Scott v Scott

[2012] NSWSC 1541

Supreme Court

New South Wales

Medium Neutral Citation:	Scott v Scott [2012] NSWSC 1541
Hearing dates:	26, 27, 28, 29, 30 November 2012
Decision date:	13 December 2012
Jurisdiction:	Equity Division
Before:	Lindsay J
Decision:	In three related sets of proceedings, orders were made inter alia under the Powers of Attorney Act2003 (NSW), the NSW Trustee and Guardian Act 2009 (NSW) and the Succession Act 2006 (NSW)
Catchwords:	MENTAL HEALTH - management and administration of property - protection orders - court-authorised will - whether enduring power of attorney made by a person suffered from mental incapacity is valid - whether an order for management of the estate of an incapable person should be made, and if so, who should be appointed manager and upon what terms - prospect of further family provision applications in relation to the estate of an incapable person - whether a court-authorised will in the name of an incapable person should be made.
Legislation Cited:	Civil Procedure Act 2005 (NSW) s 3 Uniform Civil Procedure Rules 2005 (NSW) rule 7.13; rule 42.1 Succession Act 2006 (NSW)) s 21 Evidence Act 1995 (NSW) Powers of Attorney Act 2003 (NSW) NSW Trustee and Guardian Act 2009 (NSW) s 41; s 71(1) Supreme Court Act 1970 (NSW) Civil Procedure Act s 98 Limitation Act 1969 (NSW) ss 14 and 63 Trustee Act 1925 (NSW) s 45
Cases Cited:	Law Society of New South Wales v Weaver [1977] 1 NSWLR 67 at 74F Weaver v Law Society of New South Wales (1979) 142 CLR 2010). Re An Incapable Person D [1983] 2 NSWLR 590 at 595F RH v CAH [1984] 1 NSWLR 694 at 708E PY v RJS [1982] 2 NSWLR 700 at 702 [6]-[7] McD v McD [1983] 3 NSWLR 81 at 86C-D. Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238D and 241G-242A Miller v Cameron (1936) CLR 572 at 575, 579 and 580-581 Letterstedt v Broers (1884) 9 App Cas 371 at 387. Re ES and the Mental Health Act 1958 [1984] 3 NSWLR 341 at 343D-344D. David by her Tutor the Protective Commissioner v David (1993) 30 NSWLR 417 at 438D Crisp v Burns Philp Trustee Company Limited (NSWSC 18 December 1979, unrep) Milillo v Konneche [2009] NSWCA 109 at [47]-[48] Zorbas v Sidiopoulous (No 2) [2009] NSWCA 197 at [89] Laidlaw v Kellie [2011] NSWSC 740 at [129] Luciano v Rosenblum (1985) 2 NSWLR 65 at 69G-70A Gibbons v Wright (1954) 91 CLR 423 at 437 and 438 Attorney General v Parnther (1792) 3 Bro 441; 29 ER 632 Murphy v Doman (2003) 58 NSWLR 51 at 58 [36] Owners of Strata Plan No 23007 v Cross (2006) 153 FCR 398 at [66] Harrison J in Lake v Crawford [2010] NSWSC 232 at [13].
Texts Cited:	JM Bennett, A History of the Supreme Court of New South Wales (Law Book Co, Sydney, 1974), ch 7 (entitled "Lunacy Jurisdiction") Philip Powell, The Origins and Development of the Protective Jurisdiction of the Supreme Court of New South Wales (Forbes Society, Sydney, 2003) HS Theobald, The Law Relating to Lunacy (Stevens & Sons, London, 1924), Part I entitled "Prerogative of the Crown"
Category:	Principal judgment
Parties:	Marjorie Scott by her Tutor Louise Baker; Dr Scott, Susan Byrne and Jamie Scott
Representation:	J Svehla J Simpkin SC and D Mackay (Jamie Scott) Solicitors: Rowan Solicitors Minter Ellison (for Jamie Scott)
File Number(s):	2010/426938; 2011/251591; 2012/00334076

Judgment

INTRODUCTION

The Scott Family and Friends

1. These proceedings, three in all, concern a close and loving family torn in different directions by mental illness.

1. The key members of the family for the purpose of the proceedings are an elderly couple (Marjorie and Dr Scott), their adult daughter (Susan) and their adult son (James, known as "Jamie"). Both Marjorie and Jamie have mental health problems.

1. Cameo appearances in the proceedings by Susan's husband and their two daughters, and by Jamie's former wife, are important to an appreciation of communal life in the Scott family, but they do not lie at the heart of the litigation.

1. The same cannot be said about two family friends with legal qualifications.

1. One, a barrister (William Carney) is a long time friend of Susan and her husband. They called upon him to witness the execution by Marjorie and Dr Scott of "Enduring Powers of Attorney" that provide a focus for disputes between Dr Scott and Susan, on the one hand, and Jamie on the other.

1. Another family friend, a solicitor, Louise Baker, has been called upon by Dr Scott and Susan to act as Marjorie's tutor in these proceedings. Jamie initially consented to her appointment as tutor but, in the course of the litigation, he has developed reservations about her neutrality. By reason of those reservations he opposes a proposal by Dr Scott and Susan that she be appointed manager of Marjorie's estate.

1. Marjorie is a "person under legal incapacity" within the meaning of s 3 of the Civil Procedure Act 2005 (NSW) and rule 7.13 of the Uniform Civil Procedure Rules 2005 (NSW), by reason of her mental illness. She now suffers from an advanced form of dementia or Alzheimer's Disease.

1. In two of the proceedings before the Court (Case No 2010/426938 and Case No 2011/25159) Mrs Baker was appointed as her tutor by Orders of the Court made on 1 November 2011.

1. In the third of the proceedings (Case No 2012/334076) Mrs Baker joined with Dr Scott and Susan in subscribing, as a tutor for Marjorie, to originating process filed on 26 October 2012.

1. In anticipation of the final hearing, Jamie challenged Mrs Baker's role as tutor in the 2012 proceedings by filing a Notice of Motion, returnable at the commencement of the hearing, seeking her removal from the office of tutor in those proceedings. That application was based upon evidence that Mrs Baker had acquiesced in the application of a substantial amount of money from Marjorie's estate in payment of legal costs incurred by Dr Scott and Susan, and in the name of Marjorie, in these proceedings. Jamie foreshadowed an application for a personal costs order against Mrs Baker in the event that his challenge to the validity of Marjorie's Power of Attorney succeeds and, he contended, Mrs Baker should not be allowed to act as Marjorie's tutor in circumstances in which her interests would be in conflict with her duty to Marjorie.

1. As events unfolded, Jamie did not press his challenge to Mrs Baker's role as tutor. The issue was, for all practical purposes, defused by Dr Scott. He made a gift to Marjorie of an amount of money in excess of the amount drawn from her estate for the payment of costs. This act of calculated generosity on his part is consistent with earlier conduct on his part designed, I find, to steer a path through the maze of problems thrown up by the respective mental health issues of Marjorie and Jamie.

1. Jamie has no need of a tutor in these proceedings, but he suffers from a bipolar condition that renders him a candidate for special consideration in the conduct of the affairs of Marjorie and other members of the Scott family.

1. Jamie contends that the central issue in the proceedings is whether the Enduring Power of Attorney executed by Marjorie is valid. That translates into a question whether Marjorie did, or did not, have the requisite mental capacity at the time she executed the power of attorney to support a finding of validity.

1. Jamie presented his case, for his own forensic purposes, as if his nomination of the central issue for determination made it so.

1. Marjorie's mental capacity at the time of her execution of the power of attorney is undoubtedly important in the minds of the parties on both sides of the record. Moreover, it is worthy of serious consideration in itself. However, forensic flourishes and family sensitivities aside, I doubt the primal importance of the validity of the power of attorney in the context of the proceedings as a whole. It is not a decisive issue. Not a great deal, ultimately, turns on whatever decision may be made about it. The parties are agreed that the Court should appoint a manager of Marjorie's estate. Appointment of such a manager would, in itself, cause the Power of Attorney to be suspended from operation.

1. Dr Scott and Susan do not seek to maintain control of Marjorie's estate. The relief they seek from the Court includes directions about how to deal with difficult questions that have arisen about how to deal with Jamie's entitlements and expectations in the context of Marjorie's estate. Jamie has disclaimed any affirmative case that might suggest that Susan has abused her putative office as Marjorie's attorney. There is no evidence to support any suggestion that she has acted improperly in any way. There is no suggestion, on either side of the record, that anything has been left undone in providing a high level of care, love and attention for Marjorie. She appears to have been cared for by the whole family, as far as she can be given her age and medical condition.

1. A finding that Dr Scott and Susan participated in a process of procuring Marjorie to execute an invalid power of attorney may have a bearing on the question of whether their nominee as Marjorie's manager (Mrs Baker) should be appointed, but not much else. The parties' devotion of substantial resources to an extensive exploration of evidence about the state of Marjorie's mind at the time of her execution of the power of attorney may have implications on the question of what costs orders should be made in disposition of the proceedings. However, who should bear the burden of any criticism on that quarter is not self evident.

1. Dr Scott and Susan may have overreached the reasonable in costs incurred on their side of the record. On the other hand, Jamie's single minded pursuit of a comparatively sterile question about the validity of Marjorie's power of attorney leaves him no less vulnerable to criticism.

1. The real questions in dispute driving the parties' contests in these proceedings relate, at a high level of abstraction, to two particular issues. First, what, if any, provision can and should be made now, or prospectively, for Jamie out of Marjorie's estate? Secondly, can some order be effected, now, in the succession plans of the Scott family (referable, at least, to Marjorie's estate, if not also to Dr Scott's estate) or are they to be condemned to the uncertainty of future family provision applications and the family chaos that could entail? Underlying these issues are questions about Jamie's health, present circumstances, future prospects and stability.

1. In a practical sense, those questions loom larger than comparable questions about Marjorie. She is secure in a nursing home, unlikely ever again to travel outside such an environment.

1. I intend no harshness in this assessment of the proceedings. The parties' respective self-interests are not absent from their calculations. That is true. However, this litigation cannot be characterised simply as a contest about competing self interest. It is about family, family dilemmas, management of mental health issues within a family, and how to deal constructively with succession plans for family property.

The Sale of Dr Scott's Surgery at Mary Street, Lidcombe

1. Dr Scott is a medical practitioner by profession. He has practised as a general practitioner for many years. Until 31 December 2003 or thereabouts he was in full time practice from a surgery located at 8 Mary Street, Lidcombe, in premises owned by Marjorie. After that date he scaled down his workload to practise, part time, from the family home at 79 Redmyre Road, Strathfield.

1. Marjorie sold the Mary Street premises in 2004 for $1.35 million. The sale was completed on 12 July 2004. Most of the net proceeds of sale were, and remain, invested in the share market.

1. The fact of the sale has significance in these proceedings because, by her last Will (made on 6 August 2003), the substantial testamentary provision made by Marjorie for Jamie out of her estate was the proceeds of a prospective sale of the Mary Street property.

1. At the time the Will was made, its terms plainly establish, Marjorie had no intention of selling the property during her lifetime. The Will deferred any prospective sale of the property until after Dr Scott ceased to conduct a surgery there.

1. As life unfolded, Dr Scott's retirement from full-time practice occurred before, not after, Marjorie's death; and, in or about May 2004, a local doctor approached Dr Scott and Marjorie to purchase the property.

1. After her sale of the Mary Street property, Marjorie neglected to revise her Will. The general consensus within the Scott family is that this was an oversight on her part, not a deliberate decision. I do not attribute it to the progression of her mental illness.

Marjorie's Kings Point Properties

1. It is accepted by Dr Scott, Susan and Jamie that Marjorie has generally sought to treat Susan and Jamie equally. She has not appeared to favour one over the other.

1. That fact is reflected in her Will by her testamentary gift to Susan of two properties on the south coast of New South Wales: a holiday home at 38 James Crescent, Ulladulla (more accurately, King's Point) and an adjoining, vacant block of land known as 40 James Crescent. The holiday home, acquired as an investment property, is a basic, four bedroom, log cabin on the water's edge. The vacant block is also on the water's edge.

1. The King's Point properties feature prominently in these proceedings because, after a succession of setbacks in his personal life, Jamie occupied the holiday home in about September 2010 and has, until shortly before the commencement of the final hearing of these proceedings, maintained an entitlement to reside there indefinitely. One problem with that stance has been that it has notionally deprived Marjorie's estate of rental income otherwise available to meet her living expenses. A deeper problem with it is that it has highlighted dilemmas, for Dr Scott and Susan, inherent in reconciling the competing needs, and interests, of all members of the family.

