Raiser Developments Limited v Trefoil Properties Limited HC Auckland CIV-2005-404-5883

[2007] NZHC 1724

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2005-404-5883

CIV-2005-404-5859

BETWEEN  RAISER DEVELOPMENTS LIMITED Plaintiff

ANDTREFOIL PROPERTIES LIMITED AND GRAFTON OAKS MOTELS (1999) LIMITED

Defendants

Hearing:         1 May 2007

Appearances: R. Gay for Plaintiff

W. Manning for Defendants

Judgment:      4 May 2007 at 11.45 am

In accordance with r540(4) I direct the Registrar to endorse this judgment with a delivery time of 11.45am on the 4th day of May 2007.

JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL

Introduction

[1]      The defendants apply for security for costs against the plaintiff.  The amount sought for security is based on a five day trial and is suggested at $100,000.00.

[2]      The application is opposed by the plaintiff.

Background Facts

[3]      On 11 May 2005 the plaintiff as purchaser and the defendants as vendors entered into two interdependent agreements for the sale and purchase of the Grafton

RAISER DEVELOPMENTS LIMITED V TREFOIL PROPERTIES LIMITED AND GRAFTON OAKS MOTELS (1999) LIMITED HC AK CIV-2005-404-5883  4 May 2007

Oaks Hotel business and the land on which it is situated at 117 Grafton Road, Auckland.  The combined purchase price under the agreements was $8,520,000.00. Settlement was scheduled to take place on 31 August 2005.

[4]      A deposit of $400,000.00 under the agreements was paid by the plaintiff. Settlement was not completed, however, on 31 August 2005.  Following delivery of settlement notices by the defendants, on 22nd  September 2005 they cancelled the agreements on the basis that the plaintiff had failed to comply with those notices.

[5]      The plaintiffs have taken the position that they were not required to settle, as there was an issue at the time over the provisions of the $6,500,000.00 vendor finance security to be provided on settlement.  They say these documents prepared for the defendants did not comply with the terms set out for the vendor finance securities in the agreements for sale and purchase.

[6]      On 14 October the plaintiff brought the present claim before the Court.   In addition, on that date it applied for an order that a caveat the plaintiff had registered against the title to the defendants’ property not lapse.

[7]      On 27 October 2005 an interim order was made that the plaintiff’s caveat not lapse.

[8]      On  1st   May  2006,  after  discussion  between  the  parties,  the  defendants withdrew the cancellation notices noted in paragraph [4] above and called upon the plaintiff to complete settlement by 30 May 2006, later extended at the plaintiff’s request to 14 July 2006.

[9]      The plaintiff did not complete settlement on 14 July 2006.  On 15 July 2006 the defendants cancelled the agreements on the basis of the plaintiff’s failure to settle by that extended date of 14 July 2006.

[10]     Subsequently, on 17 July 2006 a judicial settlement conference between the parties took place in this Court.

[11]     The judicial settlement conference resulted in a settlement agreement being reached between the parties.  According to the defendants, this was concluded on 21

July 2006.   This settlement entailed the parties completing the sale of the motel business and land for a reduced price of $8,217,500.00, at a settlement date of 18

August 2006, with time expressed to be strictly of the essence.

[12]     The plaintiff failed to settle on 18 August 2006.   On 19 August 2006 the defendants cancelled the settlement agreement on the basis of the plaintiff’s failure to settle by due date.

[13]     Following the collapse of this settlement, the Court directed that the caveat application be set down for hearing.  The hearing occurred on 28 September and 15

November 2006.   This led to a judgment issued by Associate Judge Faire on 16

November 2006, where he directed that the plaintiff’s caveat should not lapse.

[14]     In  its  amended  Statement  of  Claim  filed  in  this  proceeding  the  plaintiff maintains an application for an order for specific performance of the original 11 May

2005 agreement, and in addition seeks damages for what it says are the costs of delay at the rate of $3,669.00 per day from 22 September 2005.   According to the defendants, this claim would equate to the sum of $2,482,548.00 as at 24 August

2007, being the date for which the five day substantive trial of this matter is scheduled.

Counsel’s Arguments and My Decision

[15]     The  defendants’  present  security  for  costs  application  was  filed  on  20

November 2006.  It is made pursuant to r60(1)(b) High Court Rules which provides:

60.      Power to make order for security for costs

(1) Where the Court is satisfied, on the application of a defendant…

(b)      That 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 plaintiff’s proceeding -

the Court may, if it thinks fit in all the circumstances, order the giving of security for costs.

