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SISSON v IAG NEW ZEALAND LIMITED [2014] NZHC 616 [31 March 2014]
IN THE HIGH COURT OF NEW ZEALAND
CHRISTCHURCH REGISTRY
CIV-2013-409-000989
[2014] NZHC 616
BETWEEN
THERESE ANNE SISSON
Plaintiff
AND
IAG NEW ZEALAND LIMITED
Defendant
Submissions
received:
20 March 2014
Appearances:
G D R Shand for Plaintiff/Respondent
R Coltman for Defendant/Applicant
Judgment:
31 March 2014
JUDGMENT OF ASSOCIATE JUDGE OSBORNE
on interlocutory applications
Introduction
[1] This judgment relates to three interlocutory applications made by the
defendant (IAG). The substantive proceeding involves insurance claims of the
plaintiff (Ms Sisson) following substantial damage caused to a Colombo Street
property caused by the Christchurch earthquakes of 4 September 2010 and 22
February 2011.
[2] The interlocutory applications which I will deal with in this order are for:
(a) further and better discovery;
(b) further particulars of claim;
(c) security for costs.
Background
The Colombo Street Property
[3] Until 2007 the Colombo Street property was in the name of David Hampton,
Ms Sisson’s former husband. In 2005 the Commissioner of Inland Revenue
(Commissioner), as a result of claims for taxation liabilities against various entities
associated with Mr Hampton and Ms Sisson (including Chesterfields Preschools
Ltd), obtained Mareva injunctions (the freezing orders) against the Colombo Street
property, and others.1
[4] In 2007 the Colombo Street property was transferred into the name of Ms
Sisson to allow refinancing. In exchange Ms Sisson provided an undertaking (the
text of which is not in evidence). At the same time the freezing orders were set
aside.2 However, in 2008, upon concerns as to Ms Sisson’s compliance with her
undertaking, the Court imposed fresh freezing orders and left her undertaking in
place.3 The orders prevented Ms Sisson and her co-plaintiffs from any further
dealings with the properties, including Colombo Street. Fogarty J recorded that he
intended the word “dealings” to be understood in its broadest sense.4
The insurance contracts
[5] Following the transfer of the property to her, Ms Sisson had the property
insured with IAG. The two relevant periods of insurance are 22 January 2010 to 22
January 2011 and 22 January 2011 to 22 January 2012.
[6] During the term of those periods of insurance the earthquakes of 4 September
2010 (the September earthquake) and 22 February 2011 (the February earthquake)
inflicted damage upon the Colombo Street property. One earthquake occurred
during the currency of each policy.
1 The freezing orders were granted in Chesterfield Preschools Ltd v Commissioner of Inland
Revenue (2005) 22 NZTC 19,500. 2 Chesterfields Preschools Ltd v The Commissioner of Inland Revenue HC Christchurch CIV-
2004-409-1596, 31 October 2007. 3 Chesterfields Preschools Ltd v The Commissioner of Inland Revenue HC Christchurch CIV-
2008-409-722, 28 August 2008. 4 Chesterfields Preschools Ltd v The Commissioner of Inland Revenue HC Christchurch CIV-
2008-409-722, 28 August 2008 at [7].
The loss claimed
[7] Ms Sisson claims she suffered the following losses from the earthquakes:
(a) The September earthquake: $465, 750 which consists of an expert’s
estimate of $517,500 to repair the property, less a ten per cent
allowance for deprecation; and
(b) The February earthquake: a total loss, which will “cost in excess of
$1,800,000 to rebuild. The building on the Colombo Street property
has since been demolished. The value of the property now lies in its
land.
[8] Ms Sisson has so far received the following payments in respect of the
claimed losses:
(a) The September earthquake:
(i) $20,000 from the Earthquake Commission (EQC); and
(ii) No payment from IAG.
(b) The February earthquake:
(i) $120,000 from EQC; and
(ii) $720,000 from IAG, which is calculated by reference to IAG’s
estimate of the present day value of the property, being
$840,000, less the payment from EQC of $120,000.