1. The provision made for Susan and Jamie in Marjorie's Will appears to have been predicated upon an assumption, by Marjorie, that the King's Point properties (destined for Susan) and the Mary Street property (destined for Jamie) were of approximately the same value. As the events of 2004 unfolded, the sale price of the Mary Street property was greater than expected. It had special value to the purchaser, a medical practitioner.

1. Dr Scott estimates that 38 James Crescent is currently worth $475,000.00 and that 40 James Crescent is currently worth $400,000.00.

The Nature of the Questions for Determination

1. The jurisdiction of the Court invoked in all three proceedings the subject of this judgment is, essentially, protective in nature, albeit largely statutory. What is to be done with Marjorie's disputed Power of Attorney? If an order is to be made for management of her estate, as an incapable person, who should be appointed manager, and upon what terms? What, if any, provision can and should be made from Marjorie's estate for the benefit of Jamie, now or prospectively ? Should the Court entertain an application for a court-authorised will ("a statutory will") to be made in Marjorie's name to address the testamentary consequences of sale of the Mary Street property?

1. With the consent of the parties, orders have been made for the three sets of proceedings before the Court to be heard together and for evidence in each to be evidence in the others. That has required a co-operative approach to application of the "rules of evidence" because, in the proceedings for a statutory will, the Court is entitled (by virtue of s 21 of the Succession Act 2006 (NSW)) to "inform itself of any ... matter in any manner it sees fit" without being "bound by the rules of evidence". The other sets of proceedings are constrained by the rules of evidence by virtue of the Evidence Act 1995 (NSW), s 4. Against that, however, proceedings in the exercise of protective jurisdiction are not, strictly adversarial and, subject to considerations of procedural fairness, the Court may regard itself as not bound by strict rules of evidence: Roberts v Balanco (1987) 8 NSWLR 436 at 440-441; Re Victoria (2002) 29 Fam LR 157 at 159 [11].

1. A factor that has facilitated the proceedings being heard together has been recognition that, in the particular circumstances of this case (in which the Succession Act proceedings were joined with the other proceedings at a time when the other proceedings were part-heard), the requirements of procedural fairness dictated that, in the interests of all parties affected by the proceedings, generally understood rules of evidence (including the Evidence Act) be applied: Cf, Law Society of New South Wales v Weaver [1977] 1 NSWLR 67 at 74F (on appeal, Weaver v Law Society of New South Wales (1979) 142 CLR 2010).

1. On the whole, the parties have refrained from taking evidentiary objections, and no objection has been taken to an application of ss 135-136 of the Evidence Act in the few instances in which the interests of justice have required consideration of whether particular evidence should, in fairness, be excluded or limited in the purpose for which it might be deployed.

1. By their conduct of the proceedings, the parties may be taken to have acquiesced in a general application to the evidence of the provisions of the Evidence Act, applied in a liberal manner for the purpose of permitting (conformably with the requirements of Part 6 of the Civil Procedure Act) a "resolution of the real issues" in the proceedings.

1. In their conduct of the proceedings all parties have exhibited an appreciation that, subject to the terms of applicable legislation and the requirements of procedural fairness, an exercise of protective jurisdiction generally requires that the Court be particularly mindful of the rights of a party (in these proceedings, Marjorie) entitled to the benefit of that jurisdiction.

1. The Court's protective jurisdiction, historically derived from the parens patriae jurisdiction of the Crown, is generally directed towards protection of minors and the mentally ill. It has, however, been invoked in aid of orders affecting adults under a disability falling short of mental illness or otherwise in need of protection: Re P [2006] NSWSC 1082 at [8]; RH v CAH [1984] 1 NSWLR 694; PW Young, C Croft and ML Smith, On Equity (Law Book Co, Sydney, 2009) para [4.190].

1. The Court's statutory jurisdiction is sufficient to enable the current proceedings to be determined without resort to an exercise of its "inherent jurisdiction", derived (by operation of Imperial legislation and, more recently, s 22 of the Supreme Court Act 1970 (NSW)) from the concept of the sovereign as parens patriae (ie, in modern terms, "the parent, or founder, of the nation"): JM Bennett, A History of the Supreme Court of New South Wales (Law Book Co, Sydney, 1974), ch 7 (entitled "Lunacy Jurisdiction"); Philip Powell, The Origins and Development of the Protective Jurisdiction of the Supreme Court of New South Wales (Forbes Society, Sydney, 2003); HS Theobald, The Law Relating to Lunacy (Stevens & Sons, London, 1924), Part I (entitled "Prerogative of the Crown"). The Court's jurisdiction under s 23 of the Supreme Court Act (to administer justice) has also been recognised as a source of protective jurisdiction: Re Q (Young J, 29 May 1985, unrep); Re C [2012] NSWSC 1097 at [66]. The existence of such jurisdiction informs the operation of the applicable legislation.

1. The flavour of the protective jurisdiction, as perceived in modern times, is encapsulated in s 39 of the NSW Trustee and Guardian Act, which lays down general principles applicable to ch 4 of the Act, of which s 41 is part. It reads as follows:

"It is the duty of everyone exercising functions under this Chapter with respect [inter alia to a 'protected person', defined to mean a person in respect of whom a 'management order' under s 41 of the Act is in force] to observe the following principles:

(a) the welfare and interests of such persons should be given paramount consideration,

(b) the freedom of decision and freedom of action of such persons should be restricted as little as possible,

(c) such persons should be encouraged, as far as possible, to live a normal life in the community,

(d) the views of such persons in relation to the exercise of those functions should be taken into consideration,

(e) the importance of preserving the family relationships and the cultural and linguistic environments of such persons should be recognised,

(f) such persons should be encourage, as far as possible, to be self-reliant in matters relating to their personal, domestic and financial affairs,

(g) such persons should be protected from neglect, abuse and exploitation."

1. In these proceedings only Marjorie qualifies for an exercise of the Court's "protective jurisdiction" as a person in need of protection. No party has conducted his or her case on the footing that Jamie qualifies for protection upon an exercise of that jurisdiction. He is capable of managing his own affairs, and does so, albeit under the constraints of his bipolar condition.

1. Nevertheless, Jamie's health, and his personal circumstances arising from ill health, require empathetic consideration in the management of Marjorie's estate.

1. If I am not mistaken in my assessment of the evidence, and the reactions of Dr Scott and Susan to the evidence adduced on Jamie's behalf, that is an insight which emerged with clarity only during the course of the hearing of the proceedings.

1. The protective nature of the jurisdiction required to be exercised in the proceedings is apparent in the character of the principal applications made to the Court (further or in the alternative, as the nature of the case required):

(a) an application (in the 2011 proceedings) for a declaration that the Enduring Power of Attorney purportedly executed by Marjorie pursuant to ss 8 and 19 of the Powers of Attorney Act 2003 (NSW) is invalid because, Jamie alleges, Marjorie lacked mental capacity to make a valid power of attorney, countered by an application by Dr Scott, Susan and Marjorie, by her tutor, Mrs Baker (in the 2010 proceedings) for orders under ss 35-36 of the Powers of Attorney Act, including a declaration that Marjorie, as the principal named in the instrument she executed, did have "mental capacity to make a valid power of attorney" at the time the instrument was executed.

(b) an application for a declaration (pursuant to s 41 of the NSW Trustee and Guardian Act 2009 (NSW) in the 2011 proceedings and, in the 2010 proceedings, pursuant to s 37(3) of the Powers of Attorney Act read together with s 41 of the NSW Trustee and Guardian Act) that Marjorie be declared "incapable of managing ... her affairs", with a consequential "order that [her estate] be subject to management under the NSW Trustee and Guardian Act, and associated orders relating to appointment of a manager.

(c) in the 2010 proceedings, an application for advice, directions and other orders concerning Marjorie's affairs:

(i) upon an assumption that no management order is made under or by reference to s 41 of the NSW Trustee and Guardian Act, pursuant to s 38 of the Powers of Attorney Act; or

(ii) upon an alternative assumption that a management order is made under s 41, pursuant inter alia to the NSW Trustee and Guardian Act, s 64 (relating to management of Marjorie's estate) and s 65 (relating to deployment of property and income of Marjorie for the benefit of her family or her estate.

(d) In the 2012 proceedings, an application (pursuant to ss 18-26 of the Succession Act) for a court authorised will to be made on behalf of, and in the name of, Marjorie as a person who, all members of her family agree, is now a person who lacks testamentary capacity.

Principles governing questions of costs

1. A question of some consequence in relation to the various applications before the Court, in light of the vigour with which they have been contested, is the nature of the principles to be applied by the Court in formulating orders for payment of costs of the proceedings.

1. There is no question, but that the Court's general, discretionary power (under s 98 of the Civil Procedure Act) to award costs is available in the present proceedings. By s 98, the Court has "full power to determine by whom, to whom and to what extent costs are to be paid".

1. Nor is there any question, but that rule 42.1 of the Uniform Civil Procedure Rules applies. That rule provides that "[subject to Part 42 of the Rules], if the Court makes an order as to costs, the Court is to order that the costs follow the event unless it appears to the Court that some other order should be made as to the whole or any part of the costs."

1. However, consistently with both s 98 and rule 42.1, the Court has adopted a distinctive practice, in the exercise of its discretion as to costs, in proceedings in which its protective jurisdiction is invoked. In those cases, the general principle is to make such, if any, order as to costs as is, in all the circumstances, the proper order to be made: Re An Incapable Person D [1983] 2 NSWLR 590 at 595F; RH v CAH [1984] 1 NSWLR 694 at 708E.

1. The origins of this practice were located by Powell J in Re C (An Alleged Lunatic) (1874) LR 10 Ch App 75 and Re Cathcart [1893] 1 Ch 466 at 472. However, I am inclined to believe, the practice is more broadly based upon the accumulated experience of judges exercising jurisdiction which, because it is protective of the rights of a person or persons lacking capacity to protect themselves, requires an understanding that it has a public interest character that transcends ordinary inter partes litigation.

1. An invocation of protective jurisdiction may be appropriate, and in some cases necessary, even if, upon an exercise of the jurisdiction, the Court declines to grant relief in the particular case. In those circumstances, the proper administration of justice and the interests of justice may require a broader approach than the adversarial principle of "costs follow the event". The Court's protective jurisdiction is not adversarial in the same sense as litigation relating to the private rights and liabilities conducted by parties of sound mind and understanding.

Testamentary Freedom and the Prospect of Family Provision Proceedings

1. An additional factor which needs to be borne in mind in the resolution of the proceedings currently before the Court is that decisions taken by Dr Scott, Susan and Jamie in their conduct of the proceedings cannot realistically have been taken without some calculation about the potential future operation of ch 3 (ss 55-100) of the Succession Act 2006 (NSW). That legislation now governs the Court's jurisdiction to grant "family provision orders", in favour of "eligible persons", in relation to deceased estates.

1. Unless the Court otherwise directs, an applicant for a statutory will must inform the Court of evidence, available to the applicant, as to "the likelihood of an application being made under ch 3 ... in respect of the property of the person" for whom a will is sought to be made: Succession Act, s 19 (2)(i). A complication in these proceedings is that it is not only Marjorie's deceased estate which must enter the parties' calculations. Dr Scott's succession plans, not themselves exposed to orders of the Court, cannot but enter into contemplation.

1. Each of Susan and Jamie is prospectively an "eligible person" within the meaning of s 57 of the Succession Act in respect of the estates of Marjorie and Dr Scott.

1. An application for family provision relief must, generally, be made within 12 months after the death of the person from whose estate, or notional estate, relief is sought: Succession Act, s 58. The availability, and quantum, of such, if any, relief of that nature as may be granted depends upon an assessment, made at the time of the hearing of an application for relief, as to the adequacy of "provision for the proper maintenance, education or advancement in life" of the applicant made by the will of the deceased person or by the operation of the intestacy rules in relation to the estate of the deceased person: ss 59(1)(c) and 59(2).

1. The prospect of the Scott family becoming embroiled in family provision litigation after the respective deaths of the Scotts senior is a real one, not readily excluded from consideration. One or both of Susan and Jamie may well survive one or both of Marjorie and Dr Scott. Both sides of the record have made submissions referable to the prospect of Jamie, at least, making an application for family provision relief in relation, at least, to Marjorie's deceased estate. Dr Scott, Susan and Susan's daughters generously invited the Court to make a statutory will for Marjorie, for the benefit of Jamie, on the basis that they would not seek to disturb the effect of such a will via subsequent family provision proceedings. As an actual and prospective benefactor of his children, Dr Scott must have ch 3 of the Succession Act prominently in mind in his "estate planning" calculations.

