Vasilopoulos v Baroutsos

[2022] NZHC 3269

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2022-419-000013

[2022] NZHC 3269

BETWEEN

GEORGE VASILOPOULOS

Plaintiff

AND

DEMETRI BAROUTSOS

Defendant

Hearing:	24 November 2022
Appearances:	Plaintiff in Person (by VMR from Nicosia, Cyprus) D S M Gloyn for Defendant
Judgment:	7 December 2022

JUDGMENT OF ASSOCIATE JUDGE P J ANDREW

This judgment was delivered by Associate Judge Andrew on 7 December 2022 at 3.00 pm

pursuant to r 11.5 of the High Court Rules 2016 Registrar / Deputy Registrar

Date ……………………………….

VASILOPOULOS v BAROUTSOS [2022] NZHC 3269 [7 December 2022]

Introduction

[1]    The plaintiff, Mr George Vasilopoulos, is a Greek Cypriot lawyer, resident in Nicosia. He seeks by way of summary judgment an order for the recognition of a judgment of the Multi-Member Appeal Court of Kalamata, Greece, in the sum of

€77,500.

[2]    Mr Vasilopoulos is self-represented; his New Zealand solicitors have withdrawn from the proceedings.

[3]    The defendant, Mr Demetri Baroutsos, is resident in New Zealand. In opposing summary judgment, he says that the plaintiff lacks standing; he was not a party to the proceedings before the Greek Court. Mr Baroutsos further says that any purported assignment of the judgment debt was invalid and that as a matter of Greek law the judgment cannot be enforced because no executory title has been obtained.

[4]    In the present interlocutory application, Mr Baroutsos seeks security for costs in the sum of $11,200. He contends that Mr Vasilopoulos is resident overseas, is unable and/or unwilling to pay even for his own legal representation, and that the merits of his claims are weak.

[5]    The critical issue I must determine is whether, as a matter of discretion, security for costs should be imposed and, if so, the quantum of that security.

Factual background

[6]    In 2015, the Greek company “Georgios Vasilopoulos & Co” (subsequently called  Aristeidas  Mylonas  &  Co)  obtained  judgment  against  the  defendant,    Mr Baroutsos, in the Multi-Member Court of First Instance of Kalamata. The judgment related to the supply and installation of marble undertaken on behalf of   Mr Baroutsos between July 2012 and December 2013. Some of the invoices were unpaid and the subject of dispute.

[7]    Mr Baroutsos was represented at the hearing by his Greek lawyer. His counterclaim against the Greek company was unsuccessful.

[8]    Mr Baroutsos subsequently appealed the decision of the Multi-Member Court of First Instance to the Multi-Member Appeal Court of Kalamata. The appeal court determined that the judgment ordered in the lower court should be reduced to the sum of €77,500 with interest of €59,000 and a further sum of €18,500. In addition, costs of €600 and court fees of €4,200 were awarded. The awards were made in favour of the Greek company Georgios Vasilopoulos & Co.

[9]    Mr Vasilopoulos says that the judgment of the Multi-Member Court of First Instance of Kalamata was assigned to him, as plaintiff, before the appeal hearing.

[10]   On 24 June 2016, during the appeal proceedings, the Greek company changed its name from Georgios Vasilopoulos & Co to Aristeidas Mylonas & Co. Mr Baroutsos says that there was a failure to advise the Multi-Member Appeal Court of Kalamata of the company name change.

[11]On 30 June 2016, Mr Vasilopoulos sold his shares in the Greek company for

€54,000.

[12]   The final decision of the Multi-Member Appeal Court of Kalamata was issued on 4 December 2018.

[13]   Summary   judgment   proceedings   were   issued    in    January    2022.    Mr Vasilopoulos was initially represented by Zone Law. On 4 May 2022, Mr Hunter, solicitor of Zone Law, was granted an order that he cease to be the solicitor on record for Mr Vasilopoulos.1

Relevant legal principles

[14]   Under r 5.45 of the High Court Rules 2016, a Judge may, if they think it is just in all the circumstances, order a plaintiff to give security for costs if:

(a)The plaintiff is resident out of New Zealand; or

1      Vasilopoulos v Baroutsos HC Hamilton CIV-2022-419-000013, 4 May 2022 (minute of Associate Judge Andrew).

(b)It appears the plaintiff will be unable to pay costs if the proceeding fails.

