Re KT and JC, Protected Persons

[2025] NSWSC 306

Supreme Court

New South Wales

Medium Neutral Citation:

Re KT and JC, Protected Persons [2025] NSWSC 306

Hearing dates:

23 December 2024; 5 February and 12 March 2025, with written submissions

Date of orders:

4 April 2025

Decision date:

04 April 2025

Jurisdiction:

Equity

Before:

Lindsay J

Decision:

In each of two cases, orders made for removal and replacement of an institutional manager of a protected estate (a licensed trustee company) occasioned by a change of ownership of the manager; a consequential change in management policy to bring all financial advice services “in house”; and a loss of confidence on the part of the family of each protected person in the institution’s continuation in the office of manager

Catchwords:

PROTECTIVE JURISDICTION – Protected estate management – Application for change of manager – Welfare and interests of protected person the paramount consideration – Loss of confidence in manager upon change of ownership and management policy – Countervailing considerations when change of policy, and resistance to change, affect orderly management – Protected estates financial advice protocol adopted – Costs reserved

Legislation Cited:

Australian Courts Act 1828 (Imp)

Civil and Administrative Tribunal Act 2013 NSW

Civil Procedure Act 2005 NSW

Corporations Act 2001 Cth

Guardianship Act 1987 NSW

Interpretation Act 1987 NSW

Mental Health Act 2007 NSW

NSW Trustee and Guardian Act 2009 NSW

Protected Estates Act 1983 NSW

Supreme Court Act 1970 NSW

Third Charter of Justice 1823 (Imp)

Cases Cited:

Ability One Financial Management Pty Ltd and Anor v JB by his Tutor AB [2014] NSWSC 245; (2014) 11 ASTLR 155

AG v AP-G [2013] NSWSC 272

Application of J & K [2009] NSWSC 1453

Bollinger v Bell; The Estate of the Late Colin Bell [2022] NSWSC 486

C v W (No 2) [2016] NSWSC 945

CAC v Secretary, Department of Family & Community Services (No 2) [2015] NSWSC 344

CC v RAM [2012] NSWSC 1555

CCR v PS (No 2) (1986) 6 NSWLR 622

Clay v Clay (2001) 202 CLR 410

Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417

David by her Tutor the Protective Commissioner v David (1993) 30 NSW LR 417

Dixon v Dixon [1904] 1 Ch 161

Downie v Langham [2017] NSWSC 113

Estate Polykarpou [2016] NSWSC 409

Ex parte Whitbread in the matter of Hinde, a Lunatic (1816) 2 Mer 99; 35 ER 878

Fountain v Alexander (1982) 150 CLR 615

GDR v EKR [2012] NSWSC 1543

Gibbons v Wright (1954) 91 CLR 423

Gillick v West Norfolk AHA [1986] AC 112

Helmore v Smith (2) (1886) 35 Ch D 449

Holt v Protective Commissioner (1993) 31 NSWLR 227

IR v AR [2015] NSWSC 1187

JP v CP [2013] NSWSC 373

M v M [2013] NSWSC 1495

P v NSW Trustee and Guardian [2015] NSWSC 579

P v P (1985) 2 NSWLR 401

PB v BB [2013] NSWSC 1223

Perkes v Landon (1988) 15 NSWLR 408

Protective Commissioner v D (2004) 60 NSWLR 513

Re AAA; Report on a Protected Person’s Attainment of the Age of Majority [2016] NSWSC 805

Re Application of Fowler [2015] NSWSC 466

Re C [2012] NSWSC 1097

Re Eve [1986] 2 SCR 388; (1986) 31 DLR (4th) 1

Re K An Incapable Person in Receipt of Interim Damages Awards [2014] NSWSC 1286

Re L [2000] NSWSC 721

Re LSC v GC [2016] NSWSC 1896

Re TLH, a protected person [2017] NSWSC 737

Re W and L (Parameters of Protected Estate Management Orders) [2014] NSWSC 1106

SAB v SEM [2013] NSWSC 253

SC v Ability One Financial Management Pty Ltd [2024] NSWSC 637

Secretary, Department of Health and Community Services v JWB and SMB (Marion’s Case) (1992) 175 CLR 218

SLJ v RTJ [2017] NSWSC 137

Small v Phillips (No 3) [2020] NSWCA 24

W v H [2014] NSWSC 1696

Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492

Wellesley v Duke of Beaufort (1827) 2 Rus 1; 389 ER 236

YJC v PG [2024] NSWCATAP160

Texts Cited:

Sir Henry Studdy Theobald KC, The Law Relating To Lunacy (Stevens and Sons, London, 1924)

Powell J, The Origins and Development of the Protective Jurisdiction of the Supreme Court of New South Wales (Forbes Society, Sydney, 2004)

David Rolph, Contempt (Federation Press, Sydney, 2023)

Category:

Principal judgment

Parties:

Re KT (Case No 2024/00167676)
Plaintiff: ST, mother of KT
First Defendant: Australian Executor Trustees Ltd ACN 007860794
Second Defendant: KT, a protected person
Observers: On 5 February 2025 and 12 March 2025 (by leave)
Aeran Pty Ltd
TPT Wealth Ltd
Stacks Goudkamp

Re JC (Case No 2024/00184129)
Plaintiff: MC, father of JC
First Defendant: JC, a protected person
Second Defendant: Australian Executor Trustees Ltd ACN 007860794
Observers: On 5 February 2025 and 12 March 2025 (by leave)
Aeran Pty Ltd
TPT Wealth Ltd
Stacks Goudkamp

Representation:

Re KT (Case No 2024/00167676)
Counsel:
Plaintiff: S Chapple SC and D Yazdani
First Defendant: M Pringle
Second Defendant: No separate appearance
NSW Trustee: FFF Salama and M Morgan
Observers: On 5 February 2025 (by leave)
Aeran Pty Ltd: M Evans
TPT Wealth: H Morrison
Stacks Goudkamp: J Morris SC

Solicitors:
Plaintiff: Stacks Goudkamp until 4 February 2025 or thereabouts (direct access counsel thereafter)
First Defendant: Sparke Helmore Lawyers
Second Defendant: No separate appearance
NSW Trustee: L Williams
Observers: On 5 February 2025 and 12 March 2025 (by leave)
Aeran Pty Ltd : Provenance Partners
TPT Wealth: HWL Ebsworth
Stacks Goudkamp: Stacks Goudkamp

Re JC
Counsel:
Plaintiff: R Bianchi
First Defendant: No separate appearance
Second Defendant: M Pringle
NSW Trustee: FFF Salama and M Morgan
Observers: On 5 February 2025 and 12 March 2025 (by leave)
Aeran Pty Ltd: M Evans
TPT Wealth: H Morrison
Stacks Goudkamp: J Morris SC

Solicitors:
Plaintiff: Maurice Blackburn Lawyers
First Defendant: No separate appearance
Second Defendant: Sparke Helmore Lawyers
NSW Trustee: L Williams
Observers: On 5 February 2025 and 12 March 2025 (by leave)
Aeran Pty Ltd: Provenance Partners
TPT Wealth: HWL Ebsworth
Stacks Goudkamp: Stacks Goudkamp

File Number(s):

2024/00167676 (Re KT) and 2024/00184129 (Re JC)

JUDGMENT

INTRODUCTION

Overview

1. These proceedings arise out of a change of ownership of a licensed trustee company (Australian Executor Trustees Ltd, “AET”), the holder of multiple appointments by the Court to the office of a manager of a “protected estate” of a “protected person” (that is, a person found by the Court to be incapable of managing his or her own affairs) within the meaning of section 38 of the NSWTrustee and Guardian Act 2009 NSW.

2. The proceedings specifically concern management of two separate protected estates the principal asset of which, in each case, comprises the proceeds of a substantial award of compensation for personal injuries suffered by the protected person.

3. Before AET’s change of ownership, in the ordinary course of management of such a protected estate it routinely retained a licensed financial adviser (Aeran Pty Ltd, “Aeran”) to provide financial advice services.

4. In those cases Aeran generally had an existing professional relationship with the protected person and members of the protected person’s family (or significant others) arising from involvement in the compensation proceedings in which an award of compensation had been made necessitating a protected estate management regime.

5. By reason of that involvement Aeran also generally had a professional relationship with solicitors who had acted on behalf of the protected person (then represented by a tutor, commonly a member of the family of the protected person) in the compensation proceedings.

6. Routinely, an award of compensation made in the compensation proceedings (whether in the District Court of New South Wales or the Supreme Court of New South Wales) is and at all material times has been accompanied by an order that the compensation funds be paid into court to abide orders of this Court (the Supreme Court) on an application (usually made by the tutor) for a protected estate management regime.

7. Unless content to submit to an order that management of a protected estate be committed to the NSW Trustee, on such an application a plaintiff seeking the appointment of a manager generally nominates a preferred entity to serve as manager and, in support of that nomination, obtains a formal consent to its appointment from the nominated entity. In the ordinary course, affidavit evidence is also provided to the Court providing an explanation of the reasons why the particular entity has been chosen for nomination as a manager (identifying alternative choices passed over) and an outline by the nominee of the terms upon which it proposes to manage the protected estate the subject of the application.

8. Not uncommonly, before AET’s change of ownership, on an application for the appointment of AET as manager of a protected estate comprising the proceeds of an award of compensation made in proceedings in which Aeran had been retained to provide financial advice services, the plaintiff seeking the appointment of AET negotiated terms with AET that included an understanding that, in the ordinary course, AET would retain Aeran to provide financial advice services.

9. Disclosure to the Court of an intention on the part of AET to retain Aeran as a financial adviser may have given rise to an assumption or expectation in Aeran or the families of the protected person (not justified on a correct understanding of the Court’s protective jurisdiction) that the model of management involving retention of an external (Aeran says an “independent”) financial adviser was immutable. That assumption (if not, that expectation) has been tested in these proceedings.

10. After its change of ownership AET resolved to bring all financial advice services of the kind routinely provided by Aeran “in house” and, in implementation of that new policy, to dispense with the services of Aeran as an external financial adviser.

11. When AET’s prospective change of policy became known it caused disquiet on the part of Aeran and others who preferred that Aeran continue to provide financial advice services as it had customarily done before AET’s change of ownership.

12. Controversy, as yet unresolved, ensued. Sensing that Aeran and others were “bad mouthing” it in what it perceived to be a campaign of misinformation, AET unilaterally terminated Aeran’s retainer. Those parties fell into commercial litigation which remains on foot.

13. Several families of protected persons have since termination of Aeran’s retainer foreshadowed applications to the Court for the removal of AET as a manager and for its replacement by another licensed trustee company (TPT Wealth Ltd, “TPT”) in anticipation that TPT will retain Aeran to provide financial advice services.

14. Controversy associated with these developments has engulfed a firm of solicitors (Stacks Goudkamp) which had been retained, or anticipated that it might be retained, by several families contemplating an application of the Court for the removal and replacement of AET as a protected estate manager with a view to an appointment of TPT and a re-engagement with Aeran via TPT.

15. AET has extensive experience with the management of protected estates in NSW. TPT is based in Tasmania. These proceedings are its first experience of the NSW regime for protected estate management.

16. A resolution of these proceedings, and the provision of guidance for those interested in protective estate management in NSW, requires an elaboration of first principles.

