Waterhouse v Contractors Bonding Ltd

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IN THE SUPREME COURT OF NEW ZEALAND

SC 66/2012
[2013] NZSC 89

BETWEEN	GODFREY WATERHOUSE AND ROBERT JOHN WATERHOUSE Appellants
AND	CONTRACTORS BONDING LIMITED Respondent

Hearing:	19 March 2013
Court:	Elias CJ, McGrath, William Young, Chambers* and Glazebrook JJ
Counsel:	S J Mills QC and S A Grant for Appellants R E Harrison QC and J E Riddle for Respondent
Judgment:	20 September 2013

JUDGMENT OF THE COURT

AThe appeal is allowed in part and the orders set out at [78] and [79] are made in substitution for the orders made by the Court of Appeal. 

BAs each party has had a measure of success, there is no costs award.

____________________________________________________________________

REASONS

(Given by Glazebrook J)

Table of Contents

Para

Introduction

[1]

The High Court judgment

[3]

The Court of Appeal judgment

[7]

Parties’ submissions

[14]

  The Waterhouses’ submissions

[14]

  Contractors Bonding’s submissions

[19]

Issues arising from the submissions

[23]

Should the torts of maintenance and champerty be abolished?

[25]

Should the courts exercise a general supervisory role over litigation funding arrangements?

[27]

Is the ability for the courts to intervene confined to cases where conduct amounting to the tort of abuse of process manifests itself?

[30]

Are there other matters that can give rise to an abuse of process in litigation funding cases?

[33]

  The approach in Fostif

[35]

  General comments

[41]

  Control of litigation and remuneration

[44]

  Is it an abuse of process for a litigation funder not to

  provide an indemnity for costs?

[49]

  Terms on which funding can be withdrawn

[54]

  What is the appropriate position for New Zealand with
  regard to litigation funding and abuse of process?

[56]

In what circumstances should disclosure of litigation funding arrangements be made?

[60]

  Applications for a stay on abuse of process grounds

[61]

  Applications for security for costs

[63]

  Applications for costs

[64]

  Initial disclosure

[66]

  When should there be disclosure of litigation funding
  arrangements?

[73]

Should there be limits on disclosure?

[75]

Conclusion

[76]

Result

[77]

Introduction

1. Messrs Godfrey and Robert Waterhouse have brought proceedings against Contractors Bonding Ltd in relation to a failed insurance business in Georgia, the United States of America.[1]  The Waterhouses allege negligence, deceit and breach of fiduciary duty.  The litigation is to be funded by a third party litigation funder.

   [1]The full details of the claim are set out in the judgments of the Courts below: Waterhouse v Contractors Bonding Ltd HC Auckland CIV-2010-404-3074, 13 December 2010 at [2]–[10] [Waterhouse (HC)]; and Contractors Bonding Ltd v Waterhouse [2012] NZCA 399, [2012] 3 NZLR 826 at [3]–[7] [Waterhouse (CA)]. We note that the High Court entered summary judgment against Mr  Robert Waterhouse with regard to the claims on 3 August 2012.  Summary judgment was also sought but not entered against Mr Godfrey Waterhouse: Waterhouse v Contractors Bonding Ltd [2012] NZHC 566 at [133]. Mr Robert Waterhouse filed a notice of appeal against the High Court’s 3 August 2012 decision…