JRA Group Limited v Brown

[2025] NZHC 2494

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-2329

[2025] NZHC 2494

UNDER

An application for judicial review under

the Judicial Review Procedure Act 2016 and Part 30 of the High Court Rules

BETWEEN

JRA GROUP LIMITED

First Applicant

JRA CONSTRUCTION LIMITED
Second Applicant

AND

CHRISTIAN JAMES BROWN

First Respondent

Continued…

Hearing:

On the papers

Counsel:

D Bullock and B Forbes for the applicants

First to third respondents are self-represented

Judgment:

29 August 2025

JUDGMENT OF BLANCHARD J

This judgment was delivered by me on 29 August 2025 at 12.30 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
LeeSalmonLong, Auckland

JRA GROUP LTD v BROWN [2025] NZHC 2494 [29 August 2025]

AND

TOMASZ ANDRZEJ MALARCZYK

Second Respondent

KEN JOHN ALLINGTON
Third Respondent

GREEN BAY EAST RESIDENTS SOCIETY INCORPORATED

Fourth Respondent

[1]    JRA Group Ltd and JRA Construction Ltd (together, JRA) seek non-party costs orders against Christian Brown, Tomasz Malarczyk and Ken Allington.

[2]The application is made in the following circumstances:

(a)JRA was carrying out a development at 15 Cleve Road, Green Bay, Auckland.

(b)Mr Allington, Mr Brown and Mr Malarczyk lived at properties adjacent to, or near, the development.

(c)The Green Bay East Residents Society Inc (the Society) commenced a judicial review application challenging decisions of Auckland Council relating to the development not to notify, and to grant, resource consents in 2021, and to vary consents in 2024.

(d)The Society was set up shortly before the judicial review application was commenced. Its 34 members are residents in the area of the property. They include Mr Allington, Mr Brown and Mr Malarczyk.

(e)Prior to the incorporation of the Society, there was an unincorporated residents group called “Neighbours of 15 Cleve Road” (the Unincorporated Group). The Society has substantially the same membership as the Unincorporated Group.

(f)Mr Allington was the spokesperson for the Unincorporated Group and is an officer of the Society.

(g)Mr Brown’s wife, Emma Brown, is an officer of the Society.

(h)Mr Malarczyk is an officer and the treasurer of the Society.

(i)JRA applied for security for costs and, subsequently, the parties agreed that security for costs of $20,000 would be provided.1

(j)Mr Allington, Mr Brown and Mr Malarczyk were the main factual witnesses who gave evidence in support of the application for the Society. Mr Brown’s wife was also a witness.

(k)On 25 March 2025, I declined the application for judicial review.2 Further background to this application is set out in my judgment.

(l)Mr Allington ($19,500), Mr Brown ($19,442) and Mr Malarczyk ($19,000) provided the bulk (approximately 69 per cent) of the Society’s funding.

(m)On 29 April 2025, I awarded costs against the Society in favour of JRA totalling $41,477.80.3

(n)The costs order has been partially satisfied by the release of the $20,000 of security for costs.

(o)The Society has not paid any of the balance of the costs of $21,477.80.

Legal principles

[3]    Generally, non-party costs awards will not be made against a “pure funder” who does not stand to benefit from the litigation and who in no way seeks to control its course.4 However, the inverse is that a funder who stands to benefit from funding litigation, or that substantially directs or  controls the proceeding,  will be required  to pay the successful party’s costs if the Court considers it just on the basis that the

1      Green Bay East Residents Society Inc v Auckland Council HC Auckland CIV-2024-404-2326, 22 November 2024 (Minute of Lang J).

2      Green Bay East Residents Society Inc v Auckland Council [2025] NZHC 644.

3      Green Bay East Residents Society Inc v Auckland Council HC Auckland CIV-2024-404-2326, 29 April 2025 (Minute of Blanchard J).

4      Dymocks Franchise Systems (NSW) Pty Ltd v Todd (No 2) [2004] UKPC 39, [2005] 1 NZLR 145 at [25].

funder is in effect “the real party” to the proceeding.5 An interest or control will suffice. Both are not required.

The application

[4]    JRA says that non-party costs orders should be made against Mr Allington, Mr Brown and Mr Malarczyk because:

(a)they each stood to benefit from the litigation as the claims that were advanced related to asserted effects on their properties; and

(b)they each had an ability to exercise control over the course of the litigation due to their roles and relationships with the Society and because they provided the majority of its funding.

