Ability One Financial Management Pty Limited and Anor v JB by his Tutor AB

[2014] NSWSC 245

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Ability One Financial Management Pty Limited and Anor v JB by his Tutor AB [2014] NSWSC 245
Hearing dates:	12 August 2013, 13 and 23 September 2013, 25 November 2013 and 4 February 2014 (with written submissions)
Decision date:	17 March 2014
Jurisdiction:	Equity Division
Before:	Lindsay J
Decision:	Order that Short Minutes be brought in to give effect to a decision that a manager of a protected estate be allowed remuneration out of the estate on terms to be administered by the NSW Trustee.
Catchwords:	GUARDIANSHIP - Protected person - Financial management - Appointment of manager - Private manager - Terms of appointment - Remuneration - Regulatory regime - Financial services licence, issued by Australian Securities and Investment Commission, required - Subject to regulation by public authorities (by ASIC as licence holder, by NSW Trustee as financial manager) and supervision by Court (in exercise of Protective jurisdiction) - Public interest considerations MENTAL HEALTH - Protected person - Appointment of manager of estate - Private manager - Remuneration - Regulatory regime - Public interest considerations PRACTICE - NSW Trustee & Guardian Act - Protected person - Appointment of manager of estate - Private manager - Terms of appointment - Remuneration - Regulatory regime - Public interest considerations
Legislation Cited:	Administrative Decisions Review Act 1997 NSW) Corporations Act 2001 Cth chapter 5D, ss 601RAA, 601RAB(1)(b), 601RAB(2A), 601RAC (2), 601RAC (2)(d), 601RAC(2)(e), 601SAA; 601TBA(1), 601TBC, 601TBD, 601TBE; chapter 7, 760A; Part 5D.5 ss 601VAA - 601VCC, s 601RAE (4)(b); ss 601RAE (1) 601RAC (1)(a), 601RAC (2)(d)-(e), 601RAA, 601SBB(3) Corporations Regulations 2001 Cth, clause 5D.1.04 (3) and Schedule 8AD, item 4, 5D.1.04(2)(3), Schedule 8AC items 2-3, Schedule 8AD item 2 Guardianship Act 1987 NSW ss 25E, 25M(1)(b), 25M(1)(a); 25G, 25M(1) Interpretation Act 1987 NSW NSW Trustee and Guardian Act 2009 NSW ss 71, 111, 113, 114; 43-52; ss 11(2), 11(4) NSW Trustee and Guardian Regulation 2008 NSW Part 4.5, Division 1 (ss 55-62), Division 2 ss 63-70, Division 3 ss 71-84, s 115, s 64, s 115(1)(b), ss 11, 41(1)(b) and 52 Probate and Administration Act 1898 NSW, s 86A Protected Estates Act 1983 NSW, ss 77, 8 Public Trustee Act 1913 NSW s 9 Public Trustee (Further Amendment) Act 1989 NSW Trustee Companies Act 1964 NSW, s 34
Cases Cited:	Adsett v Berlouis (1992) 37 FCR 201 at 208-212 Allen v Union-Fidelity Trustee Co of Australia Limited (1986) 6 NSWLR 341 at 343F-344B Baker v H [2009] EWHC B31 Beverley's Case (1603) 4 Co Rep 123b; 76 ER 1118 Boardman v Phipps [1967] 2 AC 46 Brown v Smith (1878) 10 Ch D 377, p 386 Caltex Refining Co Pty Limited v Maritime Services Board of NSW (1995) 36 NSWLR 552 at 563G-564F) CC v RAM [2012] NSWSC 1555 at [4]-[6] Christiansen v Christiansen (Queensland Court of Appeal, 2 July 1999) BC 9904473 at [18]-[19] Clay v Clay (2001) 202 CLR 410 at 428 [37] - 430 [40] and 432 [46] - 433 [49] Crout v Beissel (1909) VLR 207 at 213-214 Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 420-423 Crossingham v Crossingham [2012] NSWSC 95 at [2], [17] - [28], [55] and [64]-[65] David by her Tutor The Protective Commissioner v David (1993) 30 NSWLR 417 at 436F-437B, 433F-434C, 436E-F, 437D-438F and 440D-E) E (Mrs) v Eve [1986] 2 SCR 388 at 412-414 and 426-427; (1986) 31 DLR (4th) 1 at 18-19 and 28-29; 411; 31 DLR (4th) 1 at 17 Estate Gowing; Application for Executor's Commission [2014] NSWSC 247 Ex parte Warren (1805) 10 Ves Jun 622; 32 ER 985 Fomsgard v Fomsgard [1912] VLR 209 at 212-213 Forster v Ridley (1864) 4 DeGJ&S 452; 46 ER 993 GDR v EKR [2012] NSWSC 1543 at [36], [37]-[42] [10]-[28]. [43] -[48] Gell v Gell (2005) 63 NSWLR 547 at 553-554 [21]-[23] Gibbons v Wright (1954) 91 CLR 423 at 437-438 Gray v Hart [2012] NSWSC 1435 at [31]-[320], [140]-[142] and [319]-[336] Griffin v Union Trustee Company of Australia Limited (1947) 48 SR (NSW) 360 at 363, 364 and 365 Guazzini v Pateson (1918) 18 SR (NSW) 275 at 285-286 Hastings) Limited v Gulliver [1967] 2 AC 134 (note) Holt v Protective Commissioner (1993) 31 NSWLR 227, 238B-D, 241G-242A Ide v Ide [2004] NSWSC 751; 184 FLR 44 at [19] and [36]-[50] In the Goods of Darke (1859) 1 Sw&Tr 516; 164 ER 839 In Re Allison Johnson & Foster Limited; ex parte Birkenshaw [1904] 2 KB 327 at 330-331 In Re Brooks (1904) 21 WN (NSW) 4 at 5-6 In re Darling [1925] SASR 262 at 265-266; In Re Duke of Norfolk's Settlement Trust [1982] Ch 61 In Re Farnham (a lunatic) (1895) 2 Ch 799 In Re Farnham (a lunatic) (No 2) [1896] 1 Ch 836 In Re Freeman's Settlement Trust (1887) 37 Ch D 148 In Re French (1868) LR 3 Ch App 317 In re Morish [1939] SASR 305 at 319-320 In Re Rhodes (1890) 44 Ch D 94 at 103, 104 In Re Weld (a person of unsound mind) (1882) 20 Ch D 451 In the Will of James Greer (1911) 11 SR (NSW) 21 at 23 In the Will of Henry Sherringham (1901) 1 SR (NSW) (B&P) 48 JJK v APK (1986) Aust Torts Reports 80-042 at 67, 881 JMK v RDC and PTO v WDO [2013] NSWSC 1362 at [38]-[50] Keech v Sandford (1726) Sel Cas Ch 61; 25 ER 223 Law Society of NSW v Harvey [1976] 2 NSWLR 154) McLaughlin v Freehill (1908) 5 CLR 858 at 862 and 863 MB v Protective Commissioner (2000) 50 NSWLR 24 at 46 [126] - 47 [129], 32 [36] - 33 [37] and 37 [64] M v M [2013] NSWSC 1495 at [10]-[20] Macedonian Orthodox Community Church St Petka Incorporated v Bishop Petar (2008) 237 CLR 66 at 93 [69] Marion's Case (Secretary, Department of Health and Community Services v JWB and SMB) (1992) 175 CLR 218 at 258-260 Mayne v Jaques (1960) 101 CLR 169, 179-183 PB v BB [2013] NSWSC 1223 at [4]-[9] Pisak v Hegedus [1983] 2 VR 386 at 388 and 392-393 Plomley v Shepherd (1896) 17 NSWR (Equity) 215 at 217 Plumpton v Burkenshaw [1908] 2 KB 572, In Re EG, a person of unsound mind not so found by inquisition [1914] 1 Ch 927 Protective Commissioner v D (2004) 60 NSWLR 513 at [12], [149]-[157] and [164]-[169] R v P (2001) 53 NSWLR 664 at 683 [63] - [65]) RL v NSW Trustee and Guardian (2012) 84 NSWLR 263 at 285 [96], 310 [212] Re D [2012] NSWSC 1006 at [46]-[62], [69]-[70] Re DJR and the Mental Health Act, 1958 [1983] 1 NSWLR 557 Re Elizabeth [2007] NSWSC 729 at [16]-[19]. Re M and the Protected Estates Act 1983 (Supreme Court of NSW, 17 February 1988) at pp 46-47; (1988) 12 NSWLR 96 Re Queensland Forests Limited (In Liquidation) [1966] Qd R 180 at 186-187 and 188. Re Sutherland [2004] NSWSC 798; 50 ACSR 297 at [11]-[17 Re Westbrooke (1848) 2 Phil 631; 41 ER 1087 Re Victoria [2002] NSWSC 647 at [31] and [36]-[40] Richards v Gray [2013] NSWCA 402 Roberts v Balancio (1987) 8 NSWLR 436 Robinson v Pett (1734) 3 P Wms 249; 24 ER 1049 Saywell v Permanent Trustee Company of NSW Limited (1931) 44 CLR 564 at 571 Secretary, Department of Health and Community Services v JWB and SMB) (1992) 175 CLR 218 at 258-260 Strangwayes v Read [1898] 2 Ch 419 W v B [2001] NSWSC 503 at [15] Walley v Walley (1687) 1 Vern 484; 23 ER 609 Willett v Futcher (2005) 221 CLR 627, 642 [49], 631 [8], 632 [12]-[13], 636 [28] and 644 [54]
Texts Cited:	HS Theobald, The Law Relating to Lunacy (Stevens & Sons, London, 1924); p 219-221, pp 51-53, 47 and 50, 380-382, 48 PW Young, C Croft and ML Smith, On Equity (Law Book Co, Sydney, 2009), para [6.1380] JD Heydon and MJ Leeming (ed), Jacobs' Law of Trusts in Australia (Lexis Nexis Butterworths, Australia, 7th ed, 2006), paras [1739]; paras [1704]-[1705] and [2214]-[2224] Jordan Chapters on Equity in NSW (6th ed, 1947), p 124 note (m) LI Rotman, Fiduciary Law (Thompson, Canada, 2005) at p 62 K Mason, JW Carter and GJ Tolhurst (ed), Mason and Carter's Restitution Law in Australia (Lexis Nexis Butterworths, Australia, 2nd ed, 2008), paras [819]-[820], [831], [1030] and [1040]
Category:	Principal judgment
Parties:	Ability One Financial Management Pty Limited and Anor (Plaintiff) JB by his Tutor AB (Defendant)
Representation:	Counsel: MJ Heath (Plaintiffs) E Brooks, solicitor, of Maurice Blackburn (Defendant) CA Webster SC (Council of the Law Society of NSW, Amicus Curiae) J Williams (Financial Services Council Limited, Amicus Curiae) C Phang (NSW Trustee & Guardian, Amicus Curiae) Solicitors: Matthews Folbigg (Plaintiffs) Maurice Blackburn (Defendant) Herbert Smith Freehills (Financial Services Council Limited)
File Number(s):	2013/00214490

Judgment

INTRODUCTION

1. This judgment addresses the basis, and terms, upon which a private corporation conducting a business of management of protected estates might be appointed, or permitted to act, and be remunerated, as manager of the estate of a person incapable of managing his or her own affairs. In these proceedings, such a corporation stands in contrast to a licensed trustee company, not only because it does not hold such a licence, but because it is privately owned and controlled.

1. The immediate focus is on the availability of allowances from a protected estate for remuneration, and expenses, of an identified manager of a particular estate.

1. However, broader questions (including a question about the true character of remuneration allowed to a manager) have been, and must be, canvassed because the current case is but one of a number of cases, pending and foreshadowed, involving similar questions affecting the plaintiffs. They, and the NSW Trustee and Guardian ("the NSW Trustee"), have invited the Court to consider general principles governing private management of protected estates for reward.

1. Each of the NSW Trustee and a licensed trustee company has a statutory "right to charge fees" in relation to its management of a protected estate. A private manager, not being a licensed trustee company, has no similar "right" unless it is conferred by an order of the Court or, within the limits of the section, pursuant to the NSW Trustee and Guardian Act 2009 NSW, s 115: Gray v Hart [2012] NSWSC 1435 at [319]-[320].

1. Whether conferred by legislation that governs the NSW Trustee (NSW Trustee and Guardian Act 2009, ss 111, 113 and 114) or a licensed trustee company (Corporations Act 2001 Cth, chapter 5D, including ss 601TBA(1), 601TBC, 601TBD and 601TBE), or by a court order to the same effect, any "right to charge fees" in relation to management of a protected estate depends for its operation upon an appointment of the prospective fee-earner to the office of manager by the Court (pursuant to s 41(1) of the NSW Trustee and Guardian Act or upon an exercise of the Court's inherent jurisdiction); the Civil and Administrative Tribunal, "NCAT" (pursuant to ss 25G and 25M(1) of the Guardianship Act 1987 NSW); or the Mental Health Review Tribunal (pursuant to Pt 4.3 Div 1 (ss 43-52) of the NSW Trustee and Guardian Act).

