Jacobson v Hoole

[2025] NZHC 2473

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2025-404-1798 [2025] NZHC 2473

UNDER

the Receiverships Act 1993, the Contract and Commercial Law Act 2017 and the Personal Property Securities Act 1999

IN THE MATTER

of an application for an order that a receiver must cease to act as such, and prohibit the appointment of any other receiver in respect of property in receivership

BETWEEN

MARCUS BRIAN JACOBSON

Applicant

AND

GARETH RUSSEL HOOLE

First Respondent

BLOMFIELD CONSULTING LIMITED

Second Respondent

Hearing:	21 August 2025
Appearances:	M T Lennard and K O M Fitzgibbon for Applicant J Oliver-Hood for Second Respondent
Judgment:	28 August 2025

JUDGMENT OF WILKINSON-SMITH J

This judgment was delivered by me on 28/08/2024 at 3.30 pm Pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors/Counsel:

Sue Stodart Law, Auckland J Oliver-Hood, Auckland Zhang Law, Auckland

Stout Stret Chambers, Wellington

JACOBSON v HOOLE & ANOR [2025] NZHC 2473 [28 August 2025]

Introduction

[1]                  Marcus Jacobson is a property developer. In 2024, he sought the assistance of Blomfield Consulting Ltd (BCL) in the context of issues that had arisen with his funder, Arena Investors LP (Arena).

[2]                  Mr Jacobson did not pay invoices issued by BCL and BCL appointed a receiver, as provided for in its terms of engagement.

[3]                  Mr Jacobson disputes that the invoices are owing and has challenged the appointment of the receiver. The substantive application in this proceeding is an application to set aside the appointment of the receiver.

[4]                  There are associated proceedings by BCL seeking to maintain  a security interest under the Personal Property Securities Act 1999 over Mr Jacobson’s personal property (the 1625 Proceeding). By an interim order dated 7 July 2025, this Court ordered that the registration of the financing interest at issue be maintained pending determination of the 1625 Proceeding.1

[5]Before me now are two interlocutory applications.

[6]                  Mr Jacobson has applied for interim orders restraining the receiver from taking further steps and restraining BCL from appointing a new receiver until the hearing of the substantive application to set aside the receivership.

[7]                  BCL has applied for security for costs on the basis that there is a credible concern that Mr Jacobson will be unable to satisfy an adverse costs award should BCL ultimately be the successful party.

Background

[8]                  In July 2024, Mr Jacobson engaged the services of BCL and accepted terms of engagement.

1      Blomfield Consulting Ltd v Jacobson HC Auckland CIV-2025-404-1625, 7 July 2025 (Minute of Gault J) at [5].

[9]                  The terms of engagement provided that Mr Jacobson engaged BCL to deliver the following services:

(a)Assist with investigation into issue between the Client and Arena Finance and or any related entity with the view of drafting a letter outlining a protected disclosure.

(b)Provide instructions to lawyers, consultants, accountants and other professional advisers on behalf of the Client, as required following engagement by the Client.

(c)Provide such other assistance and advice to the Client in respect of any other matters relating to the Client.

[10]              The terms of engagement also provided for a retainer fee of $30,000 plus GST upon execution of the engagement terms. Mr Jacobson initially paid $20,000 of the agreed retainer.

[11]              The  terms  of  engagement  provided  that  BCL  would  issue  invoices  to  Mr Jacobson at least once monthly, at the completion of each separate matter or transaction, and if the engagement is terminated.

[12]The terms of engagement stated:

All invoices issued by Blomfield are payable by the Client within 7 days of the date the invoice is sent to Client. All payments are to be made to the bank account of Blomfield specified in the attached deposit slip, or as otherwise notified by Blomfield.

If the Client wishes to dispute an invoice the Client must notify Blomfield of the disputed matter in writing within 7 days of the date on which the invoice was sent to the Client. If the Client does not notify Blomfield within that period, the Client is deemed to have accepted the invoice.