1. All parties must also have had in their minds, at least for a time, the possibility that, if a family settlement could be agreed upon for the purpose of bringing to an end not only the current proceedings, but prospective family provision proceedings, the Court might be invited: first, to approve a release of rights under ch 3 of the Succession Act (pursuant to s 95 of the Act) in anticipation of the death, at least, of Dr Scott; and, secondly, to approach the application for a court authorised, "statutory will" for Marjorie (pursuant to ss 18-26 of the Succession Act) with greater certainty than might otherwise be available about the prospect that orders made for the final determination of these proceedings will bring to an end litigation between Susan, Jamie and Dr Scott about the family inheritance of the younger generation of the Scott family.

1. The Court is in no position to know to what extent the parties' negotiations for an overall family settlement have been pursued in the course of the discussions that have taken place during the life of the current proceedings.

1. What can be known, though, is that, in the absence of court approval of a release of Susan's and (perhaps more importantly) Jamie's prospective rights to apply for family provision relief in relation to the deceased estates of Marjorie and Dr Scott, there is a live issue about the utility of any order that might be made in these proceedings for a statutory will to be made in Marjorie's name: see Re Fenwick; Application of Jr Fenwick; Re "Charles" (2009) 76 NSWLR 22 at 60-61 [189]-[199]. What's the point in making an order for a statutory will that is unlikely to settle any controversy and may, indeed, serve only to distort a relatively simple family provision application, able to be based upon an assessment of Jamie's then needs, after Marjorie's death?

1. A comprehensive assessment of the nature and scope of the current proceedings also requires that formal notice be taken of the absence of any contention in these proceedings that the testamentary freedom of Marjorie and Dr Scott, jointly or severally, is impeded by the existence of a contract to make a will (Birmingham v Renfrew (1937) 57 CLR 666) or the operation of an estoppel having a similar effect (Giumelli v Giumelli (1999) 196 CLR 101). There is no allegation that the testamentary freedom of Marjorie or Dr Scott is constrained by a trust in favour of Susan, Jamie or any other person.

1. These considerations are not merely theoretical. It is common ground between the parties that Dr Scott's net assets are greater than those of Marjorie's estate. Dr Scott estimates Marjorie's current net worth, as at 13 November 2012, at $2,829.475.49. That figure values 38 James Crescent at $475,000.00 and 40 James Crescent at $400,000.00. It also includes Jamie's indebtedness of $127,000.00. Most of the balance of her wealth takes the form of shares listed on the stock exchange ($1,307,709.78) and cash in bank accounts ($512,165.71), which accounts for the provision of an estimate of Marjorie's net worth with pretense of precision to "49 cents".

1. Jamie contends that Dr Scott's estate is currently worth an unspecified amount "in the order of $8 million". I make no finding about that. It is sufficient for present purposes to note: first, that Dr Scott's material needs are not, and are not likely to be, a charge on Marjorie's estate; and secondly, the fact that he presently has net assets greater than those of Marjorie means that his succession plans, whatever they may be or ultimately become, could influence decision making about management or disposition of Marjorie's estate.

1. Since the time of Marjorie's execution of the disputed Power of Attorney on 27 June 2008, Dr Scott has twice made a will, prospectively affecting the relative rights of Susan and Jamie.

1. On the first occasion (27 April 2009) he made a Will, for which he had planned since 1 July 2008 or thereabouts, as a means of compensating Jamie, at least in part, for the diminution in his expectant interest in Marjorie's estate consequential upon sale of the Mary Street property. On the second occasion (1 September 2010) he significantly reduced Jamie's prospective share of his estate because of his perception that Jamie had behaved badly towards him in the intervening period.

1. In its determination of the current proceedings the Court needs to bear in mind, at least in relation to the application for a statutory will for Marjorie, that: first, Jamie reserves a right to apply for family provision orders against the respective estates of his parents should he survive his parents; and, secondly, subject to such constraints as ch 3 of the Succession Act may impose on his freedom of testamentary disposition, Dr Scott is at liberty to dispose of his property, in life and upon his death, as he sees fit.

1. Neither can, or should, be criticised for their reservation of rights. In the absence of a comprehensive family settlement, this may be both rational and reasonable. Nevertheless, the fact that such rights have been reserved may have a bearing on what, if any, discretionary orders should be made in the here and now.

1. Jamie supports his present, and prospective, claims against Marjorie's estate with a submission that "[It] is ... likely given the estrangement between Dr Scott and Jamie ... that Susan ... will inherit the whole estate of her father...." That may be so, but the force of the submission is lessened by two factors. First, Dr Scott has yet to manifest an intention to exclude Jamie from his will. Secondly, Jamie has not disclaimed any intention to apply for family provision relief against Dr Scott's estate, still less to submit to a Court approved release of his rights to apply for such relief.

PERSONALIA

Marjorie

1. Marjorie was born on 12 November 1923. She is presently aged 89 years. She has exhibited the symptoms of dementia and/or Alzheimer's Disease since about 2004. She was admitted to a nursing home on 6 November 2008.

1. Prior to the onset of her illness, Marjorie had exhibited, over many years, an interest in the property she owned (including a share portfolio), local politics and her family. She was an astute woman, trained in her youth as a nurse. She and Dr Scott were married on 25 September 1959, five years or so after Dr Scott qualified to practice medicine.

1. Prior to mid-2004 she kept her own financial records. In about July of that year, at her request, Dr Scott commenced to keep a separate cash book for her in relation to her separate financial affairs.

1. Dr Scott's evidence is that she was admitted to a nursing home in November 2008, not because she lacked mental capacity, but because she suffered from a loss of "short term" memory that meant that she was in need of constant care about the house and, by reason of his own age and infirmity, he was unable to cope with her at home.

1. Some corroboration for this assessment can be found in the fact that, in the late afternoon of the day of her admission to the nursing home, she had sufficient wit to surprise her family, and the nursing home staff, by catching a taxi home.

1. Marjorie's last Will was made on 6 August 2003. There is no dispute about her testamentary capacity at that date.

1. Nor is there any dispute about her lack of testamentary capacity now. All members of her immediate family - the parties to these proceedings - agree that she no longer has the mental capacity to make a Will, and she is no longer capable of managing her affairs. They join in asking the Court to make an order (under s 41 of the NSW Trustee and Guardian Act) for the management of her estate, although they differ as to the identity of a suitable manager.

1. Between 6 August 2003 (when Marjorie made what is agreed, between all parties, to have been a valid Will) and now her mental health has declined in a manner consistent with characterisation of her illness as a slow, progressively degenerative disease.

1. Jamie contends that, by reason of that illness, Marjorie lacked the mental capacity to make the disputed Power of Attorney on 27 June 2008. He suggests that Dr Scott and Susan contrived to have her execute a Power of Attorney because they believed that, at that time, she lacked the mental capacity to make a Will and that, by execution of a Power of Attorney in favour of Susan, they could take control of her affairs, to his exclusion.

1. Dr Scott and Susan dispute this. Their evidence is that, on 27 June 2008, they believed that Marjorie in fact possessed sufficient mental capacity to make either or both a Will or a Power of Attorney.

1. Susan's evidence, more specifically, is that she participated in the events of 27 June 2008 (when both her parents executed an Enduring Power of Attorney in her favour) because she was requested by them to do so.

1. Marjorie has no siblings, nieces or nephews. Dr Scott, Susan and her family, and Jamie constitute her entire family.

Dr Scott

1. Dr Scott was born on 4 July 1927. He is presently aged 85 years.

1. In the course of his medical practice as a GP he regularly, over many years, had occasion to assess the mental health of patients. He was, in a professional setting, familiar with techniques for assessing mental capacity. However, he disclaimed any expertise as a specialist and, in his evidence, he laid emphasis on his practice of referring patients to specialist psychiatrists in the event of a preliminary assessment by him of issues relating to mental incapacity.

1. He maintained in his evidence that on 27 June 2008: first, to his observation, Marjorie had sufficient mental capacity to execute the Enduring Power of Attorney she executed that day; and, secondly, had he believed that she lacked the requisite mental capacity, he would not have permitted her to sign the instrument.

1. In giving his evidence, Dr Scott presented as frail of body, and hard of hearing, but otherwise alert and in full possession of his faculties. He described his occupation as that of a "semi-retired GP".

1. I accept him as a man of judgement and a witness of truth.

1. I discern in him no malice towards Jamie, although he has plainly taken an adverse view of Jamie's behaviour towards him in recent years. Their relationship appears to have become strained, in particular, during two periods in which Jamie lived in the family home as an adult. The first of those periods was for about 12-15 months in 2004-2005, when Marjorie was also in residence. The second was between June 2009 and August 2010 or thereabouts when Jamie lived alone with Dr Scott as Jamie's health, his attempt to establish a business and his marriage collapsed.

1. That Dr Scott's assessment of Jamie's behaviour towards him was not wholly unfounded received corroboration in the deep remorse exhibited by Jamie when giving evidence about the nature of his relationship with Dr Scott.

1. On the other hand, as Dr Scott acknowledged in his evidence, it is only from the evidence adduced on Jamie's behalf in these proceedings that the depth of Jamie's long-term medical problems has been made manifest.

Susan

1. Susan is a natural child of Marjorie and Dr Scott. She was born on 7 September 1961. She is now aged 51 years.

1. She ceased to reside in the Scott family home in or about 1984. She married Michael Byrne in or about 1991.

1. There are two children of Susan's marriage to Mr Byrne. Both are daughters. They are the only grandchildren of Dr and Mrs Scott. Macushla was born on 18 March 1992, and is now aged 20 years. Aphra was born on 3 March 1995, and is now aged 17 years.

1. Susan describes her occupation as that of an "Educator". She is a part-time private literacy teacher for school age children and, in association with her husband through a corporate vehicle they jointly own, she operates a business which has the Australian franchise for the Spalding Method for teaching primary school teachers, speech pathologists, occupational therapists and the like. She has business experience, including exposure to a stockbroker's office in London.

1. She owns the Byrne family home at Chatswood West, unencumbered. She has no significant debts.

1. Susan's husband conducts his business activities as a market contractor through the private company through which Susan conducts her business activities.

1. Susan's family appears to be comfortably well off, but not so well off as to be independent of concerns about money.

1. Macushla is a student at the University of Melbourne. She has just completed her studies for a Bachelor of Science degree, and accepted an offer from the University to study for a Doctor of Medicine degree.

1. Aphra has just completed her Higher School Certificate. She lives at home with her parents. She aspires to entry into a university course leading to the degrees of Bachelor of Science and Master of Nursing.

1. Susan anticipates that both girls will remain substantially dependent upon her and her husband for the duration of their university studies and that both will incur a liability to the government referable to the HECS scheme for their university fees.

1. Marjorie, Susan, Macushla and Aphra all received their secondary education at Ascham, a prestigious school for girls. Marjorie has made substantial contributions to her granddaughters' education, no less generous to Susan and her family than she has been towards Jamie.

1. In giving her evidence, Susan struck me as a highly organised person, with disciplined habits of thought, and the professional traits of a teacher. She presented as honest, both in her intent and in her attention to detail.

1. She frankly acknowledged that her personal relationship with Jamie has been strained since an incident, in which Jamie exhibited an outburst of aggression for which he later apologised, in 2007. She also acknowledged that, when in company at family gatherings since that time, they have treated one another with restrained civility.

1. Jamie and Susan are different types of people. Without adverse reflection on either of them, it would not be difficult to imagine that each would always have irritated the other.

1. Susan appears to have endeavoured to be scrupulously fair to Jamie in their personal dealings. In my assessment, her sense of personal propriety would have compelled her to make that endeavour. Her lack of empathy for Jamie might, however, have limited her capacity to succeed. That lack of empathy might, in turn, have been a function, in part, of her lack of appreciation of Jamie's medical problems.

1. In fairness, it should be noted that it was Susan who, shortly before 16 June 2008 came upon Marjorie's Will and, immediately, brought to the attention of Marjorie and Dr Scott the effect of Marjorie's sale of the Mary Street property on Jamie's prospective entitlement to an interest in Marjorie's estate. That occurred when, having regard to her parents' advanced ages, she was endeavouring to ensure that they each had a Will and pre-paid funeral arrangements. She discovered, not only Marjorie's Will, but also the fact that Dr Scott himself had no Will.

1. It was Susan who, in light of these discoveries, contacted the family solicitor (Peter Baker, the husband of Mrs Louise Baker) to set in train arrangements to address the question of Wills.

