Smith v Prain - [2020] NZHC 1766

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2014-409-549

[2020] NZHC 1766

BETWEEN
GREGORY ROBERT SMITH AND COLIN PETER STOKES

Plaintiffs

AND

NOBLE INVESTMENTS LIMITED

Removed First Defendant

AND

APPLE FIELDS LIMITED

Removed Second Defendant

AND

JUSTIN WILLIAM PRAIN

Third Defendant

AND

CARDNO (NZ) LIMITED

Fourth Defendant

Hearing: On the papers

Counsel:

G D Stringer for Mr Smith

Mr CP Stokes (self-represented)
P B McMenamin for Third Defendant
H J Dempsey and M R C Wolff for Fourth Defendant

Judgment:

22 July 2020

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 22 July 2020 at 4.30pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 22 July 2020

SMITH v PRAIN [2020] NZHC 1766 [22 July 2020]

[1] Justin William Prain (Mr Prain) and Cardno (NZ) Limited (Cardno), successfully applied to have the claim against them struck out on the grounds that the plaintiffs’ (Messrs Smith and Stokes) proposed sixth amended statement of claim did not disclose reasonably arguable causes of action against them.1

[2] The causes of action which were struck out, were in deceit against Mr Prain and Cardno and in negligence against Cardno. In my judgment of 5 June 2020, I concluded that had I dismissed the strike-out application, I would have granted the alternative application brought by Mr Prain and Cardno to dismiss the proceeding commenced in 2014, making allegations going back to 2007, for want of prosecution under r 15.2 of the High Court Rules 2016.

[3] The deceit causes of action were struck out as they failed to plead all of the elements of that cause of action, and in particular, failed to plead more than bare allegations of dishonesty.

[4] The negligence cause of action was struck out as the duty alleged amounted to a duty to ensure that the first defendant, Noble Investments Limited, (now struck off the Companies Office Register), met its contractual obligations to the plaintiffs under a contract it made with the plaintiffs in 2002.

[5]Mr Prain and Cardno now apply for increased costs.

[6] One of the plaintiffs, Mr Smith, in submissions prepared by Mr Stringer who represented both plaintiffs in the strike-out application, accepts costs should follow the event, but resists any increase in costs from a 2B basis.

1 Smith v Prain [2020] NZHC 1236.

[7] Mr Stokes has filed costs submissions representing himself, in which he submits:
(i)there should be no order for costs; or

(ii)that in fact costs should be awarded against the successful defendants’ counsels:

… for pursuing their case, despite the [sic] must or should have known the evidence and confession of false affidavits, must mean intent, …

or;

(iii)Mr Stringer should be liable for the plaintiffs’ costs:

…for negligently striking out their Amended Fifth Statement of Claim, and replacing it with a deficient one that could not be fixed.

Liability for costs

[8] While all matters in respect of costs are at the discretion of…

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 Smith v Prain

Details

AGLC: Smith v Prain [2020] NZHC 1766
Case: [2020] NZHC 1766
Decision Date: 22 July 2020

CaseChat Overview and Summary

In Smith v Prain, the plaintiffs, Gregory Robert Smith and Colin Peter Stokes, sought to hold Justin William Prain and Cardno (NZ) Limited liable for deceit and negligence. The court found that the plaintiffs' claims were without merit and struck them out. The plaintiffs' claim against the company they had originally contracted with was no longer possible as it had been liquidated and removed from the Companies Office Register. The plaintiffs' claims against the other defendants were also struck out as they did not disclose reasonably arguable causes of action. The court was satisfied that the plaintiffs' claims were frivolous and hopeless and that the defendants were not liable for indemnity costs. However, the plaintiffs' unreasonable approach to the litigation contributed to an increase in the defendants' costs. The court ordered that the defendants were entitled to increased costs of 40 per cent above scale costs, resulting in a joint and several award against the plaintiffs. The plaintiffs' claim for costs against their own counsel was rejected as it was not an issue to be determined in this proceeding.

Orders