SEYMOUR V THE NEW ZEALAND GUARDIAN TRUST COMPANY LIMITED HC HAM CIV 2008-419-000847

SEYMOUR V THE NEW ZEALAND GUARDIAN TRUST COMPANY LIMITED HC HAM CIV 2008-419- 000847 29 October 2008IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY CIV 2008-419-000847UNDER the Protection of Personal and Property Rights Act 1988 IN THE MATTER OF an appeal under s 83 of that Act BETWEEN JEFFREY JOHN SEYMOUR Appellant AND THE NEW ZEALAND GUARDIAN TRUST COMPANY LIMITED Respondent Hearing: 4 September 2008 Appearances: Appellant in Person (J R Goodall as McKenzie Friend) No appearance for Respondent K Muller for the Attorney-General Judgment: 29 October 2008JUDGMENT OF COOPER JThis judgment was delivered by Justice Cooper on 29 October 2008 at 2.30 p.m., pursuant to r 540(4) of the High Court Rules Registrar/Deputy Registrar Date: To: J J Seymour, 13A Roy Street, Hamilton Copies to: The Attorney-General, Crown Law Office, PO Box 2858, Wellington for K Muller J R Goodall, 193 Dinsdale Road, HamiltonIntroduction[1] This is an appeal under s 83 of the Protection of Personal and Property Rights Act 1988 ("the Act"). [2] Section 31(1) of that Act provides for the Family Court to make an order appointing one or more suitable persons to act as the manager of the property, or of any specified part of the property, of the person in respect of whom an application has been made. [3] Such an order was made in relation to Mr Seymour on 29 September 1993. The New Zealand Guardian Trust Company Ltd ("the Guardian Trust") was then appointed to manage part of Mr Seymour's assets, namely funds held in a superannuation fund that were worth approximately $56,000 at the time, together with some relatively small amounts held on deposit. Mr Seymour retained control of other assets, including shares that he had purchased in 1993 for $13,619.88, as well as his home. [4] The order made in September 1993 was periodically reviewed as required by s 31(8) of the Act and the Guardian Trust as manager remained as manager down to 15 April 2008. On that day Judge Twaddle, rejecting the Trust's application that the order continue in force, made an order discharging it as manager. [5] The Judge also ordered that Mr Seymour pay the costs of the solicitor who acted for him in relation to the proceedings in the Court, Mr C M Earl. Mr Earl was appointed by the Court to represent Mr Seymour under s 65 of the Act. [6] Section 65(5) of the Act provides as follows:Fees for professional services provided by barristers or solicitors appointed under this section, and reasonable expenses incurred, - (a) may be determined in accordance with regulations made under this Act; and (b) are payable out of public money appropriated by Parliament for the purpose.[7] There is another relevant provision concerning the fees, however, namely s 65(8). That subsection provides:Notwithstanding subsection (5) of this section, the Court shall have regard to the means of any party to the proceedings or the person in respect of whom the application is made, and shall, if it thinks proper, order any party or the person to refund to the Crown such amount as the Court specifies in respect of any fees or expenses paid under that subsection; and the amount ordered to be refunded shall be a debt due to the Crown by that party or by that person and shall be recoverable accordingly in any Court of competent jurisdiction.[8] Judge Twaddle ordered that Mr Earl's costs were to be paid in the first instance from the Consolidated Account. The full amount of those costs was then to be refunded by Mr Seymour to the Consolidated Account. It is from that part of the judgment that Mr Seymour now appeals. Essentially, he maintains that he should not have been required to refund the costs, because he had never accepted that a property manager needed to be appointed to manage his property, and on the present occasion he had successfully opposed extension of the Guardian Trust's appointment. He maintains that the requirement to refund is not justified in all the circumstances, but also that it would be unduly onerous on him. [9] At the hearing of the appeal, Mr Seymour was present in person assisted by his friends Messrs Goodall and Ran, as McKenzie Friends. In essence, given the nature of the case, I allowed Mr Goodall to perform a function analogous to that of counsel and did not subject him to the restrictions that normally apply to McKenzie Friends. I record that he acquitted himself well in that role. [10] The Guardian Trust did not oppose relief being granted on the appeal and, having filed an appearance reserving rights, abided the decision of the Court. [11] I was greatly assisted by a comprehensive submission from Ms Muller, appearing for the Attorney-General on the basis that if the order for refund is cancelled the costs will effectively be met by the Crown. Ms Muller presented well reasoned arguments in support of the decision of the Family Court.[12] One other preliminary matter can be mentioned. It appears that the appeal was filed out of time. Mr Seymour sought an enlargement of the time for filing the appeal and that was not opposed. The enlargement was granted accordingly.Background[13] It is not necessary to state the background in great detail. [14] As already mentioned, an order was first made appointing the Guardian Trust as manager under s 31 of the Act in September 1993. Section 24 of the Act provides that every person is presumed to be competent to manage his or her own affairs in relation to his or her property, until the contrary is proved. Section 25 then gives the Family Court jurisdiction in respect of any property owned by any person who is domiciled or ordinarily resident in New Zealand and:Who, in the opinion of the Court, lacks wholly or partly the competence to manage his or her own affairs in relation to his or her property. (s 25(1)(b)).