Iskandar v Mahbur
[2015] NSWSC 82
•12 February 2015
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New South Wales |
Case Name: | Iskandar v Mahbur & Ors |
Medium Neutral Citation: | [2015] NSWSC 82 |
Hearing Date(s): | 12 February 2015 |
Date of Orders: | 12 February 2015 |
Decision Date: | 12 February 2015 |
Jurisdiction: | Equity Division |
Before: | Slattery J |
Decision: |
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Catchwords: | PROCEDURE - revocation of orders by the Court - NSW Trustee and Guardian seeks an order revoking orders the Court made on 15 February 2012, appointing a financial manager to the affairs of the third defendant - whether a declaration that the defendant is incapable of managing his own financial affairs should be revoked - the proceedings are due to be finalised at a hearing on 25 February 2015 - whether the financial management orders should be revoked now. |
Legislation Cited: | NSW Trustee and Guardian Act (2009), ss 39, 41 and 86 |
Cases Cited: | Iskandar v Mahbur & Ors (No 6) (Slattery J, 15 February 2012, unreported) |
Category: | Procedural and other rulings |
Parties: | Plaintiff: Hazairin Iskandar |
Representation: | Solicitors: |
File Number(s): | 2010/122386 |
Publication Restriction: | No |
EX TEMPORE JUDGMENT
In these proceedings, the NSW Trustee and Guardian (the NSW Trustee) seeks orders revoking financial management and other orders the Court made on 15 February 2012 in respect of the actual or contingent assets of the third defendant (who is referred to only as “T” in these reasons for publication) arising out of these proceedings.
The Court's reasons for making those orders are set out in my judgment of 15 February 2012, Iskandar v Mahbur & Ors (No. 6) (Slattery J, 15 February 2012, unreported).
Since the Court made those orders much has happened. The principal proceedings that the plaintiff brought for relief were resolved before Bergin CJ in Equity in a hearing on 11, 12, 13, 14, 15, 18 and 27 February 2013; 6 March 2013. Her Honour gave judgment on 26 March 2013: Iskandar v Mahbur & Ors [2013] NSWSC 239. In her Honour's judgment the plaintiff's statement of claim was dismissed. The second and third defendants were successful. Formal orders were entered on 23 May 2013.
The underlying proceedings were for the specific performance of an agreement concerning the sale of a taxi which was said to have been sold by the plaintiff to the second defendant to the plaintiff pursuant to a deed of agreement dated 5 May 2010. The second defendant is the spouse or de facto partner of the third defendant. Mr Mahbur is the plaintiff's brother.
The NSW Trustee’s Motion
The motion before the Court seeks orders:
(1)Order that the declaration made on 15 February 2012 that the third defendant is incapable of managing his affairs be revoked.
(2)Order that the order made on 15 February 2012 that such part of the estate of the third defendant as is constituted by actual contingent assets or liabilities of the third defendant, in or arising out of these proceedings, is subject to management under the NSW Trustee and Guardian Act be revoked.
(3)Order that the order made on 15 February 2012 that the management of the estate so defined of the third defendant be committed to the NSW Trustee be revoked.
(4)Order that NSW Trustee be removed as the third defendant’s tutor in the proceedings.
(5)Grant leave to Christopher Matthew Zucker to file and serve a Notice of Ceasing to Act for the third defendant within 7 days.
(6)No order as to costs of this motion.
Represented by Mr C.M. Zucker, the NSW Trustee reads in support of the motion an affidavit of John Albert Franklin of 11 February 2015. On the motion is Mr Lawrence who also appears today on behalf of the former solicitors and counsel for the plaintiff, in these and other proceedings, lawyers who claim a charge over certain funds in Court.
The plaintiff has funds in Court of approximately $175,000. This amount represents the purchase price of the taxi which was paid by the second defendant to the plaintiff, on the transaction the subject of Bergin CJ in Equity's judgment. Two motions for the payment out of the Court of those funds are listed before me on 25 February this year.
However, the solicitors that Mr Lawrence represents say that their charge, together with the assessed and certified costs orders in favour of the second defendant, well exceed the plaintiff’s funds in Court.
