GROW BUILD NZ LTD (in liq) v TIMBER CABINS GROUP LTD [2023] NZHC 2447

GROW BUILD NZ LTD (in liq) v TIMBER CABINS GROUP LTD [2023] NZHC 2447

Because the plaintiff is insolvent the r 5.45 threshold is met but the plaintiff's contractual claim is reasonably arguable and there is credible evidence that the defendant's conduct contributed to the plaintiff's impecuniosity; balancing access to justice and defendant's protection required staged security rather than full amount sought. The judge ordered staged security ($5,000 by 29 Sept 2023; $10,000 by close of pleadings; $20,000 within 15 working days after service of defendant's evidence) and stayed proceedings until payment at each stage, reserving leave to vary the stay and directing costs issue to be considered after parties confer.

Citation
[2023] NZHC 2447
Parties
Plaintiff/respondent: Grow Build NZ Limited (in liquidation); Defendant/applicant: Timber Cabins Group Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
1 September 2023
Procedural Posture
Security for Costs Application in Liquidation Proceedings Arising From Commercial Contract Dispute / Interlocutory Hearing for Security for Costs (rule 5.45 Hcr)
Outcome
Application for security for costs granted in part; staged security ordered and proceedings stayed until each stage of security is paid.
Legal Topics
Security for Costs, Liquidation, Receivership, General Security Agreement, Contract Interpretation, Stay of Proceedings
Company Law Insolvency Civil Procedure Contract Law Security for Costs Liquidation Receivership General Security Agreement +2 more

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Parties

Grow Build NZ Limited (in liquidation)

Plaintiff/respondent

Timber Cabins Group Limited

Defendant/applicant

Procedural Posture

Security for Costs Application in Liquidation Proceedings Arising From Commercial Contract Dispute / Interlocutory Hearing for Security for Costs (rule 5.45 Hcr)

Legal Issues

  1. 1 Whether security for costs should be ordered under r 5.45 High Court Rules
  2. 2 Whether the plaintiff's impecuniosity was caused by the defendant's conduct
  3. 3 Assessment of the merits of the plaintiff's contractual claims at interlocutory stage

Ratio Decidendi

Because the plaintiff is insolvent the r 5.45 threshold is met but the plaintiff's contractual claim is reasonably arguable and there is credible evidence that the defendant's conduct contributed to the plaintiff's impecuniosity; balancing access to justice and defendant's protection required staged security rather than full amount sought. The judge ordered staged security ($5,000 by 29 Sept 2023; $10,000 by close of pleadings; $20,000 within 15 working days after service of defendant's evidence) and stayed proceedings until payment at each stage, reserving leave to vary the stay and directing costs issue to be considered after parties confer.

Court Disposition

Application for security for costs granted in part; staged security ordered and proceedings stayed until each stage of security is paid.

Orders

  • Plaintiff to provide security for defendant's costs: $5,000 by 29 September 2023
  • Plaintiff to provide further security: $10,000 by close of pleadings