Erdogan v Ekici [2012] VSC 256

PRACTICE AND PROCEDURE - inherent jurisdiction - parens patriae - application for return of funds and property in court - whether capacity to manage own affairs.

Solicitor to the Senior Master's (Funds In Court) Office

1 When on 11 November 2004 this court approved the settlement of Cemal Erdogan's damages action, it ordered that the settlement sum be paid to the Senior Master, on the basis that he is a person who is unable to manage his affairs. He has an acquired brain injury. The order provided that 'subject to any further order, the Senior Master invest the sum he receives for the benefit of the plaintiff not to be paid out without further order of the court'. Mr Cemal Erdogan seeks an order that the Senior Master pay out to him the funds remaining, on the basis that he now has the capacity to manage his own financial affairs.

2 Mr Erdogan was represented by his solicitor. His former litigation guardian, his wife Mrs Sultan Erdogan, was not present during the trial although his son, Cagri, and a psychologist, Ms Muradiye Selvi, provided support and assistance to him. Mr Tim West, from the office of the Solicitor to the Senior Master's (Funds in Court) Office (SMO), appeared, as amicus curiae, to assist the court and to act as an objective contradictor. Mr West did not advocate for the correctness of the decision of the associate judge.

3 Mr Erdogan was born on 1 January 1966 in Turkey. He attended school in Turkey until the age of 7 or 8, when he started working as a shepherd. Mr Erdogan never learned to read or write in Turkish. At the age of 29 in 1995, Mr Erdogan migrated to Australia with his wife and young son. Mr Erdogan worked as a bricklayer for Omek Pty Ltd. Mr Erdogan did not learn to speak or read English between 1995 and 1999. Presently, his English appears extremely limited and the proceedings were translated into Turkish by an accredited interpreter.

4 On 12 November 1999, Mr Erdogan was a rear seat passenger in a car involved in a four-car collision. In all nine people were injured in the accident, and the driver and another occupant in Mr Erdogan's vehicle died in the accident. In a coma, Mr Erdogan was taken to the Alfred Hospital.

5 Medical reports from 1999 indicate that Mr Erdogan suffered the following injuries:

(a) head injuries with an initial Glasgow Coma Score of 13 of 15;

(b) post traumatic amnesia for a period of approximately ten days;

(d) fractured right and left ribs and sternum with bilateral pneumothorax and lung contusion;

Of ongoing significance is the moderately severe closed head injury that he suffered. His acquired brain injury has left him with some impairment of cognitive function, providing a complex overlay on his very limited education in a language and culture other than that in which he now lives.

6 The issue for my determination is whether Mr Erdogan remains a person under disability for whom the court should continue to exercise, for Mr Erdogan's benefit, its protective jurisdiction. However, before resolving that issue I need to say a little about how Mr Erdogan's application arises and has proceeded. It is also necessary to examine the applicable principles of law, there being an apparent divergence of views.

7 In 2004 Mr Erdogan's claim against Mr Necati Ekici under the Accident Compensation Act 1985 for compensation for the injuries that Mr Erdogan sustained in the accident was compromised. At the time of settlement approval, it was common ground that Mr Erdogan lacked the capacity to provide legal instructions, make a decision regarding the settlement proposal, or manage the settlement sum because of his condition at that time. His wife, Mrs Sultan Erdogan was his litigation guardian and the compensation awarded, $616,316.40 was paid to the Senior Master, as I have noted. The Senior Master administered funds in court under s 113 of the Supreme Court Act 1986.

The Senior Master's administration of Mr Erdogan's funds from 2004

8 With a portion of the funds in court the plaintiff's current family home at 78 Wolverton Drive Gladstone Park was purchased. Some of the purchase price of this property came from the sale of the previous family home in Broadmeadows, jointly owned by Mr and Mrs Erdogan. The Gladstone Park property is held on trust by two independent solicitors, appointed by the Senior Master, for both the plaintiff and Mrs Erdogan. It is unencumbered.

9 The Senior Master invested the remaining funds, which earns a return for Mr Erdogan that provides for some, but not all, of his income needs. The Senior Master manages funds in excess of $1 billion for more than 5,000 beneficiaries. Asset preservation is the key investment principle and the Senior Master has an established record in providing consistently good returns for beneficiaries. Further, the SMO provides other services beyond investment, including administration and welfare services for beneficiaries. It is relevant on this application to acknowledge the impressive record of the Senior Master in management and administration, to appropriate prudential standards, of the funds of persons under disability.

10 Mr Erdogan's expenses exceed the income earned on the investments. Until 2011, the SMO paid all of Mr Erdogan's bills directly, including but not limited to, medical bills, school fees, rates, utilities, insurance, car expenses (other than petrol), and legal fees. Mr Erdogan also received from the SMO approximately $1,000 monthly for living expenses. In May 2011, following Mr Erdogan's requests for more financial autonomy, the SMO increased the monthly payment to Mr Erdogan to $1,420.00. Under the new arrangement, the SMO continues to pay council and water rates and insurance, while Mr Erdogan and his wife pay all other household expenses from their own accounts and resources.

11 Mr Erdogan is now 46 years of age. Since his accident he has been unable to work and his wife has acted as his full time carer. The Erdogans have two sons, now aged 21 and 14 years, both of whom live at home. Cagri Erdogan, the elder son, is a tertiary student working part time at nights in security. The sources of family income are Mr Erdogan's monthly allowance from the SMO, Mrs Erdogan's carer's pension, a family benefits pension, and some money contributed to household expenses by Cagri Erdogan from his part time employment.

12 Over time, Mr Erdogan and his family have budgeted very carefully, accumulating $18,000 for an extra vehicle for the family and $10,000 for emergencies. Mrs Erdogan travelled to Turkey, using funds so accumulated, to visit a terminally ill close relative and was not present at the hearing. Mr West informed me that Mr Erdogan, unlike some other beneficiaries, has never sought extra funds beyond the allowance provided to him. Other evidence confirmed that Mr and Mrs Erdogan are frugal and conservative in their approach to managing their finances. Mr Erdogan neither drinks alcohol nor gambles and by all accounts lives a very simple life, the focus of which has returned to providing for his family after a long battle to recover from his accident that I will presently outline.

13 However, the income alone from the funds in court is not sufficient to cover Mr Erdogan's drawings for his needs. Expenses taken out of the funds in 2010-2011 (including Mr Erdogan's monthly allowance) totalled $21,831, while in the same period income earned on investments was approximately $11,431. Since its initial receipt by the Senior Master, an annual deficit of approximately $10,000 has been eroding the capital available to Mr Erdogan. The current balance of his funds, excluding the real estate held in trust, is approximately $200,000. It is estimated that, managed by the Senior Master, the funds will be expended by the time Mr Erdogan is 75 years of age.

14 As at 28 March 2012, Mr Erdogan has assets of $412,717, being a one-half interest in the Gladstone Park property valued at $200,000, his wife being entitled to the other half interest jointly with him. The remaining funds are held in investments by the Senior Master. Leaving aside current household bills, he has no liabilities.

15 In summary, his income from investments, and the expenses paid on his behalf by the SMO (to 28 March 2012) was as follows:

16 In 2010, when Mr Erdogan and his wife applied to the Senior Master for release of Mr Erdogan's funds into his control, there was no formal application to the court for an order under r 79.02(2) of the Supreme Court (General Civil Procedure) Rules, 2005. In May 2010 the application was rejected, the decision made by the associate judge who is the Senior Master. Not being satisfied that Mr Erdogan had the capacity to manage his own financial affairs, the associate judge dismissed his application and extended generously the time permitted for an appeal to the court, constituted by a judge. The process that was followed is recorded in the order of the associate judge authenticated on 25 October 2011.

17 On 12 March 2010, Mr and Mrs Erdogan wrote to their managing trust officer at the SMO applying to have the funds released on the ground that Mr Erdogan had 'the cognitive ability to manage his financial needs at all levels'. In support, Ms Muradiye Selvi, a consultant psychologist with extensive involvement in his rehabilitation provided a supporting letter. Ms Selvi, while expressing her support for the application, also provided a neuropsychological assessment dated 3 March 2010 from Associate Professor Murat Yucel, apparently arranged by Ms Selvi at Mr Erdogan's expense. This was Mr Erdogan's second application. The SMO trust officer prepared a memorandum for the Senior Master, which recommended payment out to Mr Erdogan. Plainly, the file maintained by the SMO provided information relevant to this recommendation. The file appears to have included the following:

(a) Report dated 31 July 2001 from Dr Simon Crowe, consulting neuropsychologist, to Ms Selvi.

(b) Report dated 27 May 2002 from Dr Andrew Gibbs, clinical neuropsychologist, to TAC Claims Division.

Each of these reports refers to hospital records and reports of medical consultants including neuropsychiatrists and neurologists that I need not list.

(c) Report of Dr John H Lloyd, consultant neuropsychiatrist dated 5 December 2007, to the SMO.

(d) Report of Dr Katie Anson, consultant neuropsychologist, dated 18 February 2008.

18 Dr Anson provided her report on instructions from the SMO, which reveal that Mr Erdogan made an earlier application in late 2007 for the payment out to him of the funds in court, based on Dr Lloyd's report.

19 The primary order recites the various reports to which I have just referred, but the fate of Mr Erdogan's 2007 application was not referred to, nor was it the subject of direct evidence before me. Mr West made no submission to the court concerning the procedure adopted on, or the fate of, this application. The application, plainly, was refused, but that refusal was not by order of the court. Presumably it was the decision of the Senior Master made after considering the reports of Dr Lloyd and Dr Anson. As there was, apparently, neither a hearing nor an order made, it would appear that Mr Erdogan's 2007 application did not proceed before an associate judge pursuant to r 79.02(2) of the Rules in the usual way.[1] Mr Erdogan made no complaint to me about the disposition of his 2007 application.

20 I am unable to say when Mr Erdogan received a copy of Dr Anson's unfavourable assessment of his capacity to manage his affairs, but Ms Selvi made it available to Associate Professor Yucel when he undertook his 2010 assessment. When Mr Erdogan applied again for the release of the funds in court to him in March 2010, his application, again, was not heard in court. The Senior Master gave careful consideration to the neuropsychological evidence revealed by the reports to which I have referred, including that of Associate Professor Yucel, concluding that 'the deficits found in the beneficiary are such as to prevent me from accepting [Associate Professor Yucel's] conclusion of capacity'. A further memorandum from the Senior Master to SMO trust officers dated 12 May 2010 sets out the Senior Master's analysis of the neuropsychological reports and the conclusions that he draws, which satisfied him on the balance of probabilities, that the beneficiary could not manage his affairs. Mr Erdogan's application of 12 March 2010 for payment out of the funds in court was refused. No order was immediately authenticated.

21 The order under appeal curiously bears two dates, 12 May 2010 and 25 October 2011 as the 'date made'. The first of these dates corresponds with the date of the Senior Master's memo. In the order, the evidence, reasoning and conclusions for dismissing the application recorded in the memo are set out in 'Other Matters'. The order confirms that there was no hearing before the Senior Master sitting in his capacity as an associate judge to exercise the jurisdiction of the court.

22 By letter dated 18 May 2010, Mr Erdogan's trust officer informed him of the Senior Master's decision. The letter conveyed the substance of the Senior Master's analysis of the neuropsychological reports and his conclusions. On 10 January 2011, Mr and Mrs Erdogan asked for a review of that rejection and for the opportunity to meet with the Senior Master to discuss further their application. In short, Mr and Mrs Erdogan sought to be heard on the application. A memorandum from the trust officer to the Senior Master followed and, after considering that memorandum, the Senior Master directed the SMO that there be no further assessment or review until Mr and Mrs Erdogan had addressed the points made by the trust officer on 18 May 2010 when informing them of the refusal of their application.

23 On 4 April 2011, Mr and Mrs Erdogan met with the trust officer, and a solicitor from the SMO. A memorandum prepared by that solicitor about that meeting was in evidence. The memorandum reveals Mr Erdogan was dissatisfied with the Senior Master's decision and, when informed of his right of appeal, expressed his intention to exercise it.

