Re Sam

[2011] NSWSC 503

Supreme Court

New South Wales

Medium Neutral Citation:

Application by AMAM; Re SAM [2011] NSWSC 503

Hearing dates:

20 May 2011

Decision date:

20 May 2011

Jurisdiction:

Equity Division - Probate List

Before:

Hallen AsJ

Decision:

(i) Order prohibiting the publication, or disclosure of the name of the parties, or any details from within the court file, or from the evidence in the proceedings, that either identifies, or tends to identify, the managed person.

(ii) Order:

(a) The Plaintiff be discharged from the office of manager of the Defendant's estate.

(b) Subject to the giving of security if required by, and to, the satisfaction of the NSW Trustee and Guardian, AMAM be appointed manager of the Defendant's estate to act in relation to her estate in accordance with the order and direction of the Court.

(c) The costs of the Applicant of and incidental to the Applicant's notice of motion filed 14 March 2010 be paid from the Defendant's estate.

(d) A copy of the orders should be served, by post, or by email, on MWM together with a copy of this Judgment, within 21 days of the delivery of reasons for Judgment.

Catchwords:

Application by notice of motion by brother of protected person seeking removal of Plaintiff as manager of protected person's estate - Appointment of himself as manager in Plaintiff's place - Order for costs - Current manager does not oppose application - Consents to the appointment of applicant in his place

Legislation Cited:

Civil Procedure Act 2005
NSW Trustee and Guardian Act 2009
Protected Estates Act 1983
Public Trustee Act 1913 (NSW)

Cases Cited:

Holt v The Protective Commissioner (1993) 31 NSWLR 227
J & K, Application of [2009] NSWSC 1453
L, Re [2000] NSWSC 721
M, Re (1988) 2 VAR 213
MB v Protective Commissioner [2000] NSWSC 717; 50 NSWLR 24
R, Re [2000] NSWSC 886

Category:

Principal judgment

Parties:

MWM (Plaintiff)
AMAM (Applicant)
NSW Trustee & Guardian (Applicant to Notice of Motion)
SAM (Defendant)

Representation:

Solicitors:
Pigott Stinson (Applicant)
Crown Solicitor's Office

File Number(s):

P34/2007

Judgment

The Application

1. HIS HONOUR: Having regard to the legal status of the Defendant, to whom I have assigned the initials "SAM": s 72 of the Civil Procedure Act 2005, as a protected person, at the outset, I make an order prohibiting the publication, or disclosure of the name of the parties, or any details from within the court file, or from the evidence in the proceedings, that either identifies, or tends to identify, her.

1. This is an application, by notice of motion, filed on 14 March 2011, by the brother ("AMAM") of SAM seeking the removal of the Plaintiff ("MWM") as manager of the estate of SAM, and for the appointment of himself in MWM's place. An order for costs is also sought. The NSW Trustee and Guardian ("the NSW Trustee"), has been served with the notice of motion.

1. On 1 July 2009, the NSW Trustee and Guardian Act 2009 commenced. The Public Trustee Act 1913 (NSW), was repealed and the office of the NSW Trustee was created to carry out the functions of the Public Trustee. The Protected Estates Act 1983 (NSW) was also repealed, but was substantially re-enacted in the NSW Trustee and Guardian Act .

1. MWM who now lives in Syria, and has done so since about August 2008, does not appear in response to the notice of motion. The evidence reveals that he has no intention of returning to New South Wales. The evidence also reveals that he does not oppose AMAM's application and, in fact, consents to the appointment of AMAM in his place.

1. A copy of the notice of motion and the principal affidavits relied upon were served upon SAM on 29 March 2011. The solicitor acting for AMAM read the documents to her and they were translated for her by AMAM.

Background

1. MWM and AMAM is each a son of SAM. In August 2003, SAM was involved in a serious car accident that left her with extensive injuries, including traumatic brain injury and permanent physical injuries.

1. Proceedings commenced in the District Court resulted in a settlement, pursuant to which the settlement sum and interest, of $1,653,622.78 were paid into Court on about 25 May 2007.

1. A Summons was filed in this Court on 8 May 2007, seeking a declaration that SAM was incapable of managing her affairs and that MWM be appointed her financial manager under the now repealed Protected Estates Act 1983. Orders were made as sought in the Summons on 21 May 2007. Subject to the giving of security, if required by, and to the satisfaction of, the Protective Commissioner, MWM was appointed as manager of the estate of SAM, to act in relation thereto under the order and direction of the Court. The funds paid into court were subsequently released.

1. SAM remains incapable of managing her estate.

1. In May 2007, the NSW Trustee authorised and released funds to purchase a property at Bankstown in which SAM now lives. In June 2007, the NSW Trustee authorised and released $80,658.25 to enable renovations to be carried out upon the Bankstown property. In August 2007, an additional $89,422.67 was authorised and released.

