Home | Databases | WorldLII | Search | Feedback High Court of New Zealand Decisions

CULVERDEN RETIREMENT VILLAGE LIMITED V MCLUCKIE HC AK CIV 2007-404-000750 [2007] NZHC 954 (26 September 2007)

IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY
                                                              CIV 2007-404-000750

              UNDER                       the District Courts Act 1947


              BETWEEN                     CULVERDEN RETIREMENT
VILLAGE
                                          LIMITED
                                          Appellant

              AND
                        JOYCE LESLIE MCLUCKIE
                                          Respondent


Hearing:      24 September 2007

Appearances: A G Rowe and M Brugeyroux for Appellant
             E Telle and D Dufty for Respondent

Judgment:     26 September
2007 at 10:00 a.m.


                      JUDGMENT OF WOODHOUSE J




Uuvà wqtrà hà qryvrrqà ià rà à !%à Trrirà !&à hà ÃhÃhÃÃSyrÃ$##Ãs
urÃCvtuÃ8ÃSyr

Srtvh9rÃSrtvh
9hr«««««




Solicitors:   Wells & Co, Auckland
              McVeagh Fleming, Onehunga




CULVERDEN
RETIREMENT VILLAGE LIMITED V MCLUCKIE HC AK CIV 2007-404-000750 26
September 2007

[1]    This is an appeal from a decision of Judge
Roderick Joyce QC dated
18 January 2007. In a reserved judgment on an interlocutory application by the
appellant (Culverden), the
learned Judge refused an order for inspection of
documents for which privilege was claimed by the defendant (Mrs McLuckie).


[2]
   The documents in question were, or related to, communications between the
respondent's son, Paul McLuckie (Mr McLuckie), and solicitors,
Holmden
Horrocks, who took steps on behalf of Mrs McLuckie on instructions from
Mr McLuckie. Mr McLuckie says he had his mother's
authority to give instructions
to Holmden Horrocks on her behalf in respect of the matters at issue.


[3]    The principal contention
for Culverden before Judge Joyce was that
Mr McLuckie was not Mrs McLuckie's agent in his dealings with Holmden
Horrocks and therefore
the communications attracted no privilege.


[4]    There was a further argument relating to the validity of an enduring power of
attorney granted by Mrs McLuckie to Mr McLuckie and his sister on 17 June 2002.
This was part way through the period during which
the communications took place ­
19 April to 4 July 2002.


Background facts


[5]    In 1992 Mrs McLuckie sold her home and bought
a unit in a retirement
village owned by Culverden.        Holmden Horrocks, on instructions from Mr
McLuckie, acted for Mrs McLuckie
on the sale of her home and the purchase of the
unit at the village. Mrs McLuckie was then aged 76.


[6]    In November 1997 Mrs
McLuckie received from Culverden a proposed deed
involving variations to the arrangements with Culverden in respect of the unit.
Again Holmden Horrocks acted for Mrs McLuckie on instructions from
Mr McLuckie through to execution of the deed by Mrs McLuckie in
June 1998. On

this occasion there were also some direct communications from Mr McLuckie to
Culverden's solicitors, Wells and Co.


[7]    In early 2002 Mrs McLuckie had an accident which affected her mobility.
Mr McLuckie and his sister, Mrs Whitehead, say that
a decision was then made,
following discussions with their mother, that her unit at Culverden should be sold. A
unit owner was entitled
to give notice to Culverden of the unit owner's wish to sell
her unit. Culverden had an option to buy the unit if the option was
exercised within
30 days of receipt of the notice.         This led to the communications between
Mr McLuckie and Holmden Horrocks
in respect of which privilege was claimed. On
19 June 2002 Mr McLuckie contacted Holmden Horrocks who sent a notice to
Culverden
on the same day. Culverden claims it did not receive the notice and that it
subsequently and validly exercised its option to buy
the unit. In September 2002
Culverden issued proceedings seeking specific performance.


