Mu v Body Corporate 31241 - [2012] NZHC 22

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-4768 [2012] NZHC 22

BETWEEN DANNI MU Plaintiff

AND BODY CORPORATE 31241
First Defendant

ANDSHARRON WYNNE O'SULLIVAN Second Defendant

ANDGRAHAM BELL Third Defendant

Hearing: 25 January 2012

Appearances: G Illingworth QC for Plaintiff
T J Herbert for Defendants

Judgment: 25 January 2012

ORAL JUDGMENT OF ASSOCIATE JUDGE BELL Re: application for stay of security for costs judgment

Copy for:
Carter & Partners (Brent O’Callahan) P O Box 2137 Auckland 1140, for plaintiff
Email: brento@carterslaw.co.nz

Adina Thorn Ltd (A J Thorn) P O Box 1753 Auckland 1140, for first defendant
Email: adina@adinathorn.co.nz

Lee Salmon Long (Tim Mullins), P O Box 2026 Auckland 1140, for second and third defendants
Email: tim.mullins@lsl.co.nz

Grant M Illingworth QC, P O Box 7205 Auckland 1141, for plaintiff
Email: gmi@xtra.co.nz

Timothy J Herbert, Level 13, Shortland Chambers, 70 Shortland Street, Auckland 1010, for first defendant
Email: tim@timherbert.co.nz

David J Chisholm P O Box 2629 Auckland 1140, for second and third defendants
Email: david@dchisholm.co.nz

Paul W David, P O Box 4472 Auckland 1140, for fourth defendant
Email: paul@pauldavid.co.nz / nikki@pauldavid.co.nz

Case Officer:
Email: Leilani.Pereira-Moeono@justice.govt.nz

MU V BODY CORPORATE 31241 HC AK CIV-2011-404-4768 25 January 2012

[1] On 8 December 2011 I heard an application by the first defendant that the plaintiff provide security for costs. I gave an immediate oral decision. I dismissed the application because I was not satisfied that the first defendant had established the threshold of showing that there was reason to believe that the plaintiff would be unable to pay costs if the plaintiff were unsuccessful in the proceeding.

[2] The substantive proceeding is to be heard on 10 February 2012. The plaintiff’s substantive application challenges the validity of resolutions passed at a meeting of Body Corporate 312431. The case is expected to take no more than a day.

[3] The matter comes before the court today because the first defendant says that it has lodged a notice of appeal with the Court of Appeal against my decision of
8 December 2011. It seeks a stay of the proceeding until the appeal has been heard, and says that unless the stay is granted then the appeal will be rendered nugatory.

[4] There is a preliminary matter to be sorted out. That is whether the first defendant has chosen the correct remedy to challenge my decision on the security for costs application. An application for security for costs under r 5.45 is made by way of an interlocutory application. Rule 7.34(1) directs that an interlocutory application for which a hearing is required must be heard in chambers unless a Judge otherwise directs. In this case there was no direction that the matter was not to be heard in chambers. The matter therefore proceeded as a chambers hearing. If I had given a direction that the matter was not to be heard in chambers but was to be heard in court, then the matter would have had to be heard before a Justice, not before…

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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Details

Case: [2012] NZHC 22
Decision Date: 25 January 2012

CaseChat Overview and Summary

Danni Mu, the plaintiff, filed an application challenging the validity of resolutions passed at a meeting of Body Corporate 31241. The first defendant, Body Corporate 31241, sought a stay of security for costs judgment while appealing Associate Judge Bell's decision dismissing the application for security for costs. The second and third defendants, Sharron Wynne O'Sullivan and Graham Bell, are also involved in the case. The substantive proceeding is scheduled to be heard on 10 February 2012, and it is expected to take no more than a day.

The court was required to decide whether the first defendant had chosen the correct remedy to challenge the Associate Judge's decision on the security for costs application. The court also needed to determine whether the application for a stay of the proceeding should be granted, as the first defendant argued that without a stay, the appeal would be rendered nugatory.

Associate Judge Bell ruled that the first defendant had chosen the incorrect remedy to challenge the decision, as the appropriate remedy was to apply for a review under section 26P(1) of the Judicature Act, not to appeal to the Court of Appeal under section 26P(2). The notice of appeal to the Court of Appeal was lodged outside the time for applying for a review, and the appeal document had not yet reached the court file. The court declined the application for a stay and the oral application to extend time to file an application for review. Associate Judge Bell considered the merits of the proposed challenge and weighed the competing considerations of justice and the need for finality and prompt disposal of proceedings. In this case, the court found that the need for promptness of decision was more important.

The court declined the application for a stay and the oral application to extend time to file an application for review. The fixture for the substantive hearing on 10 February 2012 remained in place. The court varied the timetable directions to ensure compliance with the new schedule. Costs were held over to await the outcome of the substantive hearing.

Orders