Ranfurly Jixiang Development Limited v GWT NZ Limited

[2025] NZHC 215

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-409

[2025] NZHC 215

BETWEEN

RANFURLY JIXIANG DEVELOPMENT LIMITED
Plaintiff

AND

GWT NZ LIMITED

First Defendant

LEI WANG

Second Defendant

Hearing:	On the papers
Appearances:	S S Cook / C S Morrison for the Plaintiff D B Hickson for the Defendants
Judgment:	19 February 2025

COSTS JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

This judgment was delivered by me on 19 February 2025 at 3:00pm

pursuant to Rule 11.5 of the High Court Rules

…………………………. Registrar/Deputy Registrar

Solicitors:

Buddle Findlay (Sherridan Cook/Cora Morrison), Auckland, for the Plaintiff Doug B Hickson, Mt Eden, Auckland, for the Defendants

RANFURLY JIXIANG DEVELOPMENT LIMITED v GWT NZ LIMITED [2025] NZHC 215 [19 February 2025]

Introduction

[1]                 On 10 October 2024 the Court delivered a judgment dismissing the plaintiff’s application for summary judgment against the defendants (the Judgment).1 At [45](d) of the Judgment the parties were directed to agree costs, and if they were unable to agree costs each were to file memoranda as to costs.

[2]                 Mr Hickson, for the defendants, GWT NZ Ltd and Mr Lei Wang, filed a memorandum as to costs dated 29 November 2024, and Ms Cook for the plaintiff, Ranfurly  Jixiang  Development  Ltd,  filed  a  memorandum  in  response  dated     9 December 2024.

[3]                 The defendants seek category 2B costs of $6,867,00 including disbursements. The plaintiff’s position is that costs should have been reserved by the Judgment, relying on r 14.8(3) of the High Court Rules and the decision of the Court of Appeal in NZI Bank Ltd v Philpott.2

Defendants’ position

[4]                 Mr Hickson submits that notwithstanding r 14.8(3) and the decision in NZI Bank Ltd v Philpott (Philpott), this is not conclusive of the matter. He submits that while r 14.8 requires that costs on opposed interlocutory applications be fixed when the application is determined unless there are special reasons to the contrary, and the rule provides that it has no application for summary judgment, it does not override the Courts discretion to award costs on a summary judgment should it chooses to do so. As to the decision in Philpott, he submits that the present case is one of the relatively rare cases envisaged by the Court where an award of costs is appropriate. He refers to the Court’s statements in Philpott as follows:3

“…There will be other cases where the plaintiff has embarked on summary judgment proceedings erroneously in the sense that the rules do not allow the summary judgment procedure, or in the certain knowledge that there is a bona fide question of fact or law which can be determined only after a trial. In those

1      Ranfurly Jixiang Development Ltd v GWT NZ Ltd [2024] NZHC 2939.

2      NZI Bank Ltd v Philpott [1990] 2 NZL 403 (CA).

3      Above, n 2, p 405 ll 39-46.

circumstances the Court should be able in its discretion to deprive the plaintiff of costs in those unsuccessful and abortive proceedings and award costs to the defendant.”

Mr Hickson also points to the Court’s observation that:4

“In the exceptional cases involving abuses of the procedure then, as with all abuse of the process of the Court, an order for costs can be made against plaintiffs at the summary judgment stage.

[5]                 Mr Hickson submits the present case is one where summary judgment as to quantum ought never have been embarked upon or where, having received the defendants’ notice of opposition and affidavits in support, ought to have been discontinued immediately. He points to the following as compelling evidence of the plaintiff’s failure to mitigate loss, which meant that summary judgment was not available:

(a)The plaintiff offered the two properties for sale for more than $500,000 less each, without first even listing the properties for resale with a real estate agent;

(b)entering into listing agreements with Barfoot & Thompson Limited with no provision for any advertising budget;

(c)the fact that no advertising was ever actually undertaken (as demonstrated by the plaintiff’s failure to adduce any evidence of advertising);

(d)the plaintiff’s failure to list the properties for sale with another real estate agent after the first listing expired;

(e)the fact that the resales were made to two companies whose directors shared the same surname as the director of the plaintiffs, thereby giving rise to the obvious suspicion that the properties were sold at an undervalue to relatives of the plaintiff’s director.

