New South Wales Supreme Court CITATION : Pamela Anne COLLIS BHT Elyshia Leanne COLLIS [2009] NSWSC 852 HEARING DATE(S) : 8-9 July 2009; 30 July 2009 JUDGMENT DATE : 26 August 2009 JURISDICTION : Common Law JUDGMENT OF : McCallum J DECISION : 1. I note the undertaking to the Court by Mr Storie to apply to the Proper Officer of the Court for a solicitor/client costs assessment of his costs and disbursements of acting for the plaintiff in proceedings No. 58 of 2008 in the District Court and in these proceedings. 2. I make orders 2A, 2B, 2C and 3 in the amended summons filed 30 July 2009. CATCHWORDS : COMMON LAW – application for declaration pursuant to s 41(1)(a) of the NSW Trustee and Guardianship Act – application for the appointment of nominated managers of applicant's estate pursuant to s 41(1)(b) – whether applicant capable of managing her own affairs – whether solicitor, accountant and daughter acting jointly are suitable managers of applicant's estate Civil Procedure Act 2005 LEGISLATION CITED : NSW Trustee and Guardian Act 2009 Uniform Civil Procedure Rules 2005 CATEGORY : Principal judgment Holt v Protective Commissioner (1993) 31 NSWLR 227 CASES CITED : PY v RJS [1982] 2 NSWLR 700 Re GHI (A Protected Person) [2005] NSWSC 581; (2005) 221 ALR 581 Re R [2000] NSWSC 886 PARTIES : Pamela Anne COLLIS BHT Elyshia Leanne COLLIS (Plaintiff) FILE NUMBER(S) : SC 13412/09 COUNSEL : P. Glissan (Plaintiff) SOLICITORS : Roderick Storie Solicitors (Plaintiff) - 7 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION McCALLUM J 26 AUGUST 2009 13412/09 PAMELA ANNE COLLIS BHT ELYSHIA LEANNE COLLIS JUDGMENT 1 HER HONOUR: By amended summons filed in Court on 30 July 2009, Mrs Pamela Anne Collis by her tutor Elyshia Leanne Collis seeks: (a) a declaration pursuant to s 41(1)(a) of the NSW Trustee and Guardian Act 2009 that she is incapable of managing her affairs; (b) an order that her estate be subject to management under the Act; (c) an order appointing nominated managers. 2 Mrs Collis was the plaintiff in a motor vehicle accident claim in the District Court in respect of injuries she sustained on 16 January 2005 whilst she was a pillion passenger on a motorcycle being ridden by her husband. Mr Collis was the only defendant in those proceedings. Elyshia Collis is their adult daughter. 3 The present application has come before the Court by an unusual path. The proceedings in the District Court were conducted on behalf of Mrs Collis by Elyshia Collis as tutor, presumably because her solicitor formed the view that Mrs Collis was incapable of managing her own affairs within the meaning of rule 7.13 of the Uniform Civil Procedure Rules 2005. The parties reached agreement as to the compromise of the claim and the Court gave its approval to the terms of settlement in accordance with s 76(4) of the Civil Procedure Act 2005. In those circumstances, it was a requirement of s 77(2) of the Act that the proceeds of settlement be paid into Court and the Court duly made an order to that effect. 4 The plaintiff's counsel, however, sought an order that the funds paid into Court be paid out to a manager without the need for an application to the Protective Commissioner (since renamed the NSW Trustee and Guardian). Mr Glissan, who appeared for the plaintiff, submitted that the District Court had power to make such an order under s 77(3), which provides: "Despite subsection (2), the court may order that the whole or any part of such money not be paid into court but be paid instead to such person as the court may direct, including: (a) if the person is a minor, to the NSW Trustee and Guardian, or (b) if the person is a protected person, to the manager of the protected person's estate." 5 Judge Gibson refused to make that order. There was no authority binding on her Honour which precluded the making of the order. However, her Honour cited a practice, both in the District Court and in this Court, of directing that proceeds of settlement payable to a person who is incapable of managing his or her own affairs (within the meaning of the UCPR) be paid either to the Protective Commissioner or to a manager appointed pursuant to the Protected Estates legislation (now, the NSW Trustee and Guardian Act 2009). 6 In my view, that was the proper approach. It is always open, in an application under the NSW Trustee and Guardian Act, to seek the appointment of a manager other than the NSW Trustee. The principles governing such an application are well-established: see Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238 to 239 per Kirby P; Re R [2000] NSWSC 886 at [49] per Young J (as his Honour then was). 7 In those circumstances, however, the interests of the protected person obtain the protection of the provisions of the Act, including the duties imposed by s 39 of the Act on any person exercising functions under the Act with respect to protected persons. 8 The present application initially came before me as an application for the order refused by Judge Gibson for payment out of Court of the proceeds of settlement. Subsequently, however, the plaintiff's legal representatives accepted that it would be preferable to seek to invoke this Court's jurisdiction under the NSW Trustee and Guardian Act and the summons was amended accordingly. The recitation of that history explains how the proceedings came to be heard in the Common Law Division of the Court. 9 After hearing the application made by the amended summons, I sought further information by letter dated 14 August 2009 in support of the orders sought and that additional information was provided on 24 August 2009. 10 Section 41(1) of the NSW Trustee and Guardian Act provides: "(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." 11 In accordance with s 41(3), the Court may inform itself as to the person's capability to manage his or her own affairs by evidence given in any form and otherwise as the Court thinks fit. 12 The person in respect of whom such a declaration is sought ought ordinarily be made the defendant to the application so as to ensure that he or she has an opportunity to defend it. In the present case, however, there was evidence that Mrs Collis was aware of the application and consented to its being made on her behalf by her daughter as her tutor in the proceedings. I note that s 41(2) of the Act provides that the Court may make an order on its own motion "or on the application of any person having a sufficient interest in the matter". In light of the evidence that Mrs Collis consents to the making of the order, I am satisfied that she is a proper plaintiff (by her tutor), although it might have been more appropriate to have named her as a defendant. 