Wylie v Wylie [2021] NZCA 521 (11 October 2021)

Last Updated: 19 October 2021

IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA

CA600/2019 [2021] NZCA 521

	BETWEEN	SHAUNE KAHU WYLIE Appellant
	AND	KIRSTEN MONIQUE WYLIE First Respondent
	AND	KIRSTEN MONIQUE WYLIE, SHAUNE KAHU WYLIE AND JANE ELIZABETH ALLEN AS TRUSTEES OF THE TOTAL TRUST Second Respondents
	AND	THE NEW ZEALAND GUARDIAN TRUST COMPANY LIMITED AS TRUSTEE OF THE WYLIE FAMILY TRUST Third Respondent
	AND	TOTAL VETERINARY SERVICES LIMITED Fourth Respondent
	AND	KIRSTEN MONIQUE WYLIE, RICHARD ALLAN LEACH AND KEITH ROBERTS AS TRUSTEES OF THE ROBERTS FAMILY TRUST Fifth Respondents

Hearing:	13 July 2021
Court:	Brown, Gilbert and Courtney JJ
Counsel:	M T Lennard and M C McCarthy for Appellant S N van Bohemen and A L Bayliss for First Respondent No appearance for Second to Fifth Respondents
Judgment:	11 October 2021 at 10 am

JUDGMENT OF THE COURT

1. The application for leave to adduce further evidence is declined.
2. The appeal is dismissed.

100. The appellant must pay costs to the first respondent for a standard appeal on a band A basis and usual disbursements. We certify for second counsel.

____________________________________________________________________

REASONS OF THE COURT

(Given by Gilbert J)



Table of Contents

Introduction [1]
Grounds of appeal [12]
Did the Judge err in finding Mr Wylie received adequate advice
before signing the COA?
Legal principles [13]
Pleadings [15]
Evidence in the High Court [16]
Submissions in the High Court [17]
High Court judgment [19]
Submissions on appeal [21]
Application to adduce new evidence [24]
Should Mr Wylie be allowed to raise “the concept/plan in place”
thesis for the first time on appeal? [38]
Did the Judge err in finding Mr Wylie received independent advice? [46]
Result [58]

Introduction

• [1] Mr Shaune Wylie, a chemical engineer, and Dr Kirsten Wylie, a veterinarian, commenced living together in a de facto relationship in January 2005. Both were aged in their late thirties. Mr Wylie had not been previously married, but he had fathered a child. Dr Wylie had previously been married but she had no children. The couple married in March 2008 and separated seven years later, in June 2015.
• [2] The parties each had property and business interests of their own prior to commencing their relationship. Mr Wylie wished to protect his assets from potential claims from the mother of his child and from Dr Wylie. He also wished to minimise his income to limit his exposure to paying child support. With these objectives in mind, during the course of their relationship the parties formed two companies, established two trusts and entered into an agreement (the COA) contracting out of the provisions of the Property (Relationships) Act 1976 (the PRA).
• [3] Dr Wylie incorporated Total Veterinary Services Ltd (TVS) in August 2005 to own and operate her veterinary practice. Mr Wylie formed Petmove Ltd (Petmove) in May 2007, a company involved in the transportation of pets. Each was the sole director and shareholder of their respective companies.
• [4] The Wylie Family Trust was settled in May 2009 for the purpose of taking title to a heritage property (Englefield Lodge) the parties had agreed to purchase and which they intended to renovate and live in as their family home.
• [5] The COA was also drafted in May 2009. It was prepared by Mr Wylie’s usual solicitor, Ms Jane Allen, on the basis of instructions given by the parties jointly.^[1] In essence, all property held by each party was to remain that party’s separate property, including any increase in the value of that property and any substituted property. Dr Wylie was referred to another solicitor for independent advice before she signed the COA in late May 2009. Mr Wylie then signed the COA after he received separate advice from Ms Allen at a meeting arranged specifically for that purpose in July 2009. Importantly for present purposes, the COA provided that the shares in TVS were to be Dr Wylie’s separate property. Similarly, the shares in Petmove were to be Mr Wylie’s separate property, as were his six investment properties (two bare sections and four rental properties) and an expected debt for monies to be advanced by him to the Wylie Family Trust to finance the purchase of Englefield Lodge.
• [6] Dr Wylie’s veterinary practice became very successful. In January 2017, approximately one and a half years after separation and seven and a half years after the COA was signed, Dr Wylie sold the practice for a substantial sum. Petmove, on the other hand, has little value and has ceased operating.^[2] Mr Wylie’s primary objective in this proceeding is to obtain a half-share of the value of TVS.
• [7] The second trust, the Total Trust, was settled in January 2010 for the purpose of holding income-earning assets. Mr Wylie transferred his six investment properties to this trust, taking a debt back in exchange. The parties discussed the possibility of each transferring their other income-earning assets to this trust, namely Mr Wylie’s shares in Petmove and Dr Wylie’s shares in TVS. However, these transfers did not occur prior to separation. Dr Wylie makes no claim to the assets of the Total Trust.
• [8] Following their separation, five sets of proceedings were issued to determine various disputes concerning the COA, the Wylie Family Trust, the Total Trust and a further trust settled by Dr Wylie in August 2002 when she was married to her former husband (the Roberts Family Trust):

