Iskandar v Mahbur & Ors

Supreme Court of NSW|2015-02-12|Before: Slattery J, Young J, Bergin CJ

EX TEMPORE Judgment

In these proceedings, the NSW Trustee and Guardian (the NSW Trustee) seeks orders revoking financial management and other orders the Court made on 15 February 2012 in respect of the actual or contingent assets of the third defendant (who is referred to only as "T" in these reasons for publication) arising out of these proceedings.
The Court's reasons for making those orders are set out in my judgment of 15 February 2012, Iskandar v Mahbur & Ors (No. 6) (Slattery J, 15 February 2012, unreported).
Since the Court made those orders much has happened. The principal proceedings that the plaintiff brought for relief were resolved before Bergin CJ in Equity in a hearing on 11, 12, 13, 14, 15, 18 and 27 February 2013; 6 March 2013. Her Honour gave judgment on 26 March 2013: Iskandar v Mahbur & Ors [2013] NSWSC 239. In her Honour's judgment the plaintiff's statement of claim was dismissed. The second and third defendants were successful. Formal orders were entered on 23 May 2013.
The underlying proceedings were for the specific performance of an agreement concerning the sale of a taxi which was said to have been sold by the plaintiff to the second defendant to the plaintiff pursuant to a deed of agreement dated 5 May 2010. The second defendant is the spouse or de facto partner of the third defendant. Mr Mahbur is the plaintiff's brother.

