Robinson v Whangarei Heads Enterprises Limited [2013] NZHC 1029 (7 May 2013)

ROBINSON V WHANGAREI HEADS ENTERPRISES LIMITED HC WHA CIV-2012-488-185 [7 May 2013]

[1] This is a decision on an application for security for costs. The application for security for costs was made in CIV-2012-488-185. Mr Robinson has also issued a related proceeding, CIV-2013-488-223. There is significant overlap between the allegations he makes in 185 and the allegations in 223. By consent, the parties agreed that the application by Whangarei Heads Enterprises Ltd for security for costs could also address the question for security for costs not only for 185 but also for

223. Mr Robinson sensibly took the point that if he resisted an application for security for costs in 223 being dealt with today, he would face a fresh application by Whangarei Heads Enterprises Ltd in that proceeding, which would entail revisiting many of the matters that have been canvassed.

[2] Another preliminary matter concerns CIV-2012-488-185. That proceeding was started last year as an application by Whangarei Heads Enterprises Ltd under s 55 of the Judicature Act 1908. Whangarei Heads Enterprises Ltd sought an order for Mr Robinson’s arrest and detention as an absconding debtor under that provision. That part of the proceeding is effectively finished, bar the question of costs. Mr Robinson protested at the legality of his being arrested and detained. He made it clear at that time that he intended to make a claim for what he saw as his wrongful arrest and detention. He has since filed a statement of claim pursuing those issues. In effect, as the original proceedings are largely spent, he has become the plaintiff seeking relief. For convenience, he will be regarded as the plaintiff in proceeding

185 and Whangarei Heads Enterprises Ltd will be the defendant - that conveniently aligns with the status of the parties in proceeding 223.

[3] Applications for security for costs under r 5.45 of the High Court Rules require consideration of these questions:

(a) Has the applicant for security satisfied the court of the threshold under r 5.45(1)?

(b) How should the court exercise its discretion under r 5.45(2)? (c) What amount should the security for costs be fixed at?

(e) Should the court fix a time for complying with any order for security for costs?

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Has Whangarei Heads Enterprises Ltd satisfied the court of the threshold under

[4] There are alternative gateways to be satisfied under r 5.45(1). One is that the defendant can show that the plaintiff is resident out of New Zealand, is a corporation outside of New Zealand or is a subsidiary of a corporation incorporated outside New Zealand. The second is that there is reason to believe that a plaintiff will be unable to pay the costs of the defendant if the plaintiff is not successful in the plaintiff’s proceeding. Whangarei Heads Enterprises Ltd relies on the second limb – that is, that there is reason to believe that a plaintiff will be unable to pay the costs of the defendant if the plaintiff is unsuccessful.

[5] There is little dispute as to this aspect of the application. Mr Robinson accepted in submissions that he did not have the means to pay any order for costs that might be made against him in this proceeding as plaintiff. There is good reason for him to accept that. On 3 December 2012 I made an order adjudicating Mr Robinson bankrupt. The effect of his bankruptcy is that all his assets vested in the Official Assignee. Further, under s 102 of the Insolvency Act 2006, any assets that Mr Robinson acquires during his bankruptcy, including assets acquired outside New Zealand, vest in the Official Assignee. Mr Robinson has not given any evidence to show that upon all his assets being realised all his creditors would be paid and that he would have funds on hand to meet any liability for costs he might incur. By reason of his status as an undischarged bankrupt, there is every reason to believe that Mr Robinson will not be able to pay any order for costs if he is unsuccessful in these claims.

[6] There is one additional aspect to this matter. Mr Robinson spends a good deal of time in Vanuatu. The evidence is not clear whether Mr Robinson is resident only in New Zealand, or only in Vanuatu, or whether he is a resident of both countries. It does appear, however, that he is able to leave and re-enter New Zealand

without objection from the Official Assignee. Mr Robinson says that he needs to spend time in Vanuatu for health reasons. It appears that he does engage in some form of business activity in Port Vila, but I do take note that the prohibition against him taking part in the management of a business under s 149 of the Insolvency Act is territorial in effect. It does not necessarily apply outside New Zealand. However, the fact that Mr Robinson does spend considerable periods of time outside New Zealand is a matter that may come into consideration at the next stage of the application in the exercise of the discretion.

