Supreme Court New South Wales Medium Neutral Citation: Mary Perera by her tutor Marisa Perera v Alpha Westmead Private Hospital trading as Westmead Private Hospital [2022] NSWSC 571 Hearing dates: 12 May 2022 Date of orders: 27 May 2022 Decision date: 27 May 2022 Jurisdiction: Common Law Before: Johnson J Decision: In accordance with paragraph 2 of the Notice of Motion filed 9 May 2022, the Court declares that the Plaintiff is not a person under legal incapacity within the meaning of ss.3 and 76 Civil Procedure Act 2005 and Rule 7.14 Uniform Civil Procedure Rules 2005. To the extent that it is necessary, an order is made under Rule 7.18 Uniform Civil Procedure Rules 2005 removing the tutor from the proceedings. By consent, the following orders are made: a. Judgment for the Plaintiff. b. The Defendant is to pay the Plaintiff's costs of the proceedings up to 13 April 2022 and the costs of the application for removal of the tutor as agreed or assessed. c. The Defendant is to pay its own costs of the proceedings. d. The parties have liberty to apply on three days' notice if any further order is considered appropriate, having regard to the decision reached by the Court in this judgment. Catchwords: CIVIL PROCEDURE – proceedings instituted on behalf of the plaintiff by a tutor on the basis that she was a person under legal incapacity – proceedings settled – whether approval of settlement required under s 76 Civil Procedure Act 2005 – whether plaintiff remains a person under legal incapacity – application for removal of tutor Rule 7.18 Uniform Civil Procedure Rules 2005 – consideration of legal incapacity under Division 4 Civil Procedure Act 2005 and Rules 7.13-7.16 Uniform Civil Procedure Rules – consideration of whether applicant incapable of managing own affairs – plaintiff no longer a person under legal incapacity so as to require a tutor – order under Rule 7.18 removing tutor from the proceedings – approval of settlement under s 76 not required Legislation Cited: Civil Procedure Act 2005 NSW Trustee and Guardian Act 2009 Uniform Civil Procedure Rules 2005 Cases Cited: Budini v Sunnyfield (No. 3) [2021] FCA 1540 Farr v State of Queensland [2009] NSWSC 906 Gerard Malouf and Partners Pty Ltd v NSW Trustee and Guardian and Anor [2017] NSWSC 899 Mao v AMP Superannuation Limited [2017] NSWSC 987 Murray v Williams [2010] NSWSC 1243 Nurrish v Schwander [2016] NSWSC 91 Permanent Trustee Company Ltd v Mills (2007) 71 NSWLR 1; [2007] NSWSC 336 Smilevska v Smilevska [2015] NSWSC 1794 Xiang bht Cao v Tong [2021] NSWSC 44 Texts Cited: --- Category: Principal judgment Parties: Mary Perera by her tutor Marisa Perera (Plaintiff) Alpha Westmead Private Hospital trading as Westmead Private Hospital (Defendant) Representation: Counsel: Mr JM Morris SC; Ms R Bianchi (Plaintiff) Mr SD Kalfas SC; Ms KE Burke (Defendant) Solicitors: Bilias & Associates (Plaintiff) HWL Ebsworth Lawyers (Defendant) File Number(s): 2017/374274 Publication restriction: --- Judgment 1. JOHNSON J: On 12 May 2022, in my capacity as Common Law Duty Judge, I heard a Notice of Motion filed for the Plaintiff on 9 May 2022 in proceedings between the Plaintiff, Mary Perera by her tutor Marisa Perera, and the Defendant, Alpha Westmead Private Hospital trading as Westmead Private Hospital. The Plaintiff's Notice of Motion 1. The Notice of Motion sought: 1. a declaration that the Plaintiff is not a person under a legal incapacity within the meaning of ss.3 and 74 Civil Procedure Act 2005; or 2. alternatively, if the Plaintiff is declared to be a person under legal incapacity, approval of the proposed settlement under s.76 Civil Procedure Act 2005 together with an order under s.77(2) that the settlement sum be paid into Court with a further order that the matter be transferred to the Protective List of the Equity Division for the appointment of a private trustee. 1. The final hearing of the Plaintiff's claim for damages against the Defendant had been listed to commence on 16 May 2022 with an estimate of two weeks. 2. The application before the Court on 12 May 2022 arose from an agreement in principle as between the parties to settle the proceedings. As the Plaintiff had commenced proceedings by a tutor, the prima facie position was that the proposed settlement of the proceedings required approval of the Court under s.76 Civil Procedure Act 2005. 3. In ordinary circumstances, the Court would be called upon to exercise its protective function in determining whether to approve a proposed settlement under s.76 Civil Procedure Act 2005 for a person under legal incapacity. In this regard, the Court is required to determine whether the proposed settlement is beneficial to the person under legal incapacity: Permanent Trustee Company Ltd v Mills (2007) 71 NSWLR 1; [2007] NSWSC 336 at [29]; Budini v Sunnyfield (No. 3) [2021] FCA 1540 at [10]-[12]. However, an issue had arisen as to whether the Plaintiff was under legal incapacity at the present time. 4. During the hearing of the Notice of Motion, application was made under Rule 7.18 Uniform Civil Procedure Rules 2005 ("UCPR") for removal of the tutor upon the basis that the Plaintiff was no longer a person under legal incapacity so as to require a tutor. 5. In circumstances where a prompt decision was required so that the Court and the parties were aware as to whether the hearing of the claim was to proceed on 16 May 2022, and after hearing submissions, I stated that, if approval under s.76 was required, the Court would approve the settlement of the proceedings. If the Plaintiff was no longer a person under legal incapacity so that the s.76 approval was not required, the Court noted that the proceedings would be settled by the agreement inter partes which had been reached. On either view, a hearing of the Plaintiff's claim against the Defendant was not necessary. 6. In these circumstances, I vacated the hearing commencing on 16 May 2022 and reserved my decision on the issues arising concerning the question whether the Plaintiff was a person under legal incapacity. 7. This judgment contains my reasons for the orders made on that day, together with my determination of the question as to whether the Plaintiff is presently a person under legal incapacity so as to require approval of the settlement under s.76 Civil Procedure Act 2005. The Hearing of the Notice of Motion on 12 May 2022 1. Mr J Morris SC and Ms R Bianchi appeared for the Plaintiff on 12 May 2022. Mr S Kalfas SC and Ms K Burke appeared for the Defendant. 2. At the hearing, the Plaintiff relied upon the affidavit of Angelo Bilias, solicitor, dated 6 May 2022. The affidavit of Mr Bilias annexed a number of expert medical and other reports relied upon by the Plaintiff in the proceedings (Annexures A-I) together with a confidential memorandum of advice of counsel for the Plaintiff (Annexure J), the affidavit of Mary Perera dated 2 May 2022 (Annexure K), the affidavit of her husband, Ranjan Perera, dated 2 May 2022 (Annexure L) and the affidavit of the tutor and daughter of Mary and Ranjan Perera, Marisa Perera, dated 2 May 2022 (Annexure M). The affidavits of Mary, Ranjan and Maris Perera were all read on a confidential basis insofar as they disclosed the process of negotiations and considerations which bore upon the settlement of the proceedings. 3. In addition, the Plaintiff tendered a report of Dr Stephen Allnutt, psychiatrist, dated 9 May 2022 (Exhibit A). The Defendant tendered a folder containing the medical and other reports obtained by the Defendant for the purpose of the proceedings (Exhibit 1). 4. Having regard to the issues which arose for consideration by the Court, Mr Morris SC and Ms Bianchi provided helpful written submissions entitled "Submissions on Capacity/Approval" (MFI1). 5. As the hearing progressed, as noted earlier, Mr Morris SC made clear that application was made under Part 7 Rule 18 UCPR for the removal of the tutor upon the basis that the Plaintiff was no longer a person under legal incapacity. 6. Whilst accepting that the question of the status of the Plaintiff was a matter as between the Plaintiff and the Court, Mr Kalfas SC submitted that it was open to the Court upon the evidence to conclude that the Plaintiff was not now a person under legal incapacity. Factual Background 1. The Plaintiff, Mary Perera, was born on 10 September 1967 in Sri Lanka and is presently 54 years of age. 2. In August 1991, the Plaintiff married her husband, Ranjan Perera. The Plaintiff has two daughters, Marisa Perera born 13 June 1992 (now aged 29 years) and Melissa Perera born 30 September 2001 (now aged 20 years). 3. In 1995, the Plaintiff underwent atrioventricular canal defect and mitral valve repair in Sri Lanka. The operation was successful. The only other surgery the Plaintiff has had is a tonsillectomy. 4. In 2001, the Plaintiff emigrated to Australia with her husband and daughter. Within two weeks of arriving in Australia, the Plaintiff obtained employment as a data entry assistant. The evidence makes clear that the Plaintiff thereafter has worked hard in employment and in raising her family. 5. Within six months of arriving in Australia, Mr Perera secured employment and, in 2004, he was employed as quality systems co-ordinator at Goodman Fielder. Since 2008, Mr Perera has been employed as a quality assurance officer at Parmalat Australia at Lidcombe. 