[8]    In the District Court the parties
agreed that the Judge should inspect the
documents in question. He said:

       [7]     Essentially they comprise communications
between Mr McLuckie
       and the defendant's then solicitors, Holmden Horrocks, concerning the
       issues in contention as regards whether or not the plaintiff has pre-emptive
       rights.

       [8]      In some cases draft communications have been submitted by the
       solicitors to Mr McLuckie for
consideration. In others advice has been given
       and comment pertinent to the rights of the parties made.

       [9]     What
is plain from the material is that the course and content of it
       demonstrates that, in de facto terms anyway, Mr McLuckie was
walking in
       his mother's shoes as defendant and obtaining legal advice and assistance
       accordingly. And that brings me
to the plaintiff's arguments.


Was Mr McLuckie Mrs McLuckie's authorised representative?


[9]    This question was argued in the
District Court, and before me, by reference to
the common law on agency. The point at issue is now governed by ss 53-67 of the
Evidence
Act 2006 dealing with privilege. Section 51(4) provides:

       A reference in this subpart to a communication made or received
by a person
       or an act carried out by a person includes a reference to a communication

       made or received or an act
carried out by an authorised representative of that
       person on that person's behalf.

[10]   Whether there is a difference
between an agent at common law and an
authorised representative does not require determination on the facts of this case.


[11]
  On the question whether Mr McLuckie was Mrs McLuckie's authorised
representative the learned Judge said this:

       [11]    
It was claimed that the defendant never gave her son authority to
       instruct her solicitor on her behalf. Consequently there
was no valid agency
       created between the defendant and her son. Accordingly the communications
       between the solicitors
and the son could not be protected by privilege.

       [12]   It can be accepted (leaving aside later to be mentioned attorney
       appointment issues) that there was no formal agency relationship created
       between the defendant and her son.

     
 [13]     What is clear, however, is that he had managed her affairs over a
       number of years and, as a solicitor with knowledge
on the subject confirms,
       the son was concerned about protecting her position and acting in her best
       interests.

  
    [14]    This view was also supported by Mrs Whitehead's affidavit at
       para 8:

               ... I was often present when
my mother and Paul (McLuckie)
               were discussing her affairs. She never disagreed with him
               about anything
to do with the management of her affairs.
               From the point in time at which my mother decided to
               purchase
a unit at the Village, my mother asked Paul to take
               care of her affairs in particular where they involved lawyers
               on her behalf. My mother completely relied on Paul to do
               that for her, had total faith in his ability
to manage her
               affairs and totally trusted him. Paul always acted in my
               mother's best interests.

 
     [15]    It is apparent (particularly from the sister's affidavit) that the
       defendant had expected her son to be her representative/agent
in respect of
       dealings with her lawyer.

       [16]     And, as an observation which might well be said simply to reflect
       the self-evident, what has occurred in this particular case as regards the son
       managing his mother's affairs is surely
no different from what commonly
       occurs in other close and supportive families, as this one seems clearly to be.

       [17]
   In my view the focus should be on the probable intent of the
       purported principal. Did the defendant intend that her son
be her
       representative/agent to seek, and when seeking, advice from her solicitors?
       The evidence appears clearly to
indicate so.

[12]   The evidence before the Judge was in a number of affidavits on which there
was no cross-examination.      This has some bearing on the extent to which his
decision may be subject to review on appeal. However, I have no doubt that the
learned Judge was correct in his conclusion that Mr
McLuckie was authorised by his
mother to deal with Holmden Horrocks on her behalf in respect of the matters in
question.


[13] 
 Other and unchallenged evidence reinforces the conclusion of the Judge.
There is evidence from Mr McLuckie and from Mr Bruno Gin,
the responsible
partner at Holmden Horrocks, of the manner in which the transactions in 1992 and
1998 were dealt with. The essence
of this is that all necessary communications with
Holmden Horrocks (initial instructions through to completion) were from or with
Mr
McLuckie. Mrs McLuckie's authority to her son was confirmed by her execution of
documents prepared on the direct instructions
of her son. The circumstances relating
to the transaction from 19 April 2002, as described by Mr Gin as well as Mr
McLuckie, are
the same.


