Matvin Group Limited v Crown Finance Limited
[2025] NZHC 2983
•9 October 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2019-404-402
[2025] NZHC 2983
BETWEEN MATVIN GROUP LIMITED
First Plaintiff
HOBSONVILLE DEVELOPMENTS LIMITED
Second Plaintiff
AND
CROWN FINANCE LIMITED
First Defendant
CROWN ASIA PACIFIC GROUP LIMITED
Second Defendant
VISCOUNT INVESTMENT CORPORATION LIMITED
Third Defendant
Hearing: 1 October 2025 Appearances:
P J Dale KC for the plaintiffs
T Nelson for the first and second defendants D J Chisholm KC for the third defendant
Judgment:
9 October 2025
JUDGMENT OF BLANCHARD J
This judgment was delivered by me on 9 October 2025 at 2.30 pm pursuant to Rule 11.5 of the High Court Rules 2016
Registrar/Deputy Registrar
Solicitors:
Neilsons Lawyers Ltd, Auckland
Chancery Street Chambers, Auckland Friedlander & Co, Auckland
Bankside Chambers, Auckland Lawler and Co, Auckland
MATVIN GROUP LTD v CROWN FINANCE LTD [2025] NZHC 2983 [9 October 2025]
[1] In this proceeding, the plaintiffs have succeeded on liability, but the relief they are entitled to has not yet been determined. An account of profits hearing has been set down for five days in May 2026.1 As the proceeding is incomplete, costs have not yet been determined.
[2] Despite this, the plaintiffs apply to the Court for an order that a portion of the security for costs they have provided to the defendants be released to them.
[3] The application is opposed by the defendants on the ground that the Court has no jurisdiction to vary the security for costs, which was provided pursuant to an agreement between the parties and was not the subject of any order by the Court. They also say that it would be premature and unjust for the Court to order a reduction in the security at this point.
Current status of the proceeding
[4] The proceeding went to a two-and-a-half-week trial before Duffy J in May and June 2021. In a judgment dated 22 September 2022, the Judge found in favour of the plaintiffs on their claims against Crown Finance Ltd (Crown Finance) and Viscount Investment Corporation Ltd (Viscount), but she found that Crown Asia Pacific Group Ltd (Crown Asia Pacific) had no liability to them. Crown Finance was found liable for breach of fiduciary duty and Viscount for dishonest assistance. Both were also found liable for breach of confidence. Duffy J ordered an account of profits.2
[5] The proceeding was the subject of an appeal hearing in October 2023. In a judgment dated 22 November 2024, the Court of Appeal overturned the High Court’s findings that Crown Finance breached its fiduciary duty and Viscount was liable for dishonest assistance. However, the breach of confidence findings were upheld. The Court confirmed that Crown Asia Pacific had no liability to the plaintiffs. The Court also confirmed that there should be an account of profits.3
1 Matvin Group Ltd v Crown Finance Ltd HC Auckland CIV-2019-404-402, 26 June 2025 (Minute of Gault J).
2 Matvin Group Ltd v Crown Finance Ltd [2022] NZHC 2239.
3 Crown Finance Ltd v Crown Asia Pacific Group Ltd [2024] NZCA 614.
[6] Viscount and Crown Finance sought leave to appeal to the Supreme Court, but they were declined leave on 26 May 2025.4
[7] As I have said, a five-day account of profits hearing is to take place in May 2026. At this hearing, it will be determined what profit, if any, Crown Finance and Viscount made through misuse of confidential information.
Security for costs agreement
[8] The plaintiffs are shell companies. They did not trade and/or had limited income or assets.
[9] The agreement on security for costs was reached in correspondence between Mr Dale KC (counsel for the plaintiffs) and Mr Chisholm KC (counsel for Viscount). On 5 May 2020, Mr Dale offered that, “Matvin will agree to provide security for costs for both defendants in the global sum of $100,000.” Later the same day, Mr Chisholm replied that, “The defendants agree to the proposal in your letter earlier in the day.”
[10] My understanding is that, by “both defendants”, Mr Dale meant both Crown Finance and Crown Asia Pacific (together, the Crown defendants), and Viscount, so the security for costs agreement covers all three defendants.
[11] There was no application for security for costs. Nor did the Court make an order regarding security. The security for costs is not held by the Court. The plaintiffs paid it into Viscount’s solicitors’ trust account.
The basis for the plaintiffs’ application
[12] The plaintiffs seek to have $21,560 of the $100,000 of security for costs released. The reason they seek to have this sum released is that it is the amount that they are required to pay to cover scheduling and hearing fees for the account of profits hearing.
4 Viscount Investment Corporation Ltd v Matvin Group Ltd [2025] NZSC 57.
[13] The plaintiffs say that the funds should be released to them because, although the proceeding is not yet complete, it is clear already that they are the successful party in the proceeding. As such, they say there is no realistic possibility that they will be required to pay costs to the defendants and, therefore, the security for costs is surplus to requirements and should be released to them now.
