Control
of a person’s assets under the Protection of Personal and Property Rights Act
creates personal liability if acting without reasonable care but this liability
does not extend to aspects of the person’s life not covered by the
appointment. A Taranaki chartered accountant
was not liable for losses a client suffered because of delays in finalising a
relationship property claim.
The Supreme Court was told that in 1999 the
Family Court appointed accountant Christopher Schurr manager of a farming
client’s assets. The client, Mr Neil
Johnston, had suffered severe brain damage in a motorcycle crash. This appointment under the Protection of
Personal and Property Rights Act required Mr Schurr to act generally in the
best interests of Mr Johnston. Prior to
the accident, Mr Johnston was in the process of finalising a relationship
property settlement with his wife. Their
relationship had ended three years earlier.
There had been tentative agreement for Mrs Johnston to receive some
$398,000 as her share of the relationship property, but nothing was finalised
before the accident.
The court was told Mr Johnston had recovered
sufficiently from his brain injuries by 2003 that the Family Court discharged
Mr Schurr from his role as manager and Mr Johnston resumed full control of his
assets. By this time, the value of the
family farm had risen from a then government valuation of $1.1 million to $2.35
million and the relationship property claim had not been finalised. Mr Johnston sued Mr Schurr for damages, being
the increased amount now due his wife.
The Supreme Court emphasised that the Act does
not give managers control over all a person’s assets; in this case only those
assets and powers the Family Court decided.
When Mr Schurr was appointed manager in 1999 the court order
specifically excluded authority to conclude any relationship property
settlement on behalf of Mr Johnston. The
Family Court was told the Johnstons’ negotiations over relationship property
had not been completed and it was now considered the family farm should be kept
to assist in Mr Johnston’s long term rehabilitation.
The Supreme Court ruled Mr Schurr could not be
held liable for a failure to do something he was not permitted to do.
Johnston
v. Schurr – Supreme Court (12.06.15)
15.068