Vanifatova v Wang

[2025] NZHC 2265

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-000622

[2025] NZHC 2265

BETWEEN

ANGELINA VANIFATOVA

Plaintiff

AND

WEIGUO WANG

First Defendant

XIAOYUE WANG (aka CRYSTAL WANG)
Fourth Defendant

HE WANG (aka WILSON WANG)

Fifth Defendant

Hearing:

On the papers

Counsel:

G R Grant and M C Frogley for Plaintiff

P L Rice and B Han for First, Fourth and Fifth Defendants

Judgment:

12 August 2025

JUDGMENT OF ANDREW J

[Costs]

This judgment was delivered by me

on 12 August 2025 at 10 am, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

VANIFATOVA v WANG [2025] NZHC 2265 [12 August 2025]

Introduction

[1]        On 16 June 2025, I entered judgment for the plaintiff against the first, fourth and fifth defendants.1 I directed that the parties file further submissions if they were unable to agree on interest and costs.

[2]        The defendants do not dispute the plaintiff’s claims for interest and disbursements. The costs issues that I must determine concern quantum, including increased costs and costs for second counsel.

Background

[3]        The plaintiff bought a house (the Property) from the first defendant in 2021. The first defendant lives in China. The fourth defendant is the first defendant’s daughter. The fifth defendant is her husband. The fourth and fifth defendants acted as the first defendant’s agents in New Zealand at all material times.2

[4]        The plaintiff soon discovered that the Property had significant weathertightness defects. She advanced claims for misrepresentation under the Contract and Commercial Law Act 2017, breach of contractual warranty, and misleading and deceptive conduct under the Fair Trading Act 1986 (FTA) against the first defendant. She also advanced claims for deceit and breach of the FTA (as parties to the first defendant’s breach) against the fourth and fifth defendants. The broad thrust of her claims was that the defendants had misrepresented the condition of the Property by omitting to mention past weathertightness issues.

The substantive judgment

[5]While I dismissed both FTA claims, the plaintiff’s other claims succeeded.

[6]        The first defendant misrepresented the condition of the property by failing to disclose known weathertightness issues and the extent of remedial works undertaken.

1      Vanifatova v Wang [2025] NZHC 1532.

2      The plaintiff settled with the second and third defendants before the trial. The second defendant was a building inspector who had carried out a pre-purchase inspection of the Property for the plaintiff. The third defendant was the sole director and shareholder of the second defendant.

These omissions and half-truths created a misleading impression that the property had no history of leaks, which induced the plaintiff to enter into the agreement for sale and purchase (ASP). The first defendant also breached the vendor warranty in the ASP by failing to obtain a building consent for significant remedial works carried out in 2015. Expert evidence confirmed that the nature of the repairs, such as timber replacement and waterproofing, required consent under the Building Act 2004. No such consent was obtained and the first defendant was in clear breach of the ASP.

[7]        The plaintiff’s deceit claim succeeded against the fourth and fifth defendants. Both knowingly made false representations. The fifth defendant concealed tell-tale signs of water ingress. Both the fourth and fifth defendants withheld critical information about the property’s condition, including a pre-purchase inspection report prepared for a previous prospective buyer and the extent of remedial works. Indeed, they could not have honestly believed that they had provided the plaintiff with a full and accurate picture of the remedial works that had previously been carried out. Their omissions were intended to mislead the plaintiff and did in fact induce her to proceed with the purchase.

[8]        I awarded the plaintiff her pleaded estimated remedial cost of $495,190 including GST. I ordered that the plaintiff should be awarded $15,355 in consequential losses for lost rental income and general damages of $30,000.3

Overview of submissions

[9]        As outlined above, the parties agree on interest and disbursements. They also agree that 2B is the appropriate scale. However, the defendants dispute several other aspects of the plaintiff’s costs claim. These are as follows:

(a)The plaintiff claims an uplift of 50 per cent for certain steps because the defendants rejected several offers of settlement. The defendants say that increased costs are not justified in the circumstances. In the alternative, they say that an uplift of 25 per cent would be appropriate

3      The plaintiff accepted that she would have to deduct $64,048 for her settlement with the second and third defendants.

if the Court awarded increased costs. The defendants also say that any award of costs to the plaintiff should be reduced by 10 per cent, to reflect the fact that two of the plaintiff’s causes of action failed.

(b)The defendants say that the plaintiff should not be able to claim for second counsel.