[13]The terms of engagement provided for security as follows:

As security for the obligations under these engagement terms, the Client and each Guarantor grants a security interest to Blomfield in all of the Client’s and each Guarantor’s present and after-acquired personal property and mortgages to Blomfield all of the Client’s and each Guarantor’s present and future right, title, and interest in any parcel of land (as defined  in  section  5  of  the Land Transfer Act 2017) and the terms of that mortgage shall be set out in Memorandum of Mortgage No. 2007/4238 as registered with the Registrar-General of Land. The Client and each Guarantor consents to Blomfield registering a caveat over the Client’s and each Guarantor’s interest in any land. The Borrower waives the right to receive a copy of the verification statement confirming registration of a financing statement.

If the Client fails to pay any amount to Blomfield on the due date for payment, Blomfield may:

(a)stop providing services to the Client;

(b)deduct each overdue amount from any money held by Blomfield on the Client’s behalf;

(c)charge interest on each overdue amount at a rate of 5% per calendar month, both before and after judgment;

(d)apply for a Summary Judgment for the full amount of the overdue invoice;

(e)appoint any person or persons to be a receiver of all or any property over which Blomfield has security;

(f)(whether or not a receiver has been appointed) exercise any of the powers of a receiver, or which a person would have if appointed as a receiver under these engagement terms; and

(g)pay any expenses incurred in the exercise of any of such powers out of the revenue from, or proceeds of realisation of, any property over which Blomfield has security.

The Lender may remove any receiver and may appoint a new receiver in place of any receiver who has been removed, retired or died. In addition to, and without limiting or affecting, any other powers and authorities conferred on a receiver, a receiver appointed by Blomfield has the power to do all things in relation to the property over which Blomfield has security as if the receiver had absolute ownership of that property.

[14]The terms of engagement also provided that:

Except with Blomfield’s prior written consent, no copies of, or extracts or conclusions from any advice, report, or other information provided by Blomfield may be given to or relied on by any other person, filed with a governmental, ratings or other agency, placed on a publicly accessible register, database or internet service, or quoted or referred to in any public document.

[15]              There is no dispute that Mr Jacobson accepted and understood the terms of engagement.  Mr  Jacobson  agreed  to  the terms  of engagement by email  on  17 July 2024, except in relation to a condition relating to security over real estate. It was agreed that Mr Jacobson’s house would be excluded from the security.

[16]              A General Security Agreement (GSA) was registered and perfected on the Personal Properties Securities Register (PPSR) on 2 August 2024.

[17]              BCL issued invoices in accordance with the terms of engagement. The total invoices amounted to $67,839.08 including GST.

[18]              The initial $20,000 retainer and additional $8,500 paid in November 2024 was applied towards these invoices. The balance remains unpaid. The outstanding sum in relation to the services performed by BCL is $39,339.08.

[19]              By late September 2024, BCL’s relationship with Mr Jacobson had broken down due to his failure to pay the invoices. However, BCL continued to do some work for Mr Jacobson and Mr Jacobson continue to request  the assistance  of BCL.  On 25 October 2024, Mr Jacobson texted Mr Blomfield about “additional information on Arena indiscretions” which he “[needed] to get sorted to unlock funds”. Mr Jacobson texted that he had “spoken to [a BCL employee] earlier [re] payment plan”.

[20]              On 11 November 2024, Mr Jacobson sought ongoing assistance from BCL, which was refused given the outstanding invoices. It was then that Mr Jacobson paid the further $8,500.

[21]              On 13 January 2025, BCL appointed the first respondent, Gareth Hoole, as receiver and manager of Mr Jacobson’s property. A week later, on 20 January 2025, Mr Jacobson texted Mr Blomfield saying, “I  want to  sort  your bill”  and  inviting  Mr Blomfield  to  a  Zoom  meeting. Later that  day,  Mr Blomfield  spoke with Mr Jacobson’s solicitor. There is a dispute as to what transpired in that discussion, but BCL ended the receivership.

