Re KT and JC, Protected Persons [2025] NSWSC 306 | Case summary | Zoe

NSWNSWSC

Re KT and JC, Protected Persons

[2025] NSWSC 306

Supreme Court of NSW|2025-04-04|Before: Lindsay J

View on NSW Caselaw

At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2025-04-04

Before

Lindsay J

Catchwords

PROTECTIVE JURISDICTION – Protected estate management –
Application for change of manager – Welfare and interests
of protected
person the paramount consideration – Loss of confidence in manager upon

Source

Original judgment source is linked above.

Catchwords

PROTECTIVE JURISDICTION – Protected estate management –Application for change of manager – Welfare and interestsof protectedperson the paramount consideration – Loss of confidence in manager uponchange of ownership and management policy– Countervailing considerationswhen change of policy, and resistance to change, affect orderly management– Protectedestates financial advice protocol adopted – Costsreserved

Judgment

Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.

Medium Neutral Citation: Re KT and JC, Protected Persons [2025] NSWSC 306

Hearing dates: 23 December 2024; 5 February and 12 March 2025, with written submissions

Date of orders: 4 April 2025

Decision date: 04 April 2025

Jurisdiction: Equity

Before: Lindsay J

Decision: In each of two cases, orders made for removal and replacement of an institutional manager of a protected estate (a licensed trustee company) occasioned by a change of ownership of the manager; a consequential change in management policy to bring all financial advice services “in house”; and a loss of confidence on the part of the family of each protected person in the institution’s continuation in the office of manager

Cases Cited: Ability One Financial Management Pty Ltd and Anor v JB by his Tutor AB [2014] NSWSC 245; (2014) 11 ASTLR 155
AG v AP-G [2013] NSWSC 272
Application of J & K [2009] NSWSC 1453
Bollinger v Bell; The Estate of the Late Colin Bell [2022] NSWSC 486
C v W (No 2) [2016] NSWSC 945
CAC v Secretary, Department of Family & Community Services (No 2) [2015] NSWSC 344
CC v RAM [2012] NSWSC 1555
CCR v PS (No 2) (1986) 6 NSWLR 622
Clay v Clay (2001) 202 CLR 410
Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417
David by her Tutor the Protective Commissioner v David (1993) 30 NSW LR 417
Dixon v Dixon [1904] 1 Ch 161
Downie v Langham [2017] NSWSC 113
Estate Polykarpou [2016] NSWSC 409
Ex parte Whitbread in the matter of Hinde, a Lunatic (1816) 2 Mer 99; 35 ER 878
Fountain v Alexander (1982) 150 CLR 615
GDR v EKR [2012] NSWSC 1543
Gibbons v Wright (1954) 91 CLR 423
Gillick v West Norfolk AHA [1986] AC 112
Helmore v Smith (2) (1886) 35 Ch D 449
Holt v Protective Commissioner (1993) 31 NSWLR 227
IR v AR [2015] NSWSC 1187
JP v CP [2013] NSWSC 373
M v M [2013] NSWSC 1495
P v NSW Trustee and Guardian [2015] NSWSC 579
P v P (1985) 2 NSWLR 401
PB v BB [2013] NSWSC 1223
Perkes v Landon (1988) 15 NSWLR 408
Protective Commissioner v D (2004) 60 NSWLR 513
Re AAA; Report on a Protected Person’s Attainment of the Age of Majority [2016] NSWSC 805
Re Application of Fowler [2015] NSWSC 466
Re C [2012] NSWSC 1097
Re Eve [1986] 2 SCR 388; (1986) 31 DLR (4th) 1
Re K An Incapable Person in Receipt of Interim Damages Awards [2014] NSWSC 1286
Re L [2000] NSWSC 721
Re LSC v GC [2016] NSWSC 1896
Re TLH, a protected person [2017] NSWSC 737
Re W and L (Parameters of Protected Estate Management Orders) [2014] NSWSC 1106
SAB v SEM [2013] NSWSC 253
SC v Ability One Financial Management Pty Ltd [2024] NSWSC 637
Secretary, Department of Health and Community Services v JWB and SMB (Marion’s Case) (1992) 175 CLR 218
SLJ v RTJ [2017] NSWSC 137
Small v Phillips (No 3) [2020] NSWCA 24
W v H [2014] NSWSC 1696
Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492
Wellesley v Duke of Beaufort (1827) 2 Rus 1; 389 ER 236
YJC v PG [2024] NSWCATAP160

These proceedings arise out of a change of ownership of a licensed trustee company (Australian Executor Trustees Ltd, “AET”), the holder of multiple appointments by the Court to the office of a manager of a “protected estate” of a “protected person” (that is, a person found by the Court to be incapable of managing his or her own affairs) within the meaning of section 38 of the NSW Trustee and Guardian Act 2009 NSW.
The proceedings specifically concern management of two separate protected estates the principal asset of which, in each case, comprises the proceeds of a substantial award of compensation for personal injuries suffered by the protected person.
Before AET’s change of ownership, in the ordinary course of management of such a protected estate it routinely retained a licensed financial adviser (Aeran Pty Ltd, “Aeran”) to provide financial advice services.
In those cases Aeran generally had an existing professional relationship with the protected person and members of the protected person’s family (or significant others) arising from involvement in the compensation proceedings in which an award of compensation had been made necessitating a protected estate management regime.
By reason of that involvement Aeran also generally had a professional relationship with solicitors who had acted on behalf of the protected person (then represented by a tutor, commonly a member of the family of the protected person) in the compensation proceedings.
Routinely, an award of compensation made in the compensation proceedings (whether in the District Court of New South Wales or the Supreme Court of New South Wales) is and at all material times has been accompanied by an order that the compensation funds be paid into court to abide orders of this Court (the Supreme Court) on an application (usually made by the tutor) for a protected estate management regime.
Unless content to submit to an order that management of a protected estate be committed to the NSW Trustee, on such an application a plaintiff seeking the appointment of a manager generally nominates a preferred entity to serve as manager and, in support of that nomination, obtains a formal consent to its appointment from the nominated entity. In the ordinary course, affidavit evidence is also provided to the Court providing an explanation of the reasons why the particular entity has been chosen for nomination as a manager (identifying alternative choices passed over) and an outline by the nominee of the terms upon which it proposes to manage the protected estate the subject of the application.
Not uncommonly, before AET’s change of ownership, on an application for the appointment of AET as manager of a protected estate comprising the proceeds of an award of compensation made in proceedings in which Aeran had been retained to provide financial advice services, the plaintiff seeking the appointment of AET negotiated terms with AET that included an understanding that, in the ordinary course, AET would retain Aeran to provide financial advice services.
Disclosure to the Court of an intention on the part of AET to retain Aeran as a financial adviser may have given rise to an assumption or expectation in Aeran or the families of the protected person (not justified on a correct understanding of the Court’s protective jurisdiction) that the model of management involving retention of an external (Aeran says an “independent”) financial adviser was immutable. That assumption (if not, that expectation) has been tested in these proceedings.
After its change of ownership AET resolved to bring all financial advice services of the kind routinely provided by Aeran “in house” and, in implementation of that new policy, to dispense with the services of Aeran as an external financial adviser.
When AET’s prospective change of policy became known it caused disquiet on the part of Aeran and others who preferred that Aeran continue to provide financial advice services as it had customarily done before AET’s change of ownership.
Controversy, as yet unresolved, ensued. Sensing that Aeran and others were “bad mouthing” it in what it perceived to be a campaign of misinformation, AET unilaterally terminated Aeran’s retainer. Those parties fell into commercial litigation which remains on foot.
Several families of protected persons have since termination of Aeran’s retainer foreshadowed applications to the Court for the removal of AET as a manager and for its replacement by another licensed trustee company (TPT Wealth Ltd, “TPT”) in anticipation that TPT will retain Aeran to provide financial advice services.
Controversy associated with these developments has engulfed a firm of solicitors (Stacks Goudkamp) which had been retained, or anticipated that it might be retained, by several families contemplating an application of the Court for the removal and replacement of AET as a protected estate manager with a view to an appointment of TPT and a re-engagement with Aeran via TPT.
AET has extensive experience with the management of protected estates in NSW. TPT is based in Tasmania. These proceedings are its first experience of the NSW regime for protected estate management.
A resolution of these proceedings, and the provision of guidance for those interested in protective estate management in NSW, requires an elaboration of first principles.
The steady focus of these proceedings must be, and remain, upon the welfare and interests of each individual protected person whose affairs are under consideration, and what is required for an orderly management regime, prudently managing risk, looking to the present and future, informed but not bound by the past.

The importance of taking notice of the different legislative foundations is that the Court is a superior court of record (with “inherent” jurisdiction as well as statutory jurisdiction) whereas NCAT is a statutory tribunal (established and governed by the Civil and Administrative Tribunal Act 2013 NSW and the jurisdiction conferred on it by reference to other statutes, including the Guardianship Act 1987).
The distinction may be important, particularly, in a context similar to the factual matrix of the present proceedings because of the nature and breadth of the Court’s jurisdiction (not shared by NCAT) to punish contempts of court and to address interference with, or obstruction of, the performance of a financial manager’s functions.
A protected estate manager (properly so-called) is appointed by the Court and occupies an office similar to that of a receiver and manager appointed by the Court. A financial manager (properly so-called) appointed by NCAT takes office by an order of an administrative tribunal (not a court), but that order engages the provisions of the NSW Trustee and Guardian A**ct which, in itself, subjects the financial manager to orders of the Court, both under the Act and the Court’s inherent protective jurisdiction.
In respect of both a protected estate manager and a financial manager (each properly so-called), the Court has a concern to ensure that vulnerable persons are not affected by interference with, or obstruction of, a manager charged with management of their protected estate.
Whether the jurisdiction of the Court to address the Court’s concerns about conduct that interferes with, or obstructs, the manager of a protected estate, or may do so, is characterised as an exercise of “contempt jurisdiction”, “protective jurisdiction” or “inherent jurisdiction” is, perhaps, academic, especially if it is accompanied by statutory powers such as those found in the NSW Trustee and Guardian Act.
The Court is not without jurisdiction to prevent interference with, or obstruction of, a “financial manager”, whether appointed by the Court or NCAT.
What is often described as the Court’s “inherent” jurisdiction was conferred on the Court at the time of its establishment by the Third Charter of Justice 1823 (Imp), promulgated under the New South Wales Act 1823 (Imp), continued in operation and supplemented by the Australian Courts Act 1828 (Imp).
That jurisdiction included what is now commonly described as the Court’s “protective jurisdiction” (or its “parens patriae jurisdiction”) incorporating what was once called the “lunacy jurisdiction” exercised by the Lord Chancellor of England and the “infancy” or “wardship” jurisdiction exercised by the English Court of Chancery. That jurisdiction was described by the High Court of Australia in Secretary*, Department of Health and* C**ommunity S**ervices v JWB a**nd SMB (Marion’s C**ase) (1992) 175 CLR 218 at 258-260 as a jurisdiction “to do what is for the benefit of” an incapacitated person with limits (or scope) which “have not, and cannot, be defined”.
Marion’s Case is a good root of title for an understanding of the Court’s parens patriae jurisdiction, but its depths of learning can usefully be explored in its approval of the judgment of La Forest J of the Supreme Court of Canada in Re Eve [1986] 2 SCR 388 at 407-411; 31 DLR (4th) 1 at 14-17. That judgment draws heavily upon the authoritative text of Sir Henry Studdy Theobald KC, The Law Relating To Lunacy (Stevens and Sons, London, 1924), which is the source of many statements in NSW about the nature, scope, purpose and operation of the Court’s protective jurisdiction, including the proposition that an exercise of the jurisdiction is directed, principally, to administration of an estate without strife in the simplest and least expensive way.
Historically, the Court’s “parens patriae jurisdiction” is regarded as derived from an obligation of the Crown, as “father (or parent) of the nation” to take care of those not able to take care of themselves. That formulation of the nature of the jurisdiction was adopted by the High Court by reference to a quotation from the judgment of Lord Eldon in Wellesley v Duke of Beaufort (1827) 2 Rus 1 at 20; 389 ER 236 at 243.
More recently, the Court’s “parens patriae jurisdiction” has been recognised as falling within the ambit of what is sometimes described as the “inherent jurisdiction” conferred by section 23 of the Supreme Court Act 1970 NSW: eg, F**ountain v Alexander (1982) 150 CLR 615 at 633. Section 23 (headed “Jurisdiction Generally”) provides that “[the] Court shall have all jurisdiction which may be necessary for the administration of justice in New South Wales”.
Section 23 was inserted in the Supreme Court Act 1970 as a safeguard against gaps in the Court’s jurisdiction that might be perceived to exist when (in the 1820s) defined by reference to the jurisdiction of scattered English institutions or procedural rules which historically attended those institutions: Re AAA [2016] NSWSC 805 at [22]-[27]; E**state Polykarp**ou [2016] NSWSC 409 at [185]-[189].
Whatever its source, the Court’s protective jurisdiction, if and when duly engaged, is generally limited only by the purpose it serves (namely, protection of the person and property of a person in need of protection) and, whether stated in terms of jurisdiction or discretion, considerations of utility: PB v BB [2013] NSWSC 1223 at [38].
Although a determination of these proceedings may be accommodated (without recourse to the Court’s inherent jurisdiction) within a statutory framework focused upon the NSW Trustee and Guardian Act and cognate legislation, the proper construction and operation of the Act is informed by the Court’s inherent jurisdiction. The office of a manager appointed pursuant to section 41 of the Act is analogous to the office of a “committee of the estate” appointed by the Court (known by the modern title of a “manager”) upon an exercise of protective jurisdiction formerly exercised by the Lord Chancellor.
There is no dispute in these proceedings that the Court’s inherent jurisdiction is available as and if required to deal with questions that have arisen about management of the protected estates that are the subject of the proceedings.

