TTD (Administration)
[2000] TASGAB 2
•15 February 2000
Guardianship and Administration Board
Tasmania
Ref: XXXX
In the matter of TTD
TTD (Administration) [2000] TASGAB 2
BEFORE THE BOARD: John Blackwood (Chairman), Joan Fitz-Nead, Kereth West.
REASONS FOR DECISION
Administration – proposed represented person engaged in litigation arising from a motor vehicle accident – no litigation guardian available through Supreme Court Rules – whether a chose in action is part of an estate – reluctance of DPP, Public Guardian and Public Trustee to accept appointment – ability to appoint certain agencies as administrator without their consent
Guardianship and Administration Act 1995 s. 51, 54
Loxton v Moir (1914) 18 CLR 360
Georgiadis v Australian and Overseas Telecommunications Corporation (1993) 179 CLR 297
Torkington v. Magee [1902] 2KB 427
Minister for the Army v Dalziel (1944), 68 C.L.R. 261
These reasons for decision relate to orders of the Board made on the 15th February, 2000 concerning TTD.
Applications Details
This was an application for the appointment of an administrator pursuant to s51 of the Guardianship and Administration Act 1995 (hereinafter the Act). The application dated 18th November, 1999 was lodged by MN, Solicitor of XXXX, Hobart.
What the Board Decided
The Board decided that The Public Trustee be appointed as TTD’s administrator but that the powers and duties of the administrator were to be limited to bringing and defending actions and other legal proceedings in the name of and on behalf of TTD. The Board also ordered that in the event TTD’s claim for damages is settled and monies are payable to him then the administrator was directed to apply to Board for a variation of the order. The administration order is to remain in effect for a period of three (3) years.
Attendance at the Hearing
The hearing was held in Hobart on the 1st and 10th February, 2000 and the order of the Board was handed down on the 15th February, 2000. The following people attended the hearing and gave evidence to the Board:
MN (the applicant and Solicitor for TTD)
Mrs Maria Gibbs (The Public Trustee representative)
Ms Lisa Warner (the Public Guardian)
Mrs Anne Perks (Senior Investigation and Liaison Officer with the Board)
TTD and his wife DD were invited to attend the hearing but indicated that they could not attend as they live at XXXX with their two young children.
Written Evidence
In addition to the application and oral evidence the Board considered evidence from the following documents:
A Health Care Professional Report prepared by Dr Nick Hummel dated 19th November, 1999.
A report from Mrs Anne Perks, Senior Investigation and Liaison Officer for the Board dated 28th January, 2000.
A number of medical reports dealing with TTD’s medical condition and prognosis since his motor vehicle accident in 1983 including:
(i)Report Mr Liddell dated 26th October, 1993.
(ii)Reports Mr Bent dated 30th May, 1985, 14th April, 1986, 30th May, 1986, 10th March, 1987, 20th August, 1993.
(iii)Report Dr Pargiter dated 5th March 1985, 2nd July, 1985, 17th April, 1986.
(iv)Proof of evidence of Mr Fourez.
(v)proof of evidence of Prof. Olver.
(vi)Reports Dr Burges-Watson dated 12th May, 1989, 4th March, 1992, 22nd April, 1994, 25th June, 1996.
BACKGROUND
TTD is a 36 year old male who was injured in a motor vehicle accident (MVA) in September 1983. TTD was on the back of a utility, inebriated, when he fell off the ute which was being driven by a sober driver.
Legal action to recover damages arising out of the MVA was commenced in 1984. TTD has had a succession of solicitors since that date and the matter did not progress far. His current solicitor is MN from the Hobart firm of XXXX. A Certificate of Readiness has been filed. An offer of $100,000 was made by the defendant’s insurers, the MAIB, but has been rejected as too low. Liability has not been admitted.
The Board’s Senior Investigation and Liaison Officer, Mrs Anne Perks, provided a report to the Board. Aspects of her report provide an incisive background picture:
“TTD is from a family of five children. One sister lives at Hobart. One brother suffering from brain damage lives at XXXX. Another brother lives at Hobart. His parents are living at XXXX. After he left school TTD worked at a newsprint factory at XXXX and he worked as a labourer on farms. He had the accident when he was 19 and spent a few years in hospital and rehabilitation. He married DD in 1987 and they have two boys aged eight and four.
