Mitchell v Murphy - [2019] NZHC 3257

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-965

[2019] NZHC 3257

BETWEEN
HOWARD BRENT MITCHELL AND LYNNE MARY MITCHELL

Plaintiffs

AND

CLARE DIANA MURPHY as trustee of the VICTOR SYDNEY TRUST

First Defendant

IAN BRUCE KEMP
Second Defendant

BARFOOT & THOMPSON LIMITED

Third Defendant

Hearing: 14-18, 21-22, 30 October and 1 November 2019

Appearances:

S Wroe and M Ibram for the Plaintiffs D Collecutt for the First Defendant

No appearance by or on behalf of the Second and Third Defendants

Judgment:

11 December 2019

JUDGMENT OF GORDON J

This judgment was delivered by me
on 11 December 2019 at 4.00 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors: Rainey Law, Auckland
Ganda & Associates, Auckland

Counsel: S Wroe, Auckland
D Collecutt, Auckland

MITCHELL v MURPHY [2019] NZHC 3257 [11 December 2019]

Introduction

[1] The first defendant, Clare Murphy, sought a pre-trial order that the plaintiffs, Howard and Lynne Mitchell (the Mitchells), had impliedly waived privilege in respect of communications with their solicitor at the time of the purchase of a property (the subject of the substantive dispute), pursuant to s 65 of the Evidence Act 2006 (the Act).

[2] I heard the application at trial after the opening submissions for the Mitchells but before evidence commenced. I determined that privilege had not been waived. I now set out my reasons.

Background

[3] The Mitchells brought proceedings against Mrs Murphy for contractual misrepresentation and misleading and deceptive conduct under the Fair Trading Act 1986.1 The Mitchells purchased a townhouse from Mrs Murphy, which they claim is a leaky home. The Mitchells say Mrs Murphy, through her real estate agent, represented that the property was not a leaky home (and that it was built with extra care and included superior features as compared to other units in the block) despite being aware of a history of leaks in the townhouse in question and other townhouses in the complex of seven townhouses.

[4] Mrs Murphy’s primary defence is based on cl 22 of the sale and purchase agreement (SPA), which purports to exclude any warranties or representations, and states that the sale is on an “as is, where is” basis. That clause provides:

Purchaser acknowledgment

22.1The purchase acknowledges that:

(a)the dwelling has been built with a plaster cladding system;

(b)prior to entering into this agreement the purchaser has been advised to and has had the opportunity to make independent enquiry in respect of the construction, the cladding and weathertightness issues.

1 The Mitchells also brought a claim under the Fair Trading Act against the second defendant, Ian Kemp, who provided the pre-purchase inspection report, and against the third defendant, Barfoot and Thompson Ltd. The latter claim settled prior to trial. Neither of those claims is relevant for present purposes.

22.2Notwithstanding anything in this agreement the vendor provides no representations or warranties in respect of the matters set out in clause 22.1(a) and (b) and the vendor…

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.

Continue reading Mitchell v Murphy

Details

AGLC: Mitchell v Murphy [2019] NZHC 3257
Case: [2019] NZHC 3257
Decision Date: 11 December 2019

CaseChat Overview and Summary

The case of Mitchell v Murphy involved a dispute between the plaintiffs, Howard and Lynne Mitchell, and the first defendant, Clare Murphy, as trustee of the Victor Sydney Trust, over the purchase of a property. The plaintiffs sought to hold Mrs Murphy liable for contractual misrepresentation and misleading and deceptive conduct under the Fair Trading Act 1986, alleging that she misrepresented the property as not being a leaky home. Mrs Murphy defended the claim by relying on a clause in the sale and purchase agreement that excluded warranties and representations regarding the property's construction and weathertightness. The central issue before the court was whether the plaintiffs had impliedly waived legal professional privilege in their communications with their solicitor concerning the property purchase.

The court examined two provisions of the Evidence Act 2006 to determine if privilege had been waived. Under section 65(2), privilege is waived if a significant part of the privileged communication is voluntarily disclosed in circumstances inconsistent with a claim of confidentiality. Under section 65(3)(a), privilege is waived if a privileged communication is put in issue in the proceeding. Mrs Murphy argued that the plaintiffs had waived privilege by referring to their legal advice in their brief of evidence, effectively putting the substance of their legal advice in issue. The plaintiffs countered that they had not disclosed a significant part of their privileged communication and had not put the content of their legal advice in issue.

The court held that the plaintiffs had not impliedly waived privilege. Regarding section 65(2), the court found that the plaintiffs' brief of evidence did not disclose a significant part of the privileged communication. The brief made a limited reference to the "terms of the agreement," which did not amount to a significant disclosure of the privileged communication. Regarding section 65(3)(a), the court held that the privileged communication was not put in issue. The plaintiffs did not assert reliance on the privileged communication or seek to inject the substance of the communication in evidence. Instead, the court found that the plaintiffs were seeking to establish that they had obtained legal advice, which was relevant to the "fair and reasonable" assessment under section 50 of the Contract and Commercial Law Act 2017.

The court's decision meant that the plaintiffs' legal professional privilege remained intact, and Mrs Murphy was not entitled to the orders sought. The court did not find it necessary to order the disclosure of the actual advice provided by the plaintiffs' solicitor or any written advice in relation to the sale and purchase agreement clause.

Orders