Grosser v Grosser
[2015] NZHC 974
•8 May 2015
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IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
CIV-2014-409-000613 [2015] NZHC 974
BETWEEN DARRELL EMMANUEL GROSSER Applicant AND
NORMAN WILLIAM GROSSER Person in respect of whom application is made
Hearing: 26 March 2015 Appearances:
I Mitchell for Applicant
AJF Wilding as Counsel to Assist the Court
Welfare Guardian in personJudgment:
8 May 2015
JUDGMENT OF DUNNINGHAM J
[1] The questions of law arising in these proceedings under the Protection of Personal and Property Rights Act 1988 (the Act) concern whether the proposed welfare guardian for the subject person is entitled to charge directly or indirectly (by claiming an expense incurred by her company) for services provided as a welfare guardian appointed under the Act.
[2] The context for the application is succinctly explained by Judge Murfitt. He says:1
[4] On a daily basis, Family Court Judges are invited to appoint welfare guardians for individuals who are incapacitated. Sometimes, but not always, the Court is invited to appoint also a property manager with powers over the assets owned by the subject person.
[5] Usually, a family member is identified to undertake the functions of a welfare guardian and property manager, and usually such a person does not
1 Grosser v Grosser FC Christchurch FAM-2013-009-002529, 27 August 2014 (case stated by
Family Court).
GROSSER v GROSSER [2015] NZHC 974 [8 May 2015]
expect, or seek remuneration for their services. Frequently a trustee company will conduct the role of property manager, and will charge for services rendered in that capacity.
[6] Some individuals who fall within the jurisdiction to require the appointment of a welfare guardian have no family member or close friend available to undertake the role of welfare guardian, and in some other cases there are reasons for the need for an independent person to undertake that role. Examples include where there is conflict within the family, or the subject person has paranoid fears regarding an exploitation of their situation by family.
[7] In Christchurch, Mary Fraser, who is a former social worker, has established herself in business operating as an independent property manager and welfare guardian available for appointment in suitable cases. She operates a company known as Care Consultants Limited. Mrs Fraser charges for services rendered at $132 per hour, but moderated depending on the means of the individual client (to the extent where some services are rendered for no fee).
[8] Sometimes, Mrs Fraser seeks to be remunerated for work undertaken by her personally as welfare guardian [for the subject person], or alternatively to charge as an “expense” for work undertaken by her company Care Consultants Limited delegated by her in her role as welfare guardian…
[9] [In t]he present case … Mrs Fraser was identified as a suitable candidate to act as both property manager and welfare guardian, but the issue of whether she may be paid for the work undertaken as welfare guardian is alive.
[3] Given diverging Family Court authority on this issue, the Family Court has stated a case for the opinion of the High Court under the Act. The questions asked are:2
(i) Do the provisions of s 21 Protection of Personal and Property Rights Act allowing “expenses reasonably incurred” by a welfare guardian permit the Court to approve remuneration for services rendered by a welfare guardian?
(ii) Do the provisions of s 21 permit a welfare guardian to claim as “expenses” welfare guardian services and services in support rendered or undertaken by a company or other entity over which the appointee has total or substantial control?
(iii) Do the provisions of s 10(4) Protection of Personal and Property Rights Act permit the Court to make an order in appropriate cases allowing a welfare guardian to be remunerated for welfare guardian services?
(iv) Do the provisions of s 10(4) permit a welfare guardian to claim as expenses welfare guardian services and services in support rendered
2 Grosser v Grosser, above n 1.
or undertaken by a company or entity over which the appointee has total or substantial control?
(v) May a property manager who is not appointed a welfare guardian provide welfare guardian services or pay for welfare guardian services or services in support undertaken by that property manager or by a company or other entity over which the property manager has total or substantial control?
(vi) If the answer to any of the above questions is in the affirmative, then what if any inquiries, limitations or protections are required or appropriate when expenses or remuneration are to be incurred and paid, and services are engaged?
[4] Section 21 of the Act authorises a welfare guardian to charge for all expenses reasonably incurred by him or her in the performance of that statutory role. Section 10(4) confers on the Court the power to make such orders as may be necessary or expedient to give effect or better effect to personal orders, which includes an order appointing a welfare guardian.
[5] It will be apparent that the focus of the questions is on:
(a) whether welfare guardians may charge remuneration, either directly or by use of an associated entity;
(b)whether a welfare guardian may provide welfare guardian services or services in support through an associated entity and claim the costs of doing so;
(c) whether property managers may provide welfare guardian services or pay for such services, or services in support, undertaken by the property manager or an associated entity;
(d) if so, what inquiries, limitations or protections are required.
The structure of Care Consultants Limited
[6] The questions arise in the context of an application to appoint Ms Mary Fraser, a trained social worker, as a welfare guardian where there is no suitable family member to take up that role.