6. In 2006, the Plaintiff and Mr Perera purchased a residence in Yagoona under mortgage and they continue to live there at the present time. 7. The Plaintiff was responsible for the majority of child care and home duties including shopping, cooking, cleaning, washing and ironing and taking the younger daughter to school. Mr Perera was, and remains, responsible for financial matters and bill payments. 8. On 18 October 2012, the Plaintiff attended her general practitioner for management of asthmatic symptoms. She was diagnosed with cardiac insufficiency and surgery was recommended. 9. On 11 July 2013, the Plaintiff was admitted to Westmead Private Hospital to undergo surgery in the form of mitral valve replacement. It is not necessary, for the purposes of this judgment, to expand upon the detail of what occurred following surgery. It is sufficient to observe that, on the third day post-operatively, the Plaintiff suffered cardiac arrest. She was resuscitated and remained in intensive care for around 80 days. She underwent further surgical procedures whilst in intensive care in relation to the effects of the cardiac arrest. 10. On 8 October 2013, the Plaintiff was transferred to Mt Wilga Private Rehabilitation Hospital and underwent intensive physiotherapy, occupational therapy, speech pathology and exercise physiology. 11. On 18 January 2014, the Plaintiff was discharged home. 12. On 11 December 2017, a Statement of Claim was filed in the Court initiated by the Plaintiff by her tutor, Marisa Perera. An Amended Statement of Claim filed on 25 August 2021 stated, in paragraph 2 of the Pleadings and Particulars: "By reason of her injuries, the Plaintiff is incapable of managing her own affairs. Accordingly, by reason of her injuries and disabilities, the Plaintiff sues by her tutor." 1. During the course of the proceedings since 2017, the Plaintiff has been examined by a range of experts, including medical practitioners and other health professionals for the purpose of the proceedings. The question of the capacity of the Plaintiff has been touched upon in a number of reports. Relevant Statutory Provisions and Principles 1. It is appropriate, at this point, to move away from the facts of the case and refer to statutory provisions and legal principles which bear upon the present question. 2. The term "person under legal incapacity" is defined in the following way in s.3(1) Civil Procedure Act 2005: "person under legal incapacity means any person who is under a legal incapacity in relation to the conduct of legal proceedings (other than an incapacity arising under section 4 of the Felons (Civil Proceedings) Act 1981) and, in particular, includes— (a) a child under the age of 18 years, and (b) an involuntary patient, a forensic patient or a correctional patient within the meaning of the Mental Health Act 2007, and (c) a person under guardianship within the meaning of the Guardianship Act 1987, and (d) a protected person within the meaning of the NSW Trustee and Guardian Act 2009, and (e) an incommunicate person, being a person who has such a physical or mental disability that he or she is unable to receive communications, or express his or her will, with respect to his or her property or affairs." 1. Division 4 of the Civil Procedure Act 2005 (ss.74-80) concerns persons under legal incapacity. Section 76 Civil Procedure Act 2005 provides as follows: "76 Settlement of proceedings commenced by or on behalf of, or against, person under legal incapacity (cf Act No 25 1929, section 4) (1) This section applies to proceedings commenced by or on behalf of, or against, any of the following persons— (a) a person under legal incapacity, (b) a person who, during the course of the proceedings, becomes a person under legal incapacity, (c) a person whom the court finds, during the course of the proceedings, to be incapable of managing his or her own affairs. (2) The court may make a finding referred to in subsection (1) (c) only on the basis of evidence given in the proceedings in which it is made, and such a finding has effect for the purpose only of those proceedings. (3) Except with the approval of the court, there may not be— (a) any compromise or settlement of any proceedings to which this section applies, or (b) any acceptance of money paid into court in any such proceedings, as regards a claim made by or on behalf of, or against, a person referred to in subsection (1). (3A) However, the approval of the court is not required in relation to any agreement for the compromise or settlement of any matter in dispute in proceedings commenced by, or on behalf of, or against, a person under legal incapacity if, on the day the agreement for the compromise or settlement is made, that person has attained the age of 18 years and is not otherwise a person referred to in subsection (1). Accordingly, subsections (4)–(6) do not apply in relation to any such agreement. (4) If an agreement for the compromise or settlement of any matter in dispute in any such proceedings is made by or on behalf of a person referred to in subsection (1), the court may approve or disapprove the agreement. (5) An agreement disapproved by the court does not bind the person by whom or on whose behalf it was made. (6) An agreement approved by the court binds the person by whom or on whose behalf it was made as if he or she were of full capacity and (if it was made by some other person on his or her behalf) as if that other person had made the agreement as his or her agent." 1. Rule 7.13-7.16 UCPR concern persons under legal incapacity. Rule 7.13-7.16 state: "7.13 Definition In this Division, person under legal incapacity includes a person who is incapable of managing his or her affairs. 7.14 Proceedings to be commenced or carried on by tutor (cf SCR Part 63, rules 2 and 3(2); DCR Part 45, rules 2 and 3; LCR Part 34, rules 3 and 4) (1) A person under legal incapacity may not commence or carry on proceedings except by his or her tutor. (2) Unless the court orders otherwise, the tutor of a person under legal incapacity may not commence or carry on proceedings except by a solicitor. 7.15 Tutors generally (cf SCR Part 63, rules 4 and 5; DCR Part 45, rules 4 and 5; LCR Part 34, rules 5 and 6) (1) Subject to this Division, a person may become the tutor of a person under legal incapacity without the need for any formal instrument of appointment or any order of a court. (2) Any person (other than a corporation) is eligible to be the tutor of a person under legal incapacity, in respect of any proceedings, unless the person is— (a) a person under legal incapacity, or (b) a judicial officer, a registrar or any other person involved in the administration of a court, or (c) a person who has an interest in the proceedings adverse to the interests of the person under legal incapacity. (3) In the case of proceedings with respect to the estate of a person whose estate is subject to management under the NSW Trustee and Guardian Act 2009, the tutor of that person is to be the person who has the management of the person's estate under that Act. (4) Subrule (3) does not apply if the person concerned declines to act as tutor or is unable to act as tutor, or if the court orders otherwise. (5) A person may not replace another person as tutor of a person under legal incapacity except by order of the court. (6) Anything that these rules authorise or require a party to do in relation to the conduct of proceedings may, if the party is a person under legal incapacity, be done on his or her behalf by his or her tutor. 7.16 Tutor to file certain documents (cf SCR Part 63, rule 4; DCR Part 45, rule 4; LCR Part 34, rule 5) A tutor may not commence or carry on proceedings on behalf of a person under legal incapacity unless there have been filed— (a) the tutor's consent to act as tutor, and (b) a certificate, signed by the tutor's solicitor in the proceedings, to the effect that the tutor does not have any interest in the proceedings adverse to the interests of the person under legal incapacity." 1. There is no application before the Court for an order by the Supreme Court that the estate of the Plaintiff be subject to management under s.41 NSW Trustee and Guardian Act 2009. Nevertheless, this provision was referred to as shedding light on the question of legal incapacity. Section 76(1)(c), (2) and (3) Civil Procedure Act 2005 operate to require approval of a settlement if, during the course of the proceedings, the person is "incapable of managing his or her own affairs" with such a finding to be made "only on the basis of evidence given in the proceedings". Rule 7.13 UCPR defines "a person under legal incapacity" as including "a person who is incapable of managing his or her own affairs". 2. Section 41 NSW Trustee and Guardian Act 2009 provides: "41 Orders by Supreme Court for management of affairs (cf PE Act, s 13) (1) If the Supreme Court is satisfied that a person is incapable of managing his or her affairs, the Court may— (a) declare that the person is incapable of managing his or her affairs and order that the estate of the person be subject to management under this Act, and (b) by order appoint a suitable person as manager of the estate of the person or commit the management of the estate of the person to the NSW Trustee. (2) The Supreme Court may make an order on its own motion or on the application of any person having a sufficient interest in the matter. (3) For the purposes of this section— (a) evidence of a person's capability to manage his or her own affairs may be given to the Supreme Court in any form and in accordance with any procedures that the Court thinks fit, and (b) the Court may personally examine a person whose capability to manage his or her affairs is in question or dispense with any such examination, and (c) the Court may otherwise inform itself as to the person's capability to manage his or her own affairs as it thinks fit. (4) Subsection (3) also applies to an application arising out of the operation of section 37 (2) of the Powers of Attorney Act 2003." 