Gill v B & E Gill Trustee Limited

[2021] NZHC 2102

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2020-419-000322

[2021] NZHC 2102

UNDER

Trustee Act 1956

IN THE MATTER OF

An application pursuant to the Trustee Act 1956

BETWEEN

PETER WILLIAM GILL and SHERRYLE JENNIFER BENNETT

Plaintiffs

AND

B & E GILL TRUSTEE LIMITED

First Defendant

LINDA DIANNE POLLARD

Second Defendant

EDNA MARJORIE GILL

Third Defendant

Hearing:

4 August 2021

Counsel:

D M O’Neill and H J Mills for Plaintiffs

T Braun and L H Hunt for Second Defendant No appearance for Third Defendant

Judgment:

12 August 2021

JUDGMENT OF ASSOCIATE JUDGE P J ANDREW

This judgment was delivered by Associate Judge Andrew on 12 August 2021 at 4.00 pm

pursuant to r 11.5 of the High Court Rules Registrar / Deputy Registrar

Date……………………….

GILL v B & E GILL TRUSTEE LTD [2021] NZHC 2102 [12 August 2021]

Introduction

[1]    This is trust litigation. Edna Gill and her late husband, Brian Gill, have three children, Peter, Sherryle and Linda.1 The children are the beneficiaries of their parents’ respective family trusts: the Edna Gill Family Trust and the Brian Gill Family Trust. The trusts are a group of family-owned entities which are the subject of a wider familial dispute.

[2]    In these proceedings, Peter and Sherryle, the plaintiffs, challenge decisions taken by their sister, Linda, the second defendant, and their mother Edna, the third defendant, in relation to the administration of the trusts.

[3]    Edna is 94 years old and is recovering from a recent stroke. She is the settlor and appointer in the Edna Gill Family Trust and now the appointer in the Brian Gill Family Trust.

[4]    In the present interlocutory application, the plaintiffs seek an order pursuant to s 44 of the Senior Courts Act 2016 that Edna be medically examined by an independent medical practitioner. The plaintiffs say the medical examination is relevant to determining whether Edna had the requisite mental capacity to make changes to the various trusts, particularly changes of trustees made in or around June 2020.2 The plaintiffs allege the changes to trustees were part of a plan by Linda to transfer the trust assets to a trust set up for her own benefit and to the exclusion of her siblings.

[5]    Linda opposes the application on the grounds Edna’s current mental capacity is not an issue, and the scope of s 44 does not extend to an assessment of a past mental capacity.

[6]The critical issues I must determine are as follows:

(a)Is s 44 restricted to an assessment of a party’s current mental condition and therefore excludes an assessment of past mental capacity?

1      For ease of reference, I refer to the parties by their first names.

2      “The changes”.

(b)Is Edna’s mental condition relevant to a matter in these proceedings?

(c)Should I, as a matter of discretion, make the order under s 44?

Factual background

[7]    The trust properties were purchased by Brian Gill for the family business, William Gill Ltd, and were to be used by that company for future generations. Brian passed away in 2013 and Edna is the sole remaining appointer of the trusts.

[8]    The substantive proceedings relate to actions undertake by Edna in and prior to June 2020 when she transferred properties owned by the trusts to the first defendant, B & E Gill Trustee Ltd.

[9]    Edna suffered a serious stroke on 13 May 2021 and only recently returned from hospital to her home in a retirement village. Linda is her mother’s primary carer and her first point of contact. She is said to be in very poor health.

[10]   Edna Gill was served with the substantive proceedings prior to her stroke but has taken no steps to engage counsel or to defend the proceedings.

[11]   The active parties to the proceedings, namely the plaintiffs and second defendant, Linda, have provided discovery but this does not include any of Edna’s medical records.

Relevant legal principles

[12]Section 44 of the Senior Courts Act 2016 provides:

44       High Court may require person to undergo medical examination

(1)The High Court may order a party to a civil proceeding to undergo a medical examination by a registered medical practitioner at a time and place specified in the order if the court is satisfied, in the interests of justice, that the physical or mental condition of the person is relevant to a matter in the proceeding.

(2)The person to be examined may have a registered medical practitioner of the person’s own choice present at the examination.

(3)The court may order a party seeking the order to pay to the person to be examined a reasonable sum to meet –

(a)the person’s travelling and other expenses in connection with the examination; and

(b)the expenses of having a registered medical practitioner chosen by the person attend the examination.

(4)The person to be examined must do the things reasonably requested and answer the reasonable questions asked by the medical practitioner who conducts the examination.