[16]     The two-step approach under this rule is well established.   First the Court must address whether the “threshold test” (reason to believe a plaintiff is unable to pay costs) has been met.   Once this threshold has been passed, a second question arises – Should the Court exercise its discretion to order security for costs in the circumstances of the case (Hamilton v Papakura District Council (1997) 11 PRNZ

333, 335-336).

[17]     The threshold test requires the Court to be satisfied that there is reason to believe that if unsuccessful, the plaintiff will not be able to meet an adverse costs order.  Authority exists to the effect that a plaintiff’s failure to provide information about its means may be construed as inferring impecuniosity – Nikau  Holdings Limited v BNZ (1992) 5PRNZ 430, 436.  However, before such an adverse inference may be drawn, some evidential foundation to support the contention will be required

– New Zealand Kiwifruit Marketing Board v Maheatataka Coolpack Limited (1993)

7 PRNZ 209, 213.

[18]     With regard to the second question, the authorities suggest that the Court’s discretion under r60 is not to be fettered by the application of principles.  It is to be exercised based on a careful assessment of the circumstances of the particular case – A.S. McLachlan Limited v MEL Network Limited (2002) 16 PRNZ 747.  There is no pre-disposition towards either the grant or refusal of an application – Bell Booth Group Limited v Attorney-General (1986) 1 PRNZ 457, 460.

[19]     A balancing of the interests of plaintiff and defendant is necessary at this point.  If an order for security for costs will prevent the plaintiff bringing a general claim, such an order should be made only after careful consideration and where the claim has little chance of success.  This must be balanced against the need to protect a  defendant  from  unjustified  litigation  (especially  where  it  may  be  overly complicated  or  unduly  protracted  –  A.S.  McLachlan  Limited  v  MEL  Network Limited).

[20]     The merits of a case, in so far as they can be assessed at the interlocutory stage will be relevant to the exercise of the discretion under r60.  As McGechan on Procedure at para HR60.03(b) notes, there is of course a very real limit as to how far

such an enquiry as to the merits of a case can be made, particularly at an early stage of the proceeding – Meates v Taylor (1992) 5 PRNZ 524 (CA).

[21]     Further factors have been regarded as relevant in considering applications for security for costs.  These were outlined in McGechan on Procedure at para HR60.03 in the following terms:

(c)       Impecuniosity;   any   “reasonable   probability”   established   by persuasive evidence - mere assertion will not suffice - that the plaintiff’s impecuniosity results from the defendant’s actions complained of in the proceeding: Davy v Howell (1993) 7 PRNZ

141; Weld Street Takeaways and Fisheries Ltd v Westpac Banking

Corporation [1986] 1 NZLR 741 at 743. As with the merits assessment of this factor, short of a full hearing, is regularly acknowledged as being very difficult, if not impossible: Meates v Taylor (1992) 5 PRNZ 524 (CA).

(d)      Delay; in terms of delay, factors include:

(i)  Whether the application was made as soon as the defendant became  aware,  or  could  with  reasonable  enquiry  have become  aware,  of  the  plaintiff’s  likely  inability  to  meet costs.

(ii) Any needless delay, particularly if designed to prejudice the plaintiff.

(iii) Whether, and if so to what extent, the delay has prejudiced the plaintiff.   An obvious example is a plaintiff who has expended substantial sums, including legal costs, to get a proceeding to the brink of trial, only to be met by an application   for   security,   deliberately   withheld   to   the eleventh hour.

[22]     I now turn to consider this application, bearing in mind the various matters outlined above.

Threshold Test of Impecuniosity

[23]     As I have noted above, this threshold test requires the Court to be satisfied that there is reason to believe that if unsuccessful, the plaintiff will not be able to meet an adverse costs order.  For the reasons I will outline below, in my view there is little doubt in the present case that this impecuniosity test has been met.

[24]     The  plaintiff  has  provided  almost  no  information  about  its  means  or  its financial position to the Court and in my view there is a reasonable argument that this can be construed as inferring impecuniosity in the present case – Nikau Holdings Ltd v BNZ.   No financial statements or detailed financial information have been provided, nor any list of assets and liabilities for the plaintiff.