[15] The judgment now under appeal records that Mr Seymour suffered from a psychiatric illness which was first diagnosed in 1975 when he was 17. Following a period in hospital his condition remained stable until he was about 34 or 35. He then suffered an acute relapse which led to him spending much of 1992 in hospital. [16] A report prepared by a consultant psychiatrist in 1993 concluded that Mr Seymour suffered from bipolar affective disorder. It was suggested that whilst the condition was able to be controlled by medication, it was likely that he would suffer relapses for the rest of his life. When unwell, his capacity for reasonable thinking and behaviour "disintegrated swiftly and profoundly". [17] The judgment referred to further medical opinions obtained in 1996 and again in 2004. However, more recently (in October 2007) a Dr Hibbs, who had been Mr Seymour's doctor for some twelve years, reported that, over the last four to five years Mr Seymour's symptoms had been fully controlled and that he had been well and stable. Dr Hibbs saw Mr Seymour again in March 2008. He confirmed then that there was no evidence of continuing, underlying psychotic symptoms. In hisview, Mr Seymour could function successfully in the community and appropriately attend to his commitments. [18] The Judge noted that Mr Seymour was 50 years of age and had worked for the New Zealand Dairy Company for about 17 years before being made redundant in the early 1990s. By then, he had accumulated about $70,000 in the superannuation fund when the Guardian Trust had been appointed to manager his interest in that fund in 1993. [19] At the time of the hearing before Judge Twaddle Mr Seymour was in receipt of a benefit of $491.50 per fortnight. He had no debts. He owned his own home valued at about $200,000 and had savings of about $4,600. The value of shares which had been retained in his own management (having initially been valued at $13,619.88) had increased to approximately US$50,000. He was attending to maintenance and upkeep of his home and made regular charitable donations. Judge Twaddle referred to an affidavit that had been sworn by Mr Goodall stating that Mr Seymour had trustworthy friends able to give him advice. His account has never been overdrawn and he has an up to date financial plan compiled by a professional financial advisor. [20] Taking into account the up to date medical evidence, as well as Mr Seymour's demonstrated ability to manage his financial affairs with the help of others the Judge concluded that he was competent to manage his own affairs in relation to his property. As a consequence, the appointment of the Guardian Trust was discharged. [21] On the question of costs, the Judge said:Mr Earl submitted that his costs should be paid from the Consolidated Account rather than by Mr Seymour because Mr Seymour has never accepted the need for a property manager. I accept that this is so and take into account that Mr Seymour has successfully opposed the extension of the order. But the Court has found in the past that the grounds for appointing a property manager were made out and acted to protect Mr Seymour's property. Also Mr Seymour has sufficient funds to pay Mr Earl's costs. In these circumstances I do not see that the taxpayers should be required to pay Mr Earl's costs.The appeal[22] Section 83 of the Act provides for a right of appeal to this Court in any case where the Family Court has exercised its jurisdiction under the Act. Such appeals are subject to the High Court Rules and ss 74 to 78 of the District Courts Act 1947 apply with any necessary modifications as if the appeal were under s 72 of that Act. Consequently, the appeal is to be by way of re-hearing and this Court may make any decision on the appeal that it thinks should have been made at first instance, or make directions concerning further proceedings in the District Court. (s 76(1)(a) and(b) of the District Courts Act). [23] Six specific grounds were set out in the notice of motion on appeal drafted by Mr Goodall on behalf of Mr Seymour. Mr Goodall addressed each in his oral submissions at the hearing. [24] The first ground was that the Judge failed to give due consideration to Mr Earl's submissions regarding liability to pay the costs. Mr Goodall explained that it was not the amount of the costs that was being objected to, but the fact of any impost, of whatever extent. In developing this ground in argument Mr Goodall tended to concentrate on the grounds given by the Judge for making the order for costs, arguing that they did not justify the award. [25] The second argument put forward was that the Judge had failed to give due consideration and weight to the precedent established by the orders that had been made commencing in 1993, and then on the subsequent reviews down to 24 June 2004 when, on each occasion, the costs were ordered to be met out of the consolidated account. Mr Goodall argued that the same approach should have been taken when the Guardian Trust was discharged. [26] The third ground of appeal advanced was that the Judge had failed to give due weight and consideration "to the principle of equity". In advancing this ground of appeal, Mr Goodall sought to compare Mr Seymour as a law-abiding citizen with those charged with offences. Quoting Mr Seymour himself, Mr Goodall posed the question, "If the State has an obligation to pay huge amounts of money to ensure thatsuspected offenders get a fair trial, should not a law-abiding citizen like myself be afforded a few crumbs of