REECE & Anor v HALSE & Ors [2016] NZHC 1438

REECE & Anor v HALSE & Ors [2016] NZHC 1438

The court exercised its discretion to order security for costs against the plaintiffs in favour of the Grove Darlow defendants because (i) plaintiffs conceded inability to pay costs, (ii) the claim against Grove Darlow was not strong on the merits and causation was doubtful, and (iii) there was a realistic risk...

Source-derived case information.

Citation
[2016] NZHC 1438
Parties
First Plaintiff: Robert James Reece; First Plaintiff: JZE Trustee Company (No 2) Limited as trustees of the Double R Trust; Second Plaintiff: Rudyard Holdings Limited; First Defendant: Graham William Halse; Second Defendant: Grove Darlow and Partners; Third Defendant: Chris Allan
Court
High Court
Jurisdiction
New Zealand
Judgment Date
29 June 2016
Procedural Posture
Claim in Negligence and Associated Causes of Action (professional Negligence and Breach of Trust) / Interlocutory Applications for Security for Costs and Further Particulars (judgment on Applications)
Outcome
Interlocutory application partly granted: security for costs ordered in favour of Grove Darlow and Partners; extensive particulars ordered from plaintiffs against all defendants; other interlocutory relief as specified below.
Legal Topics
Security for Costs, Particulars, Duty and Scope of Retainer, Breach of Trust (bad Faith Threshold), Causation, Trustee Act S73 Relief, Independent Legal Advice
Tort Trusts Civil Procedure Costs Professional Negligence Security for Costs Particulars Duty and Scope of Retainer +4 more

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Parties

Robert James Reece

First Plaintiff

JZE Trustee Company (No 2) Limited as trustees of the Double R Trust

First Plaintiff

Rudyard Holdings Limited

Second Plaintiff

Graham William Halse

First Defendant

Grove Darlow and Partners

Second Defendant

Chris Allan

Third Defendant

Procedural Posture

Claim in Negligence and Associated Causes of Action (professional Negligence and Breach of Trust) / Interlocutory Applications for Security for Costs and Further Particulars (judgment on Applications)

Legal Issues

  1. 1 Whether security for costs should be ordered against the plaintiffs
  2. 2 Whether the Grove Darlow defendants owed a duty to the Double R Trust and the appropriate scope of Mr Allan's retainer
  3. 3 Whether Mr Allan was negligent in failing to explain the extent of Kiwibank funding (limited to $700,000) and whether that caused loss

Ratio Decidendi

The court exercised its discretion to order security for costs against the plaintiffs in favour of the Grove Darlow defendants because (i) plaintiffs conceded inability to pay costs, (ii) the claim against Grove Darlow was not strong on the merits and causation was doubtful, and (iii) there was a realistic risk defendants would be left with unsatisfied costs; quantum fixed at NZD 40,000 with specified payment schedule. The court further ordered comprehensive particulars from the plaintiffs specifying when, where and in what capacity alleged advice was given, particulars of loss calculations and particulars relevant to alleged breach of trust; Halse's separate security application was...

Court Disposition

Interlocutory application partly granted: security for costs ordered in favour of Grove Darlow and Partners; extensive particulars ordered from plaintiffs against all defendants; other interlocutory relief as specified below.

Orders

  • Security for costs NZD 40000 ordered in favour of Grove Darlow and Partners; NZD 20000 to be paid into Court within 40 working days and balance to be paid by the close of pleadings date
  • Proceedings stayed until receipt of the initial NZD 20000 payment