B K COOMBES AND L T GRANT V QUAN LI CHENG HC AK CIV-2010-404-004977

B K COOMBES AND L T GRANT V QUAN LI CHENG HC AK CIV-2010-404-004977

The vendors' application for security was dismissed because the counterclaim against them is in substance the defendant's defence to the vendors' claim (Neck v Taylor principle) and security cannot be required from a defendant defending a claim; the land agents' application was granted because they face independent exposure, the r 5.45 threshold was met (reason to believe the counterclaim plaintiff cannot pay and has moved assets), the misrepresentation claims against the agents appeared weak on available evidence, and security for costs was fixed at NZD 30,000 with a stay if not paid by the specified date.

Citation
openlaw-dc80ddb7_4289_431a_b426_828ce550c7e8.pdf
Parties
First Plaintiffs/first Counterclaim Defendants: B K Coombes and L T Grant; Second Plaintiff/second Counterclaim Defendant: Eden Holdings Ltd; Defendant/counterclaim Plaintiff: Quan Li Cheng; Third Counterclaim Defendant: Dean Whaitiri; Fourth Counterclaim Defendant: Mega Realty Ltd
Court
High Court
Jurisdiction
New Zealand
Judgment Date
12 July 2011
Procedural Posture
Civil Application for Security for Costs (r 5.45) / Interlocutory (security for Costs Hearing)
Outcome
Vendors' application for security for costs dismissed; Land agents' application for security for costs granted.
Legal Topics
Security for Costs, Misrepresentation, Contract Cancellation, Vicarious Liability, Resale Damages
Contract Property Civil Procedure Consumer Protection/fair Trading Act Security for Costs Misrepresentation Contract Cancellation Vicarious Liability +1 more

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Parties

B K Coombes and L T Grant

First Plaintiffs/first Counterclaim Defendants

Eden Holdings Ltd

Second Plaintiff/second Counterclaim Defendant

Quan Li Cheng

Defendant/counterclaim Plaintiff

Dean Whaitiri

Third Counterclaim Defendant

Mega Realty Ltd

Fourth Counterclaim Defendant

Procedural Posture

Civil Application for Security for Costs (r 5.45) / Interlocutory (security for Costs Hearing)

Legal Issues

  1. 1 Whether threshold under r 5.45(1) is satisfied
  2. 2 Whether counterclaim is in substance a defence (Neck v Taylor) and thus immune from security
  3. 3 Whether land agents have independent claim entitling them to security

Ratio Decidendi

The vendors' application for security was dismissed because the counterclaim against them is in substance the defendant's defence to the vendors' claim (Neck v Taylor principle) and security cannot be required from a defendant defending a claim; the land agents' application was granted because they face independent exposure, the r 5.45 threshold was met (reason to believe the counterclaim plaintiff cannot pay and has moved assets), the misrepresentation claims against the agents appeared weak on available evidence, and security for costs was fixed at NZD 30,000 with a stay if not paid by the specified date.

Court Disposition

Vendors' application for security for costs dismissed; Land agents' application for security for costs granted.

Orders

  • Dismiss the application for security for costs by the first and second counterclaim defendants (vendors).
  • Grant the application for security for costs by the third and fourth counterclaim defendants (land agents) and fix security at NZD 30000.