Highgate on Broadway Ltd v Devine

Case [2012] NZHC 2288


IN THE HIGH COURT OF NEW ZEALAND BLENHEIM REGISTRY

CIV 2012-406-136 [2012] NZHC 2288

IN THE MATTER OF     the Arbitration Act 1996

AND

IN THE MATTER OF      an application for a determination under

Article 16 of the Act

BETWEEN  HIGHGATE ON BROADWAY LIMITED Applicant

ANDARTHUR LAWRENCE MICHAEL DEVINE

Respondent

Hearing:         16 August 2012

Counsel:         D J Clark for Applicant

L P Radich for Respondent

Judgment:      10 September 2012

JUDGMENT OF THE HON JUSTICE KÓS (Security for costs)

Introduction

[1]      The applicant landlord unlawfully terminates the respondent tenant’s lease of a hairdressing salon.   The landlord subsequently admits it was not entitled to terminate the lease.  Agreement beyond that cannot be reached.  A High Court Judge grants the tenant relief against forfeiture, and requires reinstatement and the grant of a new lease.  Difficulties effecting these orders occur and the landlord appeals to the Court of Appeal.  The tenant abandons his efforts to regain possession.  He initiates

arbitration proceedings to recover damages for his unlawful eviction.

HIGHGATE ON BROADWAY LIMITED v DEVINE HC BLE CIV 2012-406-136 [10 September 2012]

[2]      The landlord protests jurisdiction and the arbitrator (appointed by the Law Society) hears argument on that question.  His award is available, but the landlord now says it cannot afford to pay its share of the arbitrator’s fee.  Some $5,000 or so. The arbitrator reduces his fee to one half – the amount paid by the tenant – and releases the award.   The tenant succeeds on the jurisdiction issue.   The landlord challenges  that  decision,  issuing  the  present  originating  application  in  the  High Court.

[3]      The tenant applies for security of costs, under High Court Rule 5.45(1)(b), on the basis there is evidence the landlord will be unable to pay costs if its application ultimately fails.

[4]      The various steps taken to date may be tabulated thus:

Proceeding/Application   Brought by         Result                  Appealed/reviewed

(1) Relief against forfeiture

(2) Appeal  to  Court  of

Appeal

(3) Reinstatement of premises
(4) Arbitration proceedings

(5) Protest to arbitrator’s

jurisdiction

(6) Application to challenge jurisdiction award

Tenant                 Tenant succeeds    Landlord appeals to Court   of   Appeal: see (2)

Landlord             To be heard          N/A Tenant                 Abandoned           N/A Tenant                 To be heard          N/A

Landlord             Tenant succeeds     Landlord challenges: see (6)

Landlord             To be heard          N/A

[5]      I note the substantive application is before me on 24 September in the High

Court at Blenheim.  In the circumstances I propose to be both brief and circumspect.

Issues

[6]      Three issues arise:

(a)       Issue 1: Is there reason to believe the applicant landlord will be unable to meet an award of costs against it?

(b)      Issue 2: Is it appropriate for an order for security for costs to be made? (c)     Issue 3: How much security is appropriate?

Issue 1: Is there reason to believe the applicant landlord will be unable to meet an award of costs against it?

Law

[7]      The question of whether the landlord will be able to meet an award of costs is essentially a factual question.1    There is no burden of proof…

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Highgate on Broadway Ltd v Devine [2012] NZHC 2288
Case
[2012] NZHC 2288
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CaseChat Overview and Summary

Highgate on Broadway Ltd sought to appeal a decision to grant the tenant, Arthur Lawrence Michael Devine, relief against forfeiture, and subsequently a new lease for his hairdressing salon. Devine initiated arbitration proceedings to recover damages for his unlawful eviction. Highgate on Broadway Ltd objected to the jurisdiction of the arbitrator and subsequently sought security for costs from Devine. Devine applied for security for costs under High Court Rule 5.45(1)(b), arguing that there was evidence that Highgate on Broadway Ltd would be unable to pay costs if its application ultimately failed. The court considered whether there was credible evidence that Highgate on Broadway Ltd would be unable to pay costs, whether it was appropriate for an order for security for costs to be made, and how much security was appropriate. The court found that there was credible evidence that Highgate on Broadway Ltd would be unable to pay costs, that it was appropriate for an order for security for costs to be made, and that security in the sum of $11,250 would be ordered. The tenant was entitled to costs on the application on a category 2 band B basis, together with disbursements fixed by the Registrar.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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