[14]   I note that there is no evidence from Mrs McLuckie because, by the time
these matters came before the Court, in
2006, Mrs McLuckie was aged 90 and not
able to give evidence because of infirmity.      The delay between issue of the
proceedings
by Culverden in 2002 and the interlocutory argument on inspection of
documents which did not happen until December 2006, arose from
inaction by
Culverden as plaintiff. On an earlier interlocutory application Culverden was given
leave to continue with its claim.


[15]   It was argued for Culverden that in the 1992 and 1998 transactions
Mr McLuckie was not her agent for the purposes of solicitor/client
communications
with Holmden Horrocks. Somewhat surprisingly, this argument was advanced in the
face of correspondence in late 1997
and early 1998 directly between Mr McLuckie
and Culverden's solicitor in which the solicitors implicitly recognise that
Mr McLuckie
was representing his mother. The essence of this argument was that,
because the conveyancing documents in 1992 and the deed of modification
in 1998
were executed by Mrs McLuckie herself, and not by Mr McLuckie, he could not be
an agent. Whether this might have relevance
in determining whether a person is an

agent in some cases, in my judgment it has none in this case. Indeed, it lends weight
to
the evidence of Mr McLuckie and his sister, Mrs Whitehead, that their mother
appointed Mr McLuckie her agent because her execution
of the documents confirms
her authority for her son to act on her behalf.


[16]   It was also argued for Culverden that even if
Mr McLuckie was his mother's
authorised representative for the transactions in 1992 and 1998 that was not the case
in 2002. This
was based on a single sentence in a lengthy affidavit of Mr McLuckie.
This affidavit was not dealing with the privilege issue and
whether he had authority
from his mother. It was an affidavit in opposition to the application brought by
Culverden in 2006 for leave
to take further steps in the proceedings and for
associated directions as to representation of Mrs McLuckie and as to the future
conduct of the proceeding. In this affidavit Mr McLuckie referred to his mother's
hospitalisation in January 2002 and the discussion
he and his sister had with their
mother as to whether she should return to Culverden. Mr McLuckie then said:

       Accordingly
I discussed the issue with my mother of notifying Culverden of
       my mother's intention to dispose of the unit and she agreed
to do so.

       (Affidavit sworn 26 July 2006, para 41.1)

[17]   It was submitted for Culverden that this meant that Mrs McLuckie
on this
occasion told her son that she would instruct the lawyers and otherwise handle all
relevant matters herself. I do not agree.
This sentence standing alone in my opinion
means only that Mrs McLuckie agreed that notice should be given to Culverden. In
the light
of all the other evidence, including from Mrs Whitehead and Mr Gin, what
this also meant is that this would be handled in the same way as all other legal affairs
had been handled ­
through Mr McLuckie.             Also, there is a later affidavit of
Mr McLuckie's in which he was dealing directly with the privilege
argument. In this
he said (before the present argument for Culverden was raised):

       In or about early 2002 my mother had an
accident which seriously affected
       her mobility. It soon became clear that she had to move out of the village.
       So as
with all my mother's legal dealings with Culverden my mother asked
       me to make all necessary legal arrangements for her to
leave the village. She
       was basically immobile at the time and completely relied on my sister and I
       to make all necessary
arrangements for her. I therefore once again instructed
       Holmden Horrocks as I had always done in the past to put Culverden
on
       notice pursuant to the deed that my mother had vacated her unit.

       (Affidavit sworn 5 December 2006, para 11)

[18]
  Mr Rowe for Culverden argued that two passages from that part of the
judgment set out above [para 11] indicate that the Judge misdirected
himself. The
first was His Honour's statement that "It can be accepted ... that there was no formal
agency" (para [12] of the judgment).
Second is the statement "In my view the focus
should be on the probable intent of the purported principle" (para [17]). In my
opinion
neither of these passages, when read in the context of the entire judgment,
indicate that the Judge was in error.


