HIS HONOUR: By summons filed on 17 June 2015, the then plaintiff Jake Douglas Dunning sought to invoke the protective jurisdiction of the Court in respect of moneys that had been paid into the Dust Diseases Tribunal in satisfaction of an award of damages in favour of his father Steven Douglas Dunning, who was named as defendant. For the sake of convenience and without disrespect, I shall refer to them by their first names. Jake had been Steven's tutor in the proceedings in the Dust Diseases Tribunal. Because it appeared at that stage that the moneys had been paid to the NSW Trustee & Guardian pursuant to (NSW) Civil Procedure Act 2001, s 77(4), orders were made reconstituting the proceedings by removing Steven as defendant and joining him as second plaintiff, and by joining the NSW Trustee & Guardian ("the NSW Trustee") as defendant.
After the proceedings were amended, the summons was served upon the NSW Trustee, who appeared by Ms Phang, whose submissions have been of considerable assistance to the Court. As will appear, the moneys were in fact paid to the NSW Trustee not pursuant to s 77(4), but pursuant to (NSW) Uniform Civil Procedure Rules 2005, r 41.7, and in that event it may well be that the proceedings as originally constituted were correctly constituted. In any event, all requisite parties are in one way or another now before the Court.
On 29 March 2011, Steven commenced the Dust Diseases Tribunal proceedings against BHP Billiton, for damages for negligence in exposing him to asbestos dust in the course of his employment, causing him to contract a malignant pleural mesothelioma. During the proceedings in the Tribunal, in respect of which liability was strongly contested, Steven appeared to become depressed, and his mental state deteriorated. In the course of his cross-examination, in about mid-February 2013, his lawyers became concerned as to his ability to give them instructions, and as to the manner in which he was answering questions in the witness box. As a result, they referred him for an urgent opinion by a pre-eminent consultant psychiatrist, Dr Jonathon Phillips, who diagnosed a major depressive disorder with significant catatonic features. Dr Phillips opined that Steven was handicapped in the legal process, that he was then not currently able properly to instruct his lawyers, but that with specialist psychiatrist treatment his condition was likely to remit over a period of two to three months.
The judge hearing the proceedings in the Tribunal, which extended over nearly 50 hearing days, also made observations on or about 15 February 2013 expressing concerns about Steven's capacity. In the light of those observations, and Dr Phillips' opinion, on or about 5 March 2013 Jake was appointed tutor for Steven in the Tribunal proceedings. Steven was also referred to a specialist psychiatrist, Dr McDonald, for treatment.
On 31 July 2014, the Dust Diseases Tribunal gave judgment that BHP pay Steven the sum of $2,236,959.57. With the benefit of documents produced by the NSW Trustee, it has been possible to ascertain, at least to some extent, what has since transpired.
On 31 July 2014, the Tribunal published its reasons [Dunning v BHP Billiton Limited [2014] NSWDDT 3] and announced:
For reasons which I publish, there will be verdict and judgment for the plaintiff in the sum of $2,236,959.57. I order the judgment made be paid into Court for investment on behalf of the plaintiff, subject to any further order of the tribunal or the Supreme Court. This order is subject to the stay order. I grant a stay conditional upon the defendant prosecuting any Appeal it proposes to prosecute with all due expedition on its part...
Directions were made for submissions in respect of costs, and the matter was listed for argument as to costs, if need be, on 4 September 2014. In its written reasons, though not in the orders pronounced orally, the Tribunal said (at [843]-[845]):
[843] There will be verdict and judgment for the plaintiff in the sum of $2,236,959.57.
[844] The plaintiff is to bring in short minutes of order dealing with the payment and investment of the judgment sum.
[845] I shall hear the parties on costs.
The matter returned before the Tribunal on 4 September 2014. On that occasion, it seems that a minute of judgment and orders prepared by the solicitors for BHP was produced to the Court, and according to the record of proceedings, the Tribunal made "Orders in accordance with the judgment and orders dated today." Those orders included:
1. That there be judgment in favour of the plaintiff against the defendant in the sum of $2,236,959.57 to be paid into Court to be invested on behalf of the plaintiff.
