Fanshawe 136 Limited v Fanshawe Capital Limited

[2013] NZHC 2742

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-004179 [2013] NZHC 2742

BETWEEN  FANSHAWE 136 LIMITED First Plaintiff

136 FANSHAWE LIMITED Second Plaintiff

ANDFANSHAWE CAPITAL LIMITED First Defendant

WILSON PARKING NEW ZEALAND LIMITED

Second Defendant

Hearing:                   16 October 2013

Appearances:           W McCartney for First Plaintiff

H McKee for First Defendant
D Valente for Second Defendant

Judgment:                21 October 2013

JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

This judgment was delivered by me at 3.30 pm on 21 October 2013 pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

FANSHAWE 136 LTD v FANSHAWE CAPITAL LTD [2013] NZHC 2742 [21 October 2013]

[1]      This case concerns a property at 136 Fanshawe Street, Auckland owned by the first defendant (Capital).  In brief, the plaintiffs say they have bought it, but the second defendant (Wilson) says that it has exercised a right of first refusal to buy it.

[2]      The proceeding was  filed in  September this  year.    It  has  been  accorded urgency and given a priority fixture for three days commencing on 11 November

2013.  Necessarily, therefore, preparation of the case for trial is compressed into a relatively brief time span.  It is clear that counsel have worked through a number of issues cooperatively, but three interlocutory applications by the defendants were set down for argument at short notice.

[3]      The first, an application by the defendants for further and better discovery by the plaintiffs can be resolved by the making of a consent order.  By consent I order that by Friday, 18 October 2013 the plaintiffs will give discovery of:

1.    Any documents evidencing the totality of the arrangements referred to in paragraphs 7 to 9 inclusive of Mr Mohsen Haghi’s affidavit dated 9

September 2013, including but not limited to documents referring to:

(a)     Refinancing/funding arrangements resulting in the removal of ANZ

and Fidelity mortgages.

(b)The loan by ASAP Finance Limited (ASAP) to another company controlled by Mr Haghi.

2.    Any documents or communications with any party concerning proposals for funding the purchase of the property by either of the plaintiffs.

[4]      The other applications are for security for costs, and for an order that issues in relation to the quantum of the plaintiffs’ alternative claim for damages be determined separately.

The facts

[5]      Prior to August 2012 the property was owned by Viaduct Square Limited

(Viaduct).  It was mortgaged to the ANZ Bank. ANZ was demanding repayment.  In

August 2012 Viaduct agreed to sell the property to ASAP Finance Limited for $10m, with ASAP selling the property back to Viaduct with settlement a year later, for

$11,330,000 representing the $10m paid initially, plus ASAP’s fee, and interest.

[6]      Since  1  June  2011  the  second  defendant,  Wilson  Parking  New  Zealand Limited (Wilson) has leased part of the property.  The lease includes a right of first refusal in the following terms:

If the Lessor wishes to sell the Land to any person during the term of this Lease it shall before offering the Land to any other person, give written notice to the Lessee offering to sell the Land to the Lessee on such terms and conditions as the Lessor sees fit.

[7]      The lessee is then required to either accept or reject that offer in writing within one month of receiving it.  It is deemed to have rejected it if it does not do so. After that, the lessor may offer to sell the land to any other person, but only on terms and conditions no more favourable to that person than those offered to the lessee.

[8]      Wilson expressly waived its right of first refusal in respect of the sale from

Viaduct to ASAP.

[9]      On  10  September  2012  Viaduct  and  ASAP  agreed  to  a  new  buy  back agreement.   The first defendant, Fanshawe Capital Limited (Capital), which is a company related to ASAP, would own the property instead of ASAP, and become the vendor under the buy back, and the first plaintiff, Fanshawe 136 Limited (Fanshawe

136) would be the purchaser.  Fanshawe 136 is controlled by Mr Mohsen Haghi who was the principal of Viaduct.  The settlement date was agreed to be 13 September

2013.

[10]     In  October  2012  Fanshawe  136  nominated  the  second  plaintiff,  136

Fanshawe Limited (136 Fanshawe) to settle the buy back agreement.  The director of this company is  Mr  Haghi’s sister.   The shares are owned by a trust  in which Mr Haghi and his children are beneficiaries.  Many of the references in the judgment to these companies apply to both, so I refer to them as the plaintiffs where that is the case.

