The Protective Commissioner v "D" (No 2)

[2004] NSWCA 477

CITATION:	The Protective Commissioner v "D" & Ors (No 2) [2004] NSWCA 477
HEARING DATE(S):	Written submissions
JUDGMENT DATE:	21 December 2004
JUDGMENT OF:	Mason P at 1; Giles JA at 2; McColl JA at 3
DECISION:	(1) Costs order made in Protective Commissioner (No 1) set aside. (2) Protective Commissioner to pay the second respondents' costs of Protective Commissioner (No 1) on a common fund basis. (3) No order as to the Protective Commissioner's costs.
CATCHWORDS:	COSTS - PROTECTED ESTATES - Case involving matter of general importance concerning Protective Commissioner's powers.
LEGISLATION CITED:	Protected Estates Act 1983 (NSW) s 12, s 28(1)(b) Supreme Court Rules 1970 (NSW) Pt 76 r 5(3)
CASES CITED:	Australian Federation of Consumer Organisations Inc v Tobacco Institute of Australia Ltd (1991) 100 ALR 568; (1991) ATPR 41-114 Baltic Shipping Co v Dillon (1991) 22 NSWLR 1 Holt and Another v Protective Commissioner (1993) 31 NSWLR 227 M v K (unreported, Supreme Court of NSW, 24 April 1989, Powell J, BC8902256) New South Wales Medical Defence Union Ltd v Crawford (1993) 31 NSWLR 469 The Protective Commissioner v "D" & Ors [2004] NSWCA 216 Re an Incapable Person D [1983] 2 NSWLR 590 Re B [2000] NSWSC 44 RH v CAH and Others [1984] 1 NSWLR 694
PARTIES :	The Protective Commissioner (Applicant) "D" (First Respondent) Ors (Second Respondents)
FILE NUMBER(S):	CA 40892/03
COUNSEL:	S W Balafoutis (Applicant) First respondent (No appearance) D Marks (Second respondents)
SOLICITORS:	Timothy John Tunbridge (Applicant) First respondent (No appearance) McBride Harle & Martin (Second respondents)

LOWER COURTJURISDICTION:	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S):	EQ 39/03
LOWER COURT JUDICIAL OFFICER :	Windeyer J

CA 40892/03
EQ 39/03

MASON P
GILES JA
McCOLL JA

Tuesday, 21 December 2004

THE PROTECTIVE COMMISSIONER v “D” & ORS (NO 2)

Judgment on Costs

1 MASON P: I agree with McColl JA.

2 GILES JA: I agree with McColl JA.

3 McCOLL JA: In The Protective Commissioner v “D” & Ors [2004] NSWCA 216 (“Protective Commissioner (No 1)”) pursuant to s 12 of the Protected Estates Act 1983 (NSW) (the “1983 Act”) the Court directed the Protective Commissioner that he had power to make payments for past gratuitous care out of the estate of a protected person. It ordered that the costs of the application be paid out of the estate of the first respondent (“D”) but gave the parties liberty to apply in relation to that order.

4 In my judgment (with which Mason P and Giles JA agreed) I addressed the question of costs in the following manner at [199]:

“The Protective Commissioner did not seek a costs order in the originating process. It would be customary, however, that the costs of such an application would be paid out of D’s Estate. Power to make such an order is found in s 77 of the 1983 Act . Accordingly, I propose that such an order should be made although the parties should have liberty to apply to make submissions in relation to it if appropriate.”

5 The Court has now received written submissions on costs from both the second respondents and the Protective Commissioner.

Background

6 The background can conveniently be taken from Protective Commissioner (No 1).

7 D was injured in a work accident in 1996. He is seriously disabled and requires 24 hour a day care. Since 1997 the second respondents, his wife, daughters and son-in-law, have been his primary care givers.

8 In 1998 a declaration was made in the Protective Division that D was a person who was incapable of managing his affairs. An order was made that his estate be subject to management under the provisions of the 1983 Act and that the management of his estate be committed to the Protective Commissioner. The Protective Commissioner commenced proceedings in D's name claiming damages in respect of his injuries, including a claim for past gratuitous care provided by the second respondents. The proceedings were settled in 2002 by a judgment in D's favour.

