MB Technology Ltd v Orbis Blockchain Technologies Ltd

[2025] NZHC 2607

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

COMMERCIAL PANEL

CIV-2020-404-1541 [2025] NZHC 2607

BETWEEN  MB TECHNOLOGY LTD

Plaintiff

ANDORBIS BLOCKCHAIN TECHNOLOGIES LTD

First defendant

DAVID SHU-HAN YU
Second defendant

DANIEL JOHN CROTHERS

Third defendant Continued overleaf

Hearing:                   On the papers

Counsel:                  J S Cooper KC, S A Barker, B E Marriner for plaintiff

M Heard, R M Keane and I K Rollinson for first defendant AJB Holmes for second and third defendants

C P Browne, J P Rea and J J Gosha for fourth defendant Date of judgment:                9 September 2025

JUDGMENT OF JAGOSE J

[Costs]

This judgment was delivered by me on 9 September 2025 at 3.00pm.

Pursuant to Rule 11.5 of the High Court Rules.

………………………… Registrar/Deputy Registrar

MB TECHNOLOGY LTD v ORBIS BLOCKCHAIN TECHNOLOGIES LTD - Costs [2025] NZHC 2607 [9

September 2025]

ECOMI TECHNOLOGY PTE LTD

Fourth defendant

DENISE MULLINGS
Fifth defendant

JAHANZAIB KHAN
Sixth defendant

[1]    My 1 May 2025 judgment—upholding MB Technology’s third and fourth causes of action against Orbis for rectification of its share register (and compensation under the Companies Act 1993 and the Contract and Commercial Law Act 2017) in the alternative to its fifth and sixth causes of action for damages, but dismissing its first and second (contractual and Fair Trading Act) causes of action against respectively Orbis and Ecomi, and Orbis and Mr Yu and Mr Crothers, as well as dismissing Orbis’ counterclaims—reserved costs for determination on memoranda to be filed.1 I observed:2

Although MB Technology clearly is the successful party here, it should be relatively clear from my reasons I consider its first and second causes of action to have lacked a sufficient evidentiary basis to justify their making. That may have some resonance in costs.

[2]    MB Technology seeks partial indemnity (alternatively, increased) costs and disbursements of some $1.034 million on its successful third and fourth causes of action against Orbis, and would allow 2B scale costs to each Ecomi and Mr Crothers in respect of its unsuccessful first and second causes of action against Orbis and them. Although its second cause of action also was brought against Mr Yu, MB Technology contends his conduct for and at trial disentitles him to any award of costs.

[3]    Orbis claims increased costs and disbursements of some $390,000 on the first and second causes of action as well as costs (including indemnity costs) on various interlocutory applications. It says MB Technology is not entitled to indemnity costs.

1      MB Technology Ltd v Orbis Blockchain Technologies Ltd [2025] NZHC 1012 [substantive judgment] at [235].

2 At [233].

As I invited,3 Orbis also raises as-yet undetermined applications for costs and disbursements on MB Technology’s withdrawn summary judgment application ($4,651) and Orbis’ and Ecomi’s partially successful further discovery application ($7,160.50, plus a USD 26,943 expert witness fee).4

[4]    Ecomi also claims increased costs (and disbursements) of some $560,000. So too do Mr Crothers and Mr Yu, jointly in the amount of some $250,000. Each says there is no cause for apportioning their costs between successful and unsuccessful claims. Mr Yu says his conduct had no bearing on the outcome of the proceeding.

[5]The net calculation thus is of MB Technology’s liability to pay costs of some

$130,000. Ecomi and Mr Yu and Mr Crothers seek interim charging orders against MB Technology’s Orbis shares and associated compensation “on the basis they will be awarded costs in this proceeding”. MB Technology unsurprisingly says that is premature if of right under r 17.42 of the High Court Rules 2016, under which the application is brought, and otherwise abusive absent any foundation for an order under r 17.41 on grounds MB Technology intends to defeat its creditors.

[6]    All matters relating to costs are at my discretion, having regard for relevant principle.5 I may refuse to make an order for costs, or reduce the costs otherwise payable in principle, if:6

… although the party claiming costs has succeeded overall, that party has failed in relation to a cause of action or issue which significantly increased the costs of the party opposing costs.

[7]    So far as the substantive proceeding is concerned, I am not prepared to indulge in  the  varied  accounting  contended  for  by   the  parties.   In  my  assessment,   MB Technology’s  overall success entitling it to an award of costs is in respect of   Mr Yu’s wrongful omission of MB Technology’s name from Orbis’ share register.7

3 At [235].

4      MB Technology Ltd v Orbis Blockchain Technologies Ltd [2024] NZHC 3055 [discovery judgment].

5      High Court Rules 2016, pt 14.

6      Rule 14.7(d).

7      Substantive judgment, above n 1, at [46], [55] and [72].

[8]    That omission arose in the context of Mr Yu, as sole director of each Orbis and Ecomi, promoting “the Ecomi project for investors’ purchase of a combination of Orbis shares and Ecomi’s OMI tokens”.8 Mr Yu described the Ecomi project—“‘a wider ecosystem’ of cryptoassets and associated applications”9—as “our overall project”.10 MB Technology’s first and second causes of action also arose in that context. Given that ‘combination’ and umbrella, I consider the defendants’ separate identities an artificial basis to discriminate between them and MB Technology in relation to costs, and Mr Yu’s machinations to taint all defendants.11 I am not prepared to elevate MB Technology’s failure on those causes of action to even partial success such as may entitle any of the defendants to an award of costs.

