Khan v Hussain

[2025] NZHC 1945

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-1648

[2025] NZHC 1945

UNDER

the Judicial Review Procedure Act 2016

IN THE MATTER

of an application for judicial review

BETWEEN AND

AND AND AND

ISMAIL RAHIMAN KHAN

First applicant

FARHAZ ASHIK REHMAN
Second applicant

MUNTAJ ALI
Third applicant

AZAD ALI
Fourth applicant

MOHAMMED ATIK
Fifth applicant

Continued overleaf

Hearing:

On the papers

Counsel:

I M Hutcheson for applicants

P C Murray for second respondent

Date of judgment:

16 July 2025

JUDGMENT OF JAGOSE J

[Costs]

This judgment was delivered by me on 16 July 2025 at 11.00am.

Pursuant to Rule 11.5 of the High Court Rules.

………………………… Registrar/Deputy Registrar

KHAN V NEW ZEALAND MUSLIM ASSOCIATION – Costs [2025] NZHC 1945 [16 July 2025]

ANDMOHAMMED ZAKIR HUSSAIN, MOHAMMED RAFIQ WANIA, MOHAMED AHAMED NADAT,

ABDUL AZIZ as trustees of the ABU HARAIRAH TRUST KELSTON
First respondents

ANDNEW ZEALAND MUSLIM ASSOCIATION

Second respondent

ANDTHE REGISTRAR OF INCORPORATED SOCIETIES AT AUCKLAND

Third respondent

AND  ATTORNEY-GENERAL

Intervener

[1]                  My 18 April 2023 judgment,1 dismissing the applicants’ second, third and fourth causes of action,2 took a preliminary view “the applicants should pay 2B costs and disbursements to the NZMA”.3 When the applicants did not respond as directed, I ordered “the applicants pay NZMA 2B costs and disbursements in the amount of

$49,043.85”.

[2]                  The applicants were successful on appeal,4 predominantly on an equitable proprietary claim distinct from the knowing receipt claim argued before me,5 although the Court of Appeal also held they had “established the elements of a claim of knowing receipt on the facts”.6 The Court directed “[t]he question of costs in the High Court is to be reconsidered by that Court in light of this judgment”.7

1      Khan v New Zealand Muslim Association [2023] NZHC 802.

2 At [26].

3 At [27].

4      Khan v New Zealand Muslim Association [2025] NZCA 109.

5 At [25].

6 At [46].

7 At [56].

[3]                  The applicants quantify 2B costs in their favour in the amount of $59,160, but contend NZMA—not being a bona fide purchaser for value,8 and knowing the property to have been transferred to it “potentially in breach of trust”, such allegation to be “formally advanced” in the High Court9—should “never have defended these proceedings”, but abided, rendering it susceptible to indemnity or increased costs from the time of consent orders in June 2019 or settlement agreement in July 2022.

[4]                  The NZMA resists any indemnity or uplift on the basis the applicants’ “shift in legal framing” on appeal meant its opposition at trial could not be said at the height justifying indemnity costs or unnecessarily increased the time and expense of trial for increased costs. It additionally says the applicants’ failure to advance their successful claim at trial was their unnecessary contribution to the time and expense of the proceeding, justifying refusal or reduction in costs. And it points out, until settlement in July 2022, the proceeding was maintained between trustees (the applicants and first respondents). The Court of Appeal commented on the extent and impact of that dispute.10

[5]                  On the basis of the Court of Appeal’s view the applicants should have succeeded at trial on their knowing receipt claim,11 they are in principle entitled to be paid trial costs by the NZMA. Thus there is no basis to refuse or reduce costs. Neither, in the course of this proceeding, is there anything to justify an award of increased or indemnity costs. The Court of Appeal’s decision is clear any unconscionability on the part of NZMA only arose “once it is established that the transfer was in breach of trust”,12 meaning the NZMA cannot be said to have contributed unnecessarily to the time or expense of the proceeding.

[6]                  As to scale costs, the NZMA disputes the applicants’ calculation, principally in claiming costs on an “affidavit” rather than “witness” hearing at trial and for repeated inspection and disbursements addressed in this Court’s earlier judgment on an interlocutory application.13 I consider those objections are well made, for deductions

8 At [23].

9 At [36].

10 At [50].

11 At [38].

12 At [36].

13     Khan v Hussain [2019] NZHC 99.

accordingly. And I accept the trustees’ settlement between themselves requires to be taken into account, in my view best by fixing NZMA’s costs liability only from the date of settlement. Last, absent qualifying circumstances,14 of which none is evident here, I will not award costs on costs claims.

[7]                  That accordingly is an award of 2B costs in the applicants’ favour as set out in the last section of their table of “Scale costs”, with steps 30, 31 and 32 replaced by steps 33, 33A and 33B (and omitting steps 24 and 40). By my calculation, that is costs of $24,259, plus disbursements in the amount of $5,146.38 (being the scheduling, hearing and witness fees, binding and library research expenses incurred after settlement). I will order accordingly.

[8]                  I order the NZMA pay the applicants 2B costs and disbursements in the amount of $29,405.38.

—Jagose J

Counsel/Solicitors:

I M Hutcheson, Barrister, Auckland P C Murray, Barrister, Auckland

The Small Law Firm Ltd, Auckland Newton Law, Auckland

Luke Cunningham Clere, Wellington Crown Law, Wellington

14  Miedema v Petrou [2025] NZHC 1015 at [59]–[60], citing Harrington v Wilding [2019] NZCA  605 at [45], Paper Reclaim Ltd v Aotearoa International Ltd [2007] NZCA 544, (2007) 18 PRNZ 743 at [62], Fog v Frimley Estate Ltd (No 2) [2016] NZHC 314 at [17], Little Republic New Zealand Ltd v Kum Fu Stainless Kitchen Equipment Ltd [2021] NZHC 1836 at [31], North Eastern Investments Ltd v Auckland Council [2018] NZHC 1805 at [20] and Combined Property Maintenance Ltd v Singh [2021] NZHC 621 at [19].