]

Introduction

[1] In a judgment delivered on 17 October 2012, I made an order directing the plaintiff to provide security for costs in favour of the defendant in the sum of
$20,000.1 I also made certain timetable orders by consent.

[2] The order was intended to relate to costs arising in the early stages of the proceeding. I expressly left it open to the defendant to make a further application by memorandum when stage one attendances were complete. I expressed the view that the Court and the parties would be in a better position to analyse the strength of the plaintiff’s claim once discovery and inspection of documents had been completed.

[3] In this judgment, I deal with two further applications. The first is by the defendant for an order directing that the plaintiff give further security in respect of remaining interlocutory matters and the trial itself. The second application is by the plaintiff which seeks an order in reliance on r 7.51 rescinding my earlier order for security on the ground that it had been obtained fraudulently or improperly by the defendant. The plaintiff argues that if the first order is rescinded then, as a matter of principle, no further security ought to be ordered.

Security principles

[4] The ordinary principles governing applications for security for costs are well established. For convenience I set out here the summary that appeared in my earlier judgment:

[2] An application for security gives rise to the following issues:

(a) Has the applicant satisfied the Court of the threshold under r 5.45(1)?

(b) How should the Court exercise its discretion under r 5.45(2)? (c) At what amount should security for costs be fixed?
(d) Should a stay be ordered?

[3] The ordinary approach was helpfully restated by the Court of Appeal in A S McLachlan Ltd v Mel Network Ltd.2 Whether or not to order

1 Aerospace Developments Ltd v Altitude Aerospace Interiors Ltd [2012] NZHC 2723.

security, and if so the quantum, are discretionary. They are matters for the Judge, who is to take into account all the relevant circumstances. The discretion is not to be fettered by constructing principles from the facts of previous cases.

[4] It is accepted by the plaintiff that the case meets the threshold test in r 5.45(1) because it accepts that it will be unable to pay the costs of the defendant…

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 Aerospace Developments Limited v Altitude Aerospace Interior... 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: [2013] NZHC 1337
Decision Date: 6 June 2013

CaseChat Overview and Summary

Aerospace Developments Limited, a company that specialized in furniture for corporate jets, brought a proceeding against Altitude Aerospace Interiors Limited, a subsidiary of Air New Zealand, alleging breach of contract, breach of fiduciary duty, estoppel, and breach of the Fair Trading Act 1986. The plaintiff alleged that the defendant unlawfully refused to engage the plaintiff on two projects after the plaintiff had assisted the defendant in obtaining the head contract. The defendant denied the allegations and counterclaimed. In an earlier judgment, the court made an order directing the plaintiff to provide security for costs in favour of the defendant in the sum of $20,000 and expressed the view that the court and the parties would be in a better position to analyze the strength of the plaintiff's claim once discovery and inspection of documents had been completed. The plaintiff now sought an order rescinding the earlier order for security on the ground that it had been obtained fraudulently or improperly by the defendant. The defendant opposed the application and sought an order directing the plaintiff to give further security in respect of remaining interlocutory matters and the trial itself. The court held that the earlier order was not improperly obtained and dismissed the plaintiff's application for rescission. The court also held that the defendant was entitled to an order for further security and ordered the plaintiff to pay a further sum of $40,000, making a total of $60,000 in all, to represent security for the whole of the costs for the rest of the proceeding, including the trial. The sum of $40,000 was to be paid on or before Friday 28 June 2013. The court also ordered the plaintiff to pay a single set of costs calculated on a Band 2B basis, together with reasonable disbursements to be fixed by the Registrar if necessary.

Orders