Fay Noble Dunn by her Tutor Monica Ross-Maranik v David Brenton Dunn

Supreme Court of NSW|2022-09-21|Before: Kunc J, Parker J

Summary

The plaintiff in these proceedings is a person under legal incapacity and is represented by her tutor. This judgment deals with an application brought in the Duty List for the approval of a settlement of the proceedings under s 76 of the Civil Procedure Act 2005 (NSW) (the Act) and for the payment of monies pursuant to that settlement under s 77 of the Act. There was no opposition to the approval of the settlement, which was plainly in the plaintiff's best interests. In the ordinary course it might be approved with short, if any, reasons. However, one central aspect of the settlement - the payment of the substantial settlement into a private trust for the benefit of the plaintiff - has required particular attention.
The plaintiff and her tutor were represented by Ms PJ Muscat of Counsel. Mr C Birtles of Counsel appeared for the first defendant and the proposed second defendant. The Court particularly acknowledges its indebtedness to Ms Muscat's detailed written opinion that was tendered on the application together with her careful oral exposition of the issues.

Background

The plaintiff (Mrs Dunn) is 92 years old. Her tutor, Ms Monica Ross-Maranik, is a solicitor well known to the Court and an accredited specialist in wills and estates law.
Mrs Dunn and her late husband, Mr Adrian Dunn (who died on 25 November 2020), have two adult children. Without disrespect, I shall refer to them as David and Michelle. David is the defendant in these proceedings.

The Settlement

For the purposes of these reasons, the most significant elements of the proposed settlement in these proceedings, in addition to various releases, are: 1. The payment by David or Ironfury of a lump sum of $4,500,000 inclusive of costs, as a judgment sum representing a commercial compromise of Mrs Dunn's claim in these proceedings (the Settlement); 2. An entitlement to the benefit of accommodation at a retirement village which has been paid by a refundable accommodation deposit (the Accommodation Deposit).
There is no dispute that Mrs Dunn is a person under a legal incapacity for the purposes of s 76 of the Act. She currently suffers from moderate to severe advanced dementia.
Significantly for present purposes, there is no financial management order in place for Mrs Dunn, although she has executed an Appointment of Enduring Power of Attorney in which David and Michelle are jointly and severally appointed as her attorneys. She has also executed an Appointment of Enduring Guardian in favour of David and Michelle, again jointly and severally. Both documents were executed in December 2019.
The resolution of these proceedings proposed by the parties is premised upon the settlement of the Fay Noble Dunn Trust (the Trust). A draft of the proposed deed for the Trust (the Deed) was in evidence before me. The trustees are to be David, Michelle and Mr Andrew Skyring. Mr Skyring is an experienced accountant who has been deliberately included as a trustee to provide a disinterested and independent (of the family) voice in the affairs of the Trust. Mr Skyring will be the Appointor under the Deed and will have power to remove and appoint trustees.
The sole object of the Trust is Mrs Dunn and, subsequently, her estate. The Trust will vest upon her death, with the trust fund payable to her estate. The corpus of the trust will be the Settlement together with, if it is repaid during Mrs Dunn's lifetime, the Accommodation Deposit.
The trustees of the Trust are to invest and apply the corpus and income of the Trust for the benefit of Mrs Dunn. The critical provision of the Deed is: "14. Beneficiary Under Legal Disability 14.1 Dealing with Beneficiary's entitlement While a beneficiary is an infant or otherwise under any legal disability the Trustee may: 14.1.1 on behalf of that Beneficiary, invest any money or property to which that Beneficiary is entitled and the resulting income as if it were part of the Trust Fund; and 14.1.2 Pay the whole or any part of the capital or income of the Trust Fund in or towards the maintenance, education, benefit or advancement in life of that Beneficiary having regard to the best interests of the Beneficiary and the terms of the Care Guidelines. 14.2 Application of Beneficiary's entitlement 14.2.1 The Trustee may either apply that part to the Trust Fund to which clause 14.1.1 applies for that purpose or pay it to the institution, company, residential facility and/or other person who then has the care of custody of the Beneficiary. 14.2.2 The Trustee is not required to see to the application of the relevant part of the Trust Fund or to have regard to the means of the institution, company, residential facility and/or other person that has care and custody of the Designated Beneficiary."
Ms Muscat's opinion, which formed part of the evidence, set out the reasons why the proposed settlement is in Mrs Dunn's best interests. There is also evidence that Ms Ross-Maranik, Mrs Dunn's tutor and a very experienced solicitor in matters such as these, has also concluded for reasons which she has articulated, that the settlement is in Mrs Dunn's best interests. I have reached the same conclusion for the reasons they have advanced. It is unnecessary for me to set these out in any detail. In short, the proposed settlement removes the uncertainty and delay over her affairs caused by this litigation and provides Mrs Dunn with a substantial sum sufficient for her maintenance for the rest of her life.
In both her opinion and submissions, Ms Muscat, entirely properly, drew the Court's attention to differences in the authorities on the question of whether the Court can and should approve a settlement where the settlement funds are to be paid to a private trust. It is to that issue that I will now turn.

