SIEMONEK V THE NEW ZEALAND GUARDIAN TRUST COMPANY LIMITED HC WN CIV-2006-485-001677

SIEMONEK V THE NEW ZEALAND GUARDIAN TRUST COMPANY LIMITED HC WN CIV-2006-485- 001677 1 November 2006IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY CIV-2006-485-001677BETWEEN BARBARA JOAN SIEMONEK Plaintiff AND THE NEW ZEALAND GUARDIAN TRUST COMPANY LIMITED Defendant Hearing: 27 October 2006 Appearances: J Miller for Plaintiff M J Wenley for Defendant Judgment: 1 November 2006JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN Upon Application for Summary Judgment by Defendant[1] Joan Parsons died intestate in September 1995 at Napier. Until then she had, for fifteen years, looked after Douglas Wereta who was, in 1980, seriously injured in a motor vehicle accident in New South Wales, Australia. Douglas suffered brain damage and other physical disabilities, but presently he can attend his basic health and toilet needs. [2] Prior to her death, Joan had, along with others, encouraged Douglas to seek compensation for the injuries he suffered in the 1980 motor vehicle accident. [3] In 1997 (after Joan's death) a proceeding was commenced in the New South Wales Supreme Court on Douglas' behalf. By judgment dated 25 September 2001, a sum of money was ordered to be paid on Douglas' behalf to Guardian Trust in Napier.[4] Although the award was less than 40% of the amount claimed, it was very significant. [5] Guardian Trust holds the fund on trust for Douglas on the terms of the judgment and pursuant to the provisions of s 66(4) of the Public Trust Office Act 1957. [6] The judgment was entered by consent in terms of the settlement recorded in a memorandum signed by the parties' solicitors. By the judgment it was directed the fund "be held in trust and dealt with by [Guardian Trust] for the benefit of [Douglas] in accordance with s 66(4) of the Public Trust Office Act 1957 (New Zealand) and other applicable laws as to the administration of trusts in New Zealand." [7] It is the rather general prescriptive nature of that direction which highlights some matters in issue between the parties before me. I will review the provisions of s 66(4) shortly. First I need to deal with the issues raised by Guardian Trust's summary judgment application.Summary judgment application[8] It argues: a) No right of action exists because Joan Parsons died before, indeed more than six years prior to, the date Douglas' trust fund came into existence. b) Because no cause of action vested in Joan at the time of her death, no cause could survive to vest in any person who might be a beneficiary of her estate. c) The Statute of Limitations 1950 would bar any action being brought in Joan's name against Douglas. d) The trust fund held for Douglas is not available for payment to any person who has provided care to Douglas in the past.e) There is no basis for a Court in law or equity to set aside or interfere with a discretionary decision of Guardian Trust exercised lawfully and properly.Additional facts[9] Douglas is the son of Joyce, Joan Parsons' sister. The plaintiff is Douglas' sister. Joan's husband predeceased her. The plaintiff and Douglas are lawful beneficiaries of Joan's estate. [10] The plaintiff was constituted administratrix of Joan's estate in January 2003 by grant of Letters of Administration on Intestacy. That process was undertaken for the purpose of initiating this claim on behalf of Joan's estate. [11] Joan did, more than any other and at a time when she was compelled by nothing more than moral obligation, undertake to care for Douglas following his accident. She regarded him as a son. She had raised him from birth, and since then had acted in all respects as his mother. [12] The Australian proceedings chronicle an extensive, complex and long enduring history of accident and hospital trauma for Douglas. More commonly recognisable consequences include neurosurgical convalescence, cranial repair, nephrogenic diabetes, epileptic convulsion, renal failure, fluctuating loss of consciousness, grand mal seizure and progressive decrease in brain function. [13] Douglas' disabilities include permanent brain damage, slurred speech, epileptic fits, memory loss, hearing loss, headaches, unstable gait, loss of vision in left eye and impaired vision in right eye, renal failure and a need for dialysis over the years, requirement to wear a calliper on his left leg, deteriorating cognitive function, swallows with difficulty requiring a modified diet, short term memory impairment, and a continuing slow deteriorating likely to increase his susceptibility to illness as he ages.