(a) Mr Wylie filed a proceeding in the Family Court seeking an order setting aside the COA on various grounds. These included a claim that he did not receive adequate or independent advice from Ms Allen before he signed the COA and it was therefore void for non-compliance with the requirements of s 21F of the PRA. This proceeding was subsequently transferred to the High Court (the PRA proceeding).

(b) Mr Wylie filed a proceeding in the High Court seeking various orders in connection with the Wylie Family Trust, including that the assets of this trust were held for his sole benefit (the Wylie Family Trust proceeding).

(c) Mr Wylie filed a proceeding in the Family Court for an order pursuant to s 182 of the Family Proceedings Act 1980 that the Roberts Family Trust was a nuptial settlement. This proceeding was also transferred to the High Court (the FPA proceeding).

(d) Dr Wylie filed a proceeding in the High Court seeking an order removing Mr Wylie, Ms Allen and herself as trustees of the Total Trust and appointing an independent trustee in their place (the first Total Trust proceeding).^[3]

(e) Mr Wylie filed a proceeding in the High Court seeking an order for specific performance of an alleged oral agreement reached on an unknown date between 1 May 2009 and 26 January 2010 in terms of which the parties purportedly agreed to transfer their income-earning assets (the shares in Petmove and TVS) to the Total Trust in exchange for a debt back for the value at the time of transfer. Mr Wylie sought an order requiring Dr Wylie to transfer her shares in TVS to the Total Trust based on their value as at 31 March 2010 (the second Total Trust proceeding).

• [9] It can be seen that Mr Wylie’s objective of obtaining a half-share of the value of the TVS shares was advanced on alternative bases. In the second Total Trust proceeding, he contended that a legally binding oral agreement reached on an unknown date between 1 May 2009 and 26 January 2010 required Dr Wylie to transfer her shares in TVS to the Total Trust at their then valuation. Success in that proceeding would have enabled Mr Wylie to benefit from the substantial increase in the value of the TVS shares, being the difference between the valuation at the time they ought to have been transferred to the Trust (said to be by 31 March 2010) and the value achieved on the sale seven years later. Mr Wylie’s alternative claim in the PRA proceeding was not founded on any such agreement. He sought a similar result by a different route, claiming there were deficiencies in the advice he received before signing the COA and it was void in consequence. Success in that proceeding would have enabled Mr Wylie to overcome the separate property status of the TVS shares under the COA. The shares would be relationship property and he would be entitled to a half share.
• [10] The five sets of proceedings were heard together in the High Court at Christchurch before Nation J over a three-week period in August 2018. In a comprehensive judgment delivered on 16 October 2019 and re-issued on 4 November 2019, the Judge dismissed all of Mr Wylie’s claims and granted the orders sought by Dr Wylie in the first Total Trust proceeding, removing Dr Wylie and Ms Allen as trustees of the Total Trust.^[4]
• [11] Mr Wylie’s appeal is primarily focused on the PRA proceeding. However, if his appeal in respect of the PRA proceeding is allowed, he contends this will call into question the Judge’s reasons for dismissing his claims in the Wylie Family Trust proceeding. For that reason, in the event his appeal against the judgment in the PRA proceeding is allowed, Mr Wylie seeks an order remitting the Wylie Family Trust proceeding to the High Court for reconsideration in the light of this Court’s judgment.

Grounds of appeal

• [12] Mr Wylie contends that the Judge erred in finding that:^[5]

(a) the legal advice he received before signing the COA was adequate in terms of s 21F of the PRA;

(b) the advice was independent as required by s 21F(3); and

(c) even if the advice he received was non-compliant with s 21F, he was not materially prejudiced by the non-compliance and the COA should therefore be declared valid under s 21H of the PRA.

Did the Judge err in finding Mr Wylie received adequate advice before signing the COA?