[11]     In September 2012 there were discussions between Wilson and a consultant engaged by Mr Haghi in relation to Wilson’s possible involvement as lessee of part of a substantial redevelopment, to include both car parking and a hotel, proposed for the site.  On 20 September 2012 the CEO of Wilson wrote to the consultant in the following terms:

Re: Viaduct Square Car Park Lease Right of Renewal

Further  to  our  letter  to  you  dated  21 August  2012  we  confirm  that  if

Mr Haghi or a related party were to repurchase the property at 136-142

Fanshawe Street, Wilson Parking would waive our right of first refusal to purchase the  property,  subject  to the  clause  remaining in  effect for any further sales of the property.

[12]     It is common ground that this decision by Wilson was not communicated to

Capital until around 2 August 2013.

[13]     Clause 18.1 of the buy back agreement provided:

This agreement is conditional upon Wilson Parking New Zealand Limited (the Lessee under Deed of Lease dated 1 June 2011) waiving their rights under “rights of first refusal” (clause 10.9) in the Deed of Lease.

[14]     Capital did not approach Wilson to determine its position in relation to its right of first refusal until July 2013.  On 9 July Mr Patel of Capital wrote to Wilson advising the terms of the contract of sale to Fanshawe 136, and gave formal notice offering to sell the property on the same key terms, subject to a standard agreement for sale and purchase being entered.  In the letter Mr Patel noted that the solicitor for Fanshawe 136 had advised that Mr Haghi had had a discussion with the CEO of Wilson, Mr Evans, and that Mr Evans had agreed to waive Wilson’s right of first refusal.  Mr Patel noted that Capital was not “privy to this discussion or agreement” and that it would require a formal waiver of the right of first refusal.

[15]     On 29 July 2013 Mr Evans of Wilson wrote to Mr Patel of Capital exercising its right of first refusal on the terms offered.

[16]     On 2 August 2013 the solicitors for Capital wrote to the solicitors for 136

Fanshawe advising that Wilson had exercised its right of pre-emption, as they called

it, and stated that the condition in clause 18 of the agreement for sale and purchase had not been satisfied, and the agreement was therefore at an end.

[17]     The plaintiffs plead that between October 2012 and September 2013 they have actively pursued plans for redevelopment of the property including instructing architects  to  plan  development  of  a  hotel  and  car  park  on  the  site,  obtaining feasibility information on the proposed development, obtaining a tender for construction of the intended car park, obtaining valuation information on potential returns from the proposed development to assist with financing, obtaining professional  advice  on  costing  and  timeline  programmes  and  a  budget  for construction costs, instructing professional firms in relation to renewal of resource consents for development of the site, attempting to identify an equity partner for redevelopment including taking marketing steps through a real estate firm to identify potential investors, and discussing proposals with potential car park operators including Wilson.

[18]     The plaintiffs now hold an offer of finance for $12.5m which is available to them to effect settlement under their agreement for sale and purchase, depending on the outcome of this case.

The pleadings

[19]     The  plaintiffs’ case  is  pleaded  in  four  causes  of  action  in  an  amended statement of claim.  The first is against Capital.  They say that Capital breached its contractual obligations to them when it made an offer to Wilson to sell the property pursuant to Wilson’s right of first refusal.  They say that Fanshawe was aware that Wilson had waived its right of first refusal in respect of the sale to Mr Haghi or a related party, and both Fanshawe 136, and 136 Fanshawe, are parties related to Mr Haghi.    They  say  that  Fanshawe  had  an  unconditional  sale  and  purchase agreement which is the first in time, and they seek specific performance of that agreement.  Damages are sought in the alternative.

[20]     In their first cause of action against Wilson, the plaintiffs say that if the buy back agreement triggered Wilson’s right of first refusal so that Wilson had an equitable interest that arose first in time, any such interest should be postponed to the

interests  of  the  plaintiffs  because  Wilson  had  agreed  to  postpone  or  waive  the exercise of its right of first refusal.  Alternatively, they say that if Wilson did not agree to postpone or waive its right of first refusal, it led the plaintiffs to believe that it would not enforce its right if there were a purchase by a party related to Mr Haghi. On this cause of action the plaintiffs seek a declaration that the equitable interest created by their buy back agreement has priority over any equitable interest which Wilson has pursuant to the right of first refusal, and damages.

[21]     The second cause of action against Wilson pleads that the plaintiffs’ interest has priority over Wilson’s interest under its agreement for sale and purchase, as it is prior in time, and Wilson had notice of that agreement when it executed its own agreement. Again, a declaration and damages are sought.