These proceedings

[22]              The dispute over payment of the outstanding invoices was not resolved  and Mr Jacobson was placed back into personal receivership by BCL on 9 July 2025.

[23]              Mr Jacobson says that the alleged debt arises from the non-payment of invoices for work that was never performed; namely, the preparation and delivery of a letter to the Serious Fraud Office (SFO). In addition, he says, a substantial portion of the work for which he has paid relates to work performed for the benefit of Arena—the financiers he is in a dispute with.

[24]              Mr Lennard, counsel for Mr Jacobson, submits that the SFO letter, which has now been received, is “embarrassingly amateur”.

[25]              Mr Jacobson says that the receivership is a disproportionate and commercially destructive step. It has caused immediate freezing of bank accounts and jeopardises ongoing business projects. He says it is being used as leverage to compel payment of a disputed and unadjudicated debt.

[26]The claim for interim relief alleges five causes of action:

(a)BCL repudiated the terms of engagement by failing to provide a draft letter to the SFO and/or by acting on behalf of Arena;

(b)BCL breached the terms of the letter of engagement by failing to provide the SFO letter to Mr Jacobson;

(c)BCL’s appointment of the receiver was improper because “the core debt (and by extension the interest and receivership costs incurred) is not owing”;

(d)The receiver breached his duties as his actions were neither commercially reasonable, nor in good faith; and

(e)BCL is liable for the receiver’s actions as he was acting as its agent.

[27]              BCL says that it performed valid and legitimate services on the instructions of Mr Jacobson who is now seeking to  avoid  liability  for  a  legitimate  debt.  It  says Mr Jacobson has a long and extensive history of failed companies and hundreds of millions of dollars in debts owed by those failed companies and by Mr Jacobson personally.

Applicable legal principles

Injunctive relief

[28]The test for interim injunctive relief is well settled:2

(a)the applicant must show there is a serious question to be tried;

(b)the balance of convenience, weighing prejudice to each party, must fall in favour of interim relief; and

(c)the overall justice of the case must support interim relief being granted.

Receivership

[29]              A receiver may be appointed in respect of the property of a person by, or in the exercise of a power conferred by, a deed or agreement to which that person is a party.3

[30]              Section 25 of the Personal Property Securities Act provides that all rights that arise under a security agreement, which would include the right to appoint a receiver, must be exercised in good faith and in accordance with reasonable standards of commercial practice.

[31]              Section 120 of the Credit Contracts and Consumer Finance Act 2003 allows a court to intervene if a secured party has exercised, or intends to exercise, a right under a credit contract in  a manner that is  oppressive, harsh, unjustly  burdensome, unconscionable, or in breach of reasonable standards of commercial practice.4

[32]              The court has discretion to grant relief where the appointment of a receiver is arguably invalid.5

2      See American Cyanamid Co v Ethicon Ltd [1975] AC 396 (HL); and Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 129 (CA).

3      Receiverships Act 1993, s 6(1).

4      Also see Credit Contracts and Consumer Finance Act 2003, s 118.

5      Taylor v Bank of New Zealand [2011] 2 NZLR 628 (HC).

Is there a serious question to be tried?

[33]              BCL says it has discharged its  burden  to  show  the  receivership  is  valid. Mr Jacobson agreed to the terms of engagement which contain what BCL describes as plainly valid and enforceable terms. One of those terms grants the security at issue in proceeding 1625, and provides for the appointment of a receiver in the event of default. The invoices were rendered, and the sums were claimed pursuant to the terms of engagement.

[34]              BCL says that its invoicing system is built on full  time and attendance reporting. Every invoice issued to Mr Jacobson contained a detailed breakdown of hours worked, linked to the relevant consultant’s time records, and matched to specific tasks.