The legal principles

The Act provides: "76 Settlement of proceedings commenced by or on behalf of, or against, person under legal incapacity (1) This section applies to proceedings commenced by or on behalf of, or against, any of the following persons - (a) a person under legal incapacity, (b) a person who, during the course of the proceedings, becomes a person under legal incapacity, (c) a person whom the court finds, during the course of the proceedings, to be incapable of managing his or her own affairs. (2) The court may make a finding referred to in subsection (1) (c) only on the basis of evidence given in the proceedings in which it is made, and such a finding has effect for the purpose only of those proceedings. (3) Except with the approval of the court, there may not be - (a) any compromise or settlement of any proceedings to which this section applies, or (b) any acceptance of money paid into court in any such proceedings, as regards a claim made by or on behalf of, or against, a person referred to in subsection (1). …. (6) An agreement approved by the court binds the person by whom or on whose behalf it was made as if he or she were of full capacity and (if it was made by some other person on his or her behalf) as if that other person had made the agreement as his or her agent. 77 Payment of money recovered on behalf of person under legal incapacity (1) This section applies to money recovered in any proceedings on behalf of any of the following persons - (a) a person under legal incapacity, (b) a person who, during the course of the proceedings, becomes a person under legal incapacity, (c) a person whom the court has found, under section 76 (1) (c), to be incapable of managing his or her own affairs, pursuant to a compromise, settlement, judgment or order in any proceedings. (2) All money recovered on behalf of a person referred to in subsection (1) is to be paid into court. (3) Despite subsection (2), the court may order that the whole or any part of such money not be paid into court but be paid instead to such person as the court may direct, including - (a) if the person is a minor, to the NSW Trustee and Guardian, or (b) if the person is a protected person, to the manager of the protected person's estate. …"
The question for the Court's consideration is whether it can and should exercise the power apparently given by s 77(3) for the Settlement to be paid "to such person as the court may direct", in this case the trustees of the Trust.
In Smith bht Magnusson v NRMA Insurance Australia Ltd [2008] NSWDC 261, her Honour Judge Gibson in the District Court had to consider the approval of a settlement where the plaintiff's tutor sought an order that the settlement funds be paid to the plaintiff's two daughters who held a power of attorney for her and were her enduring guardians.
At that time, ss 76 and 77 were relatively new. Her Honour considered the authorities and practice that applied prior to the Act. The critical part of her Honour's reasoning was: "31. I am guided very much by what Mr Justice Hamilton has said in Saul v Lin, particularly at [5], about the nature and extent of the new statutory regime. While the Civil Procedure Act may have fewer provisions, and may even have gaps, it was never intended to interfere with the long-established supervisory jurisdiction of the courts concerning the approval of settlements and the investment of funds in accordance with long-established rules. Harrison AJ made this clear in Davis bht Simon v Mid North Coast Area Health Service [2007] NSWSC 1044, when rejecting an argument concerning a compromise of liability that there was no present requirement to approve a partial settlement of liability in the litigation. In other words, the court maintains the same close supervisory watch of settlements because these plaintiffs are seen (rightly or wrongly) by the legislature as being vulnerable. 32. It would be fair to say that any injured plaintiff in litigation is particularly vulnerable at the time of settlement, and it is a matter of the utmost public interest that they be protected. In relation to persons who have suffered from personal injury who have suffered the additional disadvantage of being minors or under a disability, that is the more so. That is why the jurisdiction conferred on the District Court and the Supreme Court by the Civil Procedure Act, and its procedure, is protective in nature. It is akin to the inherent parens patriae jurisdiction of the court under the common law, as O'Keefe J has pointed out in several decisions, notably Yu Ge v River Island Clothing Pty Ltd [2002] NSWSC 28. Under that jurisdiction, the court must act to protect the interests of infants and disabled persons. Although the jurisdiction is broad, it is to be exercised cautiously. I note similar statements in MAW v Western Sydney Area Health Service at 238 and also in Northridge v Central Sydney Area Health Service (2000) 50 NSWLR 549 at 553. 