Ruscoe v Epic Trust Limited
[2025] NZHC 3073
•16 October 2025
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2024-485-58
[2025] NZHC 3073
UNDER the Trade Marks Act 2002 and the Fair Trading Act 1986 IN THE MATTER
of breach of confidence
BETWEEN
DAVID IAN RUSCOE and
MALCOLM RUSSELL MOORE of
Grant Thornton New Zealand Limited as liquidators of Cryptopia Limited (in liquidation)
First Plaintiffs
CRYPTOPIA LIMITED (in liquidation) Second Plaintiff
AND
EPIC TRUST LIMITED
First Defendant
THOMAS VICTOR HENRY RONALD CATTERMOLE
Second Defendant
MARTIN BRAINE
Third Defendant
PERSONS UNKNOWN
Fourth Defendant
Hearing: On the papers Appearances:
S Barker, J McGrath and B Marriner for Plaintiffs Second Defendant In Person
Judgment:
16 October 2025
RUSCOE v EPIC TRUST LIMITED [2025] NZHC 3073 [16 October 2025]
JUDGMENT OF ASSOCIATE JUDGE SKELTON
[Costs]
[1] In my judgment dated 1 August 2025 (Judgment),1 I determined by way of summary judgment that the plaintiffs were entitled to permanent injunctions against all the defendants in respect of two of the three causes of action in their statement of claim. I also dismissed the second defendant’s interlocutory application for appointment of counsel assisting and an independent expert.
[2] At [120] of the Judgment, I expressed my preliminary view that the plaintiffs are entitled to one set of costs on a 2B basis, and with reasonable disbursements, for the summary judgment application and the second defendant’s application for appointment of counsel assisting. I directed that the parties should endeavour to agree costs.
[3]The parties have been unable to resolve costs.
[4] The plaintiffs now seek costs for all stages of this proceeding on a 2B basis, only against the second defendant. They also seek increased costs (an uplift of 50 per cent) because of the second defendant’s conduct in the proceeding.
[5] The second defendant is the only defendant to respond. He contends that no costs award should be made against him at this stage. He says that if any costs award is made it should be:
(a)confined to the plaintiffs’ application for summary judgment and his application for appointment of counsel assisting;
(b)on a 1B basis;
(c)reduced because the plaintiffs abandoned their cause of action under the Trademarks Act 2002; and
1 Ruscoe v Epic Trust Ltd [2025] NZHC 2138.
(d)apportioned between all the defendants.
Legal principles — costs
[6] Costs are ultimately a matter of the court’s discretion, the overall objective being to achieve an outcome that best meets the interests of justice.2 However, that discretion is qualified by the applicable costs rules, contained in pt 14 of the High Court Rules 2016 (the Rules). The primary principle applying to the determination of costs is that costs follow the event, meaning that a party who is unsuccessful pays costs to a party who is successful.3 Costs are usually assessed against sch 2 and 3 of the Rules by applying the appropriate daily recovery rate to the time considered reasonable for each reasonably required step in relation to the proceeding or interlocutory application.4
[7] Rule 14.7 sets out the bases on which the court can decline or reduce costs, including:
14.7 Refusal of, or reduction in, costs
Despite rules 14.2 to 14.5, the court may refuse to make an order for costs or may reduce the costs otherwise payable under those rules if—
(a)the nature of the proceeding or the step in a proceeding is such that the time required by the party claiming costs would be substantially less than the time allocated under band A; or
(b)the property or interests at stake in the proceeding were of exceptionally low value; or
(c)the issues at stake were of little significance; or
(d)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; or
(e)the proceeding concerned a matter of public interest, and the party opposing costs acted reasonably in the conduct of the proceeding; or
2 High Court Rules 2016, r 14.1; Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305 at [7]; Glaister v Amalgamated Dairies Ltd [2004] 2 NZLR 606 (CA) at [21]–
[24] and [28]; Mansfield Drycleaners Ltd v Quinny’s Drycleaning (Dentice Drycleaning Upper Hutt Ltd) (2002) 16 PRNZ 662 (CA) at [27]; and Kinney v Pardington [2021] NZCA 174 at [1].
3 Rule 14.2(1)(a).
4 Rule 14.2(1)(c).
(f)the party claiming 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 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, or documents, or accept a legal argument; or
(iv)failing, without reasonable justification, to comply with an order for discovery, a notice for further particulars, a notice for interrogatories, or other similar requirement under these rules; or
(v)failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule 14.10 or some other offer to settle or dispose of the proceeding; or
(g)some other reason exists which justifies the court refusing costs or reducing costs despite the principle that the determination of costs should be predictable and expeditious.
