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Accident Compensation Cases

Re Gollan (HC, 20/04/16)

Judgment Text

JUDGMENT OF BROWN J 
Brown J
[1]
The applicants apply by originating application for the following order: 
(a)
An order authorising the applicants as trustees of the Anthony Mitchell Trust to pay the legal fees of Shirley Marie Gollan (Ms Gollan) up to an amount of $20,000.00 in respect of her application to the Family Court at Christchurch for appointment as a welfare guardian for Anthony Brian Mitchell. 
[2]
Ms Gollan is the mother of Anthony Mitchell who in May 1997 when he was three months old suffered a hypoxic-episode resulting in severe mental and physical disability. Anthony has been in institutional care full time since 1992. 
[3]
The Court of Appeal having held that Anthony had suffered a personal injury by accident, a lump sum payment of $27,000 was made pursuant to s 84 of the Accident Compensation Act 1982. 
[4]
In 1992 the Anthony Mitchell Trust (the Trust) was established to receive the $27,000 from the Accident Compensation Corporation. The capital of the Trust has been supplemented over time in the manner described in the memorandum of counsel for the applicants as follows: 
“6
When Anthony turned 18 (9 February 2007) he became eligible to receive a sickness benefit. This benefit has varied over the years. He currently receives $424.10 per week. The Trust receives this income. The funds of the Trust have accumulated as Anthony is in care and are now approximately $114,796.09 as at 23 September 2015. 
7
The funds of the Trust are held on an interest bearing account. Currently, interest is at 3.65%. Since 29 August 2008 until 23 September 2015 the funds have accrued $21,205.30 of interest (of which $3,831.44 was withholding tax and $1,484.37 was commission). If interest remains consistent, in another 8 years approximately $23,000.00 of interest will be accrued. ”
[5]
Apparently because of a requirement of ACC that Anthony should have personal legal representation, Ms Gollan commenced proceedings in the Family Court at Christchurch under the Protection of Personal and Property Rights Act 1988 (PPPR). In a Minute in that proceeding1
| X |Footnote: 1
FAM-2014-009-001430. 
dated 2 April 2015 Judge G F Ellis summarised the situation as follows: 
“[2]
Anthony has now been in care for a long time and he is placed with an organisation known as New Zealand Care at their facility at Rushmore Drive, Belfast. Mr David Collins is the representative of that organisation which has apparently been providing day-to-day care for Anthony for some time without any significant criticism. None of the parties who have proceedings before the Court are suggesting that he should be moved from that facility. 
[3]
Anthony has funds held in a solicitor's trust account from ACC and there is, apparently, an issue that has been raised by ACC as to who is the appropriate representative of Anthony to receive personal and confidential information about his affairs and his funding. It is apparently on that basis that his mother Shirley Gollan, has sought to be appointed as a welfare guardian. Ms Gollan does not suggest that she will take over his day-to-day care and the evidence suggests that she is not personally involved in his day-to-day care although clearly she has an interest in his welfare. 
[4]
Ms Gollan's ex-husband, Mr Graeme Mitchell, opposes her application and their evidence is in danger of descending into an unedifying battle over the respective rights and wrongs of their partnership and their parenting of Anthony from his infancy. That does not seem to be particularly helpful, in my view, to the immediate issue before the Court for Anthony. If he requires a personal representative in order to deal with ACC then the matter should be as simple as that and the question would be who is the most fit and proper person to carry out that function. ”
[6]
The application under the PPPR by Ms Gollan is also resisted by Mr David Collins who is a service manager employed by NZ Care which operates the facility in Christchurch where Anthony has resided for approximately nine years. Mr Collins has made applications in the PPPR proceeding for both a personal order in respect of Anthony and for the appointment of the Public Trust as property manager in respect of Anthony's property. 
[7]
Ms Gollan has filed a very substantial affidavit in support of the present application which annexes among other things the documents filed in the Family Court proceeding. Although I have read that affidavit and the annexures, I am particularly concerned not to make any observation in this judgment which might be construed as an expression of view on the merits of the applications before the Family Court. 
[8]
Consequently I confine my description of the competing positions in the Family Court proceeding to the following extract from a memorandum of counsel for the applicants: 
“7.
Ms Gollan has made an application to be appointed Welfare Guardian for Anthony. 
8.
ACC is of the opinion that a Welfare Guardian ought to be appointed. 
9.
Mr Collins of NZ Care [sic] Mr G B Mitchell (the father of Anthony) are of the opinion that a Welfare Guardian is not necessary or alternatively, that Ms Gollan is not an appropriate person to be appointed Welfare Guardian for Anthony. 
10.
Mr G B Mitchell has said that if necessary, he would apply to be Welfare Guardian for Anthony. Mr G B Mitchell opposes Ms Gollan's appointment. 
11.
Mr Collins and Mr G B Mitchell have made various accusations pertaining to Ms Gollan which these parties claim make Ms Gollan unfit to be appointed Welfare Guardian. Ms Gollan either disputes these accusations or says that they are not relevant to her application to be appointed welfare guardian. ”
[9]
Reliance is placed by the applicants on two sections of the Trustee Act 1956, namely ss 64(1) and 66(1) which provide: 
“64
Power of Court to authorise dealings with trust property 
(1)
Subject to any contrary intention expressed in the instrument (if any) creating the trust, where in the opinion of the Court any sale, lease, mortgage, surrender, release, or other disposition, or any purchase, investment, acquisition, retention, expenditure, or other transaction is expedient in the management or administration of any property vested in a trustee, or would be in the best interests of the persons beneficially interested under the trust, but it is inexpedient or difficult or impracticable to effect the same without the assistance of the Court, or the same cannot be effected by the reason of the absence of any power for that purpose vested in the trustee by the trust instrument (if any) or by law, the Court may by order confer upon the trustee, either generally or in any particular instance, the necessary power for the purpose, on such terms, and subject to such provisions and conditions (if any) as the Court may think fit, and may direct in what manner any money authorised to be expended, and the costs of any transaction, are to be paid or borne, and as to the incidence thereof between capital and income: provided that, notwithstanding anything to the contrary in the instrument (if any) creating the trust, the Court, in proceedings in which all trustees and persons who are or may be interested are parties or are represented or consent to the order, may make such an order and may give such directions as it thinks fit to the trustee in respect of the exercise of any power conferred by the order. 
66
Right of trustee to apply to Court for directions 
(1)
Any trustee may apply to the Court for directions concerning any property subject to a trust, or respecting the management or administration of any such property, or respecting the exercise of any power of discretion vested in the trustee. ”
[10]
I accept that the present case is one in which the s 66 jurisdiction is available. A decision whether or not to advance funds to Ms Gollan to pay for her legal representation in the Family Court in the matter concerning Anthony is analogous to a decision by trustees to embark upon litigation. That is a type of decision which it has been accepted falls within the category of matters upon which directions under s 66 may be sought: Neagle v Rimmington.2
| X |Footnote: 2
Neagle v Rimmington [2002] 3 NZLR 826 (HC)Has partially negative history or cases citing, but has not been reversed or overruled[Yellow]  at [29]. 
 
