Standring v Evans
[2021] NZHC 1145
•21 May 2021
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2019-409-585
[2021] NZHC 1145
BETWEEN ELLEN STANDRING by her litigation guardian SANDRA BÜRKLE
PlaintiffAND
SUZANNE JOY EVANS
Defendant
Counsel: K W Clay and P C Maciaszek for the Plaintiff E J Loughnan for the Defendant Judgment:
21 May 2021
(Determined on the papers)
JUDGMENT OF OSBORNE J
This judgment was delivered by me on 21 May 2021 at 2.30 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
STANDRING v EVANS [2021] NZHC 1145 [21 May 2021]
Introduction
[1] The Court is asked to approve a settlement of the claims in this proceeding under s 108C of the Protection of Personal and Property Rights Act 1988 (the Act).
[2] The plaintiff, Ellen Standring, is a “specified” person in terms of s 108A of the Act, in that she is not capable of managing her own affairs. Accordingly, the Court’s approval is required to validate the settlement of her claim.
[3] The plaintiff’s property affairs are managed by her daughter, Sandra Bürkle, pursuant to an order of the Family Court made under the Act on 3 October 2019.1 Under r 4.29 High Court Rules 2016 (the Rules), a “litigation guardian” includes a person who is authorised by or under an enactment to conduct proceedings in the name of, or on behalf of, an incapacitated person. Ms Bürkle authorised this proceeding in that capacity.
[4] In the proceeding, the plaintiff (by her litigation guardian) claimed the defendant (her stepdaughter) had breached fiduciary duties owed to the plaintiff and/or the plaintiff’s late husband. She claimed damages.
[5] The defendant instructed Mr Loughnan in relation to the proceeding. The parties sensibly embarked on settlement discussions which resulted in the terms of the agreement (the agreement), subject only to the Court’s approval under s 108C of the Act.
The requirement for approval
[6] Section 108B of the Act provides for the Court’s approval of agreements to settle or compromise claims for money or damages on behalf of a specified person. It states:
1 The manager’s powers include under sch 1, para 1(a) of the Protection of Personal and Property Rights Act 1988 the powers to institute proceedings and to compromise or settle claims and demands.
108B Approval of court required to settle claims of specified persons
(1)This section applies where money or damages are claimed by or on behalf of a specified person, whether alone or in conjunction with another person.
(2)If the claim is not the subject of proceedings before a court, an agreement for the compromise or settlement of the claim entered into by the specified person, or on his or her behalf by a person who, in the opinion of a court, is a fit and proper person to do so, is binding on the specified person if the agreement, or a release of the claim, is in writing and is approved by the court under section 108C.
(3)If the claim has not been compromised or settled in accordance with subsection (2), and has become the subject of proceedings before a court, a settlement, compromise, or payment, or acceptance of money paid into court, whenever entered into or made, is valid so far as it relates to the specified person’s claim only with the approval of the court under section 108C.
[7] As this proceeding was issued in relation to the claim, s 108B(3) applies so as to require the Court’s approval of the agreement.
[8] Section 108B(3) of the Act is similarly worded to s 105 Contract and Commercial Law Act 2017, which applies to the approval of settlements of proceedings on behalf of minors. In that context, the Court has said:2
The requirement of court “approval” … imports a requirement that the Court has sufficient information as to how the terms of the agreement, including importantly the amount of any settlement, were arrived at to enable the Court to approve such terms.
[9]That is also the requirement to be applied here, under the Act.
[10]Section 108C of the Act provides:
108C Applications for approval of court
(1)An application for the approval of a court under this section may be made by or on behalf of a specified person, or by any other party to the agreement or proceedings.
(2)On an application for its approval under this section, the court, in its discretion, may—
(a)refuse the application; or
2 Director of Proceedings v Southern District Health Board [2020] NZHC 503 at [13].
(b)grant its approval unconditionally; or
(c)grant its approval subject to any conditions and directions that it thinks fit, including conditions and directions as to—
(i)the terms of the agreement, compromise, or settlement; or
(ii)the amount, payment, security, application, or protection of the money paid, or to be paid; or
(iii)any other relevant matter.
[11] Accordingly, it is necessary to examine the nature, merits and quantum of the plaintiff’s claim against the terms that have been agreed. Mr Clay, counsel for the plaintiff, has filed a memorandum setting out the factors he considered in concluding the settlement was reasonable in the circumstances.
Summary of the plaintiff’s claim
[12] The plaintiff, who is in her late 80’s, married John (Jack) Standring in 1980. The defendant, Suzanne Evans, is the daughter of Jack and the plaintiff’s stepdaughter. Jack died on 28 September 2018.
[13] The defendant held an enduring power of attorney for Jack from 17 March 2017 until Jack’s death. She held a similar power for the plaintiff from 12 April 2017 until it was overtaken by the Family Court Order on 3 October 2019. Questions arose as to the validity of the plaintiff’s grant of such a power, given the development of her dementia referred to in the next paragraph.
[14] The plaintiff and Jack had made wills in 2009 under which each left their entire estate to the survivor of them, with the survivor to distribute assets among both of their respective families. The plaintiff unfortunately developed symptoms of early stage dementia in 2015. Jack continued to care for her at their home until, at age 93, he was admitted to hospice care in April 2018.
