Mark Robert Sandman v Colin Charles McKay, Roger David Cann and David John Clark (as partners of Wilson McKay)

• Jurisdiction: New Zealand
• Judge: Glazebrook,O'Regan,Ellen France,Arnold JJ,Glazebrook J,Elias CJ
• Judgment Date: 16 April 2019
• Neutral Citation: [2019] NZSC 41
• Court: Supreme Court
• Docket Number: SC 35/2018
• Date: 16 April 2019

Between

Mark Robert Sandman

Appellant

and

Colin Charles McKay, Roger David Cann and David John Clark (as partners of Wilson McKay)

Respondents

[2019] NZSC 41

Court:

Elias CJ, Glazebrook, O'Regan, Ellen France and Arnold JJ

SC 35/2018

IN THE SUPREME COURT OF NEW ZEALAND

I TE KŌTI MANA NUI

Equity, Family, Law Practitioners — will — dishonest assistance — accessory liability

Counsel:

R M Dillon for Appellant

P J L Hunt and J Heard for Respondents

• A The appeal is dismissed.

• B Costs of $25,000 plus usual disbursements are awarded to the respondents.

JUDGMENT OF THE COURT

REASONS

	Para No.
Glazebrook, O'Regan, Ellen France and Arnold JJ	[1]
Elias CJ	[104]

Glazebrook, O'Regan, Ellen France AND Arnold JJ

(Given by Glazebrook J)

TABLE OF CONTENTS

	Para No.
Introduction	[1]
Background	[3]
The proceedings	[35]
Statement of claim	[42]
Court of Appeal decision	[46]
Mr Sandman's submissions	[57]
The firm's submissions	[63]
Evidence	[69]
Summary judgment	[71]
Strike-out	[98]
Result and costs	[102]

Introduction

1 The appellant, Mr Mark Sandman, is the only surviving child of Elizabeth Nancy Sandman, who died on 30 October 2013. Mrs Sandman's other child, Victoria Sandman (Vicky), died in March 2011.

2 This appeal concerns whether the Court of Appeal was correct to make an order for summary judgment in favour of the respondent firm, Wilson McKay (the firm). 1 The claim by Mr Sandman is that the firm knowingly assisted in a breach of trust and/or fiduciary duty by Vicky and Mr Giboney. Mr Giboney was one of Mrs Sandman's executors and trustees under a will executed on 2 December 2010 (the 2010 will).

Background

3 Under the 2010 will the apartment Mr Sandman occupied was bequeathed to him and there were also a number of minor bequests. The residuary estate was to be divided equally between Mr Sandman and Vicky. In the event either of her children predeceased her, that child's share of the residuary estate was to be divided in specified

percentages among various relatives and friends 2 and would not go to the surviving child

4 Under an earlier will executed in 2005 (the 2005 will), Mr Sandman was bequeathed the apartment and Vicky was left $200,000. Vicky was also bequeathed some specific items, such as jewellery and art. The residuary estate was to be divided equally between Mr Sandman and Vicky. If one of her children predeceased her, the whole residuary estate would (absent grandchildren) 3 go to the surviving child.

5 After Mrs Sandman's death, the firm obtained probate of the 2010 will and acted in the administration of the estate. Mr Sandman had lodged a caveat against the grant of probate just after Mrs Sandman' death. This had been withdrawn after he was sent a copy of the will in early November. Mr Sandman confirmed in writing on 13 November 2013 that he was “happy with the will”.

6 On 10 December 2013 Mr Sandman consented in writing to the distribution of the estate within six months of the grant of probate and he also indemnified the executors for any loss arising from the early distribution. 4 Mr Sandman's share of the residuary estate amounted to approximately $440,000. 5 Final distribution of the estate was made by the end of 2014.

7 The firm had acted as Mrs Sandman's solicitors from 2007. At that time she sold her home and moved to a retirement village (the Village). As required before Mrs Sandman entered the Village, she executed two enduring powers of attorney in favour of Vicky. The one relating to property became immediately operable. The one relating to personal care and welfare became operable only when Mrs Sandman became mentally incapable.

8 Mrs Sandman met with Ms Paul, a solicitor from the firm, on 3 February 2010. Ms Paul's letter of 4 February 2010 records that Mrs Sandman was considering

changing the 2005 will but had decided to leave it in place for the meantime. The letter records that Mrs Sandman had been concerned that the 2005 will was not fair to Vicky in light of the continuing support provided to Mr Sandman. As the letter notes, Vicky did not wish Mrs Sandman to change her will and Mrs Sandman decided not to do so at that stage:

We note you are concerned that due to the fact you have been and will continue to support Mark, who is unemployed that Vicki is disadvantaged by your Will. As you are aware, Vicki at your request was present at this meeting [and] she did not want you to alter your Will in her favour based on current circumstances. We note that you have been experiencing medical problems and have attended a number of Doctors and ongoing investigations and tests are being carried out. As you have a valid Will that is acceptable in the circumstances, particularly to your daughter Vicki, until your health issues are identified and resolved you will not alter your existing Will.

