Ng v Harkness Law Limited - [2015] NZCA 411

IN THE COURT OF APPEAL OF NEW ZEALAND

CA275/2014
[2015] NZCA 411

BETWEEN

ADRIAN HWEE KIAT NG AND ALICIA SOCK HOON GO
First Appellants

MATTHEW HSUN YEAN LIM
Second Appellant

AND

HARKNESS LAW LIMITED
First Respondent

JOHN RENWICK HARKNESS
Second Respondent

Hearing:	11 May 2015
Court:	Cooper, Mallon and Dobson JJ
Counsel:	S H Barter for Appellants T Gee, S Shortall and G Verhaeghe for Respondents
Judgment:	4 September 2015 at 2.30 pm

JUDGMENT OF THE COURT

ALeave to adduce further evidence is granted to the appellants and the respondents.
BThe appeal is allowed. The Associate Judge’s orders striking out the Fair Trading Act 1986 claim and declaring, on the summary judgment application, that it cannot succeed are set aside.
CThe Associate Judge’s award of costs to the extent it applies to the present proceeding is set aside and the appellants are entitled to costs in the High Court. In the event of disagreement between the parties, any issues as to quantum are to be resolved by the Associate Judge.
DThe respondents are to pay costs in this Court calculated for a standard appeal on a band A basis and usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Mallon J)

Table of contents

Para No

Introduction  [1]
Jurisdiction  [2]
Background  [11]

The first appellants  [17]
      The second appellant  [42]
      Expert evidence  [47]
      Mr Harkness’ role  [48]

The pleading  [51]
The Associate Judge’s decision on the Fair Trading Act cause of action          [53]
Our assessment  [58]

Principal liability [58]
Accessory liability [69]

Result [74]

Introduction

The question before us is whether Associate Judge Bell was correct to strike out a claim brought by the appellants against the respondents under s 9 of the Fair Trading Act 1986 and to declare, on the respondents’ summary judgment application, that the claim could not succeed.[1] The appellants are Singaporean residents who paid money to obtain interests in residential lots in a proposed development in Albany, Auckland. The development did not proceed, the development companies are now insolvent, and the appellants have lost their money. They brought a claim against the law practice (Harkness Law Ltd) and its principal (Mr Harkness) who acted for the developers. The practice received the money into its trust account and paid it out to the developers in accordance with the developers’ instructions. Allowing its trust account to be used in this way was alleged to have misled the investors to believe that their money would be safe.

Jurisdiction

[1]Ng v Harkness Law Ltd [2014] NZHC 850.

We mention two preliminary issues of a jurisdictional nature which it is appropriate to address even though they were not the subject of submissions made by the parties.
First, the decision under appeal was a result of one hearing in the High Court in which the Judge dealt with both the strike-out application and the claim for summary judgment. That was appropriate, given that the factual background and the bases upon which both applications were advanced, were the same.
Dissatisfied…

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 411
Decision Date: 4 September 2015 at 2.30 pm

CaseChat Overview and Summary

The appeal is against the decision of the Associate Judge to strike out the appellants' claim under s 9 of the Fair Trading Act 1986 and to declare, on the respondents' summary judgment application, that the claim could not succeed. The appellants had invested in a property development in Albany, Auckland, which did not proceed. They brought a claim against the law practice (Harkness Law) and its principal (Mr Harkness) who acted for the developers. The practice received the money into its trust account and paid it out to the developers in accordance with the developers' instructions. Allowing its trust account to be used in this way was alleged to have misled the investors to believe that their money would be safe.

The appeal was allowed. The Associate Judge’s orders striking out the claim and granting a declaration in the respondents’ favour were set aside. The appeal is allowed. The Associate Judge’s orders striking out the claim and granting a declaration in the respondents’ favour are set aside. The applications for leave to adduce fresh evidence from both the appellants and the respondents are allowed. The appellants are entitled to costs in the High Court. In the event of disagreement between the parties, any issues as to quantum are to be resolved by the Associate Judge. We order costs in this Court in the appellants’ favour calculated for a standard appeal on a band A basis and usual disbursements.

Orders