Supreme Court New South Wales Medium Neutral Citation: MKH v JBH (No 2) [2016] NSWSC 1103 Hearing dates: 9 and 11 August 2016 Date of orders: 11 August 2016 Decision date: 11 August 2016 Jurisdiction: Equity - Protective List Before: Lindsay J Decision: Orders for adjournment of an application for appointment of a protected estate manager pending payment into court of an award of personal injury compensation and the preparation of a report to the Court by the NSW Trustee, reserving in the meantime liberty to apply generally. Catchwords: MENTAL HEALTH - Guardians, committees, administrators, managers and receivers – Appointment - Application for appointment of a protected estate manager - Application made in anticipation of personal injury compensation – Protected person without other property - Application adjourned until after resolution of compensation litigation Legislation Cited: Civil Procedure Act 2005 NSW NSW Trustee and Guardian Act NSW 2005 Cases Cited: Ability One Financial Management Pty Limited and Another v JB by his tutor AB [2014] NSWSC 245 JMK v RDC and PTO v WDO [2013] NSWSC 1362 MKH v JBH [2016] NSWSC 1031 Category: Procedural and other rulings Parties: Plaintiff: Aunty of defendant (and his tutor in compensation proceedings) Defendant: A minor who has sued for personal injury compensation in separate proceedings Representation: Solicitors for the plaintiff: Matthews Folbigg NSW Trustee: Ms C Phang File Number(s): 2016/00194682 Judgment 1. On 26 July 2016 I published, as MKH v JBH [2016] NSWSC 1031, reasons for declining to make protective estate management orders in the current proceedings pending the determination of personal injury compensation proceedings in the District Court of NSW. 2. The District Court proceedings were settled on 28 July 2016, upon which date the presiding judge made an order under section 76 of the Civil Procedure Act 2005 NSW that the terms of the settlement be approved. 3. The settlement, thus approved, provided for entry of a judgment in favour of the defendant to the current proceedings (the plaintiff in the District Court proceedings) in the sum of $3.5 million, inclusive of fund management costs but subject to adjustments, plus costs. 4. In the ordinary course, absent a contrary order under section 77(3), section 77 of the Civil Procedure Act 2005 operates, in these circumstances, to require the judgment debtor (in practical reality, an insurer standing behind him) to pay the judgment debt, subject to adjustments, into court pending consideration of an application to this Court for protective estate management orders. 5. In approving the settlement, the presiding District Court judge did not make customary, confirmatory orders that draw attention to the need for the compensation award payable by the judgment debtor to be paid into court pending the determination of an application for appointment of a protected estate manager and for a payment out of court associated with such an appointment. 6. This has caused practical uncertainty about how the parties are to proceed, and consequent delay. 7. On the application of the plaintiff (and, it can be inferred, her nephew, the defendant) in the current proceedings, I relisted these proceedings, for directions, on 9 August 2016. 8. On that occasion, the plaintiff appeared by her solicitor and the Court was assisted by an appearance on behalf of the NSW Trustee. 9. After discussion, it was agreed that the proceedings be adjourned to today to allow the parties an opportunity to consider how best to proceed. 10. Acting upon an invitation from me, the solicitor for the plaintiff advised my chambers yesterday afternoon that the parties to the District Court proceedings have agreed that, in order to bring the proceedings in that court into conformity with usual practice (supported by the NSW Trustee), they propose to invite the District Court to make an order that, subject to authorised adjustments, the judgment sum be paid into court to abide the orders of this Court in these proceedings. 11. In the particular circumstances of the current proceedings, there is no present necessity for that course to be taken. 12. The judgment debtor is presently obliged by section 77 of the Civil Procedure Act to pay the compensation award for which he is liable into court. He is represented by solicitors who are, in turn, instructed by an insurer. Those solicitors have agreed, no doubt on instructions, to pay the money into court, subject to any contrary judicial determination. 13. As evidenced by these reasons for judgment, my determination is that the money should be paid into court. That determination having being made, I anticipate no practical impediment to a payment into court being made. 14. It remains desirable, in the ordinary course, for an approval of a settlement under section 76 of the Civil Procedure Act to include an express order (conforming to section 77 of the Act) for a judgment sum to be paid into court pending further order following consideration of whether any (and, if so, what) protected estate management orders should be made. 15. Because the proceedings have, to date, taken an irregular course, the NSW Trustee has not yet received (as, by now, it probably would have received) from the prospective manager of the estate of the defendant a plan for management of the estate as a protected estate. 16. That has delayed the preparation by the NSW Trustee of a report to the Court of the type envisaged in paragraph 290(m) of Ability One Financial Management Pty Limited and Another v JB by his tutor AB [2014] NSWSC 245. 17. Such a report is required because the parties seek the appointment of a private manager for reward (Ability One Financial Management Pty Limited) which is not a licensed trustee company, subject to the regulatory regime that governs a licensed trustee company. 18. The preparation of a report by the NSW Trustee bearing upon an application for the appointment of a private manager for reward, not being a licensed trustee company, is no mere formality. Without such a report, the Court would be required, possibly at length, in each case, to investigate whether the prospective manager is (within the meaning of section 41(1)(b) of the NSW Trustee and Guardian Act NSW 2005) a "suitable person" for appointment as a protected estate manager. 19. In each case, the preparation of such a report requires the NSW Trustee's consideration of a plan of management. Such a plan is a critical element of decision making by the NSW Trustee (and, if need be, the Court) about the identity of a protected estate manager, the necessity for and nature of any security to be required of the manager pursuant to section 68 of the NSW Trustee and Guardian Act 2005, and the necessity or otherwise for directions affecting management of the estate. 20. Given the irregular course that these proceedings, and those in the District Court, have taken, I have given thought to the question whether, pending further consideration of these proceedings, orders are required for the appointment of the NSW Trustee as a protected estate receiver: see JMK v RDC and PTO v WDO [2013] NSWSC 1362. 21. Although that question necessarily remains a live one, subject to any submissions that might be made by the parties or the NSW Trustee in performance of its statutory obligations as monitor of protected estates I have determined that it is sufficient for the day to publish these reasons for judgment and to allow: (a) the parties to the District Court proceedings to act cooperatively, without any further order, to have the subject compensation money paid into court; and (b) the plaintiff in the current proceedings, in conjunction with Ability One Financial Management Pty Limited as her preferred protected estate manager, to submit a proposed plan of management to the NSW Trustee. 22. Accordingly, the only formal orders to be made, in these proceedings, today, are to the following effect: 1. ORDER that these proceedings be referred to chambers for further consideration when monies are paid into court pursuant to the District Court judgment and a further report is received by the Court from the NSW Trustee, dealing with a proposed plan of management for the defendant's estate as a protected estate. 2. RESERVE to the parties to these proceedings, to the judgment debtor in the District Court proceedings and his insurer, and to the NSW Trustee liberty to apply to the Protective List Judge generally. ********** 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: 11 August 2016