Robinson v Randell

Supreme Court of NSW|2016-11-25|Before: Hallen J

Solicitors: Teece Hodgson & Ward (Plaintiffs) Unsworth Legal Pty Ltd (Defendants) Michie Shehadie and Co Solicitors (Applicant) File Number(s): 2016/255828

Introduction

HIS HONOUR: Before the Court, for urgent hearing on 23 and 25 November 2016 (for about two hours in total), was a contested notice of motion to remove the second Plaintiff's tutor. On 25 November 2016, after the conclusion of the hearing, I refused the relief sought in the notice of motion. I ordered that the applicant's notice of motion be dismissed and ordered the applicant, Lynette Ruth Forwood, to pay the second Plaintiff's, and the tutor's, costs of the application, as well as the costs of the Defendants, who had appeared on each of the days the matter was listed. I indicated that I would provide written reasons and these are the Court's reasons for making those orders.

The Notice of Motion

By her notice of motion, which was filed on 22 November 2016, the applicant, a person who, naturally, was not a party in the substantive proceedings, sought an order that the tutor be removed as the second Plaintiff's tutor; that she be appointed as the second Plaintiff's tutor; and that the Court make "such other and further order as the Court thinks fit".
The applicant swore an affidavit that was read in support of the notice of motion.
The applicant commenced working for the deceased and the second Plaintiff, as a gardener, in about January 2004. She worked as a gardener until she resigned in December 2005 "for personal and family reasons", but returned to work for them in March 2006, working four days a week, again as a gardener. In late 2008, the applicant commenced another separate job, two days per week, which enabled her to continue working for two days per week for the deceased as a housekeeper and in the office. In late 2009, she went back to working four days per week as a gardener, housekeeper and doing some office work. In 2011, the then farm manager having resigned, the applicant assumed the role of office manager and continued to undertake housekeeping, and occasionally, gardening work. In 2013, the deceased and the second Plaintiff came to live on the property known as Princes Farm on a full-time basis, and the applicant assumed the role of their full-time personal assistant and driver. In part, her role was to arrange and take the deceased to doctor's appointments and help him with reading as his eyesight was failing. She did not assert any particularly close association with the second Plaintiff during this period.
Currently, the applicant works full-time on Princes Farm. She sees the second Plaintiff every day that she is at the farm, and she discusses, and organises, her needs with support staff and with Margaret (who also lives on the farm), one of the Plaintiffs in the associated proceedings.
The applicant also signed a Consent to Act as Tutor, on 22 November 2016, which Consent contained the certificate signed by her solicitor, Mr M Shehadie, to the effect that she did not have an interest in the proceedings adverse to the interests of the second Plaintiff.
In her affidavit, the applicant did not identify her employer. Senior counsel for the tutor and the second Plaintiff at the first hearing raised some concerns about this omission, seemingly suggesting that, perhaps, one of the second Plaintiff's other children might be behind the application. He also suggested that her employer might have an interest adverse to the second Plaintiff.

