Vowles v Rapley

[2015] NZHC 894

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

CIV-2011-454-608 [2015] NZHC 894

BETWEEN	RICHARD DUDLEY VOWLES Plaintiff
AND	COOPER RAPLEY Defendant

Hearing:	30 March 2015
Counsel:	Plaintiff in person H M Twomey and S M Watson for Defendant
Judgment	1 May 2015

RESERVED JUDGMENT OF MACKENZIE J

I direct that the delivery time of this judgment is

3.30 pm on the 1st day of May 2015

Solicitors:           Robertsons, Auckland, for Defendant

Copy to:            Plaintiff

VOWLES v COOPER RAPLEY [2015] NZHC 894 [1 May 2015]

[1]      This is an action by Mr Vowles against Cooper Rapley, the law firm which acted for him in respect of relationship property issues between Mr Vowles and his wife, from whom he had separated in May 1995.  He alleges a breach of a duty of care.

[2]      The proceedings were commenced on 1 September 2011.  There have been numerous delays in the course of the proceeding.  No timely steps were taken by the plaintiff to bring the case to a hearing, and the case was set down for hearing on the initiative of the defendant.  By a minute dated 9 December 2014, Collins J directed that the defendant could proceed on affidavit evidence and written submissions.1   A half day fixture was allocated for 30 March 2015.   I refused a late application by Mr Vowles  to  adjourn  the  trial.2      The  hearing  proceeded  on  30  March  2015. Mr Vowles appeared in person, with his daughter as his McKenzie Friend.  Cooper Rapley was represented by Ms Twomey and Ms Watson.

[3]      The defendant filed three lengthy affidavits.  These are from Mr Dobson and Mr Reardon, who had at different stages been the Cooper Rapley lawyer responsible for the file, and from Mr Graham, a chartered accountant called to  give expert evidence on the issue of whether the plaintiff had suffered a loss as a result of the way his case had been conducted.  Mr Vowles did not file evidence.  Following the hearing, Mr Vowles filed a memorandum asking that it be recorded that there was no opportunity for him to cross-examine the defendant’s witnesses.  I record that he did not give notice under r 9.74 of the High Court Rules requiring the production of any of those witnesses for cross-examination.

[4]      Mr Vowles separated from his wife in about 1995.  They took no formal steps to terminate the relationship or to reach agreement as to the division of relationship property for a number of years.  In about March 2000 Mr Vowles instructed Cooper Rapley to act on his behalf.  Initially Mr Dobson, an associate in the firm, acted in the matter.  When he left the firm in March 2001 Mr Reardon, a partner in the firm,

took over responsibility.

1      Vowles  v  Cooper Rapley  (Minute  of  Telephone Conference (No  2))  HC  Palmerston North

CIV-2011-454-608, 9 December 2014.

2      Vowles v Cooper Rapley (Minute) HC Palmerston North CIV-2011-454-608, 24 March 2015.

[5]      The sequence of events is set out fully in the affidavits of Mr Dobson and Mr Reardon, and is supported by the contemporary documentation which they have annexed.  I do not narrate the circumstances in any detail.  The dispute went to a defended hearing in the Family Court at Palmerston North in September 2006, and Judge Murfitt delivered a judgment dated 8 December 2006.3    The principal issue was a claim by the wife to an increase in the value of the farm on which the couple had lived and worked for the 20 years of their marriage.  That farm had been gifted to the husband prior to the marriage and was his separate property.  The value of the

farm had increased by $1.3 million during the marriage.  The outcome was that the wife’s claim to a share of the increase in the property under s 9A of the Property (Relationships) Act 1976 failed, because the increase in value of the property was not attributable to her actions or the application of her separate property.  The wife succeeded in her claim for a proportion of the increase in the value of the farm because  of  her  efforts  in  sustaining  the  farm  under  s 17.    She  was  awarded

20 per cent of the capital gain of the husband’s separate property, a sum of $262,000. The wife was also entitled to a share in the value of the homestead, a proposition which was not contested.  The value of that was accepted as $224,000.  Of the total debt owing on the farm, which was substantially the separate debt of the husband,

$30,000 was held to be relationship debt.

[6]      The essence of Mr Vowles’ claim is that the dispute was capable of settlement at an early stage for $250,000, and that he would have been capable of refinancing the farm property to settle the dispute at that sum.  In a letter dated 10 June 2000, to Mr Vowles, Mrs Vowles said that she would be prepared to settle her claim for

$250,000.

