Squair v Cribb - [2025] NZHC 827

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2025-409-4

[2025] NZHC 827

IN THE MATTER of the Credit Contracts and Consumer Finance Act 2003

AND IN THE MATTER

of the Contract and Commercial Law Act 2017

BETWEEN

BRIAN JAMES SQUAIR and VICKI ANN SQUAIR

First Plaintiffs

SMI PROJECTS LIMITED (in receivership) Second Plaintiff

AND

BRIAN PHILIP CRIBB

First Defendant

WAIPARA TRUSTEES LIMITED, as

trustee of the BRIAN CRIBB FAMILY TRUST

Second Defendant

CRIBB FARMING LIMITED

Third Defendant

Hearing: 31 March 2025

Appearances:

P J Dale KC for Plaintiffs

T Mijatov and E Farrell for Defendants

Judgment:

8 April 2025

JUDGMENT OF ASSOCIATE JUDGE LESTER

(Security for costs)

SQUAIR v CRIBB [2025] NZHC 827 [8 April 2025]

[1]The defendants in this proceeding seek security for costs.

[2] The principles are well known and are summarised in Mr Mijatov’s (counsel for the defendants) paragraph (6) of his submissions where he said:

It is correct that an application for security for costs has a threshold component and a discretion component. The threshold is that the Court is satisfied there is reason to believe that a plaintiff will be unable to pay the costs of the defendant if the plaintiff is unsuccessful in the plaintiff’s proceeding.1 The discretion to order security will be exercised if the Court “thinks it is just in all the circumstances”.2

[3] There needs to be credible (believable) evidence of surrounding circumstances from which it may reasonably be inferred the plaintiff will be unable to pay costs.

[4] A sworn assertion of ability to meet costs can be given due weight but is not decisive.3

[5] If the threshold is met, the Court must consider its discretion and only order security if it is just in all the circumstances.

The threshold

[6] In this case, I am satisfied there is reason to believe that the plaintiffs will be unable to meet costs if their proceeding is unsuccessful. I have reached that conclusion for the following reasons.

[7] Ms Squair swore the evidence on behalf of the plaintiffs. Her first affidavit is dated 19 December 2024.

[8] One of the difficulties the plaintiffs face is that a significant percentage of the assets they say they control are held in a company, Squair Holdings Limited. Ms Squair also refers to a property held in a partnership with the plaintiffs. However, Ms Squair’s statement of assets and liabilities refers to unpaid rates across a number

1      High Court Rules 2016, r 5.45(1)(b).
2      High Court Rules 2016, r 5.45(2).
3      Nikau Holdings Ltd v Bank of New Zealand (1992) 5 PRNZ 430 (HC) at 436; and see Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307 as to weight given to affidavit evidence.

of the properties held in the company totalling $75,000. This shows the plaintiffs company is unable to meet its debts as they fall due, meaning the company does not meet the solvency test in s 4 of the…

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 Squair v Cribb

Details

AGLC: Squair v Cribb [2025] NZHC 827
Case: [2025] NZHC 827
Decision Date: 8 April 2025

CaseChat Overview and Summary

The defendants in the case of Squair v Cribb sought security for costs from the plaintiffs, who were involved in a property transaction dispute. The legal issues at the heart of this case revolved around whether the plaintiffs would be unable to pay the defendants' costs if they were unsuccessful in their claims and whether it was just and equitable to order such security. The court had to determine if the plaintiffs could credibly demonstrate their financial capacity to cover the costs and if the defendants' circumstances warranted such a precautionary measure. The decision was based on the financial stability of the plaintiffs and the merits of their case.

Associate Judge Lester found that the plaintiffs would likely be unable to pay the defendants' costs if they lost the case. This conclusion was based on the plaintiffs' financial situation, including their reliance on a company that was not meeting its solvency obligations and their limited liquid assets. The court noted that the plaintiffs had withdrawn significant funds from their KiwiSaver to cover legal fees, indicating a lack of liquidity in other assets. Furthermore, the court found that the plaintiffs' decision to cease paying rent on the property, despite having the means to do so, reflected poorly on their ability to meet their financial obligations.

Regarding the merits of the case, the court considered the arguments on whether the deposit in the property transaction constituted a consumer credit contract and whether it involved an element of penalty. The court found that the plaintiffs' claims had weak merits, particularly since the transaction appeared to be a commercial rather than a domestic one. The court also noted that the plaintiffs had withdrawn their application for summary judgment and abandoned certain causes of action, suggesting a lack of confidence in their case.

The court ordered the plaintiffs to provide security for costs, totaling $45,000, to be paid in three instalments. The court rejected the defendants' proposal for higher security payments and accepted the plaintiffs' estimate of scale costs, adjusted for the reduced scope of the case. The court also ordered that the costs of the security for costs application follow the event on a 2B basis, along with disbursements as fixed by the Registrar.

Orders