In the proceedings before the Court, the plaintiff in each case (the applicant for a change of financial manager) is a parent of a disabled child (supported by the other parent of the child as a witness) whose protected estate essentially comprises the proceeds of a substantial award of compensation made in common law negligence proceedings for damages suffered as a result of a catastrophic personal injury.
KT was born in August 1999 and is presently aged 25 years. She suffered a serious brain injury in September 2005 when, as a pedestrian, she was struck by a motor vehicle. She is the eldest of her parents*’* four children. She lives with her parents and two of her siblings in a family home acquired in her name with part of the proceeds of her compensation award. In these proceedings, her mother (ST) can be taken to be the family’s representative without any need for a representative order. That accords with the usual practice of the Court upon an exercise of protective jurisdiction.
JC was born in July 2017 and is presently aged seven years. He suffered a permanent brain injury at the time of his birth. He lives with his parents. With the support of his mother, his father (MC) represents the family in these proceedings, again without any representative order having been made or needed.
As JC is a minor, his parents can be taken to be his guardians. Although KT has attained the age of majority, her parents, as “significant others” can be taken to have maintained an informal guardianship role in caring for her.
In neither case is there an enduring power of attorney (governed by the Power of Attorney Act 2005 NSW), an enduring guardian appointment (governed by the Guardianship Act), or any form of guardianship order (made by NCAT pursuant to the Guardianship Act, or by the Court upon an exercise of its inherent jurisdiction).
The focus for attention in these proceedings is upon the management of a protected person’s estate, not upon his or her “person” although, in practice, the boundary between management of the estate and management of the person of a protected person may be blurred. In the interests of a person in need of protection, a financial manager and a guardian (by whatever name known) are commonly called upon to use their best endeavours to co-operate one with the other and in consultation with the vulnerable person so far as may be practicable.
In each of the cases before the Court the protected person (KT and JC) has been joined as a defendant but is not separately represented. KT may be taken to have been consulted by her parents and (although, as established by evidence, not capable of managing her own affairs) to support her mother’s application for a change of manager. As a minor (unable, by reason of disability as well as age, to express a personal view about his father’s application), JC has not in any material sense been consulted about the application.
In both cases, the plaintiff’s formal contradictor has been the current financial manager, AET. In the KT proceedings the plaintiff named a related corporation of AET as a defendant (instead of AET), erroneously believing it to be the financial manager following a change of ownership of AET effected by a share acquisition.
No point has been taken about this. All parties have proceeded on the basis that the true defendant is AET and formal orders can be made in due course to reflect the true position. As a matter of form, AET should be named as representative of the current regime of protected estate management.
At the invitation of the Court and without objection by any party, the NSW Trustee has participated in both cases, as the party charged by the NSW Trustee and Guardian Act with the obligation of monitoring private managers of protected estates. The NSW Trustee performs an important public service in its availability for consultations with the Court on questions of general policy relating to management questions and, if and when appropriate, in the provision of independent Reports to the Court.
At the direction of the Court AET, as the current financial manager of each protected estate under consideration, and the NSW Trustee have both filed formal reports to the Court bearing upon the current state of the estates and, in the case of the NSW Trustee, reports (of the type described in paragraph 290(m) of Ability One Financial Management Pty Ltd and Anor v JB by his Tutor AB [2014] NSWSC 245) bearing upon the suitability of the plaintiffs*’* proposed new manager, TPT.
Although not joined as a party to the proceedings before the Court, TPT was granted leave to attend the hearing of the proceedings as an observer and, through the NSW Trustee, to place before the Court evidence and written submissions.
The same went for Aeran, the plaintiffs*’* preferred financial adviser, proposed (subject to the approval of the NSW Trustee or the Court) to be retained by TPT should it be appointed as a financial manager of one or both of the protected estates the subject of these proceedings.
Aeran was for many years, until termination of its retainer on 15 April 2024, routinely retained by AET to provide AET with financial advice in aid of its management of protected estates. The termination of Arean’s retainer followed a change in the ownership of AET that occurred on or about 1 December 2022, with consequences that took a year or more to impact discernibly on the protected estates under AET’s management, perhaps because Aeran was generally retained on an annual basis.
Before AET’s change of ownership Aeran had more direct contact with each protected person, family members and significant others than AET, after the change in its ownership, was comfortable with. Under the old regime Aeran had established personal relationships with protected persons, families and significant others. They often dated back to Aeran’s provision of financial advice in aid of the common law personal injury compensation proceedings. Those proceedings often gave rise to a large award of compensation necessitating a protective estate management regime in which a licensed trustee company was likely to be appointed as a financial manager by the Court.
Aeran appears to have, or to have had, a symbiotic commercial relationship with more licensed trustee companies than AET. Be that as it may, when retained by AET as an external financial adviser (in formal terms, an adviser to AET as a financial manager) it developed its personal relationships with protected persons, family members and significant others to such an extent that, in some sense or another, it regarded the protected persons, family members and significant others as its “clients”.
The decision of AET, under new ownership, to take all financial services relating to managed estates “in-house” disturbed the personal relationships Aeran had developed with what it perceived to be, in real terms, its clientele.
That led to an unholy outbreak of competition between AET and Aeran, which drew in disgruntled families, TPT and Stacks Goudkamp (the solicitors on the record for the plaintiff in the KT proceedings at the time of commencement of the proceedings), if not others.
The fact that TPT engaged in competition utilising a person who had been an employee of AET under the old regime (KM), coupled with AET’s concern that Aeran’s engagement with protected persons, family members and significant others involved the deployment of information regarded by AET as confidential to it, generated distrust and resentment on a large scale.
For its part, AET regarded the protected persons under its management as its “clients”(as they may be for purposes of the Corporations Act 2001 Cth). It also regarded the activities of Aeran, TPT and Stacks Goudkamp in (to use a neutral expression) their “communications” with protected persons, family members and significant others with a connection to protected estates under management by it as wilful interference with its management functions.
There is an element of truth in this, but AET’s determination to bring all financial services “in house” and, in effect, to compel all the families and significant others of protected persons to accept its management model (tailored to meet its commercial objectives) is a root cause of these proceedings.
AET is open to the criticism that it has privileged its organisational imperatives over the interests of people it regards as its clientele.
A small but perhaps a tell-tale indication of this is that AET’s decision-making processes do not appear to have been expressly informed by reference to the statutory principles for protected estate management prescribed by section 39 of the NSW T**rustee and Guardian A**ct (or the equivalent in section 4 of the G**uardianship A**ct, if applicable).
When given an opportunity to respond to AET’s concerns in these proceedings, Aeran, TPT and Stacks Goudkamp denied any wrongdoing and claimed that they were merely providing information to protected persons, family members and significant others (with whom Stacks Goudkamp and Aeran had established, historic professional relationships arising from their common involvement in compensation proceedings) about options available to them for a change of financial manager consequent upon AET’s change of ownership and modus operandi.
Aeran and Stacks Goudkamp, in particular, claimed a cover of altruism through which AET invited the Court to see commercial interest. There is an element of truth in the proposition that they protest too much.
After the hearing of the proceedings on 23 December 2024 I caused the parties to the proceedings (and TPT, Aeran and Stacks Goudkamp then on the record for the plaintiff in KT’s case) to be served on 30 January 2025 with a list of questions (later marked as exhibit C14) arising from my analysis of the evidence adduced, and submissions made, at the hearing.
That invitation was taken up by all invitees in extensive written submissions (and the NSW Trustee provided reports to Court as requested), all of which have been taken into account in preparation of this judgment.
At extended directions hearings held on 5 February and 12 March 2025 I provided feedback to all participants in the proceedings and invited responses.
At the directions hearing on 12 March 2025 I published to all participants a document (MFI C30) entitled “Discussion Draft Protocol” with a view to consideration whether it would be appropriate for the Court to make orders (under section 64 of the NSW Trustee and Guardian Act) establishing a framework for the terms upon which an external financial adviser might, at the invitation of the family or a significant other of a protected person, be retained by a licensed trustee company as a financial manager.
The formal notations recorded in the Court’s record of proceedings of 12 March 2025 included notations to the following effect:

The “written acknowledgement” sought from the participants was sought because of a perception on my part that their respective submissions were affected, unwittingly, by a sense of “ownership” or “entitlement” unhelpful to the due management of a protected estate. This was an opportunity for fixed positions to be reset in line with established principles.
AET and TPT are both a “licensed trustee company” within the meaning of section 9 of the Corporations Act 2001 Cth and are governed by Chapter 5D of that Act, as well as the Trustee Companies Act 1964 NSW so far as it complements the Corporations Act.
The role of a licensed trustee company in the context of this State’s regime for the management of protected estates was, incidentally, but at some length, considered in Ability One Financial Management Pty Ltd and Anor v JB by his Tutor AB [2014] NSWSC 245, the authority of which has not been challenged in these proceedings.
Aeran holds an Australian financial services licence (governed by Chapter 7 of the Corporations Act), and specialises in the provision of financial advice services in support of claims for personal injury compensation and in the provision of ongoing services to financial managers of protected estates appointed consequent upon awards of compensation.
At the time of appointing a date for the hearing of the proceedings presently before the Court I declined to join TPT and Aeran as parties in the proceedings but gave directions allowing them an opportunity, on the hearing of the proceedings, to have placed before the Court affidavits and written submissions bearing upon questions to be determined in the proceedings.
In my opinion it was not, and it is not, in the interests of either protected person to have attention diverted away from a focus upon the individual*’*s welfare and best interests (upon consideration of whether there should be a change in financial manager) by inter partes commercial litigation between AET and Aeran, including proceedings in the Federal Court of Australia, arising from a falling out between those parties crystallised on 15 April 2024 by AET’s termination of Aeran as a financial adviser.
I am formally on notice of those proceedings (and widespread controversy about AET’s decision to bring all financial advice services relating to protected estates under its management “in-house”) because three separate proceedings have been commenced in this Court (and case managed with the proceedings presently before the Court) seeking, in effect, orders pursuant to section 64 of the NSW Trustee and Guardian Act by way of directions in relation to the administration and management of protected estates under AET’s management.
Section 64 is in the following terms:

The Uniform Civil Procedure Rules 2005 NSW made under the Civil Procedure Act 2005, include in rule 57.2(1) a direction to the effect that “once proceedings (the original proceedings) have been commenced under the NSW Trustee and Guardian Act or the Guardianship Act or the Guardianship Act in relation to any person, any further proceedings under that Act in relation to the same person (whether or not they form part of, or relate to, the original proceedings), are to be commenced by notice of motion filed in the original proceedings.”
The utility of this direction is that, in a sense, proceedings relating to management of the affairs of a person incapable of self-management remain available for management orders to be reviewed from time to time at any time during the life of the person incapable of self-management. The direction that fresh applications be made by way of notice of motion filed in the original proceedings, facilitates the administrative task of assembling evidence bearing upon the welfare and interests of the person in need of protection.
That the present proceedings were commenced by summons is a procedural irregularity which, as recognised by section 63 of the Civil Procedure Act, does not invalidate the proceedings or any step taken in the proceedings or any document, judgment or order in the proceedings. I am content, as are the parties, to proceed on the basis that the applications made by the plaintiffs by summons are appropriate to the occasion.
Procedurally, the fact that the proceedings have been commenced by summons means (as it would if they were commenced by a notice of motion) that, in the absence of an order for pleadings or for the definition of issues by way of pleadings, “the real issues in the proceedings” must be discerned from the form of the originating process, with submissions (including importantly written submissions) made by the parties and affidavits and other evidence adduced in the proceedings.
In the present proceedings the parties have joined issue accepting that the principles applicable to a determination of the plaintiffs*’* summonses are essentially those summarised:

I will return to an analysis of those, and other authorities, later in this judgment, having taken them into account upon an assessment of the “real issues in the proceedings”.
The plaintiffs in both cases before the Court submit that the change in ownership of AET on or about 1 December 2022, AET*’*s termination of Aeran’s customary retainer as a financial adviser (on 15 April 2024) and the associated decision of AET to bring all financial advice services “in-house” jointly and severally constitute “an occasion” upon which a protected person whose estate is under management by AET (personally or represented by a significant other) should be allowed an opportunity to consider whether the financial management orders affecting the protected person should be discharged or varied, including a variation by way of a change of manager.
I accept this submission, noting that the making of a management order does not of itself preclude the revocation or variation of the order if the interests and welfare of the protected person are thereby served. Equally, the occurrence of an “occasion” for review of a management regime does not necessarily carry with it an order for the discharge or variation of a financial management order.
Short of an order for removal and replacement of a financial manager the Court, upon an exercise of protective jurisdiction, might confirm an existing management regime or give directions designed to address particular concerns arising out of “the occasion”. In an appropriate case, a management order might be revoked if it appears that the protected person has regained capacity for self-management or that there is no utility in the continuation of protective orders.
In formal terms, the primary submission of the plaintiffs is that the Court should remove AET (and replace AET with TPT as their nominee) as a financial manager for their child because, they contend, the relationship between AET and their respective families has broken down. That breakdown, they contend, provides an “occasion” for a change of manager.
That primary submission is closely aligned with an underlying submission (which is probably the core one, because it is central to the allegation of a relationship breakdown) that AET should be removed, and replaced, as a financial manager because it has terminated Aeran’s services as a financial adviser and taken financial advice services “in-house”, contrary to the plaintiffs’ shared preference that they (albeit through a financial manager) receive financial advice from Aeran.
A further submission of the plaintiff in the proceedings concerning JC is that a further “occasion” for a change of manager arises from the fact that JC*’s compensation proceedings have been finalised and, in the ordinary course, the appointment of AET to manage interim awards of compensation can, and should, be reviewed, JC’s parents having made what they regard as a commercial decision to nominate TPT (or, alternatively, Perpetual Limited, another licensed trustee company) as JC’*s financial manager going forward.
A motivation of each plaintiff in nominating TPT as a prospective financial manager is that TPT is likely to retain Aeran to provide what they perceive to be “independent financial advice” rather than insisting upon in-house financial advisers.
In performance of its role as a contradictor (arising from the obligation of a financial manager to act in the best interests of a protected person), as well as a party with a commercial interest in the outcome of these proceedings, AET counsels against a change of manager because, it submits:

TPT, Aeran and Stacks Goudkamp dispute any and all allegations that there ever was, or is, between them, or any of them, anything like a “side agreement”, collusion or solicitation in their contact with protected persons, family members or significant others in respect of a protected estate under the management of AET.
In these proceedings, it is not necessary, or in anybody’s interest, for the Court to be diverted by allegations and counter allegations about conduct that might attract closer attention in a context other than an exercise of protective jurisdiction.
AET’s case against those who it perceives to have been engaged in unfair competition against it is hotly contested but it is not fanciful. Each of TPT, Aeran and Stacks Goudkamp would do well to reflect on that lest, at some future time, conduct of the nature in which they have engaged be characterised as interference with, or obstruction of, a manager’s due performance of the obligations of a financial manager - which, if wilful, might constitute a contempt of court in so far as a manager has been appointed to the office of financial manager by an order of the Court.
The conduct attributed to TPT, Aeran and Stacks Goudkamp (and members of their staff) by AET is not far removed from an allegation of contempt of court constituted by interference with a court-appointed receiver and manager’s performance of its functions, or those of a bailiff (to whose office that of a financial manager has sometimes been compared), as an officer of the Court (Rolph, Contempt, supra, pages 391-394) or the publication of material relating to, or likely to affect, a protected person (ibid, pages 409-412; P v P (1985) 2 NSWLR 401 at 403F-G).
The judgment of the English Court of Appeal in Helmore v Smith (2) (1886) 35 Ch D 449 might be a case in point.
In that case, a former employee of a firm to which the Court had appointed a receiver and manager (to facilitate the ongoing business of the firm) distributed to all customers of the firm a circular described by the Court as a “libel on the business” under management.
Cotton LJ (at page 455) said that the contemnor “… was aware of the fact that [the receiver and manager] was to act as manager of the business, and that the issue of the circular was not an act of fair trade competition, but was done for the purpose of producing a false impression. The circular was in fact a libel on the business which this Court had directed [the receiver and manager] to manage, and in my opinion, though the case is a new one, amounted to a contempt of Court”.
Bowen LJ (at 456-457) made the following observations:

In dealing with the powers and duties of committees (at pages 48-49) Theobald records, without expressly saying the same thing about a committee of the estate, that “[interference] with [a] committee of the person in the performance of his duties is a contempt of Court which will be punished by commitment”. There is no reason to suppose that interference with a committee of the estate in the performance of his, her or its duties is not likewise a contempt of court.
In the proceedings presently before the Court there is no application for any party or person to be charged or dealt with for misconduct, breach of duty or a contempt of court. The entire focus of the proceedings is on the question whether, in the interests and for the benefit of two identified protected persons, there should be a change of financial manager to accommodate concerns ultimately arising out of a change in the ownership of AET which brought with it a disturbance of an earlier established regime for the provision of financial advice services.
The purpose of surveying the law relating to contempt of court is to draw to the attention of the parties and all interested persons in these proceedings the importance of avoiding interference with the orderly conduct of a protected estate management regime. Consequences may follow.
Families known to Stacks Goudkamp and Aeran from previous dealings were discontented with AET’s change of direction. Aeran, TPT and Stacks Goudkamp sought to harvest that discontent by offering families an opportunity to apply for displacement of AET as a financial manager. In doing so they appear to have lost sight of, if they ever saw, unintended consequences for an orderly management of a protected estate management regime attached to their efforts to divert protective business away from AET towards TPT and, incidentally but significantly, Aeran.
In these proceedings, it is sufficient to note that each of TPT, Aeran and Stacks Goudkamp has disclaimed any side agreement, collusion or solicitation and, at the invitation of the Court, reaffirmed (as have all participants in the proceedings) that they accept that:

In the context of correspondence of this character AET and Aeran, in particular, and TPT inferentially, became embroiled in controversy about the identification of “clients”, the use (or misuse) of confidential information and the propriety of communications of Aeran and Stacks Goudkamp with protected persons (or, more commonly, their family or other significant others) about the provision of financial advice services in connection with protected estates under the management of AET.
Each party to the proceedings presently before the Court (and TPT and Aeran through their affidavits and written submissions) have formally presented submissions through the prism of the paramountcy principle developed upon an exercise of the protective jurisdiction of the Lord Chancellor of England (by reference to which the Court’s inherent jurisdiction was conferred), largely reflected in judgments of Lord Eldon in the first three decades of the 19th century in the formative period of establishment of the NSW legal system, including the Court.
Despite presentation of submissions through the prism of the paramountcy principle the real issues for determination in these proceedings are essentially systemic rather than personal to the particular persons in need of protection. That is why the parties have submitted that the Court should entertain two cases chosen by them as “test cases” to guide others (said to be similarly placed) in making decisions about whether to make an application for displacement of AET as a protected estate manager of the estates of a protected person in their care.
That the real issues in dispute are systemic rather than personal is evident in three respects. First, there is no real challenge to the technical competency of AET or Aeran. Secondly, complaints about particular management decisions and processes (not uncommon in the management of any protected estate) are largely a function of differences about the model of provision of financial advice services or personal attachments associated with different models. Thirdly, the personal circumstances of each of the persons in need of protection in the present proceedings demonstrate that they are living without risk of exploitation or harm.
On the evidence before the Court each protected person is living in the care of a stable and loving family. Viewed through the perspective of each person’s estate and person, there is a protective regime in place accommodating their personal incapacity for self-management. Their estates are safe and secure, professionally managed by a licensed trustee company (as it happens) AET. There is no apparent need to make formal orders for guardianship of their person, either on the core functional topics commonly enumerated in a guardianship order or its equivalent (confining decision-making authority to decisions about accommodation, health care, medical and dental treatment and personal services) or otherwise.
The real issues in dispute essentially go to “control” of the financial and property affairs (that is, the estate) of each person and the mode of management of an estate that requires co-operation of people who, formally or informally, are the person’s significant others and find themselves in symbiotic relationships.
To paraphrase a common proverb, it may take a village to manage the affairs of an incapacitated person, depending on the nature, and extent, of the person’s incapacity and personal circumstances.
A critical question on any consideration about an exercise of protective jurisdiction concerning a person who is, or may be, in need of protection, if it be suggested that the person “lacks capacity”, is “capacity for what? The need to respect the autonomy of each individual is not displaced upon recognition that a person may, in some or all respects, lack a capacity for self-management.
The principles governing the real issues in dispute in these proceedings have general application (and must be expressed and administered in a flexible way) but are perceived by the plaintiffs and their advisers to have a distinct and perhaps unique operation in the context of a protected estate essentially comprising an award of compensation for personal injuries.
Not unnaturally, there appears to have developed among the families and significant others of protected persons, under the influence of their former solicitors and financial advisers and in common with them, a strong sense of “ownership” of management of the affairs of an incapacitated person arising from the conduct of personal injury compensation proceedings through a tutor, often a member of the family of the claimant for the compensation appointed pursuant to the Civil Procedure Act and the Uniform Civil Procedure Rules.
This is, perhaps, particularly on display in the proceedings concerning the estate of JC because a manager (AET) was appointed by this Court to manage interim payments of compensation ordered to be made in favour of the incapacitated claimant pending determination of his personal injury compensation claim. That appointment was made on terms that permitted JC’s parents to retain control of the compensation proceedings.
But once the substantial estate to be managed outside the compensation proceedings crystallised, there was, and is, a need for an institutional manager, or (less frequently and more problematically) a trust.
This was recognised in the compensation proceedings by orders made under section 77 of the Civil Procedure Act for compensation funds to be paid into court to abide the orders of the Court for a protective regime of administration of the fund.
Any breakdown in relationships of persons involved in the management of a protected estate or the care of the estate or person of a person in need of protection is a matter of concern to the Court, as it is to the families of KT and JC.
That said, the proceedings presently before the Court, to the extent that they may involve a breakdown in relationships are largely the subject of collateral, commercial competition. That competition has its roots in blurred lines of authority in the management of protected estates allowing a financial adviser (Aeran) to a financial manager (AET, before its acquisition by a new shareholder) to take the lead in dealing with the family and significant others of a protected person, and to provide services directly to the families and significant others as “their clients”, notwithstanding that remuneration for the provision of financial advice services (agreed by the manager, subject to authorisation by the NSW Trustee) was paid out of the protected estate, not by the protected person’s family or significant others personally.
In addressing concerns of parties about due management of protected estates under the management of AET after its change of ownership, no consideration appears to have been given by anybody to means other than removal of a manager that might allow their concerns to be addressed in a more prudent and orderly manner. In particular, no consideration appears to have been given to the embrace of a process of mediation or an application to the NSW Trustee or the Court for directions.

