Routhan v PGG Wrightson Real Estate Limited - [2019] NZHC 169

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2018-409-77

[2019] NZHC 169

BETWEEN
PHILIP WILLIAM ROUTHAN, JULIA

VERONICA ROUTHAN as trustees for the KANIERE FAMILY TRUST
Plaintiffs

AND

PGG WRIGHTSON REAL ESTATE LIMITED

Defendant

AND

NELSON JOHN COOK

First Third Party

AND

COOKS STUD FARMS LIMITED

Second Third Party

AND

ROSS BISHOP

Third Third Party

Hearing: 5 February 2019

Appearances:

Plaintiffs in person

E L Keeble for Defendant

Judgment:

15 February 2019

JUDGMENT OF ASSOCIATE JUDGE LESTER

[1] These proceedings were commenced approximately one year ago by the then trustees of the Kaniere Family Trust (“the Trust”), being the present plaintiffs together with a Reginald John Garters.

ROUTHAN & ROUTHAN as trustees for the KANIERE FAMILY TRUST v PGG WRIGHTSON REAL ESTATE LIMITED & ORS [2019] NZHC 169 [15 February 2019]

[2] The defendant, PGG Wrightson Real Estate Ltd (“PGG”) brought its application for security for costs on 25 July 2018. The application was opposed and set down for hearing on 24 August 2018. That hearing was vacated by then Associate Judge Osborne in a Minute dated 16 August 2018 referring to the threshold test under r 5.45 and the need for the applicant to establish that each of the plaintiffs personally would be unable to meet an adverse costs award as opposed to the position of the Trust. In August 2018, one of the originally named plaintiffs, Mr Garters, resigned as trustee.

[3] With Mr Garters’ resignation, PGG elected to pursue its application for security. PGG notes that Mrs Routhan has not filed a notice of opposition, and seeks an order against her on that basis. With Mr and Mrs Routhan being in the same position in relation to the claim, it appears reasonably clear from the Minute of 16 August 2018 that both plaintiffs intended to oppose this application. With Mrs Routhan appearing in person and adopting the submissions made by Mr Routhan, I propose to treat both plaintiffs as opposing the application.

Security for costs principles

[4] Rule 5.45 of the High Court Rules empowers the Court to order the giving of security for costs where there is reason to believe that a plaintiff will be unable to pay the defendant’s costs if the plaintiff does not succeed in the hearing.

[5] The approach is summarised in McGechan1 with an application for security for costs generally following the following steps:

(i)Has the applicant satisfied the court of the threshold that is that there is reason to believe the plaintiff will be unable to pay the defendant’s costs?

(ii)How should the Court exercise its discretion if jurisdiction?

(iii)What amount should security for costs be fixed at if it is ordered?

1 McGechan on Procedure (online loose-leaf ed, Thomson Reuters) at HR5.45.01.

(iv)Should a stay be ordered?

[6]Whether or not to order security and, if so, the quantum, are discretionary.2

[7] Balancing the interests of plaintiff and defendant is the overriding consideration.3 As discussed in McLachlan…

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: [2019] NZHC 169
Decision Date: 15 February 2019

CaseChat Overview and Summary

The plaintiffs, Philip William Routhan and Julia Veronica Routhan, as trustees for the Kaniere Family Trust, brought proceedings against the defendant, PGG Wrightson Real Estate Limited, seeking relief in respect of a sale of the Cook Farm. The defendant applied for security for costs under rule 5.45 of the High Court Rules. The application was opposed by the plaintiffs. The court was required to determine whether there was reason to believe the plaintiffs would be unable to pay the defendant's costs if the plaintiff did not succeed in the hearing. The court also had to determine whether the application for security for costs should be granted.

The court noted that the plaintiffs had acknowledged they were in a difficult financial position and would be unable to meet a costs award from their own resources. The court also considered the merits of the plaintiffs' claims. The court found that the plaintiffs had a reasonably arguable case in relation to breach of the Fair Trading Act. The court also found that the negligent misstatement cause of action was not speculative. However, the court did not need to evaluate the strength of the deceit cause of action. The court concluded that the application for security for costs should be dismissed as the plaintiffs had at least a reasonable likelihood of success in their claims. The court noted that the plaintiffs being self-represented were not entitled to costs on this application but were entitled to disbursements.

The court dismissed the defendant's application for security for costs. The plaintiffs were not entitled to costs but were entitled to disbursements. If they wished to seek disbursements, they should file a memorandum with the Registrar and serve a copy on the defendant's solicitor.

Orders