Legal principles

• [13] The formalities required for a valid contracting-out agreement are set out in s 21F of the PRA:

21F Agreement void unless complies with certain requirements

(1) Subject to section 21H, an agreement entered into under section 21 or section 21A or section 21B is void unless the requirements set out in subsections (2) to (5) are complied with.

(2) The agreement must be in writing and signed by both parties.

(3) Each party to the agreement must have independent legal advice before signing the agreement.

(4) The signature of each party to the agreement must be witnessed by a lawyer.

(5) The lawyer who witnesses the signature of a party must certify that, before that party signed the agreement, the lawyer explained to that party the effect and implications of the agreement.

• [14] The leading authority on the requirements of s 21F is this Court’s judgment in Coxhead v Coxhead, where Hardie Boys J, writing for the Court, stated:^[6]

... [T]he requirement under subs (5) of independent legal advice is no mere formalism. Each party must receive professional opinion as to the fairness and appropriateness of the agreement at least as it affects that party’s interests. The touchstone will be the entitlement that the Act gives, and the requisite advice will involve an assessment of that entitlement, and a weighing of it against any other considerations that are said to justify a departure from it. Advice is thus more than an explanation of the meaning of the terms of the agreement. Their implications must be explained as well. In other words the party concerned is entitled to an informed professional opinion as to the wisdom of entering into an agreement in those terms. This does not mean however that the adviser must always be in possession of all the facts. It may not be possible to obtain them. There may be constraints of time or other circumstances, or the other spouse may be unable or unwilling to give the necessary information. The party being advised may be content with known inadequate terms. He or she may insist on signing irrespective of advice to the contrary. In such circumstances, provided the advice is that the information is incomplete, and that the document should not be signed until further information is available, or should not be signed at all, the requirements of subs (5) have been satisfied.

Pleadings

• [15] The relevant pleading in the PRA proceeding was an amended application dated 28 March 2018. It simply stated that the COA “failed to comply with the requirements of s 21F” of the PRA but did not specify the respect(s) in which the advice was said to be deficient. Reliance was, however, placed on the affidavits filed in support.

Evidence in the High Court

• [16] Mr Wylie instructed Mr Simon Jefferson QC, an experienced barrister with specialist expertise in family law, to express an opinion as to the independence and adequacy of the advice given by Ms Allen to Mr Wylie before he signed the COA. Mr Jefferson outlined his understanding of what would be required to comply with s 21F. His principal criticism concerned the independence of Ms Allen’s advice. We address this issue below, under the second ground of appeal. Leaving the issue of independence to one side, Mr Jefferson was unable to assist the Court on the adequacy of Ms Allen’s advice given the absence of detailed file notes. Mr Jefferson concluded that the adequacy of the advice would depend on the Court’s findings as to what advice Ms Allen gave Mr Wylie at the meeting on 7 July 2009 before he signed the COA.

Submissions in the High Court

• [17] Comprehensive closing submissions (378 paragraphs in length) on behalf of Mr Wylie were presented in the High Court. As to the adequacy of Ms Allen’s advice, it was submitted that she ought to have recommended that valuations be obtained, particularly for the shares in TVS. The essence of the submissions on this aspect of Mr Wylie’s claim was encapsulated in the following two paragraphs:

A lawyer advising on a contracting out agreement must have proper knowledge of the property to which the agreement relates.

Mr Jefferson notes that Ms Allen should have identified each of the parties’ statutory rights and illustrated what rights were being surrendered under the proposed contracting out agreement. Ms Allen should have taken instructions from [Mr Wylie] alone, identified what was and was not relationship property prior to the COA, ascertained the value of such property and gave advice to [Mr Wylie] as to what he would get if he did not enter the COA and relied on the PRA versus what he would get under the COA if he contracted out of the PRA.

(Footnotes omitted.)

• [18] As we will shortly come to, the argument presented on appeal for Mr Wylie in respect of the COA is new. The claim he now seeks to advance is that Ms Allen was required to advise him on the implications of the COA in the context of what he describes as a “concept/plan” said to be “in place” at that time to transfer the parties’ income-earning assets (including the shares in TVS and Petmove) to a trust. This claim did not feature in the pleadings, evidence or submissions in the PRA proceeding and, unsurprisingly, it was not addressed in the High Court judgment.

High Court judgment

• [19] The Judge addressed the adequacy of Ms Allen’s advice under five headings, responding to each of Mr Wylie’s claims:^[7]

(a) Advice as to the extent and status of property owned before and after the relationship began.

(b) Alleged failure to complete due diligence in respect of the Roberts Family Trust.

(c) Alleged failure to obtain a valuation of the TVS shares.

(d) Alleged failure to advise on the risk of a PRA claim being made in respect of Mr Wylie’s investment properties.

