JP v CP
[2013] NSWSC 273
•28 March 2013
Supreme Court
New South Wales
Medium Neutral Citation: JP v CP [2013] NSWSC 273 Hearing dates: In chambers Decision date: 28 March 2013 Jurisdiction: Equity Division - Protective List Before: White J Decision: Plaintiff's solicitor to advise Associate as to how the plaintiff wishes to proceed.
Catchwords: GUARDIANSHIP - application for appointment of financial manager - application for declaration that person incapable of managing own affairs pursuant to s 41 of the NSW Trustee and Guardian Act 2009 - whether to make order under s 41 until person subject of the order reaches majority - appointment of trustee of settlement for benefit of minor under s 16 of the Infants' Custody and Settlements Act 1899 - whether to restrict trustee's powers of investment Legislation Cited: NSW Trustee and Guardian Act 2009
Infants' Custody and Settlements Act 1899Cases Cited: Re Liang (by her tutor Yuen) [2012] NSWSC 365 Category: Principal judgment Parties: JP (Plaintiff)
CP (Defendant)Representation: Counsel:
Solicitors:
Maurice Blackburn Solicitors (Plaintiff)
File Number(s): 2013/46072
Judgment
HIS HONOUR: The plaintiff seeks a declaration that the infant defendant is a person incapable of managing his own affairs until 18 years of age and an order that his estate be subject to management under the NSW Trustee and Guardian Act 2009. The defendant is less than five years old. He was born with brain damage. On 12 December 2012, Hislop J approved a settlement by which judgment was given for the defendant against the Sydney South West Area Health Service for a sum of $7 million. The evidence does not disclose whether, when he is older, the defendant would be capable of managing his estate.
The orders are sought pursuant to s 41 of the NSW Trustee and Guardian Act. I accept that the defendant is a person incapable of managing his affairs. However, I am unable to say whether he will become capable of managing his affairs once he is 18 years of age, or whether he may be capable of managing his affairs, subject only to the legal disabilities of infancy, prior to attaining that age. The legal disabilities of infancy are not absolute. A minor may be capable of managing his or her affairs within the meaning of s 41 of the NSW Trustee and Guardian Act.
I am not prepared to make the declaration sought in the summons. Section 41 of the NSW Trustee and Guardian Act provides only for the making of a declaration that the person is incapable of managing his or her affairs and an order that the estate be subject to management under the Act, and for the appointment of a suitable person as manager of the estate. It would not be a proper exercise of jurisdiction under s 41 to make a declaration in the form sought in the summons. If a declaration and orders are made under s 41, but the defendant becomes capable of managing his affairs, then an application can be made under s 86 for the declaration and orders to be revoked.
If a declaration and order is made under s 41 and Perpetual Trustee Company Limited is appointed as the defendant's financial manager, I would make a further order requiring Perpetual Trustee Company Limited to advise the defendant prior to his turning 18 of his right to apply to seek a revocation of the declaration and orders. I would also require the manager to provide a report to the Court prior to the defendant's turning 18, including a medical assessment as to the defendant's then capacity.
If the order for the appointment of Perpetual Trustee Company Limited as financial manager is made, as sought, its management of the defendant's estate would be subject to the supervision of the NSW Trustee and Guardian and fees would be payable to the NSW Trustee and Guardian for such supervision.
An alternative course is for the Court to make an order pursuant to s 16 of the Infants' Custody and Settlements Act 1899 for the settlement of the judgment sum for the benefit of the defendant and the appointment of Perpetual Trustee Company Limited as trustee of the settlement. It would be necessary to fix the terms of the settlement by the court order. In Re Liang (by her tutor Yuen) [2012] NSWSC 365, Davies J conferred only limited powers of investment on the trustees. But there the trustees were not a professional trustee company. Subject to any submissions that might be made for the plaintiff if an order were sought under s 16, I would not see any reason to limit the trustee's power of investment. If an order were made under s 16, I would be minded to order that the trustee seek directions from the Court prior to the defendant's turning 18 as to whether a financial management order should then be made and then provide the Court with a medical assessment.
If a trust were established pursuant to an order made under s 16 of the Infants' Custody and Settlements Act, the administration of the trust would not be subject to the supervision of the NSW Trustee and Guardian.
The plaintiff's solicitor should advise my Associate as to how the plaintiff wishes to proceed, that is, whether by way of declaration and order under s 41 of the NSW Trustee and Guardian Act, noting that I would not make a declaration in the form sought in the summons, but would make orders referred to at para [4] above, or, alternatively, as to whether she seeks an order for the settlement of the sum of damages on trust pursuant to s 16 of the Infants' Custody and Settlements Act. In the latter event, the plaintiff's solicitor should provide any submissions the plaintiff may wish to make in relation to the powers of investment or any other matter as to the terms of the settlement. If an order is sought under s 16, on the present materials, I would order that the trust continue until the defendant turns 18, but I would require a report to be made to the court as set out at para [6] above.
Decision last updated: 28 March 2013
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