Zhao v KBS Capital Limited

[2025] NZHC 2009

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-641

[2025] NZHC 2009

UNDER

the Companies Act 1993

IN THE MATTER OF

an application to put KBS Capital Limited into liquidation

BETWEEN

JIE ZHAO

Plaintiff

AND

KBS CAPITAL LIMITED

Defendant

CLEARWATER CAPITAL PARTNERS DIRECT LENDING OPPORTUNITIES FUND LIMITED PARTNERSHIP

Non-party

Hearing:

On the papers

Appearances:

K Mills/C Jiang/J Phillips for the Plaintiff Kishen Kommu for the Defendant

S M Bisley/J Schwarcz for the Non-Party

Judgment:

24 July 2025

COSTS JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

This judgment was delivered by me on 24 July 2025 at 3:00pm

pursuant to Rule 11.5 of the High Court Rules

Solicitors:

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

Tompkins Wake (Chen Jiang/Katie Mills), Auckland, for the Plaintiff Webster Law (Donald Webster), Takapuna, Auckland, for the Defendant

Wilson Harle (Felicity Monteiro/Jonathan Schwarcz), Auckland, for the Non-Party

Copy for:

Kishen Kommu, FortyEightShortland Chambers, Auckland for the Defendant Sebastian Bisley, Thorndon Chambers, Wellington, for the Non-Party

JIE ZHAO v KBS CAPITAL LIMITED [2025] NZHC 2009 [24 July 2025]

Introduction

[1]    On 16 May 2025 the Court issued a judgment in which the plaintiff’s, Ms Jie Zhao’s (Ms Zhao), application to put the defendant, KBS Capital Ltd (KBS) into liquidation was dismissed (the Judgment).1 The application was also opposed by a non-party, Clearwater Capital Partners Direct Lending Opportunities Fund L.P. (Clearwater), a significant lender to KBS.

[2]    The parties were to file memoranda if they could not agree on costs. The parties have now filed the following memoranda:

(a)Clearwater filed a memorandum dated 24 June 2025.

(b)KBS filed a memorandum dated 25 June 2025.

(c)Ms Zhao filed a memorandum in reply dated 3 July 2025.

Legal principles

[3]Rule 14.6 deals with increased costs and indemnity costs and provides that:

(1)Despite rules 14.2 to 14.5, the court may make an order—

(a)increasing costs otherwise payable under those rules (increased costs); or

(b)that the costs payable are the actual costs, disbursements, and witness expenses reasonably incurred by a party (indemnity costs).

(2)The court may make the order at any stage of a proceeding and in relation to any step in it.

(3)The court may order a party to pay increased costs if—

(a)the nature of the proceeding or the step in it is such that the time required by the party claiming costs would substantially exceed the time allocated under band C; or

1      Zhao v KBS Capital Ltd [2025] NZHC 1129.

(b)the party opposing 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 with 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, 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

(c)the proceeding is of general importance to persons other than just the parties and it was reasonably necessary for the party claiming costs to bring it or participate in it in the interests of those affected; or

(d)some other reason exists which justifies the court making an order for increased costs despite the principle that the determination of costs should be predictable and expeditious.

(4)The court may order a party to pay indemnity costs if—

(a)the party has acted vexatiously, frivolously, improperly, or unnecessarily in commencing, continuing, or defending a proceeding or a step in a proceeding; or

(b)the party has ignored or disobeyed an order or direction of the court or breached an undertaking given to the court or another party; or

(c)costs are payable from a fund, the party claiming costs is a necessary party to the proceeding affecting the fund, and the party claiming costs has acted reasonably in the proceeding; or

(d)the person in whose favour the order of costs is made was not a party to the proceeding and has acted reasonably in relation to it; or

(e)the party claiming costs is entitled to indemnity costs under a contract or deed; or

(f)some other reason exists which justifies the court making an order for indemnity costs despite the principle that the determination of costs should be predictable and expeditious.

Indemnity costs

[4]    It is clear from the authorities that a high threshold must be passed before an order for indemnity costs is to be made. In Bradbury v Westpac Banking Corp the Court of Appeal summarised the distinction between the three broad approaches to costs as follows:2

(a)standard scale applies by default where cause is not shown to depart from it;

(b)increased costs may be ordered where there is a failure by the paying party to act reasonably; and

(c)indemnity costs may be ordered where that party has behaved either badly or very unreasonably.