The first thing to consider is the question of service. Mr T, the third defendant, is not here today. Mr Zucker has tendered Exhibit A, which shows: (1) the motion; (2) the affidavit of Mr Franklin; (3) Mr Zucker's submissions; and (4) references to the authorities in which he has relied today have all been served on Mr T. Mr T has written to both Mr Zucker and the Court as Exhibit A shows, seeking an adjournment of the proceedings today.
Mr T seeks an adjournment on the basis that he is very unwell today and will not be able to attend Court. He asks that the matter be adjourned. It is also evident from this letter that Mr T seeks that no orders be made today. I considered the medical certificate which he has supplied from Dr Janus of 11 February 2015, part of Exhibit A:
“Your Honour,
I am in receipt of an email from my patient Mr T requesting that I attest to the fact that he requires continuing representation at Court.
I can confirm that I do not believe that he is mentally fit to represent himself. He continues under the care of consultant psychiatrist Dr Large and remains on daily oral anti-psychotic medication.
Yours faithfully,
Dr Richard Janus”
Dr Janus' medical certificate is very similar to a number of medical certificates which were supplied on behalf of Mr T from three years ago when in this case. Mr T continues under the care of a consultant psychiatrist, Dr Large, and remains on daily oral anti-psychotic medication.
Mr T wants the NSW Trustee to continue to represent him. The logic for that was very strong three years ago before the hearing took place. But it is clear from the motions of the plaintiff's solicitors and of the second defendant that these proceedings, one way or another, are about to come to an end. Much of the logic of my original appointment of the NSW Trustee as the financial manager of Mr T three years ago was so that stress to him could be reduced, since the proceedings had so far to go. That logic has now largely disappeared. All that matters for present purposes is that I am satisfied that Mr T had adequate notice of this motion and that I can proceed in his absence. I am so satisfied.
The starting point is my judgment appointing the NSW Trustee on 15 February 2012. I made that appointment under the NSW Trustee and Guardian Act 2009 (“the Act”), s 41 which, in substance, provides that if the Supreme Court is satisfied that a person is incapable of managing his or her affairs the Court may declare the person to be so incapable and may appoint "a suitable person as manager of the estate of the person or commit the manager of the estate of the person to the NSW Trustee". It was the latter course that was taken.
My 15 February 2012 judgment makes clear that this order was made after many appearances before the Court in which the Court's processes were becoming bogged down by the incapacity of Mr T to engage with the real issues in the proceedings for the then anticipated hearing.
There was evidence before the Court then from Dr Large and Dr Janus that Mr T suffered from a chronic psychosis (schizophrenia) and had a degree of thought disorder as a result of that illness; a diagnosis which had remained unchanged over a considerable period leading up to the Court's orders.
The Court also observed as it pointed out in that judgment that much of Mr T's behaviour in court was quite consistent with what the medical evidence indicated about his psychosis. The Court had regard to the provisions of s 39 of the Act and ultimately made orders under s 41.
Section 39 of the Act is of considerable importance not only in February 2012 at the time of appointment of the financial manager but throughout the period of financial management, and now, when it is contemplated that a financial management order might come to an end. It provides as follows:-
“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.”
The NSW Trustee managed Mr T’s affairs in a slightly unusual way, because of the unusual circumstances of this case. The NSW Trustee normally has funds under management, which are paid to the NSW Trustee and administered through its trust accounts. But the only funds to which Mr T might become contingently entitled here are the benefit of a cost order in his favour at the conclusion of the proceedings. There was no money available for his benefit to the NSW Trustee during the conduct of the proceedings. So the NSW Trustee advanced monies from its own consolidated funds to fund his role in the litigation.
I am told a sum of less than $106,263.17 was expended on the NSW Trustee’s costs of the conduct of the proceedings before Bergin CJ in Equity. From what I see and know of those proceedings, if I may say so, these are very reasonable solicitor-client costs.
Since the conclusion of the hearing before Bergin CJ in Equity Mr T has pressed the NSW Trustee to join in an application to have his costs assessed and paid out of the money presently held in Court.
