Court finds individual partner’s legal aid grants do not protect partnership from costs order
The High Court has ordered Jhanzi Afghan Hound Kennels to pay the New Zealand Kennel Club Inc $35,473.55 in costs and disbursements after finding that legal aid granted to one of the kennel’s partners did not protect the partnership from a costs order.
In Jhanzi Afghan Hound Kennels v New Zealand Kennel Club Inc [2026] NZHC 2987, the dispute arose from the club’s deregistration of Afghan hound puppies. Jhanzi appealed a District Court finding that the deregistration had caused no loss, while the club cross-appealed a finding that it had breached a contract.
In its 24 June 2026 decision, the High Court dismissed Jhanzi’s appeal and allowed the club’s cross-appeal. It found that the club had authority to deregister the puppies and had not breached the contract.
The court indicated that the club was entitled to costs on a 2B basis but initially allowed the parties to discuss costs. They failed to reach agreement.
Jhanzi argued that legal aid granted to one of its two partners prevented the court from making a costs order.
The Legal Services Commissioner granted the partner legal aid on 29 August 2025, but withdrew it on 9 April 2026, after the club challenged it. A second grant, issued on 25 May 2026, remained in effect.
Under s. 45 of the Legal Services Act 2011, courts cannot order costs against legally aided persons in civil proceedings unless exceptional circumstances exist.
However, the High Court found that the legally aided partner was not personally a party to the proceedings. Jhanzi had brought its contractual claim as a partnership and pleaded losses in that capacity.
The court also found that s. 11(1) of the act excluded the partnership from legal aid eligibility because it constituted a body of persons.
It rejected Jhanzi’s reliance on O’Donoghue v Comia [2023] NZHC 3218, finding that the earlier decision involved different circumstances concerning the timing of legal aid.
The court further held that s. 45 did not apply retrospectively to steps taken before a legal aid grant unless a grant expressly covered previously incurred costs. The court found no such provision in the grant.
The High Court awarded the club $32,196 in costs and $3,277.55 in disbursements, totalling $35,473.55.