1. I leave to one side the provisions of the NSW Trustee and Guardian Act pursuant to which the NSW Trustee may undertake management of the estate of a voluntary patient at a mental health facility (Pt 4.3, s 53) and the Court can make a management order in relation to the estate of a missing person (Pt 4.4, s 54(1)). Section 38 uses the expression "managed person" in a compendious way as referring to a "protected person" (a person incapable of managing his or her own affairs in respect of whom a management order has been made by the Court, NCAT or the Mental Health Review Tribunal); a person declared to be a missing person in respect of whose estate a management order is made under s 54(1); and a voluntary patient in a mental health facility whose estate is under management pursuant to s 53.

1. Although similar considerations may apply in the management of the estate of a "managed person", this judgment is directed towards management of the estate of a "protected person" as defined by s 38.

1. Only the Court and NCAT have power to appoint a private manager of a protected estate. The Mental Health Review Tribunal has power only to commit management of such an estate to the NSW Trustee: NSW Trustee and Guardian Act, s 52.

1. Every appointment of a manager of a protected estate under the NSW Trustee and Guardian Act or the Guardianship Act 1987 is accompanied by an order that the estate be subject to management under the NSW Trustee and Guardian Act.

1. Section 39 of that Act, and s 4 of the Guardianship Act, expressly provide that "[it] is the duty of everyone exercising functions [under the legislation, with respect to protected persons or the like] to observe [specified] principles" that include, as a primary principle, that "the welfare and interests of such persons should be given paramount consideration".

1. Those statements of principle are not an exhaustive statement of the objectives that should be advanced by decisions relating to administration of the estate of a protected person: RL v NSW Trustee and Guardian (2012) 84 NSWLR 263 at 285 [96]. The operation of the legislative regime relating to management of a protected estate in NSW is informed, and supplemented, by general law principles derived from the Court's inherent (parens patriae) jurisdiction, chief amongst which is the principle that, in administration of a protected estate, the paramount consideration is the welfare of the protected person: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238B-D and 241G-242A.

1. Such entitlement as a manager of a protected estate may have to remuneration from the particular estate under management takes the form of an allowance out of the estate under management, of remuneration which is: (a) just and reasonable; and (b) open to review by the Court to ensure that it serves the best interests, and is for the benefit, of the protected person. A "right to charge fees" does not of itself carry an entitlement to charge, or appropriate moneys from, a protected estate unqualified by the protective jurisdiction of the Court. It is not, by itself, an absolute or indefeasible entitlement to remuneration. An allowance of remuneration in favour of a protected estate manager is, ultimately, within the discretion of the Court, albeit a discretion to be exercised judicially.

1. A statutory right to charge fees, such as licensed trustee companies enjoy, may operate differently in the administration of a deceased estate than it does in relation to management of a protected estate. In the context of a probate case, significance attaches to nomination of a trustee company as an executor in a will, and to a grant of probate or administration by a court, knowing that such a company has a statutory right to charge fees and that it operates a commercial business: Saywell v Permanent Trustee Company of NSW Limited (1931) 44 CLR 564 at 571; Allen v Union-Fidelity Trustee Co of Australia Limited (1986) 6 NSWLR 341 at 343F-344B. In a probate case, a licensed trustee company's right to charge fees, coupled with a grant of probate or administration, implicitly carries with it an entitlement to remuneration, subject to the jurisdiction of the court (such as presently found in the Probate and Administration Act 1898 NSW, s 86A) to order that excessive remuneration be reduced.

1. By contrast, every appointment to the office of a private protected estate manager subjects the manager (with his, her or its consent) to an exercise of protective jurisdiction, governed by the purposive nature of that jurisdiction. In practice, the Court relies heavily on an acceptance that a licensed trustee company can be counted on to operate responsibly, subject to oversight of its operations by the NSW Trustee and the Australian Securities and Investment Commission. However, that practice does not translate into an absolute or indefeasible entitlement in a licensed a trustee company to remuneration as a protected estate manager. All managers of protected estates are governed by the constraints of the protective jurisdiction.

1. There is a symbiotic relationship between (on the one hand) any entitlement a manager of a protected estate may have to an allowance for remuneration from the estate under management and (on the other hand) the nature of the office, and the duties, of a manager of such an estate.

1. To ask whether a manager of a protected estate has, or ought to be granted, an entitlement to remuneration from the estate is to make an inquiry about the nature of protected estate management, and the subject-matter and purpose of an allowance of remuneration in favour of such a manager.

1. In keeping with the nature of the jurisdiction exercised by the Court (in its parens patriae jurisdiction or under legislation) affecting people in need of protection, because of infancy or incapacity for self-management, in this judgment some names are anonymised.

1. The judgment has been prepared with the benefit of submissions, written and oral, from:

(a)   a private corporation holding appointments as a manager of protected estates (the first plaintiff), and a related corporation routinely retained by it, in its management of protected estates, to provide financial advice (the second plaintiff).

(b)   the protected person whose estate is the immediate subject of the proceedings (the defendant), acting by his father as tutor in circumstances in which, because of a conflict between interest and duty, the manager of his estate (the first plaintiff) cannot do so.

(c)   the NSW Trustee, as amicus curiae.

(d)   Financial Services Council Limited, as amicus curiae.

(e)   the Council of the Law Society of NSW, as amicus curiae.

1. The first plaintiff is a wholly owned subsidiary of the second plaintiff. Both are managed by Mr GA White, a solicitor based in Queensland. He is admitted to practise in NSW and is thus an officer of the Court, but he holds a Queensland practising certificate, not a NSW one.

1. The NSW Trustee is a statutory corporation with responsibilities for management of protected estates, and for monitoring private managers of protected estates, in New South Wales.

1. At the invitation of the NSW Trustee, the Financial Services Council (which has a membership that includes the NSW Trustee, similar public corporations in other Australian jurisdictions and licensed trustee companies) took on responsibility for submissions in the interests of licensed trustee companies as managers of protected estates.

1. Because the plaintiffs are managed by a solicitor who, at times, has held out his professional status as a ground for acceptance of the plaintiffs as entities associated with the management of protected estates, I invited the Law Society of NSW to assist the Court (and its Council resolved to provide that assistance) on the relevance, if any, to the questions before the Court of the fact that the plaintiffs are managed by a solicitor.

1. The plaintiffs and the defendant acquiesced in the involvement in the proceedings of the NSW Trustee, the Financial Services Council and the Law Society, with each participant in the proceedings playing a constructive role.

1. The defendant's involvement in the proceedings has been relatively formal. According to the terms of an undertaking given to the Court in earlier proceedings (GDR v EKR) the plaintiffs have accepted responsibility for payment of the reasonable costs of the defendant's tutor in these proceedings.

1. As it happened, the submissions made on behalf of the defendant have been confined, in large measure, to a submitting appearance, coupled with a watching brief, consistent with an ongoing satisfaction in the defendant's family with involvement of the plaintiffs in management of his estate.

1. The proceedings require the Court, and entities actively involved in the administration of protected estates in NSW, to confront questions of principle, practice and procedure relating to the administration of protected estates in the current environment.

1. During the course of the proceedings there was a change in the legislative regime governing the administration of protected estates in NSW in that the Guardianship Tribunal was abolished, and was replaced by NCAT, on 1 January 2014. For present purposes, the change is not functionally significant. The provisions of the Civil and Administrative Tribunal Act 2013 NSW governing the Guardianship Division of NCAT (Schedule 6) are substantially similar to those (formerly in Part 6 of the Guardianship Act 1987 NSW) that governed the business of the Guardianship Tribunal. It is generally sufficient to conceptualise the Guardianship Tribunal as having been reincarnated as NCAT's Guardianship Division.

FRAMEWORK PRINCIPLES

1. Some of the questions under consideration in the proceedings, as then perceived, were brought to public notice in JMK v RDC andPTO v WDO [2013] NSWSC 1362 (19 September 2013) at [32].

1. In that judgment, at [33]-[37], attention was drawn to the following points, which continue to provide a framework within which the questions before the Court must be addressed:

(a)   Under the sway of fiduciary law, the office of a manager of a protected estate must generally be regarded as a gratuitous one unless, by an order of the Court or by legislation, a special arrangement to the contrary is made: GDR v EKR [2012] NSWSC 1543 at [32] and [38]; JJK v APK (1986) Australian Torts Reports 80-042 at 67,881-67,882; Gell v Gell (2005) 63 NSWLR 547 at 553 [21].

(b)   Caution is required in making a departure from the traditional stance of the law of fiduciaries, informed, as it is, by hard experience and a desire to maintain standards of conduct.

(c)   When the Court is called upon to make, or sanction, a special arrangement relating to the remuneration of a manager particularly careful attention must be given to the existence, effective operation and ongoing effectiveness of a regulatory regime designed to protect the protected person from any risk of exploitation by a manager whose interests, ostensibly, conflict with the duty of a manager.

(d)   The rationale for any order made for remuneration of the manager of a protected estate is, ultimately, that such an order is necessary for the benefit of the protected person - not for the benefit of the manager: Ex-parte Fletcher (1801) 6 Ves Jun 427; 31 ER 1127; Re Walker, a Lunatic (1848) 2 Phil 631; 41 ER 1087; Re Westbrooke (1848) 2 Phil 631; 41 ER 1087; G v B (Powell J, 27 May 1992) BC 9201855 at 13; Anson v Anson [2004] NSWSC 766; 12 BPR 22,303 at [76].

(e)   Any manager engaged in a business of estate management may be apt to forget this or, at least, to be distracted by his, her or its own financial imperatives. Hence the need for a regulatory regime to counterbalance those natural tendencies that are addressed (as explained in LI Rotman, Fiduciary Law (Thomson, Canada, 2005) at pp 56-66, 303-305, 318, 339-340, 343, 736-738 and 747-748) by the fiduciary law's strictures against: (i) a fiduciary occupying territory where his, her or its duty as a fiduciary and his, her or its personal interests are in conflict; and (ii) a fiduciary benefiting from profits accruing from his, her or its office as a fiduciary.

1. In another judgment, written with these proceedings in mind, attention was drawn to institutional and social changes which seemed then, and still seem, to point to a fundamental shift (since the seminal judgment of the Court of Appeal in Holt v Protective Commissioner (1993) 31 NSWLR 227) in the mindset of government about the optimal administrative framework for the administration of protected estates in New South Wales: M v M [2013] NSWSC 1495 (11 October 2013).

1. At paragraph [46] of that judgment I made the following observations:

"If I am not mistaken [the NSW Trustee's] current attitude to estate management... includes a working assumption that, although ever present to serve as manager of any protected estate management of which is committed to it, [it] should endeavour to facilitate deployment of private managers and to focus attention on its supervisory function in the monitoring of management of protected estates by private managers. Whereas once the Protective Commissioner [a predecessor of the NSW Trustee] may have been viewed as a manager of 'first resort', the NSW Trustee is more inclined to see itself as a manager of 'last resort'".

1. In the course of these proceedings, the NSW Trustee expressly embraced those observations as accurate.

1. This underscores the importance of the Court, in consultation with affected interests, working out how best to adapt to change. In a decision-making environment undergoing a process of change, attention needs to be given to identification of what can change, and what must remain constant, to serve the ends for which decisions are made.

1. With that objective in mind I set out in M v M, at [50], a series of propositions as non-exhaustive "guidelines" that might be consulted upon a consideration by the Court of questions about the identity of a manager of protected estate.

1. As each of the participants in these proceedings has accepted those propositions as correct, I reproduce them here:

"As presently advised, and subject to reconsideration in light of further experience and argument in contested cases, I adopt the following propositions as non-exhaustive 'guidelines' (or, in deference to Kirby P's observations in Holt v Protective Commissioner (1993) 31 NSWLR 227 at 241E-F and 243E-F, a "framework of approach" or a 'checklist of considerations') that might be borne in mind when the Court is called upon to make a decision about the identity of a manager of a protected estate or the substitution of one manager for another:

(a) First, the jurisdiction the Court is called upon to exercise is not a 'consent jurisdiction'. An order for the appointment, removal or replacement of a particular manager is not to be made merely because a party, or some other person, seeks it, consents to it or acquiesces in it: JJK v APK (1986) Australian Torts Reports 80-042 at 67, 881 (first guideline); JMK v RDC and PTO v WDO [2013] NSWSC 1362 at [60]-[62]. The Court is bound to exercise an independent judgment because of the public interest element in the decision to be made and the possibility, if not the fact, that the protected person lacks the mental capacity requisite to informed decision-making.