33. As O'Keefe J explains in Yu Ge at [29]-[32] concerning the provisions of the 1929 Act under which settlements were approved, the practice involved in relation to settlements and the principles to apply in relation to the approval of infants' settlements in action for damages are well established. In exercising this jurisdiction, the court must act cautiously, and if in doubt, his Honour has stressed (at [32]) that the court must decline to approve the settlement. 34. These decisions predate the current legislation. However, the intention of the current legislation, as I see it, was to maintain the status quo. It was to replace what was there with a similar regime, but imported into the Civil Procedure Act."
In declining to approve that part of the settlement proposal which provided for the settlement money to be paid to the plaintiff's daughters, her Honour concluded: "40. Looking at the interpretations of s 77 given by Hamilton J and the Guardianship Tribunal Registrar, it seems to me that, notwithstanding what appears to be a degree of ambiguity in the wording in s 77, there is no reference there to a person who has been appointed either an enduring guardian, or a power of attorney, or both. In circumstances where it seems to me that the procedure for applying for approval of a settlement, which I note is set out in paragraph 76.20 and 77.5, there is no suggestion that there is any alternative to the procedure which is currently in place."
Subsequently, it appears that in this Court, the proposed payment of settlement funds to family members or others acting as private trustees has been approached with hesitation as a matter of discretion, rather than reading down the words "to such person as the court may direct" in s 77(3) of the Act.
In AC v OC (a minor) [2014] NSWSC 53, Lindsay J was considering an application by the mother of a six-year-old boy that the approximately $1.7 million held in Court for damages paid to the child for personally injury suffered at birth should be paid out to her on trust for her son. Alternatively, the mother submitted that it would be in the interests of the child, and expedient, for her to be appointed as a private manager of the child's estate under the NSW Trustee and Guardian Act 2009 (NSW). His Honour said: "36 Nevertheless, reading s 50(1) beneficially, the expression "beneficially entitled at law or in equity to property" can, and in my judgment should, be read as extending to a party's entitlement to the due administration of funds in court, coupled with an entitlement to apply for funds to be paid out of court to or for the benefit of the party. The object of s 50 is to provide a legislative foundation for the court to make orders for the benefit of a minor, a person in a class of persons generally regarded as in need of the Court's protection. 35 Each of the legislative provisions to which reference has been made must be read in the context of this Court's "inherent" parens patriae jurisdiction. 36That jurisdiction, protective of those who are not able to take care of themselves, embraces (via different historical routes) minors, the mentally ill and those who, though not mentally ill, are unable to manage their own affairs: Re Eve [1986] 2 SCR 388 at 407-417; (1986) 31 DLR (4th) 1 at 14-21, approved by the High Court of Australia in Secretary, Department of Health and Community Services v JWB and SMB (Marion's Case) (1992) 175 CLR 218 at258; PB v BB [2013] NSWSC 1223 at [7]-[8], [40]-[42], [57]-[58] and [64]-[65]. 37 A key concept in the exercise of that jurisdiction is that it must be exercised, both in what is done and what is left undone, for the benefit, and in the best interests, of the person (such as a minor) in need of protection. 38 That concept is similar to the requirement in trust law that, subject to the terms of the trust, a trust is to be administered for the benefit of its beneficiaries: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 241G-242A, citing Letterstedt v Broers (1884) 9 App Cas 371 and Miller v Cameron (1936) 54 CLR 572. 39 Experience in the exercise of the Court's protective jurisdiction counsels caution against allowing large amounts of property to be held by a trustee or manager of any description, for the benefit of a person in need of protection, without practical arrangements for supervision of due performance by the trustee or manager of fiduciary obligations owed to the person in need of protection. 40 There is a particular need for caution in cases in which, as here, the person in need of protection is likely to need protection over a lengthy period during the course of which his or her needs may change markedly, as may the personal circumstances of his or her family and carer."
