Auckland Grammar offered the family $20,000 to settle their claim against the school, but by December 2008 the family had already paid $20,000 in legal fees and owed a further $15,125.82.
The final settlement between the school and the family was confidential, but Justice Hinton said: "As they presumably settled for at least $20,000, they also did well in terms of the dollar payment, compared with what many might have predicted for such a case."
The case revolves around fees charged by a barrister, Gregory Keene, who was engaged by Cutting in March 2007 to pursue the family's claim for compensation against Auckland Grammar.
The family claimed that they were not liable for Keene's fees because they did not give Cutting consent in advance to engage Keene, were not copied into the legal instructions that Cutting sent to Keene, and did not have a contract with Keene.
But Justice Hinton found that Keene did send a copy to the family when he replied thanking Cutting for his instructions.
"All of the subsequent attendances were carried out by Mr Keene to the knowledge of the appellants, and the appellants made payment without question of Mr Keene's earlier accounts," she said.
The judgment did not disclose how much the case has cost the family altogether, but said: "Mr Keene had told the appellants the case would be expensive and would cost about $40,000."
Cutting paid Keene's fees on the family's behalf, but went to court in early 2009 seeking an order for the family to pay the outstanding fees.
The family complained to the Law Society that Keene's fees were unreasonable, but the Law Society found that his fees were reasonable.
The family complained against that ruling to the Legal Complaints Review Officer, but that officer upheld the Law Society's view.
The District Court upheld Cutting's claim that the family should pay him Keene's unpaid fees, but reduced the amount owing from $15,125.82 down to $10,500 "on the broad-brush basis there may have been some repetitive or overly in-depth work".
Justice Hinton dismissed the family's claim for damages of $50,000 against Cutting and found that the family was also liable for Cutting's legal costs in the case.
"I recognise that what happened to Mr Liu was horrifying. He was badly wronged," she said.
"The appellants have settled the claim which they understandably brought against the school, and obtained vindication. They must pay the fees they have been ordered to pay.
"I recognise the matter cost them more than the dollar settlement they received, but that is unfortunately not uncommon and they were warned of that possibility both at the outset and along the way, by Mr Keene.
"What they achieved was not just the dollar amount but a victory in respect of an important point of principle. As they presumably settled for at least $20,000, they also did well in terms of the dollar payment, compared to what many might have predicted for such a case.
"Mr Liu is a capable young man who seems to have recovered reasonably well from the wrong that was done to him. He and his parents should now focus productively on the next stages of their lives and move on from this litigation."
Auckland Grammar headmaster Tim O'Connor said that, as far as he could tell from the school's records, the school board handed the case to its insurance company, and any final settlement was paid by the insurer.
He said it appeared that the settlement "was related to legal fees, not the student disciplinary matter".
