Flavell v Campbell
[2019] NZHC 799
•12 April 2019
NOTE: PURSUANT TO S 80 OF THE PROTECTION OF PERSONAL AND PROPERTY RIGHTS ACT 1988, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B, 11C AND 11D OF THE FAMILY COURT ACT 1980. FOR FURTHER INFORMATION, PLEASE SEE
https://www.justice.govt.nz/family/about/restriction-on-publishing-judgments/
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2017-404-003902
[2019] NZHC 799
BETWEEN MS FLAVELL
Appellant
AND
MR CAMPBELL
Respondent
Hearing: 19 March 2019 Appearances:
Appellant in Person
A Cooke as Counsel to Assist G Askelund for Mr Thomas
Judgment:
12 April 2019
JUDGMENT OF MOORE J
This judgment was delivered by me on 12 April 2019 at 11:00 am pursuant to Rule 11.5 of the High Court Rules.
Registrar/ Deputy Registrar Date:
FLAVELL v CAMPBELL [2019] NZHC 799 [12 April 2019]
Introduction
[1] The man at the centre of these proceedings is Mr Thomas.1 Mr Thomas suffers from moderate to severe cognitive deficits associated with his 30-year plus history of schizophrenia.
[2] His sister, Ms Flavell,2 is the appellant. Until the Family Court revoked it, Ms Flavell held an enduring power of attorney (“EPOA”) in respect of her brother’s financial affairs. Questions around the propriety of Ms Flavell’s conduct relative to the EPOA and her appropriateness to hold the authority have arisen. These were considered by the Family Court in November 2017 when that Court revoked the EPOA and declared that Ms Flavell was not a fit or proper person to manage Mr Thomas’ affairs. The Public Trust was appointed property manager to manage Mr Thomas’ affairs. Ms Flavell appeals those orders.
Background facts
[3] The following narrative is drawn from the decisions of Judge D A Burns3 supplemented by the affidavit evidence sworn in support of the respondent’s applications. I will also refer to the observations Duffy J made in the context of parallel civil proceedings in this Court.4
[4] As a consequence of Mr Thomas’ chronic mental illness, he suffers from impaired short term memory and an impaired capacity to process information in order to come to a decision. Despite this, he lives independently, albeit in a somewhat restricted fashion. His longer term mental health prognosis is poor. It is expected that his mental capacity will slowly and inexorably deteriorate over time.
[5] In 2015 Mr Thomas was the sole holder of an account with a credit union (“the Credit Union”). That account was operated using an EFTPOS card.
1 This is a fictitious name to protect the identity of the party.
2 This is a fictitious name to protect the identity of the party.
3 Campbell v Thomas [2017] NZFC 4720 (the 21 June 2017 orders) and Campbell v Thomas [2017] NZFC 9125 (the 14 November 2017 orders).
4 Flavell v Credit Union [2016] NZHC 133; for reasons that are unclear, this citation appears to have been duplicated. However, it is the citation that is recorded on the front of Duffy J’s judgment so I record it as such.
[6] On 16 November 2015 the sum of $203,405.40 was credited to this account. It was the proceeds of an inheritance Mr Thomas received from his late mother’s estate.
[7] Over a period of a little over a fortnight (between 16 November 2015 and 3 December 2015) funds of approximately $105,000 were drawn on the account. This left a balance of just over $93,800.
[8] Concerned about the use of the card, and more particularly that the bulk of the withdrawn funds were spent at the Sky City Casino, the Credit Union placed a stop on Mr Thomas’ card. Unable to access his funds, Mr Thomas called the Credit Union. It was explained they wished him to verify he was the user of the card. However, because Mr Thomas expressed no concerns around the spending, the card was reactivated. Within a few days a further, substantial withdrawal was made at the casino. The Credit Union suspended the card again. They invited Mr Thomas to urgently attend to verify the transactions. This he did the following day, accompanied by his sister.
[9] The respondent is Mr Campbell.5 He is the general manager of the Credit Union. On 19 April 2017 he made an affidavit in support of the applications filed in the Family Court. His unchallenged evidence in the Family Court is that on 4 December 2015 he met with Mr Thomas and Ms Flavell who said she was acting for her brother. She asked Mr Campbell to withdraw the balance in the account and close it.
[10] Mr Campbell asked to speak to Mr Thomas alone to confirm his instructions. According to Mr Campbell Ms Flavell was resistant to this course. Mr Thomas told Mr Campbell that he did not want the account to be withdrawn and asked to speak to Mr Campbell in private. Mr Campbell asked Ms Flavell to leave. She refused and the Police were called.
[11] Mr Campbell deposed that when he was able to speak with Mr Thomas alone and showed him the withdrawals he appeared shocked at the number of transactions.
5 This is a fictitious name to protect the identity of the party.
He told Mr Campbell no one else had been using his card. He said he wanted to keep the balance of the funds in a savings account and signed a transfer slip.
