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Before proceeding to trial, Insurers requested that Insured be required to place funds in a trust account to cover court costs in the event that Insuredlost the case. The court granted the request and a sum of NZD 318, 206 in security was placed in a trust account by Insured.

Subsequently, Insuredproposed changing the manner of security. Instead of the cash deposit recoverable through a trust, Insuredrequested that the security be available through a guaranteeissued by Commonwealth Bank (Guarantor), an Australian Bank, and subject to the Uniform Rules for Demand Guarantees URDG 758.

The High Court of New Zealand Christchurch Registry, Matthews, J., ordered that the NZD 318, 206 should be released from the trust and given to Insuredprovidedthat a guarantee issued by Guarantor is received by the Registrar of the High Court.At the time of this decision, the guarantee had been put in place and the Court had the original copy. The guarantee was only available for the costs of this particular proceeding and for no other cases in which Insured was involved.

The Judge found that changing the manner in which security could be given would not cause the Insurershardship in requesting or receiving a payment. In addition, no practical difficulty could be determined in requiring a signed letter, written in English, with the Registrar of the High Court’s signature and authenticated by the Registrar of the High Court’s bank to draw on the guarantee.

[JFS]

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