Gregory Stuart Bowering v Deborah Jayne Knox and David John Bowering

[2014] NSWSC 1107

Supreme Court

New South Wales

Case Title:	Gregory Stuart Bowering v Deborah Jayne Knox and David John Bowering
Medium Neutral Citation:	[2014] NSWSC 1107
Hearing Date(s):	12 August 2014
Decision Date:	15 August 2014
Jurisdiction:	Equity Division
Before:	Sackar J
Decision:	See paragraph [63]
Catchwords:	PROCEDURE - application for appointment of tutor under UCPR r 7.18 - where application made by opposing party - where substantive dispute relates to construction of a will - where individual for whom tutor is to be appointed suffers from chronic psychiatric condition - where individual previously sought to make a submitting appearance - whether submitting appearance the result of apathy or a considered approach - appointment of tutor made
Legislation Cited:	Civil Procedure Act 2005 Uniform Civil Procedure Rules 2005
Cases Cited:	Bobolas v Waverley Council [2012] NSWCA 126 Farr v State of Queensland [2009] NSWSC 906 Guthrie v Spence (2009) 78 NSWLR 225; [2009] NSWCA 369 Hazairin Iskandar v Zulfikri Mahbur & Ors [2011] NSWSC 1056 HSBC Bank Australia Ltd v Chang [2008] NSWSC 948 Masterman-Lister v Brutton & Co Ltd [2003] 3 All ER 162 Murray v Williams [2010] NSWSC 1243 PY v RJS [1982] 2 NSWLR 700 Stokes v McCourt [2014] NSWSC 61 Wyong Shire Council v Shirt (1980) 146 CLR 40
Category:	Procedural and other rulings
Parties:	Gregory Stuart Bowering - plaintiff Deborah Jayne Knox - first defendant David John Bowering - second defendant
Representation
- Counsel:	Counsel: J van Aalst - plaintiff M Meek SC - first defendant H Bennett - second defendant
- Solicitors:	Solicitors: Heydons Lawyers - plaintiff Teece Hodgson & Ward - first defendant Glass Goodwin - second defendant
File Number(s):	2013/362577

JUDGMENT

Proceedings

1. By his notice of motion filed 3 December 2013, the plaintiff Gregory Bowering seeks an order that the hearing of the proceedings be expedited and an order pursuant to UCPR rule 7.18(1)(a) that Margaret Hole be appointed tutor for the second defendant, David Bowering.

2. The appointment of a tutor is opposed by the first defendant, Deborah Knox, and the second defendant. Nevertheless, all parties accept that if I decide a tutor should be appointed, then Margaret Hole is an appropriate person to take on that responsibility.

3. Without intending any disrespect nor undue familiarity, I will refer to the parties by their first names.

4. Briefly, the plaintiff and first defendant are joint trustees and executors of the estate of their father, the late Kevin Charles Bowering. Probate of a will dated 22 December 2010 was granted on 14 December 2012.

5. The substantive issue in these proceedings relates to the proper construction of certain terms of the will in relation to a special disability trust to be established for the benefit of David. It is estimated by Greg that the total amount to be settled in the fund for David will total about $3.5 million.

6. However, only the appointment of a tutor and the application for expedition are the subject of this judgment. There does not seem to be any opposition to the order for expedition, and I am satisfied that this is indeed an appropriate case in which to grant expedition. In relation to the appointment of a tutor, I announced my decision at the conclusion of the hearing that such an appointment should be made. These are my reasons.

Legal principles in relation to the appointment of a tutor

1. UCPR rule 7.18 provides:

   7.18 Court may appoint and remove tutors
   (1) In any proceedings in which a party is or becomes a person under legal incapacity:

   (a) if the person does not have a tutor, the court may appoint a tutor, or
   (b) if the person has a tutor, the court may remove the party's tutor and appoint another tutor.

   (2) In any proceedings concerning a person under legal incapacity who is not a party, the court may appoint a tutor of the person and join the person as a party to the proceedings.
   (3) If the court removes a party's tutor, it may also stay the proceedings pending the appointment of a new tutor.
   (4) Subject to any order of the court, notice of any motion under this rule is to be served on the person under legal incapacity and, if it proposes removal of the person's tutor, on the tutor.
   (5) In proceedings on a motion for the appointment of a tutor, evidence in support of the motion must include:

   (a) evidence that the party for whom a tutor is to be appointed is a person under legal incapacity, and
   (b) evidence that the proposed tutor consents to being appointed and does not have any interest in the proceedings adverse to the interests of the person under legal incapacity.

   (6) An application for appointment as tutor under this rule may be made by the court of its own motion or on the motion of any other person, including the proposed tutor.

2. A person under legal incapacity is defined under section 3 of the Civil Procedure Act 2005 as:

   person under legal incapacity means any person who is under a legal incapacity in relation to the conduct of legal proceedings (other than an incapacity arising under section 4 of the Felons (Civil Proceedings) Act 1981) and, in particular, includes:
   (a) a child under the age of 18 years, and
   (b) an involuntary patient, a forensic patient or a correctional patient within the meaning of the Mental Health Act 2007, and
   (c) a person under guardianship within the meaning of the
   Guardianship Act 1987, and
   (d) a protected person within the meaning of the NSW Trustee and
   Guardian Act 2009, and
   (e) an incommunicate person, being a person who has such a
   physical or mental disability that he or she is unable to receive
   communications, or express his or her will, with respect to his or
   her property or affairs.