[12] On 11 December 2015 Mr Campbell wrote to Mr Thomas. He expressed his concerns that Mr Thomas was unable to give proper instructions by reason of his mental health issues and advised that he had decided to freeze the account until an independent person was appointed to manage his financial affairs. He suggested to Mr Thomas that he should engage a lawyer.
[13] On 15 January 2016 Mr Thomas and Ms Flavell arrived at the Credit Union’s offices. Mr Campbell served a trespass notice on Ms Flavell. He asked her to leave. She refused. It was only when Mr Campbell called the Police that she departed.
[14] In Ms Flavell’s absence Mr Campbell spoke with Mr Thomas. According to Mr Campbell, Mr Thomas told him he did not want his sister to have anything to do with his account. Mr Campbell said he explained to Mr Thomas that the Credit Union needed to be confident he was capable of managing his account and reiterated his earlier advice that he should contact a lawyer.
[15] On 22 January 2016 Mr Campbell received an email from a lawyer who advised he was acting for Mr Thomas. The lawyer agreed that the decision to freeze Mr Thomas’ account was appropriate but also advised that Mr Thomas wished to transfer the funds into an ASB account which would be jointly accessible by himself and his sister.
[16] A week later, on 29 January 2016, Mr Thomas advised Mr Campbell that the lawyer was no longer acting.
[17] As a consequence of Mr Campbell’s actions, a complaint was made, apparently by either Ms Flavell or Mr Thomas. It was referred to Financial Services Complaints Limited (“Complaints Services”). This is an independent external dispute resolution service which deals with complaints made against financial service providers.
[18] On 22 February 2016 Complaints Services dismissed the complaint with the following finding:
“… That it is reasonable for [the Credit Union] to hold Mr Thomas’ funds in a savings account until the Family Court has either appointed a property manager under the Protection of Personal and Property Rights Act 1988 or determine that Mr Thomas has the capacity to make his own financial decisions.”
[19] It would appear that Complaints Services’ determination led Mr Thomas to instruct a law firm to prepare two EPOAs. Quite what role Ms Flavell may have had in influencing this decision is unknown. However, on 18 March 2016, Mr Thomas executed two EPOAs; one in relation to property and the other in respect of his personal care and welfare. Both appointments purported to be made for the purposes of Part 9 of the Protection of Personal and Property Rights Act 1988 (“the Act”). It is only the EPOA in respect of property which is relevant to these proceedings. The appointments were made in favour of Ms Flavell and provided for Mr Thomas’ niece and son to act in succession in the event of the appointment ceasing. Significantly, the solicitor certified that he had no reason to suspect that Mr Thomas was or might have been mentally incapable at the time he executed the EPOA.
[20] Despite the EPOA the Credit Union refused to pay out the balance of Mr Thomas’ account to Ms Flavell.
[21] Mr Campbell deposed that it was not appropriate for the Credit Union to continue holding Mr Thomas’ funds for any longer than was absolutely necessary. He said that Ms Flavell continued to e-mail him and to make assertions about the funds being misappropriated or otherwise unlawfully dealt with. He noted that the Public Trust had indicated its consent to be appointed as property manager, observing that that organisation was in a far better position to manage and protect Mr Thomas’ funds.
[22] Finally, Mr Campbell observed that Ms Flavell had not brought an application for the appointment of a property manager, possibly because she believed that she had a valid EPOA authorising her to operate the accounts and manage her brother’s financial affairs.
[23] It is unclear on the material before me when the parallel civil proceedings in this Court were instituted by Ms Flavell or on what basis. However, what is clear from Duffy J’s decision on the strike-out application is that Ms Flavell sued the Credit Union, Complaints Services, Mr Campbell and the lawyers engaged by Mr Thomas to prepare his EPOAs. Duffy J observed that it was plain Ms Flavell was upset Complaints Services did not uphold her complaint and that her solicitors had communicated with the Credit Union regarding the EPOAs.
[24] Her Honour struck the proceedings out noting that the statement of claim was fatally flawed. She described it as:6
“… no more than a rambling incoherent diatribe against the various defendants. The contents contained argumentative and at times unintelligible material that at best could be characterised as partly evidential and partly insult, which warrants the claim being struck out.”
[25] A further criticism made by the Judge was that the claim was brought solely by Ms Flavell but made no distinction between her and Mr Thomas as persons having actions or claims against the defendants. As a consequence, it was impossible to identify not only which of the defendants was alleged to have wronged Ms Flavell or Mr Thomas, but also what the legal and factual basis for those allegations was.
Initiation of Family Court proceedings
[26] Ms Flavell was charged with trespass arising out of her refusal to leave the premises of the Credit Union. She pleaded not guilty and faced a criminal Judge-alone trial on the trespass charge. The Judge found Ms Flavell guilty and sentenced her to community work. She unsuccessfully appealed that decision to this Court.
