Stokes v Prain - [2020] NZCA 627

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA467/2020
[2020] NZCA 627

BETWEEN	COLIN PETER STOKES Appellant
AND	JUSTIN WILLIAM PRAIN First Respondent
AND	CARDNO (NZ) LIMITED Second Respondent
AND	GREGORY ROBERT SMITH Third Respondent

Counsel:	Appellant in person P B McMenamin for First Respondent M R C Wolff for Second Respondent Third Respondent in person
Judgment: (On the papers)	7 December 2020 at 2 pm

JUDGMENT OF GILBERT J

AThe application for review of the Deputy Registrar’s decision is declined.
BSecurity for costs in the sum of $14,120 is to be paid by 18 December 2020.

____________________________________________________________________

REASONS

This is an application for review of the Deputy Registrar’s decision declining to dispense with security for costs.

Background

In 2002, the appellant, Mr Stokes, and the third respondent, Mr Smith, entered into a contract relating to their purchase of land in a subdivision to be completed by Noble Investments Ltd (Noble), a company that has since been struck off the New Zealand Companies Register. Noble engaged Apple Fields Ltd (Apple Fields) (also since struck off the Companies Register) to manage the development of the subdivision and the second respondent, Cardno (NZ) Ltd (Cardno), to obtain the requisite consents and assist in the planning of the subdivision. The first respondent, Mr Prain, was a director of Apple Fields.
In August 2014, Messrs Smith and Stokes commenced proceedings in the High Court at Christchurch against Noble, Apple Fields, Cardno and Mr Prain advancing claims for breach of contract, misrepresentation and deceit. A claim in negligence against Cardno was added in an amended statement of claim filed in October 2014. Messrs Smith and Stokes persistently failed to give proper particulars of their claims. In May 2018, the Court described their fifth amended statement of claim as “manifestly unsatisfactory” and non-compliant with previous directions requiring particulars.[1] A sixth amended statement of claim was then filed in January 2019. Cardno and Mr Prain responded by applying to strike out the pleadings.
[1]Smith v Prain [2020] NZHC 1236 [Strike out judgment] at [26].
Following a hearing in May 2020, the claims were struck out by Associate Judge Lester for reasons given in a judgment delivered on 5 June 2020.[2] The Associate Judge found that the sixth amended statement of claim did not plead a reasonably arguable cause of action in deceit against Mr Prain or Cardno and this could not be saved by amendment to the statement of claim given the failure to provide proper particulars, as required over the preceding five years.[3] The claim in negligence against Cardno was untenable.[4] The Associate Judge stated that he would have dismissed the proceeding for want of prosecution under r 15.2 of the High Court Rules 2016 had he not been persuaded that the pleadings should be struck out under r 15.1 as not disclosing a reasonably arguable cause of action.[5]
[2]Strike out judgment, above n 1.
[3]At [57]–[58].
[4]At [59]–[75].
[5]At [123].
Associate Judge Lester subsequently awarded costs of $87,665.20…

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 Stokes v Prain

Details

AGLC: Stokes v Prain [2020] NZCA 627
Case: [2020] NZCA 627
Decision Date: 7 December 2020 at 2 pm

CaseChat Overview and Summary

This case involved an appeal by Mr. Colin Stokes against a decision of the Deputy Registrar not to dispense with a requirement for security for costs. Mr. Stokes was appealing against the costs orders in a case that had been struck out by the Associate Judge. The respondents in this case were Mr. Justin William Prain, Cardno (NZ) Limited, and Mr. Gregory Robert Smith. The appeal was heard on the papers and the Court declined the application for review of the Deputy Registrar's decision.

The primary legal issue before the Court was whether the Deputy Registrar was correct in declining Mr. Stokes' application to dispense with security for costs. Mr. Stokes argued that he should not be required to provide security for costs because he was the victim of deceit, lies, fraud, and perjury. He also submitted that he was not impecunious and that his interest in property was sufficient to secure any costs he may be ordered to pay if his appeal did not succeed. The respondents argued that there was no justification for dispensing with the usual requirement for security for costs.

The Court found that the Deputy Registrar was correct in declining Mr. Stokes' application to dispense with security for costs. The Court noted that Mr. Stokes did not claim to be impecunious and there was no evidence to support such a conclusion. The Court also found that Mr. Stokes' interest in property was not an adequate substitute for the requirement to pay security for costs as any order for costs would still require enforcement. The appeal had limited prospects of success, and the costs judgment necessarily assumed that the substantive judgment was correct. The Court found that there was no appeal from the substantive judgment and that a plaintiff who persistently fails to plead a tenable and properly particularised claim over a period of six years with the result that it is struck out will normally be expected to have to pay costs to the defendants.

The Court declined the application for review of the Deputy Registrar's decision and ordered Mr. Stokes to pay security for costs in the sum of $14,120 by 18 December 2020.

Orders