[22]     The third cause of action against Wilson pleads that if the plaintiffs do not have priority as alleged, the waiver of its rights given by Wilson to the plaintiffs was an express representation that it would not exercise its right of refusal if Mr Haghi or a related party repurchased the property, that the plaintiffs, Mr Haghi and his sister acted in reliance on that representation, and as a result Wilson is estopped from purporting to exercise its right of first refusal and maintaining its claim to purchase the property.  Declarations are sought accordingly, and damages.

Application for security for costs

[23]     Rule 5.45 of the High Court Rules provides that the Court may order that a plaintiff give security for the costs that may be awarded should its claim fail, if there is reason to believe that a plaintiff will be unable to pay those costs.  In this case, the plaintiffs both concede, indeed claim, that they will be unable to pay the defendants’ costs if they fail.

[24]     The Court has an unfettered discretion in relation to the making of an order.1

The making of an order that security for costs be given is not an automatic consequence of the impecuniosity of a plaintiff.   Whilst impecuniosity opens the

door for the Court to make an order, it is also a consideration relevant to the exercise

1      A S McLachlan Ltd v MEL Network Ltd (2002) 16 PRNZ 747 (CA).

of the discretion as, in certain circumstances, the making of an order may have the effect of preventing a plaintiff from having access to the Court to determine its claim.

[25]     In this case, three issues were argued by counsel, and I agree these are the issues I need to consider in deciding how my discretion should be exercised.

The plaintiffs’ financial situation

[26]     Mr Haghi has sworn two affidavits in relation to the financial position of Fanshawe 136 and 136 Fanshawe, his own financial position and that of his sister.  In summary, he says:

•     The plaintiffs have no substantial assets other than the right to purchase the property.

•     His personal financial circumstances “are not good”.   He is presently facing two bankruptcy proceedings.  (Counsel inform me that these are presently adjourned to December, pending the outcome of this case).

•     His sister, Fatemeh Haghi, is not able to provide funding.

•     If the plaintiffs were required to pay security for costs, “there is a serious risk that they would be unable to pay counsel to go to trial”, and “I do not think that the plaintiffs could afford to go to trial.  I live in hope that something will change”.

•     Within the last week he has continued to try and find funds for the litigation and has not yet obtained “all the funding I was hoping to get”. As at 15 October, there was still not enough to pay counsel through to the end of the trial.

•     Mr Haghi hopes that counsel will agree to proceed without full funding.

[27]     Although  Mr McCartney presented  the plaintiffs’ case  in  relation  to  this application on the basis that the plaintiffs were impecunious and neither they nor Mr Haghi, nor for that matter his sister, could meet an order for payment of security

for costs, Mr Haghi does not in fact say that, in either of his affidavits, as can be seen.  His evidence stops short of asserting that position.

[28]     Mr Haghi says, finally, that if he could raise money to pay security for costs as well as the money needed for trial he would agree to pay security because “what the plaintiffs stand to gain far outweighs the risk of having to pay costs”.

[29]     Although the defendants expressed moderated scepticism about Mr Haghi’s

evidence, no evidence was led to cast material doubt on what he says.

[30]     The evidence establishes that there is a fund of money, of an undisclosed sum, ready for use for the trial, and presently earmarked (though insufficient) for counsel’s fees.  If security for costs were to be ordered, and paid from that sum, the shortfall in the sum required for counsel’s fees (also undisclosed) would be that much larger.  However, the trial is still three weeks away, and endeavours to raise further funding are continuing.

The strength of the case

[31]     Counsel for the plaintiffs impressed upon me the strength of the plaintiffs’ case.  Counsel for the defendants argued its weaknesses.  The strength or otherwise of the plaintiffs’ case is a circumstance I must weigh in the balance, when there is evidence  before  the Court  that  the ordering  of  security for  costs  may result  in plaintiffs being prevented access to justice.   In A S McLachlan v MEL Network (above) the Court of Appeal said:

[15]    The rule itself contemplates an order for security where the plaintiff will be unable to meet an adverse award of costs.  That must be taken as contemplating  also  that  an  order  for  substantial  security  may,  in  effect, prevent the plaintiff from pursuing the claim.  An order having that effect should be made only after careful consideration and in a case in which the claim has little chance of success.   Access to the Courts  for a  genuine plaintiff is not lightly to be denied.

[16]    Of course, the interests of defendants must also be weighed.  They must be protected against being drawn into unjustified litigation, particularly where it is over-complicated and unnecessarily protracted.