I visited TTD and his wife and two children. They live at XXXX in spartan conditions with their two sons. TTD’s parents live nearby. TTD is obsessive with washing his hands and collects numerous gnomes and dog ornaments. He told me he does nothing all day. His wife appears to do all the work although TTD’s father does the vegetable garden. DD said they do some seasonal work now and again.
TTD is child-like asking the same questions over and over again. He is aware of the situation but says he doesn’t understand it. He told me his life history. His wife corrected him in some minor details. He told me how he wants to spend the money. He wants to sell their house which is too small and build a brick house. He wants a four wheel drive and four wheel bike for the kids. He then wants to save some money for the kids for when he dies. His wife advised they already argue over money and she does not want to be his administrator. She wants the Public Trustee. They asked about their costs. Both had difficulty understanding my discussion of the legal process from here on. TTD kept returning to the costs of a trustee and asking why he could not just have the bank manage his funds. He also asked a lot of questions about whether the trustee would allow him money for various things such as a holiday on the Gold Coast.”
An application was made to the Master to appoint the Director of Public Prosecutions (DPP) as next friend. The DPP advised they would not accept appointment - despite the provisions of Order 18.23 of the Supreme Court Rules which clearly gives the Court the power to appoint the DPP without his consent. The Master referred the matter to the Guardianship and Administration Board.
An application for the appointment of an administrator was subsequently lodged by MN of the firm of XXXX. The application requested the appointment of an administrator for the purposes of providing instructions in respect of the MVA and to manage any sum awarded by way of damages as a result of the accident. The application included a Health Care Professional Report (hereinafter HCPR) and numerous medical reports from March 1985 to June 1996.
DISABILITY
Before the Board can make an administration order it must be satisfied of the several matters set out in the Guardianship and Administration Act 1995 (the Act). S51(1)(a) requires that the proposed represented person be ‘a person with a disability’. Disability is widely defined in s3(1). The Board was satisfied TTD had a relevant disability.
According to Dr Hummel, TTD has a borderline intellectual disability due to a ‘significant closed traumatic brain injury’ and in addition has a severe debilitating obsessive compulsive disorder. A diagnosis confirmed by numerous reports from medical specialists since 1985.
INABILITY TO MAKE REASONABLE JUDGEMENTS.
The Board was satisfied after reviewing the HCPR, the numerous comprehensive medical reports and opinions and from oral evidence presented at the hearing that TTD, as a result of his disabilities, is unable to give instructions to his solicitors in respect of his claim for damages as a result of the MVA in September, 1983.
At issue was whether as a result TTD was ‘unable.... to make reasonable judgements in respect of matters relating to all or any part of his estate’ as required by (s51(1)(b) of the Act. On this issue two questions arose:
Whether TTD’s action or claim for damages amounted to a ‘chose in action’, and if so
Whether the ‘chose in action’ formed part of his ‘estate’?
These are questions of law. The Public Trustee representative requested the Board to refer these two matters to the Supreme Court for an opinion pursuant to s75 of the Act. The Board determined not to refer the matters because it was satisfied that -
a ‘chose in action’ includes a right of action arising out of tort; and
a ‘chose in action’ can be part of a person’s estate for the purpose of s51(1)(b) of the Act.
Defining a ‘chose in action’
In Loxton v Moir (1914) 18 CLR 360 Rich J said at 379:
‘The phrase ‘chose in action’ is used in different senses, but its primary sense is that of a right enforceable by an action. It may also be used to describe the right of action itself, when considered as part of the property of the person entitled to sue. A right to sue for a sum of money is a chose in action, and it is a proprietary right.’