9 After the settlement, the second respondents sought from the Protective Commissioner an ex gratia payment out of D's estate in respect of the past gratuitous care they had provided. The Protective Commissioner purported to approve payment to the second respondents in respect of their past gratuitous care. A controversy developed as to the amount of that payment. The second respondents sought a review of the Protective Commissioner’s decision in the Administrative Decisions Tribunal.

10 Subsequently the Protective Commissioner wrote to the second respondents' solicitors drawing their attention to Re B [2000] NSWSC 44 which he said he regarded as authority for the proposition that the 1983 Act did not give him power to make payments for past gratuitous care out of the estates of protected persons. The Protective Commissioner asserted that as he had no power to make such payments, there was in effect no “decision” susceptible to review by the Administrative Decisions Tribunal. The Protective Commissioner said that as Re B was also authority for the proposition that the Supreme Court had inherent jurisdiction to authorise payments for past gratuitous care, he would apply to the Court to approve the making of a payment in the sum of $150,000 for past gratuitous care in the exercise of its inherent jurisdiction. That was the amount D’s counsel had advised the Protective Commissioner, prior to the settlement of D’s common law claim, was appropriate in respect of his claim for past gratuitous care. It was substantially less than the amount the second respondents had sought.

11 In July 2003 the Protective Commissioner filed a motion in the Protective List in the Equity Division seeking a direction pursuant to s 12 of the 1983 Act as to the power, if any, of the Protective Commissioner under the 1983 Act and in particular s 28(1)(b) thereof to make payment for past gratuitous care out of the estate of the protected person (“the Section 12 Application”). D was named as the first respondent and the second respondents were also joined. The proceedings initially came before Windeyer J who ordered that the Section 12 Application be removed to the Court of Appeal on the basis that the parties submitted the question to be decided was the subject of conflicting authorities.

12 In paragraph 2 of the motion, the Protective Commissioner sought an order that he be authorised to make payment for past gratuitous care to the second respondents in the sum of $150,000 out of D’s estate. That application was not the subject of the removal to the Court of Appeal. On 8 September 2003 a consent order was made in the Protective List staying the paragraph 2 application pending disposal of the Section 12 Application in this Court.

The outstanding costs issues

13 The Protective Commissioner, while contending that he would be entitled to seek an order that his own costs be paid out of D’s Estate, does not pursue such an order. In light of the Protective Commissioner’s attitude, the costs order made in Protective Commissioner (No 1) should be set aside insofar as it related to the Protective Commissioner’s costs.

14 The only outstanding issue therefore is as to who will bear the burden of the second respondents’ costs of the Section 12 application. The second respondents ask that the Protective Commissioner pay their costs on a solicitor and own client basis or, alternatively, that their costs be paid out of D’s Estate. The Protective Commissioner submits that the second respondents should bear their own costs or, alternatively, that their costs should be paid out of D’s Estate.

The second respondents’ submissions

15 The second respondents filed extensive submissions but in my opinion it is only necessary to refer to one of the matters raised. The second respondents argued that their costs should be ordered on a solicitor and client basis so as to provide them with a full indemnity because the proceedings were in the nature of public interest or test case litigation in so far as the outcome of the application was for the benefit of, or at least relevant to, all protected estates where a claim has been or will be made in respect of past gratuitous care. They contended that it would be inappropriate for them or D’s estate to bear the own costs of proceedings which had a public benefit in clarifying the Protective Commissioner’s statutory powers. They referred to New South Wales Medical Defence Union Ltd v Crawford (1993) 31 NSWLR 469 per Kirby P at 493 – 495 (in which Kirby P rejected a submission that indemnity costs should be awarded in a case said to resolve issues in other “Chelmsford cases” on the basis that the fact that a case resolved a disputed question of statutory interpretation with the practical consequence of resolving proceedings between other parties was not ordinarily a basis for awarding indemnity costs); Baltic Shipping Co v Dillon (1991) 22 NSWLR 1 at 33 – 35 (in which Kirby P (with whom Gleeson CJ agreed, Mahoney JA not deciding) held that costs should be awarded on a solicitor and client basis in respect of an issue which was run as a “test case” under the Admiralty Rules and which was admitted after the trial began) and Australian Federation of Consumer Organisations Inc v Tobacco Institute of Australia Ltd (1991) 100 ALR 568; (1991) ATPR ¶41-114 (where Morling J applied Kirby P’s reasoning in Baltic Shipping Co v Dillon to hold that an order for costs on an indemnity basis should be made in proceedings which were in the nature of a test case on the issue of whether passive smoking was a hazard to the health of on-smokers.)