The Power to Revoke Financial Management Orders

The Act provides in s 86 for the revocation of orders made under s 41. The Act, s 86 is as follows: "86 Revocation of orders by Supreme Court (1) The Supreme Court, on application by a protected person and if the Court is satisfied that the protected person is capable of managing his or her affairs, may: (a) revoke any declaration made that the person is incapable of managing his or her affairs, and (b) revoke the order that the estate of the person be subject to management under this Act, and (c) make any orders that appear to it to be necessary to give effect to the revocation of the order, including the release of the estate of the person from the control of the Court or the manager and the discharge of any manager. (2) For the purposes of this section: (a) evidence of a person's capability to manage his or her own affairs may be given to the Supreme Court in any form and in accordance with any procedures that the Court thinks fit, and (b) the Court may personally examine a person whose capability to manage his or her affairs is in question or dispense with any such examination, and (c) the Court may otherwise inform itself as to the person's capability to manage his or her own affairs as it thinks fit."
Section 86 is only engaged if the Court is satisfied that the protected person is capable of managing his or her affairs. If the Court is so satisfied then it may revoke the declaration that the person is incapable of managing his or her affairs. Then it can revoke the order that the person's estate be subject to management under the Act.
It is clear on all sides in the case, and not least because of Dr Janus' recent medical report, that the Court could not be satisfied that Mr T is capable of managing his own affairs. Section 86 cannot be used as a source of power for the orders that the NSW Trustee seeks to have made.
In his helpful submissions, Mr Zucker on behalf the NSW Trustee has referred the Court to a decision of Lindsay J, Re W and L [2014] NSWSC 1106, where his Honour was confronted with a similar problem. In Re W and L a person who had been the subject of an order under s 41 undoubtedly had a continuing incapacity to manage his affairs. A party applied for revocation of the s 41 order but without seeking to have the Court make a finding that the person concerned was capable of managing his own affairs.
Lindsay J concluded that section 86 was unavailable. He then drew upon Re Q (Young J, 29 May 1985, unreported) and Re C [2012] NSWSC 1097 and found that the Court was able to rely on its own inherent jurisdiction and plenary jurisdiction under section 23 of the Supreme Court Act 1970 (NSW) to make orders revoking the s 41 orders, provided the Court was satisfied that the orders were in the Court's protective jurisdiction.
In Re W and L [2014] NSWSC 1106 at [73] to [82] Lindsay J affirmed that Supreme Court Act, ss 22 and 23 jurisdiction was available to justify revocation of the s 41 order, by the following analysis: "73 In submissions leading to that submission, the NSW Trustee drew attention to the width of both the Court's inherent jurisdiction (preserved by the SCA, s22) and the jurisdiction conferred on the Court by s23 of that Act. 74 Section 23 provides that "[the] Court shall have all jurisdiction which may be necessary for the administration of justice in New South Wales". 75 It has been recognized as a source of protective jurisdiction: Re Q (Young J, 29 May 1985, unreported); Re C [2012] NSWSC 1097 at [64] - [66]. 76 In Re Q, Young J treated the Court's inherent jurisdiction and that derived from SCA s23 as convergent, and described that blended jurisdiction in terms similar to, but perhaps more expansive than, the early 19th century cases associated with Lord Eldon which (as explained in PB v BB [2013] NSWSC 1223 at [38] - [55]) recognized the Court's protective jurisdiction as extending to any person unable to manage his or her own affairs: Ridgeway v Darwin (1802) 8 Ves.65; 32 ER 275; Ex parte Croamer (1806) 12 Ves. 445; 33 ER 168 at 170 - 171; Sherwood v Sanderson (1815) 19 Ves. 280; 34 ER 521 and In re Holmes (1827) 4 Russ 182; 38 ER 774. That line of cases was recognized as representative of NSW law, as received from England, by Powell J in MS v ES [1983] 3 NSWLR 199 at 202 C - G and CCR v PS (No 2) (1986) 6 NSWLR 622 at 634G et seq. 77 In Re Q, Young J's observations included the following: "[Section 23 of the Supreme Court Act or an inherent power no less ample] is the source of power of this court to make whatever order it considers appropriate for the protection and good management of the property of any person in New South Wales who is not fully able to take charge of his or her own property whether that disability comes about from infancy or mental illness or any other cause whatsoever... If a question arises as to whether this court has jurisdiction to make orders of a protective nature, that question is not to be answered by looking to particular heads of power conferred by statute but rather to s23 of the Supreme Court Act and the inherent power of this court to make plenary orders to protect the poor, the elderly, the children and the weak..." 78 In Re C, White J (at [66]) treated SCA s23 as the source of the Court's inherent, parens patriae jurisdiction, and (at [56] and [62] - [67]) found there jurisdiction in the Court to remove a guardian or a financial manager appointed to that office by the Guardianship Tribunal (now the Guardianship Division of the Civil and Administrative Tribunal, "NCAT"). The circumstance that the Guardianship Act 1987 NSW and the NSW Trustee and Guardian Act conferred similar, express powers on the Tribunal (but not the Court) did not deprive the Court of its broader, inherent jurisdiction. 79 Nothing in the NSW Trustee and Guardian Act operates to deprive the Court of its inherent, protective jurisdiction. A legislative extinguishment of that jurisdiction would require clear words (In Re WM (a person alleged to be of unsound mind) (1903) 3 SR (NSW) 552) not present in the NSW Trustee and Guardian Act. 80 The Act is, rather, predicated on the Court's retention of its inherent jurisdiction. 81 That jurisdiction is derived from the Imperial, British Legislation which, first, constituted the Court ("the New South Wales Act" of 1823, 4 Geo IV c96, s9, and clause 18 of "the Third Charter of Justice", letters patent dated 13 October 1823, promulgated pursuant to that Act) and, secondly, clarified the timing, terms and content of NSW's inheritance of English law (the Australian Courts Act 1828, 9 Geo IV c83, ss 11 and 24): J.M. Bennett, A History of the Supreme Court of NSW (Law Book Co, Sydney, 1974), chapter 7, especially pages 125 - 127; In Re WM (1903) 3 SR (NSW) 552 at 565. In my opinion, SCA s23 is an independent grant of power. 82 SCA s23 supplements, but does not limit, the inherent jurisdiction preserved by SCA s22."
Lindsay J considered other unreported instances where the Court's inherent jurisdiction and the jurisdiction under s 23 had been utilised to revoke financial management orders which were of no continuing practical utility, as follows: "85. The inherent jurisdiction (compatibly with s39) is extremely wide: PB v BB [2013] NSWSC 1223 at [29], citing M. Davies, A. S. Bell and P.L.G Brereton (eds), Nygh's Conflict of Laws in Australia (LexisNexis Australia, 8th ed, 2010), para [31.1]. 86. Its limits, and scope, have not been, and cannot be, defined. It is available to do whatever may be for the benefit of an incompetent person unable to care for himself or herself, and it is commonly invoked where there is need of a protective order uncontemplated by legislation: Re Eve (1986) 31 DLR (4th) 1 at 16-17 and 28-29; [1986] 2 S.C.R. 388 at 410-411 and 426 - 427, 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 at 258-259. 87. Although my attention has not been drawn to a reported case in which management orders have been revoked notwithstanding the continuing incapacity of a protected person, the NSW Trustee has brought to attention two unreported instances. 88. In each of those cases (one in 2004, the other in 2010) the Protective List Judge of this Court, on a report by the Protective Commissioner or the NSW Trustee, approved revocation of management orders where, although there was no evidence of capacity for self-management, there was no practical utility in continuing the management orders, and it was in the best interests of the protected person that they be revoked. 89. In all the circumstances, I am satisfied that the Court does have jurisdiction to revoke the management orders made on 30 July 2003 (as part of its inherent jurisdiction and, independently, by virtue of SCA s23) and that (for the reasons advanced by the NSW Trustee in its Report) it is in the interests, and for the benefit, of L that they be revoked."
The NSW Trustee argues that this too is a case where a financial management order should be revoked without finding that Mr T is capable of managing his own affairs. Mr T's written contentions take a different view.