3. Under UCPR rule 7.13, the definition of person under legal incapacity is expanded to include a person who is incapable of managing his or her affairs.

4. The test for whether a person is capable of managing his or her own affairs has been accepted as that being set out by Powell J in PY v RJS [1982] 2 NSWLR 700 at 702:

   ...a person is not shown to be incapable of managing his or her own affairs unless, at the least, it appears:
   (a) that he or she appears incapable of dealing, in a reasonably competent fashion, with the ordinary routine affairs of man; and
   (b) that, by reason of that lack of competence there is shown to be a real risk that either:

   (i) he or she may be disadvantaged in the conduct of such affairs; or
   (ii) that such moneys or property which he or she may possess may be dissipated or lost; it is not sufficient, in my view, merely to demonstrate that the person lacks the high level of ability needed to deal with complicated transactions or that he or she does not deal with even simple or routine transactions in the most efficient manner.

5. The well-known observation of Mason J in Wyong Shire Council v Shirt (1980) 146 CLR 40 is that a real risk is one that is not far-fetched or fanciful: at 48.

6. As Slattery J observed in Hazairin Iskandar v Zulfikri Mahbur & Ors [2011] NSWSC 1056, "it is rare but not unprecedented for a party to ask for a tutor to be appointed for an opposing party".

7. The court must be persuaded that the party is incapable of providing ongoing instructions, as opposed to being unwilling or resistant to participating in the litigation: HSBC Bank Australia Ltd v Chang [2008] NSWSC 948.

8. The first defendant submits that the test to be applied is that stated by Chadwick LJ in Masterman-Lister v Brutton & Co Ltd [2003] 3 All ER 162 at [75] in relation to the relevant applicable rule, namely whether the party to legal proceedings is capable of understanding, with assistance of such proper explanation from legal advisers and experts and other disciplines as the case may require, the issues on which his consent or decision is likely to be necessary in the course of those proceedings.

9. This test was accepted by Price J in Farr v State of Queensland [2009] NSWSC 906 at [15] and Hammerschlag J in Murray v Williams [2010] NSWSC 1243 at [26]. In Stokes v McCourt [2014] NSWSC 61 at [31], McDougall J observed:

   If one approaches the question according to the test propounded by Chadwick LJ, then it is necessary to ask whether the relevant party (in this case the plaintiff) can deal with the issues in the proceedings with the assistance of appropriate explanation from his or her lawyers and experts retained. As Hallen J said in Rappard at [78], this must extend to all the aspects of conducting a case at law or in equity. It would thus comprehend seeking advice on prospects or on evidence; considering and evaluating risks, costs and reward; dealing with the lawyers in the preparation of the case; and generally being in a position, at any given time, to give appropriate and informed instructions on issues that arise to be dealt with. But, as I have said, that task is not to be seen as one undertaken in a vacuum. It is a task to be undertaken with such advice from the lawyers (and where relevant, from experts) as may be required.

10. Even if David is found not to fall within the statutory definition, the Supreme Court retains an inherent power to appoint a tutor for a party in certain circumstances. In Bobolas v Waverley Council [2012] NSWCA 126, McColl JA (with whom Macfarlan JA and Tobias AJA agreed) observed:

    [60] In addition to its powers under UCPR r 7.18, the Court has inherent power to appoint a tutor for the purposes of particular litigation under its parens patriae jurisdiction in circumstances where there may be doubt as to whether a person's mental state falls within the statutory definition of "person under legal incapacity": Re P [2006] NSWSC 1082 per Young CJ in Eq at [8].

The Evidence

1. Affidavits were provided by a number of medical experts, Dr Olav Nielssen and Dr Ilana Hepner. Further affidavits were provided by the plaintiff, Gregory Bowering, and by Jeremy Glass, solicitor.

2. Dr Jane Lonie, clinical neuropsychologist, prepared a report dated 2 July 2013 after an assessment of David on 18 June 2013. She was not required to give evidence by the parties and did not swear or affirm an affidavit. There was no objection to her report being received into evidence. Her report contained the following relevant section:

   David acknowledged some difficulties ordering and organising his thoughts but denied difficulties distinguishing between reality-based thoughts and those not based in reality. He felt that his medication made it hard for him to think clearly and to concentrate and he acknowledged the fact that he found it difficult to motivate himself and to plan ahead at times...

3. In a section titled Neuropsychological Findings, Dr Lonie reported:

   David presented as dishevelled and highly apathetic... David exhibited a persistent tendency to give up readily and at times did so mid-task...

   Several areas of executive difficulty were apparent in David's performance on testing. David's approach to tasks lacked planning, organisation and the application of any self-generated assistive strategies. He displayed a consistent tendency to give up easily together with difficulties completing tasks of his own accord...