[25]     Instead, before me at one point Mr Gay for the plaintiff contended that the plaintiff did have assets.  He said these constituted first, the $400,000.00 deposit paid on the Grafton Oaks Hotel purchase, secondly, a  further $300,000.00  which  he maintained had been spent by the plaintiff towards development and planning for that project, and thirdly, he contended the plaintiff had an equitable interest in the Grafton Oaks Hotel property and business, and therefore effectively it held an equity in this business.

[26]     No real explanation was provided, however, as to whether these $400,000.00 and $300,000.00 amounts had been provided from the plaintiff’s own resources, or whether they were by way of loan advances.  Indeed, from the affidavit of Mr Brent Douglas Clode dated 30 November 2006 provided in support of the plaintiff’s opposition  to  the  present  application,  it  would  seem  that  all  this  funding  was provided  by  way  of  loan  advance  from  a  trust  controlled  by  Mr  Clode  –  see paragraph 6 of his affidavit.

[27]     But in any event, as I see it, these contentions put forward by Mr Gay on behalf of the plaintiff do little to assist it here.   This is because r60(1)(b) clearly provides that where the Court is satisfied:

…that 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 plaintiff’s proceeding –

the Court may, if it thinks fit in all the circumstances, order the giving of security for costs.

(emphasis added)

[28]     In considering whether the plaintiff is impecunious and therefore unable to pay the defendant’s costs if unsuccessful in this proceeding, it is clear that the monies  spent  on  the  deposit  and  subsequent  development  of  the  present  hotel

business, together with any claim to an equity in this business, need to be ignored. In  fact,  if the  plaintiff  is  unsuccessful  in  its  present  proceeding,  then  the  hotel property and business would actually remain as assets of the defendant, and not the plaintiff.

[29]     And, in the 30 November 2006 affidavit of Mr Brent Douglas Clode, he acknowledges at paragraph 1 that:

…The plaintiff in this proceeding is, superficially, a “shell” company.

[30]     This paragraph 1 does go on to claim, however, that:

There is no reason to believe that the plaintiff company would be unable to pay costs if unsuccessful in this proceeding.

But, nevertheless at paragraph 6 of this affidavit Mr Clode deposes:

The funding for the development expenses and the deposit has come by way of trust that I control and…

[31]     This evidence advanced by Mr Clode, the sole director and shareholder of the plaintiff, put forward as it is in support of the plaintiff’s opposition to the present application, in my view, tends to provide some support to the defendant’s contention that the plaintiff is in reality a shell company with no assets and supported solely by loan advances from a third party.

[32]     And finally, before me Mr Gay for the plaintiff properly and to his credit in conclusion  acknowledged  his ready acceptance  that  if  the  plaintiff  is  ultimately found not to have an equitable interest in the Grafton Oaks Hotel land and business, then the plaintiff in reality has no funds to meet any adverse award of costs against it.

[33]     Given all these matters, I am satisfied that the plaintiff has put nothing before the Court to counter the defendant’s suggestion that the plaintiff is impecunious.  I find, therefore, that the threshold test of impecuniosity is met here.

Will  an  order for security  for costs  prevent  the  plaintiff  from bringing  its present claim?

[34]     I turn now to consider the second question.  This is whether the Court should exercise its discretion to order security for costs in the circumstances of the present case.  In doing so, and in balancing the respective interests of the parties, I will look first at whether an order for security for costs, if made here, would prevent the plaintiff from proceeding with its general claim before the Court.

[35]     As to that aspect, it is instructive to consider again the affidavit of Mr Brent Douglas Clode dated 30 September 2006 filed in support of the plaintiff’s position. At paragraphs 6 and 7 of that affidavit Mr Clode deposes:

6.The funding for the development expenses and the deposit has come by way of trust that I control and to which I have access to fund the ongoing litigation on behalf of Raiser Developments Limited.  Any further funding including any Court costs and legal fees will come by way of the same channel.

7.Accordingly, I believe that Raiser Developments Limited has access to funding to pay any legal costs and any expenses that would be incurred if the claim by the company was unsuccessful.

[36]     Given this evidence provided for the plaintiff, and notwithstanding my earlier finding that the plaintiff itself is impecunious, the plaintiff through its sole director and shareholder Mr Clode appears confident that it has arrangements which will provide “access to fund the ongoing litigation” from the trust which he controls. Indeed, this affidavit says that Mr Clode’s trust will fund the ongoing litigation for the plaintiff.