[5]    In Bradbury, the Court of Appeal endorsed Goddard J’s remarks as to some of the categories in which indemnity costs have been ordered:3

(a)the making of allegations of fraud knowing them to be false, and the making of irrelevant allegations of fraud;

(b)particular misconduct that causes loss of time to the court and to other parties;

(c)commencing or continuing proceedings for some ulterior motive;

(d)doing so in wilful disregard of known facts or clearly established law; or

(e)making allegations which ought never to have been made or unduly prolonging a case by groundless contentions summarised in French J’s “hopeless case” test.

Increased costs

[6]    The leading authority on the correct approach to increased costs is the four- step approach explained by the Court of Appeal in Holdfast NZ Ltd v Selleys Pty Ltd:4

2      Bradbury v Westpac Banking Corp [2009] NZCA 234, [2009] 3 NZLR 400 at [27].

3      At [29], citing Hedley v Kiwi Co-operative Dairies Ltd (2002) 16 PRNZ 694 at [11].

4      Holdfast NZ Ltd v Selleys Pty Ltd (2005) 17 PRNZ 897 (CA) at [40]–[48]. The cited case refers to the equivalent rules under the previous High Court rules. This judgment refers to the present applicable rules.

(a)Categorisation: the first  step is  to  categorise  the proceeding  under  r 14.3. This proceeding is categorised as category 2.

(b)Standard time allocation: the second step is to work out a reasonable time for each step in the proceeding under r 14.5. This proceeding is categorised as band B.

(c)Increased time allocation: a party can, under r 14.6(3)(a) apply for extra time for a particular step. It is possible to get a greater time allocation for a particular step if the party can show that the step in the proceeding was such that the time required by the party would substantially exceed the time allocated under band C.

(d)Overall assessment: the fourth step requires the applicant for costs to step back and look at the costs award it could be entitled to at this point. If it considers it can argue for additional costs due to the way the other party conducted the case in terms of r 14.6(3)(b), it should do so. An increase of more than 50 per cent is unlikely.

KBS’s position

[7]    Mr Kommu, for KBS, is seeking indemnity costs, or in the alternative, scale 2B costs with a 50 per cent increase.

Indemnity costs

[8]    Mr Kommu submits that indemnity costs should be awarded against Ms Zhao for the following reasons:

(a)It was conceded in Ms Zhao’s counsel’s written submissions that there was a factual dispute in relation to Mr Xu “Edison” Xin (Mr Xin), KBS’ director, alleging misrepresentations in relation to the Deed of Subordination as follows:

Counsel acknowledges that there is a factual dispute over the Escrow                Arrangement      and      Edison’s      [alleged

misrepresentations, which is not capable of resolution in any summary setting.

(b)A further concession by Ms Zhao’s counsel that:

a finding in relation to the Escrow Agreement and Edisons [alleged] misrepresentations is not required, because the Deed of Subordination has not been signed in counterparts”.

(c)Further concessions were made by Ms Zhao’s counsel at the hearing on 26 March 2025 relating to Ms Zhao signing a counterpart of the Deed of Subordination, and whether the Deed of Subordination was binding on Ms Zhao. Counsel for Ms Zhao did not pursue paragraphs 27 to 33 of his written submissions at the hearing, as noted in the judgment.5

[9]    Mr Kommu submits that the above concessions means that the allegations and argument puts forward by Ms Zhao in relation to which the concessions were made, were unmeritorious and should not have been put forward in the first place. Accordingly, the evidence and submissions prepared by KBS and Clearwater in relation to the consented allegations and arguments identified at [8(a)–(c)], were unnecessary and KBS and Clearwater were unnecessarily and unreasonably put to the cost of preparing that evidence and those submissions.

[10]   Mr Kommu submits the only remaining issue raised by Ms Zhao in relation to whether the KBS Loan was due and owing, was whether it fell within the ambit of the Deed of Subordination. He submits that the Judgment held that it was reasonably arguable that the KBS Loan was not due and owing as a consequence of the dispute about whether it fell within the ambit of the Deed of Subordination and, as there was a genuine dispute, Ms Zhao could not rely on the statutory demand as a basis for her liquidation application against KBS.