1. An additional amount of $27,838.80 was also authorised and released to purchase a car for SAM.

1. Since August 2009, the daily care of SAM has fallen to AMAM. Although she originally followed MWM to Syria in August 2008, she returned to New South Wales, about 12 months later.

1. AMAM is aged 32 years. He is married with two children. Since about March 2010, he has lived with SAM in order to assist her with her activities of daily living. His family have also moved with him. He continues to look after her. He has also attempted, with some difficulty, to assist in the management of her financial affairs.

1. One of his brothers and his family also live with SAM. They also provide assistance to SAM. They also do not pay any rent to SAM but contribute to property expenses such as rates. They also assist in paying for some of SAM's daily living expenses.

1. The evidence reveals that SAM's other children support the application. Each has sworn an affidavit that has been read in the proceedings. They are aware of the living arrangements, there having been several discussions within the family before they were made, and have consented to that arrangement, which includes the AMAM and his wife receiving income from renting their own home whilst they live with SAM.

1. Each of SAM's other children have also consented to the removal of MWM, and the appointment of AMAM, as the financial manager of SAM.

1. The task of assisting in the management of SAM's financial affairs prompted me to suggest, when the matter was before the Court on 18 April 2011, that perhaps AMAM might prepare outstanding accounts which could be provided to the NSW Trustee. This suggestion was made as I had been informed that no accounts had been prepared and filed for the financial years ending June 30, 2009 and 2010, these being the two years since AMAM has been acting as the de facto financial manager of SAM.

1. There is evidence that on 16 May 2011, AMAM sent draft financial accounts for each of those financial years to the NSW Trustee. The accounts are said to list all income received and expenditure paid during each of the accounting periods, together with all assets and liabilities at the end of the accounting period. (AMAM has also provided draft accounts for the 2008 financial year to the NSW Trustee, but has not retained a copy of these accounts.)

1. The accounts, in part, are incomplete. It is possible, but unlikely, that the information necessary to complete the accounts will be provided after AMAM speaks to MWM. Otherwise, AMAM believes that the accounts are correct and complete to the best of his knowledge and belief.

1. Ms Phang, the senior legal officer of the NSW Trustee, informs me from the Bar Table, that the draft accounts provided by AMAM have been inspected and that the NSW Trustee is satisfied with them. Having inspected the accounts, and having had discussions with AMAM directly, the officers of the NSW Trustee are satisfied that he is ready, willing and able to co-operate with them and to comply with the statutory requirements imposed upon him.

1. SAM's estate now consists of amounts held on deposit with the NSW Trustee ($454,951.43), some shares ($12,345), the Bankstown property ($1.2 million) in which SAM lives and furniture ($50,000). The value of the capital of SAM's estate is in the order of $1.7 million. The accounts reveal income of about $43,000 per annum and expenditure is about $56,000 per annum.

1. Ms Phang, who appears for the NSW Trustee, has stated that it does not oppose the orders sought by AMAM.

1. One might think, with the facts elucidated so far, that a detailed judgment was unnecessary. However, AMAM has disclosed to the court that he was made bankrupt in 2002 and was discharged from bankruptcy in March 2005. However, since then, he has been conducting his own business and his own financial affairs. There is independent evidence, including from AMAM's accountant, regarding his work ethic, professionalism, reliability and trustworthiness.

The Principles

1. There can be no doubt that the court has the power to remove the MWM as manager of SAM's estate and to appoint another person in his place: s 41(2) and s 64(1) of the NSW Trustee and Guardian Act ; MB v Protective Commissioner [2000] NSWSC 717; 50 NSWLR 24; Application of J & K [2009] NSWSC 1453 at [4].)

1. Although not regarded as rules, or even guidelines, the framework within which the court is to approach a matter such as this is:

(a) An application to remove the financial manager is one that invites the exercise of a judicial discretion. That discretion is conferred on the court in the exercise of a special jurisdiction. It derives from legislation. It must, therefore, be exercised keeping in mind the purposes of that legislation. The general principles, set out in s 39 of the NSW Trustee and Guardian Act should be remembered. Particularly relevant to this case are the matters in s 39(a) and (e).

(b) The abiding rule in the exercise of powers under the Act is the achievement of best interests of the managed person; the court's overriding duty is to see that the managed person's estate is so managed as to serve the protected person's best interests.

(c) An application for the removal of a person validly appointed as a manager, will not invoke the same discretion as the initial appointment of such a person, or another, as manager. As in any application, it will normally be necessary, at least forensically, for the party seeking a change in the status quo to show some reason why the court should so order.