1. Susan, Dr Scott and Marjorie regarded the question of Wills as separate from any question about the execution of powers of attorney. For about a year before 27 June 2008 Dr Scott and Marjorie had, from time to time, discussed the desirability of their executing powers of attorney in anticipation of declining health. For about six months prior to 27 June 2008 Susan, too, was working towards having them execute powers of attorney.

1. Dr Scott's evidence is that more than once in the year before 27 June 2008 Marjorie initiated discussion of a perceived need for a power of attorney to be prepared for each of herself and Dr Scott, and she herself nominated Susan as their prospective attorney. I accept that evidence.

1. The evidence given by Susan in these proceedings, like that given by Dr Scott, included frank, personal assessments of Marjorie's degenerative illness. She was quite clear in her own assessment that Marjorie had sufficient mental capacity on 27 June 2008 to grant the Power of Attorney executed that day. She communicated that assessment without any overt sense of tailoring her evidence to her own self interest.

1. The relief she seeks in these proceedings, coupled with the evidence that she has adduced in support of her claims for relief, are consistent with what I take to be a strong personal predisposition to endeavour to organise the affairs of her family. She is an organiser. She wants to ensure that everything is in its place, and that everybody (including Jamie) gets his or her due.

1. The following exchange between Susan and me, at the conclusion of her evidence, provides an illustration of her attitude to the proceedings:

"Q. Would there be any great disruption to family life if Jamie were permitted to stay [at the Scott family holiday home at King's Point] on an indefinite basis?

A. I would have no problem if Jamie were to own that property in the end. I have no interest in owning that property or having anything to do with that property. It doesn't worry me if Jamie lives in that property for the rest of his life. My worry is the lack of income for my mother with regard to that property. I have no sentimental attachment to that property.

Q. Does that explain in some respects at least your desire to get possession of the property back at the moment?

A. Yes, exactly, to maintain my mother's income.

Q. How much income does your mum need?

A. She pays $5,000 a month at the nursing home. I am not exactly sure of her current tax position or what her income tax would be."

1. I interpret Susan's preparedness to surrender any moral claim to the King's Point holiday home as simultaneously generous and indicative of a person who knows both her own mind and her own priorities. I interpret her concern about the need to preserve Marjorie's income as entirely sincere and formally correct. I intend no criticism of her when I notice, however, that Marjorie's current net wealth - including assets in a liquidated form - is of such an order that it is difficult to imagine that her resources could not sustain her for the balance of her life expectant. That is so even if Jamie were to be allowed to live at King's Point, rent free, indefinitely. Marjorie's present needs are modest, finite, unlikely to expand materially beyond the nursing home in which she currently resides, a similar aged care facility or a hospital visit for medical care.

Jamie

1. Jamie was born on 17 October 1963. He is now aged 49 years.

1. His birth mother is Ms JA (Jan) Griffiths, who lives at Werri Beach. The evidence does not disclose the identity of his birth father (beyond his identification as "Peter") but, in or about the late 1990s, he gave Jamie $90,000.

1. Jamie was adopted, at birth, by Marjorie and Dr Scott.

1. He was not reunited with his birth mother until 1 December 1980.

1. Marjorie and Dr Scott never hid from Jamie the fact of his adoption; but, I am satisfied, they have at all times, and in all respects, treated him as if he were their natural son.

1. For his part, the fact of his adoption appears to have been a cause of anxiety for Jamie, at least since his reunion with his birth mother.

1. His adoption is, at least in his perception, a factor in what he perceives always to have been his difficult personal relationship with Susan.

1. I suspect that he attributes to his adoptive status tensions between brother and sister that have nothing to do with how they each came to be members of the same family. They are different personalities. Susan is naturally clinical, precise and proper. Jamie is naturally more emotive, impulsive and gregarious. I do not share his belief that Susan has never really accepted him as her brother.

1. Jamie has, it seems, always enjoyed a closer personal relationship with Marjorie than he has enjoyed with Dr Scott. A partial explanation for that could be the fact that Marjorie was more available to play the role of a caring parent, and was naturally more empathetic than Dr Scott. Dr Scott, in my assessment, has fully acknowledged Jamie as his son; but his personality is closer to that of Susan than to that of Jamie, and he has dedicated his life to work. He may well have been a workaholic. Without any undue reflection on either Dr Scott or Jamie, it is not difficult to imagine that Dr Scott was never quite as accessible to Jamie as Jamie would have liked and, perhaps, have needed.

1. Jamie was educated at the King's School at Parramatta (1973-1981) and thereafter attended two universities without completing a degree course. The first was the University of New South Wales. There he studied for a Bachelor of Commerce Degree, full time in 1982-1983, and part time between 1984-1986, before he discontinued his studies. His second university experience was at the University of Technology, Sydney. There he studied for a Bachelor of Land Economics Degree part time, between 1987-1989 or thereabouts, before discontinuing.

1. Between 1999-2001 he studied for, and completed, a course at the Australian College of Applied Psychology that led to a Diploma in Counselling and Communication.

1. He has had a varied work experience. He has worked with a firm of chartered accountants (1984-1985). He has driven a taxi (1986-1991) and worked as a limousine driver (2005-2006). He has worked as a sales agent for, first one and then another, optical supplier (1990-1995); as a product manager (1997-1999); and subsequently as a sales representative for a work wear company (2004-2005). He has also taught English as a second language at various private colleges in Sydney (2001-2005).

1. Whilst working as a limousine driver in 2005 he met, and commenced a relationship with, Tanwarad Deesin, generally known as "Sunny". They married on 4 November 2006, separated in January 2009 and divorced in April 2010.

1. During the course of their marriage they attempted to establish various businesses. They began with an importing, retail and wholesale distribution business, primarily importing beach baskets and handbags from Thailand; for a short time they had a retail outlet at Birkenhead Point in Sydney. They subsequently commenced wholesaling to various businesses. Then Jamie decided to suspend wholesaling and to focus on retail trading. To facilitate this, he bought a trading location at Paddy's Markets in Sydney. Between July 2008 to July 2010 he operated a stall at Paddys.

1. Jamie's various business ventures were supported financially by both Marjorie and Dr Scott.

1. In the period between July 2004 and June 2008 or thereabouts Marjorie lent Jamie, without security or any formal loan agreements, sums totalling a documented $127,000.00. Her records record that amount as having been made up of the following payments: $5,000.00 (on 26 July 2004); $4,000.00 (on 18 October 2004); $23,000.00 (on 5 February 2007); $15,000.00 (on 19 March 2007); and $80,000.00 (on 6 June 2008).

1. Between July 2004 and December 2009 or thereabouts Marjorie also made 11 documented gifts of smaller amounts of money to Jamie or his wife. They totalled $15,356.40. That amount is made up of the following payments: $246.40 (17 June 2005); $500.00 (17 October 2005); $160.00 (4 November 2005); $3,000.00 (10 February 2006); $1,000.00 (1 September 2006); $10,000.00 (for Jamie's wedding to Sonny on 10 October 2006); $200.00 (27 December 2006); $50.00 (in the form of a present to Sonny on 10 July 2008); $100.00 (as presents for Jamie and Sonny on 29 December 2008); $50.00 (9 October 2009); and $50.00 (29 December 2009).

1. The recollections of Dr Scott and Jamie differ as to whether Jamie's request for financial assistance in June 2008 was communicated by him to Marjorie personally or whether he dealt only with Dr Scott. It matters not which is correct. I accept that, one way or the other, Jamie's request was communicated to Marjorie personally and Marjorie, in consultation with Dr Scott, personally approved the loan of $80,000.00 made in response to Jamie's request.

1. By their actions, both Dr Scott and Jamie acted at that time upon the basis that Marjorie had sufficient mental capacity to approve that loan. Any finding to the contrary would have to proceed on a premise (which I do not embrace) that both men were prepared to disregard Marjorie's interests and to deploy her resources without her fully informed consent. Jamie was a known financial risk. $80,000.00 is no small amount for an unsecured loan to a family member who is a known financial risk. The fact that Dr Scott, Marjorie and Jamie were all prepared to participate in the making of such a loan is a testament to the fundamental bonds that bound the Scott family together, as well as evidence of Marjorie's mental capacity in early June 2008.

1. Further evidence of those bonds is found in the fact that, between August 2006 and June 2009 or thereabouts, Dr Scott himself made unsecured loans to Jamie, without any formal documentation, in sums totalling $65,000.00. That amount is made up of the following payments: $5,000.00 (28 August 2006); $5,000.00 (12 September 2006); $25,000.00 (9 October 2006); $20,000.00 (6 June 2008); and $10,000.00 (30 June 2009).

1. It is necessary to record details of these loans made by Dr Scott and Marjorie to Jamie because, whatever orders are to be made in these proceedings, an allowance has to be made for the terms upon which Jamie may be called upon to repay the loans. That must be done bearing in mind that his present, and prospective, financial circumstances lend little hope to his ever being able to effect a repayment except by way of an allowance or charge against such entitlements as he may have to participate in whatever provision may, in due course, be made for him out of the deceased estates of his parents.

1. Jamie has suffered from depression since childhood. For most of the 1990s he was treated by a psychotherapist for depression and anxiety. In or about 1996 he took 15 months off work to assist him to treat that condition. Since about 2000 he has taken anti-depressant drugs.

1. He also has other health issues. Since 2008 he has suffered from hypertension, for which he currently takes medication. For approximately the last 15 years he has suffered from irritable bowel syndrome.

1. At the hearing of these proceedings he adduced evidence from Dr Robert Kaplan, a Forensic Psychiatrist and an Honorary Clinical Associate Professor at the Graduate School of Medicine, University of Wollongong.

1. Dr Kaplan assessed Jamie as suffering from Bipolar Affective Disorder, Type 2, with recurrent depression, hypomanic episodes and secondary alcohol/cannabis abuse. His evidence was that this is a constitutional disorder resulting in mood swings, difficulties in relationships and work, episodes of impaired judgement and difficulty keeping to an ordered routine. He assessed Jamie's depression and bipolar disorder as in the category of mild to moderate severity.

1. He recommended that Jamie receive treatment comprising regular attendance at a psychiatrist for up to three years. He anticipated that Jamie could also require further counselling with a psychologist, and that Jamie may need to attend a drug and alcohol programme.

1. Consistently with the fact that Jamie is presently living on a disability pension, Dr Kaplan expressed the opinion that Jamie is unable to work (despite taking antidepressants) and that he is coping as well as he can living down the coast. He expressed the further opinion that, with the recommended treatment, Jamie's ability to obtain work may improve to some extent but, having regard to his poor record in the past, the prospects for such improvement are not good.

1. Jamie has been receiving a Disability Support Pension from the Commonwealth Government since 11 July 2011. That pension, with a supplement, provides him with $755.50 per fortnight.

1. On her own admission, in or about mid-2011 Susan took steps "to disconnect the electricity for 38 James Crescent so that Marjorie would no longer be liable" for the cost of electricity used by Jamie. He has been bearing that cost since that time.

1. Marjorie's estate has continued to meet all other outgoings on the King's Point properties, including council rates, water rates, land tax and insurance. Marjorie's loss of rental income from the holiday home has also meant that none of those outgoings has attracted income tax deductibility for the benefit of her estate.

1. As at the end of August 2012, Jamie had savings of approximately $11,000 (representing the remains of the proceeds of the sale of his business); a 2004 Ford Falcon station wagon worth approximately $6,000; and superannuation entitlements to the value of about $16,865.

1. His regular expenses (without any allowance for rent referable to his occupation of the Scott family holiday home at King's Point) have been constrained by his need to live within the limits of his pension. Those expenses include allowances for medication, hydrotherapy, food and household groceries, petrol and motor vehicle maintenance and insurance expenses, electricity, telephone, internet, Austar and veterinary care for a dog.

1. Jamie's evidence is that he regards his present financial position as such that he can no longer afford a number of expenses. Included in that list are: travel and accommodation expenses to visit Marjorie in her nursing home more than once a month; treatment by a psychiatrist of his bipolar mental illness; private medical insurance; private physiotherapy for treatment of a break sustained to his foot in January 2012; dental treatment; firewood to keep the family holiday home warm in winter; and new clothes.

1. He has applied for public housing. He is on a waiting list.

1. Dr Scott, Susan and Marjorie's tutor accept that Jamie is living under strained financial circumstances. None of them seeks to press him to the point of bankruptcy. It is on that basis, as it appears to me, that they have agreed that, subject to any orders made by the Court, Jamie should be permitted to defer until their respective deaths repayment of moneys he borrowed from Marjorie and Dr Scott. In that connection, it is agreed that, between 23 July 2004 and 6 June 2008 or thereabouts, Jamie borrowed sums totalling $127,000 from Marjorie; and that, between 28 August 2006 and 30 June 2009 or thereabouts, he borrowed $65,000 from Dr Scott.

