Jensen v Rameka
[2014] NZHC 1720
•23 July 2014
IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY
CIV-2013-463-486 [2014] NZHC 1720
UNDER the District Courts Act 1947 BETWEEN
TONY MICHAEL JENSEN AND CRAIG PHILLIP WAYMOUTH TRADING AS JENSEN WAYMOUTH LAWYERS Appellants
AND
TAMATI REIHANA RAMEKA Respondent
Hearing: 5 June 2014 Appearances:
P Napier for Appellants
M Armstrong and T M Wara for RespondentJudgment:
23 July 2014
JUDGMENT OF COOPER J
This judgment was delivered by Justice Cooper on
23 July 2014 at 11.00 a.m., pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date:
Solicitors:
Keegan Alexander, Auckland
Aurere Law, Rotorua
JENSEN AND OTHERS v RAMEKA [2014] NZHC 1720 [23 July 2014]
[1] The appellants, who are a firm of solicitors, appeal against a judgment of Judge Cooper delivered in the District Court at Taupo.1 The Judge gave judgment against the appellants in favour of the respondent in the sum of $30,000, together with costs and interest. The claim was for exemplary damages as the result of negligent destruction of a will and the instructions on which the will had been based.
[2] The respondent (who was the plaintiff in the District Court) was the nephew of Ngahuia Ranginui Rameka. Soon after he was born Mrs Rameka took the respondent into her home, adopting him according to Māori custom, and raising him as her whangai son. Soon after his fourth birthday Mrs Rameka was granted custody, and appointed his additional guardian. She had no natural children.
[3] Mr Kevin Wikatene was Mrs Rameka’s de facto partner, and lived with her while she was bringing up the respondent. In 2003 she made a will which I will refer to as “the first will”. That will was prepared by the appellants’ firm. The terms of the first will cannot now be established, but it is common ground that it would have included provision for the respondent.
[4] On 14 November 2005 Mrs Rameka was seriously ill in hospital. She was suffering from terminal cancer. She was undergoing chemotherapy and receiving strong medication including morphine. On that day a second will was taken to her for execution by Mr Wikatene. The will was prepared by the appellants’ firm and left the entire estate to Mr Wikatene, although it did provide that if Mr Wikatene did not survive Mrs Rameka then the residuary estate was to be paid to the respondent.
[5] On the following day, Mrs Rameka died. Probate was granted by the High Court on 24 January 2006. The estate had a value of a little over $427,000. The Judge found that Mr Jensen, one of the appellants, had destroyed the first will. Further, the appellants’ employee, Ms Maureen Sando, destroyed the file and all
associated documents and records relating to the first will.
1 Rameka v Jensen and Others DC Taupo CIV-2011-069-000220, 23 October 2013 [District Court judgment].
[6] In January 2007 the respondent, who was then aged 14, commenced a proceeding suing through his biological mother as his litigation guardian, against Mr Wikatene as executor of the estate. That proceeding was heard by Rodney Hansen J in May 2008 and on 11 September he delivered a judgment in which he found that:2
(a) Mr Wikatene had not shown on the balance of probabilities that Mrs Rameka had testamentary capacity when she executed the second will.
(b)He had not shown that she knew and approved of the contents of the second will prior to her signing it.
(c) It was probable that Mrs Rameka had made meaningful provision for the respondent in the first will but there was insufficient evidence available to prove the exact terms of that will.
[7] Rodney Hansen J recorded his “astonishment” that the first will had been destroyed after the new will was executed and that the notes of the instructions given by Mrs Rameka had also been destroyed.3 Later, he said:4
As my earlier findings make clear, I think it probable that Ngahuia made meaningful provision for Tamati in her 2003 will and intended to make similar provision in her last will. Her wishes have been frustrated to this point by a combination of professional incompetence, questionable practices and bad faith. It will be for others to explore possible avenues by which Tamati can obtain redress. They include enquiry into whether any relevant professional standards have been breached. For that purpose, I direct that a copy of this judgment be sent to the Waikato Bay of Plenty District Law Society.