[7] On the exercise of the discretion, it is normal to have regard to the decision of the Court of Appeal in A S McLachlan Ltd v MEL Network Ltd: 1

[13] Rule 60(1)(b) High Court Rules provides that where the Court is satisfied, on the application of a defendant, that there is reason to believe that the plaintiff will be unable to pay costs if unsuccessful, “the Court may, if it thinks fit in all the circumstances, order the giving of security for costs”. Whether or not to order security and, if so, the quantum are discretionary. They are matters for the Judge if he or she thinks fit in all the circumstances. The discretion is not to be fettered by constructing “principles” from the facts of previous cases.

PRNZ 430, can be of assistance, they cannot substitute for a careful assessment of the circumstances of the particular case. It is not a matter of going through a check list of so-called principles. That creates a risk that a factor accorded weight in a particular case will be given disproportionate weight, or even treated as a requirement for the making or refusing of an order, in quite different circumstances.

[15] The rule itself contemplates an order for security where the plaintiff will be unable to meet an adverse award of costs. That must be taken as contemplating also that an order for substantial security may, in effect, prevent the plaintiff from pursuing the claim. An order having that effect should be made only after careful consideration and in a case in which the claim has little chance of success. Access to the courts for a genuine plaintiff is not lightly to be denied.

[16] Of course, the interests of defendants must also be weighed. They must be protected against being drawn into unjustified litigation, particularly where it is over-complicated and unnecessarily protracted.

1 A S McLachlan Ltd v MEL Network Ltd [2002] NZCA 215; (2002) 16 PRNZ 747 at [13] -[16].

[8] In exercising the discretion, there are certain matters to be considered: the merits of Mr Robinson’s proceeding; his status as a bankrupt; the fact that he is a litigant in person; and the balancing of risk to the defendants against any injustice to Mr Robinson in restricting his access to the courts.

[9] Both proceedings have their background in disputes that have arisen between Mr Robinson and Mr Victor Freakley as shareholders and directors of Whangarei Heads Enterprises Ltd. Mr Robinson’s case is that he and Mr Freakley formed Whangarei Heads Enterprises Ltd in 2009. They each held 500 shares and they were each directors. The company is apparently based on Pataua South Road, Whangarei Heads. It has a contracting business, hires out machinery and deals in building supplies and also some stock-feed and related agricultural products. There is a marked disagreement between Mr Freakley and Mr Robinson as to later transactions they had.

[10] Mr Freakley’s case is that Mr Robinson sold Mr Freakley his shares in the company. There was a debt which Mr Freakley could apply in part against the purchase price of the shares, and there was a residual debt of about $66,000 which Mr Freakley owed Mr Robinson. But Mr Freakley’s case is that from the time of the sale he became the absolute owner of shares formerly owned by Mr Robinson. Mr Freakley says that from the time of that sale in 2011 Mr Robinson remained a director of the company until events in March 2012.

[11] Mr Robinson puts matters differently. Mr Robinson says that although he transferred the shares to Mr Freakley, Mr Freakley was to hold those shares on trust for him. Mr Robinson says that he was facing insolvency issues and he was concerned that if he was adjudicated bankrupt then the shares would vest in the Official Assignee and they would be better off in Mr Freakley’s ownership instead.

difficult to show that the shares are held on a resulting trust for him, given the

decision of the English Court of Appeal in Tinker v Tinker.2 If someone transfers assets in contemplation of bankruptcy, the transfer is regarded as absolute. A person cannot assert a beneficial interest in assets which they were intending to put out of the reach of creditors.