assistance?" [27] Next, it was argued that it would be unfair and contrary to the principles of natural justice for the appellant to suffer the "double jeopardy" of having to pay for his own defence and also having to pay for, as it were, the "costs of prosecution". Mr Goodall explained that if the judgment under appeal stood, Mr Seymour would have to pay the costs of Mr Earl in the approximate sum of $3,500. In addition, however, the Guardian Trust had rendered two accounts being respectively for the periods 1 April 2007 to 31 March 2008 and 1 April 2008 to 30 April 2008 in the sums of $1,629 and $3,937.50. From the recitals given on those invoices, it appears that most of those costs, if not all of them, were related to the review process under the Act concluded by the decision of Judge Twaddle. [28] Mr Goodall described as anomalous a situation in which the Guardian Trust were seeking prolongation of their appointment as manager, against Mr Seymour's will, with him being required to fund the cost both of that and of his own Court appointed counsel. [29] The next ground of appeal advanced was that the Guardian Trust itself had asked the Family Court to order that Mr Earl's costs be paid by the State. He conceded that that might have been because of anticipation on the part of the Guardian Trust that the protection order would not be discharged. [30] Finally, Mr Goodall submitted that the order requiring payment of costs was not in Mr Seymour's best interests. I understand that, at least indirectly, this was to invoke s 65(8) of the Act, which requires the Court to have regard to the means of any party to the proceeding or the person in respect of whom the application is made before deciding "if it thinks proper" to order any party to make a refund to the Crown.The Attorney General's case[31] For the Attorney-General, Ms Muller pointed out that the appeal involved a challenge to the exercise of a discretion in the Court as to whether and if so, the extent to which, it should order a refund under s 65(8) of the Act. Consequently, in accordance with the judgment of the Court of Appeal in Blackstone v Blackstone[2008] NZCA 312 at 8, this Court is not required to embark upon the wider inquiry that might be necessary in the case of other kinds of appeal in accordance withAustin, Nichols & Co Inc v Stichting Lodestar [2008] 2 NZLR 141 (SC). Rather, the principles in May v May [1982] 1 NZFLR 165 (CA) continue to apply:The function of the Court is to intervene only if it is shown that the Judge acted on a wrong principle, failed to take into account some relevant matter or took into account some irrelevant matter, or made a decision that was plainly wrong.[32] Ms Muller submitted that the discretion under s 65(8) should be exercised on a reasoned and principled basis, and be guided by the object of the legislation under consideration: R v S [2004] NZFLR 207 (HC). In CMS v Public Trust [2008] NZFLR 640 Keane J referred to the purpose of the Act in the following terms, at [21]:The purpose of the 1988 Act is, so far as it is set out in the short title, to protect personal and property rights. That is incomplete. The full purpose is, as the long title confirms, both to protect and to promote those rights; the rights of "persons who are not fully able to manage their own affairs". In its objectives, principle and purposes, the 1988 Act sets out to protect such persons and, so far as can be achieved, to promote their autonomy, all the while according to them, whenever any decision is to be made, the most complete right to be heard.[33] Having given a reasonably detailed summary of the statutory scheme, Keane J referred to it as a "regime in which the autonomy of the person is protected and promoted to the highest degree consistent with his or her welfare". [34] Ms Muller also referred to a decision of Judge Inglis QC in Re T [1992] NZFLR 619 in which, at 621 he discerned in s 65(8) an intention that, in exercising its discretion to depart from s 65(5) of the Act, the Court is required to consider thefinancial means of the disabled person and that "a user pays philosophy is an undoubtedly appropriate element in the discretion". [35] Ms Muller pointed out that the Court had evidence before it of Mr Seymour's assets as at 31 March 2007. There was a house worth $203,000; an ANZ savings account with a deposited balance of $4,608.68, a share portfolio with a worth approximately of US$50,000 in January 2008 as well as the fortnightly benefit earlier referred to. The superannunation fund hitherto managed by the Guardian Trust was valued at $83,944.78 as at 8 June 2007. There were no debts. In the circumstances, Ms Muller submitted that the Judge had properly taken into account the means of Mr Seymour to pay the legal costs and had exercised his discretion properly under s 65(8). [36] She argued that for the reasons given by the Judge for making such an order were appropriate and sufficient. She rejected the appellant's contention that decisions made on costs on previous reviews should have been applied again as "precedents" when Judge Twaddle made the present orders. She referred to the different purposes and considerations relevant under the Legal Services Act 2000 with respect to grants of legal aid to those accused of criminal offending, and noted that the grant of aid is often simply a loan which must eventually be repaid. [37] Ms Muller also pointed out that there is nothing in the Act which precludes an estate from being subjected to multiple charges for costs, and accordingly no room for a "double jeopardy argument" of the kind advanced by the appellant. The Guardian Trust's concurrence with the course favoured by the