[8] It is clear that the destruction of the first will and of the file relating to it
meant that it was impossible to give effect to Mrs Rameka’s intentions expressed in
the first will notwithstanding the conclusion that the second will was invalid.
2 Rameka v Wikatene HC Rotorua CIV-2007-463-076, 11 September 2008.
The District Court proceeding
[9] The respondent commenced the District Court proceeding in 2011. He claimed that the appellants had been negligent in destroying the first will and all records of its contents. He sought exemplary damages. Initially the appellants denied negligence. However, at the trial they conceded that the prior will should not have been destroyed and in closing, counsel conceded negligence. The Judge noted:5
It is clear from the evidence of Mr Kelly and the evidence of the defendants’
expert Mr Eade, that the actions of the defendants’ firm in destroying the
2003 will and the notes of instruction for the 2003 will were negligent. It was conceded by Mr Napier that the defendants owed a duty of the care to
the plaintiff not to destroy the 2003 will and that the defendants breached
this duty. Mr Napier concedes that this is a case of negligence but submits that the circumstances are not such as to give rise to a claim for exemplary
damages.
[10] Other key findings in the District Court judgment were that:
(a) It was likely that there was some provision for the respondent in the first will, but it was not possible to say exactly what the extent of that provision was.6
(b)Although Mr Jensen gave evidence that his policy was that an earlier will would be destroyed only on the express instructions of the client, neither he nor Ms Sando had Mrs Rameka’s instructions to destroy the first will.7 Mr Jensen had accepted in evidence that obtaining a client’s specific instructions and advising her would involve “a very careful explanation to the client to ensure there was informed consent”.8
(c) Both Mr Jensen and Ms Sando knew of the importance attaching to prior wills and instructions where a subsequent will is declared
invalid.9
5 District Court judgment, above n 1, at [29].
6 At [15].
7 At [20]-[21].
(d)Both Mr Jensen and Ms Sando were aware of the possibility that a will is open to challenge, and that if the will is declared invalid, a prior will takes effect.10
(e) Mr Jensen had said it was not the firm’s policy to destroy the will instructions, but Ms Sando believed, according to her evidence, mistakenly, that it was the firm’s policy to destroy the will instructions. Although Mr Jensen accepted that he had a responsibility to supervise Ms Sando’s work in relation to wills and estates, at no stage did he ever review any of her will files.11
(f) There was no evidence that Mr Jensen made any inquiry of Ms Sando concerning the file, before he destroyed the first will.12
(g)Since Mr Jensen was a qualified and experienced solicitor, it was “inconceivable” that he was unaware of potential prejudice to someone in the respondent’s position if the first will was destroyed. He continued:13
…The fact that he had a subjective appreciation of that risk can be seen from his evidence referred to earlier, as to the risks involved in destroying a prior will, and the care that he knew that was required in obtaining informed client instructions before doing so. Notwithstanding that risk and his knowledge of that risk and the absence of client instructions, Mr Jensen went ahead and destroyed [the first will] anyway.
(h) Viewed objectively, Mr Jensen had a “subjective appreciation for the
risks involved of causing loss to someone in the position of the
plaintiff in destroying the [first] will but did so anyway”.14
10 At [34].
11 At [26].
12 At [40].
13 At [41]. The Judge had earlier resolved a conflict in the evidence as to whether the first will had been destroyed by Mr Jensen or Ms Sando, finding on the balance of probabilities that it was Mr Jensen who did so (at [39]).
[11] Clearly, the Judge had in mind the law stated in Couch v Attorney-General.15
The Judge quoted in particular Tipping J’s statement that:16
Exemplary damages should be confined to torts which are committed intentionally or with subjective recklessness, which is the close moral equivalent of intention.
[12] It followed that the appellants were liable to the respondent for exemplary damages. The Judge fixed the quantum at $30,000, the sum that had been claimed.
The appeal
[13] The appellant challenges both the decision to award exemplary damages and the quantum of the award.
