Knight Investments Limited v Peng

[2025] NZHC 2465

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-001397

[2025] NZHC 2465

IN THE MATTER OF

an application for contempt orders

BETWEEN

KNIGHT INVESTMENTS LIMITED

Plaintiff

AND

YAOWEI PENG aka JAY PENG

Defendant

Hearing:

On the papers

Appearances:

R Rao for the Plaintiff

Z Chen / S Han for the Defendant

Judgment:

28 August 2025

JUDGMENT OF GARDINER J

(Costs)

This judgment was delivered by me on 28 August 2025 at 10.00 am pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:

Inder Lynch, Auckland

Righteous Law Ltd, Auckland

KNIGHT INVESTMENTS LTD v PENG [2025] NZHC 2465 [28 August 2025]

Introduction

[1]    This proceeding concerns a dispute arising from the defendant Mr Peng’s purchase of two sections in the plaintiff’s subdivision in Clarks Beach. Mr Peng entered into an agreement to purchase the two lots but failed to do so, in breach of the agreements.

[2]    On 23 February 2024, by way of summary judgment, I made orders for specific performance of these agreements as sought by the Knight Investments Ltd (Knight).1 Mr Peng’s defence of impossibility was dismissed by me and the Court of Appeal.2

[3]    Knight then sought judgment holding Mr Peng in contempt following his failure to comply with these orders. Knight sought an order for the sequestration of Mr Peng’s property until he complied. In an interim judgment delivered on 27 March 2025, I found that most of the requirements for a sequestration order were made out, but I directed Mr Peng file further information to allow the Court to form a better view of his financial situation.3 He was required to file this information by 17 April 2025, later extended to 5 June 2025. He did not file the information and instead informed the Court that he would be able to comply with the specific performance orders (by on-selling the properties in question).

[4]    On 21 July 2025, Knight filed a notice of discontinuance on  the basis  that Mr Peng had settled the sale of the subject lots in compliance with the Court’s orders. Accordingly, the contempt proceeding was no longer necessary.

[5]    As indicated in its notice, notwithstanding the discontinuance, Knight seeks its costs for the contempt proceedings. It also seeks increased costs on the basis Mr Peng contributed unnecessarily to the time and expense of the proceeding.

[6]Mr Peng has not filed a memorandum as to costs.

1      Knight Investments Ltd v Peng [2024] NZHC 285.

2      Peng v Knight Investments Ltd [2024] NZCA 463.

3      Knight Investments Ltd v Peng [2025] NZHC 675.

Plaintiff submissions

[7]    Mr Rao submits that, given one of the primary purposes of contempt proceedings is to secure compliance with court orders, Knight should be regarded as the successful party. Following filing and pursuit of the contempt application, Knight was able to achieve its objective of specific performance of the agreements. Accordingly, it should be entitled to costs. In the interim judgment, the Court found that the elements of s 16(3) of the Contempt of Court Act 2019 had been made out. Final judgment was withheld merely to allow Mr Peng to produce further financial information before enforcement orders could be made.

[8]    Mr Rao further submits that increased costs  are  appropriate  on  the  basis Mr Peng pursued arguments without merit: namely, that it was impossible for him to comply with the orders and that there were other avenues of enforcement available to Knight. The defence of impossibility was dismissed in this Court and the Court of Appeal, with both noting the paucity of evidence provided in support of the defence.

[9]    Accordingly, Knight seeks 2B scale costs with a 25 per cent uplift of $8,813.13 as well as disbursements.

Legal principles

Costs on discontinuance

[10]   Rule 15.23 of the High Court Rules 2016 provides the presumption that costs are to be borne by the party that discontinues the claim unless the defendants otherwise agrees or the court otherwise orders. The rule’s rationale is that discontinuance is ordinarily tantamount to judgment for the defendant and costs should follow the event.4

4      Powell v Hally Labels Ltd [2014] NZCA 572 at [19].

[11]   However, the presumption can be displaced where it would be just and equitable to do so, recognising the Court’s discretion as to costs.5 Factors to be taken into account include:6

(a)why parties brought and defended proceedings;

(b)whether steps taken by the parties were reasonable;

(c)whether the defendant’s acts caused the litigation and rendered the litigation unnecessary;

(d)whether the proceeding was discontinued due to the actions of a third party; and

(e)whether the plaintiff has discontinued the proceedings because they “substantially succeeded”.

Increased costs

[12]   Ordinarily, costs are to be paid to the successful party according to a scale which reflects the complexity and significance of the proceeding. But there are circumstances where the court may depart from the scale.

[13]   One example is increased or indemnity costs. The Court’s jurisdiction to award increased or indemnity costs is derived from r 14.6 of the High Court Rules 2016:

5      Kroma Colour Prints Ltd v Tridonicatco NZ Ltd [2008] NZCA 150 at [12]; and Earthquake Commission v Whiting [2015] NZCA 144 at [66].

6      Powell v Hally Labels Ltd, above n 4.

14.6     Increased costs and indemnity costs

…

(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—

(i)failing to comply with these rules or with a direction of the court; or

(ii)taking or pursuing an unnecessary step or an argument that lacks merit; or

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

…

[14]   In terms of increased costs, only to the extent to which a failure to act reasonably contributed to the time and or expense of the proceeding should any percentage uplift be awarded.7

Discussion

[15]   I accept that the r 15.23 presumption is displaced in this case. Knight brought the contempt proceeding to enforce this Court’s judgment ordering specific performance of the agreements. Ultimately, after two hearings in this Court and one appeal to the Court of Appeal, Mr Peng settled the purchases. Knight was the successful party on the contempt proceeding (as well as in the earlier specific performance proceeding and appeal).

[16]   I also accept that increased costs are appropriate. Mr Peng advanced obviously unmeritorious positions at the hearing, including the alternative enforcement mechanisms proposed. Furthermore, Mr Peng again failed to provide a comprehensive statement of his financial position, despite comments from this Court

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

and the Court of Appeal on the deficiencies in the evidence provided for the earlier hearings.

Result

[17]   I order Mr Peng to pay 2B scale costs to Knight Investments Limited in the amount of $7,050.50 with an uplift of 25 per cent as set out in the plaintiff’s schedule, for the increased amount of $8.813.13 plus disbursements of $650.00.

Gardiner J