L T A—A W v L T W
IN THE FAMILY COURT AT MANUKAU
A J Twaddle
In The Matter Of The Protection Of Personal And Property Rights Act 1988
L T A-V W in Person (by telephone)
D G W in Person
R Glynn for L T W (Subject Person)
N Tollich Counsel to assist the Court
NOTE: PURSUANT TO S 80 OF THE PROTECTION OF PERSONAL AND PROPERTY RIGHTS ACT 1988, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B TO 11D OF THE FAMILY COURTS ACT 1980. FOR FURTHER INFORMATION PLEASE SEE WWW.JUSTICE.GOVT.NZ/FAMILY/LEGISLATION/RESTRICTIONS.
Application for directions under s30A(2) Protection of Personal and Property Rights Act 1988 (temporary orders) for allocation of proceeds from sale of property — applicant was property manager for mother who suffered from dementia — application for reimbursement of expenses and remuneration under s50 (expenses of management and remuneration of managers) — whether brother should be allocated funds to purchase a house — whether applicant should have child's school fees paid — whether proposed use of money promoted the mother's best interests under s36 (functions and duties of manager).
The issue was whether the proposed use of funds promoted the mother's best interests under s36 PPPRA (functions and duties of manager).
Held: The first and paramount consideration of a manager was to use the property in the promotion and protection of the best interests of the subject person under s36 PPPRA.
LTA was entitled to her out of pocket expenses (telephone calls, internet charges, clothes for LTW and stationery) under s50 PPPRA as on a broad view the expenses were properly incurred for the benefit of her mother. LTA was not entitled to payment of remuneration. This was more difficult as LTA was not involved in managing her mother's affairs in a professional capacity. Where a manager was a family member, the manager should be expected to act out of natural love and affection and remuneration was only warranted in unusual or special circumstances.
The power to authorise a settlement or gift was to a degree circumscribed by s62(6) (court may settle the beneficial interests of person subject to property order), which referred to making due provision for the maintenance of the subject person in accordance with his or her means and way of life. On any application under s62, the first inquiry was whether it was shown that the proposed settlement or gift was one which the protected person would have made in the circumstances if he or she had retained capacity. If the answer to this inquiry was yes, then the next inquiry centres on the factors to be considered in terms of s32(6). (Re Kay).
There was no objective or supporting evidence for the contention that the mother intended to provide a home for the son. In the ordinary course it would not be expected that a son at the age of this one, would expect his mother to purchase a home for him to live in, having regard to her very modest means. It was not clear why the brother could not have lived in the house and paid rent which would have provided income for LTW. A contribution of $100,000 would not be enough for the brother to purchase a home, and there was no evidence he would be able to borrow more or how he would be able to pay the debt. It was not a safe or prudent investment.
Although there was evidence that LTW valued education there was no evidence as to how she thought her grandson should be educated or that that she was under a moral duty to provide for her grandson's education. Having regard to her modest assets and income it was unlikely she would have considered paying over AU$20,000.00 per year.
The use of the funds as suggested by LTA would seriously deplete the amount available to provide for LTW's maintenance, and to give her a contingency fund.
In the circumstances, there would be no conflict of interest with LTA remaining as her mother's manager. All real estate fees and costs owing on LTW's home were to be paid. LTA was entitled to out of pocket expenses. A funeral expense trust fund could be set up. The balance of the sale proceeds were to be invested in an interest bearing account for the benefit of LTW.
L W is the manager of the property of her mother L T W. Ms W was initially appointed by a temporary order made in December 2009. A final order was made in January last year. The order applies to all of Mrs W' property. As manager, Ms W has all the powers specified in the first schedule to the Protection of Personal and Property Rights Act.
Mrs W is 84. She has severe dementia and lives in a dementia unit at a rest home. Medical evidence produced to the Court at the time Ms W applied to be appointed property manager established that Mrs W totally lacks the competence to manage her own affairs in relation to her property and I infer that there is no likelihood of her recovering any competence to manage her property affairs in the future.
The major asset owned by Mrs W is a house in Mangere East. In June last year Ms W applied to the Court for authority to sell the house and to use the sale proceeds “to pay for L T W' care, existing debt, any future expenses and to carry out her wishes”.
Authority to sell the property was given to Ms W by the Court on 8 November. A direction was made that the sale proceeds, after deduction of real estate agents fees, legal fees and any fees owing to the rest home where Mrs W is living, are to be paid in to Court and held on trust for Mrs W until further order of the Court. Ms W was directed to provide a brief monthly report to the Court about the sale of the property and when it is anticipated that the net sale proceeds will be deposited in Court. Mr Tollich was appointed to assist the Court on the issue of any conflict of interest on the part of Ms W and any possible jurisdictional issues.
At the hearing Ms W reported that the home was subject to an agreement for sale and purchase. The offer of $272,000.00, was subject to the purchaser obtaining finance. The property was not insured and I made a direction that the property was to be insured urgently.
On the sale of the property, after payment of real estate agents fees, legal fees and any fees owing to Mrs W' rest home, Ms W proposed that the sale proceeds will be used as follows:
(a) To repay any debts owing by Mrs W;
(b) To set up a funeral trust for Mrs W;
(c) To reimburse her for her costs associated with preparing the property for sale;
(d) To reimburse her for her expenses associated with attending to her mother's care and affairs;
(e) To pay costs associated with Mrs W' ongoing medical and residential care;
(f) Once Mrs W is eligible for a residential care subsidy (that is when her funds do not exceed $200,000.00) Ms W proposes;
(i) To invest $100,000.00 in a property to be purchased by her brother D W or to lend him that amount to assist him to buy a property;
(ii) To invest over a two – three year period from 2012 onwards, an aggregate of $100,000.00 to pay for secondary school fees for her son S who will shortly be 12, or to borrow that amount from her mother for that purpose.
Ms Glynn and Mr Tollich filed memoranda and I heard oral submissions from Ms W, Ms Glynn and Mr Tollich. Mr D W supports his sister's application.
Ms W filed affidavits dated 8 June 2010 and 23 February 2011.
When her mother dies, Ms W wants to repatriate her to the Cook Islands to be buried. This is in accordance with a direction made by Mrs W in her will dated 5 December 1996. Ms W has obtained a quote from the Public Trust to set up a prepaid financial trust for $11,695.50.
Ms W' expenses in respect of sale of property
Although Ms W' application refers to these costs, there is no evidence that such costs have been incurred.
Ms W' expenses associated with attending to her mother's care and affairs
Ms W lives in Australia. She says managing her mother's affairs from there has been difficult. There is no money to pay an organisation like the Public Trust to manage her mother's affairs and no suitable relation. Ms W works a minimum of 37.5 hours per week for Direct Recruitment and is paid an hourly rate. She claims NZ$8,642.50 for the period October 2009 to May 2010 and NZ$5,213.06 for the period June 2010 to February 2011. Her claim for remuneration is assessed at $28.96 per hour and is based on the time she spent on her mother's affairs during normal business hours and was therefore not able to be at her paid employment. She makes no claim for time spent before work, during the evening or over the weekends. The out of pocket expenses for the period October 2009 to May 2010 include Telstra telephone call charges, the cost of internet access, postage expenses, a shower curtain for Mrs W' house, clothes for Mrs W, stationery and petrol (presumably for travel associated with Mrs W). These costs are set out in both of Mrs W' affidavits, but although she refers to exhibit 2 relating to expenses between June 2010...
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