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NA v JB [2022] NZFC 1666

Published 21 December 2022

Application — settle property on trust — appointment of property managers — incapacitated persons — reporting requirements — Protection of Personal and Property Rights Act 1988, ss 11, 31, 38 & 62 — Trusts Act 2019. The application concerned a new trust, established to benefit the subject person as its sole beneficiary. The applicant mother and sister applied under the Protection of Personal and Property Rights Act (PPPRA) to appoint property managers for the subject person. They had both been appointed as joint welfare guardians and jurisdictional matters were satisfied in terms of the subject person lacking capacity. Lawyer for the subject person proposed that the assets should be settled on the trust pursuant to s 62 of the PPPRA, which would give the Court a broad ability to settle the subject person's property on trust. Applying this section would eliminate the need for a property manager to be appointed, as an order to administer his property under s 11 PPPRA could be made instead. However, s 62 could only be used to settle the property of a person subject to a property order. The Court noted that this would require a property manager to be appointed under s 31 PPPRA, and the applicants would be subject to additional reporting requirements. The Judge highlighted the purposes of the PPPRA: to help manage the lives of incapacitated persons in the least restrictive way possible, and to protect and promote their autonomy to the greatest extent possible. The requirement on property managers to report annually added another layer of protection. As such, any decision to remove the subject person's assets from the protection of the PPPRA should be treated cautiously. However, the applicants had a long positive history of caring for the subject person and managing his finances for his benefit. The Court held that the specific circumstances in these proceedings and the principles of the PPPRA justified an alternative course of action. The Judge appointed the applicants as joint property managers for a period of three months to allow for the transfer of the subject person's assets to the trust, after such time an order to administer property could be made. The Judge considered the obligation on trustees to provide information to beneficiaries so that they can be held accountable. As the subject person (and sole beneficiary) lacked capacity, he was not in a position to hold the trustees to account. The Court directed that information about the financial situation of the trust should be provided for review to a lawyer appointed to act for the subject person. Judgment Date: 10 March 2022. * * * Note: names have been changed to comply with legal requirements. * * *