Kaye v Norris Ward McKinnon - [2016] NZCA 32

IN THE COURT OF APPEAL OF NEW ZEALAND

CA333/2015
[2016] NZCA 32

BETWEEN	ANTHONY PRATT KAYE AND MORVA KAYE Appellants
AND	NORRIS WARD MCKINNON Respondent

Hearing:	17 February 2016
Court:	Harrison, Fogarty and Toogood JJ
Counsel:	Appellants in Person T Taptiklis as McKenzie Friend M J Dennett for Respondent
Judgment:	29 February 2016 at 3 pm

JUDGMENT OF THE COURT

A The appeal is dismissed.

BThe appellants are ordered to pay the respondent costs as on a standard appeal on a band A basis together with usual and reasonable disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Harrison J)

Introduction

Anthony and Morva Kaye brought a proceeding in the High Court at Hamilton against their former solicitors, Norris Ward McKinnon. The essence of the Kayes’ claim was that the firm breached its contract of retainer when representing them, first, on the purchase of a business and associated properties and, second, in implementing instructions to sue their former solicitors. The Kayes sought damages of $5,581,228 (since amended to $5,340,288).
Following trial Peters J dismissed the Kayes’ claim.[1] She found that Norris Ward was not negligent in performing its contract to provide professional services on the business purchase transaction but had negligently delayed in issuing a proceeding against the Kayes’ former solicitors. However, the Judge found that this latter negligence did not cause the Kayes any loss.
[1]Norris Ward McKinnon v Kaye [2015] NZHC 1025 [HC decision].
The Kayes appeal against the judgment, challenging in particular Peters J’s dismissal of their first claim of Norris Ward’s negligence on the business acquisition.

Background

Between May and July 2005 the Kayes or their nominee agreed to buy a Palmers Garden Centre business in Cambridge. The transaction comprised three principal agreements with the vendor, Robyn Wade:
(1)The purchase of the land where the garden centre was situated known as Lot 3. The price was $725,000 of which $510,000 was to be borrowed from the Southland Building Society (SBS). Settlement was due on 31 August 2005;
(2)The purchase of the business for a price shown on the face of the agreement at $449,000 comprising individual values attributed to goodwill, stock in trade, and plant and equipment. The vendor agreed to lend $244,000. The agreement provided that the price for stock was to be confirmed at the date of possession, subject to a maximum value adjustment of 5 per cent, as well as a price adjustment for variations in plant and equipment by seeking a current valuation. The final purchase price was to be settled by 31 August 2006. Failing settlement by then the Kayes or their nominee would incur penalty interest of 15 per cent on the purchase price (penalty interest of or at least $1,236 per week); and
(3)The purchase of an adjoining property known as Lot 1 for $375,000. Settlement was due for 31 August 2006.
Another law firm, Tanner Fitzgerald Getty, was then acting for the Kayes. It is common ground that the firm negligently performed its instructions by paying Ms Wade…

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: [2016] NZCA 32
Decision Date: 29 February 2016 at 3 pm

CaseChat Overview and Summary

In Kaye v Norris Ward McKinnon, the Kayes brought a proceeding against their former solicitors, Norris Ward McKinnon, claiming that the firm had breached its contract of retainer in two respects. First, in advising them on the purchase of a business and associated properties. Second, in implementing instructions to sue their former solicitors. The Kayes sought damages of $5,581,228 (later amended to $5,340,288). The High Court dismissed the Kayes’ claim, finding that while Norris Ward had been negligent in delaying in issuing a proceeding against the Kayes' former solicitors, this negligence did not cause the Kayes any loss. The Kayes appealed against this judgment. The Court of Appeal found that the Kayes had failed to prove any breach of contract by Norris Ward in relation to the business acquisition. The Kayes had not provided expert evidence as to what a competent solicitor acting reasonably would have done in the circumstances, and the scope of the Kayes' instructions to Norris Ward was limited to settling the contracts, not to advising them or their company generally. The Court of Appeal dismissed the appeal and ordered the Kayes to pay Norris Ward costs on a standard appeal on a band A basis together with usual and reasonable disbursements.

Orders