[14] Douglas' initial claim included a sum of about $1.3 million for care and assistance, together with a sum of about $1.8 million for interest accumulated on the care and assistance claim over a period of nearly 20 years. [15] In percentage terms his claim was compromised significantly in the settlement which was endorsed by the Court's judgment. There was no reference in the settlement or in the judgment to the payment including consideration for reimbursement to providers of past care. Indeed, although Douglas' original claim included out of pocket expenses, future out of pocket expenses, the need for home modifications, claim for future care and assistance, economic loss past and future, holiday and travel costs, and fund management fees, the settlement sum was not fixed by reference to particular criteria or consideration at all, nor would I have expected that to happen. The claim was calculated to the last cent. The settlement was fixed in general terms of hundreds of thousands of dollars. [16] Guardian Trust's affidavits provide little information regarding Douglas' present circumstances. It is mentioned he has children. Their ages are not detailed. That information may be irrelevant for present purposes, as may be any detail regarding the size of Douglas' considerable trust fund, or the amount of earnings from it required to meet Douglas' upkeep. What is known is that: i) Payments totalling $96,600 have been made to three of Douglas' family members on account of past maintenance provided by them. ii) Joan Parsons' care of Douglas over the period of 15-16 years was significantly greater than that provided by all other family members. iii) Had Joan Parsons lived at the time Douglas' trust fund was created, Guardian Trust would have paid her a significant sum on account of her past care and maintenance of Douglas.iv) This proceeding has been brought to benefit Joan's beneficiaries in the sum she would have received but for her death. v) Apparently one or more other claims are being made by claimants to an interest in Douglas' trust fund. One such by a person claiming to have been in a de facto relationship with Douglas for three and a half years prior to his accident. Apparently two children were born of that relationship.Guardian Trusts' position[17] Central to Mr Wenley's submissions for Guardian Trust is that Joan Parsons was not a beneficiary of the trust fund created for Douglas by Court order. Rather, by her death six years earlier there died with her any actionable cause to that trust fund. Mr Wenley relies upon s 3 of the Law Reform Act 1936 which provides:3 Effect of death on certain causes of action(1) Subject to the provisions of this Part of this Act, on the death of any person after the passing of this Act all causes of action subsisting against or vested in him shall survive against or, as the case may be, for the benefit of his estate:[18] In this case, because the trust fund and the trust did not exist at Joan's death, there was no cause of action to vest because the trust fund came into existence at earliest more than six years later. [19] Further, and because Joan had been dead for more than six years at the time the trust fund came into existence, any claim against Douglas in equity or contract would be statute barred because of the provisions of the Limitation Act 1950. [20] Mr Wenley submits that because Douglas' settlement was not impressed with a trust for past caregivers, and because the provision of gratuitous services to a person suffering personal injury does not entitle recovery of damages for past care by the persons who provided those services, no trust fund can be implied or created on behalf of past caregivers.[21] Mr Wenley invites the Court to distinguish the New Zealand High Court decisions in R A Williams & Ors HC AK M964/98 4 March 1999 Robertson J, andTaylor v Taite HC ROT M13/00 23 May 2002 Chambers J. Those cases involved claims against a fund that arose from past care. Further, the funds came from the Accident Rehabilitation Insurance Corporation and were created to provide compensation in respect of attendant care. No such inference or character is available in the trust fund awarded to Douglas, submits Mr Wenley. He says the terms of the order make it express that the fund was to be aid to Guardian Trust "for the benefit of [Douglas] in accordance with s 66(4)". [22] Therefore, if the Court had wanted to impress the trust with a responsibility for past care, then it would have done so, but it did not do so. [23] The R A Williams and Taylor cases deal with ACC payment provision for future care. Douglas did not have ACC cover because he was injured in Australia, and he obtained common law damages. The claim was compromised in terms whereby no part of the damages was identified as being for past attendant care. The fund was created with the intention and purpose of supporting Douglas for the rest of his life. Although Guardian Trust had exercised its discretion to compensate living members of the family that had provided past care, it was entirely proper, reasonable and lawful that Guardian Trust exercise its discretion not to enrich the children of Joan Parsons, who whilst personally deserving of recognition for past care provided, had died some six years prior to the fund coming into existence.Considerations[24] If I am to award summary judgment to Guardian Trust I must be satisfied that none of the plaintiff's causes of action can succeed. By none of those reasons advanced for Guardian Trust do I