[37]     In my view it is reasonable to conclude, therefore, that on the basis of the clear evidence put before the Court for this application by the plaintiff itself, if an order for security for costs is made here, this would not prevent the plaintiff from pursuing its general claim against the defendant, because the full funding of that claim is to come from Mr Clode’s third party trust as he confirms in his affidavit.

[38]     And noting that conclusion, I now turn to deal with the further arguments advanced by counsel to assist the Court in considering whether it should exercise its discretion to order security here.

Merits

[39]     In considering the merits of the plaintiff’s claim, I remind myself of the comments noted above (at paragraph [21]) that there is always a difficulty and a very real limit as to how far such an enquiry can be made, particularly at what is often a relatively early stage of the proceeding – Meates v Taylor.

[40]     Before me counsel advanced little argument concerning the merits of the plaintiff’s present claim.   Reference was made to the decision of Associate Judge Faire dated 16 November 2006 where he upheld the caveat registered by the plaintiff over the defendant’s property.   The test for sustaining a caveat under s145 Land Transfer Act  1952  however  simply requires  the  caveator  to  show  that  it  has  a reasonably arguable case to the interest it claims.  This of course is a different test from that which is to be adopted in the substantive proceeding.

[41]     Notwithstanding these matters, in reaching a reasonable balance between the interests of the plaintiff and the defendants in the present case, I form the broad initial impression that although the present claim made by the plaintiff may not be totally lacking in merit, on the material before the Court, the claim ultimately may not prove to be a strong one.  If relevant, what does seem clear is that the plaintiff has had several opportunities to complete settlement of the purchase of the hotel business and property, including one at a reduced sale price which followed the agreement said to be reached following the judicial settlement conference.  It appears somewhat puzzling at this point that given these matters, the plaintiff now should be in part seeking specific performance of an agreement to purchase these assets, an agreement which is presumably at a higher price.

[42]     No doubt the plaintiff would advance a different view and will maintain that its substantive claim here has substance.  But as little argument was put to me over

this question of the merits of the general claim before the Court, I can form no definitive conclusion on this aspect.

Defendants’ conduct caused the plaintiff’s impecuniosity?

[43]     I turn now to consider the next claim by the plaintiff.  This is that the conduct of the defendants in the transaction which is the focus of complaint here has itself caused or contributed to any impecuniosity the plaintiff suffers.   As I have noted above, the authorities establish that where there is a reasonable probability a defendant has caused or significantly contributed to a plaintiff’s impecuniosity, this militates against an application for security – Davy v Howell and Weld Street Takeaways and Fisheries v Westpac Banking Corporation.

[44]     In considering this aspect, a starting point must be the 30 November 2006 affidavit of Mr Clode, which as I have noted at paragraph [29] above, leads to the irresistible inference that the plaintiff throughout has been a shell company with no assets of its own.  Mr Clode goes on to acknowledge that all monies for the deposit and this development have come from his trust.

[45]     That said, in my view it is difficult for the plaintiff to sustain any argument that its impecuniosity here results from the defendants’ actions.

[46]     The authorities note that a “reasonable probability” that this is the case is required to be established by persuasive evidence.  Mere assertion will not suffice. In my view the plaintiff has failed to establish this reasonable probability by a wide margin.

[47]     In addition, however, there is in my view a further possible  flaw in the plaintiff’s argument here, and this concerns the question of causation.

[48]     The plaintiff’s superficial submission on this impecuniosity suggestion is that cancellation of the three agreements for sale and purchase by the defendants was the cause of its impecuniosity.

[49]     Arguably, however, the cancellation of these agreements was a consequence of  the  plaintiff’s  failure  on  those  three  occasions  to  complete  the  individual purchases.   This was particularly the case, it seems, in the plaintiff’s failure to complete settlement under the third agreement for sale and purchase reached, it is said, following the judicial settlement conference.

[50]     As I understand the position, the plaintiff’s reasons for its failure to settle the purchase on these three occasions have been broadly unexplained until its reasonably recent attempts to do so.

[51]     In my view there is a possible further argument that it is the plaintiff’s failure to settle these purchases, which has caused any impecuniosity it may complain of, and not the actions of the defendants here.

[52]     I conclude, therefore, that the material presently before the Court in this case does not provide persuasive evidence that there is a “reasonably probability” that the impecuniosity the plaintiff suffers has resulted from the defendants’ actions complained of here.  This factor does not assist the plaintiff in its opposition to the current application.