4. In a section titled Summary of Findings / Opinion, Dr Lonie reported:

   Many areas of David's intellectual functioning remain well preserved at average levels for a man of his age. Aspects of David's general presentation and performance of formal testing, however, indicate the presence of a number of areas of executive difficulty. Such difficulties comprise David's ability to reason in abstract terms, plan and organise his approach to tasks, think in a strategic manner, filter out irrelevant yet related thoughts in order to focus and inhibit his verbal response, engage and sustain his motivation in order to embark on and complete tasks of his own accord and correct self-made errors. David presents as highly agreeable, unquestioning and lacking in the assertion of self-will.

   ...

   On the basis of the areas of executive compromise noted above (and coupled with the fact that David has never been placed in a position where he is required to manage more complex financial matters in the past), it is my opinion David does not have the necessary cognitive capacity to safely and effectively handle the more complex financial decisions that would likely accompany management of larger sums of money (such as that which comprises his inheritance).

   ...

   Furthermore, in the event that a [sic] some point in the future David were seen to relapse or his medication become less effective at managing the symptoms of his illness, it is conceivable he may not retain the capacity to make important decisions pertaining to his wellbeing. In this situation, David would once again be reliant on the cooperative support of his brother and sister to arrive at a decision that represented his best interests. In the event that this was not possible, appointment of an enduring guardian would be advisable.

   ...

   Greg has more recently requested an opinion regarding David's testamentary capacity as well as his capacity to appoint an enduring power of attorney. I have indicated to Greg that whilst I consider that David does indeed possess the cognitive ability to comprehend the meaning and role of an enduring guardian, I would not feel comfortable providing an opinion on such matters without having had the opportunity to question David in a more specific manner about his knowledge of the personal implications involved in each of these areas.

5. Dr Olav Nielssen filed an affidavit for the plaintiff. He is a qualified medical practitioner and specialist psychiatrist. Dr Nielssen prepared two reports concerning the capacity of David, dated 8 November 2013 and 10 May 2014 respectively.

6. The 8 November 2013 report was prepared after an interview with David occurred on 21 October 2013. Dr Nielssen also read the report by Dr Lonie, various medical reports and a letter from David's treating psychiatrist, Dr Stephanie Bradstock, in preparing his report.

7. Dr Nielssen observed that:

   Dr Lonie found Mr Bowering's immediate attention and receptive language to be unimpaired. However, she found significant impairment in executive function, including the generation of ideas, planning and the recognition of errors. She found him to be highly agreeable, unquestioning and lacking in the assertion of self will. She concluded that he did not have the capacity to handle more complex financial decisions. She wrote that he would be at risk of large scale financial exploitation if he were required to manage his financial affairs of his own accord.

8. Under a heading of Mental State Examination, Dr Nielssen reported:

   He reported continuing hallucinations of voices but did not offer a delusional explanation for that experience, and no other delusional beliefs were elicited during a fairly limited interview. He was unable to describe his state of mind or his beliefs during previous exacerbations of mental illness, including any past delusional beliefs. He was approximately oriented, and had some knowledge of recent events, for example, weather patterns and recent notable sporting and political news, although his knowledge was not very detailed. He was able to read fairly fluently and perform simple arithmetic, and his pre-morbid intelligence was estimated to be about average. However, he had obvious impairment in most aspects of intellectual function arising from a severe and chronic form of schizophrenia.

   [emphasis added]

9. Dr Nielssen gave his psychiatric diagnosis as "chronic treatment resistant schizophrenia". It is necessary to set out some of the content of his report in detail:

   OPINION

   The diagnosis of chronic treatment resistant schizophrenia is based on the symptoms reported by Mr Bowering, the corroborative information in the medical records and reports, and aspects of his presentation during the recent interview. He reported continuing auditory hallucinations despite receiving a medication reserved for treatment resistant forms of schizophrenia. However, the main manifestation of his chronic mental illness is its effect on his intellectual function, in particular, volition, self awareness and self care, the generation of ideas, the orderly retrieval of information and problem solving.

   His condition is chronic and resistant to treatment and is unlikely to improve significantly over time or with any change to his treatment.

   It is clear from his presentation and information in the documents that Mr Bowering is unable to manage his own financial affairs, especially in making decisions regarding the management of a large estate. Moreover, I believe he is unable to provide reliable instructions to a legal representative. Hence I believe he would require a tutor to be appointed to act on his behalf in any legal proceedings.

   In answer to your specific questions:

   1. Does David have testamentary capacity such that he is capable of executing a last will and testament? In my opinion, Mr Bowering does not currently have the capacity to make a will as he does not fully understand the extent of his estate. He would also be susceptible to external influence regarding how he might frame his will.

   2. Does David have the capacity to grant a legal Power of Attorney and/or an Enduring Guardianship Appointment? I believe Mr Bowering would be capable of understanding the meaning of nominating a person to hold power of attorney or to act as his guardian for financial and medical decisions.

   3. Whether by reason of David's current condition is he susceptible to the influence of others? Mr Bowering is susceptible to undue influence. Dr Bradstock noted that he was subject to financial exploitation by his fellow residents and I found him to be quite suggestible in his answers.

   4. I note that you advise in your email that David is unfit to manage his financial affairs; in addition to his capacity to manage normal day to day financial issues and in light of the disability trust, in particular would you be able to expand on his incapacity to manage any significant sum of money or assets held in his name. The main issue is that he is unable to manage either large or small sums of money. The potential loss to him is greater if the sums involved were larger. Moreover, the types of decisions in larger sums are more complex and would require him to retain more information, which in my opinion he is incapable of doing.