1. To the extent that consideration of provisions in the NSW Trustee and Guardian Act 2009 bear indirectly upon issues raised by the present application, it is appropriate to note s.39 of that Act which states: "39 General principles applicable to Chapter It is the duty of everyone exercising functions under this Chapter with respect to protected persons or patients to observe the following principles— (a) the welfare and interests of such persons should be given paramount consideration, (b) the freedom of decision and freedom of action of such persons should be restricted as little as possible, (c) such persons should be encouraged, as far as possible, to live a normal life in the community, (d) the views of such persons in relation to the exercise of those functions should be taken into consideration, (e) the importance of preserving the family relationships and the cultural and linguistic environments of such persons should be recognised, (f) such persons should be encouraged, as far as possible, to be self-reliant in matters relating to their personal, domestic and financial affairs, (g) such persons should be protected from neglect, abuse and exploitation." 1. The Statement of Claim in the present proceedings was filed in 2017 upon the basis that the Plaintiff was a "person under legal incapacity" who was incapable of managing her affairs. No ruling by the Court was required in this regard: Rule 7.15(1) UCPR. The litigation was commenced upon the basis that this was the appropriate characterisation concerning the Plaintiff's capacity. 2. Thereafter the proceedings have continued with the Plaintiff's daughter acting as her tutor and this remained the position as at 12 May 2022. Once again, no court ruling or determination was undertaken or required for the status of the Plaintiff to remain so classified. 3. Rule 7.18 provides for the Court to appoint and remove tutors: "7.18 Court may appoint and remove tutors (cf SCR Part 63, rules 5, 7 and 8; DCR Part 45, rules 7 and 8; LCR Part 34, rules 8 and 9) (1) In any proceedings in which a party is or becomes a person under legal incapacity— (a) if the person does not have a tutor, the court may appoint a tutor, or (b) if the person has a tutor, the court may remove the party's tutor and appoint another tutor. (2) In any proceedings concerning a person under legal incapacity who is not a party, the court may appoint a tutor of the person and join the person as a party to the proceedings. (3) If the court removes a party's tutor, it may also stay the proceedings pending the appointment of a new tutor. (4) Subject to any order of the court, notice of any motion under this rule is to be served on the person under legal incapacity and, if it proposes removal of the person's tutor, on the tutor. (5) In proceedings on a motion for the appointment of a tutor, evidence in support of the motion must include— (a) evidence that the party for whom a tutor is to be appointed is a person under legal incapacity, and (b) evidence that the proposed tutor consents to being appointed and does not have any interest in the proceedings adverse to the interests of the person under legal incapacity. (6) An application for appointment as tutor under this rule may be made by the court of its own motion or on the motion of any other person, including the proposed tutor." 1. The present application is similar to that considered by Price J in Farr v State of Queensland [2009] NSWSC 906, namely, in the context of a proposed settlement, a declaration that the Plaintiff is not under a legal incapacity for the purposes of Rule 7.14 UCPR. Price J said at [11]-[16]: "11 The first question for consideration is whether the plaintiff is not under a legal incapacity for the purposes of UCPR rule 7.14 and, in particular, for the purposes of settling the proceedings with the second and third defendants and carrying on the proceedings against the first defendant. 12 UCPR rule 7.14(1) provides: 'A person under legal incapacity may not commence or carry on proceedings except by his or her tutor.' 13 UCPR rule 7.13 provides: 'In this Division person under legal incapacity includes a person who is incapable of managing his or her affairs.' 14 A person under legal incapacity is defined under s 3 of the Civil Procedure Act to mean 'any person who is under a legal incapacity in relation to the conduct of legal proceedings.' 15 For the resolution of this question I refer to the test applied by Chadwick LJ in Masterman-Lister v Brutton & Co [2003] 3 All ER 162 where his Honour said at [75]: '…the test to be applied, as it seems to me, is whether the party to legal proceedings is capable of understanding, with the assistance of such proper explanation from legal advisers and experts in other disciplines as the case may require, the issues on which his consent or decision is likely to be necessary in the course of those proceedings. If he has capacity to understand that which he needs to understand in order to pursue or defend a claim, I can see no reason why the law - whether substantive or procedural - should require the interposition of a next friend or guardian ad litem.' 16 I am satisfied the plaintiff has the capacity to understand what is necessary to pursue her claim against the first defendant, to understand the precise details of the proposed settlement offer, the consequences of its acceptance or rejection, the advice proffered by counsel and has the ability to make decisions and give instructions based upon that advice for the following reasons … ." 1. In Murray v Williams [2010] NSWSC 1243, Hammerschlag J determined that the Plaintiff in that case was not a person under legal incapacity so that a tutor was not required. His Honour said at [26]-[28]: "26 There is no dispute that the test to be applied in determining Christopher's mental capacity or lack of it is that applied by Chadwick LJ in Masterman-Lister v Brutton & Co [2003] 3 All ER 162 (and accepted by Price J in Farr v State of Queensland [2009] NSWSC 906 at [15]) which his Lordship articulated as follows: [...] the test to be applied, as it seems to me, is whether the party to legal proceedings is capable of understanding, with the assistance of such proper explanation from legal advisers and experts in other disciplines as the case may require, the issues on which his consent or decision is likely to be necessary in the course of those proceedings. If he has capacity to understand that which he needs to understand in order to pursue or defend a claim, I can see no reason why the law - whether substantive or procedural - should require the interposition of a next friend or guardian ad litem. 27 To similar effect is what was said by Handley JA in Murphy v Doman (as representative of the estate of the late Min Simpson) and Another (2003) 58 NSWLR 51 at 58 [34]-[36]: 34 The definition of an incompetent person in the Rules reflects the earlier law. See Martin v Azzopardi (1973) 20 FLR 345, 347 per Fox J. At 348 Fox J referred to evidence that the plaintiff was incapable of managing his own affairs and continued: 'If, and as soon as, the plaintiff was in this condition he would be unable to retain a solicitor. That is to say, he would not have the mental capacity to understand the nature of the acts or transactions which he would be authorising.' 35 The cases do not consider the level of mental capacity required to be a 'competent' litigant in person but it cannot be less than that required to instruct a solicitor. It should be greater because a litigant in person has to manage court proceedings in an unfamiliar and stressful situation. 36 There is a presumption of sanity which applies unless and until the contrary is proved. Attorney General v Parnther [1792] EngR 2455; (1792) 3 Bro CC 441, 443 [29 ER 632, 634]; M'Naghten's Case (1843) 10 Cl&Fin 200, 210 [8 ER 718, 722]. This means, in modern terms, that there is a presumption that a person of full age is capable of managing his or her affairs. 28 Hence I approach the matter by considering whether with proper explanation from legal advisers and experts Christopher has capacity to understand what he needs to understand to pursue (or decide to pursue or not to pursue) the claim which Narelle has made." 1. His Honour concluded at [35]-[36]: "35 Whilst detailed and nuanced decisions on sophisticated financial questions may be beyond Christopher's present capacity, far from it having been established that Christopher lacks capacity to understand that which he needs to in order to pursue the present claim or to decide not to pursue it, in my view Christopher has that capacity. 36 I therefore answer the question, is Christopher William Charles Murray a person under a legal incapacity in relation to the conduct of these proceedings? No." 1. In Smilevska v Smilevska [2015] NSWSC 1794, Slattery J said at [27]-[28]: "27 Whether a person is 'under legal incapacity' is defined within Civil Procedure Act, s 3 to mean 'any person who is under a legal incapacity in relation to the conduct of legal proceedings' and includes a number of special categories not applicable in the present case. Blaguna is certainly not 'an incommunicate person' as she is able to receive communications and to express her will with respect to her property and affairs in a general sense. She was able to make clear that for example she did not wish for Temjana to have the Property. 