[27] It appears it was in the course of this hearing that the Judge became concerned that unless the EPOA made in favour of Ms Flavell was reviewed there was a risk Mr Thomas might be subjected to improper pressure by his sister to make decisions regarding his financial affairs which were not in his best interests.
6 At [25].
[28] As a consequence, the Judge determined the Court had jurisdiction under Part 3 of the Act which relates to property rights. He appointed Mr Cooke as counsel to assist. He directed the following terms of appointment:
(a)to inquire into the circumstance of the matter;
(b)to look at the criminal files;
(c)to discuss and enter discussions (privately with Mr Thomas);
(d)to bring or assist the Credit Union or some other person to bring an application to the Family Court for appointment of a property manager, including and/or the Public Trust;
(e)to determine and inquire into the operation of the EPOA as to whether that had been properly operated under s 102 of the Act; and
(f)such other inquiries as may be relevant and appropriate in order to resolve the impasse seen and referred to in his oral judgment.
[29]Mr Cooke assisted Mr Campbell to bring the following applications:
(a)leave for the appointment of a temporary property manager for Mr Thomas and for a final order;
(b)leave to apply to discharge the EPOA executed by Mr Thomas in favour of Ms Flavell dated 18 March 2016; and
(c)revocation of the appointment of Ms Flavell as attorney under the EPOA.
[30] These applications were brought pursuant to ss 102 and 103(2) of the Act. They were also supported by counsel’s memorandum and Mr Campbell’s affidavit.
District Court decisions
21 June 2017 (Interim orders)
[31] Following the filing of the applications the Court appointed Mr Finnie to represent Mr Thomas. Such an appointment is obligatory. Section 65(1) of the Act requires the Court to appoint a lawyer to represent the person in respect of whom an application is made unless the Court is satisfied that the person has retained or will retain a lawyer. At no stage did Mr Thomas engage his own lawyer despite apparent indications from Ms Flavell to the contrary.
[32]Section 65(2) of the Act sets out the duties of the lawyer so appointed.
“So far as may be practicable, it shall be the duty of the lawyer appointed under subsection (1) to—
(a) contact the person in respect of whom the application is made, explain to that person the nature and purpose of the application, and ascertain and give effect to that person’s wishes in respect of the application; and
(b) evaluate the solutions for the problem for which an order is sought submitted by other parties to the proceedings, taking account of the need to find a solution that—
(i) makes the least restrictive intervention possible in the life of the person in respect of whom the application is made, having regard to the degree of incapacity or incompetence of that person; and
(ii) enables or encourages the person in respect of whom the application is made to develop and exercise such capacity or competence that the person may have to the greatest extent possible.”
[33] Mr Finnie filed three reports dated 15 March 2017, 10 May 2017 and 31 May 2017. Subsequently he filed a further memorandum dated 18 October 2017. The essence of those reports may be summarised as follows:
(a)Mr Thomas wanted his sister to continue her involvement;
(b)Ms Flavell insisted on remaining present during the course of Mr Finnie’s discussions with Mr Thomas; and
(c)Mr Thomas did not want the Public Trust involved.
[34] Having considered Mr Finnie’s reports the Judge commissioned a psychiatrist to undertake an examination of Mr Thomas and provide an expert report pursuant to s 76 of the Act. This report was to address the question of his legal capacity and thus the jurisdiction of the Court to make the orders sought.
[35] On 9 June 2017 the applications were scheduled to be heard. Mr Cooke appeared as counsel assisting and Mr Finnie appeared for Mr Thomas. However, Mr Finnie made an application to have his appointment discharged and new counsel appointed. He provided the Court with a report setting out the pattern of verbal abuse he had received at the hands of Ms Flavell. Plainly he considered his ability to continue to act for Mr Thomas had been irreparably compromised by the abusive and obstructive actions of Ms Flavell. While sympathetic to Mr Finnie’s predicament, and dismissive of Ms Flavell’s criticisms of him, the Judge observed that any successor was likely to suffer similar criticism and abuse. He declined Mr Finnie’s application but granted leave for him to re-apply “should new events arise”.7 By the time the present appeal was heard Mr Finnie had been given leave to withdraw and Mr Askelund appeared in his place.
[36] However, apart from Mr Finnie’s concerns an even greater obstacle to the Court making final orders emerged. Mr Thomas, contrary to the direction of the Court, had not been examined by Dr Goodwin, the Court-appointed psychiatrist. Indeed, Ms Flavell confirmed that she had stopped her brother from attending on Dr Goodwin, a tactic which was clearly designed to frustrate the Court’s process.
[37] In these circumstances Judge Burns made interim orders directing Mr Thomas to meet with Dr Goodwin. He deferred making final orders until the receipt of Dr Goodwin’s report noting that if there were any further instances of non-co-operation he would consider finding Ms Flavell in contempt of Court.