1. In substance, the parties propose that these debts be treated as advances against such entitlements as Jamie may have to receive testamentary benefits from his parents.

1. That characterisation of them having been agreed "within the family", the Court was not invited to consider whether, if viewed as debts, Jamie's liability to repay them might have fallen due or, at least to some extent, been extinguished by the operation of ss 14 and 63 of the Limitation Act 1969 (NSW).

1. In giving his evidence at the hearing of the proceedings it was apparent that Jamie clings to happy memories, and his ongoing image, of Marjorie as a loving mother. It was also apparent that he feels remorse for having fallen out with Dr Scott, and that he continues to harbour resentment, and perhaps envy, towards Susan.

1. Jamie struck me as honest, sincere and presentable. Despite his illness and anxieties he is, and is proud to be, a member of the Scott family. To my observation, he is conscious of limitations arising from his illness.

THE DISPUTED "ENDURING POWER OF ATTORNEY"

1. On 27 June 2008 Marjorie and Dr Scott each executed an instrument bearing the character of an "Enduring Power of Attorney" as contemplated by ss 8 and 19 of the Powers of Attorney Act 2003.

1. They each appointed Susan as their attorney.

1. Both instruments took the form of a handwritten adaptation of a printed form. Dr Scott completed the preliminary sections of Marjorie's printed form.

1. Both instruments were executed by Marjorie and Dr Scott at the family home at Strathfield: in the presence of one another, the witness to both their signatures (William Carney, Barrister) and Susan.

1. In the process of procuring execution of Marjorie's power of attorney, Mr Carney ruled through particular provisions of the printed form and asked Marjorie to initial them.

1. Jamie was not part of the process of preparation or execution of the instruments, though he was present in the surrounds of the family home at or about the time of their execution. His presence, such as it was, was a brooding one. Having arrived at the premises without forewarning of the transactions planned for the day, he took offence at his exclusion from the proceedings or, perhaps more accurately, his non-inclusion in them. He was, to paraphrase Robert Burns' Tam O'Shanter, "[Gathering his] brows like gathering storm, Nursing [his] wrath to keep it warm".

1. His emotional reaction to his perceived exclusion from family business might be thought, objectively, to evidence his unsuitability to serve as an attorney for Marjorie. He did not confront any of the participants in the process of procuring execution of powers of attorney with a protest placing in issue the mental capacity of Marjorie. He took no steps to document a conversation with Marjorie directed towards her understanding of the day's events. His focus, sadly, was on himself. His health, I assume, was a contributing factor in that; but the objective facts remain as they are.

1. His absence from the event, such as it was, was no doing of Susans. She was not unhappy about his absence, but she expressed to Dr Scott her opinion that he should have been invited to participate.

1. The respective instruments signed by Marjorie and Dr Scott were in substantially the same terms.

1. Both instruments contained, in "Part 1", provisions to the following effect:

"Clause 1 Attorney(s)

I appoint [Susan] to be my Attorney(s).

My attorney(s) may exercise the authority conferred on my attorney/s by Part 2 of the Powers of Attorney Act 2003 to do on my behalf anything I may lawfully authorise an attorney to do.

My attorney's/attorneys' authority is subject to any additional details specified in Part 2 of this document.

Clause 2 Continuation of Power of Attorney if loss of mental capacity

I give this power of attorney with the intention that it will continue to be effective if I lack capacity through loss of mental capacity after its execution.

Clause 3 Commencement of the Power of Attorney

This Power of Attorney operates immediately. "

1. The reference in clause 1 to "Part 2 of this document" was otiose because, in each of the instruments executed, the provisions of Part 2 were deleted.

1. Those deletions meant that neither Marjorie nor Dr Scott authorised Susan: (a) "to give reasonable gifts as provided by s 11(2) of the Powers of Attorney Act 2003"; (b) "to confer benefits on the attorney to meet the attorney's reasonable living and medical expenses as provided by s 12(2) of the Act; or (c) "to confer benefits on [a named person or named people] to meet their reasonable living and medical expenses as provided by s 13(2)" of the Act.

1. By deletion of Part 2, neither power of attorney was expressed to be subject to particular "conditions and limitations".

1. On its face, the object of each instrument was to allow Susan to serve the interests of the Principal with none of the extended powers that a donor of a power of attorney governed by the Powers of Attorney Act 2003 might have conferred on his or her attorney.

1. On its face, and in the eyes of the law, neither instrument authorised Susan to act otherwise than in the interests, and for the benefit, of her respective parents. Neither instrument authorised Susan to apply her parents' property or income in the giving of gifts or in the payment of living or medical expenses for herself, Jamie or any member of the extended Scott family.

1. Each instrument took the form of an "Enduring" Power of Attorney because, in compliance with s 19 of the Powers of Attorney Act, it bore a certificate by a barrister (William Carney) to the following effect:

"Certificate under section 19 of the Powers of Attorney Act 2003

I, William Carney, of [a specified set of barristers' chambers in Sydney] certify the following:

• I explained the effect of this power of attorney to the principal before it was signed.
• The principal appeared to understand the effect of this power of attorney.
• I am a prescribed witness.
• I am not an attorney under this Power of Attorney.
• I have witnessed the signature of this power of attorney by the principal".

1. Consistently with the requirements of s 20 of the Power of Attorney Act 2003, each instrument bears Susan' endorsement of her acceptance on 27 June 2008 of the office of attorney in the following terms:

"I accept my appointment as an attorney under this Enduring Power of Attorney".

1. Having been executed in the form and manner required by s 19, and accepted as required by s 20, each instrument attracted the operation of s 21 of the Powers of Attorney Act 2003:

"21. Effect of Enduring Power of Attorney

(1) Subject to this Act, an act done by an attorney that is within the scope of the power conferred by an Enduring Power of Attorney [such as the instruments signed by Marjorie and Dr Scott] and that is of such a nature that it is beyond the understanding of the principal through mental incapacity at the time of the act is as effective as it would have been had the principal understood the nature of the act at that time.

(2) This section does not save a Power of Attorney from being or becoming ineffective by reason of any matter other than mental incapacity of the principal arising after the execution of the instrument creating the power.

(c) This section applies only if and to the extent that a contrary intention is not expressed in the instrument creating the power and has effect subject to the terms of the instrument creating the power".

1. Marjorie's Power of Attorney was registered (as contemplated by ss 51 and 52 of the Powers of Attorney Act 2003) as Book 4601 No 549 on 11 November 2010, presumably in aid of steps taken, or possibly to be taken, by Susan, in Marjorie's name, to recover possession of Marjorie's property (in particular, the King's Point holiday home) from Jamie.

1. By that time, the relationships between Dr Scott and Susan (on the one hand) and Jamie (on the other) had deteriorated to the point of mutual suspicion.

1. The circumstances in which the Powers of Attorney of 27 June 2008 had been executed led Jamie, understandably but not entirely rationally, to believe that Dr Scott and Susan were trying to affect his personal relationship with Marjorie and, in due course, to exclude him from any benefit from her deceased estate.

MARJORIE'S CAPACITY TO MAKE A POWER OF ATTORNEY

Legal principles in context

1. Jamie contends that the "Enduring Power of Attorney" executed by Marjorie is invalid because Marjorie lacked the mental capacity to grant such a power at the time she executed the instrument.

1. Dr Scott and Susan contend, to the contrary, that Marjorie possessed the requisite capacity.

1. A resolution of that dispute must commence with recognition of its parameters. First, the instrument at the heart of the controversy is and was at all material times governed, largely but not exclusively, by a statute; specifically, the Powers of Attorney Act 2003. Secondly, as confirmed by s 7, that Act "does not affect the operation of any principle or rule of the common law or equity in relation to powers of attorney except to the extent that [the Act] provides otherwise, whether expressly or by necessary intention". Thirdly, there is no statutory definition of the expression "mental capacity to make a valid power of attorney" found in the provisions of the Act (including s 36) governing a challenge to the validity of a power of attorney. Fourthly, the concept of "mental capacity" in the context of the Act is informed by the concept of "mental capacity" under the general law: Szozda v Szozda [2010] NSWSC 804 at [12]-[19] and [27]-[42]. Fifthly, the question of "mental capacity to make a valid power of attorney" must, in each case, be directed to the terms, and process of execution, of the particular instrument under review: Gibbons v Wright (1954) 91 CLR 423 at 437-438.

1. A broad review of the provisions of the Powers of Attorney Act 2003 is necessary to place in context the parties' dispute about the validity of Marjorie's power of attorney. In undertaking that review, I proceed on the basis that there is no material difference between the scheme of the Act as at 27 June 2008 and as currently enacted. There have been amendments to the legislation effected in the interim, but the scheme of the Act remains substantially unchanged.

1. The long title of the Act includes recognition of it as "[an] Act to consolidate and revise the legislation relating to powers of attorney...".

1. The expression "power of attorney" is not defined in the Act. It probably means a formal grant of agency powers: Vella v Permanent Mortgages Pty Limited [2008] NSWSC 505; 13 BPR 25,343 at [205]. That is its ordinary meaning: Szozda v Szozda [2010] NSWSC 804 at [38].

1. Section 8 provides that an instrument, whether or not under seal, that is in or to the effect of the form set out in schedule 2 to the Act (the prescribed form) and is duly executed creates a "prescribed power of attorney" for the purposes of the Act. Marjorie's power of attorney was in the prescribed form. Section 9 provides that, subject to the Act, a prescribed power of attorney confers on the attorney "the authority to do on behalf of the principal anything that the principal may lawfully authorise an attorney to do", subject to compliance with any "conditions or limitations specified in the instrument creating the power".

1. Section 10 provides that a prescribed power of attorney does not confer on a principal authority to exercise any function as a trustee that is conferred or imposed on the principal. Sections 11, 12 and 13 have previously been noted. They provide that a prescribed power of attorney does not , without an express election by the principal to do so, confer authority to give gifts, to confer benefits on attorneys or to confer benefits on third parties.

1. Part 2 (ss 15-16) of the Act and Division 2 of Part 5 of the Act deal with the creation, effect and termination by the Court of an "irrevocable power of attorney". Those provisions have no application to this case. The power of attorney executed by Marjorie is not expressed to be "irrevocable". Nor was it given, or expressed to have been given, for valuable consideration.

1. Part 4 of the Act deals with incapacity and enduring powers of attorney. Division 1 of that Part comprises ss 17 and 18. They are in the following terms:

"17 Initial mental incapacity

(1) Subject to this Act, a power of attorney is not ineffective if only because any act within the scope of the power is of such a nature that it was beyond the understanding of the principal through mental incapacity at the time the power is given.

(2) However, a power of attorney does not authorise an attorney to do any such act unless it is authorised by or under this Act.

18 Supervening mental incapacity does not affect validity of acts principal understands

A power of attorney is effective to the extent that it concerns any act within its scope that is of such a nature that is not beyond the understanding of the principal through mental incapacity at the time of the act".

1. A legislative note to s 17 places it in context by recording that Division 3 of Part 5 of the Act (ss 29-32) contains provisions that enable the Court to confirm the operation of a power of attorney despite the mental incapacity of the principal at the time the power is given.

1. A legislative note to s 18 places it in context by recording that Division 2 of Part 4 "makes provision for enduring powers of attorney, which can have effect in relation to acts that are beyond the understanding of the principal through mental incapacity at the time of the act".

1. For present purposes, sufficient has been said of the provisions of Division 2 of Part 4. Section 19 deals with the creation of an enduring power of attorney. Section 20 provides that such an instrument does not confer authority until an attorney accepts his or her appointment. Section 21 describes the effect of an enduring power of attorney. Section 22 deals with ademptions of testamentary gifts effected by an act of an attorney under an enduring power of attorney. Section 23 empowers the Court to make orders confirming or varying the operation of s 22. Section 24, which has been repealed, had no application to the facts of these proceedings in any event. Section 25 deals with recognition of enduring powers of attorney made in other Australian states and territories.

1. Part 5 of the Act (ss 26-42) deals with reviews of powers of attorney, either by the Guardianship Tribunal or the Court. Division 3 contains provisions governing confirmation of powers conferred when the principal is mentally incapacitated. Those powers are available on an application by a principal. They have no scope for operation in the current proceedings.