Conclusion

But for the following reasons I am persuaded that the orders should be made. Firstly, I should attend to the principles set out above in s 39 of the Act. This is a slightly unusual case in which, as is evident from my earlier judgment, Mr T did not want to have the NSW Trustee and Guardian appointed in the first place because he wanted to try express his own views to the Court. He has continued through correspondence to express his own views to the Court despite the NSW Trustee's appointment.
The Court must have regard to the welfare and interests of Mr T: s 39. Although he opposes the making of this order, it will permit him to communicate directly with the Court and will, in that sense, be in his "interests". A concern is whether that is for his "welfare". But the answer to that seems also to me to be clear. It was for his welfare for his relevant financial affairs to be managed by NSW Trustee when these proceedings were likely to stretch ahead some years. That is not the case now. The hearing on 25 February should bring these proceedings to an end.
The other principles set out in s 39 support the making of the orders. The orders will support the freedom of decision and freedom of action of Mr T and create as little restriction upon him as possible. He will be free to put submissions to the Court. Everything he has said in correspondence before the Court on this application can be repeated to the Court when the application comes on hearing on 25 February.
The other consideration in favour of making of the revocation orders is that the structure of the orders in February 2012 was only to manage the proceedings and obtain a costs order in Mr T's favour. Although a costs order has been made in his favour, the only party who could gain any practical benefit from it, the NSW Trustee, does not wish on reasonable grounds to pursue enforcement any further. It seems to me that the whole point of the financial management order is now spent.
For those reasons, I will make the orders sought in Mr Zucker's motion. As I do so, I will make clear what Lindsay J did in Re W and L: that when making order 1 the Court is not finding positively that the third defendant, Mr T, is a person capable of managing his affairs. He plainly, on the evidence I have seen, is not such a person.
I make orders 1, 2, 3, 4, 5 and 6 of the orders sought in the notice of motion of 11 February 2015: 1. Order that the declaration made on 15 February 2012 that the third defendant is incapable of managing his affairs be revoked. 2. Order that the order made on 15 February 2012 that such part of the estate of the third defendant as is constituted by actual contingent assets or liabilities of the third defendant, in or arising out of these proceedings, is subject to management under the NSW Trustee and Guardian Act be revoked. 3. Order that the order made on 15 February 2012 that the management of the estate so defined of the third defendant be committed to the NSW Trustee be revoked. 4. Order that NSW Trustee be removed as the third defendant's tutor in the proceedings. 5. Grant leave to Christopher Matthew Zucker to file and serve Notice of Ceasing to Act for the third defendant within 7 days. 6. No order as to costs of this motion.

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: 18 February 2015

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