[13] Mr Robinson also alleges an arrangement under which Mr Freakley was to have free control of the company for a period of 12 months, following which Mr Robinson would in turn have the free run of the company for a further

[14] Mr Freakley’s version of events is supported by written documents. Mr Robinson’s version of events refers to notes for an agreement – which do not appear to be signed by Mr Freakley but which Mr Robinson asserts were the basis for discussion and for an agreement. There is nothing in the evidence so far that shows any documentary support for the notion that Mr Freakley was to hold the shares in Whangarei Heads Enterprises Ltd on trust for Mr Robinson. Mr Robinson faces a difficulty that the case he wishes to establish will have to show that his version of discussions is acceptable in the face of written documents recording the transactions between the parties.

[15] There was a falling-out between Mr Robinson and Mr Freakley. Matters eventually came to a head in March 2012. Mr Robinson took objection to being removed from participation in the company. His statement of claim alleges that he was expelled from the company’s premises, treated as a trespasser, and that he was denied any say in the running of the company. He removed certain equipment belonging to the company. He had this equipment placed in various properties around the Whangarei district, which he did not disclose to Mr Freakley. He was intending to leave New Zealand for Vanuatu.

[16] Mr Freakley then arranged for Whangarei Heads Enterprises Ltd to apply to the court under s 55 of the Judicature Act for Mr Robinson to be arrested and detained, subject to Mr Robinson giving a bond. The record shows that

_{Mr Robinson was arrested at the Auckland International Airport when he
was about}

to leave for Vanuatu. He was taken into custody. He was released on his surrendering his passport. There was an examination under which he provided evidence as to the whereabouts of the machinery he had caused to be removed from the company’s premises. Woodhouse J ordered that as the purpose of Mr Robinson’s arrest had been served and that he had provided the evidence that might be required for a proceeding which Whangarei Heads Enterprises Ltd intended taking against Mr Robinson, that he should be released. It appears that Mr Robinson was in custody for a period of about one day.

[17] In proceeding CIV-2012-488-185 Mr Robinson has claimed various causes of action:

(a) The first cause of action is for “estoppel”. He contends that the defendant is estopped from having Mr Robinson removed as director and claiming ownership of his shares. He claims that Whangarei Heads Enterprises Ltd unlawfully deprived him of assets of the company and caused damage to his reputation, stress, anxiety and humiliation, and ongoing stress and mental health issues. He seeks

$5,000 general damages and $50,000 aggravated damages, and exemplary damages of $500,000.

(b) The second cause of action alleges that in applying to the court for an arrest warrant, Whangarei Heads Enterprises Ltd did not disclose that there was an ongoing dispute regarding the ownership of the company, and that the defendant’s actions were motivated by a desire to deprive Mr Robinson of assets (being his interest in the company) and preventing him presenting his case to court. By that I take it as being an allegation that the order was made ex parte, without any opportunity being given to Mr Robinson to be heard before the order was made for his arrest. For that, Mr Robinson claims $50,000 for damage to his reputation locally and in Port Vila; $40,000 for stress and anxiety and humiliation; aggravated damages of $50,000 and exemplary damages of $500,000.

	(c)	In the third cause of action it is pleaded that the conduct of Whangarei Heads Enterprises Ltd in removing him from the position as director,
		and later actions leading to his arrest, expulsion from the company and from the assets of the company caused damage. Again there are
		claims of general damages of $5,000, aggravated damages of $50,000, and exemplary damages of $500,000.
	(d)	The fourth cause of action alleges that he was slandered because the defendant purported that he was the legal owner of Whangarei Heads
		Enterprises Ltd and had Mr Robinson “trespassed”. It is said that the defendant’s conduct took place in the Mount Manaia Club and in a
		letter to Julie Freakley – who is the separated wife of Mr Victor Freakley. Damages of $600,000 are claimed.
	(e)	For a fifth cause of action it is said that the arrest and detention and the ongoing exclusion from the company property were a breach of a
		resulting trust.
	(f)	For a sixth cause of action it is alleged that Whangarei Heads
		Enterprises Ltd has been unjustly enriched. However, this is not pleaded as a restitutionary claim. Instead, damages are sought for
		harm to reputation, stress, anxiety and humiliation, and ongoing stress, humiliation and mental health issues.
[18]	The	statement of claim in CIV-2013-488-223 is directed more at a criminal

proceeding taken against Mr Robinson for trespass. Mr Robinson was convicted on a charge of trespass in a hearing before Judge Davis. Mr Robinson says he has appealed to the High Court against that conviction.