His Honour concluded: "53 That said, I am not satisfied that, on the facts of the case, it is in the best interests of the defendant to make orders designed to put his settlement moneys beyond the practical oversight of the NSW Trustee for a period likely, prima facie, to extend beyond a decade. 54 On the contrary, I am satisfied that it would be in the best interests of the defendant to make orders under Part 4.2 of the NSW Trustee and Guardian Act designed to have his estate administered under the Act by the plaintiff, as a private manager."
His Honour took a similar approach in Re X [2016] NSWSC 275. That case concerned a twenty-year-old plaintiff with a damages award of approximately $1 million. His Honour declined to approve the private trust arrangement advanced by the plaintiff and her parents, and instead appointed the parents of the plaintiff as joint managers of the estate of the plaintiff subject to the orders and directions of the NSW Trustee.
However, Ms Muscat also drew to attention a broader approach adopted by Hallen J in Rappard v Williams [2013] NSWSC 1279. In that case, the plaintiff, who was represented by her adult son as her tutor, agreed to a settlement of family provision proceedings whereby she was to receive an interest in the real property in which she had been living (valued at $180,000-$200,000), a lump sum of $185,000, such of the deceased's furniture as she wished to receive, and an amount ($50,000) on account of her costs of the proceedings.
The plaintiff suffered from severe vision impairment, depression, insomnia and stress. In approving the settlement, whereby her son as tutor was to hold the property subject to the proposed family provision order upon trust for the plaintiff, his Honour said: "101 In Fairhurst (bht NSW Trustee and Guardian) v Fairhurst [2012] NSWSC 388, I wrote at [29] - [40]: "The section applies to all proceedings by, or against, a person under a legal incapacity and irrespective of the nature of the claims made by, or against, that person. The jurisdiction of the court and its procedure is protective in nature. It is akin to the inherent parens patriae jurisdiction of the court under the common law. Relevantly, the Court must act so as to protect the interests of infants: Yu Ge v River Island Clothing Pty Ltd [2002] NSWSC 28; (2002) Aust Torts Reports 81-638 at [28]. In Permanent Trustee Co Ltd v Mills [2007] NSWSC 336; (2007) 71 NSWLR 1, Hammerschlag J said, in relation to such approval: "[29] The principle is that for the Court to grant approval for a compromise to be entered into by the disable person it must form the view that it is beneficial to his or her interests. The compromise should be assented to by the tutor and there should be opinions from his or her legal advisers that they consider it to be so: Re Birchall. The Court will consider for itself whether the compromise will be beneficial to the disable person: Re Ley's Trusts [1964] 1 WLR 640." In Fisher (by her tutor) Fisher v Marin [2008] NSWSC 1357, Rothman J said: "[29] The jurisdiction of the Court is protective in nature and the overriding principle is that the Court will base the approval or disapproval upon the formation of an opinion that the agreement is or is not beneficial to the interests of the person under the incapacity. It is for the Court, not the parties, to determine whether the compromise will be beneficial to the person under an incapacity: Re Ley's Trusts [1964] 1 WLR 640;Permanent Trustee v Mills [2007] NSWSC 336. ... Ultimately, the principle that I apply is whether the settlement that has currently been reached (and the amount thereof) is in the interests of the plaintiff. In that regard, bearing in mind the risk that, liability being in issue, the plaintiff would receive nothing from any hearing that may occur, the test may be described as whether the risk to the plaintiff, of losing that which is already agreed, is outweighed by the possibility of receiving more if the matter were to go to hearing." In Elderfield (by her litigation guardian Visentin) v Transport Accident Commission (TAC) [2010] VSC 116; (2010) 55 MVR 206, Robson J referred to these two NSW decisions, and accepted the test laid down by Rothman J in Fisher quoted above. At [20], Robson J went on to say: "In my view that question is relevantly answered by deciding whether or not, in my opinion, the certainty of obtaining the compromise sum is