17. The steady focus of these proceedings must be, and remain, upon the welfare and interests of each individual protected person whose affairs are under consideration, and what is required for an orderly management regime, prudently managing risk, looking to the present and future, informed but not bound by the past.

The Applications before the Court

18. Before the Court, heard together, are two separate applications for the removal and replacement of a manager (commonly called a “financial manager”) appointed by the Court pursuant to section 41 of the NSW Trustee and Guardian Act 2009 NSW to manage the protected estate of a person found to be incapable of managing his or her own affairs.

19. Section 47 of the Interpretation Act 1987 NSW operates in aid of section 41 in authorising the Court (from time to time and as occasion requires) to remove and replace a manager: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 237G.

20. Section 41 does not use the expression “financial manager” in reference to the appointment of a “protected estate manager” but essentially the same office of manager is described as a “financial manager” in relation to appointments made by the NSW Civil and Administrative Tribunal (NCAT) under the Guardianship Act 1987 NSW, and the term “financial manager” is commonly used to describe both types of appointment.

21. In any event, the appointment of a manager of either description carries with it subjection of a managed person’s estate to management under the NSW Trustee and Guardian Act and through that Act (if not also the Court’s protective jurisdiction), the oversight of the Court.

22. Recognising that these proceedings concern applications for the removal and replacement of a manager appointed by the Court (rather than NCAT) this judgment uses the expression “financial manager” because that is the expression used by the parties in ordinary discourse without reference to different legislative foundations.

The Nature and Scope of the Court’s Jurisdiction

23. The importance of taking notice of the different legislative foundations is that the Court is a superior court of record (with “inherent” jurisdiction as well as statutory jurisdiction) whereas NCAT is a statutory tribunal (established and governed by the Civil and Administrative Tribunal Act 2013 NSW and the jurisdiction conferred on it by reference to other statutes, including the Guardianship Act 1987).

24. The distinction may be important, particularly, in a context similar to the factual matrix of the present proceedings because of the nature and breadth of the Court’s jurisdiction (not shared by NCAT) to punish contempts of court and to address interference with, or obstruction of, the performance of a financial manager’s functions.

25. A protected estate manager (properly so-called) is appointed by the Court and occupies an office similar to that of a receiver and manager appointed by the Court. A financial manager (properly so-called) appointed by NCAT takes office by an order of an administrative tribunal (not a court), but that order engages the provisions of the NSW Trustee and Guardian Act which, in itself, subjects the financial manager to orders of the Court, both under the Act and the Court’s inherent protective jurisdiction.

26. In respect of both a protected estate manager and a financial manager (each properly so-called), the Court has a concern to ensure that vulnerable persons are not affected by interference with, or obstruction of, a manager charged with management of their protected estate.

27. Whether the jurisdiction of the Court to address the Court’s concerns about conduct that interferes with, or obstructs, the manager of a protected estate, or may do so, is characterised as an exercise of “contempt jurisdiction”, “protective jurisdiction” or “inherent jurisdiction” is, perhaps, academic, especially if it is accompanied by statutory powers such as those found in the NSW Trustee and Guardian Act.

28. The Court is not without jurisdiction to prevent interference with, or obstruction of, a “financial manager”, whether appointed by the Court or NCAT.

29. What is often described as the Court’s “inherent” jurisdiction was conferred on the Court at the time of its establishment by the Third Charter of Justice 1823 (Imp), promulgated under the New South Wales Act 1823 (Imp), continued in operation and supplemented by the Australian Courts Act 1828 (Imp).

30. That jurisdiction included what is now commonly described as the Court’s “protective jurisdiction” (or its “parens patriae jurisdiction”) incorporating what was once called the “lunacy jurisdiction” exercised by the Lord Chancellor of England and the “infancy” or “wardship” jurisdiction exercised by the English Court of Chancery. That jurisdiction was described 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 258-260 as a jurisdiction “to do what is for the benefit of” an incapacitated person with limits (or scope) which “have not, and cannot, be defined”.

31. Marion’s Case is a good root of title for an understanding of the Court’s parens patriae jurisdiction, but its depths of learning can usefully be explored in its approval of the judgment of La Forest J of the Supreme Court of Canada in Re Eve [1986] 2 SCR 388 at 407-411; 31 DLR (4th) 1 at 14-17. That judgment draws heavily upon the authoritative text of Sir Henry Studdy Theobald KC, The Law Relating To Lunacy (Stevens and Sons, London, 1924), which is the source of many statements in NSW about the nature, scope, purpose and operation of the Court’s protective jurisdiction, including the proposition that an exercise of the jurisdiction is directed, principally, to administration of an estate without strife in the simplest and least expensive way.

32. Historically, the Court’s “parens patriae jurisdiction” is regarded as derived from an obligation of the Crown, as “father (or parent) of the nation” to take care of those not able to take care of themselves. That formulation of the nature of the jurisdiction was adopted by the High Court by reference to a quotation from the judgment of Lord Eldon in Wellesley v Duke of Beaufort (1827) 2 Rus 1 at 20; 389 ER 236 at 243.

33. More recently, the Court’s “parens patriae jurisdiction” has been recognised as falling within the ambit of what is sometimes described as the “inherent jurisdiction” conferred by section 23 of the Supreme Court Act 1970 NSW: eg, Fountain v Alexander (1982) 150 CLR 615 at 633. Section 23 (headed “Jurisdiction Generally”) provides that “[the] Court shall have all jurisdiction which may be necessary for the administration of justice in New South Wales”.

34. Section 23 was inserted in the Supreme Court Act 1970 as a safeguard against gaps in the Court’s jurisdiction that might be perceived to exist when (in the 1820s) defined by reference to the jurisdiction of scattered English institutions or procedural rules which historically attended those institutions: Re AAA [2016] NSWSC 805 at [22]-[27]; Estate Polykarpou [2016] NSWSC 409 at [185]-[189].

35. Whatever its source, the Court’s protective jurisdiction, if and when duly engaged, is generally limited only by the purpose it serves (namely, protection of the person and property of a person in need of protection) and, whether stated in terms of jurisdiction or discretion, considerations of utility: PB v BB [2013] NSWSC 1223 at [38].

36. Although a determination of these proceedings may be accommodated (without recourse to the Court’s inherent jurisdiction) within a statutory framework focused upon the NSW Trustee and Guardian Act and cognate legislation, the proper construction and operation of the Act is informed by the Court’s inherent jurisdiction. The office of a manager appointed pursuant to section 41 of the Act is analogous to the office of a “committee of the estate” appointed by the Court (known by the modern title of a “manager”) upon an exercise of protective jurisdiction formerly exercised by the Lord Chancellor.

37. There is no dispute in these proceedings that the Court’s inherent jurisdiction is available as and if required to deal with questions that have arisen about management of the protected estates that are the subject of the proceedings.

THE NATURE AND SCOPE OF THE COURT’S PARENS PATRIAE JURISDICTION

38. Although it is commonplace to acknowledge that the limits (or scope) of the Court’s parens patriae jurisdiction (in modern parlance, the protective jurisdiction) have not been, and cannot be, defined, it is equally clear that the jurisdiction must be exercised in accordance with its informing principles; particularly, to do what is necessary for the benefit, and in the interests, of the person whose need for protection has engaged the jurisdiction.

38. In a paper entitled “Children: The Parens Patriae, and Supervisory, Jurisdiction of the Supreme Court of New South Wales” published on 18 November 2017 (accessible on the Court’s website) I presented a non-exhaustive “Summary Statement of Principles” about the nature, scope, purpose and exercise of the jurisdiction.

39. It is not necessary to repeat what was written there, but it may be of assistance to an understanding of the present proceedings to note the following “principles” identified in paragraph [94] of the paper:

“(1)   The jurisdiction exists for the purpose of taking care of those who are not able to take care of themselves: Marion’s Case (1992) 175 CLR 218 at 258; Re Eve [1986] 2 SCR 388 at 425-426; (1986) 31 DLR (4^th) 1 at 28.

…

(6)   The jurisdiction is not a “consent jurisdiction”. Orders of the Court are not made merely because a party, or some other person, seeks it, consents to it or acquiesces in it. The Court is bound to exercise an independent judgement because of the public interest element in the decision to be made and the possibility, if not the fact, that the person in need of protection lacks the mental capacity requisite to informed decision-making: Ability One Financial Management Pty Limited and Anor v JB by his Tutor AB [2014] NSWSC 245 at [35](a).

(7)   Care needs to be taken, in all decision-making affecting a person in need of protection, to focus on the facts of the particular case, preferably with due consultation with the affected person, his or her family and carers who may be well placed to inform the Court of his or her particular circumstances: Ability One Financial Management Pty Limited and Anor v JB by his Tutor AB [2014] NSWSC 245 at [35](d).

(8)   Depending on the nature of the case, the jurisdiction may be exercised cautiously (Re Eve [1986] 2 SCR 388 at 427; (1986) 31 DLR (4^th) 1 at 29), and the fact that jurisdiction exists to make orders upon an exercise of protective jurisdiction does not mean that orders will necessarily be made (Re Eve [1986] 2 SCR 388 at 437; (1986) 31 DLR (4^th) 1 at 36; MS v ES [1983] 3 NSWLR 199 at 203B; RH v CAH [1984] 1 NSWLR 694 at 706G).

(9)   The limits (or scope) of the jurisdiction have not been, and cannot be, defined: Marion’s Case (1992) 175 CLR 218 at 258.

(10)    The categories of case in which the jurisdiction can be exercised are not closed. The jurisdiction is of a very broad nature. It can be invoked in such matters as custody (parental responsibility), protection of property, health problems, religious upbringing and protection against harmful associations: Re Eve [1986] 2 SCR 388 at 426, 427 and 437-438; (1986) 31 DLR (4^th) 1 at 28, 28-29 and 36-37.

(11)    The jurisdiction must be exercised in accordance with its informing principle; namely, to do what is necessary for the benefit, and in the interests, of the person in need of protection: Re Eve [1986] 2 SCR 388 at 414 and 427; (1986) 31 DLR (4^th) 1 at 19

(12)    The jurisdiction is to be exercised for the benefit of that person, not for the benefit, or convenience, of others or the state; the welfare and interests of the person in need of protection are the paramount consideration: Re Eve [1986] 2 SCR 388 at 427, 429-430 and 434; (1986) 31 DLR (4^th) 1 at 29, 31 and 34

(13)    What is done, or not done, upon an exercise of protective jurisdiction is to be measured against what is for the benefit, and in the interests, of the person in need of protection: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238D-F and 241G-242A; GAU v GAV [2016] 1 Qd R 1 at 25[48].

(14)   The protective jurisdiction is parental and protective. It exists for the benefit of the person in need of protection, but it takes a large and liberal view of what that benefit is, and will do on behalf of the person in need of protection not only what may directly benefit him or her, but what, if he or she were fully capable, he or she would as a right minded and honourable person desire to do: H S Theobald, The Law Relating to Lunacy (London, 1924), page 380; Protective Commissioner v D (2004) 60 NSWLR 513 at 540-541.

(15)   The jurisdiction may be exercised, in the interests of a person in need of protection, against prospective as well as present harm: Re Eve [1986] 2 SCR 388 at 426; (1986) 31 DLR (4th) 1 at 28.