[7] Ms Fraser provided affidavit evidence to the Court, and represented herself at the hearing, to explain the relationship between her appointment as a welfare guardian and the provision of “services in support” provided by her company, Care Consultants Limited. She explained that her company contracts a professional social worker and a qualified diversional therapist to provide professional support services, including to a subject person where Ms Fraser has been appointed as that person’s welfare guardian. Their services are provided at a contracted rate of $35
and $30 per hour plus expenses, respectively.3 She therefore engages “either
Care Consultants Ltd professional service or alternative and appropriate service
providers to support and contribute to the care and wellbeing of the subject person”.
[8] She explains that the professional and administrative services provided by Care Consultants Limited to her when she is appointed as a welfare guardian and property manager “includes, but is not limited to, secretarial/administration support; accounting support (including the services of a chartered accountant to reconcile my ledgers on a monthly basis and to assist me to maintain up to date accounting information), office space for meetings; office consumables; professional fees; a vehicle; telephone; social work support and diversional therapy services, wages, ACC levies, GST, PAYE and company taxes”. She states that Care Consultants Limited charge-out rate is $132 per hour, as is her professional hourly rate, “unless the Court directs otherwise”.
[9] It is not readily apparent, therefore, what is encompassed by the terms “welfare guardian services” and “services in support”. There also appears to be some overlap with the services provided by the company to the duties she undertakes when she is also appointed as a property manager for a subject person.4 It will therefore be necessary in the following discussion to identify and differentiate between expenses claimable under s 21, remuneration for services as a welfare
guardian, and the payment for providing consequential services or services in support (such as care and therapy to the subject person), which are determined to be
appropriate for the subject person by the welfare guardian. However, this can only
3 Although they also do some work on a voluntary basis.
4 The need for accounting support, for example, only seems relevant to her role as a property manager.
be done, after considering how the Act is drafted and how it defines the role of the welfare guardian.
An overview of the Act
[10] The Act came into force on 1 October 1988 replacing Part 7B(1)(i) of the
Mental Health Act 1969 and the Aged and Infirmed Persons Protection Act 1912.
[11] The Act had a lengthy gestation period and prior to the Bill being introduced there was much debate as to what was required. The Bill was also considered by the Justice and Law Reform Select Committee.5 The report of the Department of Justice to the Committee (clause by clause analysis) referred to the “expenses” of the welfare guardian in cl 21, but that commentary focused on whether monitoring of expenses claims was required to counter potential abuse, rather than giving any particular insight into what is captured by that word.6 No party directed me to any other commentary on the development of the Bill which expressly addressed the scope of a welfare guardian’s entitlement to payment.
[12] Turning to the Act itself, a purposive approach to the Act’s interpretation is mandated by the Interpretation Act 1999. It requires that the meaning of an enactment must be ascertained from its text and in light of its purpose.7
[13] The Long Title of the Act is “An Act to provide for the protection and promotion of the personal and property rights of persons who are not fully able to manage their own affairs”. That statement effectively captures the purpose of the Act, which is squarely on the “protection and promotion” of the rights of the subject person.
[14] Section 8 of pt 1 and s 28 of pt 3 of the Act set out the “primary objectives of a court” in “the exercise of its jurisdiction under” each respective Part, which is, of course, the jurisdiction to determine applications for personal orders and for the
appointment of property managers respectively. There are two aspects:
5 Protection of Personal and Property Rights Bill 1986 (select committee report).
6 Department of Justice Protection of Personal and Property Rights Bill: Report of the
Department of Justice (22 May 1987) at 19.
7 Interpretation Act 1999, s 5(1).
(a) to make the least restrictive intervention possible into the life of the subject person with the management of the affairs of that person; and
(b)enabling or encouraging the subject person to exercise and develop his or her capacity, or such competence as he or she has to manage his affairs in relation to property, to the greatest extent possible.
[15] That those statements of purpose should govern the interpretation of the Act was emphasised by the full Court of the High Court when Ellis and Doogue JJ stated:8
What is transparently clear about the provisions of the Act which we have traversed is that the legislature has seen fit to make provision for the welfare and best interests of certain disadvantaged members of the community to be addressed in a particular fashion. The part of the Act we are concerned with is all about the welfare and best interests of such people. The Act makes clear, in s 8 and elsewhere, that the Family Court, which is responsible for the application and administration of the Act, shall have as a primary objective the least restrictive intervention possible in the life of the person in respect of whom the application is made and enable or encourage that person to exercise and develop his or her capabilities to the greatest extent possible.