appellant was, in her submission, not significant and while the interests of the appellant were important they were not the paramount consideration. Given that the appellant could afford to pay, there was no reason to uphold the appeal.Discussion[38] I consider that the arguments advanced by Ms Muller are by and large correct. Although general observations about the purpose of the legislation can only take one so far in deciding whether or not a discretion such as that contained ins 65(8) has been properly exercised, it is plain that the legislature intends that in an appropriate case a person who has been the subject of an order made under s 31 might be required to pay costs, even when the result of a review is in that person's favour. That was the present case. Section 65 has to be applied with due recognition of the fact that unless satisfied that the subject of the application will him or herself retain a barrister or solicitor, the Court must appoint a lawyer under s 65(1). The fees of the person appointed are to be met out of public funds, unless, having regard to the means of the subject person, it is "proper" for there to be a refund in whole or in part. [39] It seems reasonably clear from the legislative scheme that once s 65(8) is reached, the controlling consideration ought to be the means of the person to make the payment. [40] In such a statutory scheme the question of which party has been successful and which unsuccessful will often have far less relevance than it does in general civil litigation. Here, Mr Seymour's costs were, properly in my view, met out of public funds for so long as the order remained in effect, even though he was opposed to the maintenance of the order. At this point, although on one level he has "succeeded" in the litigation, it is not for that reason inappropriate that he himself should make a refund of the costs which related to the present review. [41] For the same reasons, it is very difficult to assert that previous decisions should have been treated as a precedent. Apart from any other consideration, the historical outcomes of the process were different from the present. Secondly, Mr Seymour is now in a position where the Court is confident that he would be able to manage his own affairs properly without the benefit of an order under the Act. It is not inappropriate that, having reached that position, full assumption of responsibilities for his personal affairs should involve, amongst other things, making a proper contribution to the costs under s 65(8). [42] However, there is one argument that has been advanced in support of the appeal which, on the face of it, may have some merit. It is clear that in order to decide whether or not an order should be made under s 65(8), the Judge must haveregard to the means of the subject person. Judge Twaddle found that Mr Seymour had sufficient funds to pay Mr Earl's costs and ordered a refund of the full amount of those costs. The only respect in which one might raise an issue about that determination concerns the costs which Mr Seymour was also required to pay (by way of deduction from the managed fund) to the Guardian Trust. Mr Goodall submitted that, by the time the Judge reserved his decision (15 April 2008) it was unlikely that he was aware of the amounts in fact charged by the Guardian Trust. Certainly, Mr Seymour had not been in the position to raise that issue in the Family Court, because he did not then himself know what amounts the Guardian Trust would require him to pay. [43] The costs in question total $5,566.50. Added to the $3,500 payable to Mr Earl there is therefore a total bill for legal costs, referable to the review procedures under the Act, in the sum of $9,066.50. That is a substantial sum for somebody with Mr Seymour's income even taking into account his asset position. [44] It is unclear from the record whether or not Judge Twaddle would have made an order under s 65(8) had he known of the full extent of the Guardian Trust's costs. In saying that, I do not wish to criticise and do not wish to be taken as criticising the level of those costs. It may well be that they were justified, but that is not the present point. [45] If the full extent of the costs payable to the Guardian Trust were not taken into account then it could be said, I think, that the Judge may not have taken into account a relevant matter in exercising his discretion under s 65(8). That is because at the time, Mr Seymour's ability to pay should have been assessed on his net asset position taking into account his obligation to pay the Guardian Trust.Conclusion[46] In the circumstances, I consider that the appropriate course to follow is to refer the matter back to Judge Twaddle for further consideration as to whether or not an order should be made under s 65(8) and if so, whether it should be for the full amount of Mr Earl's legal costs. That reconsideration should take into accountMr Seymour's financial position having regard to the fees charged by the Guardian Trust. [47] In the circumstances, I order that: a) The appeal is allowed. b) Order (b) made in the Family Court on 15 April 2008, that Mr Earl's costs are to be paid in the first instance from the Consolidated Account and that the full amount of those costs is to be refunded by Mr Seymour to the Consolidated Account, is set aside. c) The issues of whether or not there should be an order under s 65(8) of the Act, and if so, whether it should relate to the full amount of Mr Earl's costs, is to be further considered in accordance with this judgment. [48] For the avoidance of doubt, I direct that the reconsideration should be by Judge Twaddle, unless for any reason that is not possible.