[9] Since receiving the above payments, Ms Sisson has repaid and discharged the
mortgage securing the loan over the property, leaving a balance of the insurance
proceeds ($180,000) invested on term. That deposit is now also the subject of the
freezing orders and/or Ms Sisson’s undertaking to the Court in the litigation with the
Commissioner.
The claim
[10] In the meantime, Ms Sisson was adjudicated bankrupt on 29 November 2011.
The Official Assignee disclaimed any interest in the Colombo Street property. Mr
Hampton was subsequently adjudicated bankrupt on 5 June 2013.
[11] Ms Sisson issued this proceeding on 15 May 2013. Her claim is in two
principal parts, and one ancillary part:
(a) First, she sues for $465,750, which she says is IAG’s liability for the
September 2010 loss.
(b) Secondly, she sues for $473,000 for the difference between what she
was paid by IAG ($840,000 less the $120,000 payment from EQC)
and IAG’s total liability under the policy of $1,313,000.
Alternatively, if there is not to be judgment for the $473,000, she
seeks a declaration that IAG is liable to pay for replacement costs up
to that sum.
(c) Finally, she sues for general damages.
The pleadings
[12] In issuing this proceeding, Ms Sisson referred to herself on the heading in
this way:
Therese Ann Sisson as trustee of 854 Colombo Street, Christchurch,
property owner
Plaintiff
[13] In its statement of defence, IAG stated that it had insufficient knowledge and
therefore denied the description of Ms Sisson in the intituling to the Claim as “a
trustee”. IAG had its solicitors write to Ms Sisson’s solicitor on 24 September 2013
requesting details as to the basis upon which Ms Sisson alleged that a trust exists. In
the letter, Mr Coltman noted that various Court judgments and minutes which had
been provided in Ms Sisson’s discovery did not make clear the nature of the
trusteeship.
[14] In the letter, Mr Coltman also sought:
information as to Ms Sisson’s financial circumstances and her ability to
effect reinstatement of the building;
details of any litigation funding arrangement; and
discovery of documents relating to the demolition payments made by
IAG and whether Chesterfields had undertaken the demolition.
[15] IAG, through John Parker gave evidence that Ms Sisson’s solicitor had not
responded to the September 2013 letter.
[16] There occurred, in the meantime, the first conference in relation to this
proceeding. Wylie J dealt with discovery as the Court is required to do at the first
conference. The reference to Ms Sisson’s trusteeship in the statement of claim was
discussed as was IAG’s request for documents in that regard. Wylie J recorded that
Ms Sisson (and Mr Hampton) did not resist making discovery to IAG. His Honour
then made a direction that general discovery take place within five weeks and also
directed:
Discovery is to extend to Ms Sisson’s position as a trustee and the ultimate
beneficiary or beneficiaries of any monies which might be paid to her.
IAG files its interlocutory applications
[17] Against this background, IAG made the three applications5 which I have now
heard.
[18] Ms Sisson filed a notice of opposition but no evidence in opposition. The
notice of opposition recorded that Ms Sisson opposes all the orders sought by IAG
and specified two grounds:
5 Above at [2].
Ms Sisson is the owner of the Colombo Street property which has a value
of $720,000; and
there are no further documents as Ms Sisson has provided discovery of all
documents available to her in a verified list.
[19] IAG’s solicitors then emailed Ms Sisson’s solicitors. They referred to the
2004 Chesterfields proceedings and also later Chesterfields proceedings issued in
2008. They noted that it was likely that documents relating to the ownership of the
Colombo Street property might be located on those files and sought Ms Sisson’s
consent to accessing the Court files.
[20] Mr Shand responded by email, attaching a copy of an affidavit sworn by Mr
Hampton on 25 October 2013 in support of an application to set aside freezing
orders. The application itself was not provided. Nor did Mr Shand explain the
outcome of the application. Shortly afterwards, Mr Shand sent some further
judgments and minutes of the High Court from a number of Chesterfields
proceedings.