… We cannot imagine for one moment that the legislature, particularly in legislation of this kind, which was clearly of a remedial nature, expected the
Family Court in the exercise of its jurisdiction to adopt a narrow, legalistic approach to the provisions of the Act. The legislature would have expected
the purpose and intention of the legislation to be given effect to without recourse to an over-refined consideration of why the legislature may have thought it wise to use the words “welfare and best interests” in one place butnot in another. It is quite apparent that the Act is concerned with the welfare and best interests of the persons in respect of whom applications are brought
to the Family Court.
[16] In discerning the purpose, matters that may also be taken into account include the indications in the enactment.9 The Act is comprised of 10 distinct parts. Significantly, it contains separate regimes for personal care and welfare on the one hand and for management of property on the other.
[17] Part 1 deals with personal rights and the making, under ss 10 to 12, of a range of orders known as personal orders. They include the following:
(a) An order under s 10(1)(k) and s 12 appointing a welfare guardian;
8 Re A, B and C (Personal Protection) [1996] 2 NZLR 354 at 365-366.
9 Interpretation Act 1999, s 5(2).
(b)An order under s 10(4) allowing the making of such other orders and directions “as may be necessary or expedient to give effect, or better effect, to the personal order”;
(c) An order under s 11 appointing a person to administer property and income of modest value. Such an order imports certain protections which apply to orders appointing property managers.
[18] Part 2 sets out the powers and obligations of welfare guardians. Section 21, which provides for the recovery of expenses by welfare guardians, is contained within that part.
[19] Part 3 deals with the appointment of property managers and pts 4 and 5 set out their powers and obligations. Section 50, which falls within pt 5, includes provision for property managers to recover expenses and charge remuneration. Its wording contrasts with that in s 21 applying to welfare guardians. The remaining parts of the Act are of little direct relevance to this proceeding.
[20] As will become apparent, the separation the Act provides between the role of the welfare guardian and the role of the property manager, and the deliberate differences in the wording of these powers, rights and obligations, are relevant to the questions raised in the case stated.
The role of a welfare guardian
[21] The scope of a welfare guardian’s role bears on the extent of the duties and, therefore, on the services for which expenses and remuneration (if allowed) might be charged. Section 12(1) of the Act authorises the appointment of a welfare guardian “in relation to such aspect or aspects of the personal care and welfare of that person as the Court specifies in the order”.
[22] It is clear that a welfare guardian is taking on a decision making role. Before appointment of a welfare guardian can be considered, the Court must be satisfied, under s 12(2):
(a) that the person in respect of whom the application is made wholly lacks the capacity to make or to communicate decisions relating to any particular aspect or particular aspects of the personal care and welfare of that person; and
(b)that the appointment of a welfare guardian is the only satisfactory way to ensure that appropriate decisions are made relating to that particular aspect or those particular aspects of the personal care and welfare of that person.
Only if those strict pre-requisites are established can a welfare guardian be appointed.
[23] The scope of the welfare guardian’s role is then set out in s 18(2) as follows:
18 Powers and duties of welfare guardian
…
(2) Subject to subsection (1), a welfare guardian shall have all such powers as may be reasonably required to enable the welfare guardian to make and implement decisions for the person for whom the welfare guardian is acting in respect of each aspect specified by the court in the order by which the appointment of the welfare guardian is made.
[24] Pursuant to s 18(3), the “first and paramount” consideration of a welfare guardian is the “promotion and protection of the welfare and best interests” of the subject person. That requirement is supplemented by other considerations including:
(a) to the extent possible, to encourage the subject person to develop and exercise such capacity as that person has to participate in making such decisions;10
(b) to encourage the subject person to act on his or her own behalf;11
10 Section 18(3).
11 Section 18(4)(a).
(c) to facilitate the integration of the subject person into the community to the greatest extent possible;12
(d)to consult with the subject person and other persons with an interest in the welfare of the subject person, including representatives of groups engaged “otherwise than for commercial gain” in the provision of services and facilities for the welfare of such persons,13 and
(e) to consult with the property manager where one is appointed.14
[25] As Mr Wilding submitted, the scope of the powers given to a welfare guardian in s 18(2), being “all such powers as may be reasonably required to enable the welfare guardian to make and implement decisions”, are not expressly limited. However, they are constrained by:
(a) the purpose and scheme of the Act;
u
payment the Act intended a welfare guardian to receive, was the extent to which the
(b)
(c)
the objective of making the least restrictive intervention;
the need to encourage the subject person to act on his or her own
behalf; (d)
the need for the powers to be “reasonably required”;
(e)
the requirement that the powers “enable” decision-making and implementation.
[26]
A f
rther matter identified by Mr Wilding which might have a bearing on the
welfare guardian’s role included the implementation of decisions.