significantly outweighed by the uncertain prospect of obtaining more by rejecting the compromise after taking into account the risk of obtaining less." In Stephens-Sidebottom v State of Victoria (Department of Education and Early Childhood Development) [2011] FCA 893, Tracey J said: "[12] In determining whether to sanction a compromise under O 43 r 9 the court is concerned only with the benefit of the disabled person: see Gillespie v Alperstein [1964] VR 749. In forming the necessary judgment significant weight will be given to the opinions of the applicant's legal advisers and, in some cases at least, the views of the applicant's tutor. In Re Barbour's Settlement [1974] 1 All ER 1188 at 1191, Megarry J, speaking of an application made on behalf of a minor, said that: Second, there is the important matter of the minor's benefit. When the court is asked to give its approval on behalf of minors to a compromise of a dispute, the court has long been accustomed to rely heavily on those advising the minors for assistance in deciding whether the compromise is for the benefit of the minors. Counsel, solicitors, and guardians ad litem or next friends have opportunities which the court lacks for prolonged and detailed consideration of the proposals and possible variations of them in relation to the attitudes of the other parties and the apparent strength and weakness of their respective claims. When the matter comes before the court, the terms of settlement are in final form and the time for consideration is of necessity less ample. The court accordingly must rely to a considerable extent on the views of those whose opportunities of weighing the matter have been so much greater. Expressing a view on whether the terms of a proposed compromise are in the interests of a minor is a matter of great responsibility for all concerned." It is clear from s 76 that the jurisdiction to sanction a compromise or settlement is broad and general. It is not confined in any way, and the Court is not given any guidance about how to exercise the power. Not unnaturally, the section does not provide any criteria by reference to which the court should approve, or should decline to approve, the compromise or settlement. Nor is it useful to purport to lay down an exhaustive list of the criteria by reference to which an application for the approval of a settlement ought to be determined. Whether or not to approve the settlement will be fact specific and determined on its own merits. It is not the role of the court asked to approve a settlement or compromise to decide whether the outcome of the settlement or compromise is the one that it would have made, but, rather, whether it (as a settlement or compromise) ought to be approved. The court is requested by the parties to exercise its independent judgment on the question whether or not to approve the proposed compromise or settlement. The purpose of court approval is, principally, to protect the person under legal incapacity. Yet, the power given to the court should also been seen as a facultative one, since except with the approval of the court, there may not be any compromise or settlement of any proceedings to which the section applies and only when the settlement or compromise is approved does it bind the person by whom, or on whose behalf it was made, as if he, or she, were of full capacity and (if it was made by some other person on his, or her, behalf) as if that other person had made the agreement as his, or her, agent. Where someone opposes the approval of the settlement, her, or his, reasons for opposition may provide "a convenient focus" (see, Jessup J in Darwalla Milling Co Pty Ltd v F Hoffman La Roche Ltd (No 2)) [2006] FCA 1388; (2006) 236 ALR 322, at [39]) by reference to which the court will consider whether to approve the settlement. Similarly, that no one opposes the settlement, in the interests of the person under the legal incapacity, may, in some circumstances, also be relevant. Section 77(2) of the Civil Procedure Act 2005 provides that money recovered in any proceedings on behalf of any of a person under legal incapacity, is to be paid into court. However, s 77(3) empowers the court to order that the whole, or any part of, such money not be paid into court, but be paid instead to such person as the court may direct, including, if the person is a protected person, to the manager of the protected person's estate." 102 What I said was applied by Allsop P (as his Honour then was) in Institoris by his next friend Maria Institoris v Falconer [2012] NSWCA 298, at [2] and by Sackar J in Gordon Leslie Rowell As Trustee of the Estate of Burnett Leslie Carlisle (dec'd) v Heffernan [2013] NSWSC 404, at [7]."

