IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2015-404-2924 [2017] NZHC 647
BETWEEN
NICOLA JUNE SHARP
Plaintiff
AND
PAVITHRA PILLAY First Defendant
CR MARKETING NORTH SHORE LTD T/A CENTRAL REALTY
Second Defendant
LESLEY WHEATLEY Third Defendant
BC HOLDINGS LTD PREVIOUSLY KNOWN AS BODY CORPORATE SPECIALISTS LTD
Fourth Defendant
DAVID IRVING LLEWELLIN Fifth Defendant (discontinued)
ARMSTRONG MURRAY Sixth Defendant
DAVID IRVING LLEWELLIN First Third Party
Hearing:
28 March 2017
Counsel:
H L Quinlan for Plaintiff R Scott for Sixth Defendant
Judgment:
5 April 2017
JUDGMENT OF BREWER J
This judgment was delivered by me on 5 April 2017 at 3:00 pm pursuant to Rule 11.5 High Court Rules.
Registrar/Deputy Registrar
SHARP v ARMSTRONG MURRAY [2017] NZHC 647 [5 April 2017]
Introduction
[1] Armstrong Murray is being sued by Ms Sharp for the consequences of alleged negligence. Armstrong Murray seeks security for costs.
[2] Ms Sharp, in 2012, bought an apartment in a 14 apartment block. The apartments leak. Armstrong Murray acted for Ms Sharp as her solicitors when she bought her apartment. Armstrong Murray did the conveyancing. Ms Sharp’s cause of action against Armstrong Murray is particularised as follows:1
69.1By 2012, a prudent and competent solicitor would be aware of the statutory requirement for Bodies Corporate to have an LTMP in place, and the risks and consequences of not having an (or an adequate) LTMP in place.
69.2 Ms Sharp was an inexperienced, first time home buyer.
69.3Armstrong Murray failed to advise Ms Sharp to inquire as to the existence and adequacy of an LTMP in place for the Complex.
70In reliance on the Advice Ms Sharp did not inquire as to the existence or adequacy of an LTMP for the Complex.
71Had Ms Sharp known about the lack of an LTMP for the Complex, she would have had the opportunity to make further inquiries which should have highlighted the obvious weathertightness risks, and she would have avoided the Agreement.
Discussion
[3] Rule 5.45 of the High Court Rules provides that if there is reason to believe that a plaintiff will be unable to pay the costs of the defendant if the plaintiff is unsuccessful then a Judge may, if the Judge thinks that it is just in all the circumstances, order the giving of security for costs.
[4] The position of the plaintiff if she is ultimately unsuccessful is not particularly clear. In her affidavit of 3 February 2017, Ms Sharp deposes:
20My focus this year financially is to fund the remediation levies and ensure the repair work is completed so that my property retains its value. The current remediation project cost estimate is around
$3.7 million, which would mean my repair levies will be approximately $300,000 (plus the additional cost of overhead items).
21If I was required to put aside funds as security for costs, I would find it very difficult to fund the repair levies. Like most ordinary homeowners, I do not have unlimited funds so that I can “lock up” tens of thousands of dollars, when…
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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AGLC
Sharp v Pillay [2017] NZHC 647
Case
[2017] NZHC 647
Decision Date
CaseChat Overview and Summary
Nicola June Sharp is suing Armstrong Murray for alleged negligence in relation to the purchase of an apartment in a block that has leaking issues. Armstrong Murray, who acted for Ms Sharp as her solicitors in the purchase of the apartment, has applied for security for costs. The Court had to determine whether there was reason to believe that Ms Sharp would be unable to pay the costs of Armstrong Murray if she was unsuccessful, and if so, what amount of security for costs, if any, should be ordered. The Court found that there was reason to believe that Ms Sharp would be unable to pay the costs of Armstrong Murray if she was unsuccessful. The Court also found that Ms Sharp's case against Armstrong Murray was weak, but not without merit. The Court ordered that Ms Sharp give security for costs in the amount of $18,286 by a specified date. The Court also awarded costs to Armstrong Murray on an interim basis.
The Court considered the financial position of Ms Sharp and found that she would be unable to fund the remediation levies and repair work necessary to retain the value of her property if she was required to put aside funds as security for costs. The Court noted that Ms Sharp had already paid a substantial amount for the apartment and had significant upcoming costs for the remediation project. The Court also considered the likelihood of Ms Sharp succeeding in her claim against Armstrong Murray and found that it was weak but not without merit. The Court ordered security for costs on a staged basis, with the first stage being costs on a 2B basis for the majority of the steps required between then and the trial date. The Court exercised its discretion in determining the amount of security for costs, taking into account the narrowness of Ms Sharp's case against Armstrong Murray and the clarity of the issues. The Court ordered that Ms Sharp give security for costs in the amount of $18,286 by a specified date and awarded costs to Armstrong Murray on an interim basis.