FTG Securities Limited v Gower - [2018] NZHC 1513

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2018-409-000041

[2018] NZHC 1513

UNDER THE Declaratory Judgments Act 1908 and Receiverships Act 1993

IN THE MATTER

Of the Receivership of Tuam Ventures

Limited (In Receivership and In Liquidation)

BETWEEN

FTG SECURITIES LIMITED

Plaintiff

AND

COLIN ANTHONY LATHAM GOWER AND STEPHEN JOHN TUBBS AS

RECEIVERS OF TUAM VENTURES LIMITED (IN LIQUIDATION AND RECEIVERSHIP)
First Defendants

ROBERT BRUCE WALKER IN PERSON AND AS LIQUIDATOR OF TUAM VENTURES LIMITED (IN LIQUIDATION AND RECEIVERSHIP)

Second Defendant

Hearing: Determined on the Papers

Counsel:

D J Ballantyne for FTG Securities Limited

K C Francis – for Second Defendant Liquidator R B Walker

Judgment:

22 June 2018

JUDGMENT OF GENDALL J

FTG SECURITIES LIMITED v GOWER [2018] NZHC 1513 [22 June 2018]

[1] On 27 March 2018, FTG Securities Ltd (FTG) discontinued this proceeding against the liquidators and receivers of Tuam Ventures Ltd (Tuam). Robert Walker, as the liquidator of Tuam, (the Liquidator) seeks costs from FTG. Stephen Tubbs and Colin Gower, as the receivers of Tuam (the Receivers) do not seek costs.

[2] The Liquidator seeks an award of what he says are category 2B scale costs here of $5,798 and filing fee disbursements of $220.

[3] FTG is presumptively liable to pay the Liquidators costs under r 15.23 High Court Rules. However, FTG submits that the clear merits of its case justify overriding that presumption.

Background

[4] FTG commenced the current proceeding on 26 January 2018. In it FTG sought declarations regarding the validity of the transfer of Tuam’s debt to it. Initially it seems the Liquidator and the Receivers may not have formally opposed these orders. FTG amended its claim on 27 February 2018 to raise the issue of whether it had, under the disputed securities, validly appointed a second receiver, a Mr Hunt, over Tuam’s assets. This resulted in an overlap between this proceeding and an earlier 2016 proceeding FTG had brought against BNZ and the Receivers, CIV-2016-409-659 (the BNZ proceeding).

[5] The defendants in the present proceeding and BNZ sought a telephone conference to discuss the difficulties caused by the amended pleading. At this conference, I considered that it was important that all parties genuinely affected by the proceedings involving Tuam be heard. A direction was made for a hearing in this Court of a formal consolidation application between this and the BNZ proceeding. In the event, this hearing was not necessary as FTG discontinued the present proceeding 2018-409-41 the following day, 27 March 2018.

[6] Shortly thereafter, the Liquidator’s solicitors sent several emails to inquire whether FTG was prepared to meet the Liquidator’s costs and disbursements following the discontinuance. Those costs were sought on a category 2B scale basis. However,

it seems that, this was met with no response. Memoranda seeking costs have now been filed and responded to.

Submissions

Liquidator’s submissions

[7] Mr Francis, for the Liquidator, submits that nothing here displaces the r 15.23 presumption on a discontinuance that FTG must…

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 FTG Securities Limited v Gower

Details

AGLC: FTG Securities Limited v Gower [2018] NZHC 1513
Case: [2018] NZHC 1513
Decision Date: 22 June 2018

CaseChat Overview and Summary

FTG Securities Limited sought declarations in the High Court of New Zealand regarding the validity of the transfer of Tuam Ventures Limited's debt to it, and whether it had validly appointed a second receiver over Tuam's assets. The liquidator and receivers of Tuam, Robert Walker and Stephen Tubbs and Colin Gower, respectively, were the defendants. FTG discontinued the proceeding, and Walker sought costs from FTG under rule 15.23 of the High Court Rules, which provides that a plaintiff who discontinues a proceeding must pay the defendant's costs. Tubbs and Gower did not seek costs. FTG argued that the clear merits of its case justified overriding the presumption that it must pay the Liquidator's costs. The court held that the presumption should not be displaced as FTG did not act reasonably in maintaining its claim after a clear change in circumstances, and it could have appropriately dealt with the appointment of the second receiver in another proceeding. The court also held that there was no justification for staying determination of the costs question pending the outcome of the other proceeding. The costs sought by the Liquidator were appropriate, and an order was made that FTG is to pay to the Liquidator his costs on this proceeding of $5,798 and disbursements of $220.

Orders