Submissions

Ms Muscat's fundamental submission is that proper consideration of both s 77(3) and the authorities lead to the conclusion that the Court's exercise of its discretion is grounded in its view of what was in the best interests of the person under legal incapacity. This was a fact specific exercise where the Court's role was a facultative one to be determined on the individual merits of each case.
In the present case, Ms Muscat drew attention to these features which she submitted supported the Court approving the Settlement being paid to be held on the terms of the Deed: 1. Mrs Dunn is not a protected person in respect of whom a manager has already been appointed. The proposed resolution of the proceedings did not require additional orders in respect of management more generally, and would likely avoid a time consuming and costly process that will follow (including insofar as engagement with the NSW Trustee and Guardian is concerned). 2. Mrs Dunn's age and health suggest that the Settlement will not require management for a protracted period and will be used on particular, and known, needs applicable to her circumstances. 3. The two attorneys and guardians (Michelle and David) will be joined, as trustees, by an independent and well qualified accountant (Mr Skyring), who would provide a level of independent oversight and be a circuit breaker in respect of decision-making, guided by Mrs Dunn's best interests. 4. The terms of the Deed were otherwise cast in a manner considerate of Mrs Dunn's best interests. 5. The evidence was clear that the Settlement was sufficient to meet all of Mrs Dunn's needs as best they could be calculated over a life expectancy of five years (noting that her current life expectancy according to the Australian Bureau of Statistics' life tables was 3.61 years). 6. Michelle and David as her guardians and attorneys have had day-to-day involvement with Mrs Dunn, including in relation to her accommodation and care. They have been involved in the management of her affairs for many years.
Mr Birtles, whose client joined in the application for approval, did not direct any specific submissions to this aspect of the application. I note that for completeness and certainly not as any criticism.

