H�rlimann v Lilley - [2021] NZHC 2689

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

I TE KŌTI MATUA O AOTEAROA TE PAPAIOEA ROHE

CIV-2021-454-23

[2021] NZHC 2689

UNDER the Contract and Commercial Law Act 2017

IN THE MATTER

of specific performance of an agreement for sale and purchase

BETWEEN

JOSHUA SAMUEL HÜRLIMANN

Plaintiff

AND

PAUL ANTHONY LILLEY and MELANIE JANE LILLEY

Defendants

Hearing: 9 September 2021 (via VMR)

Appearances:

M Freeman for Plaintiff

N Jessen and A J R Sinclair for Defendants

Judgment:

11 October 2021

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

Introduction

[1] This is a summary judgment application by the plaintiff, Joshua Hürlimann, for an order for the removal of certain restrictive covenants registered on the title to a property sold to him by the defendants, Paul and Melanie Lilley.

[2] In November 2019 Mr and Mrs Lilley as vendors and Mr Hürlimann as purchaser entered into an agreement for the sale and purchase of a 1.18-hectare block of land on the rural outskirts of Levin in the Horowhenua.

[3]Clause 23 of the sale and purchase agreement provided:

HÜRLIMANN v LILLEY [2021] NZHC 2689 [11 October 2021]

The Vendor agrees not to allow any land covenants, easements or Council consents to be registered over the Property without the prior written consent of the Purchaser. If the Purchaser objects to any of the proposed land covenants, easements or Council consents which are required to be registered on the title, the Purchaser may cancel this agreement and receive a full refund of deposit paid.

[4] When the transaction settled the title to the property transferred by Mr and Mrs Lilley to Mr Hürlimann contained the restrictive covenants.

[5] Mr Hürlimann says that cl 23 precluded the imposition of these covenants and he seeks their removal. In the prayer for relief in his statement of claim he sought injunctive relief. Since the commencement of the proceeding, his advisers have identified a second possible avenue for claiming relief, that is to say an order pursuant to s 317 of the Property Law Act 2007.

[6] That is a skeletal description of the factual background. It is sufficient to set the scene. It will require fleshing out in order fully to deal with Mr Hürlimann’s application for summary judgment, though perhaps not to the extent canvassed in some of the affidavit evidence.

Summary judgment application

[7]The High Court Rules 2016 deal with summary judgment in pt 12.

[8] Rule 12.2 confers on the Court jurisdiction to enter judgment summarily in favour of a plaintiff against a defendant “… if the plaintiff satisfies the Court that the defendant has no defence to a cause of action in the statement of claim or to a particular part or any cause of action”.

[9] The leading authority is Krukziener v Hanover Finance Ltd where the Court of Appeal outlined the principles involved in these terms:1

The principles are well settled. The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading H�rlimann v Lilley

Details

AGLC: H�rlimann v Lilley [2021] NZHC 2689
Case: [2021] NZHC 2689
Decision Date: 11 October 2021

CaseChat Overview and Summary

Joshua Hürlimann initiated a summary judgment application against Paul and Melanie Lilley for the removal of restrictive covenants registered on the title to a property sold to him by the defendants. The agreement for sale and purchase contained a clause which allowed the purchaser to object to any proposed land covenants, easements, or council consents required to be registered on the title. The plaintiff contended that the clause precluded the imposition of the restrictive covenants and sought their removal. The defendants argued that the plaintiff had consented to the covenants and that his consent was vitiated by duress.

The court considered the interpretation of clause 23 of the agreement and whether it enabled the vendors to propose impediments on the title. The court found that it was arguable that clause 23 allowed the vendors to propose covenants or other impediments, whether mandated by a third party or not, but the plaintiff had the right to withhold consent. The court also considered the plaintiff's argument that the vendors could only exercise their discretion reasonably, but found that the default rule did not apply in this case.

The court further considered the plaintiff's argument that his consent to the covenants was vitiated by duress. The court found that there was some force in this argument, but that it was open to the plaintiff to resist any attempt to have the caveat removed from the title and come to the court for relief. The court concluded that the plaintiff was not able to demonstrate that the defendants had no defence to the claim, and that the matter should proceed to trial.

The court reserved costs, noting that the most common outcome in cases involving unsuccessful applications for summary judgment is that no award of costs is made and that the costs are left to be dealt with as costs in the cause.

Orders