Malcolm v John aka De Faria
[2022] NZHC 388
•8 March 2022
IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY
I TE KŌTI MATUA O AOTEAROA NGĀMOTU ROHE
CIV-2020-443-55
[2022] NZHC 388
UNDER the Trustee Act 1956 IN THE MATTER
of an application pursuant to section 51 of the Trustee Act 1956
BETWEEN
MAREE PATRICIA MALCOLM
Plaintiff
AND
CRAIG LESTER JOHN (also known as CRAIG DE FARIA)
Defendant
Hearing: On the papers Appearances:
S W Hughes QC for the Plaintiff A F Johnston for the Defendant
C A Gelston for the Subject Person
Judgment:
8 March 2022
JUDGMENT (NO 2) OF COOKE J
[Final Orders]
[1] By judgment dated 10 December 2021 I addressed two applications: an application by the plaintiff under the Trustee Act 1956 for orders removing the defendant as trustee of their father’s estate, and secondly an application by the plaintiff under the Protection of Personal and Property Rights Act 1988 (the PPPR Act) seeking review of the defendant’s appointment as the attorney for their mother, with an independent person appointed in his place.1 The second application was transferred by the Family Court to this Court under s 14 of the Family Court Act 1980.
1 Malcolm v John [2021] NZHC 406.
MALCOLM v JOHN [2022] NZHC 388 [8 March 2022]
[2] In the interim judgment I reached a series of conclusions and made a series of initial orders. First I concluded that Mrs John had capacity to appoint the defendant and Mr Howard John as her attorneys/substitute attorney under the PPPR Act at the time of those appointments.2 Secondly I accepted that the defendant should be removed as Mr John’s attorney under s 105 of the PPPR Act, and as a trustee of the estate under s 51 of the Trustee Act 1956, as he had misconducted himself in his role as attorney and trustee.3
[3] I then indicated that I wished to hear further from the parties as to who should fulfil the replacement roles. When doing so I rejected Ms Hughes QC’s argument that I did not have jurisdiction to replace the plaintiff as well as the defendant as trustee of their father’s estate as the ultimate objective was to ensure that trusts were properly administered, and it was now appropriate to have a single independent trustee to fulfil this role given the history of family disagreement.4
The parties further submission
[4] I was hopeful that counsel for the parties might have been able to guide the agreed position on the remaining issues, but that has not proved to be the case. I will address each of the relevant roles in turn. In doing so I have regard to the PPPR Act objectives, the best interests of Mrs John, and the best interests of the beneficiaries of Mr John’s estate.
Property Manager and Trustee
[5] Counsel appointed for Mrs John, Ms Gelston has suggested that an accountant with whom she has previously worked, Mr Anthony Vincent be appointed property manager under s 31 of the PPPR Act and replacement trustee of Mr John’s estate under s 51 of the Trustee Act. He is independent of the parties.
[6] The plaintiff suggested that Mr Grant Hassall, a local accountant be appointed. That was initially agreed to by the defendant. Ms Gelston was concerned about this suggestion, given that Mr Hassall had an association with the plaintiff. Counsel for
2 At [25]–[42].
3 At [43]–[64].
4 At [65]–[76].
the defendant also then advised that the defendant recognised the desirability of minimising further family conflict and for that reason he would accept Mr Vincent.
[7] For the reasons set out by Ms Gelston I accept that Mr Vincent is a more appropriate appointment, and he is duly appointed Mrs John’s property manager under s 31 of the PPPR Act over all of Mrs John’s property. As I note in [11] below, this appointment does not technically replace Mr Howard John as attorney under the power of attorney, but Mr Vincent’s appointment is made on the basis that it gives him overriding authority to make all the relevant decisions. Given that Mr Howard John lives in Australia I doubt whether he can perform this role effectively in any event. It may well be appropriate for him to relinquish the power of attorney, but I make no order to that effect at this stage.
[8] I also appoint Mr Vincent as the placement trustee of the estate of Mr John in substitution for the plaintiff and defendant under s 51 of the Trustee Act for the same reasons.