The Hearing of the Notice of Motion

The notice of motion was filed with a return date of 2 December 2016. The solicitor for the Plaintiffs in the associated proceedings, by email sent at 5:26 p.m. on that day to my Associate, provided a copy of the notice of motion and the affidavit in support and requested that "it be listed for an urgent directions hearing as soon as possible and prior to the end of this week". He also adverted to the fact that there was a private mediation which the parties were to attend on 30 November 2016, "at great expense".
At my request, my Associate immediately responded, by email, to all parties that "His Honour would be prepared to list this Notice of Motion tomorrow afternoon at 2:00 p.m. so as to avoid any risk that the mediation will not be able to proceed".
My Associate received confirmation from each of the legal representatives, that the time suggested was suitable to each. Although it was too late to have the listing appear in the Court's list, the notice of motion proceeded at that time.
When the notice of motion was called, Mr M Shehadie, solicitor, appeared for the applicant, Mr C Harris SC appeared for the second Plaintiff and her tutor in the substantive proceedings, Mr R Wilson SC appeared for the Plaintiffs in the associated proceedings, and Mr L Ellison SC appeared for the Defendants in each of the substantive proceedings. (On 25 November 2016, Ms S Warren of counsel appeared for the applicant.)
Following the reading of the notice of motion and the affidavit in support by Mr Shehadie, Mr Harris SC tendered some documents. Mr Wilson SC sought to file in Court and read an affidavit to which Mr Harris SC objected (as a copy had only been provided to his solicitors at Court) and which, subsequently, I rejected. Mr Ellison SC did not read any evidence or tender any documents.
The Plaintiffs in both proceedings and the applicant accepted that the second Plaintiff was a person under a legal incapacity and that she required a tutor. The Defendants did not dispute that the second Plaintiff required a tutor but were not prepared to admit that she did. (It seemed to me that this fact required confirmation, even though the applicant's application was not for the removal of the tutor on the basis that the second Plaintiff no longer required one.)
In an application for removal, the tutor must establish that the appointment of the tutor continues to be justified in the circumstances: Coffey v Coffey (No. 2) [2015] NSWSC 338 at [5] and [10] (Slattery J).
When asked to identify the grounds on which the application to remove the tutor was being made, Mr Shehadie stated that the basis of the application was that the current tutor was a person who had an interest in the proceedings adverse to the interests of the second Plaintiff. When asked to identify the evidence in the applicant's affidavit to support that ground, he stated that he was unable to do so and that what the applicant was relying upon was other evidence, filed in the substantive proceedings (to which no reference had been made at the hearing and no notice of reliance on such affidavits had, apparently, been given.)
When asked to identify that evidence, Mr Shehadie was unable to do so, submitting that he had not anticipated that the notice of motion was to be heard and determined. He then made an application to adjourn the notice of motion to later in the week to enable the applicant's counsel to be available and to enable an opportunity to be given to identify and consider the evidence upon which it was intended to rely.
Mr Harris SC opposed the application to adjourn the notice of motion upon the basis that to do so was futile because the notice of motion was, on any view, hopeless. (He provided written submissions to support that proposition, to which I shall later refer.)
Because I considered that there might have been some ambiguity or misunderstanding regarding whether the listing of the notice of motion urgently meant that it would be heard at that time ("directions" having been adverted to in the email), I granted the applicant's application for adjournment, but ordered her to pay the second Plaintiff's and tutor's costs of that day (which order Mr Shehadie did not oppose).
I made the order for costs because if there had been ambiguity or misunderstanding, it should have been resolved prior to the hearing of the notice of motion and also because Mr Shehadie should not have waited until submissions had begun to state that other evidence, which, up to that time, had not been adverted to, was to be relied upon in support of the notice of motion.
I then made directions regarding the service of an outline of submissions, which was to include a reference to the evidence already filed, upon which it was intended to rely. I adjourned the notice of motion until Friday 25 November 2016.
On 25 November 2016, the parties again appeared. Ms Warren of counsel sought to read the affidavit of Michael Jaloussis sworn 23 November 2016 (referred to earlier as the affidavit that had been rejected), to which, relevantly, was annexed a report of Dr M F Kakkat, a senior hospitalist, Geriatric Medicine, at Nepean Hospital. (The Macquarie Dictionary defines a hospitalist as "a medical practitioner who works in the public healthcare sector to provide cross-specialty expertise and facilitate a patient's access to a variety of medical services".)