The KT Proceedings. By a summons filed on 3 May 2024 ST (the mother of KT and the person on whose application the orders of 10 April 2019 were made) applies to the Court, in substance, for orders, pursuant to section 41 of the NSW Trustee and Guardian Act and section 47 of the Interpretation Act 1987 NSW, to the effect that AET be removed as KT*’*s financial manager and be replaced by TPT.
As drafted the Summons, in terms, seeks orders for removal and replacement of Equity Trustees Ltd as KT*’*s financial manager. It is, to that extent, expressed in erroneous terms, based upon an incorrect assumption that when EQT Holdings Ltd (an Australian listed public company) on or about 1 December 2022 acquired AET by way of a share acquisition from SFG Australia Ltd, a wholly owned subsidiary of Insignia Financial Limited (an Australian listed company), Equity Trustees (another company in the “Equity Group”) became KT’s financial manager by reason only of the corporate takeover.
The Equity Group’s takeover of AET did not disturb the legal identity of AET or the appointments to the office of a financial manager held by AET by virtue of orders made by the Court under the NSW Trustee and Guardian Act.
It did, however, change the management profile of AET and, to that extent, caused anxiety to Aeran (in particular, JCC and her husband, the principals of Aeran and JF, a Senior Financial Adviser employed by Aeran) who had worked closely with the families and significant others of incapacitated persons in the conduct of personal injury compensation proceedings and, since the finalisation of those proceedings, as financial advisers upon an annually renewed retainer from AET as financial manager.
Despite the form of ST*’*s summons, her application has proceeded on the basis that the object of her application for a change of manager is AET.
The JC Proceedings. By a summons filed on 17 May 2024 MC (the father of JC and the person on whose application the orders of 27 November 2018 were made) applies to the Court, in substance, for orders (implicitly by reference to section 41 of the NSW Trustee and Guardian Act and section 47 of the I**nterpretation Act 1987) to the effect that AET be removed as JC*’*s financial manager and be replaced by TPT.
At the hearing of these proceedings MC abandoned prayer 6 of his summons, which reads as follows:

An affidavit in similar terms was affirmed by DG on 9 October 2024.
Perpetual Limited is a licensed trustee company in good standing in the management of protected estates but, in light of the email of Aeran dated 25 April 2024 extracted above, in which JF (on behalf of Aeran) claimed that there was an agreement between Aeran and Perpetual Limited that Aeran “cannot be removed [as a financial adviser] without consultation with the client”, any prospective change of manager away from AET requires confirmation from a nominated new manager that it is not bound by any such agreement, and will not act in the discharge of the functions of the financial manager simply at the direction of a party who claims an interest in the estate of a protected person.
There is in Aeran*’*s reference to “the client” an ambiguity that also needs to be recognised in the effective operation of a protected estate management regime.
AET, Aeran and TPT have encountered problems arising from a lack of clarity in boundaries attending the relationship between a financial manager and a protected person and blurred lines of authority when a financial manager allows a financial adviser retained by it to be a primary point of connection between the financial manager and the family and significant others of a protected person.
Whatever may be the merits of the commercial dispute between AET and Aeran, AET*’s termination of Aeran’s retainer as the company’*s customary financial adviser can be explained as a natural response to the realisation of AET under its new management that the problem of blurred lines of authority had to be confronted.
The anxieties of Aeran about its future in working with AET*’s new management regime, and the perception of TPT that AET’s change of ownership presented it with commercial opportunities to displace AET as a financial manager, have arguably caused them, largely through the efforts of KM, to interfere with AET’*s performance of its functions as a financial manager.
A lack of trust on all sides (and a perception on the part of Aeran, TPT and Stacks Goudkamp that the family and significant others of a protected person “own” management of the protected person’s estate) have led to overreach in the actions and reactions of competing interests. In common with AET, they are not immune from criticism.

The framework principles summarised in M v M were restated, with context, in Ability One Financial Management Pty Ltd and Anor v JB by his Tutor AB [2014] NSWSC 245 at [28]-[36]. That judgment was, in terms, directed to the formulation of principled, workable guidelines for dealing with an application for the appointment of a private institutional protected estate manager “for reward” which was not a “licensed trustee company” regulated by statute.
It was prepared with the benefit of submissions from the NSW Trustee, the Financial Services Council and the Council of the Law Society of NSW, as well as the legal representatives of parties to the proceedings (one of whom appears in the present proceedings as the solicitor for MC).
The present proceedings also invite attention to a number of judgments published after Ability One Financial Management Pty Ltd and Anor v JB by his Tutor AB dealing with cases specifically involving an application for a change of a protected estate manager and, in one case, a review of the appointment of what was loosely described as an “interim manager” charged with management of interim awards of personal injury compensation. Because most of the judgments to which the parties have referred in submissions have been mine, I remind myself of the origins, development and purposive nature of the principles I have endeavoured to give consistent effect in a changing world.
Over time I have, as the Court’s Protective List Judge, come increasingly to realise the foundational role played by the judgments of the High Court of Australia in Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 420-423; Gi**bbons v Wr**ight (1954) 91 CLR 423 at 437-438; and Secretary, Department of Health and Community Services v JWB and SMB (Marion’s Case) (1992) 175 CLR 218 at 237-239 and 258-259.
The Countess of Bective case addresses the liability to account of a guardian, as distinct from a trustee, focusing upon whether or not a guardian has faithfully performed the protective purpose of guardianship. It is reinforced by the observations of the High Court in Cla**y v Clay (2001) 202 CLR 410 at [37] et seq.
Gibbons v Wright cautions that the law does not prescribe any fixed standard of sanity (or, more generally, mental capacity) as requisite for the validity of all transactions.
Marion’s Case (following Gillick v West Norfolk AHA [1986] AC 112) confirmed that “parental power to consent to medical treatment on behalf of a child diminishes gradually as the child*’*s capacities and maturity grow and that this rate of development depends on the individual child” and (following Re Eve [1986] 2 SCR 388 at 407-417; (1986) 31 DLR (4th) 1 at 14-21) identified the nature, scope and purpose of the Court’s inherent protective jurisdiction.
If, as I am persuaded, the common law of Australia governing an exercise by the Court of jurisdiction affecting management of the affairs of a central personality who is unable (by reason of incapacity or death) to manage his or her own affairs must be exercised within a paradigm an autonomous individual living, and dying, in community, foundational judgments of the High Court confirm that the starting point is generally and, upon an exercise of protective jurisdiction, always the perspective of the individual.
In the course of an ordinary life the person or estate of each person may be the subject of an exercise of one or more branches of what (for want of a better generic description) may be described as the Court’s “welfare jurisdiction”: notably, the protective jurisdiction (comprising what was historically an exercise of infancy or lunacy jurisdiction); the probate jurisdiction; and the family provision jurisdiction, all of which provide occasions for an exercise of the Court’s equity jurisdiction in the maintenance of standards of conduct. Each jurisdiction requires consideration (in one guise or another) of the welfare and interests of the central personality.
Each branch of the Court’s “welfare” jurisdiction is governed by the purpose for which it exists, a fact that needs to be borne in mind in any search for coherence in the general law. What they have in common is that they each concern the affairs of a central personality who (by reason of disability or death) is not wholly present in the conduct of proceedings albeit that he or she (in life, actually and in death, notionally) may be represented by a person charged with management of his or her affairs.
Before turning to the framework principles set out in M v M and restated in Ability One Financial Management Pty Ltd and Another v JB by his T**utor, AB, acknowledgement should be given to the contribution made by Powell J as the Court’s Protective Judge (described in P v NSW Trustee and Guardian [2015] NSWSC 579 at [227)-[274) to law reform culminating in enactment of the Protected Estates Act 1983 NSW, and the judgments of the Court of Appeal in David by her T**utor the Protective Commissioner v David (1993) 30 NSWLR 417 (published about two months before publication of Hol**t v The Protective Commissioner) and its judgment in Protective Commissioner v D (2004) 60 NSWLR 513 (which post dated Holt v the Protective Commissioner).
The earlier judgment of the Court of Appeal determined that once the management of an incapacitated person’s property was committed under the Protected Estates Act 1983 to the Protective Commissioner or other nominee, because of the person*’*s incapacity to manage his or own affairs, the right of the protected person to deal with the property was suspended.
That principle is now embodied in section 71 of the NSW Trustee and Guardian Act 2009. The observations of Sheller JA in that case at 436E-437C record a shift in emphasis in the management of estates under protective management:

“The Lord Chancellor [Eldon]. For a long series of years the Court has been in the habit, in questions relating to the property of a Lunatic, to call in the assistance of those who are nearest in blood, not on account of any actual interest, but because they are most likely to be able to give information to the Court respecting the situation of the property, and are concerned in its good administration. It has, however, become too much the practice that, instead of such persons confining themselves to the duty of assisting the Court with their advice and management, there is a constant struggle among them to reduce the amount of the allowance made for the Lunatic, and thereby enlarge the fund [102] which, it is probable, may one day devolve upon themselves. Nevertheless, the Court, in making the allowance, has nothing to consider but the situation of the Lunatic himself, always looking to the probability of his recovery, and never regarding the interest of the next of kin. With this view only, in cases where the estate is considerable, and the persons who will probably be entitled to it hereafter are otherwise unprovided for, the Court, looking at what is likely the Lunatic himself would do, if he were in a capacity to act, will make some provision out of the estate for those persons. So, where a large property devolves upon an elder son, who is a Lunatic, as heir at law, and his brothers and sisters are slenderly or not at all provided for, the Court will make an allowance to the latter for the sake of the former; upon the principle that it would naturally be more agreeable to the lunatic, and more for his advantage, that they should receive an education and maintenance suitable to his condition, than that they should be sent into the world to disgrace him as beggars. So also*, where the father of a family becomes a lunatic, the Court does not look at the mere legal demands which his wife and children may have upon him, and which amount, perhaps, to no more than may keep them from being a burthen on the parish, - but, considering what the Lunatic would probably do, and what it would be beneficial to him should be done, makes an allowance for them proportioned to his circumstances. But the Court does not do this because, if the Lunatic were to die to-morrow, they would be entitled to the entire distribution of his estate, nor necessarily to the extent of giving them the whole surplus beyond the allowance made for the personal use of the Lunatic*.