Delay

[53]     I turn now to consider the plaintiff’s argument that there has been undue delay on the part of the defendants in bringing and pursuing the present application for security for costs, and that this has prejudiced the plaintiff.

[54]     These  substantive  proceedings  were  commenced  by  the  plaintiff  on  14

October 2005.  Also on that date the caveat proceedings were brought.

[55]     As I have noted in paragraphs [7]-[12] of this judgment, from the time the substantive and caveat proceedings were issued up to 19 August 2006 a range of things occurred.  First, considerable negotiations appear to have taken place between the parties, secondly, attempts were made to settle the agreement for sale and purchase on a second occasion, thirdly, the judicial settlement conference took place,

and fourthly, as I understand it, a settlement agreement was reached, on which the plaintiff failed to settle on 18 August 2006.

[56]     Then in September 2006 the caveat proceeding was set down for hearing, and finally the present application for security for costs was filed on 20 November 2006.

[57]     The first question to be answered is whether there has been delay on the part of the defendants in bringing the present application.  Despite arguments put to me by Mr  Gay for  the  plaintiff,  in  my view  there  is  substance  in  the  defendants’ contention that there has been no significant delay here in bringing this application. It was filed by the defendants on 20 November 2006, which was shortly after the caveat proceeding was set down for hearing, and only about two months after the plaintiff had failed to settle the agreement for sale and purchase reached at the judicial settlement conference.

[58]     In addition, the defendants’ position expressed before me was that it was not until  the  end  of  September  2006  that  the  defendants  fully  appreciated  that  the plaintiff was a shell company and that it would be unlikely to meet any adverse award of costs.

[59]     I accept there is something in these arguments put before the Court on behalf of the defendants that there has been no unreasonable delay on the part of the defendants in bringing the present application for security.

[60]     But, notwithstanding this, in any event, I take the view that if there may be found to be unreasonable delay on the part of the defendants in bringing the present application, this delay has not resulted in any undue prejudice to the plaintiff.

[61]     The plaintiff’s suggestion before me that it has been prejudiced by the late bringing of the application is quite unsupported by any evidence or material before the Court.  Tellingly, the 30 November 2006 affidavit of Mr Clode in support of the plaintiff’s opposition to the present application makes no claim that the plaintiff has been prejudiced by the late bringing of the present application.

[62]     The  defendants  argue  that  the  vast  majority  of  costs  which  have  been incurred already in the proceeding in this Court relate to the caveat application.  This is a separate matter from the present substantive proceeding.

[63]     I accept this contention.   In addition, there is nothing before the Court to support any suggestion that the defendants deliberately withheld bringing the present security for costs application until the eleventh hour.

[64]     In weighing up all these matters, I come to the view that although a security for costs application brought in November 2006 when substantive proceedings were issued on 14 October 2005 might be thought to trigger a supportable allegation of delay, this is clearly explained by the events which occurred in the interim, and further, and in any event, there is nothing before the Court to show that any delay has been designed to prejudice the plaintiff, nor that it has indeed caused significant prejudice to the plaintiff.

[65]     In conclusion, I find that in balancing all the factors I am required to consider here, an order for security for costs should be made in favour of the defendants.

Quantum

[66]     As to the quantum of security to be ordered, as I noted at the outset, the amount sought by the defendants is $100,000.00.  This is based upon a five day trial.

[67]     On the issue of quantum, McGechan on Procedure para HR60.07 states:

The amount of security is equally in the Court’s discretion.   It is not necessarily to be fixed by reference to likely costs awards.  Rather, it is to be what the Court thinks fit in all the circumstances: A.S. McLachlan Limited v MEL Network Limited (2002) 16 PRNZ 747 (CA).   Those circumstances include:

(a)  The amount or nature of the relief claimed.

(b) The  nature  of  the  proceeding,  including  the  complexity  and novelty of the issues, and therefore the likely extent of interlocutories.

(c)  The estimated duration of trial.

(d) The probable costs payable if the plaintiff is unsuccessful, and perhaps also the defendant’s estimated actual (i.e. solicitor and client) costs.