Dr Goodwin
[38] Mr Thomas met with Dr Goodwin on 30 August 2017. In his report dated 13 September 2017 Dr Goodwin referred to Mr Thomas’ chronic history of
7 At [8].
schizophrenia noting that Mr Thomas presented with “moderate to severe cognitive deficits typical of chronic schizophrenia”. This manifested itself in impaired short-term memory and an impaired capacity to process information for decision-making.
[39] Dr Goodwin opined that these symptoms were such that Mr Thomas’ capacity to manage his affairs and to foresee the consequences of his decision making concerning his property were impaired.
[40] Dr Goodwin expressed the opinion that Mr Thomas required the appointment of a property manager.
[41] On the question of whether Mr Thomas was mentally capable when he executed the EPOA on 18 March 2016, Dr Goodwin noted that Mr Thomas’ clinical presentation would not have been significantly different from that when he presented at the examination. Mr Thomas was unable to demonstrate he truly understood the nature and extent of an EPOA. At a superficial level he appeared to understand the information imparted but on further inquiry the doctor considered it was “highly unlikely” he retained or processed it. Thus, Dr Goodwin concluded that Mr Thomas was mentally incapable when he executed the EPOA on 18 March 2016.
14 November 2017 (Final orders)
[42]The three applications came before Judge Burns again on 10 October 2017.
[43] On the basis of Dr Goodwin’s opinion, the Judge found that the Court had jurisdiction to make the orders under the Act.
[44] Mr Finnie reiterated Mr Thomas’ views and in particular his opposition to the Public Trust being appointed and his desire that his sister continue in her role as Attorney. He emphasised that Mr Thomas’ voice needed to be heard but also conceded that there were inconsistencies in his stated preference that his sister remain involved.
[45] The Judge made orders in terms of the applications. He appointed the Public Trust as property manager to manage the Thomas funds held by the
Credit Union. He made an order revoking the EPOA in favour of Ms Flavell. In making those orders he determined that:
(a)the medical evidence established that Mr Thomas lacked the necessary capacity to make decisions for himself. That incapacity was likely to increase over time;
(b)there were funds held by Mr Thomas which needed to be preserved for his long-term benefit and welfare;
(c)if an order appointing a property manager was not made there was a risk the funds would be diminished;
(d)Ms Flavell was not a suitable person to undertake the role of property manager and there was no evidence of any other person within Mr Thomas’ family prepared and competent to undertake that role;
(e)the content and nature of the documents provided to the Court by Ms Flavell gave the Court no confidence she had the ability to manage his affairs. The Judge considered that she was in a potential conflict of interest in undertaking her role and there was a risk that funds would be spent unwisely and not in Mr Thomas’ best interests;
(f)at the time the EPOA was executed Mr Thomas did not have the requisite capacity;
(g)there was also a likelihood that at the time the EPOA was executed Mr Thomas was under the undue influence of his sister who appeared to be the prime motivator behind the document. The Court expressed its concern over her lack of objectivity, particularly in respect of the actions which led to the trespass charge indicating a level of personal involvement and the taking of actions inconsistent with the legal and ethical obligations of an attorney in the circumstances; and
(h)any claims by Ms Flavell that the Credit Union had engaged in any inappropriate conduct were rejected. Freezing the account to preserve Mr Thomas’ funds was an appropriate and responsible step for the Credit Union to take in light of the pressure Ms Flavell was placing on her brother to transfer the funds to another account.
Subsequent events
[46] It appears Mr Finnie later withdrew. In the circumstances set out later in this judgment, Mr Askelund was appointed counsel for Mr Thomas. In a report filed for this appeal, he said he was unable to ascertain Mr Thomas’ wishes. In short, Ms Flavell frustrated his attempts to obtain instructions. His dealings are set out below.
[47] Mr Askelund was not given a contact number for Mr Thomas. As a consequence, he spoke to Ms Flavell by phone on 4 March 2019. He explained his role. Ms Flavell agreed to take her brother to Mr Askelund’s chambers. She agreed to allow Mr Askelund to speak with her brother alone. According to Mr Askelund, she accused the Credit Union and/or the Public Trust of misappropriating her brother’s funds.
[48] On 6 March 2019 Mr Askelund met with Ms Flavell and Mr Thomas. He described Ms Flavell as overbearing and dominant; continually speaking over Mr Askelund and her brother. During the meeting, Mr Askelund claimed Ms Flavell complained about the Family Court process, Court officials, her brother’s money being stolen by the Credit Union and/or the Public Trust. Although there were some discussions about a further meeting, it never occurred. On several occasions Mr Thomas indicated he wanted to speak with Mr Askelund alone, but Ms Flavell, contrary to her earlier indications, would not permit this. When Mr Askelund explained that he needed to meet with Mr Thomas privately so as to meet his professional and statutory obligations as the Court-appointed counsel, she would not permit it. Eventually she brought the meeting to an end.