[27] The term “implement” commonly means to put a decision, plan or agreement
into effect. It can encompass simply ensuring arrangements are made for a decision
12 Section 18(4)(b).
13 Section 18(4)(c).
14 Section 18(5).
to be carried out through to actually undertaking the agreed course of action. Thus, to use the simple example discussed in the hearing, a welfare guardian may make a decision that the subject person should be taken on an outing once per week and then arrange for someone to do that, or the welfare guardian can make the same decision and then, still in the welfare guardian capacity, take the subject person on such outings. Either could be said to be “implementing” the decision, but clearly the different approaches will have different consequences for the costs a welfare guardian may incur in undertaking his or her role.
[28] Mr Wilding advocated for a more limited interpretation of the power to “implement” decisions, saying that such an interpretation aligned more closely with the objectives served by appointing a welfare guardian. It was the lack of decision-making and communicating capacity that was being protected against by making the least restrictive intervention possible and that suggested a confined role for the welfare guardian.
[29] He also pointed to the distinction between decision-making and the provision of services to the subject person found in other provisions in the Act as supporting a narrow role for the welfare guardian. For example, s 18(4) imposes an obligation on the welfare guardian to consult with non-commercial entities involved in “the provision of services and facilities for the welfare of persons in respect of whom the Court has jurisdiction” and s 7(e) and s 26(b) gives such entities a right to make application to the Court for exercise of the Court’s discretion. This suggests the provision of consequential services and facilities is not intended to be part of the role of a welfare guardian, but rather it is to be provided as a consequence of decisions by the welfare guardian.
[30] Section 21, which enables the expenses of a welfare guardian to be charged, also appears to favour a more confined role. The expenses usually fall on the subject person, but s 21(2) allows the Court to order that expenses be met from public funds. A broad approach to the welfare guardian’s role would allow a welfare guardian to provide a potentially vast range of services at the public’s expense, including education, day care, surgery and psychiatric treatment in a relatively unfettered way,
whereas the entitlement to, and funding for, such services are tightly controlled in other contexts.15
[31] For these reasons it was submitted, and I accept, that a welfare guardian’s role is intended to be confined, and the provision of consequential services to the subject person which are required as a consequence of welfare guardian’s decisions, is not within the scope of a welfare guardian’s role. Instead, the welfare guardian is to consider what decisions need to be made for the subject person. Having made those decisions, the next step is to decide who is best to provide the subject person with any services, facilities, equipment or products required as a result of those decisions. Payment for those consequential services will be made by those given powers to deal with property, who can provide a level of scrutiny as to the quantum and appropriateness of those costs.
[32] Having reached the view that a welfare guardian’s role is not intended to extend to the provision of consequential services to the subject person, I now turn to issues which might arise when a welfare guardian, in a different capacity, directly or indirectly offers to provide consequential services or facilities.16 The main concern is, of course, that a conflict of interest may arise, especially where a financial benefit may result to the welfare guardian.
[33] Section 12(4) prohibits a body corporate from being a welfare guardian, and s 12(6) provides that only one welfare guardian may be appointed except in exceptional circumstances. This reflects an intention that the type of decisions that welfare guardians may make are best left to individuals who have, or can develop, a personal relationship with the subject person. As the Rt Hon Geoffrey Palmer stated when introducing the second reading of the Bill, “that kind of relationship is best
developed on a one to one basis”.17
15 For example, by the Ministry of Education, Ministry of Health, District Health Boards and
Pharmac.
16 Including through an associated person or entity.
17 (18 February 1988) 486 NZPD 2120-2121.
[34] Section 12(5) requires that a welfare guardian be capable of carrying out his or her duties in a satisfactory manner,18 will act in the best interests of the subject person,19 and, critically, requires the Court to be satisfied there is “unlikely to be any conflict between the interests of the proposed appointee and those of the person in respect of whom the application is made”.20 That requirement is important as any circumstances which make it likely there would be a conflict of interest would preclude the appointment.
[35] Conflicts may arise in a number of ways where a welfare guardian supplies paid services either directly or indirectly. First, if a welfare guardian is entitled to undertake the role for remuneration, the costs they incur erode the financial resources of the subject person who is often someone of limited means. More importantly though, if the welfare guardian was offering consequential services for gain, he or she may be in the position of choosing between whether to implement a decision by providing consequential services for a benefit (whether directly or indirectly through an entity they control), or choosing an unrelated provider for no benefit.
[36] Although parallels may be drawn with property managers who can charge remuneration, there are some important distinctions:
(a) Parts 4 and 5 of the Act contain a range of provisions governing property managers to help reduce the risk of abuse and provide scrutiny. These provisions are largely absent in the case of welfare guardians;
(b)The requirement in s 12(5)(c) that a welfare guardian be unlikely to have “any conflict” is more rigorous than the requirement in s 31(6) in relation to property managers where the Court must simply “take into
account any likely conflict”;
18 Section 12(5)(a).
19 Section 12(5)(b).
20 Section 12 (5)(c).
(c) Section 31(1) allows the appointment of one or more property managers and they hold that responsibility jointly, in contrast to the personal appointment of a welfare guardian.