Exemplary damages
[14] Mr Napier’s principal submission was that the Judge had incorrectly applied the law as set out in Couch v Attorney-General. Mr Napier submitted that the unchallenged evidence of Mr Jensen was that when destroying the first will he had not turned his mind to the risks involved of causing loss to someone in the position of the respondent. Mr Napier further relied on Mr Jensen’s evidence that it was his practice only to destroy wills where the client consented to their destruction, and submitted there was no evidence that Mr Jensen knew there was a lack of consent by Mrs Rameka to the first will’s destruction. While destroying the first will without properly satisfying himself that there was consent for its destruction was negligent, the destruction did not take place in circumstances where Mr Jensen consciously appreciated the risks that he would do harm to someone in the respondent’s position.
[15] In essence, Mr Napier submitted that in order for Mr Jensen to have had a subjective appreciation of the risk of causing such loss he would have had to have consciously thought of and appreciated the following when he destroyed the will.
(a) there was not or might not be consent for the destruction of the will:
15 Couch v Attorney-General [2010] NZSC 27, [2010] 3 NZLR 149.
(b) the subsequent will revoking the first will might not be valid;
(c) a beneficiary under the first will might not be a beneficiary, or might not have as good a bequest under the subsequent will as he did under the first will;
(d)if the first will is destroyed, such a person might be disadvantaged in view of the foregoing; and
(e) decided to go ahead and destroy the first will in any event.
[16] For the respondent, Mr Armstrong and Ms Wara argued that the Judge had correctly applied the law as stated in Couch. They submitted that while exemplary damages is only available where there is a conscious appreciation of the risk of causing harm and the defendant deliberately runs that risk, that state of mind could be inferred from the objective circumstances of the case. That is what the Judge had done in the present case. Thus, the Judge found that:
(a) Mr Jensen was aware of the possibility that a will would be open to challenge and that if declared invalid, the prior will takes effect.
(b)Mr Jensen understood the importance of retaining a prior will for that reason.
(c) Mr Jensen’s evidence was that his policy to destroy wills was that the will should only be destroyed with the client’s specific instructions and after advice to the client.
(d)Mr Jensen accepted that this would involve a very careful explanation to the client to ensure that there was informed consent.
(e) The first will was destroyed, but neither Mr Jensen nor Ms Sando had express instructions from Mrs Rameka to do that.
(f) Mr Jensen accepted that he had a responsibility to supervise Ms Sando’s work in relation to wills and estates but at no stage did he ever review any of her will files.
(g)There was no evidence that Mr Jensen made any inquiry of Ms Sando concerning the file before destroying the first will.
Discussion
[17] Following the decision of the majority of the Supreme Court in Couch, it is clear that exemplary damages may be awarded in New Zealand only where it is established that the defendant acted intentionally, or had a conscious appreciation of the risk of causing harm and chose to run that risk. In the latter case, liability for exemplary damages is said to require “subjective recklessness, which is the close moral equivalent of intention”.17
[18] Couch was a case of negligently caused personal injury. In such a case, it was held that exemplary damages could be awarded only if the defendant “deliberately and outrageously ran a consciously appreciated risk of causing personal injury to the plaintiff”. Whether running such a risk was to be regarded as outrageous would depend on the degree of risk that was appreciated and the seriousness of the personal injury that was foreseen as likely to ensue if the risk
materialised.18
[19] The decision in Couch rejected the approach that had been taken by the majority of the Privy Council in Bottrill v R.19 There the Privy Council held that there could be cases, albeit they would be rare, where a defendant had departed so far and so flagrantly from the dictates of ordinary or professional precepts of prudence, or standards of care, that the conduct was sufficiently outrageous to warrant an award of exemplary damages. Following the decision in Couch, that kind
of case will not attract an award of exemplary damages unless intention or conscious
recklessness can be shown. Where that can be established, however, it appears that
17 Couch v Attorney-General, above n 15, at [178], per Tipping J.
18 At [179].
19 Bottrill v A [2010] UKPC 44, [2003] 2 NZLR 721.
any kind of tortious wrongdoing can be the subject of an award of exemplary damages. In this respect it seems that the decision in Couch is consistent with what Lord Nicholls said in Bottrill, that if that were not the case the law would lack coherence.20 In a case such as this however, a case of negligence causing economic loss, it is necessary to adapt some of the language used in Couch reflective of the fact that it was a case of personal injury. I did not understand Mr Napier to submit
that the different cause of action was in itself significant.