[49] In an attempt to meet his professional obligations, Mr Askelund made an unannounced visit to Mr Thomas’ home on 13 March 2019. Mr Askelund asked him
whether he would like to discuss the Court proceedings. He replied that he would but, after glancing over his shoulder, told Mr Askelund that his sister was present. He asked him if he could come back later. Mr Askelund asked for his phone number. Mr Thomas said it was written down and he would fetch it. He went inside. When he returned shortly afterwards Ms Flavell was with him. She obstructed any attempts by Mr Askelund to talk with her brother, standing between them and creating an effective barrier to any form of communication.
[50] Mr Askelund’s view was that Mr Thomas wished to meet with Mr Askelund but was afraid to do so.
Grounds of appeal
[51] It is common ground that Ms Flavell has standing to bring this appeal. She is a party to the proceedings and was served with the original applications.8
[52] However, Ms Flavell’s notice of application for leave to appeal to this Court is all but completely incomprehensible. For example, in the field headed, “Decision details” she has recorded:
“Revoke enduring power of attorney, property manager, miscarriage of justice, perjury, conspiring to defeat justice, failure to comply with Family Court Rules and conspiring to bring false accusation.”
[53] On the form, in response to the question, “Does your appeal relate to the admissibility of evidence at trial?”, Ms Flavell has answered, “Yes”. And then, in the space left for details of the disputed evidence, Ms Flavell has listed 11 matters which, amongst other things, state that the Police evidence proves perjury, conspiring to defeat justice, criminal defamation and conspiring to bring false accusations. She refers to fraud, embezzlement and theft purporting to cite the observations of Venning J, Judge Burns, Mr Cooke and others in support.
[54] Other documents attached to the notice are similarly incomprehensible. In an untitled document, which appears to attach Judge Burns’ judgments, the intituling runs for three pages and cites not only the Family Court Rules, but also the Serious Fraud
8 Protection of Personal and Property Rights Act 1988, ss 63(2) and 83(1).
Office Act 1990, the Crimes Act 1961, the Anti-Money Laundering and Countering Financing of Terrorism Act 2009, the Reserve Bank Act 1989, the Lawyers and Conveyancers Act 2006, the Friendly Societies and Credit Unions Act 1982, the New Zealand Bill of Rights Act 1990, the Trespass Act 1980, the Corruption Act 1961 and the Defamation Act 1992.
[55] Other documents, the provenance and purpose of which are obscure, have been filed. One is a 16-page memorandum dated 22 February 2018. It is unsigned. It appears to focus on Ms Flavell’s concern that contrary to what she understood to be the Family Court’s order, the funds held by the Credit Union were not transferred to the Public Trust. Indeed, it would appear from these and other papers filed, as well as Ms Flavell’s oral submissions before me, that this issue lies at the heart of her grievances.
[56] As this appeal proceeded through its various administrative stages Judges of this Court attempted to identify and clarify the grounds of appeal. On 6 March 20189 Lang J expressed his concern that the appeal had the potential to expand into areas which were not properly the subject of an appeal against Judge Burns’ decision of 14 November 2017. He noted that the Judge made two decisions which might properly have been the subject of an appeal; the revocation of the EPOA and the finding that Ms Flavell was not a proper person to manage her brother’s property. To address that issue Lang J directed Ms Flavell to file an amended notice of appeal. He placed the matter in the Civil appeals callover for 10 April 2018 for further directions.
[57] On 10 April 2018 the matter came before Venning J.10 He referred to Lang J’s comments and the direction that Ms Flavell file an amended notice of appeal. The Judge noted that further papers had been filed which did not address Lang J’s concerns. Venning J described the documents as:
“… expansive and discursive and raise issues which are not justiciable on this appeal. Rather than continually adjourn the matter with further directions in relation to paper work it seems to me the best way to deal with this case is to allocate a fixture and bring it some finality.”
9 Minute of Lang J of 6 March 2018.
10 Minute of Venning J of 10 April 2018 at [3].
[58]He made the following directions:
(a)the appeal will be limited to Judge Burns’ revocation of the EPOA in favour of Ms Flavell and the finding that Ms Flavell was not a proper person to be her brother’s manager;
(b)Mr Cooke was re-appointed; and
(c)Ms Flavell had indicated that her brother might wish to appoint counsel of his own but unless an appearance was noted on the record by 31 May 2018 the Court would be minded to appoint counsel to assist in relation to Mr Thomas’ position.
[59] Venning J’s Minute went on to record that Mr Cooke had indicated Mr Askelund would be a suitably experienced counsel. The Judge directed the Registry to make enquiries of Mr Askelund and confirm his availability to act if no other counsel recorded an appearance by 31 May 2018. No other counsel filed an appearance. Thus by operation of Venning J’s order Mr Askelund was appointed counsel for Mr Thomas.
[60] Thus, for the purposes of the present decision I shall treat the grounds of appeal as being that the Judge was wrong:
(a)to revoke the EPOA granted by Mr Thomas in favour of Ms Flavell; and
(b)to find that Ms Flavell was not a proper person to be Mr Thomas’ manager and the appointment of the Public Trust (solely in relation to the funds held by the Credit Union).