The NSW Trustee has declined to do so for reasons that are understandable. The NSW Trustee says that were Mr T's costs to be assessed, followed by him joining in the application to have the monies presently held in Court paid out to him, two things would probably happen. First, on payment out the monies will be repayable to the NSW Trustee to reimburse its common fund. But the greater problem is that, as all parties at the Bar table acknowledge, the claim under a charge by the former solicitor for the plaintiff is likely to have priority over any of Mr T's claims to the funds in Court, which only arose upon the making of the costs orders in the proceedings before Bergin CJ in Equity. The charge in favour of the former solicitors for the plaintiff was taken out to fund the plaintiff's unsuccessful defence of the murder charges against him.
I do not have to decide this priorities issue now on the basis of the precise circumstances, or the relative priority of that charge. But, if the NSW Trustee were persuaded that it should do what Mr T requests and to pursue payment out of the plaintiffs funds in Court, it would only be expending further costs out of its own pocket, which will probably not be recoverable if it is unsuccessful in claiming priority over the other claimants to the fund. But even if the NSW Trustee were to be successful and were to obtain a costs order, these costs would only go back to it and not to Mr T.
The logic for the NSW Trustee not proceeding further is overwhelming. It remains for the Court to consider the Court’s power to revoke the orders made on 15 February 2012 and to attend to the discretionary considerations associated with the revocation being requested.
The Power to Revoke Financial Management Orders
The Act provides in s 86 for the revocation of orders made under s 41. The Act, s 86 is as follows:
“86 Revocation of orders by Supreme Court
(1) The Supreme Court, on application by a protected person and if the Court is satisfied that the protected person is capable of managing his or her affairs, may:
(a) revoke any declaration made that the person is incapable of managing his or her affairs, and
(b) revoke the order that the estate of the person be subject to management under this Act, and
(c) make any orders that appear to it to be necessary to give effect to the revocation of the order, including the release of the estate of the person from the control of the Court or the manager and the discharge of any manager.
(2) For the purposes of this section:
(a) evidence of a person’s capability to manage his or her own affairs may be given to the Supreme Court in any form and in accordance with any procedures that the Court thinks fit, and
(b) the Court may personally examine a person whose capability to manage his or her affairs is in question or dispense with any such examination, and
(c) the Court may otherwise inform itself as to the person’s capability to manage his or her own affairs as it thinks fit.”
Section 86 is only engaged if the Court is satisfied that the protected person is capable of managing his or her affairs. If the Court is so satisfied then it may revoke the declaration that the person is incapable of managing his or her affairs. Then it can revoke the order that the person's estate be subject to management under the Act.
It is clear on all sides in the case, and not least because of Dr Janus' recent medical report, that the Court could not be satisfied that Mr T is capable of managing his own affairs. Section 86 cannot be used as a source of power for the orders that the NSW Trustee seeks to have made.
In his helpful submissions, Mr Zucker on behalf the NSW Trustee has referred the Court to a decision of Lindsay J, Re W and L [2014] NSWSC 1106, where his Honour was confronted with a similar problem. In Re W and L a person who had been the subject of an order under s 41 undoubtedly had a continuing incapacity to manage his affairs. A party applied for revocation of the s 41 order but without seeking to have the Court make a finding that the person concerned was capable of managing his own affairs.
Lindsay J concluded that section 86 was unavailable. He then drew upon Re Q (Young J, 29 May 1985, unreported) and Re C [2012] NSWSC 1097 and found that the Court was able to rely on its own inherent jurisdiction and plenary jurisdiction under section 23 of the Supreme Court Act 1970 (NSW) to make orders revoking the s 41 orders, provided the Court was satisfied that the orders were in the Court's protective jurisdiction.
In Re W and L [2014] NSWSC 1106 at [73] to [82] Lindsay J affirmed that Supreme Court Act, ss 22 and 23 jurisdiction was available to justify revocation of the s 41 order, by the following analysis:
“73 In submissions leading to that submission, the NSW Trustee drew attention to the width of both the Court's inherent jurisdiction (preserved by the SCA, s22) and the jurisdiction conferred on the Court by s23 of that Act.
