Mao v AMP Superannuation Ltd

[2018] NSWCA 72

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Mao v AMP Superannuation Ltd [2018] NSWCA 72

Hearing dates:

10 April 2018

Date of orders:

10 April 2018

Decision date:

11 April 2018

Before:

Basten JA; Leeming JA

Decision:

(1)   Refuse the application of the applicant for an adjournment of the proceedings.

 

(2)   Refuse the applicant’s application for a stay of the proceedings.

 (3)   Dismiss the application for leave to appeal from the judgment of Ward CJ in Eq of 26 July 2017 as incompetent.

Catchwords:

APPEAL – application for leave – applicant incapable of managing her affairs – manager appointed to manage rights and interests pertaining to proceedings – application not brought by manager or tutor – whether application incompetent – whether requirement to bring proceedings by tutor should be waived – whether arguable error by trial judge

  APPEAL – applicant incapable of managing her affairs – order appointing manager to manage rights and interests pertaining to proceedings – whether order interlocutory or final – whether leave required

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 14
Constitution, s 51(xxxi)
Judiciary Act 1903 (Cth), s 78B
NSW Trustee and Guardian Act 2009 (NSW), ss 38, 39, 41, 71
Uniform Civil Procedure Rules 2005 (NSW), rr 7.14; 7.15, 7.18

Cases Cited:

Coco v The Queen (1994) 179 CLR 427; [1994] HCA 15
Mao v AMP Superannuation Ltd [2015] NSWCA 252
Mao v AMP Superannuation Ltd; Mao v BT Funds Management Ltd [2014] NSWSC 1794
Re DEF and the Protected Estates Act 1983 [2005] NSWSC 534; 192 FLR 92
Re GHI (a protected person) [2005] NSWSC 581; [221 ALR 589

Category:

Principal judgment

Parties:

Youhua Mao (Applicant)
AMP Superannuation Ltd (First Respondent)
BT Funds Management Ltd (Second Respondent)
AMP Life Ltd (Third Respondent)
AIA Australia Ltd (Fourth Respondent)
NSW Trustee and Guardian (Fifth Respondent)

Representation:

Counsel:
Applicant in person
Mr J G Duncan (First and Third Respondents)
Mr D F Villa (Second and Fourth Respondents)
Ms S Kaur-Bains/Mr A Smorchevsky (Amici Curiae)

  Solicitors:
Applicant self-represented
Turks Legal (First to Fourth Respondents)
NSW Trustee (Fifth Respondent)

File Number(s):

2017/230266

 Decision under appeal 

Court or tribunal:

Supreme Court

Jurisdiction:

Equity Division

Citation:

[2017] NSWSC 987

Date of Decision:

26 July 2017

Before:

Ward CJ in Eq

File Number(s):

2013/232241

Judgment

1. JUDGMENT of THE COURT delivered by BASTEN JA: Some four years ago, Ms Mao, originally with legal representation, commenced proceedings in the Equity Division seeking to enforce entitlements she claimed to have in superannuation funds under the control of the respondents. Her solicitors ceased to act on 15 April 2014, in circumstances where Ms Mao’s mental health had deteriorated to an extent that her solicitors were unable to obtain meaningful instructions.

2. If it were established to the satisfaction of the Court that the applicant was incapable of managing the litigation, then the litigation would be stayed until such time as a tutor was appointed or, if no tutor were available, an order was made appointing a manager under the NSWTrustee and Guardian Act 2009 (NSW).

3. On 5 November 2014 Hallen J heard an application by AMP Superannuation Ltd for the appointment of a tutor. On 18 December 2014 Hallen J made orders in the following terms:[1]

(1)   Being satisfied that the plaintiff is a person under a legal incapacity, orders that a tutor be appointed for the plaintiff.

(2)   Orders that the defendants in the AMP proceedings continue to make attempts to nominate a tutor who consents to being appointed and, failing that nomination, consideration will be given to whether the court should make a declaration under the NSW Trustee and Guardian Act 2009 (NSW) that the plaintiff is incapable of managing her affairs and order that the part of her estate, constituted by her actual contingent assets or liabilities in, or arising out of, these proceedings, be subject to management under that Act.

1. Mao v AMP Superannuation Ltd; Mao v BT Funds Management Ltd [2014] NSWSC 1794.

4. On 27 August 2015 this Court set aside those orders on the basis that there was no power to make an order appointing a tutor in circumstances where no person had been identified who would consent to act as a tutor. [2]

   2. Mao v AMP Superannuation Ltd [2015] NSWCA 252 (“Mao (2015)”).

5. The matter went back to the Equity Division where, on 26 July 2017 Ward CJ in Eq made the following order:[3]

(2) Of the Court’s own motion, pursuant to s 41(2) of the NSW Trustee and Guardian Act 2009 (NSW) appoint the NSW Trustee as manager of so much of the estate of the plaintiff as pertains to the plaintiff’s right, title and interest in proceedings 2013/232241 and in proceedings 2013/244238.