(b) Secondly, the governing purpose of the jurisdiction exercised by the Court is protection of the welfare and interests of the particular protected person concerned: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238B-C and 241A-B and F-G.

(c) Thirdly, any decision made affecting the welfare or interests of a protected person must be made in a manner, and for a purpose, calculated to be in the best interests, and for the benefit, of the protected person: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238D-F and 241G-242A.

(d) Fourthly, care needs to be taken in all decision-making affecting a protected person to focus on the facts of the particular case, preferably with due consultation with the protected person, his or her family and carers who may be well placed to inform the Court of the protected person's particular circumstances: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238C-239B, 240D, 241B-F and 243E-F; Re L [2000] NSWSC 721 at [10].

(e) Fifthly, in the choice of a manager consultation of the welfare and interests of a protected person may favour appointment of a member of his or her family over the appointment of an institutional manager: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238G-239B.

(f) Sixthly, decisions need to be made in the context of a prudential management regime that can be administered, without strife in the simplest and least expensive way, in the interests of the protected person: HS Theobald, The Law Relating to Lunacy (Stevens and Sons, London, 1924), pp 380 and 382.

(g) Seventhly, regard needs to be had to the value and nature of the property comprising a protected person's estate in deciding upon the identity of a manager or an appropriate management plan: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 242E and 243D-F.

(h) Eighthly, recognition needs to be given to the status and obligations of a manager of a protected estate as the holder of a fiduciary office. This means that the Court, managers and other affected persons need to be alive to the importance of avoiding, or at least minimising, exposure of a protected person to dangers associated with a manager having a conflict between a duty owed to the protected person and the manager's personal interests: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 239B and 242B-C; Re L [2000] NSWSC 721 at [12]. Nevertheless, it must also be recognised that the liability of a manager of a protected estate to account may differ from that of a trustee of an ordinary trust to the extent necessary to accommodate the protective purpose of the manager's appointment: Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 420-423.

(i) Ninthly, in conformity with fiduciary law, the office of a manager of a protected estate must generally be regarded as a gratuitous one unless, by an order of the Court or by legislation, a special arrangement to the contrary is made: Gell v Gell (2005) 63 NSWLR 547 at 553-554 [21]-[23]; Macedonian Orthodox Community Church St Petka Incorporated v Bishop Petar (2008) 237 CLR 66 at 93 [69].

(j) Tenthly, in deciding whether, when and on what terms a manager of a protected estate is to be allowed remuneration out of the estate, care needs to be taken not to shift the focus of decision-making from what is in the best interests, and for the benefit, of the protected person to a perceived "right" on the part of any, or any prospective, manager to remuneration. If a manager is to be allowed remuneration, a decision to that effect must be driven by the perspective of the protected person, not the perspective of the manager: Fletcher, Ex parte (1801) 6 Ves Jun 427; 31 ER 1127; Re Walker (1848) 2 Phil 630; 41 ER 1087; Re Westbrooke (1848) 2 Phil 631; 41 ER 1087; G v B (Powell J, 27 May 1992) BC 9201855 at 13.

(k) Eleventhly, the primacy given to the protective purpose of the Court's jurisdiction carries with it, as a correlative, the absence in any manager (public or private) of a legal entitlement to be, or to remain, manager of a particular protected estate: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 237F-238F.

(l) Twelfthly, a decision about whether a manager should be replaced may need to be approached differently from one made about the identity of an appointment as an initial manager because of a perceived need to identify an acceptable reason (ie, one governed by the purpose of the protective jurisdiction and consideration of the best interests of, and benefits available to, the protected person) for change. Depending on the facts of the particular case this may, but will not necessarily, involve recognition that an applicant for change bears, at least, a forensic onus to establish a case for change: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 237F, 238B-F, 239C-G and 242A-B.

(m) Thirteenthly, a manager, or prospective manager, of a protected estate needs to have given thoughtful attention (in the case of a private manager, in consultation with the NSW Trustee and, in the context of the Corporations Act, the Australian Securities and Investments Commission) to the development, and operation, of a plan for management of the protected person's estate: Re L [2000] NSWSC 721 at [11]-[12]; Re McL [2001] NSWSC 280 at [3]-[5].

(n) Fourteenthly, although disputes about the management of a protected estate may at times need to be determined in an adversarial setting, an exercise of protective jurisdiction is not inherently, or necessarily, adversarial in nature. That reality finds expression in the Court's approach to orders for costs in protective list proceedings. The Court ordinarily exercises its discretion, not by reference to a rule that costs follow the event, but having regard to what, in all the circumstances, seems proper: CCR v PS (No 2) (1986) 6 NSWLR 622 at 640.

(o) Fifteenthly, part of the role of the Court in its exercise of protective jurisdiction is to give consideration to the manner and form of a decision-making process calculated to ensure that the protective purpose of the jurisdiction is duly served.

(p) Sixteenthly, in the context of the current legislative and administrative regime for management of protected estates, the Court will ordinarily require that any substantial decision it may be called upon to make affecting a protected estate, beyond the routine, is made on notice to the NSW Trustee, allowing the NSW Trustee to be heard in an appropriate case and inviting its assistance where necessary."

1. MB v Protective Commissioner (2000) 50 NSWLR 24 at 46 [126] - 47 [129] should be added to the list of authorities here cited, as a demonstration that a manager (in that case, the Protective Commissioner) may be replaced, simply, on the ground of a breakdown in personal relationships between the manager, the protected person and the protected person's carer. Hodgson CJ in Equity's judgment also illustrates that, in serving the interests of the protected person, an incoming manager may have an obligation to hold an outgoing manager to account: 50 NSWLR 32 [36] - 33 [37] and 37 [64].

THE PLAINTIFFS' APPLICATION FOR "REMUNERATION"

1. The plaintiffs' application in the current proceedings (by an amended summons filed on 25 November 2013) includes claims for relief to the following effect:

(a) an order, under s 115(1)(b) of the NSW Trustee and Guardian Act 2009 NSW, that the entitlement of the first plaintiff (as manager of the protected estate of the defendant) to retain remuneration it has appropriated to itself from the estate be confirmed.

(b) an order, under s 115(1)(a) of the NSW Trustee and Guardian Act 2009, that the Court confirm:

(i)   the entitlement of the second plaintiff to retain remuneration it has received, from the first plaintiff as manager of the defendant's protected estate, for the provision of financial advice to the first plaintiff in management of the estate; and

(ii)   the entitlement of the first plaintiff to charge against the defendant's estate the costs of the second plaintiff's services.

(c) an order, under s 115(1)(b) of the NSW Trustee and Guardian Act, that the first plaintiff, as manager of the defendant's protected estate, be authorised to receive remuneration from the estate on a continuing basis as set out in an affidavit filed in support of the summons.

(d) an order, pursuant to s 64(3) of the NSW Trustee and Guardian Act, that the first plaintiff submit to the NSW Trustee annual accounts in a form prescribed or approved by the NSW Trustee.

(e)   an order that the plaintiffs, jointly and severally, be granted relief against any personal liability which they might otherwise have for a breach of trust arising from their receipt of remuneration from the defendant's protected estate.

1. Section 115 of the NSW Trustee and Guardian Act is in the following terms:

"115 Supreme Court or NSW Trustee may order certain costs to be paid out of managed estate

(1) The Supreme Court or the NSW Trustee may order that the following costs be paid, in accordance with the order, from the estate of a managed person:

(a) costs with respect to actions taken for the purposes of complying with any order or direction under this Act, or any transfer or conveyance under Chapter 4,

(b) remuneration, of a specified amount, to the manager of the estate.

(2) The NSW Trustee may make an order under this section only in relation to costs arising from an order or direction given by the NSW Trustee under Chapter 4 or work carried out by the manager of an estate of a managed person in connection with any such order or direction. [Emphasis added] "

1. Although the amended summons invokes s 115, submissions also canvassed the inherent jurisdiction of the Court (including the Court's parens patriae and general equitable jurisdiction) to allow remuneration to a manager.

1. That such a jurisdiction exists is clear: Willett v Futcher (2005) 221 CLR 627 at 636 n 26; Re Sutherland [2004] NSWSC 798; 50 ACSR 297 at [11]-[17]. Section 115 is not expressed in terms indicative of a legislative intention to abrogate it. Absent a clear intention to displace it, it subsists: In Re WM (A person alleged to be of unsound mind) (1903) 3 SR (NSW) 552.

1. Whether, in anything other than an exceptional case, the inherent jurisdiction should be exercised outside the parameters of s 115 is a separate question. There is an established pattern, in the several branches of protective jurisdiction exercised by the Court, that the inherent jurisdiction is generally exercised only in circumstances that are exceptional or may have not been anticipated by legislation that applies generally: E (Mrs) v Eve (better known as Re Eve) [1986] 2 SCR 388 at 411; 31 DLR (4th) 1 at 17 (approved by Marion's Case (Secretary, Department of Health and Community Services v JWB and SMB) (1992) 175 CLR 218 at 258-260 and followed in Christensen v Christensen (Queensland Court of Appeal, 2 July 1999) BC 9904473 at [18]-[19]); Re Victoria [2002] NSWSC 647 at [31] and [36]-[40]; Re Elizabeth [2007] NSWSC 729 at [16]-[19].

1. The relief sought by the plaintiffs from any liability they may have for breaches of trust invokes the Court's general parens patriae jurisdiction (Brown v Smith (1878) 10 Ch D 377 at 386); its statutory power to grant relief from liability for breaches of trust under the Trustee Act 1925 NSW, s 85, which, by virtue of the definition of "trust" in s 5 of the Act, extends to constructive trusts (In re Darling [1925] SASR 262 at 265-266; In re Morish [1939] SASR 305 at 319-320); and the Court's general, inherent jurisdiction over the due administration of trusts and the like: JD Heydon and MJ Leeming (ed), Jacobs' Law of Trusts in Australia (Lexis Nexis Butterworths, Australia, 2006), paras [1704]-[1705] and [2214]-[2224]; Fomsgard v Fomsgard [1912] VLR 209 at 212-213.

1. The amended summons also invites the Court to note undertakings proffered to the Court by the plaintiffs in the form which White J, in CC v RAM [2012] NSWSC 1555 at [4]-[6], held necessary where the manager of a protected estate proposes to retain a financial adviser or fund manager to assist it in management of the estate:

(a)   an undertaking by the manager that any payment or other reward that might be paid to the manager by a third party as a result of an investment of the protected person's estate in a financial product will be accounted for to the protected person's estate; and

(b)   a separate, similar undertaking by the adviser.

1. In requiring such undertakings from the manager of a protected estate, and a financial adviser routinely retained by it, White J (at [4]) made the following observations, which bear repetition:

"It is not clear to me precisely what it is that [a nominated adviser to a proposed manager] would do which would amount to the management of the investment of [an award of personal injury compensation made to a person in need of protection, whose entitlement to compensation triggered an application for the appointment of a manager of his estate]. Where a person is appointed as a manager of an incapable person pursuant to s 41(1)(b) of the NSW Trustee and Guardian Act, it is the person who is so appointed as manager who has the responsibility for the management of the estate. That person can seek the assistance of others, subject to complying with any order or direction of the NSW Trustee and Guardian or the Court, but the Act does not contemplate a delegation of management to third parties. The precise role that [the proposed adviser] would play in determining the assets in which the [protected person's damages] would be invested, and the role that [the proposed manager] would play in deciding upon or approving of investments, should be clarified."

1. The operations of the plaintiffs in the current proceedings, like those of the proposed manager and financial adviser in CC v RAM, involve deployment of a manager and a financial adviser acting in tandem.

1. The practice within the estate management industry (to which, in this respect, the plaintiffs adhere) appears to be that two companies work in tandem in the management of a protected estate. One occupies the office of manager of the estate and, as such, administers the estate and liaises with the protected person, his or her family and carers, and reports to the NSW Trustee. The other, engaged by the manager and subject to decisions made by the manager, provides financial and investment advice to the manager, in consultation with the protected person and his or her family and carer.

1. Whether, and to what extent, this practice is driven by, or only by, the financial interests (including taxation arrangements) of the manager and associated commercial interests the evidence does not enable me to determine. The plaintiffs contend that their corporate structure represents a functional reality. No participant in these proceedings has contended otherwise. As, at day's end, any remuneration allowed to a manager coupled with a financial adviser, in this structured environment, must be assessed having regard to the claims made on the protected estate by both types of entity, I do not here pause to consider this topic further.

STATUTORY FRAMEWORK : PROTECTED ESTATES and MANAGMENT ORDERS

1. This judgment deals, specifically, with rights and obligations of a manager appointed by the Court under s 41(1)(b) of the NSW Trustee and Guardian Act 2009 NSW. However, its focus is, more broadly, on the management of an estate subject to management under that Act.

