Kain v Wynn Williams & Co - [2012] NZCA 563

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA635/2011
[2012] NZCA 563

BETWEEN GEORGE CHARLES KAIN, GEORGE MICHAEL KAIN, GEORGE THOMAS CARLTON KAIN, GEORGE HARRY KAIN & GEORGINA KAIN
Appellants

AND WYNN WILLIAMS & CO
Respondent

Hearing: 15 October 2012

Court: Hammond, Harrison and Ronald Young JJ

Counsel: O G Paulsen and S Dwight for Appellants
G H Nation and J Day for Respondent

Judgment: 30 November 2012 at 12.30 pm

JUDGMENT OF THE COURT

A The appeal is dismissed.

BThe appellants are to pay costs to the respondent for a standard appeal on a band B basis together with usual disbursements.

REASONS OF THE COURT

(Given by Harrison J)

Contents

Para No

Introduction  [1]
Background  [3]
Issue 1: was the conditional fee agreement unlawful?  [13]
(a)   High Court  [13]
(b)   Appeal  [15]
(c)    Decision  [18]

Deferred payment of a reasonable fee is not champertous in
             New Zealand  [18]
      (ii) Considerations of public policy  [33]
      (iii) Effect of the Lawyers and Conveyancers Act 2006  [49]

(iv) Conclusion [56]

Issue 2: Credit Contracts and Consumer Finance Act 2003  [57]
(a)   Introduction  [57]
(b)   Appeal  [58]
(c)    Decision  [61]
Result  [72]

Introduction

This appeal raises two issues: first, whether a conditional fee agreement entered into between a law firm, Wynn Williams & Co, and its former clients, members of the Kain family, was unlawful because it provided a financial benefit to the firm in the event of its successful performance of a professional service; second or alternatively, whether the Credit Contracts and Consumer Finance Act 2003 (the CCCF Act) rendered the agreement unenforceable because Wynn Williams did not comply with its disclosure provisions.
French J answered both questions in favour of Wynn Williams[1] and entered summary judgment for the firm. The Kains are dissatisfied and appeal on both grounds.

Background

[1]Wynn Williams & Co v Kain [2011] 3 NZLR 709 (HC).

The Kains are the beneficiaries of various trusts. The first and third appellants, Charles and Tom Kain, were the trustees of some of those trusts. In the late 1990s the Kains became involved in protracted litigation about the administration of the trusts.
The litigation was hard fought in all courts. Wynn Williams represented Charles and Tom Kain in their capacities as trustees in the High Court where after a lengthy trial Panckhurst J delivered judgment in December 2004.[2] Cross-appeals to the Court of Appeal followed; Wynn Williams again represented Charles and Tom Kain. This Court’s decision was unfavourable to the Kains.[3] Wynn Williams rendered a fee for professional services of $175,500 plus disbursements. The Kains paid some of this fee but left a balance owing of $87,000.
[2]Kain v Hutton HC Christchurch M189/00, 3 December 2004.
[3]Kain v Hutton [2007] NZCA 199, [2007] 3 NZLR 349 (CA).
The Kains decided to appeal to the Supreme Court. All five of the Kains retained Wynn Williams as their solicitors. However, the Kains’ collective financial position was adverse; not…

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: [2012] NZCA 563
Decision Date: 30 November 2012

CaseChat Overview and Summary

The Kains appeal against a summary judgment entered by French J in favour of Wynn Williams & Co, a law firm, for an outstanding debt of $237,000. The Kains argue that the conditional fee agreement under which the debt arose was unlawful and, alternatively, that it was a consumer credit contract which was not properly disclosed. Wynn Williams contends that the agreement was neither unlawful nor a consumer credit contract. The Court of Appeal considers that neither contention is arguable. The conditional fee agreement was not unlawful because it only deferred payment of a reasonable fee and did not involve a division of the spoils of litigation. The conditional fee agreement was not a consumer credit contract because Wynn Williams had not granted a contractual right to defer payment of the fee. The appeal is dismissed. The appellants are to pay costs to the respondent for a standard appeal on a band B basis together with usual disbursements.

Orders