CLODE v SULLIVAN [2015] NZHC 2364

CLODE v SULLIVAN [2015] NZHC 2364

Security for costs was ordered because the judge was satisfied there was reason to believe the plaintiffs would be unable to pay defendants' costs if unsuccessful, aspects of the plaintiffs' pleaded case were weak or deficient, the volume of discovery imposed a real burden on defendants, and third party assistance did not remove the need to protect defendants; quantum was fixed at 50% of assessed recoverable costs: $25,000 as security for the First and Third Defendants and $17,500 as security for the Second Defendant, to be provided by 4 pm on 6 November 2015, failing which leave to apply; the proceeding was stayed pending provision of security.

Citation
[2015] NZHC 2364
Parties
First Plaintiff: Brent Douglas Clode; Second Plaintiff: Synergy Management Limited; First Defendant: Michael Grant Sullivan; First Defendant: Duthco Trustees (Sullivan) Limited as trustees of The Sullivan Family Trust No 1; Second Defendant: David Robert Jans; Third Defendant: Thompson Park Trust Limited as trustee of The Thompson Park Trust
Court
High Court
Jurisdiction
New Zealand
Judgment Date
29 September 2015
Procedural Posture
Civil: Application for Security for Costs Under High Court Rules R 5.45 Arising From Contractual and Property Disputes / Interim Application for Security for Costs Prior to Trial; Proceeding Stayed Pending Provision of Security
Outcome
Security for costs ordered; proceedings stayed pending provision of security
Legal Topics
Security for Costs, Discovery and Inspection, Contractual Remedies (cancellation), Third Party Litigation Funding, Costs Estimation, Share Ownership/transfer
Civil Procedure Contract Law Property Law Equity Security for Costs Discovery and Inspection Contractual Remedies (cancellation) Third Party Litigation Funding +2 more

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Parties

Brent Douglas Clode

First Plaintiff

Synergy Management Limited

Second Plaintiff

Michael Grant Sullivan

First Defendant

Duthco Trustees (Sullivan) Limited as trustees of The Sullivan Family Trust No 1

First Defendant

David Robert Jans

Second Defendant

Thompson Park Trust Limited as trustee of The Thompson Park Trust

Third Defendant

Procedural Posture

Civil: Application for Security for Costs Under High Court Rules R 5.45 Arising From Contractual and Property Disputes / Interim Application for Security for Costs Prior to Trial; Proceeding Stayed Pending Provision of Security

Legal Issues

  1. 1 Whether to exercise discretion to order security for costs under High Court Rules r 5.45
  2. 2 Whether there is reason to believe plaintiffs will be unable to pay defendants' costs if unsuccessful
  3. 3 Appropriate quantum and form of security

Ratio Decidendi

Security for costs was ordered because the judge was satisfied there was reason to believe the plaintiffs would be unable to pay defendants' costs if unsuccessful, aspects of the plaintiffs' pleaded case were weak or deficient, the volume of discovery imposed a real burden on defendants, and third party assistance did not remove the need to protect defendants; quantum was fixed at 50% of assessed recoverable costs: $25,000 as security for the First and Third Defendants and $17,500 as security for the Second Defendant, to be provided by 4 pm on 6 November 2015, failing which leave to apply; the proceeding was stayed pending provision of security.

Court Disposition

Security for costs ordered; proceedings stayed pending provision of security

Orders

  • First and Second Plaintiffs (Brent Douglas Clode and Synergy Management Limited) to provide security for costs for the First and Third Defendants in the sum of NZD 25,000 (being 50% of assessed costs of NZD 49,952)
  • First Plaintiff (Brent Douglas Clode) to provide security for costs for the Second Defendant (David Robert Jans) in the sum of NZD 17,500