[11]   As further grounds for the Court awarding indemnity costs, Mr Kommu submits:

5 The Judgment, above n 1, at [36].

(a)Ms Zhao unreasonably failed to accept KBS’s evidence as to its solvency, and instead sought to produce an inadmissible lay assessment and opinion evidence in reply, which the Judgment held should be excluded;

(b)there were breaches of the timetable to file Ms Zhao’s reply evidence, submissions and the common bundle, which incurred further costs and increased the urgency of preparation, given the close proximity to the hearing; and

(c)arguably the liquidation application was an abuse of process, referring to the finding in the Judgment that there was sufficient argument raised in relation to this point to weigh against granting Ms Zhao’s application for liquidation.6

[12]   Mr Kommu submits for the reasons set out [9] to [12] that r 14.6(4)(a) is engaged and indemnity costs are quantified at $69,115.08 together with disbursements of $5,493.72.

Increased costs

[13]   Mr Kommu submits that, in the alternative if the Court is not minded to award indemnity costs, KBS should be awarded increased costs against Ms Zhao for the reasons set out in his submissions in respect of indemnity costs, and refers to two recent cases where increased costs were awarded in liquidation matters.7

[14]   Mr Kommu quantifies 2B costs at $30,592.00 together with a 50 per cent uplift in those costs of $15,296.00 totalling $45,888.00 plus disbursements in the sum of

$5,493.72.

6      The Judgment, above n 1, at [83(b)].

7      Super Power Earthmoving Limited v Dreamhome Construction Group Limited [2024] NZHC 3349; and Wimpex Limited v Open Country Dairy Limited [2023] NZHC 1476.

Clearwater’s position

[15]   Mr Bisley, for Clearwater, seeks an order for indemnity costs in favour of Clearwater or, in the alternative, costs assessed on a 2B basis with a 50 per cent uplift.

Indemnity costs

[16]   Mr  Bisley  submits  that  Clearwater  is  entitled  to  indemnity  costs  under  r 14.6(4)(e) which provides indemnity costs may be awarded where the party claiming costs is entitled to indemnity costs under a contract or deed.

[17]   Mr Bisley submits that Clearwater’s participation in the proceedings was a step taken to enforce against Ms Zhao its rights under the Deed of Subordination including, as to:

(a)The subordination of the amount owing under the KBS Loan to KBS’s indebtedness to Clearwater (cl 3.1);

(b)Ms Zhao’s undertaking not to demand or declare to be due and owing the amount under the KBS Loan (cl 3.3(a));

(c)Ms Zhao’s undertaking not to take steps to challenge the enforceability of the Deed of Subordination (cl 3.3(o)).

[18]   Mr Bisley submits that enforcement of those rights gives rise to Clearwater’s entitlement to indemnity costs and refers to:

(a)cl 9.11of the Deed of Subordination which provides that:

… [Ms Zhao] agree(s) to pay on demand all costs incurred by [Clearwater] in connection with the enforcement against the Obligor or [Ms Zhao] (as applicable), or (in the case of the Obligor only) review and consideration of [Clearwater]’s rights under this Deed.

(b)the definition of “costs” in cl 1.2 of the Deed of Subordination which includes:

all costs, fees, commissions, charges, losses, damages, expenses (including any break costs and legal fees and disbursements on a solicitor and own client basis) and taxes, including any interest or taxes on such costs.

[19]   He submits that those clauses are sufficiently broad to give rise to entitlement to indemnity costs in the present circumstances as costs incurred “in connection with enforcement” of the Deed of Subordination.

Reasonableness of Clearwater’s costs

[20]   Mr Bisley submits that Clearwater has at all times acted reasonably as a non- party whose interests would have been materially prejudiced had Ms Zhao’s application succeeded. He submits that the amount of Clearwater’s costs is justified by the complexity of the proceeding in which Ms Zhao significantly contributed to by:

(a)not complying with timetable orders, which increased the costs associated with Clearwater’s submissions and created urgency;

(b)advancing complex and unmeritorious arguments, including putting Clearwater to the cost of responding to allegations that were not relied upon at the hearing (some of which were only withdrawn at the start of the hearing in respect of the Deed of Subordination). He submits that the allegations around the validity of the Deed of Subordination, in particular, required a lengthy response (and evidence from off-shore lawyers) and these issues were abandoned at the eleventh hour and not progressed at the hearing; and

(c)unreasonably failing to accept KBS’s solvency and attempting to adduce inadmissible accounting evidence.

