Re Application of Martin Fowler [2015] NSWSC 466

Supreme Court New South Wales

Medium Neutral Citation: Re Application of Martin Fowler [2015] NSWSC 466 Hearing dates: 13 April 2015 and on papers Date of orders: 24 April 2015 Decision date: 24 April 2015 Jurisdiction: Equity Division Before: White J Decision: See para [14] of judgment. Catchwords: GUARDIANSHIP – remuneration of financial managers – application by financial manager of a protected estate to be remunerated out of the estate pursuant to orders made in Re Managed Estates Remuneration Order –NSW Trustee and Guardian provided a report stating that, subject to the plaintiff's insurance position being clarified, it is not aware of anything which might ground an objection to the application – held that the plaintiff is entitled to just and reasonable remuneration out of the estate, subject to conditions and with liberty to apply Legislation Cited: NSW Trustee and Guardian Act 2009 (NSW) Cases Cited: Re Managed Estates Remuneration Orders [2014] NSWSC 383 Ability One Financial Management Pty Ltd v JB by his tutor AB [2014] NSWSC 245 Category: Procedural and other rulings Parties: Martin Fowler (Plaintiff) ES (Defendant) Representation: Counsel: D B Beukes (Plaintiff) C Phang (NSW Trustee & Guardian)

Solicitors: Streeterlaw (Plaintiff) C Phang, NSW Trustee & Guardian (NSW Trustee & Guardian) File Number(s): 2014/376547

