Redhill Development (NZ) Limited v SK Brothers Builders & Developers Limited HC Auckland CIV2008-404-6510
[2011] NZHC 278
•31 March 2011
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV2008-404-6510
BETWEEN REDHILL DEVELOPMENT (NZ) LIMITED
Plaintiff
ANDSK BROTHERS BUILDERS & DEVELOPERS LIMITED Defendant
Hearing: 23 March 2011
Counsel: G Keene for proposed Plaintiff
J Atkinson for Defendant
Judgment: 31 March 2011 at 3:30 PM
AMENDED FINAL JUDGMENT OF ASSOCIATE JUDGE SARGISSON
This judgment was delivered by me on 31 March 2011 at 3.30 pm pursuant to
Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date ..........................
Solicitors:
Patel Nand Legal, PO Box 26-717, Epsom, Auckland
Dawsons, PO Box 38143, Botany Town Centre, Auckland
REDHILL DEVELOPMENT (NZ) LIMITED V SK BROTHERS BUILDERS & DEVELOPERS LIMITED HC AK CIV2008-404-6510 31 March 2011
[1] In the interim judgment issued on 25 February 2011 I invited submissions from counsel on the orders that should be made on Sonsram’s application and on the defendant’s application for an order for security for costs. Specifically, I invited submissions on:
a) The proposed order under r 4.52 that the proceeding be carried on between
Sonsram, in substitution for the plaintiff, and the defendant;
b)The appropriate conditions to attach to such an order to prevent injustice to the defendant; and
c) The sufficient sum to be the subject of an order under r 5.45 requiring
Sonsram to give security for costs.
[2] I allocated a chambers hearing today for the purpose of giving counsel the opportunity to be heard on the above matters.
[3] Agreement has been reached at today’s hearing on the terms that orders may be made on Sonsram’s application. Agreement has also been reached on the terms of an order for security of costs.
[4] In accordance with counsel’s agreement I make orders in the terms set out in the schedule attached to this minute.
[5] I record that Sonsram has signalled an intention to make application to this Court, or if need be to the Court of Appeal, to stay the obligation to make payment of the costs referred to in order (b) (i) and (ii). It says it can provide security for those costs and that its obligation to make immediate payment should be stayed. If such applications are successful, then it is agreed that there should be leave to seek that the order be varied.
[6] As matters stand, however, unless and until payment is itself stayed I am satisfied that, in order to avoid injustice to the defendant, the obligation is one that must be met before the defendant is put to further cost and that the proceeding should be stayed pending payment accordingly.
[7] That leaves, for decision, the issue of costs on Sonsram’s application and on
the defendant’s application.
[8] Counsel for the Sonsram submits, in effect, that costs should lie where they fall as each party has been successful on its application.
[9] Counsel for the defendant on the other hand submits that it is entitled to costs on its application for security for costs as it is the successful applicant on that application. I accept he is right about that. He submits further, in respect of Sonsram’s application, that there should be no order for costs because:
a) The application for substitution was necessitated not by the defendant
but because of the “frailties” of the original plaintiff;
b)The application was made pursuant to the wrong rule and “rescued” by the Court. Further, had the application been made under the correct rule the significance of the need for conditions to avoid injustice to the defendant, particularly with respect to costs incurred to date, would have been apparent to the plaintiff. The defendant may well have consented to the application.
[10] I accept there is merit in the further submissions. At the heart of the defendant’s opposition has been its concern that substitution of the plaintiff would leave it high and dry when it comes to recovering costs that have been ordered in its favour and any other costs that may be awarded for steps it has already taken. Such an outcome would result in injustice and is the kind of concern that an applicant for an order under r 4.52 must confront. I cannot put to one side that costs’ considerations seem to have influenced the way that Sonsram has approached the issue of substitution. In any event, had Sonsram faced the issue squarely at the outset, the defendant would have had no basis for opposition. As it was, the defendants’ opposition was, in large measure, justified.
[11] In these circumstances, I accept the submission that though Sonsram is the successful party on its application, there should be no costs award on the application. Rather, costs on the application should lie where they fall, and I order accordingly.
[12] There will be an order for costs in favour of the defendant on the security for costs application on a 2B basis plus disbursements to be fixed by the Registrar.
Associate Judge Sargisson
SCHEDULE
1. The following Orders are made:
(a) An Order pursuant to r 4.52 that this proceeding be carried on between Sonsram Trustee Limited as plaintiff and the defendant, subject to the conditions in (b).
(b)This proceeding is stayed pending further order of the Court or payment by Sonsram of:
(i)$13,195.18 to the defendant, being costs and disbursements as listed in the judgment of the Court of Appeal sealed on 23
March 2010, and
(ii)scale costs awarded by Associate Judge Doogue to the defendant at the Directions Conference on 4 June 2010 on a
2B basis, and
(iii)$40,000 in cash or cash equivalent as security for costs in this proceeding to the satisfaction of the Registrar.
(c) Leave is reserved to Sonsram to seek further orders in the event that it has:
(i) given security for costs as directed, and
(ii)obtained orders staying its obligation to pay the abovementioned costs awards.
A memorandum may be filed on 2 days notice for that purpose;
(d)The defendant is to seek that the Registrar fix the costs that were awarded on 4 June 2010 with a view to serving a sealed costs order on Sonsram as expeditiously as possible.
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