24 Thereafter the order under appeal was authenticated on 25 October 2011 and Mr Erdogan filed his notice of appeal within the extended time permitted by the order.

25 That the application proceeded in this fashion - one that, at first glance, bears closer resemblance to the exercise by a trustee of discretions under a trust deed on the application of a beneficiary, than to the exercise by the court of its inherent jurisdiction - caused me some concern. Mr Erdogan did not take any point before me about the procedure adopted by the primary judge in 2010 and Mr West made no submission about it. Thus, in what follows I do not wish to be taken to express any concluded view. I also draw a distinction between the procedure where the beneficiary seeks to terminate the protective jurisdiction altogether and applications concerning the management or administration of the beneficiary's affairs. I am not concerned with the latter procedure.

26 It is an aspect of the rule of law that courts sit in public and they accord procedural fairness.[2] Limiting the scope of operation of the open justice principle may be necessary to secure the proper administration of justice. Section 19 of the Supreme Court Act 1986 sets out the circumstances in which an order may be made under s 18 having the effect of closing proceedings to the public. Every case turns on its own facts. In Hogan v Hinch[3] French CJ observed, in a different context:

The open hearing is an essential characteristic of courts, which supports the reality and appearance of independence and impartiality. Its corollary is the freedom to make a fair and accurate report of what transpires in court proceedings, including the orders made by the court. However, at common law the open justice principle has, consistently with the judicial function, long been subject to qualifications reflected in the inherent jurisdiction of courts or their implied incidental power to hear part of their proceedings in camera and to restrict the publication of evidence or the names of witnesses.

27 The two traditional rules of procedural fairness are the hearing rule and the bias rule. The content of the hearing rule in particular circumstances may start with a consideration of the views of the decision maker as to what fairness requires in the circumstances but what principle requires is that the decision maker adopt a reasonable and fair procedure in the circumstances as known to the decision maker at the time or such circumstances as he might, acting reasonably and fairly, have discovered or ought to have known. This is not the occasion to fully analyse such matters as applied to an application to terminate the protective jurisdiction, but questions about procedural fairness and open justice cannot be ignored.

28 It is not apparent from the material before me why Mr Erdogan's application was dealt with in the manner I have described. Mr Erdogan ultimately sought to be heard in open court. Had he filed an application by originating motion, or by summons in the original proceeding for damages, that is what would have occurred. It may be that the procedure presently adopted by the associate judge who is the Senior Master has its genesis in Chancery practice from earlier times, perhaps arising from the fact that the hearing is an inquiry about mental capacity, not always suited by adversarial procedure. The beneficiary is, at the time of the application, effectively declared a person under disability by force of court order. There is a long history to the involvement of the Senior Master in the exercise of aspects of this inherent jurisdiction of the court, but I am not satisfied that history or precedent permits the procedure that was followed on Mr Erdogan's applications.

29 The Supreme Court Act 1852 established the position of the Master in Equity. The Master in Equity undertook a range of tasks including controlling the payments in to Court by trustees or executors. From 1867, the Master in Equity was also responsible for managing the estates of those who lacked the capacity to manage themselves. The Master of the Supreme Court Act 1948 created the modern role of the Master, incorporating the Master in Equity. The Master exercised jurisdiction in aspects of administering estates, empowered under legislation such as the Lunacy Act 1928, Mental Hygiene Act 1933, Inebriates Act 1928, Administration and Probate (Amendment) Act 1948 and the Public Trustee Act 1939. The earlier Mental Hygiene and Lunacy Acts became the Mental Hygiene Act 1958.

30 Section 49 of the Public Trustee Act 1939 (now repealed) provided that the court could, upon the application of a family member of an infirm person for an order that a person was no longer 'infirm', direct the Master to personally examine the patient or infirm person. On this inquiry, the Master would take such evidence and call for such information as seemed necessary to satisfy him whether such person was 'lunatic' or 'infirm' and then report to the court. With or without an examination report from the Master, the court could order the Public Trustee to sign a certificate declaring that the person has ceased to be an infirm person. The Public Trustee Act 1958 provided that an infirm person or a family member opposing certification by the Public Trustee could apply to a judge of the court 'in chambers in a summary manner' for an order requiring the Public Trustee to certify that they are not an infirm person.

31 A Master also exercised the jurisdiction of the court on an application made by a person, previously declared insane, to be declared sane. The applicant could elect for an inquiry by the court either with, or without, a jury. Under s 114 of the Mental Hygiene Act 1958 the Supreme Court Master was empowered to personally examine the 'alleged lunatic', and to take such evidence upon oath or otherwise and call for such other information as he thinks fit or the court directs in order to ascertain whether or not the alleged lunatic is a lunatic and from what time he has been lunatic, and certify his finding thereon. One of the issues to be considered was whether the 'lunatic' was capable of managing himself or his affairs, and should the Master have certified that the person was not capable of managing his or her affairs, the Master had power to manage the individual's estate. For such examinations, masters were given broad powers by the Mental Hygiene Act 1958 (now repealed[4]).

32 Re MacGregor[5] illustrates the procedure in 1985 on the exercise of this jurisdiction. When the applicant sought a certificate that she was no longer incapable of managing her affairs, a judge directed the Senior Master to personally examine the applicant and inquire into whether the applicant was an infirm person within the meaning of the Public Trustee Act 1958, and then report to the court. The Senior Master conducted the hearing in chambers, taking evidence from the applicant, doctors, psychologists, the applicant's family and submissions from a representative of the Public Trustee's Office and the applicant's solicitor, concluding that the applicant remained incapable of managing her affairs. On the Senior Master's report, the matter returned to a judge who refused relief. I will return to this decision.

33 Historically, the jurisdiction of masters, developed to service the operational needs of the court and allocated principally by the judges of the court by the Rules, was also conveniently adopted by the parliament in certain circumstances, as illustrated by the legislative examples I have given. Following after Re MacGregor, in the mid-1980's there was a sweeping overhaul of guardianship and mental health legislation in Victoria and new legislation included the Guardianship and Administration Act 1986 and the Mental Health Act 1986. The allocated role of the Senior Master to manage the estates of those without capacity, being founded in the inherent parens patriae jurisdiction of the court, was not abolished. But there were procedural changes. The new legislation no longer provided for inquiry, in chambers, as to capacity by the Senior Master. Around the same time, amendment of the Supreme Court Act 1986 abolished the distinction between court and chambers, while preserving the court's practice and procedure for when business can be conducted otherwise than in open court. Practice Note No. 9 of 1986 - Applications to Masters[6] identified the procedure for certain applications before a master, specifying that the Senior Master conduct, in his chambers, applications for payments of money out of court.

34 Further relevant reform came in 2008 with the abolition of the office of master, replaced with the new office of associate judge.[7] Upon the creation of the office of associate judge, the Supreme Court Act 1986 now provided for the associate judges to include the Associate Judge who is the Senior Master[8]. The Chief Justice has responsibility for the administration of the business of the associate judges, including the Associate Judge who is the Senior Master, and the orderly and expeditious exercise of their functions and powers.[9] The Senior Master has the duties, powers and authorities imposed or conferred on him or her by or under the Supreme Court Act 1986 or any other Act or the Rules.[10] The associate judges assist in the general business of the court, performing the duties and exercising the powers and authorities imposed or conferred on them by or under the Supreme Court Act 1986 or any other Act or the Rules.[11]

35 Since 1986, the processes of the court concerning masters/associate judges have evolved. Practice Note No. 2 of 1993 - Applications to Masters[12] varied the Practice Note No. 9 of 1986 in recognition of increasing specialty in the functions of masters. This practice note provided that masters would continue to exercise jurisdiction on applications for compromise approvals involving persons under disability. The present procedure when exercising that jurisdiction is described by Hargrave J in Diver v Diver.[13] With the 2008 amendments to the Supreme Court Act 1986 that created the office of associate judge, the Supreme Court (Associate Judges Amendment) Rules 2008 reformed the distribution of the business of the court between the judges and the associate judges. Following the amendments to the Rules, Practice Note No. 9 of 1986 and Practice Note No. 2 of 1993 no longer had effect.[14] There have also been reforms to the procedures under Order 79, particularly with the introduction of rules distributing the business of the Senior Master between the Associate Judge who is the Senior Master and a judicial registrar.[15] A judicial registrar will not have authority to determine that a beneficiary is not a handicapped person.[16] However, the amendments to Order 79 are not presently relevant.

36 By reason of these matters, it appears to me to be open to some doubt whether the practice of a master's inquiry, once utilised under now repealed legislation, has survived these reforms. Whether the associate judge based the adopted procedure on such practice, or by reference to other enabling rules, was not debated before me. Nevertheless, I consider that the adopted procedure was inappropriate for the applications made by Mr Erdogan for his funds. Further, although the material considered by the associate judge could be identified, there is not evidence that all of it was disclosed to Mr Erdogan, before the primary decision. Nor is there evidence that Mr Erdogan was afforded a hearing, or other opportunity to address the material being put against him and make submissions in support of his application. Neither Mr Erdogan, nor his solicitor, submitted that I should be critical of the processes by which the primary decision was made, but the process by which the matter came before me necessarily caused a certain focus on the procedure that was adopted.

37 I do not wish to be thought to be condoning the procedure that was adopted at the level of the primary decisions, but as I have noted, the procedure was not argued before me. I will say no more about it. Having regard to the provisions of rr 79.02(2) and 77.01, the SMO might consider assisting beneficiaries with applications of this nature to bring them by originating motion, or by a summons ion the original proceeding, supported by evidence on affidavit. A litigation guardian may be needed. Where, as here, the issues that were the subject of expert evidence were complex and the points of disagreement between the experts were subtle, procedures such as concurrent evidence may be valuable. Further, it may be desirable that the application be heard by an associate judge other than the associate judge who is the Senior Master, since the Senior Master is the natural contradictor.

38 The matter came before me in the Practice Court as an appeal against that order. Pursuant to r 77.05(7)(a), an appeal from a decision of an associate judge to a judge is a rehearing de novo of the application that was made to the associate judge, and on the material and evidence that was before the associate judge. Special leave is required to file and rely on material that was not before the associate judge (r 77.05(b)). I adopted a different procedure to determine Mr Erdogan's application.

39 When the matter came on before me in the Practice Court on 30 March 2012, I directed that the notice of appeal stand as an originating motion seeking an order that the funds in court currently held by the Senior Master, pursuant the order of Master Wheeler dated 11 November 2004, be paid out to the plaintiff, Cemal Erdogan, on the basis that he has the capacity to manage his own financial affairs. I also gave leave to Mr Erdogan to rely on any evidence that was not before the associate judge, as he may be advised. In making these orders I acted under s 47(1) of the Civil Procedure Act 2010 (Vic), under rr 1.15 and 77.06(7)(b), and the court's inherent jurisdiction for four reasons.

40 First, Mr Erdogan had new evidence, an up to date neuropsychological assessment from Associate Professor Yucel dated 2 March 2012, which was not considered by the associate judge. Significant developments in the neuropsychological assessment of Mr Erdogan were evident. It was desirable that the differing views of Associate Professor Yucel and Dr Anson on a matter of some complexity be explored by concurrent evidence, following a conference to identify matters of agreement or disagreement between them. I considered it appropriate to depart from the procedure usually followed on an appeal from an order made by an associate judge in order to employ that process.

41 Second, the nature of the application, reconsideration of whether the court should continue to manage Mr Erdogan's affairs by the exercise of its parens patriae jurisdiction, will always fall to be exercised on broad discretionary considerations applying to the circumstances then prevailing. While, historically, questions of capacity in this context were often thought to have been resolved with finality, advances in medical science, changes in personal circumstances, and contemporary, progressive attitudes to the rights of persons with disabilities require that the court consider afresh both the proper exercise of its jurisdiction on the particular application and the appropriate procedures for these applications. Associate Professor Yucel's report dated 2 March 2012 satisfied me that there were materially different circumstances that warranted a fresh examination of his application.