[32]     The reference by the Court  to  the  claim  having little chance of  success implies that the Court must, in circumstances such as this case, carefully consider whether  that  is  the  position.    But  as  the  Court  of Appeal  also  noted  in  A  S McLachlan:

[21]    ... At best, in such a complex matter, assessment at the interlocutory stage can be no more than impression and cannot be a definite indicator of the ultimate outcome after trial.

[33]     Mr McCartney stresses Wilson’s express advice to the plaintiffs that if the buy back proceeded either by Mr Haghi or a related party it would waive its right of first refusal, an express assurance on which it relied in incurring substantial expenditure in relation to development of the site, in the period of several months following that assurance being given.   He argues that there is a strong case for estoppel against Wilson exercising its right of first refusal under its contract with Capital, the result of which would be that Capital’s refusal to proceed with its sale to

136 Fanshawe would be unlawful, and the Court would require Capital to settle.

[34]     For Capital Ms McKee says that although the plaintiffs allege that Wilson waived its right of first refusal in correspondence with the plaintiffs, Capital was quite unaware that that had occurred.   She says that for this reason the actions of Wilson were not a waiver as a matter of law.  She relies on Sorenson v Easter:2

A waiver  in  this  sense  occurs  where  a  party  entitled  to  insist  on  strict compliance with a provision as to time leads the other party to assume the provision will no longer be relied upon as affecting the obligation to complete.  The intention to waive must be made manifest to the other party to the agreement.   That can be done either expressly or by conduct, the intimation required being that fulfilment is no longer being insisted upon as avoiding responsibility to complete.

[35]     Ms  McKee  also  notes  Attorney-General  v  Forestry  Corporation  of  New

Zealand Ltd:3

The intention to waive must be made known to the other party expressly or by conduct ... Further for present purposes waiver may be regarded as requiring clear and unequivocal evidence that compliance with legal rights will not be insisted upon.

2      Sorenson v Easter (1994) 12 NZ ConvC 191,855 (HC) at 191,857, Henry J.

3      Attorney-General v Forestry Corporation of New Zealand Ltd [2001] 3 NZLR 172 (CA) at [66], Williams J.

[36]     Ms McKee says that as Wilson had not waived its right, when it did exercise it, Capital became bound to sell the property to Wilson and, as its contract to sell to

136 Fanshawe was conditional upon that not occurring, it lawfully brought that contract to an end.

[37]     Ms McKee also says that even if the Court finds that Wilson is estopped from exercising its right of first refusal, that does not render Capital in breach of its contractual obligations to the plaintiffs.   She says an estoppel could not be retrospectively imposed on Capital to place it in breach of contract by refusing to proceed with the conditional contract to sell to the plaintiffs.  She says that estoppel

cannot affect a third party.4

[38]     Thus Ms McKee says that the claim against Capital is unlikely to succeed. [39]     For Wilson, Ms Valente also says that the advice given by Wilson to the

plaintiffs does not constitute a waiver of its right of first refusal, that the person to whom it was given (Mr Parrant who was appointed as agent for Mr Haghi) was not the agent of either of the plaintiff companies, that 136 Fanshawe did not even exist as at the date the statement was made, so no relevant representation could have been made  to  it,  and  that  Fanshawe  136  has  nominated  136  Fanshawe  as  purchaser thereby giving up any equitable interest it has obtained in the property.

[40]     It  will be evident  from  the foregoing that this is a case of considerable complexity.   As noted, the Court of Appeal recognised in A S McLachlan v MEL Network, that at an interlocutory stage the Court can do no more than form an impression of the strength of the positions of the parties, and I find that to be the position here.  To the extent that, on the material before me, I am able to form such an impression, it is this.  I refer to the claim against Capital first.

[41]     First, I think it most unlikely that the Court will find that the statement made to the plaintiffs amounts to a waiver of its right of first refusal in its contract with Capital.  The law on how a waiver can take place is clear and is as submitted by

Ms McKee ([34] above).

4      Kensington v Liggett [1994] 3 NZLR 385 at 396.

[42]     Secondly, although Capital did not comply correctly with the obligations imposed on it under the right of first refusal, in that it entered a conditional contract with Fanshawe 136 before it offered the property to Wilson, whereas the clause contemplates the inverse, nothing turns on the point as Capital did offer the property to Wilson at a point when it was free to do so, its contract with Fanshawe 136 being conditional on Wilson not exercising its right.