(5)If the person to be examined fails, without reasonable excuse, to comply with the order or wilfully obstructs the medical examination, the High Court may –

(a)stay the proceeding; or

(b)strike out a notice, statement, or other document filed, or a step taken, in the proceeding by the person to be examined.

[13]   Section 44 is expressed in similar, but not identical terms, to its predecessor,  s 100 of the Judicature Act 1908. The provision was analysed by the Court of Appeal in W v S.3 The Court adopted the following principles:4

(a)Jurisdiction to make an order arises where the mental and physical condition of a person who is a party to a civil proceeding is relevant to a matter at issue in the proceedings.

(b)The ultimate purpose of the provision is to enable the Court to reach a just determination of cases where the physical and mental and condition of a party is relevant.

(c)The refusal of a party to submit to a medical examination when requested by the opposite party can give rise to a significant disadvantage to the latter. The section is designed to “rebalance the information deficit” where only one party holds direct evidence from a medical examination.

3      W v S [2012] NZCA 166.

4      W v S, above n 3, at [13]-[16] (citations omitted).

(d)Natural justice considerations may often support the making of an order to ensure each party has a proper opportunity to advance their case, and where it is more likely the court will be able to reach a fair and just conclusion based on all the evidence.

(e)Because a medical examination ordered by the Court against the will of the person to be examined involves a significant invasion of personal liberty, the court will not make an order unless the interests of justice require it.

(f)The purpose of an order will be highly relevant to determining whether an order for examination will serve the interests of justice in a particular case, as will any conditions which may ameliorate the impact of the examination upon the privacy, dignity or convenience of the person to be examined. An examination should be no more intrusive than is reasonably necessary to achieve its object.

Analysis and decision

Issue (a) – What is the scope of s 44?

[14]   Edna’s present mental capacity is not in issue. All parties accept that she currently lacks mental capacity.

[15]   The plaintiffs seek to have an independent expert geriatrician examine Edna to determine her likely mental condition in or around June 2020, when she made the impugned changes to the various trusts. There is evidence before the Court from the geriatrician that despite Edna’s recent stroke, he believes he will be able to assess her mental condition prior to the stroke with a view to assessing whether she had mental capacity at that earlier time.

[16]   I reject the submissions of Mr Braun, on behalf of Linda, that s 44 is restricted to an assessment of a party’s current mental condition. Plainly, neither the words of the section nor the statutory scheme supports that interpretation. Section 44 is expressed in wide terms and subject to the twin requirements of relevance and

“interests of justice”. As the Court of Appeal noted in W v S, the “ultimate purpose” of s 44 is “to enable to the court to reach a just determination” in the particular case.5 The inclusion of the wording the “interests of justice” in s 44, not previously in the equivalent s 100 of the Judicature Act, reinforces the breadth of the section.

[17]   While this is not a case described in W v S where the defendants have medical evidence of Edna’s mental capacity as it was in June 2020 and the plaintiffs do not, requiring the Court to “rebalance the information deficit”,6 the Court’s statement is apposite, that:7

Where the parties each have the opportunity to adduce expert evidence after a medical examination of the person whose physical or mental state is at issue, it is more likely that the court will be able to reach a fair and just conclusion based upon all the evidence.

[18]   In my view, the words of the section and these statements encompass evidence of a party’s past mental capacity at the point in time relevant to the litigation – particularly here where the examination is to determine whether the party had the same condition the parties accept afflicts them now. In a range of proceedings, the courts are commonly required to determine, usually with the assistance of medical evidence, a person’s physical or mental capacity at a particular point in time. Under s 44, any concern about additional intrusion on the examinee’s liberty in determining their past, as opposed to strictly present, mental condition can be addressed in the Court’s assessment of the interests of justice and whether to make the order sought, including whether to impose any ameliorating conditions. In addition, as noted in W v S, in granting an order for examination the Court is not determining the admissibility of the evidence which may be adduced as a result. The evidence will be subject to the admissibility thresholds in the Evidence Act 2006 and can be challenged on those bases.8

5      W v S, above n 3, at [14].

6      Wiffin v Attorney-General (2009) 19 PRNZ 307 (HC) at [17].

7      W v S, above n 3, at [15].

8      The Court noted, however, the “interests of justice” test requires some consideration of whether the proposed examination evidence would be substantially helpful.

Issue (b) – Is Edna’s mental condition relevant to an issue in the proceeding?

[19]   Mr Braun contended that the threshold requirement of relevance in s 44 has not been made out. Edna’s  present  mental  condition,  as  noted,  is  not  at  issue. Mr Braun argues that on the pleadings, which focus on Edna’s present capacity, an examination is not relevant to a matter in the proceedings.