[35]              BCL relies on the terms set out in the letter of engagement which set out a process to dispute any invoice.

[36]              The amount in dispute is under $40,000 but BCL says that its business model relies on the ability to obtain the sort of security that is relied on in this case. Without the arrangements as set out in the terms of engagement, BCLsays that the work it does would be subject to an unacceptable risk of non-payment.

[37]              Mr Jacobson says that the invoices were issued for ongoing work and were paid on the basis that the work would be completed,  but in fact was not completed. He could not have disputed the invoices within seven days because he only became aware that the work was not performed after the seven-day period was up.

[38]              The central tenet of Mr Jacobson’s dispute is that BCL failed to provide him with a copy of the SFO letter prepared  between 9 July 2024 and 12 August 2024. Mr Jacobson says that BCL cannot sensibly assert that it is entitled to charge for work that was simply not performed.

[39]                There are considerable factual disputes between the parties. The hearing proceeded as an affidavit hearing without cross-examination. It is not possible to resolve a credibility contest other than by reference to contemporaneous documents.

[40]              It is apparent that when Mr Jacobson sought BCL’s services, he was facing potential personal indebtedness of many millions of dollars as a result of his dispute with Arena. The terms of engagement make it clear that Mr Jacobson did not approach BCL for the sole purpose of preparing a letter to the SFO. The scope of the anticipated work was much wider.

[41]              Mr Jacobson sought BCL’s assistance to manage his commercial relationship with Arena and to try to favourably resolve the issues he had with Arena. Initially, it was thought that a letter to the SFO under the provisions of the Protected Disclosures (Protection of Whistleblowers) Act 2022 was the best way to manage that.

[42]              From 12 August 2024, it is apparent from the documents filed that the preferred approach changed. Mr Jacobson appeared to become more focused on improving his relationship with Arena. He sought a copy of the SFO letter for the purpose of providing it to Arena, rather than the SFO. It is on that basis that BCL says the letter was not provided. Mr Blomfield was said to be concerned that it could be seen as blackmail. The contemporaneous documents largely support BCL’s position.

[43]              BCL says that there was a meeting on 12 August 2024, following which the work on the SFO letter was overtaken by further instructions from Mr Jacobson.

[44]                A tax invoice dated 2 September 2024 evidences the change of direction from 12 August 2024. Prior to 12 August 2024, the invoice reveals time records described as “drafting letter to SFO”.6 The notation relating to 12 August 2024 is “meeting with Marcus [Jacobson] and Brandyn [Gloyn]”. Mr Gloyn was a BCL employee.

[45]                   Following the 12 August 2024 meeting, there is no further reference to drafting the SFO letter. There is one reference to an employee reviewing that letter on 10 September 2024, but that employee of BCL has provided an affidavit stating that the letter was reviewed in order for him to understand the background to the relationship between BCL, Mr Jacobson and Arena. From that point on, there is reference to drafting correspondence to Arena representatives, and meetings with Arena representatives and Mr Jacobson.

6      This notation was used for four invoice lines from 6 August 2024 to 9 August 2024.

[46]              It is clear that BCL had a commercial relationship with Arena. Mr Jacobson complains that BCL was working for Arena as well as for him and says that BCL had, and still has, a conflict. BCL says that the nature of its work is to manage commercial relationships and its relationship with Arena was known to Mr Jacobson and seen as advantageous by him.

[47]              There does not  appear  to  have  been  any  dispute  over  the  invoices  or  Mr Jacobson’s liability to pay them prior to December 2024. In particular,  in October 2024 there is the text message from Mr Jacobson to Mr Blomfield indicating  a willingness to pay the invoice if funds could be unlocked and raising the potential for a payment plan to be put in place. In November 2024 Mr Jacobson made the further payment of $8,500.

