IMRE BUILDERS LTD v VINTON [2018] NZHC 1626

IMRE BUILDERS LTD v VINTON [2018] NZHC 1626

The threshold under r 5.45(1)(b) was not satisfied because the evidence did not give reason to believe the plaintiff would be unable to pay an adverse costs order; the specific matters relied on by defendants (statutory demand, overdraft, accounting entries, counterclaim, Newco, and alleged financial distress) were each insufficient and collectively did not establish the threshold, so the court declined to exercise its discretion to order security for costs.

Citation
[2018] NZHC 1626
Parties
Plaintiff / Counterclaim Defendant: Imre Builders Limited; Defendant / Counterclaim Plaintiff: Craig John Vinton; Defendant / Counterclaim Plaintiff: Elena Sasha Vinton; Counterclaim Defendant: Laszlo Michael Imrie
Court
High Court
Jurisdiction
New Zealand
Judgment Date
3 July 2018
Procedural Posture
Construction Contract Dispute / Interlocutory Application for Security for Costs (r 5.45 High Court Rules 2016)
Outcome
Application for security for costs dismissed; defendants to pay costs of the application on a 2B basis with disbursements to be fixed by the Registrar.
Legal Topics
Security for Costs, Adjudication, Statutory Demand, Counterclaim, Costs Orders
Civil Procedure Construction Law Company Law Costs Insolvency Security for Costs Adjudication Statutory Demand +2 more

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Parties

Imre Builders Limited

Plaintiff / Counterclaim Defendant

Craig John Vinton

Defendant / Counterclaim Plaintiff

Elena Sasha Vinton

Defendant / Counterclaim Plaintiff

Laszlo Michael Imrie

Counterclaim Defendant

Procedural Posture

Construction Contract Dispute / Interlocutory Application for Security for Costs (r 5.45 High Court Rules 2016)

Legal Issues

  1. 1 Whether there is reason to believe the plaintiff will be unable to pay the defendant's costs for the purposes of r 5.45(1)(b) High Court Rules 2016
  2. 2 Whether the court should exercise its discretion under r 5.45(2) to order security for costs
  3. 3 Whether the defendants' counterclaim should be treated as a contingent liability affecting the plaintiff's ability to pay costs

Ratio Decidendi

The threshold under r 5.45(1)(b) was not satisfied because the evidence did not give reason to believe the plaintiff would be unable to pay an adverse costs order; the specific matters relied on by defendants (statutory demand, overdraft, accounting entries, counterclaim, Newco, and alleged financial distress) were each insufficient and collectively did not establish the threshold, so the court declined to exercise its discretion to order security for costs.

Court Disposition

Application for security for costs dismissed; defendants to pay costs of the application on a 2B basis with disbursements to be fixed by the Registrar.

Orders

  • Application for security for costs dismissed
  • Defendants to pay the costs of the application on a 2B basis together with disbursements to be fixed by the Registrar