   5. I understand you were briefed with Dr Lonie's report dated 2 July 2013, could you advise if you agree with Dr Lonie's opinion about David's intellectual functioning described in the first and second paragraphs of page 5 of the report. If so would you be able to set out your reasons in support of that conclusion. I concur with Dr Lonie's conclusion regarding Mr Bowering's intellectual function. I base that on my clinical observations and my knowledge of the effect of very severe forms of schizophrenia on intellectual function.

   6. As you may be aware there has been an disability trust established in the Will of the Late Kevin Bowering, to benefit and support David. Could you advise in your report as to whether David has the capacity to be able to consider and if necessary resist a call by someone to have his consent to withdraw funds from the disability trust to be applied for unspecified reasons. That is, does David have the capacity to recognise when he should refuse access to the disability trust fund even by the trustee of same, and to independently seek advice from a legal practitioner? My opinion is that Mr Bowering lacks the capacity to recognise that his trust was not being used in his interest, or the capacity to reliably resist that use if it were pointed out to him.

10. Dr Nielssen was asked to prepare a further report, which was dated 10 May 2014. That report was prepared following an additional interview with David and with Dr Nielssen having read various documents including the report of Dr Ilana Hepner which had been obtained by the solicitor appointed to act for the second defendant.

1. In that report, Dr Nielssen confirmed his opinion expressed in the earlier report and expressed his opinion that David suffered from a medical or mental condition which affects his cognition and his belief that Mr Bowering is a person under legal incapacity because "his severe mental disability affects his ability to express his will in a reliable way with regards his property and affairs". Dr Nielssen also states:

   I believe he is unable to provide reliable or consistent instructions because of the effect of his condition and lacks that decision making capacity to provide ongoing instructions in the course of any proceedings because of the severe impairment in executive function arising from his chronic mental illness.

   ...

   In my opinion Mr Bowering requires a tutor in order to participate in Supreme Court proceedings. The scientific basis for that opinion is my understanding of the effect of severe forms of schizophrenia on volition and decision making ability, together with my extensive clinical experience as a psychiatrist over twenty years working in the prison hospital and the homeless sector, where I regularly assess the effect of severe forms of schizophrenia on social function.

   ...

   According to the standard in Murray v Williams, Mr Bowering probably has sufficient understanding of the explanations he has received of the issues to be considered to have the capacity to instruct Mr Glass. However, having an understanding of the issues does not equate to decision making capacity, and the test in Murray v William does not capture the particular disability of severe forms of chronic schizophrenia, in which Mr Bowering is subject to daily financial exploitation, and is at real risk of being disadvantaged in the conduct of his affairs.

2. Dr Ilana Hepner filed an affidavit for the second defendant. She is a consultant neuropsychologist. Dr Hepner prepared a report dated 21 March 2014, following assessments of David on 24 February and 3 March 2014.

3. Dr Hepner noted:

   In response to your specific queries:

   1) In your opinion, does David suffer from a medical or mental condition (or conditions) which affects his cognition?
   Yes

   2) If yes:
   i) Please describe the condition(s) and the facts and assumptions supporting your opinion;
   According to the available file material (the letter of Dr Stephanie Bradstock dated 8/10/2013, the report of Dr Olav Nielssen, Psychiatrist dated 8/11/2013 and my telephone discussion with Dr Stephanie Bradstock, Psychiatrist on 10/3/2014, paragraph 15.20), David suffers from chronic schizophrenia that has been treatment resistant and characterised by negative symptoms. This condition has been reported as stable for many years.

   ii) Specify the nature and severity of David's cognitive impairments;
   For the reasons as outlined in sections 4 and 16 above, my response to this question is based upon the description of the findings of David's previous neuropsychological assessment, conducted by Dr Jane Lonie, Clinical Neuropsychologist, and contained in her report dated 2/07/2013.

   In brief, according to Dr Lonie's report, David appears to have several areas of executive difficulty comprising verbal reasoning, planning and organisation, the application of self-generated assistive strategies, strategic thinking, filtering out and inhibiting verbal responses under specific circumstances, engaging and sustaining his motivation, and monitoring and correcting any self-made errors. (Please refer to paragraph 2.3 for further detail).

   iii) Do these impairments impact upon his everyday life, and if so, how?
   According to David's self-reports (e.g., paragraphs 6.1 and 14.4), the informant reports (section 15), the results of the BRIEF-A (paragraphs 16.5-16.7) and review of the available file material, it appears that these impairments do impact upon David's everyday life.

   For example, David is consistently described in the progress notes as having low motivation, apathy and being difficult to engage at a day to day level. All informants identify social isolation or low motivation as main concerns, David also appears to have a degree of difficulty remembering day to day information (e.g., conversations) and he can concentrate for only short periods. His HATI case worker reports that David requires prompting and/or supervision for a number of day to day tasks (e.g., cooking, getting out of his room to go shopping, making initial contact with cleaning services). David remains vulnerable to his fellow resident's requests for money and cigarettes, despite interventions; David explains that he finds it hard to say no and is manipulated. David also appears to be easily led (as seen in his signing of the withdrawal of consent to release information form, as documented above in section 4).