There seems little doubt that ‘a right of action arising out of tort’ is a chose in action. The leading Australian case on the matter is Georgiadis v Australian and Overseas Telecommunications Corporation (1993) 179 CLR 297 where Brennan J said:
“A plaintiff’s claim in negligence causing personal injuries is a chose in action, as the Court of Appeal decided in Curtis v. Wilcox[39]. In that case it was held that a wife’s claim for damages for pre-nuptial negligence was part of her property [40] for which she was entitled to sue her husband pursuant to the Married Women’s Property Act. Although such a cause of action is not assignable, their Lordships rejected the argument that assignability is the test of whether a claim in negligence was a chose in action [41] and, in my respectful opinion, rightly so. It is not by reason of its nature that such a claim is not assignable; it is for reasons of public policy that the courts have held that such a claim is not assignable [42], thereby avoiding the evils of champerty [43]. And, as Mason J. pointed out in Reg. v. Toohey; Ex parte Meneling Station Pty. Ltd. [44]: “Assignability is not in all circumstances an essential characteristic of a right of property.” It needs not extension of the meaning of “property” in s. 51(xxxi) [of the constitution] to comprehend a chose in action for damages for negligence causing personal injury. That paragraph, which is construed liberally as befits a constitutional guarantee of just terms [45], protects common law choses in action which are vested in an individual [46] (at 311-312).”
[39] [1948] 2 K.B. 474
[40]By s. 24 of the Married Women’s Property Act 1882 (U>K>), “property” was defined to include a thing in action.
[41] [1948] 2 K.B., at p. 481
[42] Trendtex Trading Corporation v. Credit Suisse, [1982] A.C. 679, at p. 703, per Lord Roskill.
[43] ibid.; see also per Lord Denning M.R. in the Court of Appeal [1980] Q.B. 629, at p. 656.
[44](1982) 158 C.L.R. 327, at pp. 342-343; see also Australian Capital Television Pty. Ltd. v. The Commonwealth (1992), 177 C.L.R. 106, at pp. 165-166.
[45]Australian Tape Manufacturers Association Ltd. v. The Commonwealth (1993), 176 C.L.R. 480 at p. 509.
[46] Minister for the Army v. Dalziel (1944), 68 C.L.R. 261, at pp. 285, 290, 295.
Mason C J, Deane and Gaudron JJ in the same case supported the view that a right to bring an action for damages in negligence was a valuable right and that ‘property as used in s51 (xxxi) extends to “every species of valuable right and interest including ....choses in action” (at 303-304).
Finally Toohey J in Georgiadis had no doubt that ‘what the plaintiff had was a right of action in tort against the defendant. Such a right is regarded as a legal chose in action’ (at 318).
The position is the same in England. In Curtis v. Wilcox Wynn-Parry J for the Court of Appeal (Scott and Wrottesley JJ) said:
“We agree...... that a right to recover damages for a wrong is a chose in action which does not arise out of contract, all the books to which we were referred that a right of action to recover damages for a tort as being a thing in action.” ( [1948] 2KB 474 at 480.)
See also to the same unanimous effect Halisburys Vol. 6 para (8) sub-section (5) and cases cited therein and W Holdsworth, ‘The History of the Treatment of Chose in Action by the Common Law’ (1920) 33 Harv. L & R 997 at 997-8.
The ‘chose in action’ as part of a person’s ‘estate’
The second issue is whether the chose in action in this case forms part of TTD’s ‘estate’ for the purposes of s51(1)(b) of the Act. The word ‘estate’ is not defined in the Act. The Acts Interpretation Act 1931 defines estate but only in reference to land and does not assist. The Board determined that the word ‘estate’ must be used in its widest possible sense. It clearly includes a represented person’s real and personal property. The common law has traditionally regarded a chose in action as an item of personal property. Channel J in Torkington v. Magee [1902] 2KB 427 said that:
“a chose in action is a ‘known legal expression used to emphasise all personal rights of property which can only be claimed or enforced by action.....” (at 430).
In Georgiadis (supra) Mason C J, Deane and Guadron JJ construed the word ‘property’ in s51(xxxi) liberally and said the word is ‘not to be confined pedantically to the taking of title..... to some specific estate or interest in land recognized at law or in equity..... but extends to inanimate and anomalous interests’ (at 303). See also Brennan J in Georgiadis to the same effect at 312.
In the Board’s view the word ‘estate’ in s51(1)(b) should be similarly defined. We would add that the word ‘estate extends to every species of valuable right and interest including chose in action (see Minister for the Army v Dalziel (1944), 68 C.L.R. 261 per Starke J at p 270.
Having decided that TTD’s chose in action amounted to part of his estate the Board determined that he was not able to make reasonable judgements in respect of at least one aspect of his estate namely to give instructions for the settlement of his MVA in September 1983.