1. In several separate proceedings the first plaintiff in the current proceedings (and, in one case, the second plaintiff) has been appointed as manager of protected estates by the Court (pursuant to s 41(1)(b) of the NSW Trustee and Guardian Act 2009) and by the Guardianship Tribunal (pursuant to ss 25E and 25M of the Guardianship Act 1987 NSW). The effect of both types of order has been to subject each of the protected estates the subject of such an order to management under the NSW Trustee and Guardian Act.

1. Section 41(1) of the NSW Trustee and Guardian Act provides as follows:

"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."

1. Section 25E of the Guardianship Act 1987 provides that NCAT may, in accordance with Part 3A of that Act (entitled "Financial Management"), order that the estate of a person be subject to management under the NSW Trustee and Guardian Act. In the context of Part 3A, s 25F defines particular circumstances in which such an order (defined, by s 25D, as a "financial management order") may be made.

1. For present purposes, the flavour of the jurisdiction exercised by the Tribunal (formerly the Guardianship Tribunal, now NCAT) can be discerned from s 25G and 25M of the Guardianship Act, which are in the following terms:

"25G Grounds for making financial management order

The Tribunal may make a financial management order in respect of a person only if the Tribunal has considered the person's capability to manage his or her own affairs and is satisfied that:

(a) the person is not capable of managing those affairs; and

(b) there is a need for another person to manage those affairs on the person's behalf, and

(c) it is in the person's best interests that the order be made ....

25M Tribunal may commit estate of protected person to management

(1) If the Tribunal makes a financial management order in respect of the estate (or part of the estate) of a person, the Tribunal may, by order:

(a) appoint a suitable person as manager of that estate, or

(b) commit the management of that estate to the NSW Trustee.

(2) Despite section 68(1), an order under subsection (1)(a) does not authorise the person appointed as manager to interfere in any way with the estate concerned unless:

(a) such directions of the Supreme Court as are relevant to the management of the estate have been obtained, or

(b) the NSW Trustee has, under Division 2 of Part 4.5 of the NSW Trustee and Guardian Act 2009, authorised the person to exercise functions in respect of the estate.

(3) However, the person appointed as manager may take such action as may be necessary for the protection of the estate (including action specified by the Tribunal) pending the directions of the Court or authorisation by the NSW Trustee."

1. The reference in s 25M to s 68(1) is a drafting error, a slip of the Parliamentary draftsman. Section 68 (along with the rest of Part 6 of the Guardianship Act) was repealed upon the establishment of NCAT by the Civil and Administrative Tribunal Act 2013. The topic dealt with in s 68(1) of the Guardianship Act is now dealt with in s 61 of the Civil and Administrative Tribunal Act. A formal legislative amendment can confidently be expected. In the meantime, it can be noted that s 68(1) provided, in substance, that a decision of the Guardianship Tribunal generally took effect immediately an order arising out of the decision was made. The effect of s 25M(2) is to confirm that a financial management order operates to place management of a protected person's estate under the control of the NSW Trustee (also known as the NSW Trustee and Guardian) subject to the supervisory jurisdiction of this Court.

1. Consistently with that intendment, upon appointment of a manager under s 41(1)(b) of the NSW Trustee and Guardian Act, the Court customarily makes an order (pursuant to s 64 of that Act and r 57.7(2)(c) of the Uniform Civil Procedure Rules 2005 NSW) that the newly appointed manager "may not do anything in reliance on [the manager's] appointment as manager of the estate of ['the protected person] until the NSW Trustee has authorised [the manager] to assume management of [the protected person's] estate."

1. The public administrative regime that underpins the Court's exercise of protective jurisdiction has the NSW Trustee at its core. The Court looks to the NSW Trustee to play a leading role, either as a manager or as a monitor of managers, in ensuring due management of the estate of a protected person.

1. Division 2 of Part 4.5 of the NSW Trustee and Guardian Act (referred to in s 25M(2)(b) of the Guardianship Act) contains provisions (in ss 63-70) designed to permit the NSW Trustee to monitor, and the Supreme Court to supervise, the performance of managerial functions by a person appointed to manage a protected person's estate.

1. Both the Court and the NSW Trustee have express powers to make orders in relation to the administration and management of the estates of protected persons (s 64(1)) and, as they think necessary or desirable, for the care and management of a protected estate (s 65). An order by the NSW Trustee is subject to any direction by the Court: s 64(4). And the Court may also make such orders as it thinks fit in connection with supervising the exercise of the functions of managers under the NSW Trustee and Guardian Act: s 64(3).

1. Those powers are both extensive and confined by the protective purposes of the jurisdiction exercised: RL v NSW Trustee and Guardian Pty Ltd (2012) 84 NSWLR 263 at 284 [93]-[94].

1. Section 25G of the Guardianship Act, in terms, requires that NCAT not make a financial management order unless it is satisfied that: (a) the person the subject of an order is not capable of managing his or her own affairs; (b) there is a need for another person to manage those affairs on the person's behalf; and (c) it is in the person's best interests that the order be made.

1. Although s 41(1) of the NSW Trustee and Guardian Act is not expressed in similar terms, the nature of the jurisdiction exercised by the Court by reference to that section is comparable. That is because the statutory jurisdiction of the court is informed by the Court's inherent jurisdiction (as explained in PB v BB [2013] NSWSC 1223, and noted in parliamentary debate, leading to enactment of s 13 of the Protected Estates Act 1983 NSW, extracted in David by her tutor the Protective commissioner v David (1993) 30 NSWLR 417 at 436F-437B), reinforced by s 39 of the NSW Trustee and Guardian Act.

1. Section 39 (which appears in chapter 4 of the NSW Trustee and Guardian Act, entitled "Management functions relating to persons incapable of managing their affairs") is in the following terms:

"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. Section 39 is in substantially the same terms as the Guardianship Act, s 4, which reads as follows:

"4. General principles

It is the duty of everyone exercising functions under this Act with respect to persons who have disabilities 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,

(h) the community should be encouraged to apply and promote these principles."

1. A prominent feature of the jurisdiction to appoint a manager of the estate of a person incapable of managing his or her affairs is the need to ensure that whatever decisions are taken in management of his or her estate are guided by reference to his or her best interests and what is, or may, be of benefit to him or her.

PROTECTED ESTATE "REMUNERATION" : NATURE AND GOVERNING PRINCIPLES

1. A key question in the current proceedings is whether the manager of a protected estate, who accepted appointment as manager upon an erroneous assumption that it was entitled to receive remuneration, should be entitled to retain money hitherto appropriated as remuneration and, hereafter, to charge remuneration for work done in performance of the functions of a manager.

1. In deciding whether the plaintiffs should be granted relief against any liability they may have for breaches of trust or other fiduciary obligations arising from their appropriation of funds, as remuneration or expenses, from a protected estate under the first plaintiff's management, a significant question may be, "What does the Court now judge that it would have allowed if the plaintiffs had applied for an order for remuneration at the time of the first plaintiff's appointment as manager?": Brown v Smith (1878) 10 Ch D 377 at 386.

1. An answer to this question requires an exploration of the nature of "remuneration", and an order allowing it, in management of a protected estate.

"Remuneration" as an Allowance in favour of an Accounting Party

1. The expression "remuneration" here refers to an allowance, in the nature of profit, in excess of an amount for reimbursement of expenses.

1. One should hesitate before equating the concept of "remuneration" here examined with a right arising, at common law, under a contract between parties possessed of contractual capacity: Brockwell v Bullock (1889) 22 QBD 567 at 571 and 572; cf, 573.

1. An illustration of the need to tread carefully may be found in cases dealing with an entitlement, under the general law, to recover a reasonable price for "necessaries" supplied to a mentally incompetent person, by way of the provision of goods or services, for his or her maintenance.

1. Any such entitlement is probably grounded in the law of restitution rather than contract: McLaughlin v Freehill (1908) 5 CLR 858 at 862 and 863 citing, inter alia, In Re Rhodes (1890) 44 Ch D 94 at 103, 104; In Re Brooks (1904) 21 WN (NSW) 4 at 5-6; Re D [2012] NSWSC 1006 at [69]-[70], citing Powell J in Re M and the Protected Estates Act 1983 (Supreme Court of NSW, 17 February 1988), at p 45, in a passage not included in the report at (1988) 12 NSWLR 96; HS Theobold, The Law Relating to Lunacy (1924), pp 219-221. Cf, K Mason, JW Carter and GJ Tolhurst (ed), Mason and Carter's Restitution Law in Australia (Lexis Nexis Butterworths, Australia, 2nd ed, 2008), paras [819]-[820], [831], [1030] and [1040].

1. Although an entitlement may be asserted against an incompetent person personally it is, having regard to that person's disability, generally aimed at a recovery from his or her estate.

1. Where property available to a protected person is necessary for his or her maintenance, the Court (acting in the best interests, and for the benefit, of the protected person) may decline to apply, to the satisfaction of a "debt" of the protected person, such property as is within its control (subject to such, if any, operation as must be afforded to legislation such as the Bankruptcy Act 1966 Cth): In Re Farnham (a lunatic) [1895] 2 Ch 799; cf, In Re Farnham (a lunatic) (No 2) [1896] 1 Ch 836. Conversely, even in the absence of a legally enforceable entitlement, the Court may authorise, or direct, that an ex gratia payment be made out of a protected estate in the interests, and for the benefit, of the protected person: Griffin v Union Trustee Company of Australia Limited (1947) 48 SR (NSW) 360 at 363, 364 and 365; Protective Commissioner v D (2004) 60 NSWLR 513 at [12], [149]-[157] and [164]-[169].

1. Subject to such (if any) legislation as may govern a case, the Court's protective jurisdiction includes a discretionary power to determine (by reference, inter alia, to a protected person's welfare) when, how and on what terms a protected estate is to be applied in satisfaction of "debts": cf, RL v NSW Trustee and Guardian (2012) 84 NSWLR 263 at 285 [96] and 310 [212].

1. The availability of property held by or on behalf of a protected person is critical to such, if any, entitlement his or her committee, or manager, of his estate might have to "remuneration". When the Court approves an arrangement for remuneration of a manager, its approval ultimately takes the form of an allowance out of the protected person's estate. Use of that terminology reflects the liability of a manager to account for his, her or its dealings with the protected estate. Technically, "remuneration" (including "expenses") is "allowed" in favour of the manager on, or subject to, the passing (that is, approval) of the manager's accounts.

1. In the protective jurisdiction, the form and frequency of accounts being submitted to a regulatory authority for review (whatever label may attach to the process of review, and whether or not it is described as accounts being taken, vouched or passed or is described as a process of inquiry in lieu of a formal accounting) depends on the circumstances of the particular protected estate. The object of such an accounting exercise (by whatever name known) is to ensure that the estate is being duly managed and that the protected person is being properly maintained: HS Theobold, The Law Relating to Lunacy (1924), pp 51-53 and 468-471.

1. Subject to any applicable legislation, a manager has no legal right to remuneration, but, in the ordinary course, may, at most, have a reasonable expectation that, upon a due exercise of protective jurisdiction, a discretionary concession (allowance) will be made in his, her or its favour as an accounting party. The fact that the Court can, in an appropriate case, allow a manager remuneration provides no justification for a manager to presume an entitlement to take, or keep, remuneration or to self-assess an allowance for remuneration without authority conferred by the Court or, subject to supervision by the Court, another competent authority: Crout v Beissel [1909] VLR 207 at 213-214.

1. The position of a manager of a protected estate is, in this respect, not unlike that of an executor or administrator who makes a claim for "commission" out of a deceased estate: Nissen v Grunden (1912) 14 CLR 297; In the Will of Sheldon [1972] 1 NSWLR 196 at 199F, 199G-200A, 200E-F; Probate and Administration Act 1898 NSW, s 86 (read with ss 85 and 86A); Re Estate Gowing; Application for Executor's Commission [2014] NSWSC 247. "Executor's commission" is allowed out of estate assets on the passing of accounts.

1. Different considerations may apply to a liquidator who asserts an equitable claim to remuneration from trust assets for work done in administering them (Re French Caledonia Travel Service Pty Limited (In Liq); [2003] NSWSC 1008; 48 ACSR 97 at [198], [207] and [211]-[212]) but such differences are a function of legislation, the nature of a liquidator's office, the purposes served by a liquidator's appointment and the nature of assets administered by a liquidator.

1. Much the same can be said of a trustee in bankruptcy: Mayne v Jaques (1960) 101 CLR 169, especially at 179-183 (including the reference to In Re Allison Johnson & Foster Limited; ex parte Birkenshaw [1904] 2 KB 327 at 330-331); Adsett v Berlouis (1992) 37 FCR 201 at 208-212.

