Ji v Protective Commissioner (GD)

[2005] NSWADTAP 76

Appeal Panel - Internal

CITATION:	JI and anor v Protective Commissioner (GD) [2005] NSWADTAP 76
PARTIES:	APPELLANT JI and JK RESPONDENT Protective Commissioner
FILE NUMBER:	059040
HEARING DATES:	15/09/2005
SUBMISSIONS CLOSED:	09/15/2005
DATE OF DECISION:	12/23/2005
DECISION UNDER APPEAL:	JI and anor v Protective Commissioner (No 2) [2005] NSWADT 115
BEFORE:	O'Connor K - DCJ (President); Britton A - Judicial Member; Bolt M - Non Judicial Member
CATCHWORDS:	costs - relevant considerations - statutory interpretation
MATTER FOR DECISION:	Principal matter
FILE NUMBER UNDER APPEAL:	033353
DATE OF DECISION UNDER APPEAL:	05/26/2005
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Protected Estates Act 1983
CASES CITED:	JI and anor v Protective Commissioner [2005] NSWADT 55 JI and anor v Protective Commissioner (No 2) [2005] NSWADT 115
REPRESENTATION:	APPELLANT R Pepper of counsel instructed by P Kennedy, Mooney and Kennedy Solicitors RESPONDENT T Tunbridge, solicitor, Office of the Protective Commissioner
ORDERS:	Appeal dismissed

1 This appeal relates to the second of two decisions made by the General Division (Guardianship and Protected Estates List) of the Tribunal (‘the Tribunal’). The appellants are a wife and her husband. The wife was seriously injured in a car accident about 20 years ago. She is now in her late 60s. She has a level of brain injury and requires constant care. Her husband is her principal carer, and is about nine years older than her. The wife’s financial affairs are the subject of an order under the Protected Estates Act 1983 (PEA), the Protective Commissioner being the appointed manager.

2 For most of the last 20 years the appellants have lived in a home at Turramurra, owned by the wife. In 2001 the wife purchased another property, at Peats Ridge, which the appellants both saw as more suited to their future needs. The Protective Commissioner approved the purchase, but, according to him, did so on the basis that the Turramurra property would be sold. When in August 2003 he decided to sell Turramurra, the appellants disputed the decision and applied for review by the Tribunal. The Tribunal dismissed their application: JI and anor v Protective Commissioner [2005] NSWADT 55. This decision has not been appealed.

3 The Tribunal then proceeded to deal with an application by the appellants for payment of their costs of the proceedings out of the wife’s estate. They had been represented in the proceedings before the Tribunal by counsel, instructed by a firm of solicitors. The Protective Commissioner opposed the application, so as to avoid further depletion of the estate. He also submitted that an award of costs was not deserved in circumstances where, in the Protective Commissioner’s opinion, the husband had agitated the proceedings, had needlessly engaged legal representation and the case had been a weak one. The Tribunal refused the application: JI and anor v Protective Commissioner (No 2) [2005] NSWADT 115.

4 The practical effect of the decision was that the appellants were left personally liable to pay the costs, in particular the husband. The Tribunal’s reasons indicate that the income received by the appellants is very limited and that they have lived frugally over the years.

5 The appellants claim that the Tribunal’s decision is affected by various errors of law, should be set aside and have applied for leave to extend the appeal to the merits (see generally ADT Act, s 113).

Tribunal’s Reasoning Process

6 In its decision, the Tribunal described the basis upon which the applicant’s made their application as follows:

‘9 … [T]hey are seeking an order that the OPC pay the applicants costs from the funds of the first applicant on behalf of the first applicant. This is necessary - the applicants argue - because the OPC wholly controls the financial affairs of the first applicant and it was on the first applicant’s behalf that the proceedings were commenced. This was done - they say - because due to her incapacitation she was not able to commence them herself.

10 The applicants assert that they should not be compelled to commence a fresh application for review of the OPC's decision not to release the funds for the payment of the applicants' legal costs. They say that such a course would obviate the very object of the amendments to the Protected Estates Act 1983 - ie to facilitate the simple cheap and quick resolution of disputes between Protected Persons and the OPC. The applicants therefore seek an Order under s 85 [of the Administrative Decisions Tribunal Act 1997 (the ADT Act)] making the Order the Tribunal made in this matter on 16 March 2005 subject to the condition that the OPC release sufficient funds to allow the first applicant to pay the legal costs of the applicants.’