(c)The defendants say that the plaintiff has claimed costs for two steps that are not specifically provided for in the High Court Rules 2016 (HCR) and that there is no basis for the claims by analogy.

(d)Finally, the defendants say that the HCR do not provide for the claiming of three lists of documents under step 20, as the plaintiff has done.

[10]I address the parties’ specific submissions below.

Uplift/reduction

Submissions

[11]      The plaintiff says that a 50 per cent uplift is justified in  the present  case.  She says that the defendants  unreasonably  rejected  multiple  settlement  offers.  She contends that despite a Calderbank offer made in December 2023 and other offers, including a buyback proposal and an open offer just before trial, the defendants either rejected the offers outright or failed to respond. The plaintiff further contends that an uplift is justified by the defendants’ refusal to mediate, failure to present credible expert evidence, and insistence on contesting liability despite clear evidence of misrepresentation and breach of warranty. The plaintiff says that a 50 per cent uplift should be applied to all costs incurred after the rejection of her Calderbank offer in December 2023.

[12]      For their part, the defendants say that it was reasonable for the fourth and fifth defendants to reject the plaintiff’s offers of settlement. They say that they had a “plainly arguable defence” against the plaintiff’s deceit claim and were entitled to have the Court determine it. Settling would also have amounted to an admission of deceit.

The defendants also say that it was not unreasonable for the first defendant to decline settlement offers, given the desire of the fourth and fifth defendants not to settle.

[13]      Further, the defendants submit that any award of costs to the plaintiff should be reduced by 10 per cent, given that two of the plaintiff’s causes of actions failed. However, they acknowledge that the conduct of the trial was not greatly lengthened by the unsuccessful claims.

Legal principles

[14]      The Court may order a party to pay increased costs where that party has failed to act reasonably.4 One such example is if the party has contributed unnecessarily to the time or expense of the proceeding by failing without reasonable justification to accept an offer of settlement.5 This applies to both Calderbank offers under rr 14.10 and 14.11 of the HCR, and other offers of settlement.6 Katz J in Weaver v HML Nominees Ltd identified a number of factors that may be relevant to considering whether a party has unreasonably rejected a settlement offer. These include:7

(a)the size of the offer relative to the actual costs of counsel;

(b)the amount of the claim;

(c)the reasonable expectations of the party that refuses the offer;

(d)the amount of preparation of trial already undertaken;

(e)whether the proceeding concerns an uncertain area of the law;

(f)whether the parties were in a position to assess the merits when the offer was received;

4      Bradbury v Westpac Banking Corporation [2009] NZCA 234, [2009] 3 NZLR 400 at [28].

5      Rule 14.6(3)(b)(v), High Court Rules 2016.

6      David Bullock and Tim Mullins The Law of Costs in New Zealand (LexisNexis, Wellington, 2022) at 3.9.

7      Weaver v HML Nominees Ltd [2016] NZHC 473 at [30].

(g)the information available to the party who receives the offer and the extent to which they can assess the offer;

(h)the timing of the offer; and

(i)the conduct of the offeror.

[15]      The reasonableness of the rejection is to be assessed at the time the offer was made, without the benefit of hindsight.8 Whether it was reasonable for a party to reject an offer is a fact-specific enquiry.9 Ultimately, the focus remains on the conduct of the offeree and whether their refusal contributed unnecessarily to the time and expense of the proceeding.10

Are increased costs justified?

[16]      In my view, the threshold for increased costs is made out. The successful causes of action turned on the defendants’ deliberate omissions in disclosing problems about the Property to the plaintiff, and their efforts to conceal the true state of affairs. The legal principles underpinning the successful claims  are  decidedly  settled.  They unreasonably rejected the settlement offers.

[17]      I also note that the plaintiff made more than one offer to settle. The first offer was also made well before any trial had been scheduled and before much of the preparation for trial had been undertaken. The close date for pleadings was the following August. Briefs of evidence were due in late 2024, nearly a year away. There were also two buyback offers in September and October 2024, and an approach to negotiate a settlement four days before the trial. The two buyback offers were rejected outright, while some discussions took place following the approach before trial. I give less weight to these later offers and approaches individually, given the increasingly close time to trial. However, they reinforce the conclusions I have already drawn. Indeed, barring the discussions a few days before trial, the defendants consistently refused to engage with the plaintiff as to a potential settlement.

