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Hurlimann v Lilley

Hurlimann v Lilley

Case [2023] NZHC 352 28 February 2023

Civil Litigation & Procedure

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IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

I TE KŌTI MATUA O AOTEAROA TE PAPAIOEA ROHE

CIV-2021-454-23

[2023] NZHC 352

BETWEEN
JOSHUA HÜRLIMANN

Plaintiff

AND

PAUL LILLEY AND MELANIE LILLEY

Defendants

Hearing: On the papers

Counsel:

M Freeman for Plaintiff

D I Shepherd for Defendants

Judgment:

28 February 2023

JUDGMENT OF ISAC J

[Costs]

Introduction

[1] In 2020, Mr Hürlimann entered into an agreement to purchase a section from the respondents, Mr and Mrs Lilley. Subsequently, there was a dispute about a range of restrictive covenants that the Lilleys wished to register over the title. Mr Hürlimann eventually settled the purchase without prejudice to his ability to challenge the imposition of the covenants. In a judgment of 20 July 2022, I dismissed Mr Hürlimann’s proceeding seeking removal of the covenants.1

[2]The question now is what costs, if any, ought to follow the event.

1 Hürlimann v Lilley [2022] NZHC 1751.

HÜRLIMANN v LILLEY [2023] NZHC 352 [28 February 2023]

[3] Mr Hürlimann is legally aided, having obtained a grant of legal aid partway through the proceeding on 10 May 2022. Section 45(2) of the Legal Services Act 2011 provides that no costs may be awarded against a legally aided person unless there are “exceptional circumstances”.

[4] The Lilleys accept Mr Hürlimann has the benefit of the protection under s 45(2) for steps taken after the grant of legal aid. However, they submit that the protection does not apply “retrospectively”, and that they are entitled to recover their costs incurred prior to the grant of legal aid. In any case, they argue that there are exceptional circumstances which justify an award of costs against a legally aided party.

[5] Mr Hürlimann submits that he has the protection under s 45(2) for all steps taken in the proceeding and argues there are no exceptional circumstances warranting a costs award. In addition, Mr Hürlimann also seeks his own costs of $13,384 in relation to his “first cause of action”, a summary judgment application in which he sought specific performance (settlement) of the sale and purchase agreement. The parties settled the first cause of action with costs reserved.

Issues

[6]There are three issues that require determination:

(a)Does the costs protection of a legally aided person under s 45 of the Act apply to steps taken in a proceeding before a grant of legal aid is made?

(b)Are there exceptional circumstances in terms of s 45(2) of the Act which justify ordering costs against Mr Hürlimann in this case?

(c)Is Mr Hürlimann entitled to costs in relation to his first cause of action?

Consideration

Timing of the protection under s 45 of the Legal Services Act 2011?

[7]Section 45(1) and (2) of the Act provide:

45 Liability of aided person for costs

(1)If an aided person receives legal aid for civil proceedings, that person’s liability under an order for costs made against him or her with respect to the proceedings must not exceed an amount (if any) that is reasonable for…

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 Hurlimann v Lilley

Details

AGLC: Hurlimann v Lilley [2023] NZHC 352
Case: [2023] NZHC 352
Decision Date: 28 February 2023

CaseChat Overview and Summary

In the case of Hurlimann v Lilley, the High Court was tasked with determining the issue of costs following a proceeding between Mr Hurlimann, the plaintiff, and Mr and Mrs Lilley, the defendants. The primary dispute centered around restrictive covenants that the Lilleys sought to register over a property purchased by Mr Hurlimann. The case was initially adjudicated in July 2022, where Mr Hurlimann's application to remove the covenants was dismissed. The court was now required to determine the costs associated with the proceeding, particularly in light of Mr Hurlimann's status as a legally aided person.

The central legal issues before the court were threefold: firstly, whether the protection afforded by section 45 of the Legal Services Act 2011 applied retrospectively to steps taken in a proceeding before the grant of legal aid; secondly, whether there were exceptional circumstances that would justify an order for costs against a legally aided party; and thirdly, whether Mr Hurlimann was entitled to his own costs in relation to his first cause of action.

The court examined the provisions of section 45, which limits the liability of an aided person for costs to a reasonable amount and mandates that no costs order can be made unless exceptional circumstances exist. The Lilleys argued that the protection should not apply retrospectively, and they sought to recover costs incurred before Mr Hurlimann's legal aid grant. They further contended that exceptional circumstances warranted a costs award against Mr Hurlimann. Mr Hurlimann, on the other hand, argued that the protection under section 45(2) should apply to all steps taken in the proceeding and that there were no exceptional circumstances warranting a costs award.

The court concluded that the protection under section 45(2) of the Act applied to all steps taken in the proceeding for which legal aid was granted, irrespective of the timing of the grant. The court found that the Lilleys were not entitled to recover costs incurred before the grant of legal aid. Regarding exceptional circumstances, the court held that the factors presented by the Lilleys did not collectively or individually amount to exceptional circumstances under the Act. Consequently, the court found no basis to order costs against Mr Hurlimann. Lastly, concerning Mr Hurlimann’s own costs for the first cause of action, the court determined that he was not successful in that application and thus not entitled to costs.

In conclusion, the court declined to make an order for costs against Mr Hurlimann. However, it specified the costs that would have been awarded had Mr Hurlimann not been legally aided, indicating a 2B liability together with reasonable disbursements.

Orders