In their broader operation Lord Eldon*’*s observations highlight the centrality of the perspective of a protected person, the importance and limitations of participation by a protected person’s family and significant others in decision-making about a protected estate, and the need for prudent, pragmatic empathy with the wishes and preferences of a protected person.
Lord Eldon*’*s observations inform not only the way the Court endeavours to exercise its protective jurisdiction but also what is required of a financial manager of an estate which (to paraphrase section 41(1)(a) of the NSW Trustee and Guardian Act) is “subject to management” under the Act, reinforced by the general principles set out in section 39 of the Act, themselves informed by the purposive nature of the Court’s protective jurisdiction.
A common error (embraced by Aeran*’*s principal, JCC, in her evidence in these proceedings, and by TPT’s General Manager Wealth, MP, in his evidence) is to characterise the management of a protected estate under the NSW Trustee and Guardian Act (whether ordered under that Act or the Guardianship Act) as simply a “substitute decision-making model” i**n contrast to a “supported (or assisted) decision-making model” as if a bare binary choice must be made in characterisation of the functions of a manager in the decision-making process affecting the property and affairs of a protected person.
This error deflects analysis away from the protective nature and purpose of the office of the manager of a protected estate.
True it is that section 71(1) of the NSW Trustee and Guardian Act “suspends” the power of a protected person to deal with his or her estate and section 41 authorises the appointment of a person to “manage” a protected estate, but section 39 expressly defines principles that bind a manager, for the benefit of a protected person, requiring management decisions that respect the dignity of the individual protected person in fundamental ways. A manager might well make a decision that operates as a “substitute” for a decision that a protected person might have made if capable, but to describe the management process as one of “substituted decision-making” (an expression not found in the NSW legislation) is to impose an impermissible gloss on the statute, and to discount the nature of protective management recognised by Lord Eldon in Ex Parte Whitbread in the matter of Hinde, a L**unatic (1816) 2 Mer 99; 35 ER 878.
The NSW legislation provides for a system of protective management. It is different from the Guardianship and Administration Act 2019 Vic and the Guardianship and Administration Act 1995 Tas (as amended), which (under the guise of a “supported decision” making model) focus more upon a vulnerable person’s decision-making capacity than general management of his or her affairs.
In the NSW context (without comment about the operation of different interstate models), to define the function of a manager as essentially one of “supporting” or “assisting” a vulnerable person to make his or her own decisions might relieve a manager of responsibility for decision-making and provide cover for financial abuse for a self-serving manager who, under the guise of assisting a vulnerable person to make a decision, could reasonably be expected to have opportunities to influence the vulnerable person to favour him or her. Abuse of an enduring power of attorney commonly takes the form of an attorney using the legitimacy of his or her office to influence a vulnerable principal to confer a benefit on him or her, ostensibly through an independent exercise of free will. A regulatory system for the protection of a vulnerable person based upon a “supported (or assisted) decision-making model” may require safeguards very different from those attending a “protective management” model.
In the NSW context, characterisation of a manager’s function as that of “substituted decision-making” (implicitly drawing a comparison with “supported or assisted decision-making”) also overlooks the importance of section 39 of the NSW Trustee and Guardian Act and the comparable provisions of section 4 of the G**uardianship A**ct, provisions easily overlooked by an institutional manager focused upon management of the “property” element of a protected “estate”, not the broader element of “affairs” identified in the definition of “estate”.
A focus on a perceived binary choice between a “substitute decision-making model” and a “supported (or assisted) decision-making model” in protected estate management is a conceptual trap because it focuses attention on a protected person’s decision-making capacity (an invitation to controversy if only because it may fluctuate) rather than the obligation of a manager acting (as befits an exercise of protective jurisdiction) with wisdom and prudence, for the benefit of the protected person (taking a large and liberal view of what is for his or her benefit), in a way which it is probable that the protected person would have acted if fully capable, consulting both the interests of the protected person and so far as may be practicable the protected person personally.
There is a logical framework for decision-making by the manager of a protected estate. The office of a manager is a fiduciary one, governed by the purpose for which the office (and the jurisdiction of the Court) exists: to take care of a person who is unable to take care of himself or herself. For that reason, the welfare and interests of a protected person under management must always be of paramount concern, mindful of the statutory duties for which section 39 of the NSW Trustee and Guardian Act provides. Whatever is done or not done in management of a protected estate must be for the benefit, and in the interests, of the protected person. A manager’s risk management decisions should be prudent (guided by practical wisdom), including decisions made allowing a protected person an opportunity to (succeed or) fail.
The decision-making process in the management of a protected estate is neither simply substituting the manager’s views for those of a protected person or abrogating responsibility for management decisions by simply, without an independent assessment, assisting a protected person to do what he or she wants. Management of a protected estate requires empathy of the manager with the protected person and his or her family and significant others so that the manager, taking care to know of the personal circumstances, needs and aspirations of a protected person is in a position to assess, subject to considerations of prudence, what it is probable that the protected person would do it if fully capable.
This approach accommodates nuances in a protected person’s capacity, recognises the idiosyncratic nature of a protected estate manager’s fiduciary obligations to a protected person, and protects third parties dealing with a manager without having to make inquiries about a protected person’s decision-making capacity at the time business is transacted.
Some insight into the nature, scope and functions of a protected estate manager (a financial manager by another name) appointed under section 41 of the NSW Trustee and Guardian Act (or its equivalent under the Guardianship Act) can be gained from: (a) placement of the office of manager in the broader context of the legislative scheme that embraces the work of the Guardianship Division of NCAT and the Mental Health Review Tribunal, which engages the administrative regime for which the NSW Trustee and Guardian Act provides; and (b) a comparison between complementary concepts that go hand-in-hand, with sometimes blurred boundaries, between management of “the person” (the body) and management of “the estate” (the property) of a person who is unable to manage his or her own “affairs”.
A distinction between management of “the person” and management of “the estate” finds reflection in: (a) the Court’s inherent jurisdiction concepts of a committee of the person (a guardian in contemporary usage based upon terminology deployed by the G**uardianship Act which confers jurisdiction on NCAT) and a committee of the estate (a financial manager in contemporary NSW usage based upon the jurisdiction conferred on NCAT by the Guardianship Act); (b) the Guardianship Act’s distinction between a guardian and a financial manager; and (c) the private law but statutory distinction between an “enduring guardian” appointed pursuant to the Guardianship Act and an “enduring attorney” appointed pursuant to the Powers Of Attorney Act 2005 NSW by a capable person in anticipation of incapacity.
In broad terms, the natural field of operation of the office of a financial manager is control (not ownership) of (in stock terms) property, (in flow terms) the receipt of income and the payment of debts, and (generally) all things financial owned by a person incapable of self-management. Nevertheless, as observed in connection with the definition of “estate” in section 38 of the NSW Trustee and Guardian Act and section 41 of the Act, the role of a manager is not confined to management of “property” alone.
In equally broad terms, the natural field of operation of a guardian (as that expression is used in NSW) is control (not ownership) of the body of a person incapable of self-management.
Each field of operation naturally overlaps with the other in the sense that both are concerned with the welfare and interests of a living person incapable of self-management without assistance.
Both concepts, in each of the contexts in which they are encountered, are limited by principles designed to protect the individual autonomy and dignity of the person in need of protection from an abuse of power. A financial manager and a guardian are bound always to consult the interests, and wherever possible to consult the person, of the person whose affairs are under management.
Whatever powers a financial manager or a guardian may have in dealings with a third party on behalf of the person whose affairs are under management, the office of a financial manager and that of a guardian are fiduciary and the officeholder is accountable to the person whose affairs are under management for the due performance of the obligations of a fiduciary even if (in practice) they can only be held to account by some other person who invokes the jurisdiction of the Court as a representative, and for the benefit, of the person in need of protection.
Customarily, the powers of a financial manager are not expressed in terms limited in the way that powers of attorney were limited before legislation provided for the execution of a “general” power of attorney (conferring plenary authority on an attorney) or the memorandum of association of a company provided for limited objects.
Conferral of a general authority on a financial manager reflects the great variety of transactions a financial manager may be called upon to give effect and the need to protect the interests of third parties who, in good faith, deal with the manager. As noted in Ability One Financial Management Pty Ltd and Anor v JB by his Tutor AB [2014] NSWSC 245; (2014) 11 ASTLR 155 at [172] (extracted above), Theobald, in The Law Relating to Lunacy (1924) at page 48, records that “… the powers of [a] committee of the estate have never been precisely defined”.
By statute in the case of an enduring guardianship appointment, and by practice of NCAT in the making of a guardianship order, a guardian’s powers over the person of a person whose affairs are under management (guardianship) are required to be enumerated. Routinely, such powers are defined by reference to one or more of the following topics (here identified by reference to section 6E(1) of the Guardianship Act which, subject to the terms of an instrument appointing an enduring guardian, specifies the functions of a guardian: deciding the place where the person under guardianship is to live; deciding the healthcare that the person is to receive; deciding the other kinds of personal services that the person is to receive; and giving consent to the carrying out of medical or dental treatment on the person.
In concept, these topics provide insight into the different fields of operation of financial management and guardianship of the person.
The one person may occupy both the office of the financial manager and the office of a guardian of the person, although that may not be prudent in a particular case. The distinct offices and their different fields of operation are reflected in the public realm by the separate identity afforded to the NSW Trustee and the Public Guardian.
A financial manager and (whether a parent governed by the general law or statutory appointment) a guardian of a person whose affairs are under “management” (however described), have a symbiotic relationship which, ideally, requires empathetic engagement.
In the event of a disagreement between a financial manager and a guardian about management of the affairs of a person “under management”, an appropriate course may be for one or both of them to apply to the Court for directions.
With this background, I turn attention to the “framework principles” informed, particularly by the judgment of the Court of Appeal in Holt v P**rotective Commissioner (1993) 31 NSWLR 227, summarised in M v M [2013] 1495 at [49]-[50], here reproduced:

Because, in practice, an order for the appointment of a protected estate manager is generally expressed without limitation of time, the order continues in operation unless an order is subsequently made for its revocation or variation, terminating only upon the death of the protected person. Apart from transitional orders that may be necessary or convenient upon the death of a protected person, his or her estate is governed by the law of succession administered by the Court upon exercise of probate jurisdiction: Bollinger v Bell; The Estate of the Late Colin Bell [2022] NSWSC 486 at [25]-[26] (Slattery J).
Although a financial management order generally operates indefinitely, events commonly occur which provide an occasion, necessary or convenient, for review of the Court’s orders. Where a manager is a natural person, death may intervene. A financial management order made in respect of a minor routinely provides for the order to be reviewed as the protected person approaches the age of majority: R**e AAA; R**eport on a Protected Person’s Attainment of the Age of Majority [2016] NSWSC 805, following White J in A**G v A**P-G [2013] NSWSC 272 at [9] and JP v CP [2013] NSWSC 373 at [4].
Upon an exercise of the Court’s inherent jurisdiction, a financial management order may be revoked, despite the ongoing incapacity of a protected person if there is no utility in the continuing operation of the order (if, for example, there is no property available, or likely to become available, for management): R**e W and L (Parameters of Protected Estate Management Orders) [2014] NSWSC 1106 at [55]-[99]. Section 86 of the NSW Trustee and Guardian Act (which provides an avenue for the revocation of management orders on the application of a protected person who has regained capacity) does not displace the Court’s inherent jurisdiction.
Another occasion for review of a financial management order (illustrated by the case of JC in these proceedings) is when, upon finalisation of a personal injury compensation claim with an award of compensation, a financial management regime put in place to manage interim payments of compensation comes under review as anticipated by all interested persons at the time the “interim” financial manager was appointed.
Shortly after publication of the judgment in Ability One Financial Management Pty Ltd and Anor v JB by his Tutor AB [2014] NSWSC 245, an occasion arose to consider the approach of the Court to the review of an “interim” management regime upon finalisation of personal injury compensation proceedings.
In Re K, an incapable person in receipt of interim damages awards [2014] NSWSC 1286, I wrote the following, at paragraphs [1], [5], [10], [16]-[17], [26] and [45]-[49], to which I adhere:

Where a financial manager is a natural person, a breakdown in the personal relationship between the manager and a protected person, such as to frustrate the process of protective management the fact of that breakdown might provide an occasion for review of the management orders, including the removal and replacement of the manager.
So too may a breakdown in relationships between an institutional financial manager and a protected person or persons (notably, close family and significant others) in whose care the protected person resides but the context of a particular case can, not surprisingly, be fundamentally different from a management regime involving only natural persons, because an institutional manager, which is bound to act through employees or agents, may necessarily appear more remote from the protected person and his or her family and significant others in the transaction of business.
A decision to appoint an institutional financial manager rather than a natural person in many cases (including those the subject of these proceedings) may turn on the size and nature of the estate to be managed and an assessment of future risks arising from mismanagement, unrealised budget forecasts or wholly unforeseen events.
Where a protected estate comprises a large fund of compensation awarded to an injured person with a long life to live prudence generally instructs the Court, and all interested persons, that a licensed trustee company is the safest option for appointment as a financial manager.
A licensed trustee company may be the most secure and financially beneficial option for appointment as the financial manager of a large fund of compensation but its commercial imperatives may be in tension with the need for empathetic protective management governed by the paramountcy principle operating under the general law and the guiding principles for which section 39 of the NSW Trustee and Guardian Act provides.
That tension is perhaps most noticed by the family and significant others of a protected person who, rightly or wrongly, may have expectations of personal service beyond what any institution can consistently provide and still function effectively in a business environment.
That tension surfaced dramatically when Perpetual Trustee Co Ltd took over the companies for convenience described as “The Trust Company” and (in reliance upon Voluntary Transfer Determinations made by the Australian Securities and Investments Commission (ASIC) under section 601WA of the Corporations Act 2001 assumed the role The Trust Company had under section 41 of the NSW Trustee and Guardian Act without (as I insisted was necessary) obtaining orders for its appointment by this Court entitling it to act as a financial manager in the affected estates.
The reasons explained in Re LSC v GC [2016] NSWSC 1896 orders had to be made upon an exercise of the Court’s protective jurisdiction in respect of each affected protected estate.
Nevertheless in the particular case (after remedial orders were made to regularise the protected estate management regime) management orders were revoked under section 86 of the NSW Trustee and Guardian Act because each protected person then before the Court was found to have capacity for management of his own affairs.
In the course of the judgment I made the following observations at paragraphs [31]-[56], to which I adhere:

The significance of sections 601SAA and 601SAC of the Corporations Act in the current proceedings is that those provisions confirm that the Court’s protective jurisdiction (including that exercised by reference to section 41 of the NSW Trustee and Guardian Act) is not constrained by the regulatory regime prescribed by the Corporations Act for licensed trustee companies. If a licensed trustee company wants business as a financial manager it must, like all managers, submit to the protective regime supervised by the Court.
In the course of these proceedings, in response to a requisition by me as to whether any participant in the proceedings claimed a protected person as a “client”, AET claimed that the protected persons the subject of its appointment as a financial manager are its “clients” within the meaning of section 601RAB of the Corporations Act.
Section 601RAB(3) provides that “[a] client of a trustee company is a person to whom a financial service (being a traditional trustee company service) is provided by the trustee company”.
A protected person may be classified as a “client” of a licensed trustee company in the context of the Corporations Act but it is not so in the context of the Court’s exercise of protective jurisdiction. A protected person is not a “client” of any other person upon an exercise of the Court’s protective jurisdiction. References by AET and Aeran to protected persons as their “clients” reflect loose language in a commercial context that needs to be jettisoned upon an exercise of protective jurisdiction, the operation of which is preserved by sections 601SAA and 601SAC of the Corporations Act.
The next case drawn to attention by the plaintiffs emerged from Equity Trustees Limited*’*s takeover of ANZ Trustees Ltd causing the mother of a protected person to apply to the Court for a change of manager, seeking removal of ANZ Trustees Ltd (renamed Equity Trustees Wealth Services Ltd, a licensed trustee company, and replacing it with Ability One Financial Management Pty Ltd, a manager for reward but not a licensed trustee company).
In that case reported as SLJ v RTJ [2017] NSWSC 137, I made the following observations at [20] and [26]-[30] in granting the mother’s application:

The most recent judgment drawn to my attention by the parties is my judgment in SC v Ability One Financial Management Pty Ltd [2024] NSWSC 637, a case factually different from earlier cases but concerned, as are the present proceedings, with an application for a change and replacement of a financial manager based upon an allegation that there had been a breakdown in the relationship between the manager and the protected person who was then living with the applicant, a nephew of the protected person.
The case had several distinctive features. First, although the financial manager was an institutional manager for reward with substantial experience in protected estate management, it was not a licensed trustee company.
Secondly, the applicant for a change had resisted the financial manager’s appointment and had obstructed the manager’s performance of its functions since that time, actively causing or contributing to what was agreed by the manager to have been a breakdown in relationships.
Thirdly, although the applicant placed before the Court correspondence ostensibly written by the protected person in support of his nephew’s application for change of manager I was not satisfied that the protected person (rather than the nephew) was the true author of the correspondence.
Fourthly, the applicant and the protected person’s son (his only surviving child) were engaged in bitter disputation in circumstances in which the son, as the nephew’s contradictor, alleged, in substance, that the nephew had without notice to him taken his mentally incapacitated father interstate, denied him access to the old man and endeavoured to take close control of the old man’s affairs.
Fifthly, although the financial manager acknowledged that there had been a breakdown in the relationship between it and the nephew, and that some management decisions may have been open to criticism, I was satisfied that the manager had, on the whole, acted diligently and reasonably in management of the protected person’s affairs and could be relied upon to perform the functions of the protected person’s financial manager in a professional and independent way.
Sixthly, despite the financial manager’s willingness to submit to an order for its removal from office I was affirmatively satisfied that it was in the best interests of the protected person for the financial manager, at least for the time being, to remain in office and, in particular, to complete particular management tasks that it was uniquely positioned to perform.
It was not necessary, in the circumstances of the particular case, to consider whether the nephew’s nominee as a replacement manager was a “suitable person” to be appointed.
In my reasons for judgment I made the following observations in paragraphs [42]-[43] and [56]-[66]:

To their credit all parties to these proceedings have endeavoured, for the most part, to tailor their evidence, submissions and forensic choices in a manner that pays due respect to oft-repeated statements of the Court that, because of the protective purpose served in proceedings relating to management of the affairs of an incapacitated person and the centrality of such a person to all decision-making, upon an exercise of the Court’s protective jurisdiction proceedings are not adversarial (as they are commonly regarded in connection with civil proceedings between parties fully able to protect their interests) but inquisitorial in nature.
The nuances inherent in the conduct of protective proceedings often run counter to the combative instincts of parties who, in one sense or another, and perhaps with the very best of motives, feel “ownership” of a problem to be solved, and an “entitlement” to control the affairs of a person in need of protection, or aggrieved by what they perceive to be a challenge to their involvement in management of the affairs of a person in need of protection.
The difficulty is often not in an in-principle acceptance of the paramountcy principle or the associated idea that no person (other than the protected person) has a vested interest in management of a protected estate (first order principles) but in grappling with second order ideas attending implementation of the first order principles. A natural tendency of mind is to rationalise one’s own views as a manifestation, particularly, of the paramountcy principle.
As I have earlier observed, in my assessment the real issues in dispute in these proceedings are essentially systemic in nature, turning upon an objective assessment on “first principles” to be applied rather than credit-based findings about particular contested facts. Had I formed a different view of the proceedings I might have insisted upon an opportunity to hear from absent witnesses whose evidence could have thrown light upon controversial events.
This assessment may not present itself comfortably to parties interested in the outcome of the proceedings bearing in mind that each plaintiff’s primary submission is that a change in financial manager is justified, and needed, because there has been a relationship breakdown between the manager on the one hand and, on the other hand, the family of the protected person, if not the protected person personally.
In assessing the forensic dynamic of the proceedings, one should not be unmindful that statements of principle and practice in earlier cases (including, but not only, those decided by me) to the effect that a breakdown in relationships provides both an occasion and a justification for an application by a protected person’s family or significant others for a change in manager, must be presented as being for the benefit, and in the interests, of the protected person, and take into account (in that context) the importance of maintaining an orderly regime for prudential management of a protective estate.
The plaintiff in SC v Ability One Financial Management Pty Ltd [2024] NSWSC 637 presented his case for a change of manager as essentially for the benefit of the protected person even though, as I found, he was the cause of the relationship breakdown that obstructed the due performance by the financial manager of its functions. His conduct did not entitle him to, or warrant, a change of manager, but guidance as to management of a difficult estate and support for the manager against obstruction.
In some cases, the mere existence of an ostensibly obvious relationship breakdown may be sufficient to warrant a change in manager without close attention being given to the existence, nature, or causes of the breakdown or an exploration of the availability of remedial orders (such as directions) short of an order that a financial manager be removed and replaced.
Not every case is so simple. In some cases (not those presently before the Court) a breakdown in relationship involving a financial manager might have an ultimate or effective cause in a breakdown in personal relationships within the family of the protected person, or difficulties associated with the care of a disabled person. In those cases, criticism of the financial manager might be a convenient outlet for the expression of a frustration not fairly attributable to the conduct of the manager.
A common example of this, at a higher level of estate administration, is found in criticism directed at the NSW Trustee for alleged failures of an institutional manager other than the NSW Trustee. “The Public Trustee” (as some members of the public, lawyers and doctors commonly call the NSW Trustee many years after that name was abandoned) is a convenient target for criticism that should be owned, if by anybody, by somebody else.
That is not to say that, as a manager, the NSW Trustee is not as susceptible to criticism of the kind commonly associated with other institutional managers when a protected estate is committed to it for management.
Upon an exercise of the Court’s protective jurisdiction over time, one becomes familiar with common patterns in the way applications to the Court are presented, no doubt with honest intent.
One such pattern is found in a standard form affidavit filed in support of an application for the appointment of a “private manager for reward” (commonly, but not always, a licensed trustee company) instead of the NSW Trustee despite the acknowledged fact that the fees charged by the private manager are, and are likely always to be, higher than those charged by the NSW Trustee.
The justification for the applicant in preferring the appointment of a private manager is commonly said to be that, having met with a representative of the nominated private manager (and perhaps representatives of other private managers) the applicant is satisfied that the protected person (and his or her family and significant others) will receive a greater, or more personal, level of service than can be expected from a “Public Trustee”. This may or may not be true but constant formulaic repetition of such a statement does not make it true and, viewed objectively, it is not universally true.
There is, in some quarters, an unfair prejudice against the NSW Trustee arising from the NSW Trustee’s acceptance that, in service of the public, it alone of all potential financial managers can be appointed by the Court or by NCAT without first being asked to consent to an appointment. The NSW Trustee’s acceptance of the burden of submitting to an order for management in every case if so required is reflected in UCPR Rule 57.4(1). That rule provides that where the proposed manager is the NSW Trustee there is no need for evidence as to its fitness as a manager or as to its consent to an appointment. (Incidentally, the same rule dispenses with any need of an affidavit of fitness where the proposed manager is a trustee company.)
When, in M v M [2013] NSWSC 1495 at [46], read with Ability One Financial Management Pty Ltd and Anor v JB by his Tutor AB [2014] NSWSC 245 at [31]-[32] I recorded that “whereas once the Protective Commissioner [a predecessor of the NSW Trustee] may have been viewed as a manager of ‘first resort’, the NSW Trustee is more inclined to see itself as a manager of ‘last resort’” and that the NSW Trustee had expressly embraced that observation, I did not intend to reflect adversely on the fitness of the NSW Trustee, or to suggest that in making an order under section 41(1) of the NSW Trustee and Guardian Act the choice of manager to be appointed is the subject of a presumption in favour of a private manager, relegating the NSW Trustee to a subordinate status as a “manager of last resort”. Each case must be considered on its own facts without such a gloss on the statute.
Accordingly, I take this opportunity to endorse the reasoning of the Appeal Panel of NCAT in YJC v PG [2024] NSWCATAP160 at [39]-[67] in rejecting a proposition (stated in paragraph [24(1)] and said to be derived from Holt v Protective Commissioner (1993) 31 NSWLR 227) and under section 25M of the Guardianship Act (read with sections 25E and 25G, an equivalent of section 41 of the NSW Trustee and Guardian Act), “the power to commit the estate of a protected person to the NSW Trustee can only be exercised as a ‘last resort’, where there is no suitable person available to be appointed”. The Tribunal was quite correct in rejecting what, for convenience, it described as “the concept of a so-called ‘last resort’ principle”.
The so-called “last resort” principle rejected by the Appeal Panel is an illustration of a gloss on the statute which may arise in aid of adversarial submissions which, however well-intentioned, erroneously elevate a second level consideration over the first order purpose of legislation.
Upon an exercise of protective jurisdiction, such as that for which section 41 of the NSW Trustee and Guardian Act provides (informed, inter alia, by section 39 of the Act) that purpose, commonly called “the paramountcy principle” is that in all decision-making affecting a person who is or may be in need of protection, the welfare and interests of that person are paramount and that whatever is done, or not done, must be for the benefit, and in the interests, of that person. It was for that reason that Kirby P in Holt v Protective Commissioner (1993) 31 NSWLR 227 at 241D-F prefaced his “framework” for decision-making with the following remarks:

In the present proceedings, the plaintiffs have, not unreasonably, endeavoured to advance a case for a change in manager by advancing as a determinative proposition the idea that the existence of a relationship breakdown in the management of a protected estate is, of itself, sufficient justification for the removal and replacement of a financial manager. That proposition has been, as it must be, advanced in the context of reliance upon the paramountcy principle, but it has been given too heavy an emphasis. At the end of the day a decision about the removal and replacement of a financial manager must be made on all the circumstances of the particular case, informed by the paramountcy principle.
A relationship breakdown might provide an occasion upon which the operation of a financial management order can, and should, be reviewed. But it cannot rise higher than the paramountcy principle. Neither can it be deployed in deflecting attention from examination of the genesis and course of a breakdown. Nor can it displace the importance attaching to the maintenance of a stable, prudent management regime with a larger focus than individual members of the staff of an institutional manager or changes in individual staff members.
The occurrence of an “occasion” for review of a financial management order does not automatically result in a discharge of the order or the removal and replacement of a financial manager, particularly if it be the case that directions can be given by the Court (if not also the NSW Trustee) to address particular issues of concern.
The importance of recognising this is that the due and proper management of a protected estate requires, not only that a financial manager approach its functions empathetically, but that the manager have the strength of “character and will” (purpose) to say, “no” as well as “yes” when invited by a protected person and his or her family or significant others to take a particular step in management of the protected estate, and have the wisdom to assess what, if any, steps need to be taken, or can prudently be taken, in addressing issues raised by the invitation.
A financial manager who abrogates the responsibility for decision-making by subordinating an independent judgement to the “will and preferences” of an incapacitated person (whether expressed personally or with the assistance of a family member or other representative) runs the risk, not only of exposing a protected estate to a risk of imprudent management decisions, but also of exposing the manager and others to personal liability arising from irregularities in the conduct of the protective management regime. In the present proceedings considerations of this nature flow from the systemic nature of the real issues in dispute.
It is not necessary, or in the interests of either protected person or their families, that those systemic issues be lost to sight in competing allegations about particular facts about day-to-day management of the protected estates under consideration.
If I am not mistaken, the parties have recognised this in conducting the hearing before me on the basis of evidence that was wholly written, admitted into evidence without objection and not made the subject of either cross examination or an application for such leave as may have been necessary for cross examination.

In these proceedings commercial rivalries between AET and Aeran have elicited countervailing expressions of concern about “conflicts of interest”.
AET complains that, by “side agreements” (now disclaimed) and solicitation of “clients” (denied), Aeran has endeavoured, in its own commercial interests, to divert protected estates under AET’s management to TPT or other prospective financial managers amenable to retaining Aeran. AET’s complaints are accompanied by a contention that its “in-house” financial services model is cheaper and better than the “independent financial adviser” model championed by Aeran.
Aeran claims as a virtue its self description as an “independent” financial adviser as a contrast with the “in house” model of financial advice services preferred by AET. The “in house” model, Aeran claims, inherently involves a financial manager in conflicts of interest because it wears “two hats”: one as a manager, the other as a provider of financial products.
These complaints, on either side of the record, ring hollow because neither complainant is prepared to occupy its office (as a financial manager or as a financial adviser for a protected person) on the basis that, as a fiduciary office, it carries no entitlement to remuneration.
This point is made not to suggest that remuneration should not be allowed out of a protected estate but to highlight that conflicts of interest (more particularly, conflicts between interest and duty) are inherently involved in the appointment of a financial manager, or a financial adviser, “for reward”. As discussed in Ability One Financial Management Pty Ltd and Ano**r v JB by his T**utor AB [2014] NSWSC 245; (2014) 11 ASTLR 155, the starting point for consideration of a claim for remuneration by a fiduciary out of a protected estate is that the office of the fiduciary is prima facie gratuitous and any allowance for remuneration (except to the extent it may be authorised by statute) requires Court approval.
The Court’s approval depends on a judgement that the paramount purpose of a protective regime is served by the appointment of a financial manager (or the engagement of a financial adviser, as the case may be) and that any allowance for remuneration is both fair and reasonable, and subject to review on the taking of accounts.
As explained in Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 420-423 (and confirmed in Clay v Clay (2001) 202 CLR 410 at 428 [37]-433 [49]), the accountability of a fiduciary who occupies the office of a guardian (however defined) is measured against the protective purpose of the appointment of the guardian in the particular case. In the context of a regime of protective estate management “for reward” the question is, perhaps, not one of avoiding all “conflicts” but of ensuring that any conflict between interest and duty in the management of a protected estate can be justified by reference to the paramountcy principle and, as to quantum, no more than is fair and reasonable.
As noted in IR v AR [2015] NSWSC 1187 (by reference to section 17(1)(b) of the Guardianship Act) a decisionmaker is not precluded from appointing a particular person as a guardian if the decisionmaker considers that, although a conflict exists, the conflict is not “undue”: SAB v SEM [2013] NSWSC 253 at [61]-[62].
Section 17(1)(b) provides that a person shall not be appointed as a guardian of a person under guardianship (in proceedings before NCAT) unless the Tribunal is satisfied that, inter alia, “there is no undue conflict between the interests (particularly, the financial interests) of the proposed guardian and those of the person under guardianship”.
A “conflict of interest” is “undue” within the meaning of section 17(1)(b) if it is reasonably likely, to an unacceptable degree, to impede the proposed guardian’s performance of the duties of a guardian in the particular case.
That perspective is consistent with the general law relating to conflicts between interest and duty upon an exercise of protective jurisdiction.
In Holt v Protective Commissioner (1993) 31 NSWLR 227 at 237F, Kirby P warned that “[there] is a danger in applying too readily the learning which has developed around general trustees and company or bankrupts’ receivers to the particular case of the appointment of persons to manage the estate of a protected person under the [Protected Estates] Act [since repealed and replaced by the NSW Trustee and Guardian Act]”.
At 242B, his Honour made the following observations (in the context of consideration of the appointment of a family member as a financial manager:

Section 41(1)(b) of the NSW Trustee and Guardian Act identifies as an explicit criterion for the appointment of a private manager of a protective estate that the appointee be a “suitable person”, a concept not specifically defined in the abstract but located in a context which ties it to management of a particular estate of a particular person found to be incapable of managing his or her affairs.
In its setting the expression “suitable person” may be taken as meaning “suitable” (meaning “appropriate” or “fit”, if a synonym be required) for the purpose of performing the functions of a manager of the estate (the property and affairs) of the particular person found to be incapable of managing his or her affairs and, in performing those functions, observing the principles identified in section 39 of the NSW Trustee and Guardian Act.
For my part, I regard the several paragraphs of section 39 of the NSW Trustee and Guardian Act after section 39(a) as manifestations of section 39(a) and thus entirely consistent with the paramountcy principle that lies at the heart of the Court’s inherent protective jurisdiction.
What is required of a private manager in service as a “suitable person” in a particular case is relative to the personal circumstances of the particular protected person; the nature and extent of both any capacity and incapacity he or she may have; and the nature and extent of his or her estate, not limited to property. That is, what is required on a day-to-day basis and prospectively for management of the particular estate (property and affairs) in an optimal manner.
Uncontroversial examples of the relativity of the concept of a “suitable person” are, first, the suitability of a licensed trustee company for management of a large estate, offering security and terms not commonly associated with a natural person; and, secondly, the suitability of a close family member of a protected person with a modest estate which could not bear claims for remuneration commonly made by an institutional manager.
Another set of examples may illustrate the relativity of the concept of a “suitable person”.
At one end of the spectrum, a natural person appointed (by the Court or NCAT) as the manager of a small or modest estate with no expectation, or only a distant expectation, of recovery of a large award of compensation for personal injuries might cease to be a “suitable person” to manage the estate of the protected person if he or she receives such an award.
At the other end of the spectrum, an institutional manager appropriately appointed to manage a large estate might cease to be a “suitable person” to manage it if the estate, for whatever reason, is reduced in value to a size that cannot bear the manager’s usual fees.
In either case, if a change in the suitability of a manager comes to the attention of the Court, NCAT, the NSW Trustee or an interested person, there may have arisen an “occasion” for a change of manager based upon the touchstone of “suitability”.
In the present proceedings questions of “suitability” focus attention on the extent to which a licensed trustee company, as an institutional manager of a large protected estate, can engage with the protected person and his or her family and significant others at a personal level.
The problem for AET in dealing with KT, JC, and their respective families is that it has given to the families an indelible impression that it is only concerned with matters financial, not the personal welfare of their children, and it is not prepared to listen to what they believe to have been the benefit to them of direct engagement with Aeran.
Whatever may be the merits of the commercial dispute between AET and Aeran, if AET wants to retain management of estates like those of KT and JC, it will need to repair a loss of confidence in it arising from the manner in which it implemented its change of policy after its change of ownership.
Experience teaches that if an institutional manager (of any description) wants to retain the confidence of the family of a person whose estate is under protective management it must demonstrate to them that it is alive to their deep concerns.
As I observed in Re TLH, a protected person [2017] NSWSC 737 at [12], families are commonly anxious to preserve an estate (with maximum returns and minimum expenses), acutely conscious of the possibility that, at some indefinite future time, the estate might be exhausted in the midst of ongoing need, and they are commonly sensitive to the possibility that they are being taken for granted by institutional managers. This is especially so if prompt attention is not given to their requests for assistance, and if personnel changes (or decision-making structures) within the institution deny them a means of establishing a personal relationship with an experienced manager familiar with their particular case.
The concept of a “suitable person” in the context of an institutional manager includes an ability and willingness to provide the services of a dedicated staff with personal knowledge of each protected person and his or her family, with constant and ready availability. The personal touch may in some cases, if not all, be just as important as marginal differences in returns on investments.