[21]   Mr Bisley submits the proceedings as a whole were unnecessary, and increased or indemnity cost would be justified where the proceedings are an abuse of process, particularly in the insolvency context where the Court has underscored the serious nature of statutory demands (upon which these proceedings were based), saying they should only, at the risk of increased costs, be enforced where there is a proper basis.

[22]In support, Mr Bisley submits:

(a)The Court found there were indications of intention, on the part of   Ms Zhao, to use the proceeding in an attempt to leverage repayment of the Edison Loan and the KBS Loan from Clearwater, and the Court concluded it was arguable the proceeding was an abuse of process;

(b)Clearwater made Ms Zhao aware of the applicability of the Deed of Subordination in October 2024 and the hopelessness of her case, as soon as it became aware of the proceedings. Ms Zhao has long been on notice that her application would not succeed, and proceeded nevertheless, only now conceding the proper course is to bring an ordinary proceeding;

(c)Ms Zhao should have discontinued in the light of Clearwater’s offer to resolve the proceedings as set out in its letter of 6 March 2025, under which Clearwater offered to adjourn the liquidation proceedings to allow Ms Zhao to bring a substantive proceeding to determine issues pertaining to the Deed of Subordination.

[23]   Mr Bisley submits it is accepted that Clearwater’s costs with respect to the preparation of submissions are substantial, but they were exacerbated by two elements of Ms Zhao’s conduct:

(a)The allegations that execution versions of the Deed of Subordination had been altered, necessitated the withdrawal of Clearwater’s previous counsel (Buddle Findlay) under r 13.5.3 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008; and

(b)the withdrawal of the arguments on the eve of submissions meant unnecessary time was spent preparing submissions on allegations that were ultimately not advanced.

[24]   Mr Bisley quantifies indemnity costs at $282,430.65 together with disbursements of $5,703.91, totalling $288,134.56.

Increased costs

[25]   Mr Bisley submits that if the Court is not minded to order indemnity costs against Ms Zhao, then the conduct of Ms Zhao set out at [22] and [23] justifies an uplift of scale costs. He submits that an uplift of 50 per cent for all steps taken in the proceedings is appropriate.

[26]   Mr Bisley quantifies 2B scale cost at $37,284.00 including a 50 per cent uplift, together with disbursements of $5,703.91, totalling $42,987.91.

Ms Zhao’s position

[27]   Mr Jiang, for Ms Zhao, acknowledges that Ms Zhao agrees that scale costs on a 2B basis are appropriate for KBS and Clearwater, with some adjustments to the   2B costs claimed by those parties. He submits there are no grounds for either indemnity costs or increased costs.

No grounds for indemnity costs

[28]   Mr Jiang submits that Clearwater is not contractually entitled to indemnity costs. He submits that Clearwater succeeded in opposing the liquidation application, not, as it has claimed, enforcing its rights under the Deed of Subordination. He submits the Court recognised that the Deed of Subordination’s validity may ultimately need to be determined at trial.8

[29]   Mr Jiang submits that a high threshold must be passed before an order for indemnity costs is to be made. He refers to Nags Head Horse Hotel Limited v Epsom Woods Limited,9 and submits that this threshold has not been reached for the following reasons:

8 The Judgment, above n 1, at [83].

9      Nags Head Horse Hotel Limited v Epsom Woods Limited [2020] NZHC 2973 at [5].

(a)There was nothing improper in Ms Zhao filing the liquidation application. The liquidation application was filed in March 2024 following the issue of a statutory demand, which KBS did not comply with or apply to set aside;

(b)KBS only filed a defence in November 2024, and it was not until after Clearwater raised the dispute regarding the Deed of Subordination that KBS raised a dispute regarding the Deed of Subordination and a defence to the liquidation application; and

(c)Ms Zhao does not accept the proceeding is an abuse of process or commenced or continued for an ulterior motive, and nor has the Court found this. There was no conduct by Ms Zhao, either in terms of the grounds in r 14.6(4) or the categories in Bradbury v Westpac Banking Corporation10 which would justify an order for indemnity costs.