[37] In summary then, the Act envisages a limited role for welfare guardians. Their ability to “implement” decisions is not intended to include provision of consequential services, but simply to ensure that necessary consequential services are being provided. They are also required to act in a personal capacity, for the best interests of the subject person and in circumstances where there is no potential for conflict.
[38] Those conclusions form the context in which I now turn to the discussion of the charging provisions.
The charging provisions
[39] The case stated refers to two possible charging provisions within the Act, ss 21 and 10(4) of the Act.
[40] Section 21(1) provides:
21 Welfare guardian's expenses
(1) Subject to any order of a Court made under subsection (2), all expenses reasonably incurred by a welfare guardian in the exercise of the powers and duties conferred by or under this Act shall be charged against, and payable out of, the property of the person for whom the welfare guardian is acting.
[41] Section 10(4) of the Act allows for the making of ancillary orders to personal orders including to appoint a welfare guardian but does not expressly authorise charging. The power it confers is to make such orders as are necessary or expedient “to give effect, or better effect, to the personal order”.
[42] On the one hand, it is clearly a broad power and should not be interpreted restrictively without good reason. However, on the other hand, given the clear and coherent structure of the Act, s 10(4) is unlikely to empower the Court to permit a welfare guardian to receive remuneration when s 21 of the Act expressly allows
welfare guardians to recover expenses, but does not refer to remuneration, and where there is a clear distinction drawn throughout the Act between the ability to recover expenses and to receive remuneration.
[43] The distinction between recovering expenses and charging remuneration is found in several of the Act’s provisions. For example, s 11, which provides for orders to administer property and income of modest value, limits such managers to recover their expenses only, but not, as a full property manager would, to charge remuneration.
[44] Section 21 which authorises welfare guardians to recover expenses, reflects the language in corresponding provisions for property managers which cover the Public Trust,21 the Maori Trustee22 and non trustee property managers, and which distinguish expenses from remuneration.
[45] In those contexts remuneration is either authorised by the Court, or must be charged in accordance with a scale of charges, or in accordance with relevant regulations. For example, in s 40, where the Public Trust is appointed as the property manager, s 40(2) provides:
All expenses incurred by Public Trust as manager, whether alone or together with any other person or persons, in respect of the maintenance of any person subject to a property order or in the management of the property of any such person, or in the exercise of the powers, authorities, and discretions conferred on Public Trust in respect of that property, shall be charged against and payable out of that person’s property; and, in addition, there shall be payable in respect of that property remuneration and amounts in accordance with Public Trust’s scale of charges.
[46] In s 41 there is a similar provision which applies when one of the managers is the Maori Trustee, allowing, in addition to expenses, payment of “the commissions and other charges from time to time prescribed by regulations made under section 48
of the Maori Trustee Act 1953”.
21 Sections 37 and 40.
22 Section 41.
[47] Section 50 expressly authorises the payment of both expenses and remuneration to property managers, but they are to be paid out of the property of the person for whom the manager is acting, and not from a Crown account.
[48] Section 46 of the Act provides for the Public Trust to scrutinise the accounts of property managers and to charge for both remuneration and expenses of the Public Trust for that role.
[49] Section 65(5) of the Act allows for lawyers appointed for the subject person to be remunerated and, again, makes a distinction between recovery of fees for professional services and recovery of reasonable expenses incurred. Similarly, s 76, which authorises the Court to obtain a medical, psychiatric, psychological or other report on the subject person, provides for the payment of both the fees for the report and for the reasonable expenses incurred.
[50] In summary, the Act clearly and repeatedly distinguishes between expenses on the one hand and fees or remuneration for professional services on the other. There can be no real doubt, therefore, that s 21 was intended to preclude remuneration being paid to a welfare guardian for undertaking that role.
[51] In light of that express provision and the overall scheme of the Act, I do not consider that s 10(4) can be interpreted to override the legislative intention that welfare guardians can recover expenses only.
[52] Section 10(4) may, however, allow for payment of consequential services which the welfare guardian has determined are required by the subject person. Those services could be provided by the welfare guardian acting in a different capacity, or by an associated entity, but only where the Court can be satisfied that the provisions of s 12 and 18(3) can be met.
The role of the property manager
[53] Property managers are appointed under s 31 of the Act. When a property manager is appointed, the Court must, under s 29(3):
… determine which of the rights and powers specified in clause 1 of Schedule 1 the manager is to have in respect of that property, what other rights and powers (if any) the manager is to have in respect of that property, and what restrictions (if any) are to be imposed on the exercise of any such rights and powers.
