Hole v Snedden - [2012] NZHC 1907

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2012-404-001699 [2012] NZHC 1907

BETWEEN REGINALD ANTHONY HOLE First Plaintiff

ANDMARY-ANN BOYS Second Plaintiff

ANDDAVID WARWICK SNEDDEN First Defendant

ANDSNEDDEN SOLICITORS NOMINEE COMPANY LIMITED
Second Defendant

Hearing: 27 July 2012

Appearances: R Hindle for the Plaintiffs
M Armistead for the Defendants

Judgment: 1 August 2012

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on
01.08.12 at 4:30pm, pursuant to
Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar
Date……………

Solicitors/Counsel:
Clendons North Shore (B Joyce), P O Box 305-349 North Shore Auckland 0757, for Plaintiffs. Email: brian.joyce@clendons-ns.co.nz
Kennedys (Mark Dennett/Megan Armistead) P O Box 3158 Auckland, for Defendants.
Email: m.armistead@kennedys-law.co.nz / m.dennett@kennedys-law.co.nz

Copy for:
Royden Hindle, Bankside Chambers, Lumley Centre, 88 Shortland Street, Auckland 1010
Email: royden@roydenhindle.conz

REGINALD ANTHONY HOLE V DAVID WARWICK SNEDDEN HC AK CIV 2012-404-001699 [1 August
2012]

Background

[1] The case concerns an application for summary judgment by plaintiffs against their solicitor, Mr Snedden, and his nominee company, in connection with their investment of funds through the nominee company.

[2] The claim focuses upon a registered valuer’s valuation prepared by Garton & Associates (Garton Valuation Report) dated 20 March 2006. Mr Snedden acted for both plaintiffs at the time they agreed to invest in a subdivision development owned by Northcorp Developments Limited (Northcorp). In or about April 2006 Mr Hole had discussed with Mr Snedden a proposed investment through the nominee company. Subsequently Mr Snedden’s letter dated 5 April 2006 to Mr Hole confirmed his earlier advice that a loan of $250,000 had been arranged for his client Northcorp with mortgage security over the development property. A form of Specific Authority For Investment was sent to Mr Hole with a request that he sign it where indicated and return it to Mr Snedden. Mr Snedden also enclosed a copy of the Garton Valuation Report which Mr Snedden stated “values the property at
$1,450,000 with a first mortgage recommendation of $725,000”.

[3] On 2 August 2006 Mr Snedden wrote again to Mr Hole with advice that Northcorp wished its mortgage advance to be increased to $450,000 because it was purchasing another property. Mr Hole was asked to sign another Specific Authority For Investment for that purpose. The arrangement did not require Mr Hole to lend more, rather to recognise that the mortgage security over the property would be increased because of the sum of $200,000 being borrowed from another source.

[4] Again, Mr Snedden enclosed a copy of the Garton Valuation Report (the

same one that had previously been sent), noting the report “values the property at

$1,450,000 with the first mortgage recommendation of $725,000”.

[5] At the same time on 2 August 2006 Mr Snedden wrote to Ms Boys. He referred to their recent telephone conversation in connection with Ms Boys investing through the nominee company. The letter noted that Mr Snedden had arranged a

loan of $450,000 for his client Northcorp on the security of its development property. Mr Snedden enclosed a…

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.

Keep reading for free

Create a free CaseChat account to read Hole v Snedden and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2012] NZHC 1907
Decision Date: 1 August 2012

CaseChat Overview and Summary

The case of Hole v Snedden involved a dispute between two plaintiffs, Reginald Hole and Mary-Ann Boys, and their solicitor, David Snedden, as well as Snedden's nominee company. The plaintiffs had invested funds through Snedden's nominee company into a subdivision development owned by Northcorp Developments Limited. They alleged that Snedden had negligently advised them to invest in the mortgage without disclosing certain conditions that were attached to the valuation of the property. The plaintiffs sought summary judgment against Snedden and the nominee company for their alleged negligence and misleading conduct. The legal issues in the case included whether Snedden owed the plaintiffs fiduciary duties as their solicitor and whether he breached those duties by failing to disclose the conditions attached to the valuation. The court also considered whether Snedden's reliance on the valuation reports was reasonable and whether there were any material factual disputes that would prevent summary judgment.

The court found that Snedden had indeed breached his fiduciary duties by failing to disclose the conditions attached to the valuation and by advising the plaintiffs to invest in the mortgage without sufficient security. The court held that the valuation reports were conditional and hypothetical, and that Snedden was negligent in not advising the plaintiffs about these conditions. The court rejected Snedden's argument that he was entitled to rely on the valuation reports and that there was no evidence to establish that they were unreliable. The court also found that there were no material factual disputes that would prevent summary judgment.

The court granted summary judgment in favour of the plaintiffs against Snedden and the nominee company, as to liability only. The court ordered that the proceeding be adjourned to schedule a trial to deal with the plaintiffs' quantum claims. Costs were ordered to be payable to the plaintiffs on a category 2B basis together with disbursements as approved by the Registrar.

Orders