28 The relevant principles may be shortly stated. Whether a party to proceedings is under a legal incapacity and requires a tutor depends upon whether he or she is capable of understanding, with the assistance of such proper explanation from legal advisors and experts in other disciplines as the case may require, the issues on which consent or decision is likely to be necessary in the course of the proceedings: Masterman-Lister v Brutton & Co [2003] All ER 162 per Chadwick LJ, and Stokes v McCourt [2014] NSWSC 61 at [31]. Whether a person is under a legal incapacity is always a task, and time, specific matter and it is dependent upon whether a person has the ability to understand and evaluate the particular task in question at the particular time: Guthrie v Spence [2009] NSWCA 369; 78 NSWLR 225 at [174] – [175]." 1. In determining to remove a tutor under Rules 7.14 and 7.18 UCPR in Nurrish v Schwander [2016] NSWSC 91, Button J said at [12]-[13]: "12 Counsel for the plaintiff helpfully took me to the recent decision of Stokes v McCourt [2014] NSWSC 61. He invited me to [consider] [23] to [33] of that judgment of McDougall J, themselves expressed to be based upon the judgment of Hallen J in Rappard v Williams [2013] NSWSC 1279. In particular, I was taken to the following at [29]-[31]: [29] Hallen J adopted as appropriate an explanation of the task given, in relation to different but not materially inconsistent English rules, by Chadwick LJ in Masterman-Lister v Brutton and Co [2003] 1 WLR 1511 at [75]. His Lordship there said that, for the purposes of the relevant rules of court in England: 75 For the purposes of Order 80 and now CPR Pt 21 the test to be applied, as it seems to me, is whether the party to legal proceedings is capable of understanding, with the assistance of such proper explanation from legal advisers and experts in other disciplines as the case may require, the issues on which his consent or decision is likely to be necessary in the course of those proceedings. If he has capacity to understand that which he needs to understand in order to pursue or defend a claim, I can see no reason why the law whether substantive or procedural should require the interposition of a next friend or guardian ad litem (or, as such a person is now described in the CPR, a litigation friend). [30] The approach taken by Chadwick LJ received the approbation of Hallen J in Rappard (in particular, at [77], [78]). Further, although on a somewhat different point, his Lordship's reasons attracted the approval of Campbell JA in Doulaveras v Daher [2009] NSWCA 58 at [155], [156]. [31] If one approaches the question according to the test propounded by Chadwick LJ, then it is necessary to ask whether the relevant party (in this case the plaintiff) can deal with the issues in the proceedings with the assistance of appropriate explanation from his or her lawyers and experts retained. As Hallen J said in Rappard at [78], this must extend to all the aspects of conducting a case at law or in equity. It would thus comprehend seeking advice on prospects or on evidence; considering and evaluating risks, costs and reward; dealing with the lawyers in the preparation of the case; and generally being in a position, at any given time, to give appropriate and informed instructions on issues that arise to be dealt with. But, as I have said, that task is not to be seen as one undertaken in a vacuum. It is a task to be undertaken with such advice from the lawyers (and where relevant, from experts) as may be required. 13 I respectfully adopt that analysis." 1. In Gerard Malouf and Partners Pty Ltd v NSW Trustee and Guardian and Anor [2017] NSWSC 899, Slattery J said at [25]: "Where the legal capacity of a party is in question, the Court needs to satisfy itself that the relevant party has capacity before the proceedings can continue. If the party is a "person under legal incapacity", as defined in Civil Procedure Act, s 3, they are only able to commence or carry on proceedings with a tutor: Uniform Civil Procedure Rules 2005, rule 7.14. This rule operates in order to do justice as between the parties concerned, and to protect the court process: Rappard v Williams [2013] NSWSC 1279 at [93] per Hallen J. See also Stokes v McCourt [2014] NSWSC 61 at [22] to [31] per McDougall J, applying paragraphs [62] to [81] of Hallen J's judgment in Rappard v Williams [2013] NSWSC 1279." 1. In Xiang bht Cao v Tong [2021] NSWSC 44, Hallen J at [52] referred to the "inclusive, but not exhaustive definition" of a "person under legal incapacity" in s.3(1) Civil Procedure Act 2005. 2. Hallen J continued at [53]-[61]: 53 Pursuant to s 11 of the Interpretation Act 1987 (NSW), which makes a definition in a statute also apply to delegated legislation made under that statute, the definition in the Civil Procedure Act also applies to the UCPR. In any event, a note to the Dictionary of the UCPR expressly adopts the definition of 'person under legal incapacity' contained in the Civil Procedure Act. 54 UCPR r 7.13, which was described as 'a supplementary definition' by Basten JA in Tanamerah Estates Pty Ltd as the trustee for Alexander Superannuation Fund v Tibra Capital Pty Ltd [2013] NSWCA 266, at [19], defines a 'person under legal incapacity' as including 'a person who is incapable of managing his or her affairs'. Otherwise, there is no definition of the term in the UCPR. 55 UCPR r 7.14(1) requires a person under legal incapacity to commence, and carry on, proceedings by a tutor. 56 In Rappard v Williams [2013] NSWSC 1279, I noted, at [68], the fact of a tutor having been appointed, is not determinative of the question whether the proceedings should have been instituted by the Plaintiff through a tutor: also see, for example, Chong v Mo [2010] NSWSC 251 at [70] (McLaughlin AsJ). 57 I also wrote, at [71], [76] - [80]: 'Where there is no evidence that a party fits within sub-paragraphs (a) to (e) of the definition of 'person under legal incapacity' in s 3 of the Civil Procedure Act, the only way in which she, or he, could be a person under legal incapacity is if the Court were satisfied that she, or he, is a 'person who is under a legal incapacity in relation to the conduct of legal proceedings' who does not fit within any of paragraphs (a) - (e) of the definition, or that she or he was a person who was incapable of managing her affairs within the meaning of UCPR rule 7.13. … Whether a person is under a legal incapacity is always a task, and time, specific, matter, dependent upon whether the person has the ability to understand and evaluate the particular task that is in question at the particular time: Guthrie v Spence [2009] NSWCA 369; (2009) 78 NSWLR 225 at [174] - [175]; Azar v Kathirgamalingan [2012] NSWCA 429, per Campbell JA, at [168]. In this case, whether the Plaintiff is a 'person who is under a legal incapacity in relation to the conduct of legal proceedings' must be considered. Thus, even though a party may be able to carry out tasks associated with daily living, she, or he, may lack the capacity to understand and evaluate the matters involved in the conduct of legal proceedings, and for that reason fall within the definition of 'person under legal incapacity'. Chadwick LJ in Masterman-Lister v Brutton & Co (referred to in the passage quoted above) also said, at [75]: '... the test to be applied, as it seems to me, is whether the party to legal proceedings is capable of understanding, with the assistance of such proper explanation from legal advisers and experts in other disciplines as the case may require, the issues on which his consent or decision is likely to be necessary in the course of those proceedings. If he has capacity to understand that which he needs to understand in order to pursue or defend a claim, I can see no reason why the law - whether substantive or procedural - should require the interposition of a next friend or guardian ad litem …' The 'conduct of legal proceedings' refers to doing the various things that would need to be done in the course of the proceedings in which the party is involved, including seeking advice as to the nature of the proceedings, about the difficulties, risks, costs and effort, involved in pursuing the claim, and the likely result, including the type of order that may be made, comprehending and evaluating that advice, and engaging in the continuing process of co-operation, interaction and decision-making that exists between lawyer and client in running any civil action. In other words, the sort of incapacity involved in the requirement for a tutor is incapacity to do the range of things that is involved in, not only starting, but also continuing, litigation and being able to give instructions and consider advice about settling the proceeding: see, for example, Pistorino v Connell [2012] VSC 438, per Dixon J, at [21] - [24]. In Dalle-Molle v Manos [2004] SASC 102; (2004) 88 SASR 193, Debelle J observed, at [23], that the question of whether a litigant has the capacity to understand the issues in legal proceedings so that he may conduct them is 'issue-specific' and 'relates to the facts and subject-matter of the particular case'. In Re P [2006] NSWSC 1082, Young CJ in Eq considered the evidence pointed to the defendant as a person with 'a mental problem in continuing with the litigation'. He found that the defendant had 'a problem which stops him from giving proper instructions to his lawyers and the lawyers would have difficulty in doing what they were instructed by the client because they could not be assured that his mind was proceeding his mouth'.' 