[48]              In his affidavit of 8 August 2025, Mr Jacobson says the total invoices for services provides to him between March 2023 and November 2024 are $67,839.08 ($58,990.50 excluding GST) and that he paid $28,500, which leaves $39,339.08 ($34,207.90 excluding GST) that he has not paid.

[49]              BCL says the unpaid invoices relate to services provided between the following date ranges:

(a)8 March 2023 to 14 March 2023 in relation to Amour De Le Mer—

$1,799.18 ($1,564.50 excluding GST);

(b)9 July 2024 to 12 August 2024 in relation to the draft SFO letter—

$14,922.05 ($12,975.70 excluding GST); and

(c)13 August 2025 in relation to the services provided after Mr Jacobson’s change of objective (after the draft SFO letter)—$22,617.85 ($19,667.70 excluding GST).

[50]              Mr Jacobson did not pay any invoices following an assessment of what the invoices related to. Rather, he paid an initial $20,000 of the $30,000 retainer agreed  to.  He paid a further $8,500 in November 2024.  That amount was applied to invoices

by BCL. Mr Jacobson did not dispute any amount in any invoice within the prescribed seven day period.

[51]              The $8,500 was not paid until 11 November 2024 and BCL says this was only paid because Mr Jacobson was continuing to seek BCL’s help and BCL would not take any further steps without some payment. BCL says that it is clear there is no dispute that the debt was owing in November 2024 because Mr Jacobson made a payment.

[52]              Mr Jacobson’s position is that he is not liable to pay invoices relating to the preparation of the draft SFO letter. He says that the unpaid invoices all relate to the SFO letter, except for $3,840.90 excluding GST which is a small amount not justifying the appointment of a receiver. He does not say why he has not paid that small amount if it is not disputed.

[53]              Ms Quizon, accountant for BCL, sets out in her affidavit that the total amount for work provided that did not relate to the draft SFO letter totals $32,917.03 ($28,623.50 excluding GST).

[54]              I do not accept as a matter of fact that work done after 12 August 2025 related to drafting the SFO letter. Rather, I find that it was general consultancy work. The combination of the affidavit  evidence, the particulars  in the invoices, and the contemporaneous correspondence and documents, shows a  change of  focus  after  12 August 2024.

[55]              It is also clear that once BCL took enforcement action, Mr Jacobson sought to avoid liability in many and varied ways.

[56]              On 14 January 2025, he wrote to the receiver, Mr Hoole, making a number of complaints which are now abandoned. He said that BCL did not hold a valid GSA because any GSA must be in writing. He said that there is no valid debt because the work done was for legal services which BCL was prohibited by law from providing. He complained that BCL was using the receivership as an exercise by Arena to place additional pressure on Mr Jacobson and not as a means to recover funds for BCL.

[57]              It is notable that there was, at that stage,  no issue taken that the work relating to the SFO letter had not been done; rather the main contention was that the work was prohibited as legal work. That argument is not now maintained.

[58]              On 7 March 2025, Mr Zhang, who is Mr Jacobson’s current solicitor,  raised the dispute regarding the SFO letter. For the first time, Mr Jacobson disputed he was liable to pay the debt because he was not given the SFO letter prepared by BCL. The debt was also still disputed at that stage on the basis that it was an illegal contract because BCL provided legal advice. The allegation of a conflict of interest was maintained.

[59]              Mr Jacobson was entitled to dispute the invoices under the terms of engagement and there was a mechanism for him to do so. He chose to accept those terms and it is notable that he did not dispute liability to pay at any stage until the receiver was appointed for the first time. He now says that he only became aware in December 2024 of a potential conflict with BCL acting for Arena. Having apparently become aware of the situation in December, however, there is no correspondence between BCL and Mr Jacobson setting out this apparent concern back in December. Nor was Mr Jacobson’s reticence about paying the invoices a recent development. He did not pay the agreed retainer in full and only paid a further amount towards the retainer in November 2024 when he perceived a further need for BCL’s assistance.