No grounds for increased costs

[30]   Mr Jiang submits that increased costs are not justified by Ms Zhao not pursuing aspects of the application that were not suitable for resolution in summary proceedings, in particular the escrow arrangement in respect of which conflicting accounts were given by Ms Zhao and Mr Xin.

[31]   As to the allegation that Ms Zhao failed to accept KBS’ evidence of solvency, he submits that Ms Zhao had reasonable arguments that justified continuing the proceeding in the light of KBS’s evidence of its insolvency. He submits that KBS was arguably balance-sheet insolvent and its cash-flow solvency was also at risk—given KBS’ obligation to pay all sale proceeds of units to Clearwater and no enforceable obligation on Clearwater to continue financing KBS.

[32]   Mr Jiang submits it was not obvious that Ms Zhao’s application would not succeed, or that pursuit of the application was unnecessary or unreasonable, and accordingly increased costs are not appropriate.

10     Bradbury v Westpac Banking Corporation, above n 2.

Increased costs not justified by Clearwater’s offers

[33]   Mr Jiang submits that it was not unreasonable for Ms Zhao to reject Clearwater’s offer in its letter dated 6 March 2025 to suspend the application for the liquidation order pending her bringing substantive proceedings to determine the issues in relation to the Deed of Subordination. He submits that:

(a)As at October 2024, KBS had not applied to set aside the statutory demand, or disputed the KBS Loan was due. The timing of Ms Zhao’s revocation and Clearwater’s execution of the Deed of Subordination was in issue, and Ms Zhao asserted she had provided the Deed of Subordination in escrow. The Deed of Subordination on its face does not apply to the KBS Loan. Accordingly, it was not unreasonable for Ms Zhao to reject the offer to withdraw in the early stage of the proceeding on the available information; and

(b)Clearwater’s offer in its letter of 6 March 2025 was akin to a “walk away” offer. The offer did nothing other than repeat Clearwater’s opposition and arguments. “Walk away” offers do not generally provide a basis for awarding increased costs, and the Court should be “conventionally cautious” of increasing costs in those circumstances, citing Talbot v Talbot.11

Quantum of costs sought

[34]   Mr Jiang takes issue with the calculation of the costs by KBS and by Clearwater. He also takes issue with disbursements claimed by KBS and Clearwater and he provides Ms Zhao’s calculation of costs assessed on a 2B basis in respect of Clearwater at Schedule 1 to his memorandum of 3 July 2025, and the calculation of KBS’s costs and disbursements at Schedule 2 to that memorandum.

11     Talbot v Talbot [2017] NZHC 257 at [32].

Result

[35]   Having considered the respective memoranda filed by counsel, I am of the following views:

(a)KBS is not entitled to indemnity costs. The correct interpretation of the Deed of Subordination may ultimately require a trial, and therefore Ms Zhao’s assertion that it did not apply to the KBS Loan as a basis for the liquidation application was not unreasonable. Ms Zhao did not behave “either badly or very unreasonably” (in the formulation of Bradbury v Westpac Banking Corporation) in bringing the liquidation application.

(b)Clearwater is not entitled to indemnity costs under r 14.6(4)(e) claimed on the basis that Clearwater was enforcing its rights under the Deed of Subordination. The Judgment only decided that it was reasonably arguable that the Deed of Subordination applied to the KBS Loan, and therefore there was a substantial dispute regarding whether the KBS Loan was due and owing. The Judgment did not decide the Deed of Subordination was fully enforceable by Clearwater, hence the provisions of the Deed of Subordination entitling Clearwater to obtain costs from Ms Zhao (as set out at [20]) cannot be relied upon by Clearwater for the purposes of r 14.6(4)(e).

(c)For the same reasons that KBS is not entitled to indemnity costs based on the behaviour of Ms Zhao in bringing the liquidation application, Clearwater are also not entitled to indemnity costs on the basis of    Ms Zhao’s actions in bringing the liquidation application.

[36]   Some measure of increased costs is justified by the late withdrawal of various submissions made on behalf of Ms Zhao, and the concessions by Mr Jiang regarding those submissions. In particular, concessions were made that the following issues could not be dealt with in the context of the liquidation application:

(a)issues regarding the validity of the Deed of Subordination including allegations that various different versions of it were signed;

(b)issues in relation to the conflict of evidence between Ms Zhao and   Mr Xin as to representations Mr Xin may have made in relation to the Deed of Subordination;

(c)issues as to whether any escrow arrangement applied to the Deed of Subordination and whether Ms Zhao had validly withdrawn her consent to the Deed of Subordination; and

(d)issues relating to whether the Deed of Subordination was binding as an agreement or not.

