LEE v LEE [2018] NZCA 282

LEE v LEE [2018] NZCA 282 [1 August 2018]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA458/2017[2018] NZCA 282BETWEEN ROBERT LEE AS A TRUSTEE OF THEESTATE OF J G LEEApplicantAND GREGORY LEEFirst RespondentGREGORY LEE AND JANE LOIS LEE ASTRUSTEES OF THE LEEROY FAMILYTRUSTSecond RespondentsHearing: 28 May 2018Court: Winkelmann, Clifford and Williams JJCounsel: Applicant in personD A T Chambers QC for First and Second RespondentsJudgment: 1 August 2018 at 10 amJUDGMENT OF THE COURTA Leave to appeal against the decision of the High Court in Lee v Lee [2017]NZHC 431 is granted.B The approved question on which leave is granted is whether the High Courtwas wrong, in all the circumstances of this case, to order Mr Robert Lee toprovide security for costs without considering the merits of the claim hebrings.C All questions of costs are reserved pending determination of the substantiveappeal.____________________________________________________________________REASONS OF THE COURT(Given by Clifford J)[1] The approved question of law involves a matter of private interest of sufficientimportance, in the circumstances of this case, to outweigh the cost and delay of furtherappeals.1 That is, the High Court proceeded on the basis that (i) Mr Robert Leeadmitted he was impecunious, but for his interest in the family home he lives in, andthat (ii) the equity in that family home was sufficient to enable Mr Lee to providesecurity for costs by way of a mortgage over that property. On that basis,the High Court did not consider the merits of Mr Lee's claims. In all the circumstancesof this case, we consider it is arguable that the High Court was wrong to do so.[2] We reach that view because although the anticipated source of the security forcosts, namely the equity in Mr Lee's family home, was sufficient for the purpose, thatfamily home is owned by a family trust of which Mr Lee is only one of two trustees.2If Mr Lee is unable to procure a mortgage over that equity (a possibility raised byMr Lee but not considered by the High Court)3 the effect of the order for security (onthe basis he is otherwise impecunious) will be to prevent him pursuing his claimwithout the merits of that claim having been investigated.4[3] Special leave to appeal against the decision of the High Court in Lee v Lee isgranted.51 Snee v Snee (1999) 13 PRNZ 609 (CA) at [15] applying Waller v Hider [1998] 1 NZLR 412 (CA).2 Mr Lee was first ordered to provide security for costs by Associate Judge Christiansen. Beforethe Associate Judge, Mr Lee admitted he was impecunious. The suggestion that, notwithstanding,he provide security over the family home came from the respondents. When Davison J reviewedthe Associate Judge's decision, Mr Lee did not resile from his acceptance that he was impecunious.Rather, he challenged the Associate Judge's decision on the basis (i) of a mistake made as to theequity in that property and (ii) his ability to procure the proposed mortgage, given the property'sownership by the Trust.3 The significance of the fact that Mr Lee's family home is owned by a trust was considered in somedetail in the leave judgment. The defendant acknowledged the property was held in trust butchallenged the suggestion there was a validly appointed second trustee. Whether or not thatconsideration is relevant for the purposes of the substantive argument on appeal will be forthe Court considering that appeal to determine. Likewise, if the parties consider additionalevidence is appropriate, that will be a matter for that Court. No application has been made thusfar.4 As to which, see Andrew Beck and others McGechan on Procedure (Thomson Reuters, onlinelooseleaf ed) at [HR 5.45.3(2)].5 Lee v Lee [2017] NZHC 431.[4] The approved question on which leave is granted is whether the High Courtwas wrong, in all the circumstances of this case, to order Mr Lee to provide securityfor costs without considering the merits of the claim he brings.6[5] All questions of costs are reserved pending determination of the substantiveappeal.Solicitors:Lance Lawson, Rotorua for First and Second Respondents6 We note that claim has, however, survived a strike-out application. See Lee v Lee [2015]NZCA 514, [2016] NZAR 61.