[19]   I was
referred to numbers of authorities on aspects of the law of agency. It is
unnecessary to refer to these. The question here is a straightforward
one of fact ­ did
Mrs McLuckie give her son authority to act on her behalf in dealing with Holmden
Horrocks?


[20]   Mr Rowe also
referred to Wheeler v Le Marchant  (1881) 17 Ch D 675 and C-
C Bottlers Limited v Lion Nathan Limited  [1993] 2 NZLR 445. I respectfully agree
with the essential points to be drawn from those cases, on the present issue, with the
summary by Judge Joyce
as follows:

       [19]    In Wheeler Cotton LJ observed at 681 that communications between
       the representatives of a client
and his legal advisers were privileged provided
       the representative was employed as an agent on the part of the client to

      obtain the legal advice of the solicitor.

       [20]     However, he continued, communications were not protected by
   
   privilege in the situation where the representative was employed on behalf of
       the client to do certain work, but that work
was not communicating with the
       solicitors to obtain legal advice.

The argument for Culverden was that this case comes within
the second situation,
but that is clearly not so on the evidence.


Was the "agency" revoked by subsequent incapacity?


[21]   The
appellant argued that, if Mr McLuckie did initially have authority from
his mother to deal on her behalf with Holmden Horrocks in
2002, the authority came
to an end through subsequent mental incapacity.

[22]   In this regard Mr Rowe accepted that the onus was
on his client to establish
that on some date Mrs McLuckie had become mentally incapacitated to an extent
which would have resulted
in revocation of the authority as a matter of law. It is not
clear whether this point was argued in the District Court. I am satisfied
that the
appellant has not met the onus on it. The reasons are conveniently dealt with under
the next heading.


Validity of enduring
power of attorney


[23]   By deed dated 17 June 2002 Mrs McLuckie granted an enduring power of
attorney to Mr McLuckie and Mrs Whitehead.
The appellant contends that the
power of attorney is ineffective because Mrs McLuckie lacked the mental capacity to
understand what
she was doing. The learned Judge said he was satisfied, on the
evidence available to him, that Mrs McLuckie knew what she was doing
when she
signed the document.


[24]   In the light of the learned Judge's findings on the primary issue of agency,
with which I
agree, and my finding that the agency was not revoked, the question as
to whether or not there was a valid power of attorney cannot
alter the result on the
interlocutory application upholding the claim to privilege. However, as the matter
was dealt with in the
District Court judgment and argued before me I will deal with
the question.


[25]   The contention that Mrs McLuckie did not have
the requisite mental capacity
to understand what she was doing when she executed the power of attorney was, of
course, the contention
of Culverden, the opponent of Mrs McLuckie in the
proceeding as opposed, for example, to a personal representative.            Culverden
produced no medical evidence going to the question of mental capacity. In that
regard I note that the appellant applied to this Court
on 11 September 2007 for leave
to adduce medical evidence as to Mrs McLuckie's capacity from early February
2002 until 17 April 2002.
This was an application made two weeks before the
scheduled date of this appeal, nine months after the hearing in the District Court,
five
years after the proceedings were issued and well over five years after the date of the
events in question.    The question was
fully argued before Andrews J on 18

September. On the question as to whether the evidence, being medical notes, was
cogent and
material on the appeal, Her Honour held:

       [24]    I cannot conclude that the records would enable a Judge on appeal to
  
    make any conclusion as to capacity. That would require, in my view, an
       analysis by someone suitably qualified in that
respect.

[26]   For the same reason Her Honour held that the evidence sought to be adduced
would not have led to a different result
had it been before the District Court Judge.


[27]   As to the evidence before him, the District Court Judge said:

       [44]
    In the present case there was no such [medical] examination. Nor
       was there, or is there, any evidence by medical expert witnesses from either
       side as
to the defendant's mental capacity in June 2002.

       [45]    Nevertheless Mr Naran, the proprietor and manager of the rest home
       where the defendant by then resided, has testified in his affidavit at para 8
       that he strongly believed that when the
defendant executed the power she
       understood exactly what she was signing, and why she was signing it.