[68]     Here, counsel for the plaintiff has provided a schedule to the Court setting out his calculation of the category 2 scale costs which this proceeding would involve. Calculated on a category 2B basis, this schedule shows total costs at 50.2 days amounting to $80,320.00.   Calculated on a category 2C basis, the schedule shows total costs at 85 days amounting to $136,000.00.

[69]     In each case costs have been calculated at $1,600.00 per day.

[70]     Counsel for the plaintiff takes issue with a number of these quantum matters. [71]     The first is the daily rate of $1,600.00 per day, which counsel notes should

apply only to work carried out post-1 June 2006.  Prior to that time Mr Gay for the plaintiff indicates that category 2 proceedings costs should be calculated at the lesser rate of $1,450.00 per day.

[72]     Secondly, counsel for the plaintiff claims that the costs incurred on the caveat application should not be included in the defendants’ calculations, as the plaintiff had effectively been successful in the caveat proceeding.

[73]     Thirdly, counsel for the plaintiff objects to the defendants’ inclusion of a claim for second counsel noted at 2.5 days.

[74]     On this basis, Mr Gay for the plaintiff indicated his calculation for costs on a category 2B basis at around $69,000.00, as opposed to the defendant’s calculation of

$80,320.00.

[75]     In considering these aspects, first I find that category 2B is the appropriate costs category here.  Secondly, I note that the plaintiff’s objection to any pre-1 June

2006 costs being assessed at $1,600.00 per day rather than $1,450.00 per day was effectively unopposed by Mr Manning for the defendants.   I accept that this adjustment needs to be made.

[76]     As to the issue of second counsel, by a fine margin I accept too that a claim for second counsel here is not appropriate.  The 2.5 days sought by the defendants is rejected.

[77]     Finally, the defendants’ inclusion of costs on hearing the caveat application, in my view, is appropriate.   At paragraph 37 of the judgment of Associate Judge Faire dated 16 November 2006 on the caveat matter, he reserved costs and stated that they “should simply follow the outcome of the substantive proceeding”.  Associate Judge  Faire  went  on  to  note  also  that  both  counsel  agreed  that  this  was  the appropriate result.

[78]     The defendants’ security for costs schedule calculation is made on the basis that  the  defendants  are  ultimately successful  in  the  substantive  proceeding,  and therefore they would be entitled to include costs on the caveat proceeding.

[79]     That said, the approximate calculation by Mr Gay for the plaintiff of around

$69,000.00 for category 2B costs, in my view, should be increased by the sum of

$5,760.00 (representing 3.6 hours post-1 June 2006 at $1,600.00 per hour for work involved in the caveat proceeding).  This gives a total category 2B costs of around

$75,000.00.

[80]     In the present case the relief claimed by the plaintiff in this proceeding is either specific performance of contracts totalling around $8,500,000.00, or alternatively an additional claim for damages of $2.5-3 million.  This is substantial and must have some relevance to the significant level of security which it is appropriate for the Court in exercising its discretion to order here.  It appears too that the proceedings are likely to be relatively complex, given the history of dealings between the parties, the issues to be raised over the cancellation of the transactions and the plaintiff’s readiness to settle the transactions at the operative times.

[81]     McGechan on Procedure at para HR60.07 notes in part:

In so far as past awards of security are a legitimate guide, they generally represent some discount on the likely award of costs as calculated under Schedule 3.

[82]     With  all  those  factors  in  mind,  in  my  view  the  appropriate  amount  for security for costs in the present case is a total figure of $65,000.00.

[83]     And, given that the trial date set for the substantive hearing of this proceeding is 18 August 2007, as I see the position, it is not appropriate for this security to be awarded on a staged basis.

Conclusion

[84]     The defendants’ security for costs application therefore succeeds.

[85]     An  order  is  now  made  that  within  10  working  days  of  the  date  of  this judgment the plaintiff is to give security for costs to the defendants in the sum of

$65,000.00 –

a)        By paying that sum into Court;

b)Such security is to be deposited in an interest-bearing account, with the interest accrued thereon to be available as further security for costs;

c)       If the plaintiff is unable to satisfy the order for security for costs within the 10 working day period from the date of this judgment noted in this paragraph, then from that date this proceeding is stayed until security in the sum of $65,000.00 is properly provided.

[86]     As to costs on this application, the defendants have been successful and are entitled to an award of costs.   Costs are awarded to the defendants against the plaintiff on this application on a category 2B basis, together with disbursements as fixed by the Registrar.

‘Associate Judge D.I. Gendall’