(e) Alleged failure to advise on the wisdom of the agreement.

• [20] The Judge carefully addressed each of these topics in his judgment (devoting 121 paragraphs to them) and ultimately concluded that none of Mr Wylie’s complaints about the adequacy of the advice he received were made out. The Judge later observed:

[293] Despite the claims he now makes as to the inadequacy of the advice he received, I am well satisfied that Mr Wylie had a good understanding of the effect and implications of the agreement at the time he signed the COA. He knew what it meant in terms of Dr Wylie’s interest in TVS being her separate property. There was no suggestion in the evidence that, at the time, he had any reservations as to the wisdom or fairness of what he was doing. Even when they first separated, he still considered the COA to have been fair.

Submissions on appeal

• [21] Mr Lennard, who was engaged by Mr Wylie for the appeal, focused his submissions on the alleged “concept/plan” said to be “in place” by the time the COA was signed, namely that the shares in TVS and Petmove would be put in a trust. He argues that the legal consequence of this concept/plan, had it been implemented, would have “rendered moot” the classification of these shares under the COA (and the investment properties) as separate property. Mr Lennard points to the fact that both parties gained the mistaken impression that any trust structure would be rendered invalid by the COA. He says this supports his overall contention that adequate advice as to the wisdom of the COA therefore had to include advice that, should the parties divest income-earning separate property into a trust, the property would cease to be separate property and would instead become the property of the trustees held on trust for the beneficiaries. It is common ground that Ms Allen gave no such advice.
• [22] Mr van Bohemen, for Dr Wylie, acknowledges there was some discussion in May 2009 about the possibility of a trust being formed to hold income-earning assets. However, he says these discussions were brief and inconclusive. Dr Wylie disputes that there was any “concept/plan in place” in May 2009. She says there was certainly no agreement to settle such a trust at the time the COA was signed, let alone any agreement to transfer assets to it, as the Judge found when dismissing Mr Wylie’s specific performance claim in the second Total Trust proceeding.^[8]
• [23] Mr Lennard says the factual dispute concerning the concept/plan is key and goes to the heart of the adequacy of Ms Allen’s advice. He expressed this point in his outline of oral argument as follows:

The respondents say the concept/plan was not in place at the time Mr Wylie executed the CoA and was given the relevant advice. This factual dispute is key: we say the concept/plan was in place, Mr Wylie should have been advised on how it affected the CoA and vice versa, he was not so advised, such advice was essential, therefore the CoA was void, and it is not saved by s 21H (material prejudice).

(Footnote omitted.)

Application to adduce new evidence

• [24] Rule 45 of the Court of Appeal (Civil) Rules 2005 permits the Court to grant leave for the admission of further evidence on questions of fact. The principles to be applied are well established. Further evidence will generally not be admitted on appeal unless it is fresh, credible and cogent. Evidence is fresh only if it could not, with reasonable diligence, have been adduced at trial. Evidence that is not fresh may be admitted, but in the civil context this is only permitted in exceptional and compelling circumstances. These principles are strictly applied in civil cases to serve the dual public interest in finality in litigation and ensuring that court resources are not wasted.^[9]
• [25] Mr Wylie applies to adduce further evidence in support of his appeal. The application was initially wide in scope but had narrowed by the time of the hearing to four documents (three file notes prepared by Ms Allen and a second copy of the COA) and an affidavit from Mr Wylie explaining how these documents came into his possession and his understanding of their significance. Dr Wylie opposes the application to adduce this evidence on the basis it is not fresh, credible or cogent.
• [26] Mr Wylie explains that despite considerable efforts on his part to obtain all relevant documents on Ms Allen’s files, the three file notes were not provided to him until after the High Court trial. He acknowledges he received the second copy of the COA in advance of the trial. However, he says he did not realise until after the trial that this copy was “imperfectly executed”. He contends that this evidence is cogent because it indicates “poor standards” on the part of Ms Allen.
• [27] We can deal with the application to adduce the second copy of the COA as evidence quite briefly. This evidence is plainly not fresh and, more importantly, it is not cogent. The content of this copy of the COA is exactly the same as the copy produced in evidence in the High Court. That there are differences in the way they were executed is immaterial and has no relevance to the issues raised on appeal. There is no possibility that this evidence could affect the outcome and there can be no justification for admitting it on appeal.
• [28] We proceed on the basis that the three file notes are fresh in the sense that, despite Mr Wylie’s reasonable diligence, he was not able to obtain these documents prior to the trial. We also accept that the documents are credible as being contemporaneous file notes prepared by Ms Allen. However, we do not consider this evidence is cogent either. As we will demonstrate, these three file notes are brief, sketchy and cryptic. They are incapable of bearing the weight Mr Wylie seeks to place on them.
• [29] The first file note is undated. It comprises three crude drawings and records contact details for Mr Wylie’s accountant, Mr Grant Stewart. Shorn of Mr Stewart’s contact details, this file note is as below:

• [30] Mr Wylie says this file note could not have been made later than May 2009 because of its reference to “corporate”, “trust” and “LACQ”. He says that in his early discussions with Ms Allen, consideration was given to transferring his rental properties to one or more loss attributing qualifying companies. However, he says this idea was “quickly dismissed”. Referring to the top box (the one with the large cross through it), Mr Wylie says it is not clear whether this was intended to represent a corporate trust or a trust with a corporate trustee, or both. He says he cannot recall any mention of a corporate trustee. However, despite not knowing precisely what was meant by these words, he says he is “sure” this was a reference to “a trust to hold income‑producing assets, specifically, TVS and Petmove”. He says the notation alongside the second box — “WFT” — denotes the Wylie Family Trust established on 19 May 2009. Mr Wylie invites the Court to infer from this that the top diagram must have represented a trust to hold TVS and Petmove. We are not prepared to make this leap. Not only is there no reference, directly or by implication, to TVS or Petmove in this cryptic file note, this entire box has been crossed out. This file note provides scant, if any, support for the “concept/plan in place” thesis.
• [31] The second file note, also undated, has Mr Wylie’s Petmove business card (or a copy of it) at the top and the following handwritten words below:

Development Trust

Incorporation of Trust

LAQC

Petmove 0508 738668

• [32] Mr Wylie explains in his affidavit what he perceives to be the significance of this file note as follows:

[This file note] again shows that at some stage, Ms Allen was noting matters to be attended to were “Development Trust, Incorporation of Trust, LAQC”.

• [33] Mr Wylie says that by the end of May 2009, “the separate development trust and LAQC idea for the rental properties had been dismissed”. He acknowledges this file note appears on the inside of a file cover entitled “RE: Restructure of Your Properties”, a file dated 22 March 2010. However, he asserts that this file is incorrectly dated:

As already illustrated, [the two file notes] were created in early May 2009, as were the annotations on [another document]. All of these documents appear in this Restructure file but that file is incorrectly dated 22 March 2010. The date is problematic because a file that supports my case, has been presented with missing documents and a date that converts it into evidence against me.

• [34] Whether or not Mr Wylie is correct that this file note was created in May 2009, the references to “Development Trust” and “LAQC” were, according to Mr Wylie, to a structure to hold the rental properties. The file note does not refer to a trust to hold other assets. We cannot see how it provides any material support for Mr Wylie’s claim that a concept/plan was in place when the COA was signed that “every income producing asset would be transferred to the Pet Services Trust” and “the Total Trust was fully defined in everything but its name, which was finalised in 2010”.
• [35] The third file note is dated 26 January (presumably 2010) and appears to be a note of a discussion with Mr Stewart. It relevantly reads as follows:

need valuations

will sort thru

what needs to

be done

properties 1st then

meet with to

put plan in place

• [36] Mr Wylie claims this file note “further confirms that there was an overarching plan right from early May 2009 through to the establishment of the Total Trust in January 2010”. We are unable to read it that way. It records steps envisaged as at 26 January 2010. The reference to “put plan in place” suggests no such plan was in place nine months earlier, in May 2009, when the COA was drafted, or in July 2009, when Mr Wylie signed it.
• [37] These file notes are not cogent. In any event, there are no exceptional or compelling reasons that could justify their admission in evidence on appeal. The application to adduce further evidence must accordingly be declined, irrespective of the even more fundamental obstacle to which we now turn.

Should Mr Wylie be allowed to raise the “concept/plan in place” thesis for the first time on appeal?

• [38] As noted, Mr Wylie claimed in the second Total Trust proceeding in the High Court that a legally binding oral agreement was reached on an unknown date between 1 May 2009 and 26 January 2010 in terms of which the parties agreed to transfer their income-producing assets to the Total Trust with a debt back for their value at the time of transfer. Mr Wylie sought an order for specific performance of this alleged agreement in the second Total Trust proceeding. That claim failed and is no longer pursued. Mr Wylie’s argument on appeal in the PRA proceeding is that there was a concept/plan to this effect in place by the time the COA was signed and that Ms Allen should have advised on the implications of this. This argument was not raised in the High Court. As we have seen, it was not addressed in the pleadings, the evidence, the submissions or in the High Court judgment. Mr Lennard acknowledges this.
• [39] That a point was not raised at trial is usually, but not necessarily, fatal. A party may be permitted to raise a new point on appeal where the pleadings and evidence leave it open to be taken and there is no risk of causing prejudice and therefore injustice to the other party. However, the bar is set high in terms of demonstrating lack of prejudice, as is apparent from the following passages from the judgments of McMullin and Casey JJ in Savill v Chase Holdings (Wellington) Ltd:^[10]