Approach on appeal
[61] Appeals from the Family Court are in the nature of general appeals. Section 83(1) of the Act provides for a right of appeal to this Court in respect of any order or orders made under the Act. The principles set out in Austin, Nicholls & Co
Inc v Stichting Lodestar11 apply. Unless the decision under review involves the exercise of a discretion, which in this case it does not, the Court has the responsibility of making its own assessment of the merits.
[62] The appellant bears the onus of satisfying the appeal court that it should differ from the decision under appeal and it is only if the appellate Court considers the decision is wrong that it is it justified in interfering. The appellate Judge is entitled to adopt the reasons of the first instance decision-maker to assist in reaching conclusions but the weight the Judge on appeal places on them is a matter for the appeal Court. Of course, where the first instance Judge saw and heard parties, that advantage may be taken into account on appellate review to the extent it may be of assistance. But judicial deference on that account should be avoided.
Legal principles
The Protection of Personal and Property Rights Act 1988
[63] For the purpose of this appeal it is useful to start with a consideration of the purposes and principles of the Act. The Act provides for adult guardianship and the property management of those who are considered unable to manage their own affairs. Where it is necessary to appoint a guardian or manager, there is an assumption that the person will support the subject person to make their own decisions and develop their capacity as much as possible.12
[64] The Act is premised on a presumption of competence.13 Everyone is assumed to have the ability to make decisions about their personal care and welfare and to express their views unless the presumption is displaced by evidence that they lack the requisite capacity. The burden establishing lack of competence falls on the person alleging it.14 The evidential burden then passes to the person who is the subject of the application to rebut it.15
11 Austin, Nicholls & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.
12 Section 28(b).
13 See, for example, ss 5 and 24.
14 Re “Tony” (1990) 5 NZFLR 609 (FC) at 616.
15 Sylvia Bell Protection of Personal and Property Rights Act and Analysis (2nd ed, Thomson Reuters, Wellington, 2017) at 4.
[65] In order to decide whether a person lacks capacity the Court will look to their ability to follow a logical sequence of thought in order to reach a decision.16
[66] A property order is required to be tailored to minimise interference with the subject’s rights. It should be designed, not only to reflect the less restrictive intervention, but, where possible also to assist the person to develop the competence to manage their property where possible. The order will only apply to management of those areas where the intervention is essential.17
[67] In this context I agree with the observations of Judge Inglis in Re “Tony” when he said:18
“All this leads me to the view that it does not matter greatly whether the disability from which the person concerned is said to suffer is described in terms of capacity or competence, for the essential issue in terms of the Act is the extent to which his power to function is impaired in particular respects. That must necessarily be a matter of degree, to be assessed and determined in each particular instance.”
[68] If the Court is satisfied it has jurisdiction, that is that the subject owns property in New Zealand and lacks competency, the issue is whether a property manager should be appointed and, if so, what powers they should possess. These powers are set out in Schedule 1 of the Act.
[69] Any person appointed to manage property under Part 3 is entitled to possession of the property. The property does not, however, vest in the manager. Ownership is retained by the subject. The manager has only the right to make decisions relating to the actual management. As such, the manager owes a fiduciary duty to the subject. The primary concern is to manage the property in a way which best promotes the interests and self-reliance of the person for whom they are acting.19
[70] Where the Public Trustee is appointed as manager, it has the additional powers listed in Schedule 2. The Public Trustee may charge for its services, but the advantage
16 Re FT DC, Auckland PPPR 68/94, 11 January 1995.
17 Re “Tony”.
18 At 614.
19 Sylvia Bell at 21.
of distance and dependence may well make it the appropriate appointee, particularly where there is dissention over who should be appointed.
[71] At the hearing the subject of the application is required to be present unless excused or excluded by the Court.20 They are entitled to be heard and call evidence.21
[72] In practice, the proceedings are inquisitorial in nature with the Court having considerable discretion as what evidence it will hear.22
[73] With those principles in mind I now turn to the particular questions raised in this appeal.
Appellant’s submissions
[74] It is apparent from the papers filed and confirmed by Ms Flavell in her oral submissions, that she does not seek to challenge the appointment of the Public Trust as manager of her brother’s funds. Indeed, in her oral submissions she told me that the Public Trust was “fine in the beginning when the orders were made”.
[75] Her primary concern, as I understood it, is that the Family Court’s sealed order of 14 November 2017 required the Public Trustee to arrange the transfer from Credit Union. The relevant paragraph reads as follows:
[2] The Public Trust shall arrange for transfer of the property of [Mr Thomas] from the [Credit Union] and shall hold and use that property for the benefit of [Mr Thomas].