42 Third, Mr Erdogan has limited means. This application will inevitably diminish to some extent his remaining funds. The application was therefore inappropriate for a detailed examination of the efficacy or validity of the procedures that had been adopted by the primary court when that inquiry was likely to prejudice Mr Erdogan financially. The cost effective solution was to reconstitute the court's process.

43 Fourth, the appeal was in no sense an abuse of the process of a rehearing de novo.[17]

44 The funds Mr Erdogan became entitled to on settlement of his claim against Mr Ekici were paid into court because he was a person under disability as a result of his acquired brain injury. As I have noted, the court's jurisdiction concerning the management of the affairs of persons under disability, and the course of statutory regulation of such matters, has a long and colourful history. The present regime is best understood by commencing with the Guardianship and Administration Act 1986 (Vic).

45 Under the Guardianship and Administration Act 1986 'disability', in relation to a person, means intellectual impairment, mental disorder, brain injury, physical disability or dementia. Section 66(3) of the G&A Act provides that if in any civil proceeding before a court it is ordered that money be paid to a person with a disability (whether or not that person is a party to a cause or matter) the money is to be paid into court and, unless the court otherwise orders, it is to be paid out to the administrator (if any) of the estate of that person or State Trustees. As Hargrave J explained in Diver v Diver[18] there is a general rule that money that is to be paid to a person under a disability is, after initial payment into court, to be paid to his or her administrator or to State Trustees if there is no administrator. The court may, in the exercise of its discretion, depart from the general rule and order that funds be paid into court. It is on that consideration that the court's inherent parens patriae jurisdiction, to protect the interests of those who cannot protect themselves, falls to be exercised.

46 An associate judge's jurisdiction, both to order that funds be paid into court and regarding the administration, or payment out, of funds once in court is a delegated power.[19] Under r 77.01(a) an associate judge has power to exercise the inherent jurisdiction of the court. The inherent jurisdiction of the court includes its parens patriae jurisdiction to make orders for the control and administration of funds in court for the benefit of a person incapable of managing his or her own property.[20]

47 Order 79 of the Rules governs the process for administering funds in court that are held for persons under disability. Rule 79.02(2) provides that funds in court and interest that is generated on those funds shall not be paid out except by order of the court. Under r 79.01, 'handicapped person means a person who is incapable by reason of injury, disease, senility, illness or physical or mental infirmity of managing his or her affairs".[21] A handicapped person would ordinarily be described as a person under disability, but the expression 'persons under disability' is not defined for the purposes of Order 79 or for the purposes of the Rules generally. The expression 'person under disability' is defined for the purposes of Order 15, which deals with litigation in which a party is a person under disability, to mean 'minor or handicapped person' and 'handicapped person' is defined in terms identical to the definition in r 79.01. I am satisfied that the expression 'person under disability' when used in Order 79 includes a handicapped person and that the latter expression is to be understood in the same terms as in r 15.01. That understanding is consistent with the definition found in the G&A Act, and there is no basis to give the expression another, or different, meaning.

48 On this application, there is no issue that the parens patriae jurisdiction was appropriately exercised in Mr Erdogan's circumstances when he settled his claim for damages. He was, undisputedly, a 'person with a disability' as that term is defined in s 66 of the G&A Act. This finding is commonly made, or implied, when the issue of exercising the parens patriae jurisdiction for the benefit of a person under a disability arises. Once paid into court, the funds are held for a 'person under disability'. Because Mr Erdogan's disability arises from an acquired brain injury, there is no distinction in this case between the concept of a 'person with a disability' under the G&A Act and a 'person under disability' under Order 79.[22] The original order provided, as does r 79.02(2), that the funds in court shall not be paid out except by order of the court. Mr Erdogan now contends that although he has an acquired brain injury, he is not a person under disability and that the court should cease to exercise its parens patriae jurisdiction in his favour.

49 What then are the principles applying to identify when the court should cease to exercise this jurisdiction? The law requires that a person have the necessary mental capacity to do legally effective acts or make legally effective decisions. All adult persons are presumed to be competent, that is, to have that capacity, unless the contrary is shown, and the onus of doing so rests with those who assert incapacity.

50 Just as it was in the exercise of the parens patriae jurisdiction that the court ordered that Mr Erdogan's settlement proceeds be paid into court, because he was a person under disability, it is in the exercise of that jurisdiction that I determine whether Mr Erdogan is no longer a person under disability entitled to the return of his property. The exercise of the parens patriae jurisdiction which, being protective, is exercised with special care, turns on the particular circumstances of the proposed or actual beneficiary and the question is now whether the circumstances which prompted the court's intervention have ameliorated so that the beneficiary of the court's protection may take back control of property managed for his or her benefit. Applications of this sort have been described as 'the last act in the exercise of that protective jurisdiction'.[23] It is to the language of Order 79, in particular, that close attention ought to be directed, avoiding distractions from the myriad legislative expressions of like concepts.

51 Further, a person's right to the free use of his or her property is a significant and important civil right, long recognised by the common law. Thus, in 1851, in a related context, Knight-Bruce LJ said, in In re Cumming:[24]

It is the right of an English person to require that the free use of his property, and personal freedom, hall not be taken away from him on the ground of alleged lunacy, without being allowed the opportunity of establishing his sanity or denying his insanity before a jury as a contesting party, not merely the subject of inquiry.

52 The notions of vulnerability and protection remain in balance with human rights perspectives, now comprehensively stated in the United Nations' Convention on the Rights of Persons with Disabilities, which was ratified by the Commonwealth in July 2008. Both the Convention and the Charter of Human Rights and Responsibilities Act 2006 (Vic) underline the changing contemporary response to citizens with impaired cognitive capacity. In 2009, the Attorney-General referred a range of capacity protecting laws, principally the G&A Act, to the Victorian law Reform Commission for its consideration and report.[25]

53 Central to the reform movement is the recognition that a black and white view of legal capacity is not an appropriate contemporary response. In its report, the Victorian Law Reform Commission noted that commentators have described the search for a uniform legal standard for capacity as 'the search for the holy grail'.[26] A uniform standard for the required level of cognitive ability for legal capacity is both as illusory and as relevant.

54 Taking an overview of the many different situations in which courts have been called on to consider questions of capacity - the validity and fairness of transactions, fitness to plead, testamentary capacity, litigation guardians, guardianship and administration statutes, and consent to medical treatment are examples - demonstrates the test of capacity is specific to the issues for which capacity is required.[27] It is hardly surprising, given the complexity of human cognitive and intellectual function, that capacity is related to the nature and complexity of the transaction or decision or the ongoing continuum of transactions that are in issue. A clear illustration of this distinction can be seen in a comparison of the requirements for capacity to institute, conduct, and compromise litigation and the capacity then to manage the award subsequently received.

55 Advances in medical science, in our understanding of brain injury and function, create new opportunities to carefully assess and appreciate the true extent of disability from an acquired brain injury. Policy makers are alert to these developments. The Victorian Law Reform Commission recommends that the contemporary approach to balancing the need to protect persons under disability while giving proper recognition to their basic human rights now requires greater emphasis on tailored outcomes beyond substitute decision making arrangements, which may extend to concurrent responsibility by supported decision making and co-decision making arrangements with regular reviews. Outcomes for individuals that recognise their distinct circumstances and the wide range of abilities or deficits that may remain following recovery from an acquired brain injury can be more compatible with human rights considerations. The parens patriae jurisdiction, exercised solely in the best interests of the beneficiary being protected,[28] need not be inflexible.

56 An initial issue that arises is where the onus of proof lies on this application. Statements from authorities dealing with related considerations, such as applications for discharge under mental health or guardianship legislation, usually turn on the governing text and must be considered with care.[29] Although the presumption of competence has been displaced in these circumstances, there is no presumption of continuity.[30] In Masterman-Lister v Brutton & Co[31] Kennedy LJ suggested, although in a different context, that the burden of proof rests on those asserting incapacity. Despite the importance of human rights considerations, I do not think that in this circumstance an onus is cast on the SMO to prove incapacity.

57 In Re MacGregor,[32] Starke J considered an application under s 29 of the Public Trustee Act 1958 (Vic) that the applicant was 'no longer incapable of managing her affairs'. His Honour noted that it was common ground before the court that the applicant bore the onus of proof, citing PY v RJS.[33] In the cited decision, Powell J was considering an application for discharge from a mental hospital, under s 18 of the Mental Health Act 1958 (NSW). The Act permitted the making of an order for discharge if 'it appears to the court that such person is not a mentally ill person'. Powell J accepted, as a principle of law, that an applicant for discharge bears the onus of showing that he or she is not a 'mentally ill person'.

58 On the present application, the onus of showing competent mental capacity rests with the applicant, Mr Erdogan, bearing in mind the terms of r 79.02(2) and the close analogy between considering whether to cease to exercise a parens patriae jurisdiction over the affairs of a beneficiary and the statutory task considered in these decisions.

59 For the purposes of the Evidence Act 2008 (Vic), this is a civil proceeding and the standard of proof is defined by s 140 of that Act. I must find the case of a party proved if satisfied that the case has been proved on the balance of probabilities. Section 140(2) permits reference, when assessing proofs, to some of the general considerations I have noted. It provides:

(2) Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account-

(a) the nature of the cause of action or defence; and

(b) the nature of the subject-matter of the proceeding; and

(c) the gravity of the matters alleged.

60 There appears to be some divergence of opinion evident in the cases between the Supreme Courts of Victoria and of New South Wales about whether the test for capacity is subjective or objective. When the authorities are carefully read in the context of the enabling jurisdiction, or the proper purpose of the inquiry, l am not persuaded that any relevant distinctions can be maintained. I should note the practice of the Senior Master, when commissioning a neuropsychological or neuropsychiatric assessment of a beneficiary. The SMO instructs the assessor about the size and nature of the beneficiary's estate, a description of what capacity involves, and of what an ability to manage one's financial affairs may entail, drawn from the judgment of Kennedy LJ in Masterman-Lister v Brutton & Co:[34]

A person's ability to manage his or her property and affairs required an ability to make and communicate, and where appropriate give effect to, all decisions required in relation to them. So the mental abilities required include the ability to recognise a problem, obtain and receive, understand and retain relevant information, including advice; the ability to weigh the information (including that derived from advice) in the balance in reaching a decision and the ability to communicate that decision.[35]

61 There is not a single test by which questions of capacity are resolved. The test of capacity is issue and time specific. Dealing with a question if incapacity in relation to a legal instrument, the High Court said, in Gibbons v Wright,[36] that the mental capacity required by the law in respect of any instrument is relative to the particular transaction which is being effected by means of the instrument, and may be described as the capacity to understand the nature of that transaction when it is explained. The court approved of Hodson LJ's pithy remark in In the Estate of Park, (Dec'd) Park v Park;[37] 'one cannot consider soundness of mind in the air, so to speak, but only in relation to the facts and the subject-matter of the particular case'.[38]

62 In PY v RJS[39], Powell J considered the words 'incapable of managing his or her own affairs' appearing in s 18 of the Mental Health Act 1958 (NSW). The plaintiff sought to be discharged from a mental hospital. Powell J's general test for capacity, repeatedly applied in New South Wales,[40] was:

It is my view that a person is not shown to be incapable of managing his or her own affairs unless, at the least, it appears:

(a) that he or she appears incapable of dealing, in a reasonably competent fashion, with the ordinary routine affairs of man; and

(b) that, by reason of that lack of competence there is shown to be a real risk that either:

(i) he or she may be disadvantaged in the conduct of such affairs; or,

(ii) that such moneys or property which he or she may possess may be dissipated or lost ... ; it is not sufficient, in my view, merely to demonstrate that the person lacks the high level of ability needed to deal with complicated transactions or that he or she does not deal with even simple or routine transactions in the most efficient manner.

This test is not particularly practical for evaluating contemporary neuropsychological assessments of cognitive deficits.