1. Division 4 of Part 5 (ss 33-38) relates, inter alia, to a review of an enduring power of attorney. Section 36 provides, so far as is material, that the Court "may, on the application of an interested person, decide to review the making or the operation and effect of a reviewable power of attorney or not to carry out such a review". Marjorie's power of attorney is a "reviewable power of attorney" as defined by s 33. The concept of an "interested person" is defined by s 35 as including an attorney, the principal and any "person who, in the opinion of [the Court], has a proper interest in the proceedings or a genuine concern for the welfare of the principal". Each of the parties to the current proceedings qualifies as an "interested person". Section 37 permits the current proceedings to be treated as an application for a management order under s 41 of the NSW Trustee and Guardian Act. Section 38 governs the provision of advice or directions concerning Marjorie's power of attorney.

1. Part 6 of the Act (ss 43-52) relates to powers of attorney generally. Section 43 provides that an attorney may execute instruments and do other things in his or her own name. Section 45 provides that an attorney cannot delegate his or her power unless the instrument creating the power expressly so provides. Marjorie's power of attorney makes no such provision; Susan has no power of delegation. Of other provisions in Part 6 it is sufficient, for present purposes, to note s 50, which deals with the relationship between a power of attorney and a management order:

"50 Effect of management of estate

(1) A power of attorney is not terminated by the estate of the principal becoming subject to management under the NSWTrustee and Guardian Act 2009 (a "managed estate").

(2) Subsection (1) has effect subject to the terms of the instrument creating the power.

(3) A power of attorney is suspended while the estate of the principal is a managed estate.

(4) Despite subsection (3), if the Guardianship Tribunal, in making a financial management order under section 25E of the Guardianship Act 1987 in relation to a principal, excludes a specified part of the principal's estate from the order, the Guardianship Tribunal may order that the power of attorney is to remain in force in respect of so much of the estate as is excluded from the financial management order concerned.

(5) The Guardianship Tribunal may make a similar order in respect of so much of the estate of the principal as is not managed estate, but only if the estate is a managed estate because of a financial management order made by the Guardianship Tribunal.

(6) Despite subsection (3), where an attorney under a power of attorney does an act within the scope of the power while the estate of the principal is a managed estate, the act of the attorney has no less validity and effect than the act of the attorney would have had if this section had not been enacted, but this subsection does not affect the operation of subsection (9).

(7) While a power of attorney is suspended by this section, the Supreme Court may restore the power of attorney to operation to such extent, and on such terms and conditions, as the Supreme Court thinks fit.

(8) The Supreme Court may restore a power of attorney to operation under subsection (7) as from any time whether before or after the order of restoration is made or takes effect.

(9) If the estate of a principal is a managed estate, the Supreme Court may:

(a) terminate the power of attorney, or

(b) order that the power of attorney be subject to such conditions as the Court thinks fit.

(10) An attorney under a power of attorney and persons dealing with the attorney and all other persons have the like protections against any term or condition of any restoration of the power and against any condition or restriction to which the power is subject under this section as if the term, condition or restriction were effected by act of the principal.

(11) The estate of a person whose estate is subject to management under Division 2 of Part 4.3 of the NSW Trustee and Guardian Act2009 is taken to be a managed estate for the purposes of this section for the life of the person or until the Supreme Court declares that the exercise of the powers of the NSW Trustee and Guardian in relation to the estate is not required. An application to the Court for a declaration may be made by the NSW Trustee and Guardian, the person whose power of attorney is in question or an attorney under the power of attorney.

(12) A declaration for the purposes of subsection (11) has no effect otherwise than for the purpose of subsection (11).

(13) This section does not apply to a power of attorney given before the commencement of Schedule 1 to the Conveyancing (Powers of Attorney) Amendment Act 1983 .

(14) This section has effect subject to Part 3."

1. Other provisions of the Powers of Attorney Act 2003 can, for present purposes, be passed over.

1. Dr Scott and Susan correctly point out that, by virtue of s 37(1), it is not necessary for the Court to carry out a review of Marjorie's power of attorney.

1. They submit that the Court should not carry out such a review, but should proceed simply to make a management order under s 41 of the NSW Trustee and Guardian Act as permitted by s 37, bearing in mind that both they, and Jamie, have invited the Court to make a s 41 order.

1. There is some force in the approach advocated by Dr Scott and Susan. First, although Jamie refrains from making a concession that there has been no misapplication of Marjorie's property or income by Susan acting as her attorney, his senior counsel has expressly disclaimed any "affirmative case" that there has been such a misapplication. Secondly, during the course of these proceedings Susan has more than once offered to make the records of her administration of Marjorie's affairs available for the inspection of Jamie's legal representatives. Thirdly, although Jamie was critical of Susan for applying a substantial amount of Marjorie's funds towards legal costs incurred in proceedings against him, that issue has receded from view because Dr Scott took it upon himself to reimburse Marjorie's estate, by way of a gift of moneys in excess of the costs taken out by Susan.

1. Moreover, Dr Scott's side of the record has made it plain that they will not seek an order for costs against Jamie or the payment of costs out of Marjorie's estate.

1. The parties debated whether failures in Marjorie's memory were indicative of a failure of "short term memory", a failure of "long term memory" or both.

1. Attention was given to the processes by which Dr Scott took over maintenance of Marjorie's detailed cash books, and his ongoing discussions with her about management of her shares and her financial affairs generally.

1. Jamie invited the Court to draw inferences against the case presented by Dr Scott and Susan, based on Jones v Dunkel (1959) 101 CLR 298 at 312 and 321, arising from the absence of evidence from Marjorie's doctor at the nursing home (Dr Albrechtson), her stockbroker (Mr Tyrell) and her accountant (Mr Stubbs).

1. Dr Scott and Susan were cross examined about their participation in the various stages of medical assessment of Marjorie, from the time when she was assessed for suitability to retain a driver's licence to the time of her admission to the nursing home.

1. Significance was, for a time, attached to opinions about Marjorie's mental capacity attributed to her solicitor, Mr Peter Baker (husband of Mrs Louise Baker) in the context of preliminary discussions with him, on and about 27 June 2008, about the possibility of a Will being prepared for Marjorie. Mr Baker was not in a position, personally, to express any informed opinion as to the state of Marjorie's mental capacity. The Scott family may have attributed undue significance to comments made by him directed simply to preliminary arrangements for a conference (scheduled for 5 August 2008 but not ultimately held) at a later time.

1. In light of fuss surrounding Jamie's reaction to the Powers of Attorney executed on 27 June 2008, Dr Scott attempted to overcome disharmony in the family by a resolution to make a Will himself, rather than to allow Marjorie to be embroiled in intra-family controversy. That decision having been taken, Mr Baker was not called upon, and had no opportunity, to form a view as to Marjorie's mental capacity.

1. Greater significance may attach to evidence, adduced by Dr Scott and Susan, from the Scotts' friend and neighbour, Mr Glass. He is a retired magistrate and State Coroner. He regularly, but only briefly, spoke to Marjorie on social visits to Dr Scott at the Scott family home. At one point, a month or so before Marjorie executed her Power of Attorney, he agreed to serve as her witness to execution of such an instrument. However, he advised Dr Scott to make other arrangements when he realised that, having retired from judicial office, he was no longer qualified to sign a Section 19 Certificate under the Powers of Attorney Act 2003. His evidence, not directed to the events of 27 June 2008, tended to suggest that at or about that time, or shortly before it, Marjorie had the requisite mental capacity.

1. The witnesses whose dealings with Marjorie permitted them to speak of her condition on 27 June 2008 were Dr Scott, Susan, Jamie and Mr Carney. Susan's children were in attendance at their grandparents' house at the time the Powers of Attorney of Marjorie and Dr Scott were executed, but they did not participate in the process leading to the execution of those instruments. Their father, Susan's husband, was also in attendance at the Scotts'. He clashed with Jamie after the Powers of Attorney were executed and Jamie, to his mind, overstepped the bounds of propriety in confrontation with Susan. Mr Byrne gave no evidence in the proceedings. I infer that his evidence could not have assisted the case sought to be made by Dr Scott and Susan. It is not beyond the bounds of possibility, however, that a decision was taken not to adduce evidence from him in case his participation in the proceedings might be productive of disharmony vis á vis Jamie.

1. Dr Scott and Susan adhered to their evidence that, to their observation and to the best of their belief, Marjorie knew what she was doing when she executed her Power of Attorney. Dr Scott, in particular, emphasised that, had he had any doubt about Marjorie's mental capacity, he would not have permitted her to execute any Power of Attorney.

1. It is possible that the contemporaneous assessments of Marjorie's mental health by both Dr Scott and Susan was more in the realm of subconscious than deliberate. That is consistent with Mr Carney's evidence that he could not recall being forewarned of the existence of any doubts about Marjorie's capacity.

1. Mr Carney's evidence was criticised because, having discharged his recollection of material events in an affidavit served well before commencement of the final hearing, he supplemented it in another affidavit, when called upon by the legal representatives of Dr Scott and Susan to do so, during the course of the hearing.

1. The supplementation of his evidence was important because, inter alia, in the later affidavit Mr Carney recalled a conversation in which he asked Marjorie, "What assets do you now have?", and she responded, "I have the holiday house, cash and shares." That evidence neatly met criticism, from Jamie's side of the record, about the absence of any evidence demonstrative of an understanding by Marjorie on 27 June 2008 about the nature of her estate.

1. Mr Carney was subjected to forthright cross examination by senior counsel for Jamie. In the circumstances, that was entirely appropriate. Late service of evidence of the character of Mr Carney's supplementary affidavit called for a robust response.

1. It is not surprising that Jamie submits that the Court should not accept Mr Carney's evidence and, in particular, his evidence in the supplementary affidavit.

1. Yet despite the combative forensic environment in which Mr Carney came to give oral evidence, and his occasional surrender to frustrations he experienced in the process of giving evidence, Mr Carney was, in my assessment, an honest witness mindful of his duty to the Court. I accept as substantially correct the substance of his evidence about his conversations with Marjorie in the process of moving towards certification of her execution of the Power of Attorney. I accept that he did have a conversation with her, as has been noted, about her understanding of her assets. I accept, also, that in the preliminary stages of their engagement on 27 June 2008, Marjorie entered into a reasoned, and reasonable, discussion about local politics. The fact of that discussion is not irrelevant to an appreciation of who Marjorie was, and the range of her personal interests.

1. Mr Carney did not present himself as possessed of any professional expertise in the process of supervising execution of an Enduring Power of Attorney. He did not fall into the category of an "experienced solicitor" spoken of by Young JA in Zorbas v Sidiopoulous (No 2) [2009] NSWCA 197 at [89]. However, he was an experienced legal practitioner, with experience in local government, mindful of the nature of the task he was required to perform and the terms of the certificate he was called upon to give. His evidence cannot be discounted, as Jamie would have it discounted. It supports a finding that Marjorie had the requisite capacity.

1. The suggestion that Marjorie lacked a proper appreciation of Jamie's position is met, at least in part, by an examination of the terms in which Marjorie initially gave to Mr Baker instructions for her 2003 Will. Even without the benefit of the medical evidence now available about Jamie's mental health, Marjorie had real insight about who her son was:

"... My son is a charming young man, does not drink or smoke and is always employed although he changes jobs very often. He owns a unit at Pyrmont but never pays it off.

I do not want him to be given the money from the sale of the surgeries [ie, the Mary Street property] as he would fly to America and entertain all his girlfriends.

I want the money to be invested by a company like the Permanent Trustee Co and the interest on it, the interest to be sent to Jamie every month - when he dies the money to go to my two grand daughters - half each and to be invested and managed by my daughter until she considers they are old enough to manage it themselves - any amount of it can be used for their education at any time. ..."

1. These observations, coupled with evidence of Dr Scott and Susan that Marjorie had long determined that her attorney should be Susan alone, demonstrate, to my mind, that Marjorie was alive to issues concerning Jamie on 27 June 2008.

1. A decision to appoint Susan (without Jamie) as her attorney, on the terms set forth in the Enduring Power of Attorney she signed, was both rational and reasonable. The purpose of the instrument was to provide for management of Marjorie's affairs, for her benefit, not to provide for disposition of her estate. Susan had a proven track record; she lived in a stable family environment; she is a highly organised person; she has business experience; she could be relied upon. Jamie was not living in a stable family relationship; his personal financial affairs were not conducted with due diligence; he was perceived to be a spendthrift; loved as he was, he was not perceived to be reliable. Dr Scott had resolved, as had Marjorie, to appoint Susan as attorney without Jamie. An appointment of an attorney, not intended to have extended powers to dispose of property, involved no departure from Marjorie's long expressed, and generally known, desire to treat Susan and Jamie with equal favour. With the best will in the world on both sides, appointment of the siblings as co-attorneys could be administratively problematic.