13 There was evidence before the Court to establish that Mrs Collis is incapable of managing her affairs. In Re GHI (A Protected Person) [2005] NSWSC 581; (2005) 221 ALR 581, Campbell J stated at [5] that the test of capacity to be applied in this state is as stated by Powell J in PY v RJS [1982] 2 NSWLR 700 at [702] where his Honour said: "It is my view that a person is not shown to be incapable of managing his or her own affairs unless, at the least, it appears: (a) that he or she appears incapable of dealing, in a reasonably competent fashion, with the ordinary routine affairs of man; and (b) that, by reason of that lack of competence there is shown to be a real risk that either: (i) he or she may be disadvantaged in the conduct of such affairs; or (ii) that such moneys or property which he or she may possess may be dissipated or lost (see Re an Alleged Incapable Person ) [(1959) 76 WN (NSW) 477]); it is not sufficient, in my view, merely to demonstrate that the person lacks the high level of ability needed to deal with complicated transactions or that he or she does not deal with even simple or routine transactions in the most efficient manner: see In the Matter of Case (1915) 214 NY 199, at p 203, per Cardozo J." 14 Mrs Collis' incapacity arises as a result of a severe brain injury sustained in the accident the subject of the claim in the District Court. Several doctors have expressed the opinion that, as a result of that injury, she requires assistance in the management of her financial affairs. In a report dated 26 November 2007, Dr Patricia Jungfer stated: "While she may have some awareness of what the issues are at hand, her problems with regards to recall would limit her ability to remember all the facts and information. She also has problems with regards to deciding what steps to take and making a decision. … Therefore in my opinion her capacity to provide instruction is reduced. This would … impede her ability to manage large sums of money." 15 On 28 May 2008, a clinical neuropsychologist, Jennifer Batchelor, expressed the opinion that Mrs Collis: "[w]ould require assistance in managing any large sum of money. She has difficulty reasoning and analysing complex material. She is impulsive in her responses and disorganised in her thinking. If not provided with such assistance there is, in my opinion, a real risk of funds being dissipated or lost." 16 On 8 July 2008, a consultant physician in rehabilitation medicine, Dr Steven Buckley, expressed the opinion that Mrs Collis "probably does not require administration of her funds via the Protected Estates Act". However, he also stated: "On the other hand there is serious impairment in her cognitive capacity, and she therefore requires the assistance of a professional financial manager to assist her in the management of any settlement funds she might receive. I propose that she have provision of the costs of such professional funds management made within her settlement." 17 I am satisfied on the balance of probabilities that Mrs Collis is incapable of managing her own affairs in accordance with the test articulated by Powell J. 18 The persons sought to be appointed as manager of Mrs Collis' estate are Elyshia Collis, Roderick Storie (her solicitor) and Denis Graham (an accountant). Each has sworn an affidavit confirming his or her preparedness to act as one of three trustees for Mrs Collis in relation to the management of the settlement proceeds, and acknowledging an intention to invest the funds conservatively in consultation with the two other trustees. 19 In determining whether those are suitable persons within the meaning of s 41(1)(b) of the Act, the dominant consideration is the welfare of the protected person: cf Holt at [238]-[239]. 20 In Re R, Young J stated at [49] that, when considering the appointment of a private manager, the Court must be satisfied: (a) as to any financial expert, that he or she has appropriate expertise to assist the protected person in the circumstances of the particular case; and (b) as to any relative, that there is no conflict of interest or that any conflict of interest is able to be handled by appropriate guidelines from the Deputy Registrar in the Protective Division. 21 The affidavit of Mr Graham, the accountant, establishes that he has appropriate expertise and experience in the management of funds. I note that he is an independent accountant and that he proposes to charge fees for the work undertaken by him at his usual rates, which it appears from the evidence will be substantially less than the fees that would be incurred if the estate is managed by the NSW Trustee. 22 As to the proposed appointment of Elyshia Collis, there is no suggestion of any particular conflict of interest. In addition, I accept that the plaintiff's welfare is likely to be well served by the inclusion of her daughter as a trustee, having regard to the natural affection that attends their relationship: cf Holt at 239 per Kirby P. 23 I note that the proposed third trustee is a solicitor and therefore an officer of this Court. He has stated in his affidavit that he is well acquainted with the plaintiff and is prepared to give his undertaking to ensure that the funds are invested wisely and conservatively and directed to her benefit. I do not think it is necessary to take that undertaking as the price of the orders sought. I am satisfied that, so long as the three persons proposed are required to act together, there will be adequate protection against any risk of exploitation: cf Re R at [51]. 24 Accordingly, I am satisfied that it is appropriate to make orders 2A, 2B, 2C and 3 sought in the amended summons. 25 Orders (1) I note the undertaking to the Court by Mr Storie to apply to the Proper Officer of the Court for a solicitor/client costs assessment of his costs and disbursements of acting for the plaintiff in proceedings No. 58 of 2008 in the District Court and in these proceedings. (2) I make orders 2A, 2B, 2C and 3 in the amended summons filed 30 July 2009. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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