NZAgbiz Limited v Hanley

[2025] NZHC 1485

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2022-419-37

[2025] NZHC 1485

BETWEEN

NZAGBIZ LIMITED

Plaintiff

AND

PHILIPPA MARY HANLEY, MARCHAL JOSEPH HEAD and HANLEY

SUPPLEMENTS LIMITED
First Defendants

MARCHAL JOSEPH HEAD
Second Defendant

PHILIPPA MARY HANLEY
Third Defendant

HANLEY SUPPLEMENTS LIMITED

Fourth Defendant

Hearing:

On the papers

Appearances:

MD Branch and K Shaw for the Plaintiff

GN Bradford for PM Hanley and Hanley Supplements Limited

Judgment:

6 June 2025

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

(Costs)

This judgment was delivered by me on 6 June 2025 at 4 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:

Harkness Henry, Hamilton Hill Lee & Scott, Christchurch

NZAGBIZ LIMITED v HANLEY & ORS [2025] NZHC 1485 [6 June 2025]

Introduction

[1]                   The first defendants (excluding Marchal Head) and the third and fourth defendants (together “Defendants”) seek costs following my 11 December 2024 decision declining NZAgbiz’s application for leave to issue a summary judgment application and granting the Defendants’ application for a stay.

[2]                  While counsel for the Defendants acknowledges that the proceedings have been categorised as category 2 proceedings, and submits costs are sought on a 2C basis, the costs claimed are calculated using the daily rate for category 3 of $3530, rather than $2390 for category 2. Costs are therefore claimed in the amount of

$20,121.00 for each of the applications, plus disbursements of $1,577 for court fees, and travel and accommodation costs.

[3]                  NZAgbiz submits that costs in respect of the application for leave to apply for summary judgment ought to be reserved in accordance with NZI Bank Limited v Philpott1 or alternatively awarded to the Defendants on a 2B basis in the sum of

$5,616.50, plus disbursements only in respect of the filing fee for the notice of opposition filed.

[4]                  In respect of the application for stay, NZAgbiz submits that costs should be awarded to the plaintiff, rather than the Defendants, in the sum of $5,616.50 plus disbursements of $143, on the basis that the stay is a rare indulgence granted to the Defendants. If the Court does not agree, NZAgbiz submits costs ought to be reserved.

[5]                  I consider costs in respect of the application for leave to apply for summary judgment first before considering costs on the stay application.

1      NZI Bank Limited v Philpott [1990] 2 NZLR 403.

Application for leave to bring summary judgment application

[6]                  The starting point in any costs decision is that costs are at the discretion of the Court.2 Generally, the party who fails with respect to a proceeding or an interlocutory application ought to pay costs to the party who succeeds.3

[7]                  Rule 14.8 of the High Court Rules provides that costs on an opposed interlocutory application must be fixed when the application is determined, unless there are special reasons to the contrary, and are payable when fixed.   However,      r 14.8(3) specifically excludes summary judgment applications from that rule.

[8]                  NZAgbiz submits the same approach ought to apply to applications for leave for summary judgment, citing Scully v Holland, where Associate Judge Sargisson declined an application for leave for summary judgment and reserved costs in accordance with NZI Bank Limited v Philpott.4 NZAgbiz submits that this approach is appropriate as if NZAgbiz is ultimately successful it would be wrong for costs to have been awarded for seeking to have its meritorious claim resolved at an earlier point in time. Similarly, they say if the claim does not succeed at trial, the Defendants would in the normal course be entitled to costs on the leave application.

[9]                  I accept that costs are often reserved on declined leave applications for the same reasons it is appropriate to reserve costs for unsuccessful summary judgments. However, the Courts have recognised on a number of occasions that it may be appropriate to award costs even in applications directly for summary judgment and not just for leave. In Mason v Dodd, Katz J held that exceptional circumstances were not necessary in order to justify determining costs immediately rather than after trial holding that “[w]here it should have been clear to the plaintiff that there was an arguable defence, costs will generally be fixed immediately”.5 In that case, Katz J fixed costs after finding that the negligence claims were unsuitable for summary judgment by a very wide margin.6

2      High Court Rules 2016, r 14.1.

3      Rule 14.2(1)(a).

4      Scully v Holland [2018] NZHC 3440 at [28], citing NZI Bank Limited v Philpott [1990] 2 NZLR 403(CA).

5      Mason v Dodd [2020] NZHC 2005 at [2] and [11].

6 At [10].

[10]              Here, I do not consider the position on the merits is as straightforward but I also held that the delay in bringing the application could not be satisfactorily explained and there was a risk of miscarriage of justice were leave to be granted.

[11]              In terms of delay, the proceedings had first been filed in March 2022 and following a case management conference on 16 February 2024, a five day substantive fixture was allocated for 31 March 2025 as a backup fixture and 22 September 2025 as a firm fixture. The explanation given for the delay in applying for summary judgment was that counsel was surprised at the dates allocated for trial and that given the delay in being able to advance its case, leave was sought to bring a summary judgment application. I held that this was not a satisfactory explanation for the delay.

[12]              In addition, I considered that there would be a risk of a miscarriage of justice in allowing leave at this late stage as if the backup fixture was available in March 2025, the criminal trial may be being heard at a similar time. And even if it was not, any time advantages in terms of a summary judgment application proceeding in the first quarter of 2025 compared to a September 2025 civil trial may have been negated by the disruption to the pre-trial process. Furthermore, contrary to the usual position if summary judgment was successful, a trial may still have been needed to determine quantum with counsel for NZAgbiz estimating that three days, rather than the five currently allocated may have been necessary.