[20] I do not doubt that the Judge appreciated the law he had to apply. His error, if he made one, was in the way he did so.
[21] On my reading of the judgment, the Judge’s essential reasons for awarding exemplary damages were that Mr Jensen destroyed the first will without making any enquiry to ascertain whether Mrs Rameka had given instructions for that to occur. At the same time, he appreciated that if a subsequent will is challenged and declared invalid, a prior will takes effect. Consequently, he was aware of potential prejudice to someone in the respondent’s position if the first will was destroyed. The fact of his subjective appreciation of the risk of prejudice could be inferred from his knowledge of the kinds of risks involved in destroying a prior will and the care needed when obtaining informed client instructions before doing so.
[22] In essence, the issue here can be reduced to the question of whether those facts were sufficient to meet the test of subjective recklessness, or whether, as the appellants contend, it would be necessary for the evidence to establish a more specific knowledge on Mr Jensen’s part of the circumstances in which he destroyed the will.
[23] Counsel for both parties discussed the observations made by Blanchard J in
Couch:21
[63] It has also been suggested that drawing a line between advertent and inadvertent negligence is difficult in another way, because conduct which may consist of inadvertent negligence in one respect may be combined with
20 Bottrill v A, above n 19, at [22]. Compare Couch, above n 15, at [178] (per Tipping J), [246] (McGrath J) and [259] (Wilson J).
21 Couch, above n 15, at [63].
deliberate conduct in another respect. But the question in any such case is merely whether a defendant was conscious of creating a risk of injury or loss to the plaintiff. Take the examples given by Thomas J in Bottrill (CA). The first was posited by Glanville Williams and BA Hepple, of a defendant pointing and firing a gun believing it to be unloaded. Surely the defendant who acted without checking on the accuracy of that belief cannot be heard to say that he was unaware that there was some degree of risk that there was a bullet in the chamber. If, when the trigger was pressed, the gun was knowingly pointed at someone, or in a direction where someone might be present, the act was advertently reckless. Likewise, a medical practitioner who does not bother to read medical journals must surely be taken to be aware of running the risk of not keeping up to date and thus doing something which may needlessly harm his or her patients… .
(Footnotes omitted.)
[24] Mr Napier argued that the present case was very different from the example given of a defendant pointing and firing a gun believing it to be unloaded, without checking that was the case, and also of the medical practitioner who deliberately chose to run the risk of not keeping up to date. Mr Armstrong however countered that as in the examples given, Mr Jensen was guilty of failing to check that Mrs Rameka had given instructions to destroy the first will when he knew that harm might ensue. As Mr Armstrong put it, Mr Jensen destroyed the first will without any instructions, without any knowledge of the file in relation to either the first or the second will, and without having overseen the execution of the second will. The fact that the respondents had a policy in place that was breached by the destruction of the first will and the file relating to it was compelling evidence that Mr Jensen must have been consciously running a risk of causing harm to a beneficiary under the first will.
