Max Fortuna 3 Ltd v Kitchener Trust Investments Ltd

[2025] NZHC 1741

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-000837

[2025] NZHC 1741

UNDER

the Arbitration Act 1996

IN THE MATTER

of an appeal against Arbitration Tribunal’s award

BETWEEN

MAX FORTUNA 3 LTD

First Appellant

JI HO RYU
Second Appellant

AND

KITCHENER TRUST INVESTMENTS LTD

Respondent

Judgment:

(On the papers)

30 June 2025

JUDGMENT OF BREWER J

[Costs]

This judgment was delivered by me on 30 June 2025 at 11.30 am pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Fairbrother Family Law (Napier) for Appellants Meredith Connell (Auckland) for Respondent

MAX FORTUNA 3 LTD v KITCHENER TRUST INVESTMENTS LTD [2025] NZHC 1741 [30 June 2025]

[1]This is a costs judgment.

[2]        On 20 November 2024,1 I dismissed the appeal of Max Fortuna 3 Ltd against an Arbitral Tribunal’s partial award in favour of the respondent, Kitchener Trust Investments Ltd, ruling that Infrastructure Growth Charges (IGCs) imposed on the landlord in response to the use of water by the tenant should be paid by the tenant. I allowed the respondent’s cross-appeal against the Tribunal’s finding that an IGC is not a charge payable by the tenant.

[3]In my judgment, I concluded:

[41] Costs are to be addressed by memoranda.  The  landlord’s  memorandum is to be filed by 19 December 2024; the tenant’s memorandum by 24 January 2025.

Submissions

[4]        The respondent seeks costs on an indemnity basis, in accordance with cl 6.1 of the Deed of Lease, which relevantly provides:

The Tenant shall pay … the Landlord’s legal costs (as between lawyer and client) of and incidental to the enforcement of the Landlord’s rights remedies and powers under this lease.

[5]        In light of cl 6.1, and but for a minor reduction on the basis that the arbitrator had not accepted a primary point advanced by the respondent, the Arbitral Tribunal awarded costs in relation to the arbitration. This award was not challenged on appeal.

[6]The respondent now seeks costs on an indemnity basis in the amount of

$39,420.30. The appellants take no issue with the amount sought. The only issue for me to resolve is against whom the award is to be made.

[7]        The first appellant accepts an order for costs being made against them, but  Mr Kang submits that no order should be made against the second appellant. He submits that, as Mr Ryu is legally aided, he is protected from personal liability by s 45

1      Max Fortuna 3 Ltd v Kitchener Trust Investments Ltd [2024] NZHC 3458. On 10 June 2025, I declined the appellant’s application for leave to appeal my decision to the Court of Appeal: Max Fortuna 3 Ltd v Kitchener Trust Investments Ltd HC Auckland CIV-2024-404-837, 10 June 2025 (Minute of Brewer J).

of the Legal Services Act 2011. Further, Mr Kang submits that Mr Ryu acted reasonably during the proceedings, so none of the exceptional circumstances in s 45(3) of the Act apply.

Decision

[8]        The Court of Appeal in Ngāti Tama Custodian Trustee Ltd v Phillips has interpreted what is meant by “exceptional circumstances” as circumstances that are “quite out of the ordinary”.2 Nothing in Mr Ryu’s conduct in the proceedings can be said to have reached this high threshold and, accordingly, s 45 precludes the making of a costs order against him. Consequently, I will award costs in the amount sought against the first appellant only.

Orders

[9]        The first appellant, Max Fortuna 3 Ltd, is to pay  Kitchener  Trust Investments Ltd costs in the sum of $39,420.30.

Brewer J

2      Ngāti Tama Custodian Trustee Ltd v Phillips [2020] NZCA 252, (2020) 25 PRNZ 465 at [7], quoting Laverty v Para Franchising Ltd [2006] 1 NZLR 650 (CA) at [31].