[15]   As to the terms of any order for security, the Court may require a plaintiff to give security for a sum that the Judge considers sufficient by either paying that sum into court or giving security for that sum to the Judge or Registrar’s satisfaction. The Court may order that the proceedings be stayed until the sum is paid or the security is given (r 5.45(2)(b)).

[16]   As summarised in Busch v Zion Wildlife Gardens Ltd (in rec and in liq),2 an application for security for costs generally requires consideration of the following steps:

(a)Has the applicant satisfied the Court of the threshold under r 5.45(1)?

(b)How should the Court exercise its discretion under r 5.45(2)?

(c)What amount should security for costs be fixed at?

(d)Should a stay be ordered?

[17]   Whether or not to order security and, if so, the quantum, are discretionary matters.3

[18]   The general approach taken by the Court is to balance the two competing interests – the defendant’s interest in being protected from a barren costs order and the plaintiff’s right of access to the Court.4

[19]   In deciding whether to grant an application for security for costs where the plaintiff is residing overseas, the Court may adopt the following approach in the giving of security by the plaintiff:5

2      Busch v Zion Wildlife Gardens Ltd (in rec and in liq) [2012] NZHC 17.

3      McLachlan Ltd v MEL Network Ltd (2002) 16 PRNZ 747 (CA) at [13] and [14].

4      Clear White Investments Ltd v Otis Trustee Ltd [2016] NZHC 2837 at [4].

5      Aquaculture Corporation v McFarlane Laboratories (1984) Ltd (1987) 1 PRNZ 467 (HC) at 470.

(a)There is no inflexible principle that such a plaintiff with no assets within the jurisdiction should normally be ordered to give security;

(b)The Court’s discretion is to be exercised by taking into account all the circumstances of the case and arriving at a conclusion which will do justice between the parties;

(c)The ease, convenience, and cost of enforcing a costs judgment in the plaintiff’s country of residence are primary considerations;

(d)Otherwise, the principles applicable to applications for security by a plaintiff resident overseas are those applicable under what is now       r 5.45(1)(b).

Analysis and decision

[20]   There is no dispute that the threshold in r 5.45 has been met. Mr Vasilopoulos is a resident out of New Zealand, namely in Nicosia, Cyprus. The critical issue is the exercise of discretion. In resolving that issue, I acknowledge that these are summary judgment proceedings. It is unusual to order security in a summary judgment proceeding, but there is no prohibition on doing so.6

[21]   Costs are generally not awarded against unsuccessful plaintiffs on summary judgment applications because even if the plaintiff fails in the summary judgment application, they may be vindicated at trial. This means that when a defendant applies for security for costs against a plaintiff seeking summary judgment, the defendant must show a very strong case on the merits that the summary judgment application will fail and that the Court is likely to order costs against the plaintiff.7

[22]   Mr Baroutsos seeks security in the sum of $11,200, being two-thirds of a potential costs award calculated on a 2B basis.

6      See Tongan Cultural Society v Bank of New Z HC Auckland CP811/89, 14 April 1994; Everest Serviced Apartments Ltd v Body Corporate 511909 [2019] NZHC 1987 at [10]–[11].

7      Andrew Beck and others McGechan on Procedure (looseleaf ed, Thomson Reuters) at [HR5.45.05(5)].

[23]   The merits of proceedings of this kind, particularly where there is a dispute over the content and application of Greek law, are difficult to assess. However, it appears that there is agreement between the parties that before Mr Vasilopoulos can take enforcement action, he is required under Greek law to make payment of a certain percentage of the judgment award. It is likewise not disputed that Mr Vasilopoulos has not taken that step. In order to overcome the difficulty, Mr Vasilopoulos submitted to me at the hearing that he is seeking a New Zealand order for recognition of the Greek judgment rather than enforcement of it as the current statement of claim pleads. It also seems that he intends, once an order for recognition has been obtained, to take further enforcement action in Greece. This all renders the present summary judgment proceedings potentially more complex and expensive than a straightforward summary judgment application.