[54] Clause 1 of sch 1 contains a detailed range of possible powers and it is the function of the Court, when making an appointment, to be selective in the choice of the powers to be given to a property manager, so that the objective of s 28(a) which is “to make the least restrictive intervention possible in the management of the affairs of the person … having regard to the degree of that person’s lack of competence”, is achieved.
[55] One of the powers in cl 1, sch 1 is the ability to:
(b) apply and expend … any money belonging to the person subject to the property order … for any 1 or more of the following purposes:
…
(v) in or towards the payment of any debt, obligation, or liability of the person, or incurred by the manager in the exercise of the powers vested in the manager by this or any other enactment or by any order of the Court or by law.
[56] Neither s 38, which refers to the powers of a manager, nor cl 1 of sch 1, envisage the property manager making personal care and welfare decisions, nor providing services directed at personal care and welfare. They are confined to property.
[57] This is unsurprising given the scheme of the Act, which separates care and welfare decisions from the power to deal with property. It also makes sense to have a division between the roles of welfare guardian and property manager. It enables separate people to fulfil each role, particularly where each role may require a different skill set, and helps avoid or minimise the potential for conflict.
[58] Furthermore, the Act contains several provisions to ensure that the division of roles is not problematic. Section 42 requires that a property manager’s powers are subject to the terms of any personal order.
[59] Section 11 requires the property matters to be considered when a personal order is being made and allows the making of an order to administer modest amounts of property.23
[60] There are also, importantly, requirements under s 18(5), and 43(6), on welfare guardians and property managers to consult with each other to ensure that the interests of the subject person “are not prejudiced through any breakdown in communication between the welfare guardian and the manager”.
[61] In the circumstances, I am satisfied that it was not intended that a property manager would provide welfare guardian services, directly or indirectly. They are quite distinct roles, and even if one person is appointed in both capacities, they should recognise and observe the demarcation between the two.
Protections when dealing with property
[62] The Act contains a range of protections when property is dealt with. They apply to property managers and, importantly, also to persons who are authorised to administer modest amounts of property under s 11, by virtue of the provisions of
s 11(5) of the Act.
[63]
proper
Som
ty ma
(a)
e of the Act’s provisions which specify relevant protections when a
nager is appointed are as follows:
Under s 31(3), a person under 20 and a body corporate, save for a
trustee corporation, are precluded from being a property manager; (b)
Under s 31(4), when the subject person is a patient or resident of a
hospital, home or other institution, the superintendent, licensee,
supervisor or other person in charge cannot be appointed as a property
manager. This is clearly intended to prevent the person controlling
23 Not exceeding $5,000 in value in respect of any one item, or any income or benefit in excess of
$20,000 per annum, or, under s 64, to join applications under parts 1 and 3 of the Act, so those matters may be heard together in respect of a particular subject person.
the assets of the subject person from being someone who may benefit
commercially from that person’s decisions as property manager.
(c) Under s 31(5) and (6), when considering appointment, the Courts must take into account any likely conflict between the interest of the proposed appointee and those of the subject person.
(d) Under s 37, the Court may order a manager to provide security for the
performance of the manager’s duties.
(e) Under ss 40 and 41, where the Public Trust or the Maori Trustee is appointed property manager, then remuneration for those services can only be recovered in accordance with a pre-determined scale of charges.
(f) Under s 45(2), a property manager must prepare a statement and file it in Court at the commencement of the role and thereafter on an annual basis in a prescribed form which requires provision of specified information including “full and detailed accounts for the year,
showing the receipts and payments for the year”.24 There are
penalties for omitting to file such statements or for filing false statements.
(g)Under s 46, where the property manager is not a trustee corporation, then the statement is reviewed by the Public Trust or a chartered accountant, who in turn files their report with the Court.
(h)Under s 52, a property manager’s appointment ceases on a range of specified events, including where the appointee is adjudicated bankrupt, or becomes incapable of acting themselves.
[64] In summary, there is a broad range of provisions governing the appointment,
oversight and termination of a property manager’s role which are not replicated in
24 Protection of Personal and Property Rights Regulations 1988, reg 4(2)(c).
relation to the appointment of welfare guardians. As Mr Wilding pointed out, if welfare guardians were able to recover remuneration and to effect payment of expenses and remuneration to themselves, they could do so in a relatively unfettered way, whereas property managers, who are granted express power to do so, are subject to strict regulation and oversight. This tells against a welfare guardian incurring fees, either themselves or through an associated entity, because there are simply not the same level of protections in respect of incurring that expenditure as there are when a property manager does so.
Is there a lacuna in the Act?