58 If one approaches the question according to the test propounded by Chadwick LJ, it is necessary to ask, in this case, whether the Plaintiff can deal with the issues in the proceedings with the assistance of appropriate explanation from his lawyers and the experts who have been retained to give evidence. This must extend to all the aspects of conducting a case: Rappard v Williams at [78]. 59 There is no doubt that the Court may dispense with the requirement for a tutor to be appointed in particular cases: Mao v AMP Superannuation Ltd [2015] NSWCA 252 at [59] (The Court); Kostov v YPOL Pty Ltd (2018) 98 NSWLR 1002 at 1008 [20]; [2018] NSWCA 306 at [20] (The Court). 60 Counsel for the Defendant stated that the Defendant had 'taken the view that we don't dispute there is a level of incapacity which warrants the intervention of a tutor' and counsel for the Plaintiff accepted that, even if the Plaintiff was not a person within the definition of a person under a legal incapacity, 'in circumstances where a plaintiff can't deal with the issues in the proceedings, a tutor would be useful': Tcpt, 12 August 2019, p 5(30) – p 6(01). 61 Whether the Plaintiff falls strictly within the definition of '[a] person under legal incapacity' within the meaning of UCPR r 7.14, the medical evidence, to which I shall refer later in these reasons, persuades me that the Plaintiff requires a tutor in relation to the conduct of the proceedings, in order to protect his interests, even if there is insufficient evidence to enable me to be affirmatively satisfied that he falls within the various statutory definitions of 'a person under a legal incapacity': see Ferrier v Nationwide News Pty Limited (No 3) [2015] NSWSC 1806 at [20]–[21] (McCallum J)." 1. Mr Morris SC submitted that assistance was provided by the judgment of Ward CJ in Eq (as her Honour then was) in Mao v AMP Superannuation Limited [2017] NSWSC 987, a decision which touched upon provisions of the NSW Trustee and Guardian Act 2009 and Rules 7.14 and 7.18 UCPR. Her Honour said at [143]-[148]: "143 The threshold question is whether I am satisfied on the evidence before me that Ms Mao is 'incapable of managing his or her affairs' (at least so far as those affairs comprise or relate to the prosecution of the respective sets of proceedings) (s 41(1)). Although the AMP entities have urged upon me that there is an extant finding (in these very proceedings) of incapacity, I am of the view that it is incumbent on me to address the question afresh, particularly given that the matter seems to have been approached in the Court of Appeal on the basis that order (i) was a declaration of incapacity and that order was then set aside by the Court. 144 As Lindsay J noted (at [14]) in CJ v AKJ, that expression is left undefined by the NSW Trustee and Guardian Act. His Honour went on to make some general remarks about the interpretation of the provision (at [22]-[25]): The practice of the Court, over many years, has been to view the expression 'a person ... incapable of managing his or her affairs' through the prism of observations made by Powell J in PY v RJS [1982] 2 NSWLR 700 at 702B-E. However, as explained by White J in Re D [2012] NSWSC 1006 at [46]- [67] and Re R [2014] NSWSC 1810 at [84]- [94], Powell J's formulation of his test (sometimes described as an 'objective' test) of capacity for self-management by reference to 'the ordinary affairs of man' has been the subject of criticism as: (a) a gloss on the legislation; and (b) not in unison with a perceived need, according to the terms of the legislation, to take subjective considerations into account on a determination of a particular person's capacity for self-management. In light of White J's analysis (with which, in general, I agree), the Court should be mindful of a need to give effect to the text of the legislation without any elaborative gloss. Insight into the meaning of the expression 'a person ... incapable of managing his or her affairs', as used in chapter 4 of the NSW Trustee and Guardian Act, can be had by study of broadly comparable provisions in Part 3A of the Guardianship Act. 145 Lindsay J enumerated (at [27]) some general principles to be borne in mind in cases like the present; including that: (b) of central significance is the functionality of management capacity of the person said to be incapable of managing his or her affairs, not: (i) his or her status as a person who may, or may not, lack 'mental capacity' or be 'mentally ill'; or (ii) particular reasons for an incapacity for self-management: PB v BB [2013] NSWSC 1223 at [5]-[9] and [50]. 146 Lindsay J also emphasised the need to view the statutory formulation in its broader context, about which his Honour made the various observations (see [28]-[49]). 147 In H v H [2015] NSWSC 837, Lindsay J said the following: … although a decision about whether a particular person is, or is not, capable of managing his or her affairs may be powerfully informed by an expression of a medical opinion, based upon articulated observations of fact and accompanied by an exposition of technical medical terms, a determination about capacity for self-management made upon an exercise of protective jurisdiction is not, in essence, the province of medical expertise but of independent judgment by the Court applying established criteria to particular facts. [Emphasis in original.] 148 In IA v TA, the Court of Appeal quoted the above passage and left open (at [69]) the question whether a judge could ever make an order under s 41 of the NSW Trustee and Guardian Act without psychiatric evidence, since in that case there was, in fact, psychiatric evidence, from both parties. The Court there also recognised (at [71]) the importance of lay evidence in this task, agreeing with the view expressed by Lindsay J at [37] in H v H that: ... there is no substitute for a direct, personal engagement with the person whose capacity for self-management is under consideration, and those closely associated with him or her in daily living." 1. Examination of the authorities set out above indicates that two related issues arise for consideration regarding a question as to legal incapacity and whether application is made for removal of a tutor: 1. whether the Plaintiff is capable of understanding and communicating with her legal representatives in the conduct of the proceedings and settlement discussions and has the ability to provide instructions to them; and 2. whether the Plaintiff is capable of managing her affairs, including the making of financial decisions and receiving advice concerning financial affairs. 1. The submissions of the parties focused more on the second issue. 2. It will be necessary to consider aspects of these principles for the purpose of determining the present question. Submissions Concerning the Legal Capacity of the Plaintiff 1. Mr Morris SC and Ms Bianchi noted that there was no application by any person, including Mr Perera and Marisa Perera, the tutor, for a declaration that the Plaintiff is a person under legal incapacity, or is a person incapable of managing her own affairs for the purpose of the NSW Trustee and Guardian Act 2009. Whilst noting that there was a real concern when the proceedings were commenced, so that the Plaintiff was named with a tutor in the Statement of Claim, it was submitted that the evidence concerning the Plaintiff's condition, and her progress since that time, was pertinent to the question whether the Plaintiff was, in fact, a person under legal incapacity at the present time. 2. It was submitted that the preponderance of the lay and expert evidence was such that the Plaintiff requires assistance with management and investment advice, but that this arose from the fact that she had been awarded (in the proposed settlement) a large sum of money, the management of which she has no experience. It was submitted, correctly, that this state of affairs did not equate to legal incapacity. 3. Counsel submitted that the evidence disclosed that the Plaintiff had physical, psychological or possible mild cognitive difficulties, but that this did not amount to legal incapacity either. 4. It was submitted that the lay evidence demonstrates the Plaintiff's understanding of the purpose of the settlement sum and the need to preserve it to provide for her care into the future. There is no evidence of inappropriate expenditure by the Plaintiff, despite receipt of income protection payments and having access to a card linked to that account. 5. Reference was made, as well, to aspects of the expert evidence including that of Dr Sara Lucas, the joint neuropsychologist expert, in a report dated 11 November 2020, Dr Anna Castle-Burton, occupational therapist, in a report dated 11 November 2020 and Dr Stephen Allnutt, psychiatrist, in his initial report dated 24 August 2020 and the supplementary report dated 9 May 2022 (Exhibit A). 6. In addition, reference was made to the report of Dr Neil Mahant, neurologist and neurophysiologist, dated 1 July 2017. 