Bridging Finance Group Limited v Tapp

[2025] NZHC 1686

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-003307

[2025] NZHC 1686

BETWEEN

BRIDGING FINANCE GROUP LIMITED & NEW ZEALAND CAPITAL

MANAGEMENT LIMITED
Plaintiffs

AND

STEVEN JOHN TAPP

Defendant

Hearing:	On the papers
Judgment:	25 June 2025

JUDGMENT OF DOWNS J

(Costs)

This judgment was delivered by me on Wednesday, 25 June 2025 at 3 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel: Aspiring Law, Wanaka. SRG Judd, Auckland. GDR Shand, Auckland.

BRIDGING FINANCE GROUP LTD & NEW ZEALAND CAPITAL MANAGEMENT LTD v TAPP [2025] NZHC 1686 [25 June 2025]

Background

[1]                 Two sets of costs arise. Both concern land owned by Steven Tapp in Kaiwaka, over which the plaintiffs held mortgages.

[2]                 Mr Tapp defaulted on his loan obligations. The plaintiffs sought to sell the property. Mr Tapp  then  applied  for  an  interim  injunction  to  restrain  the  sale. On 14 March this year, I dismissed that application.1 The plaintiffs seek indemnity costs in relation to their successful dismissal of that application, relying on these clauses in the loan agreement(s):2

7.        RIGHTS AND POWERS OF LENDER ON DEFAULT

…

(f)Costs of default are payable: All sums expended by the lender in the exercise of the lender’s rights and powers following a default or in exercising or enforcing or attempting to exercise or enforce any power, right or remedy contained or implied in this contract are payable by you to the lender upon demand. This clause does not limit any other term of this contract relating to costs; nor is it limited by any other such term.

…

12.      COSTS

(a)Costs payable by you: You must pay to the lender upon demand, the lender’s legal costs (as between solicitor and client) for:

…

(ii)costs on default: legal services arising from or related to any default under this contract or the enforcement or exercise or attempted enforcement or exercise of any of the lender’s rights, remedies and powers under this contract…

(iii)costs of variation, waiver or change demand…

(iv)legal costs of lender: legal services relating to the protection of the lender’s security interest taken in conjunction with this contract…

[3]                 Mr Tapp resists indemnity costs. He says the relevant invoices are not clearly referrable to the application; case law does not support indemnity costs; and his

1      Bridging Finance Group Ltd v Tapp [2025] NZHC 521.

2      High Court Rules 2016, r 14.6(4)(e).

reception of legal aid means no costs should be awarded against absent exceptional circumstances.3

[4]                 The second costs issue arises this way. The plaintiffs applied for possession of the property. But, they ended up selling the property (1 April 2025) while Mr Tapp was still in possession.  The plaintiffs then abandoned their possession application  (9 May 2025).

[5]                 The plaintiffs seek indemnity costs in relation to their abandoned application, again under the loan agreement(s). Mr Tapp seeks increased costs against the plaintiffs. Mr Tapp has sworn an affidavit in support of that position.

[6]                 The plaintiffs contend the affidavit should not be received as the timetable did not provide for evidence, and much of the affidavit is directed at what the new owner allegedly did to Mr Tapp, rather than the plaintiffs.

Costs in relation to Mr Tapp’s unsuccessful interim injunction application

[7]                 In Black v ASB Bank, the Court of Appeal emphasised the important question is whether indemnity costs were reasonably incurred.4 This involves an objective assessment, with “room for robust judgment as to the costs considered reasonable in all the circumstances”.5 I have reviewed the invoices, which are admittedly broad. All refer to the application.6 Those tasks that are identified are commensurate with the type of work one would anticipate, and the sums claimed are commensurate with the amount of time reasonably necessary for that work. That (underlying) time sheets have  not  been  provided  is,   therefore,   irrelevant,   particularly   given   the   Court of Appeal’s observation “a detailed assessment” is not feasible.7 I find the costs reasonably incurred.

3      Legal Services Act 2011, s 45.

4      Black v ASB Bank [2012] NZCA 384 at [77].

5      At [80]–[81], citing Frater Williams & Co Ltd v Australian Guarantee Corp (NZ) Ltd (1994) 2 NZ ConvC 191,873 (CA) at 191,887.

6      The plaintiffs are involved in multiple proceedings against Mr Tapp, some of which are ongoing.

7      Black v ASB Bank, above n 4, at [81].

[8]                 Case law supports (rather than detracting from) indemnity costs. In LJ Group New Zealand Ltd v New Zealand Capital Management Ltd, costs of this nature were awarded in analogous circumstances.8

[9]                 Interim legal aid appears to have been granted to Mr Tapp on 16 May 2025. That grant came two months after I dismissed Mr Tapp’s application for an interim injunction. Self-evidently, Mr Tapp was not an “aided person” when his interim injunction application was filed or heard either.9 That Mr Tapp received an interim grant was raised only during submissions in relation to costs. It follows the provisional immunity conferred by s 45 of the Legal Services Act 2011 is not engaged.10 Mr Tapp is, therefore, liable to meet costs.

The plaintiffs’ abandoned possession application

[10]Rule 15.23 of the High Court Rules 2016 provides:

Unless the defendant otherwise agrees or the court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance.

[11]              I am not persuaded the loan agreements constitute a basis for the plaintiffs to have costs notwithstanding r 15.23, as their possession application was never determined; again, they sold the land while Mr Tapp was in possession. That said, I am not persuaded Mr Tapp should have costs, let alone increased costs, in reliance on r 15.23, as it was reasonable for the plaintiffs to seek possession given Mr Tapp’s ongoing (and significant) default in relation to the property. On this aspect then, costs should lie where they fall.

[12]              My receipt of Mr Tapp’s affidavit in the interests of justice does not affect this conclusion.

8      LJ Group New Zealand Ltd v New Zealand Capital Management Ltd [2024] NZHC 1564 at [26].

9      Legal Services Act, s 4(1).

10     Elishua v Freeland [2022] NZHC 895 at [36]; and Shi v So [2021] NZHC 879 at [31].

Result

[13]              Mr Tapp must pay the plaintiffs (indemnity) costs of $27,481.45 on his unsuccessful interim injunction application.

[14]              Costs in relation to the plaintiffs’ abandoned possession application lie where they fall.

……………………………..

Downs J