Shamariah Consultancy Ltd v New Zealand Egg Group Ltd

[2025] NZHC 808

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-2074

[2025] NZHC 808

BETWEEN

SHAMARIAH CONSULTANCY LTD

First Plaintiff

AND

ROBERT GRANT DARBY

Second Plaintiff

NEW ZEALAND EGG GROUP LTD
First Defendant

NICHOLAS JOHN BENNIK and
CULLINANE STEELE TRUSTEES (2020)

LTD as trustees of the NJ BENNIK TRUST Second Defendants

Hearing:

On the papers

Appearances:

E Taia for the Second Plaintiff

J Land / S Jeffs for the Second Defendants

Judgment:

7 April 2025

JUDGMENT OF GARDINER J

(Costs)

This judgment was delivered by me on 7 April 2025 at 3:00pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:

Franklin Law, Pukekohe

Cullinane Steele Lawyers, Levin Bankside Chambers, Auckland

SHAMARIAH CONSULTANCY LTD v NEW ZEALAND EGG GROUP LTD [2025] NZHC 808 [7 April 2025]

[1]    On 30 September 2024, I dismissed the second defendants’ application for summary judgment or strike out of the second plaintiff’s claim.1

[2]    The second defendants, the trustees of the NJ Bennik Trust (trustees), now seeks costs.

[3]    Robert Darby, the second plaintiff, also seeks costs and denies that the trustees are entitled to costs.

Application for summary judgment and strike out

[4]    The trustees sought summary judgment or strike out of Mr Darby’s claim against them that they hold 22,500 shares on trust for him pursuant to an institutional constructive trust. This claim was the sixth cause of action in the statement of claim.

[5]    After reviewing the facts, I accepted that the pleaded claim against the trustees based on an institutional constructive trust could not succeed. However, I was not persuaded that Mr Darby did not have a claim of any kind against the trustees. Therefore, I declined to enter summary judgment or strike out the cause of action and gave Mr Darby leave to replead the cause of action in light of the discussion in the judgment.

The trustees’ submissions

[6]    Since my judgment, Mr Darby has filed an amended statement of claim abandoning the cause of action in constructive trust  and  advancing  two  new  causes of action,  for  breach  of  contract  and   misrepresentation.   Accordingly,  the trustees submit that they are entitled to 2B scale costs, or that costs should lie where they fall or be reserved until the substantive hearing.

[7]    In support of their submission they are entitled to 2B costs, the trustees say they were more successful considering the completely amended statement of claim. The trustees say that the exercise of the Court’s discretion to grant leave to amend the pleading, rather than striking it out, does not affect their entitlement to costs to the

1      Shamariah Consultancy Ltd v NZ Egg Group Ltd [2024] NZHC 2771.

extent this signalled that the claim was fundamentally untenable and could not succeed. This is also evidenced by the amended statement of claim, which has abandoned the constructive trust claim in its entirety  in  favour  of  claims  in  breach of contract and misrepresentation.

[8]    Alternatively, the trustees submit that costs should lie where they fall. They take the view that Mr Darby cannot be seen as truly successful considering his entirely amended claim.

[9]    Also in the alternative, the trustees submit that costs should be reserved pending final determination of the substantive litigation. Again, Mr Darby has significantly changed his position  since judgment  was  granted in  his  favour and he cannot truly be regarded as the successful party.

Mr Darby’s submissions

[10]   Mr Darby’s position is that he was plainly the successful party and is thus entitled to costs in the ordinary way.

[11]   Alternatively, Mr Darby submits that costs should lie where they fall as     the trustees should have anticipated that leave to amend the pleadings was a possible outcome following their application.

[12]   Also in the alternative, Mr Darby  submits that costs  should be reserved  per r 14.8(3) of the High Court Rules 2016. The trustees have not identified any special circumstances which would warrant a departure from the usual rule.

Legal principles

[13]   The usual rule is that costs on an opposed interlocutory application become payable when they are fixed does not apply to an application for summary judgment.2

[14]   The traditional approach following a plaintiff’s unsuccessful summary judgment application is to reserve costs rather than make them costs in the

2      High Court Rules 2016, r 14.8(3).

proceedings.3 However, the courts have recognised that there are differences between applications for plaintiff’s and defendant’s summary judgment that may warrant      a different costs approach.4 There is no settled practice in respect of costs following unsuccessful defendants’ summary judgment applications.5 Each case will turn on its own facts.6

[15]   If a summary judgment  application  covers essentially  the same ground  as  a strike-out application, it may be appropriate to fix and make costs payable following the  interlocutory  decision  rather  than  attempt  to  allocate  costs  between  the  two applications.7

Assessment

[16]   I accept that, on a superficial level, Mr Darby was the successful party in that he managed to avoid summary judgment or strike out. I keep in mind the settled principles that a defendant’s application for strike out or summary judgment is only appropriate in cases where there is clear legal impediment to liability or a complete and incontrovertible answer on the facts.8 Plainly, I could not conclude on the facts that Mr Darby had no claim at all.

[17]   However, I also accept the trustees’ submission that Mr Darby cannot truly be defined as the successful party, considering he has completely changed his position in light of my conclusion that his claim could not succeed as pleaded.   This is not    a situation where the application has resulted in minor or even moderate amendments to the pleading. Mr Darby has repleaded the cause of action concerning the second defendants entirely.

3      NZI Bank Ltd v Philpott [1990] 2 NZLR 403 (CA) at 406.

4      Suharnan v Brookfields [2013] NZHC 586, (2013) 22 PRNZ 790 at [13].

5      Miah v National Mutual Life Association of Australasia Ltd [2016] NZCA 590, [2017] 2 NZLR 241 at [61], n 39.

6      See Schmidt v Registrar-General of Land [2015] NZHC 2438, (2015) 22 PRNZ 794 (costs reserved); EBS v CAS [2014] NZHC 2929 (costs reserved); Miah v National Mutual Life Association of Australasia Ltd, above n 5 (costs fixed but not payable); Suharnan v Brookfields, above n 4 (costs awarded to plaintiff where the unsuccessful strike out and summary judgment applications covered essentially the same ground); and Judge v Dempsey [2014] NZHC 2864 (costs awarded to plaintiff in respect of unsuccessful defendant’s summary judgment application).

7      Tandem Group Ltd v ASB Bank Ltd [2021] NZHC 1135 at [11].

8      Body Corporate No 207624 v North Shore City Council [2012] NZSC 83, [2013] 2 NZLR 297 at [4].

[18]   It is also relevant that the second defendants put Mr Darby on notice that    the claim against the trustees was defective. It is not as if the second defendants did not attempt to address the issues with the statement of claim before they brought their applications. Mr Darby denied that the claim was defective but said that he would file an amended statement of claim. No amended statement of claim was filed.

[19]   Weighing these considerations, I am of the view that the trustees are entitled to their costs. The trustees would not have been put to the cost of bringing the application for summary judgment/strike out had Mr Darby appropriately pleaded his claim, as he has now done, following my judgment.

Result

[20]   Accordingly, I order Mr Darby to pay 2B scale costs as sought by the trustees, in the amount of $7,648 along with disbursements of $650.

Gardiner J