[43]     Thirdly, although I think there is some strength in the plaintiffs’ claim against Wilson in estoppel (discussed below), I think it unlikely that the Court will find that an estoppel, if established, can place Capital in breach of its contract with Fanshawe

136, thereby exposing it to a remedy in favour of the plaintiffs.  At the time Capital advised that its conditional contract with Fanshawe 136 was at an end, it did so having followed, at least in substance if not to the letter, its contractual obligation to Wilson.  If Wilson through its own conduct becomes unable to complete its purchase as a result of an estoppel established in favour of the plaintiffs, it is not immediately apparent how that can place Capital in breach of its contract with Fanshawe 136.

[44]     As a result I think the claim against Capital is unlikely to succeed, on the material I have to consider.   The evidence is not complete, and has not been the subject of cross-examination, so submissions were necessarily based on limited evidence.  I have couched my views in circumspect language accordingly.

[45]     There is more merit, in my view, in the claim by Fanshawe 136 against Wilson.  There is clear evidence of a statement of the position Wilson would take in its right of first refusal, and the circumstances in which Wilson would act as stated have, at least arguably, come about, as a contract has been entered with a party which, for present purposes at least, is related to Mr Haghi.  There is evidence, albeit limited, of a degree of detrimental reliance on the statement made by Wilson.

[46]     I find little strength in the submission by Ms Valente that the statement made by Wilson was made to an agent of Mr Haghi not to an agent of the plaintiffs.  For present purposes, at least, the point is too fine.

[47]     I  do  not  accept  that  as  a  result  of  the  nomination  of  136  Fanshawe  as purchaser, Fanshawe 136 no longer has any equitable interest in the property.  The nomination is just that; Fanshawe 136 remains contractually bound.

[48]     For these reasons I find there is some strength in the case by Fanshawe 136 against Wilson, for the purposes of considering this interlocutory application, but again subject to the caveat that I can only make this assessment as an impression, on the material that I have. The claim by 136 Fanshawe faces the obvious difficulty that it was not incorporated at the time the events relied on by the plaintiffs took place.

Claim could have been a counterclaim

[49]     Thirdly, Mr McCartney submits that it was only a coincidence of timing that his clients had brought the proceeding; in the circumstances the defendants could have brought the proceedings and his clients would have been the defendants, and thus not facing these applications.  In response to that, the defendants say that they would nonetheless have faced counterclaims, and would have sought security for costs accordingly.

[50]     I  do  not  find  this  hypothesis  helpful.    In  my  view  the  outcome  of  this application must be driven by carefully weighing up the financial issues I have outlined, and  my observations  on  the strength  of the cases  against  each  of the defendants.  The complexities of this case are such that I do not find it helpful, in reaching a decision on this application, to postulate on how the disputes between the parties might otherwise have been pleaded.

Discussion

[51]     I  have  carefully  considered  the  issues  which  I  have  identified  to  be  of relevance to deciding this application.  I am particularly conscious of weighing in the balance any identified risk of denying the plaintiffs access to justice.

[52]     In my view the identified weakness in the claim against the first defendant would, all else being equal, be a strong indication that there should be an order for security for costs to be given to the first defendant.  As I have said, I find the claim

by Fanshawe 136 against the second defendant to be stronger.   Even so, it is not without its difficulties.   Mr McCartney accepted that the relative strengths of the positions of the plaintiffs, in respect of either defendant, could be reflected in an assessment of the amount of security for costs which should be ordered, if I reach a point where I consider that an order should be made.   I think this is the correct approach in this case.

[53]     Although there is evidence which suggests that the plaintiffs face difficulties in meeting any order for security for costs that may be made, that evidence is far from unequivocal, as noted in the summary of evidence set out above.   Whilst acknowledging the plaintiffs’ difficulties, I do not think they have established a position where I can find with confidence that making an order for security for costs to be given will deprive them of access to justice because they could not meet such an order.

[54]     Weighing up all these factors, therefore, my decision is that there will be an order that the plaintiffs will give security for costs to each defendant.

[55]     Each defendant sought an order directing that security be given in the sum of

$30,000.  In respect of Capital, I find that a reasonable sum.  In respect of Wilson, for the reasons discussed, the order should be of a lesser amount.  I consider the sum of $20,000 to be appropriate.

Application for an order that issues in relation to the quantum of the plaintiffs’

alternative claim for damages be determined separately

[56]     At the close of argument I gave counsel my decision that I would allow this application.  I now record my reasons.

