GLW GROUP LTD v LEPIONKA AND COMPANY INVESTMENTS LTD [2016] NZHC 3125

GLW GROUP LTD v LEPIONKA AND COMPANY INVESTMENTS LTD [2016] NZHC 3125

Although GLW lacked liquid assets and the land had encumbrances, the Court dismissed the application for security for costs because GLW demonstrated a reasonably arguable case (notably in light of the Court of Appeal's findings in Coltart regarding duty and arguable bad faith by the mortgagee) and the discretionary...

Source-derived case information.

Citation
[2016] NZHC 3125
Parties
First Plaintiff: GLW Group Limited; Second Plaintiff: Garth Bowkett Paterson; First Defendant: Lepionka and Company Investments Limited; Second Defendant: Lepionka and Company Limited; Third Defendants: Stefan Jozef John Lepionka and Nigel Warrant Hughes as trustees of the SJ Lepionka Family Trust
Court
High Court
Jurisdiction
New Zealand
Judgment Date
19 December 2016
Procedural Posture
Civil (security for Costs Application) / Hearing on Defendants' Application for Security for Costs; Judgment Delivered
Outcome
Application for security for costs dismissed.
Legal Topics
Security for Costs, Mortgage, Power of Sale, Redemption, Good Faith, Costs Orders, Caveat, Breach of Equitable Duties, Credit Contracts and Consumer Finance Act
Property Law Civil Procedure Equity Bankruptcy Contract Security for Costs Mortgage Power of Sale +6 more

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Parties

GLW Group Limited

First Plaintiff

Garth Bowkett Paterson

Second Plaintiff

Lepionka and Company Investments Limited

First Defendant

Lepionka and Company Limited

Second Defendant

Stefan Jozef John Lepionka and Nigel Warrant Hughes as trustees of the SJ Lepionka Family Trust

Third Defendants

Procedural Posture

Civil (security for Costs Application) / Hearing on Defendants' Application for Security for Costs; Judgment Delivered

Legal Issues

  1. 1 Whether plaintiff will be unable to meet an award of costs (threshold impecuniosity)
  2. 2 Whether the first mortgage provides security for defendants' costs
  3. 3 Whether GLW has an arguable case against the defendants

Ratio Decidendi

Although GLW lacked liquid assets and the land had encumbrances, the Court dismissed the application for security for costs because GLW demonstrated a reasonably arguable case (notably in light of the Court of Appeal's findings in Coltart regarding duty and arguable bad faith by the mortgagee) and the discretionary balance favoured allowing access to the courts rather than imposing security that would likely prevent pursuit of the claim.

Court Disposition

Application for security for costs dismissed.

Orders

  • Application for security for costs by all three defendants dismissed
  • First plaintiff (GLW Group Limited) awarded costs on a 2B basis plus reasonable disbursements; any quantification dispute to be determined by the Registrar