7. Reference was made as well to each of the affidavits of Mary Perera, Ranjan Perera and Marisa Perera which touched upon the observations and experience of family members concerning the present capacity of the Plaintiff. 8. It was submitted that the commencement of proceedings using a tutor did not of itself establish incapacity. A number of factors were taken into account in this respect which were addressed in the confidential memorandum of advice of counsel for the Plaintiff. In circumstances where it was submitted that there had been a substantial improvement in the Plaintiff's functioning since the proceedings were commenced and that protection of assets was of concern in a difficult liability case, it was submitted that the presence of a tutor was not evidence of current incapacity, and that this feature needed to be weighed against the current position as reflected in the evidence. As Ward CJ in Eq stated in Mao v AMP Superannuation Ltd at [143] (see [47] above), the matter needs to be determined at the present time and not at some earlier point in time. 9. Mr Morris SC and Ms Bianchi submitted that the making of a declaration that the Plaintiff is incapable of managing her own affairs is a serious step which would serve to restrict the Plaintiff in a significant respect. To the extent that the general principles contained in s.39 NSW Trustee and Guardian Act 2009 were to be considered, it was submitted that the Court should keep in mind the need for the welfare and interests of the Plaintiff as the paramount consideration. The Plaintiff's freedom of decision and action ought be restricted as little as possible to encourage, as far as possible, the Plaintiff to live a normal life in the community taking into account the views of the Plaintiff and her family, amongst other relevant considerations. 10. It was submitted that the Court should determine that the Plaintiff is not, at the present time, a person under legal incapacity. If such a finding is made, it was submitted that no approval under s.76 Civil Procedure Act 2005 is required. The inter partes agreement would be put into effect, by way of the making of consent orders in accordance with the Consent Judgment signed by the legal representatives for the parties which is annexed to the Notice of Motion. 11. If the Court determined that the Plaintiff is presently a person under legal incapacity, or a person incapable of managing her own affairs, it was submitted that the Court should make orders that the settlement monies be paid into Court to enable the Plaintiff and the tutor to make application to the Equity Division to seek the appointment of a private tutor. 12. As noted earlier, Mr Kalfas SC submitted that it was open to the Court, on the evidence, to make a finding that the Plaintiff is not under legal incapacity and that such a finding is appropriate in this case. 13. Mr Kalfas SC acknowledged that the agreed position as to costs would stand, so that the Defendant should pay the Plaintiff's costs of the proceedings up to 13 April 2022 together with the costs of approval of the settlement or, if s.76 approval was not necessary, the costs of the application for the removal of the tutor as agreed or assessed. Determination on the Capacity Issue 1. The proceedings were commenced in 2017 by the Plaintiff with a tutor, the Plaintiff's daughter, consenting to act on her behalf. That step was taken by the Plaintiff's legal representatives having regard to a number of considerations, including the material then relevant to an assessment of the Plaintiff's legal capacity. 2. The proceedings have continued since 2017 with a tutor acting on her behalf. No judicial determination has been made or required concerning the legal capacity of the Plaintiff. 3. Following a process of negotiation, including the making of offers of compromise, there is a desire on the part of the parties to settle the proceedings for a sum which, in the Court's view, is beneficial to the interests of the Plaintiff. As the Plaintiff continues to be represented, it was necessary for the Plaintiff's legal representatives to seek the approval of the Court for the settlement under s.76 Civil Procedure Act 2005. That is the point which had been reached prior to 12 May 2022. 4. Having regard to the application now made on behalf of the Plaintiff, which is supported by her husband and tutor, the question to be determined is whether the Plaintiff is, at the present time, a person under legal incapacity. That question is to be determined by reference to evidence with respect to her current fitness and capacity. Evidence Concerning the Plaintiff's Legal Capacity or Incapacity 1. Dr Sara Lucas, clinical neuropsychologist, prepared a joint neuropsychological assessment concerning the Plaintiff dated 11 November 2020. In that report, Dr Lucas was asked to express an opinion concerning the Plaintiff's ability to manage her financial affairs (page 2 of report): "1. In your opinion, does Mrs Perera suffer from any impairment in cognition and in her ability to process complex information? If so, what are those impairments? Unfortunately, the results of current cognitive testing were found to be invalid so I cannot use the test data to determine Mrs Perera's current level of cognitive function. In the documents available to me, the focus of treatment appears to have been mobility, myoclonus and physical speech changes. There is reference to her memory being quite good in the early stages of recovery. However, it is clear she sustained a hypoxic brain injury resulting in the neurological changes so I consider it more likely than not that there is probably at least a mild degree of cognitive difficulty -unfortunately, I cannot be more definitive than this, and I cannot delineate the extent or nature of any such changes. Given information provided by several psychiatric reports, it appears that she has developed significant anxiety, abnormal illness behaviour and a decline in mood, and has become extremely dependent on her family. For this reason, it is likely that she would have difficulty processing and responding to complex information, and this was evident during the interview where she frequently looked to her husband - he also described her as being highly dependent on him for guidance, reassurance and prompting for many activities of daily living. It is my opinion that at least a proportion of her daily impairment is related to a psychiatric cause and personality factors. 2. In your opinion, if Mrs Perera does suffer from cognitive impairment, how does this impact upon her ability to manage her activities of daily living, and particularly her ability to manage her financial affairs? Whilst she probably suffers from some degree of cognitive deficit it appears from available information that much of her difficulty with activities of daily living relates to mobility issues, anxiety/fear around falls and psychiatric symptoms. In relation to managing finances, Mrs Perera indicated that she had always been dependent on her husband to make the larger financial decisions for the household, and this continues to be the case. She has been responsible for paying a few bills online, but always at his instruction. He has made all the decisions around dealings with the bank, their mortgage and budgeting. As such, given this long term dependence as well as a recent increase in anxiety and reliance on her husband, I am of the opinion that Mrs Perera is not capable of managing high level finances. Moreover, she stated that she would definitely hand over any large sum of money to her husband to manage if she were to receive a lump sum payment, and is happy for him to manage any monies on her behalf. I doubt she would have the capacity to be discerning about financial decisions and options for a large sum of money in her current state." 1. In a report dated 1 July 2017, Dr Neil Mahant, the Plaintiff's treating neurologist, provided the following description of the Plaintiff's neurological condition (page 2 of report): "Description of neurological condition: The is summarised in the preamble, above, I have not attempted to perform detailed cognitive testing, however there is no suspicion of significant cognitive impairment given that she can accurately recount her history, ask complex and, appropriate questions, and appears to comprehend my responses. While she is mobile, she is only able to walk slowly, falls regularly and is understandably anxious about walking without assistance. There is only mild impairment of motor skills in the upper limbs." 1. In his initial report dated 24 August 2020, Dr Allnutt was asked about the Plaintiff's cognitive functioning and her ability to manage her own financial affairs (page 9 of report): "In my view, at this stage, if one looks at the combination of factors, on balance 1 have concern about her capacity to deal with her financial affairs. She has limited experience of managing her own financial affairs preceding the index injury (in that she has always been reliant on her husband for banking and budgeting). There also appears to be a pre-existing tendency to be overgenerous with money. She now suffers a depression which, in my view, would increase the risk of her being even more overgenerous, as she may be more prone to over-identify with people who are suffering as she does. She also now has the compounding effect of cognitive difficulties and on balance, it would be preferable if she was provided with support when it comes to managing her financial affairs." 