63 Powell J's formulation was considered in Re MacGregor.[41] Mrs MacGregor had been certified as an infirm person pursuant to the Public Trustee Act 1958 (Vic) after suffering brain injury in a fall from a bicycle. She applied for a certificate that she was 'no longer incapable of managing her affairs'. She had a substantial estate including the townhouse in which she lived, shares in a family company that owned a holiday home in Sorrento, accounts totalling approximately $150,000 and a 75% share in a reception venue. When identifying the applicable principles of law, Starke J declined to accept the definition of that which one must have capacity to deal with as objectively determined by the phrase 'the ordinary routine affairs of man', but otherwise accepted Powell J's formulation. The preferable subjective formulation, traced to a note in a textbook of an unreported decision of Lord Wilberforce,[42] recognises that the question of degree of incapacity in managing and administering a beneficiary's affairs must be related to the beneficiary's circumstances. Thus, Starke J would prefer to substitute in sub-paragraph (a) for the words 'the ordinary routine affairs of man', the words, 'his or her own affairs'. Starke J considered that if Powell J had intended an objective test he had erred.

64 In M and The Protected Estates Act 1983,[43] Powell J, during a close consideration of the language of then recently amended NSW legislation applicable in that proceeding, dissented with reluctance from the views of Lord Wilberforce and Starke J. Powell J was unable to accept that the intention of the Parliament expressed in the Protected Estates Act 1983, was that a person who does not suffer from mental illness, mental infirmity, mental retardation, or some other like condition, but who, although otherwise capable of leading a normal life and managing his affairs, is, for some reason, as, for example, a limited education, incapable of managing or administering a large or complex estate which may fortuitously come his way, should be liable to be deprived by the Court of all power to manage his life and affairs. As a response to Starke J's criticism, this self-evident observation is unpersuasive. Such a person could not, in the jurisdiction I am exercising, be a 'person under disability'.

65 In EMG v Guardianship and Administration Board of Victoria[44], Young J (as his Honour then was) described the test in Re McGregor, known in NSW as 'the subjective test' and as 'easier for the alleged incapable person to satisfy', to be whether the alleged incapable person is able to manage his or her own affairs 'as they exist in actuality. Accordingly, a multi-millionaire with complex affairs would be more likely to be declared an incapable person than a pensioner living in a retirement village without any property interests'.[45]

66 In Re GHI (a protected person),[46] Campbell J, while expressing his preference for the 'objective test' propounded by Powell J, and approved by Young J, also considered the complexity of the beneficiary's affairs to be relevant and warned of the danger of paternalism, noting that the question was of capacity, not ability. Campbell J stated:[47]

Any consideration of whether a person "is capable" of doing some task, involves assessing the present condition of the person and deciding whether they have the present powers and skills to carry out that task. The task involved in section 13 is that of managing affairs. Deciding whether a person is capable of managing affairs is in part an exercise in prediction - of deciding whether the skills and abilities which the person now has are such that they are likely to be able to deal satisfactorily with the tasks that will arise in the future concerning the management of their affairs.

A closely related, but not identical, idea has earlier been expressed by Powell J, when he held that the time as at which the capacity should be shown is not just the immediate time of the hearing, but also the reasonably foreseeable future.

The word "affairs" is one which is capable of a variety of meanings, and can be quite broad. In the context of the [Protected Estates Act 1983] the word takes some of its colour from the consequence which might flow from a person being incapable of managing his or her affairs, namely that his or her estate becomes subject to management under this Act.

67 The quaint expression 'the ordinary routine affairs of man' is a distraction. The inquiry required by the plain text of O 79 of the Rules is whether the beneficiary is not incapable, by reason of his acquired brain injury, of managing his affairs. In the complex inquiry into neurological assessments of cognitive deficits caused by acquired brain injuries, terms of uncertain content are unhelpful.

68 Campbell J in Re GHI (a protected person) did not seek to define the ordinary routine affairs of man; he concentrated on the words 'incapable' and 'affairs' which expressed the key requirements in the statutory test that he was then considering. In OM v MN,[48] Windeyer J also expressed a preference for the 'objective test' and proffered that 'the ordinary affairs of man does not just mean going down to the local shop and buying ordinary household goods, it means being able to manage ordinary household funds and ordinary investments and it does involve the ability not only to understand that advice ought to be obtained for the investment of a large amount of money but to be able to properly consider that advice'.[49] This reference is to the 'affairs' that the applicant might manage or administer in the future and Windeyer J's subsequent analysis of the circumstance of the applicant recognises, with Lord Wilberforce and Starke J, that the question of degree of incapacity in managing and administering a beneficiary's affairs must be related to the beneficiary's circumstances.

69 In Cadwallender (by his next friend Cadwallender) v Public Trustee[50] the plaintiff, as a person under disability whose settlement sum following a serious head injury in a motor vehicle accident was paid to the Public Trustee, applied for the return to him of the balance of his funds. The plaintiff contended that he was capable of managing his own affairs. EM Heenan J, following a consideration of the court's parens patriae jurisdiction, identified the relevant considerations.

It follows from these considerations that the only justification for the legal estate in the trust fund to be held and administered by the trustee is the protection of the disabled person rendered necessary by his or her own incapacity. Such an incapacity deemed to exist by reason of infancy alone will disappear on the beneficiary attaining the age of majority and then the beneficiary will be entitled to call for the transfer of the entire corpus of the trust estate. However, where the disability is due to the presence of some other incapacity then the reason for the trust will continue so long as the incapacity continues but not longer. If and when the beneficiary is able to establish that he is no longer disabled because that incapacity has passed or he has recovered from it, then there is no longer any basis to withhold the absolute enjoyment of the trust property. In such cases, however, adequate proof of recovery from the disability must be shown but, once it is, there does not appear to me to be any justification to continue the trust or to withhold the transfer of the corpus to the beneficiary absolutely. As I have previously observed, the exercise of determining whether or not this is the case seems, inescapably, to be a part of the administration of the trust and of the protective role which the court retains in its supervision.

70 As I have stated, I doubt whether this debate about a subjective or objective test remains one of real substance. For my part, just as Campbell JA did[51] when considering the way the general law decides questions of capacity, I prefer, following Gibbons v Wright, to consider whether the beneficiary has sufficient cognitive function to be capable of understanding the general nature of what he is doing by his or her participation in managing his or her affairs. That question is necessarily directed to the circumstances of the beneficiary and the affairs that he or she must manage. I cannot see any distinction between that approach and the approach attributed to Lord Wilberforce that was adopted by Starke J in Re MacGregor. The question cannot properly be answered without close consideration of the beneficiary's affairs both now and in the future. Use of the concept 'ordinary routine affairs' should be properly understood as requiring no more than an objective consideration of the meaning of 'affairs' for the purposes of the inquiry, but the relevant concept of affairs, as the terms of r 79.02(2) make clear is the affairs of the beneficiary, not the 'ordinary routine affairs of man'. For these reasons, I prefer the test as explained in Re MacGregor.

71 Nevertheless, it was stated nearly 30 years ago and the cases since then mostly express the test in the negative. I prefer to restate the test to be applied on an application by a beneficiary that funds and property in court be returned to the control and management of the beneficiary. The beneficiary must show that he or she has the capacity or competency[52] to manage his or her affairs and is, therefore, no longer a person under disability. In this context, 'affairs' draws its meaning from the language of Order 79 and refers to the beneficiary's property and his or her financial affairs. A beneficiary must demonstrate the capacity to make decisions in relation to his or her property and financial affairs. The inquiry is into the quality of cognitive function and mental capacity, which inquiry is partly illuminated by a medical perspective and is partly a factual inquiry for the decision maker. In each context the focus remains on the circumstances of the beneficiary.

72 It is not an inquiry into the merit of any decision. If it appears that the beneficiary may be disadvantaged in self-management of his or her affairs, such disadvantage must be caused by disability; cognitive deficit or impaired function from the acquired brain injury. In this context, disadvantage in self-management includes dissipation or loss of property or moneys. Disadvantage that is caused by factors not related to disability is not relevant. Thus, a low standard of education, or of life skills, or language and cultural disadvantages should be excluded, notwithstanding that such matters may cause a risk of dissipation and loss of property and moneys.

73 The inquiry usually requires assessment of medical or neuropsychological opinion and that will be assisted by providing the focus that I have referred to since capacity in law depends on time and context. To evaluate capacity, the nature of the responsibilities and transactions that management and administration of the beneficiary's property and moneys will entail, both at present and into the future, needs to be understood. The key considerations for expert assessment of the beneficiary's capacity are whether the beneficiary now has:

(a) capacity to understand, with the assistance of proper explanation and advice, the issues that will arise in self-management of his or her financial affairs. The identification of capacity requires the identification of the nature, extent and significance of the issues that will arise for consideration by the beneficiary in the management of financial affairs.

(b) capacity to make rational decisions. The issue of capacity is not to be assessed by whether the beneficiary's decision is that which would be made by a person of ordinary prudence. Not every person has the ability to manage competently his or her financial affairs unaided. The inquiry is not into the competence of the management process or the probable outcomes in the future. Issues about capacity concern process not achievement, the result need not be right but it must be rationally reached. The jurisdiction protects against vulnerability, not against mistakes.

(c) capacity to direct or implement the transactions that are, or may be, required.

74 Evaluating such capacities or competencies requires identification of the cognitive ability to implement or participate in processes, particularly:

(a) An ability to identify and comprehend the existence of an event, transaction or issue which requires management - a decision or a choice.

(b) Once the matter is identified, insight into, and understanding of, the matter is needed. The person must be able to understand or appreciate and recall the relevant facts, the alternatives available, whether by action or inaction, including seeking advice or assistance where appropriate, with sufficient clarity to permit rational choice or decision.

(c) The person must have the capacity to reason, to make a rational decision or choice about the steps to be taken, or avoided to achieve an appropriate outcome or otherwise give effect to or implement a transaction.

75 What needs to be demonstrated is the capacity to understand, absorb and retain information, whether numerical, language, or spatially based, a capacity to process that information rationally, a capacity to balance risk and need in context, and a capacity to appreciate consequence as opposed to the immediate.

76 The personal circumstances of the beneficiary will define the focus of the inquiry into cognitive capacity in the sense I have described.[53] Relevant personal circumstances will include some or all of the following matters:

• the nature of the person's assets and liabilities;
• the person's understanding about sources of income, the reliability of supply and amount, and the obligations of taxation, expenses, and debt;
• the tasks or activities involved in the management and maintenance of assets - the need, periodically, to paint a house or service a car;
• the tasks or activities involved in everyday financial transactions - cash transactions, banking, credit cards, bills and accounts, and the electronic financial system;
• protection of the security of assets, in particular perceptions of risk to the security of assets;
• related to the preceding issue, is the management of debt obligations;
• the appreciation of capital risks and income risks and the appropriate uses for debt are more complex considerations, particularly referable to the beneficiary's overall estate. Considerations may vary in the circumstances; assets may be appreciating or depreciating. Assets and liabilities can also be affected by issues concerning family provisions, such as wills and gifts, decisions to save and create reserves, such as cash in bank accounts or superannuation.

77 In addition to the subject matter of financial management, there are broader management considerations. These include budgeting, managing financial disputes, responding to advertising and commercial persuasion, the ability to detect and manage financial risk, the ability to understand financial transaction documents. Most importantly, there is the capacity to seek, understand and consider advice. It is trite to note that the financial market place in which Mr Erdogan seeks to participate as a manager of his own affairs is more complex and risky in many different respects that that which faced the beneficiary in Re MacGregor or in PY v RJS. Advice comes from many sources, and many of those sources will not owe Mr Erdogan fiduciary obligations.

78 What of these considerations apply is to be determined by the nature and size of Mr Erdogan's estate, which I have already described, and the financial affairs that will likely arise from it. They also apply, not just at present, but also into the reasonably foreseeable future. Of particular relevance is the fact that his estate is modest, his affairs are not complex, and his property is jointly held with his wife with whom he has a stable marriage and a supportive family.

79 Associate Professor Murat Yucel and Dr Anson gave their evidence concurrently at trial, and tendered a report dated 18 May 2012 identifying the matters on which they agreed and disagreed. I received reports from Associate Professor Yucel dated 3 March 2010 and 2 March 2012, and from Dr Anson dated 18 February 2008. Two affidavits were read, sworn by Sultan Erdogan and Cagri Erdogan. Evidence was given by Mr Erdogan, Ms Selvi, Associate Professor Murat Yucel, Dr Katie Anson, and Cagri Erdogan.