(16)   The Court will not risk of the incurring of damage to a person in need of protection which it cannot repair, but it will act rather to prevent damage being done: Re Eve [1986] 388 at 428 and 430; (1986) 31 DLR (4th) 1 at 29-30 and 31.

…

(19)   The Court’s jurisdiction is not limited to supervision of decisions made by a parent, or some other person taking care, of a person in need of protection; the jurisdiction is not confined to what a guardian, or manager, might do vis-a-vis the person in need of protection: Marion’s Case (1992) 175 CLR 218 at 258-259.

…

(21)   Where necessary to avoid frustration of the purpose for which the protective jurisdiction of the Court exists, the principles governing procedural fairness may be qualified: J v Lieschke (1987) 162 CLR 447 at 457.

(22)   Upon an exercise of protective jurisdiction, when endeavouring to ascertain what is in the interests and for the benefit of the person in need of protection, the Court is not bound by rules of evidence: Roberts v Balancio (1987) 8 NSWLR 436; Re Victoria (2002) 29 Fam LR 157; CAC v Secretary, Department of Family and Community Services [2014] NSWSC 1855 at [7]-[8].

(23)   The protective jurisdiction of the Court is not displaced by legislation absent a clear legislative intention that it be so displaced: Johnson v Director-General of Social Welfare (Victoria) (1976) 135 CLR 92 at 97 and 100; Re Eve [1986] 2 SCR 388 at 426; 31 DLR (4th) 1 at 28; X v The Sydney Children’s Hospitals Network (2013) 85 NSWLR 294 at 301 [26]-[27].

…

(25)   The parens patriae jurisdiction is generally reserved for dealing with uncontemplated, or exceptional, situations where it appears necessary for the jurisdiction to be invoked for the protection of those who fall within its ambit: Re Eve [1986] 2 SCR 388 at 411; (1986) 31 DLR (4th) 1 at 17.

(27)   The Court’s jurisdiction may be called in aid specifically to reinforce a statutory appellate procedure (Re B (No. 1) [2011] NSWSC 1075 at [58]-[60]; P v NSW Trustee and Guardian [2015] NSWSC 579 at [116]) or to supplement statutory appointments of financial manager and guardian (IR v AR [2015] NSWSC 1187 at [115]-[118]).

(28)   Upon an exercise of protective jurisdiction, the Court aims to give effect to a prudential regime for management of the affairs of the person in need of protection (managing risk prudentially), without strife, in the simplest and least expensive way, in the interests of that person: Ability One Financial Management Pty Limited and Anor v JB by his Tutor AB [2014] NSWSC 245 at [35](f). The jurisdiction is not encumbered with technicalities: Re Application of Local Health District; Patient Fay [2016] NSWSC 624 at [23].”

41. Two particular manifestations of the purposive character of the Court’s inherent jurisdiction, not limited to the protective jurisdiction (which might have potential for operation in a case such as those presently before the Court) are: first, publication of material relating to, or likely to affect, a protected person (or interference with a bailiff’s or a court-appointed receiver and manager’s performance of official duties) may constitute a contempt of court: David Rolph, Contempt (Federation Press, Sydney, 2023), pages 391-394 and 409-412; and, secondly, the protective jurisdiction of the Court extends, in an appropriate case, to an order that a guardian, or the like, be relieved of personal liability for a breach of fiduciary obligations in management of the affairs of an incapable person.

42. The first of those manifestations (the question of contempt) requires separate consideration later in this judgment. The second can be addressed here under the rubric of “parens patriae” jurisdiction.

43. Taken together they are consistent with the existence in the Court of a distinctive jurisdiction to protect a vulnerable person in service of the purpose for which the jurisdiction exists: endeavouring to take care of a person unable to take care of his or her own affairs.

44. As to the second topic (relief against liability), with the benefit of experience derived from Ability One Financial Management Pty Ltd and Anor v JB by his Tutor AB [2014] NSWSC 245; (2014) 11 ASTLR 155 at [ 65] and [328), in C v W (No 2) [2016] NSWSC 945 at [45]-[47] I recorded a non-exhaustive statement of principles applicable to an application for an order that a breach of fiduciary obligations in management of the affairs of an incapable person be excused:

“[45]   Drawing the threads of discussion together I venture to record (as a non-exhaustive statement of applicable principles) that, upon an exercise of protective jurisdiction involving an application by a guardian, or the like, to be relieved of personal liability for a breach of fiduciary obligations in management of the affairs of an incapable person:

(a)   The purposive character of the jurisdiction must be constantly borne in mind; an exercise of protective jurisdiction is governed by the purpose for which the jurisdiction exists (protection of those not able to take care of themselves): Marion’s case (1992) 175 CLR 218 at 258.

(b)   The welfare and interests of the person in need of protection are the (or, at least, a) a paramount consideration: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 228B-C and 241A-B and F-G; NSW Trustee and Guardian Act, section 39.

(c)   Consideration must be given (as illustrated by Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 420-423) to whether the fiduciary whose conduct is sought to be excused has, generally and as a matter of substance, discharged his or her obligation to take care of the person in need of protection, relative to:

(i)   the terms of any formal instrument of appointment of the fiduciary to any office materially occupied by the fiduciary;

(ii)   the basis upon which the fiduciary, formally or informally, assumed his or her fiduciary role vis-à-vis the person in need of protection;

(iii)   the resources available for performance of the fiduciary’s obligations; and

(iv)   any impediments to due performance of those obligations

(d)   Consideration might be given (as Brown v Smith (1878) 10 Ch D 377 at 386 suggests) to what orders the Court might have made about management of the affairs of the person in need of protection had the fiduciary made a timely application for directions or other orders.

(e)   The jurisdiction to be exercised is parental and protective, existing for the benefit for the person in need of protection, but taking a large and liberal view of what that benefit is, doing on behalf of the person in need for protection not only what may directly benefit him or her but what, if he or she were capable of self-management, he or she would, as a right minded and honourable person, desire to do: Protective Commissioner v D (2004) 60 NSWLR 513 at 522 [55] and 540 [150].

(f)   Whatever is to be done, or not done, must be measured against what is in the interests, and for the benefit, of the person in need of protection: Holt v Protective Commissioner at 31 NSWLR 238D-F and 241G-242A; GAU v GAV (2014) QCA 308 at [48].

(g)   Consideration should be given to what the particular person incapable of self-management would be likely to do (acting with wisdom and prudence) if he or she possessed the capacity to act: Ex parte Whitbread in the matter of Hinde, a lunatic (1816) 2 Mer 99 at 101-103; 35 ER 878 at 879.

(h)   Consideration should also be given to whether any loss, cost or other detriment, to the estate of the incapable person suffered, or likely to be suffered, as a consequence of conduct sought to be excused is of an order that falls within, or goes beyond, a dimension that can reasonably be accounted for on the ground of friendship, relationship, charity or other motives on which ordinary people act: Spong v Spong (1914) 18 CLR 544 at 550; Nock v Austen (1918) 25 CLR 519 at 529-530.

(i)   An assessment of what is appropriate to the particular case requires that an eye be kept on the future, not directed only to the past.

[46]   These factors have a bearing on whether (to adapt the language of section 85 of the Trustee Act) a person “ought fairly” to be relieved, in whole or part, of personal liability for a breach of a fiduciary obligation, a question to which characterisation of the person’s conduct as “honest” and/or “reasonable” may have significance.

[47]   Whether or not the conduct sought to be excused is “honest and reasonable”, important though this may be, is not necessarily decisive upon an exercise of protective jurisdiction because, even if the conduct concerned was not both honest and reasonable, it may, exceptionally, be in the interests, and for the benefit, of the incapable person that it be excused and (as recognised in Marion’s case at 175 CLR 258) the limits and scope of the protective jurisdiction have not been, and cannot be, defined save by reference to the purpose for which it exists.”

45. C v W (No 2) was followed by White J in Downie v Langham [2017] NSWSC 113 at [8]-[12] and applied in Re LSC and GC [2016] NSWSC 1896 at [59]-[63] and SLJ v RTJ [2017] NSWSC 137 at [32] and [34](12).

THE PARTIES TO THESE PROCEEDINGS, PROCESS AND CONTEXT

46. In the proceedings before the Court, the plaintiff in each case (the applicant for a change of financial manager) is a parent of a disabled child (supported by the other parent of the child as a witness) whose protected estate essentially comprises the proceeds of a substantial award of compensation made in common law negligence proceedings for damages suffered as a result of a catastrophic personal injury.

47. KT was born in August 1999 and is presently aged 25 years. She suffered a serious brain injury in September 2005 when, as a pedestrian, she was struck by a motor vehicle. She is the eldest of her parents’ four children. She lives with her parents and two of her siblings in a family home acquired in her name with part of the proceeds of her compensation award. In these proceedings, her mother (ST) can be taken to be the family’s representative without any need for a representative order. That accords with the usual practice of the Court upon an exercise of protective jurisdiction.

48. JC was born in July 2017 and is presently aged seven years. He suffered a permanent brain injury at the time of his birth. He lives with his parents. With the support of his mother, his father (MC) represents the family in these proceedings, again without any representative order having been made or needed.

49. As JC is a minor, his parents can be taken to be his guardians. Although KT has attained the age of majority, her parents, as “significant others” can be taken to have maintained an informal guardianship role in caring for her.

50. In neither case is there an enduring power of attorney (governed by the Power of Attorney Act 2005 NSW), an enduring guardian appointment (governed by the Guardianship Act), or any form of guardianship order (made by NCAT pursuant to the Guardianship Act, or by the Court upon an exercise of its inherent jurisdiction).

51. The focus for attention in these proceedings is upon the management of a protected person’s estate, not upon his or her “person” although, in practice, the boundary between management of the estate and management of the person of a protected person may be blurred. In the interests of a person in need of protection, a financial manager and a guardian (by whatever name known) are commonly called upon to use their best endeavours to co-operate one with the other and in consultation with the vulnerable person so far as may be practicable.

52. In each of the cases before the Court the protected person (KT and JC) has been joined as a defendant but is not separately represented. KT may be taken to have been consulted by her parents and (although, as established by evidence, not capable of managing her own affairs) to support her mother’s application for a change of manager. As a minor (unable, by reason of disability as well as age, to express a personal view about his father’s application), JC has not in any material sense been consulted about the application.

53. In both cases, the plaintiff’s formal contradictor has been the current financial manager, AET. In the KT proceedings the plaintiff named a related corporation of AET as a defendant (instead of AET), erroneously believing it to be the financial manager following a change of ownership of AET effected by a share acquisition.

54. No point has been taken about this. All parties have proceeded on the basis that the true defendant is AET and formal orders can be made in due course to reflect the true position. As a matter of form, AET should be named as representative of the current regime of protected estate management.

55. At the invitation of the Court and without objection by any party, the NSW Trustee has participated in both cases, as the party charged by the NSW Trustee and Guardian Act with the obligation of monitoring private managers of protected estates. The NSW Trustee performs an important public service in its availability for consultations with the Court on questions of general policy relating to management questions and, if and when appropriate, in the provision of independent Reports to the Court.