[65] In the course of the hearing I was referred to a number of Family Court decisions where the question of payment for welfare guardian services and for consequential services was considered. In some cases, the Court took an expansive view of what constituted “expenses reasonably incurred” in the context of s 21 to allow payment to a professional welfare guardian for their services where no suitable alternative appointee was available. In those cases, it is suggested that a strict adherence approach to the division between the regime for compensating property managers could create problems where there is no suitable volunteer to act as welfare guardian. For example, in Fraser v H, Judge Strettell authorised the professional welfare guardian to render accounts up to $1,500 per annum, pursuant
to s 10(4) saying:25
[6] The difficulty is that in these cases in which, as here, a professional social worker is prepared to do the work and there is no alternative to it, to not allow some degree of remuneration is to place the individual at a considerable disadvantage and in the long run does not reflect the person’s best interest.
[66] It is clear from the earlier discussion that I am satisfied that the lack of provision for welfare guardians to charge remuneration was a matter of parliamentary choice not oversight. However, in the context of the case stated, I heard there was insufficient evidence to determine whether that approach means
there is an unmet need because some subject persons would have no suitable person
25 Fraser v H [2013] NZFC 10265.
who could be their welfare guardian, unless that was met by a professional appointment who would need to be paid for their services.
[67] However, the cases I was referred to did not suggest there was a large number of cases where a suitable appointee could not be found if a paid professional was not appointed. Furthermore, Ms Fraser’s own submissions to the Court emphasised that she simply sought clarity as to the correct legal position in light of the conflicting Family Court decisions relating to her ability to charge for her time spent on her duties as a welfare guardian. She did not insist that it was imperative that she was able to be remunerated for such services, especially as, even now, she did not charge for such services where the person could not afford to pay.
[68] That said, there are people who lack capacity to look after their own care and welfare, and who do not have a suitable family member to fulfil the role of welfare guardian. That was identified as an issue in the affidavit of Mr Gregory Brogden, a solicitor employed by the Canterbury District Health Board. However, an alternative way of meeting this need has been devised in the Dunedin region where, Mr Geoffrey Mirken, a solicitor, has been involved in the establishment of the Otago Welfare Guardianship Trust. This trust has recruited and trained suitable volunteers, including social workers, lawyers, and other suitably qualified persons, to become welfare guardians and it also provides structure and support for volunteers who act as welfare guardians. The trust is also assisting groups in Invercargill, Christchurch, Wellington/Lower Hutt and Palmerston North with establishing similar trusts in those regions. He explains that these people undertake those services without charge, although, of course, they can seek reimbursement for actual
out-of-pocket expenses such as travel.26
[69] This certainly seems an appropriate alternative to fulfilling the welfare guardian role for a subject person, without creating the risk of conflict or complications as to how payment of remuneration should be controlled and
supervised, and without offending the language of the Act.
26 Although he says none in fact have actually done this.
[70] In summary therefore, I am not satisfied that there is a significant unmet need, which the Act does not, in its current form, provide for. There have been only a small number of cases which have come before the Family Court where this issue has had to be considered. It also appears that there are other mechanisms, such as the establishment of welfare guardianship trusts, which can fulfil the need for welfare guardians where an immediate family member is not available, without the requirement to look for scope in the Act to remunerate professional people to undertake those services.
[71] Even more importantly, given my view that the Act reflects a clear parliamentary choice to preclude remuneration for the role of welfare guardian then, even if there were a lacuna, I consider it would be for Parliament to determine how that lacuna was to be met, including making provision for controls and protections on how such remuneration was to be quantified and regulated.
Response to the questions for determination
[72] In light of the discussion above, I now turn to the questions on which the
Family Court has sought the opinion of the High Court.
Do the provisions of s 21 Protection of Personal and Property Rights Act allowing “expenses reasonably incurred” by a welfare guardian permit the Court to approve remuneration for services by a welfare guardian?
[73] No. The Act makes a clear distinction between expenses on the one hand and remuneration and professional fees on the other, and it would be inconsistent with that distinction to interpret “expenses” as also covering remuneration.
Do the provisions of s 21 permit a welfare guardian to claim as “expenses” welfare guardian services and services in support rendered or undertaken by a company or any other entity over which the appointee has total or substantial control?
[74] Whether a welfare guardian can claim such services as expenses depends on the nature of those services. Where those services involve out of pocket expenses that are reasonably incurred by the welfare guardian in the performance of his or her duty (for example, toll calls or photocopying) then they are genuine expenses and can legitimately be recovered under s 21. However, a welfare guardian may not
claim as expenses, payment for welfare guardian services, in the sense of decision making services, which are undertaken by a company or other entity over which the appointee has total or substantial control. To devolve those services to another entity would be inconsistent with the requirement that welfare guardians be individuals who meet the requirements of s 12(5).27
[75] Where the services are services in support in the sense of consequential services (for example physiotherapy, healthcare, educational assistance and the like), then the costs of those are not expenses of the welfare guardian which can be claimed under s 21. Instead, they are obligations incurred by the subject person, which either the property manager would meet pursuant to that person’s powers, or, alternatively, could be met by someone with property administration powers under s 11, or if authority to make such payments to the providing entity is given to the welfare guardian under s 10(4).