[60]              The argument that the invoices could not be disputed within the seven-day period provided for in the contract because Mr Jacobson did not realise until later that the work he was paying for would not be performed does not explain why Mr Jacobson did not complain about liability to pay for the SFO letter work as soon as BCL declined to provide the letter in August 2024. It looks instead like a recently invented complaint to avoid paying invoices that Mr Jacobson accepted at the time.

[61]              Whether the SFO letter was work that was done well is not the issue. The real issue is that Mr Jacobson contracted with BCL and accepted terms of engagement which provided for regular invoicing and a mechanism for Mr Jacobson to dispute the invoice.

[62]              Mr Jacobson did not dispute the invoices as provided for in the terms of engagement. The contemporaneous documents do not support the position that he now takes. There is no serious argument that owes BCL for work invoiced in accordance with the terms of engagement. He is simply seeking to avoid paying invoices that are due.

The balance of convenience

[63]              Even if the serious question test were satisfied, Mr Jacobson would still have  to show that he will suffer irreparable damage between now and the substantive hearing if the injunction declined. If damages are an adequate remedy, injunctive relief is unlikely to be granted.

[64]              Mr Jacobson says the prejudice to him if no injunction is granted is severe, namely:

(a)loss of control over the property and potential irreversible sale;

(b)reputational damage through the threatened media campaign;

(c)loss of financing from other lenders if the receivership is publicised; and

(d)inability to recover his position even if ultimately successful at trial.

[65]              By contrast, Mr Jacobson says BCL’s prejudice is limited to a delay in enforcement, and it can be protected by the undertaking as to damages which has been filed. In addition, Mr Jacobson has deposited $20,000 in his solicitor’s trust as security.

[66]              BCL says that the claim of irreparable harm to Mr Jacobson is unsubstantiated and insufficient to justify interim relief. No evidence is provided of any imminent payment requirements, payment schedule dates, or any suggestion of personal liability by Mr Jacobson whatsoever. BCL says it is likely that, due to the quantum of his debt

and the size and scale of his current development, the only prejudice Mr Jacobson will face is simply having to pay the invoices.

[67]              As to reputational damage, BCL says that Mr Jacobson has already been the director of six companies placed into  receiverships and/or liquidations since  September 2021, with three of his companies being placed into receivership and liquidation since December 2024. BCL says it can reasonably be inferred that funders will be well and truly aware of Mr Jacobson’s precarious financial position.

[68]              BCL says that as a result of the high-risk clients and situations it navigates, clients often struggle to pay their accounts and BCL’s term of engagement are drafted to reflect that level of risk. It anticipates that clients it undertakes work for will use the dispute process as a mechanism to avoid payment after significant time has passed and when there is no more value to be gained from BCL performing further services. BCL submits there should be real hesitation to endorse this behaviour as it would bring BCL’s entire business model and the clients it works for into question.

[69]              I do not accept that the prejudice to BCL is limited to delay in enforcement of its debt. Granting an interim injunction to prevent the receiver from acting would render the terms of engagement meaningless and, I accept, would make BCL’s business model unworkable. Developers, such as Mr Jacobson, would find themselves with nowhere to turn in the future as they would be seen as presenting too high a risk.

[70]I also accept that the reputational damage claimed is overstated.

[71]              The receiver can only take action to recover the amount due under the contract. There are terms that provide for penalty interest and indemnity costs to be recovered. Despite those provisions, the receiver cannot act in a way that is oppressive, harsh, unjustly burdensome, unconscionable or in breach of reasonable standards of commercial practice. An overly punitive approach by the receiver would support Mr Jacobson’s contention that the enforcement of the debt is being pursued for the benefit of Arena and reflects a conflict of interest on the part of BCL. However, I do not consider Mr Jacobson has demonstrated that Mr Hoole’s approach was overly punitive or problematic in any other way.