[25] The question whether a defendant has acted with the requisite conscious recklessness must be answered by reference to the risk he is said to have consciously run. The examples referred to by Blanchard J in the passage I have quoted were ones in which the defendant must have been advertently reckless. In a case of a loaded gun, it seems to me that the recklessness was necessarily advertent because of the obviously dangerous act of firing the gun. But it is also true of the second example, although in the case of the doctor not keeping up to date the risk is run by omission. I do not understand Blanchard J to have contemplated that, in either case, the defendant could escape liability by asserting that he had not turned his or her mind to the risks actually being run. That must be the case, I think, because the conduct notionally engaged in was inherently risky so that the defendant “cannot be
heard” to deny he was running the risk, or “must be taken to be aware” of running the risk. Consistently with that, Blanchard J went on to refer to conduct that, like the examples he had just given, demonstrated that the defendant must have been aware of the risk to the plaintiff or someone in the position of the plaintiff.22
[26] I acknowledge there is tension between the observations of Blanchard J, and
Tipping J’s emphasis on conscious appreciation of the actual risk of running harm.23
However, it seems that with certain kinds of actions or omissions there are obvious risks of which defendants must be taken to be aware, even if that analysis comes very close to the now-rejected concept of objective recklessness.
[27] Mr Napier sought to rely on evidence given by Mr Jensen that it had been his general practice with client consent to destroy wills once they were revoked, up until the “ramifications emanating” from the destruction of the first will. He said that that policy was followed so as to reduce the need for document storage capacity. Mr Napier then noted that the Judge had relied on the cross-examination of Mr Jensen and Ms Sando as establishing that Mr Jensen had a subjective appreciation of the risks involved in causing loss to someone in the position of the respondent in destroying the first will. However, Mr Napier submitted that Mr Jensen’s unchallenged evidence was to the opposite effect: that evidence was that when destroying the will the possibility of loss was not something to which he had turned his mind.
[28] The passage in the cross-examination on which the Judge relied was as follows:
Q: And you’re aware, aren’t you that the validity wills is sometimes
challenged?
A: I certainly am now.
Q: And you’re aware being a practising solicitor and partner in a law firm that’s something that happens?
A: This was the first time it had happened with direct impact on my practice.
22 At [64].
23 At, for example, [113] and [117].
Q: But prior to this occurring you were aware that wills can sometimes be challenged?
A: It wasn’t – just try and recollect how I, or what I was aware of at the time, it wasn’t in my direct contemplation that wills we were obviously doing would be, would be challenged and perhaps in reflection that was that was just a state of where the practice was at that time. Certainly I’ve observed over the past four or five years it’s happening a lot more.
Q: Is it your evidence that as a partner in this firm you were completely unaware that on occasions wills could be challenged?
A: No that’s not my evidence. I’m saying in terms of my direct contemplation trying to cast my mind back to the things that were relevant at that time. It’s, it’s not something that was in my direct contemplation or focus, but certainly I can remember these cases that date back to law school.
Q: And you were aware that if there was such a challenge and successful a previous will takes effect if there is one?
A: Well depending on the circumstances of the execution of that will, yes.
Q: And are you aware that if that happened you would need the prior will to prove what the contents of that prior will were?
A: Yes.
Q: And if there was no prior will you might be able to look at will instructions or file notes or some of the file records to prove the contents of the prior will?
A: Yes.
Q: And you’d accept that for those reasons you’d have to be extremely
careful about destroying any prior wills or file records about a prior will?
A: Well subject to client instructions, yes absolutely and also subject to the requirement to retain file records for the minimum period.
[29] It was on the basis of that evidence that the Judge reached the conclusions that I have already set out above.24 He did not refer to further evidence given in cross-examination that is also relevant for present purposes. That evidence was as follows:
Q. When you say in your brief that wills are only destroyed after discussions with the client?
A. Yes.
24 At [10](g).
Q. You would accept you would have to explain it very carefully to them to ensure that there was informed consent?
A. Yes I do accept that.
Q. And again as raised before the higher the risk of a challenge the more careful you’d have to be about informing them and ensuring that you can rely on their instructions?
A. No, no, in my view the level of discussion needs to be extremely careful and accurate at all times.
Q. That’s advice given and instructions received should be recorded in writing?
A. Sometimes it is, in my experience as I’ve stated didn’t always happen, people would ask that the documents be retained. Similarly the nature of the scenario was such that the clients have also uplifted the document and then I’ve also experienced a situation where the clients have destroyed the document themselves and other than that, yes, file notes have been taken to my recollection relating to that instruction for the will to be destroyed.