56. At the direction of the Court AET, as the current financial manager of each protected estate under consideration, and the NSW Trustee have both filed formal reports to the Court bearing upon the current state of the estates and, in the case of the NSW Trustee, reports (of the type described in paragraph 290(m) of Ability One Financial Management Pty Ltd and Anor v JB by his Tutor AB [2014] NSWSC 245) bearing upon the suitability of the plaintiffs’ proposed new manager, TPT.

57. Although not joined as a party to the proceedings before the Court, TPT was granted leave to attend the hearing of the proceedings as an observer and, through the NSW Trustee, to place before the Court evidence and written submissions.

58. The same went for Aeran, the plaintiffs’ preferred financial adviser, proposed (subject to the approval of the NSW Trustee or the Court) to be retained by TPT should it be appointed as a financial manager of one or both of the protected estates the subject of these proceedings.

59. Aeran was for many years, until termination of its retainer on 15 April 2024, routinely retained by AET to provide AET with financial advice in aid of its management of protected estates. The termination of Arean’s retainer followed a change in the ownership of AET that occurred on or about 1 December 2022, with consequences that took a year or more to impact discernibly on the protected estates under AET’s management, perhaps because Aeran was generally retained on an annual basis.

60. Before AET’s change of ownership Aeran had more direct contact with each protected person, family members and significant others than AET, after the change in its ownership, was comfortable with. Under the old regime Aeran had established personal relationships with protected persons, families and significant others. They often dated back to Aeran’s provision of financial advice in aid of the common law personal injury compensation proceedings. Those proceedings often gave rise to a large award of compensation necessitating a protective estate management regime in which a licensed trustee company was likely to be appointed as a financial manager by the Court.

61. Aeran appears to have, or to have had, a symbiotic commercial relationship with more licensed trustee companies than AET. Be that as it may, when retained by AET as an external financial adviser (in formal terms, an adviser to AET as a financial manager) it developed its personal relationships with protected persons, family members and significant others to such an extent that, in some sense or another, it regarded the protected persons, family members and significant others as its “clients”.

46. The decision of AET, under new ownership, to take all financial services relating to managed estates “in-house” disturbed the personal relationships Aeran had developed with what it perceived to be, in real terms, its clientele.

47. That led to an unholy outbreak of competition between AET and Aeran, which drew in disgruntled families, TPT and Stacks Goudkamp (the solicitors on the record for the plaintiff in the KT proceedings at the time of commencement of the proceedings), if not others.

48. The fact that TPT engaged in competition utilising a person who had been an employee of AET under the old regime (KM), coupled with AET’s concern that Aeran’s engagement with protected persons, family members and significant others involved the deployment of information regarded by AET as confidential to it, generated distrust and resentment on a large scale.

49. For its part, AET regarded the protected persons under its management as its “clients”(as they may be for purposes of the Corporations Act 2001 Cth). It also regarded the activities of Aeran, TPT and Stacks Goudkamp in (to use a neutral expression) their “communications” with protected persons, family members and significant others with a connection to protected estates under management by it as wilful interference with its management functions.

50. There is an element of truth in this, but AET’s determination to bring all financial services “in house” and, in effect, to compel all the families and significant others of protected persons to accept its management model (tailored to meet its commercial objectives) is a root cause of these proceedings.

51. AET is open to the criticism that it has privileged its organisational imperatives over the interests of people it regards as its clientele.

52. A small but perhaps a tell-tale indication of this is that AET’s decision-making processes do not appear to have been expressly informed by reference to the statutory principles for protected estate management prescribed by section 39 of the NSW Trustee and Guardian Act (or the equivalent in section 4 of the Guardianship Act, if applicable).

53. When given an opportunity to respond to AET’s concerns in these proceedings, Aeran, TPT and Stacks Goudkamp denied any wrongdoing and claimed that they were merely providing information to protected persons, family members and significant others (with whom Stacks Goudkamp and Aeran had established, historic professional relationships arising from their common involvement in compensation proceedings) about options available to them for a change of financial manager consequent upon AET’s change of ownership and modus operandi.

54. Aeran and Stacks Goudkamp, in particular, claimed a cover of altruism through which AET invited the Court to see commercial interest. There is an element of truth in the proposition that they protest too much.

55. After the hearing of the proceedings on 23 December 2024 I caused the parties to the proceedings (and TPT, Aeran and Stacks Goudkamp then on the record for the plaintiff in KT’s case) to be served on 30 January 2025 with a list of questions (later marked as exhibit C14) arising from my analysis of the evidence adduced, and submissions made, at the hearing.

56. That invitation was taken up by all invitees in extensive written submissions (and the NSW Trustee provided reports to Court as requested), all of which have been taken into account in preparation of this judgment.

57. At extended directions hearings held on 5 February and 12 March 2025 I provided feedback to all participants in the proceedings and invited responses.

58. At the directions hearing on 12 March 2025 I published to all participants a document (MFI C30) entitled “Discussion Draft Protocol” with a view to consideration whether it would be appropriate for the Court to make orders (under section 64 of the NSW Trustee and Guardian Act) establishing a framework for the terms upon which an external financial adviser might, at the invitation of the family or a significant other of a protected person, be retained by a licensed trustee company as a financial manager.

59. The formal notations recorded in the Court’s record of proceedings of 12 March 2025 included notations to the following effect:

“2.   NOTE that each participant [in the proceedings concerning KT and JC] (other than the NSW Trustee) are to deliver to the NSW Trustee no later than 17 March 2025:

(a)   should they be so advised (and whether or not expressly “without admissions of any kind”), a written acknowledgement that they accept that:

(i)   the paramountcy principle applies to all decisions made about management of the affairs of a protected person, including decisions about the provision of financial advice to a financial manager;

(ii)   no person other than the protected person has a vested interest or entitlement in management of the affairs of a protected person;

(iii)   in the due performance of its obligations as manager of a protected person [sic, estate], a financial manager is obliged to consult the best interests of the protected person and to use its best endeavours to consult the person of the protected person.

(b)   should they be so advised to do so, a written commentary on the “Draft Discussion Protocol” dated 12 March 2025 (MFI C30).

3.   NOTE that, following 17 March 2025, Lindsay J proposes to confer with the NSW Trustee concerning whether a protocol such as MFI C30 should be adopted (or not) and, if so, the terms of any such protocol.”

76. The “written acknowledgement” sought from the participants was sought because of a perception on my part that their respective submissions were affected, unwittingly, by a sense of “ownership” or “entitlement” unhelpful to the due management of a protected estate. This was an opportunity for fixed positions to be reset in line with established principles.

77. AET and TPT are both a “licensed trustee company” within the meaning of section 9 of the Corporations Act 2001 Cth and are governed by Chapter 5D of that Act, as well as the Trustee Companies Act 1964 NSW so far as it complements the Corporations Act.

78. The role of a licensed trustee company in the context of this State’s regime for the management of protected estates was, incidentally, but at some length, considered in Ability One Financial Management Pty Ltd and Anor v JB by his Tutor AB [2014] NSWSC 245, the authority of which has not been challenged in these proceedings.

79. Aeran holds an Australian financial services licence (governed by Chapter 7 of the Corporations Act), and specialises in the provision of financial advice services in support of claims for personal injury compensation and in the provision of ongoing services to financial managers of protected estates appointed consequent upon awards of compensation.

80. At the time of appointing a date for the hearing of the proceedings presently before the Court I declined to join TPT and Aeran as parties in the proceedings but gave directions allowing them an opportunity, on the hearing of the proceedings, to have placed before the Court affidavits and written submissions bearing upon questions to be determined in the proceedings.

81. In my opinion it was not, and it is not, in the interests of either protected person to have attention diverted away from a focus upon the individual’s welfare and best interests (upon consideration of whether there should be a change in financial manager) by inter partes commercial litigation between AET and Aeran, including proceedings in the Federal Court of Australia, arising from a falling out between those parties crystallised on 15 April 2024 by AET’s termination of Aeran as a financial adviser.

82. I am formally on notice of those proceedings (and widespread controversy about AET’s decision to bring all financial advice services relating to protected estates under its management “in-house”) because three separate proceedings have been commenced in this Court (and case managed with the proceedings presently before the Court) seeking, in effect, orders pursuant to section 64 of the NSW Trustee and Guardian Act by way of directions in relation to the administration and management of protected estates under AET’s management.

83. Section 64 is in the following terms:

“64 Orders by Supreme Court and NSW Trustee as to management of estates

(1)   The Supreme Court or the NSW Trustee may make such orders as it thinks fit in relation to the administration and management of the estates of managed persons.

(2)   The Supreme Court or the NSW Trustee may also make such orders as it thinks fit in connection with authorising, directing and enforcing the exercise of the functions of managers under this Act.

(3)   The Supreme Court may also make such orders as it thinks fit in connection with supervising the exercise of the functions of managers under this Act.

(4)   An order by the NSW Trustee is subject to the regulations or to any direction by the Supreme Court or to any order of the Civil and Administrative Tribunal (in the case of a person under guardianship).”

84. The associated proceedings are focused, particularly, upon disputation between AET and Aeran about competing communications with “protected persons” following AET’s determination of Aeran’s retainer.

85. By a summons filed on 9 August 2024 (in proceedings numbered 2024/00292772) Aeran sought declarations against AET and the NSW Trustee, together with an order that AET pay its costs of the proceedings.

86. By a summons filed on 15 August 2024 (in proceedings numbered 2024/00302339) the NSW Trustee expressly sought orders under section 64 of the NSW Trustee and Guardian Act, joining AET (and related companies, Equity Trustees Ltd, and Equity Trustees Wealth Services Ltd) and Aeran. Those proceedings have been styled “the umbrella proceedings” at a case management directions hearing because of the possibility that (should there be multiple applications for a change of financial manager in estates managed by AET) they might be dealt with administratively within those proceedings.

87. By a summons filed on 23 August 2024 (in proceedings numbered 2024/00312774) AET sought directions which, in terms, are the most succent of the claims made in the associated proceedings. The summons seeks:

“[1]   Directions from the Court as to the management of the estates of the protected persons of which the plaintiff is currently the manager and in respect of which objection has been raised as to the plaintiff continuing as the manager

[2]   Directions from the Court as to communications with the protected persons of whose estates the plaintiff is currently the manager.”

88. The associated proceedings have been adjourned for directions to follow upon publication of these reasons for judgment.

89. In the meantime, some of the documentation filed in the associated proceedings was included in the Court book prepared for the hearing of the proceedings presently before the Court. The materials in the Court Book provided, at least in summary form, the competing contentions of AET and Aeran, together with documentation provided by TPT.

90. At the hearing of the proceedings presently before the Court no objection was taken to any of the material in the Court Book (whether by way of affidavit, report or submissions) and no application was made for such, if any, leave as may have been required for the cross examination of the deponent’s two affidavits. As a formal precaution against any suggestion that these proceedings are directed to the making of a final determination of the competing claims of AET and Aeran against each other in civil proceedings, I (without objection by any party) made an order under section 136 of the Evidence Act 1995 NSW to the effect that materials reproduced from the associated proceedings were not to be taken as evidence of the facts stated, but to be received as evidence of the nature of the cases sought to be made in those proceedings.