Overall justice

[72]              The primary issue for the grant or refusal of interim relief remains the overall justice of the case. I must weigh the competing considerations. This includes the relative strength of each party’s case, the adequacy of damages as a remedy, the impact on the respondent if relief is granted, and the broader interests of preserving the status quo or avoiding unfair prejudice.7

[73]              BCL says the balance of justice in this case weighs strongly against granting the injunction because the application is an attempt by Mr Jacobson to shield himself from the consequences of his own default. Mr Jacobson has consistently failed to pay for services rendered, has now been placed in receivership following non-payment, and seeks to use the injunction process to delay enforcement.

[74]              BCL says the prejudice to it if an interim injunction is granted is significant. BCL will be required to completely revisit its terms of engagement, including the clients it undertakes work for and the nature of the work it performs. BCL has already incurred substantial costs in attempting to recover the debt and further restraint, it is said, would worsen BCL’s position with very little certainty of payment, given the potentially enormous debts owed by Mr Jacobson, as set out in relation to the security for costs application.

[75]              Further, Mr Jacobson has failed to substantiate his undertakings as to damages and refrained from swearing an affidavit setting out his financial position. He has instead deposited $20,000 into his solicitor’s trust account.

[76]              BCL says that the granting of an interim injunction would have a significant chilling effect on all of BCL’s clients and projects.

[77]              BCL also says the Court should have regard to Mr Jacobson’s conduct in seeking relief. It is a well-established principle that a party seeking an injunction must come to the court with clean hands. Mr Jacobson’s conduct demonstrates a pattern, it

7      Intellihub Ltd v Genesis Energy Ltd [2020] NZHC 807, [2020] 3 NZLR 230 at [92].

is said, of dishonesty, evasiveness and bad faith, on which, again, the Court should place significant weight in favour of refusing an interim injunction.

[78]              Mr Jacobson has sworn affidavits that are inconsistent and contradicted by contemporaneous correspondence and text messages, which undermines  the credibility and reliability of his evidence. He has substantial outstanding financial obligations and has engaged in selective payment of invoices when offering to pay

$8,500 to secure BCL to undertaking further work even though BCL was owed more than  that  based  only  on  the  retainer  provided  for  in  the  contract.   BCL  says Mr Jacobson’s litigation strategy has been marked by reactive, tactical applications designed to delay enforcement of the debt. It is notable that Mr Jacobson never disputed that he owed the debt until the receivership action.

[79]              I consider that the overall justice in this case tells against interim relief. Interim relief would not simply preserve the status quo. It would render the contractual  scheme set out in the terms of engagement for disputing invoices meaningless.

Security for costs

[80]              There is a further interlocutory  application brought by BCL, namely an application  for  security  for  costs.  BCL  says  there  are  credible   concerns  that Mr Jacobson, as “a quintessential high-risk litigant”, will be unable to satisfy an adverse costs award.

[81]The application seeks orders that Mr Jacobson be required to pay the sum of

$50,000, or such other amount as the Court considers just, as security for BCL’s costs, together with leave to apply for further security and for the substantive proceedings to be stayed until payment of the security.

[82]              Mr Jacobson says this is, in essence, a disputed debt matter. Mr Jacobson is being pursued for that debt. Regardless of the form of the two related proceedings before the Court, he is the natural defendant.

The law

[83]              Before making an order for security for costs, the Court must be satisfied that one of the threshold situations applies. Under r 5.45(1)(b) of the High Court Rules 2016, an order for security for costs may be made if there is reason to believe that a plaintiff will be unable to pay the costs of the defendant if the plaintiff is unsuccessful in the proceeding.

