White v Allen - [2019] NZHC 2717

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-2478

[2019] NZHC 2717

BETWEEN
CAROLINE RUTH WHITE

Plaintiff

AND

RICHARD VIVIAN MARSH ALLEN

Defendant

Hearing: 24-28 June 2019

Appearances:

L Herzog for the Plaintiff

H M Twomey and N Faulkner for the Defendant

Judgment:

24 October 2019

JUDGMENT OF GAULT J

This judgment was delivered by me on Thursday 24 October 2019 at 10:00 a.m. pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar

……………………………………

Solicitors / Counsel:
Mr L Herzog, Barrister, Auckland
Ms M Lu (plaintiff’s instructing solicitor), Churton Hart & Divers Ltd, Auckland Ms H M Twomey and Ms N Faulkner, Robertsons, Auckland

WHITE v ALLEN [2019] NZHC 2717 [24 October 2019]

[1] The plaintiff, Ms White, sues as trustee of the Grafton Road Trust (GRT).1 The claim alleges negligence by the defendant solicitor, Mr Allen, in relation to the GRT’s purchase of two unit titles (units 3A4 and 3B1) in an apartment development at 160 Grafton Road, Auckland, in 2011.

Factual background

[2] Ms White was interested in purchasing units in a building at 160 Grafton Road, which was being converted into 99 residential apartments. Ms White acknowledged she is a property investor and that her life partner, Mr Gray, and her financial adviser and accountant, Mr McCall, suggested the purchase to her, but the extent of her involvement with the redevelopment is contested, as is that of Mr Gray, and their association with Mr Kelly, a property developer.

[3] Mr Kelly had been involved with the building at 160 Grafton Road since 2004. Companies of which Mr Kelly was a director owned the building, formerly known as the Datacom building. Mr Kelly’s plans to convert part of the building to residential apartments were initially thwarted as refinancing required renewal of the lease to a large commercial tenant and the Datacom renewal did not allow mixed use. But after the global financial crisis in 2008 some owners wished to sell, and it was possible to convert units to residential use as the Datacom lease had not been renewed.

[4] In July 2008 Ms White signed sale and purchase agreements for four apartments at 160 Grafton Road as pre-sales, and her company, Mt Eden Shops Ltd, agreed to lease two of those apartments to the Body Corporate, commencing in July 2009. In 2009 she also entered into sale and purchase agreements as pre-sales of units at 160 Grafton Road, including for an apartment that was to be formed out of unit 3B1. That purchase did not go ahead because the apartment conversion had not taken place.

[5] The redevelopment did not proceed smoothly. For example, Mr Kelly was adjudicated bankrupt in November 2008. In October 2010 the High Court appointed a Body Corporate administrator. In February 2011 the local authority discovered the as-built walls of the 10 apartments on Level 3 did not match the building consent and

1 The defendant accepted that as a trustee…

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 White v Allen

Details

AGLC: White v Allen [2019] NZHC 2717
Case: [2019] NZHC 2717
Decision Date: 24 October 2019

CaseChat Overview and Summary

Caroline Ruth White, as trustee of the Grafton Road Trust (GRT), sued Richard Vivian Marsh Allen, a solicitor, alleging negligence in relation to the GRT’s purchase of two unit titles in a building at 160 Grafton Road, Auckland, in 2011. The key issues to be determined were: the scope of Mr Allen’s retainer, whether the agreement for sale and purchase of unit 3B1 was executed with clause 6 struck out, if not, whether Mr Allen breached his duty by failing to identify the change and proceeding with settlement, whether Mr Allen breached his duty by not providing the s 147 certificates to the trustees of the GRT, whether the trustees of the GRT would have settled the purchases in any event, and the measure of any loss. The High Court held that Ms White had not proved that she signed the 3B1 agreement on 3 November 2011 in the presence of Mr Allen with clause 6 intact. The Court found that Ms White had also not proved that clause 6 was intact when she signed the 3B1 agreement. Ms White’s complaint relating to clause 6 therefore fell away. Mr Allen did not breach his duty. Ms White’s other complaint, that Mr Allen failed to provide to the GRT the s 147 certificates which he received before settlement, also failed. The Court found that there was a conversation as Mr Allen recalled, in which he told Ms White he could not advise on the documentation in the circumstances as he had not been given enough time and had not been given instructions about the deletion of clause 6. Ms White’s inaction when she received the s 147 certificates in July 2012 was consistent with such a conversation pre-settlement. Otherwise, I expect she would have raised the matter with Mr Allen then. The Court also held that even if there had been a breach of duty, Ms White had failed to prove loss on the correct basis. The measure of loss would not be calculated as Ms White claims. Mr Allen was entitled to costs.

Orders