7 It will be seen that, in the Tribunal’s mind, the appellants were seeking an order to have costs paid out of the estate. Section 85 of the ADT Act provides:

‘ 85 Power to impose conditions

A power of the Tribunal to make an order or other decision includes a power to make the order or other decision subject to such conditions (including exemptions) as the Tribunal specifies when making the order or other decision.’

8 The appellants saw this as providing a basis for the Tribunal to deal with an application for costs arising in protected estate proceedings similar to that enjoyed by the Supreme Court when exercising its protective jurisdiction. In the instance of the Supreme Court, s 77 of the PEA provides:

‘ 77 Costs may be paid out of estate

(1) The Court [‘Court’ means the Supreme Court of New South Wales: s 4(1)] may order the costs of and relating to the applications, orders, directions, conveyances and transfers to be presented or made in pursuance of this Act to be paid and raised out of or from the property or the rents, income or profits in respect of which they are presented or made in such manner as it may think proper.

(2) The Court may order such sum by way of remuneration to be paid out of the estate to the manager of the estate of a protected person or protected missing person as the Court may think fit.

(3) A reference in subsections (1) and (2) to the Court includes a reference to the Protective Commissioner where the costs referred to in subsection (1) arise, or the remuneration referred to in subsection (2) is warranted, by reason of applications to, or orders or directions by, the Protective Commissioner under section 30.’

9 The Tribunal was satisfied that it had jurisdiction in this case to deal with the application before it under s 85 of the ADT Act. But as to what were the relevant considerations when dealing with an application for costs made pursuant to s 85, it considered that it would only be proper to make an order if there were ‘special circumstances’ within the meaning of s 88(1). Section 88(1) provides:

‘(1) Subject to the rules of the Tribunal and any other Act or law, the Tribunal may award costs in relation to proceedings before it, but only if it is satisfied that there are special circumstances warranting an award of costs.’

10 The Tribunal then referred to the submissions of the parties. The Tribunal continued:

‘24 The applicants argue that if the order sought is not made it will subject the applicants to significant financial hardship. This submission is difficult for the Tribunal to assess in any detail because no information has been provided as to the amount of costs currently outstanding. However, the Tribunal recognises that the applicants are living on social security benefits plus some income from the OPC, and is prepared to take their financial situation into account as part of any assessment of special circumstances.

25 The applicants further argue that to deny this order would be a disincentive to parties challenging the decisions of the OPC in the Tribunal. They assert, as set out earlier in this judgement, that at a broader level to not allow the claiming of costs from JI's funds would severely limit the number of reviews sought under the amendments to the Protected Estates Act 1983. This, too, is a factor which the Tribunal is prepared to weigh. However, it does so in the context that, in normal circumstances, parties are responsible for their own costs.

26 The applicant has not argued other special circumstances, and the Tribunal is of the view that there are no other factors arising from its review of the OPC's decision that it would place into this category.

27 The respondent submits that this case does not give rise to any special circumstances warranting an award of costs in favour of JK, and against the estate of JI. It notes that the Tribunal affirmed the decision of the Protective Commissioner in this matter, and that in the normal course of events costs would follow the result.

28 Further, the respondent submits that the Tribunal, in affirming the Protective Commissioner's decision, also endorsed the Commissioner's reasons for selling the property. The Tribunal found that depletion of JI's estate is of major concern, as funds must be maintained to provide for her future care needs. It argued that to award costs to JK would unfairly penalise JI, and cause her estate to be further depleted.

29 Weighing all of these factors, the Tribunal is not persuaded that the applicants have made out an argument that the circumstances of this case are "special", and that even half of the costs should be drawn from the funds held by the OPC on behalf of JI.

CONCLUSION AND ORDERS

30 The Tribunal, whilst recognising the financial difficulties faced by JI and JK in this matter, and the importance of maintaining in practise the ability of parties to challenge the decisions of the OPC, is not persuaded that a case for special circumstances has been made out. Whilst it is satisfied that the course of action proposed by the applicants - to make a condition of the order the release of funds from JI's estate - is one that the Tribunal may pursue, it is not prepared to pursue that course in this case.

31 The Tribunal orders that the application of the applicants is dismissed.’

Assessment

11 The costs question was not raised during the main hearing, which concluded on 19 August 2004. On 7 October 2004, the appellants’ solicitors wrote to the Tribunal advising that the applicants wished to be heard on the question of costs. The letter concluded, ‘It may be convenient for that to take place after the decision is handed down and before final Orders are made’. After making its principal decision, the Tribunal gave directions for written submissions to be filed. In their submissions, the appellants raised issues under both ss 85 and 88 of the ADT Act.