Consideration

Notwithstanding the many authorities and long history which underpin the exercise of the Court's discretion in matters such as these, in my respectful view the essential principles may be summarised as: 1. The natural and ordinary meaning of s 77(3) of the Act is clear. The Court may order settlement funds to which a person under a legal disability is entitled to be paid "to such person as the court may direct". There is no basis to read those words down. In particular, no such reason is provided by ss 77(3)(a) and (b), which do no more than reflect longstanding practice and what, in any particular case, may in fact be the result. However, the word "including" does not operate to constrain the discretion. 2. The paramount consideration is what is in the best interests of the person under legal incapacity. 3. Each case will turn on its own particular facts and the Court should approach each case without any predisposition towards a particular outcome. 4. In considering any proposed arrangement for the disposition of settlement funds, the best interests of the person under legal incapacity will generally be assured by the Court maximising the prospect of the competent management of those funds and minimising the possibility of conflict of interest or, worse, corrupt dealing with those funds. 5. It is the longstanding experience of the Court, even when the best intentions of those caring for the person under legal incapacity are evident and taken into account, that the purposes identified in the preceding subparagraph will in many cases, but not all, only be met by committing those funds to at least the supervision, and where necessary the control, of the government authority charged with protecting the estates of legally disabled persons.
There can be no doubt that the Settlement is a very large sum. Subject to the resolution of the matters set out in paragraphs [32] to [37] below, and applying the principles referred to in the preceding paragraph, I accept Ms Muscat's submissions that, notwithstanding it might be thought unusual to commit a sum as large as the Settlement to a private trust arrangement, it was in Mrs Dunn's best interests to approve the settlement of these proceedings, including the payment of the Settlement to the Trust on the terms of the Deed.
The dispositive considerations in reaching that conclusion are: 1. The experience of the trustees, each of whose consent was accompanied by an affidavit of fitness from an independent person which, on its face, disclosed circumstances of knowledge of each proposed trustee upon which the Court could rely. Michelle is an architect/project manager, David is a dentist and Mr Skyring is a very experienced accountant. 2. Given Mrs Dunn's advanced age and medical situation, the Trust is likely to have a relatively short period of operation. Furthermore, during that period the trajectory of her needs may be expected to be both limited and clear: the increase in both her medical and personal care requirements. 3. The Court is satisfied that Mr Skyring's involvement will ensure independent advice and supervision. The evidence included his estimate of professional fees for his services which appeared, and the parties did not contend otherwise, to be fair and reasonable in all the circumstances.
During the course of argument there were four matters which I identified with Ms Muscat that needed to be attended to before the Court would make any orders.
First, I indicated to Ms Muscat that I would not make orders until the Trust had been settled. This would enable the Court to order payment of the Settlement to the trustees of the Trust in their capacity as such rather than passing through any intermediary.
Second, and related to the first point, I was of the view that all of the trustees, including Mr Skyring, should be parties to the proceedings. This was important for at least two reasons. First, any undertakings that they were to give or agreements between them which the Court would be asked to note would be given or made by them as parties to the litigation and therefore subject to the control of the Court. Second, joining them as parties would ensure that they could exercise the liberty reserved to any party to make any further application to the Court in relation to the working out of the orders giving effect to the settlement that the Court will make.
Third, as a matter of contract, the Accommodation Deposit was technically repayable to Mrs Dunn if that occurred in her lifetime. If, as was likely the case, this would be acquitted by the retirement village to Michelle and David as Mrs Dunn's attorneys and guardians, there should be an express and binding obligation upon them to pay it into the Trust.
Fourth, the Deed as it was originally tendered in evidence to the Court provided for the exercise of the trustees' powers by majority. Ms Muscat explained that the practical reason for this was that it was expected that there would be many unremarkable matters that, if Michelle and David agreed, could most simply be attended to in that way. While understanding the practical force of that position, my concern was to ensure that Mr Skyring could not be outvoted on any substantial matter. Some such protection was, in my view, essential to maintaining Mr Skyring's role as a source of independent accountability in the management of the Trust.
Ms Muscat suggested that in the event of real difficulty Mr Skyring, as Appointor, could remove one or both of Michelle or David as a trustee. While that may be so, in my view a more practical protection would be provided by requiring some decisions to be made with Mr Skyring's approval. This concern has now been met by the inclusion of this provision in the Deed as finally made by the parties: "5.4 Majority decision of trustee Where there are two or more Trustees, their powers may be exercised by a majority of them, provided that any payment or determination as to payment of income or capital of in excess of $50,000 (either payable as a lump sum or as an annual total of a periodic payment), must be approved by the Appointor [Mr Skyring], unless made pursuant to an order of the Court."

Conclusion

The matters referred to in paragraphs [32] to [37] have now been resolved and evidence of that has been provided to me with the executed form of the Deed and other documents in chambers. This includes that the Trust has now been settled. Accordingly, I made orders in chambers approving the settlement of these proceedings in accordance with the form of short minutes provided by the parties, including that the Settlement be paid to the trustees of the Trust.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 September 2022

Trustee and Guardian Act 2009(NSW)

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