Craike v Tilsley - [2012] NZHC 565

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-404-2846 [2012] NZHC 565

BETWEEN DJ CRAIKE AND JA CRAIKE First Plaintiffs

ANDSHOWFIELDS EQUESTRIAN CENTRE LIMITED
Second Plaintiff

ANDR TILSLEY First Defendant

ANDSD WATSON LIMITED Second Defendant

ANDS D WATSON Third Defendant

ANDE S WATSON Fourth Defendant

ANDR WATSON Fifth Defendant

Hearing: 11 November 2011

Counsel: N W Woods for Plaintiff
P Grace for First Defendant
P Webb for Second to Fifth Defendant

Judgment: 28 March 2012 at 3 pm

RESERVED JUDGMENT OF ASSOCIATE JUDGE SARGISSON (Security for Costs)

This judgment was delivered by me on 28 March 2012 at 3 pm pursuant to
Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar

Solicitors:
Rice Craig, PO Box 295 1701, Auckland
Franklin Law, PO Box 43, Pukekohe
Webb Morice, P O Box 316, Pukekohe

Date ..........................

DJ CRAIKE AND JA CRAIKE V R TILSLEY HC AK CIV-2010-404-2846 [28 March 2012]

[1] In this proceeding the plaintiffs sue the defendants for breach of contract and negligence.

[2] The first defendant is sued as the plaintiffs’ consulting engineer on a large project the plaintiffs embarked on to develop an equestrian centre. The second defendant is an earthworks and drainage contracting company that is sued in respect of major earthworks undertaken for the development. The remaining defendants are family members who own and operate, or work for, that company. The plaintiffs seek in excess of $900,000 in damages from the defendants, being the cost of remedial works they say the defendants are liable for.

[3] In the present application, the defendants apply jointly for an order for the giving of security for costs. The first defendant seeks security in the sum of
$108,852.00, and the remaining defendants seek a global order for security in the same amount. The application is made in reliance on High Court Rule 5.45.

[4] Relevantly r 5.45 states:

5.45 Order for security of costs

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

(a) ...

(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] The application is opposed. The plaintiffs say they have a good case that they will be unable to pursue if they have to give security for costs.

[6] There is no dispute that the jurisdictional threshold in r 5.45(1)(a) is met. It is common ground that the plaintiffs are impecunious and will, in all probability, be unable to pay the costs of the defendants if their claim is unsuccessful. There is also no real dispute that if required to give security the plaintiffs will likely have to

abandon their claim. The real issue for determination is therefore whether there are discretionary factors that:

(a) Favour giving the defendants a measure of protection for their costs if…

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 Craike v Tilsley

Details

AGLC: Craike v Tilsley [2012] NZHC 565
Case: [2012] NZHC 565
Decision Date: 28 March 2012

CaseChat Overview and Summary

In Craike v Tilsley, the plaintiffs, Mr. and Mrs. Craike, and Showfields Equestrian Centre Limited, sued the defendants for breach of contract and negligence in relation to a failed equestrian centre development project. The defendants applied for security for costs under High Court Rule 5.45, arguing that the plaintiffs were likely unable to pay their costs if they were unsuccessful. The plaintiffs opposed the application, asserting that they had a good case and would likely abandon their claims if required to provide security. The court had to determine whether the defendants were entitled to security for costs and, if so, the appropriate amount.

The court found that the jurisdictional threshold in rule 5.45(1)(a) was met, as it was common ground that the plaintiffs were impecunious and would likely be unable to pay the defendants' costs if their claims were unsuccessful. The real issue was whether there were discretionary factors that favoured giving the defendants a measure of protection for their costs if the plaintiffs were unsuccessful, and whether these factors outweighed the likely adverse effect that such an order would have on the plaintiffs.

The court balanced the likely merits of the plaintiffs' case against the first and remaining defendants, whether the defendants unduly delayed in applying for security of costs, and whether the plaintiffs' impecuniosity was caused by the actions of any of the defendants. The court found that the plaintiffs' case against the Watsons had merit, and that the case against Mr. Tilsley was somewhat different, with some factors suggesting the case was not strong, while other factors suggested otherwise.

The court also found that the defendants did not unduly delay in applying for security of costs, and that the plaintiffs' impecuniosity was likely contributed to by the unauthorised works. On balance, the court ordered the plaintiffs to provide a modest amount of security in respect of the claim against Mr. Tilsley, but not in respect of the claims against the Watsons. The appropriate amount of security was fixed at $20,000.

Orders