NEED FOR AN ADMINISTRATOR
The Board must be satisfied TTD ‘needs’ an administrator (see s51(1)(c) of the Act. It is clear that TTD needs someone to give instructions to continue and settle his legal action No. XXXX of 1984 which has been ongoing since the accident in 1983. The Board was satisfied that there had been unnecessary and unjustified delay in progressing TTD’s action and one reason for that had been the difficulty in obtaining reliable instructions.
It is possible that a next friend could be appointed to give the necessary instructions. See Order 18:16 of the Supreme Court Rules. TTD has no relatives or friends who could undertake this task. His wife is unwilling to accept appointment and she is not considered a suitable administrator as there are some difficulties within the marriage and she is put under a lot of pressure by TTD. ( See Senior Investigation & Liaison Officer report p.3).
Where there is no person who can act as next friend a court or judge can, appoint ‘a fit person with his consent, or the Director of Public Prosecutions’ (Order 18:16(3) SCR). As noted earlier the DPP indicated they will not accept appointment and have suggested that the matter be referred to the Guardianship and Administration Board for the appointment of an administrator.
There are other difficulties associated with the appointment of a next friend in this case and at this time. Order 18 and the definition of ‘patient’ in Order 3 both refer to the Mental Health Act 1963 but that Act has been repealed. The provisions of Order 18:16 (3), if still valid would be relevant in determining whether TTD is in ‘need’ of an administrator. Order 18:16(3) as currently drafted provides that ‘subject to an order of a court or judge, where a person is authorized under Part VI of the Mental Health Act 1963 to conduct proceedings in the name of a patient or on his behalf, that person shall be entitled to be next friend.....’.
The clear intent of the Order is that the only way a person appointed under the Mental Health Act 1963 could bring or defend actions in the Supreme Court was by acting as next friend and not in their separate capacity as Committee. If the position was the same in respect of a person appointed as administrator under the Guardianship and Administration Act 1995 there may be no need for that appointment or the appointment may be futile. If for example The Public Trustee was appointed administrator against their wishes they could not subsequently be required to act as next friend because the only person who can be appointed as a next friend without consent is the DPP.
However as noted the authority of Order 18:16(3) is questionable even given the inherent jurisdiction of the Supreme Court to make orders for persons with a disability (see Hodges Unreported decision of theSupreme Court of Tasmania No. 96 of 1998).
Irrespective of the validity of Order 18:16(3) the Board has determined that an administrator appointed under the Guardianship and Administration Act 1995 can, provided he or she is so authorized, institute legal proceedings in the Supreme Court as of right and does not need to be appointed or to act as next friend. S56(1) & (2) of the Act gives an administrator wide powers to act in the name of and on behalf of a represented person including the power to bring and defend actions and other legal proceedings (s56(2)(l). These provisions are clearly wide enough to confer power on an administrator to commence or defend legal proceedings in the Supreme Court. The Board notes that the Solicitor General concurs with this view. See letter to the Public Guardian dated 13th November, 1999.
Given the matters outlined above the Board determined that the appointment of a next friend was not a realistic alternative in this case. The Board therefore considered that the only person or body who could give the necessary instructions was a duly appointed administrator. It was clear that an administrator was urgently needed and that s51(1)(d) of the Act was satisfied.
The Board was also satisfied that in the circumstances of this case TTD’s needs (to have his claim for damages settled after a delay of 17 years) could not be met by other means less restrictive of his freedom of decision and action (s51(2) of the Act). It was not argued before the Board that there were any other less restrictive means or ways of meeting TTD’s clearly identified need.
THE APPROPRIATE ADMINISTRATOR
The application did not nominate an administrator but it was clear from the papers lodged with the Board and subsequent enquiries that the only suitable administrator were either The Public Trustee or the Public Guardian.
Copies of the application and other papers were sent to both parties. The Public Guardian argued that it was not appropriate for that office to be appointed as administrator and that the appropriate administrator in this case was The Public Trustee as the administrator of ‘last resort’ and the most experienced administrator in cases of this type. The Public Guardian also stated she was not sufficiently resourced to act in these cases.
The Public Trustee indicated at the hearing on the 1st February, 2000 that they had not had time to consider their attitude to their appointment as administrator. The matter was adjourned to the 10th February, 2000. At the reconvened hearing the Solicitor representing the Public Trustee indicated to the Board that The Public Trustee would not consent to act as administrator.
