Collins & May Law v Memelink - [2017] NZCA 541

IN THE COURT OF APPEAL OF NEW ZEALAND

CA159/2016
[2017] NZCA 541

BETWEEN	COLLINS & MAY LAW Appellant
AND	HARRY MEMELINK AND PATRICK JOHN RENSHAW AS TRUSTEES OF THE LINK TRUST (NO. 1) First Respondent
AND	HARRY MEMELINK Second Respondent

Hearing:	31 July 2016
Court:	Miller, Simon France and Toogood JJ
Counsel:	H M Twomey and M O Fee for Appellant Q S Haines for Respondents
Judgment:	23 November 2017 at 3.00 pm

JUDGMENT OF THE COURT

AThe appeal is allowed.
BWe set aside the orders made in the High Court.
CJudgment is entered for the appellant on the respondents’ claims.
DThe cross-appeal is dismissed.
ECosts in the High Court to be determined in that Court in light of this judgment.

F Costs in this Court are reserved.

____________________________________________________________________

REASONS OF THE COURT

(Given by Toogood J)

Collins & May Law appeals against a judgment of Clifford J in which the law firm was held to have been negligent in the conduct of a conveyancing transaction and ordered to pay damages of $155,715.33.[1]
[1]Memelink v Collins & May Law [2016] NZHC 442.
The facts reveal an unusual train of events between November 2003 and the hearing before Clifford J in September 2015.

The purchase of 4 Suzetta Place, Pakuranga

In late August 2006, Mr Harry Memelink instructed Mr Eugene Collins of Collins & May Law to act for his family trust, the Link Trust (No. 1) to settle the purchase of a property at 4 Suzetta Place, Pakuranga. The property was then owned by Mr John Hoyte and his wife, Ms Cecile Matthews, as tenants in common in equal shares. The transaction had its origins in an agreement entered into in November 2003, settling a dispute between Mr Memelink and Mr Hoyte over the ownership of a company, John Hoyte and Associates Ltd (JHAL), and related issues.
The settlement of that dispute included an agreement that, among other things, Mr Memelink’s 50 per cent shareholding in JHAL and other debts owed by the company to him would be secured by a mortgage over the property in favour of Mr Memelink and a company owned by him, Link Technology 2000 Ltd (Link Technology). The arrangements were recorded in a written acknowledgement dated 29 November 2003, prepared by Mr Memelink and signed by Mr Hoyte, in these terms:
I John Hoyte officially recognize Harry Memelink as a 50% shareholder of John Hoyte and Associates Limited (Enterprise Tools). Balance out as according to original agreement (i.e. Stock & Cash input for balance out of shareholding still to be done.)
I John Hoyte agree to grant a mortgage and guarantee over my house at 4 Suzetta Place, Pakuranga, Auckland, life insurance policies and personal guarantee to Harry Memelink, Link Technology 2000 Ltd and associated companies, as security for any debt that John Hoyte and Associates Limited (Enterprise Tools) owe. This includes advanced monies, interest, stock, outstanding invoices, rent, power etc.
It seems that a mortgage was never registered but Mr Memelink arranged…

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.

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Details

Case: [2017] NZCA 541
Decision Date: 23 November 2017 at 3.00 pm

CaseChat Overview and Summary

Collins & May Law appeals against a judgment of Clifford J in which the firm was held to have been negligent in the conduct of a conveyancing transaction and ordered to pay damages of $155,715.33. The Court of Appeal found that the appeal should be allowed and that the orders made in the High Court should be set aside. Judgment was entered for the appellant on the respondents’ claims. The Court of Appeal found that Collins & May Law had not been negligent in their conduct of the transaction and that the loss suffered by the respondents was caused by Mr Memelink’s failure to produce a crucial document signed by Ms Matthews and not by any negligence on the part of the law firm. The Court found that the settlement statement provided by the vendors’ solicitors provided sufficient clear evidence that payment of the sum tendered on settlement was a full and final discharge of the Link Trust’s obligations to pay the full purchase price.

Orders