3. Mao v AMP Superannuation Ltd [2017] NSWSC 987.

6. The two proceedings were those brought respectively against AMP Superannuation Ltd and BT Funds Management Ltd (and in each case a related entity), with respect to their superannuation schemes from which the applicant claims an entitlement to benefits.

7. The applicant resists (and resents) the finding that she is not capable of managing that aspect of her affairs involving the carrying on of the proceedings. On 5 October 2017 she filed a summons seeking leave to appeal from the judgment and orders of Ward CJ in Eq. The NSW Trustee is named as the fifth respondent on the summons, but has taken no active role in the proceedings. However, it has consented to be tutor for the applicant in the proceedings in the Equity Division.

Is the present application incompetent?

8. There are two initial procedural issues to be addressed. The first is that, while the order made in the Equity Division remains on foot, the applicant has no power to deal with her estate to the extent that it is subject to management under the Act. [4] There is a qualification in that the manager may by instrument in writing authorise the applicant to deal with so much of the estate as the manager considers appropriate and specifies in the instrument. [5] There is no evidence of any such instrument and Mr McCarthy, legal officer for the NSW Trustee appeared, but took a neutral position with respect to the application for leave. He did not seek to take over the proceeding in this Court.

   4. Trustee and Guardian Act, s 71(1).

   5. Trustee and Guardian Act, s 71(2).

9. That circumstance raises a question as to whether the present application for leave to appeal “pertains to” the applicant’s right, title and interest in the underlying proceedings. However, even if a narrow view were formed as to the terms of the order (which we do not favour) it remains a fact that the Chief Judge has made a finding of incapacity which must be understood to extend to the proceedings in this Court. Accordingly, absent the appointment of a tutor, who, in turn, may not commence or carry on proceedings except by a solicitor, unless the court otherwise orders,[6] the applicant is not entitled to commence proceedings in this court.

   6. Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”), r 7.14.

10. UCPR r 7.15(3) provides that, where a person’s estate is under the management of the NSW Trustee, “the tutor of that person is to be the person who has the management of the person’s estate”. However, subr (3) does not apply if the person concerned declines to act as tutor: r 17.15(4). Understandably, a person cannot be appointed as tutor unless they consent.

11. This dilemma arose in the course of the first appeal to this Court. [7] As the Court said:[8]

“Division 4 of Pt 7 of the UCPR proceeds on the basis that, if, as a matter of fact, a person is under legal incapacity, that person may not commence or carry on proceedings except by a tutor. There is considerable justification for such a scheme. A person under legal incapacity should not be permitted to commence or carry on proceedings to the detriment of that person unless represented by another person who is able to make reasoned and sensible forensic decisions on behalf of the first person in relation to the proceedings.”

7. Mao v AMP Superannuation Ltd [2015] NSWCA 252.

8. Mao (2015) at [48].

12. One might add that the scheme also provides a degree of protection for other litigants and the court from expense and expenditure of time in dealing with a litigant who is not capable of prosecuting proceedings in a rational manner. Indeed, the scheme is primarily protective of the interests of the person under incapacity, who is not capable of pursuing his or her own interests effectively. In the earlier case, the Court felt able to waive the requirement for a tutor on the basis that the application for appointment of a tutor had been brought in the Equity Division by AMP Superannuation, which had failed to obtain evidence of a person willing to act as tutor, in accordance with r 7.18(5). In those circumstances, the Court considered it was “the appropriate, and pragmatic, course” to dispense with compliance with r 7.14(1), a power conferred under s 14 of the Civil Procedure Act 2005 (NSW). [9]

    9. Mao (2015) at [59].

13. There were two circumstances which warranted the exercise of such a power in that case which are not present in this case. The first was that, to the extent that AMP Superannuation required protection, it might be said that it was their own error which had led to an arguably inappropriate order being made. Secondly, the Court itself had identified an apparent difficulty with the order which had been made in the Equity Division, which provided a reasonable basis upon which it should be set aside.

14. The Court further felt troubled by the possibility that r 7.14 could prevent a person seeking the protection of the court in circumstances where, for example, an apprehended violence order might be sought or a family provision order sought under the Succession Act 2006 (NSW). Those cases, however, are very different from an application for leave to appeal from a considered judgment in the Equity Division, where a responsible authority has been appointed manager of the applicant’s estate, with power to commence these very proceedings, albeit that the intention is to have the appointment set aside. (There also appears to be an implicit assumption underlying the examples given that the proposed claims would have some arguable merit and could effectively be pursued by the person suffering from incapacity.)