This raised the issue of whether an administrator could be appointed despite his or her refusal to act. The Board referred to s54 and invited submissions. MN argued that under s54(1) the Board could appoint The Public Trustee, the Public Guardian or a Trustee company without their consent. She referred to s54(1)(d) which provides inter alia that the Board ‘may appoint as an administrator... any other person... who consents to act.’
Mrs Gibbs argued that it was inappropriate for the Board to appoint The Public Trustee unless it consented to the appointment. However Mrs Gibbs did not refer to the legislation or make any submission as to why it was not legally possible for the Board to make an appointment of the persons named in s54(1) of the Act despite their reluctance or refusal to act as administrator.
The Board determined that s54 made it clear that the persons listed in s54(1) could be appointed as administrator without consent. The purpose and objectives of the legislation would be undermined if the Board was not able to make administration orders in appropriate cases even if the Public Guardian or The Public Trustee were unwilling to act. There may be situations where for example The Public Trustee may not consent to an appointment where the proposed represented person had minimal assets, e.g. a pension only, or was thought to be a person with extremely challenging behaviours. In these cases however it may be that the need for a professional administrator is overwhelming and the appointment totally justified in the ‘best interests’ of the person.
The Public Trustee is the appropriate administrator
The Board determined that The Public Trustee was the appropriate administrator in this case despite their reluctance to accept the appointment. In summary the reasons were:
The Guardianship and Administration Act 1995 recognizes that The Public Trustee is the administrator of ‘last resort’ and should be appointed in most cases where there is no other person willing or suitable to act as administrator. S65 of the Act enables the Board to make emergency administration orders but only The Public Trustee can be appointed administrator. See also s63(4) of the Act which requires The Public Trustee to audit statements of accounts if requested by the Board. On this aspect the Public Guardian drew the Board’s attention to the Community Services Obligation Agreement entered into by The Public Trustee and Crown in 1997. That agreement clearly recognizes the role of The Public Trustee as administrator of ‘last resort’ and their commitment to accept appointment as administrator for matters that are not commercially viable. Schedule 1.1 says:
‘The Public Trustee is also obliged to accept appointments made by the Guardianship and Administration Board for clients deemed to be incapable of managing their own financial affairs regardless of the value of the client’s assets.
In clause 1.2 headed Manner in which CSO’s to be performed it is noted:
‘The PT will accept matters for administration that fall within the criteria contained in clause 1.1 of this Schedule which may not be commercially viable, so as to provide the general community with access to professional, traditional Trustee Services and to protect the financial interests of individuals under a legal, physical or intellectual disability, irrespective of the value of the client’s funds.’
The Public Trustee has acted in the past as administrator to bring and defend actions on behalf of represented persons. In Higginbottom No. XXXX, the Board continued an administration order at the request of The Public Trustee with powers limited to bringing and defending actions. This Board has perused the Higginbottom file and can find no practical differences between the circumstances in that case and the present.
The applicant, MN, has indicated that should a substantial award of damages be received by TTD The Public Trustee would be required to administer that part of TTD’s estate. She submitted that he would be incapable of managing the money and would, as Dr Hummel has indicated, be ‘easily persuaded to part with his money by unscrupulous individuals. (Dr. H. Hummell, HCPR p.3). Irrespective of whether The Public Trustee is eventually authorised to manage any lump sum settlement on behalf of TTD it is highly likely The Public Trustee would be awarded the funds if and when the action was settled or compromised (see Order 24:11 of the Rules of the Supreme Court). The Board takes the view that it is entirely appropriate for the one administrator to provide instructions, settle the claim and subsequently administer the sum awarded for the benefit of the represented person. In this case it is appropriate for The Public Trustee to take some of the responsibility for finalising the matter before ultimately having the benefit of administering TTD’s estate pursuant to a varied administration order of the Board or upon a trust created by the Supreme Court.
The Public Trustee has the expertise and resources to provide instructions and to have the carriage of the matter. The Public Trustee is experienced in matters of damages awards, compromises and estate administration whereas the Public Guardian who primarily acts in cases of guardianship and lifestyle matters is not.