The transfer was not effected until relatively recently. In Ms Flavell’s submission the failure to do so, at least in a timely way, amounted to a breach of the Court’s order and thus a contempt. Linked to this claim is Ms Flavell’s concern that the funds have not been properly managed by the Credit Union which has resulted in some dissipation; she claims at best through incompetence and at worst through fraud. No evidence to support these very serious allegations was put before me.
20 Protection of Personal and Property Rights Act 1988, s 74(1).
21 Section 75(1).
22 Sylvia Bell at 31.
[76] Ms Flavell’s criticisms also focused on the Public Trust’s management of her brother’s affairs. She claimed the Public Trust has never provided her with a balance, has never contacted her brother and has placed unreasonable obstacles on him and his sister when it has come to the payment for utility services, such as power and water.
[77] But Ms Flavell’s criticisms did not end there. She claimed Mr Cooke, and as I understood her, Mr Askelund to a lesser extent, have been accomplices in frustrating the process. She was particularly critical of Mr Cooke. While, of course, I can only comment on what I have read and what I observed in the course of the hearing, I can see no foundation whatsoever for these attacks on counsel. Mr Cooke’s submissions, both in writing and orally, were measured, courteous and objective. My impression is that from the moment he was appointed by the District Court he has conducted himself professionally. Mr Askelund’s representation of Mr Thomas has also been consistent with what I would expect of counsel of his seniority and experience. Necessarily, his involvement in these proceedings has been more limited. He took over Mr Thomas’ representation from Mr Finnie who withdrew for the reasons discussed earlier and which primarily related to the pattern of verbal abuse he received at the hands of Ms Flavell.
[78] As I attempted to explain to Ms Flavell, none of these criticisms, whether founded or not, are justiciable issues on this appeal. They may be capable of review in other fora, but not this Court on this appeal.
[79] Furthermore, when I attempted to point out that even if there had been a breach of the Court’s orders, which I do not accept for reasons which are unnecessary to canvas, that is not a matter which is relevant to this appeal. Unfortunately, that observation provoked an energetic and voluble response from Ms Flavell who asked me to recuse myself on the grounds I was complicit in condoning a contempt. I refused to recuse myself.
Was the Judge correct to revoke the EPOA made in favour of Ms Flavell?
[80] In the present case the orders were made under Part 3 of the Act which relates to property rights and then, only in respect of the funds held by the Credit Union on
Mr Thomas’ behalf. No other orders were made in respect of Mr Thomas’ welfare or other property.
[81] Given that Ms Flavell does not challenge the correctness of the Public Trust’s appointment as property manager, the first question is somewhat academic. This is by reason of the effect of s 100 of the Act, which is discussed later in this judgment.
[82] Notwithstanding I turn now to consider the grounds of appeal. As to the first, I am satisfied that Judge Burns was correct to revoke the EPOA for the reasons set out in the judgment under review at [9](a) to (j). However, the particular matters which persuade me that the EPOA was correctly revoked follow.
[83] First, there is Dr Goodwin’s report. It was unchallenged. He concluded that Mr Thomas’ moderate to severe cognitive deficits impaired his capacity to manage his own affairs and foresee the consequences of his decision-making. That this condition is irreversible and progressive equates to a grim prognosis. Dr Goodwin was clear in his opinion; a property manager was required.
[84] That, of course, was the clinical presentation when Dr Goodwin met with Mr Thomas on 30 August 2017. But significantly, he said the situation would not have been significantly different in March 2016. This led him to conclude that Mr Thomas was mentally incapable when he executed the EPOA.
[85] Secondly, Dr Goodwin reported that Mr Thomas’ mental deficits made him vulnerable to being easily influenced by others, including his sister. I readily accept that Mr Thomas’ views on the issue of who should manage his account should not be disregarded unless there is good reason to do so. However, assessing what Mr Thomas’ actual views are is not without complication. On this issue there are competing and contradictory expressions of preference attributed to Mr Thomas. Mr Finnie’s reports tend to indicate that Mr Thomas’ preference is for his sister to continue her involvement. But, as Mr Finnie himself observed, those stated preferences are far from unequivocal. In his report of 18 October 2017, Mr Finnie described Mr Thomas’ stated views as “crystal clear”; that he wished his sister to remain holding his EPOA. However, attempts by Mr Finnie to discuss these issues
without Ms Flavell requiring a record of the conversation and her refusal to leave Mr Finnie and Mr Thomas in private are troubling.
[86] It is plain that from the reports filed by Mr Finnie and, more recently, by Mr Askelund, that Ms Flavell exerts considerable influence and dominance over her brother. Of particular concern is that she has engaged in a course of conduct designed to frustrate counsel’s attempts to obtain Mr Thomas’ views and, as a consequence, improperly limit the Court’s access to relevant information. Another example is Ms Flavell’s intervention which led to her brother not attending his appointment with Dr Goodwin; conduct which frustrated the Court’s processes and required the adjournment of the applications.