(a) The first alleges that the defendant (it is not specified which) is estopped from having Mr Robinson removed as director, and there was no right to proceed to have a trespass order issued without his

agreement, and he was therefore deprived of access to the company. Again damages are sought but at a lower level than are claimed in the first proceeding.

(b) The second cause of action seems to be a claim for malicious prosecution. The allegations are against instigating Police action in issuing and enforcing a trespass notice resulting in his wrongful arrest and conviction for trespass. It is said that the defendant’s actions were motivated by greed and the failure of the defendant to advise the Police of the agreement entered into in November 2011 about the control of the company and its day-to-day running was therefore an abuse of process.

(c) The third cause of action is that the respondent - in this case Mr Freakley rather than Whangarei Heads Enterprises Ltd – gave false evidence under oath in the District Court hearing on 11 February

(d) The fourth cause of action alleges that he was wrongfully deprived of access to the company premises on 12 November 2012, and he was deprived of the opportunity to operate the company and earn income. I note that that was shortly before he was adjudicated bankrupt.

[20] Mr Robinson is an undischarged bankrupt. In case management conferences I have clarified that whereas any causes of action related to property vest in the Official Assignee, Mr Robinson remains free to sue for personal wrongs. Mr Robinson has endeavoured to bring his claims within that head.

[21] There is a difficulty, however, with Mr Robinson’s pleadings. In CIV-2012-

488-185 he has not carefully distinguished between claims that may be available to

him against Whangarei Heads Enterprises Ltd and claims that he has available against Mr Freakley. For example, when he alleges that he was the victim of dishonest evidence in the District Court, that could not have been evidence given by Whangarei Heads Enterprises Ltd. That was evidence given by Mr Freakley. When Mr Robinson alleges that he was wrongfully removed as director of the company, Mr Robinson is making an allegation against Mr Freakley’s actions as a shareholder of the company. Again, that is not an allegation against Whangarei Heads Enterprises Ltd.

[22] On the other hand there are aspects to his claim which can be properly brought against the company as well as or instead of against Mr Freakley. For example, the application under s 55 of the Judicature Act was brought in the name of the company. Mr Robinson is in order in taking a proceeding against that company as the person who instituted that proceeding.

[23] During submissions, I explored with Mr Robinson exactly how he formulated his claim in tort for the wrongful arrest. It is not clear to me yet that Mr Robinson has considered how his claim should be properly formulated as a proper cause of action under the law of torts.

[24] What I say now is simply provisional. It seems to me that Mr Robinson could not make a claim for false imprisonment because the defendant would be able to point to a court order for his arrest and refer to that court order as justification for any claim for false imprisonment. Mr Robinson would not have any claim under the New Zealand Bill of Rights Act 1990, because that Act gives remedies only against the Crown, not against private citizens. And if he were to sue under that Act, it would be difficult to obtain any monetary relief, given that under Attorney-General v

Chapman3 the judiciary cannot be liable to pay damages for any breaches of the New

[25] Instead, Mr Robinson might have to consider either malicious prosecution or the tort of abuse of process.

[26] There are difficulties with bringing a claim for malicious prosecution for civil proceedings in New Zealand. The law is still not clear-cut whether there can be liability for malicious prosecution. Generally for civil proceedings there are limited exceptions. The matter still seems to be at large.4

[27] Probably the most fruitful avenue for Mr Robinson is a claim in tort for abuse of process. That might be available because the arrest and detention, and the subsequent release, have already taken effect. It is not a case where Mr Robinson has to await the final outcome of the proceeding and then see whether it goes in his favour, as might happen in a claim for malicious prosecution. The wrong has been done to him before he has even been given the chance to be heard. The tort of abuse of process may be allowed in circumstances where the person obtaining the court orders for the detention of property of another person has been wrongly motivated.