80 At the heart of the application was Mr Erdogan's contention that since 2004 his medical condition has significantly improved and that he now has capacity to manage his financial affairs. This submission was supported by evidence from two sources, medical assessments and evidence of his role in, and conduct of, his family finances and related matters. Mr Erdogan testified that since 2008 he has weaned himself from pain medication that was, in itself, producing disabling side effects including depression, inability to concentrate, lethargy, and tiredness. Mr Erdogan told me he has a better understanding of his finances and now has a greater role in the management of the family's affairs. I will consider Mr Erdogan's evidence further in due course.

81 His son, Cagri Erdogan testified that since his father has ceased taking pain medication he is a very different person and now plays an active role in parenting within the family. Cagri Erdogan explained that prior to this time, for many years, his father was mostly in his room, disengaged from his family. Cagri now observed that his father has re-engaged with his life, had established a father son relationship with both of his sons, and worked together with his mother to make household financial decisions.

82 Ms Muradiye Selvi, one of few Turkish-speaking psychologists practising in Melbourne, has been Mr Erdogan's psychologist since 2000. Ms Selvi's background is in trans-cultural psychology; studying the presence of mental illness in ethnic communities. Her expertise is in cross-cultural counselling. Ms Selvi, appointed as Mr Erdogan's case manager by the Victorian Workcover Authority, has assisted in a variety of ways, principally with regular psychological counselling sessions and liaising with his GP, physiotherapist, and the hospital. In the last three years, Ms Selvi has seen Mr Erdogan for approximately 20 consultations. Mr Erdogan continues to benefit from monthly counselling sessions with Ms Selvi under his mental health care plan with his GP. I accept that Ms Selvi is well placed, and qualified, to describe Mr Erdogan's progress from the accident to the present. I was impressed by her evidence and the informed professional, and caring, attitude she demonstrated.

83 When Mr Erdogan initially consulted with Ms Selvi, she observed not just the effects of his significant closed head injury, but also other physical injuries, and the effects of ongoing pain management. Importantly, she also observed that he was suffering from grief, shock and anxiety from the accident. He was depressed and withdrawn. Later, Dr Lloyd would recognise the significance of the relief of these other reactions.

84 Ms Selvi identified Mr Erdogan's very limited education in his native language and culture as a significant impediment to his recovery, noting that in counselling and therapy, repetition and learned exercises, focused on communication and life skills, was assisting Mr Erdogan to rebuild his life. Ms Selvi was instrumental in assisting Mr Erdogan to manage, through 2008 to 2010, a staged reduction and cessation of his pain medication. Mr Erdogan no longer uses pain medication and, freed from debilitating side effects, now demonstrates previously obscured capacities. In this respect, Ms Selvi's observations reinforce the clinical testing and observations of the neuropsychologists that I will later describe. From the beginning of her treatment of Mr Erdogan, he impressed Ms Selvi as a hard working patient determined to overcome as best he could the significant difficulties associated with his brain injury.

85 Mr Erdogan has re-learned how to interact with his family, and developed personal skills to enable him to engage in recreation and socialise with friends and family. A significant lack of intimate connection between Mr Erdogan and his immediate family was observed by Ms Selvi as a major impediment to his rehabilitation. His son Cagri confirmed the impediment, at least from his perspective. It required much one-on-one counselling from Ms Selvi to enable Mr Erdogan to learn how to engage with his loved ones. I do not underestimate his achievements in reconnecting with his wife and children. Although the focus of this application is his capacity to manage financial affairs, that capacity requires dealing with others and re-establishing the ability to participate in intimate family relationships. It shows that his capacity to deal appropriately with other persons has also improved since 2004. In broader respects, Ms Selvi recognised she was dealing with a man who, not long after arriving in Australia, with an extremely limited education, no English and little understanding of Australian culture and institutions, was withdrawn from interaction with that culture by the consequences of his accident.

86 Once Mr Erdogan had withdrawn from pain medication, Ms Selvi could compare him with his peers within the Turkish community with whom she had professional association. She assessed him as no different to anybody else. He is able to communicate; he has a good concentration span. His memory is intact. He was able to remember strategies learnt in earlier sessions and give an account of his progress, both good and bad. During counselling sessions a range of issues from very simple things to quite complex matters are covered and Mr Erdogan has the ability to articulate and present his recollection and his response on such issues. The issues discussed in counselling included financial issues. For example, Ms Selvi recalled that in relation to buying a car for his son, Mr Erdogan was, over several counselling sessions, able to recall and discuss the pros and cons of the process of saving for the car, managing the additional expense it would entail and reasoning, rationally, about his desire to buy the car not just for his son but because the family would benefit from access to two cars. It had not been an impulsive decision. Ms Selvi assessed Mr Erdogan as very conservative, obviously lacking for educational opportunity, but not impulsive. He can display anxiety associated with wanting to appear, socially, to be coping and functioning.

87 Ms Selvi observed that Mr Erdogan does not learn well in a class or group environment. Ms Selvi attributes much of the success that Mr Erdogan has achieved in re-learning or acquiring skills to the nature of her consultations with him; one-on-one counselling conducted in Turkish. It is not suggested that Mr Erdogan is a fast learner; merely that it is significant that he is making progress. Ms Selvi considers there is still scope for improvement in areas of Mr Erdogan's life that are important to him. Although his condition has stabilised, he has the ability to recognise areas where he can improve his skills. As will become apparent, this observation is consistent with the neuropsychological assessments.

88 Ms Selvi has also been working with Mr Erdogan to teach him skills to help him take more control over his financial affairs. Over the course of counselling sessions, she has devised strategies to teach him the skills to conduct bank transactions and use an ATM. Ms Selvi noted that Mr Erdogan had discussed with her his yearning to control the funds in court himself for the benefit of his family, including his future plans for the funds. Ms Selvi agreed that Mr Erdogan would benefit from further counselling about financial management, particularly to understand more the complex issues that can arise. Ms Selvi expects that Mr Erdogan can, if taught or assisted appropriately within the context of his limitations, continue to improve his financial management skills.

89 Ms Selvi assessed Mr Erdogan's primary goal, financially, to have always been to make sure there was enough for the family when he passed away. He shows no inclination to take the money and do something grand with it. Ms Selvi considers that he is open to proper advice and support although, to her knowledge, he has not engaged an accountant or financial adviser because there has not been a need to do so. Mr Erdogan has known since the time of his settlement that there was a specific exclusion from entitlement to Centrelink payments that he has calculated will expire in 2013.

90 On instructions from the SMO, Dr John Lloyd, a consultant neuropsychiatrist, assessed Mr Erdogan in December 2007. Dr Lloyd, having retired from medical practice, was not available to give evidence. Dr Lloyd has -

• very substantial experience in private practice and public hospitals in neuropsychiatric services;
• held positions at Melbourne and Monash Universities in the Departments of Psychiatry and Psychological Medicine;
• completed many assessments in both psychiatry and neurology of impairment; and
• published articles and written chapters of books in his field of expertise.

Although he did not conduct a neuropsychological assessment by testing, on his mental status examination Dr Lloyd concluded that Mr Erdogan was quite genuine in his presentation and able to give a good history, indicating sound memory functions. Mathematical tasks were performed to an average level, and his judgment appeared sound. He was correctly oriented for time, place and person and could give a good account of recent national and sporting events. Memory functions appeared generally intact.

91 Dr Lloyd observed a very clear difference in his presentation in December 2007 from that recorded by Dr Andrew Gibbs in May 2002, attributing this difference to reduced medication and the possible relief of other psychological factors that may have been operating at the time of earlier assessment. Dr Lloyd concluded that Mr Erdogan did have the capacity to manage his own affairs, having given a good account of the overall family financial situation and their requirements. Dr Lloyd considered that Mr Erdogan was able to evaluate the relative needs and value of various expenditures.

92 Dr Lloyd's report is not transparent about his process of reasoning from his clinical assessment and is limited to expressing his conclusions. Nevertheless, in view of his qualifications and experience, the fact that his conclusions appear to have been directed by the instructions from the SMO broadly to the correct issues, and the high regard for his standing expressed by Associate Professor Yucel, in my deliberations, I will give some consideration to Dr Lloyd's opinions.

93 When Dr Anson saw Mr Erdogan for neuropsychological assessment in January 2008, she was instructed by the SMO, to investigate Mr Erdogan's capacity to manage his own financial affairs if funds in court were given to him. Dr Anson -

• holds a doctorate of psychology (clinical neuropsychology) from Monash University and has worked as a consultant neuropsychologist since 2004, principally providing community based assessment and rehabilitation services for clients following acquired brain injury;
• is a member of the Australian Psychological Society and the College of Clinical Neuropsychologists;
• has particular expertise in neuropsychological assessment and the management of cognitive-behavioural impairment following acquired brain injury;
• has, with others, co-authored approximately 10 publications in professional journals.

With the assistance of a Turkish interpreter, Dr Anson conducted an assessment of four hours' duration consisting of an interview and administration of standardised neuropsychological tests. Prior to the assessment, Dr Anson reviewed the reports of Dr Lloyd and Dr Gibbs and discussed Mr Erdogan's circumstances with Ms Selvi by telephone.

94 Associate Professor Yucel assessed Mr Erdogan on two occasions, in March 2010 and March 2012. Associate Professor Yucel undertook a substantial clinical assessment including the administration of neuropsychological tests. Being fluent in Turkish, he conducted his clinical assessment in that language, including administering a number of the standardised tests by using Turkish translations.

• has an honours degree in psychology/psychophysiology from Swinburne University and a clinical Ph D (neuropsychology) from LaTrobe University, graduating in 2001;
• has published over 160 journal articles and book chapters in journals and at conferences specialising on the application of cognitive and brain imaging tools to better understand the neurobiological, cognitive, and effective disturbances in neuropsychiatric, as well as drug and alcohol abuse disorders;
• has, since 2006, been in clinical practice in a consultancy that specialises in cognitive/neuropsychological assessment to assist in the diagnostic formulation and therapeutic management of persons confronted with a broad range of emotional, behavioural and brain related issues including head injuries, neurological and psychiatric disorders and substance abuse disorders.

96 Associate Professor Yucel and Dr Anson agree that:

(a) Mr Erdogan sustained a severe traumatic brain injury as a result of his accident in November 1999 and has an ongoing level of residual cognitive impairment.

(b) Mr Erdogan has demonstrated improvement from the 2008 assessment to the 2012 assessment in functional day to day money management skills, some areas of neuropsychological test performance, and mental health functioning.[54]

(c) When interpreting the neuropsychological assessment results, cultural and educational factors and Mr Erdogan's pre-injury level of ability are relevant.

(d) It would not be appropriate or beneficial to conduct another neuropsychological assessment at this time.

97 Where Associate Professor Yucel and Dr Anson parted company was on the question of the potential impact of Mr Erdogan's residual traumatic brain injury related cognitive dysfunction on his capacity for complex financial decision-making. Specifically, Dr Anson expressed concerns that improved functionality in day-to-day money management skills was not a sufficient guide to his capacity to manage his lump sum payment and his real estate. Before explaining the evidence given on this issue, I will set out the conclusions more broadly drawn by each psychologist from their assessments.