1. There is no suggestion, in the evidence or Jamie's submissions, that Marjorie's execution of her Enduring Power of Attorney was procured by any exercise of undue influence upon her by any person.

1. She executed the Enduring Power of Attorney in the context of a close, loving and ongoing relationship in which her husband and principal carer was doing the same. There was nothing in it for him, or Susan or her family, beyond an orderly management of Marjorie's affairs in anticipation of the declining years of Dr Scott and Marjorie.

Conclusion

1. I find that Marjorie had the mental capacity to execute her Enduring Power of Attorney and that it was, and is, valid. In making that finding I rely, particularly, on the evidence of Dr Scott, Susan and Mr Carney about their dealings with Marjorie on 27 June 2008, their conversations with her and their observations of her. I attribute particular significance to: (a) the evidence of Dr Scott, his professional expertise as a medical practitioner and his knowledge and understanding of Marjorie as his wife and as her principal carer; and (b) the fact that the grant of an Enduring Power of Attorney, on the terms granted to Susan, was both a rational and a reasonable step for Marjorie to have taken at that time in consultation with her own interests and those of her family.

1. I propose, in due course, to make (pursuant to s 36(3) of the Powers of Attorney Act) an order declaring that Marjorie did have the mental capacity to make a valid power of attorney at the time she executed her Enduring Power of Attorney on 27 June 2008.

AVAILABILITY OF A MANAGEMENT ORDER

1. Marjorie's mental condition has deteriorated to such a stage that she is, and for the remainder of her life is likely to be, "incapable of managing her affairs" within the meaning of s 41 of the NSW Trustee and Guardian Act: PY v RJS [1982] 2 NSWLR 700 at 702 [6]-[7]; McD v McD [1983] 3 NSWLR 81 at 86C-D.

1. She has been unable to recognise Dr Scott, Susan, Jamie or any other member of her family, and she has had no capacity to make even routine decisions for herself, since 2010. She is confined to a nursing home in which her welfare is, and necessarily is, entirely under the day-to-day control of medically qualified staff. Physically, she is totally dependent upon them for her daily care.

1. In these circumstances I propose, in due course, to make a declaration (pursuant to s 41(1)(a) of the NSW Trustee and Guardian Act) that Marjorie is incapable of managing her affairs and an order that her estate be subject to management under that Act.

1. That raises for consideration the identity of the manager of Marjorie's estate to be appointed by order of the Court pursuant to s 41(1)(b).

THE IDENTITY OF MARJORIE'S MANAGER

1. In making a decision as to the identity of Marjorie's manager, the paramount considerations are her welfare and her interests. That is mandated by s 39(a) of the NSW Trustee and Guardian Act. It also accords with the general law relating to appointment of a trustee, or similar officer, responsible for management of the estate of a mentally ill person: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238D and 241G-242A, citing, inter alia, Miller v Cameron (1936) CLR 572 at 575, 579 and 580-581 and Letterstedt v Broers (1884) 9 App Cas 371 at 387.

1. The choice to be made in these proceedings in the identification of a prospective manager really boils down to whether or not, in all the circumstances, it is appropriate that Marjorie's tutor (Mrs Baker) be appointed as her manager. Dr Scott and Susan urge such an appointment. Jamie opposes it. She is prepared to submit to the order of the Court.

1. If for any reason Mrs Baker is not to be appointed as manager, no strong preference has been expressed by the parties as between the NSW Trustee (a NSW government agency with corporate status, constituted and governed by the NSW Trustee and Guardian Act) or a trustee company (governed by the Trustee Companies Act 1964 (NSW)). In terms, Jamie seeks the appointment of the NSW Trustee.

1. In favour of an appointment of Mrs Baker are the facts that she is a solicitor with substantial experience; she is, with her husband, named in Marjorie's Will as an executor and trustee; she has been, for many years, a friend of the entire Scott family, including Jamie; and, when first appointed as Marjorie's tutor in these proceedings, her appointment was consented to by all parties.

1. Against Mrs Baker's appointment as manager is the decided opposition of Jamie in light of his experience in these proceedings. In his perception, she has become closely identified with the adversarial interests of Dr Scott and Susan. That perception is not entirely without foundation. Mrs Baker, according to her own lights, has remained above the fray. However, to all intents and purposes she has appeared to participate in hotly contested proceedings as a member of the legal team of Dr Scott and Susan. Dr Scott has undertaken to pay her professional costs.

1. Whoever might be appointed to manage Marjorie's estate will be called upon to consider whether (and, if so, what) provision should be made out of Marjorie's estate for her family, including not only Jamie but also Susan and Susan's daughters. Questions of that character will need to be decided with an impartiality which is both apparent and real, particularly as the family's perception of events may be affected by issues relating to Jamie's mental health and associated intra family tensions.

1. In my assessment, Marjorie's welfare and interests are most likely to be best served by appointment of a manager other than Mrs Baker. I propose, in due course, to make an order (pursuant to s 41(1)(b) of the NSW Trustee and Guardian Act) that the management of Marjorie's estate be committed to the NSW Trustee.

1. My decision to make such an order, and to refrain from appointing Mrs Baker as Marjorie's manager, is not intended to displace Mrs Baker from her role (under Marjorie's 2003 Will or a statutory Will made for Marjorie) as an executor and trustee of Marjorie's deceased estate. Different considerations are likely to govern the relationship between members of the Scott family in that context. Subject to any claims for family provision relief under ch 3 of the Succession Act, the respective interests of Jamie and Susan's family are likely to have crystallised without any prospect of, or need for, management decisions of the sort presently in contemplation.

DIRECTIONS FOR MANAGEMENT OF MARJORIE'S ESTATE

1. Part 4.5 Division 1 (ss 55-62) and Division 3 (ss 71-84) of the NSW Trustee and Guardian Act govern management by the NSW Trustee of the estate of a protected person such as Marjorie.

1. Section 56 empowers the NSW Trustee to exercise all functions necessary and incidental to its management and care of the estate of a managed person, and such other functions as the Court may direct or authorise it to have or exercise. Section 57(1) provides that, for the purposes of its protective capacities in respect of a protected person, the NSW Trustee has, and may exercise, all the functions the person has and can exercise or would have and could exercise if under no incapacity. Section 59 provides, inter alia, that the NSW Trustee may apply money of the estate of a managed person towards purposes that include (in paragraph 59(c)) "the maintenance of the spouse of the person or any child, parent or other person dependent upon the person, or for whose maintenance the person provided when not a managed person or would be expected to provide". Section 73(1) provides that the NSW Trustee may, if of the opinion that it is desirable to do so, make an order authorising payments from any part of the estate of a managed person for the provision of maintenance and other necessary requirements of the managed person or the managed person's family, pending orders being made as to the management of the estate.

1. Section 61 provides that the Court may give to the NSW Trustee such directions as the Court thinks necessary with respect to the exercise by the NSW Trustee of its functions in its protective capacities. An application for such directions can be made by the NSW Trustee; a managed person; a relative friend or debtor of a managed person; or any other person who has, in the opinion of the Court, a sufficient interest in the matter.

1. This legislation is consistent with the jurisdiction of the Court, under the general law, to authorise application of part of a mentally ill person's property for the maintenance of family, provided that that can be done without compromising the future maintenance and care of the mentally ill person: Griffin v Union Trustee Company of Australia Ltd (1947) 48 SR (NSW) 360 a t 363-364; Re ES and the Mental Health Act 1958 [1984] 3 NSWLR 341 at 343D-344D.

1. In the particular circumstances of these proceedings it is appropriate to permit the NSW Trustee, as Marjorie's manager, to apply part of her estate, from time to time, for the maintenance and benefit of her family, having regard to: (a) the special needs of Jamie arising from his health and other personal circumstances; (b) the expressed desire of Marjorie to treat her children with substantial equality, according to their needs; (c) the historical fact of material support given by Marjorie to both her children and to her grandchildren; (d) Marjorie's expressed desire to assist her grandchildren in pursuit of an education; (e) the modest needs that Marjorie presently has for her care and maintenance; and (f) the comparative plenitude of her estate.

1. Accordingly, subject to any submissions as may be made as to the form of orders to be made by the Court in disposition of these proceedings, I propose, in due course, to give directions to the following effect:

(a) DIRECT that, subject to any further order of the Court and unless the NSW Trustee determines in writing that the welfare and interests of Marjorie otherwise require, the NSW Trustee permit Jamie to reside in the premises known as 38 James Crescent, King's Point, without requiring Jamie to pay any rent, licence fee or monetary contribution to the repair, maintenance or improvement of those premises.

(b) DIRECT that, subject to any order of the Court, all costs relating to the repair, maintenance or improvement of the premises known as 38 James Crescent, King's Point, be charged against property other than the properties known as 38-40 James Crescent, King's Point, comprising part of Marjorie's estate.

(c) DIRECT that, subject to any order of the Court, the NSW Trustee be at liberty to apply property (other than the properties known as 38-40 James Crescent, King's Point) forming part of the estate of Marjorie towards:

(i) the reasonable living or medical expenses of Jamie, including expenses incurred, or to be incurred, in respect of housing, food, education, transportation or medical care and medication.

(ii) the education expenses of Susan's daughters (Macushla Clare Byrne and Aphra Pearl Byrne), whether those expenses are incurred, or to be incurred, by the children or by their parents jointly or severally.

(d) DIRECT that the NSW Trustee take no steps, without the leave of the Court, to enforce against Jamie the indebtedness that Jamie presently has or may have to the estate of Marjorie for $127,000.00 lent by Marjorie to him between July 2004 and June 2008 or thereabouts.

1. I do not intend, by these directions, to deal exhaustively with the nature of the decisions that must, or should, generally be made in management of Marjorie's estate, or to limit the rights of any member of Marjorie's family.

1. The directions are given, rather, to allow Marjorie's estate to be managed, in the reasonably foreseeable future, unencumbered by the disputation that has darkened family relationships since 2008.

THE EFFECT OF A MANAGEMENT ORDER ON MARJORIE'S POWER OF ATTORNEY

1. The statutory effect of a management order is to suspend the power of a managed person to deal with his or her estate: NSW Trustee and Guardian Act, s 71(1); David by her Tutor the Protective Commissioner v David (1993) 30 NSWLR 417 at 438D.

1. Under s 50 of the Powers of Attorney Act, a power of attorney is not terminated by the estate of the principal becoming subject to management under the NSW Trustee and Guardian Act, but it is suspended while the estate of the principal is a managed estate and, by s 50(9)(a), the Court may terminate the power of attorney.

1. Having regard to the nature of Marjorie's present incapacity and her confinement to nursing home care, I propose, in due course, to make orders to the effect that:

(a) Marjorie's Enduring Power of Attorney dated 27 June 2008 be terminated.

(b) the Power of Attorney instrument be delivered up to the Court for cancellation.

A STATUTORY WILL FOR MARJORIE

1. Dr Scott, Susan and, by her tutor, Marjorie, have applied to the Court (pursuant to s 19 of the Succession Act 2006) for a grant of leave, pursuant to s 20 of the Act, to permit them to apply, under s 18, for an order authorising that a will be made on behalf of Marjorie recasting her 2003 Will.

1. Jamie does not oppose a grant of leave. He joins with the applicants in urging the Court to make an order under s 18, though he differs from them in the order he invites the Court to make.

1. Susan's daughters, Macushla and Aphra, who stand to benefit under Marjorie's 2003 Will, support the application and submit to such orders as the Court may make.

1. It is common ground that Marjorie is now "a person who lacks testamentary capacity" within the meaning of s 18.

1. Minor beneficiaries named in Marjorie's 2003 Will (namely, her godchildren, the RSPCA and Ascham) have not been served with notice of the application. Nevertheless, I am satisfied, for the purpose of s 22(e) of the Succession Act, that, provided the modest provision made for them in the 2003 Will is maintained, they have no legitimate interest in the present application so as, by their absence, to impede its consideration.

1. By s 18(3) of the Act, the Court is directed not to make any order under s 18 unless the person in respect of whom the application is made is alive when the order is made. I note that provision, specifically, because, by these Reasons for Judgment, I propose to determine the nature of a statutory will that might be made on behalf of Marjorie and, then, to invite the parties to bring in, for the Court's consideration, a fresh draft of a statutory will. A form of Will having been settled by the Court, it will be necessary for evidence, then, to be adduced as to Marjorie's continued presence with us at the time a s 18 order is to be made.