[28] If the case is run along those lines, Mr Freakley would be able to point to the fact that Mr Robinson had removed valuable equipment of the company. That equipment included a John Deere tractor, a Komatsu digger, and a 25 tonne log- splitter which Mr Freakley had estimated would be worth about $140,000 on the market. It was used as working plant and it was important to the company to generate income. Mr Robinson had removed this from the company premises to parts unknown, at a time when he was about to depart the country and make himself unavailable to Mr Freakley. It does not appear that Mr Robinson strenuously disputes those particular facts, although he contends that his actions were in the interests of the company. He contends that Mr Freakley had no right to institute the court proceedings against him because he was a director also and proceedings could not be started without the consent of both directors.

[29] When a court reviews the merits of a proceeding on a security for costs application, the court must come to a view as a matter of first impression because the

proceeding is often at an early stage and the court has not had a full hearing on the merits, has not seen witnesses and has not had full submissions. But it seems to me at this stage that Mr Robinson does have an uphill job in his claim for alleging the tort of abuse of process. It is a difficult cause of action to prove. It is rarely brought. While I am aware of references to the cases, I am not aware of any claim under the tort having succeeded in New Zealand. Mr Robinson faces factual difficulties because at the moment the balance of evidence tends to favour Mr Freakley’s version that he owned the shares absolutely, that he exercised his voting powers legitimately to remove Mr Robinson as a director, and he can point to a letter by Mr Robinson in March 2012 in which Mr Robinson gave written notice of his intention to resign as a director of the company.

[30] Under proceeding 223, the real thrust of Mr Robinson’s allegations centre around the matter of trespass including the prosecution. Mr Freakley can again point to his position as sole shareholder, his exercise of his powers as shareholder to remove Mr Robinson as a director as then entitling him to exercise the powers of the company to exclude Mr Robinson from the company premises. Mr Robinson’s statement of claim includes an allegation of malicious prosecution. A claim for malicious prosecution is available when there is a criminal prosecution. But in a claim for malicious prosecution it has to be established that there was not a reasonable cause for the prosecution, the prosecution was brought maliciously, and that the prosecution was unsuccessful.

[31] Leaving aside the question of motive, the prosecution resulted in a conviction. Mr Robinson would point out that he has appealed and on the appeal he may be vindicated. But the fact that a District Court Judge heard the charge and found it proved might be some support for Mr Freakley and Whangarei Heads Enterprises Ltd that there was a reasonable basis for the prosecution. Again, I regard Mr Robinson’s chances of success in proceeding 223 as likewise being very much an uphill task for him.

[32] For his causes of action in proceeding 185, Mr Robinson has made what I regard as exaggerated claims for damages. For each cause of action the relief sought is in the order of $500,000. Mr Robinson is not familiar with this aspect of

the law. The courts do take a relatively strict view of exaggerated claims for exemplary damages.6 In the words of one Judge they are often seen to be in terrorem.7 I regard these claims for exemplary damages of $500,000 per cause of action as being grossly exaggerated and as intended to intimidate; they are improper.

[33] Mr Robinson is a litigant in person. That is necessarily so. He is unable to afford a lawyer. That is understandable given that he has been adjudicated bankrupt. He says that he has applied for legal aid but he has not been successful. In that he is like many people who appear before the court these days in civil proceedings who have very limited means but are unable to obtain grants of legal aid.

