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…
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.
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AGLC
Highgate on Broadway Ltd v Devine [2012] NZHC 2288
Case
[2012] NZHC 2288
Decision Date
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.