[9]    I am in no doubt MB Technology’s failure in relation to the first and second causes of action significantly increased legal expenses incurred by the defendants in taking steps in the proceeding. I am unsure of that increase’s extent, because all causes of action had at their foundation the circumstances in which the transfer and share subscription agreements were negotiated and concluded. Given the illegal nature of the latter agreement,12 I particularly was required to have regard for “the conduct of the parties” in determining relief.13 Given I have not been required to assess damages,14 I cannot calculate what weight (if any) to give MB Technology’s settlement offer(s).

[10]   But I am clear, even if the scope of discovery may not have been significantly less, there could have been significantly less evidence and argument addressed to the first and second causes of action. Indeed, given my view these causes of action “lacked a sufficient evidentiary basis to justify their making”,15 arguably there should have been none. My judgment’s 46 paragraphs on MB Technology’s successful third and fourth causes of action, compared to its 141 paragraphs on MB Technology’s unsuccessful first and second causes of action, may be thought a reasonable reflection

8 At [32].

9 At [15].

10 At [61].

11     At [45] and [60].

12 At [63].

13     At [62], referring to s 78(a) of the Contract and Commercial Law Act 2017.

14 At [78].

15 At [233].

of at least the excess faced by the defendants at trial. The nine paragraphs on Orbis’ unsuccessful counterclaims afford only modest offset.

[11]   In my view, MB Technology’s failure on its very substantial escalation of what should have been a relatively straightforward claim for rectification and compensation, whether under the Companies or Contract and Commercial Law Acts, is best addressed by refusing to make an order for costs at all. I dismiss all applications for costs (and disbursements) on the substantive proceeding.

[12]I turn therefore to the applications for costs on the interlocutory applications.

[13]   So far as Orbis’ and Ecomi’s partially successful further discovery application is concerned, that success only was in respect of MB Technology’s records of its OMI token transactions and payments through third parties, predominantly relevant to its damages claim.16 The application was substantially wider.17 Thus I expressed a preliminary view “given Orbis and Ecomi’s only partial success on the application, costs on the application should lie where they fall or fell”.18 That was resisted largely on the basis “success on more limited terms is still success”.19

[14]   I am confirmed in my preliminary view by the materiality of such limited success in the overall context of the proceeding,20 in which I deferred consideration of MB Technology’s alternative damages claim pending Orbis’ and Ecomi’s opportunity to respond,21 ultimately to dismiss them.22 The discovery obtained thus ultimately was immaterial but to Orbis’ and Ecomi’s prospective benefit otherwise.

[15]   I also dismiss this claim for costs. I would not in any event have included the sought disbursement, of an expert witness’ fee, which was not reasonably necessary

16     Discovery judgment, above n 4, at [6].

17     At [6], [8] and [11].

18 At [13].

19     Referring to Weaver v Auckland Council [2017] NZCA 330 at [25]–[26].

20 MB Technology Ltd v Orbis Blockchain Technologies Ltd [2024] NZHC 3631 [pre-trial applications judgment] at [7].

21    MB Technology Ltd v Orbis Blockchain Technologies Ltd HC Auckland CIV-2020-404-1541,     25 November 2024 (Minute of Jagose J) at [2(b)(i)]; pre-trial applications judgment, above n 20, at [13].

22 Substantive judgment, above n 1, at [78].

for the conduct of the proceeding or reasonable in amount.23 The relevance of the ordered discovery was obvious from first principle,24 and did not require the expert’s (disputed) advice as to its representative nature.

[16]   Finally, I turn to Orbis’ claim for costs on withdrawal of MB Technology’s summary judgment application. In dispute is if Orbis is entitled to claim a proportion of scale costs for work towards identified steps rendered otiose by the withdrawal. The short answer is ‘No’: in principle, costs are to be assessed by applying the rate to the time of each step “reasonably required in relation to the… interlocutory application”.25 The steps are specified. Given the withdrawal, the steps themselves were not reasonably required. Subsets of a step’s reasonable time are not claimable in principle. And the parties’ agreement there was no issue as to costs on the defendants’ protest as to  jurisdiction  necessarily   includes   any   related   disbursement.   Otherwise,   MB Technology does not dispute its liability to pay the balance of costs claimed, being

$1,434. Except to that extent, this claim also is dismissed.

[17]   Accordingly, I also dismiss the application for interim charging orders as unnecessary on any basis.

—Jagose J

Counsel/Solicitors:

J S Cooper KC, Auckland M A Corlett KC, Auckland

AJB Holmes, Barrister, Auckland JAR Barrow, Barrister, Auckland Buddle Findlay, Wellington

Lee Salmon Long, Auckland Wilson Harle, Auckland

Koo Telle Lawyers, Auckland

23     High Court Rules, r 14.12(2).

24     Pre-trial applications judgment, above n 20, at [5]–[6].

25     High Court Rules, r 14.2(1)(c).