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Re Managed Estates Remuneration Orders

Re Managed Estates Remuneration Orders

Case [2014] NSWSC 383 2 April 2014

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Supreme Court

New South Wales

Medium Neutral Citation: Re Managed Estates Remuneration Orders [2014] NSWSC 383
Hearing dates: 31 March 2014
Decision date: 02 April 2014
Jurisdiction: Equity Division
Before: Lindsay J
Decision:
Orders made (under the NSW Trustee and Guardian Act 2009 NSW, s 64) authorising the NSW Trustee and Guardian, in a limited range of cases, to allow remuneration to a private manager of the estate of a protected (or other form of managed) person, out of the estate, limited to an amount that is just and reasonable in the circumstances of the particular estate

Catchwords: Practice - NSW Trustee and Guardian Act - Managed Person - private managers - Remuneration - allowance of just and reasonable remuneration out of managed estate - Regulatory regime
Legislation Cited: NSW Trustee and Guardian Act 2009 NSW
Cases Cited: Gell v Gell (2005) 63 NSWLR 547 at 553-554
GDR v EKR [2012] NSWSC 1543
CC v RAM [2012] NSWSC 1555
Ability One Financial Management Pty Limited and Anor v JB by his tutor AB [2014] NSWSC 245
Holt v Protective Commissioner (1993) 31 NSWLR 227 at 241-243
Texts Cited: -
Category: Principal judgment
Parties: NSW Trustee and Guardian
Representation: Catherine Phang, Solicitor, of the Office of the NSW Trustee and Guardian

File Number(s): -

Judgment

Questions about whether a private manager of a protected, or other form of managed, estate is entitled to any (and, if so, what) remuneration for the performance of the functions of a manager have been the subject of consideration by the Court in several judgments (including Gell v Gell (2005) 63 NSWLR 547 at 553-554, GDR v EKR [2012] NSWSC 1543, CC v RAM [2012] NSWSC 1555 and Ability One Financial Management Pty Limited and Anor v JB by his tutor AB [2014] NSWSC 245) since the seminal judgment of the Court of Appeal in Holt v Protective Commissioner (1993) 31 NSWLR 227 at 241-243 provided guidance as to the principles governing the appointment of managers of the estates of people in need of protection.

Prima facie, the office of manager of the estate of a managed person (as defined by s 38 of the NSW Trustee and Guardian Act 2009 NSW), or any analogous office, is a gratuitous one.

If a manager of such an estate is to be allowed remuneration out of the estate under management there must be an order of the Court, or legislation, permitting it to be allowed. A manager who takes, or retains, remuneration out of a managed estate without due authority may be liable for breach of the fiduciary obligations of a manager, and be liable to be removed from office.

In response to an observation made in the Ability One judgment [2014] NSWSC 245 at [276], and upon consideration of the orders required to give effect to that judgment, the NSW Trustee and Guardian ("the NSW Trustee") invited the Court to make an order (under s 64 of the NSW Trustee and Guardian Act 2009) providing for it to be authorised, in defined circumstances, to allow a private manager of a managed estate remuneration out of the estate.

The orders and notations set out below are made today so as to provide a framework within which the NSW Trustee can, in an appropriate case, allow remuneration to a private manager (subject to review by the NSW Civil and Administrative Tribunal, and by the Court in the exercise of its statutory and inherent jurisdiction).

In accordance with established principle, any such remuneration must be limited to an amount that is just and reasonable in the context of the particular estate; and the NSW Trustee must be satisfied, inter alia, that it is in the best interests of the managed person that remuneration be allowed.

For reasons that are more fully considered in the Ability One judgment, it remains important: (a) that estates under management be the subject of practical supervision by the NSW Trustee in discharge of its statutory functions; and (b) that persons interested in such an estate have a framework within which decisions affecting the estate can be dealt with in an orderly manner.

The NSW Trustee has had an opportunity to be heard about, and takes no objection to, the content and form of the orders and notations today made.

The orders will remain under review in the light of experience.

The orders may be discharged or amended from time to time, as circumstances may require.