The Protective Commissioner’s submissions

16 The Protective Commissioner submitted that the usual rule in protective list cases is that costs are paid out of the protected person’s estate: Re an Incapable Person D [1983] 2 NSWLR 590; RH v CAH and Others [1984] 1 NSWLR 694 and M v K (unreported, Supreme Court of NSW, 24 April 1989, Powell J, BC8902256).

17 However he contended that in the circumstances of this case it would be more appropriate for the second respondents to bear their own costs. This was because he argued their involvement in the proceedings was at their own instigation and they had no real interest in the Section 12 application. He submitted that their involvement was unnecessary to the resolution of the issues in the Court of Appeal because he had presented arguments on both sides concerning the “conflicting” authorities. He pointed out that while the usual manner for him to seek directions was by way of Report and Proposal pursuant to Part 76 rule 5(3) of the Supreme Court Rules, he had proceeded by way of Notice of Motion because the second respondents wished to be heard on the issue.

18 The Protective Commissioner accepted Protective Commissioner (No 1) were proceedings in the public interest. He argued that the cases upon which the second respondents relied were distinguishable as they each concerned the costs of a party who had succeeded after adversarial litigation and who had instigated the relevant proceedings whereas he had brought the present proceedings.

19 The Protective Commissioner argued it would be absurd to award costs against him for bringing proceedings in the public interest.

Consideration

20 The Protective Commissioner’s submission concerning the reason the second respondents came to be parties to the proceedings does not accord with the correspondence. In his letter to the second respondents’ solicitors of 28 July 2003 (annexure “N” to Mr Lester’s affidavit) he advised:

“The Commissioner intends to proceed by way of Summons or Notice of Motion rather than by Report and Proposal so that your clients may have the opportunity to be heard in relation to an application to the Court.

21 Accordingly, it appears that the second respondents were brought to the Supreme Court as respondents to the Protective Commissioner’s motion on his instigation. As far as I can determine there has never been any objection from the Protective Commissioner to the second respondents pursuing an active role in the proceedings. While I accept the Protective Commissioner’s submission that he presented both sides of the debate (a point upon which I remarked in Protective Commissioner (No 1) at [28]), the second respondents should not be denied their costs when there was no suggestion from the Protective Commissioner that they should not appear.

22 Further, they had a real interest in the issue as the question of their entitlement to the payments they sought for past gratuitous care could have been influenced by the outcome of the proceedings. The second respondents’ solicitors had advised the Protective Commissioner that if, as turned out to be the case, the Court determined that the Protective Commissioner did have the power to make payments for past gratuitous care out of D’s estate, they would advise their clients to pursue their review proceedings in the Administrative Decisions Tribunal.

23 In my opinion the Court should determine the issue of the second respondents’ costs by following Holt and Another v Protective Commissioner (1993) 31 NSWLR 227, a case to which neither party referred. In that case, Kirby P (with whom Sheller JA and Windeyer A-JA agreed) held (at 244B) that where issues on the appeal were of concern to all protected estates, the Protective Commissioner should pay the costs on a common fund basis.

24 In my opinion the approach taken in Holt is the appropriate course for the Court to pursue in this case. For the reasons I have given, the second respondents should not be left to bear their own costs. Rather than the costs coming out of D’s estate, the relevance of the issue to a great many protected estates makes it the more appropriate course that the costs are spread over all funds under the Protective Commissioner’s control (as are the Protective Commissioner’s own costs).

25 The issue determined by Protective Commissioner (No 1) was a matter of general importance concerning the Protective Commissioner’s powers. The Protective Commissioner correctly drew the second respondents’ attention to the limitation on the power of the Administrative Decisions Tribunal to deal with their review application, in circumstances where the state of Supreme Court authority meant there was doubt about his power to make payment for past gratuitous care out of D’s estate.

26 In my opinion it would also be inappropriate for D’s estate to bear any part of the second respondents’ costs in circumstances where they were seeking to recover monies in their own right.

Orders

27 I propose the following orders:

(1) Costs order made in Protective Commissioner (No 1) set aside.

(2) Protective Commissioner to pay the second respondents’ costs of Protective Commissioner (No 1) on a common fund basis.

(3) No order as to the Protective Commissioner’s costs.

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Last Modified: 12/21/2004