The remaining orders dealt with costs, and concluded with a notation that the judgment took effect from 31 July 2014. The formal order did not entirely reflect the oral orders pronounced on 31 July, in particular because it did not include the words "subject to any further order of the Tribunal, or the Supreme Court." However, it may be that that omission is immaterial, and that the order has that effect in any event, a matter to which I shall return.
BHP Billiton filed a notice of intention to appeal on 1 August 2014, and a notice of appeal on 3 October 2014. The appeal was dismissed by the Court of Appeal on 11 March 2015 [BHP Billiton Ltd v Dunning [2015] NSWCA 55]. On 10 April 2015, solicitors for BHP Billiton confirmed that there would be no application for special leave to appeal to the High Court, and the defendant paid the judgment sum (less 10%, which was deducted and paid to Medicare pending a Medicare notice of charge) into the Tribunal. The sum paid in was $2,013,263.61. It seems that, for reasons which are not apparent, BHP did not pay any post-judgment interest, but that is not a matter that need trouble this Court.
Subsequent to the finalisation of the proceedings with the dismissal of the appeal and the payment of the judgment sum, Steven's wife, his tutor, and his solicitor have, through observation of and communications with him, formed the impression that his mental state is much improved, and that he now has the capacity to make decisions in respect of his affairs. He was seen again by Dr McDonald on 4 May 2015, who concluded that he had sufficient cognitive capacity and competence to resume full responsibility for the management of his financial and personal affairs, and that while there were some residual elements of his illness, his major depressive disorder was largely in remission, as a consequence of his medication and being under substantially less stress.
It is in those circumstances that application is made for the moneys that were paid into Court, and in the manner in which I will describe have since come to be held by the NSW Trustee, to be paid out to Steven's solicitors Slater & Gordon, he having executed an authority to pay the moneys paid into the Tribunal to his solicitors.
It is necessary to notice some of the statutory provisions. Civil Procedure Act, s 77, provides:
77 Payment of money recovered on behalf of person under legal incapacity
(1) This section applies to money recovered in any proceedings on behalf of any of the following persons:
(a) a person under legal incapacity,
(b) a person who, during the course of the proceedings, becomes a person under legal incapacity,
(c) a person whom the court has found, under section 76 (1) (c), to be incapable of managing his or her own affairs,
pursuant to a compromise, settlement, judgment or order in any proceedings.
(2) All money recovered on behalf of a person referred to in subsection (1) is to be paid into court.
(3) Despite subsection (2), the court may order that the whole or any part of such money not be paid into court but be paid instead to such person as the court may direct, including:
(a) if the person is a minor, to the NSW Trustee and Guardian, or
(b) if the person is a protected person, to the manager of the protected person's estate.
(4) Money paid into court under subsection (2) is to be paid to such person as the court may direct, including:
(a) if the person is a minor, to the NSW Trustee and Guardian, or
(b) if the person is a protected person, to the manager of the protected person's estate.
As I have said, I initially assumed that the moneys had come into the hands of NSW Trustee pursuant to a direction made under s 77(4), but that was not the case. As appears from the material provided by the NSW Trustee, the moneys having been paid into the Tribunal on 10 April, on 16 April 2015 the Registrar of the District Court - presumably in which the judgment of the Tribunal was registered, or which provides registry services for the Tribunal - paid the funds which had been paid into court to the NSW Trustee & Guardian "pursuant to Pt 41.7 of the (NSW) Uniform Civil Procedure Rules 2005 and in accordance with s 36G(1) of the (NSW) Public Trustee Act 1913".
UCPR, r 41.7, provides:
41.7 Payment to the NSW Trustee and Guardian
(1) The registrar may, and if the court so directs, must:
(a) pay funds in court to the NSW Trustee and Guardian for payment into the NSW Trustee and Guardian's common fund, or
(b) demand repayment by the NSW Trustee and Guardian to the registrar of money so paid.
(2) When making a payment referred to in subrule (1)(a), the registrar must give particulars of the payment.
(3) When making a repayment referred to in subrule (1)(b), the NSW Trustee and Guardian must give particulars of the repayment and any interest.
Public Trustee Act, s 36G (now repealed), provided:
36G Investment in common fund of money paid into court
(1) Money paid into court that has subsequently been paid to the Public Trustee for payment into the common fund must be so paid by the Public Trustee.