THE CENTRAL QUESTIONS IN DISPUTE

91. The proceedings before the Court are “civil proceedings” within the meaning of section 3(1) of the Civil Procedure Act 2005 NSW, and accordingly governed by the “Guiding Principles” set out in Division 1 of Part 6 of the Act relating to “case management” of proceedings, including section 56, subsections (1) and (2), which read as follows:

“(1)   The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.

(2)   The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule.”

92. The Uniform Civil Procedure Rules 2005 NSW made under the Civil Procedure Act 2005, include in rule 57.2(1) a direction to the effect that “once proceedings (the original proceedings) have been commenced under the NSW Trustee and Guardian Act or the Guardianship Act or the Guardianship Act in relation to any person, any further proceedings under that Act in relation to the same person (whether or not they form part of, or relate to, the original proceedings), are to be commenced by notice of motion filed in the original proceedings.”

93. The utility of this direction is that, in a sense, proceedings relating to management of the affairs of a person incapable of self-management remain available for management orders to be reviewed from time to time at any time during the life of the person incapable of self-management. The direction that fresh applications be made by way of notice of motion filed in the original proceedings, facilitates the administrative task of assembling evidence bearing upon the welfare and interests of the person in need of protection.

94. That the present proceedings were commenced by summons is a procedural irregularity which, as recognised by section 63 of the Civil Procedure Act, does not invalidate the proceedings or any step taken in the proceedings or any document, judgment or order in the proceedings. I am content, as are the parties, to proceed on the basis that the applications made by the plaintiffs by summons are appropriate to the occasion.

95. Procedurally, the fact that the proceedings have been commenced by summons means (as it would if they were commenced by a notice of motion) that, in the absence of an order for pleadings or for the definition of issues by way of pleadings, “the real issues in the proceedings” must be discerned from the form of the originating process, with submissions (including importantly written submissions) made by the parties and affidavits and other evidence adduced in the proceedings.

96. In the present proceedings the parties have joined issue accepting that the principles applicable to a determination of the plaintiffs’ summonses are essentially those summarised:

1. in relation to the identification of a “suitable person” to act as manager of a protected estate, in Ability One Financial Management Pty Ltd and Anor v JB by his Tutor AB [2014] NSWSC 245 at [35]-[36], incorporating the observations made in M v M [2013] NSWSC 1495 at [50].

2. in relation to the removal and replacement of a protected estate manager, in Re LSC and GC [2016] NSWSC 1896, SLJ v RTJ [2017] NSWSC 137 and Re TLH, A Protected Person [2017] NSWSC 737, noting as a recent example of a refusal to remove a manager, SC v Ability One Financial Management Pty Ltd [2024] NSWSC 637.

3. in relation to the review of a management order at the conclusion of personal injury compensation proceedings during which a manager was appointed to manage an interim award of damages (made under the Civil Procedure Act, section 82), in Re K An Incapable Person in Receipt of Interim Damages Awards [2014] NSWSC 1286.

97. I will return to an analysis of those, and other authorities, later in this judgment, having taken them into account upon an assessment of the “real issues in the proceedings”.

98. The plaintiffs in both cases before the Court submit that the change in ownership of AET on or about 1 December 2022, AET’s termination of Aeran’s customary retainer as a financial adviser (on 15 April 2024) and the associated decision of AET to bring all financial advice services “in-house” jointly and severally constitute “an occasion” upon which a protected person whose estate is under management by AET (personally or represented by a significant other) should be allowed an opportunity to consider whether the financial management orders affecting the protected person should be discharged or varied, including a variation by way of a change of manager.

99. I accept this submission, noting that the making of a management order does not of itself preclude the revocation or variation of the order if the interests and welfare of the protected person are thereby served. Equally, the occurrence of an “occasion” for review of a management regime does not necessarily carry with it an order for the discharge or variation of a financial management order.

100. Short of an order for removal and replacement of a financial manager the Court, upon an exercise of protective jurisdiction, might confirm an existing management regime or give directions designed to address particular concerns arising out of “the occasion”. In an appropriate case, a management order might be revoked if it appears that the protected person has regained capacity for self-management or that there is no utility in the continuation of protective orders.

101. In formal terms, the primary submission of the plaintiffs is that the Court should remove AET (and replace AET with TPT as their nominee) as a financial manager for their child because, they contend, the relationship between AET and their respective families has broken down. That breakdown, they contend, provides an “occasion” for a change of manager.

102. That primary submission is closely aligned with an underlying submission (which is probably the core one, because it is central to the allegation of a relationship breakdown) that AET should be removed, and replaced, as a financial manager because it has terminated Aeran’s services as a financial adviser and taken financial advice services “in-house”, contrary to the plaintiffs’ shared preference that they (albeit through a financial manager) receive financial advice from Aeran.

103. A further submission of the plaintiff in the proceedings concerning JC is that a further “occasion” for a change of manager arises from the fact that JC’s compensation proceedings have been finalised and, in the ordinary course, the appointment of AET to manage interim awards of compensation can, and should, be reviewed, JC’s parents having made what they regard as a commercial decision to nominate TPT (or, alternatively, Perpetual Limited, another licensed trustee company) as JC’s financial manager going forward.

104. A motivation of each plaintiff in nominating TPT as a prospective financial manager is that TPT is likely to retain Aeran to provide what they perceive to be “independent financial advice” rather than insisting upon in-house financial advisers.

105. In performance of its role as a contradictor (arising from the obligation of a financial manager to act in the best interests of a protected person), as well as a party with a commercial interest in the outcome of these proceedings, AET counsels against a change of manager because, it submits:

1. each application for its removal and replacement as a manager in these proceedings is principally motivated by commercial considerations (promoted by TPT and Aeran) rather than paramount concern for the interests and welfare of the protected person;

2. it terminated its retainer of Aeran because it became aware that, following the change in ownership of AET (if not before), TPT and Aeran were actively soliciting the families of protected persons whose estates are under AET’s management to apply for TPT to replace AET as manager in anticipation that TPT would retain Aeran for the provision of financial advice services.

1. an active participant in the process of solicitation was KM, an employee of TPT who was, before her employment by TPT, an employee of Perpetual Limited and, before that, an employee of AET.

2. KM’s sales pitch to the families of protected persons was that:

(i)   AET is only concerned with the management of funds and, so, is not empathetic with the concerns of protected persons and their families or significant others who bear the everyday burden of caring for an incapacitated person;

(ii)   if TPT were to be appointed as a financial manager in lieu of AET it would retain Aeran to provide “independent” financial advice services, as Aeran had done during the conduct of the personal injury compensation proceedings that culminated in an award of compensation and before AET’s change in ownership, guaranteeing (as the sales pitch promised) an empathetic engagement with each protected person and their families and significant others not likely to be available under AET’s current ownership;

(iii)   the staff employed by TPT and Aeran would be those known to the protected persons, their families and significant others (and to the solicitors who had represented the interests of the protected persons in and following the completion of the personal injury compensation proceedings).

5. The process of solicitation by TPT and Aeran was attended by misleading or deceptive conduct.

6. Perhaps most significantly, TPT, Aeran and the solicitors acting for ST (Stacks Goudkamp) had entered into an agreement (crystallised in a letter dated 19 April 2024 addressed by MP (as general manager, Wealth Management, of TPT) to KG (the Practice Group Leader/director of Stacks Goudkamp) for TPT to act at the direction of Stacks Goudkamp in the retention of the solicitors’ “preferred independent financial adviser” in respect of the firm’s “personal injury client referrals made to TPT”.

7. Armed with that agreement, or perhaps in anticipation of it, Stacks Goudkamp has solicited 50 or more of its former personal injury clients to make an application for the removal of AET and its replacement by TPT, anticipating that the fees charged by Stacks Goudkamp (presumably charged against the protected estate by acquiescence of the Court) would be of the order of “somewhere between $7,000-$10,000” and the “legal process (which needs to go back through the Courts) will probably take around six months or so.”

106. TPT, Aeran and Stacks Goudkamp dispute any and all allegations that there ever was, or is, between them, or any of them, anything like a “side agreement”, collusion or solicitation in their contact with protected persons, family members or significant others in respect of a protected estate under the management of AET.

107. In these proceedings, it is not necessary, or in anybody’s interest, for the Court to be diverted by allegations and counter allegations about conduct that might attract closer attention in a context other than an exercise of protective jurisdiction.

108. AET’s case against those who it perceives to have been engaged in unfair competition against it is hotly contested but it is not fanciful. Each of TPT, Aeran and Stacks Goudkamp would do well to reflect on that lest, at some future time, conduct of the nature in which they have engaged be characterised as interference with, or obstruction of, a manager’s due performance of the obligations of a financial manager - which, if wilful, might constitute a contempt of court in so far as a manager has been appointed to the office of financial manager by an order of the Court.

109. The conduct attributed to TPT, Aeran and Stacks Goudkamp (and members of their staff) by AET is not far removed from an allegation of contempt of court constituted by interference with a court-appointed receiver and manager’s performance of its functions, or those of a bailiff (to whose office that of a financial manager has sometimes been compared), as an officer of the Court (Rolph, Contempt, supra, pages 391-394) or the publication of material relating to, or likely to affect, a protected person (ibid, pages 409-412; P v P (1985) 2 NSWLR 401 at 403F-G).

110. The judgment of the English Court of Appeal in Helmore v Smith (2) (1886) 35 Ch D 449 might be a case in point.

111. In that case, a former employee of a firm to which the Court had appointed a receiver and manager (to facilitate the ongoing business of the firm) distributed to all customers of the firm a circular described by the Court as a “libel on the business” under management.

112. Cotton LJ (at page 455) said that the contemnor “… was aware of the fact that [the receiver and manager] was to act as manager of the business, and that the issue of the circular was not an act of fair trade competition, but was done for the purpose of producing a false impression. The circular was in fact a libel on the business which this Court had directed [the receiver and manager] to manage, and in my opinion, though the case is a new one, amounted to a contempt of Court”.

113. Bowen LJ (at 456-457) made the following observations:

“… I pass to that about which there can be no question, namely, the intent and meaning of this circular. It can only mean one thing, that the business carried on by the firm was in troubled waters, that its management was in a disturbed condition through the appointment of a receiver, and that there was a good opportunity for some one outside the firm to step in and catch its falling trade. That was, in fact, a libel on the business, a libel tending to prejudice the management of the business under the order of this Court. If there had been any doubt or question as to the meaning of the circular, it might be proper to leave the parties to another remedy, so that it might be submitted to a jury, who might take a different view of the meaning of the document: but there is no question as to that, and it is a clear wrong done to the owners of the business, and calculated to injure the property under the management of this Court. I will not discuss the cases as to what interference with a receiver and manager will justify this Court in interfering, or lay down any rule upon the subject. All I say is, that this was a wrongful act calculated to destroy property under the management of this Court, and that it was done deliberately. Are the hands of the Court so tied that it cannot protect its officers, and must relegate them to the ordinary legal remedy, and the consequent delay of execution? Where it is necessary for the protection of its officers or of the property itself the Court must shew that it has long arm.”

114. These observations found reflection in a similar case decided by Swinfen Eady J in Dixon v Dixon [1904] 1 Ch 161, without any reported citation of Helmore v Smith (2). In that case, the headnote provides a convenient summary:

“Where a partnership is dissolved by the Court, and a receiver and manager is appointed with a view to the sale of the business as a going concern, any deliberate act, whether by a partner, party to the action, or a stranger, calculated to destroy the value of the business, is an interference with the receiver and manager, and may be restrained as such, even though not otherwise illegal.