8      Openyd Ltd v Lawrence [2019] NZHC 583 at [7].

9      Weaver v HML Nominees Ltd, above n 7, at [30].

10     Openyd Ltd v Lawrence, above n 8, at [7]–[8].

[18]      For completeness, I note that the correspondence provided by the plaintiff in support of her costs submissions record that the defendants made an offer of $50,000 to settle the matter. That carries little weight in my assessment, given the size of the damages that were ultimately awarded against them.

The effect of the two failed FTA claims

[19]      The defendants say that I should reduce costs by 10 per cent to reflect the fact that two of the plaintiff’s causes of action failed. The plaintiff opposes any reduction being made.

[20]      If I had not already considered that an uplift was justified, a minimal reduction would have been appropriate to reflect the failed claims. The scope of these claims was fairly restricted. The legal and factual issues were straightforward, and limited hearing time was devoted to them.

Conclusion

[21]      Weighing the above matters and considering all the circumstances, I consider that a 20 per cent increase in costs should be applied. I note that the 50 per cent uplift sought by the plaintiff is generally considered the upper limit for an increase of costs.11 This is not a case that justifies such a large increase.

Second counsel

[22]      The plaintiff says that second counsel was necessary for a range of tasks. These include arranging the appearance of the plaintiff’s witnesses, one of whom was overseas and appeared via audio-visual link, preparing the electronic bundle, and organising a Mandarin interpreter. The defendants say that the present case was not complex enough to warrant second counsel.

[23]      The Courts have held that there usually has to be some special feature to justify costs for a second counsel.12 Consideration must be given to whether the nature of the

11     Holdfast NZ Ltd v Selleys Pty Ltd (2005) 17 PRNZ 897 (CA) at [48].

12     Body Corporate S73368 v Otway (No 2) [2018] NZHC 1761 at [4].

proceeding and the way the trial was conducted justifies requiring the losing party to contribute to the winning party’s junior counsel.13

[24]      I consider that certification of second counsel is not justified. I accept there were some logistics involved with one of the witnesses, who was overseas. However, the case was not of unusual complexity. The expert evidence was limited and not overly complex. There were five causes of action, but the legal issues and facts relating to these were limited in scope.

[25]      I also note the plaintiff’s submission that counsel for the defendants was assisted by second counsel. Certification of second counsel depends on an objective consideration of the nature of the proceeding, not how the parties chose to conduct the litigation.14 That is not to say that second counsel cannot add real value without the circumstances necessary for certification (and likely did so here).15 It is simply that this proceeding was not of such a nature as to justify certification of second counsel.

Claims for steps by analogy

[26]      The plaintiff claims for two steps that are not directly represented in sch 1 of the HCR. These are for “agreeing terms of undertaking to the Court” (by analogy with steps 28 and 36) and the preparation of a “detailed chronology” for trial (by analogy with steps 18 and 36). The defendants say that costs generally lie where they fall when parties resolve matters by agreement. They also say that the preparation of chronologies is a standard part of trial preparation.

The undertaking

[27]      The plaintiff made an interlocutory application on 22 September 2022 for an urgent freezing order over the proceeds of sale of the Property. Justice Duffy made an interim freezing order on 29 September, pending the hearing of the application that November.

13     Nomoi Holdings Ltd v Elders Pastoral Holdings Ltd (2001) 15 PRNZ 155 (HC) at [21].

14     Body Corporate S73368 v Otway (No 2), above n 12, at [7].

15 At [7].

[28]      Before the application was heard, the fourth defendant made an undertaking to the Court that she would not sell another property that she had purchased using the proceeds, or encumber or dispose of the property without notice to the plaintiff.   That proved satisfactory to the plaintiff. Counsel for the parties jointly applied for the interim freezing order to be set aside and for the hearing of the application to be vacated. Justice Moore made these orders by consent on 2 November 2022.16

[29]      Generally, costs lie where they fall when matters are resolved between the parties.17 I do not accept the plaintiff’s submission that she effectively “succeeded”. The application was never argued before the Court. Nor is this a case where a party has conceded that the orders sought can be made after previously defending the application.18 It was resolved by the parties agreeing to certain, specific terms under which the fourth defendant would deal with the proceeds of sale. Significantly, the terms of the undertaking differed from the freezing orders sought by the plaintiff. The freezing orders sought related to any prospective proceeds of sale if the Property was sold. In the alternative, freezing orders were sought over the interests of the first, third and fourth defendants in the Property,19 and to restrain them from disposing of, dealing with or diminishing the value of the Property. The undertaking given by the fourth defendant related only to her share of the proceeds of sale, which had been used to buy the new property. I therefore see no basis on which the plaintiff should receive costs relating to the undertaking.