Welfare guardian
[9] Ms Gelston has suggested that Mr Michael Thorne, Mrs John’s nephew take on the position of welfare guardian. Mr Thorne’s mother also suffers from dementia and he is her welfare guardian. He is accordingly familiar with the requirements of the role. He is a former detective based in New Plymouth and I am advised he is respected in the community. I am also advised that he is aware of the conflict within the family. Ms Gelston has spoken to him and advised that he would not have any issue with managing the conflict in the family. The plaintiff supports his appointment as welfare guardian.
[10] The defendant is strongly of the view that Mr Howard John should remain Mrs John’s attorney. There may be a misunderstanding in the stance taken by the defendant. As counsel submitted the Court has no jurisdiction to remove Mr Howard John as attorney. But it does have jurisdiction to appoint a guardian for personal welfare under s 12 of the PPPR Act notwithstanding the existence of such an attorney. Section 100 of the PPPR Act provides:
100Enduring powers of attorney subject to personal order and property order
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.
[11] Again for the reasons traversed by counsel appointed to represent Mrs John, I am satisfied that he should be appointed Mrs John’s welfare guardian for all issues relating to her personal care and welfare, overriding the authority arising from the power of attorney. That will mean that Mr Thorne has the ultimate legal authority on all matters of personal welfare, although he no doubt will consult as required with Mr Howard John and potentially the family more broadly. Again Mr Howard John may wish to consider relinquishing the role as personal attorney, but I make no order to that effect, however.
Mrs John’s administrator
[12] A final issue arises from the fact that the defendant is apparently named as an administrator/executor of Mrs John’s estate in Mrs John’s will.
[13] Ms Gelston indicated that she would have grave concerns if the defendant remained in that role in light of his conduct to date, and has suggested that Mr Vincent should be appointed. The defendant points out that a local solicitor, Mr Cameron Middleton is the joint executor with the defendant, and suggested he would be an ideal person to continue in that role together with the defendant. The plaintiff suggests that Mr Hassall join Mr Middleton as the administrator/executor.
[14] Again I was hopeful that these matters could be resolved by the parties. In the absence of agreement I do not believe the Court has jurisdiction to make any orders at this stage. If necessary it can do so in the future. The two proceedings before me were the application to remove the defendant as trustee under the Trustee Act, and the application for review of the defendant’s appointment as the attorney under the PPPR Act. These two applications give me the jurisdiction to make the orders I have made above.
[15] An application for removal of the defendant as administrator/executor of Mrs John’s estate is not before me, and in any event the defendant has not taken up that role and will not do so until Mr John’s death. The fact that Mr Middleton is also named as the administrator/executor also provides a degree of assurance that the position will be dealt with appropriately. The defendant would not be able to act without Mr Middleton’s agreement.
Identification
[16] There is a final technical issue arising from the fact that Mrs John is technically a vulnerable person under the Family Courts Act 1980, and accordingly has suppression unless leave is granted under s 11B.
[17] I accept that there is no need to suppress the identity of Mrs John. There is also a desirability that all those dealing with Mrs John’s situation be clearly aware of the effect of the Court’s orders. I accordingly give leave for her to be referred to in any reports in accordance with s 11B(3).
Conclusion
[18] I accordingly appoint Mr Anthony Vincent as Mrs John’s property manager under s 31 of the PPPR Act in relation to all of her property, and Mr Michael Thorne as Ms John’s welfare guardian under s 12 of the PPPR Act in relation to all issues of personal care and welfare. I direct that both appointments take priority over the power of attorney granted to Mr Howard John, and are subject to a requirement to apply to the Family Court for a review of the appointments within three years of the date of this judgment. I also appoint Mr Vincent as the replacement for the plaintiff and defendant as trustee of their father’s estate.
[19] These orders leave some loose ends — particularly given the continuation of Mr Howard John as attorney, and the defendant as a future executor/administrator of Mrs John’s estate. I am nevertheless satisfied that the above orders achieve what is necessary, and that the orders are within the Court’s jurisdiction to deal with the current circumstances.
Cooke J
Solicitors:
Quin Law, New Plymouth for the Plaintiff C&M Legal, New Plymouth for the Defendant