   David's, Debbie's and Gregory's responses on the BRIEF-A indicate that David does experience difficulties with executive functions at an everyday level, although the extent to which this is the case seems to vary across raters. David indicates that he has difficulties with planning and organisation and both Debbie and Gregory indicate that David has difficulties with monitoring his performance while performing a task and with concentrating, holding and mentally manipulating information. Gregory endorses further areas of difficulty (please refer to paragraph 16.7 for further detail).

   The above cognitive impairments, as documented in my response to (ii) and the ways in which they impact upon David's everyday life, as documented in my response to (iii) would be considered consistent with the expected effects of schizophrenia on an individual's cognition and day to day level of function.

   3) If cognitive impairments are present, are they of such a nature or extent that he is a person under legal incapacity, having regard to the legal definitions and tests set out at 14-18 above?
   In particular, you write that "[M]ore recently, the test of legal incapacity, in the context of legal proceedings, has been held to be:

   "...the test to be applied, as it seems to me, is whether the party to legal proceedings is capable of understanding, with the assistance of such proper explanation from legal advisers and experts in other disciplines as the case may require, the issue on which his consent or decision is likely to be necessary in the course of those proceedings, if he has capacity to understand that which he needs to understand in order to pursue or defend a claim, I can see no reason why the law - whether substantive or procedural - should require the interposition of a next friend or guardian ad litem".
   [Murray-v- Williams [2010] NSWSC 1243, at [26] per Hammerschlag J (quoting Chadwick LJ in Masterman-Lister-v- Brutton & Co [2002] EWCA Civ 1889; [2003] 3 All ER162]""

   In my opinion, and based on my understanding of the terms of the Trust (gained from your letter of instruction), David demonstrates an understanding of the key concepts of the terms of the Trust. That is, he is able to tell me that;

   i) His father left him money, shares and a unit (which he refers to as his 'funds') and that a Trust has been set up over the funds
   ii) His sister is the Trustee, the custodian of these funds. She can transfer money to his account and if he wants money, he approaches her
   iii) Debbie, as Trustee can transfer the funds to her own account or to Gregory's account and following explanation, he can tell me that Debbie can also transfer funds to her daughters' account
   iv) With explanation, he understands that if he passed away before Debbie or Gregory, anything that remained in the Fund would go to Debbie and Gregory.
   v) If his health returns, such that he no longer suffers from a mental illness, his finances would then be transferred to his control

   David is also able to demonstrate an understanding that his funds are not protected at present. In particular, if something happens to Debbie, for example, she dies, he initially thinks that his nieces would take over as custodians of the Trust. However, during the second session, he tells me that this is probably not the case and says that someone else could access his funds if something happened to Debbie. He identifies this as a concern.

   David does not appear to demonstrate an understanding of the more detailed and complex aspects of the terms of the Trust (e.g., the full meaning of clause 7.4 as documented in your letter of instruction and the meaning of clauses 7.7 and 7.8 as documented in your letter of instruction). However, it is unclear to me if an understanding of these more detailed and complex aspects of the terms of the Trust relate to an issue on which David's consent or decision is likely to be necessary in the course of the proceedings.

   In my opinion, and based upon my understanding of the proceedings (gained from your letter of instruction) David is able to identify the main issues which arise in the proceedings. That is, he is able to tell me that;
   vi) Gregory is concerned that Debbie, as Trustee, can access his (David's) funds, that Debbie is being dishonest with his money, and that if something happened to Debbie, someone else could access his funds,
   vii) Gregory commenced the proceedings because of these concerns
   viii) If Gregory won, Debbie, as Trustee, would only be able to transfer funds to David's account and his funds would be protected (no-one else would be able to access his funds)
   ix) If his health returns, such that he no longer suffers from a mental illness, he would then be in control of his finances,
   x) With explanation, David understands that if he passed away before Debbie or Gregory, the balance of the Fund would go to Debbie and Gregory

   David's understanding of these issues relating to the Trust and the proceedings was generally stable across both sessions that I saw him. Please refer to sections 11 and 12 for further detail regarding David's understanding of the Will, the Trust and the proceedings.

   Taken together, and on the balance of probabilities, I am of the opinion that David is capable of understanding (at times, with explanation), the main issues regarding the terms of the Trust and the proceedings. Hence, in my opinion, his cognitive impairments are not of such a nature or extent that they impact upon his capacity to understand that which he needs to understand with respect to the proceedings and that in my opinion, he would not be considered a person under legal incapacity according to the judgment of Hammerschlag J in Murray -v- Williams [2010] NSWSC 1243, at [26]

   4) In your opinion, does David have capacity to make decisions about, and authorise transactions, in respect of his affairs, particularly his financial affairs?
   In my opinion, and based on David's self-reports (section 14) and the informant reports (section 15), David is able to manage his basic day to day affairs (i.e., as they relate specifically to withdrawing funds from his own bank account, checking his account balance, making everyday purchases, including groceries and cigarettes) within the context of a supportive environment, where he has the benefit of prompting and supervision as necessary. This also affords him a degree of autonomy. Given the reports of ongoing small scale financial exploitation (i.e., his fellow resident borrowing money and cigarettes from him on an ongoing basis, despite David indicating that he has trouble saying no and that they manipulate him), I would suggest that in collaboration with David, a set amount of money should be agreed upon and be made available to David for his weekly expenses (including an allowance for some lending of money and/or cigarettes; this may help curtail escalating requests for sums of money by his fellow residents, while maintaining a degree of autonomy for David.