[14] Mr Dale argued that the Court has jurisdiction to vary the terms of the security for costs even though the security was provided pursuant to an agreement between the parties and there was no order of the Court in relation to the security. He relied on the decision of this Court in Stead v The Ship Ocean Quest of Arne.5
[15] In that case, the defendant applied to the Court for security for costs. Subsequently, the parties filed a consent memorandum agreeing that security of $5,000 should be paid by the plaintiff. The Court made the order sought by consent. After the plaintiff amended his statement of claim, the defendant made a further application for security for costs. The application was resisted by the plaintiff on the basis that the consent order was binding on the parties and there was no jurisdiction or grounds upon which the underlying agreement could be overturned.
[16] Thomas J did not accept the plaintiff’s argument. He considered that not every agreement on which a consent order is based is intended to exclude the jurisdiction of the Court to revoke or vary the order at a later date.6 In appropriate cases, the Court has jurisdiction to revoke or vary a consent order where the interests of justice require it, notwithstanding that the agreement on which the order has been based might be contractually inviolate.7
[17] Mr Dale argued that the plaintiffs are the successful party. Liability has already been determined in the plaintiffs’ favour. It has been determined that Crown Finance and Viscount breached confidence. The only matter that remains to be determined is the account of profits. While that has been set down for a five-day hearing, it is,
5 Stead v The Ship Ocean Quest of Arne [1995] 3 NZLR 415 (HC).
6 At 418.
7 At 419–420.
Mr Dale submitted, inevitable that Crown Finance and Viscount will be ordered to pay a sum of money in the many millions to the plaintiffs.
[18] This submission was based on a report provided by Calibre Partners to the plaintiffs’ solicitors on 22 August 2023 (in between the trial before Duffy J and the hearing in the Court of Appeal). Mr Dale handed up a copy of this report during the hearing before me. The report is a short form one. It commences by saying that Calibre Partners “have been instructed to estimate the ‘gross profits’ in respect of Viscount”. In Appendix 3 to the report, it is said that Viscount has received “gross profits” of $42,233,860.10.
Opposition to the application
[19] The correspondence between Mr Dale and Mr Chisholm in which it was agreed that security for costs would be provided did not specify the terms on which the security would be provided. The terms must be implied. Mr Chisholm and Mr Nelson (counsel for the Crown defendants) submitted that one of the terms that must be implied is that the security for costs will be held until costs are finally determined in the proceeding.
[20] Mr Chisholm and Mr Nelson both submitted that the Court has no jurisdiction to vary the parties’ agreement on security for costs. They say that the agreement was a private one between the parties. There was no application for security for costs and the agreement was not subject to an order of the Court. They say that the Stead case is distinguishable on this basis.
[21] Mr Chisholm and Mr Nelson also submitted, in the alternative, that it would be premature and unjust for the Court to order a reduction in the security. It would be premature because the proceeding is not yet complete, and no costs orders have been made. It would be unjust because the security may well be needed to meet costs orders that will ultimately be made in favour of the defendants.
[22] The Calibre Partners report does not appear to relate to Crown Finance (or Crown Asia Pacific). As I have said, the Calibre Partners report refers to the “gross profits” of Viscount. It does not mention either of the Crown defendants. This is
presumably because the confidential information related to an opportunity to purchase and develop a property, and it was Viscount that purchased the property and, therefore, Viscount (allegedly) made a profit as a result.
[23] Despite this, the plaintiffs are continuing with their claim for an account of profits against Crown Finance. They do not accept that Crown Finance did not make any profit as a result of the misuse of confidential information. Even though the Calibre Partners report does not appear to relate to Crown Finance, the plaintiffs continue to allege that it made a profit.
[24] Mr Nelson referred me to an affidavit of Mr Arbuckle, who is a director of each of the defendants. Mr Arbuckle’s affidavit was sworn on 28 August 2025 in opposition to the plaintiffs’ application. The affidavit states that Crown Finance did not make any meaningful profit from Viscount’s purchase and development of the property. The payments Crown Finance received from Viscount in connection with the property totalled only $662.47, which was interest on a short-term bridging loan when Viscount had a temporary financing need. According to Mr Arbuckle, once Crown Finance’s operating costs and overheads are considered, there is no meaningful profit. Based on this evidence, Mr Nelson submitted that the account of profits hearing will determine that no meaningful amount is payable by Crown Finance to the plaintiffs.
[25] The defendants made Calderbank offers prior to the trial before Duffy J. Of course, the Court cannot have regard to these Calderbank offers until costs are determined. However, Mr Nelson submitted that, while the plaintiffs have been successful in establishing liability against Crown Finance, ultimately, they will not be successful against Crown Finance. It will not be ordered to pay any meaningful amount to the plaintiffs, and this will be a less favourable result than the plaintiffs would have achieved had they accepted a Calderbank offer.
