Sroubek aka Antolik v Bozhenko - [2023] NZHC 3137

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-2463

[2023] NZHC 3137

BETWEEN
KAREL SROUBEK aka JAN ANTOLIK

Plaintiff

AND

ALEXANDER BOZHENKO and NATALIA BOZHENKO

Defendants

EKATERINA BOZHENKO

Counterclaim Plaintiff

Hearing: On the papers

Counsel:

Plaintiff in person

W A McCartney for the Defendants / Counterclaim Plaintiff

Judgment:

8 November 2023

JUDGMENT OF ASSOCIATE JUDGE BRITTAIN

This judgment was delivered by me on 8 November 2023 at 11 am, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors/Counsel:
Davies Law, Auckland
Carson Fox Legal, Auckland

SROUBEK v BOZHENKO [2023] NZHC 3137 [8 November 2023]

Introduction

[1] The defendants, Mr and Mrs Bozhenko, seek leave to appeal my judgment dated 28 July 2023 declining to order the plaintiff, Mr Sroubek, to give security for costs in respect of his claim (the judgment).1 Mr Sroubek abides the decision of the Court.

[2] The background to Mr Sroubek’s claim is set out in the judgment and need not be repeated here.

The judgment

[3] I found that Mr and Mrs Bozhenko had established the threshold required for an order for security, based on evidence of what was known about Mr Sroubek’s financial position since 2015, and drawing the inference that he will be unable to meet an adverse costs order.2

[4] I then carried out the required balancing exercise and exercised the discretion under r 5.45(2) of the High Court Rules 2016 (HCR) in Mr Sroubek’s favour. The factors in favour of that exercise of discretion were my findings that:

(a)Mr Sroubek has a tenable claim that he and his former wife, Ms Bozhenko, share a joint equitable interest in the property that is the subject of this proceeding.3

(b)Mr Sroubek’s and Ms Bozhenko’s equitable interests in the subject property, whether held severally or jointly, are likely to be relationship property.4

(c)To determine the relationship property proceeding, commenced by Ms Bozhenko and consolidated with this proceeding, the Court will need to determine whether Mr Sroubek and/or Ms Bozhenko hold an

1 Sroubek v Bozhenko [2023] NZHC 1995.
2 At [24]–[30].
3 At [45].
4 At [49].

equitable interest in the subject property and whether any equitable interest is relationship property or separate property.5

(d)Mr and Mrs Bozhenko are directly interested in the Court’s determination of the issues that arise in the relationship property proceeding. Irrespective of whether Mr Sroubek’s claim proceeds, Ms Bozhenko’s relationship property claims and Mr and Mrs Bozhenko’s claims against Mr Sroubek will still need to be determined together.6

[5] I concluded that the interests of justice were best served by all claims between the parties proceeding to a hearing and that an order for security for costs might stymie that.7

Legal principles

[6] Pursuant to s 56(3) of the Senior Courts Act 2016, Mr and Mrs Bozhenko are required to obtain the leave of this Court to pursue an appeal against my refusal to order security for costs.

[7] The rationale behind the requirement…

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: [2023] NZHC 3137
Decision Date: 8 November 2023

CaseChat Overview and Summary

In the High Court of New Zealand, the case of Sroubek aka Antolik v Bozhenko involves a dispute over the refusal to order security for costs in relation to Mr. Sroubek's claim against Mr. and Mrs. Bozhenko. Mr. Sroubek contends that he and his former wife, Ms. Bozhenko, have a joint equitable interest in a property that is central to the proceedings. The defendants sought leave to appeal the earlier decision, arguing that the court wrongly declined to order security for costs, potentially hindering Mr. Sroubek's ability to pursue his claim.

The legal issues before the court centered on whether the refusal to order security for costs constituted an arguable error of law or fact and whether such an error warranted granting leave to appeal. The court had to consider the threshold for leave, the importance of the issue to the applicants, and whether the interests of justice would be served by allowing the appeal. The court evaluated whether the defendants had met the established criteria for leave to appeal, including identifying an arguable error of law or fact and demonstrating the importance of the issue to them.

The court found that while the defendants established the threshold for an order for security based on Mr. Sroubek's financial position, the decision not to order security was justified because it would likely prevent Mr. Sroubek's claim from proceeding to a hearing. The court concluded that the interests of justice were best served by allowing all claims between the parties to proceed to a hearing. As such, the court refused the defendants' application for leave to appeal, considering that an interlocutory appeal would unnecessarily delay the resolution of the substantive proceeding.

The final orders of the court included the refusal of leave to appeal and the allocation of a case management conference to proceed with the substantive issues. The court emphasized that the refusal of leave did not prevent the defendants from raising the appeal point in a future appeal against the substantive judgment.

Orders