[57]     The principal remedies sought are specific performance and declarations in relation to alleged equitable interests.  Damages are a secondary issue and counsel agree that consideration of damages will only arise if the principal remedies sought are not, for some reason, granted, notwithstanding that liability is established.

[58]     As a general rule there are advantages to the parties and to the Court in all issues raised in a case being determined after one trial.  In my view, there must be sound reasons to depart from this course.  Mr McCartney argued that the value of the property, a principal issue in relation to quantum, will be an issue in the trial for the purposes of liability as well as in relation to damages.  He bases this assertion on the prospect that the property may now be worth  approximately $15m, though this estimate was not established in evidence.  I am prepared to accept that the property may well be worth more than the contract price of $11.483m, principally because there is a loan offer available in the sum of $12.5m suggesting that the property has a value exceeding the price in each contract.   As well, the prices in the buy back contract and in the Wilson contract are derived from the price in the ASAP buy out contract, which appears to have been established by reference to the sum owing to the ANZ, a fee for ASAP and interest on the sum borrowed, for a year, rather than to market value.  There is an element of estimation on my part in this exercise but that does not count strongly against it in the present context.

[59]     However, I do not consider that establishing the exact value of the property now is material to the issues which the Court has to decide, in relation to liability. Mr McCartney described Wilson’s position as one where it would receive a windfall were it to succeed.   He appeared to be arguing that liability was less likely to be established in Wilson’s favour, were that the case.   I disagree.   Liability will be established or otherwise by an assessment of the facts which give rise to the causes of action, and if they favour a finding for Wilson I do not consider that the Court would be deflected from finding in Wilson’s favour just because it stood to receive a property worth considerably more than the price which it had exercised its right to purchase.  Similarly I see no way in which the value of the land can be relevant to establishing the outcome of the claim against Capital, by which the plaintiffs seek specific performance of a contract at an agreed price.  In my view the Court will not be deflected from granting specific performance, or declining to grant specific performance, by the present value of the property.

[60]     The plaintiffs are anxious to establish their position with certainty and do not wish to have any aspects of the case remaining for further debate or adjudication after the first trial. This is an understandable position.

[61]   However in my view it is outweighed by the practical considerations surrounding the obtaining of evidence.  As indicated the trial is imminent.  Counsel for the defendants pressed on me the very real difficulty, if not impossibility, of obtaining valuations of a substantial asset within a very short space of time, and there then being sufficient time for the valuers to confer and, as well, to present briefs of evidence.   I think there are very real practical difficulties in the position outlined by counsel.

[62]     Given that the claims for damages are in essence secondary to the principal remedies sought, and there do not appear to be any reasons why, should the plaintiffs succeed, they should not receive the remedies they principally seek, I find that in the circumstances I have discussed questions of awards of damages should be deferred for further consideration if, and only if, they remain relevant after the trial.

Outcome

[63]     The application for security for costs is granted.  I fix security at $30,000 in respect of Capital, that being the sum sought, representing a high proportion of counsel’s estimate of a likely award of costs in Capital’s favour.

[64]     I fix security in favour of Wilson in the sum of $20,000, representing a little under half of the estimate of a likely award of costs in Wilson’s favour, this lower share reflecting the greater strength of the plaintiffs’ claim against Wilson, balanced against the plaintiffs’ difficulties in relation to meeting these orders.

[65]     Each  sum  is  to  be  made  available  no  later  than  5.00  pm  on  Friday,

1 November 2013.  Counsel did not discuss how security should be held.  Counsel may reach  agreement  on  this,  which  might  include the sums  being held  in  the plaintiffs’ solicitor’s trust account on undertakings acceptable to the solicitors for the defendants, respectively.  If difficulties arise memoranda may be filed.

[66]     The defendants have succeeded on all three applications.  They are entitled to costs.  I direct the plaintiffs to pay costs on a 2B basis plus disbursements fixed, if necessary, by the Registrar.  I direct that the costs are to be paid to the solicitors for each defendant by 5.00 pm on 1 November.

[67]     Because the trial is to follow a week after the  deadlines  I have set, the proceeding will be stayed and the fixture vacated if the orders I have made for the giving of security for costs are not met by the time stated.  This does not apply to the

orders by way of costs on these applications.

J G Matthews

Associate Judge

Solicitors:

Carson Fox Legal (Matthew Carson), Auckland. Glaister Ennor, Auckland.

Lee Salmon Long, Auckland.