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…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Khan v Hussain

Details

AGLC: Khan v Hussain [2025] NZHC 1945
Case: [2025] NZHC 1945
Decision Date: 16 July 2025

CaseChat Overview and Summary

In Khan v Hussain, the applicants, Ismail Rahman Khan, Farhaz Asik Rehman, Muntaj Ali, Azad Ali, and Mohammed Atik, sought a review of the costs awarded in their successful appeal against the New Zealand Muslim Association (NZMA). The applicants, who were also trustees of the Abu Harairah Trust Kelston, had previously been ordered to pay the NZMA $49,043.85 in costs. The appeal was successful, leading the Court of Appeal to direct that the question of costs be reconsidered by the High Court. The applicants now sought an order for the NZMA to pay them $59,160 in costs, arguing that the NZMA should not have defended the proceedings given their knowledge of the potential breach of trust. The NZMA opposed any indemnity or uplift in costs, arguing that the applicants' shift in legal framing on appeal meant that its opposition at trial could not be said to have unnecessarily increased the time and expense of the trial.

The High Court found that the applicants were entitled to be paid trial costs by the NZMA, as the Court of Appeal had concluded that the applicants should have succeeded at trial on their knowing receipt claim. However, there were no grounds to award increased or indemnity costs, as the Court of Appeal had determined that any unconscionability on the part of the NZMA only arose once it was established that the transfer was in breach of trust. The Court also considered that the trustees' settlement between themselves required to be taken into account, and fixed the NZMA's costs liability only from the date of settlement. The Court found that the applicants' calculation of costs was overstated and made several deductions, including for costs on an affidavit hearing rather than a witness hearing at trial, repeated inspection and disbursements, and costs incurred after settlement.

Ultimately, the High Court ordered the NZMA to pay the applicants 2B costs and disbursements in the amount of $29,405.38. The Court's reasoning was based on the principle that the applicants were entitled to trial costs, but there were no grounds for increased or indemnity costs, and the applicants' calculation of costs was overstated. The Court also considered the trustees' settlement between themselves and fixed the NZMA's costs liability only from the date of settlement. This outcome reflects the Court's careful consideration of the legal issues and the principles of costs in judicial review proceedings.

The final orders of the court were that the New Zealand Muslim Association pay the applicants 2B costs and disbursements in the amount of $29,405.38. The Court's decision was based on its careful consideration of the legal issues and principles of costs in judicial review proceedings, and its finding that the applicants were entitled to trial costs, but there were no grounds for increased or indemnity costs, and the applicants' calculation of costs was overstated. The Court's decision also reflected its consideration of the trustees' settlement between themselves and its fixing of the NZMA's costs liability only from the date of settlement.

Orders