Hazairin Iskandar v Zulfikri Mahbur & Ors [2011] NSWSC 1056 | Case summary

Supreme Court of NSW|2011-09-07|Before: Slattery J, Ward J

EX TEMPORE Judgment 1The plaintiff's notice of motion dated 1 September 2011 seeks orders appointing a tutor to the third defendant and supplementary orders requesting the President of the Law Society of New South Wales to nominate a solicitor to act in that capacity. The motion comes before the Court in somewhat unusual circumstances. It is rare but not unprecedented for a party to ask for a tutor to be appointed for an opposing party. 2The plaintiff seeks principal relief in the proceedings to set aside an alleged agreement in April 2010 between himself and the second defendant to sell a taxi motor vehicle and taxi licence plate to the second defendant. This agreement is said to have been made through the active encouragement of the third defendant. The plaintiff also alleges that the first defendant unconscionably induced the plaintiff to appoint him (the first defendant) as the plaintiff's attorney in late April 2010. Then in early May 2010 it is said that, with the first defendant acting as the plaintiff's attorney, the alleged sale took place. 3The merits of the plaintiff's claim are not for determination today. At the final hearing the plaintiff will seek to set aside the taxi plate sale transaction on grounds of alleged undue influence said to have been practised by the first and third defendants upon the plaintiff, and the alleged unconscionable conduct and alleged breach of fiduciary duty of those persons. The defendants deny these allegations. 4The procedural history of the case can be reduced to the following main events. In May of last year the proceedings were commenced in the Duty Judge list before Ward J. Her Honour made orders restraining the defendants from dealing with the taxi plate before final hearing and for the filing of a statement of claim. 5The defendants have also filed cross-claims. The third defendant has also brought a motion to strike out the statement of claim, which is listed for hearing before me on 7 and 8 November this year. 6In the course of the Court giving directions about that motion, it has become clear, through the third defendant himself supplying evidence to the court from his own medical advisers, that there is an arguable case that he is a person under legal incapacity who, under Uniform Civil Procedure Rules , Rules 7.17 and 7.18, requires the appointment of a tutor before the proceedings can continue. 7I am not currently hearing this motion. This is the first return date. The motion was only recently served on the third defendant. But on the available evidence the Court can infer that the case for the appointment of a tutor is arguable to the point that further directions should be made to bring the motion rapidly on for hearing. 8Today I have decided to vacate the hearing of the third defendant's application to strike out the statement of claim on 7 and 8 November 2011 and to use those Court dates to hear any remaining contest in relation to the appointment of a tutor to the third defendant. 9I do not need at this stage to go into the medical evidence that might justify the appointment of the tutor. This judgment may be published. Also, I am not hearing that question at the present time. That question will be considered at the hearing on 7 and 8 November 2011. It is appropriate, nevertheless, in anticipation of the issues that will arise on 7 and 8 November, now to make directions to facilitate the hearing of those issues. 10Although this application is unusual, it is not unprecedented: Lawrence v Mayes (1900) 16 WN (NSW) 229; Sanguinetti v Weaver (1910) 27 WN (NSW) 142, and Deputy Commissioner of Taxation v P (1987) 11 NSWLR 200 per Hodgson J. Applications by one party to appoint a tutor to a party in an opposing interest are within the scope of Uniform Civil Procedure Rules , Rules 7.17 and 7.18. Those Rules allow the Court to appoint a tutor to a person under a legal incapacity. Such motion may be brought by the Court of its own motion or "on the motion of any other person, including the proposed tutor." UCPR , Rules 7.17 and 7.18 are in these terms:- "7.17 Non-appearance of person under legal incapacity (1) Subject to subrule (2), the plaintiff in proceedings against a defendant who is a person under legal incapacity may take no further step in the proceedings following service of the originating process until a tutor has entered an appearance on behalf of the defendant. Note: If no such appearance is entered, the plaintiff may apply to the court under rule 7.18 for the appointment of a tutor of the defendant, or for the removal and appointment of such a tutor. (2) In the case of proceedings in the Local Court against a defendant who appears to be a person under legal incapacity by reason only of his or her minority: (a) the plaintiff may serve on the defendant a notice requiring a tutor of the defendant to enter an appearance in the proceedings, and (b) unless the court orders otherwise, the plaintiff may continue the proceedings as if the defendant were not a person under legal incapacity if such an appearance is not entered within 28 days after service of the notice. 7.18 Court may appoint and remove tutors (1) In any proceedings in which a party is or becomes a person under legal incapacity: (a) if the person does not have a tutor, the court may appoint a tutor, or (b) if the person has a tutor, the court may remove the party's tutor and appoint another tutor. (2) In any proceedings concerning a person under legal incapacity who is not a party, the court may appoint a tutor of the person and join the person as a party to the proceedings. (3) If the court removes a party's tutor, it may also stay the proceedings pending the appointment of a new tutor. (4) Subject to any order of the court, notice of any motion under this rule is to be served on the person under legal incapacity and, if it proposes removal of the person's tutor, on the tutor. (5) In proceedings on a motion for the appointment of a tutor, evidence in support of the motion must include: (a) evidence that the party for whom a tutor is to be appointed is a person under legal incapacity, and (b) evidence that the proposed tutor consents to being appointed and does not have any interest in the proceedings adverse to the interests of the person under legal incapacity. (6) An application for appointment as tutor under this rule may be made by the court of its own motion or on the motion of any other person, including the proposed tutor."