74 Section 23 provides that "[the] Court shall have all jurisdiction which may be necessary for the administration of justice in New South Wales".
75 It has been recognized as a source of protective jurisdiction: Re Q (Young J, 29 May 1985, unreported); Re C [2012] NSWSC 1097 at [64] - [66].
76 In Re Q, Young J treated the Court's inherent jurisdiction and that derived from SCA s23 as convergent, and described that blended jurisdiction in terms similar to, but perhaps more expansive than, the early 19th century cases associated with Lord Eldon which (as explained in PB v BB [2013] NSWSC 1223 at [38] - [55]) recognized the Court's protective jurisdiction as extending to any person unable to manage his or her own affairs: Ridgeway v Darwin (1802) 8 Ves.65; 32 ER 275; Ex parte Croamer (1806) 12 Ves. 445; 33 ER 168 at 170 - 171; Sherwood v Sanderson (1815) 19 Ves. 280; 34 ER 521 and In re Holmes (1827) 4 Russ 182; 38 ER 774. That line of cases was recognized as representative of NSW law, as received from England, by Powell J in MS v ES [1983] 3 NSWLR 199 at 202 C - G and CCR v PS (No 2) (1986) 6 NSWLR 622 at 634G et seq.
77 In Re Q, Young J's observations included the following:
"[Section 23 of the Supreme Court Act or an inherent power no less ample] is the source of power of this court to make whatever order it considers appropriate for the protection and good management of the property of any person in New South Wales who is not fully able to take charge of his or her own property whether that disability comes about from infancy or mental illness or any other cause whatsoever...
If a question arises as to whether this court has jurisdiction to make orders of a protective nature, that question is not to be answered by looking to particular heads of power conferred by statute but rather to s23 of the Supreme Court Act and the inherent power of this court to make plenary orders to protect the poor, the elderly, the children and the weak..."
78 In Re C, White J (at [66]) treated SCA s23 as the source of the Court's inherent, parens patriae jurisdiction, and (at [56] and [62] - [67]) found there jurisdiction in the Court to remove a guardian or a financial manager appointed to that office by the Guardianship Tribunal (now the Guardianship Division of the Civil and Administrative Tribunal, "NCAT"). The circumstance that the Guardianship Act 1987 NSW and the NSW Trustee and Guardian Act conferred similar, express powers on the Tribunal (but not the Court) did not deprive the Court of its broader, inherent jurisdiction.
79 Nothing in the NSW Trustee and Guardian Act operates to deprive the Court of its inherent, protective jurisdiction. A legislative extinguishment of that jurisdiction would require clear words (In Re WM (a person alleged to be of unsound mind) (1903) 3 SR (NSW) 552) not present in the NSW Trustee and Guardian Act.
80 The Act is, rather, predicated on the Court's retention of its inherent jurisdiction.
81 That jurisdiction is derived from the Imperial, British Legislation which, first, constituted the Court ("the New South Wales Act" of 1823, 4 Geo IV c96, s9, and clause 18 of "the Third Charter of Justice", letters patent dated 13 October 1823, promulgated pursuant to that Act) and, secondly, clarified the timing, terms and content of NSW's inheritance of English law (the Australian Courts Act 1828, 9 Geo IV c83, ss 11 and 24): J.M. Bennett, A History of the Supreme Court of NSW (Law Book Co, Sydney, 1974), chapter 7, especially pages 125 - 127; In Re WM (1903) 3 SR (NSW) 552 at 565. In my opinion, SCA s23 is an independent grant of power.
82 SCA s23 supplements, but does not limit, the inherent jurisdiction preserved by SCA s22.”
Lindsay J considered other unreported instances where the Court’s inherent jurisdiction and the jurisdiction under s 23 had been utilised to revoke financial management orders which were of no continuing practical utility, as follows:
“85. The inherent jurisdiction (compatibly with s39) is extremely wide: PB v BB [2013] NSWSC 1223 at [29], citing M. Davies, A. S. Bell and P.L.G Brereton (eds), Nygh's Conflict of Laws in Australia (LexisNexis Australia, 8th ed, 2010), para [31.1].
