Energy Securities LP v Vector Limited - [2018] NZHC 2271

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-166

[2018] NZHC 2271

BETWEEN
ENERGY SECURITIES LP

Applicant

AND

VECTOR LIMITED

Respondent

Hearing: 21 August 2018

Appearances:

T J Herbert for Applicant

J K Goodall for Respondent

Judgment:

30 August 2018

JUDGMENT OF PALMER J

This judgment is delivered by me on 30 August 2018 at 2.30 pm pursuant to r 11.5 of the High Court Rules.

.....................................................
Registrar / Deputy Registrar

Counsel/Solicitors:
Timothy Herbert, Barrister, Auckland Jason Goodall, Barrister, Auckland

Copy to:
Currie Lawyers Limited, Christchurch

ENERGY SECURITIES LP v VECTOR LTD [2018] NZHC 2271 [30 August 2018]

The proceeding

[1] Energy Securities Ltd (ESL) has brought proceedings against Vector Ltd (Vector) for breach of a duty of care in tort for around $70,000 –$80,000.

[2] Vector applied for security for costs on 1 June 2017. The application was resolved by consent, with ESL agreeing to an order for security for costs on 14 November 2017. It was agreed security would be paid in three tranches, the first of which (amounting to $5,000) had already been paid. The order was made by Wylie J on 16 November 2017 and varied by consent by Associate Judge Sargisson on 30 November 2017. ESL also agreed to pay scale costs on the application within three working days. Payment of the scale costs was made seven months late.

[3] The second tranche of security, amounting to $10,000, was payable 10 days after the affidavit of documents was filed. The deadline for filing the affidavits was originally 2 March 2018 but extended to 9 March 2018 by informal agreement. When ESL did not comply with this deadline, despite two requests, Vector applied on 23 April 2018 for strike-out and costs on that application. The plaintiff’s affidavit was eventually served on 9 May 2018, so Vector’s application was rendered nugatory. Associate Judge Smith granted costs on a 2B basis on the 23 April 2018 application in a minute of 18 May 2018. I understand those costs were paid on 5 July 2018

[4] Following filing of the discovery affidavits, the second tranche of security was due on 23 May 2018. It has not yet been paid despite three requests. On 28 June 2018 Vector sought leave to apply for summary judgment or to strike out ESL’s statement of claim or orders that ESL’s claim be struck out unless, within three working days, ESL pays the second tranche of security for costs. ESL consents to leave to apply for summary judgment but not summary judgment itself. ESL consents to a stay of the proceeding, terminable on payment of the outstanding tranche of security. I heard the application on 21 August 2018.

Law of unless orders for failing to pay security for costs

[5] An unless order carrying the risk of strike-out is not available only if a stay has been imposed first. Under r 7.48 of the High Court Rules 2016 (the Rules), I may

make any…

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 Energy Securities LP v Vector Limited

Details

AGLC: Energy Securities LP v Vector Limited [2018] NZHC 2271
Case: [2018] NZHC 2271
Decision Date: 30 August 2018

CaseChat Overview and Summary

Energy Securities LP, an applicant, brought proceedings against Vector Limited, the respondent, for breach of a duty of care in tort for approximately $70,000 to $80,000. Vector applied for security for costs in June 2017, and the application was resolved by consent in November 2017. The order required Energy Securities to pay security in three tranches, with the first tranche already paid. Energy Securities agreed to pay scale costs on the application, but payment was made seven months late. The second tranche of security, amounting to $10,000, was payable 10 days after the affidavit of documents was filed. When Energy Securities did not comply with the deadline, Vector applied for strike-out and costs, which were eventually paid. Following the filing of the discovery affidavits, the second tranche of security was due on 23 May 2018, but it had not been paid despite three requests. Vector sought leave to apply for summary judgment or to strike out Energy Securities' statement of claim, unless the outstanding tranche of security was paid within three working days. Energy Securities consented to leave to apply for summary judgment but not summary judgment itself and consented to a stay of the proceeding, terminable on payment of the outstanding tranche of security. The court heard the application on 21 August 2018.

The legal issues that the court was required to decide were whether to grant an unless order carrying the risk of strike-out and whether to impose a stay of the proceeding. The court considered the duration of the default, its impact on the progress of the proceedings, whether there appeared to be any excuse or explanation, whether it continued after reasonable opportunities and reminders, whether it substantially prejudiced the innocent party, and whether there was any realistic expectation that it would be rectified following further opportunity for compliance. The court also considered the submissions made by both parties.

The court decided to grant a stay of the proceeding for one month, until Friday 21 September 2018, to give Energy Securities further time to find the money it had agreed to pay as security. If the second tranche of security for costs of $10,000 had not been paid by then, it would be struck out at 5.00 pm on Friday 28 September 2018. Unless Energy Securities elected not to pursue the matter, the proceeding would be called in the civil list in the week of 24 September 2018 so the parties could make submissions about whether that strike-out order should be varied or not. In that case, the parties should file memoranda by noon Monday 24 September 2018. The court also awarded costs of this application to Vector on a 2B basis.

Orders