[24]   There does appear to be substantial merit to Mr Baroutsos’ contention that the plaintiff, Mr Vasilopoulos, lacks standing to sue. There are multiple difficulties for Mr Vasilopoulos. Mr Baroutsos, whose defence is supported by expert evidence from a Greek attorney, says that Mr Vasilopoulos was not awarded the judgment and is not an  officer  of  the  now  defunct  Greek  company.    Mr  Baroutsos   notes  that     Mr Vasilopoulos sold his shares in the company, the named plaintiff in the Greek proceedings, in June 2016, well before the judgment of the Multi-Member Appeal Court of Kalamata was released. Mr Baroutsos also says that upon transfer of those shares the original company no longer exists. He says that Mr Vasilopoulos cannot be assigned (even if it was valid) the benefit of a judgment that does not exist. Furthermore, as indicated above, the expert Greek opinion evidence suggests that  Mr Vasilopoulos’ failure to obtain an executory title means that he cannot enforce the judgment.

[25]   It is regrettable that Mr Vasilopoulos is no longer legally represented. However, I note that he is a practicing lawyer in Cyprus and that his father is also a lawyer, having practiced law for some 50 years.

[26]   Mr Vasilopoulos tells me that he earns €4,000 per month as a lawyer, but that he has no assets of value. He candidly acknowledged that he was opposed to paying any further legal fees either here or in Cyprus to enforce the judgment. I understand

his objection to ever-increasing legal costs, but this does go to show that the defendant, Mr Baroutsos, would have some considerable difficulties in enforcing a costs judgment against Mr Vasilopoulos in Greece.

[27]   In weighing all of these discretionary factors, I conclude that Mr Vasilopoulos should be required to pay a modest sum of security for costs. That sum is $5,000 New Zealand dollars. In arriving at that figure, I acknowledge that the defences advanced by Mr Baroutsos are somewhat technical. On the other hand, Mr Vasilopoulos, a Cypriot-registered and practicing solicitor who would understand the benefit of having legal representation, appears to be deliberately trying to circumvent the requirements of Greek law by failing to obtain the necessary executory title and make the required payment in Greece, as he is ordinarily required to do.

[28]   The question of whether there should be any additional security could be reviewed (as necessary) after the conclusion of the summary judgment proceedings.

[29]   It is not necessary for me to deal with the challenges to the admissibility of the documents filed by Mr Vasilopoulos. I agree with the submission of Mr Gloyn, for Mr Baroutsos, that a number of the affidavits do not meet the requirements of the High Court Rules 2016 and/or s 11 of the Oaths and Declarations Act 1957. However, I was able at the hearing to clarify directly with Mr Vasilopoulos a number of important points.   That  said,  the  objections  taken  by  Mr  Baroutsos  are  a  reminder  to   Mr Vasilopoulos of the disadvantage of not having legal representation in New Zealand and should the proceedings proceed to trial, a failure by Mr Vasilopoulos to comply with the requirements of New Zealand law may prove fatal to his claim. These further technical difficulties also suggest that the proceedings may be more fraught and  complicated  than  is  necessary  or   might   otherwise   be   the   case   were  Mr Vasilopoulos to retain legal representation.

Result

[30]   The application by the defendant, Mr Baroutsos, for security for costs is granted. I order that Mr Vasilopoulos, the plaintiff, is to pay security for costs in the sum of $5,000 by making payment of that amount to the Registrar by 1 February 2023.

[31]   In the event that Mr Vasilopoulos fails to make payment of the sum of $5,000, then the proceedings are stayed. That is without prejudice to Mr Baroutsos subsequently making an application that the proceedings should be dismissed because no security has been paid.

[32]   As to costs on the security for costs application, I find that Mr Vasilopoulos should pay costs to Mr Baroutsos on a 2B basis plus disbursements.

Associate Judge P J Andrew