New South Wales Supreme Court CITATION : Re B [2000] NSWSC 44 CURRENT JURISDICTION: Equity Division Protective List FILE NUMBER(S) : SC 47/98 HEARING DATE(S) : 08/02/2000 JUDGMENT DATE : 8 February 2000 PARTIES : The names of the parties are suppressed in cases in the Protective List JUDGMENT OF : Young J COUNSEL : The proceedings were heard in Chambers without representation SOLICITORS : CATCHWORDS : Mental Health [8]- Management of Protected Person's Estate- Moral Obligations of Protected Person- How far might these be discharged Re Alderson (1808) Collinson "A Treatise on The Law Concerning ... Lunatics" Re Carysfort (1840) Cr & Ph 76; 41 ER 418 In re Darling (1888) 39 Ch D 208 Re DJR [1983] 1 NSWLR 557 CASES CITED : Re Drummond (1836) 1 My & Cr 627; 40 ER 516 Re ES [1984] 3 NSWLR 341 Re Frost (1870) LR 5 Ch App 699 Griffiths v Kerkemeyer (1977) 139 CLR 161 Re Strickland (1871) LR 6 Ch App 226 Ex parte Whitbread; Re Hinde (1816) 2 Mer 99; 35 ER 878 DECISION : See para 24 THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION PROTECTIVE LIST YOUNG J Tuesday 8 February 2000 47/1998 - RE B JUDGMENT 1 HIS HONOUR: This is an application in chambers by the Protective Commissioner as Manager of the Estate of B, for approval of his proposed payment to B's mother of a sum in recognition of her past services to B. 2 B was born in March 1977 and is thus now 22 years of age. When she was three years of age she was a passenger in a motor vehicle which was involved in a serious accident. This resulted in B being in a coma for five weeks and suffering very serious injury. 3 In May 1998, that is, 18 years after the accident, Master Malpass found a verdict for B for $2.955 million which included $370,000 for the damages considered by the High Court in Griffiths v Kerkemeyer (1977) 139 CLR 161, and $470,000 interest referable to such damages. 4 The whole amount of the verdict was paid over to the Protective Commissioner. He used some $700,000 to purchase a house, furniture and car for B, and the balance is invested. 5 B is presently living overseas and her mother is being paid $100 per week by the Protective Commissioner to support B. When B returns to Sydney the Protective Commissioner intends to pay B's mother $500 per week to care for B. 6 There is no doubt at all that for the 18 years that it took for B's damages claim to be determined by the court, B's mother cared for her. There is also some evidence to suggest that B's mother gave up an opportunity to earn income during at least part of this period. However, there is also material to show that, shortly after the accident, B's mother had a second child and her ability to earn income may well have been affected by that and other family factors. 7 There is also no doubt that B's mother suffered considerable personal stress because of the difficulties in managing B over many years. 8 B's mother claims that $630,000 would be an appropriate sum to be paid to her in connection with past care for B. The Protective Commissioner has recommended that B's mother be paid $400,000. He assessed this sum by taking the $370,000 allowed by the Master as Griffiths v Kerkemeyer damages and adding $30,000 for out-of-pocket expenses. He informed B's mother of this: she asked him to reconsider. The Commissioner did so, but has submitted his original recommendation for approval. 9 It would seem that the learned Master relied on rates charged by a company, Macquarie Nursing Services, for his calculation as to what was the reasonable amount to be allowed for Griffiths v Kerkemeyer damages. 10 B's mother provided material that B was happy for her to be paid $630,000, and also produced figures that she had actually lost something like $519,000 in potential income. Both before the Master and before the Protective Commissioner there was justifiable criticism that these figures were rubbery and lacked real corroboration. 11 There is no provision in the Protected Estates Act 1983 to permit payment out of the estate to settle any moral obligation that the protected person may have had, cf s 24. However, it has been held that the Court retains its inherent jurisdiction to authorise payments of this nature in appropriate cases. I shall flesh out this statement shortly with reference to decided cases. 12 It is now quite clear that Griffiths v Kerkemeyer damages are damages belonging to the injured person beneficially. There is no legal obligation to pay them over to a carer, nor is there any equitable obligation involving any element of trust. This follows from Griffiths v Kerkemeyer itself and see also Re DJR [1983] 1 NSWLR 557, 561. 