Spackman v Martin - [2020] NZHC 2148

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2020-409-142

[2020] NZHC 2148

UNDER the Fair Trading Act 1986

IN THE MATTER

of SOLAR BRIGHT LIMITED (in liq)

BETWEEN

MURRAY SPACKMAN

First Plaintiff

AND

THOMAS MOORE

Second Plaintiff

AND

PATRICK MARTIN

First Defendant

AND

NICOLA MARTIN

Second Defendant

AND

ROBERT SNOEP

Third Defendant

AND

CREATEIP

Fourth Defendant

Hearing: On the papers

Counsel:

G E Slevin for First and Second Plaintiffs

E L Keeble for Third and Fourth Defendants

Judgment:

24 August 2020

JUDGMENT OF ASSOCIATE JUDGE LESTER

(costs)

This judgment was delivered by me on 24 August 2020 at 2.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 24 August 2020

SPACKMAN v MARTIN [2020] NZHC 2148 [24 August 2020 ]

[1] On 5 May 2020, the third and fourth defendants (the applicants), made an application for security for costs against the second plaintiff, Mr Moore, on the basis that he is resident out of New Zealand.

[2] Counsel for the plaintiffs, Mr Slevin, upon receiving the application for security, sent an email to counsel for the applicants which began:

It is disappointing to see that you have filed an application for security for costs without bothering to first enquire whether that would be necessary, which it is not.

[3] That email went on to suggest that Mr Moore would provide security but queried the amount sought, and sought a breakdown of how the sum proposed for security was made up.

[4] Having received the applicants’ explanation as to the sum sought for security, Mr Slevin replied by email noting that the first and second plaintiffs’ claims were identical in every respect except for quantum and it was therefore likely that if their claims failed, only one costs award would be made against both plaintiffs.

[5] Mr Slevin, in his reply email, noted that given the plaintiffs’ cost liability would be joint and several and that one of the plaintiffs is in New Zealand and would be able to satisfy a costs award, it was most unlikely that an order for security would be made and he referred to Chiu Chui-I v Tang Shuo Development Co Ltd.1 Mr Slevin advised in light of that factor, the second plaintiff would oppose the application for security, but would consent to it being discontinued without issue as to costs, provided that was done promptly. Notices of opposition were then filed which relied on the grounds identified by Mr Slevin in his last email.

[6] Following the filing of the papers in opposition, the applicants raised some queries about the first plaintiff’s financial position. A further affidavit of the first plaintiff was filed to address those issues and the applicants withdrew their application. Both parties seek costs.

1 Chiu Chui-I v Tang Shuo Development Co Ltd HC Wellington, CIV-2006-485-1824, 3 March 2008.

[7] The applicants for security seek costs, essentially saying they were the successful party and as they obtained sufficient…

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 Spackman v Martin

Details

AGLC: Spackman v Martin [2020] NZHC 2148
Case: [2020] NZHC 2148
Decision Date: 24 August 2020

CaseChat Overview and Summary

The case of Spackman v Martin is an application for security for costs in relation to proceedings under the Fair Trading Act 1986. The third and fourth defendants, Robert Snoep and Createip respectively, sought an order for security for costs from the second plaintiff, Thomas Moore, who is resident outside New Zealand. The plaintiffs opposed the application and the applicants subsequently withdrew their application. Both parties sought costs.

The legal issue before the court was whether the plaintiffs were entitled to costs as a result of the applicants discontinuing their application for security for costs. The plaintiffs relied on the presumption in rule 15.23 of the High Court Rules 2016 that a defendant is prima facie liable for costs upon discontinuing a proceeding. The applicants argued that they were entitled to costs as they were successful in obtaining sufficient assurance that a costs award against the plaintiffs would not be barren.

The court accepted the plaintiffs' submission that the general rule in civil litigation is that there should be a “letter before action” and that unnecessarily commencing a step in a proceeding is a ground for indemnity costs. The court noted that the applicants had not explored the issue of security prior to filing their application and that the plaintiffs had shown a preparedness to deal with the issue of security constructively. The court concluded that the discontinuance rules applied and ordered the applicants to pay the plaintiffs' costs on a 2B basis in respect of the application, together with 0.4 of a day in respect of the costs memoranda itself and disbursements as fixed by the Registrar.

The court's reasoning was that the applicants should have explored the issue of security informally before applying to the Court, otherwise they risk being denied the costs of their application even if successful. The court found that the applicants had not taken any steps to raise the issue of security prior to filing their application, and that the plaintiffs had shown a willingness to negotiate the issue of security. The court concluded that the applicants' failure to explore the issue of security informally before filing their application was unreasonable and that the plaintiffs were entitled to costs as a result of the applicants discontinuing their application.

Orders