(2) The money must be paid into the common fund within one day after the date of the receipt of the money by the Public Trustee.
(3) On demand by any registrar of the court in respect of which the relevant money was paid under subsection (1), the Public Trustee must repay the money together with interest on the money calculated in accordance with section 36A (3) and (4).
(4) In this section, "court" means the following:
(a) the Supreme Court,
(a1) the Land and Environment Court,
(b) the District Court,
(c) the Dust Diseases Tribunal,
(d) a Local Court.
That section was repealed with effect from 30 June 2009, with the enactment of the (NSW) NSW Trustee and Guardian Act 2009. While the NSW Trustee and Guardian Act does not contain an identical provision, s 105 is to similar effect, and provides as follows:
105 Amounts that may be included in common funds
(1) A common fund may include only the following:
(a) trust funds or protective funds, or both,
(b) amounts payable to the common fund from the Reserve Fund,
(c) money paid into court that has been subsequently paid to the NSW Trustee for payment into a common fund,
(d) any other money required under any Act to be paid into a common fund under this Act.
(2) An amount must not be included in a common fund if:
(a) the relevant trust instrument prohibits investment in the common fund, or
(b) the amount is held by the NSW Trustee with another person who has objected in writing to the amount's inclusion in the common fund.
(3) In this section,
"court" means the following:
(a) the Supreme Court,
(b) the Land and Environment Court,
(c) the District Court,
(d) the Dust Diseases Tribunal,
(e) the Local Court,
(f) any other court or tribunal prescribed by the regulations
Coupled with UCPR, r 41.7(1)(b) and (3), the practical effect is essentially the same.
Although it was submitted on behalf of the NSW Trustee that in this type of situation it is a mere banker for the District Court or the Tribunal, I do not think the position is quite so simple as that. NSW Trustee and Guardian Act, s 104, provides:
104 Common funds
(1) The NSW Trustee is to establish one or more funds to be known as common funds.
(2) If there is more than one common fund, each common fund must have a distinguishing number.
(3) The NSW Trustee may from time to time, without liability for breach of trust, pay into or withdraw money from a common fund in accordance with this Act.
(4) Without limitation, money may be paid into a common fund in respect of one or more trust matters and in respect of one or more clients or managed estates.
(5) Amounts credited to a common fund are held on trust by the NSW Trustee.
(6) The NSW Trustee may:
(a) establish such portfolios and accounts within a common fund as it thinks fit, and
(b) establish a common fund on the basis of a unitised system or any other appropriate basis.
Accordingly, the moneys paid pursuant to s 105 and deposited in a common fund under that section are, by reason of s 104(5), "held on trust by the NSW Trustee". There may be some cases in which it is difficult to identify precisely who is the beneficiary of such a trust, but in this case there could be no doubt that the person beneficially entitled to the moneys that were paid to the NSW Trustee is Steven. Accordingly, the consequence of NSW Trustee and Guardian Act, ss 104 and 105, is that the moneys held in its common fund are held on trust by it for Steven, but that by operation of UCPR r 41.7, in the event of a demand by the Registrar of the Tribunal, the NSW Trustee would have to repay them to the Registrar.
The starting point for considering how these funds can be dealt with and who has jurisdiction in that respect must be Civil Procedure Act, s 77. It was always apparent that the moneys were paid into court in conformity with the Tribunal's order pursuant to s 77(2). The court referred to in s 77(4) is the court into which the money is paid under subsection (2), and not some other court. The effect of s 77(4) is to give that court power to make directions as to the payment out of court of the moneys paid in. When read in conjunction with ss 78 and 79, the intent is that the moneys ordinarily be paid out, in the case of a minor to the NSW Trustee to be held on trust and for the benefit of the minor, and in the case of a protected person, to the manager of the protected person's estate to be held and applied by the manager as part of that estate [s 79]. But the court in question can make an order under subsection (4) that the money be paid to persons other than the NSW Trustee (in the case of a minor) or a manager (in the case of a protected person).
