Wei v Chin Yun Holdings Limited
[2025] NZHC 688
•28 March 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2024-404-387
[2025] NZHC 688
BETWEEN KAI WEI
First Plaintiff
GUOLONG OU
Second PlaintiffAND
CHIN YUN HOLDINGS LIMITED
First Defendant
DAQIN HOLDING LIMITED
Second DefendantHEPING YANG
Third Defendant
YUQI YANG
Fourth DefendantYUHAN YANG
Fifth Defendant
Hearing: On the papers Counsel:
D Bigio KC and C Jiang for the Plaintiffs / Respondents R Stewart KC for the Defendants / Applicants
Judgment:
28 March 2025
JUDGMENT OF GORDON J
[As to costs]
This judgment was delivered by me on Friday, 28 March 2025 at 12.30 pm, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
WEI v CHIN YUN HOLDINGS LTD [2025] NZHC 688 [28 March 2025]
[1] This judgment determines an application for costs by the defendants, following my judgment on the defendants’ interlocutory application for security for costs against the plaintiffs (the Judgment).1
[2]In the Judgment:
(a)I made an order that the plaintiffs were to provide security for costs in the sum of $212,826 (on a staged basis);2
(b)I found that neither the plaintiffs nor the defendants had been entirely successful;3 and
(c)I suggested that, in the circumstances, the parties may be prepared to let costs lie where they fall.4
[3]However, the defendants now seek costs against the plaintiffs in the sum of
$7,648 plus disbursements of $650.
[4] The plaintiffs oppose the application and take the position that, in all the circumstances, it is appropriate for the Court to order that costs should lie where they fall. On that basis, and having been required to file a costs memorandum in opposition to the defendants’ claim, the plaintiffs seek a “costs on costs” award in the sum of
$956.
Background
[5] The background to the application for security for costs is set out at [2]–[4] of the Judgment. Briefly summarised it is as follows:
(a)Both the defendants and the plaintiffs agreed that the plaintiffs should give security for costs on a staged basis.
1 Wei v Chin Yun Holdings Ltd [2025] NZHC 220.
2 At [83]
3 At [84]
4 At [85]
(b)The defendants said that the appropriate sum was $320,000.
(c)The plaintiffs said that the amount of $320,000 was “unfair” and proposed a total sum of $125,000 instead.
(d)Part of the dispute over quantum arose due to disagreement as to how the proceeding should be categorised. Both the plaintiffs and the defendants agreed that scale costs provided a useful starting point. However:
(i)the defendants said that the proceeding should be categorised as category 3 whereas the plaintiffs said category 2; and
(ii)the parties also disagreed on the appropriate band, with the defendants saying band C and the plaintiffs saying band B.
[6] In the Judgment, I ordered that the plaintiffs provide security for costs in the sum of $212,826. I reached this figure by:
(a)assessing the likely scale costs as $178,533 on the basis that the appropriate category is category 2, with some steps at band B and some at band C;
(b)applying a 20 per cent discount to arrive at a discounted scale costs figure of $142,826; and
(c)adding $70,000 for disbursements (expert witnesses).
The law on costs
[7] Costs awards are at the discretion of the Court.5 This discretion is to be guided by the principles set out in the High Court Rules 2016.
5 Rule 14.1 of the High Court Rules 2016.
[8] The general principle is that the party who fails with respect to a proceeding should pay costs to the successful party.6 Ultimately, though, the overall objective is that any costs award ought to do justice between the parties.7
Should costs be awarded to the defendants?
Defendants’ position
[9] The defendants seek costs on a 2B basis and disbursements in the aggregate sum of $8,298. In seeking costs, the defendants say that:
(a)they were successful in the proceeding;
(b)the order in the Judgment that the plaintiffs provide security for costs in the sum of $212,826 is a finding that the $125,000 sum offered by the plaintiffs was insufficient; and
(c)although the defendants did not succeed on all points, their success, even if on more limited terms, is still success which makes a costs award appropriate.8
Plaintiffs’ position
[10] The plaintiffs oppose the application and say that, in all the circumstances, it is appropriate for the Court to order that costs should lie where they fall. In support, the plaintiffs say that the Court largely rejected the reasoning behind the arguments made by the defendants, namely that:
(a)the defendants’ proposed figure of $320,000 was based on 3C scale costs, which the Court rejected;
(b)the defendants claimed that the appropriate band for all steps was band C, which the Court rejected;
