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Houghton v Saunders

Houghton v Saunders

Case [2015] NZCA 141 1 May 2015

Security for Costs

Costs

Jurisdiction

Civil Litigation & Procedure

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IN THE COURT OF APPEALOF NEW ZEALAND

CA578/2014
[2015] NZCA 141

BETWEEN

ERIC MESERVE HOUGHTON
Appellant

AND

TIMOTHY ERNEST CORBETT SAUNDERS, SAMUEL JOHN MAGILL, JOHN MICHAEL FEENEY, CRAIG EDGEWORTH HORROCKS, PETER DAVID HUNTER, PETER THOMAS AND JOAN WITHERS
First Respondent

CREDIT SUISSE PRIVATE EQUITY INC
Second Respondent

CREDIT SUISSE FIRST BOSTON ASIAN MERCHANT PARTNERS LP
Third Respondent

FIRST NEW ZEALAND CAPITAL
Fourth Respondent

FORSYTH BARR LIMITED
Fifth Respondent

Hearing:	13 April 2015
Court:	Stevens, Wild and Miller JJ
Counsel:	C R Carruthers QC and PAB Mills for Appellant A R Galbraith QC and S V East for First Respondent JBM Smith QC and A S Olney for Second to Fifth Respondents
Judgment:	1 May 2015 at 2.15 pm

JUDGMENT OF THE COURT

A The Registrar’s decision is varied.

BIncreased security for costs in the sum of $100,000 is to be paid by 29 May 2015.
CThe time for filing the case on appeal is extended until 7 May. Amended grounds of appeal should be filed, or an extension sought for good reason, by 29 May.

____________________________________________________________________

REASONS OF THE COURT

(Given by Miller J)

This judgment responds to the appellant’s application for review of a Registrar’s decision increasing, from $23,520 to $344,000, the amount of security for costs payable on this appeal.
The appellant is a representative plaintiff who is supported by litigation funders. He is indemnified for adverse costs awards under an insurance policy for $5 million, and he is protected by undertakings from Harbour Litigation Investment Fund LP, a limited partnership domiciled in the Cayman Islands.[1] Harbour Litigation Investment Fund is not a party to the litigation.
[1]A New Zealand resident litigation funder (Joint Action Funding Ltd) is also involved, but it appears to be common ground that it has no assets of its own.
The claim failed in the High Court, following a trial of 52 days duration.[2] The High Court has very recently fixed costs and disbursements payable to each respondent at a total of approximately $5 million.[3] That sum will exhaust the insurance policy, leaving the appellant to rely upon the indemnity from Harbour Litigation Investment Fund. However, it is not in dispute that the indemnity extends to costs of the appeal, or that Harbour Litigation Investment Fund can meet its obligations to Mr Houghton.
[2]Houghton v Saunders [2014] NZHC 2229.
[3]Houghton v Saunders [2015] NZHC 548 [Costs judgment].
Security for costs is not payable as a matter of course in the High Court, but under r 35 of the Court of Appeal (Civil) Rules 2005 it is presumptively payable on appeal to this Court. The rationale is that the respondent, having succeeded at first instance, should enjoy a degree of protection against the risk that costs awarded on an unsuccessful appeal will not be paid. Security is fixed according to the following formula:[4]
2 x a, where a is the daily recovery rate for category 3 proceedings that is specified in Schedule 2 of the High Court Rules.

The daily…

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 Houghton v Saunders

Details

AGLC: Houghton v Saunders [2015] NZCA 141
Case: [2015] NZCA 141
Decision Date: 1 May 2015 at 2.15 pm

CaseChat Overview and Summary

The Court of Appeal of New Zealand dealt with an appeal regarding the amount of security for costs in the case Houghton v Saunders. The appellant, Eric Meserve Houghton, was represented by litigation funders and sought a review of the Registrar's decision to increase the security for costs from $23,520 to $344,000. The respondents argued that the appeal would require 15 days to argue, leading to the higher security amount.

The primary legal issue was whether the increased security for costs was justified. Under the Court of Appeal (Civil) Rules 2005, security for costs is presumptively payable, and the Registrar has the authority to adjust this amount based on the circumstances. The court had to determine if the reasons provided by the respondents warranted an increase from the default amount.

The court held that the Registrar's decision to increase the security was justified. Two main reasons supported this decision: first, the appellant relied on an overseas litigation funder, which retained the right to terminate its indemnity for costs on notice. Second, the scale costs were expected to be unusually high due to the extensive preparation and the likely duration of the hearing. The court concluded that total security of $100,000 appropriately balanced the parties' interests. This amount was to be held in equal shares for the four separately represented sets of respondents and had to be paid by 29 May 2015. The court also addressed other issues, including the content of the case on appeal, the extension of time for filing the case on appeal, and the direction for filing amended grounds of appeal.

In summary, the Court of Appeal varied the Registrar’s decision, ordering increased security for costs in the sum of $100,000. The time for filing the case on appeal was extended until 7 May, and amended grounds of appeal should be filed by 29 May.

Orders