Background 11The immediate difficulty though in this case is that Mr Sasterawan, the third defendant, says he has no assets. He further says that even though there may be some reason for the appointment of a tutor in his circumstances, of the several options that are available for the appointment, he says that he expects that the proposed tutor will be found and funded in a way that is as satisfactory as possible to him. The appointment of a tutor in these circumstances, on the motion of an opposing party, is one where the wishes, interests and affairs of the person to whom the tutor is to be appointed, should be given the closest attention. 12Enquiries have been made about the third defendant's assets. These indicate that there is some prospect of an application for Legal Aid for him being successful. The evidence also indicates that the President of the Law Society of New South Wales could nominate someone who might be appointed as a tutor. Given the third defendant's financial circumstances, it may well be that the third defendant and the third defendant's tutor would receive a grant of Legal Aid to allow the tutor to act, not only as tutor, but also as a solicitor for the third defendant. 13The orders of the Court currently have quarantined in Court an amount of approximately $175,000, which is said to have been part payment for the sale of the taxi vehicle and licence plate. Apart from those funds, there seems to be no money available to pay a tutor, other than through Legal Aid. 14Looking at these circumstances, the following issues will arise before and at the hearing for the appointment of a tutor:

How is a tutor to be found?
How is the tutor to be paid?
If a tutor is appointed, could that tutor act as a solicitor for the third defendant as well? 15The third defendant has indicated, that he may not oppose the appointment of a tutor, provided those three issues can satisfactorily be addressed. On those three issues the law provides some guidance.

(1) Finding a Tutor 16As for finding a tutor, the first of those three issues, four possibilities come to mind.

Appointing as a tutor, a solicitor employed by the Legal Aid Commission of New South Wales.
Appointing a person nominated by the President of the Law Society of New South Wales as tutor but arranging for that person to be paid under a grant of Legal Aid, if one is available.
Appointing a solicitor who is employed or arranged in association with a charity, such as for example the Salvation Army, being a charity that does provide some limited legal expertise to disadvantaged people, or
Appointing the New South Wales Trustee and Guardian as a tutor. 17The second of these options is the preferred option. The other three options are inappropriate for reasons that I will briefly explain. 18The third defendant does not wish to have an employed solicitor with the Legal Aid Commission of New South Wales to act as his tutor. He would prefer an independent solicitor to act and to be funded by the Legal Aid Commission of New South Wales. That is not a preference which may be ultimately persuasive even if the President of the Law Society is unable to nominate someone who can be appropriately funded. But it is a preference which the Court takes into account. 19Enquiries have been made of the New South Wales Trustee and Guardian. In response it says that it would be prepared to act as a tutor if a tutor were appointed as the financial manager of the third defendant's estate. But the third defendant says he has no estate and there is no immediate plan for anyone such as the New South Wales Trustee and Guardian to be formally appointed to manage his affairs. 20An application to appoint the New South Wales Trustee and Guardian as financial manager and then as tutor would be considerably wider than is necessary to accommodate the more limited purpose of having someone to act as the third defendant's tutor to assist in the conduct of these proceedings in his interests. 21Finally, with respect to the Salvation Army (or some similar charity), the difficulty is that although the Salvation Army has recently commenced a legal department, "Salvos Legal", it is presently unclear whether its services might extend to providing a person to act as tutor. 22The course that presents itself as the most attractive in the circumstances and a course provided for in the plaintiff's motion, is to ask the President of the Law Society to nominate a tutor. In Deputy Commissioner of Taxation v P [1987] 11 NSWLR 200 a plaintiff sought the appointment of a tutor to act on behalf of a defendant, in that case an infant. There, as here, the mechanism suggested for use, was the Law Society of New South Wales President nominating a tutor. This process is independent of the plaintiff and has the advantage of allowing a person with no connection with a plaintiff or a plaintiff's legal representatives to be nominated for appointment as tutor for a defendant. So, before the motion is returned again to the Court, I will direct the plaintiff to send a copy of these reasons to the President of the Law Society and request him to nominate a person suitable to be appointed as the third defendant's tutor. 23I will make a direction in this form and with this timing so that if a suitable person is found, the nominee is able to come to the Court and put submissions to the Court at the same time as the plaintiff and the third defendant, if the balance of the motion is contested. This will enable all issues associated with the appointment to be dealt with at the one time, including any financial difficulties. This is the next subject to which I will come.

(2) Paying the Tutor 24The second, and potentially the most difficult, question is how the tutor will be paid. In Deputy Commission of Taxation v P (1987) 11 NSWLR 200, the Court suggested that where one party seeks the appointment of a tutor for another party, that the appointment should ordinarily occur on the basis that the applicant for appointment would indemnify the tutor for his or her expenses and costs in acting as a tutor for the other party. 25Although this may at first seem surprising, that is to have a tutor for one party paid for by the opposing party, the independence of the tutor is assured by the tutor declaring, in accordance with the UCPR , 7.18(5)(b) his or her independence from the party paying his fees. 26I will also direct though in the first instance that any person nominated to be a tutor for the third defendant, and who is prepared to accept that office, will make an application to the Legal Aid Commission of New South Wales for that person to be funded to act as the tutor and possibly the solicitor for the third defendant. That application may be able to be determined before this matter comes back for hearing on 7 November 2011. 27If that Legal Aid application is unsuccessful, the only other source of funding for the tutor would be either the plaintiff's indemnity, or the funds that are in Court. Subject to hearing further argument, I see no reason why the plaintiff's indemnity would not be an appropriate way of funding the appointment of a tutor. The ultimate burden of costs so incurred may have to be adjusted depending on the outcome of the proceedings. The funds in Court however present difficulty as a possible source of funding. At least one claimant to that fund, the second defendant, is not represented in Court today.

(3) Tutor and Solicitor 28The third question is whether or not the tutor can also act as a solicitor. This matter was also considered by Hodgson J (as his Honour then was) in Deputy Commissioner of Taxation v P (1987) 11 NSWLR 200. A fter considering authorities, such as Loorham v Loorham (1947) 65 WN (NSW) 98 (Bonney J) which rejected such double appointment, and Parkers Practice in Equity , Second Edition 1949, at 359 and Ex Parte; Shearer [1949] QEN 41 which would allow a double appointment, his Honour saw that there should be no obstacle to making such an appointment, if the circumstances warranted it. But that is not the question for determination today. But I raise it now because the solicitor of the Legal Aid Commission may need to address that possibility before 7 November 2011.

Conclusions and Orders 29A copy of these reasons should be given (1) to the President of the Law Society of New South Wales when he is considering his nomination, and (2) to the nominated solicitor who consents to act as a tutor should he be appointed, I will make the orders and directions which are set out below. 30Where the Court has power under UCPR , 7.17 to appoint a tutor, the Court is also able to stay the proceedings pending that appointment. Rather than stay the proceedings though I will make an order vacating existing procedural orders and do all such things as are necessary to allow this motion for the appointment of a tutor to be listed for hearing on 7 November 2011 in place of the motion originally listed. It is hoped that as a result of the making of these orders and directions a person will appear who is ready to act and will be funded to act as the tutor for the third defendant. This will assist in the orderly progress of these proceedings 31Accordingly, I make orders in accordance with the short minutes of order, signed by me, dated today and placed with the papers. These orders follow. 32The Court orders and notes:- (1)Direct that within 7 days the plaintiff provide a copy of these reasons to the President of the Law Society of New South Wales ("the President") and request the President to nominate within a further 7 days a solicitor who: (a)is prepared to act as the tutor for the third defendant in these proceedings; (b)has appropriate expertise to act not only as tutor, but, if the Court were later to permit that solicitor to act as the solicitor for the third defendant in these proceedings, as well as the third defendant's tutor, that such solicitor has appropriate expertise to so act in the proceedings; (c)is prepared to act in the capacity of the third defendant's tutor at rates of professional remuneration set by the New South Wales Legal Aid Commission; and (d)has no interest in the proceedings adverse to the third defendant and no connection with the plaintiff or the plaintiff's legal representatives in the proceedings. (2)In the event that the President is unable to nominate a solicitor within the time allowed under Order 1 then I direct the plaintiff to inquire of: (a)the Salvation Army; (b)the Muslims Australia (the Australian Federation of Islamic Councils Inc); (c)the Legal Aid Commission of New South Wales; as to whether a suitably qualified professional person known to those organisations may be prepared to act as the tutor for the third defendant in these proceedings; and I note that it would not be inconsistent with this direction for the third defendant to make contact with any of these organisations for same purpose. 3. Direct the plaintiff to provide to the Court affidavit evidence of his compliance with orders 1 and 2 by Friday, 23 September 2011. 4(a) Vacate all existing directions for the filing of evidence by the parties; and 4(b) Vacate the hearing of the third defendant's motion currently listed for 7-8 November 2011. 5. List the plaintiff's motion for the appointment of a tutor on 7 November 2011 for hearing. 6. Direct the third defendant to file any further evidence upon which he relies to oppose the making of orders for the appointment of a tutor by 23 September 2011. 7. If the President of the Law Society of New South Wales nominates a solicitor in accordance with Order 1, direct the solicitor for the plaintiff to request that the solicitor (a) to be present in court for the third defendant in Court on 7 November 2011, or on such other date before then, as the Court may direct., and (b) to make, if possible, an application to the Legal Aid Commission of New South Wales for legal aid to act as tutor for the third defendant. 8. I direct that a copy of the transcript of today's proceedings be provided without charge to the third defendant. 9. Direct the plaintiff's legal representatives to supply to any solicitor the President nominates in accordance with order 1 such materials in connection with the proceedings as that solicitor may reasonably request. 10. Note that the affidavit of Mr Benjamin Archbold of 2 September 2011 has only been read today for the purpose of determining what directions should be given on the plaintiff's motion of 1 September 2011, but that the third defendant's rights to object to that affidavit at the hearing of the motion have been reserved. 11. Grant liberty to apply. 12. Reserve costs. 13. I note that it will be sufficient compliance with any direction for or obligation of the plaintiff to communicate with the third defendant before any tutor is, or may be, appointed for the third defendant, to communicate by sending material to facsimile number [number not published] and [address not published] Kensington NSW 2033. 14. List the matter for mention before me at 9.30am on 30 September 2011.

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: 08 September 2011

Hazairin Iskandar v Zulfikri Mahbur & Ors

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