The opposition

[5]The respondents oppose the application on the following grounds:

(a)The agreed security for costs should be determinative of the application for non-party costs. They rely on the decision of the High Court in Shanghai Neuhof Trade Co Ltd v Zespri International Ltd, in which it was said that the availability of security will count against any costs orders against non-parties.6

(b)The respondents did not stand to gain financially from the outcome of the litigation. They say that almost all the case law relating to non- party costs awards involves non-parties who stood to gain financially from the litigation.

(c)The fact that the respondents provided evidence regarding the adverse effects of the development does not establish that any of them stood to

5      Dymocks Franchise Systems (NSW) Pty Ltd v Todd (no 2) [2005] 1 NZLR 145 (PC) at [25].

6      Shanghai  Neuhof  Trade   Co   Ltd   v   Zespri   International   Ltd   [2020]   NZHC   987, (2020) 25 PRNZ 319 at [34].

substantially benefit from the litigation. Various other members of the Society could have provided the relevant evidence.

(d)The respondents did not exercise the substantial degree of control over the litigation necessary to justify a non-party costs order:

(i)They were only three of 34 members of the Society. The members voted unanimously to pursue the litigation.

(ii)Mr Allington and Mr Malarczyk were officers of the Society, but their roles were only to effect decisions made by the members. The assertion that Mr Brown exercised substantial control because his wife was an officer of the Society is without merit. The litigation would likely have been pursued regardless of whether the respondents were members of the Society or held formal roles in relation to it.

(iii)When the members voted unanimously to commence the litigation, neither Mr Brown nor Mr Malarczyk had donated any funds to the Society. Mr Allington had made a donation that was only 12 per cent of the total funding at that time. When the members voted unanimously to pay security for costs and proceed to a priority hearing, the percentage of the donations paid by the respondents was 44 per cent. None of the respondents was the biggest individual donor to the Society at that time. The balance of donations made by the respondents occurred after the substantive hearing. There were no agreements regarding funding.

(e)This was public interest litigation. As such, a non-party costs order should not be made.

Decision

[6]    In my view, the non-party costs orders sought by JRA are appropriate for the following reasons:

(a)While the failure of a party to apply for security when there was the opportunity to do so will count against them, the position is different where the party did obtain security but it turned out to be inadequate.7

(b)Whether the respondents stood to gain financially from the outcome of the litigation is not the test.   What matters is whether they stood   to benefit from the litigation.

(c)Here, the respondents did stand to benefit from the litigation. It is clear from Mr Allington’s evidence that he was opposed to the development. He had an interest in the proceeding because he wished to see the development stopped. The Society’s claim was directed at complaints that specifically related to Mr Brown’s property and his evidence covered the effect that the development would have on his property.  A significant part of the claim concerned a resource consent variation that would allow a wastewater connection from the development to be made to existing wastewater infrastructure under Mr Malarcyzk’s property. Like Mr Allington, he was opposed to the development and had an interest in trying to stop it.

(d)The respondents also had the requisite substantial degree of control over the litigation. I agree that this can be inferred from their roles and relationships with the Society and because they provided the majority of its funding. I do not see the timing of the provision of the funding as being significant. I also think it is relevant that they were the main factual witnesses for the Society in the litigation. Overall, the impression I am left with is that they were the driving force in the litigation.

7      Love v Auburn Apartments Ltd (in rec and in liq) [2013] NZHC 851 at [43].

(e)I accept that there was an element of public interest in this litigation, but the extent of the public interest was not sufficient for me to refuse to order costs or make a  reduced costs  order.8  I ordered the Society to pay costs on the usual basis because, in my view, the proceeding was predominantly brought to advance private interests. Similarly, the element of public interest  in  this  litigation  is  insufficient  for  me  to decline to make non-party costs orders.

Costs

[7]As the successful party, JRA is entitled to costs in relation to this application.

Result

[8]    I grant JRA’s non-party costs application. I order Mr Allington, Mr Brown and Mr Malarcyzk to pay to JRA, on a joint and several basis with each other and the Society, the amount of $21,477.80.

[9]    I also order Mr Allington, Mr Brown, Mr Malarcyzk to pay to JRA, on a joint and several basis with each other, costs of this application. As I have already held, this is a category 2 proceeding. Time band B should apply in relation to each step. Reasonable disbursements are also payable.

Blanchard J

8      High Court Rules 2016, r 14.7(e).