12 Despite what Ms Pepper of counsel said to us at one point in the appeal hearing, we are not satisfied that the appellants ever made their application on the basis of s 88 of the ADT Act. For reasons which are entirely understandable, they sought to have the Tribunal deal with the matter on the basis of the s 85 power. The obvious attraction of that course is that it might allow the Tribunal to address the question of costs free from the bias reflected in s 88(1) against any order for costs being made in proceedings in the review jurisdiction of the Tribunal. Section 85, therefore, might provide a vehicle through which the Tribunal can deal with protected estates applications from unsuccessful applicants in a manner similar to the way the Supreme Court uses its PEA s 77 power.

13 Our view as to the basis of the application at the time it was before the Tribunal is confirmed, we think, by Ms Pepper’s written submission for the appeal (filed 15 August 2005), where she says:

‘6. The appellants were at no time seeking an award of costs in their payable by the OPC. Rather they sought an order that the OPC release sufficient funds so that they could pay their legitimately incurred costs. This was necessary because, as found by the ADT, the OPC wholly controls the financial affairs of the first appellant and, contrary to the assertions of the OPC, it was on the first appellant’s behalf that the proceedings were commenced given that by reason of her incapacitation she was not able to do so herself.

7. Thus the appellants sought an order that each party bear their own costs but that the costs borne by the appellants be paid from the funds of the first appellant released by the OPC specifically for this purpose. Such an order would do no more than apply what is otherwise the ‘usual rule’ were the proceedings to have taken place in the Supreme Court.’

14 This basis is also reflected in a statement Ms Pepper made at the beginning of her oral submissions at the appeal hearing, where she said that the appellants were asking for reimbursement of their costs from the estate not an inter partes order.

15 The Tribunal was mistaken, we think, in entertaining an application on the basis of s 85 in the present circumstances.

16 The only power available to the Tribunal to consider a costs application that is made, as occurred here, in the course of review proceedings is that provided by s 88(1) of the ADT Act.

17 In our view, the function of s 85 is to provide the Tribunal with some flexibility when making final orders. The words ‘includes a power to make the order or other decision subject to such conditions (including exemptions) as the Tribunal specifies’ must be read in a way which confines the ‘conditions’ or ‘exemptions’ to be imposed to ones relevant to, or connected in some plausible way, with the contents of the principal order. Any application made to the Tribunal to exercise the power contained in s 85 must show a connection with the subject of the principal application.

18 So, for example, a decision to affirm the sale of a property (the case here) might have attached to it conditions to do with method of sale, selling period, reserve and even choice of selling agent. There must be a nexus between the condition or variation and the order to which it attaches. The subject matter of costs of proceedings would, rarely if ever, be connected with the principal subject matter of an order in the way suggested.

19 In an instance (difficult to comprehend) where s 85 did allow a question of the costs of proceedings to be considered, it is wrong we think to limit the power by reference to the considerations found in s 88(1). Section 85 has as its context the general obligation of the Tribunal to make the correct and preferable decision (ADT Act, s 63), and the considerations relevant to its exercise are those which are consistent with the making of a correct and preferable decision.

20 While errors have been demonstrated, we must nonetheless dismiss the appeal. The outcome was correct. The application under s 85 was simply not competent.

21 Even though they may see themselves as in a conflict with the Commissioner and regard his office’s exercise of discretion as likely to be biased against them, applicants seeking payment of costs out of the estate must, as we see it, first apply to the Commissioner for a payment out of the estate. If that decision is adverse, it may be brought to the Tribunal by way of an application for review.

22 We have noted that on 19 April 2005, while awaiting the Tribunal’s decision in the matter, the solicitors for the appellants wrote to the Commissioner notifying his office that they held an authority from the wife dated 14 April 2005 consenting to the payment of legal costs out of the wife’s funds held by the Commissioner; and requesting that those funds be released so as to obviate the need for the applicants to incur further costs by revisiting the Tribunal.

23 It remains open to the appellants to apply formally to the Protective Commissioner for a decision to that effect. On the same basis as already explained in dealing with the application of s 85, it would, in our view, be an error for the Tribunal to limit its thinking in the way reflected in s 88(1). The task on review would be to determine what is the ‘correct and preferable’ decision in the circumstances.

24 In that regard, we think it would be proper for the Tribunal to have regard to such matters as the fact that unless funds are made available to cover the legal costs of a protected person, he or she might be unable to challenge a decision made by the Protective Commissioner. It would also be appropriate to have regard to the way the Supreme Court has gone about exercising its discretion under s 77 of the PEA, as it contains no bias one way or the other as to when it is appropriate to make a costs award.

Order

1. Appeal dismissed.