[7]      Mr Dobson had on 30 March 2000 written to Mr Vowles advising that he required a number of documents to enable him to advise as to her entitlement and make a proposal to her for settlement.   Those requested documents had not been supplied by June 2000.  Mr Vowles asserts that he had been advised by Mr Dobson that his wife was entitled to nothing.  Mr Dobson denies ever giving that advice.  I accept his denial.  It is not advice which any solicitor would be likely to have given

in the circumstances.   Mr Dobson sought Mr Vowles’ instructions on a letter of

3      V v V [Relationship property] [2007] NZFLR 350.

proposal   to   his   wife’s   lawyer   and   eventually   a   letter   was   written   on

19 December 2000  dealing with several matters.   The letter was  described as  a preliminary letter to paint the broad terms of a potential settlement.   Her lawyers replied on 22 February 2001 noting that the broad proposition, which appeared to be that Mrs Vowles had no claim against the farm land with the exception of her claim against the homestead, was not acceptable to her.   After further correspondence Mr Reardon wrote on  30 April 2001  making an  offer to settle the claim by the husband paying the wife $10,456.  Her lawyers responded by saying “[i]t would not be an  overstatement to  say that Mrs Vowles  was  particularly dismayed”  at  that proposal. There was further correspondence.  On 30 June 2004 Mr Reardon wrote to Mrs Vowles’ solicitors making an offer of $210,000 in full and final settlement. That offer was not accepted.  Ultimately, the matter proceeded to the Family Court as I have described.

[8]      Mr Vowles’ main complaint is that the matter was not settled for $250,000 when this was first offered.  Mrs Vowles’ letter of 10 June 2000 did not contain an offer which could have been accepted by Mr Vowles so  as to  create a binding agreement to settle.  More negotiation would have been needed.  Responsibility for not following through on that settlement initiative rests clearly with Mr Vowles.  He gave no instructions to Cooper Rapley to enable them to engage in negotiations at that stage.  Mrs Vowles’ proposal to settle the matter was not taken up. Any prospect that the claim be resolved along the lines of her suggestion was ended by the letter of

30 April 2001  offering  settlement  at  $10,456.     That  was  sent  on  Mr Vowles’ instructions.  If, despite what I have said, the letter of 10 June 2000 is to be regarded as an offer, it was rejected by that counter offer.  The failure to resolve the matter at an early stage following Mrs Vowles’ letter of 10 June 2000 did not result from any breach of duty on the part of Cooper Rapley.

[9]      Mrs Vowles’ original  indication  that  she  would  be  prepared  to  settle  for

$250,000 made no reference to her entitlement to a half share in the homestead. I am not able to conclude that, if the matter had been settled on the basis of her initial proposal, $250,000 would have been accepted in satisfaction of her claim to both an interest in the homestead and a recognition of her contribution to the farm.  It seems unlikely that, when Mrs Vowles had obtained the legal advice which would have

been  needed  for  her  to  settle  her  claim, the  claim would  have been  settled at

$250,000 in total.

[10]     I do not find, on the balance of probabilities, that any of the delay which occurred  before  the  matter  was  brought  to  a  hearing  in  the  Family  Court  is attributable to any breach of duty by Cooper Rapley.   The correspondence demonstrates quite clearly that over a long period Mr Vowles was tardy in giving the information requested from him.   He expressed a wish to have the matter settled promptly.  His actions did not match that expression of wish.  Mr Vowles’ allegation that Cooper Rapley was in breach of its professional obligations to him is not made out.

[11]     The fact that the matter was not resolved by agreement, but had to go to the Family  Court,  did  not   lead  to   a  less   favourable  outcome  for   Mr Vowles. Mr Reardon, in his letter of  15  December 2006  to Mr Vowles reporting on  the outcome, described Mr Vowles as  having been  “entirely successful”.    It  is  also relevant  to  note  that  on  15 February 2007  Mr Vowles  wrote  to  Mr Reardon expressing satisfaction with the way the case had been handled.

[12]     The amount which was awarded by the Court as Mrs Vowles’ share of the separate property was $262,000.   She was also entitled to a half share in the homestead, and the total payment for her claim, in May 2007, was $410,000.  Even if (contrary to my findings) it might have been possible to settle the case earlier for

$250,000, there is evidence from Mr Graham that the terms of the judgment, having regard to the lengthy period which had elapsed, were more favourable to Mr Vowles than  the  earlier  suggestion  that  the  matter  might  be  settled  by  a  payment  of

$250,000. The effect of his evidence is that if Mr Vowles had settled his wife’s claim for  $250,000  in  March 2001,  and  had  borrowed  that  amount  to  finance  the settlement, the interest payable would have exceeded the increase in value to May

2007.  If he sold the farm to fund the settlement, his loss would have been greater. That evidence establishes that if (contrary to my findings) Cooper Rapley was in breach of its duty in respect of any of the matters relied on, no loss would have resulted from that breach.

[13]     These findings are fatal to all of Mr Vowles’ pleaded causes of action, and his

claim must accordingly fail.  I give judgment for the defendant.

[14]     The defendant, having been successful, is entitled to its costs.  I award costs on a 2B basis, plus disbursements.

A D MacKenzie J