[76] Where it is envisaged that a welfare guardian may use a company or other entity over which that person has total or substantial control to provide consequential services, the potential for conflict would need to be declared at the time the application was made for appointment so that the risk could be assessed as required by s 12 of the Act. There would almost certainly need to be ongoing controls put in place to ensure some independent check on the appropriateness of the decisions made, and the level of expenses incurred, where the welfare guardian uses an associated entity to provide consequential services to the subject person for payment.
Do the provisions of s 10(4) Protection of Personal and Property Rights Act permit the Court to make an order in appropriate cases allowing a welfare guardian to be remunerated for welfare guardian services?
[77] No. This follows on from the finding that this would be inconsistent with the express provision as to remuneration found in s 21, and the overall scheme of the Act which only allows for remuneration of property managers and, even then, with a
number of protections to ensure limits on the remuneration allowed.
27 And would offend the prohibition against the appointment of body corporates contained in s 12(4).
Do the provisions of s 10(4) permit a welfare guardian to claim as expenses welfare guardian services and services in support rendered or undertaken by a company or entity over which the appointee has total or substantial control?
[78] Just as the answer to the third question follows on from the answer to question one, so the answer to this question follows on from the answer to question two.
[79] In summary, payments that effectively amount to remuneration are not permitted under s 10(4). The actual expenses of a welfare guardian are provided for solely under s 21. Where the “services in support” are, in reality, consequential services to implement the decisions of the welfare guardian, then there could be express provision for payment of these under s 10(4), but again, the potential for conflict in all relevant circumstances would need to be declared at the time of the application for the appointment so that the Court could make a proper assessment of the risks as required by s 12 of the Act.
May a property manager who is not appointed a welfare guardian provide welfare guardian services or pay for welfare guardian services or services in support undertaken by that property manager or by a company or other entity over which the property manager has total or substantial control?
[80] In respect of the first part of this question, the answer is no, a property manager may not undertake the role of a welfare guardian. It is inconsistent with the scheme of the Act, which clearly distinguishes between these roles, and it is not within the possible powers that can be given to a property manager as prescribed in cl 1 of sch 1.
[81] However, a property manager may pay for the expenses of a welfare guardian and for services in support, insofar as the property manager is satisfied they are properly authorised.
If the answer to any of the above questions is in the affirmative then what, if any enquiries, limitations or protections are required or appropriate when expenses or remuneration are to be incurred and paid and services engaged?
[82] In summary, I have found that a welfare guardian is not entitled to remuneration for that role. They are, however, entitled to claim expenses and it is also possible that, through a company or other associated entity, they could:
(a) provide services which the welfare guardian can claim as expenses
(such as photocopying); or
(b)provide consequential services to the subject person (such as social services, healthcare or education), which the subject person, or a property manager or other person with power over their property can pay for.
[83] In those latter circumstances, there is a clear need to ensure that s 12 is complied with, and that s 18 will not be breached. There would need to be effective oversight of the liabilities that may be incurred and paid for, and that may mean that some of the protective mechanisms in pts 3 and 4 of the Act are imposed on such expenditure.
[84] Where a welfare guardian does anticipate providing services in support or consequential services to the subject person via a company or associated entity, then, in considering what limitations or protections are required if that arrangement is to proceed, the Court should be considering:
(a) the means of the subject person to meet such costs;
(b)whether to define or restrict the range and type of services to be provided;
(c) the need to ensure adequate remuneration for services rendered, but
“without any element of super profit”;28
28 As noted by Judge Murfitt in M v W [2013] NZFC 3907.
(d)the need to ensure that the rate and overall quantum of any such remuneration reflects the fact that they are to be met by the subject person, or else met from the consolidated fund;
(e) the need to consider whether those services are more efficiently or effectively provided by other providers than by the proposed related entity;
(f) the need to consider how compliance with any restrictions is to be checked, whether by oversight of a property manager, or by the Court;
(g)whether there needs to be more frequent review of such arrangements than simply on the expiry of the order of appointment.
[85] Such a list should not, of course, be treated as exhaustive, but serves to identify the range of enquiries which might need to be addressed to ensure the welfare and best interests of the subject person are promoted and that there is unlikely to be any conflict between the interests of the welfare guardian and the subject person.
Solicitors:
Cunningham Taylor, Christchurch
Malley & Co., Christchurch
AJF Wilding, Christchurch
Copy to: Mary Fraser, Welfare Guardian
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