Coffey v Walker - [2021] NZHC 1073

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-000857

[2021] NZHC 1073

BETWEEN
PAUL CORNEL COFFEY and WILLIS

STREET TRUSTEE SERVICES LIMITED
as trustees of the PC COFFEY TRUST Plaintiffs

AND

MARK ALAN WALKER as a trustee of the WYNSFIELD FAMILY TRUST

Defendant

Hearing: 11 May 2021

Counsel:

K C Francis and S J McNae for Plaintiffs D J Clark and E Z Caro for Defendant

Judgment:

13 May 2021

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 13 May 2021 at 3.30 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

COFFEY v WALKER [2021] NZHC 1073 [13 May 2021]

The application

[1] The plaintiffs bring this proceeding to recover the balance of a loan and default interest said to be owing under an agreement for the sale and purchase of shares. This judgment concerns an application by the defendant under r 5.45 of the High Court Rules 2016 that the plaintiffs give security for costs. The plaintiffs accept an order that they give security for costs should be made, but they do not accept the quantum sought by the defendant.

The issues arising on this application are:

(a)the amount of security to be paid;

(b)when and to whom the security is to be paid; and
(c)should an order be made that this proceeding is stayed pending payment of security or upon default in payment.

Background

[3] The plaintiffs are the trustees of the PC Coffey Trust. The defendant is the trustee of the Wynsfield Family Trust.

[4] On 14 May 2008, the trustees of the PC Coffey Trust agreed to sell shares in Alligator Ltd (Alligator) and Independent Monitoring Services Ltd (IMS) to the trustees of the Wynsfield Family Trust.

[5] Under the sale agreement, the purchase price of the shares was $700,000. An additional payment was made for stock, plant and equipment. Of the $700,000 purchase price:

(a)$200,000 was paid by the defendant on the settlement date; and

(b)the remaining $500,000 was advanced as an interest-bearing loan repayable after five years.

[6] The settlement date was 1 June 2008 and the shares were duly transferred shortly thereafter.

[7] The defendant failed to pay interest on the loan and, in due course, did not pay the balance of the loan on due date.

[8] The plaintiffs say demand was made for payment of the loan on 28 September 2015 but no payment was made.

[9] The plaintiffs commenced this proceeding in May 2019 and sought summary judgment on their claim. On 31 October 2019, Associate Judge Smith refused summary judgment finding the plaintiffs had failed to prove the defendant did not have an arguable defence he had validly cancelled the sale agreement in mid-2009.1

[10] The defendant filed his statement of defence on 22 November 2019. In addition to the defence the sale agreement had been cancelled, he pleaded defences that the sale agreement had been abandoned, that the plaintiffs…

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 Coffey v Walker

Details

AGLC: Coffey v Walker [2021] NZHC 1073
Case: [2021] NZHC 1073
Decision Date: 13 May 2021

CaseChat Overview and Summary

The case of Coffey v Walker, heard in the High Court of New Zealand, involved a dispute over a loan agreement for the sale and purchase of shares between the trustees of the PC Coffey Trust and the Wynsfield Family Trust. The plaintiffs, trustees of the PC Coffey Trust, sought to recover the balance of a loan and default interest, while the defendant, trustee of the Wynsfield Family Trust, argued various defences, including the cancellation of the sale agreement. The court was required to determine the appropriate amount of security for costs to be paid by the plaintiffs, the timing and recipient of the payment, and whether the proceedings should be stayed pending payment or upon default.

The court found that the plaintiffs should provide security for costs, accepting that there was a reason to believe they would be unable to pay the defendant's costs if they were unsuccessful. The court exercised its discretion in determining the quantum of security, considering the likely scale costs, the complexity of the case, and the risk of the plaintiffs being unable to pay costs if unsuccessful. The court rejected the plaintiffs' argument that the case was a simple debt collection claim, noting the substantial amount of evidence and legal issues involved. It also rejected the plaintiffs' access to justice argument, finding that the plaintiffs had not demonstrated they would be unable to pursue the claim if required to pay the ordered security.

The court ordered the plaintiffs to pay $50,000 in security for costs, to be paid in three tranches, with the final payment due eight weeks prior to the trial. The security was to be paid to the Registrar of the High Court at Auckland. The court declined to stay the proceedings pending payment of the first tranche but ordered that the proceedings would be stayed if any tranche was not paid on or before the due date. The court reserved costs and directed the parties to attempt to agree on costs, with the possibility of filing memoranda if they could not agree.

Orders