Hurlimann v Lilley - [2022] NZHC 1751

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

I TE KŌTI MATUA O AOTEAROA TE PAPAIOEA ROHE

CIV-2021-454-23

[2022] NZHC 1751

BETWEEN
JOSHUA HURLIMANN

Plaintiff

AND

PAUL LILLEY AND MELANIE LILLEY

Defendants

Hearing: 4 July 2022 (via AVL)

Appearances:

M Freeman for Plaintiff

D Shepherd for Defendants

Judgment:

20 July 2022

JUDGMENT OF ISAC J

Introduction

[1] Mr Hürlimann wanted to buy a lifestyle section so he could build a home. Mr and Mrs Lilley wanted to subdivide their seven-hectare rural property into four lots so they could sell three of them. These propitious circumstances culminated in an agreement for sale and purchase between the parties relating to a section that was yet to be created.

[2] The agreement contained a provision dealing with the imposition of restrictive covenants. Mr Hürlimann considers the provision prevented Mr and Mrs Lilley from requiring covenants of any kind. Despite this, he agreed they could register a suite of them over the land he was to acquire. He then proceeded to settle the purchase and acquired his title subject to those covenants.

HURLIMANN v LILLEY [2022] NZHC 1751 [20 July 2022]

[3] In this proceeding Mr Hürlimann now says the Lilleys breached the agreement by insisting on the covenants. He says their imposition amounted to a variation of the sale agreement that was unsupported by consideration because his consent was the product of illegitimate pressure. He seeks their removal from the title both under the law of contract and in terms of the Court’s jurisdiction to remove covenants under s 317 of the Property Law Act 2007.

[4] The primary issue I need to determine is the effect of cl 23 of the agreement for sale and purchase. It governed the imposition of restrictive covenants and the rights of the parties in relation to them.

The evidence and my findings

Scope of the evidence and my approach to factual findings

[5] The trial occupied one day. The evidence consisted of a largely contemporaneous documentary record of communications between the parties’ solicitors as well as oral evidence from Mr Hürlimann, his solicitor at the time, Mr Matsis, and Mr Lilley.

[6]My findings of fact are drawn almost entirely from the documentary record.

[7] The areas of conflict between the witnesses were limited. The first area— relating to pre-contractual negotiations—is not relevant to the issues I have to determine. Mr Hürlimann has not brought a claim for misrepresentation or rectification, and the oral evidence does not establish a common pre-contractual understanding of the intended effect of cl 23.1

[8] The second area of conflict—relating to Mr and Mrs Lilley’s true motivations for requiring the restrictive covenants—involved a challenge to Mr Lilley’s credibility. As I record later in this judgment, I am not satisfied there is a safe basis on which to conclude that Mr Lilley was not truthful when giving his evidence so, again, I have not found the viva-voce evidence helpful.

1 I use the expression “oral evidence” to refer to both the…

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 [2022] NZHC 1751
Case: [2022] NZHC 1751
Decision Date: 20 July 2022

CaseChat Overview and Summary

In Hurlimann v Lilley, the High Court of New Zealand dismissed Joshua Hurlimann's application to remove restrictive covenants on a property he purchased from Paul and Melanie Lilley. The court found that clause 23 of the agreement for sale and purchase permitted the Lilleys to impose restrictive covenants on the property, contrary to Hurlimann's argument. The court also found that Hurlimann's acceptance of the covenants was not the product of illegitimate pressure or duress. Additionally, the court held that the imposition of the covenants did not constitute an abuse of a contractual discretion. Finally, the court declined to exercise its discretion under section 317 of the Property Law Act to remove the covenants, finding that it was not just and equitable to do so given Hurlimann's informed decision to accept them. The court dismissed Hurlimann's application for a permanent injunction preventing the Lilleys from enforcing the restrictive covenants and declined to make an order under section 317 of the Property Law Act. The court encouraged the parties to set aside their differences and build a better relationship as neighbours.

Orders