[8] Increased costs may be awarded “where there is a failure by the paying party to act reasonably”.5 The Court may order a party to pay increased costs where that party has contributed unnecessarily to the time or expense of the proceeding (or a step in it).6 Examples include failing to comply with the Rules or taking or pursuing an unnecessary step or argument that lacks merit.7
[9] The Court may also award the actual costs reasonably incurred by a party (indemnity costs).8 Indemnity costs may be awarded where a party has behaved either badly or very unreasonably.9 For example, indemnity costs may be ordered if the party has acted vexatiously, frivolously, improperly, or unnecessarily in commencing,
5 See Bradbury v Westpac Banking Corp [2009] NZCA 234, [2009] 3 NZLR 400 at [27].
6 Rule 14.6(3)(b).
7 Rule 14.6(3)(b)(i) and(ii).
8 Rule 14.6(1)(b).
9 Bradbury v Westpac Banking Corp, above n 5, at [27]–[29] and Prebble v Awatere Huata (No. 2)
[2005] NZSC 18, [2005] 2 NZLR 467 at [6].
continuing, or defending a proceeding or step in a proceeding.10 Misconduct to justify indemnity costs must be flagrant.11
[10] Applications to depart from a standard award of costs based on the schedular approach are discouraged unless there is a clear basis for such departure in accordance with the Rules.12
Discussion
Scope of costs award
[11] The first issue is whether costs should be awarded for the whole of the proceeding or only the summary judgment application and the second defendant’s application for appointment of counsel assisting.
[12] As noted above, I expressed a preliminary view in the Judgment, prior to hearing fully from the parties on costs. At that stage, I did not appreciate that costs for the earlier stages of this proceeding, in particular the applications for interim and interlocutory injunctions, had not been addressed. The High Court Rules require costs for interlocutory applications to be fixed when the applications are determined (unless there are special circumstances to the contrary).13 That did not happen here.14 The plaintiffs say that they have not previously sought costs in the proceeding because, if they were ultimately unsuccessful in their claims, then they would not seek to recover costs for the interim and interlocutory injunctions.
[13] As noted above, costs are ultimately a matter of the court’s discretion, the overall objective being to achieve an outcome that best meets the interests of justice. In this case, I think it is in the interests of justice to consider the plaintiffs’ application for costs for the whole proceeding. There is no good reason why the plaintiffs should now be denied the opportunity to recover costs for their earlier interlocutory
10 High Court Rules, r 14.6(4)(a); Bradbury v Westpac Banking Corp, above n 5, at [29]; Jessica Gorman and others McGechan on Procedure (online looseleaf ed, Thomson Reuters) at [HR14.6.03(1)(c)] [McGechan].
11 Bradbury v Westpac Banking Corp, above n 5, at [28].
12 Lepionka & Company Investments Ltd v Gibson Sheat [2023] NZHC 2745 at [3] and [7].
13 High Court Rules, r 14.8. See Tyre Collection Services Ltd v Le Roy [2016] NZHC 896 at [16].14 It did not occur because special circumstances were argued and accepted, but rather, appears to be an oversight.
applications simply because costs were not addressed by the Court when those applications were determined.15
Successful party?
[14] In terms of the substantive proceeding, the plaintiffs are clearly the successful party. I granted summary judgment in respect of two of the plaintiffs’ three causes of action; the first cause of action for breach of confidence and the third cause of action for breach of the Fair Trading Act 1986. The plaintiffs were granted permanent injunctions. The plaintiffs advised that if they were successful in obtaining summary judgment for the first and third causes of action, they would withdraw the second cause of action under the Trade Marks Act 2002. A formal notice of discontinuance was filed on 25 August 2025. These proceedings are at an end. There is no basis for deferring the determination of costs pending the outcome of the liquidation of Cryptopia Ltd as submitted by the second defendant.
[15] Further, the plaintiffs obtained interim and interlocutory injunctions in the early stages of the proceedings.16 The plaintiffs were also successful in opposing an application by the first defendant to set aside the interim orders.17
[16] The plaintiffs did not formally oppose the second defendant’s application for appointment of counsel to assist. However, they filed a memorandum submitting that it was apparent that appointment of counsel to assist was not necessary in the circumstances.18 I declined the application.19
Appropriate categorisation for costs and plaintiffs’ calculation
[17] The second defendant contends if costs are to be awarded, then 1B costs are appropriate. He argues that this reflects: the reduced complexity of the proceedings (particularly because the plaintiffs did not pursue the trademark claim); the “limited
15 See Exportrade Corporation v Irie Blue New Zealand Ltd [2013] NZHC 427 at [14].
16 Ruscoe v Epic Trust Limited [2024] NZHC 165; Ruscoe v Epic Trust Limited [2024] NZHC 1336 [Isac J May 2024 Judgment]; Ruscoe v Epic Trust Limited [2024] NZHC 1564.
17 Isac J May 2024 Judgment, above n 16.
18 See Ruscoe v Epic Trust Limited HC Wellington CIV-2024-485-058, 1 April 2025 (Email Minute of Associate Judge Skelton).
19 Judgment, above n 1, at [106]–[116].
personal involvement of Mr Cattermole”; and the “proportionate nature of the dispute” because the injunctions granted under the Fair Trading Act do not apply to conduct outside New Zealand.