15. It is, nevertheless, appropriate for the purpose of determining whether to make an order waiving the requirements of r 7.14 to consider whether the proposed appeal has merit and then to consider whether, if so satisfied, “it is appropriate” to waive the requirement “in the circumstances of the case.”[10]

    10. Civil Procedure Act, s 14.

Notices of constitutional matter

16. The second preliminary issue to note is the service by the applicant of several notices of constitutional matters on the Attorneys General for the various states and territories, the latest of which is dated 9 April 2018 (that is, the day before this hearing). Clearly, if reasonable notice were required to be given of any particular matter pursuant to s 78B of the Judiciary Act 1903 (Cth), it has not been given and the hearing cannot proceed.

17. However, the obligation under s 78B is not engaged. The issues raised in the last notice were raised in similar terms in the earlier notices and before the primary judge, who gave careful and detailed consideration to them, before determining that none raised an arguable constitutional issue requiring the issue of a notice under s 78B. That determination was correct.

18. The applicant’s position appeared to be that, because her claims involved superannuation schemes governed by Commonwealth statutes and regulated by Commonwealth authorities, they raised issues involving the interpretation of the Constitution. More aptly she said that the laws by which employees’ contributions were levied breached s 51(xxxi) being an acquisition of property (part of her salary) otherwise than on just terms. Precisely how this was to be put, given the state of the law with respect to this head of power, and its relevance to her case against the respondents, were matters which were not explained, nor self-evident.

19. Although reference to the judgment of the primary judge has been included in the new notice, there is nothing resembling a relevant and tenable constitutional issue which need detain this Court.

20. Almost in passing, and without notice, the applicant sought both an adjournment of these proceedings and a stay of the proceedings in the Equity Division, in part to allow her to join the regulators and to remove these proceedings to the High Court. There was no warrant to take either step on these bases.

Requirement for leave

21. On 12 December 2017 a judge of the Court directed the Registrar to seek the appointment of an amicus curiae to assist the court in relation to the application. Two members of the bar, Ms Kaur-Bains and Mr Smorchevsky, undertook to play that role and have provided carefully reasoned and comprehensive written submissions identifying possible issues which might be understood to arise from the judgment of the primary judge and warrant further consideration by this Court.

22. First, the amici raised a procedural question as to whether the order appealed from was final or interlocutory; if final, there was no requirement for leave to appeal. Reference was made to a decision of Campbell J in Re DEF and the Protected Estates Act 1983 [11] where Campbell J held that “an order appointing a manager of a protected person’s estate is a final order, and is not appropriately made pursuant to a motion in proceedings”. This statement was not made in relation to the scope and operation of s 101(2)(e) of the Supreme Court Act 1970 (NSW), requiring leave to appeal from interlocutory judgments made in a Division.

    11. [2005] NSWSC 534; 192 FLR 92 at [16].

23. Nor is it necessary for present purposes to describe the different structure of, and powers under, the current Trustee and Guardian Act, as compared with the Protected Estates Act. Notably, the earlier Act did not provide for limited management orders of the kind made in the present case, being restricted to particular proceedings.

24. There was no suggestion that the Court could not make the order in the course of the substantive proceedings, nor that the judge could not vary the order if it were later shown to be inappropriate in some respect. The order would not operate beyond the term of the proceedings and the disposal of the proceeds of any judgment or settlement in the proceedings. The order was interlocutory.

Correct legal test – s 41

25. The second matter raised was whether the primary judge applied the correct test pursuant to s 41(1) of the Trustee and Guardian Act. In substance the alleged error was in making a declaration of incapacity only in respect of part of a person’s estate.

26. Section 41(1) is in the following terms:

41   Orders by Supreme Court for management of affairs

(1)   If the Supreme Court is satisfied that a person is incapable of managing his or her affairs, the Court may:

(a)   declare that the person is incapable of managing his or her affairs and order that the estate of the person be subject to management under this Act, and

(b)   by order appoint a suitable person as manager of the estate of the person or commit the management of the estate of the person to the NSW Trustee.

(2)   The Supreme Court may make an order on its own motion or on the application of any person having a sufficient interest in the matter.

(3)   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.

(4) Subsection (3) also applies to an application arising out of the operation of section 37(2) of the Powers of Attorney Act 2003.

27. The amici accepted that, pursuant to s 40, a management order could be made in relation to “the whole or part of the estate of a person”. Further, the term “estate” was defined in s 38 to mean “the property and affairs of a person and, if only part of the estate of a person is under management … only that part of the property and affairs of the person”. Nevertheless, it was argued that there was no such alternative basis for judging incapacity.

28. The semantic assumption was correct: Ch 4 expressly envisages a limited management order defined by reference to part only of the person’s estate. Further, in respect of such an order, “estate” means only that part of “the property and affairs” of the person. However, the most likely circumstance in which a court would make a limited management order would be where it was satisfied that management was required only with respect to part of the person’s affairs, because the incapacity was limited. Furthermore, the proposition that an order could only be made where the court was satisfied that the person was entirely incapable of managing his or her affairs in any respect would make a mockery of the power to make a limited management order. It would also prevent proceedings being brought on a limited basis where, as is commonly the case, a person may have capacity to manage simple or straightforward financial matters, but not complex matters.

29. The amici also referred the Court to Re GHI (a protected person) [12] in which Campbell J discussed the meaning of the phrase “capable of managing his or her own affairs”, as it appeared in the Protected Estates Act and in the Mental Health Act 1958 (NSW). The judge noted that the word “affairs” is one which is “capable of a variety of meanings, and can be quite broad”, further stating that in the context of the Protected Estates Act, “the word takes some of its colour from the consequence which might flow from a person being incapable of managing his or her affairs, namely that his or her estate becomes subject to management under this Act.” [13] This approach should be accepted; however, it does not support the reading proposed by the amici. Rather, it supports the approach adopted by the primary judge of considering that aspect of a person’s “affairs” relevant to the proposed order.

    12. [2005] NSWSC 581; 221 ALR 589.

    13.    Re GHI at [13] (emphasis in original).

30. It is clear that the applicant sees the appointment of the NSW Trustee to manage her affairs in relation to the proceedings and, as tutor, to conduct those proceedings, as a gross infringement of her personal integrity and an affront to her dignity. The amici sought a construction of s 41 of the Trustee and Guardian Act, based on the well-known principle of statutory interpretation expressed in Coco v The Queen,[14] that “an intention to interfere with fundamental rights … must be clearly manifested by unmistakable and unambiguous language.” No doubt the appointment of a manager of a person’s estate does intrude on the person’s freedom of decision and action with respect to his or her affairs. However, it is the established fact of incapacity which warrants such an intrusion, the intrusion being necessary to protect the welfare and interests of the person concerned. This is not a case, as was Coco, in which an intrusion on individual rights is sought to be justified by reference to the public interest; rather, the intrusion is undertaken in the interests of the very individual subjected to the order, with the intention of allowing someone else to do, on behalf of the incapable person, that which he or she could not adequately do for himself or herself.

    14. (1994) 179 CLR 427 at 437 (Mason CJ, Brennan, Gaudron and McHugh JJ); [1994] HCA 15.

27. There is no basis for considering that the primary judge approached the task on an erroneous basis.

Relevant considerations

32. Thirdly, the amici argued that the primary judge failed to take “relevant considerations” into account, referring to the duty imposed under s 39 of the Trustee and Guardian Act to observe certain “principles”, namely (a) that “the welfare and interests of [protected persons or patients] should be given paramount consideration” and (b) that “the freedom of decision and freedom of action of such persons should be restricted as little as possible”.

33. First, there is no basis for thinking that the management order was other than properly made. It is far from clear that the principle stated in s 39(a) applies to a court which is considering whether to make a management order pursuant to s 41(1). If it did so apply, it is clear that the principles of having regard to the welfare and interests of a person potentially the subject of an order, and the person’s freedom of decision and action, were considered by the primary judge in making a limited order. It could not possibly be argued that the judge disregarded any of the principles set out in s 39, including those in (a) and (b).

Conclusions

34. There were several incidental matters raised in the course of the applicant’s oral submissions which need not be addressed because they did not affect the outcome of the application for leave to appeal. For example, one basis upon which the applicant sought to have the proceedings adjourned, and a stay ordered in respect of the Equity proceedings, was her professed intention to move to Victoria and take the proceedings with her. Any such transfer application can, if properly pursued, be dealt with in the Equity Division.

35. The applicant also complained about her parlous financial state and the absence of legal aid. (It appears that she had in fact received an offer of legal aid from the Commonwealth Attorney General, but had deemed that the rates proposed were not sufficient to allow her to obtain competent representation.)

36. While there may be circumstances in which the court would at least stay its hand before dismissing proceedings, in order to allow a party to obtain representation, this is not such a case. AMP Superannuation Ltd filed an affidavit outlining certain events which had occurred since delivery of the judgment sought to be challenged. In particular, the NSW Trustee has retained solicitors to act for it, and has given consent to its appointment as tutor for the applicant in the Equity proceedings.

37. There were no other potential bases upon which the orders made by the primary judge could be challenged. As the matters discussed above do not raise an arguable case of error, there is no warrant to waive the requirement that the proceedings be commenced by a tutor. The application for leave to appeal was dismissed as incompetent.

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Endnotes

Decision last updated: 11 April 2018