[26] In the case of Crown Asia Pacific, the position is simpler. The plaintiffs’ claims against Crown Asia Pacific have failed. Accordingly, Mr Nelson submitted that Crown Asia Pacific must be considered the successful party and it is entitled to costs against the plaintiffs.
[27] In respect of Viscount, Mr Chisholm submitted that, ultimately, the plaintiffs’ claim will also be unsuccessful, even though Viscount purchased and developed the property and despite the content of the Calibre Partners report. Mr Chisholm made the following points in support of this submission:
(a)The only cause of action that was successful, the breach of confidence claim, was added, with the leave of the Court, after the plaintiffs had closed their case at trial.
(b)Although the Calibre Partners report refers to “gross profits” of Viscount of approximately $42 million, the report does not contain a calculation of what is normally considered to be “gross profits”. Rather, it is a calculation of Viscount’s revenue.
(c)In fact, once Viscount’s costs are taken into account, it did not make a profit. Mr Chisholm relied here on Mr Arbuckle’s affidavit. The affidavit says that calculating the finance and related costs incurred by Viscount is complex. It is in the process of preparing expert evidence to confirm the numbers. But the amounts will be substantial. Once these costs are accounted for, along with development costs and other expenses, Viscount is unlikely to have any substantial net profit from the property. Therefore, the plaintiffs’ assumption that there are substantial profits to be shared is misconceived.
(d)Again, the Calderbank offers need to be considered. Once it has been determined that Viscount did not make a substantial net profit from the purchase and development of the property, and when regard is had the Calderbank offers, it will be clear that Viscount is the successful party, not the plaintiffs.
Decision
[28] As I have said, the terms on which the security for costs were to be held were not agreed by Mr Dale and Mr Chisholm. The terms must be implied. I have set out above one term that Mr Chisholm and Mr Nelson say can be implied.
[29] I think it is arguable that a further term can be implied that the agreement regarding security is subject to the jurisdiction of this Court to revoke or vary the terms where the interests of justice require it. However, I do not need to determine whether this further term exists, because I have reached a clear view that Mr Chisholm and Mr Nelson are right that it would be premature and unjust for the security for costs to be released at this point.
[30] It is not normal for security for costs to be released before a proceeding is complete at a time when no costs orders have been made. I do not say that this could never occur. However, it could only occur in exceptional circumstances, which I do not consider apply in this case.
[31] Mr Chisholm’s and Mr Nelson’s submissions suggest that there is a realistic possibility that the defendants could ultimately be the successful parties in the proceeding. The plaintiffs have been successful in establishing liability against Crown Finance and Viscount. However, there have been many cases in which plaintiffs have been successful in establishing liability, but, once quantum is considered and Calderbank offers are taken into account, they end up being treated by the Court as unsuccessful in the proceeding for the purpose of costs. Based on Mr Arbuckle’s affidavit, this appears to be a realistic possibility.
[32] The position is particularly clear in the case of the Crown defendants. It has been determined that Crown Asia Pacific has no liability. It is out of the case now. While the plaintiffs are continuing against Crown Finance, it is common ground that it did not purchase the property. Further, the Calibre Partners report does not refer to Crown Finance. The affidavit of Mr Arbuckle suggests that Crown Finance received minimal fees and would not have made any meaningful profit. Mr Dale was not able to point to anything that refutes Mr Arbuckle’s evidence.
[33] The position of Viscount is not as straightforward. The Calibre Partners report suggests that Viscount received a very large sum of money as a result of purchasing and developing the property. However, Mr Chisholm seems to be correct that the amount that it received, as recorded in the report, was revenue rather than gross profit. The Calibre Partners report includes the following:
Based on our instructions and correspondence, this analysis assumes a definition of gross profit [that] encompasses the revenue and other income received to date, and the value remaining for the subject property, but excludes cost associated with achieving these amounts.
[34] Mr Dale essentially asked me to disbelieve Mr Arbuckle’s statement in his affidavit that, once the financing and other costs are accounted for, Viscount is unlikely to have any substantial net profit from the property. Mr Dale said that $42 million is a huge sum of money and it stands to reason that Viscount must have made a large profit. However, I do not think that I can simply disregard Mr Arbuckle’s evidence. It is of course sometimes the case that businesses or projects achieve large revenue figures but, ultimately, are unprofitable. It is possible that this could be the case here.
[35] For these reasons, I agree that it would be premature and unjust for the Court to order a reduction in the security at this point.
Costs
[36] The defendants seek increased costs. They say that the plaintiffs’ application was misconceived and caused wasted costs for all parties. But, while I agree the application should be declined, I do not think it was so lacking in merit that increased costs should be ordered.
Result
[37]The application is declined.
[38] I order plaintiffs to pay the defendants’ scale costs on the application, without any uplift.
Blanchard J
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