E.g., tampering with the employees of the business and inducing them to give notice to leave, and to join a rival business, is an act of interference, although no breach of contract is instigated.”

115. The text of the judgment includes (at 163) the following observations:

“The defendant [against whom a plaintiff had moved the Court for an injunction to restrain him from in any way interfering with a receiver’s management of a business under receivership] contends that as the employees gave proper notice to terminate their employment according to his instructions, so that no breach of contract was instigated or committed, there was no interference with the receiver and manager. I am unable to take that view. In my opinion, any deliberate act calculated to destroy property under the management of the Court by means of a receiver and manager is an interference with that receiver and manager, although it may not induce the breaking of any contract. The object of the Court is to prevent any undue interference with the administration of justice, and when any one, whether a partner in a business, a party to the litigation, or a stranger, interferes with an officer of the Court, it is essential for the Court to protect that officer. In my judgement, tampering with employees and inducing them to leave a business that is being carried on under the direction of the Court with the view of taking employment at a business that is being started in opposition is an interference against which the receiver and manager is entitled to protection. …”

116. In Perkes v Landon (1988) 15 NSWLR 408 Kearney J (at 414B) recognised a class of case “involving contempt by interference or obstruction of a receiver” and (at 414E-F) wrote:

“Where the contempt consists in interference with an officer of the court in the exercise of his duty it is his authority which must be confirmed and protected by the court in order to vindicate its own authority and thereby ensure that you had effective administration of justice. Whether this be done by committal, fine or payment of expenses simply depends upon the circumstances of the case.”

117. Theobald, The Law Relating To Lunacy, supra (at page 401) records the following entry about the appointment of an “interim receiver” upon an exercise of protective jurisdiction:

“When the receiver went to the house to carry out [his receivership order directing him to check on the welfare of an elderly lady of weak mind] he was refused admission by a person who had been allowed to occupy the basement. Application was thereupon made to the Lords Justices for an order to commit this person, and after discussion in Court an order for committal was made, thus recognising in the clearest way the validity of the interim order. W., Sterndal, M.R., Younger L.J., 1st February, 1922.”

118. In dealing with the powers and duties of committees (at pages 48-49) Theobald records, without expressly saying the same thing about a committee of the estate, that “[interference] with [a] committee of the person in the performance of his duties is a contempt of Court which will be punished by commitment”. There is no reason to suppose that interference with a committee of the estate in the performance of his, her or its duties is not likewise a contempt of court.

119. In the proceedings presently before the Court there is no application for any party or person to be charged or dealt with for misconduct, breach of duty or a contempt of court. The entire focus of the proceedings is on the question whether, in the interests and for the benefit of two identified protected persons, there should be a change of financial manager to accommodate concerns ultimately arising out of a change in the ownership of AET which brought with it a disturbance of an earlier established regime for the provision of financial advice services.

120. The purpose of surveying the law relating to contempt of court is to draw to the attention of the parties and all interested persons in these proceedings the importance of avoiding interference with the orderly conduct of a protected estate management regime. Consequences may follow.

121. Families known to Stacks Goudkamp and Aeran from previous dealings were discontented with AET’s change of direction. Aeran, TPT and Stacks Goudkamp sought to harvest that discontent by offering families an opportunity to apply for displacement of AET as a financial manager. In doing so they appear to have lost sight of, if they ever saw, unintended consequences for an orderly management of a protected estate management regime attached to their efforts to divert protective business away from AET towards TPT and, incidentally but significantly, Aeran.

122. In these proceedings, it is sufficient to note that each of TPT, Aeran and Stacks Goudkamp has disclaimed any side agreement, collusion or solicitation and, at the invitation of the Court, reaffirmed (as have all participants in the proceedings) that they accept that:

1. the paramountcy principle applies to all decisions made about management of the affairs of a protected person, including decisions about the provision of financial advice to a financial manager;

2. no person other than the protected person has a vested interest or entitlement in management of the affairs of a protected person; and

3. in the due performance of its obligations as manager of a protected estate, a financial manager is obliged to consult the best interests of the protected person and to use its best endeavours to consult the person of the protected person.

123. Nevertheless, having regard to the terms of TPT’s letter dated 19 April 2024 the term “side agreement” is a convenient label to attach to dealings between TPT and Stacks Goudkamp when placed in context with dealings between TPT and Aeran and the steps taken, in combination if not concert, consequent upon AET’s change in ownership and its decision to take financial advice services in-house, to the detriment of Aeran.

124. TPT’s letter dated 19 April 2024 was addressed personally to KG (described as Practice Group Leader/Director) of Stacks Goudkamp by MP, TPT’s General Manager, Wealth M. The letter was in the following terms:

“Dear [K],

Re: Personal Injury Client Referrals made to TPT Wealth by Stacks Goudkamp.

I can confirm that in any instance TPT Wealth is appointed the financial manager/administrator/trustee in a personal injury matter that has been referred to us by yourself (or by any representative of Stacks Goudkamp) TPT Wealth will appoint Stacks Goudkamp’s preferred independent financial adviser.

The appointed external financial adviser (or the adviser’s firm) will not be removed by TPT Wealth during the period of TPT Wealth’s appointment when all legislative and regulatory requirements, such as the submission of an annual investment review, and other reasonable service expectations are satisfied.

In the unlikely event that we would propose a change to the financial advisor in a matter referred to us by Stacks Goudkamp, concerns or feedback regarding the financial advisor will be shared with Stacks Goudkamp prior to any decision to appoint a new financial advisor.

Please feel free to contact me directly if you have any further concerns or questions about working with TPT Wealth.

Kind regards,

[MP].”

125. A “side agreement” ostensibly binding TPT as a financial manager to act at the direction of Stacks Goudkamp may not have been the only such agreement entered into by TPT, as appears from standard forms of email distributed to the families (or significant others) of protected persons by TPT in or about April 2024.

126. The estimate of costs to which reference has here been made is found in a standard form of email dated 25 April 2024 distributed by JF, (a Senior Adviser employed by Aeran) to the families or significant others of protected persons.

127. After disparaging AET for “disengaging Aeran from providing independent financial advice” for the protected person’s funds and expressing concern “about the ramification of AET’s in-house model” of providing financial advice, the email contained the following assurance:

“… [You] do have options.

You can move to another Trustee, being either TPT Wealth, Australian Unity or Perpetual Limited.

All of them are now partnering with Aeran to ensure we provide independent advice to clients and we have signed agreements saying that Aeran cannot be removed without consultation with the client.

We have engaged a solicitor (Stacks) to help facilitate the move for many of our clients (upset at recent developments) to a new Trustee. We will be helping the clients select the Trustee which best fits their requirements.

This legal process (which needs to go back through the Courts) will probably take around six months or so, and cost somewhere between $7,000-$10,000.

We will do our best to ensure that these are comparable (and hopefully cheaper) in moving to a new Trustee/Aeran model, so that we can re-coop the legal costs over time.

Again, we reinforce that Aeran is not for sale, and will continue for the long-term. I have no intention of leaving Aeran.

Could you either ring me or let me know what you are thinking you might do.”

128. The Court’s requisitions of 30 January 2025 (exhibit C14) included, in substance, a request that the NSW Trustee (in the first instance) “enquire of National Unity and Perpetual Limited whether they have made with Aeran an arrangement in the nature of the side agreement; and, if so, whether they support or disclaim the continuing operation of the arrangement, and whether they wish to be heard in relation to the lawfulness or propriety of such an arrangement.”

129. In the absence of any objection by any participants in these proceedings to that course, the NSW Trustee on or about 25 February 2025 filed a “Report to Court” in each of the proceedings before the Court (a copy of which has been provided to all participants in the proceedings) summarising the formal responses of Australian Unity Trustees Ltd and Perpetual Trustee Co Ltd, each of which disclaimed an intention to appear before the Court, or to be heard in the proceedings, unless requested by the Court.

130. In response to the NSW Trustee’s inquiries, a senior officer of Australian Unity Trustees Ltd on 12 February 2025 wrote to the NSW Trustee an email which included the following text:

“In response to your letter of 10 February 2025, we confirm that there is no agreement between Australian Unity Trustees (AUT) and Aeran to the effect of the TPT letter dated 19 April 2024.

For the sake of transparency, we have attached our letter to [KG] of Stacks Goudkamp dated 19 April 2024, which, in our view, is different to the TPT letter, namely that:

.   AUT confirms that it will continue to engage an independent financial adviser, not anyone's preferred adviser;

.   AUT can change the adviser at any time with the injured client's consent (or next of kin where the client cannot consent), as it is the client’s wishes and preferences that are held at the forefront;

.   There is no obligation on AUT to give feedback or provide the adviser or Stacks Goudkamp (or employees of either) if the client and/or AUT has concerns or wishes to change advisers. The decision and discretion ultimately rests with AUT as financial manager.”

131. The letter of 19 April 2024 written by a senior officer of Australian Unity Trustees Ltd to KG of Stacks Goudkamp was in the following terms:

“We confirm that for any clients referred to Australian Unity Trustees (AUT) by you and/or Stacks Goudkamp, and AUT is appointed by the Court as financial manager or trustee after the date of this letter, for the duration of that appointment, AUT will continue to engage an independent financial advisor unless AUT has consulted with and obtained the consent of the client and/or the client’s next of kin.”

132. In response to the NSW Trustee’s inquiries a senior officer of Perpetual Trustee Co Ltd sent to the NSW Trustee a letter dated 19 February 2025 the substance of which was in the following terms:

“Perpetual submit that there is no agreement in existence with Aeran Ply Ltd to the effect of the TPT letter dated 19 April 2024.

As discussed, Perpetual did provide, at the request of [KG] of Stacks Goudkamp, the attached letter dated 30 May 2024 from …, Perpetual's Trustee Services State Manager - Health and Personal Injury NSW/ACT/VIC, as an assurance to their clients that wished to continue using the services of Aeran Ply Ltd.”

133. The letter dated 30 May 2024 of Perpetual Trustee Co Ltd was addressed to “the Partners of Stacks Goudkamp Attn: [KG]” in the following terms:

“Re: Assurances regarding appointment of Aeran Pty Ltd

In the event that Perpetual Trustee Company Limited (Perpetual) agrees and is appointed by a Court or tribunal to act as financial manager or trustee or administrator (pursuant to the jurisdiction of its appointment) for a client of Stacks Goudkamp and where the client wishes to continue using the services of Aeran Pty Ltd (Aeran) for financial and investment advice, Perpetual agrees to engage Aeran in accordance with the wishes of the client, until the happening of one of the following events:

331. In the abstract, there is no universal principle that the provision of financial advice services is “cheaper” or “better” if delivered through an “in-house model” or an “independent adviser model” or vice versa.

332. That is why, within the constraints of prudential management, protected persons, family members and significant others should be allowed a reasonable opportunity to be heard, and be respected, about what they believe to be in the interests, and for the benefit, of the protected person in each case.

333. A practical constraint in every case, however, may be that the welfare and interests of a protected person are generally best served by a stable and orderly regime of management.