Having reviewed the principles to be applied, the context in which those principles are to be applied and the personal circumstances of the protected persons whose welfare and interests are the paramount consideration, I turn attention to a determination of the present proceedings.
In doing so, I begin with an acknowledgement that KT and JC are each currently incapable of managing their own affairs and so require an exercise of protective jurisdiction on the part of the Court, recognising that KT (as an adult) has been assessed as having capacity, for example, to make a will and that JC’s incapacity is in part a function of his age. Incapacity for self-management is a nuanced concept focused on functionality.
The size and nature of the respective estates of KT and JC require the appointment of an institutional manager for each estate.
The preference of the respective families of KT and JC for the appointment of a licensed trustee company, rather than the NSW Trustee, should be respected.
AET is and was at all material times technically competent to serve as a financial manager for the estates of KT and JC, whether with or without the services of an external licensed financial adviser.
As a licensed financial adviser Aeran is and was at all material times technically competent to provide financial advice services to a licensed trustee company charged with management of a protected estate.
TPT is technically competent to serve as a financial manager of a protected estate, reserving (for future cases, if and as necessary) the question whether it yet has the staff available in NSW to manage multiple protected estates.
A significant, subjective factor in the respective decisions of the families of KT and JC, originally, to apply to the Court for the appointment of AET as a financial manager of the protected estate of their child was a desire to maintain a working relationship with Aeran as a financial adviser to AET.
The change in ownership of AET provided an occasion upon which the protected persons whose estates were under management by AET, their families and significant others should be allowed an opportunity, objectively, to review the protected estate management orders affecting them; but it did not, of itself, provide a justification for a change in financial manager in the abstract.
However, it is not in these proceedings to be considered only in an isolated, abstract setting. It quickly became a material factor in how protected estates were, and were to be, managed by AET operationally vis-à-vis individual protected persons, their families and significant others, profoundly affecting their confidence in AET’s management.
The unilateral decision of AET, under new ownership, to take all financial advice services “in house” was primarily motivated by the commercial imperatives of AET, not a measured consideration of the welfare and interests of the individual protected persons whose estates were under the management of AET.
The decision of AET, under new management, to take financial advice services “in house” was taken without allowing the families of KT and JC a reasonable opportunity to object or to renegotiate the operational terms upon which AET proposed to engage with them.
The unilateral decision of AET, under new management, to terminate the retainer of Aeran (without allowing the families of KT and JC a reasonable opportunity to object or to re-negotiate the operational terms upon which AET proposed to engage with them) was primarily motivated by the commercial imperatives of AET, not a consideration of the welfare and interests of KT and JC.
Each of the decisions of AET to take all financial services “in house”, and to terminate the retainer of Aeran in its connection with the protected estates of KT and JC, presented an occasion upon which the respective families of KT and JC were entitled to expect that they would be given a reasonable opportunity to object or to renegotiate the operational terms upon which AET proposed to engage with them.
For the family of JC the fact that AET’s appointment as a financial manager of JC’s estate was for the purpose of managing an interim award of personal injury compensation, and subject to review upon the finalisation of the compensation proceedings, presents an additional occasion (and, in fact, a fresh occasion) for a consideration of the identity of a “person suitable” for appointment as manager of JC’s protected estate going forward.
The respective parents of KT and JC, having taken legal advice and given conscientious consideration to the welfare and best interests of their child, have formed the view, on reasonable grounds, that their relationship with AET has broken down to such an extent that they can no longer have confidence that AET can be relied upon by them to manage their child’s estate with the degree of empathy they need and expect.
Although AET remains technically competent to serve as the financial manager of a protected estate in an appropriate case (and, in the abstract, a “suitable person” to occupy such an office), its loss of the confidence of the respective families of KT and JC renders it no longer, for the time being, a “suitable person” to remain manager of the particular protected estates of KT and JC. It is no longer well placed, vis-à-vis the families of KT and JC, to give effect to the general principles enunciated in section 39 of the NSW Trustee and Guardian Act 2009 NSW because of that loss of confidence. Rightly or wrongly, they no longer trust AET. The pendency of these proceedings has stood in the way of any endeavour on the part of AET to win back that trust. Its relationship with the families of both protected persons is such that its continuation in the office of manager of the estates of those particular persons does not serve the best interests of either protected person where an alternative manager is reasonably available.
In the circumstances of the present proceedings, the blanket refusal of AET to “reinstate” Aeran’s retainer (should that still be preferred by the families of KT and JC and Aeran be prepared to accept such a retainer, which perhaps remains to be tested), tells against AET remaining in office as manager of the protected estates of KT and JC.
On one view, this outcome flows from the determination of AET, under new ownership, and privileging its own commercial imperatives, to impose on the families of protected persons, without due consultation with affected families, a management regime unwelcome to those families. Whether it might have fared better if it hastened slowly towards its “in house model”, without disturbing established relationships, but introducing its new model progressively with each of its new appointments to the office of manager or on longer notice, is moot.
The outcome of future applications for a change of manager affecting AET must await a determination “on the merits” of each case; but, in the context of the Court’s protocol, everybody should reflect upon whether arrangements satisfactory to all affected parties might still be negotiated, subject to directions of the NSW Trustee (in the ordinary course) or orders of the Court if need be.
AET and Aeran might do well to settle their differences so that they can each return to their core business in a professional way. A failure to do so could carry unforeseen consequences in their involvement with protected estate management. If they do not resolve their differences neither may be able to expect, as has been a matter of course in the past, to play a role in the management of a protected estate. They need to focus attention on what is required for an orderly regime of protected estate management, with prudential management of risk, driven by the paramountcy principle and, to that extent, subordinating commercial imperatives, if need be.
Given the course of events, prudence may persuade Stacks Goudkamp to step back from a major role in such, if any, applications for a change of manager as may be made arising out of the unresolved controversies between AET and Aeran. They have been too close to the centre of controversy to be seen as independent legal advisers, if independence of legal advice is (as it should be) seen as a virtue. I do not propose, however, that the firm be compelled to stand aside or that clients, or former clients, of the firm be compelled to look elsewhere for legal services.
Ultimately, there is in these proceedings no point in attributing “blame” for what has happened since AET’s change of ownership. The machinery for management of protective estates having broken down as a result of “overreach” on several fronts, the larger question for the Court is what must be done to restore the machinery to a working order.
The conduct of each of AET, Aeran, TPT and Stacks Goudkamp is open to criticism as having unnecessarily disturbed the orderly management of the protected estates of KT and JC (amongst others) by an overreaching concern for their own commercial interests.
The collateral proceedings between AET and Aeran serve no purpose vis-à-vis the welfare and interests of protected persons whose estates are under management.

Lest these orders be misunderstood as an invitation for applications to be made for the removal and replacement of AET, and as vindication of whatever concerted action there may have been in recruitment of families to apply for a change of manager, I record that my decision that AET be removed and replaced in management of the particular protected estates the subject of these proceedings has been made not because of (but in spite of) any such campaign. The present proceedings do not require engagement of the Court’s inherent jurisdiction to relieve a party from liability for a breach of duty or a contempt of court, but the forbearance required of the Court in the exercise of that jurisdiction is not far removed from that required in a decision to “notice, but not notice” conduct arguably open to characterisation as a contempt of court. Interference with, or obstruction of, performance of the functions of a financial manager is not a light matter.
I do not regard either of the preferred models for the provision of financial advice services (internal or external) as inherently superior, one over the other. In management of protected estates there is no presumption in favour or against either model.
With promulgation of the Protocol, and upon consideration of whether an application should be made for directions in relation to the future management of a protected estate, all persons interested in the maintenance of a protected estate should pause for thought before engaging in unnecessary controversy. Timely consultation and empathetic consideration of competing perspectives remains a virtue to be embraced.
I should also caution all concerned that a particular form of management regime (such as appointment of a financial manager with the intention that the manager retain a particular financial adviser or that all financial advice services be provided “in house”) cannot be secured, or entrenched, by a statement of intention about the course of future management made at the time of the application for the appointment of a manager. No party can secure or entrench arrangements for financial advice services by means of a public announcement or a private agreement.
All parties and the public at large are, by these reasons for judgment, cautioned against disruption of the orderly management of a protected estate.
I conclude with the final observation that changes in the staff arrangements of an institutional financial manager do not, of themselves, provide an occasion or justification for the removal and replacement of a manager.

Re KT and JC, Protected Persons

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment

JUDGMENT

INTRODUCTION

Overview

The Applications before the Court

The Nature and Scope of the Court’s Jurisdiction

THE NATURE AND SCOPE OF THE COURT’S PARENS PATRIAE JURISDICTION

THE PARTIES TO THESE PROCEEDINGS, PROCESS AND CONTEXT

THE CENTRAL QUESTIONS IN DISPUTE

PROCEDURAL CONTEXT

The Existing Management Orders

The Orders Sought

THE LEGISLATIVE FRAMEWORK

THE NATURE OF THE OFFICE OF THE MANAGER OF A PROTECTED ESTATE

APPLICABLE PRINCIPLES

THE FORENSIC DYNAMICS OF THESE PROCEEDINGS

CONFLICTS BETWEEN INTEREST AND DUTY

THE ESSENCE OF WHAT IT IS TO BE A PERSON “SUITABLE” FOR SERVICE AS A FINANCIAL MANAGER

ACKNOWLEDGEMENT OF FUNDAMENTALS

A PROTOCOL FOR FINANCIAL ADVICE SERVICES

CONSIDERATION ON THE FACTS OF THE PARTICULAR CASES BEFORE THE COURT

CONCLUSION

COSTS

Legislation Cited (14)

Cases Cited (29)

Cited By (1)