Sullivan v Wellsford Properties Ltd

[2018] NZHC 708

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

I TE KŌTI MATUA O AOTEAROA WHANGĀREI TERENGA PARĀOA ROHE

CIV-2016-488-35

[2018] NZHC 708

BETWEEN

PETER ANTHONY SULLIVAN

First Plaintiff

PORT ALBERT INVESTMENTS LIMITED
Second Plaintiff

AND

WELLSFORD PROPERTIES LIMITED

First Defendant

GARRY EDWARD HANNAM
Second Defendant

SUMPTER BAUGHEN CHARTERED ACCOUNTANTS LIMITED

(Discontinued) Third Defendant

Hearing:

On the papers

Counsel:

P Dale and A Steel for the Plaintiffs

J Golightly and D Reeves for the Defendants

Judgment:

18 April 2018

JUDGMENT OF GORDON J

[Application for stay of costs award pending appeal]

This judgment was delivered by me on 18 April 2018 at 1.00 pm, pursuant to

r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors:           Stafford Klaassen, Epsom, Auckland

Marsden Woods Inskip Smith, Whangarei McElroys, Auckland

Counsel             P J Dale, Auckland

SULLIVAN v WELLSFORD PROPERTIES LTD [2018] NZHC 708 [18 April 2018]

Introduction

[1]                 In my judgment dated 8 December 2017,1 I determined that the plaintiffs failed entirely in their claims against the first and second defendants2 which arose out of a purchase by the second plaintiff of a multi-tenanted commercial property from the first defendant.

[2]                 Subsequently, I held in my judgment as to costs dated 14 February 2018 (the costs judgment) that the defendants were entitled to costs and disbursements of

$87,997.97.3

[3]                 The plaintiffs now apply for an order staying execution of the costs judgment on the condition that the sum of $87,997.97 be held in an interest-bearing deposit in the first defendant’s solicitor’s trust account pending agreement of the parties, further order of the court, or the disposal of the plaintiffs’ pending appeal against my judgment of 8 December 2017.

[4]                 The defendants oppose the application. They propose that most of the award, namely $57,997.97, should remain secured in their solicitor’s trust account pending determination of the appeal, while the remaining $30,000 should be released to them.

[5]The parties are content for the application to be dealt with on the papers.

Evidence on the application

[6]                 The plaintiffs and defendants each filed affidavit evidence in support of, and in opposition to, the application.

[7]                 Noel Chandler, one of the plaintiffs’ witnesses in the substantive hearing, deposes that:

3.The Court fixed costs in this matter in the sum of $87,997.97. PAIL accepts that those costs must be paid, but is concerned that it is at risk

1      Sullivan v Wellsford Properties Ltd [2017] NZHC 3047.

2      I will use the term ‘the defendants’ to refer to the first and second defendants. As is apparent from the entituling, the plaintiffs’ claim against the third defendant was discontinued (following settlement).

3      Sullivan v Wellsford Properties Ltd [2018] NZHC 129 at [59].

of not being able to recover those costs in the event that the appeal is allowed. That is because of uncertainty about the financial position of Wellsford Properties Limited.

…

9. The primary concern, and which is noted in  the  attached  correspondence, is that if the plaintiffs’ appeal is successful WPL will be called upon…