1. Neither a liquidator nor a trustee in bankruptcy is, by the nature of his or her office, administering the estate of a person who, by reason of death or incapacity, is unable to protect his or her interests. The scope of a fiduciary duty (including the duty of a guardian in the broad sense of that term as discussed by Dixon J in Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 420-423) depends on the nature of the underlying fiduciary relationship and the facts of the case: Clay v Clay (2001) 202 CLR 410 at 432 [46] - 433 [48].

1. This analysis of a manager's "entitlement" to remuneration from a protected estate is consistent with the general law governing fiduciaries. It also accommodates the need, arising out of the nature of the protective jurisdiction, to accommodate standards of accounting to the personal circumstances of a protected person: Countess of Bective v Federal Commissioner of Taxation, ibid; Clay v Clay (2001) 202 CLR 410 at 428 [37] - 430 [40] and 432 [46] - 433 [49]; W v B [2001] NSWSC 503 at [15]; Crossingham v Crossingham [2012] NSWSC 95 at [2], [17] - [28], [55] and [64]-[65]; HS Theobold, The Law Relating to Lunacy (1924), pp 51-53.

1. This may be seen in the following observations of Dixon J in Countess of Bective v Federal Commissioner of Taxation at 47 CLR 420-423:

"[420]... an obligation to apply moneys in the maintenance of children or others does not involve the liability which arises from an ordinary trust. It is a general rule that guardians of infants, committees of the person of lunatics, and others who are entrusted with funds to be expended in the maintenance and support of persons under their care are not liable to account as trustees. They need not vouch the items of their expenditure, and, if they fulfil the obligation of maintenance in a manner commensurate with the [421] income available to them for the purpose, an account will not be taken. Often the person to be maintained is a member of a family enjoying the advantages of a common establishment; always the end in view is to supply the daily wants of an individual, to provide for his comfort, edification and amusement, and to promote his happiness. It would defeat the very purpose for which the fund is provided, if its administration were hampered by the necessity of identifying, distinguishing, apportioning and recording every item of expenditure and vindicating its propriety. Although these considerations furnish an independent foundation for the general rule, yet, after all, it is a doctrine regulating the application of moneys payable under an instrument, whether a will, a settlement or an order of a Court of equity, and the operation of the doctrine must depend upon the provisions contained in the instrument, both express and implied. But the effect of the instrument will often be governed by the circumstances to which it was intended to apply, and, in particular, by a consideration of the nature of the actual abode, the condition of the household and the state of the family of the infant or other person to be maintained. Courts of equity have not disguised the fact that the general rule gives to a parent or guardian dispensing the fund an opportunity of gaining incidental benefits, but the nature and extent of the advantages permitted must depend peculiarly upon the intention ascribed to the instrument... Statements to be found in some authorities that any surplus remaining after adequate maintenance has been provided belongs to the person having the care of the infant or of the lunatic cannot be safely used unless careful attention is given to the scope and purpose of the instrument under which the moneys arise and the conditions to which its operation is directed. A confusion appears to have arisen out of the decision in Grosvenor v Drax, a lunacy appeal to the Privy Council in which no reasons were given ... [422] But the difficulty relates to the application rather than to the nature of the rule, and in any case it is evident that to reach the conclusion that savings belong to the guardian is much easier if the allowance is meant to include some inducement to the recipient to undertake the care of the person to be maintained, or if the intention is that the guardian should be associated with a child in a mode of life, or standard of living or in the enjoyment of pursuits which, otherwise, he would not adopt. The conclusion is less easy when the fund is meant simply to provide the proper charges of the infant.

A guardian is not permitted to receive moneys for maintenance without liability to account except upon the condition that he discharges his duty adequately to maintain and not otherwise. Upon his default the Court will administer the fund or intercept the payments and has jurisdiction to order an account or an inquiry... Where, however, the condition is performed the Court does not inquire whether the money has been completely expended or whether the recipient has spent small sums for his personal benefit, but, nevertheless, it [423] remains an allowance to a person in a fiduciary capacity and for a definite purpose [Emphasis added]."

1. Cases cited in support of these observations include In Re French (1868) LR 3 Ch App 317, Brown v Smith (1878) 10 Ch D 377, In Re Weld(a person of unsound mind) (1882) 20 Ch D 451 and Strangwayes v Read [1898] 2 Ch 419.

1. Dixon J expressly spoke of a committee (of the person) of a lunatic as one of the subjects of his observations (420), and described such officers as dealing with funds in a fiduciary capacity (423) and for a definite purpose associated with maintenance of a protected person (421 and 423). His entire discussion was structured around "allowances" and a liability to account. He noted that, in this context, a fiduciary might be permitted, in aid of the protective purpose of the law, to enjoy "incidental benefits" associated with an "allowance ... meant to include some inducement to the recipient to undertake the care of the person to be maintained..." (421 and 422). Any enjoyment of such benefits, or inducements, is conditional upon the fiduciary discharging his, her or its duty to the protected person (422-423).

1. Conceptually, this analysis is able to accommodate analysis of remuneration allowed to a manager of a protected estate under the legislative regime governed by the NSW Trustee and Guardian Act and the Guardianship Act. A prospect of remuneration may serve as an inducement to act as a manager, and to encourage the due discharge of managerial functions as a fiduciary.

1. Characterisation of a claim of remuneration or expenses as a "commission" or "percentage" does not alter the nature of inquiries that must be made about the reasonableness, or otherwise, of the claim.

1. An allowance for remuneration may take the form of a "commission or percentage" or a lump sum without altering its character as remuneration. Remuneration in the form of a commission or percentage may be allowed as a means of facilitating an objective assessment of an entitlement, in a relatively summary way, without a need for an application of a rate of remuneration to an itemised statement of work done or services supplied: Re Estate Gowing; Application for Executor's Commission [2014] NSWSC 247. In any event it may be appropriate, in light of the nature or amount of work done or services supplied, to moderate a figure based on a commission or percentage calculation in order to ensure that the bounds of reasonableness are not exceeded. In each case, an element of judgment is required to ensure that there is a just reconciliation of the competing interests of a manager and the protected estate under management.

1. This is not a call for a wholesale departure from agreed rates of remuneration, or market forces, in the assessment of remuneration allowed to managers of protected estates, but a reminder: first, that there is a divergence of interests in the realm of remuneration allowed to a manager out of a protected estate under management; and, secondly, an exercise of protective jurisdiction must consult the welfare and interests of the protected person.

1. Mindful, particularly, of the protective nature of the jurisdiction exercised on an inquiry into the reasonableness, or otherwise, of a claim for remuneration, the Court (or, in exercise of their legislative powers, the NSW Trustee and, on an appeal from an administrative decision of the NSW Trustee, NCAT), must look to the substance of the claim, whatever its form. Where (as commonly now occurs) a manager routinely, or ostensibly, outsources a financial advice function to an entity with which it has a corporate, or commercial, connection an inquiry about the reasonableness of a claim for remuneration and expenses must have regard to their global claim on the protected estate under management.

A "right to charge fees" distinguished from an entitlement to remuneration

1. Introduction: A general "right to charge fees" in relation to the NSW Trustee's performance of estate management functions (NSW Trustee and Guardian Act, s 111, read with NSW Trustee and Guardian Regulation 2008 NSW, clause 38 and cognate provisions) or for the provision of traditional trustee company services (Corporations Act s 601 TBA (1) read, relevantly, with ss 601 RAC (1)(a) and 601 RAC (2)(d)-(e)) does not, of itself, carry with it an absolute or indefeasible entitlement to be paid, or to retain, remuneration out of a particular protected estate under management by the corporation in which the right to charge fees resides.

1. The NSW Trustee as a Manager: If a protected estate is committed to the NSW Trustee's management it has, as manager, the same rights, immunities and liabilities as a private manager, and is similarly subject to the control of the Court: NSW Trustee and Guardian Act, ss 11(2) and 11(4). Its statutory right to retain or pay out of the estate of a protected person any "costs... incurred [by it] in the care and management of the estate... or in the supervision of the management of the estate..." (s 113) does not detract from this. Nor does the NSW Trustee's statutory entitlement (under s 114) to recover as a debt any "costs" due or payable to it.

1. A study of the legislative history of the provisions that now confer on the NSW Trustee a right to charge fees (principally, the NSW Trustee andGuardian Act, s 111) requires an appreciation that the functions now performed by the NSW Trustee were, in former days, performed by the Public Trustee and the Protective Commissioner: M v M [2013] NSWSC 1495 at [17]-[19].

1. The Protected Estates Act 1983 NSW, s 8, conferred upon the Protective Commissioner a right to charge fees, as prescribed for the purposes of the section, and provided for those fees to be "charged upon and payable out of the estate" of a protected person. Importantly, though, s 8(4) provided as follows:

"Where it appears to the Protective Commissioner to be just and reasonable to do so, the Protective Commissioner may, at the discretion of the Protective Commissioner, waive, remit or reduce any of the fees chargeable under [s 8]".

1. The comparable provision of the Public Trustee Act 1913 NSW (s9) provided, until enactment of the Public Trustee (Further Amendment) Act 1989 NSW, that fees fixed by regulations made under the Act "shall be charged" against an estate under administration by the Public Trustee. In 1989, Parliament substituted the word "may" for the word "shall" in s 9(1) for the express purpose of making it "discretionary rather than mandatory, for the Public Trustee to recover fees and expenses from the trust property in respect of which those fees and expenses are charged": Hansard, Legislative Assembly, 26 July 1989, p 8551.

1. Accordingly, since the 1980s provisions conferring on a public authority a statutory "right to charge fees" have been uncoupled from a mandatory requirement that, in every case, that right be satisfied out of an estate under administration.

1. Licensed Trustee Companies:The legislative warrant for a licensed trustee company to charge fees (found principally in s 601 TBA (1) of the Corporations Act) is expressly subject to Part 5D.2 of the Act, which includes s 601 SAA, the terms of which read as follows:

"Jurisdiction of courts not affected etc.

(1) Any inherent power or jurisdiction of courts in respect of the supervision of the performance of traditional trustee company services is not affected by anything in this Chapter.

(2) A licensed trustee company that is performing traditional trustee company services of a particular kind is subject in all respects to the same control and to removal or restraint from acting, and generally to the jurisdiction of courts, in the same manner as any other person who performs traditional trustee company services of that kind."

1. Section 20 of the Trustee Companies Act 1964 NSW is to the same effect. It provides as follows:

"20 Removal from office

A trustee company which has been appointed executor, administrator, trustee, receiver, committee, manager, guardian or attorney, whether before or after the commencement of this Act, shall be subject in all respects to the same control and to removal or restraint from acting and generally to the jurisdiction of the courts, in the same manner as any other executor, administrator, trustee, receiver, committee, manager, guardian or attorney."

1. There is a separate legislative warrant, in ss 601 SBB (3) and 601 TBC of the Corporations Act for a licensed trustee company to charge a reasonable fee for providing, on application by a person with a proper interest in an estate managed by the company, accounting statements relating to that estate. Section 601 TBD also expressly provides that "[nothing in Part 5D.2] prevents the reimbursement to a licensed trustee company of all disbursements properly made by the trustee company in the provision of a traditional trustee company service."

1. Section 601 TBE provides for the payment of fees charged by a licensed trustee company, for the performance by the company of an estate management function relating to a particular estate, out of that estate, subject to regulatory decisions that can be made by the Australian Securities and Investments Commission, not presently relevant.

1. The extent to which the Court is empowered by s 601 TEA (1) to review fees charged by a licensed trustee company in respect of an estate depends on whether, and to what extent, those fees are charged pursuant to s 601 TBB: s 601 TEA (2)(a). Section 601 TBB permits a trustee company to charge fees that have been agreed with "a person or persons who have authority to deal with the trustee company on matters relating to the provision of the service": s 601 TBB (1)(b) and 601 TBB (2)(a).

1. The scope for such an agreement is limited in a case in which the estate that is, or is proposed to be, under management by the trustee company is the estate of a person who lacks contractual capacity and does not have, at the time of the agreement, a duly appointed manager. In any event, the power conferred on the Court by s 601 TEA (1) supplements, rather than displaces, the jurisdiction that the Court has in relation to protected estates by reason of the parens patriae jurisdiction, the NSW Trustee and Guardian Act or the Guardianship Act: Corporations Act, ss 601 RAE (4)(b) and 601 SAA.

1. Supervision by the Court: Although each of them has a right to charge fees as a manager of a protected estate, any entitlement that the NSW Trustee or a licensed trustee company may have to be paid, or to retain, remuneration out of an estate under management is subject to the supervision of the Court.

