ARCADIA HOMES LIMITED (IN LIQUIDATION) v ANDREWS & ORS [2015] NZHC 2825

ARCADIA HOMES LIMITED (IN LIQUIDATION) v ANDREWS & ORS [2015] NZHC 2825

Defendants failed to establish the threshold that there is reason to believe plaintiffs will be unable to pay defendants' costs; the funding agreement and the apparent availability of funds under the trust/group structure (including proceeds of the Waimana sale) make inability unlikely; on the merits the plaintiffs' claims have sufficient substance to weigh against ordering security; accordingly the court declined to order security for costs and dismissed the applications.

Citation
[2015] NZHC 2825
Parties
First Plaintiff: Arcadia Homes Limited (in liquidation); Second Plaintiff: More To This Life Limited; Second Plaintiff: Andrew George Clark as trustee of the Ultimate Lifestyle Trust; First Defendant: Craig Raymond Andrews trading as McVeagh Fleming; Second Defendant: Andrew John Dexter Guest; Third Defendant: William James Dexter Guest; Fourth Defendant: Wyndham Trustees Limited; Fifth Defendant: Joint Family Trustees Limited; Sixth Defendant: Toms Properties Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
13 November 2015
Procedural Posture
Civil (company Liquidation; Creditors Claims; Professional Negligence and Trust Claims) / Application for Security for Costs (pre Trial Hearing)
Outcome
Application for security for costs declined
Legal Topics
Security for Costs, Directors' Duties, Breach of Fiduciary Duty, Knowing Assistance, Dispositions Prejudicing Creditors (property Law Act), Funding Agreements, Solvency Certificates, Costs Assessment
Civil Procedure Insolvency Company Law Trusts and Equity Professional Negligence Security for Costs Directors' Duties Breach of Fiduciary Duty +5 more

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Parties

Arcadia Homes Limited (in liquidation)

First Plaintiff

More To This Life Limited

Second Plaintiff

Andrew George Clark as trustee of the Ultimate Lifestyle Trust

Second Plaintiff

Craig Raymond Andrews trading as McVeagh Fleming

First Defendant

Andrew John Dexter Guest

Second Defendant

William James Dexter Guest

Third Defendant

Wyndham Trustees Limited

Fourth Defendant

Joint Family Trustees Limited

Fifth Defendant

Toms Properties Limited

Sixth Defendant

Procedural Posture

Civil (company Liquidation; Creditors Claims; Professional Negligence and Trust Claims) / Application for Security for Costs (pre Trial Hearing)

Legal Issues

  1. 1 Whether there is reason to believe plaintiffs will be unable to pay defendants' costs (threshold under r 5.45)
  2. 2 Whether the court should exercise its discretion to order security for costs
  3. 3 Assessment of appropriate amount of security

Ratio Decidendi

Defendants failed to establish the threshold that there is reason to believe plaintiffs will be unable to pay defendants' costs; the funding agreement and the apparent availability of funds under the trust/group structure (including proceeds of the Waimana sale) make inability unlikely; on the merits the plaintiffs' claims have sufficient substance to weigh against ordering security; accordingly the court declined to order security for costs and dismissed the applications.

Court Disposition

Application for security for costs declined

Orders

  • Parties to confer on costs and any costs order; if unable to agree applicants to file submissions (max seven pages) within 10 working days and respondents to file submissions (max seven pages) within a further 10 working days