Roband v O'Sheas - [2017] NZHC 354

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2013-419-966 [2017] NZHC 354

IN THE MATTER of the McGerkinshaw Property Trust

BETWEEN

JANINE MAREE ROBAND Plaintiff

AND

OʼSHEAS
First Defendant

MICHAEL CANN Second Defendant

Hearing: 22 February 2017

Appearances:

S Rawcliffe for the Plaintiff
R Woods for the First Defendant

Judgment:

7 March 2017

JUDGMENT OF GORDON J

This judgment was delivered by me on 7 March 2017 at 3 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar
Date:

Solicitors: Harkness Henry, Hamilton
Robertsons, Auckland

ROBAND v OʼSHEAS [2017] NZHC 354 [7 March 2017]

Introduction

[1] The first defendant, O’Sheas, has filed an interlocutory application dated

29 November 2016 seeking security for costs against the plaintiff, Ms Janine Roband, pursuant to r 5.45 of the High Court Rules 2016. Ms Roband opposes the application.

[2] The second defendant, Mr Michael Cann, also made an application seeking security for costs but it was withdrawn prior to the hearing.

Background

[3] The substantive proceedings in this case concern matters relating to the McGerkinshaw Property Trust. Ms Roband and her former husband Mr Cann settled the Trust in 2003. The trustees of the Trust were Ms Roband, Mr Cann and John O’Shea, a partner in O’Sheas, and then solicitor for Ms Roband and Mr Cann.

[4] One of the assets held by the Trust was a property situated at 773 State Highway 26, Newstead. Ms Roband and Mr Cann utilised the Newstead property as a base for their trucking companies, Roadhaul (N.I.) Ltd and RHT Holdings Ltd. In early 2005 the Trust, the two trucking companies, Mr Cann and Ms Roband (collectively, “the group”) transferred their banking facilities to Westpac. As a part of the transfer, the Trust was required to provide guarantees of the companies’ debts, secured over the Newstead property.

[5] In 2006, the Trust acquired a second property at 169 Victoria Road, Hautapu. Westpac provided a $1.1 million loan facility to facilitate the transaction. In return, the Trust and the companies entered into an unlimited interlocking guarantee, under which the Trust was liable for all debts owed to Westpac by the companies, and vice versa. The guarantee was secured by mortgages over the Newstead and Hautapu properties.

[6] In September 2007, Ms Roband and Mr Cann separated. The Newstead property was sold in November of that year for $1.6 million. Westpac then required that the full net proceeds of sale be applied in reduction of the group’s debt to

Westpac. O’Sheas complied with this requirement. As a result, the proceeds of sale were used to repay the loan in relation to the Newstead property as well as other debts owed by the companies to Westpac.

[7] In 2008, Westpac indicated that it would no longer provide finance to the group. In April 2008, the group’s debt was refinanced by means of a new loan facility with BNZ.

[8] As a result of the events detailed above, in December 2013 Ms Roband filed proceedings in the High…

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 Roband v O'Sheas

Details

AGLC: Roband v O'Sheas [2017] NZHC 354
Case: [2017] NZHC 354
Decision Date: 7 March 2017

CaseChat Overview and Summary

The case of Roband v O'Sheas involved an application by the first defendant, O’Sheas, seeking security for costs against the plaintiff, Ms Janine Roband. The second defendant, Mr Michael Cann, had also filed an application but withdrew it before the hearing. The substantive proceedings related to the McGerkinshaw Property Trust, which was settled by Ms Roband and her former husband, Mr Cann, in 2003. The trustees of the Trust included Ms Roband, Mr Cann, and John O’Shea, a partner in O’Sheas, who were also the solicitors for Ms Roband and Mr Cann. The proceedings involved allegations of improper advice by O’Sheas regarding the payment of proceeds from the sale of a property, the BNZ refinancing, and the purchase of another property.

O’Sheas sought security for costs under r 5.45 of the High Court Rules, requesting $60,000, which included future costs and disbursements. The basis for the application was the serious allegations of forgery, dishonesty, partiality, and improper pressure. To succeed, O’Sheas had to demonstrate that there was reason to believe Ms Roband would be unable to pay costs if unsuccessful, and that it was just to order security. Ms Roband opposed the application, stating that her relatives who had been funding the claim were at their limit and she was uncomfortable asking for more money.

The court found that there was credible evidence indicating Ms Roband would be unable to pay the costs if unsuccessful. However, the court also considered the discretionary factors, including the potential impact on Ms Roband's ability to pursue her claim, the strength of her case, and the delay in making the application. The court was reluctant to deprive Ms Roband of access to justice and found that the delay in making the application bore significant weight. Consequently, the application for security of costs was dismissed.

Costs were to follow the event, with the parties required to file memoranda if they could not agree on costs.

Orders