[21] IAG then filed a further affidavit in support of the applications exhibiting the
correspondence just referred to. The deponent asserted that there were other relevant
documents which had clearly not been disclosed including:
the undertaking of Ms Sisson’s to the Court;
any consent of the Court to the Colombo Street property being provided
as security for costs in this proceeding; and
all judgments in the various Chesterfields proceeding which related to the
freezing orders.
[22] Ms Sisson did not provide any further evidence.
The position of the Commissioner of Inland Revenue
[23] The Commissioner became aware of these interlocutory applications.
Through counsel she filed a memorandum for the hearing. The memorandum
records:
3. The Commissioner wishes to be heard in relation to any application
which may cut across freezing orders granted in her favour and to
inform the Court of the following:
3.1 The property at 854 Colombo Street is subject to a freezing
order.
3.2 She is not aware that his Honour Justice Fogarty has
approved the use of 854 Colombo Street as security for
costs.
3.3 She does not consent to the use of 854 Colombo Street as
security for costs.
Information as to the freezing orders
[24] When IAG’s applications were allocated a hearing before me, I convened a
conference. It emerged at the conference that Mr Coltman was still without the
information which might reasonably inform him as to the current standing of
freezing orders. By agreement of counsel, I arranged for the Registrar to provide
counsel with copies of each of the judgments of Fogarty J which I had referred to in
a judgment I gave in Chesterfields Preschools Ltd v Commissioner of Inland
Revenue.6
[25] This was a peculiar situation to have developed. Ms Sisson had been
involved throughout the relevant stages of the Chesterfields litigation, having taken
over ownership of the Colombo Street property and having been involved in the
undertakings and orders made. One might have anticipated that even had she not to
hand the relevant documents she could, with reasonable enquiry, have obtained them
and been able to inform the Court and IAG both as to the current state of the freezing
orders and as to the precise arrangements of her trusteeship. In the event the matter
proceeded to the hearing before me on the basis that Ms Sisson opposed any
direction that she give any further information as to her trusteeship. To the extent
6 Chesterfields Preschools Ltd v Commissioner of Inland Revenue [2012] NZHC 2629 at [52] –
[54].
that issues relating to the freezing orders remained unclear, Mr Shand was left in the
position of having to record in his written submission:
… the property appears to be currently subject to a freezing order in the
separate Chesterfields proceedings.
[26] Quite why Ms Sisson was unable to bring Mr Shand to a clearer
understanding of the freezing order position before the hearing escapes me.
Further particulars
The application
[27] IAG seeks further and better particulars as to Ms Sisson’s representative
capacity referred to in the intituling in the statement of claim
Opposition
[28] Ms Sisson opposed such an order. The ground apparently relating to that
opposition was that Ms Sisson is “the owner of the property”.
Discussion
[29] The representative capacity of a party must be shown in the statement of
claim. Rule 5.35 High Court Rules provides:
5.35 Representative capacity of party
A party to a proceeding who sues or is sued in a representative capacity must
show in what capacity the party sues or is sued in the statement of claim.
[30] The identification of the representative capacity within the intituling to a
statement of claim (while not contained in the pleading itself) sufficiently meets the
requirements of r 5.35.7
[31] As the pleadings stand, IAG has denied Ms Sisson’s asserted representative
capacity (because it does not know whether that is correct or not). The capacity is
therefore in issue.
7 Cadman v Visini HC Auckland CIV-2009-404-7925, 30 May 2011, per Toogood J, at [40] – [46].
[32] Further particulars of the way in which the trusteeship is said to exist must be
likely to assist the resolution of this issue before trial. Counsel for IAG will, through
the Chesterfields judgments which are now available to him, be able to assess
whether a more particularised claim of trusteeship matches up with information
contained in those judgments.
