//
you're reading...
Removal of trustees, Testamentary trusts, Trustees, Will trusts, Wills

Capacity in context

Jellyman v Jellyman is about two children with different views as to what is in their mother’s best interests.  The matter came before the court because Mrs Jellyman was a trustee of a testamentary trust under her late husband’s will.  Her son Maurice was the other trustee.

Mrs Jellyman wanted to sell her home in Hastings and purchase a home in Tauranga to live closer to her daughter.  Maurice did not support the sale and did not want the estate to incur the costs of sale.  The residuary beneficiaries of the testamentary trust are Maurice and his three siblings.

The matter came before the court as an application to remove Maurice as a trustee pursuant to s 51 of the Trustee Act 1956  and replace him with his sister Heather, or in the alternative orders under s 68 of the Trustee Act for the sale of the Hastings property and the purchase of a property in Tauranga.

Mrs Jellyman has Alzheimer’s Disease and was represented in the hearing through a guardian ad litem.  However, notwithstanding this, her views were able to be considered and although she was assessed as not having capacity to defend herself in the proceedings she was still considered by her doctor to be able to undertake her role as a trustee where the matters involved were not complex.  See [15]:

“Mrs Jellyman does, however, have Alzheimer’s disease. Her doctor, Andrew Heslop, has sworn an affidavit dated 22 January 2018 in which he gives his opinion on how Alzheimer’s disease affects the plaintiff and records her wish to move to Tauranga. Dr Heslop states:

3. In February 2017, my opinion was sought regarding Hazel Jellyman’s capacity to defend or comprise proceedings before this Court and I stated that, in my opinion, she did not have that capacity. A copy of my letter of 23 February 2017 to the solicitors for the Plaintiff is attached as Exhibit “A”. My reason for that view, was that litigation is generally stressful, sometimes complex or urgent, and in this case, personal.

4. At that time, I also expressed the view that while Mrs Jellyman suffered from Alzheimer’s Disease, she was still well able to form a view about her living circumstances. In particular, I said:

I believe she has a clear desire to move to Tauranga. She knows she wants to move and the reasons for it — ie to be closer to her family. She understands the benefits to her mental and physical wellbeing and is clear that she no longer wishes to remain in her current situation. She is able to clearly state the reasons for this. I believe she is able to make choices around her planning for the future.

5. In December 2017, I was requested again to review Mrs Jellyman’s capacity. After doing so, I confirmed the opinion expressed in my letter of 28 February 2017. I was aware of what Mrs Jellyman proposed to aver in her further affidavit. In my opinion, Mrs Jellyman’s Alzheimer’s has not deteriorated significantly since February 2017.

6. I attach as Exhibit “B” a copy of my letter to the solicitors for the Plaintiff dated 18 December 2017. I confirm that Mrs Jellyman is very clear in her desire to move to Tauranga.

7. There is no doubt in my mind that Mrs Jellyman is quite certain about what she wishes to do and I can see positive benefits to her health and her wellbeing if she is able to do it. Living as she does, alone in a house in Hastings, with support only from a person who she apparently finds intimidating and therefore does not want to rely upon, means that it is likely that her ability to remain independent will be curtailed. As I understand her wishes she wants to live in Tauranga where she has more general support from her wider family and as a consequence can remain independent with that support. From a health perspective maintaining the independence of the elderly where they can manage with proper support is a desirable outcome. I would endorse that for my patient.

8. In my opinion, Mrs Jellyman is still able to undertake the role as a Trustee of her late husband’s estate where the matters involved are relatively simple decisions and do not involve complex reasoning or stress.

The Court was satisfied that the guiding principle was the welfare of Mrs Jellyman and accepted the evidence of her doctor regarding the importance of maintaining her independence and choosing where she lives.  The court expressed a view that Maurice had a “closed mind” about the matter.

With respect to the s 51 application the Woolford J set out the principles as follows:

[29]  In the present case, the assistance of the court is required because there is no power to appoint or remove trustees conferred by the trust set up in the deceased’s will.

[30]  Section 51(2) lists five situations where the court may make an order under s 51(1). The first listed situation is where the court finds that a trustee has “misconducted himself in the administration of the trust”.

[31]  It is, however, clear that the court is not limited to those five situations as s 51(2) commences with the words “In particular and without prejudice to the generality of the foregoing provision” (that is, s 51(1)). It is also evident from case law that the criteria under which the court may act pursuant to s 51(1) is somewhat broader that simply misconduct.1 The main guide to the exercise of the court’s power must be the welfare of the beneficiary or beneficiaries. Other guiding principles include the settlor’s intentions, the promotion of the purposes of the trust and neutrality between beneficiaries.

The court was not satisfied, based on past conduct, that Maurice would necessarily act in his mother’s best interests and that she should be free to make her own choices about where she lives.  Maurice was removed as a trustee and replaced with his sister Heather to act as a trustee with Mrs Jellyman.

References:

  • Jellyman v Jellyman [2018] NZHC 210

Discussion

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Categories

%d bloggers like this: