Re D
[2011] NSWSC 1140
•05 September 2011
Supreme Court
New South Wales
Medium Neutral Citation: Re D [2011] NSWSC 1140 Hearing dates: Monday, 5 September 2011 Decision date: 05 September 2011 Jurisdiction: Equity Division - Protective List Before: White J Decision: Make orders 1 to 6 of the notice of motion filed on 25 July 2011.
Catchwords: PROTECTED ESTATES - application for removal of manager of estate - whether in best interests of protected person that management of estate be transferred to NSW Trustee - where manager of estate received gifts from protected person - manager of estate must proceed on basis that unless Court decides otherwise protected person is not capable of managing his affairs and is not capable of giving away his own money - manager of estate has obligation to act in interests of protected persons and cannot without the approval of the Court accept gifts from the protected person Legislation Cited: Protected Estates Act 1983 Category: Interlocutory applications Parties: NSW Trustee & Guardian (Applicant)
D (2nd Respondent)
J (3rd Respondent)Representation: C Phang (Applicant)
D in person (2nd Respondent)
J in person (3rd Respondent)
NSW Trustee & Guardian (Applicant)
n/a (Respondents)
File Number(s): 2011/258912
Judgment
HIS HONOUR : On 29 August 2006 the Court declared that D was a person incapable of managing his affairs. The Court ordered that D's estate be subject to management under the provisions of the Protected Estates Act 1983. His father J was appointed manager of the estate.
On 3 May 2007 the Office of the Protective Commissioner, now the NSW Trustee, received on D's behalf $1,324,735.32, being the proceeds of a damages award. Those moneys have been the subject of management by J on D's behalf, subject to the direction of the NSW Trustee.
On 2 September 2009 $1.1 million was released by the NSW Trustee for lodgment with Questor Financial Services Pty Limited. A further $34,000 approximately was paid to that company in May 2010. It undertook (subject to some qualifications) that the capital would not be withdrawn without prior written consent of the NSW Trustee.
The NSW Trustee says that it agreed to the release of some $25,000 in September and November 2008 for the purchase of a car and a caravan.
I am told by J and D that a car was purchased.
The amount of capital held by Questor has been reduced. It is now in the order of $945,000. That may be partly as a result of approvals given by the NSW Trustee to withdrawals of capital. It may also be on account of capital being withdrawn to pay expenses of the administration and expenses of D. Such withdrawals are excluded from the undertaking.
According to the NSW Trustee, between January 2010 and January 2011 deposits were made to an account with Westpac for D totalling $97,500, all of which has been withdrawn.
The evidence before me is that between November 2008 and October 2010 D was in prison. During that time at least $78,000 was paid to J from D's account. I was told that about $50,000 of this money was paid to J and to D's mother by way of gifts from time to time.
It appears that regular management of the moneys held for D was carried out by Bridges Advisory Services through a financial planner, one Nerida Hicks. Last week she advised the NSW Trustee that she did not wish to persevere with management of the client's funds. She advised that a request had been made to withdraw all of the funds held with Bridges Advisory Services.
That request would not be acted on as to do so would be in breach of an undertaking provided to NSW Trustee. In any event, the supervision of D's estate is subject to the direction of the NSW Trustee. Its approval is required for major management decisions.
By notice of motion filed on 25 July 2011 the NSW Trustee seeks orders for the removal of J as manager of D's estate and that management of the estate be committed to the NSW Trustee or some other appropriate person. No other appropriate person has been identified.
D and J appeared on the application today.
D's position is that he proposes to seek an order to discharge the order made in 2006.
No application has yet been made by D for orders that he is now capable of managing his affairs, and discharging the orders for the management of his estate by others.
I must proceed on the basis that unless and until an order is made discharging the order made in August 2006, D remains presently incapable of managing his affairs.
D wants the management of his estate to remain with his father until his application that he be able to manage his own affairs is determined. I take it that he would want his father to remain as manager if his foreshadowed application was unsuccessful.
The question is whether it is in the interests of D that management of his estate be transferred to the NSW Trustee. Such an order would not preclude D from applying to have the existing management orders discharged.
The NSW Trustee says that J should be removed as manager for a number of reasons. First, according to the Office of the NSW Trustee, J has not filed all of the accounts he is required to file and the accounts that have been filed are not adequate. The NSW Trustee accepts that J has filed accounts for the period 1 July it 2009 to 30 May 2010. It says earlier accounts were not filed. It says that it has not been able to pass the accounts that have been filed because supporting documents were not provided. No particulars were provided as to what documents are missing. J says that he has provided to the Office of the NSW Trustee all of the accounts that he understands are required.
On the material provided to me it is not possible to determine who is right and who is wrong about that matter. I would not make the orders sought on the basis of the non-provision of accounts. However, there is a more troubling aspect of the application.
J admits that he and D's mother have received gifts from D's estate in the order of $50,000. He says that these were gifts freely and voluntarily given by D, and D confirms that this is so. D says, in effect, that his parents provide for him and that he wishes to provide some assistance to them from his own money.
However, J must proceed on the basis that unless the Court decides otherwise, D is not capable of managing his affairs and is not capable of giving away his own money.
A financial manager's obligation is to act in the interests of the protected person and, without the approval of the Court, a financial manager cannot accept gifts from the protected person.
D is presently 29 or 30 years old. The withdrawals from the account over the last nine months or a year are such as to raise concerns as to whether the award of damages received in 2007 may be being whittled away, so that in years to come there will not be the money that is needed for D's support. The request to Bridges Advisory Services for the transfer of funds from it raises concerns as to the possible dissipation of the estate.
I think that the paramount consideration is to secure the estate, pending the hearing and determination of D's foreshadowed application that the financial management order be discharged. I think it is in D's interests that the financial management of his estate be vested in the NSW Trustee until that application is determined. I have regard to the fact that the financial planner, Ms Hicks, is no longer willing to provide her services in assisting in that financial management.
This will not prevent D and his father from addressing some of the important decisions that have to be made in relation to the estate. One of those is the purchase of a property for D and his family to live on. There will be nothing to prevent D and his family from pursuing that course and submitting any proposals to the Office of the NSW Trustee. Its approval would in any event be required.
For these reasons I propose to make the orders sought by the NSW Trustee. J will be required to do all that is needed to transfer the estate to the NSW Trustee and to submit the accounts that as financial manager he is required to provide.
For these reasons I make orders 1 to 6 of the notice of motion filed on 25 July 2011. So that it is clear, the making of those orders does not prevent D from bringing the application he has foreshadowed seeking orders for the discharge of the order made in 2006. In the meantime the estate is to be managed by the Office of the NSW Trustee.
I note that pending further consultation between the Office of NSW Trustee and D the moneys currently being paid to him as income will continue.
Decision last updated: 23 September 2011
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