[20]   There may be some merit to Mr Braun’s criticism of the wording of the amended statement of claim and, in particular, its use of the present tense when referring to Edna’s capacity. However, in my view, it is sufficiently clear from the third cause of action, directed at Edna, and the amended statement of claim as a whole, that the plaintiffs challenge Edna’s mental capacity to remove the former trustees in 2020 and to appoint in their place, the first defendant. Her mental capacity at that time is directly relevant to the issue of whether decisions in June 2020 in respect of trustees were valid.

[21]   Therefore, I find Edna’s mental condition as at 2020 is relevant to a matter in these proceedings.

Issue (c) – Should I make an order under s 44?

[22]   In addressing the broad test of “interests of justice”, it is important to have regard to:

(a)a party’s right not to be subjected to a medical assessment to which he or she has not given informed consent;9 and

(b)a party’s right to conduct litigation as they think fit, including the ability for their expert witness to obtain access to all relevant material necessary to reach an informed view on a relevant issue.10

[23]   There is, at present, a significant information deficit in this proceeding. None of the parties have had access to Edna’s medical records and do not know whether

9      Anderson & Ors v Hawke [2016] NZHC 607, (2016) 23 PRNZ 308 at [8].

10     W v S, above n 3, at [18].

there are any relevant medical records relating to her mental condition in 2020. While steps such as non-party discovery orders could be taken to possibly address this issue, there is considerable uncertainty. In addition, the plaintiffs are naturally concerned that given Edna’s advanced years and ill-health, there may be a limited window of opportunity for them to obtain the necessary information.

[24]   As to the interest of the plaintiffs, I find that this is a case where natural justice considerations support making an order under s 44 to ensure they have a proper opportunity to advance their case. The examination evidence may well provide clarification for the defendants and the Court, too. It is clear the issue of Edna’s capacity needs to be determined by an expert.

[25]   Edna’s present circumstances are obviously of great importance. Any order I make may interfere with her dignity and privacy and she is not in a position to give her informed consent. However, the plaintiffs propose that a very senior and experienced geriatrician carry out the examination, a professional who will obviously be aware of the need for sensitivity in the conduct of any examination.11 Any further concerns that any examination is to be no more intrusive than is reasonably necessary can be addressed by the terms of an order to be made directed at matters such as the place of examination and who might be present.

[26]   Balancing all these factors, I conclude it is in the interests of justice to make the order.

Result

[27]   I grant the plaintiffs’ application and make an order pursuant to s 44 of the Senior Courts Act 2016 that the third defendant, Edna Marjorie Gill, is to undergo a medical examination by Dr Shengyang Liao, to assess her current and past mental condition (as at around mid-2020).

[28]   The terms of my order will be finalised following receipt of a further memorandum from the parties proposing a date and time that the examination is to

11     Dr Shengyang Liao is a consultant geriatrician and general physician and the clinical director of the Older Person’s and Rehabilitation Service with the Waikato District Health Board.

take place. That memorandum should also address the issue of the mechanics for ensuring that Dr Liao may have access to any medical records held by Mrs Gill’s medical practitioner. The details of the practitioner need to be provided.

[29]The order is subject to the following conditions:

(a)The examination is to take place at the rest-home where Mrs Edna Gill currently resides;

(b)Mrs Edna Gill may have her medical practitioner present, with the costs to be borne by the plaintiffs;

(c)Mrs Edna Gill’s main carer from the rest-home may be present;

(d)No other person (including the parties) may be present;

(e)The period of the assessment will be for Dr Liao to determine, but following consultation with the rest-home;

(f)Dr Liao is to consult with the rest-home prior to the examination to ensure that he has up-to-date information as to Mrs Edna Gill’s physical and mental condition. Mr Liao will need to satisfy himself that before commencing the examination it is still appropriate to do so;

(g)Dr Liao is to file with the Court and to serve on the plaintiffs, within 10 working days from the date of his assessment, a medical report setting out his:

(i)clinical findings;

(ii)opinion as to the current mental condition of Edna Marjorie Gill and opinion as to the recent mental condition of Edna Marjorie Gill in 2020; and

(iii)if appropriate, a prognosis in respect of the mental condition of Edna Marjorie Gill.

[30]   As to costs, having succeeded, and in the context of an opposed application, I am of the preliminary view that the plaintiffs are entitled to costs from the second defendant, Linda Pollard. If costs cannot be agreed, then memoranda are to be filed and served within 14 days (no more than three pages each).

[31]   Finally, I note that the parties are agreed that they should give consideration to the appointment of a litigation guardian to represent Mrs Edna Gill. It may be prudent to await the outcome of the medical examination, but subject to Dr Liao’s findings, that is a matter that counsel should confer on.

Associate Judge P J Andrew