98 Dr Anson recorded in some detail Mr Erdogan's responses to her inquiries about financial management issues during her clinical assessment interview. Dr Anson was unable readily to assess the severity of Mr Erdogan's acquired brain injury. She found Mr Erdogan to be motivated in participating in the assessment, but performing within the extremely low to borderline range on the majority of the tasks completed. Of his performance in psychological testing, Dr Anson reported that Mr Erdogan's general knowledge and social reasoning were within the extremely low range of intellectual functioning. Mr Erdogan had considerable difficulty comprehending the task instructions on a verbal abstract reasoning task. He encountered significant difficulty with non-verbal skills as the assessment became more complex. Significant differences between his performance on verbal and non-verbal tasks was not observed. His speed and attention in information processing reflected an extremely low average level of performance and information processing slowed considerably as the decision-making demands of the task increased in complexity. Difficulty was observed on tasks of abstract reasoning, working memory and visuo-spatial skills. The formal measures of attention and concentration were within the extremely low range. He displayed poor working memory skills, requiring frequent repetition of information and with a high number of impulsive errors. Mr Erdogan was unable to complete simple mathematical equations in his mind despite repetition. Significantly, evidence of executive function difficulties including poor planning and impulsive errors were noted. Nonetheless, Mr Erdogan did demonstrate the capacity to learn verbal information with repetition and was able to retain information over a delay period. Dr Anson considered the results of her cognitive assessment to be largely consistent with previous assessments although some improvement was noted with verbal learning and memory. Mr Erdogan's capacity to present and provide background information had also improved.

99 Instructed by the SMO to do so, Dr Anson focussed her assessment towards a statement of the considerations relevant in assessing the cognitive skills required to manage one's property and financial affairs derived from Masterman-Lister v Brutton & Co.[55] Dr Anson noted that Mr Erdogan was able to provide a description of his current financial affairs, but did not reveal any responsibility for more complex financial matters. He was unable to estimate the amount required for a weekly budget. With prompting he was able to describe a short to medium term plan for the management of his financial assets, but was unable to identify from whom he would seek financial advice. Dr Anson noted that Mr Erdogan's understanding of more complex financial issues might be reinforced by repetition, particularly in Turkish. Dr Anson noted Mr Erdogan intended to 'buy a block of land', and expressed concern that, contrary to repeated explanations from his trust officer of the correct situation, his children could not inherit his real estate.

100 Dr Anson was prompted by the profile of global cognitive difficulties that she observed on assessment to conclude that Mr Erdogan did not have the capacity to manage his property and financial affairs independently. Dr Anson concluded that it is unlikely that his cognitive profile observed on assessment will change significantly over time, but he has the potential to develop stronger routines for independent financial management through functional assessment and reinforced learning from an occupational therapist.

Evidence of Professor Yucel's assessments in 2010 and 2012

101 As I have noted, Associate Professor Yucel assessed Mr Erdogan in March 2010 and March 2012. On his March 2010 assessment, Associate Professor Yucel concluded that Mr Erdogan's neuropsychological status was superior to that demonstrated on his previous assessments. Associate Professor Yucel considered the proper interpretation of these assessments required consideration of four factors:

(a) Prior assessments had not been conducted in Mr Erdogan's native language;

(b) Prior assessments may have been confounded by the side effects of medication, the significant language barrier, and consequent lack of motivation/rapport during assessment;

(c) Mr Erdogan's extremely low educational attainment placed him outside comparative groupings by which performance is compared and graded;

(d) Assessments of Mr Erdogan's real life functioning capacity, evident from his presentation during the interview and assessment process, and the reports of significant persons close to him, notably his wife and his treating psychologist, showed a more positive outcome that formal comparative assessments.

Taking all these factors into consideration, Associate Professor Yucel concluded that despite his impaired performance in some neuropsychological domains, Mr Erdogan has sufficient cognitive capacity to manage his own financial affairs. However, Associate Professor Yucel did not articulate the concept of capacity to manage one's own financial affairs to which he was referring when expressing this conclusion following his March 2010 assessment.

102 When reassessing Mr Erdogan in March 2012, Associate Professor Yucel concluded that while Mr Erdogan still displays neuropsychological impairments, particularly involving his attentional capacity and perceptual reasoning capacity, these are not sufficient to render him incapable of making financial decisions. Associate Professor Yucel advances the following reasons for his opinion.

(a) Mr Erdogan demonstrated an improved neuropsychological profile compared with previous assessments. His latest improvements are likely to be due to a combination of being free of the side effects of medications as well as some practice effects, that is, becoming familiar with the tasks of assessment through exposure, which is more commonly observed in better-educated patients. These observations are consistent with the existence of a mental capacity that is obscured by apparent deficits capable of alleviation.

(b) Mr Erdogan demonstrated that his 'real world' or 'functional' performance is superior to his 'neuropsychological performance'. Thus, formal assessment understates his actual functional capacity, principally by reason of his extremely low educational attainment and personal background.

(c) The influence, in neuropsychological assessment, of low educational attainment is a major issue in Mr Erdogan's case as it has been well documented that poorly educated individuals may be misclassified. Education can greatly influence test performance in that poorly educated but cognitively intact persons may score lower than moderately impaired but better educated persons may. In such cases, it is appropriate to consider more carefully behavioural data, clinical interviews, and real life functioning.

(d) Associate Professor Yucel found no impulsive tendencies either on testing or during his clinical interviews. He considers Mr Erdogan to be a man who is conservative rather than risk taking or impulsive.

(e) Informed by the terms of the associate judge's order, Associate Professor Yucel carefully investigated Mr Erdogan's insight and judgment about his financial status, as well as life matters more broadly, concluding that his insights and judgments were all accurate, rational and intact. Associate Professor Yucel considered that the recent history of financial management, including saving for a car, a family holiday and establishing an emergency savings account for unexpected situations with family members overseas, all support the contention that Mr Erdogan can adaptively plan for future financial uncertainties and that he has appropriate judgment and insight.

(f) Associate Professor Yucel noted that both his wife of more than 20 years and his treating psychologist for more than 10 years have no hesitation in stating that Mr Erdogan has the resources to manage his own financial affairs. While such assessments may be partly motivated by other considerations, they are supported by the impartial opinion of Dr Lloyd.

103 Associate Professor Yucel went further, suggesting that limiting Mr Erdogan's independence by restricting his ability to manage his own financial affairs is adversely affecting his autonomy and quality of life. He stressed the continued improvement in Mr Erdogan's neuropsychological status over time, and that his assessment scores need to be considered in the light of information gleaned from informants and clinical interviews about his real life behaviour/functioning because, given his poor educational background, there is a risk of inappropriate assessment of Mr Erdogan's capacities on the basis of test scores alone. Associate Professor Yucel concluded that Mr Erdogan has sufficient cognitive and decision making capacity to recognise a problem, obtain and receive, and understand and retain, relevant information (including advice), the ability to weigh information (including that derived from advice) in the balanced reason to a decision, and the ability to communicate that decision.

Matters arising during their concurrent evidence

104 It is a significant feature of Mr Erdogan's financial position that his capital is being eroded over time because his needs exceed his resources. Common law damages are assessed on this basis. Mr Erdogan's appreciation of this feature of his financial position was not explored by either expert, in clinical assessments. Associate Professor Yucel told me that Mr Erdogan demonstrated that he has a very good and accurate understanding of the money coming in and going out, day to day, week to week and across the months. He stressed the difficulty in relating neuropsychological assessment of particular cognitive domains to real life function because of the biases that I have noted. Associate Professor Yucel stressed the fact that Mr Erdogan's CT scan has always been normal, his wife has described his decision-making and judgment as stable and improving over time, as has Ms Selvi. His own assessment between 2010 and 2012 showed improvement across several domains since the time of his accident and his personality style is conservative, not impulsive.

105 Associate Professor Yucel considers that Mr Erdogan can appreciate, and balance, his desire to spend against the risks that such expenditure poses for his financial security. This assessment was particularly based upon his observations in March this year. Associate Professor Yucel concluded from that assessment that Mr Erdogan's decision-making was simple and conservative, demonstrating consistent recourse to discussing the issues involved with his wife and with his psychologist. He has had little involvement in risky financial activities over the course of his life and his pre-injury cognitive capacity was limited.

106 Responding to Associate Professor Yucel's conclusions about Mr Erdogan's insight and judgment about financial management, Dr Anson accepted that Mr Erdogan has a good understanding of his day-to-day financial affairs but was less satisfied about his broad understanding of the issues involved in major financial decisions. She was concerned that repeated explanations of more complex matters were simply not understood by Mr Erdogan. Dr Anson conceded that Mr Erdogan has many cognitive strengths, he demonstrated good learning and memory skills that support the notion that he has residual areas of function that might permit the development of further skills enabling him to manage his affairs. To date his response to the increased responsibilities he has received supports that assessment.

107 Dr Anson placed greater emphasis on test results, which, she contended, should not be wholly discounted because in the cognitive domains relevant for financial decision making - basic level attention and information processing speed, the ability to obtain and process information adequately, complex executive function skills such as planning, problem solving and being able to use previous experience to guide future behaviour - the results of testing were significant indicators of a want of appropriate capacity. Dr Anson conceded that a poor or low educational attainment, a lack of English and cultural issues are very relevant in interpreting the assessments and determining Mr Erdogan's cognitive capacity. Dr Anson agreed with Associate Professor Yucel's assessment of Mr Erdogan as very conservative in his management of day-to-day financial affairs, able to live within the allowances that he receives from the SMO.

108 When considering more complex financial transactions, Dr Anson found it difficult to disentangle the exact relative contribution of Mr Erdogan's pre-injury level of education and experience and the residual impairment from his brain injury. Dr Anson suggested that both of these factors would play a role in his decision making about, for example, debt transactions. Dr Anson considered that Mr Erdogan's residual cognitive deficits, like the limitations in education and experience that preceded his injury, would play a role in decision making concerning his financial affairs. Dr Anson noted that Mr and Mrs Erdogan made joint financial decisions and that Mr Erdogan is very well supported by his family and others. In that sense, it is a little bit artificial just to view his capacity in isolation.

109 Dr Anson conceded that the long-term support of Mrs Erdogan and Ms Selvi was a relevant consideration, although she expressed concerns that while her views were based upon a discrete assessment of cognitive function, those of Mrs Erdogan and Ms Selvi were based on different concerns for Mr Erdogan's wellbeing.

110 Dr Anson also drew attention to the pattern of Mr Erdogan's test results noting there was consistent comparison between verbal and non-verbal tasks, when better performance on non-verbal based tasks that are less affected by cultural and educational factors would be expected. Dr Anson concluded that notwithstanding the background factors of language and education, the deficits associated with his acquired brain injury could be seen as responsible for the performance revealed by the assessment.

111 Invited to consider Mr Erdogan's possible response to financial risk in contemporary Australian society, Dr Anson's concern was that Mr Erdogan's ongoing executive function deficits affected the skills essentially required to deal with novel situations in management of one's financial affairs. Mr Erdogan has a simple life and copes well within that situation. Nevertheless, Dr Anson agreed that financial uncertainty or increased risk as a result of an imprudent decision adversely affecting his financial position, would, in her view, require those high-level skills that are, on her assessment, subject to residual impairment related to the brain injury.

112 However, Dr Anson agreed with Associate Professor Yucel that neuropsychological assessments should always take into consideration real life functioning and that as much functional information as can be gathered, together with clinical observations made while testing is being conducted, may relevantly affect the final assessment. Dr Anson noted that Mr Erdogan appeared impulsive during her assessment in 2008. She agreed that impulsivity is relevant in terms of decision-making capacity. However, Dr Anson accepted that Associate Professor Yucel's more recent assessment suggested that Mr Erdogan may no longer be displaying impulsivity.

113 Dr Anson considered that, if Mr Erdogan's capacity to manage his financial affairs has been recovered or revealed, as Associate Professor Yucel contends, it is likely to be a learned response. It would be appropriate to return responsibility to Mr Erdogan in a staged way, permitting gradual development in skills where the risks associated with his present decision making skills could be minimised. Nevertheless, Dr Anson's major concern was that an error or mistake in financial management, collapsing a fairly fragile financial position, would create circumstances that Mr Erdogan has not yet demonstrated a capacity to appropriately manage, by reason of his cognitive deficits.