[11]
With reference to the s 64 power, the submission is made that the proposed expenditure would be in the best interests of Anthony as it is in his interest to have appropriate arrangements made for the appointment of a welfare guardian and that his mother should be part of that process to determine guardianship. In respect of s 66 counsel's memorandum stated: 
“31
It is submitted for Ms Gollan that she is correct that this application is directly due to her son's injury. Her logic is simple, no personal injury by accident, normal child, no Court application. ”
[12]
In my view, whichever section is invoked, the determinative issue is whether or not expending approximately 17 per cent of the capital of the Trust for the legal costs of one of the participants in the PPPR litigation in the Family Court would be in the best interests of Anthony. 
[13]
I am mindful that the proposed payee is Anthony's mother who naturally has an interest in his welfare. The submission is made that it is necessary for the requested funds to be obtained from the Trust in order for Ms Gollan to be represented: 
“5
Ms Gollan does not qualify for legal aid. She is not able because of her personal situation to use other funds and so the fact remains that unless funding can be obtained from this Trust for Ms Gollan's legal representation it is unlikely that she will be represented. That would be unfortunate counsel believes from Anthony's point of view. We would have thought the Family Court needed to have Anthony's mother's view point appropriately expressed to the Court through legal assistance. ”
[14]
In principle the funding of all parties to the litigation in the Family Court may, directly or indirectly, serve Anthony's best interests. However it does not follow in my view that that ideal scenario warrants the depletion of what is still a relatively modest trust fund for a significantly disabled person by an amount which comprises approximately one sixth of the capital. 
[15]
I do not consider that it is impossible for Ms Gollan's views to be sufficiently conveyed to the Family Court Judge without legal representation. I am also mindful of the point made in the memorandum of Mr A J F Wilding, counsel appointed for Anthony, that if funding from the Trust were to be provided to Ms Gollan, then the trustees may be faced with a request for funding from other parties to the Family Court proceedings. 
[16]
I am also mindful of the fact that opposition to Ms Gollan's application in the Family Court is made not only on the basis that she is not an appropriate appointee but because the appointment of a welfare guardian is said to be not in fact necessary. Consequently the possibility that the expenditure of the sum sought could be viewed as wasted should Ms Gollan's application be unsuccessful must weigh in the Court's consideration. 
[17]
In a memorandum dated 25 February 2016 counsel for the applicants suggested that one way in which assistance could be given to Ms Gollan would be for the trustees to be authorised to make an unsecured personal loan to Ms Gollan to be repayable on demand. It was said that that would release funds to assist her but would mean that if the fund was ever exhausted from other resources the trustees could call on Ms Gollan to repay. 
[18]
I do not consider that an unsecured long term loan is an appropriate alternative option. There is nothing in the material I have read that indicates that Ms Gollan has the ability to repay such a loan. In the interim the Trust would be deprived of interest on the amount lent. 
[19]
Having weighed the competing considerations as best I can, I am not satisfied that it is appropriate in the best interests of Anthony that the trustees should reduce the capital of the trust by expending the sum sought as legal costs for representation of Ms Gollan in the Family Court proceeding. 
[20]
Consequently the applicants' application for orders under ss 64 and 66 is declined. 


FAM-2014-009-001430. 
Neagle v Rimmington [2002] 3 NZLR 826 (HC)Has partially negative history or cases citing, but has not been reversed or overruled[Yellow]  at [29]. 

From Accident Compensation Cases

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