Although the moneys have been paid to the NSW Trustee pursuant to UCPR, r 41.7, they remain "money paid into Court" under s 77(4). In my view, an application could have been made to the Tribunal for a direction under s 77(4) that the money be paid out to Steven, and that would probably have been the preferable course, since plain statutory provision is made in that respect. But that is not the only available course. Civil Procedure Act, s 77, does not appear (at least in this respect) to have been the subject of judicial consideration in this State. However, similar provisions have been considered in other Australian jurisdictions, and have consistently been held to be procedural in character, and not to affect the inherent jurisdiction of the Supreme Court to make orders dealing with moneys paid into any court by way of satisfaction of a damages award in favour of a mentally infirm person [Smith v Reynolds [1989] VR 309 (Kaye J); Morris v Zanki (1997) 18 WAR 260 (Full Court); Jones v Moylan (1997) 18 WAR 492 (Full Court); Singh (by her next friend Singh) v Calvary Hospital ACT Inc (No 2) (2009) 3 ACTLR 247; (2009) 166 ACTR 78; (2009) 3 ASTLR 50; [2009] ACTSC 57; Diver v Diver [2007] VSC 146; (2007) 16 VR 318; Dickson v Australian Associated Motor Insurers Ltd [2010] QSC 69; [2011] 1 Qd R 214 (Mullins J)]. In the light of those authorities and their analysis of equivalent provisions, the proper construction and application of s 77(3) and (4) is that those sections confer on the other courts to which the Civil Procedure Act applies an element of this Court's parens patriae jurisdiction to deal with funds paid into court or recovered on behalf of an incapable person; but they do so without affecting or detracting from this court's inherent protective jurisdiction. Thus, if this Court were satisfied that Steven were an incapable person, it could appoint a manager of the funds that had been recovered for his benefit, notwithstanding that the funds were paid into another court.
A question arises whether the jurisdiction can be exercised, in circumstances where I am not only not satisfied that he is now an incapable person, but am affirmatively satisfied on the evidence now tendered that he is not and that he has the capacity and competence to resume full responsibility for management of his affairs. The touchstone of the jurisdiction is the need of an incapable person for protection. In the statutory jurisdiction, it is clear that if the court, having made an order for the management of a person's estate, was subsequently persuaded that a manager was no longer required, the orders can be revoked and consequential orders made for the disbursement of estate [NSW Trustee and Guardian Act, s 86]. Even if the Court were satisfied that Steven was incapable, it could nonetheless decide that some of the moneys could be paid to him rather than to a manager.
In my view, it is a necessary incident of the protective jurisdiction that if the circumstances that once required protective measures no longer obtain, the court must be able to make consequential orders for the vacation of those measures. If this court is satisfied that moneys paid into court for the benefit of a person who was at that time incapable but is no longer incapable, then it must be able to order that the moneys be paid to him personally. This view is consistent with that expressed by Lindsay J in H v H [2015] NSWSC 837 (particularly at [6]), and with the course adopted by his Honour in CJ v AKJ [2015] NSWSC 498. In the former case, his Honour, in the course of explaining the relationship between protective proceedings and common law proceedings for recovery of damages, said (at [5]):
Absent satisfaction that the person is indeed incapable of managing his or her affairs, and that there is a real need for and utility in the appointment of a protected estate manager, the court may decline to make a protective order, instead simply ordering that moneys paid into court be paid out to him or her personally.
In CJ v AJK, the person in question had recovered a judgment for damages in the District Court, and the judgment had been paid into court pursuant to Civil Procedure Act, s 77. Application was made to the Supreme Court for protective orders. His Honour was not satisfied that the person in question was incapable of managing his affairs, dismissed the application for a declaration to that effect, and ordered that all funds paid into court in relation to the District Court proceedings be paid out to him personally or as he may direct in writing.
Accordingly, while it may have been preferable and more straightforward to make the application to the Tribunal, I am satisfied that this court has jurisdiction, in respect of moneys paid into a court for the benefit of a person who was formerly incapable, to order their payment out to that person upon being satisfied that he is no longer incapable.
The Court therefore orders that the moneys paid into the Dust Diseases Tribunal in proceedings DDT79 of 2011 and District Court proceedings 2014/45774 and currently held in the common fund of the NSW Trustee & Guardian pursuant to payment made on 16 April 2015, and any subsequent payment in respect of such moneys, be paid out to the solicitors for Steven Dunning, Slater & Gordon.
[3]
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Decision last updated: 08 September 2016