Kaye v Norris Ward McKinnon - [2015] NZCA 513

IN THE COURT OF APPEAL OF NEW ZEALAND

CA333/2015
[2015] NZCA 513

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

Counsel:

Appellants in person
R Latton for Respondents

Judgment:

(On the papers)

3 November 2015 at 4:00 pm

JUDGMENT OF RANDERSON J

The appellants’ application for review of the Registrar’s decision of 14 September 2015 declining to dispense with security for costs is granted. No security is required.

____________________________________________________________________

REASONS

Introduction

On 12 June 2015 the appellants Mr and Mrs Kaye filed an appeal against a judgment of Peters J delivered on 14 May 2015.[1] Security for costs on the appeal was set at $5,880 but on 25 June 2015, the appellants applied to have security dispensed with under r 35(6) of the Court of Appeal (Civil) Rules 2005 (the Rules). The respondents advised on 6 July 2015 that they would abide the Registrar’s decision. They have since confirmed they will abide the Court’s decision on this review.
[1]Norris Ward McKinnon v Kaye [2015] NZHC 1025.
The Registrar considered that further information was required and wrote to Mr and Mrs Kaye on 16 July 2015 seeking further information including full details of their financial position. Mr and Mrs Kaye provided additional materials but, on 14 September 2015, the Registrar dismissed the application to dispense with security for costs.
On 25 September 2015, Mr and Mrs Kaye applied to review the Registrar’s decision. I have considered the application under r 7(2) of the Rules and s 61A(3) of the Judicature Act 1908.

Background facts

The respondents are a firm of solicitors in Hamilton. They were asked to represent Mr and Mrs Kaye after their previous solicitors had allegedly acted negligently over the purchase by the Kayes and their company of a business and associated land. The respondents’ instructions included attending to settlement of the transactions and issuing proceedings against the Kayes’ previous solicitors for negligence.
The respondents later brought proceedings against Mr and Mrs Kaye for legal fees, but when confronted with a counter-claim by Mr and Mrs Kaye alleging professional negligence, the respondents abandoned their claim. The trial before Peters J was therefore confined to the counter-claim brought by Mr and Mrs Kaye. Losses in excess of $2.5 million were claimed.
Peters J found that the respondents were in breach of their duty to the Kayes. In particular:
(a)They had received instructions from Mr and Mrs Kaye to pursue the negligence claim against the previous solicitors in May 2007 but did not file proceedings until March 2008.
(b)They failed to give adequate advice to Mr and Mrs Kaye and their company about the damages they might expect to recover as well as failing to advise that any such sum might be reduced due to the Kayes’ contributory negligence.
Despite finding that the respondents had breached their duty of care to Mr and Mrs Kaye and their company, Peters J found that any such negligence was not causative of any loss to Mr and…

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: [2015] NZCA 513
Decision Date: 3 November 2015 at 4:00 pm

CaseChat Overview and Summary

In the Court of Appeal of New Zealand, Anthony Pratt Kaye and Morva Kaye, the appellants, appealed against the decision of the Registrar not to dispense with security for costs. The respondents, Norris Ward McKinnon, a firm of solicitors, were the parties against whom the Kayes brought their legal claim. The respondents had previously represented the Kayes in a matter concerning the purchase of a business and associated land. The Kayes had brought a counter-claim against the respondents for professional negligence, which was the subject of the appeal. The Court of Appeal was required to decide whether the Kayes were entitled to an exemption from paying security for costs for their appeal.

The primary legal issue before the Court was whether the appellants should be required to provide security for costs for their appeal against the Registrar’s decision. The Court considered the merits of the appeal, the financial circumstances of the appellants, and the balance of convenience. The Court also took into account the nature of the counter-claim and the likelihood of the appeal succeeding. The Registrar had found that the appeal was not hopeless, the merits of the case were not strong, and the counter-claim was extremely unrealistic. However, the Court disagreed with the Registrar’s assessment, finding that the appeal had sufficient merit to warrant an exemption from security for costs. The Court also noted that the Kayes had limited financial resources and were unlikely to be able to pay the required security.

The Court of Appeal granted the appellants' application for review of the Registrar's decision and determined that no security for costs was required. The Court found that the appeal was not hopeless and had sufficient merit to warrant an exemption from security for costs. The Court also found that the appellants were unlikely to be able to pay the required security due to their limited financial resources. The Court noted that the amount of the counter-claim may be inflated, but it could not be said at that stage that the costs of pursuing the claim were likely to be outweighed by the benefits. The Court further found that the merits of the case were not as weak as the Registrar had suggested, and that the appeal should not be dismissed on the basis of the amount claimed. The Court concluded that the balance of convenience favoured granting the appellants' application for exemption from security for costs.

The Court ordered that the appellants’ application for review of the Registrar’s decision of 14 September 2015 declining to dispense with security for costs was granted. No security was required. The Court noted that an extension of time under r 43(3) of the Rules had been granted by Harrison J on 28 September 2015. The application for a hearing date could now progress. The Registrar was requested to deal with this as soon as convenient. The Court also suggested that, as the Kayes were self-represented, it would be helpful if the Registrar could arrange for a telephone conference for case management purposes, including timetable directions.

Orders