Ballantyne Trustees Limited v Papprill Hadfield & Aldous Solictors Nominee Company Limited

[2017] NZHC 937

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2014-409-000178 [2017] NZHC 937

UNDER

the Companies Act 1993

BETWEEN

BALLANTYNE TRUSTEES LIMITED, A N HEAD, B R HEAD, CALMWATER ENTERPRISES PTY LIMITED AND S B KEUNG AS TRUSTEE OF THE GBR TRUST

Applicants

AND

PAPPRILL HADFIELD & ALDOUS SOLICITORS NOMINEE COMPANY LIMITED

First Respondent

D D CRICHTON and K A HORNE Second Respondents

Hearing:	10 May 2017 (by Telephone Conference)
Appearances:	S Campbell for Applicants A B Darroch for First Respondent M E Parker for Second Respondents
Judgment:	10 May 2017

JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

[1]      The applicants have filed an application on notice for a stay of the judgments of the Court in relation to costs dated 30 January 2017 13 February 2017, and the order made by the Court on 27 April 2017.

[2]      The application followed a series of documents filed in the court in relation to the issue of whether security for costs, held for the respondents by Bell Gully, solicitors, should be released to the respondents in partial satisfaction of the costs orders referred to above.  Details of these are recorded in a minute issued on 8 May

2017.   In particular, on 27 April 2017, the Court issued an order to Bell Gully to

BALLANTYNE TRUSTEES LTD and ORS v PAPPRILL HADFIELD & ALDOUS SOLICITORS NOMINEE COMPANY LTD and ORS [2017] NZHC 937 [10 May 2017]

release  $25,000  to  each  of  the  respondents  forthwith.    Before  that  order  was complied with by Bell Gully the present application was filed and served.

[3]      Having considered the sequence of events recorded in the minute of 8 May, I convened a hearing by way of telephone conference this morning, as counsel for each of the first and second respondents practise out of Christchurch.

[4]      Mr Campbell for the applicants conceded that the appeal which has been lodged in the Court of Appeal would not be rendered nugatory if the costs held as security were paid to the respondents.  That was an appropriate concession, in my view.  The thrust of his argument, however, was that his clients are bona fide, and that there is, as he submitted, a public interest in ensuring that liquidators (the second respondents), are held to account.  He also informed the Court that his clients have instructed his firm that the appeal has a good chance of success.   When I asked whether this meant that his firm had formed a view on that position, he reiterated that it was an instruction.

[5]      The position of the first respondent has been resolved by a settlement which involves an order being made that half the sum held by way of security be paid to that firm.  No issue as to costs arises in relation to that firm’s involvement in this application or the preceding steps to which I have referred.

[6]      For  the  second  respondents,  Mr  Parker  refers  to  the  delay  before  this application was brought, and the fact that money is fungible so if the monies are paid they  are  readily  repayable  if  the  appeal  against  the  costs  orders  is  allowed. Mr Parker  also  argues  that  because  of  the  nature  of  the  orders  sought  in  the substantive proceeding, the settlement with the first respondent effectively means that the appeal cannot succeed.

Discussion

[7]      I  have  considered  the  grounds  of  the  application  and  the  argument  of Mr Campbell in support.  I have also considered the grounds set out in the notice of opposition and the argument presented by Mr Parker.  I have approached the matter

in the way described in Phillip Morris (New Zealand Limited) v Liggett & Myers

Tobacco Co (New Zealand) Limited:1

In my view we can only exercise the discretion conferred by the rule in a manner which, on the balance of all the factors involved, best meets the overall justice of the present case.

[8]      Weighing up all factors I consider to be relevant, I have reached the view that the  judgments  of  this  Court  should  not  be  stayed,  for  five  reasons.    First,  as Mr Campbell concedes, the appeal would not be rendered nugatory.  In the event that the appeal succeeds and a costs order is subsequently made in favour of the present applicants, I have no doubt that it would be met by the second respondents. They are liquidators and in that capacity are officers of this Court.

[9]      Secondly, the present applicants took the risk, such as they may conceive it to be,  of not  recovering costs  from  the second  respondents  when  they issued this proceeding against them and that risk is no greater now than it was when they took that step.

[10]     Thirdly, the monies in issue are part of a fund created by court order to protect the respondents in precisely the circumstances which have arisen, non- payment of a costs order of the Court by the applicants.   There is no reason put before the Court now which casts any doubt on the correctness of the decision of the Court to impose that requirement on the applicants at the time the order was made.

[11]     Fourthly, the application is not timely.  The costs have been outstanding for nearly three months.  The application was brought only after the Court had directed Bell Gully as stakeholder to release the funds, after receiving and considering opposition from the applicants to that course being directed.

[12]     Fifthly,  I  do  not  accept  Mr  Campbell’s  submission  that  the  balance  of

convenience favours the applicants.  Obviously there is a public interest in ensuring that liquidators are held to account in their actions, but that scarcely entitles parties

1      Phillip Morris (New Zealand) Limited v Liggett & Myers Tobacco Co (New Zealand) Limited

[1977] 2 NZLR 41 at 42, per Richmond P.

who have failed in that quest to withhold payment of costs legitimately ordered by the Court in favour of those liquidators.

[13]     In my opinion all factors favour the application for a stay being declined.

Outcome

[14]     The application for a stay is dismissed.

[15]     As  a  consequence  the  order  directing  Bell  Gully  to  pay  out  the  funds forthwith, made on 27 April 2017, stands.

[16]     The applicants will pay costs to the second respondents on a 2B basis plus disbursements fixed by the Registrar.  There is no order for costs in respect of the

first respondent.

J G Matthews

Associate Judge

Solicitors:

Wynn Williams, Christchurch

Darroch Forest, Wellington Parker Cowan, Queenstown cc: Bell Gully, Auckland