       [46]    He went
on to say (at para 9) that, having looked after elderly people
       with dementia and mental illnesses for 16 years, he believed
his assessment
       of the defendant was an accurate one.

       [47]     Obviously, of course, his self-assessment (which is
what the latter
       statement amounts to) is irrelevant, but there is no reason to doubt that which
       is conveyed by what
he has said of his experience, namely, that he would be
       distinctly better versed than most people ­ in fact perhaps quite
singularly so
       ­ in making an "educated," albeit lay, assessment.

       [48]     Indeed his was in my view (having regard
to all the affidavits) the
       best (for present purposes) evidence on that topic. Although Mr Naran is not
       (makes no claims
to be) a medical expert I find, for those purposes, his
       evidence to be compelling. The opposing evidence for the plaintiff
has not
       proved relevantly destructive either of that or of the evidence of the son and
       daughter.

       [49]     The
evidence with which I am impressed, being that just now
       identified, favours the conclusion (for ­ I reiterate - the present
purpose) that
       the defendant knew what she was doing when she signed. And that she
       signed is consistent with the claim
that her son was "in her shoes" for the
       matters that matter here.

       [50]    On the other hand, and taken as a whole,
the affidavit evidence for
       the plaintiff (including that filed after the hearing with my leave) has left me
       with the
picture of a litigant working too hard altogether to make its case. I
       have been left with the sense that the end advantage
it seeks has caused it to,
       as it were, over-egg the omelette.

[28]   In my judgment His Honour was justified in coming to
the conclusion he did.

[29]   The principal evidence pointed to by the appellant in support of the argument
that Mrs McLuckie lacked
capacity on 17 June 2007, is a paragraph in a letter dated
21 June 2002 from her solicitors, Holmden Horrocks, to Culverden's solicitors,
Wells and Co. The Holmden Horrocks letter was replying to a letter from Wells and
Co of 18 June 2002. In the 18 June letter Wells
and Co stated, amongst other things,
that the day before Culverden had served a notice of exercise of option on Mrs
McLuckie. In
the 21 June letter in reply Holmden Horrocks took issue with a
number of matters, protested at the lodging of a caveat by Culverden
against title to
Mrs McLuckie's unit at Culverden and said, in the final paragraph:

       Lastly, you and your client are requested
to direct all correspondence,
       contacts etc to the writer. We are instructed that our client suffers from
       dementia and
it is totally inappropriate for your client to be visiting her and,
       we are instructed, having her sign documents. Any such
signature, as you
       will appreciate, is inappropriate and not binding.

There was no argument from Mr McLuckie and his sister
that their mother, even
before this date, was not displaying early signs of dementia. Although the District
Court Judge does not
refer to the statement in the Holmden Horrocks' letter of 21
June 2002, in my judgment he was entitled to regard it as a statement
similar to the
direct evidence he had from Mr McLuckie and Mrs Whitehead that their mother was
displaying only early stages of dementia.
This, in the light of all of their evidence,
and with this evidence then weighed with that from Mr Naran, meant that at least on
the balance of probabilities that there was not evidence
that Mrs McLuckie's power
of attorney was invalid through lack of mental capacity.


[30]   In the light of this evidence as to Mrs
McLuckie's mental capacity when she
signed the power of attorney the appellant did not satisfy the onus on it of
establishing that
the authority granted by Mrs McLuckie to her son to look after her
legal affairs had come to an end.


[31]   Moreover, any question
that might arise as to Mrs McLuckie's mental
capacity from and after 17 June 2002, has no relevance on the question of privilege
claimed for documents from that date in the light of a concession by Mr Rowe for
Culverden in the course of his submissions; that
is that from 17 June 2002 the
documents would be protected by litigation privilege.

Conclusion


[32]   The appeal is dismissed.


[33]   The respondent is entitled to costs on a 2B basis.




                                             __________________________
                                             Woodhouse J