(d) It is not necessary for the applicant to establish that the relevant respondent has misconducted herself, or himself, or that she, or he, has not acted competently in the management of the estate. However, where it is shown that a person appointed as manager is incompetent or has acted in a relevant way improperly, or unlawfully, the Court may terminate the appointment and appoint another manager.

(e) Ordinarily, a person who would face a conflict of interest and duty would not be appointed a manager of a managed person's estate. However, such a conflict does not, necessarily, present an absolute bar to appointment as a manager, for otherwise, this would exclude from consideration a range of family members who are, in every other way, appropriate.

1. I accept that there are inherent advantages in SAM's estate being continued to be managed by a family member, with appropriate advice, rather than by a statutory body, particularly since the estate is of modest size, if there is no conflict of interest and duty, and where a relationship of love and affection between the applicant and the managed person is established.

1. I remind myself, also, that when exercising the discretion, the Court bears in mind that, ordinarily, members of the community consider that an outside manager is a measure of last resort: see Re M (1988) 2 VAR 213; Re R [2000] NSWSC 886 at [32].

1. In Re L [2000] NSWSC 721, at [7] and [12], Young J (as his Honour then was) recognised that a responsible family member will often be best placed to manage an incapable person's affairs provided there are minimal conflicts of interest or, if there are conflicts of interest, that they are properly dealt with.

1. In Holt v The Protective Commissioner (1993) 31 NSWLR 227, Kirby P (as his Honour then was), with whom Sheller JA and Windeyer AJA agreed, identified the advantages to a protected person of having a family member appointed as manager of his estate as including:

"(b) to the appointment of a family member, the following advantages:

...

(ii) the capacity of the protected person, if disabled, to interact with his or her manager so that, so far as possible, within the disability which has led to the appointment, such person may remain in charge of, or at least able to influence, the broad directions of the management of the estate;

(iii) the ingredient of love and affection and unquestioning devotion to the protected person which an appropriate family member can add to the task of management. Whilst the office of manager is, by its definition, concerned with proprietary and financial matters and involves the prudent control of the property and like interests of the protected person, in the nature of things the manager of the estate of a protected person is more likely than a general trustee or receiver to become involved in decisions which affect the protected person's quality of life. A lifetime knowledge of the person and a devotion to his or her interest may contribute to that quality. It may more readily be secured by the appointment as manager of a family member with the requisite knowledge and motivation."

1. In Holt , the Court of Appeal rejected the principle that the person applying for a change of manager bears the onus of demonstrating a "clear and convincing" case that the form of management proposed would better advance the interests of the protected person than the existing arrangements. In relation to onus of proof, as stated above, the Court put it no higher than saying that, generally, a person who seeks the removal of a manager needs to show "some reason" why the Court should so order (at 241).

1. The "reason" advanced in this case is the delinquency of MWM in lodging the accounts, and more importantly, that he no longer lives within the jurisdiction.

1. Before making any orders, I must be satisfied that to make such orders are in the best interests of SAM. If I come to that view, I am "duty bound" to revoke the order previously made and make another order.

1. This requires me to consider whether AMAM is a "suitable person" to be appointed as the financial manager. There is no indication given in the Act to what factors enable me to determine whether a person is "a suitable person".

1. It would be unwise to attempt any definition of the matters that may legitimately be enquired into to determine whether the applicant is suitable. Each case must depend upon its own circumstances. Needless to say, however, the Court must consider, at least, the proposed manager's character, honesty and ability to manage, diligently, the managed person's property in the managed person's best interests.

1. I am satisfied, in this case, that there is an available basis for a change of the financial manager of SAM. I am also satisfied that AMAM is a suitable person who ought to be appointed. The speed with which he adopted the suggestion, and complied with the court's request, to file the accounts, together with the NSW Trustee's acceptance of him being ready, willing and able to comply with the obligations of a financial manager, demonstrate that he has the best interests of SAM in mind.

1. I am also satisfied that a relationship of love and attention between SAM and AMAM has been established.

1. The lack of opposition by any other person, or the NSW Trustee, fortifies this conclusion.

Conclusion

1. I order:

(a) The Plaintiff be discharged from the office of manager of the Defendant's estate.

(b) Subject to the giving of security if required by, and to, the satisfaction of the NSW Trustee and Guardian, AMAM be appointed manager of the Defendant's estate to act in relation to her estate in accordance with the order and direction of the Court.

(c) The costs of the Applicant of and incidental to the Applicant's notice of motion filed 14 March 2010 be paid from the Defendant's estate.

(d) A copy of the orders should be served, by post, or by e-mail, on MWM, together with a copy of this Judgment, within 21 days of the delivery of reasons from Judgment.

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Decision last updated: 07 June 2011