ALLNUTT & ORS V SILVERDALE DEVELOPMENTS (2007) LTD (IN LIQ) & ORS HC AK CIV-2011-404-004983

ALLNUTT & ORS V SILVERDALE DEVELOPMENTS (2007) LTD (IN LIQ) & ORS HC AK CIV-2011-404-004983

The Court found, by a narrow margin, that the threshold test was satisfied because of a real possibility SD2007 may not be able to meet an adverse costs award; balancing interests and noting SD2007's limited assets and creditor beneficiaries, the Court exercised its discretion to order SD2007 to provide security for costs of Atlas and NCC in the sum of NZD 35,000 each by 17 December 2012 and ordered a stay of SD2007's claims against them if security is not provided; applicants awarded costs on a scale 2B basis.

Citation
openlaw-eb60c804_aafd_43b8_b0cb_c86cae137b05.pdf
Parties
First Plaintiff: Royden Brett Allnutt; First Plaintiff: Diane Patricia Allnutt; First Plaintiff: Jane Nemary Olson; Second Plaintiff: Gary Hugh Chambers; Second Plaintiff: Denise Cathy Chambers; Second Plaintiff: Davenports Harbour Trustee (2008) Limited; Third Plaintiff: The Importer Brassware Limited; Fourth Plaintiff: Body Corporate 411035; First Defendant: Silverdale Developments (2007) Limited (In Liquidation); Second Defendant: Anthony Bunting; Third Defendant: Gary Raymond Cooper; Fourth Defendant: Barfoot & Thompson; Fifth Defendant: Omaha Investments No.1 Limited; Sixth Defendant: Robert James Foster; Seventh Defendant: HFC: Civil and Structural (North) Limited; First Third Party: Riley Consultants Limited; Second Third Party: Atlas Concrete Limited; Third Third Party: West End Contractors Limited; Fourth Third Party: Northern Concrete Cutters Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
20 November 2012
Procedural Posture
Commercial Building Defects / Civil Claims Involving Company in Liquidation / Interlocutory — Application for Security for Costs Pre Trial (preparation for Trial Feb 2013)
Outcome
Application granted in part: SD2007 ordered to provide security for costs to Atlas Concrete Ltd and Northern Concrete Cutters Ltd of NZD 35,000 each by 17 December 2012; SD2007's claims against those third parties stayed if security not provided; applicants awarded costs on scale 2B plus disbursements.
Legal Topics
Security for Costs, Third Party Claims, Liquidation Effects on Litigation, Costs Allocation, Causation and Expert Evidence
Civil Litigation Construction Law Company Law Civil Procedure Insolvency Security for Costs Third Party Claims Liquidation Effects on Litigation +2 more

Case Brief

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Parties

Royden Brett Allnutt

First Plaintiff

Diane Patricia Allnutt

First Plaintiff

Jane Nemary Olson

First Plaintiff

Gary Hugh Chambers

Second Plaintiff

Denise Cathy Chambers

Second Plaintiff

Davenports Harbour Trustee (2008) Limited

Second Plaintiff

The Importer Brassware Limited

Third Plaintiff

Body Corporate 411035

Fourth Plaintiff

Silverdale Developments (2007) Limited (In Liquidation)

First Defendant

Anthony Bunting

Second Defendant

Gary Raymond Cooper

Third Defendant

Barfoot & Thompson

Fourth Defendant

Omaha Investments No.1 Limited

Fifth Defendant

Robert James Foster

Sixth Defendant

HFC: Civil and Structural (North) Limited

Seventh Defendant

Riley Consultants Limited

First Third Party

Atlas Concrete Limited

Second Third Party

West End Contractors Limited

Third Third Party

Northern Concrete Cutters Limited

Fourth Third Party

Procedural Posture

Commercial Building Defects / Civil Claims Involving Company in Liquidation / Interlocutory — Application for Security for Costs Pre Trial (preparation for Trial Feb 2013)

Legal Issues

  1. 1 Whether there is reason to believe the defendant company (SD2007) will be unable to pay the applicants' costs if unsuccessful (threshold test under High Court Rules r 5.45)
  2. 2 Whether the Court should exercise its discretion to order security for costs and, if so, the appropriate quantum
  3. 3 Whether the company's liquidation is a bar to ordering security and how creditor interests affect the exercise of discretion

Ratio Decidendi

The Court found, by a narrow margin, that the threshold test was satisfied because of a real possibility SD2007 may not be able to meet an adverse costs award; balancing interests and noting SD2007's limited assets and creditor beneficiaries, the Court exercised its discretion to order SD2007 to provide security for costs of Atlas and NCC in the sum of NZD 35,000 each by 17 December 2012 and ordered a stay of SD2007's claims against them if security is not provided; applicants awarded costs on a scale 2B basis.

Court Disposition

Application granted in part: SD2007 ordered to provide security for costs to Atlas Concrete Ltd and Northern Concrete Cutters Ltd of NZD 35,000 each by 17 December 2012; SD2007's claims against those third parties stayed if security not provided; applicants awarded costs on scale 2B plus disbursements.

Orders

  • SD2007 to provide security for costs to Atlas Concrete Ltd in the sum of NZD 35,000 by 17 December 2012
  • SD2007 to provide security for costs to Northern Concrete Cutters Ltd in the sum of NZD 35,000 by 17 December 2012