1. A right to charge fees does not, of itself, relieve a manager of a protected estate of an obligation, grounded in a fiduciary relationship with the protected person, to account for estate property on the basis that, unless otherwise authorised by an order of the Court, or another competent authority, a manager is entitled to an allowance for remuneration no greater than an amount that is just and reasonable. Nor does it displace the jurisdiction of the Court (both inherent and statutory) to protect the interests, and welfare, of a person in need of protection.

1. Each manager of a protected estate, not excepting the NSW Trustee or a licensed trustee company, is a fiduciary (with an obligation to account for a protected estate under its management) from which remuneration may be allowed, by the Court, provided that: (a) it duly performs its obligations as a manager, an important one of which is that it treats the welfare and interests of the protected person as a paramount consideration (Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 422-423; In the Will of Henry Sherringham (1901) 1 SR (NSW) (B&P) 48; In the Will of James Greer (1911) 11 SR (NSW) 21 at 23); (b) it remains liable to account for estate property as and when called upon so to do; and (c) subject to the terms of any order made by the Court, its remuneration is no more than a just and reasonable allowance for its provision of services as manager.

1. As a matter of practice, and taking comfort from the existence of a regulatory regime for their supervision, the Court generally proceeds on the footing that, subject to any order to the contrary, and to their ongoing liability to account for their dealings with estates under their management as and when called upon to do so, each of:

(a)   the NSW Trustee; and

(b)   a licensed trustee company,

is allowed remuneration from an estate under management by it, being no more than an allowance for just and reasonable remuneration, quantified as no more than an amount calculated in accordance with its statutory right to charge fees.

1. In the light of these proceedings, it may be expedient, from time to time, to make an order or orders, under the NSW Trustee and Guardian Act s 64, to formalise this practice, or some variant of it, so as to facilitate the conduct of proceedings, not only in the Court, but also in NCAT. That is a question to be reserved for further consideration.

1. If that course were to be followed care should be taken not, unwittingly, to limit (via the NSW Trustee and Guardian Act, ss 62(2) or 70(2)) the right of interested parties to apply to NCAT under s 70 of the Act (read with the Administrative Decisions Review Act 1997 NSW), for a review of decisions made by the NSW Trustee passing accounts that contain an allowance for remuneration, or quantification of remuneration, of a private manager.

1. The practice of the NSW Trustee, backed by orders made by it under s 66 of the NSW Trustee and Guardian Act, with s 115(2) of the Act in mind, is to require private managers to prepare accounts for its consideration at regular intervals and otherwise as required. Prudential performance of its function as monitor of private managers dictates that this be done. It can be counted on to continue, and to adapt as circumstances may require, regulatory requirements for estate accounts to be submitted to it for review.

1. The availability to all interested parties of a right to apply to NCAT for a review of decisions made by the NSW Trustee in this context provides an important safeguard against excessive claims to remuneration, not only by private managers (s 70), but also by the NSW Trustee when it itself manages a protected estate (s 62).

1. The supervisory jurisdiction of the Court continues to operate, grounded on more than one foundation. Its inherent jurisdiction is preserved. Under the NSW Trustee and Guardian Act, it can make orders about the management of protected estates or give directions to the NSW Trustee. NCAT decisions are subject to rights of appeal. As statutory bodies, NCAT and the NSW Trustee may also be susceptible to judicial review proceedings.

1. Ordinarily, one might expect that, while the Court may remain centrally involved in a determination whether, in principle, a private manager can have an entitlement to charge fees or be allowed remuneration out of a protected estate, disputes about the quantum of any remuneration to be allowed out of an estate can, and should, be dealt with by the NSW Trustee in a process of passing a manager's accounts, and by NCAT on an application for a review of any such decision made by the NSW Trustee.

1. It may be necessary for the Court, in light of ongoing experience, to adapt its practices. In the meantime, however, the NSW Trustee, licensed trustee companies, NCAT and all persons dealing with them can proceed on the basis that, subject to such (if any) orders as may be required in a particular case, the Court will adhere to established practice as regards licensed trustee companies at least.

Protected Estate Managers As Fiduciaries

1. At a high level of abstraction, the principles to be applied in analysis of a claim to remuneration, or reimbursement of expenses, made by a manager of a protected estate are, essentially, those applied to all fiduciaries. A fiduciary has a foundational duty to act, in the interests of a beneficiary, in good faith. From that duty flow: (a) precepts about avoidance of conflicts of interest and duty; and (b) the duty not to make an unsanctioned profit from the office of a fiduciary.

1. Not uncommonly, discussion about the remuneration of trustees, executors and administrators of deceased estates, managers of protected estates and other fiduciaries(and associated topics) traverses all types of fiduciary office without distinguishing between them.

1. Willett v Futcher (2005) 221 CLR 627 at 631 n 15 and 636 n 26 provides one illustration of this. Although the Court there was mindful that its observations about protective jurisdiction were made in the context of a primary focus on an assessment of damages on a common law cause of action in tort (as appears at 221 CLR 644 [54]), its discussion of an allowance of remuneration to a manager of a protected estate proceeded by reference to cases involving trustees (In Re Freeman's Settlement Trust (1887) 37 Ch D 148; In Re Duke of Norfolk's Settlement Trust [1982] Ch 61) and cases involving executors and administrators (Robinson v Pett (1734) 3 P Wms 249; 24 ER 1049; Forster v Ridley (1864) 4 DeGJ&S 452; 46 ER 993), with a degree of overlap between those categories.

1. That an executor or administrator of a deceased estate may become a trustee on completion of executorial duties (Estate Wight; Wight v Robinson [2013] NSWSC 1229 at [10]-[22]; Riccardi v Riccardi [2013] NSWSC 1655 at [8]-[12]) underscores a close affinity, in practice, between those different types of fiduciary office.

1. Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238D and 242A provides an illustration of the analytical affinity between trustees and protected estate managers. There Kirby P drew a parallel between a manager's duty to act in the best interests of a protected person and the duty of a trustee (and others in a "quasi-trust relationship") to be guided always by the welfare of a beneficiary as the dominant consideration. He relied, particularly, on Letterstedt v Broers (1884) 9 App Cas 371 at 387 and Miller v Cameron (1936) 54 CLR 572 at 575, 579, 580 and 581.

1. Drawing upon NSW caselaw about the proper exercise of the Court's probate jurisdiction, the Financial Services Council submits that the Court should not, at all, countenance the appointment of a private corporation as the manager of a protected estate. This submission is based upon the following observation of Hutley JA in Government Insurance Office v Johnson [1981] 2 NSWLR 617 at 625 D-E:

"...Except where specially authorised by statute, a corporation cannot be appointed as an administrator, though it has the power to designate by instrument under its seal one of its officers (a syndic) to take a grant on its behalf: In the Goods of Darke (1859) 1 Sw&Tr 516; 164 ER 839; Mortimer on Probate, 2nd ed, (1927) 205."

1. The forensic force of this submission is to highlight that licensed trustee companies have the benefit of legislation (Corporations Act 2001 Cth, chapter 5D; Trustee Companies Act 1964 NSW, especially s 11(1), 11(6) and 20) that both governs their operations and provides a foundation for their appointment, inter alia, to the office of a manager of a protected estate without any inquiry by the Court, on a case-by-case basis, about their fitness for office. The NSW Trustee, also, has statutory authority to act, inter alia, in the management of a protected estate: NSW Trustee and Guardian Act 2009, ss 11, 41(1)(b) and 52; Guardianship Act 1987, s 25M(1)(b).

1. A private corporation, such as the plaintiffs, has no such legislative warrant or presumptive fitness for the office of a protected estate manager.

1. In each case in which the first plaintiff has been appointed manager there appears to have been, as one would expect, a need for detailed evidence about the plaintiffs' organisational structure, the terms of their prospective appointments as manager and financial adviser to the manager, and the availability of security for the due performance of management functions.

1. In each case, a disproportionate allocation of resources of the Court, or the Guardianship Tribunal, has been required to canvass the respective claims to preference of the plaintiffs, vigorously asserted by or on behalf of the plaintiffs, through Mr White.

1. In each case, the identity and qualities of the prospective manager have been a major, if not the major, focus for attention. To that extent, decision-making processes appear unnecessarily to have been diverted from their true focus on the welfare and interests of a protected person. This does not sit well with the traditional boast of those exercising protective jurisdiction that "practice [in the jurisdiction] should be directed to administration without strife in the simplest and least expensive way": HS Theobold, The Law Relating to Lunacy (1924), p 382.

1. Evidence adduced by the plaintiffs in the current proceedings indicates that they currently have under management assets valued in excess of $90 million. Theirs is no small business.

1. This, the plaintiffs contend and I accept, demonstrates that the plaintiffs' operations are established, substantial and responsibly conducted. All that can readily be accepted. However, it comes with a corresponding concern about the extent to which the ongoing affairs of any business of protected estate management, of those dimensions, can be conducted without exposure to risk.

1. An appointment of a manager to a protected estate focuses attention on a particular point of time, the time of appointment. Neither the Court nor NCAT has administrative responsibility, or resources, for close, ongoing supervision of a manager once appointed. That role belongs to the NSW Trustee. It is one thing for the Court, or NCAT, to say, on evidence placed before it at a single point of time, that a candidate for appointment as a private manager is "a suitable person". It is quite another to administer a regulatory regime consequent upon, and subsequent to, the appointment of a manager.

1. If, as it does, the NSW Trustee anticipates that there will be a greater deployment of private managers (including private managers for reward) in the management of protected estates in NSW in the future, than has been experienced in the past, it will be necessary for the development of an administrative regime to accommodate such change.

1. From the Court's perspective, what is required, here, is a consideration of questions of practice and procedure affecting not only the current proceedings, but also other, proceedings of a similar nature pending in the Protective List involving the present plaintiffs and other cases in which an application is made for appointment as a manager of an entity engaged, or seeking to engage, in a business of management of protected estates.

1. By their nature, determinations about practice and procedure must yield to the facts of the particular case, and they are liable to be modified, abandoned or departed from where necessity, or convenience, dictate in the administration of justice. The Court reserves a right to adapt practice and procedure to meet the ends served by the jurisdiction it is called upon to exercise.

1. With that caveat firmly in view, I venture the following observations about the practice and procedure of the Court in its exercise of protective jurisdiction in the Protective List:

(a)   A claim for remuneration by a private manager (including, but not limited to, a licensed trustee company) should generally be foreshadowed to the Court, if not formally made, at the time of the claimant's appointment as a manager is under consideration. It should, generally, be brought to the attention of the Court, on notice to the NSW Trustee, without delay: F Jordan Chapters on Equity in NSW (6th ed, 1947), p 124 note (m); Plomley v Shepherd (1896) 17 NSWR (Equity) 215 at 217; Guazzini v Pateson (1918) 18 SR (NSW) 275 at 285-286.

(b)   The Court will not in every case make a determination on a claim for remuneration at the time of appointment of a manager, but disclosure of such a claim permits the Court and all interested parties to take the claim into account in determining whether or not to acquiesce in an appointment of the claimant as a manager, and the prospective manager will have protected himself, herself or itself against criticism if and when a formal determination about an allowance for remuneration must be made.

(c)   In the absence of special circumstances, and a reasonable explanation for earlier non-disclosure of a claim for remuneration, no manager will, generally, be granted an allowance for remuneration the basis of which has not been disclosed to the Court at the time of the manager's appointment to that office.

(d)   If and to the extent a prospective manager proposes to retain a financial adviser or fund manager to assist him, her or it in management of a protected estate, that fact should be disclosed to the Court and undertakings of the type identified in CC v RAM [2012] NSWSC 1555 at [4]-[6] should be offered to the Court, or the absence for such an undertaking explained.

(e)   Undertakings of that character will not necessarily be noted in formal orders or notations made by the Court, but: (i) they will be taken into account by the Court in its making of a decision about the appointment of a manager; and (ii) when appointed, a manager and his, her or its assistant will be held to account on the basis of the undertakings given or such, if any, orders as may be made in lieu of, or as a supplement to, such an undertaking.

(f)   Even in the absence of any such formal undertaking, a manager of a protected estate, a financial adviser or fund manager who receives collateral benefits from management of a protected estate that are not disclosed to, and approved by, the Court may be liable (under the general law governing fiduciaries) to account for those benefits to the estate. A failure to appreciate, or to do, that may be indicative of a lack of suitability to be, or remain, a protected estate manager or otherwise involved in the management of a protected estate.

(g)   If a protected person has received an award of damages for personal injuries that includes a component for the costs of fund management (including remuneration of a manager and/or a financial adviser) each applicant for appointment of a manager, and any prospective manager, will be expected to disclose to the Court, and the NSW Trustee, in an affidavit: (i) the fact, amount and basis of calculation of the funds management component of the damages award; and (ii) whether the prospective manager and financial adviser had any (and, if so, what) involvement in the process that led to the award of damages.