[Per McMullin J] This argument was, as Mr Young acknowledged, not advanced in the High Court. ... The fact that the point was not raised is not fatal to it being taken on appeal if the pleadings and the evidence leave it open to be taken. Mr Camp, whose client Chase Holdings was directly affected by the argument, contended that further evidence would have been called and different questions asked of existing witnesses had the point been raised in the High Court. ...

...

It is difficult to see how Chase Corporation would have dealt with the point now raised by Mr Young had it been pleaded or otherwise signalled as an issue at trial. But the real possibility that the Chase Group would have shaped its case to deal with the specific point cannot be ignored. For that reason it would be wrong to allow the appellants to introduce it into the case at this stage.

...

[Per Casey J] If there were any prospect of Mr Young’s new point succeeding, there could well be an injustice to Chase Holdings in allowing it to be put forward at this late stage and decided on evidence which was directed at other targets, in a case shaped to meet a different pleading. Accordingly I would not allow it to be raised ...

• [40] The Supreme Court explained in Paper Reclaim Ltd v Aotearoa International Ltd the strong policy reasons why a restrictive approach should be taken to allowing parties to alter on appeal the basis of the case they presented at trial:^[11]

[15] There are strong policy reasons why the Courts should take a restrictive approach to applications by parties to litigation who seek to alter the basis of the case that they presented at trial after judgment has been given. They reflect a strong societal interest in the final determination of concluded litigation. This interest must be balanced against the individual interests of particular litigants who, having received an adverse judgment, consider that the approach they took at the trial of their dispute was based on an incorrect premise and that a new approach is necessary to achieve the right result. It has been said that part of the societal interest lies in the risk that a liberal approach would lead to temptation by dissatisfied litigants to commit perjury. Another consideration is the unfairness to a successful litigant in allowing the protraction of proceedings by its opponent because its witnesses now say their evidence was mistaken. To these ends Courts are required to function within prescribed limits framed to ensure there is an end to litigation.

(Footnotes omitted.)

• [41] A key consideration will always be whether the other party would be prejudiced if the appellant were permitted to raise the point for the first time on appeal. This will almost inevitably be so where the other party can show a real possibility they would have presented their case differently at first instance had the point been raised at that time. This Court emphasised this point in McCollum v Thompson:^[12]

[53] ... It is not fair to allow a new tack if there is a real possibility that the party affected by the change of position will be materially disadvantaged.

[54] The unfairness stems from the fact that if the party opposing the raising of the new point would, on an objective assessment, have fairly wished to run the case differently in the trial court had the point been raised, the appeal court cannot provide that opportunity without ordering a new trial. To put a party to the delay and expense of a new trial because something that could have been raised in the trial court was not raised would be unjust. Indeed, it would run against the principle that litigation should be final, and it would bring the administration of justice into disrepute.

• [42] Assuming there was substance in this new claim, we consider it would be contrary to the interests of justice to allow Mr Wylie to raise it at this late stage, following trial and judgment. If the claim had been made in the High Court, it would have been addressed in the evidence of the relevant witnesses — Mr Wylie, Dr Wylie, Ms Allen and Mr Jefferson. Their evidence on the topic, referring to any relevant documents such as Ms Allen’s file notes upon which Mr Wylie now seeks to rely, would have been tested in cross-examination. Detailed submissions addressing the claim with reference to the relevant evidence would have been required. We cannot undertake this exercise on appeal, without hearing from any of the witnesses.
• [43] Again, assuming there is substance to the new claim, there is not just a “real possibility” of a material disadvantage to Dr Wylie, but an inevitable material disadvantage, if Mr Wylie is permitted to raise it now. The matter would have to be remitted to the High Court for a new hearing. This course cannot be justified, especially not in a case such as this which involves the division of property under the PRA. Section 1N(d) of the PRA gives statutory recognition to the principle that questions about relationship property should be resolved as inexpensively, simply and speedily as is consistent with justice.
• [44] In any case, we doubt there is any substance in the new claim. The requisite legal advice under s 21F must include a comparison between the party’s position under the general law absent the agreement and their position if they were to enter into the contracting out agreement. While future possibilities and potentialities may be relevant as part of the evaluation, the exercise must be carried out at the time the party enters into the agreement. The prospect that some property covered by the agreement might at a later stage be settled on a trust would not render the contracting out agreement moot as Mr Wylie suggests. The prospective transfer to a trust along the lines he anticipated would simply involve swapping one asset (shares) for another (a debt) of equal value at the date of transfer. The classification of the asset would remain the same (whether separate or relationship property), only its form would change.^[13] Legal or accounting advice might be desirable before contracting to make such a transfer, but such advice would only be needed at that time and would involve quite separate considerations to those relevant for a contracting out agreement.
• [45] For all of these reasons, this ground of appeal must fail.