114 Associate Professor Yucel's assessment is that Mr Erdogan's cultural and background issues reveal a man who lives day to day in terms of his finances, who has always kept his life very simple. Associate Professor Yucel suggests that life for Mr Erdogan has probably always been that way and it is not necessarily related to cognitive deficits. This assessment is consistent with the views expressed by Mrs Erdogan and Ms Selvi. Professor Yucel considers that Mr Erdogan appreciates wasteful expenditure, understands what things are worth, and seems to appreciate the idea of depreciation. Moreover, it is likely that the potential complexities that he might face in managing his affairs will not be fully appreciated until those issues are more concrete for him. Associate Professor Yucel assesses that he has the capacity to appreciate such issues when they arise, not so much on the basis of his neuropsychological assessment but rather by reference to his real life functioning.

115 Associate Professor Yucel assessed Mr Erdogan to be a reasonable man who learns from and listens to people around him, describing him as being, in this respect, quite open-minded. While his curiosity might place him at risk he would not be significantly more at risk than he was prior to his accident. Associate Professor Yucel proceeded on a presumption that Mr Erdogan will make mistakes along the way but concluded that he has the capacity generally to make rational decisions. That capacity should not, in Associate Professor Yucel's opinion, be obscured by his low education and his limited exposure to financial management matters in his life.

116 Associate Professor Yucel noted that Mr Erdogan had reconsidered the statements made in March 2010 that he might purchase a block of land, appreciating that it was not a viable option. Mr Erdogan proposed to invest the funds in an interest bearing deposit to help sustain his income. Invited to comment on this change of position, Associate Professor Yucel suggested that it does take Mr Erdogan a while to appreciate fully the complexities behind such issues but, if taken through the issues repetitively and slowly, he is, over time, capable of appreciating the relevant distinctions. This is proved by his acquisition of more simple day to day management skills and his capacity to learn, albeit on slow detailed repetition in Turkish, is shown by neuropsychological testing, properly considered, as not being impaired. In Associate Professor Yucel's opinion, it is significant that since March 2010, Mr Erdogan appears to have reconsidered his initial intentions for self-management of his funds, realising that his initial suggestions were not prudent. Mr Erdogan's conduct reinforced Associate Professor Yucel's assessment that as the issue comes closer to home and becomes more concrete, Mr Erdogan has been able to weigh up his options and, where appropriate, change his mind.

117 Family support will assist him in making appropriate decisions although he may well struggle if he found himself isolated and required to make a decision without any assistance. Associate Professor Yucel agreed with Dr Anson that both his cognitive deficits and his pre-existing levels of education and experience would both play a part when complex financial transactions arise. However, Associate Professor Yucel assesses the background factors as likely to be dominant in a poor decision, although he has no doubt that cognitive impairments - slowed information processing, some attentional issues and other deficits - would slow him down.

118 Associate Professor Yucel commented that it is very rare to do a neuropsychological test on a person with only three years of education. The norms typically compare persons who have completed education, at least to high school and often tertiary level. Thus, in assessing cognitive deficits it is difficult to find appropriate comparisons, limiting the utility of testing in isolation. However, Associate Professor Yucel agreed that testing remains a useful part of overall clinical assessment. Further, Associate Professor Yucel considered he was able to identify improvements in cognition by comparing Mr Erdogan's results with his own earlier assessment. Whether the evident improvements are the consequence of the alleviation of his depression, the cessation of pain management, or the benefit of practice with testing does not alter the fact that such improvements are evident. Moreover, they are consistent with other observations, including normal findings in his CT scan, and the observations of Mrs Erdogan, Ms Selvi, and Dr Lloyd.

119 Invited to consider Mr Erdogan's capacity to deal with substantial complex financial decisions, Associate Professor Yucel expressed two perspectives. First, starting from the assumption that Mr Erdogan has capacity until there is evidence to the contrary, he assessed that cognitive impairments are present but not to the extent that supports the conclusion that Mr Erdogan lacks the capacity to make decisions. His second perspective is that independently of his residual cognitive impairment, given his limited exposure to large sums of money and managing complex decisions, an educational program to assist Mr Erdogan would be of value. Further, it would be appropriate that he be supported in making independent decisions because he has the capacity over time to make the right decision. He is likely not to be attracted to complicated financial transactions because of his conservative personality profile and will prefer a relatively straightforward and simple approach, which, in itself, will minimise some, but not all, of the risk that he will face. He is likely to be influenced in the joint decision making processes by his wife and his son.

120 Mr Erdogan gave evidence through an interpreter. He appeared comfortable in the unfamiliar surroundings of a witness box and responded frankly and directly to the questions asked of him. Mr Erdogan explained his role in managing the income he receives from the SMO, in paying bills and doing banking. Asked to explain his plans for his funds, if released to him, Mr Erdogan intends to bank them in a term deposit to accrue interest. He said he would choose a term deposit by reference to what is available in the market at the time referring to the length of the term and the interest rates on offer. He appeared to understand that a term deposit may not yield as well as the investments with the SMO but he expects that his family will 'cope well overall', saying 'I don't have much personal expenses like drinking or gambling or spending by going out. We have so far managed to pay off other things and I believe we will manage quite comfortably'. Asked about his property, Mr Erdogan replied that everything would remain as is; there will not be any problems. He has no intentions of purchasing other property. He said there are some maintenance issues with the house that require some attention.

121 Mr Erdogan is no longer considering purchasing a block of land, explaining that in 2008 when that suggestion was made he was still on heavy medications and not thinking clearly. He no longer proposes to 'go along that path'. Mr Erdogan said he does not intend, or desire, to change the real estate and any suggestions that he might do so in the future would be discussed with his wife with any decision made as a couple.

122 Mr Erdogan was able to explain that the funds in court came from his compensation award, and were invested, probably on the stock market, to earn income. He also understood that part of the funds was invested in fixed interest. He was unable to nominate the particular interest rate he might secure on a term deposit but was able to explain that penalties are incurred when fixed term deposits are withdrawn prior to maturity. Mr Erdogan also explained, correctly, how his property would pass on his demise, and that he has a will. Asked about a mortgage, Mr Erdogan explained that it requires you to make repayments to the bank because the money owing is 'on the house'. Mr Erdogan explained that he knows that his wife would not want to mortgage their home and neither does he. He is not considering borrowing from a bank or a mortgage over his home.

123 Mr Erdogan understood that the amount of money being managed by the Senior Master has decreased over time but when asked whether if he managed all of his funds and invested them in a term deposit would he have more or less income, he replied that 'it will be more'. Mr Erdogan also considered that the expenses that he will have to pay from his own money will be the same adding 'we don't spend on unnecessary things'.

124 Asked about banking, Mr Erdogan was able to explain transactions in bank statements, particularly those transactions that showed periodic withdrawal of funds to a separate account as savings. However, when asked how long he thought the funds might last, Mr Erdogan referred to the need to pay the expenses that had been paid by the Senior Master's Office and to the fact that he had not been on a holiday. Pressed to respond to the question, Mr Erdogan replied that the funds will be invested in a similar way, paid into a term deposit account and that he would live off the interest it will bring. Mr Erdogan added 'whether the money is there or not I believe that anyone and everyone should have at least $10,000 to put aside for a rainy day'. Mr Erdogan was aware that his exclusion period for social security benefits expires in about one year.

125 Mr Erdogan's solicitor submitted that I should follow the subjective test in Re MacGregor. Alternatively, he submitted that I should be satisfied that Mr Erdogan is able to manage his own affairs by either test. Such a finding should be based upon the evidence of Associate Professor Yucel, in particular because Dr Anson accepted that language and educational difficulty, in combination with the alleviation of side effects from his pain medication and the evidence of his real life functioning, required a more generous assessment of the clinical testing. Although Dr Anson stopped short of Associate Professor Yucel's assessment that Mr Erdogan had the capacity to manage his own affairs, Mr Erdogan's solicitor suggested that that conclusion could appropriately be based in the evidence of both Associate Professor Yucel and Ms Selvi.

126 Mr Erdogan would be open, his solicitor submitted, to an order, which has provision that he undergo training or counselling in order to address, not cognitive deficits, but the limited skills associated with his low education.

127 Mr West submitted that the extract from Masterman-Lister correctly states the applicable test appropriate for non-statutory capacity assessments. Mr West submitted that because of Master Wheeler's order in 2004 the presumption of capacity was inapplicable and the onus was on Mr Erdogan to demonstrate positively, on the balance of probabilities, that he has the capacity to manage his finances and affairs. Mr West agreed that, being an aspect of the court's protective jurisdiction, the application must be assessed with particular care. Mr West accepted that the estate was relatively small and its management was not complicated.

128 Mr West agreed that the court must determine whether Mr Erdogan has the capacity to understand, whether with the assistance of explanations and advice or on his own behalf, the issues that will arise in the self-management of his financial affairs. The identification of that capacity requires an assessment of the process of management of financial affairs particularly, a capacity to make rational decisions. Mr West did not submit that there was any evidence given to the court of irrational decision making by Mr Erdogan in recent times. He noted that the experience of the SMO was that Mr Erdogan did appropriately manage the limited funds he received and Mr West took no issue that his capacity to manage his financial affairs at a lower level had been established. There was no evidence of reckless spending and that the evidence of saving for specific purposes from the family's limited funds was very much in Mr Erdogan's favour.

129 Mr West submitted that I should regard the possible mortgage of the family home as a major concern. He submitted I ought also to be concerned that Mr Erdogan might not cope with the consequences of a possible bad decision. Although the complications of language, culture, a want of education ancillary psychological states such as anxiety and grief, and side effects from pain management were all factors that might explain poor outcomes in clinical assessment, I should give due weight to Dr Anson's conclusions that even taking those matters into account, cognitive deficits in capacities required for complex decision making remained evident.

130 The plaintiff was composed and rational when giving evidence. It cannot have been an easy experience for him, yet he demonstrated a capacity to understand, absorb and respond appropriately to most questions asked of him. His concentration, memory, and capacity to reason appear to me to be consistent with the assessments that had been made by each of the neuropsychologists and by Ms Selvi. Not all of his responses were model answers. When addressing more abstract questions about future management of his property, he did not respond with irrational suggestions. Rather, he appeared not to fully comprehend the question asked of him. Again, his evidence was consistent with the opinions of Associate Professor Yucel and Ms Selvi that if he is taken through issues slowly and emphatically and in a more concrete context, he has a capacity to learn skills and understand consequences, which he will later call upon.

131 Mr Erdogan did not present a financial plan to the court and he does not have a history of budgeting. He clearly understands that his welfare benefits preclusion period has almost run and I have no doubt that he is factoring a benefit from Centrelink into his future income stream. I do not think Mr Erdogan could find paid employment in future, but there is no evidence that he wants to apply his funds in a risky business venture, a small business, or the like. Overall, I accept that his financial plan in the future is to live a conservative and simple life.

132 I accept that it is unlikely that he would mortgage his home. I also consider, since the SMO stressed the possibility of a bad mortgage decision as a major concern, that on this issue Mr Erdogan has a co-decision maker, namely the joint co-proprietor of the property, his wife.

133 There is substantial agreement between the neuropsychologists, and with Ms Selvi's evidence, that the apparent degree of cognitive deficit relevant to managing his affairs has been exacerbated by other factors. Not all of those other factors are appropriate considerations when considering legal capacity. Some factors are no longer operative. Some factors can be alleviated in ways other than depriving Mr Erdogan of the management of his affairs.

134 Each of the neuropsychologists found many positives in their assessment of Mr Erdogan, notwithstanding that they agreed that he has ongoing residual cognitive impairment. I accept that Mr Erdogan can continue to learn appropriate life skills, including skills that will assist in the management of his affairs. I am satisfied that past assessments of his cognitive deficits have been complicated in the manner that I have described. In particular, Mr Erdogan's inability to speak English, his want of familiarity with Australian culture and institutions, his lack of education, and his want of experience in financial management at a more complex level are factors that obscure the proper assessment of his cognitive abilities in the relevant sense. I am also satisfied that factors such as unresolved emotional states, including grief, anxiety and inability to participate in intimate relationships, and the side effects of his physical injuries, particularly pain medication, partly obscured the proper assessment of his cognitive deficits when those influences had operative effect and his true residual cognitive deficits have been slowly revealed over time. However, his condition is now regarded both identifiably clear and stable.