1. In a report dated 9 May 2022 (Exhibit A), Dr Allnutt addressed the question of the Plaintiff's capacity to manage her own affairs. Dr Allnutt noted the following information which had been furnished concerning the Plaintiff (page 1 of report): "From your letter of retention, you informed me that she relied on her husband to manage overall financial affairs for the family. She did not gamble, there had been no irrational expenditure while shopping or using online shopping. She discussed expenses with her husband, decisions were joint decisions. She had received income from the income protection insurer which deposited into a joint to which she had access by virtue of a linked debit card; there were no concerns. She is capable of online banking. There was no evidence that funds had been disputed recklessly or indiscriminately, She had conducted banking transactions. She was seeking advice from a financial advisor." 1. Dr Allnutt provided a detailed outline of his interview with the Plaintiff on 28 April 2022 which was supplemented by a telephone call to the Plaintiff's husband on 10 May 2022. In the course of this summary, Dr Allnutt said (page 3 of report): "She understood that the matter had been settled and she was to receive a large amount of money but there would still be some deductions. The final figure was to be clarified with her legal team. Her husband had explained to her that this was for her maintenance, the money was to be invested with the advice of a financial advisor. They were in the process of arranging a financial advisor. She did not intend to give her money to the church. She said that if she gave her money away, she would get treatment because she would not get Medicare once she had this money, and it would be unwise to waste it. She would get advice from her husband and daughter. She might give a small donation to something charitable but never a big lump sum. Her husband she added had enduring guardianship. She said she was not a gambler or a spendthrift. He husband thought that she has improved in the last few years. She paid bills on time, made Mastercard payments, put money aside for Mastercard payments, always topped up and was to go at the end of the month. She paid al the bills online by due date. She writes due dates on the calendar and paid bills on time. She paid for the shopping with her card. She could anticipate upcoming expenses (insurances for example). On a monthly basis she put money aside for these expenses. She did this without his prompting. He had helped her to relearn habits, in case something happened to him; so she could manage by himself. He is of the view that she would be able to manage her financial affairs fi the was not available to do so. It had been a matter of getting back her old skills that she had prior to the index injury, She was not reckless with money in his view. She would always run things by him, and he thought she was very careful with the money. He fond he mental state to have improved." 1. Dr Allnutt undertook a documentation review with respect to expert reports concerning the Plaintiff which had been provided to him (pages 3-4 of report). 2. Dr Allnutt's mental state examination of the Plaintiff was summarised by him in the following way (page 4 of report): "She presented as cooperative, well groomed. Her speech was clear and coherent. She maintained good eye contact. She did not manifest behaviours consistent with side effect to psychiatric medication or neurological illness. Her affect was mildly restricted. She endorsed some symptoms of depression and anxiety but there was no suicidal ideation, plan, or intent. There was no psychosis. Cognitively, I believe she had neuropsychological testing and I did not perform cognitive testing. Her capacity for insight and judgement was adequate." 1. Dr Allnutt expressed the following opinion with respect to the Plaintiff's ability to manage finances (pages 4-5 of report): "All clinicians have raised concern about her ability to manage finances. The issue is further complicated by the absence of valid measure of her cognitive ability. The testing demonstrated difficulties with memory, processing speed and executive functioning, but at the same time the neuropsychologist was of the view that this did not reflect her optimum cognitive capacity. Overall, my view is that your client is compromised in managing her own affair and concern is fairly raised; but this can be offset if she has accounting and financial advice. Notably, while there concern she appears to have adequate insight into her own difficulties to intend to seek the advice of others and her husband to manage affairs and assist in rational and responsible decisions regarding the investment and use of settlement monies. There has been no evidence of poor management of money since the index injury and she has relied on her husband. She also has the support of her husband, and it appears would be making joint decisions with her husband who would act as oversight and notably her husband has enduring guardianship. While she has some depressive symptoms, depression in and of itself is not a condition that would undermine a person's capacity in this regard. Overall, while there appears to be reason to be concerned, she has adequate insight into her own difficulties to seek the advice of others in her decision-making. In this sense I would regard her as having capacity to manage her finances/affairs. I note that her husband has the power of guardianship and could intervene in the situation where concern is raised. I would caution, that in a situation where others might perceive her to be making reckless or irrational decisions with the money that the issue of capacity should be revisited." 1. The affidavits of the Plaintiff, her husband and daughter were relied upon on a confidential basis with respect to the approval application if s.76 approval is required. It is appropriate to refer to parts of these affidavits which bear upon the related issues of legal incapacity and capacity of the Plaintiff to manage her affairs. As this is a live issue on the application, reference to that evidence does not cut across the rationale for confidentiality concerning this material. 2. The affidavit of the Plaintiff dated 2 May 2022 provides a clear and coherent understanding of the position which has been reached and reflects her own direct involvement in the decision making to accept the Defendant's offer of compromise. 3. In that part of the affidavit which may be disclosed for the purpose of this application, the Plaintiff states that she and her husband plan to see a financial advisor if the settlement proceeds. She states that she has never dealt with such a large sum of money and neither has her husband. She wishes to invest the money so as to obtain enough income to pay medical bills and to pay for some transport and cleaners, and invest the rest to pay for future problems if they occur. 4. The Plaintiff states that she does not wish to be involved in deciding the actual investments, but to invest in known performing financial institutions. She also wishes to pay off the house to take financial pressure off her husband, and enable him to retire when he wants, rather than to keep working just to pay the mortgage and bills. 5. The affidavit of Ranjan Perera dated 2 May 2022 also provides a helpful picture of the Plaintiff's condition and capacity at the present time. Mr Perera states that it is proposed to obtain financial advice, which is necessary given the quantum of the sum involved. He expresses the belief that it would be psychologically beneficial for the Plaintiff to know that she does not require a trust manager and is found to be a capable person. Mr Perera confirms that the Plaintiff has attended every legal conference and the mediations and many appointments with experts. 6. Mr Perera confirms that the Plaintiff understands that the question as to whether to appoint a trust manager is one to be determined by the Court. 7. In her affidavit of 4 May 2022, Marisa Perera states that her mother's condition has improved slowly over time, but she has never returned to her former abilities. Ms Perera addresses the question of her mother's capacity to manage her financial affairs. Ms Perera provides a helpful assessment of her mother's capacity to manage financial affairs over recent years. She states at paragraphs 16-25 of the affidavit: "16 Due to the uncertainty of the outcome of these proceedings and my father's concern for mum's lack of skills in managing their finances should something happen to him, my father has taught my mother how to manage simple banking online. 17 Over the past two years, there is no evidence mum has dissipated any funds or used them in any way that is reckless or overly generous. 18 In fact the opposite has occurred. Mum is very aware of the fact her condition has place a financial burden on the family due to increased expenses including medication, specialist appointments, uber/ taxi rides and modifications to the home. She has told me that she does not want to be a financial burden on the family. In addition, mum is very cautious and will double check transactions with my father first as she is concerned about making a mistake. There has been no online spending, and the family has always been able to pay the bills, even with the additional medical expenses for mum's care. 19 There has been no gambling or irrational spending. There has been no spending on jewellery or drugs. She lives very modestly, wears plain comfortable clothing. Her income protection payments have been used to pay the mortgage, buy food or clothing or pay expenses. There have been several holidays to Sri Lanka to visit her ageing father, but no other international travel. 