86. Its limits, and scope, have not been, and cannot be, defined. It is available to do whatever may be for the benefit of an incompetent person unable to care for himself or herself, and it is commonly invoked where there is need of a protective order uncontemplated by legislation: Re Eve (1986) 31 DLR (4th) 1 at 16-17 and 28-29; [1986] 2 S.C.R. 388 at 410-411 and 426 - 427, approved by the High Court of Australia in Secretary, Department of Health and Community Services v JWB and SMB (Marion's Case) (1992) 175 CLR 218 at 258-259.
87. Although my attention has not been drawn to a reported case in which management orders have been revoked notwithstanding the continuing incapacity of a protected person, the NSW Trustee has brought to attention two unreported instances.
88. In each of those cases (one in 2004, the other in 2010) the Protective List Judge of this Court, on a report by the Protective Commissioner or the NSW Trustee, approved revocation of management orders where, although there was no evidence of capacity for self-management, there was no practical utility in continuing the management orders, and it was in the best interests of the protected person that they be revoked.
89. In all the circumstances, I am satisfied that the Court does have jurisdiction to revoke the management orders made on 30 July 2003 (as part of its inherent jurisdiction and, independently, by virtue of SCA s23) and that (for the reasons advanced by the NSW Trustee in its Report) it is in the interests, and for the benefit, of L that they be revoked.”
The NSW Trustee argues that this too is a case where a financial management order should be revoked without finding that Mr T is capable of managing his own affairs. Mr T's written contentions take a different view.
Conclusion
But for the following reasons I am persuaded that the orders should be made. Firstly, I should attend to the principles set out above in s 39 of the Act. This is a slightly unusual case in which, as is evident from my earlier judgment, Mr T did not want to have the NSW Trustee and Guardian appointed in the first place because he wanted to try express his own views to the Court. He has continued through correspondence to express his own views to the Court despite the NSW Trustee’s appointment.
The Court must have regard to the welfare and interests of Mr T: s 39. Although he opposes the making of this order, it will permit him to communicate directly with the Court and will, in that sense, be in his “interests”. A concern is whether that is for his “welfare”. But the answer to that seems also to me to be clear. It was for his welfare for his relevant financial affairs to be managed by NSW Trustee when these proceedings were likely to stretch ahead some years. That is not the case now. The hearing on 25 February should bring these proceedings to an end.
The other principles set out in s 39 support the making of the orders. The orders will support the freedom of decision and freedom of action of Mr T and create as little restriction upon him as possible. He will be free to put submissions to the Court. Everything he has said in correspondence before the Court on this application can be repeated to the Court when the application comes on hearing on 25 February.
The other consideration in favour of making of the revocation orders is that the structure of the orders in February 2012 was only to manage the proceedings and obtain a costs order in Mr T’s favour. Although a costs order has been made in his favour, the only party who could gain any practical benefit from it, the NSW Trustee, does not wish on reasonable grounds to pursue enforcement any further. It seems to me that the whole point of the financial management order is now spent.
For those reasons, I will make the orders sought in Mr Zucker's motion. As I do so, I will make clear what Lindsay J did in Re W and L: that when making order 1 the Court is not finding positively that the third defendant, Mr T, is a person capable of managing his affairs. He plainly, on the evidence I have seen, is not such a person.
I make orders 1, 2, 3, 4, 5 and 6 of the orders sought in the notice of motion of 11 February 2015:
(1)Order that the declaration made on 15 February 2012 that the third defendant is incapable of managing his affairs be revoked.
(2)Order that the order made on 15 February 2012 that such part of the estate of the third defendant as is constituted by actual contingent assets or liabilities of the third defendant, in or arising out of these proceedings, is subject to management under the NSW Trustee and Guardian Act be revoked.
(3)Order that the order made on 15 February 2012 that the management of the estate so defined of the third defendant be committed to the NSW Trustee be revoked.
(4)Order that NSW Trustee be removed as the third defendant's tutor in the proceedings.
(5)Grant leave to Christopher Matthew Zucker to file and serve Notice of Ceasing to Act for the third defendant within 7 days.
(6)No order as to costs of this motion.
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