Re Protected Estates Financial Advice Protocol

[2025] NSWSC 311

Supreme Court

New South Wales

Medium Neutral Citation:

Re Protected Estates Financial Advice Protocol [2025] NSWSC 311

Hearing dates:

12 March 2025

Date of orders:

4 April 2025

Decision date:

04 April 2025

Jurisdiction:

Equity

Before:

Lindsay J

Decision:

Orders made (under the NSW Trustee and Guardian Act 2009 NSW, section 64) establishing a protocol governing the retention by the manager of a protected estate of the services of an external licensed financial adviser

Catchwords:

PRACTICE – NSW Trusteeand Guardian Act – Managed person – Private managers – Retention of services of external financial adviser – Protocol – Regulatory regime

Legislation Cited:

Corporations Act 2001 Cth

Guardianship Act 1987 NSW

NSW Trustee and Guardian Act 2009 NSW

Cases Cited:

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

Category:

Principal judgment

Parties:

x

File Number(s):

x

JUDGMENT

1. In the course of management of a “protected estate” (within the meaning of section 38 of the NSW Trustee and Guardian Act 2009 NSW), pursuant to Chapter 4 of the Act, a manager (appointed by the Court under section 41(1)(b) of the Act or by the NSW Civil and Administrative Tribunal (“NCAT”) under section 25M(1)(a) of the Guardianship Act 1987 NSW) may, on its own initiative or by a direction given by the Court or the NSW Trustee, retain a financial adviser (being a holder of an Australian Financial Services Licence governed by Part 7.6 of the Corporations Act 2001 Cth) to provide the manager financial advice in aid of management of a particular estate.

2. In Re KT and JC, Protected Persons [2025] NSWSC 306 questions arose as to the relationships between a protected estate manager (a licensed trustee company within the meaning of section 9 and Chapter 5D of the Corporations Act 2001 Cth), an external licensed financial adviser formerly retained by the manager and a protected person (and members of the protected person’s family) with whom both the manager and the financial adviser had dealt.

3. For reasons elaborated in that judgment the Court, in consultation with the NSW Trustee and with the benefit of submissions made by several interested parties, resolved to establish (by orders made under section 64 of the NSW Trustee and Guardian Act) a Protocol designed to facilitate an orderly determination of disputes arising from a manager’s retention of an external financial adviser.

4. The Protocol (established by the orders set out below) does not, of itself, operate to require a manager to retain an external financial adviser but applies if a manager does retain an external financial adviser.

5. A licensed trustee company which holds the office of a manager is not precluded by the Protocol from utilising its own internal capabilities for the provision of financial advice.

6. Independently of the Protocol, a protected person or other person with a sufficient interest may apply to the NSW Trustee (or the Court), at his or her own risk as to costs, for a direction that a manager retain an external financial adviser, to which retainer the Protocol would apply subject to the terms of the NSW Trustee’s (or the Court’s) direction in the particular case.

THE PROTECTED ESTATES FINANCIAL ADVICE PROTOCOL

ORDERS AND NOTATIONS

Orders and notations are made in the following terms:

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.

Lindsay J

4 April 2025

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