The chronology

[30]      The plaintiff says that the chronology was “extraordinarily detailed” and ultimately helpful to the Court. The defendant says that preparing a chronology is a standard part of trial preparation.

[31]      While the document was helpful, a chronology is a standard part of the bundle in many civil trials. In my view, it was not so complex or difficult to assemble such that a discrete award of costs should be made for it.

16     Vanifatova v Wang HC Auckland CIV-2022-404-622, 2 November 2022.

17     Lepionka & Company Investments Ltd v Sheat [2023] NZHC 2745 at [17].

18     See, for example, Italian Surfaces NZ Ltd (in liq) v Kitchen Magic Ltd [2014] NZHC 1724.

19     The third defendant held a 3/5th share in the property on power of attorney for the first defendant. The remaining 2/5th share was held by the fourth defendant.

Other disputed steps

[32]      The plaintiff claims costs under step 20 specifically for her second and third supplementary affidavits of documents. The defendants say that there is no provision for supplementary lists of documents in the HCR and that I should only allow the plaintiff to claim once under step 20.

[33]      I consider that these steps were reasonably necessary. As the plaintiff observes, the first supplementary affidavit was necessary because of discovery deficiencies on the part of the defendants.

[34]      The second affidavit related to a notice to admit facts sent by the plaintiff to the defendants. The notice requested that the defendants admit that translations of certain WeChat text and voice messages were accurate, and that the quantum of remedial costs was $495,190. It appears (and the plaintiff submits) that the defendants eventually agreed to admit the translations. However, they did not admit the quantum of remedial costs, and the plaintiff was still put to the cost of proving it at trial.20 It is unclear exactly when the defendants agreed to admit the translations. However, by the time they did, the plaintiff’s supplementary affidavit containing the translations and documents on which the plaintiff’s remedial costs expert based his evidence had already been prepared and filed. I therefore consider it appropriate for the plaintiff to be awarded costs for this step.21 I reject the defendants’ submission that there is any rule against claiming costs for steps of one type multiple times.

Conclusion

[35]      I order that the first, fourth and fifth defendants pay the plaintiff $115,150.20 in costs and $61,328.08 in disbursements. I set out the full analysis at Schedule A, which details costs, and Schedule B, which details disbursements.

Andrew J

20 Nor did the defendants offer any evidence at trial on the issue.

21 See r 8.47(4) of the HCR: if the party on whom a notice to admit facts has been served refuses or neglects to admit the facts within 5 working days after the day of service or within any longer time allowed by a Judge, the costs of proving the facts must be paid by that party, unless a Judge otherwise orders.

SCHEDULE A

Step claimed	Category 2 daily recovery rate	Time allocation (Band B unless otherwise specified)	Scale costs divided by two
Commencement and pleadings
Step 1 Commencement of proceeding against first defendant	$2,390	3	$3,58522
Step 1 Commencement of proceedings against the fourth and fifth defendants (first amended statement of claim), 22/09/2022	$2,390	3	$7,170
Step 3 Plaintiff’s reply to statement of defence, 06/08/2024	$2,390	0.8	$1,912
Case management
Step 10 Preparation for first case management conference (CMC)	$2,390	0.4	$47823
Step 11 Memorandum for first CMC, 11/7/2022	$2,390	0.4	$47824
Step 11 Memorandum in support of freezing order and injunction 22/09/2022	$2,390	0.4	$956
Step 12 Appearance in duty judge list to obtain interim freezing orders, 29/09/2022	$2,390	0.2	$478
Step 11 Joint memorandum to set aside freezing order, 12/10/2022	$2,390	0.4	$956
Step 11 Memorandum for second case management conference, 2/12/2022	$2,390	0.4	$47825
Step 11 Memorandum by plaintiff (particulars and discovery), 22/12/2022	$2,390	0.4	$956
Step 11 Memorandum by plaintiff for third case management conference, 21/03/2023	$2,390	0.4	$47826

22     $7,170 divided by two, a reduction volunteered by the plaintiff to reflect costs recovered from the second and third defendants.

23     $956 divided by two, a reduction volunteered by the plaintiff to reflect costs recovered from the second and third defendants.

24     $956 divided by two, a reduction volunteered by the plaintiff to reflect costs recovered from the second and third defendants.

25     $956 divided by two, a reduction volunteered by the plaintiff to reflect costs recovered from the second and third defendants.