THE ESSENCE OF WHAT IT IS TO BE A PERSON “SUITABLE” FOR SERVICE AS A FINANCIAL MANAGER

335. Section 41(1)(b) of the NSW Trustee and Guardian Act identifies as an explicit criterion for the appointment of a private manager of a protective estate that the appointee be a “suitable person”, a concept not specifically defined in the abstract but located in a context which ties it to management of a particular estate of a particular person found to be incapable of managing his or her affairs.

336. In its setting the expression “suitable person” may be taken as meaning “suitable” (meaning “appropriate” or “fit”, if a synonym be required) for the purpose of performing the functions of a manager of the estate (the property and affairs) of the particular person found to be incapable of managing his or her affairs and, in performing those functions, observing the principles identified in section 39 of the NSW Trustee and Guardian Act.

337. For my part, I regard the several paragraphs of section 39 of the NSW Trustee and Guardian Act after section 39(a) as manifestations of section 39(a) and thus entirely consistent with the paramountcy principle that lies at the heart of the Court’s inherent protective jurisdiction.

338. What is required of a private manager in service as a “suitable person” in a particular case is relative to the personal circumstances of the particular protected person; the nature and extent of both any capacity and incapacity he or she may have; and the nature and extent of his or her estate, not limited to property. That is, what is required on a day-to-day basis and prospectively for management of the particular estate (property and affairs) in an optimal manner.

339. Uncontroversial examples of the relativity of the concept of a “suitable person” are, first, the suitability of a licensed trustee company for management of a large estate, offering security and terms not commonly associated with a natural person; and, secondly, the suitability of a close family member of a protected person with a modest estate which could not bear claims for remuneration commonly made by an institutional manager.

340. Another set of examples may illustrate the relativity of the concept of a “suitable person”.

341. At one end of the spectrum, a natural person appointed (by the Court or NCAT) as the manager of a small or modest estate with no expectation, or only a distant expectation, of recovery of a large award of compensation for personal injuries might cease to be a “suitable person” to manage the estate of the protected person if he or she receives such an award.

342. At the other end of the spectrum, an institutional manager appropriately appointed to manage a large estate might cease to be a “suitable person” to manage it if the estate, for whatever reason, is reduced in value to a size that cannot bear the manager’s usual fees.

343. In either case, if a change in the suitability of a manager comes to the attention of the Court, NCAT, the NSW Trustee or an interested person, there may have arisen an “occasion” for a change of manager based upon the touchstone of “suitability”.

344. In the present proceedings questions of “suitability” focus attention on the extent to which a licensed trustee company, as an institutional manager of a large protected estate, can engage with the protected person and his or her family and significant others at a personal level.

345. The problem for AET in dealing with KT, JC, and their respective families is that it has given to the families an indelible impression that it is only concerned with matters financial, not the personal welfare of their children, and it is not prepared to listen to what they believe to have been the benefit to them of direct engagement with Aeran.

346. Whatever may be the merits of the commercial dispute between AET and Aeran, if AET wants to retain management of estates like those of KT and JC, it will need to repair a loss of confidence in it arising from the manner in which it implemented its change of policy after its change of ownership.

347. Experience teaches that if an institutional manager (of any description) wants to retain the confidence of the family of a person whose estate is under protective management it must demonstrate to them that it is alive to their deep concerns.

348. As I observed in Re TLH, a protected person [2017] NSWSC 737 at [12], families are commonly anxious to preserve an estate (with maximum returns and minimum expenses), acutely conscious of the possibility that, at some indefinite future time, the estate might be exhausted in the midst of ongoing need, and they are commonly sensitive to the possibility that they are being taken for granted by institutional managers. This is especially so if prompt attention is not given to their requests for assistance, and if personnel changes (or decision-making structures) within the institution deny them a means of establishing a personal relationship with an experienced manager familiar with their particular case.

349. The concept of a “suitable person” in the context of an institutional manager includes an ability and willingness to provide the services of a dedicated staff with personal knowledge of each protected person and his or her family, with constant and ready availability. The personal touch may in some cases, if not all, be just as important as marginal differences in returns on investments.

ACKNOWLEDGEMENT OF FUNDAMENTALS

350. Cutting through much controversy in these proceedings each party to the proceedings (AET and the plaintiffs, ST and MC) and each other participant in the proceedings (TPT, Aeran and Stacks Goudkamp; Australian Unity Trustees Ltd and Perpetual Trustee Co Ltd) has expressly accepted the following foundational principles for the determination of these proceedings:

1. the paramountcy principle applies to all decisions made about management of the affairs of a protected person, including decisions about the provision of financial advice to a financial manager;

2. no person other than the protected person has a vested interest or entitlement in management of the affairs of a protected person;

3. in the performance of its obligations as manager of a protected estate, a financial manager is obliged to consult the best interests of the protected person and to use its best endeavours to consult the person of the protected person.

351. The most articulate of the responses to my invitation to accept these principles was that communicated to the Court by senior counsel for ST (the mother of KT):

“.   [ST] understands and accepts that any financial manager appointed in respect of the protected estate of her daughter, [KT], makes independent decisions guided by the paramount consideration of what is in the interests of [KT]. That applies to all decisions made about the management of the affairs of [KT], including the provision of financial advice. [ST] accepts that, at times, what is in [KT’s] interests may conflict with her own expectations or interests, either directly or indirectly. [KT’s] interests must be given priority.

.   As a parent, [ST] wants what is best for [KT], and therefore appreciates the role that a financial manager plays, and the financial separation it provides between her, and the interests of her daughter. The financial manager is protective in this sense of both [KT] and [ST].

.   [ST] wants [KT] to grow and be supported to lead an independent life as much as possible. [ST] accepts that she has no entitlement to require that [KT]'s affairs are managed in a particular way, and no vested interest in [KT] or her affairs. She accepts that no person other than [KT] has a vested interest or entitlement in management of [KT’s] affairs.

.   [ST] understands and accepts that a financial manager is obliged to act in the best interests of [KT], and will use its best endeavours to consult with the protected person. [ST] would like to work collaboratively with any financial manager. Recognising that the financial manager makes independent decisions for the benefit of [KT] and that the views of particular family members provide guidance only to the financial manager, [ST] will be available if the financial manager wishes to consult with her and her family to assist in understanding what is in [KT’s] best interests.”

352. AET, TPT, Aeran and Stacks Goudkamp, in express terms, accepted the three foundational principles as invited.

353. The solicitors for MC chose a different formula, which I take to be to the same effect. They wrote: “We acknowledge the principles underlying the Discussion Draft Protocol and we confirm that neither the plaintiff, [MC], nor this firm have a vested interest in the management of the protected estate of the defendant, [JC]”.

A PROTOCOL FOR FINANCIAL ADVICE SERVICES

354. With the benefit of comments by all participants in these proceedings, and consultations with the NSW Trustee, I propose to publish (in a separate, formal judgment) the following protocol, based on the “Discussion Draft” (MFI C30) circulated for comment:

“(1)   NOTE that:

1. These orders are made by the Court pursuant to the NSW Trustee and Guardian Act 2009 NSW, section 64.

2. Nothing in these orders is intended to limit the jurisdiction of the Court with respect to the management of estates or the guardianship of persons.

3. The Court reserves an entitlement, of its own motion, in consultation with the NSW Trustee, to review the Protocol and, if and as may be appropriate, to rescind or vary it.

(2) NOTE that, subject to further order, these orders apply to so much of a protected person’s estate that is subject to management under Chapter 4 of the NSW Trustee and Guardian Act 2009 NSW where the person (hereinafter called “a financial manager”) appointed to manage the estate under section 41(1)(b) of the Act or section 25M(1)(a) of the Guardianship Act 1987 NSW is a licensed trustee company within the meaning of section 9 (and Chapter 5D) of the Corporations Act 2001 Cth, a private corporation or a natural person appointed as a “suitable person” to manage a protected estate subject to the orders and direction of the NSW Trustee.

(3)   ORDER, subject to further order of the Court and orders or directions of the NSW Trustee, that:

(a) subject to section 71 of the NSW Trustee and Guardian Act 2009, a financial manager must not delegate any functions of the office of a financial manager to any person;

(b) a financial manager is at liberty (but not obliged) to retain a person (hereinafter “a financial adviser”) who is a licensed financial adviser (being the holder of an Australian Financial Services Licence governed by Part 7.6 of the Corporations Act 2001 Cth) to provide to the financial manager financial advice in aid of management of a particular estate;

(c)   a financial manager must not retain an external financial adviser to provide financial advice in aid of management of a particular estate unless the retainer is in writing and includes terms to the effect that:

(i) the financial adviser acknowledges the obligation of the financial manager to comply with section 39 of the NSW Trustee and Guardian Act 2009 (in the case of an appointment by the Court under section 41(1)(b) of the Act) or section 4 of the Guardianship Act 1987 (in the case of an appointment by the NSW Civil and Administrative Tribunal (NCAT) under that Act) according to the tenor of the appointment;

(ii)   the retainer is revocable at will and without grounds;

(iii)   the financial manager is not obliged to accept or act upon advice provided by the financial adviser to the financial manager pursuant to the retainer;

(iv)   the financial adviser warrants that its advice is independent of all persons;

(v)   no representative of the financial adviser will have direct contact with a protected person the subject of the retainer (or a member of the family, a carer or a significant other of the protected person) unless in the company of a representative of the financial manager or with the prior written consent of the financial manager, or the NSW Trustee or the Court.

(d)   Subject to any order of the Court or any order or direction of the NSW Trustee, no external financial adviser is to be paid or allowed remuneration claimed out of a protected estate under management by a financial manager unless the claim in respect of services rendered by the financial adviser is rendered pursuant to a retainer compliant with these orders.

(4)   ORDER, subject to further order of the Court and orders or directions of the NSW Trustee, that:

(a) at least once in each calendar year, or as the NSW Trustee may in writing direct, a financial manager provide to the protected person (and a member of his or her family or a significant other, if any, in whose care he or she may then be) a written statement of financial advice regarding management of the estate under management, having regard to the provisions of section 39 of the NSW Trustee and Guardian Act or section 4 of the Guardianship Act, according to the tenor of the order appointing the financial manager to the office of financial manager;

(b)   a protected person (or a member of his or her family or a significant other in whose care he or she then is, if any) may by a written application made at any time request the financial manager to allocate a reasonable monetary allowance for the provision of financial advice (as to management of the estate of the protected person) from a financial adviser nominated by the person making the request.

(c)   a financial manager who receives such a request be required (so far as may be reasonable) to respond to it, in writing, within a reasonable time of the request having been received.

(d)   any dispute arising out of such a request may be referred to the NSW Trustee for directions or, if the NSW Trustee deems fit, referred to the Court for determination.

(5)   ORDER, subject to further order of the Court and orders and directions of the NSW Trustee, that:

(a)   a protected person (or a member of his or her family or a significant other, if any), be at liberty at any time to make, in writing, representations to the financial manager of the protected person about proposals for investment of the estate under management.

(b)   without being under an obligation to invest the estate of the protected person in a particular way as a consequence of any such representation, the financial manager must acknowledge the representation within a reasonable time and take it into account in due management of the estate.

(6)   RESERVE to the NSW Trustee liberty to apply generally for an order that these orders be discharged or varied.”