Q. In the present case there was no discussion at all with this testatrix about the destruction of her earlier will?
A. I’m not aware of any no.
Q. No evidence anywhere that she consented to that earlier will being destroyed?
A. I’m not aware of that no.
[30] Regardless of the stance to be taken following Couch, I do not accept Mr Napier’s proposition that the Judge’s conclusions were not available on the basis of Mr Jensen’s evidence. Those findings were premised on the Judge’s view of Mr Jensen’s credibility. While it is true that Mr Jensen implied that he did not at the relevant time directly contemplate that the second will might be challenged, the Judge was not obliged to accept that evidence. His conclusion that it was “inconceivable” that as a qualified and experienced solicitor Mr Jensen would have been unaware of potential prejudice to someone in the position of the plaintiff when he destroyed the first will was a finding that I consider he was entitled to make.
[31] It was after all consistent with the policy the appellants had in place not to destroy a will without the client’s informed instructions. Had those instructions been sought, it seems most likely that there would have been some focus on the circumstances in which the second will had been executed. In all the circumstances,
the Judge was entitled to conclude that destruction of the first will without making any inquiry about the client’s instructions could properly be viewed as engaging in conduct that was inherently risky, in a way that Mr Jensen as an experienced solicitor, must have appreciated, and in fact did appreciate, at the time. To use the Judge’s words, it is inconceivable that he did not.
[32] Mr Napier complained that it had not been put to Mr Jensen in cross- examination that when destroying the first will he consciously appreciated that if the subsequent will was set aside then he might be depriving beneficiaries under the first will of an entitlement under that will. While the proposition may not have been put to him in those precise terms, the questions and answers that he gave in cross- examination in my view justified the Judge’s key findings, for the reasons already explained.
[33] The duty to cross-examine on significant matters that are relevant and in issue finds statutory expression in s 92 of the Evidence Act 2006. Ms Wara referred me to R v Soutar25 in which the Court of Appeal said:
The general purpose of the duty reflected in s 92 was commented on by this Court in R v Dewar [2008] NZCA 344 as being one of fairness. It relates to the challenge and confrontation of opposing witnesses under the adversarial system. It is not, however, absolute. Nor does it need to be slavishly followed where the witness is perfectly well aware if his or her evidence is not accepted on a particular point.
[34] In the present case, the pleading very clearly alleged that the appellants had a conscious appreciation of the risk of causing harm to the respondent and that the appellants deliberately and outrageously ran that known risk by destroying the first will and or records of its contents.
[35] Those allegations were denied in the Notice of Response. Consequently, I accept Ms Wara’s submission that the appellants were well aware in advance of the trial that their position was not accepted on this point.
[36] I note in addition that Mr Jensen maintained that he himself did not destroy the will, alleging that had been done by Ms Sando. For reasons explained in the
25 R v Soutar [2009] NZCA 227 at [27].
judgment the Judge rejected that evidence. Given that Mr Jensen’s stance was that he had not destroyed the will, it is difficult to see what would have been achieved by putting to him what his conscious appreciation was at the time. In all the circumstances I am of the view that the relevant issues were sufficiently explored in cross-examination.
[37] Another point raised by Mr Napier was that there was no evidence of a lack of instructions to destroy the will. However, as has been seen from the excerpts of his cross-examination set out above, Mr Jensen effectively conceded that there had been no discussion with Mrs Rameka.
[38] For the various reasons I have addressed I reject the appellants’ argument that
the Judge should not have awarded exemplary damages.
Quantum
[39] The notice of claim sought exemplary damages in the sum of $30,000. The Judge awarded that amount. It is unclear why there was no claim for compensatory damages; I infer that there were thought to be too many obstacles in the way of establishing a claim to any significant amount for compensatory damages because of the uncertainty surrounding the content of the first will.