[18] I disagree. Even though the plaintiffs did not pursue the trademark claim at the substantive hearing, the proceeding involved determination of jurisdictional issues and claims for breach of confidence and breach of the Fair Trading Act. The plaintiffs sought permanent injunctions. I do not consider the level of personal involvement of the second defendant in the proceeding is relevant to the appropriate cost categorisation for the proceeding. The injunctions granted under the Fair Trading Act apply to conduct outside New Zealand.20
[19] The proceeding is clearly appropriately categorised 2 for costs: it is a proceeding of average complexity requiring counsel of skill and experience considered average in the High Court.21
[20] The second defendant has not raised any issues with the plaintiffs’ calculation of 2B costs set out in schedule 1 to the plaintiffs’ memorandum dated 13 August 2025, in the sum of $48,517, or with the plaintiffs’ disbursements set out in schedule 2 to the memorandum in the sum of $5,046.10.
[21] I have reviewed the plaintiffs’ schedules and I consider the calculation of costs is in accordance with the High Court Rules and the claimed disbursements are reasonable.
Should scale costs otherwise payable be reduced?
[22] The second defendant contends that costs should be reduced because the plaintiffs did not pursue the trademark claim at the substantive hearing and because the plaintiffs have not “constructively engaged” with settlement offers made by the defendants.
20 Judgment, above n 1, at [79]–[80].
21 Rule 14.3.
[23] I agree that there should be some reduction in scale costs to reflect that the plaintiffs did not pursue one of their three causes of action (the second cause of action under the Trade Marks Act) at the substantive hearing and have discontinued this cause of action. The plaintiffs have acknowledged that to the extent they were ultimately unsuccessful in their claims, they would not seek to recover costs for the injunctions. I consider that a reduction of 20 per cent in overall costs is appropriate, recognising that the defendants did not have to deal with the trademark claim in opposing the application for summary judgment.
[24] I do not consider there should be any further reduction in respect of any failure by the plaintiffs to engage in settlement discussions. It is apparent that the plaintiffs have not acted unreasonably by not engaging with the settlement offers made by the second defendant. It is contended by the plaintiffs that an offer made by the second defendant in March 2025 involved threats against staff, family and consultants of Grant Thornton and Buddle Findlay.
Should scale costs be increased?
[25] The plaintiffs seek an uplift of 50 per cent to reflect the second defendant’s conduct in the proceeding. They submit that the second defendant has contributed unnecessarily to the time or expense of the proceeding (or a step in it) by pursuing an unnecessary step or argument that lacks merit. In particular, the second defendant protested the Court’s jurisdiction, and opposed the plaintiffs’ application for summary judgment and for interlocutory injunctions in circumstances where the second defendant had already admitted to the core elements of the causes of action in his statement of defence. The plaintiffs also submit that increased costs are appropriate because of the second defendant’s attempts to “threaten/blackmail” the plaintiffs into settling the proceeding.
[26] Taking into account that the second defendant is a litigant in person, I do not consider that it is appropriate to award increased costs against him on the basis that he has contributed unnecessarily to the time and expense of the proceeding by raising the jurisdictional issue, and because he opposed applications in circumstances where the plaintiffs say he had admitted some elements of their causes of action in his statement
of defence. Further, on the material before me, I am not prepared to make findings as to the plaintiffs’ allegations of threats and blackmail in the context of this costs decision.
[27] However, I consider it is appropriate to award increased costs on the basis of the defendants’ non-compliance with the interim injunctions and interlocutory injunctions and ancillary orders, which was a factor in the plaintiffs having to return to the Court to have the injunctions made permanent.22 I consider an uplift of 40 per cent is appropriate.23
Should costs only be awarded against the second defendant?
[28] The plaintiffs contend that costs should only be awarded against the second defendant as “the person in control of all the defendants’ conduct in this proceeding”.
[29] While the second defendant owns the first defendant and appears to be in control of its activities, and appears to control the Principality of Cogito, I do not agree that costs should only be awarded against the second defendant.
[30] The first defendant is a separate legal entity, and the second defendant is not registered as its director. The first defendant was represented by counsel at an earlier stage in the proceedings and took an active part in opposing the applications for injunctions, and also unsuccessfully applied to set aside the interim orders.24 Further, it not clear what level of control the second defendant has over the third defendant and fourth defendant(s). The first defendant, third defendant and fourth defendant(s) did not file notices of opposition to the plaintiffs’ applications for leave to apply for summary judgment and for summary judgment, or statements of defence. However, nor did they file memoranda advising the Court that they consented to or did not oppose the application for summary judgment.
22 Judgment at [69]–[70] and [93]–[98]. See also Nicholas v Carter [2025] NZHC 2237 at [17].
23 Rule 14.6(3)(b)(i)).
24 Isac J May 2024 Judgment, above n 16, at [1]. There is an error in that paragraph where Epic Trust is labelled the second defendant, when it is the first.
[31] In the circumstances, I am satisfied that costs should be awarded against all the defendants. The defendants should be jointly and severally liable for costs.25 Any arrangements that might then exist between the defendants are matters for them.26
Result
[32] The plaintiffs are entitled to costs in the sum of $54,339.04 and disbursements in the sum of $5,046.10. The defendants are jointly and severally liable for these costs and disbursements.
Associate Judge Skelton
Solicitors:
Buddle Findlay, Wellington for Plaintiffs
25 High Court Rules, r 14.14.
26 Sleight v Beckia Holdings Ltd [2021] NZHC 456 at [14].
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