Malcolm v John aka de Faria - [2021] NZHC 406

IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY

I TE KŌTI MATUA O AOTEAROA NGĀMOTU ROHE

CIV-2020-443-55

[2021] NZHC 406

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: 25 November 2021

Appearances:

S W Hughes QC for the Plaintiff A F Johnston for the Defendant

C A Gelston for the Subject Person

Judgment:

10 December 2021

JUDGMENT OF COOKE J

Table of Contents

Factual background [3]

The issues [24]

Did Mrs John have capacity? [25]

The test to be applied [26]

Application of the test in the current case [34]

Removal of the defendant [43]

Removal of an attorney [45]

Removal of a trustee [49]

Application to the present case [55]

Who will fulfil the replacement roles? [65]

MALCOLM v JOHN [2021] NZHC 406 [10 December 2021]

[1] These proceedings involve two applications. First, by statement of claim dated 21 December 2020 the plaintiff applies for orders removing the defendant as trustee of the estate of Mr Anthony Bruce John and replacing him with Mr Boyd John. Boyd John is a brother to the plaintiff and defendant. Anthony Bruce John was their father. There are four other siblings.

[2] Further by application dated 15 August 2019 the plaintiff seeks to review the defendant’s appointment as the attorney for their mother, Mrs Margaret John and to have an independent person appointed in his place. Mrs John is in her nineties and now lacks capacity. By order dated 3 September 2021 the Family Court directed that this application be transferred to this Court under s 14 of the Family Court Act 1980 to be heard together with the first proceeding. I heard the applications together under Part 18 of the High Court Rules with witnesses being cross-examined on their affidavits. A bundle of documents was also provided. The parties also provided a statement of matters that were agreed.

Factual background

[3] I begin by describing the factual background. This will involve making some factual findings.

[4] Mr Anthony John died on 19 November 2006. His final will was dated 20 July 2001. The primary asset of his estate was then the matrimonial home in Oriental Street, New Plymouth. In his will the executors of his estate were Mrs John, the plaintiff and the defendant. Mrs John had a life interest in the estate, and on her death the residue is to be divided between the plaintiff, defendant and two of their siblings (Owen and Howard John). Boyd John and Sharyn Mottram are not provided for in the will, and a final brother, Mark John had died in 1989.

[5] It is apparent that there were, and are, differences of view amongst the family, and that this involves quite strongly held views. I had the advantage of hearing evidence from the long-standing family solicitor, Mr Harold Fitzgibbons. He had acted for Mr…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] NZHC 406
Decision Date: 10 December 2021

CaseChat Overview and Summary

This case concerns two applications brought by Maree Patricia Malcolm against Craig Lester John, also known as Craig de Faria. The first application seeks the removal of Craig as the trustee of the estate of his deceased father, Anthony Bruce John, and his replacement with Maree's brother, Boyd John. The second application seeks the removal of Craig as the attorney for their mother, Margaret John, and the appointment of an independent person in his place. Craig's mother is in her nineties and lacks capacity.

The court first considers whether Margaret had capacity when appointing Craig as her attorney in April 2017. The court concludes that Margaret did have capacity at that time, as she was able to give clear instructions to change the powers of attorney, and she believed that Margaret had the capacity to give those instructions at that time.

The court then considers whether Craig should be removed as Margaret's attorney and as trustee of Anthony's estate due to the way he has conducted these roles. The court finds that Craig has not been acting in the best interests of Margaret and has been preferring his own interests. The court removes Craig from his role as attorney in both respects and considers who should fulfil the replacement roles. The parties will need to review the position in light of the findings in this judgment, and then provide further information to the court by way of memoranda indicating who the parties have agreed should fulfil the replacement roles, or in the event of disagreement, who they propose should fulfil those roles. The court reserves leave to apply, especially in relation to any orders or directions required to preserve the interim position while discussions take place.

Orders