9 On 4 February 2010 Mrs Sandman was referred to Auckland hospital by her general practitioner, Dr Jane Buckley, for anxiety and depression. Dr Buckley said Mrs Sandman was now very dependent on Vicky but was still living independently. It was noted that Mrs Sandman was becoming increasingly reclusive and had become more confused when on holiday with Vicky (apparently in December 2009). Dr Buckley said that Mrs Sandman had become increasingly forgetful and fearful. On 19 March 2010, a consultant psychiatrist reported that there were no immediate safety concerns but there was “mild cognitive impairment”.

10 In July 2010 Mrs Sandman had a fall and broke her femur. Consent to the resulting operation was given by Vicky on Mrs Sandman's behalf, due to, as stated in medical notes, Mrs Sandman's “mild dementia”. After the operation Mrs Sandman suffered from post-operative delirium which was slow to resolve. 6

11 On her return to the Village, Mrs Sandman was placed in the hospital wing of the Village to recuperate. Mrs Sandman, however, wished to return to her unit. According to Ms Paul's affidavit filed in these proceedings, she provided advice to Vicky about Mrs Sandman's rights in this regard in a telephone call on 31 August 2010, followed up by a letter on 1 September 2010 recording her advice.

12 A gerontology nurse specialist, Ann Pidgeon, was instructed by the Village doctor to assess whether a return to independent living was possible. Her report of 21 September said that Mrs Sandman's “MMSE today [16 September] was 19/30; losing points in orientation, short term recall, and copying of design.” 7 It was said that Mrs Sandman had become “institutionalised” and would need time “to adjust to some self reliance”. It was said further:

Mrs Sandman mobilises with a stroller frame, she needs encouragement to walk more. … I would recommend that she is supervised when walking in the [V]illage and we have discussed this added risk of falling when alone in her apartment. A St John's medical alarm may also be warranted.

Mrs Sandman will require ongoing supervision with showering and medication management, breakfast set up and exercise times. This will be provided by RDNS [Royal District Nursing Society] who will visit twice daily. … Leigh [Giboney] will organise a privately paid person called Lisa to visit 10.30 to 1.30 each day; she will assist with shopping, outings, home help and lunch.

Leigh will organise a visit to her previous GP Dr Buckley once she is in her own apartment.

13 Mrs Sandman was cleared to trial a return to her unit and independent living arrangements from the end of September 2011. Ms Paul in her affidavit deposed that her understanding was that the Village's concerns were only in relation to Mrs Sandman's physical health. She considered that, if the Village had had concerns about Mrs Sandman's mental health, she would not have been allowed to return to her unit. 8

14 On 19 October 2010 Ms Paul met with Mrs Sandman to take instructions for a new will. In the course of that meeting Vicky disclosed that she had been diagnosed with terminal cancer. Ms Paul deposed that, apart from naming a few chattels that she wanted and suggesting that the Auckland Cup be given to the Auckland Racing Club, Vicky's only influence during the meeting was telling Mrs Sandman she did not want to be compensated for Mr Sandman being left the apartment.

15 On 21 October 2010 Ms Paul wrote to Mrs Sandman setting out the instructions received. The letter was sent care of Mr Giboney at Mrs Sandman's request. 9 The letter recorded a change of executors and trustees: from the New Zealand Guardian Trust Company 10 to Mr Giboney and Mr McKay, one of the partners of the firm. It then said:

Personal effects. You will make a list of all furniture, household goods and personal chattels that you want to leave to specific individuals ie Mark, friends and family members with a description sufficient for identification in due course. The balance of your assets will be sold and the funds form part of your residue and those assets that have no economic value, your Executors will dispose of them as they see fit ie donate to a charity. Please sign and date that list and forward to our office and retain a duplicate with your papers.

16 The letter went on to record that the apartment and related chattels were to go to Mr Sandman and that there was to be a legacy of $10,000 to Mr Giboney for his work as executor. As to the residue of the estate, it was said:

The balance of the estate will be transferred to the Trustees upon trust to pay all estate expenses and fifty per cent of the balance will go to Mark and 50% to Victoria, provided however in the event either Mark or Victoria predecease you then their share will be divided between your sister Christine, two nephews and one niece. In the event your sister has predeceased you, her share would go to her children.

17 In the same letter Ms Paul said that Mrs Sandman may wish...