13 It must also be observed that the injured person receives the Griffiths v Kerkemeyer damages because of the loss of capacity which occasioned the need for them. The cost of the services is the measure of such damages, not the loss suffered by the person who provides them. Accordingly, the amount awarded by the Master does not necessarily bear any relation to what B's mother personally lost by providing the services, or any moral obligation of B to compensate her mother for such loss. As Powell J said in Re DJR at 567-8, "The sum allowed for the services gratuitously supplied not only provides a convenient starting point, but, in many, if not all cases, will be the sum appropriate to be allowed." However, his Honour pointed out that various factors may make this amount inappropriate and it must also be borne in mind that the carer would not be paying income tax on the gratuitous payment. 14 The rule adopted in the 19th century for mentally ill persons is that the Court would sanction gratuitous payments in appropriate cases (a) if it could be seen to be for the benefit of the protected person; or (b) that it was more likely than not that had the protected person remained sane, he or she would have made the payments. 15 As to (a), an example is the case where the protected person would be benefited if he or she could rely on relatives to provide care, but those relatives have already had their fortunes depleted because of past care so that unless a gratuitous payment were made for past care, they would be unable or unwilling to provide future care; see eg Re ES [1984] 3 NSWLR 341 at 344. 16 The rule as to situation (b) was enunciated as early as 1816 by Lord Eldon in Ex parte Whitbread; Re Hinde (1816) 2 Mer 99, 103; 35 ER 878, 879 that the Court will not refuse to make a voluntary payment "for the benefit of the lunatic, that which it is probable the lunatic himself would have done." See also In re Darling (1888) 39 Ch D 208, 213 and Re ES supra. These last two cases show that situation (b) is justified by the Court on the basis that it is taking a "large view" of what is for the benefit of the protected person. 17 Thus payments have been authorised to provide a pension for an old servant: Re Carysfort (1840) Cr & Ph 76; 41 ER 418, payment for articles with a solicitor for a son: Re Alderson (1808) referred to in Collinson "A Treatise on The Law Concerning ... Lunatics" (Reed, London, 1812) Vol 1 p 244, and an allowance for a daughter on marriage: Re Drummond (1836) 1 My & Cr 627; 40 ER 516. See Heywood & Massey, Court of Protection Practice, 12th Ed (Sweet & Maxwell, London, 1991) p 115. 18 The cases show examples where the "large view" has been widely applied. Thus in Re Frost (1870) LR 5 Ch App 699, 702 there was a large surplus of income, the lunatic had supported poor relations when she was sane and they would be beneficiaries on her death, and the Court authorised payment of income to relieve their poverty even though there was no legal claim by the relatives. 19 In Re Strickland (1871) LR 6 Ch App 226, there was surplus income. The heiress and sole next of kin wished to contribute £250 towards the building of a new church. As this may have been what the lunatic wanted and the heiress would be the only one to suffer, the allowance was made. 20 However, in all of this it must be remembered that the fund is held by the Protective Commissioner for the benefit of the protected person and no gratuitous payment should be permitted if in any way the money held to provide for the protected person for the rest of her life could be diminished below what is necessary; see eg Re ES (supra) at p 343. 21 Applying these principles to the present case, if in full control of her faculties, the protected person may very well have reasoned that her mother has suffered a detriment through long term care, and that it would be more likely that her mother would look after her in the future if she made some provision to recompense for that detriment. 22 The amount held to B's credit by the Protective Commissioner even if the recommended payment were made would still appear to be ample for B's needs. 23 Both the expectation of B's mother and the formula used by Master Malpass to calculate the Griffiths v Kerkemeyer damages do not provide an adequate quantification of what a reasonable person in the position of B might consider she should pay her mother. The fact that B is happy to pay her mother $600,000 is of little weight as B is not in a position to make that judgment, and in any event, the chances of her mother having some influence over B in the matter is fairly high. 24 However, doing the best one can it seems that the amount fixed on by the Protective Commissioner is fairly within the range. Accordingly I will approve it and order that that sum be paid out of B's estate. **************** Last Modified: 09/25/2000 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.