(h)   An application for remuneration made to the Court by a manager should, ordinarily, be made by a notice of motion filed in the proceedings in which the manager was appointed to that office (thereby facilitating the Court's reference to papers earlier filed in relation to the particular protected estate).

(i)   All applications to the Court for remuneration should, ordinarily, be served on the NSW Trustee so as to facilitate the NSW Trustee's performance of its role as monitor of all privately managed protected estates, and its associated role as a public authority upon which the Court can call for assistance if need be.

(j)   An application for remuneration made to the Court by a manager should, ordinarily, be served by the applicant on at least one person (such as a spouse, other close member of family or carer of the person whose estate is under management) who might reasonably be regarded as having a genuine interest in being heard by the Court on a consideration of the application, and on such (if any) other persons who might be identified by the Court or the NSW Trustee as falling within that category.

(k)   It is not necessary, in every case, on an application by a manager for remuneration that the NSW Trustee, or some other person, be formally joined as a respondent to the application. The Court may, however, direct that notice of the application be given to identified parties, or published, before proceeding to a determination.

(l)   Any order made by the Court for remuneration of a manager out of a protected estate under its management is predicated upon: (i) the manager duly performing its obligations as a manager; (ii) the manager remaining liable to account for an estate as and when called upon to do so; and (iii) subject to the terms of any order of the Court, the remuneration being quantified in an amount that is no more than a just and reasonable allowance for the manager's provision of services in that capacity.

(m)   The Court will 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: (i) whether there is known to the NSW Trustee any (and, if so, what) fact or circumstance which may reasonably ground an objection to appointment of the candidate as manager of the protected estate in question; (ii) whether any (and, if so, what) suitable arrangements have been made, or are proposed to be made, for the provision by the prospective manager of security for protection of the particular protected estate, and generally, against defaults on the part of the prospective manager; and (iii) what, if any, terms should be imposed on a manager for the provision, and passing, of accounts by the proposed manager, if appointed.

(n)   Accordingly, where an application is made to the Court for the appointment of a non-trustee company, private manager for reward, the Court may, in the ordinary course, determine to decline, or defer dealing with, the application and proceed, instead, to appoint the NSW Trustee as the manager, or as a receiver, of the protected estate, reserving to the NSW Trustee and all interested parties liberty to apply for appointment of the proposed, private manager if and when a report from the NSW Trustee on the availability of security is to hand.

(o)   Save in exceptional cases, the determination of proceedings for the appointment of a manager will not be delayed for the purpose of engagement by the Court in a complex, or detailed, examination of whether a prospective appointee is "suitable" for appointment as a manager.

(p)   So far as may be practicable, but at all times reserving a right and duty to make decisions in the interests, and for the benefit, of the person in need of protection, the Court will endeavour to give substantial weight in decision making about the identity of a manager (and the terms upon which remuneration may be allowed) to views that might be expressed by that person and any family, friends and carers well placed to express an informed view about his or her welfare.

THE PARTICULAR CASE

The First Plaintiff's Appointment as Manager of the Defendant's Estate

1. The defendant was born in June 1983. He suffered brain damage in August 1983 following a cardiac arrest.

1. In 2008 (by his father acting as his tutor) he commenced proceedings in the Common Law Division of this Court (numbered 20193 of 2008) seeking an award of damages, for negligence, against a hospital in which he had been treated. He subsequently joined the doctor who treated him.

1. On 30 July 2010 a judge approved a settlement of those proceedings, pursuant to s 76 of the Civil Procedure Act 2005 NSW, on terms that awarded him (the defendant in the current proceedings) damages of $283,750 against the hospital and $5,391,250 against the doctor, together with an award of costs against those parties jointly in the sum of $300,000.

1. The defendant's father made an application to the Court (in proceedings numbered 44/2010) for management orders against his son, in the Protective List of the Equity Division, by a summons filed on 15 October 2010. An amended summons was filed on 27 April 2011, but nothing presently turns on the nature of the amendment.

1. In both forms of originating process, the defendant's father sought an order that the defendant be declared to be a person incapable of managing his affairs; an order that his estate be subject to management; an order that Ability One Financial Management Pty Limited (the present first plaintiff) be appointed, without security, as manager of the defendant's estate; and an order that funds then held in court on behalf of the defendant in connection with the Common Law proceedings, be paid out to the first plaintiff as manager of the protected estate.

1. The evidence filed in support of the application for management orders included affidavits sworn or affirmed by the defendant's father; medical practitioners; a solicitor who had acted for the present defendant and his father in the Common Law proceedings and then, in formal terms, acted for the father against the son on the application for management orders; a formal consent to act as manager signed by Mr White and a co-director of the present first plaintiff; affidavits by both directors deposing to the nature of the business conducted by each of the present plaintiffs and their relationship; and an affidavit by a financial planner engaged by the present second plaintiff.

1. That evidence included a disclosure to the Court that the first plaintiff proposed to charge an "establishment fee" and an "ongoing fee" if appointed to management of the defendant's estate. It also included an express recognition that any such fees "must be approved by the NSW Trustee and Guardian before implementation".

1. In the ordinary course, the proceedings were referred by a registrar of the court to the then Protective List Judge in chambers.

1. On 24 November 2010 that judge, by his associate, wrote to the solicitors for the defendant's father in terms to the following effect:

"The documents have been reviewed by [the Protective List Judge, who] is satisfied that a financial manager should be appointed for [the defendant. His Honour] requires further information, which is to be provided by affidavit on the following issues:

1. Particulars of the qualifications and experience of each of the directors of Ability One Financial Management Pty Limited and Ability One Pty Limited [noting that affidavits thus far filed were regarded as insufficient]?

2. Why is it necessary to appoint Ability One Financial Management Pty Limited as manager of [the defendant's] estate while Ability One Pty Limited is, apparently, actually to manage the estate?

3. Are both companies to charge a fee and, if so, how are they calculated?

4. What relationship has Charter Financial Planning Pty Limited [a company the activities of which were later described in the Judgment of White J in GDR v EKR [2012] NSWSC 1543] to any of the other corporate identities, why are fees payable to it under the Financial Plan prepared by [the financial planner who had provided an affidavit in support of the summons] and why has [that financial planner] prepared his plan as authorised representative of Charter Financial Planning?

5. What part will Charter Financial Planning play in management of [the defendant's] estate?

6. What precisely are the circumstances justifying the payments described [in a specified part of the Financial Plan] as 'Capital/One Off Expenses' other than repayment of legal fees] and how are they said to be for the benefit of [the defendant]?

7. The total fees payable to Charter Financial Planning, Ability One Pty Limited and Ability One Financial Management Pty Limited should be presented in a table which compares them to the fees which would be charged by NSW Trustee and Guardian and another major financial manager such as Perpetual Trustee.

8. The apportionment of 70% of funds invested to 'non-defensive' investments seems high in current market conditions, particularly when the Financial Plan does not specify what proportion of the 'balance' risk investments will be invested in 'growth' and 'high growth' categories.

9. His Honour requires comment on the prudence of the Financial Plan from the NSW Trustee and Guardian. ..."

1. These interrogatories led to the filing of three further affidavits sworn by Mr White as the Chief Executive Officer of the plaintiffs: respectively sworn on 1 February, 11 February and 21 April 2011.

1. Those affidavits deposed to an exchange of correspondence between Mr White and the office of the NSW Trustee, in which Mr White addressed a letter to the following effect to the NSW Trustee's "Manager, Client Private Management":

"Ability One Financial Management is seeking to be appointed as Financial Manager for [the defendant].

The matter came before [the Protective List Judge ...].

Before appointing Ability One Financial Management Pty Limited, [the judge] requires the NSW Trustee and Guardian to consider and approve the Statement of Advice [of Ability One's financial planner].

Therefore we enclose the Statement of Advice now before his Honour.

May we have your consideration of the Statement of Advice and approval in due course. ..."

1. The officer of the NSW Trustee to whom this letter was addressed responded by a letter in terms to the following effect:

"... [The NSW Trustee] cannot approve the Statement of Advice for a person who is not yet a client of this organisation and it would be inappropriate for [the NSW Trustee] to give an opinion on the Investment Proposal prior to the making of the Management Order and being aware of the background and circumstances of the managed person and their estate.

If a request is received directly from the Supreme Court [the NSW Trustee] will, of course, comply with that direction.

The selection of the Investment proposal is a choice to be made by the appointed financial manager. The role of [the NSW Trustee] is not to approve the investments themselves but rather to oversight that the Manager has made a prudent decision by reference to independent advice, the circumstances and wishes of the client and their family. Therefore it would be inappropriate for [the NSW Trustee] to make specific comment regarding the specific types of investments and assumptions contained within the proposal at this time.

It is understood that this letter does not contain the approval you were seeking however please note that this letter should not be interpreted as supporting or not supporting an applicant for financial management. ..."

1. As appears from this correspondence, the plaintiffs have actively pursued (not merely consented to) the first plaintiff's appointment as a manager of protected estates, and the NSW Trustee has been reluctant to engage in a formal process of investigation of prospective managers, confining its formal role to dealing with managers after their appointment.

1. Both tendencies were evident in the current proceedings. The plaintiffs' pursuit of their business interests has been unrelenting. The NSW Trustee has continued to disclaim any formal role in vetting prospecting managers or their proposals for financial management of protected estates.

1. The plaintiffs' supplementary affidavits answered the Protective List Judge's second interrogatory (about the necessity for the involvement of both plaintiffs in management of the defendant's estate) in the following terms:

"The Directors of [the second plaintiff], following discussions with our [Financial Services Licence] licensee Charter Financial Planning Limited and their parent AXA, considered it prudent to separate all aspects of the financial planning advice provided by [the second plaintiff] from the activities undertaken by a financial manager. It was considered that a conflict of interest might arise when [the second plaintiff] was acting as financial manager and providing advice when at the same time acting as financial manager.

Therefore in November 2009 [the first plaintiff] was incorporated to act solely as a financial management company on behalf of persons who suffered a disability and received a large personal injury settlement sum.

The sole activity of [the first plaintiff] is to undertake all tasks of a Court, or Tribunal appointed, or privately created financial manager.

[The first plaintiff] has available to it all the resources and detailed experience of [the second plaintiff].

[The first plaintiff] has a very distinct role as financial manager which is separated from and different from the role of [the second plaintiff] which provides financial planning advice. The roles which the 2 companies perform are very distinct and different. [The second plaintiff] does not undertake any Financial Management tasks as these are all performed by [the first plaintiff]."

1. The Judge's third interrogatory (about whether the plaintiffs both proposed to charge a fee, and if so, how such fees were to be calculated) was answered in the affirmative by Mr White. He explained that "[each] company charges a fee commensurate with the services to be provided by each company", and he disclosed that the fees to be charged to the defendant's estate were as follows:

(a) One off 'Establishment fees' totalling $31,900, comprising:

(i) the second plaintiff's establishment fee of $13,750; and

(ii) the first plaintiff's establishment fee of $18,150; and

(b) ongoing (annual) fees totalling $41,800, comprising:

(i) the second plaintiff's 'ongoing advice fee' of $20,350; and

(ii) the first plaintiff's 'ongoing estate management fee' of $21,450.

1. In summary, the plaintiffs disclosed that their combined fees, in the first year of management of the defendant's estate, would total $73,700, representing establishment fees of $31,900 and an annual fee of $41,800.

1. Mr White deposed that, for every subsequent year in which the defendant's estate might be managed by the first plaintiff, the fee payable to the plaintiffs would be capped at a maximum of $41,800 even if the capital sum under management were to increase. He recorded, also, that the plaintiffs review their fees annually and, if the capital sum under management were to decrease as a result of capital expenditure, then it could be expected that the plaintiffs' fees would reduce "on review".

1. It is not necessary to set out further detail of the evidence offered by the plaintiffs as to their fees, and comparisons of their fees with those of the NSW Trustee and an identified licensed trustee company. Nor is it necessary to canvass responses to each of the List Judge's nine interrogatories.

1. Enough has been set out to demonstrate that the fact, and quantum, of the plaintiffs' prospective fees were disclosed to the Court in response to interrogatories administered by the Protective List Judge in the interests of the defendant.

1. It is, however, important to notice that the plaintiffs' supplementary affidavits disclosed to the Court that, although the first plaintiff had not previously been appointed to act as a financial manager by the Court, it had been appointed to such a role by the Guardianship Tribunal on 10 prior occasions.

1. One of those appointments, as it happens, was of the second plaintiff rather than the first plaintiff. One of the other proceedings awaiting determination of these proceedings involves an application that the first plaintiff be substituted for the second as manager of the affected protected estate.