[33] In their commentary on r 5.35 in McGechan on Procedure, the authors
provide an example of a satisfactorily worded heading:8
HR5.35.01 Proceedings against executors and trustees of estates
The rule has perhaps its commonest application in proceedings against
executors and trustees of estates. Such should be named in the statement of
claim in fashion recognising their capacity as such, and not simply in their
individual names. For example, description in the heading of the statement
of claim might be “AB and CD of Wellington, Solicitors as executors and
trustees of the estate of EF, late of Wellington, Retired, Deceased”. In
Cadman v Visini HC Auckland CIV-2009-404-7925, 30 May 2011 it was
held that reference to representative capacity in the intituling is sufficient,
rather than requiring the capacity to be fully pleaded in the body of the
claim.
[34] As the example from McGechan illustrates, the identification of the type or
source of trusteeship is a particular which is reasonably required. A proper
description in a case such as the present requires the plaintiff to identify not simply
(as Ms Sisson has done) that she is a “trustee” but rather to identify “trustee of
what?” It seems likely, on the limited information available, that there is no trust
instrument relevant in this case such as would apply in relation to a written inter
vivos trust or in relation to a will trust. Mr Coltman has hypothesised that it may be
suggested that there is a resulting trust. The proper particularisation of the
representative capacity of Ms Sisson will identify the nature of the trust and will
identify the general circumstances by which that trust was created. That approach is
similar to the particularity with which a caveator identifies the nature of any non-
written trust on which he or she claims an interest.
[35] There will be an order for further particulars of the “trusteeship” such as
would meet the requirements under s 137(2)(b) Land Transfer Act 1952 that the
nature of the interest claimed be stated with sufficient certainty.
8 Above.
Further and better discovery
The categories of documents sought
[36] IAG applies for three categories of documents by way of further and better
discovery:
(a) as to Ms Sisson’s trusteeship;
(b) as to the trustees’ ability to reinstate the building; and
(c) as to demolition of the building.
Mr Coltman abandoned at the hearing the application in relation to another category,
namely litigation funding.
Opposition
[37] Ms Sisson’s notice of opposition gave as the ground of resisting all discovery
orders that:
There are no further documents as the Plaintiff has provided discovery of all
documents available to it (sic) in a verified list.
Trusteeship
[38] In line with its request for further particulars of the trusteeship, IAG seeks
further discovery in relation to the trusteeship. For this purpose, Mr Coltman has
identified more specifically three sub-categories of document, namely:
(i) [those o]n the identity and creation of the purported trust including
whether there is a deed of trust or if there is a constructive or
informal trust the basis on which the plaintiff purports to act as
trustee;
(ii) Whether there is a judgment, direction or minute of a competent
court which established the existence of the purported trust of any
other records;
(iii) On ownership of the property by the purported trust of the property
…
[39] Mr Shand submitted that documents relating to Ms Sisson’s trusteeship are
irrelevant to the issues in the proceeding. Mr Shand noted that in relation to an
insurance claim such as the present, the essential facts are:
(a) Property ownership;
(b) Policy existence and terms;
(c) Insured event(s);
(d) Losses.
[40] Mr Shand submitted that the nature, duration and beneficial entitlements
under a trust are irrelevant to the claim. He submitted that they are not essential
facts and need not be pleaded.
[41] Mr Shand’s submissions overlook two matters. First, he ignores Ms Sisson’s
previous agreement (on 25 July 2013) to provide discovery of this category of
document and the consequential order made by Wylie J that day. There has been no
request to amend or rescind that aspect of the order. Secondly, Mr Shand ignores
that trusteeship is in issue in the pleadings, precisely because Ms Sisson showed in
her claim at least her trusteeship and IAG has denied it.
[42] If it had transpired that discovery of the ordered trusteeship documents would
be disproportionate in terms of time and expense, the Court may well have
favourably considered a request for amendment of the earlier order. But Ms Sisson
has not suggested discovery would include disproportionate time or expense.
Rather, Mr Shand’s submissions were addressed to the proposition that the
documents were simply irrelevant. In the course of his submissions he went on
(slightly in the alternative) to suggest that, if there were judgments and minutes
which cast light on the trusteeship, then Ms Sisson was not required to give
discovery of those as they were matters of “public record” obtainable by IAG. That
alternative submission of Mr Shand is not an answer – Ms Sisson’s obligation is to
give discovery of documents in her control or possession. Given that she is a party
(through partnership) to the key Chesterfields proceedings, the documents such as
the judgments and minutes must be taken to be within her control if not possession.
[43] The documents sought by IAG in relation to the trust referred to by Ms
Sisson in her claim reasonably relate to the existence and nature of that trust.
Additionally the discovery order made by Wylie J of 25 July 2013, which included
identification of the ultimate beneficiary or beneficiaries under the trust, remains
unmet.
[44] There will accordingly be orders as to the discovery of documents relating to
the trust in the terms sought by IAG together with a reiteration of the particular order
previously made.
Documents relating to ability to reinstate
[45] IAG seeks discovery of documents which relate to the ability of Ms Sisson or
the trust to reinstate the Colombo Street property.
[46] The grounds in Ms Sisson’s notice of opposition did not challenge the
relevance of that category of documents. Rather the simple relevant ground was that
there were no further documents as Ms Sisson had provided discovery of all
documents available. She has not explained in evidence why there are no documents
pertaining to the financial ability of herself or the trust to reinstate the property.
[47] I cannot accept, in the absence of evidence, Ms Sisson’s assertion that there
are no additional relevant documents. It is probable that she has the ability to
provide documentary evidence (including in relation to the bank statements of any
relevant funder and any correspondence relating to the financing of reinstatement).
[48] In his submissions Mr Shand noted that, in relation to the reinstatement issues
arising in relation to the insurance for the February 2011 earthquake, Ms Sisson
seeks a declaration of IAG’s liability to pay the full replacement costs to a maximum
of $473,000. The implication of his submission was that it was not necessary to
consider documents relating to Ms Sisson’s actual financial ability to reinstate,
because even were a declaration granted, she would not be immediately receiving the
insurance funds which she is then required to utilise to replace the property.
[49] Mr Shand’s submission cannot stand because Ms Sisson seeks, alternatively
to a declaration, a judgment for $473,000. In other words, one outcome of the claim
as pleaded is that IAG would be ordered to pay money to Ms Sisson as part of the
replacement costs. IAG understandably wishes to see documents which will cast
light on whether Ms Sisson is in a position or not to use such funds for replacement.
[50] There will accordingly be an order for discovery of that category of
documents.
Documents relating to the demolition of the building
[51] IAG seeks two categories of documents relating to the demolition of the
building, IAG having made two payments of $86,825 and $11,438.57 in connection
with that demolition. It is common ground that the building has been demolished.
[52] IAG has not demonstrated a satisfactory basis on which it needs to know, in
relation to the issues in the case as pleaded, how Ms Sisson spent monies paid
previously by IAG on account of demolition costs. IAG in its statement of defence
refers to its making of the demolition payments but does not assert that those
payments affect the entitlements pleaded in this proceeding by Ms Sisson.
[53] The application for documents relating to the demolition will be refused.
Security for costs
The jurisdiction
[54] The jurisdiction to grant security for costs is contained in r 5.45 High Court
Rules. Relevantly, r 5.45 provides:
5.45 Order for security of costs
(1) Subclause (2) applies if a Judge is satisfied, on the application of a
defendant,—
(a) that a plaintiff—
(i) is resident out of New Zealand; or
(ii) is a corporation incorporated outside New Zealand;
or
(iii) is a subsidiary (within the meaning of section 5 of
the Companies Act 1993) of a corporation
incorporated outside New Zealand; or
(b) that there is reason to believe that a plaintiff will be unable
to pay the costs of the defendant if the plaintiff is
unsuccessful in the plaintiff's proceeding.