26     $956 divided by two, a reduction volunteered by the plaintiff to reflect costs recovered from the second and third defendants.

Step claimed	Category 2 daily recovery rate	Time allocation (Band B unless otherwise specified)	Scale costs divided by two
Step 13 Appearance at case management conference, 23/03/2023	$2,390	0.3	$717
Step 11 Memorandum for adjustment to timetable orders, 19/05/2023	$2,390	0.4	$956
Step 11 Joint memorandum for timetable adjustment, 30/06/2023	$2,390	0.4	$956
Step 16 Notices to answer interrogatories for first, fourth and fifth defendants, 04/08/2023 and 14/08/2023	$2,390	1	$2,390
Step 11 Joint memorandum, 18/08/2023	$2,390	0.4	$956
Step 11 Joint memorandum, 22/11/2023	$2,390	0.4	$956
Step 18 Notice to admit facts, 05/09/2024	$2,390	0.8	$1,912
Step 11 Joint memorandum on trial roadmap, 23/12/2024	$2,390	0.4	$956
Step 11 Joint memorandum, 20/03/2025	$2,390	0.4	$956
Interrogatories, discovery and inspection
Step 20 List of documents on discovery, 15/08/2022	$2,390	2.5	$2,987.5027
Step 21 Inspection of documents of first defendant, 15/08/2022	$2,390	1.5	$1,792.5028
Step 22 Filing interlocutory application against fourth defendant, 22/09/2022	$2,390	0.6	$1,434
Step 29 Sealing interim freezing order	$2,390	0.2	$239
Step 21 Inspection of documents, 15/12/2022	$2,390	2.5	$5,975
Step 20 Plaintiff’s first supplementary affidavit of documents, 16/05/2023	$2,390	2.5	$5,975
Step 20, Plaintiff’s second supplementary affidavit, 21/10/2024	$2,390	2.5	$5,975
Step 29 Sealing judgment, 16/06/2025	$2,390	0.2	$478

27     $5,975 divided by two, a reduction volunteered by the plaintiff to reflect costs recovered from the second and third defendants.

28     $3,585 divided by two, a reduction volunteered by the plaintiff to reflect costs recovered from the second and third defendants.

Step claimed	Category 2 daily recovery rate	Time allocation (Band B unless otherwise specified)	Scale costs divided by two
Preparation for witness hearing
Step 33 Preparation of briefs, issues list, authorities and agreement on common bundle	$2,390	5.75 (six hearing days)	$13,742.50
Step 33A Allowance for preparing common bundle	$2,390	0.5	$1,195
Step 33B Preparation for hearing	$2,390	5.75 (six hearing days)	$13,742.50
Step 34 Appearance at hearing of principal counsel	$2,390	5.75	$13,742.50
Total			$95,958.50
With 20 per cent uplift applied			$115,150.20

SCHEDULE B

Disbursements claimed	Amount claimed
Filing fees
Initial filing fee statement of claim	$67529
Amended SOC joining fourth & fifth defendants, 22/9/2022	$110
Amended statement of claim, 21/06/2024	$110
Interlocutory application for freezing order against the fourth defendant	$200
Sealing fee – interim freezing order, 29/09/2022	$50
Scheduling fee	$1,600
Hearing fees	$22,880
Sealing judgment fee	$65
KRT Consultants Ltd (Gerard Ball)
Expert witness work	$27,103.90
Process servers
Service of proceedings, 24/05/2022	$517.51
Service of subpoena on Bruce Fruean, 26/03/2025	$341.55
Bruce Fruean travel costs, 23/03/2025	$100.00
Miscellaneous costs
LINZ title searches, 08/03/2022	$60.87
Auckland Council, property file, 13/08/2021	$65.00

29     $1,350 divided by two, a reduction volunteered by the plaintiff to reflect costs recovered from the second and third defendants.

Disbursements claimed	Amount claimed
Litigation support
Collation of electronic bundle, 16/03/2025	$2,041.25
Trevor Henry expert witness fees
Expert witness fee, 22/09/2021	$1,196
Expert witness fee, 26/03/2025	$690
Translation services, World Atlas Translations Ltd
WeChat translations, 15/10/2024	$1,680
Travel and accommodation for trial
Flights to and from Sydney	$694
Hotel accommodation, 23/03/2025-28/03/2025	$844
Accommodation, 30/03/2025-31/03/2025	$284
Airport travel, 01/04/2025	$20
Total	$61,328.08