[34] Mr Robinson is on friendly terms with a Whangarei firm of lawyers, who have given him access to their library so that he can consider legal texts. He has tried to obtain some information as to how to formulate his claim. But it is readily apparent from the conduct of this case that although he has tried to get to grips with the law in a sincere effort to do the best he can for himself, he has not been able to formulate his statement of claim competently, in the way expected of a qualified lawyer. Inevitably these proceedings are going to require extra effort on Mr Robinson’s part, on the part of the defendants, and on the part of the court, to see that they are conducted properly. That is going to require increased effort on the part of all parties, with increased costs. It is no criticism of Mr Robinson that he is trying to conduct the proceeding by himself but it has to be recognised that one of the consequences of that is that there are likely to be higher costs to Whangarei Heads Enterprises Ltd because Mr Robinson is acting for himself rather than with a lawyer.

[35] I have already recorded that his status as a bankrupt does not prevent him suing for personal causes of action. It is only those causes of action relating to

_{property that are vested in the Official Assignee. The fact that Mr
Robinson is}

6 Ellison v L [1998] 1 NZLR 416 (CA) at 419, McDermott v Wallace [2005] 3 NZLR 661 (CA) at

bankrupt does not mean that he has lost access to the court. A bankrupt like anyone else is entitled to have access to the courts to have his rights determined. In particular, I take into account the fact that under the proceeding under s 55 of the Judicature Act, Mr Robinson was arrested and prevented from leaving the country and was held in custody without being given proper opportunity to test the validity of his arrest. The power of arrest in these circumstances is an extraordinarily powerful remedy. Anyone arrested in those circumstances should be given proper opportunity to test the legality of the arrest in court. Without that opportunity that extraordinary power might be misused.

[36] The exercise of the discretion on a security for costs application is a balancing exercise. It is necessary to consider not only the interests of the plaintiff in having access to the court and having his rights determined, but also the rights of the defendant. The injustice the court tries to prevent is to protect a defendant who is sued unsuccessfully from being unable to recover from the plaintiff the costs of defending the proceeding. Costs under our court rules perform a valuable task. They instil a sense of restraint and responsibility on litigants. People are discouraged from taking proceedings needlessly because of the consequence that if they are unsuccessful they may be ordered to pay costs. The potential injustice to Whangarei Heads Enterprises Ltd and to Mr Freakley is that they will be put to the trouble of defending claims for exaggerated sums. Necessarily they will have to devote considerable resources to defending them, yet they may find that in the end, if they are successful, they have no remedy against Mr Robinson. Correspondingly, Mr Robinson’s status as a bankrupt means that unless security for costs is required, then he will be able to litigate with impunity because he need fear no order for costs against him. It would have no effect. It is those competing considerations that require careful evaluation by the court.

[37] At paragraph [15] of its decision in A S McLachlan Ltd v MEL Network Ltd the Court of Appeal emphasised the need for care when any order requiring substantial security would in effect prevent the plaintiff from pursuing the claim. I consider that that need for care applies here. I am conscious that if I were to

require Mr Robinson to put up any security at all, I may be closing the court door on him. The Court of Appeal emphasised that that approach is required where substantial security would be ordered. I consider that this case is one which would require substantial security in the sense that any security would have to be reasonably meaningful to give some measure of protection to the defendants. That is required because Mr Robinson is running a claim as a litigant in person which will tend to escalate time and attendances and correspondingly the amount of costs that may be ordered. I also take into account the limited prospects of success for Mr Robinson under his claims.

[38] In weighing Mr Robinson’s interests on the one hand and the interests of the defendants on the other, and in taking account of the Court of Appeal’s advice to proceed with care, it is my assessment that the balance lies in favour of the defendants in requiring Mr Robinson to provide security for his claims. I am satisfied that this is an appropriate case to require security from Mr Robinson.

