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Davis v Mancer

Davis v Mancer

Case [2015] NZHC 3005 30 November 2015

Contract Formation

Duty of Care

Unconscionable Conduct

Professional Negligence

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-000687 [2015] NZHC 3005

BETWEEN
KARLEEN ITA DAVIS

First Plaintiff

TANYA MARIE SMART Second Plaintiff

TONI WILLIAMS MANCER Third Plaintiff

AND

KERRY JOHN MANCER First Defendant

KEITH WILLIAM YOUNG and CAROL ANN CAULFIELD

Second Defendants

Hearing: 30 September 2015

Appearances:

P Craighead for the Plaintiffs
No appearance by or on behalf of the First Defendant
P Napier for Second Defendants

Judgment:

30 November 2015

JUDGMENT OF WOOLFORD J

This judgment was delivered by me on Monday, 30 November 2015 at 3:15 p.m., pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:
Alistaire Hall, Solicitor, Manukau City
Keegan Alexander, Auckland
Counsel:
P Craighead, Manukau City

DAVIS & ORS v MANCER & ORS [2015] NZHC 3005 [30 November 2015]

Introduction

[1] The plaintiffs in this proceeding, Karleen Davis, Tanya Smart and Toni Mancer are three children of the late Mrs Doris Mancer. The first defendant, Kerry Mancer, is a fourth child of Mrs Mancer. The second defendants are lawyers who acted for the first defendant in his capacity as executor and trustee of his mother’s estate.

[2] Sometime before her death, Mrs Mancer transferred her home to the Mancer Family Trust with a deed of acknowledgement of debt in the sum of $373,000. Mrs Mancer’s will provided that the debt of $373,000 owed by the Mancer Family Trust was to be forgiven and that all her other assets were to pass to the first defendant. After their mother’s death, the plaintiffs brought a Family Protection Act claim against her estate in which they claimed that Mrs Mancer had not adequately provided for them in her will. The plaintiffs were successful in their claim against her estate. The Family Court directed that the $373,000 debt was not to be forgiven. The Court also awarded a percentage of the debt to each of the plaintiffs.

[3] In the current proceedings, the plaintiffs allege that the first defendant breached his duties as executor and trustee of their mother’s estate in that he has not arranged repayment of the debt from the trust, nor has he paid out the percentages of the debt that the Family Court ordered should be paid to the plaintiffs. The funds are apparently now irrecoverable.

[4] The second defendants, Keith Young and Carol Caulfield, are sued in their capacities as partners of the firm Young and Caulfield, based in Auckland. It is alleged that the law firm owed duties of care to the plaintiffs not to be negligent and that they breached these duties through the provision of inadequate advice to the first defendant.

[5] Young and Caulfield now apply to have the claim against them struck out as being untenable.

Factual background

[6] Although I set out my understanding of the factual background below, a fuller picture may emerge at trial.

[7] The late Mrs Mancer’s estate was structured in such a way that the majority

of her wealth was in the form of a debt owed to…

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 Davis v Mancer

Details

AGLC: Davis v Mancer [2015] NZHC 3005
Case: [2015] NZHC 3005
Decision Date: 30 November 2015

CaseChat Overview and Summary

The plaintiffs, Karleen Davis, Tanya Smart, and Toni Mancer, are three children of the late Mrs Doris Mancer, who transferred her home to the Mancer Family Trust prior to her death. The first defendant, Kerry Mancer, is another child of Mrs Mancer and a trustee of the trust. The second defendants, Keith Young and Carol Caulfield, are partners of the firm Young and Caulfield, who acted as solicitors for the first defendant in his capacity as executor and trustee of Mrs Mancer’s estate. The plaintiffs claim that the first defendant breached his duties as executor and trustee by not arranging repayment of a debt from the trust, nor paying out percentages of the debt ordered by the Family Court. They further allege that the second defendants breached their duty of care by providing inadequate advice to the first defendant.

The second defendants apply to have the claim against them struck out as being untenable. The Court must decide whether the claim discloses an arguable cause of action. The plaintiffs argue that the solicitors had a duty to them to prevent the first defendant from misapplying trust funds. The second defendants counter that they owed a duty of care only to their client, the first defendant, and not to the beneficiaries. The Court finds that while the usual rule is that a solicitor owes no duty of care to the beneficiaries of an estate, this rule may not apply where the executor has a conflict of interest and is not acting in the best interests of the beneficiaries. The Court concludes that it is not certain that the claim cannot succeed and declines to strike it out at this preliminary stage. The Court finds that the relationship between the second defendants and the plaintiffs is not so distant as to preclude a claim being brought in negligence, and that any policy reasons do not definitively militate against the duty. The claim raises novel issues, which warrant further exploration at trial.

The application by the second defendants to strike out the claim against them is declined. Costs should follow the event.

Orders