Did the Judge err in finding Mr Wylie received independent advice?

• [46] In terms of s 21F(3) of the PRA, each party to a contracting out agreement must have independent legal advice before signing it. Mr Wylie argues that the Judge was wrong to find that this requirement was met.
• [47] Ms Allen took initial joint instructions from Mr Wylie and Dr Wylie on 5 May 2009 for the purposes of drafting the COA. She also acted for them on the contemporaneous establishment of the Wylie Family Trust and purchase of Englefield Lodge. Having confirmed the contents of the COA with the parties at a joint meeting on 19 May 2009, Ms Allen forwarded execution copies of the COA to another solicitor, Ms Sue Foley, who provided independent advice to Dr Wylie before she signed them. Ms Foley duly returned the executed copies to Ms Allen. Ms Allen then met with Mr Wylie alone on 7 July 2009 and gave separate advice to him before he signed the COA.
• [48] Mr Lennard submits that the requirement for independent advice was not satisfied in these circumstances. He argues that because Ms Allen drafted the COA on the basis of what she understood both parties wanted, this was “the very antithesis” of the independence required of Ms Allen when acting for Mr Wylie and advising him on the COA. He says that because the initial instructions were taken from the parties at a meeting they both attended, neither party could fully and frankly express what they wanted. He says this was crucial. Mr Lennard says Ms Allen accepted each party’s declaration as to their separate property without “interrogating them” as to the status of this property.
• [49] Mr Lennard contends it was not enough that Ms Allen’s final meeting, when Mr Wylie signed the COA on 7 July 2009, was with him alone. He says the earlier joint meetings “had already compromised Ms Allen’s independence” and he suggests that she “may at the very least have been unconsciously influenced” when advising Mr Wylie as to the wisdom of the COA. Mr Lennard claims that by the time of this meeting, execution of the agreement of which Ms Allen was the prime author, “was simply a fait accompli”. No amendments were suggested or made by Mr Wylie or Ms Allen.
• [50] We consider the Judge was correct to dismiss the lack of independence contention. It is not uncommon for parties who wish to contract out of the provisions of the PRA to engage the services of their usual solicitor to prepare an agreement intended to give effect to their joint wishes. The receipt of such joint instructions would not normally disqualify the solicitor from being able to give independent advice to one of the parties with the other party being referred to another solicitor for independent advice before either party signs the agreement.
• [51] The question is whether there is any impediment to the solicitor discharging his or her obligations to the party being advised and this will usually depend on whether there is any potential conflict of duty. This will not normally be the case so long as the instruction can be accepted without compromising any obligation owed to the other party, such as the obligation not to disclose information obtained in confidence while acting for that party on some other matter.^[14] An obvious example might be where the solicitor has learned in confidence from party A in the course of acting for him or her that a particular asset has imminent prospects of significantly increasing in value. In that scenario, the solicitor would not be able to accept instructions to give independent advice to party B on a contracting out agreement where the value of this asset was a material factor unless party A had made full disclosure to party B or given informed consent to the solicitor to disclose it.
• [52] We respectfully concur with the observations made by MacKenzie J to similar effect in Zhou v Ye:^[15]

[11] As to the independence of the advice, I reject the submission that the advice to the husband was not independent. The solicitor had acted for both parties in the past. That is not in itself fatal to independence: the question is whether the circumstances in which the solicitor acted are such that this could interfere with the impartiality of the advice given. I consider that there is no reason to suspect that this may be so here. The transactions in which the solicitor had acted for both parties were routine conveyancing transactions. Further, the person complaining of the lack of independence is the person for whom the solicitor acted on the relationship property agreement. The issues of possible use of confidential information, and of unconscious influence in favour of the party for whom the solicitor is acting because of past familiarity, do not arise here. ...