   I am of the opinion that David is incapable of making decisions about, authorising transactions or managing his affairs independently of supervision. This is by virtue of his previous lack of experience in this regard (according to his brother's reports in paragraph 15.10 and the information contained in the progress notes), his inability to list ways in which he would do so at the present time (paragraph 14.3), his lack of understanding that his funds are not inexhaustible (paragraph 14.5), his tendency to be easily led (paragraph 4.2) and the impact of his executive difficulties on his everyday level of function (informant reports in section 15 and paragraphs 16.5-16.7). For example, given his documented low motivation and apathy, serious concerns would be raised with respect to his ability to perform tasks that require sustained effort and monitoring (as would be required for managing a large estate). Lastly, the ongoing small scale financial exploitation (as reported by David, his brother, his case worker, his treating psychiatrist and as documented in the progress notes), puts him at significant risk of large scale financial exploitation.

   5) Does he understand the nature of the dispute between his brother and sister regarding the Trust? -j
   In my opinion, David appears to demonstrate an understanding of the main issues regarding the nature of the dispute between his brother and sister.

   That is, on interview he is able to tell me how the dispute arose, he demonstrates an understanding of Gregory's concerns as well as Debbie's response to Gregory's concerns, he can say what Gregory is doing because of his concerns and what the main outcomes would be if Gregory or Debbie won the case. Furthermore, David's account of the nature of the dispute was relatively stable across both sessions that I saw him (please refer to section 12 for further detail regarding David's understanding of the dispute between his brother and sister).

   6) Does he have the capacity to make a decision about whether or not to participate in the proceedings and, in particular, to make a decision to instruct me to file a submitting appearance?
   In my opinion, David does have the capacity to decide about whether or not to participate in the proceedings and to instruct you to file a submitting appearance.

   As outlined in my response to (5) above, David understands the main issues regarding the nature of the dispute between his brother and sister, which is the basis for the proceedings. On further questioning, he has expressed his decision (that he does not wish to participate in the proceedings and that he is happy whatever the outcome) consistently over time (across two sessions with me and also on two occasions with you, according to your letter of instruction) and he has demonstrated sound reasoning as to how he came to that decision. In particular, David demonstrates insight into his tendency to become easily influenced by either side and he tries to avoid this possibility. He also seeks to be excluded from any family conflict. David has also demonstrated an understanding of the possible consequences of his decision (Gregory becoming upset with him; his funds remaining unprotected, which he identifies as a worry if someone else other than Debbie or her daughters gained control of the Fund) and his decision remains stable with the knowledge of these consequences.

   David also tells me that he arrived at his decision on his own, and he denies being influenced. In support of this, his decision remained unchanged during the second session, when he presented on his own (having him arrive unaccompanied during the second session reduced the likelihood that any decision expressed at that time was subject to the effects of undue influence).

   When an explanation of the effect of a submitting appearance is given to David, he is able to understand the essential elements of the action, which is to exclude himself from the proceedings and abide by any decision of the Court; as described above, this has been his consistent position all along and he identifies this as the case.

   In view of David's psychiatric condition, the associated cognitive impairments and the impact of these impairments on his day to day level of function, David's capacity to understand or give instructions in relation to any other matter or issue would need to be evaluated with respect to the particular decision and/or issues in question.

4. At [9.3], Dr Hepner noted:

   I asked him if he is happy to take his medications and he stated "I don't like being sedated, but I get the impression that medication is compulsory. The Doctor thinks I need it because I am sick. I'm worried that if I stop I'll have a relapse, but I'd prefer not to be on it".

5. An affidavit was filed by Mr Jeremy Glass. Although the applicant did not contest the standing of Mr Glass to appear and to instruct counsel for the purpose of the application, that concession was not intended to extend to a further concession that Mr Glass's affidavit was admissible should it be relied upon to demonstrate that David had legal capacity to instruct Mr Glass. For reasons that later appear I admitted the affidavit on the basis that it provided some evidence of David's capacity to give instructions.

6. In his affidavit, Mr Glass sets out a number of conversations between himself and David. Although admitted in 1977, Mr Glass does not profess to have any specialist expertise (for example, in wills and estates matters where the assessment of the client's capacity by the solicitor may carry significant weight). Nor does Mr Glass indicate his experience and involvement in litigious matters. In any event, Mr Glass was not required for cross-examination.

7. It should be noted that although some supplementary written submissions were made by counsel for the plaintiff in relation to the failure of the first defendant to give evidence of her observations of David's capacity, she was made available at the hearing and was not required to give evidence. Therefore those submissions are no longer of any utility.

The submissions

1. The plaintiff submits that the general law test of capacity, as summarised by Campbell JA in Guthrie v Spence (2009) 78 NSWLR 225; [2009] NSWCA 369 (Basten JA and Handley AJA agreeing), ought to be applied to determine David's capacity rather than test in Murray v Williams (Plaintiff's Submissions dated 8 July 2014 at 3).