reach the conclusion the plaintiff could not succeed, whether: a) Because Joan Parsons predeceased the creation of the trust, even by more than six years, or;b) Because the creation of the trust was not expressed to provide compensation for past caregivers. [25] Although the position in the Australian Courts is not clear, it would appear byGriffiths v Kerkemeyer (1977) 139 CLR 161 that although an award of damages may include a sum representing the value of services rendered, where those services have been provided gratuitously there was no legal obligation by a successful plaintiff to pay for those services. It appears to follow that no trust is thereby created for the beneficiary of the provider of the services. [26] I doubt that view of matters will stand the test of time. Even Stephen J, in that case, indicated that a carer should be "rewarded in kind by a payment voluntarily made by the injured person, who has been put in funds for that purpose". I do not accept Mr Wenley's contention that relevant New Zealand authorities can be distinguished or in some way be viewed as supporting the now vintage position expressed in Griffiths. Although in R A Williams and in Taylor the basis for the entire fund was clearly for past attendant care, that does not affect the principle in both cases that any amount paid for past care is held in trust for those who provided it. That should be no less the case if there may be difficulties in deciding what part of the general fund was paid on account of past care received. [27] In this case: i) No doubt properly and for good purpose, living members of the family have been compensated for past care provided. ii) It has been acknowledged that Joan Parsons would have received similar consideration had she survived. iii) Although the settlement sum was not specific regarding the purpose for which it was settled, the original claim comprised a claim for past attendant care which amounted to more than one third of the total claim.(a) Although the total claim was settled in a sum equal to about one third, it would be naïve to consider the settlement sum precluded consideration of the claim for past attendant care. [28] Guardian Trust professed to act legally and properly in the exercise of a discretionary power. Essentially they had precluded the plaintiff's claim because Joan Parsons died before the trust fund was created. But for that fact a payment would have been made to her, the benefit of which may in time have passed to her estate. Therefore, if Joan's death does not affect the principle that a proportion of the fund that represents past care be held in trust for her estate, then Guardian Trust may not be acting properly or legally by refusing to make a payment to her estate. Guardian Trust was required to administer the trust in accordance with the provisions of s 66(4). That section requires Guardian Trust to "apply the income and capital of the amount, or so much thereof, as the trustee from time-to-time thinks fit for and towards the maintenance or education (including past maintenance or education) or the advancement or benefit of such person". That direction amongst the many and various others, cannot simply be dismissed as an incidental purpose or overall discretionary part of the trustee's powers. Clearly it is an entitling provision and one which, for proper purposes, the trustee ought to respect. In short it is not to be ignored because of a trustee's perceptions regarding the use-by date by which a claim for past maintenance ought to be made. [29] This claim may well not be precluded for the reasons Guardian Trust identifies. [30] Joan's death would not affect the principle that the part of the fund that represents past care is held in trust for her or her estate. Her death does not absolve the fund from this trust. The creation of the trust arguably would transcend consideration of her early demise. But if not, then a vested cause of action against Douglas may vest in Joan's estate because: i) To do otherwise could result in the unjust enrichment of Douglas or of Guardian Trust;ii) By the provision of services to Douglas an implied contract was created for the provision of a reward, the first step in which was the action taken in 1997 in the New South Wales Supreme Court; iii) Claims in equity are not subject to the restrictions of Limitation Act provisions; iv) If the Limitation Act did apply then time would run from the date the fund became available to meet claims for past attendant care, and because the Law Reform Act would not preclude a claim on behalf of an estate. [31] These are possibilities that might reasonably be argued in defence of Guardian Trust's position.Judgment[32] The summary judgment claim fails. [33] It is appropriate to fix costs at this time. The defendant is to pay costs on a 2B basis. [34] The proceeding will be adjourned to a telephone conference in four weeks' time upon a date and at a time to be advised by the Registrar.Solicitors: John Miller Law,Wellington for Plaintiff Willis Toomey Robinson, Napier for Defendant