20 When considering whether mum requires a trust manager, I am aware she sometimes has trouble remembering things. Her concentration can also wane due to fatigue. However she is also capable of learning new things although she is much slower than before. 21 Mum has not lost the ability to understand the meaning or importance of something and she has the ability to talk and write. She has been involved in all the negotiations and mediations concerning this matter, including conferences with her legal team. She often requires us to explain outcomes and instructions; however I attribute this more to her anxiety than her cognitive function and the complexity of some of the language used or concepts with which she is unfamiliar as she has never had to deal with these issues before. Once we explain the concept to her, she understands it. 22 I do believe Mum will require accounting and financial advice to invest the settlement sum, and she and my father will need to discuss the balance between providing her with income, paying for cleaners, and paying medical expenses and saving the settlement sum to provide for her future care needs. 23 Mum has told me, 'I understand the compensation money has to last me for the rest of my life.- It is not for me to give any of it away I would like to use some of the money to pay the mortgage and put Ranjan and me in a more secure position. We have also made an appointment with a financial adviser.' 24 I do not believe mum displays confusion, I do maintain the view that her anxiety can make it difficult for her to make a decision without seeking assurance from my father or me; however I do believe my mother would be able to understand the advice of a financial advisor and act on it. 25 I maintain the view my mother's physical condition is such she does not have the ability to live independently of my father. If anything happened to him, either me or my sister or friends would have to help out, or she may need other accommodation." 1. Ms Perera explained, as well, in the affidavit the careful process of consideration within the family, in which the Plaintiff was fully involved, leading to the decision to accept the Defendant's offer of compromise. 2. In that part of the confidential memorandum of advice which bears upon the question of the Plaintiff's capacity (and which may be disclosed for the purpose of this decision), counsel for the Plaintiff noted that there has been significant functional improvement in recent years given the stabilisation of the Plaintiff's medication. Further, the Plaintiff has participated in all conferences where instructions were necessary to be given, and the family has never made application to appoint a guardian under the NSW Trustee and Guardian Act 2009. It was noted that there is no evidence of abuse or exploitation within the family. To the extent that the Plaintiff's husband and elder daughter were concerned that the Plaintiff might dissipate the fund through her natural generosity, the family has stated that there is no evidence that the Plaintiff has engaged in this type of expenditure, nor has there been any sign of gambling, online purchases or imprudent spending habits even though she has had access to funds, including income protection payments. 3. The submission for the Plaintiff is that the medical evidence does not provide support for a conclusion that the Plaintiff is incapable of managing her own affairs so as to require the whole of the settlement amount being placed under the control of an independent trustee. Whilst there is no doubt that the Plaintiff will require assistance and professional advice in managing a large sum of money, it is submitted that this would be the case in any event for a person receiving a sum in the quantum involved in this case. Conclusion Concerning the Incapacity Issue 1. The settlement of the proceedings will see a very substantial sum of money being paid to the Plaintiff. Having regard to the nature of the claim and the evidence which would be placed before the Court at a final hearing, it is understandable that the settlement sum is very substantial. 2. With respect to the first issue concerning the capacity of the Plaintiff to provide instructions and to communicate with her legal representatives (see [48] above), the question is whether the evidence demonstrates that the Plaintiff is capable of giving instructions in the sense explained by Price J in Farr v State of Queensland (see [39] above). I am satisfied that the Plaintiff is so capable so that this aspect does not require the continuing appointment of a tutor for the Plaintiff. 3. The second issue involves a practical and realistic assessment of the Plaintiff's capacity to manage her affairs. It may be taken that any person will require financial advice concerning management of a large sum of money. The evidence points clearly to the Plaintiff, with the support of a loving family, being capable of managing her affairs, as outlined in the cases considered earlier in this judgment. 4. In my view, on the evidence before the Court on this application, the Plaintiff is not presently a person under legal incapacity. It is clear that the Plaintiff has a number of physical and mental deficits arising from events which have given rise to these proceedings. However, I am not satisfied that the Plaintiff is not capable of managing her own financial affairs. In this regard, I have taken into account the provisions of the NSW Trustee and Guardian Act 2009, as well as relevant provisions of the Civil Procedure Act 2005 and the UCPR. 5. I am satisfied that the Plaintiff, in her responsible and supportive family setting, is able to manage her financial affairs. Undoubtedly, given the quantum of the settlement sum, the Plaintiff requires expert financial and accounting advice. She is well aware of this, as are her family members, including her husband and her daughter, who is the tutor. There is a careful and responsible attitude displayed by the Plaintiff and her family concerning the prospect of receipt of a substantial sum of money as a settlement and the need for appropriate planning and management of that fund. 6. The question as to whether the Plaintiff is presently under a legal incapacity is not a theoretical one. It has practical and financial consequences for the Plaintiff. 7. Those consequences should only flow where the person is, in fact, a person under legal incapacity at the time of the proposed settlement. Having regard to the evidence placed before the Court on the present application, I am not satisfied that the Plaintiff is a person under legal incapacity who is incapable of managing her financial affairs. 8. In reaching this decision, I have kept in mind the important provisions in s.39 NSW Trustee and Guardian Act 2009 (see [35] above). The Court should keep firmly in mind the interests of the person in question, and the desirability of preserving that person's rights and independence, unless there is a proper basis for concluding that the person is not capable of managing their own financial affairs. 9. Having concluded that the Plaintiff is not a person under legal incapacity and is not incapable of managing her own affairs, it is not necessary for the Court to grant its approval to the proposed settlement under s.76 Civil Procedure Act 2005. As noted earlier, if this point had been reached, I would have approved the settlement in any event upon the basis that it is beneficial to the interests of the Plaintiff. The appropriate decision to be made, with the Court exercising this protective function, would have been to approve the settlement as sought by the parties. 10. However, it is not necessary for the Court to exercise that function as the Plaintiff is not, in my view, a person under legal incapacity for the purpose of s.76 Civil Procedure Act 2005. Orders 1. In accordance with paragraph 2 of the Notice of Motion filed 9 May 2022, the Court declares that the Plaintiff is not a person under legal incapacity within the meaning of ss.3 and 76 Civil Procedure Act 2005 and Rule 7.14 Uniform Civil Procedure Rules 2005. 2. To the extent that it is necessary, I make an order under Rule 7.18 UCPR removing the tutor from the proceedings. 3. It is sufficient to note the terms of the settlement agreed between the parties. I will make orders in accordance with the Consent Judgment annexed to the Notice of Motion, with appropriate amendments as agreed between the parties at the hearing on 12 May 2022. 4. By consent, I make the following orders: 1. Judgment for the Plaintiff. 2. The Defendant is to pay the Plaintiff's costs of the proceedings up to 13 April 2022 and the costs of the application for removal of the tutor as agreed or assessed. 3. The Defendant is to pay its own costs of the proceedings. 4. The parties have liberty to apply on three days' notice if any further order is considered appropriate, having regard to the decision reached by the Court in this judgment. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 06 June 2022