JUDGMENT 1. HIS HONOUR: This is an application by a private financial manager for an order authorising him to charge fees for the performance of his functions as manager of a protected estate being managed pursuant to the NSW Trustee and Guardian Act 2009 (NSW). The application is made pursuant to orders made by Lindsay J in Re Managed Estates Remuneration Orders [2014] NSWSC 383 at [12]. 2. In Ability One Financial Management Pty Ltd v JB by his tutor AB [2014] NSWSC 245 Lindsay J addressed the practice and procedure to be followed where the appointment was sought of a private financial manager to a protected estate where the manager was expected to seek remuneration. In the course of his Honour's reasons he proposed that consideration be given to the Court's making an order under s 64 of the NSW Trustee and Guardian Act to the effect that, subject to any order of the Court, the NSW Trustee be authorised to allow just and reasonable remuneration out of the estate of a protected person, subject to the NSW Trustee's being satisfied that the manager has duly performed his or her functions and that it is in the best interests and for the benefit of the protected person for the manager to be remunerated. In Re Managed Estates Remuneration Orders Lindsay J ordered, amongst other things, that: "(2) Order, subject to further order, that Order 3 applies if and only if, in relation to the particular estate of a managed person in respect of which a claim for remuneration is made by a manager of the estate, the manager has been authorised, by an order of the Court or by legislation governing a 'Trustee Company' within the meaning of the Trustee Companies Act 1964 NSW, to charge fees for performance of the functions of the manager of the estate. (3) Order, subject to any order of the Court, that the NSW Trustee and Guardian be authorised (upon the passing of accounts of the manager of the estate of a managed person or otherwise) to allow, out of the estate of the managed person, such, if any, remuneration (including expenses) of the manager as may be just and reasonable, subject to being satisfied that: (a) the manager has duly performed the functions of a manager; and (b) it is in the best interests, and for the benefit, of the managed person to do so." 1. The present application is for an order in relation to the estate of a person who will be referred to by the initials ES to authorise the NSW Trustee to allow the plaintiff to be remunerated out of the estate of ES. 2. In Ability One Financial Management Pty Ltd v JB by his tutor AB Lindsay J observed that in the exercise of the Court's protective jurisdiction the Court would not ordinarily appoint a private manager for reward, not being a licensed trustee company, without first receiving a report from the NSW Trustee as to whether anything is known to the NSW Trustee which might reasonably ground an objection to the appointment of the person as manager, whether suitable arrangements have been or are proposed to be made for the provision of security and generally against defaults on the part of the prospective manager, and what, if any, terms should be imposed on a manager for the provision and passing of accounts (at [290(m)]). 3. In the present case the NSW Trustee has provided a report of the type described in para [290(m)] relevant to the applicant's application for an order authorising the payment of remuneration. 4. Mr Fowler was appointed as manager of the estate of ES by an order of the NSW Civil and Administrative Tribunal on 3 December 2014. The Tribunal made an interim financial management order appointing "Mr Martin Fowler of Moore Stephens Accountants and Advisors" as ES's financial manager "subject to the authorities and directions ordered by the NSW Trustee and Guardian". The Tribunal recorded that Mr Fowler's appointment was acceptable to all of the parties before it. Mr Fowler is an accountant by profession. On the day of the hearing before the Tribunal Mr Fowler was telephoned by the Tribunal. He was questioned as to the absence of conflicts of interest, his experience in acting as manager of protected estates, and other matters relevant to his suitability for the office. He explained to the Tribunal that he would propose to seek court approval for his remuneration if he were appointed. 5. Mr Fowler has previously acted in the capacity of a financial manager in relation to eight other estates pursuant to orders made by the Tribunal or its predecessor, the Guardianship Tribunal, between 23 December 2008 and 28 February 2014. The NSW Trustee reports that it has no concerns regarding the suitability of Mr Fowler to act as financial manager. Mr Fowler is a director and shareholder of Moore Stephens Sydney Pty Limited. That is a company providing personal and corporate tax and advisory services. He is also a director and shareholder of Moore Stephens Sydney Wealth Management Pty Limited, being a company that holds an Australian Financial Services and Credit Licence and which provides personal financial and investment advice. He is a partner in "Moore Stephens Sydney Partnership" which is a partnership that provides audit services. His primary business is providing financial and investment advice to private clients as well as acting as private financial manager for protected persons under financial management orders. 6. At the time of his appointment the Tribunal considered that the person to be appointed as financial manager would need to consider whether immediate steps should be taken regarding a property transaction involving the sale of certain property of ES by her attorney that had been entered into on the morning of the hearing. Mr Fowler was asked to assume the role of financial manager at short notice and did so. He dealt with the immediate issue. On 19 February 2015 the NSW Trustee authorised him to continue with the sale of the property. The NSW Trustee has not yet considered whether he should be required to provide security for the performance of his functions as financial manager as the sale of the property was not completed (at least as at the date of the NSW Trustee's report) and Mr Fowler has only been appointed on an interim basis. The NSW Trustee anticipates receiving an investment proposal once the sale of the property is completed. Subject to one matter the NSW Trustee states that it is not aware of any fact or circumstance which might reasonably ground an objection to an order from the Court that the NSW Trustee be authorised to allow out of ES's estate such remuneration, including expenses, of Mr Fowler as may be just and reasonable on the basis set out in the orders made in Re Managed Estates Remuneration Orders. 7. The matter on which the NSW Trustee seeks clarification is that the policy of professional indemnity insurance provided to it names a large number of insureds, including "Moore Stephens Sydney" and "Moore Stephens Sydney Wealth Management Pty Ltd", but Mr Fowler and "Moore Stephens Accountants and Advisors" are not separately named on the certificate of insurance. The plaintiff submits that when making the order the Tribunal made a slip or error by incorrectly describing the "associated entity" which should have been Moore Stephens Sydney Wealth Management Pty Limited, which is an insured. 8. The Tribunal did not appoint the company, Moore Stephens Sydney Wealth Management Pty Ltd, as interim financial manager of ES's estate. It appointed Mr Fowler as her manager. Its description of him as being "of Moore Stephens Accountants and Advisors" was simply a means of further identifying the Martin Fowler referred to in the order. No application has been made to change the financial manager to Moore Stephens Sydney Wealth Management Pty Ltd. The NSW Trustee should require either that Mr Fowler be added as an insured or that the insurer acknowledges that the insurance cover applies to him in his capacity as financial manager. Although Mr Fowler presumably accounts to Moore Stephens Sydney Wealth Management Pty Ltd for remuneration he receives as financial manager, it cannot be assumed that that company would be vicariously liable for his actions or omissions as financial manager. The NSW Trustee is right to require this position to be "clarified". The appointment of Mr Fowler as financial manager is subject to the direction of the NSW Trustee. The NSW Trustee would be justified in giving a direction requiring Mr Fowler to satisfy it that he has the appropriate professional indemnity insurance cover. 9. This is not a reason for the Court's refusing to approve Mr Fowler's application that he be eligible for remuneration. It is clear from the circumstances in which he took the appointment that the Tribunal and all parties expected that he would charge appropriate fees for his services. It is in ES's interests that he be remunerated. He intends to charge for his own time at a rate of $330 per hour. The NSW Trustee considers this hourly rate to be reasonable. I see no reason to disagree with that opinion. He proposes to charge a rate of $220 per hour for the support staff who provide services for ES's benefit. The position of the NSW Trustee is that it is unable to state as to whether it considers that rate to be reasonable and this would be a matter to be considered against the details of what work is actually done by the support staff. Mr Fowler submits that the proposed rate of charge for support staff is reasonable and represents the costs needed to recover overhead costs and is not dissimilar to standard rates charged by any accounting firm for similar work. 10. It is clear from the judgment in Re Managed Estates Remuneration Orders that the purpose of the orders now sought is to allow the NSW Trustee to determine the appropriate quantum of remuneration to be allowed to a private manager once the Court has made an order authorising the manager to charge fees. The question of the reasonableness of the total charges is a matter for the NSW Trustee. 11. Undertakings of the type identified in CC v RAM [2012] NSWSC 1555 at [4]-[6] are offered by Mr Fowler (see Ability One Financial Management Pty Ltd v JB by his tutor AB at [290(d)]). The orders proposed by him also comply with the principle in para [290(l)] of that case. 12. For these reasons I make orders in accordance with the short minutes of order proposed by the plaintiff as set out below: 1. Note the orders and notations made in the judgment reported as Re Managed Estates Remuneration Orders [2014] NSWSC 383 (2 April 2014). 2. Order, subject to: a. further order; b. due performance by him of his obligations as a manager of the defendant's estate; and c. his ongoing liability to account for estate property, that the plaintiff be allowed out of the estate of the defendant such, if any, remuneration for his provision of services as manager of the estate of the defendant (including any fees approved by the NSW Trustee from time to time) as may be just and reasonable, not exceeding the amounts or rates disclosed to the Court in these proceedings or such other amounts or rates as may, from time to time, be fixed by the NSW Trustee. 3. Order that the plaintiff, as manager of the estate of the defendant, provide to the NSW Trustee, or as the NSW Trustee may in writing direct, an accounting for his management of the estate of the defendant as and when directed by the NSW Trustee so to do. 4. Note the undertakings given by the plaintiff to the Court at paragraphs 19 and 20 of the affidavit of Martin Fowler affirmed on 3 March 2015. 5. Order that the plaintiff be paid his costs of and incidental to the proceedings out of the estate of the defendant. 6. Reserve to the plaintiff, the defendant and the NSW Trustee liberty to apply generally.