Intop Homes Limited v Xie

[2025] NZHC 3061

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2025-404-862

[2025] NZHC 3061

UNDER

the Land Transfer Act 2017

IN THE MATTER OF

an application under Section 142 of the Land Transfer Act 2017

BETWEEN

INTOP HOMES LIMITED

First Applicant

CARNATION DEVELOPMENT LIMITED
Second Applicant

AND

LU XIE

Respondent

Hearing:	On the papers
Counsel:	J Taylor for Applicants K Sun for Respondent
Judgment:	15 October 2025

JUDGMENT OF O’GORMAN J

[As to costs]

This judgment was delivered by me on 15 October 2025 at 12 pm pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

…………………………………

Solicitors:

Inspire Legal, Hamilton

Capstone Law Ltd, Auckland

INTOP HOMES LTD v XIE [2025] NZHC 3061 [15 October 2025]

Introduction

[1]    This judgment determines the issue of costs, following my judgment delivered on 7 August 2025 granting the application and ordering removal of two notices of claim (NOCs) lodged by the respondent, Ms Lu Xie, over properties  owned by  Intop Homes Ltd and Carnation Development Ltd.

[2]The parties have failed to agree costs:

(a)The applicants seek costs of $24,378 and disbursements of $1,017.71 (GST exclusive), comprising $16,252 on a 2B basis plus a 50 per cent uplift.

(b)The respondent does not dispute that the applicants are entitled to costs but submits that there are no grounds for a 50 per cent uplift. Furthermore, it contends that the proper 2B calculation is only

$10,874.50 and disbursements should be limited to $769 (the service fee should be excluded).

Background facts

[3]    The applicant companies, Intop Homes Ltd and Carnation Development Ltd, are property development companies controlled by Mr Wu.

[4]    Ms Xie and Mr Wu were married in 2007 and separated in 2021. During their marriage, they jointly operated a real estate development business, and Ms Xie alleged that relationship property funds were used to acquire and operate the companies and their assets. Ms Xie lodged NOCs over properties owned by the applicant companies, claiming this was necessary to prevent Mr Wu from dissipating relationship property through the companies, citing a lack of transparency and a pattern of asset transfers.

[5]    I found that Ms Xie’s asserted interests, as described in the NOCs, were insufficient due to the principle of separate legal personality. I also rejected the respondent’s assertion that the NOCs should be maintained but amended to assert a resulting trust, amongst other reasons because there was no evidential basis for such a

claim on the facts. Accordingly, Ms Xie failed to substantiate a proprietary interest in the land and the application was granted.

Legal principles

[6]    The court has a general discretion to award costs under r 14.1 of the High Court Rules 2016. Subject to that discretion, r 14.2 provides the principles to be applied in most cases:

(a)Under r 14.2(1)(a), the party who fails with respect to a proceeding or an interlocutory application should pay costs to the party who succeeds.

(b)Under r 14.2(1)(b), an award of costs should reflect the complexity and significance of the proceeding. For those purposes, r 14.3 provides for three categories of proceeding (1, 2 or 3).

(c)Rule 14.2(1)(c) provides that costs should generally be assessed by applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required in relation to the proceeding or interlocutory application. The reasonable determination of time is set out in r 14.5 by band (A, B or C).

(d)Rule 14.2(1)(f) provides that an award of costs should not exceed the actual costs incurred by the party.

[7]    The above position of limiting a losing party’s liability for costs to scale in most cases is supported by access to justice considerations.1 Other objectives are that the determination of costs should be predictable and expeditious.2

1      Bradbury v Westpac Banking Corp [2009] NZCA 234, [2009] 3 NZLR 400 at [10]; and Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue [2014] NZCA 348, (2014) 22 PRNZ 322 at [13].

2      Lawrence v Glynbrook 2001 Ltd [2015] NZHC 1005 at [18]–[20], citing North Shore City Council v Body Corporate 188529 [2010] NZCA 234, (2010) 20 PRNZ 740 at [12].

[8]    Rule 14.6 provides for increased and indemnity costs. Relevantly, r 14.6(3) provides:

(3)   The court may order a party to pay increased costs if—

…

(b)the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—

…

(iii) failing, without reasonable justification, to admit facts, evidence, documents, or accept a legal argument; or

…

[9]    Under r 14.6(3) the circumstances where increased costs may be appropriate include a failure to act reasonably,3 or where the party opposing costs has contributed unnecessarily to the time or expense of the proceeding by pursuing an argument that lacks merit, or unreasonably failing to accept a legal argument. In such a case, the Court must consider the extent to which the failure to act reasonably contributed to the time or expense of the proceeding and it is only to that extent that any percentage uplift from scale can be justified.4

[10]   There is no inflexible rule that a party who is awarded costs is “entitled” to costs associated with the application for costs.5 Costs for each step in a proceeding are always at the discretion of the court. Relevant considerations are whether it has been addressed by memoranda only (making an award less likely), and the extent to which the parties succeeded on the disputed cost issues.6

Applicants’ submissions

[11]   The applicants seek costs of $16,252 on a 2B basis and a 50 per cent uplift under r 14.6. This would result in costs of $24,378, plus disbursements of $1,017.71.