355. Adopting a recommendation of the NSW Trustee the Protocol will come into operation immediately upon its publication (as Re Protected Estates Financial Advice Protocol [2025] NSWSC 311) contemporaneously with publication of these reasons for judgment.

356. If any transitional problems arise in the operation of the Protocol they can be dealt with within the framework of the Protocol.

357. The efficacy of the Protocol will remain under review.

358. Nothing in the Protocol compels a licensed trustee company to retain an external financial adviser. But if it does retain an external financial adviser the Protocol will apply.

359. Independently of the Protocol, nothing prevents a family from seeking from the Court an order that, as the price of a financial manager remaining in office, it submit to a direction that it retain an external licensed financial adviser. Such a course is not to be taken lightly but it is a course which is open if families and financial managers cannot reach an accommodation. What might be the outcome of an application made to the Court (or to the NSW Trustee) for directions must depend on the facts of the particular case.

360. Nothing in the Protocol is intended to limit the jurisdiction of the Court with respect to the management of estates or the guardianship of persons. The Court reserves an entitlement, of its own motion, to review the Protocol in consultation with the NSW Trustee. In any event, the Court reserves to the NSW Trustee liberty to apply generally for an order that the Protocol be rescinded or varied.

CONSIDERATION ON THE FACTS OF THE PARTICULAR CASES BEFORE THE COURT

361. Having reviewed the principles to be applied, the context in which those principles are to be applied and the personal circumstances of the protected persons whose welfare and interests are the paramount consideration, I turn attention to a determination of the present proceedings.

362. In doing so, I begin with an acknowledgement that KT and JC are each currently incapable of managing their own affairs and so require an exercise of protective jurisdiction on the part of the Court, recognising that KT (as an adult) has been assessed as having capacity, for example, to make a will and that JC’s incapacity is in part a function of his age. Incapacity for self-management is a nuanced concept focused on functionality.

363. The size and nature of the respective estates of KT and JC require the appointment of an institutional manager for each estate.

364. The preference of the respective families of KT and JC for the appointment of a licensed trustee company, rather than the NSW Trustee, should be respected.

365. AET is and was at all material times technically competent to serve as a financial manager for the estates of KT and JC, whether with or without the services of an external licensed financial adviser.

366. As a licensed financial adviser Aeran is and was at all material times technically competent to provide financial advice services to a licensed trustee company charged with management of a protected estate.

367. TPT is technically competent to serve as a financial manager of a protected estate, reserving (for future cases, if and as necessary) the question whether it yet has the staff available in NSW to manage multiple protected estates.

368. A significant, subjective factor in the respective decisions of the families of KT and JC, originally, to apply to the Court for the appointment of AET as a financial manager of the protected estate of their child was a desire to maintain a working relationship with Aeran as a financial adviser to AET.

369. The change in ownership of AET provided an occasion upon which the protected persons whose estates were under management by AET, their families and significant others should be allowed an opportunity, objectively, to review the protected estate management orders affecting them; but it did not, of itself, provide a justification for a change in financial manager in the abstract.

370. However, it is not in these proceedings to be considered only in an isolated, abstract setting. It quickly became a material factor in how protected estates were, and were to be, managed by AET operationally vis-à-vis individual protected persons, their families and significant others, profoundly affecting their confidence in AET’s management.

371. The unilateral decision of AET, under new ownership, to take all financial advice services “in house” was primarily motivated by the commercial imperatives of AET, not a measured consideration of the welfare and interests of the individual protected persons whose estates were under the management of AET.

372. The decision of AET, under new management, to take financial advice services “in house” was taken without allowing the families of KT and JC a reasonable opportunity to object or to renegotiate the operational terms upon which AET proposed to engage with them.

361. The unilateral decision of AET, under new management, to terminate the retainer of Aeran (without allowing the families of KT and JC a reasonable opportunity to object or to re-negotiate the operational terms upon which AET proposed to engage with them) was primarily motivated by the commercial imperatives of AET, not a consideration of the welfare and interests of KT and JC.

362. Each of the decisions of AET to take all financial services “in house”, and to terminate the retainer of Aeran in its connection with the protected estates of KT and JC, presented an occasion upon which the respective families of KT and JC were entitled to expect that they would be given a reasonable opportunity to object or to renegotiate the operational terms upon which AET proposed to engage with them.

363. For the family of JC the fact that AET’s appointment as a financial manager of JC’s estate was for the purpose of managing an interim award of personal injury compensation, and subject to review upon the finalisation of the compensation proceedings, presents an additional occasion (and, in fact, a fresh occasion) for a consideration of the identity of a “person suitable” for appointment as manager of JC’s protected estate going forward.

364. The respective parents of KT and JC, having taken legal advice and given conscientious consideration to the welfare and best interests of their child, have formed the view, on reasonable grounds, that their relationship with AET has broken down to such an extent that they can no longer have confidence that AET can be relied upon by them to manage their child’s estate with the degree of empathy they need and expect.

365. Although AET remains technically competent to serve as the financial manager of a protected estate in an appropriate case (and, in the abstract, a “suitable person” to occupy such an office), its loss of the confidence of the respective families of KT and JC renders it no longer, for the time being, a “suitable person” to remain manager of the particular protected estates of KT and JC. It is no longer well placed, vis-à-vis the families of KT and JC, to give effect to the general principles enunciated in section 39 of the NSW Trustee and Guardian Act 2009 NSW because of that loss of confidence. Rightly or wrongly, they no longer trust AET. The pendency of these proceedings has stood in the way of any endeavour on the part of AET to win back that trust. Its relationship with the families of both protected persons is such that its continuation in the office of manager of the estates of those particular persons does not serve the best interests of either protected person where an alternative manager is reasonably available.

366. In the circumstances of the present proceedings, the blanket refusal of AET to “reinstate” Aeran’s retainer (should that still be preferred by the families of KT and JC and Aeran be prepared to accept such a retainer, which perhaps remains to be tested), tells against AET remaining in office as manager of the protected estates of KT and JC.

367. On one view, this outcome flows from the determination of AET, under new ownership, and privileging its own commercial imperatives, to impose on the families of protected persons, without due consultation with affected families, a management regime unwelcome to those families. Whether it might have fared better if it hastened slowly towards its “in house model”, without disturbing established relationships, but introducing its new model progressively with each of its new appointments to the office of manager or on longer notice, is moot.

368. The outcome of future applications for a change of manager affecting AET must await a determination “on the merits” of each case; but, in the context of the Court’s protocol, everybody should reflect upon whether arrangements satisfactory to all affected parties might still be negotiated, subject to directions of the NSW Trustee (in the ordinary course) or orders of the Court if need be.

369. AET and Aeran might do well to settle their differences so that they can each return to their core business in a professional way. A failure to do so could carry unforeseen consequences in their involvement with protected estate management. If they do not resolve their differences neither may be able to expect, as has been a matter of course in the past, to play a role in the management of a protected estate. They need to focus attention on what is required for an orderly regime of protected estate management, with prudential management of risk, driven by the paramountcy principle and, to that extent, subordinating commercial imperatives, if need be.

370. Given the course of events, prudence may persuade Stacks Goudkamp to step back from a major role in such, if any, applications for a change of manager as may be made arising out of the unresolved controversies between AET and Aeran. They have been too close to the centre of controversy to be seen as independent legal advisers, if independence of legal advice is (as it should be) seen as a virtue. I do not propose, however, that the firm be compelled to stand aside or that clients, or former clients, of the firm be compelled to look elsewhere for legal services.

371. Ultimately, there is in these proceedings no point in attributing “blame” for what has happened since AET’s change of ownership. The machinery for management of protective estates having broken down as a result of “overreach” on several fronts, the larger question for the Court is what must be done to restore the machinery to a working order.

372. The conduct of each of AET, Aeran, TPT and Stacks Goudkamp is open to criticism as having unnecessarily disturbed the orderly management of the protected estates of KT and JC (amongst others) by an overreaching concern for their own commercial interests.

373. The collateral proceedings between AET and Aeran serve no purpose vis-à-vis the welfare and interests of protected persons whose estates are under management.

CONCLUSION

386. All things considered, the welfare and interests of KT and JC are, in my opinion, likely to be best served by orders (in the separate proceedings) to the effect that:

1. AET be removed from the office of financial manager for KT and JC.

2. TPT be appointed as financial manager of the respective estates of KT and JC.

3. Subject to authorisation of the NSW Trustee in the ordinary course, TPT be at liberty to retain Aeran to provide to it financial advice services in respect of the estates of KT and JC on terms consistent with the Court’s Protocol.

387. Lest these orders be misunderstood as an invitation for applications to be made for the removal and replacement of AET, and as vindication of whatever concerted action there may have been in recruitment of families to apply for a change of manager, I record that my decision that AET be removed and replaced in management of the particular protected estates the subject of these proceedings has been made not because of (but in spite of) any such campaign. The present proceedings do not require engagement of the Court’s inherent jurisdiction to relieve a party from liability for a breach of duty or a contempt of court, but the forbearance required of the Court in the exercise of that jurisdiction is not far removed from that required in a decision to “notice, but not notice” conduct arguably open to characterisation as a contempt of court. Interference with, or obstruction of, performance of the functions of a financial manager is not a light matter.

388. I do not regard either of the preferred models for the provision of financial advice services (internal or external) as inherently superior, one over the other. In management of protected estates there is no presumption in favour or against either model.

389. With promulgation of the Protocol, and upon consideration of whether an application should be made for directions in relation to the future management of a protected estate, all persons interested in the maintenance of a protected estate should pause for thought before engaging in unnecessary controversy. Timely consultation and empathetic consideration of competing perspectives remains a virtue to be embraced.

390. I should also caution all concerned that a particular form of management regime (such as appointment of a financial manager with the intention that the manager retain a particular financial adviser or that all financial advice services be provided “in house”) cannot be secured, or entrenched, by a statement of intention about the course of future management made at the time of the application for the appointment of a manager. No party can secure or entrench arrangements for financial advice services by means of a public announcement or a private agreement.

391. All parties and the public at large are, by these reasons for judgment, cautioned against disruption of the orderly management of a protected estate.

392. I conclude with the final observation that changes in the staff arrangements of an institutional financial manager do not, of themselves, provide an occasion or justification for the removal and replacement of a manager.

COSTS

393. I will allow all parties, and participants, in these proceedings a reasonable opportunity to make such, if any, submissions they seek to make as to the costs of the proceedings.

394. Any question of costs is complicated by the submission of the proceedings to the Court as “test cases” and the involvement of persons other than those directly concerned in management of the protected estates under consideration. Special orders as to costs might be necessary to protect the estates from an unfair burden.

395. Nevertheless, I remind all concerned that, upon an exercise of protective jurisdiction, the Court generally proceeds on the basis, not that costs follow the event, but that it is generally necessary, and appropriate, to ask: “What, in all the circumstances, seems the proper order to make in relation to costs?”: CCR v PS (No 2) (1986) 6 NSWLR 622 at 640E-G; CAC v Secretary, Department of Family & Community Services(No 2) [2015] NSWSC 344 at [14]-[21]; Small v Phillips(No 3) [2020] NSWCA 24 at [2].

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Decision last updated: 04 April 2025