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General

Friendship and support

Mr Friend met Mrs Latika Sen in 2011 outside a diary. Mr Friend and Mrs Sen became friends and her family provided Mr Friend with friendship and support. Mr Friend had some ill-health and in 2013 he scored 23/30 on a mental state assessment, equating to mild dementia. Mr Friend was discharged from hospital to Mrs Sen’s care and he stayed in her home for two months. In 2014 Mrs Sen and her family relocated to Wellington for better work opportunities.

In 2015 Mr Friend, now aged 88 won $1million in bonus bonds. Three months later he purchased a house in Stoke near Nelson for $425,000. Following this he told Mrs Sen that if she and her family moved from Wellington back to Nelson, to resume providing him with friendship and care they could all live in the new house and on his death it would become hers. The Stoke property was transferred to Mr Friend and Mrs Sen as joint tenants.

Shortly before his death, Mr Friend’s family discovered the arrangement and his attorney severed the joint tenancy so that on Mr Friend’s death, Mrs Sen only retained a half share in the property.

The matter proceeded as set out at [3] of Sen v Public Trust:

The first leg advanced by Mr Friend’s family to defend Mrs Sen’s claims related to capacity. The following passages from Sen v Public Trust provide useful, practical guidance regarding the assessment of capacity in light of a decision made by an elderly man who was wanting to remain in his home with people who he wanted to entice back to care for him and to allow him to live where he chose:

Two doctors had different views regarding the extent of Mr Friend’s capacity. Importantly at [26] Cooke J noted that “The assessment of capacity is also transactional.”

The context of the transaction and the related decisions is set out at [27] and [28]:

While it is easy to challenge a transaction entered into by a person with some impairment of capacity, or simply of advanced age because it might not appear entirely rational, or it might not suit other family members; it is important to remember that under the Protection of Personal and Property Rights Act 1988 there is a presumption of capacity. While “rights” can be claimed in respect of much, the right to make decisions about oneself or one’s own property, even if decisions others would not make, should not be denied lightly.

It may well have been sensible for the lawyer acting on Mr Friend’s purchase of the Stoke property to have recommended a capacity assessment. In this regard, as noted at [32]:

The challenge to capacity was denied.

The allegation of undue influence was similarly denied. The reasons for this were simply that as noted by Cooke J: “the transactions involved a quite careful plan implemented by Colin to get Latika and her family back into his life. Rather than them being a product of Latika’s undue influence, they were the product of Colin’s shrewdly devised strategy to achieve the most happiness he could in his remaining years.”

Illustratively:

Unconscionability was also considered. By way of explanation at [44]: “undue influence focusses on the mind of the person said to be influenced, whereas unconscionability focuses on the conscience of the person benefitting.”

Cooke J concluded: “It may be that Latika and her family have benefitted financially from Colin from the transaction in question. But this benefit arose from a financial windfall. And in the end they have benefited because they acted kindly towards an old man they had met in the community, and they provided him with friendship and support without any suggestion that they should be financially
rewarded, and notwithstanding that they were not well off. What goes around comes around.”

Editor’s note: Had the funds utilised for the purchase of the house not been a bonus bonds windfall, perhaps the outcome might have been different. What is clear is that Mr Friend utilised his good fortune to ensure as happy an end to his life as he was able to. He was able to plan and objectively achieve an outcome that does not appear irrational, in fact quite the contrary.

References:

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