(2) A Judge may, if the Judge thinks it is just in all the circumstances,
order the giving of security for costs.
…
The threshold test
[55] IAG asserts that there is reason to believe that Ms Sisson will be unable to
pay an adverse award of costs to the defendant in the event Ms Sisson’s claim is
unsuccessful.
[56] IAG relies upon the fact that Ms Sisson is bankrupt. It also relies on the
bankruptcy of Mr Hampton, who has been closely associated with her in relation to
businesses and properties (having previously been the registered proprietor of the
Colombo Street property itself).
[57] IAG also relies on evidence given by Mr Hampton in other litigation which
indicates that Ms Sisson’s conduct of this litigation is being carried for the time
being by solicitors with the expectation that Ms Sisson’s costs will be recovered as
an additional entitlement under her IAG insurance policies. Mr Coltman points out
that the basis upon which the policies make such provision has not been established
by Ms Sisson – he rejects the correctness of the assumption. More relevantly to a
security for costs application, the apparent situation in relation to Ms Sisson’s own
costs serves to emphasise that, should she be unsuccessful in the litigation, there are
real doubts as to her ability to pay costs to IAG.
[58] The single ground of opposition advanced by Ms Sisson is that she is the
owner of the Colombo Street property which has a value of $720,000.
[59] It is common ground that $720,000 is the Quotable Valuation figure for the
property. It is also common ground that there is no debt secured over the property.
For these interlocutory purposes, I would be prepared to assume that the property has
a value in the region of $720,000.
[60] Were the affairs of Ms Sisson and Mr Hampton not complicated by the pre-
judgment claim of the Commissioner against the Colombo Street property (together
with the $180,000 deposit), Ms Sisson would have defeated this security application
on the threshold test.
[61] The freezing orders in relation to the Colombo Street property and the
undertaking apparently given by Ms Sisson in relation to dealing with the property
clearly take IAG across the threshold. The Commissioner of Inland Revenue has
gone to lengths to obtain, and then to keep, freezing orders against the property, so as
to protect a fund from which the Commissioner might obtain satisfaction of taxation
debts if judgment is obtained in relation to them. Through counsel The
Commissioner confirms that she does not consent to the use of the property as
security for the costs of this proceeding. There are therefore two consequences to
the orders and undertakings which effectively freeze the property:
(a) First, the property and the deposit may well remain out of reach of
IAG if it is the successful defendant in this proceeding so that the
threshold test is clearly established for the time being;
(b) Secondly, it is not realistic to anticipate that those assets will be
available to Ms Sisson for security purposes unless she can persuade a
Judge, over the Commissioner’s objection, to release some of the
frozen assets for the effective benefit of IAG.
The discretion
[62] The awarding of security for costs involves the exercise of a discretion based
upon the considerations of justice in all the circumstances.
[63] I have referred to the single ground of opposition relating to the security
application. Appreciating how limited that ground was, I had directed before the
hearing that Ms Sisson file any amended grounds of opposition prior to the hearing.
She did not do so. Nevertheless, Mr Shand at the hearing placed the emphasis of his
submissions upon the discretion. In doing so, he went so far in his oral submissions
as to accept that realistically the threshold test has been achieved in this case.
[64] That leaves me to consider the exercise of my discretion. It is not because of
any matters properly raised by Ms Sisson against the exercise to the discretion that I
consider that discretion but rather because it falls to me in any event to exercise a
discretion under r 5.45.
[65] Mr Shand invited me to exercise the discretion against an order for security
for three reasons.
[66] First, Mr Shand submitted that any order for security might bring to an end
Ms Sisson’s claim. I reject that submission because Ms Sisson elected to provide no
evidence to support it. As it happens, the level of security I propose to order at this
point is not great, particularly when regard is had to the size of the claim. Given Mr
Hampton’s explanation that Ms Sisson’s costs in this litigation are effectively being
carried for the time being, Ms Sisson may be in the unusual position of being able to
focus her need for immediate cash resources on the security sum only and not on her
legal costs.
