Michelle Cooper v Ian Anthony McCormack as executor of the estate of the late Colin Windsor McCormick; Wayne McCormick v Ian Anthony McCormick as Executor of the estate of the late Colin Windsor McCormick

Ex TEMPORE Judgment 1This is my second judgment in these proceedings. In my first judgment, on an application for judicial advice by an executor, the Court advised that the executor would not be justified in accepting an offer of settlement of litigation, which the executor was then considering: Michelle Cooper v Ian Anthony McCormack as executor of the estate of the late Colin Windsor McCormick; Wayne McCormick v Ian Anthony McCormick as Executor of the estate of the late Colin Windsor McCormick [2013] NSWSC 1207. This judgment should be read with my first judgment. The parties are referred to in the same way here as they are in the first judgment. The full circumstances of the matter set out in the first judgment are not repeated. 2Since my first judgment was given the parties have engaged in further negotiations and reached a settlement which is now satisfactory to them all. That was not the situation at the time that the executor sought the Court's judicial advice. At that stage the executor was doubtful that the offer then made and which is set out in the Court's earlier reasons should be accepted. Now the legal representatives of Michelle and Wayne and the estate have all executed terms of settlement, which the Court is asked to approve. The Court's approval under the Civil Procedure Act 2006, s 76, is required because of Wayne's disability. 3The settlement is generally one which the Court should approve for the reasons stated in the Court's previous reasons. The full text of the settlement is set out at the end of this judgment. 4The essential change from what was proposed before is that it is now clear that if the estate realty is to be sold, and that for any reason substituted realty is purchased for Wayne's and Michelle's residence, that certain conditions will apply that allow greater portability to Wayne's capital - a concern which was highlighted in the Court's previous reasons. 5The Court has a residual concern even with these terms. Although the approval of these terms was sought in chambers, the Court has listed the matter today to express its concern. One of these concerns is clause 6(c) of the settlement. 6Clause 6(c) of the settlement provides that for the joint tenancy over the existing real estate to be severed, during Wayne's lifetime, Wayne's financial manager or guardian would need to consider "it to be in Wayne's best interests for the realty or substitute realty to be sold". 7The concern is the conflict of interest and duty the settlement creates for Michelle. In Clause 6g Michelle has agreed "that she will make an application to the [Guardianship] tribunal for the appointment of herself as a financial manager for Wayne". The Court's previous judgment, in particular [45], made clear that it was highly desirable that the financial manager who would make the decision about what was in Wayne's best interests in relation to the severance of the joint tenancy and the sale of the property would be a third party; that is, someone other than Michelle. 8The parties have nevertheless agreed upon terms that are consistent with a possible outcome that Michelle would be the financial manager and that she would be the person who would decide what would be in Wayne's best interest for the sale of the present or the substitute realty. Of course, in the making of that decision she would have a conflict of interest. 9It seems to the Court that unless other controls or mechanisms are put in place this would place Michelle in an impossibly difficult position. Of course, it is open upon Michelle's application for the Tribunal to appoint someone other than her as Guardian or financial manager. The settlement agreement is also consistent with that outcome. Who should be appointed is a matter for the Tribunal ultimately. It is hard to foresee all the relevant circumstances that would bear upon the appointment at this stage. It may be someone other than Michelle cannot be found to act readily. 10In those circumstances it seems to me that the best course is that any application which Michelle makes to the Tribunal should propose a reporting structure which ensures that: (1) if at any stage Wayne seeks to have his interest in the real estate sold or; (2) if Michelle seeks to have the real estate sold, that particular part of Michelle's management of Wayne's estate will be referred to the NSW Trustee and Guardian before any final decision is made. 11Without becoming any more prescriptive about it than this, there may be a number of mechanisms the Tribunal can put in place which will allow the general intent expressed in the previous paragraph to be given effect. The Court can approve this settlement, which is otherwise in the best interests of the parties for the reasons stated in my previous judgment. But I will give liberty to apply to the parties in the implementation of the orders which will be made. That liberty would encompass the possibility that once a financial manager has been appointed, and in particular if the financial manager is Michelle, Wayne is able to come back to the court to have orders made under of the NSW Trustee and Guardian Act 2009, ss64, 65 and 55 to ensure that the intent of what is stated in this judgment is given effect. 12Of course, without recourse to this Court, the Tribunal may impose terms that if Michelle is appointed financial manager she must refer decisions such as those she might need to make under clause 6(c) to the NSW Trustee and Guardian. 13Mr Ellison SC has undertaken on behalf of his client, Michelle that when the application which is contemplated to be made under Clause 6g of the orders is made a copy of my reasons today and of the previous occasion, will be put before the Tribunal. Those reasons should sufficiently arm the Tribunal with the Court's concerns about putting in place an appropriate mechanism to implement this settlement in everyone's, but particularly in Wayne's, best interests. 14So I approve the settlement under Civil Procedure Act, s 76 and make orders in accordance with the short minutes of order initialled by me, dated today and placed with the Court papers.