The judge presiding over the Feltex investor case has given its funder one last chance to pay up or the case will be struck out.
Justice Robert Dobson has given Tony Gavigan's Joint Action Funding until July 13 to lodge $1.65 million in security for costs.
At this date the lawyer for the Feltex investors, Colin Carruthers QC, must also confirm to the court that investors have enough money for the rest of the trial.
• Feltex court saga: Insurance, costs issues arise
The case was brought in 2008 over untrue statements in the Feltex Carpets prospectus issued in 2004. In 2018 the Supreme Court ruled that the prospectus had an untrue statement.
But the second stage, or quantum part of the case, has been stalled since the funder for the 3,600 investors has failed to pay costs in court.
It was meant to start in February and would have involved individual investors and experts outlining how much they thought they had lost in reliance on the statements.
However, JAF has not paid security for costs and has recently turned to crowdfunding to raise money for the claim.
On May 11, the defendants, former Feltex directors Timothy Saunders, Sam Magill, John Feeney, Craig Horrocks, Peter Hunter, Peter Thomas and Joan Withers, as well as two Credit Suisse entities said the case should be thrown out because of the on-going delays.
They accused JAF director Gavigan of coming up with new funding initiatives shortly before each court hearing on the matter, so that the court would not know its success until the next hearing.
Justice Dobson agreed that the case should be struck out, saying that it was a "regrettable outcome," given the length of its history.
"However, in balancing the competing interests of justice as reflected for claimants and defendants, it is an outcome I am satisfied is warranted, subject to affording the claimants and their funder one last opportunity to perform," the judge said.
Should the payment be made, Justice Dobson said he would arrange an alternative venue for the trial to begin on October 27, as the Wellington High Court building would not be available.
2004 – Feltex Carpet floats
2006 – Moved into receivership and liquidation
2008 – Eric Houghton files representative claim
2014 – Justice Robert Dobson finds against claimants in High Court
2016 – Court of Appeal upholds most of High Court decision
2018 – Supreme Court reverses Court of Appeal decision, First NZ Capital and Forsyth Barr removed from the case
2019 – Stage two trial to evaluate quantum scheduled
2020 – Court hearing scheduled for February delayed as investors not ready
2020 – Judge gives July deadline for payment or case will be struck out