[67] Secondly, Mr Shand invited me to place emphasis on Ms Sisson’s rights of
access to justice than the right of IAG to know that it will be able to collect any costs
awarded. Access to justice is a valid consideration in relation to security, but it will
usually be most significant when an order for security will end a plaintiff’s claim.
By reason of my finding in relation to Mr Shand’s first submission, access to justice
considerations do not weigh significantly in this case.
[68] Thirdly, Mr Shand submits that security should not be awarded because Ms
Sisson has a strong claim that IAG has breached its payments obligations, thereby
contributing to the current financial position of Ms Sisson. I find in relation to this
particular submission that Ms Sisson’s failure to identify it in her notice of
opposition as a ground for opposing an award must have a consequence. The ground
surfaced late the evening before the hearing in Mr Shand’s written submission, filed
after Mr Coltman had filed his submissions. It is unsupported by any affidavit
explanation of the facts on the part of Ms Sisson, or other analysis by those legally
advising her. Because of the way the issue was raised IAG has not had an
opportunity to respond to it by reference to the detail of the insurance policy and the
factual background. The merits of a claim and contribution to the plaintiff’s
financial position are classically viewed as matters on which the Court must form an
impression rather than being able to come to any clear view. In the circumstances of
this case the only impression I can reach which is fair to both sides is that there are
arguments to be had on both sides.
[69] Bringing the various matters raised together, the discretion in this case ought
to be exercised in favour of a grant of security.
The amount of security
[70] Counsel both accepted that it was appropriate to approach costs on a 2B basis
when considering security in this case. I agree.
[71] A solicitor employed by IAG’s solicitors firm deposed as to the Schedule
items which are likely to be recovered by IAG if it is successful after a one day
hearing. I adopt what MacKenzie J said in relation to the future-looking nature of
security in Pickard v Ambrose,9 the comments of whom were apparently accepted on
appeal by the Court of Appeal.10
In particular, MacKenzie J observed:11
It would not be appropriate now to make an order for security of costs which
have already been incurred by the defendants.
9 Pickard v Ambrose HC Wellington CIV-2003-091-143 13 August 2009, per MacKenzie J at [9].
10 Ambrose v Pickard [2009] NZCA 502.
11 Above n 9, at [30]-[32].
[72] I indicated to counsel that that was the approach I intended to adopt in this
case. Mr Coltman responsibly did not submit that there was any good reason to
depart from that approach. Counsel accepted that it was appropriate in this case, if
security is awarded, that it be dealt with in a staged manner.12
[73] There is a realistic prospect in this case that the parties will seek in the first
instance a one day trial which may focus solely on contractual interpretation issues.
Judgment on those issues may be determinative of the proceeding. If not, the
broader and factual issues may require a second trial of some days’ duration.
[74] In these circumstances, a first tranche of security covering attendances from
now to the conclusion of an (assumed) one day trial is appropriate, with the security
application to be adjourned to be brought on at the election of IAG if it transpires
that there is initially to be longer than a one day trial.
Items to be allowed in security calculation
[75] I have taken into account for the purposes of assessing an appropriate award
of security the four costs items identified by IAG from now to a one day trial, as
follows:
Item 30 (preparation of briefs) – 2.5 days $4,975.00
Item 32 (issues, authorities and bundle) – 2 days $3,980.00
Item 33 (preparation for hearing) – 3 days $5,970.00
Item 34 (hearing) – 1 day $1,990.00
Total $16,915.00
[76] I have not allowed Item 35 (second counsel) as sought by IAG. It is not
probable that that item would be allowed in relation to a one day trial.
12
Following the approach adopted in cases referred to in McGechan on Procedure (online
looseleaf ed, Brookers) at HR5.45.09.