6 Rule 14.2(1)(a).
7 Kinney v Pardington [2021] NZCA 174 at [1].
8 Weaver v Auckland Council [2017] NZCA 330; (2017) 24 PRNZ 379 at [26].
(c)the amount the Court accepted for disbursements (expert witness fees) was in the range proposed by counsel for the plaintiffs in submissions;
(d)the amount awarded of $212,826 was largely due to the consideration of disbursements and not on the basis of the scale 3C costs sought by the defendants; and
(e)the assertion in the defendants’ costs memorandum that the defendants proposed figure of $320,000 was always “in the round” is incorrect as it was based on 3C scale costs, which the Court rejected.
Discussion
[11] The defendants’ reliance on Weaver v Auckland Council is misplaced. The present case is not one where, for example, the defendants succeeded on say two out of four causes of action, or one interlocutory application out of two, or obtained judgment for a lesser sum than sought where the losing party opposed the basis for any monetary order being made.
[12] In this case there was never any doubt that the Court would make an order for security for costs. The plaintiffs agreed that an order should be made and both sides agreed that the payment should be on a staged basis. The only issue was quantum.
[13]The defendants put forward a figure of $320,000. The plaintiffs proposed
$125,000. The Court made an order for $212,826, a sum between those two amounts and which, in fact, is closer to the amount proposed by the plaintiffs than the amount proposed by the defendants.
[14]In Weaver, the Court of Appeal stated as follows:9
But it is well settled that the party that lost should pay the costs of the party that won. The Supreme Court in Shirley v Wairarapa District Health Board, in referring to what is now [r 14.2(1)(a)], made clear that the “loser, and only the loser, pays”, unless there are exceptional reasons.
9 At [20]–[21] and [26].
Recourse may then be had in search of such reasons to r 14.7(d) of the High Court Rules, which gives the Court discretion “despite rr 14.2 to 14.5,” to refuse to award costs to the successful party if, notwithstanding overall success, “that party has failed in relation to a cause of action or issue which significantly increased the costs of the party opposing costs.” The same rule also empowers the Court to reduce costs in such circumstances.
…
In the present case however, the only party to have succeeded by any “realistic appraisal” were the appellants. It is true that they did not succeed to the full extent of their claim but only to roughly half that extent, yet success on more limited terms is still success. We do not therefore see a proper basis upon which the usual rule that the party who fails with respect to a proceeding should pay costs to the party who succeeds should not apply….
[15] However, in this case I do not consider there was a “loser” as traditionally identified in costs judgments. It cannot be said, as was the case in Weaver that the defendants were “the only party to have succeeded by any ‘realistic appraisal’” as the appellants were in that case.
[16] I consider the present case is more akin to the position in Packing In Ltd (in liq) formerly known as Bond Cargo Ltd v Chilcott,10 which was discussed in Weaver as follows:11
… It was, in the context of that particular statutory procedure, not at all clear how to identify a winner. Both sides got a portion of the money they wanted:
…
[17] In this case, the defendants did not get as much as they wanted, and the plaintiffs had to pay more than they wanted.
[18] Mr Stewart KC, counsel for the defendants, submits that the defendants’ application sought security for costs “in such sum and in such manner as this Court considers just”, and the Court made an order for an amount the Court considered was just. Accordingly, he submits, the defendants were the successful party. I do not accept that submission. The reality was that the defendants proposed an amount and sought to justify it.
[19]In all those circumstances, I consider costs should lie where they fall.
10 Packing In Ltd (in liq) formerly known as Bond Cargo Ltd v Chilcott (2003) 16 PRNZ 869 (CA).
11 Weaver v Auckland Council, above n 8, at [25].
[20] Having “won” the argument on costs, by adopting the Court’s suggestion that costs should lie where they fall, the plaintiffs are entitled to costs on their costs memorandum (per Item 11 of Schedule 3 of the High Court Rules 2016) on a 2B basis. The plaintiffs were required to file a memorandum given the position the defendants took seeking costs. The amount is $956.
Result
[21] The application by the defendants for costs is refused. Costs are to lie where they fall.
[22]I make an order in favour of the plaintiffs for $956 against the defendants.
Gordon J
Solicitors: Tompkins Wake, Auckland
Heritage Law, Auckland
Counsel:R Stewart KC, Auckland D Bigio KC, Auckland
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