[84]              Ordering security for costs is a matter of discretion, taking into account the interests of a defendant who is forced into litigation by the bringing of the claim, and those of a plaintiff who may face hardship,  or even the inability  to  advance the case, if an order for security is made that cannot be met.8

[85]              An order for security may be made where it is just to do so in all the circumstances.9

[86]              Whether to order security is a broad enquiry not to be constrained by reference to “principles”.10 It is relevant that an order for security for costs may prevent a plaintiff from proceeding. A genuine plaintiff is not lightly to be denied the opportunity to advance a claim.11 The amount of security is at the discretion of the Court—balancing the interests of the plaintiff and defendant.

Discussion

[87]              Mr Jacobson says that the evidence relied upon by BCL, primarily allegations of past company failures and press articles, does not demonstrate any such inability to meet a costs award in this proceeding. Mr Jacobson is disputing the Arena debt which was the very debt that BCL was contracted to oppose. Mr Jacobson says BCL failed to do that because it was working for Arena. Mr Jacobson submits that security for costs would have the practical  effect of determining the substantive issues by interlocutory order.

8      David Bullock and Tim Mullins The Law of Costs in New Zealand (LexisNexis, Wellington, 2022) at [7.2].

9      Westpac New Zealand Ltd v Adams [2013] NZHC 3112 at [25].

10     McLachlan Ltd v MEL Network Ltd (2002) 16 PRNZ 747 (CA) at [13]–[14].

11 At [15].

[88]              Mr Jacobson also says that Mr Blomfield has told his solicitor he will publicise the receivership in the media to scare other financiers and trigger calls on other debts, pushing Mr Jacobson towards bankruptcy. He says that these statements are relevant to whether the security for costs application is part of a broader tactical pressure campaign, rather than a genuine protective measure.

[89]              Mr Jacobson has now deposited $20,000 into his solicitor’s trust account, accompanied by irrevocable instructions to hold that amount on trust until final determination of the 1652 and these proceedings.

[90]              There is also $10,000 held in Mr Jacobson’s solicitor’s trust account in relation to the first personal receivership of Mr Jacobson in January 2025, which can only be released on unanimous joint written instructions from BCL, Ecovis KJA Ltd (the receiver, Mr Hoole’s company) and Mr Jacobson. Both Ecovis KJA Ltd and BCL have agreed in writing to release the  funds, however Mr Jacobson has not agreed.  It is likely, however, that this money cannot be applied to the security  for costs.  It will be applied to Ecovis KJA Ltd’s receivership costs.

[91]              BCL says that Mr Jacobson has de facto conceded the application for security for costs and the legal costs alone are already in excess of $20,000, so the $20,000 deposited in Mr Jacobson’s solicitor’s trust account is insufficient.

[92]              BCL says the balance of convenience strongly favours an order for security. It says it does not seek to stifle the proceeding but rather  to ensure that if  it is required to continue to defend it is not left out of pocket. Mr Jacobson has chosen to litigate despite his impecuniosity and, accordingly, it is appropriate he should provide security to protect BCL.

[93]              I agree that Mr Jacobson is natural defendant in this matter. BCL has a registered security interest which gives it multiple options to pursue Mr Jacobson for costs. Mr Jacobson has already made provision for $20,000 to be held in his solicitor’s trust account.

[94]              I do not find that an order for security for costs would be just in this case. The amount sought would not meet any costs order. It is not related to scale costs. It seems designed to flush out the level of Mr Jacobson’s actual impecuniosity and it is not required in light of the decision to decline the application for an interim injunction.

Result

[95]The application for an interim injunction is declined.

[96]The application for security for costs is declined.

Costs

[97]The parties are directed to attempt to agree costs.

[98]If agreement is not reached, I make the  following directions:

(a)BCL is to file and serve material to support the actual and reasonable costs claimed in the respect of the interim injunction application and in respect of the application for security within 20 working days of the date of this judgment; and

(b)Mr Jacobson is to file and serve, within a further 10 working days following service of BCL’s material, any material relevant  to the issue of costs in respect of either interlocutory application.

[99]              I will deal with the issue of costs on the papers unless the parties indicate that hearing time is required.

Wilkinson-Smith J