4      Above n 2, at 407 ll 1-3.

[6]                 Mr Hickson also submits that the position was also exacerbated by the evidence of the plaintiff’s director, Mr Junhau Lin, in which he:

(a)misstated the facts of the case by asserting that as soon as the defendants had defaulted on the agreements, his company had immediately contacted the real estate agents to discuss potential sale prices, market expectations, marketing and commission (the correspondence revealed no such discussion whatsoever of any of those matters);

(b)made the improbable assertion that the Barfoot & Thompson listing agent was the person responsible for having deleted the advertising budget provision in the listing agreement and that he was unaware that she had done so.

[7]                 Mr Hickson submits that the application for summary judgment as to quantum ought never have been brought and the fact that it was, despite the plaintiff ‘s failure to undertake the most basic of steps to try and mitigate loss on a re-sale, i.e. to advertise the properties for sale, raises the case to one of abuse of process, entitling the defendants to costs on the failed summary judgment.

[8]                 Mr Hickson concludes by supporting a re-call of the cost determination of the Judgment and advocating that the Judgment be re-called and re-issued with reasons specifying why the award of costs on summary judgment was indeed appropriate in the present case.

Plaintiff ’s position

[9]                 Ms Cook submits that the grounds relied on by the defendants in support of the order for costs have been overstated and are otherwise inconsistent with the accepted practice and concepts of summary judgment application, with costs being reserved. She relies on the Philpott decision, submitting that the Court of Appeal in that case considered the best course was to reserve costs except in an exceptional case where the plaintiffs using the summary judgment procedure amounted to an abuse of process,

that is, where the procedure is used erroneously, unreasonably, by way of experiment or with certain knowledge of its failures.5

[10]             Ms Cook submits that the summary judgment application was not an abuse of process or an application that ought not to have been made and does not fall into the category of an “exceptional case” of the type referred to by the Court of Appeal in Philpott as to justify an award of costs.

[11]             Ms Cook submits that the plaintiff’s decision to commence and pursue the summary judgment application was reasonable in the following circumstances:

(a)through the application and the events which ensued, the issues of liability were dispensed with, as there is no dispute that the defendants are liable to the plaintiff;

(b)the plaintiff considered the claim against the defendants was properly quantified as the difference between the sale prices as agreed and the re-sale prices as obtained;

(c)the plaintiff properly considered that it had sufficient evidence to establish that all reasonable steps were taken to mitigate losses, and the defendants’ defence would be unsuccessful on the basis that:

(i)the defendants’ allegations regarding a familial link based on a shared last name sought to draw stretched inferences;

(ii)the plaintiff provided evidence of various attempts, through real estate agents and independently, to obtain a sale of the cancelled properties;

(iii)the plaintiff provided evidence regarding its attempts to obtain as high a price on resale as possible, and reject bona fide offers

5      Above n 2, at 406.

in a declining property market (a fact accepted by the defendants);

(d)the evidence tendered on behalf of the plaintiff in the application was not “hopelessly improbable” or constituted “egregious misstatements”;

(e)the defence raised by the defendants in their notice of opposition was not “unimpeachable”;

(f)the plaintiff was entitled to hold the position that his matter was suitable, and capable of being dispensed through the summary judgment procedure.

[12]             As to re-call of the costs determination of the Judgment, Ms Cook submits that under the test set out in Horowhenua County v Nash (No.2),6 the judgment as to costs was made without proper attention to an authoritative decision of plain relevance, namely the Philpott decision, and accordingly the criteria for rescission of the costs determination was fulfilled.

[13]             Ms Cook also seeks “costs on costs” to the extent of claiming costs on her memorandum of 9 December 2024.

Result

[14]             I am of the view that the costs determination in the Judgment should be recalled. The reasons for this are as follows:

(a)As to meeting the criteria for recall of a judgment before it is sealed, in my view the plaintiff’s application fits within the criteria set out in the Horowhenua County decision, in that the Philpott decision was not considered or referred to in the determination of costs. In addition, reasons were not specified in the Judgment as to why the summary

6      Horowhenua County v Nash (No.2) [1968] NZLR 632 at 633.

judgment application fell within “exceptional cases” as described in

Philpott and amounted to being an abuse of the Court’s processes;

(b)consequent upon [14](a), the usual position of costs being reserved was appropriate to apply;

(c)as to Ms Cook’s application for costs on costs in respect of her memorandum as to costs, I have not allowed this as the position of the defendants seeking costs on a 2B basis was not sufficiently egregious as to justify costs on costs.

Orders

[15]I make the following orders:

(a)Paragraph [45](b) of the Judgment is recalled and replaced by the following: “Costs are reserved”. The Judgment to be reissued accordingly.

(b)there is no order as to costs on the application for recall.

…………………………….. Associate Judge Taylor