135 I have given particular consideration to Dr Anson's concern that whatever weight be afforded to such matters, Mr Erdogan's ongoing executive function deficits deprived him of the high-level skills required when complex decision-making is called for. Dr Anson's assessment is that these deficits are residual impairment related to his brain injury that cannot be restored. I am satisfied that such deficits are evident. I do not think that Associate Professor Yucel suggested otherwise. I am not satisfied that this consideration alone warrants depriving Mr Erdogan of control of the management of his financial affairs. I prefer the assessment of Associate Professor Yucel that while Mr Erdogan will make mistakes in the future, he has sufficient cognitive capacity, identified more by reference to assessment of his real life functioning than neuropsychological testing, to manage his affairs.

136 I take into account the significant improvement in functioning that Ms Selvi has identified particularly Mr Erdogan's ability to learn life skills when appropriately counselled. I accept that the consensus view about his personality type now is that he is conservative, not impulsive, family oriented and free of relevant negative personal habits, despite some evidence of impulsive behaviour in 2008 when tested by Dr Anson. Mr Erdogan is likely not to be attracted to complicated financial transactions because of his conservative personality profile. He is likely to prefer a relatively straightforward and simple approach, with strong influence in joint decision making from his wife.

137 Almost any person will face issues in the contemporary financial marketplace where that person is not able by education, experience, or canniness to correctly exercise judgment or perform a task. The significant risks that exist are not only faced by persons with cognitive deficits. Competent people manage their affairs by recognising that situation and seeking advice or assistance from those with the appropriate skills and experience. I am satisfied both from my assessment of Mr Erdogan when he gave evidence and from the assessment of other witnesses that Mr Erdogan understands his limitations, that he is conservative. I am satisfied that he is not impulsive and has the capacity to recognise when he needs to draw upon the support and advice of others. There are various examples, referred to above, where that has occurred. Because it is in his dealings with others, that the residual deficits from Mr Erdogan's brain injury are most likely to emerge, it is significant to note the improvements in that aspect of his functioning that have followed from Ms Selvi's counselling. Those improvements were noted as significant by Dr Lloyd. More generally, each of Associate Professor Yucel and Dr Anson have acknowledged that Mr Erdogan has a lot of cognitive strengths demonstrating good learning and memory skills that support the notion that he has residual areas of function capable of permitting further skills development relevant to managing his affairs.

138 A clear theme emerges that rather than substituting for Mr Erdogan's decision-making processes those of the Senior Master, it is appropriate in Mr Erdogan's circumstances to support his decision-making capacities, particularly during transition to exercising self-management.

139 Two influential considerations about his financial circumstances are firstly, that his estate is not complex and secondly, that his real estate is jointly owned by his wife. His wife's role as a co-decision maker with him about all aspects of his estate is appropriate in these circumstances and is not doubted on the expert assessments. There is no reason to expect that Mrs Erdogan's support, as a co-decision maker, will not continue. As management of his affairs becomes less abstract, more concrete, Mr Erdogan has demonstrated appropriate management skills, particularly in conjunction with his wife. Important considerations in this respect include the acknowledgement that he accepts and manages within the monthly allowance paid to him from his funds by the SMO. He has never gone 'cap in hand' asking for more. Rather, he demonstrates a capacity to plan and save, appropriately and rationally, to meet the future financial needs of his family. No separate individual financial needs have been identified.

140 I am satisfied that it has taken some time and significant repetition, for Mr Erdogan to understand the imprudence of withdrawing income producing capital to buy a block of land, or how succession planning operates. Some of his answers in evidence unsurprisingly demonstrated a similar want of full cognitive capacity. No one suggests that he has fully recovered. However, I am satisfied that he does generally understand the depreciating nature of his capital sum and the need to manage conservatively its future preservation.

141 Mr Erdogan bears the onus of establishing that he is capable of managing his affairs and the serious consequences of an error of judgment that results in a loss of capital funds remains the major concern. Of course, persons with no cognitive deficits make such errors, ending up in bankruptcy. Mr Erdogan has no capacity to re-establish his financial position through employment. However, it is significant that his remaining pension preclusion period is short.

142 In all of the circumstances, I have come to the conclusion that Mr Erdogan has discharged the onus that rests upon him and I propose to address my residual concern in two ways. First, I do not propose to order the immediate transfer of Mr Erdogan's funds and property to him. A transition period is appropriate and I will hear further from the parties on precisely when transfer ought to occur but I have in mind that a period of delay of not less than six, preferably nine, months will be appropriate. This period is contemplated because anticipation of receiving his property will render more concrete for Mr Erdogan the financial decisions that he will need to make, focussing his attention on the decisions he will confront and the skills he will need. Second, Associate Professor Yucel, Dr Anson, and Ms Selvi are all agreed that Mr Erdogan will probably respond to specific counselling directed to financial management skills, as discussed above, which will require time. A transition period, with self management a concrete reality, may assist Mr Erdogan to learn how to understand and appreciate some of the more complex issues he will face, hopefully avoiding early errors of judgment, and affording Mr Erdogan the best opportunity to succeed in managing his own affairs. Acknowledging that Mr Erdogan has sufficient cognitive capacity to manage his own financial affairs does not require that I ignore his non-cognitive deficits.

143 The precise date upon which control of his property will be returned to Mr Erdogan is a matter upon which I will take further submissions from the parties. These submissions ought to be directed to the development of a counselling and educational program for Mr Erdogan as I have suggested and to identify the assistance on transition that may be available from the SMO, as well as any other practical considerations on transfer that warrant consideration. With the benefit of further submissions on such matters, I will set the operative date for an order that the funds and property in court be returned to Mr Erdogan's control and consider any ancillary conditions or other matters that arise.

[1] The Senior Master is an associate judge.

[2] K-Generation Pty Ltd v Liquor Licensing Court [2009] HCA 4; (2009) 237 CLR 501, 520 [48].

[3] (2011) 243 CLR 506; [2011] HCA 4.

[4] by the Mental Health Act 1986.

[5] [1985] VicRp 85; [1985] VR 861.

[6] [1987] VicRp 14; [1987] VR 163.

[7] See now Part 7 of the Supreme Court Act 1986 (Vic) as amended by Acts 24/2008, 78/2008, and 34/2010.

[8] Section 104(2) Supreme Court Act 1986 (Vic).

[9] Section 109A Supreme Court Act 1986 (Vic).

[10] Section 110 Supreme Court Act 1986 (Vic).

[11] Section 111 Supreme Court Act 1986 (Vic).

[12] [1993] VicRp 78; [1993] 2 VR 362.

[13] [2007] VSC 146 (22 May 2007).

[14] See Practice Note No. 6 of 2008 - Associate Judges and Practice Note No. 3 of 2009 - Associate Judges.

[15] A judicial registrar is yet to be appointed.

[17] See Brownport Management Ltd v Aqua-Tec 21 Pty Ltd [2002] VSC 396, [39]; Express Gas Operations Pty Ltd v Axton Jones Pty Ltd [2009] VSC 321, [10]; Octagon Inc. v Hewitt & Anor (No. 2) [2011] VSC 373, [19].

[18] (2007) 16 VR 318; [2007] VSC 146.

[19] See Excell v Excell [1984] VicRp 1; [1984] VR 1.

[20] Diver v Diver [2007] VSC 146; (2007) 16 VR 318, [36] (per Hargrave J). His Honour referred to Smith v Reynolds [1989] VicRp 25; [1989] VR 309, 312-3; Morris v Zanki (1997) 18 WAR 260, 284-6.

[21] That defined term then appears in the text of r 79.12, dealing with the authority of a judicial registrar. That rule provides that a judicial registrar may not make a determination that an applicant for payment out of money in court is not a handicapped person. These provisions were inserted by SR No 133/2011, the amending rule that introduced Part 5 of the order concerning authority of the judicial registrar.

[22] It is likely there is no relevant distinction arising from the different wording of the definitions, but it is not a matter I need pause to consider.

[23] Cadwallender (by his next friend Cadwallender) v Public Trustee [2003] WASC 72 [42].

[24] [1852] EngR 427; (1852) 1 De GM&G 537, 557.

[25] Victorian Law Reform Commission, Guardianship - Final Report 24, (2012).

[27] Compare, for example Gibbons v Wright [1954] HCA 17; (1954) 91 CLR 423, 437-438; In the Estate of Park (Dec'd); Park v Park [1954] P 89; Martin v Azzopardi (1973) 20 FLR 345, 358; PY v RJS [1982] 2 NSWLR 700, 702; Secretary, Department of Health and Community Services v JWB (Marion's Case) [1992] HCA 15; (1992) 175 CLR 218, 237-238; Masterman-Lister v Brutton & Co [2003] 1 WLR 1511; Murphy v Doman (as representative of the estate of the late Min Simpson ) & Anor [2003] NSWCA 249; (2003) 58 NSWLR 51 [35]; Sheffield City Council v E [2004] EWHC 2808 (Fam); Edwards v Edwards (2009) 25 VR 40 [56]; Farr v State of Queensland [2009] NSWSC 906 [15]; Guthrie & Anor v Spence [2009] NSWCA 369; PJB v Melbourne Health and State Trustees Limited [2011] VSC 327.

[28] Secretary, Department of Health and Community Services v JWB (Marion's Case) [1992] HCA 15; (1992) 175 CLR 218, 258, 280, 301.

[29] See Re GHI (a protected person) (2005) 221 ALR 589, [2005] NSWSC 581 [22].

[30] Masterman-Lister v Brutton & Co [2003] 1 WLR 1511, 1520 [17].

[32] [1985] VicRp 85; [1985] VR 861, 866.

[33] [1982] 2 NSWLR 700, 701.

[34] Masterman-Lister v Brutton & Co [2003] 1 WLR 1511.

[35] However, the passage at ibid, 1523 [26] comes from the judge's recital of a submission put by counsel, with which he agrees, but the issue in that proceeding was whether the plaintiff had full capacity when he settled his claim. Whether he had the mental capacity to manage and administer a large damages award was not the issue.

[36] [1954] HCA 17; (1954) 91 CLR 423.

[38] See also the discussion by Chadwick LJ in Masterman-Lister v Brutton & Co [2003] 1 WLR 1511, 1533 [58]-[62] and that of Campbell JA in Guthrie v Spence [2009] NSWCA 369; (2009) 78 NSWLR 225, 256 [174]-[175].

[39] [1982] 2 NSWLR 700.

[40] CF v TCML [1983] 1 NSWLR 138, 139-40; M and the Protected Estates Act 1983 (1988) 12 NSWLR 96, 99, 101; G v G (No 2) (Unreported, New South Wales Supreme Court, Powell J, No 41/98, 7 February 1989); N v N (Unreported, New South Wales Supreme Court, Hodgson J, 13 March 1997); Re C (TH) and the Protected Estates Act [1999] NSWSC 456, [11] per Young J; EMG v Guardianship and Administration Board of Victoria [1999] NSWSC 501, [3], [46] per Young J; H v H (Unreported, New South Wales Supreme Court, Young J, 20 March 2000); P v R [2003] NSWSC 819, [8] per Barrett J.

[41] [1985] VicRp 85; [1985] VR 861.

[42] Re CAF, 1961 No. 2369 (unreported, High Court Chancery Division, Wilberforce J, 23 March, 1962).

[43] (1988) 12 NSWLR 96, 102.

[44] [1999] NSWSC 501.

[46] [2005] NSWSC 581; (2005) 221 ALR 589.

[47] Ibid 592 [11]-[13] (citations omitted).

[48] [2008] NSWSC 36.

[50] [2003] WASC 72.

[51] In Guthrie v Spence [2009] NSWCA 369; (2009) 78 NSWLR 225, 256 [174].

[52] I use the term competence interchangeably with capacity.

[53] It is appropriate that a difference is recognised when making the inquiry into the circumstances of a multi-millionaire with complex affairs compared with a pensioner living in a retirement village without any property interests. The medical assessment of cognitive deficits may be analysed from different perspectives.

[54] Mr Erdogan is now managing without medication for mental health issues.

[55] [2003] 1 WLR 1511, which I have set out above at [60].