[37]   These issues did require submissions and evidence by both KBS and Clearwater, and therefore increased costs are justified under r 14.6(3)(b);

[38]   As to the issue of Ms Zhao acting unreasonably by not accepting the solvency of KBS, as it transpired, the issue of solvency of KBS and the position of KBS relative to the lending by Clearwater to the wider Edison & Wayne Group, turned out to be relatively complex. As noted in the Judgment, Ms Zhao’s lay evidence and opinion as to the solvency of  KBS  was  excluded.  Non-expert  evidence  was  produced  by Mr Bisley as to the Group position in respect of Clearwater lending to the Edison & Wayne Group. As the Judgment concluded,12 this evidence demonstrated that a much more detailed investigation was necessary into the solvency position of KBS (in the context of Clearwater’s lending to the wider Edison & Wayne Group) and therefore Ms Zhao had not discharged the burden of demonstrating KBS was insolvent (having lost the ability to rely on KBS’ failure to satisfy the statutory demand as evidence of insolvency). Accordingly, Ms Zhao’s non-acceptance of KBS’ solvency evidence was not unreasonable and does not justify increased costs.

[39]   In my view, Ms Zhao’s decision not to accept the offer in Clearwater’s letter of 6 March 2025 was not unreasonable. As I have already noted, the ambit of the Deed

12     The Judgment, above n 1, at [85](c).

of Subordination may ultimately require determination at trial and the argument taken by Ms Zhao that the Deed of Subordination did not on its face apply to the KBS Loan was not unreasonable. Clearwater’s offer was equivalent to a “walk away” offer, given the length of time that will be taken to resolve the substantive proceedings, and does not justify increased costs.

Quantum of costs and disbursements

[40]   Mr Jiang takes issue with applying any uplift to costs to all steps taken by KBS and Clearwater respectively in the proceedings (if the Court is minded to grant the uplift). He submits that:

(a)the arguments not pursued at the hearing are unlikely to have contributed significantly to the preparation of Clearwater or KBS’ submissions;

(b)while Ms Zhao’s attempted to adduce “accounting” evidence, Clearwater’s counsel also attempted to do so himself from the bar during the hearing;

(c)while Ms Zhao had not complied with the timetable, counsel ought to have sufficient time to prepare when granting an extension of time for submissions in response. KBS also filed late evidence.

[41]As to disbursements, Mr Jiang takes issue with the following disbursements:

(a)in the case of Clearwater, its filing fees for the application for extension of time (the need for which arose from KBS’ non-disclosure to Clearwater) and for Clearwater’s stay/restraint application which was not determined; and

(b)in the case of KBS’s disbursements, legal fees billed by S P Bryers and Mr Dragonson’s fee.

[42]Having considered Mr Jiang’s objections, I am of the view:

(a)in the case of Clearwater, item 8, step 30 in Schedule 1, should be reduced to one and a half days from two days, and the disbursement for filing the interlocutory application for extension of time of $260.00 is disallowed; and

(b)in the case of KBS, the disbursement for the opinion from the barrister, Mr S P Bryers, is disallowed as this is properly regarded as part of the legal fees or scale costs.

[43]   Adopting the overall assessment as set out in step 4 in the Holdfast case,13 I am of the view that KBS and Clearwater’s fees should be subject to a 25 per cent uplift on account of the abandoned arguments and the concessions made by Mr Jiang regarding aspects of the application which were conceded to be unsuitable to be dealt with in a liquidation application.

Orders

[44]I order that Ms Zhao is to pay:

(a)KBS the sum of $43,043.72, (being 2B costs assessed at $38,240.00 including a 25 per cent uplift), together with disbursements of $4803.72 (totalling $43,043.72).

(b)Clearwater the sum of $34,760.16 (being 2B costs assessed at

$29,576.25 including a 25 per cent uplift), together with disbursements of $5,183.91 (totalling $34,760.16).

…………………………….. Associate Judge Taylor

13     Above, n 4.