[87] Thirdly, what views have been conveyed to the Court are contradictory. To Mr Finnie, Mr Thomas has said he wishes his sister to continue her involvement in his affairs. To Mr Campbell, Dr Goodwin and Mr Askelund he has conveyed an opposing view. Against that background I agree with Judge Burns that there must be a real likelihood, if not probability, that at the time the EPOA was signed, Mr Thomas was under the influence of his sister who appears to have been the prime motivator in having the document executed.
[88] On the appeal, Ms Flavell was insistent that her brother address the Court directly. Notwithstanding that Mr Thomas was represented by counsel, I permitted this course. Mr Thomas described his sister as his “best friend”. He said she understands his mental health issues and with her help and support, his low levels of self-esteem are improving. He said that his sister had come back into his life a couple of years ago. She now helps him with his shopping and ensures he takes his medication. He said that he has problems paying his bills for the phone, internet and power. He said he receives only $100 a week and relies on his sister.
[89] The orders made in the Family Court which, in this judgment, I shall not disturb, should not interfere with the assistance Mr Thomas told me he receives from his sister. Issues around Mr Thomas’ welfare are not affected by this decision. Neither are Mr Thomas’ property rights affected, except to the extent of the funds held on his account by the Public Trust. It is only those monies which are the subject of the order.
In all other respects, Ms Flavell’s relationship and assistance to Mr Thomas is not affected.
[90] For the reasons set out above, I am easily satisfied that Judge Burns was correct to revoke the EPOA made in favour of Ms Flavell.
Was the Judge correct that Ms Flavell was not a proper person to be Mr Thomas’ manager?
[91] To some extent this question is also academic, although for different reasons. This is because s 100 of the Act provides that when an EPOA is given by a person who subsequently becomes the subject of a property order, the order is binding on the attorney. In the event of there being any conflict between the powers and duties of the attorney and the terms of the order, the order shall prevail.
[92]Section 100 is set out below:
“Where an enduring power of attorney is given by a person who is or who subsequently becomes subject to a personal order or a property order, the order shall be binding on the attorney; and, in the event of any conflict arising between the powers and duties of the attorney and the terms of the order, the order shall prevail.”
[93] I agree with Mr Cooke that if the EPOA is revoked the order appointing the Public Trust as manager of the funds held in the account would operate as the effective instrument.
[94] However, quite separately from the operation of s 100, I am satisfied that Ms Flavell is not a fit or proper person to manage this aspect of her brother’s property.
[95] Section 31(5) prescribes the test which the Court must apply in appointing any person a manager.
“31 Appointment of manager
…
(5)The court shall not appoint any person a manager under this section unless it is satisfied—
(a) that the proposed appointee is capable of carrying out the duties of a manager in a satisfactory manner, having regard to the needs of the person in respect of whom the application is made, and the relationship between that person and the proposed appointee; and
(b) that the proposed appointee will act in the best interests of the person in respect of whom the application is made; and
(c)the proposed appointee consents to the appointment.
…”
[96]Because I assume Ms Flavell consents to the appointment only s 31(5)(a) and
(b) apply. In the present case, to a considerable extent, these requirements overlap.
[97] I have already discussed the concerns the Court has regarding Ms Flavell’s conduct relative to her brother. I am satisfied that her conduct leaves the Court with no confidence she is capable of carrying out the duties of a manager in a satisfactory manner having regard to the needs of her brother and the relationship between them both. Furthermore, I am not satisfied that she will act in the best interests of her brother for the reasons already discussed.
[98] In addition to these reasons, it is a matter of considerable concern that Ms Flavell has extensive criminal convictions for offences of dishonesty. These leave me with serious misgivings she is a fit or appropriate person to be appointed manager. By my calculation, apart from Youth Court notifications, she has over 60 convictions for dishonesty accumulated over a two-decade period. However, I do note that the most recent convictions were entered 16 years ago. Of particular concern are four 2003 convictions described as “theft with power at attorney”. When I asked Ms Flavell what these convictions related to she was unable to assist other than to claim that she had never held an EPOA before the present events. When questioned further about the offending, she was surprisingly vague about the circumstances around the convictions and was unable to tell me even whether the matters had gone to trial or she had pleaded guilty. For her offending she has received various penalties ranging from fines, periodic detection, suspended terms of imprisonment and home detention.
[99] Taking all these matters into account I agree with Judge Burns that Ms Flavell is not a fit or appropriate person to manage her brother’s property.
Result
[100]The appeal is dismissed.
Costs
[101] The respondent as the successful party would normally be entitled to an award of costs. I am uncertain what arrangements or agreements, if any, may be in place between the parties on this issue. I would invite the parties to confer with a view to filing a consent memorandum as to costs.
[102] In the event of disagreement I direct memoranda be filed and served, not exceeding three pages (exclusive of appendices) no later than 5:00 pm on Tuesday, 30 April 2019.
Moore J
Solicitors/Counsel:
Mr Cooke, Auckland Mr Askelund, Auckland
Copy to:
The Appellant
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