[40] The Judge dealt with the issue of quantum very briefly, as follows:26
The plaintiff seeks an award of $30,000 exemplary damages. In my view, such an amount is modest and appropriate given the nature of the defendants’ actions, the harm that followed, and the Court’s conservative and restrained approach to awards of exemplary damages.
[41] Mr Napier submitted that the quantum of the damages awarded was excessive, and out of step with other exemplary damages awards. Although he had been unable to find any cases where exemplary damages had been awarded for professional negligence, Mr Napier did refer to Kim v Oh, where a claim for
exemplary damages was made in the statement of claim.27 However, the case is not
26 District Court judgment, above n 1, at [44].
27 Kim v Oh [2013] NZHC 925, [2013] 2 NZLR 825.
a useful authority for present purposes. Counsel did not address the issue in closing and the issue was dealt with only very briefly in the judgment.28
[42] Mr Napier drew attention to a decision of Chisholm J in J v J29 which set out a table of amounts awarded as exemplary damages in a number of cases relating to sexual abuse of children. The awards ranged between $85,000 and $10,000. In J v J the award was $75,000. Mr Napier submitted that the $30,000 award in the present case appeared extremely high when compared to that awarded as a result of repeated sexual abuse of children.
[43] He also referred to McDermott v Wallace30 in which the defendant flying instructor was required to pay $20,000 as exemplary damages in respect of conduct described as “gross misfeasance in an instructing role in an aircraft”.31 As a result of the defendant’s actions an aeroplane crashed, causing the plaintiff serious injuries. Once again, Mr Napier submitted that the award of exemplary damages in the present case was in comparison too high.
[44] In McDermott v Wallace the Court of Appeal identified six principles to be born in mind in fixing the quantum of an award of exemplary damages.32 The first three were derived from Rookes v Barnard.33 They are first, that the claimant was the “victim of punishable behaviour”; second, that there should be moderation in awards and third, the means of the parties should be considered.
[45] Further principles referred to by the Court of Appeal were that awards of compensation to a claimant must also be taken into account, as should the imposition of any relevant criminal principle. Finally, regard must be had to the conduct of the
parties.
28 At [161]-[162].
29 J v J [2013] NZHC 1512.
30 McDermott v Wallace [2005] 3 NZLR 661 (CA).
31 At [90].
32 At [94]-[102].
33 Rookes v Barnard [1964] AC 1129 (HL) at 1227-1228.
[46] I note that the judgment in that case also contained a schedule of awards ranging from $100,000 (awarded by the High Court in a sexual abuse case in 1998) down to an award of $500 for unlawfully towing a car away.34
[47] Obviously, each case must turn on its own facts. It is difficult to make comparisons based simply on the nature of the conduct to be punished (for example, sexual misconduct) when all of the principles referred to by the Court of Appeal must necessarily be taken into account.
[48] Applying the relevant principles here I note that I have upheld the Judge’s decision to award exemplary damages and it notionally follows that the respondent was the victim of “punishable behaviour”. There has been no other compensatory award to the respondent in this case, although he might have achieved a modest award of compensatory damages.
[49] As to the means of the parties, I accept that the appellants are an established legal practice and the respondent, by contrast, was unemployed at the time of the hearing in the District Court. I note next that there has, of course, been no criminal sanction.
[50] As to the conduct of the parties, the respondent has obviously done nothing that should disentitle him to a claim. On the other hand, the conduct in question in this case was a serious failure to comply with professional standards. Rodney Hansen J found it “astonishing”. Nevertheless, my overall judgment is that the award of $30,000 was too high. Having considered the relevant circumstances, I would reduce the award and substitute a sum of $23,000.
Result
[51] For the reasons I have given the appeal is allowed, but only in respect of the quantum of the award of exemplary damages. For the exemplary damages award of
$30,000 made in the District Court, the sum of $23,000 is substituted. The appeal is
otherwise dismissed.
34 The High court case referred to was M v L, but no citation was given.
[52] As each party has achieved a measure of success, it may be appropriate for costs to lie where they fall. However, if the parties are of a different view I will receive memoranda within 10 working days of delivery of this judgment.
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