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NP v JR [2023] NZFC 1477

Published 13 September 2023

Enduring power of attorney — property division — competence — duties — mental capacity — testamentary capacity — undue influence —Protection of Personal and Property Rights Act 1988, ss 5, 25, 93A, 93B, 95C, 97A, 99A & 102 — Family Protection Act 1955 — Testamentary Promises Act 1949 — Interest on Money Claims Act 2016 — CMS v Public Trust [2008] NZFLR 640 — Vernon v Public Trust [2016] NZCA 288; [2016] NZFLR 578 — Mckay v Sandman [2018] NZCA 103 — Jones v Te Maro [2013] NZFC 8555 — Foster v Foster [2014] NZFLR 931 — Green v Green [2015] NZHC 1218 — K P v M R [2004] 2 NZLR 847 R G (PPPR Jurisdiction) (1994) 11 FRNZ 43 — Green v Green [2017] 2 NZLR 321 — Gorringe v Pointon [2023] NZCA 42 — Scott v Wise [1986] 2 NZLR 284 — W J T v P J T [2012] NZFLR 855 — Treneary v Treneary (2008) 27 FRNZ 78 — CT [2013] NZFC 17790. This was a reserved judgment on the main issue of whether the respondent was partly lacking in competence at the time decisions were made which benefited a third party, and whether the third party breached his duties as an attorney. The statutory power required the third party to act in good faith and in the interest of the respondent as the respondent's attorney. The respondent experienced cognitive decline and the Court had to determine whether the respondent had the capacity to make decisions regarding property and assets at the time that the decisions were made. The third party did not accept that he was acting under an Enduring Power Of Attorney when the respondent did not have the mental capacity. However, the Court determined that he was advised and knew of his role. There were eight transactions in question. The transactions were claimed to be gifts from the respondent to the third party. They were mostly withdrawals from the respondent's account into the third party's account. The third party claimed these transactions were only done after he discussed them with the respondent and obtained her consent. Many of the transactions were found to have benefited the third party and not the respondent. The Court found the respondent lacked the capacity to make decisions at the time of the transactions. The third party's duty as an attorney for the respondent was breached as he acted contrary to the respondent's interests, failed to maintain adequate records and imposed undue influence on the respondent. The Court found that the third party was taking money from the respondent that he was not entitled to. The Court determined that the third party was required to pay back the respondent's proceeds for the sale of her property, a portion of his ATM withdrawals from the respondent's account and the legal fees that the third party had directed to the respondent. Judgment Date: 9 May 2023. * * * Note: names have been changed to comply with legal requirements. * * *