Application of Peter Hodges [2021] NSWSC 55

Supreme Court New South Wales

Medium Neutral Citation: Application of Peter Hodges [2021] NSWSC 55 Hearing dates: 5 February 2021 Date of orders: 5 February 2021 Decision date: 05 February 2021 Jurisdiction: Equity Before: Kunc J Decision: Directions made in relation to possible settlement Catchwords: CIVIL PROCEDURE – Parties – Persons under legal incapacity – Tutors – Application for directions by tutor not to be confused with application by trustee for judicial advice – Anticipatory applications by tutors for directions in relation to potential settlement of proceedings should generally not be made – Civil Procedure Act 2005 (NSW), ss 76(3), 80 Legislation Cited: Civil Procedure Act 2005 (NSW) Trustee Act 1925 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: A v A [2015] NSWSC 1778 AC v OC (a minor) [2014] NSWSC 53 Hancock v Rinehart [2019] NSWSC 1451 Macedonian Orthodox Community Church St Petka Incorporated v His Eminence Petar The Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand & Anor (2008) 237 CLR 66; [2008] HCA 42 Rappard v Williams [2013] NSWSC 1279 Category: Procedural rulings Parties: Peter Hodges (Plaintiff) Representation: Counsel:

M Gunning (Plaintiff)

Solicitors:

Mills Oakley (Plaintiff) File Number(s): 2020/260355 Publication restriction: No

eX TEMPORE Judgment (REVISED)

Summary 1. By Summons filed on 7 September 2020, the applicant solicitor, Mr Peter Hodges, seeks judicial advice in the form frequently sought by trustees. However, Mr Hodges is not a trustee. 2. By order of this Court made on 24 February 2020, Mr Hodges was appointed tutor for Mr Eric Darley. Mr Darley is the defendant in proceedings (the "Primary Proceedings") brought by Mr Darley's daughter, Mrs Jillian Links, and her husband, Mr Colin Links (the "Links"). Mr Darley has been diagnosed by his general practitioner with "severe cognitive impairment because of dementia". 3. Mr Hodges' summons, which names no defendant, seeks this relief: "1. An order that the plaintiff would be justified in defending Supreme Court of New South Wales Case No. 2019/00229657 (Primary Proceedings). 2. An order that the plaintiff would be justified in paying the legal costs of defending the Primary Proceedings out of the Estate of Eric Darley on an indemnity basis. 3. Alternatively, an order that the plaintiff would be justified in accepting the offer made by the plaintiffs in the Primary Proceedings on 3 September 2020. 4. Further or other orders and directions. 5. An order that the costs of these proceedings be paid out of the Estate of Eric Darley on an indemnity basis." 1. In the Primary Proceedings, the Links allege that Mr Darley and his late wife agreed to lend them up to $250,000 to purchase a property at Kariong (the "Property") on which the Links would live, but which would be held by Mr and Mrs Darley for the benefit of the Links. The Links seek relief in the Primary Proceedings to the effect that, subject to their obligation to do equity by repaying what they borrowed, Mr Darley holds the Property on trust for them. They also claim alternative and ancillary relief, all of which depends upon the basic allegation of the agreement to which I have just referred. 2. The Links have filed their evidence in the Primary Proceedings. Having made all reasonable inquiries, but fundamentally hampered by being unable to take instructions from Mr Darley due to Mr Darley's dementia, Mr Hodges finds himself in the unusual situation where he is unable to advance a defence to the Links' claim that, in accordance with his professional ethical duties, he is able to say has a proper basis. 3. Furthermore, the Links have made an offer to settle the Primary Proceedings (the "Settlement Offer"). Mr M Gunning of Counsel, who appeared for Mr Hodges on today's application, has provided to Mr Hodges a careful and thorough opinion (which I admitted into evidence as Confidential Exhibit 2P and is an opinion of the kind common in trustees' applications for judicial advice) to the effect that it would be reasonable and justified in the circumstances for Mr Hodges to accept the Settlement Offer. 4. Because Mr Hodges is not a trustee, the Court has concluded that this is not a case where the advice sought by Mr Hodges can be given either pursuant to s 63 of the Trustee Act 1925 (NSW) (the "TA") or the Court's inherent jurisdiction to advise trustees. However, while I am of the view that the more orthodox vehicle for consideration of the issues which Mr Hodges has raised would have been an application for approval of a settlement after acceptance of the Settlement Offer (under s 76(3) of the Civil Procedure Act 2005 (NSW) (the "CP Act")), I am satisfied that the Court has power to advise Mr Hodges that he would be justified in settling the Primary Proceedings on terms no less favourable than those contained in the Settlement Offer in exercise of its power to give directions to a tutor under s 80 of the CP Act. While that advice will be given, any settlement of the Primary Proceedings will still require the Court's approval pursuant to s 76(3) of the CP Act.