3      Bradbury v Westpac Banking Corp, above n 1, at [27].

4      Commissioner of Inland Revenue  v  Chesterfields Preschools  Ltd  [2010] NZCA 400, (2010) 24 NZTC 24,500 at [165].

5      Harrington v Wilding [2019] NZCA 605 at [45].

6      See Jeffreys v Morgenstern [2013] NZHC 1361 at [40]; DGL Manufacturing Ltd v Simmonds

[2022] NZHC 1434 at [18]; and Legler v Formannoij [2022] NZHC 1804 at [12].

[12]   They contend that increased costs are justified under r 14.6 for the following reasons:

(a)The respondent pursued an argument that was clearly without merit and contrary to established law, thereby causing the applicants significant expense.

(b)The respondent improperly used the notice of claim procedure as a makeshift freezing order to gain control over the applicant companies, which is not the purpose of the regime.

(c)The respondent changed her position shortly before the hearing, requiring the applicants to prepare additional submissions on new grounds, which increased their costs.

(d)On 6 May 2025, Ms Xue’s lawyers advised that she did not intend to oppose the removal of the NOCs, and that the procedure under s 143 of the Land Transfer Act 2017 should have been used instead as more efficient. On the same day, the applicants’ lawyers proposed that a consent memorandum should be filed to avoid any further costs, but Ms Xue went on to oppose the application.

Respondent’s submissions

[13]   The respondent does not dispute that the applicants are entitled to costs but submits that there are no grounds for a 50 per cent uplift and that costs and disbursements should total $11,643.50.

[14]   The respondent contends that increased costs are not appropriate in the circumstances. Her case was not meritless, as it was based on established facts regarding the use of relationship property and Mr Wu’s conduct. She maintains that she acted in good faith in lodging the NOCs to protect her interest in relationship property and should not be penalised for being unsuccessful, especially given the misuse of funds by Mr Wu.

[15]In terms of the 2B calculation, the respondent contends:

(a)The applicants are not entitled to costs for the second set of submissions filed without leave of the Court, as these were necessitated by the applicants’ failure to anticipate the respondent’s arguments, not by any change in the respondent’s case (1.5 days claimed at $2,390 per day, making $3,585).

(b)The service fee is not claimable as a disbursement.

(c)The applicants should not be awarded costs for preparing the memorandum on costs (0.75 days claimed at $2,390 per day, making

$1,792.50).

Analysis

[16]   Although any departure from 2B  costs  should  be  rare,  I  consider  that  a 25 per cent uplift is justified on the facts:

(a)The case law was clear that the NOCs in the form lodged were unsustainable. That was ultimately accepted at the hearing, but after costs of preparation had been incurred.

(b)The arguments advanced in the hearing were clearly without merit and contrary to established law.

(c)The evidence suggests the lodging and defence of the NOCs was for a different purpose (company control and a de facto freezing order) that was not properly achievable through a protean assertion of interests in land.

[17]   I accept the second set of submissions was necessary only because of a last minute change of position in opposition. I consider that the incremental costs of that step only justify 0.75 days, with no uplift.

[18]   No particulars have been provided about the nature of the service fee. It has been held that unparticularised expenses fixed as a percentage of fees payable for professional services are not recoverable as they are not identifiable as an expense payable and incurred for the purposes of the proceeding, and do not allow the reasonableness of the charge to be assessed.7 For those reasons, I am not satisfied that a service fee charge is appropriate for the costs award in this case.

[19]Accordingly, my calculation of the above adjustments to costs is as follows:

Step	Description	Days	Cost @
$2,390 per day
37	Filing application and supporting affidavits	2.00	$4,780
40	Preparation of written submissions	1.50	$3,585
41	Preparation by applicant of bundle for hearing	0.60	$1,434
42	Appearance at hearing for	0.25	$597.5
sole or principal counsel
29	Sealing order or judgment	0.20	$478
4.55	10,874.50
Plus 25 per cent uplift		2,718.62
Plus costs for second set of submissions		1,792.50
Total costs		$15,385.62

[20]Disbursements are quantified at $769.

[21]   Given the result is not what either party sought and these disputed issues have been determined on the papers, I do not award any costs associated with the application for costs.

7      Beatson v Property Brokers Ltd [2024] NZHC 2057 at [14]. See also Sax v Dempsey Wood Civil Ltd [2013] NZHC 1126 at [42]–[46]; and David Bullock and Tim Mullins The Law of Costs in New Zealand (LexisNexis, Wellington, 2022) at [6.30].

Result

[22]I award the applicants costs of $15,385.62 plus disbursements of $769.

O’Gorman J