Porter v Porter - [2015] NZHC 3258

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2015-409-000207 [2015] NZHC 3258

IN THE MATTER OF Section 347, Property Law Act 2007

BETWEEN

PAUL VICTOR PORTER Plaintiff

AND

CHARLES WILLIAM PORTER AND ROXANNE DADSWELL

First Defendants

AND

PWA GRIFFIN LIMITED Second Defendant

Hearing: 29 September 2015

Appearances:

G M Brodie for Plaintiff
G K Riach for First Defendant
G Cooper for Second Defendant

Judgment:

16 December 2015

JUDGMENT OF ASSOCIATE JUDGE OSBORNE AS TO SECURITY FOR COSTS

The application

[1] The defendants seek security for costs. They each seek an order of $20,000.

The background

[2] The plaintiff, Paul Porter (Paul), and the first-named defendant, Charles Porter (Charles), are brothers. Charles and Roxanne Dadswell (the second-named first defendant) were de facto partners but have since separated.

[3] Paul’s claim flows from investments Paul, Charles and Roxanne made in printing businesses through a series of companies.

PORTER v PORTER [2015] NZHC 3258 [16 December 2015]

[4] Before 2006 Charles and Roxanne owned a small printing business, as did

Paul (a separate business).

[5] Purse Willis Aitken Limited was acquired for approximately $650,000. Working capital was provided by Copycraft Limited. The company name was changed to PWA Print Limited (PWA Print). Paul, Charles and Roxanne each took one-third shareholdings and became directors.

[6] Paul, Charles and Roxanne each contributed by borrowings (Paul borrowing

$250,000 from the Paul Porter Trust (Paul’s Trust), secured over his home).

[7] From 2009 PWA Print experienced (as did other printing businesses) difficult trading conditions.

[8] 2009 PWA Print negotiated an agreement with Griffin Press Limited (Griffin Press) to form a joint venture company, PWA Griffin Limited (PWA Griffin). PWA Griffin is the second defendant in these proceedings.

[9] PWA Print and Griffin Press each took 50 percent shareholdings in PWA Griffin.

[10] PWA Griffin purchased the PWA Print business for $970,000. The full purchase price was advanced by way of vendor finance by PWA Print to PWA Griffin. PWA Griffin also borrowed approximately $300,000 for working capital from Kiwi Finance. PWA Print’s debts to Paul’s Trust and to Charles and Roxanne remained owing.

[11] The directors of PWA Griffin were Charles, Roxanne and Graeme Dods. Charles, Roxanne and Paul were all initially employed in the business.

[12] From 1 January 2010 PWA Griffin informally had possession of the assets it was purchasing, with formal settlement of the purchase completed subsequently.

[13] On 4 September 2010 the first earthquake in the Canterbury Earthquake

Sequence occurred.

[14] After September 2010 the loan repayments of PWA Print to Paul’s Trust

become sporadic. Paul’s Trust issued a statutory demand for repayment on 27

November 2011, resulting in a compromise agreement in December 2011 by which

PWA Print was to pay Paul $2542 per month.

[15] From December 2011 to March 2013, PWA Print made its instalment payments, but the payments ceased in March 2013.

[16] On 10 April 2014, Paul obtained an order putting PWA Print into liquidation.

[17] In July 2015 the liquidators of PWA Print, by their final…

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 Porter v Porter

Details

AGLC: Porter v Porter [2015] NZHC 3258
Case: [2015] NZHC 3258
Decision Date: 16 December 2015

CaseChat Overview and Summary

In Porter v Porter, the plaintiff, Paul Porter, sought to recover losses arising from investments made in printing businesses through a series of companies. Paul sued his brother, Charles Porter, and Charles’s former partner, Roxanne Dadswell, as well as a company called PWA Griffin Limited. The first and main issue before the court was whether Paul should be required to provide security for costs in the event that he was unsuccessful in his claims. The second issue was the amount of security, if any, that should be ordered.

The court considered the legal regime for security for costs and applied it to the facts of the case. The court found that Paul met the threshold test for requiring security for costs because he was resident outside New Zealand and he was insolvent. The court then exercised its discretion under the High Court Rules, weighing the various factors to determine the appropriate amount of security for costs. The court found that Paul’s claims were weak and that he had no realistic access to third-party funding. The court also found that Paul’s impecuniosity did not flow from the defendants’ conduct, but rather from a fundamental lack of equity and borrowing for capital introduction when adverse trading conditions were experienced. The court concluded that an order of security in the sum of $20,000 was appropriate against PWA Griffin Limited, while a modest order of $5,000 was appropriate against Charles and Roxanne. The court ordered that if Paul failed to provide the security, the respective claims against the defendants would be stayed until further order of the court.

The final orders of the court were that Paul must provide security for costs and disbursements in the sum of $5,000 against Charles and Roxanne and $20,000 against PWA Griffin Limited by a specified date. If Paul failed to provide the security, the respective claims against the defendants would be stayed until further order of the court. The court also ordered that Paul must pay the costs of the defendants’ interlocutory applications. The court adjourned the proceeding to a case management conference to be held by telephone on a specified date.

Orders