[39] In CIV-2012-488-185, Whangarei Heads Enterprises Ltd is still pursuing its application for costs. Mr Ebert submitted that as the successful party in the initial proceeding, Whangarei Heads Enterprises Ltd may continue to seek costs against Mr Robinson, notwithstanding Mr Robinson’s adjudication in bankruptcy. Apparently it is regarded as a right that had already accrued before adjudication. I have not had to consider that matter. In seeking costs against Mr Robinson under the s 55 application, the Whangarei Heads Enterprises Ltd is seeking security from Mr Robinson in his role as a defendant. Rule 5.45 only allows for orders for security for costs to be made against a plaintiff, not against a defendant. That part of the application by Whangarei Heads Enterprises Ltd cannot succeed.

[40] For the 185 proceeding, Mr Ebert prepared a schedule showing the likely costs on a 2B basis. Mr Ebert calculated total costs on a category 2B basis to be for

13.3 days giving a total of $26,467.00. Mr Ebert allowed for only three case management conferences. He allowed for the application for security for costs, but not for its hearing. And he allowed for only two days’ hearing time. It seems to me

that even if proceeding 185 ran on its own, that estimate is on the light side. When the proceeding 223 is also taken into account, I can say with some confidence that Mr Ebert’s calculation is very much an under-estimate. I would regard it as quite reasonable to expect this case, if competently conducted, to require a hearing of up to four days, with corresponding increases in costs for hearing and for preparation.

[41] It is not normal practice when fixing security for costs to require costs to be fixed at the full amount of a court award for costs. There tends to be a reduction according to the court’s view of the plaintiff’s chances on the merits. Let me put it this way – if a plaintiff has a dead certain case then there is really no reason for requiring the plaintiff to provide any security for costs at all, because there is no prospect of the plaintiff having to pay costs. On the other hand, if it is absolutely certain that the plaintiff is going to fail completely, then security for the full amount of costs should be ordered. But security for costs applications do not come up at those extremes. They come up on intermediate cases.

[42] I have said that Mr Robinson has an uphill task but I have not said that it is completely hopeless. I bear in mind that any amount of security or costs that Mr Robinson would be required to put up is going to be difficult for him to raise, and potentially any amount might close the door of the court to him. Nevertheless, doing my best, I fix the amount at which security should be fixed at $20,000.

[43] A stay is normally granted when security for costs is fixed. That is to ensure that the proceeding is not allowed to run on with the defendants unprotected. Accordingly, I order a stay of proceedings 185 and 223 until Mr Robinson pays into court the sum of $20,000 by way of security for costs. If Mr Robinson pays that sum of $20,000 into court, it is to be held in an interest-bearing deposit.

[44] If a plaintiff does not comply with an order for security for costs, the defendants can be left in a position of uncertainty as to what is to happen to the

proceeding. An order for payment of security for costs is an order that the plaintiff is required to carry out and failing to comply with it can give grounds for strike-out. I bear in mind that Mr Robinson should have a generous amount of time in which to find security for costs before there should be any suggestion that his claim should be struck out. I fix the time for Mr Robinson to comply with the order at six months from today’s date. After that, he will be regarded as being in default of the order. That is not to say what should happen on any application to strike out his proceeding. That will have to be judged on the circumstances then.

[45] Mr Ebert seeks costs on this application. Whangarei Heads Enterprises Ltd is entitled to costs on a category 2 basis. I invite Mr Ebert to write to Mr Robinson setting out a calculation of costs, to see if they can reach agreement. If they cannot reach agreement then Mr Ebert may file a memorandum with the court. Mr Robinson should file a response within five working days after that. I will then to decide the question of costs on the papers.

185 and 223 in the sum of $20,000. The security is for the benefit of both plaintiffs in 223.

(d) If Mr Robinson does not pay within six months then he will be regarded as in default.

(f) The Registrar is to arrange a case management conference for further directions, after security has been paid in.

(g) Leave is reserved to the parties to apply for further directions. If either party seeks a conference, they should contact Susan Parker at the Auckland High Court.

(h) Proceedings 223 and 185 are to be case managed together from now on. That is with a view to them being heard together. They are not, however, consolidated.

High Court of New Zealand Decisions

Robinson v Whangarei Heads Enterprises Limited [2013] NZHC 1029 (7 May 2013)