1. Consequent upon the prospective retirement of the Protective List Judge, the proceedings were ultimately determined, not by him, but by another judge.

1. That judge, in his turn, critically reviewed the Court's file, including the supplementary affidavits. He may be taken to have directed his mind to four topics presently material: first, the first plaintiff was not (as it still is not) a licensed trustee company; secondly, the fact, and quantum, of fees proposed to be charged to the defendant's estate by the plaintiffs; thirdly, the need for the first plaintiff to provide security for the due performance of the functions of a protected estate manager; and, fourthly, the prior experience of the first plaintiff as a protected estate manager.

1. On 6 May 2011 the Court made orders that included orders to the following effect:

(a)   A declaration that the defendant is a person incapable of managing his affairs.

(b)   An order that the estate of the defendant be subject to management under the NSW Trustee and Guardian Act.

(c)   An order that the first plaintiff be appointed, with security, as manager of the estate of the defendant, to act in relation thereto under the order and direction of the NSW Trustee.

(d)   An order that the first plaintiff was not to do anything in reliance on that appointment until the NSW Trustee had authorised it to assume management of the defendant's estate.

(e)   A direction that the security to be provided by the first plaintiff be to the satisfaction of the NSW Trustee.

(f)   A direction that funds in court, in relation to the defendant's Common Law proceedings, be paid out to the first plaintiff upon its being authorised by the NSW Trustee to assume management of the defendant's estate.

1. In conformity with the Court's practice in administration of the Protective List, no formal reasons for judgment were published in support, or explanation, of these orders.

The Guardianship Tribunal Background to the First Plaintiff's Appointment

1. In the course, and for the purpose, of the current and related proceedings, the NSW Trustee and the plaintiffs have provided information about the plaintiffs' appointments to the office of a financial manager by the Guardianship Tribunal between 8 March 2010 (the first of its appointments) and 17 June 2013.

1. I have, by that means, been able to read the confidential "Reasons for Decision" published by the Guardianship Tribunal to parties affected by the Tribunal's decisions to appoint the first plaintiff as a financial manager.

1. Although a court exercising protective jurisdiction may not be bound by formal rules of evidence (Roberts v Balancio (1987) 8 NSWLR 436), s 91 of the Evidence Act 1995 NSW is a salutary reminder that caution should be exercised in making findings of fact based upon reasons for judgment. Section 91(1) is to the effect that "[evidence] of the decision, or of a finding of fact, in an Australian or overseas proceeding is not admissible to prove the existence of a fact that was in issue in that proceeding". Experience also informs a need for similar caution, as does a regard for principles governing procedural fairness.

1. Although no objection has been taken by any participant in these proceedings to the Tribunal's Reasons for Decision being available for use in the current proceedings generally, prudence dictates that I remain conscious of the limitations inherent in treating such material as primary evidence of particular facts.

1. I am, however, both entitled to notice and comfortable in noticing, the following common features upon a review of the Tribunal's Reasons: First, even though the Tribunal did not have (as NCAT does not have) jurisdiction to authorise a manager to receive remuneration, the fact that the plaintiffs intended to charge fees for their services was openly and routinely discussed in the Tribunal proceedings before the first plaintiff's appointment to the office of manager. Secondly, Mr White, on behalf of the plaintiffs, gave evidence in support of the first plaintiff's prospective appointment in each case. Thirdly, the Tribunal, the plaintiffs, the NSW Trustee and all other participants in the Tribunal's decision-making process appear to have proceeded upon the assumption that, independently of a grant of authority by the Court, the functions of the NSW Trustee include the authorisation of the fees payable to a private manager. Fourthly, all participants also (correctly) assumed that any fees payable to the plaintiffs must be subject to approval by the NSW Trustee. Fifthly, a disproportionate amount of time appears to have been spent by the Tribunal, in each case, in wrestling with the question whether the first plaintiff was a person suitable for appointment as a protected estate manager.

1. The observations made by the Tribunal about the plaintiffs in general, and Mr White in particular, must, in fairness, be taken as being, on the whole, positive. However, they are not uniformly so. There is some criticism of Mr White as a witness and of the operations of the plaintiffs. There are, within the Tribunal's reasons, foundations upon which Mr White could be criticised. However, any such criticism must, in fairness, be balanced against the fact that the Tribunal acted favourably to the interests of the plaintiffs by appointing the first plaintiff, more than a few times, as a financial manager.

The NSW Trustee's Practical Regulation of Remuneration Cases

1. The assumption of all concerned in proceedings leading to the appointment of the first plaintiff as a protected estate manager (that any fees payable to the plaintiffs would be subject to the NSW Trustee's approval) appears, in practice, to have been well founded. Evidence before me includes evidence that the NSW Trustee has, on more than one occasion, queried fees charged, or proposed to be charged, by the plaintiffs and, on at least one occasion, expressly disallowed such fees.

1. That same evidence shows that, from time to time, and particularly in connection with its review of the first plaintiff's accounts, the NSW Trustee has expressly granted "authority" for the first plaintiff to remunerate itself from protected estates.

1. A sample of a record evidencing that activity is a file note of the NSW Trustee dated 26 September 2011 on the subject of "management and financial fees". It records, after a brief review of factual material, a "decision" by the NSW Trustee expressed in terms to the following effect:

"(1) It is authorised for [the first plaintiff] to remunerate itself for financial management of the [protected person's] estate at the rate of an initial fee of $... and an ongoing fee of $... annually.

(2) The Manager is to review the level of financial management fee annually to ensure that it is commensurate with the level of capital in the estate.

(3) The Manager is not authorised to pay the financial planning fees without further reference to this office to establish the level of service to [the protected person] and the selection of financial planner is in the best interests of [the protected person]."

1. Procedures of the NSW Trustee have been exposed to view sufficiently to demonstrate that, as a practical matter, the NSW Trustee has experience, and capability, in making decisions about whether (and, if so, in what amounts) private managers should be permitted to remunerate themselves from estates under their management.

1. The possibility that it has, from time to time, strayed beyond the limitation in s 115(2) of the NSW Trustee and Guardianship Act cannot be excluded. The file note decision of 26 September 2011 does not sit comfortably with the terms of the section as the NSW Trustee's only legislative warrant for authorising remuneration.

CONCLUSION

1. Viewed in the context of the plaintiff's claims for relief in these proceedings, I am bound to conclude that:

(a)   had the plaintiffs applied for an order for remuneration at the time of the first plaintiff's appointment as manager of the defendant's estate (Brown v Smith (1878) 10 Ch D 377 at 386), the likelihood is that some form of order for remuneration would have been made.

(b)   the precise form of such an order for remuneration cannot be known with any certainty, but it may well have taken the form of an order that the plaintiffs be at liberty to charge fees as disclosed, subject to the approval, from time to time, of the NSW Trustee.

(c)   insofar as the plaintiffs have been remunerated from the protected estate of the defendant, with the approval of the NSW Trustee, each company has (to paraphrase the Trustee Act 1925, NSW, s 85(2)) "acted honestly and reasonably".

(d)   in large measure, that characterisation of the plaintiff's conduct is based on their consistent course of conduct in co-operating with, and subjecting their decision-making processes to the supervision of, the NSW Trustee.

1. I propose, accordingly, to grant to the plaintiffs relief along the lines sought in their amended summons.

1. However, having regard to the general principles identified in this judgment, and the legal and administrative framework within which they are to be applied, I propose to make orders designed to recognise the primary role played by the NSW Trustee in administrative decision making about the quantum of the plaintiffs' fees.

1. If private managers for reward, other than licensed trustee companies, are to be appointed to management of protected estates then, for the time being, it is important that applications for their appointment be brought before the Court (as they presently must be, if remuneration is to be duly allowed from a protected estate), with a report on the proposed appointment prepared by the NSW Trustee.

1. It is equally important that the administrative expertise of the office of the NSW Trustee be brought to bear in decision-making about quantification of any remuneration to be appropriated from a protected estate.

ORDERS

1. Subject to allowing, to all participants in these proceedings, an opportunity to be heard as to the form of orders to be made, I propose (in addition to noting undertakings proffered to the Court by the plaintiffs) to make orders to the following effect:

(1)   ORDER, subject to:

(i)   further order;

(ii)   due performance by it of its obligations as a manager of protected estates; and

(iii)   its ongoing liability to account for estate property,

that the first plaintiff be allowed out of the estate of the defendant such remuneration for its provision of services as manager of the estate of the defendant (including any fees of the second plaintiff 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 upon its appointment as manager or such other amounts or rates as may, from time to time, be fixed by the NSW Trustee.

(2)   ORDER that the first 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 its management of the estate of the defendant as and when directed by the NSW Trustee so to do.

(3)   ORDER, subject to order 4, that the plaintiffs jointly and severally, be relieved of any liability for breach of trust that they might otherwise have had for taking, receiving or retaining remuneration from the estate of the defendant at any time before the commencement of these proceedings (on 15 July 2013).

(4)   ORDER that the relief granted by order 3 is conditional upon the first plaintiff having obtained, and acted in accordance with, an order, direction or authority of the NSW Trustee in the taking, receiving or retaining such remuneration.

(5)   ORDER that the plaintiffs pay the defendant's costs of and incidental to the proceedings.

(6)   RESERVE for further consideration, in these or other proceedings constituted for the purpose, whether any (and, if so, what) orders or directions should be given (pursuant to the NSW Trustee and Guardian Act, s 64, or otherwise) in relation to the practice to be followed in the making of an application, or in the approval of an allowance, for remuneration of a manager of a protected estate.

(7)   RESERVE to the plaintiffs, the defendant and the NSW Trustee liberty to apply generally.

1. The only order I presently make is that the plaintiffs, on notice to all participants in the proceedings, bring in short minutes of orders to give effect to these Reasons. I will, on that occasion or as may otherwise be convenient, give consideration to questions reserved by draft Order 6.

1. I thank each of the participants in the proceedings for their assistance, particularly the Financial Services Council and the Council of the Law Society of NSW.

ADDENDUM (2 April 2014)

1. Lindsay J heard submissions as to the form of final orders on 31 March 2014.

1. On that occasion, the NSW Trustee invited his Honour to make an order (under s 64 of the NSW Trustee and Guardian Act) of the type contemplated in paragraph [276] of the Reasons for Judgment.

1. His Honour referred both questions (final orders and a s 64 order) to chambers for further consideration.

1. On 2 April 2014, having allowed the NSW Trustee an opportunity to be heard as to the content and form of the proposed s 64 orders, and having been advised by the NSW Trustee that it did not seek to be heard further, his Honour made the orders published in the judgment reported as Re Managed Estates Remuneration Orders [2014] NSWSC 383.

1. On the same date, his Honour then made the following orders and notations in disposition of these (Ability One) proceedings:

(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 it of its obligations as a manager of protected estates; and

(c)   its ongoing liability to account for estate property,

that the first plaintiff be allowed out of the estate of the defendant such, if any, remuneration for its provision of services as manager of the estate of the defendant (including any fees of the second plaintiff 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 upon its appointment as manager or such other amounts or rates as may, from time to time, be fixed by the NSW Trustee.

(3)   ORDER that the first 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 its management of the estate of the defendant as and when directed by the NSW Trustee so to do.

(4)   ORDER, subject to order 5, that the plaintiffs, jointly and severally, be relieved of any liability for breach of trust that they might otherwise have had for taking, receiving or retaining remuneration from the estate of the defendant at any time before the commencement of these proceedings (on 15 July 2013).

(5)   ORDER that the relief granted by order 4 is conditional upon the first plaintiff having obtained, and acted in accordance with, an order, direction or authority of the NSW Trustee in the taking, receiving or retaining such remuneration.

(6)   ORDER that the plaintiffs pay the defendant's costs of and incidental to the proceedings.

(7)   NOTE the undertaking to the Court of the second plaintiff that commission paid to it since 6 May 2011 calculated in the sum of $6,903.00 is to be paid to the defendant and form part of his managed estate.

(8)   NOTE the undertaking to the Court of the first and second plaintiffs that any commission (calculated in accordance with the formula set out in paragraph 20 of the Affidavit of Grant Alan White sworn 12 July 2013) paid to them or any advisor of the defendant as the result of an investment in any financial product forming part of the defendant's estate is to be paid to the defendant to form part of his estate.

(9)   NOTE the undertaking of the first plaintiff and second plaintiff, as set out in paragraph 17 of the affidavit of Grant Alan White sworn 12 July 2013, not to charge the protected person remuneration greater than the sum of $723,717.00 without further application to the Court, if such an application becomes necessary.

(10)   RESERVE to the plaintiffs, the defendant and the NSW Trustee liberty to apply generally

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Amendments

09 May 2014 - A record, and explanation, of final orders.

Amended paragraphs: Addendum (2 April 2014)

Decision last updated: 09 May 2014