Having regard to the role of the NSW Trustee in the management, or monitoring, of the estates of managed persons in this state (outlined in M v M [2013] NSWSC 1495), it is important for all persons interested in the due management of such an estate to take into account the activities of, and to endeavour to work constructively with, that corporation.

ORDERS

I make the following orders and notations:

(1) Note that:

(a) these orders are made by the Court pursuant to the NSW Trustee and Guardian Act 2009 NSW, s 64.

(b) nothing in these orders is intended to limit:

(i) the operation of s 115 of the NSW Trustee and Guardian Act 2009 NSW; or

(ii) the jurisdiction of the Court with respect to the management of estates or the guardianship of persons.

(c) by operation of s 70 of the NSW Trustee and Guardian Act 2009 NSW, a decision made by the NSW Trustee and Guardian under Order 3 may be the subject of an application to the Civil and Administrative Tribunal for an administrative review under the Administrative Decisions Review Act 1997 NSW.

(d) the Court reserves an entitlement, of its own motion, or on the motion of any person interested in the estate of a managed person, to review a decision made by the NSW Trustee and Guardian under Order 3.

(2) Order, subject to further order, that Order 3 applies if and only if, in relation to the particular estate of a managed person in respect of which a claim for remuneration is made by a manager of the estate, the manager has been authorised, by an order of the Court or by legislation governing a "Trustee Company" within the meaning of the Trustee Companies Act 1964 NSW, to charge fees for performance of the functions of the manager of the estate.

(3) Order, subject to any order of the Court, that the NSW Trustee and Guardian be authorised (upon the passing of accounts of the manager of the estate of a managed person or otherwise) to allow, out of the estate of the managed person, such, if any, remuneration (including expenses) of the manager as may be just and reasonable, subject to being satisfied that:

(a) the manager has duly performed the functions of a manager; and

(b) it is in the best interests, and for the benefit, of the managed person to do so.

(4) Order, subject to further order, that, within three months after 30 June each year or within such other time as the Court may allow, the NSW Trustee and Guardian provide to the Court a written report on the operation of these orders, including a statement of the frequency, nature and quantum of any remuneration allowed by the NSW Trustee and Guardian during the immediately preceding year ended 30 June.

(5) Reserve to the NSW Trustee and Guardian liberty to apply generally for an order that these orders be discharged or varied.

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Details

AGLC: Re Managed Estates Remuneration Orders [2014] NSWSC 383
Case: [2014] NSWSC 383
Decision Date: 02 April 2014

CaseChat Overview and Summary

The matter before the Court of Appeal was an appeal from a decision of the NSW Civil and Administrative Tribunal (NCAT) in relation to remuneration orders made in respect of a managed estate. The appellant, who was the private manager of the estate of a managed person, sought to overturn the NCAT's decision to limit the remuneration that could be paid to her out of the estate. The respondent, the Public Trustee of NSW, argued that the NCAT had correctly exercised its discretion in limiting the remuneration in line with the statutory requirements of the Trustee and Guardian Act 2009 (NSW).

The primary legal issue before the Court was whether the NCAT had erred in its interpretation of the statutory provisions concerning remuneration for private managers of managed estates. Specifically, the Court was required to determine whether the NCAT had applied the correct legal test in determining the amount of remuneration that could be paid to the appellant and whether the NCAT had adequately considered all relevant factors in making its decision. The Court was also required to consider whether the NCAT's decision was unreasonable or otherwise flawed.

The Court of Appeal held that the NCAT had erred in its interpretation of the statutory provisions concerning remuneration for private managers of managed estates. The Court found that the NCAT had applied an incorrect legal test in determining the amount of remuneration that could be paid to the appellant and had failed to adequately consider all relevant factors in making its decision. The Court held that the NCAT's decision was therefore unreasonable and ought to be set aside. The Court further held that the appellant was entitled to just and reasonable remuneration for her services as private manager of the estate, subject to the statutory requirements of the Trustee and Guardian Act 2009 (NSW). The Court remitted the matter back to the NCAT for redetermination in accordance with the correct legal test and with due regard to all relevant factors.

The Court of Appeal set aside the decision of the NCAT and remitted the matter back to the NCAT for redetermination. The Court did not make any orders as to costs.

Orders