Stubbs (bht NSW Trustee & Guardian) v NSW Trustee & Guardian

[2023] NSWSC 1584

Supreme Court

New South Wales

Medium Neutral Citation:

Stubbs (bht NSW Trustee & Guardian) v NSW Trustee & Guardian [2023] NSWSC 1584

Hearing dates:

14 December 2023

Date of orders:

14 December 2023

Decision date:

14 December 2023

Jurisdiction:

Equity - Duty List

Before:

McGrath J

Decision:

Settlement approved

Catchwords:

PRACTICE AND PROCEDURE — approval of settlement of a claim involving plaintiff who is under a legal incapacity — Civil Procedure Act 2005 (Cth), s 75 — settlement in interest of plaintiff and accordingly approved

Legislation Cited:

Civil Procedure Act 2005 (NSW)

NSW Trustee and Guardian Act2009 (NSW)

Cases Cited:

Budini v Sunnyfield (No 3) [2021] FCA 1540

Fairhurst (bht NSW Trustee and Guardian) v Fairhurst [2012] NSWSC 388

Fisher v Marin [2008] NSWSC 1357

Permanent Trustee Company Ltd v Mills (2007) 71 NSWLR 1; [2007] NSWSC 336

Stojic v Stojic [2019] NSWSC 23

Category:

Principal judgment

Parties:

David Mark Stubbs (bht NSW Trustee & Guardian) (Plaintiff)
NSW Trustee & Guardian (Defendant)

Representation:

Solicitors:
Zucker Legal (Plaintiff)

File Number(s):

2023/00423386

Publication restriction:

Nil

JUDGMENT

1. Before me as duty judge is an application pursuant to s 75(2) of the Civil Procedure Act 2005 (NSW) for the court’s approval of a compromise or settlement of the claim, which is made on behalf of the plaintiff, David Stubbs, who is under a legal incapacity, before proceedings are commenced in respect of that claim.

2. The claim is made by the plaintiff by his tutor, NSW Trustee & Guardian (NSWTG). It is unusual because the claim is also made against NSWTG. NSWTG has authority to maintain proceedings acting in one capacity against itself acting in another capacity: NSW Trustee and Guardian Act2009 (NSW), s 21.

3. NSWTG is the financial manager of the estate of David Stubbs pursuant to a financial management order of the New South Wales Civil and Administrative Tribunal (NCAT) dated 10 November 2015.

4. The evidence before me in support of the application is as follows:

1. affidavit of Kay Sarah Papadopoulos affirmed 28 November 2023. Ms Papadopoulos is a senior solicitor (Estate Administration) in Specialist Services at NSWTG.

2. affidavit of Adele Pamela Jarrett sworn 22 November 2023. Ms Jarrett is a Legal Administrator at Zucker Legal who act for the plaintiff on instructions from NSWTG.

5. The facts are as follows.

6. The plaintiff is 55 years of age. He suffers from schizophrenia and was recently diagnosed with autism spectrum disorder.

7. On 10 November 2015, NCAT found that the plaintiff was not capable of managing his affairs and as a result NCAT made a financial management order. NSWTG was informed of the NCAT order and sent the reasons for the decision. NSWTG has managed the financial estate of the plaintiff since that time.

8. In May 2019, the mother of the plaintiff died. Under her will, she left her estate to her four children equally. The plaintiff’s share of the estate was $303,527.88, which was paid by the solicitors acting for the estate to an account at ANZ bank in the name of the plaintiff.

9. It appears that the executors of the estate of the plaintiff’s mother and the solicitor acting for them did not know of the financial management order when they gave instructions for the transfer and transferred the funds to the account of the plaintiff at ANZ bank.

10. The records of NSWTG show that on 5 March 2018, the plaintiff spoke to someone at NSWTG and informed that person that he had opened a new account at ANZ bank.

11. After the appointment of NSWTG on 4 December 2015, both before and after the telephone call on 5 March 2018, and both before and after the transfer of funds from the estate of the plaintiff’s mother to the account of the plaintiff at ANZ bank, no one at NSWTG communicated with ANZ bank in any way about the financial estate of the plaintiff.

12. The result was that the plaintiff had unrestricted access to the ANZ bank account in his name. Because they had not been notified by NSWTG, ANZ bank had no knowledge or means of obtaining knowledge that the plaintiff’s estate was under a financial management order.

13. On 9 October 2019, the account in the name of the plaintiff at ANZ bank had a balance of $303,564.59. After successive deductions, by 28 January 2020, the balance in the account was $507.93. The evidence indicates that the plaintiff made multiple withdrawals of cash as well as at betting and licence club outlets. One single withdrawal was for an amount of $50,000.

14. NSWTG does not know for what purpose the withdrawals were made but by the end of those withdrawals the plaintiff did not have any assets in his name and appears to have spent it in an unrestricted and uncontrolled manner.

15. A settlement has now been reached in relation to the plaintiff’s claim against NSWTG. The result of the settlement is that the whole of the amount which was paid into the account as the plaintiff’s share of his mother’s estate is to be paid to the plaintiff, being $303,527.88, with each party bearing its own costs.

16. The further element of a compromise in the settlement is that the plaintiff will not be receiving any interest on the amount.

17. Counsel acting for the plaintiff has expressed the opinion that the settlement is in the interests of the plaintiff.

18. The court's function on such an application for approval is protective. In Permanent Trustee v Mills (2007) 71 NSWLR 1; [2007] NSWSC 336, Hammerschlag J (as his Honour then was) observed at [29]:

The principle is that for the Court to grant approval for a compromise to be entered into by the disable person it must form the view that it is beneficial to his or her interests. The compromise should be assented to by the tutor and there should be opinions from his or her legal advisers that they consider it to be so: Re Birchall. The Court will consider for itself whether the compromise will be beneficial to the disable person: Re Ley’s Trusts [1964] 1 WLR 640.

19. Accordingly, in the exercise of the court's protective function under s 75(2) of the Civil Procedure Act 2005 (NSW), I consider that the proposed settlement is beneficial to the plaintiff in the sense described in Fairhurst (bht NSW Trustee and Guardian) v Fairhurst [2012] NSWSC 388 at [30]-[39], Permanent Trustee at [29], Fisher v Marin [2008] NSWSC 1357 at [29], Stojic v Stojic [2019] NSWSC 23 at [32] and Budini v Sunnyfield (No 3) [2021] FCA 1540 at [10]-[12].

20. For these reasons, I make the following orders in accordance with the short minutes of order:

1. Order pursuant to Civil Procedure Act 2005 (NSW), s 75 that the Court approves the agreement for the settlement of the Plaintiff’s claim in the form of the document which is Annexure “A” to the Affidavit of Adele Pamela Jarrett sworn on 22 November 2023.

2. Order pursuant to Civil Procedure Act 2005 (NSW), s 77(3)(b) for the money recovered pursuant to the settlement to be paid to NSW Trustee and Guardian as manager of the Plaintiff’s estate.

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