2. In that case, however, the Court of Appeal was considering a section of the Limitation Act and explicitly stated that "the circumstances where disability exists for the purpose of the Civil Procedure Act and Uniform Civil Procedure Rules are different to the circumstances where disability exists for the purpose of the Limitation Act": at [165]. There is also a contrast between the test for disability under the Limitation Act and the way that the general law decides questions of capacity: at [174].

3. What is made clear by the Court of the Appeal is that the "task-specific nature of these tests of capacity has the effect that the one person could have capacity to perform one task, but lack capacity to perform a different task": at [175]. For example, explicit reference is made to the judgment of Kennedy LJ in Masterman-Lister v Brutton & Co [2003] 3 All ER 162 at [27] where his Lordship recognised that a personal injuries plaintiff may have capacity to settle litigation but not have capacity to administer a large award arising from such a settlement. I should note no reference is made to the test set out by Chadwick LJ at [75].

4. Counsel for the plaintiff did not develop further in oral submissions the question of the appropriate test. In contrast, counsel for the first defendant submits that the appropriate test is that set out by Chadwick LJ in Masterman. The second defendant also does not challenge the correctness of that test.

5. In my view, it is appropriate to apply that test which has been accepted by several judges of this Court. It is not necessary to apply Guthrie v Spence, as it does not arise on this application and more importantly it does not suggest a different test in my view to that set out in Masterman should be applied.

6. The submission of the plaintiff is that David's condition, as described by Dr Nielssen, permits the inference that his executive functioning is limited and those limitations would clearly limit his capacity to knowingly instruct a solicitor without being swayed or influenced by others.

1. The plaintiff further refers to the substantive issue in dispute, namely the construction of the terms of the will and in particular the special disability trust, and suggests that the actions of the deceased in seeking to protect David because of a perceived lack of capacity further support the need for the appointment of a tutor.

2. It is submitted by the first defendant that the context of the proceedings, being a dispute over the construction of certain provisions in the will, makes it unnecessary or highly unlikely that David will be required to engage in any complicated decisions in relation to the conduct of the proceedings. Counsel submits there is an appropriate contradictor, being Deborah, and it is far from clear that David will need to consider tasks beyond formally appearing so he is bound by the outcome.

3. Reference is also made to section 56 of the Civil Procedure Act, in that the first defendant questions the utility of the appointment of a tutor when it is doubtful what role David should play beyond that being performed by the plaintiff.

4. The second defendant submits that David is not a person under legal incapacity in relation to the conduct of the proceedings. Emphasis is placed on the presumption of legal capacity and the importance of the test of capacity being issue specific. Submissions are also made as to the weight to be placed on the evidence of Dr Lonie and Dr Hepner, in contrast to the evidence provided by Dr Nielssen, to which I will return.

Discussion

1. The medical evidence provided by each practitioner was provided in a measured and candid fashion. Both Dr Nielssen and Dr Hepner gave their evidence from the perspective of their respective disciplines; Dr Nielssen as a specialist psychiatrist and Dr Hepner as a consultant neuropsychologist. It was common ground for example that David had reported auditory hallucinations and financial exploitation by other residents to both Dr Nielssen and Dr Hepner.

2. Counsel for the second defendant sought to criticise Dr Nielssen, and therefore diminish the weight to be given to his report, on the basis that he had failed to keep contemporaneous notes in a form separate to his final report. Dr Nielssen gave evidence that his practice was instead to type his notes from an assessment into a draft report, and then edit that report. In this particular case, the assessment of David occurred on 21 October 2013 and the first report of Dr Nielssen was dated 8 November 2013. Although some general criticism was made of this practice, there were no specific criticisms that identified any substantial and material inaccuracies arising from the failure to keep such contemporaneous notes.

3. It was also submitted that the weight to be given to Dr Nielssen should be diminished as his expertise was working in the prison and homeless sectors, and that frame of reference was not as relevant to a person living in supported community residential care, (T57/12).

4. There was also some questioning by counsel of whether Dr Nielssen's assessment of David's condition as 'severe' was appropriate, (T15/42-T17/27).

5. Under cross-examination, Dr Nielssen did not resile from any of the opinions in his report.

6. In my view, he properly applied his knowledge of the disease in question, its manifestations and the way in which it affects various people. Indeed, despite the criticisms levelled by counsel described above, Dr Nielssen's diagnosis of David as having "chronic treatment resistant schizophrenia" is not under challenge by other medical evidence, and Dr Hepner acknowledged that she was not in a position to challenge such a diagnosis, (T39/20).

7. I should also note, that in response to my questioning, Dr Nielssen indicated that the medication which David was prescribed was "extremely sedating", (T25/43).

8. Dr Hepner gave evidence in chief that she had obtained the test results arising from Dr Lonie's assessment of David. She sought to clarify certain aspects of the report that she had previously prepared, which was written with the benefit of Dr Lonie's report but not the test results upon which the latter report was based.

9. In essence, she indicated that her own independent opinion, based on the same test results that were available to Dr Lonie, was that the degree and extent of David's impairment was not as severe as had been suggested by Dr Lonie. However, she accepted that "it's probably a case of reasonable minds differing", (T34/13).