[13]              In all of those circumstances, I determined that it was not appropriate to grant leave as the overall aim of summary judgment was to avoid prolonged proceedings and it appeared very unlikely that allowing summary judgment would do so in this case.

[14]              In my view, it ought to have been clear to NZAgbiz that the usual advantages of summary judgment would not be available and that summary judgment was not appropriate in the circumstances.

[15]              I therefore consider it is appropriate to fix costs now. Even if NZAgbiz succeeds in its claim against the Defendants, the application for leave to bring summary judgment proceedings added unnecessary costs for the Defendants.

What is the appropriate quantum of costs for the application for leave?

[16]              As both parties recognise, the proceedings have already been categorised as category two in terms of r 14.3 of the High Court Rules. There does not appear to be any basis for adjusting that category now.

[17]              The determination of the reasonable time for each step as provided for in r 14.5, in my view, ought to be made by reference to Band B rather than Band C. I agree with the plaintiff's submission that it would be unusual to award costs on a Band C basis where the hearing only occupied 0.25 of a day.

[18]The Defendants seek costs for the following steps, calculated on a 2B basis:

Item	Description	Allocated days or part days (2B)	Total
23	Filing opposition to interlocutory applications	0.6	$1,434.00
24	Written submissions	1.5	$3,585.00
26	Appearance	0.25	$597.50
29	Sealing Judgment	0.2	478.00
TOTAL		2.55	$6,572.50

[19]              NZAgbiz accepts items 23, 24 and 26 would appropriately be claimed but opposes costs in respect of the time for sealing the judgment, submitting that it was unnecessary, and that the plaintiff advised the Defendants they did not need to take this step. I allow this step to be claimed by the Defendants as it is not clear when this advice was provided, sealing is the usual process and the item is only for 0.2 of a day.

[20]               I therefore award 2B costs to the Defendants for the leave application for a total of $6,572.50.

[21]              Counsel for the Defendants sought GST on the costs award made but costs awards based on schedule 3 of the High Court Rules are GST neutral so GST is not added.7

7      New Zealand Venue and Event Management Ltd v Worldwide NZ LLC [2016] NZCA 282 at [7] – [10].

[22]              The Defendants seek disbursements for the filing fee for the notice of opposition of $143 and the sealing fee of $65, plus accommodation costs of $219 and travel costs between Auckland and Hamilton of $500. Invoices are not attached to the Defendants’ memorandum in respect of the accommodation and travel and it is not clear how counsel for the Defendants travelled to Hamilton.

[23]              The plaintiff opposes costs for travel and accommodation on the basis that the Defendants did not apply for a VMR appearance and because it is only 2 hours between Hamilton and Auckland so accommodation was unnecessary.

[24]              Whether travel and accommodation costs are awarded depends on whether they were reasonably necessary for the conduct of the proceeding and reasonable in amount.8 The question of reasonableness will depend on the circumstances of each case.9

[25]              I consider that it was appropriate for Auckland counsel to appear given Mr Bradford’s background in the matter and do not consider that the fact that VMR might have been available undermines the reasonableness of the costs where two interlocutory applications were being heard. However, as Hamilton is only 2 hours from Auckland, I do not consider accommodation costs ought to be awarded. I therefore allow a disbursement for travel only but on the basis that Mr Bradford is to provide an invoice or details of mileage to the Registrar for fixing.

Application for stay

[26]              NZAgbiz submits that the starting point is that costs should be declined in accordance with r 14.7(g) on the basis that the stay is an indulgence to the Defendants.

[27]              Counsel for NZAgbiz records that McGechan notes that “the grant of an indulgence… conventionally is made at the expense of a cost award against the party obtaining the indulgence”.10

8      High Court Rukes 2016, r 14.12(2)(c) and (d).

9      Buis v Accident Compensation Corporation (2010) 19 PRNZ 585.

10     Jessica Gorman and others McGechan on Procedure (online ed, Thomson Reuters) at [HR14.7.01].

[28]              NZAgbiz submits that it has a legitimate right to proceed with it civil claim, and that the Defendants’ application to defer that right is an indulgence to them, and that it is not unreasonable that the plaintiff would oppose that step and so NZAgbiz submits the plaintiff ought to be awarded its costs.

[29]              Counsel for NZAgbiz further records that they have not found any cases where costs have been awarded against the party seeking to defend their right to proceed with their civil proceedings.

[30]              No authority is given on behalf of NZAgbiz for awarding costs to a plaintiff in such circumstances. I accept that granting a stay ordinarily would be an indulgence for the party applying and so ordinarily costs ought to lie where they fall but not that costs ought to be awarded to the plaintiff.

[31]              The circumstances in this case were unusual in that the timing of the criminal proceedings may have overlapped with the timing of the backup fixture. In the end however as the criminal proceeding had not been allocated a firm fixture at the time of the stay application, I consider that it is appropriate for costs in respect of the stay application to lie where they fall as I accept that the stay is an indulgence to the Defendants.

Result

[32]              Costs are awarded to the Defendants on a 2B basis for the successful opposition to the application for leave to bring a summary judgment application in the amount of

$6,572.50 plus disbursements of $208 ($143 + $65), and for travel to Hamilton to be fixed by the Registrar on presentation of the appropriate invoice or details of mileage.

[33]Costs on the application for stay are to lie where they fall.

Associate Judge Sussock