1. Section 22 of the Act is in the following terms:

"22 Court must be satisfied about certain matters

The Court must refuse leave to make an application for an order under section 18 unless the Court is satisfied that:

(a) there is reason to believe that the person in relation to whom the order is sought [Marjorie] is, or is reasonably likely to be, incapable of making a will, and

(b) the proposed will, alteration or revocation is, or is reasonably likely to be, one that would have been made by the person [Marjorie] if he or she had testamentary capacity, and

(c) it is or may be appropriate for the order to be made, and

(d) the applicant for leave is an appropriate person to make the application, and

(e) adequate steps have been taken to allow representation of all person with a legitimate interest in the application, including persons who have reason to expect a gift or benefit from the estate of the person in relation to whom the order is sought."

1. I am satisfied, for the purpose of s 22(d), that each of Dr Scott and Susan is "an appropriate person" to make an application for a grant of leave. It is not necessary for Marjorie's tutor to join in the application. Indeed, it may have been preferable for Marjorie to have been joined in the application as a defendant, rather than a plaintiff, and for her tutor to have filed a submitting appearance. However, it is not necessary, in the circumstances of this case, to consider whether Mrs Baker is, in her own right, or as Marjorie's tutor, "an appropriate person" to make an application. Her joinder in the application, as a plaintiff, is a formality going to the constitution of the proceedings rather than the substantive relief sought.

1. The participation in the proceedings of Dr Scott, Susan, Susan's daughters and Jamie satisfies s 22(e), provided Marjorie's existing minor beneficiaries do not have the provision made for them in the 2003 Will disturbed.

1. The requirements of s 22(a) are readily satisfied. Marjorie lacks testamentary capacity, and there is no prospect that she will ever regain it.

1. The primary focus in these proceedings must be in s22(b) and s 22(c).

1. The question, raised by s 22(c), whether "it is or may be appropriate for [an] order to be made" must, ultimately, be assessed at the time the Court has under consideration the precise terms of a proposed s 18 order. Nevertheless, in anticipation of such an occurrence, there is at least one topic that can be usefully addressed at this stage of the proceedings. That is whether there is any utility in the making of a s 18 order at all or whether, in light of the possibility of ch 3 "family provision" proceedings in relation to the respective estates of Marjorie and Dr Scott, the parties should be left to such rights as they might have in those proceedings.

1. Subject to being satisfied as to the requirements of s 22(b), I propose to proceed on the basis that it is, in terms of s 22(c), appropriate for a s 18 order to be made notwithstanding my ongoing reservations about the utility of any such order. There are several reasons for this. First, the prospective ademption of the provision made for Jamie in Marjorie's 2003 Will has been a major factor in the calculations of Dr Scott, Susan and Jamie since it came to Susan's notice in June 2008. Secondly, despite the fact that they have been unable to reach a comprehensive settlement as to the terms upon which Marjorie's deceased estate should be dealt with, each of Dr Scott, Susan and Jamie has urged the Court to authorise the making of a statutory will for Marjorie. Thirdly, Susan's concession that she has no objection to Jamie inheriting the King's Point properties opens up, more fully than otherwise, the possibility that those properties might be devised to him. Fourthly, that possibility complements the reality that Jamie current resides at King's Point and provision can be made from Marjorie's managed estate for him to continue living there. Fifthly, although Marjorie is of an age when an early death might not be unexpected, it is, I assume, possible that she could continue to live for a long time yet. Sixthly, that being so, the making of a statutory Will might bring greater order, if not absolute certainty, to the personal affairs of all members of the Scott family.

1. The substantive difference between members of the family, in the context of the s 18 application, focuses upon their different ideas about how Marjorie's deceased estate should be carved up. Those different ideas have, necessarily, been articulated by reference to Marjorie's (presumed) actual, subjective intention: Re Fenwick (2009) 76 NSWLR 22 at 54-57. Everyone is agreed that, if Marjorie had testamentary capacity, she would affirmatively want her 2003 Will to be revised to make up for the present "inequality" affecting the respective rights of Jamie, on the one hand, and Susan and her daughters, on the other. Everybody is also agreed that, having regard to Jamie's ill health, present circumstances and limited prospects, Marjorie could well be expected, subjectively, to weight in Jamie's favour the provision to be made for him out of her deceased estate vis á vis that to be made for Susan and her daughters.

1. I would have thought, myself, that the terms in which Marjorie gave Mr Baker her initial instructions for the 2003 Will, coupled with more complete knowledge of Jamie's health, present circumstances and future prospects, point in the direction of a "protective trust" of income under s 45 of the Trustee Act 1925 (NSW). Not unnaturally, though, Jamie has not embraced that idea. Although Dr Scott and Susan have raised for consideration similar ideas - including a "Crisp order" - they have not pressed the point overmuch.

1. A "Crisp order" takes its name from Crisp v Burns Philp Trustee Company Limited (NSWSC 18 December 1979, unrep). It is an order generally made, if at all, in family provision proceedings. It is sometimes referred to as a "portable life estate". Generally speaking, such an order gives a party a right of residency (whether in the nature of a licence or a life estate) in a combination, coupled with a right (should a need arise) for transference of such a right to alternative, more suitable accommodation: Milillo v Konneche [2009] NSWCA 109 at [47]-[48]; Laidlaw v Kellie [2011] NSWSC 740 at [129].

1. The temptation to entertain such ideas should, I think, be resisted for a few reasons. First, although Marjorie's initial instructions for the 2003 Will might be taken as authentic evidence of her attraction to the idea of some form of maternalistic limitation on the provision to be made for Jamie, the fact that she did not, in terms, embrace such an idea in the 2003 Will counsels caution. Secondly, the creation of limited rights such as those contemplated by a Crisp order is not likely to be conducive to harmonious relations between family members in circumstances in which Jamie may be chafing at the bit to escape residential controls. Thirdly, imposition on the parties of a limited form of relief for Jamie might be nothing more than an invitation to the making of an application for family provision relief against one or the other, or both, of the deceased estates of Marjorie and Dr Scott.

1. At one point Dr Scott and Susan suggested that the sort of provision Marjorie could be expected, in the current circumstances, herself to make for Jamie is provision designed to ensure that he has a secure right of residency in a home, a reasonable but modest income, and a modest fund to meet unforseen contingencies. That formulation brings to mind Powell J's standard for the provision that ordinarily should be made by a testator for his widow: Luciano v Rosenblum (1985) 2 NSWLR 65 at 69G-70A. It is not without some attraction.

1. The difficulty of assessing the subjective intent of a compos mentis Marjorie is compounded because of the possibility that, before making any Will in the current circumstances, she would consult with Dr Scott, and make an assessment about what to do with her deceased estate with the benefit of knowledge about his testamentary intentions. The Court is in no position to speculate about his intentions. Indeed, they may well depend on the outcome of these proceedings, whatever his current intentions may be.

1. There is no certainty that Marjorie would, if well, consult Dr Scott before today making a Will. He made no Will in 2003 when she made hers. Throughout their active years, they both tended to make independent decisions about their separate property.

1. In all the circumstances, I am minded to proceed, by reference to s 22(b), on the basis that, if Marjorie had testamentary capacity, the type of will that she is reasonably likely to make is one in which:

(a) her solicitors, Mr and Mrs Baker, are retained as her legal personal representatives.

(b) the gifts of chattels presently dealt with in clause 3 of the 2003 Will are retained.

(c) the legacies presently provided for in clause 4(a) of the 2003 Will are retained.

(d) the gift of the King's Point properties presently provided for in favour of Susan, in clause 3(a) of the 2003 Will, is made, instead, in favour of Jamie.

(e) the residue of Marjorie's estate is divided between Susan, her daughters and Jamie.

(f) if either Susan or Jamie were to predecease Marjorie, that share of Marjorie's estate that would have gone to him or her goes to Susan's daughters.

(g) any indebtedness Jamie may have to Marjorie is forgiven.

1. It is not easy to fix upon the proportions in which Marjorie would be likely to divide her residuary estate between Susan, Jamie and the grandchildren. I am inclined to think, however, that 20% would be allocated to the grandchildren and 40% to each of Susan and Jamie.

1. This scheme of division of Marjorie's estate could provide for Jamie something similar to the provision proposed by analogy with Luciano v Rosenblum. The cabin at 38 James Crescent provides a residence; indeed, Jamie's present home. The adjoining block of land at 40 James Crescent, provides an additional resource that could, in time, be sold (with or without the cabin for the purpose of funding the purchase of alternative accommodation or providing capital or income for other purposes. Given the nature of Marjorie's estate (the King's Point properties, shares and cash), a 40% share of her residuary estate is likely to provide Jamie with a liquid fund available for application towards current expenses or investment.

1. I propose, on publication of these Reasons for Judgment to the parties, and before any final orders are made at all, to direct that the legal representatives of Dr Scott, Susan and Jamie bring in Short Minutes that incorporate the precise terms of a Will that accommodates my s 22(b) findings and might be made the subject of a s 18 order.

JAMIE'S INDEBTEDNESS TO DR SCOTT

1. There is no dispute between Dr Scott and Jamie that Jamie has borrowed $65,000 from Dr Scott and must, in due course, repay it unless Dr Scott decides to forgive the debt or it is extinguished by operation of the Limitation Act 1969 (NSW).

1. Jamie contends that the debt is repayable by him only at the time of Dr Scott's death and, then, only out of such provision as Dr Scott may make for him.

1. Dr Scott has not, in terms, entirely embraced Jamie's view of their debtor - creditor relationship. However, in the final submissions made on his behalf, Dr Scott undertook to the Court "that he will not enforce or take any steps to enforce [Jamie's debt] such that [it] will become payable out of any amount which Jamie receives out of Dr Scott's estate after Dr Scott dies".

1. The same submissions sought that Dr Scott be allowed interest on the outstanding debt, limited to one half of the ordinary Court rate on judgment debts, to be repaid on the same terms as the principal debt.

1. I apprehend, from this, that there is no real dispute between the parties as to the nature of the relief to be granted to Dr Scott, even if there is not yet full agreement.

1. In these circumstances, I propose to reserve the question of Dr Scott's entitlement until such time as final orders are to be made in the proceedings generally. I anticipate that, with the benefit of these Reasons for Judgment, the parties may agree upon the terms of orders to be made in relation to Jamie's indebtedness to Dr Scott. If that turns out not to be the case, I will myself make a determination.

COSTS

1. Whatever costs orders might be made in these proceedings, it is neither necessary nor appropriate that orders for costs be charged against Marjorie's estate.

1. In other circumstances all of the costs, or a substantial proportion of them, might have been ordered to be paid out of the estate. However, were that to occur in these proceedings, there might be a need for reconsideration of the substantive orders appropriate to the circumstances. Jamie is in need and, as I have determined, it is appropriate that provision be made for him out of Marjorie's estate without it too readily being diminished by orders for costs.

1. Dr Scott's generosity in meeting the costs of all parties (including costs incurred on behalf of Marjorie) on his side of the record does not extend to Jamie's side of the record beyond the point of accepting that no order for costs will be sought against Jamie.

1. Having regard to the issues upon which success and failure have attended both sides of the record, and to the central role played by Dr Scott in promoting the proceedings for the purpose of protecting the estate of his wife and settling (so far as can be) the respective entitlements of his children and grandchildren, I am inclined to the view that the only order for costs that should be made, upon an exercise of protective jurisdiction, is that Dr Scott pay one half of Jamie's costs of the proceedings.

1. However, before making any orders for costs, I will allow the parties an opportunity to make submissions on costs generally.

CONCLUSION

1. In publishing these Reasons for Judgment to the parties, I make no orders other than a direction for draft Short Minutes of Orders to be brought in for the Court's consideration.

1. In giving such a direction, I indicate that, before the Reasons for Judgment or any Supplementary Reasons are published beyond the parties, I will entertain such (if any) application as may be made by any or all of the parties for an order that there be some restriction on the general publication of the Court's Reasons.

1. The possibility that some form of restriction may be appropriate flows from, and only from, the protective nature of the jurisdiction exercised by the Court. It may be appropriate, because the proceedings have that character, to take steps to have these, or any other, Reasons for Judgment published in a redacted form or using pseudonyms.

ADDENDUM

1. On 14 December 2012, after further argument, orders and notations were made to give effect to the Reasons for Judgment published on 13 December 2012. Those orders included an order approving the form of a statutory will; a declaration dealing with the terms of Jamie's indebtedness to Dr Scott; and an order that Dr Scott pay 75% of Jamie's costs. The Court also made a formal notation that no party had any objection to publication of the Court's orders, notation or Reasons for Judgment without provision for redaction or the use of pseudonyms.

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Decision last updated: 06 February 2013