The Public Trustee’s claim that they would be personally liable for costs in the event that TTD’s action failed could not be accepted by the Board as a sufficient reason for not making the administration order. In this respect the Board noted:
¨ The Public Trustee could cite no authority to support their argument that they may be personally liable for costs in the event of the plaintiff’s action failing. While that may be the position if The Public Trustee was acting as next friend pursuant to Order 18 of the Supreme Court Rules the position under the Guardianship and Administration Act 1995, where The Public Trustee acts as administrator, may be different. There is a strong argument that an administrator’s liability to costs in bringing an action or taking other legal proceedings is limited to the value of the estate of the represented person. So that provided the action is brought by TTD by his administrator the only person exposed to adverse costs would be TTD. This view is supported by s56(5).
¨ The potential liability to costs in this case was remote and speculative. Although the defendant had not admitted liability an offer to settle of $100,000 was made by the defendant’s insurers. That amount was rejected, on counsel’s advice, as being inadequate compensation for the plaintiff’s injuries. MN advised the Board she expected the eventual quantum of damages to be in excess of $200,000.
¨ That while legal aid had not been obtained to cover disbursements these costs were currently being met by TTD’s solicitors and would continue to be met until the matter was settled. MN agreed to arrange for the provision of an ‘irrevocable authority’ in the event that one may be required.
Was the Order in TTD’s ‘best interests’?
S6 of the Act requires the Board to consider whether the best interests of TTD would be promoted by the making of an administration order. There can really be no doubt as to this aspect. TTD’s accident occurred in September 1983. The delay in settling his action for damages as a result of an MVA in which he suffered serious head injuries has been protracted and unnecessary. Without the appointment of an administrator to provide the necessary instructions and settle his action TTD will continue to be denied the access to justice to which he is entitled.
The Public Trustee’s representative indicated that it may not be in TTD’s best interests for The Public Trustee to be appointed because there was a potential conflict of interest. The submission appeared to be that if The Public Trustee was ‘forced’ to act as administrator against its wishes it may be more concerned to act in its own interests, e.g. with reducing or minimizing its liability to costs rather than in acting impartially and objectively in TTD’s interest. In other words an administrator appointed against his or her will cannot clearly separate off their own concerns - including a potential liability for costs - and make impartial and objective decisions in the represented person’s best interests. Might not such an appointment force the administrator to act ultra-conservatively and only in their interests?
The Board rejects the submission in its entirety. It is impossible to believe that a professional organization such as The Public Trustee would act otherwise than in a represented person’s best interests irrespective of the nature and circumstances of the appointment. Apart from the statutory duties and responsibilities contained in the Act (see s57 and s6) and the relevant provisions of the Public Trustee Act 1898 it would be completely unethical for any professional administrator not to act at all times in the represented person’s best interests objectively evaluated.
THE NATURE OF THE ORDER
TTD’s immediate need is for an administrator to give instructions and if necessary institute legal proceedings in the Supreme Court in relation to his MVA in 1983. It was argued by the applicant that the order should also include power for the administrator to manage any monies received as a result of the action being settled. However TTD is not currently in need of an administrator for that purpose. S51(4) of the Act requires that when the Board makes an administration order it must be that which is the ‘least restrictive of the person’s freedom of decision and action as is possible in the circumstances’. The order can however include a clause that enables The Public Trustee as administrator to apply for a variation of the order to enable the management of monies received in settlement if and when that becomes necessary or appropriate.
CONCLUSION
There can be no doubt that TTD has a disability and cannot give instructions to his solicitor to settle his claim for damages arising out of his motor vehicle accident. It has been nearly seventeen years since the accident but the matter has still not been finalised. His current solicitor MN is doing everything in her power to conclude the matter. Her legal firm are paying the disbursements and current costs and are acting on a contingency basis. All that is needed is for somebody with the necessary expertise to give instructions. However there is nobody who will consent to act either as next friend or as administrator. The DPP says it is not their responsibility, the Public Guardian and The Public Trustee have concerns about appropriateness and liability for costs.
The Board believes it has the power to appoint an administrator to act for TTD and to act in his best interests even if the administrator is reluctant or as in this case ‘declines’ appointment. To do otherwise and dismiss the application would be a complete abrogation of the Board’s responsibilities and powers and be contrary to Parliament’s intention in enacting this new legislation.
| ............................................ John Blackwood CHAIRMAN | ............................................ Joan Fitz-Nead | ............................................ Kereth West |
15th February, 2000
0
4
1