10. Dr Hepner also readily accepted in cross-examination that David was unable to monitor his own medication, (T41/21). She had indicated in her report that although David told her he had started taking Cogentin about 8 months ago (CB173 at [9.2]), his treating psychiatrist Dr Bradstock had confirmed that Cogentin had not been added to David's medication regime, (CB180 at [16.3]). Dr Hepner accepted in cross-examination that if Dr Bradstock were correct, David was clearly wrong in his memory, (T45/43). She was unable, as I understood her evidence, to give any explanation as to why he could not remember his medication regime given it was a specific and confident assertion on his part. She acknowledged his memory related to his capacity to instruct a solicitor, (T46/17).

11. In response to a direct question by counsel for the plaintiff on David's capacity in light of his apathy, Dr Hepner responded, (T43/50):

    Q. So if David doesn't care and he suffers from apathy can you suggest why he has capacity to instruct a solicitor?
    A. Well, he has capacity to instruct a solicitor with respect to those very particular instructions, because he is able to understand the facts involved; he is able to understand the choices; the consequences; and he is able to make a decision. So in my opinion the apathy does not impact on those factors for those specific sets of instructions. In my report I did say that, if there were any other matters or issues for him to give instructions or make decisions about, that would require an assessment of his decision-making capacity in that regard.

12. It should be noted that at several points in her report, Dr Hepner used particular terms to describe David's ability to understand certain concepts. She noted that "David demonstrates an understanding of the key concepts of the terms of the Trust" (CB182), "David appears to demonstrate an understanding of the main issues regarding the nature of the dispute between his brother and sister" (CB183), and "he is able to understand the essential elements of the action" (CB184). While the use of these words may not be intentional, it certainly does not go towards alleviating my concerns about David's capacity to instruct a solicitor.

13. Whilst I accept both Dr Nielssen and Dr Hepner have approached the issue from their respective disciplines and areas of expertise, on balance I prefer the opinions expressed by Dr Nielssen. I am of the view that his experience in the diagnosis and treatment of schizophrenia provides me with a safer guide as to David's vulnerabilities and therefore his capacity to instruct solicitors. Whilst his condition has been stable for some significant period, there is always the potential for relapse and more to the point his current medication has a tendency to sedate him, which may well exacerbate his apathy.

14. Counsel for the first defendant suggested that the issues likely to arise in the construction suit are limited and this should be taken into account when considering whether David has capacity to instruct a lawyer. In my view, this is somewhat simplistic because although the issues may be few in number, they may well belie potential complexity. David may well need advice not only on the proper construction of the terms of the will, but also strategic or forensic advice on how to best proceed with the litigation. In addition, it is not beyond the bounds of possibility that he may need to consider a compromise for the purpose of settling the litigation.

15. The common thread in this case, whether expressed in terms of a real risk by Powell J in PY v RJS [1982] 2 NSWLR 700 or in terms of a doubt as to whether a person's mental state falls within the statutory definition of a person under legal incapacity by McColl JA in Bobolas v Waverly Council, is that the Court should be very carefully concerned to ensure that David's interests are protected. My real concern is that David may be disadvantaged because it may be impossible to distinguish between, on the one hand, an apathetic reaction to the prospect of being involved in litigation and avoidance through the mechanism of a submitting appearance, and on the other, a considered and fully-informed decision that such a submitting appearance is in his best interests.

Conclusion

1. The Court, on an application such as this, has an important role to play in protecting the interests of a clearly vulnerable person. It is an even more important role where the application for a tutor to be appointed is made by the opposing side, which although rare is not unprecedented, and where such an appointment is contested by the second defendant as unnecessary.

2. Aside from the proper test of capacity, the protective role to be taken by the Court was also the subject of consideration in Masterman-Lister, in which Chadwick LJ observed at [78] that:

   The courts have ample powers to protect those who are vulnerable to exploitation from being exploited; it is unnecessary to deny them the opportunity to take their own decisions if they are not being exploited. It is not the task of the courts to prevent those who have the mental capacity to make rational decisions from making decisions which others may regard as rash or irresponsible.

3. In my view, given the medical evidence which has been advanced by both the plaintiff and the second defendant, I consider there is a real risk David may be disadvantaged in that he may not be capable of understanding, even with the assistance of such proper explanation from legal advisers and other experts, the issues on which his consent or decision is likely to be necessary in the course of the proceedings. He is someone, therefore, who is a person under a legal incapacity and for whom a tutor should be appointed.

4. Even if I am wrong as to whether David properly comes within the definition of a person under legal incapacity, I am satisfied that it is appropriate to exercise the inherent power of the Supreme Court to appoint a tutor, as discussed by the Court of Appeal in Bobolas v Waverly Council. Because of his illness he is vulnerable in my view. He is potentially agreeable and/or apathetic and I am concerned to ensure that his true wishes are implemented.

5. In my view, it is therefore appropriate that I make the orders sought in the notice of motion filed 3 December 2013 that Margaret Hole be appointed tutor for the second defendant pursuant to UCPR rule 7.18(1)(a) and that the hearing of the proceedings be expedited.

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