Clode v Sullivan - [2015] NZHC 2364

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-2717 [2015] NZHC 2364

BETWEEN
BRENT DOUGLAS CLODE

First Plaintiff

SYNERGY MANAGEMENT LIMITED Second Plaintiff

AND

MICHAEL GRANT SULLIVAN and DUTHCO TRUSTEES (SULLIVAN) LIMITED as trustees of THE SULLIVAN FAMILY TRUST NO 1

First Defendants

DAVID ROBERT JANS Second Defendant

THOMPSON PARK TRUST LIMITED as trustee of THE THOMPSON PARK TRUST

Third Defendant

Hearing: 14 September 2015

Appearances:

M Heard and S G T Ma Ching for Plaintiff
S C Gollin and J A Harrop for First and Third Defendants
P T Finnigan for Second Defendant

Judgment:

29 September 2015

JUDGMENT OF M PETERS J

This judgment was delivered by Justice M Peters on 29 September 2015 at 1 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar
Date: ...................................

CLODE v SULLIVAN [2015] NZHC 2364 [29 September 2015]

[1] This judgment determines applications for orders that the Plaintiffs

(“Mr Clode” and “Synergy”) give security for costs in this proceeding.

[2] The orders are sought pursuant to High Court Rules, r 5.45 which provides:

5.45 Order for security of costs

(1) Subclause (2) applies if a Judge is satisfied, on the application of a defendant,—

...

(b) that there is reason to believe that a plaintiff will be unable to pay the costs of the defendant if the plaintiff is unsuccessful in the plaintiff's proceeding.

(2) A Judge may, if the Judge thinks it is just in all the circumstances, order the giving of security for costs.

...

(5) A Judge may make an order under subclause (2) even if the defendant has taken a step in the proceeding before applying for security.

...

[3] The Plaintiffs do not dispute that the threshold for an order is met,1 that is that there is reason to believe that they will be unable to pay the Defendants’ costs if they (the Plaintiffs) are unsuccessful. Given that, the question of whether to order the provision of security and, if so, quantum are at the discretion of the Court.

[4] The applications are made on the grounds that: (a) the Plaintiffs’ case is weak;
(b) a third party is assisting the Plaintiffs in funding the conduct of this

proceeding; and

1 Notice of Opposition to Application by First and Third Defendants for Security for Costs dated
7 August 2015; and Notice of Opposition to Application by Second Defendant for Security for
Costs dated 7 August 2015.

(c) the Plaintiffs have given discovery of more than 8,000 documents, some of which at least the Defendants contend are irrelevant.

[5] In opposition, the Plaintiffs contend that:

(a) the Defendants ought to have applied for security at an earlier stage; (b) the Plaintiffs’ case is strong;
(c) the discovery that has been given is relevant;

(d) the Defendants have contributed to any impecuniosity there may be;

and

(e) the quantum sought is excessive.

[6] The First and Third Defendants (“the trustees” and “TPTL” respectively) seek an order that both Plaintiffs give security. The Second 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.

Continue reading Clode v Sullivan

Details

AGLC: Clode v Sullivan [2015] NZHC 2364
Case: [2015] NZHC 2364
Decision Date: 29 September 2015

CaseChat Overview and Summary

In the High Court of New Zealand, Clode v Sullivan involved a dispute between Brent Douglas Clode and Synergy Management Limited (the plaintiffs) and Michael Grant Sullivan, Duthco Trustees (Sullivan) Limited, David Robert Jans, and Thompson Park Trust Limited (the defendants) regarding a settlement agreement concerning property development in Mt Wellington. The defendants sought an order for security for costs based on the plaintiffs' potential inability to pay if they were unsuccessful. The plaintiffs opposed the application, arguing their case was strong, and the defendants delayed in seeking security.

The court considered whether to order security for costs under the High Court Rules, weighing the plaintiffs' weak case, third-party financial assistance, and the oppressive volume of discovery. The court found the defendants should not be left unprotected and ordered security. The plaintiffs' claim faced difficulties, such as the absence of pleaded cancellation of the settlement agreement and an excessive relief sought based on agreements the defendants argued were a sham. The plaintiffs argued the defendants contributed to their financial difficulties, but the court found otherwise. The court also considered the substantial burden of inspecting over 8,000 documents on the defendants.

The court ordered the plaintiffs to provide security for costs, calculated at approximately $63,000 for the first and third defendants and $17,500 for the second defendant, to be given by 4 pm, 6 November 2015. The proceeding was stayed pending compliance with the order. The defendants were entitled to costs for the applications, though the court expected those costs to reflect partial success on quantum.

Orders