[15]By March 2016, the plaintiff and Jack owned the following major assets:
(a)their family home in Redwood, Christchurch (the property) which was sold in October 2019 for $430,000; and
(b)funds in bank accounts and investments, in total valued at approximately $720,000.
[16]Beginning in March 2016, Jack effected the following transactions:
(a)On 23 March 2016, he severed a joint tenancy of the property (Jack and the plaintiff thereby becoming tenants in common in equal shares);
(b)On 12 April 2016, he transferred $260,000 from the couple’s joint bank account into a sole account in his own name;
(c)on 27 April 2016, he transferred a further $40,000 from the joint account into the sole account.
[17] On 17 March 2017, Jack executed his power of attorney in favour of the defendant (above at [13]). On the same day he signed a new will. The defendant had taken him to the appointment for that purpose.
[18] On 1 May 2018, the defendant in her capacity as Jack’s attorney transferred a further $60,000 from the joint account into the sole account.
[19] On 29 May 2018, the defendant then arranged for Jack to convert his sole account into a joint account in the names of the defendant and Jack (jointly).
[20]Jack died on 28 September 2018.
The plaintiff’s case
[21] The plaintiff’s pleaded claim was for breach of fiduciary duty. The plaintiff characterised the defendant’s conduct as having procured Jack’s various transactions through undue influence. Through the conversion of Jack’s sole account into a joint account, the plaintiff became the owner of the funds in that account through survivorship upon Jack’s death. The plaintiff’s case was that the series of transactions beginning with the severing of the joint tenancy were driven by the defendant.
[22] The pleadings were not complete when the parties entered into their negotiations. Indeed, the defendant had yet to file a statement of defence and had not done so by the time the terms of settlement were reached. She entered into the negotiations and subsequently the settlement with a denial of liability.
The value of the claim
[23]The high point of the plaintiff’s claim would be:
(a)$215,000 — half the sale proceeds, being 50 per cent of the sale proceeds of the property; and
(b)$260,000 — money transferred on 12 April 2016; and
(c)$40,000 — monies transferred on 27 April 2016; and
(d)$60,000 — monies transferred on 1 May 2018.
This totals $575,000.
The settlement or compromise
[24] The parties negotiating the proposed settlement entered into a deed dated 23 February 2021 recording the agreement which is now the subject of this application for approval.
[25] By the agreement, the plaintiff would receive a settlement or compromise sum of $370,000. The defendant would be surrendering an entitlement under or claim upon the plaintiff’s estate.
[26] The plaintiff has been represented throughout the proceeding by Mr Clay, an experienced practitioner. By his memorandum to the Court he has identified the matters which he took into account in advising his client that the settlement was appropriate. I am satisfied, having regard to Mr Clay’s memorandum, that the matters he took into account, including the risks of litigation, were all appropriate considerations. The risk extended not only to matters of factual dispute but also
jurisdictional issues (relating to the exclusive jurisdiction of the Family Court) which could have complicated how the plaintiff’s claim could be taken through to a hearing or hearings. Mr Clay also appropriately considered the fact that the settlement (if approved) can be promptly implemented by reason of a preservation order previously made in the proceeding. Finally, the costs savings of achieving a prompt payment through settlement rather than a later (uncertain and litigated) outcome are obvious, particularly given the plaintiff’s health circumstances.
[27]The assessment of experienced counsel warrants weight.
[28] Upon the basis of the detailed information provided in relation to the settlement, I am satisfied the settlement is appropriate and in the best interests of the plaintiff. It is one which should be approved by the Court under s 108C of the Act.
Procedural defects
[29] Ms Bürkle has participated in this proceeding as the plaintiff’s litigation guardian. She has that capacity by reason of the definition in r 4.29 of the Rules, because she was appointed the plaintiff’s property manager before this proceeding was commenced.
[30] When the proceeding was commenced, the requirement under r 4.37 of the Rules (requiring Ms Bürkle to file a copy of the Family Court Order) was overlooked. A copy of that order has since been provided to the Court.
[31] Pursuant to r 1.9 of the Rules I make an order that the earlier failure to file a copy of the Family Court Order does not affect the validity of the proceeding or the order that is made hereunder.
[32] I direct that the naming of the plaintiff in the proceeding be amended to read “Ellen Standring, by her litigation guardian Sandra Bürkle”, as reflected in the heading to this judgment.
Order
[33] The Court approves the settlement of this proceeding in terms of a Deed of Settlement entered into between the parties on 23 February 2021.
[34] Funds currently held in the bank account of J C and S J Evans [REDACTED] are to be disbursed as follows:
(i)$162,488.03 is to be paid to the trust account of Maciaszek Brown Law,
Christchurch; and
(ii)the balance is to be applied in accordance with instructions to be supplied by the defendant to Westpac.
[35]There is no order as to the costs and disbursements of the proceeding.
Osborne J
Solicitors:
Maciaszek Brown Law, Christchurch Counsel: K W Clay, Barrister, Christchurch Shirley Law, Christchurch
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