Assessment of appropriate award of security
[77] The likelihood is that IAG would be awarded at least $16,915 by way of costs
if successful in the litigation. It does not automatically follow that that sum should
be awarded. As the authors of McGechan on Procedure note:13
Past costs awards often represent some discount on the likely award of costs
calculated under schedule 3.
[78] I view this case as slightly unusual. Ms Sisson is bankrupt. She has provided
no information whatsoever as to any assets or income outside the frozen assets. Mr
Hampton, who because of the background, may have been expected to later assist
Ms Sisson if able to do so (such as in the event she faces a court judgment for costs),
is himself bankrupt and unlikely to be able to assist.
[79] In these circumstances I do not consider it appropriate or just to award
security other than upon the basis of the full 2B calculation set out above.
Timing of security
[80] The orders I make in relation to further particulars and better discovery will
require compliance within 20 working days. Ms Sisson and her counsel will need to
have a focus on those matters of particularisation and discovery in that period.
[81] It is appropriate that there be an additional 10 working days thereafter for
security to be provided. The total time (30 working days) leaves Ms Sisson with the
opportunity to pursue some form of assistance in relation to the frozen assets either
through discussion with the parties involved in the Chesterfields litigation or through
application to the Court in that proceeding as she sees fit. At the 30 working day
time limit, security is to have been provided regardless of what assistance or
difficulties are encountered in relation to freeing up the frozen assets.
13
At HR5.45.07.
Stay of proceeding
[82] IAG’s application for an order for security did not include an application for
an order that the proceeding be stayed if security is not provided. Nor did Mr
Coltman’s submissions address that issue.
[83] I regard it as appropriate from now to order without the imposition of a
pending stay that security be provided. The Court expects the security to be
provided as ordered, particularly having regard to the limited sum involved. If for
any reason security is not provided as ordered, leave is reserved to IAG to have this
adjourned application brought back on for further direction in relation to the security
order and possible stay.
Costs
[84] Mr Shand accepted that in relation to these interlocutory applications costs
would follow the event on a 2B basis, together with disbursements.
[85] There will accordingly be such an order.
Order
[86] I order:
Particulars
(a) The plaintiff is, within 20 working days, to file and serve a
Memorandum (to be treated as a pleading) as to the representative
capacity of the plaintiff, providing:
(i) Details identifying the purported trust including the name of
the trust (if named) and whether there is a deed of trust or if
there is some other form of trust (such as resulting or
constructive trust) in which case identifying the principal
documents or events relevant to the plaintiff’s assumption of
her role of trustee; and
(ii) Further and better particulars as to whether there is another
trustee or trustees of the said trust and, if so, whether those
persons have consented to the plaintiff acting on their behalf.
Further and better discovery
(b) The plaintiff is to file and serve within 20 working days a
supplementary verified list of documents listing documents in the
following categories:
(i) Documents in relation to the identity and creation of the
purported trust including whether there is a deed of trust and
(if not) the basis upon which the purported trust came to exist;
(ii) Documents in the nature of judgments, directions or minutes
of competent courts which establish or evidence the existence
of the purported trust;
(iii) Documents which deal with any involvement of the trust in the
ownership of the plaintiff’s property at Colombo Street,
Christchurch; and
(iv) Documents which are relevant to an assessment of the ability
of the plaintiff or the purported trust to reinstate the property.
Security
(c) The plaintiff is within 30 working days to provide security to the
satisfaction of the Registrar for the defendant’s costs in this
proceeding in the sum of $16,915;
(d) The defendant’s application for security stands adjourned to be
brought on on three days’ notice by the defendant in the event either
that there is to be in this proceeding a trial lasting more than one day
or that the plaintiff fails to provide the directed security;
Costs
(e) The plaintiff is to pay in any event the costs of these applications, this
hearing and the orders thereon on a 2B basis, together with
disbursements to be fixed by the Registrar.
Solicitors: Grant Shand, Christchurch Fortune Manning, Auckland