• [53] In the present case, we are not convinced the acceptance of joint instructions in May 2009 had any influence on the impartiality of the advice given by Ms Allen to Mr Wylie prior to signing the COA in July 2009. Mr Wylie first met Ms Allen on 4 March 2008 to discuss his two sections and a problem with an easement. Mr Wylie mentioned at this meeting that he wished to protect his assets against any claim by the mother of his child, in respect of child support, or by Dr Wylie. There was a general discussion about the possibility of establishing a trust, preparing a contracting out agreement and minimising his personal income in order to avoid paying child support. However, no instructions were given and Mr Wylie had no further contact with Ms Allen until over a year later.
• [54] On 4 May 2009, Mr Wylie sent an email to Ms Allen stating:

Hi Jane

Sorry its been a long time and still havent finished the mat property stuff.

In the meantime we are buying another house [Englefield Lodge], contract should be with you soon.

• [55] A meeting was arranged for the following day to discuss the purchase. This was the first time Dr Wylie had met Ms Allen. Instructions were given at this meeting to establish the Wylie Family Trust which was to own the Englefield Lodge property. As noted, the parties intended this property to be their family home after it had been renovated. It was at this meeting that Ms Allen was instructed to prepare the COA.
• [56] The draft COA was discussed in detail at a subsequent meeting on 19 May 2009. It was agreed that Ms Allen would advise Mr Wylie on the COA because she had previously acted for him and Dr Wylie would be referred to Ms Foley for independent advice. We can see nothing in these circumstances that would disqualify Ms Allen from being able to give independent advice to Mr Wylie on the COA before he signed it. Such advice was given at the meeting on 7 July 2009, when only Mr Wylie was present. His signature was not treated as “a fait accompli” by Ms Allen. Mr Wylie’s own evidence was that he found it “frustrating” having to listen to Ms Allen work through the agreement with him in detail when he said he could read and understand it himself perfectly well.
• [57] This ground of appeal must also be dismissed. It follows that we do not need to consider the third ground of appeal as to whether the Judge was right to conclude that the COA should be validated in any event. Because Mr Wylie’s appeal in respect of the Wylie Family Trust proceeding was parasitic on his appeal in respect of the PRA proceeding, that too does not need to be considered.

Result

• [58] The application for leave to adduce further evidence is declined.
• [59] The appeal is dismissed.
• [60] The appellant must pay costs to the first respondent for a standard appeal on a band A basis and usual disbursements. We certify for second counsel.

Solicitors:
Rainey Collins, Wellington for Appellant
Malley & Co Lawyers, Christchurch for First Respondent

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^[1] Ms Allen simultaneously prepared the Wylie Family Trust deed and was acting on the purchase of Englefield Lodge.

^[2] Petmove Ltd was removed from the Companies Register on 18 July 2019.

^[3] Such orders were sought only in the event the Court made a finding that the trustees were entitled to the shares in TVS. In the alternative, Dr Wylie sought only that she and Ms Allen be removed as trustees of the Total Trust.

^[4] Wylie v Wylie [2019] NZHC 2638 [High Court judgment].

^[5] At [32]–[34] and [287]–[288].

^[6] Coxhead v Coxhead [1993] 2 NZLR 397 (CA) at 403–404. Coxhead was decided under an earlier version of the PRA. However, the requirement of independent legal advice in s 21(5) of this earlier version is identical to that now found in s 21F(3).

^[7] High Court judgment, above n 4, at [169], [246], [249], [271] and [274]. A sixth heading — “Discussion as to COA in presence of both parties” — was also identified and addressed by the Judge at [239], but this relates to the issue of independence rather than adequacy.

^[8] High Court judgment, above n 4, at [643] and [699].

^[9] Rae v International Insurance Brokers (Nelson Marlborough) Ltd [1998] 3 NZLR 190 (CA) at 192–193, approved in Paper Reclaim Ltd v Aotearoa International Ltd (Further Evidence) (No 1) [2006] NZSC 59, [2007] 2 NZLR 1 at [6] n 1.

^[10] Savill v Chase Holdings (Wellington) Ltd [1988] NZCA 113; [1989] 1 NZLR 257 (CA) at 307 and 316.

^[11] Paper Reclaim Ltd v Aotearoa International Ltd (Further Evidence) (No 2) [2007] NZSC 1, [2007] 2 NZLR 124.

^[12] McCollum v Thompson [2017] NZCA 269, [2017] NZAR 1106.

^[13] The schedules attached to the COA list each party’s separate property. In each case the list includes “[a]ny substituted property or form of property into which the foregoing or the sale proceeds of it may pass”. This provision is cl 13 of sch B listing Dr Wylie’s separate property and applies to all separate property, including the shares in TVS.

^[14] Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, r 8.

^[15] Zhou v Ye HC Wellington CIV-2006-485-757, 14 December 2006.