So far as is relevant, the report stated that the second Plaintiff had been seen at her home on 1 September 2016 in the presence of the tutor. It is unnecessary to set out all of the contents of the report, other than to note that: "On mental status examination, she presented as an appropriately dressed elderly Caucasian lady. Her mood was depressed and affect was congruent…There were hallucinations of animals and people around. She scored 21/25 on SMMSE [the Standardised Mini-Mental State Examination] as she was not able to write or draw because of her pain in the joints. She scored 2/3 on memory recall. …A full cognitive assessment is not possible at this stage because of her uncontrolled pain and her depressive symptoms…".
There was no evidence by the applicant of how she came to know of, or otherwise be involved in, making the application. Her evidence regarding her role in the life of the second Plaintiff did not reveal how she would have known about the current proceedings or the nature of the claim of the second Plaintiff against the estate of the deceased.
I should also note that the applicant, in the evidence upon which Mr Shehadie relied in support of the notice of motion, did not disclose her financial and material circumstances and whether she had any ability to satisfy the second Plaintiff's costs of her own solicitors, or to satisfy the order for costs, if any, that may be made in favour of the Defendants. This is relevant, as will be read when the evidence relied upon by Mr Harris SC is adverted to.
At the hearing on 23 November 2016, Mr Harris SC tendered and relied upon a letter dated 23 November 2016, sent by the Defendants' solicitors (not by the applicant's solicitors), to the Plaintiffs' solicitors, requesting "your clients to produce at the listing the original or a copy of any will of [the second Plaintiff] made since 1 January 2014": (Ex. NMP1). He also tendered and relied upon firstly, a Notice to Produce served upon the applicant in which she was required to produce: "1. A copy of the cost disclosure and costs agreement you have with your solicitors acting in this matter. 2. Copy of any agreement with any other person or company in relation to the payment of legal fees of the Motion filed 22 November 2016 and the proceedings should you be appointed tutor." and secondly, the documents produced, being an unsigned, undated and incomplete "Costs Disclosure and Costs Agreement" together with "General Terms of Business" (which was described by Mr Shehadie as a "draft") (together marked Ex. NMP2).
At the hearing on 25 November 2016, the second Plaintiff's tutor relied upon the certificate given by the solicitor that was included in the Consent to Act as Tutor. (In Saravinovska v (Chris) Saravinovski; Saravinovski v Saravinovski (No 5) [2015] NSWSC 128 at [36] - [48], Kunc J had dealt with the evidentiary nature of the solicitor's certificate and concluded that a certification by a legal representative to the effect required by UCPR rule 7.18(5)(b) was evidence of the fact certified, and could be relied upon by the Court in the absence of evidence to the contrary, but that the facts stated in the certificate were not conclusive or irrebutable.)
In addition, Mr Harris SC tendered, as Ex. NMP3: 1. A letter dated 24 November 2016 from the second Plaintiff's and tutor's solicitor, to the applicant's solicitor, asking: "1. Who is your client's employer or employers? 2. Is there an agreement between your client and any other party as to the funding of these proceedings if she is appointed tutor? Has she made any informal or formal agreement with any of the executors of the estate of the deceased, Anthony Cummings, or any other person, regarding who is to bear the burden of her legal costs? If so, please provide us with a copy of any written agreement.…" 1. The response dated 25 November 2016 to that letter, from the applicant's solicitor, which relevantly stated: "1. Stopoff Employees Pty Limited. A copy of our client's most recent payslip is attached and 2. Yes. Anthony Cummings has agreed to indemnify our client against any costs incurred in the application. As yet there is no written agreement." 1. A copy of a medical report dated 10 November 2016 from Dr Michael Noel to Dr Philip Chen, relating to a consultation with the second Plaintiff, which took place on 10 October 2016. (It is unnecessary to refer to the contents of this report which confirms the undisputed fact that the second Plaintiff is a person under a legal incapacity.)
No ASIC search of the employer of the applicant, Stopoff Employees Pty Limited, was tendered.

The Submissions

In accordance with the directions made on 23 November 2016, the Court received submissions made on behalf of the applicant.
The applicant's submissions included the following passage: "20. The applicant is an employee of the estate. In the applicant's submission that fact does not create an interest adverse to [the second Plaintiff's] interest. The applicant has no interest in the estate and is not a beneficiary of any of the trusts."
It was inferred, since "the estate" is not a juristic entity, that the applicant meant that her employers are the two Defendants, who are the executors of the estate of the deceased to whom Probate of the deceased's Will was granted and who are directors of Stopoff Employees Pty Limited.
I have adverted to the affidavit evidence of the applicant. There is other evidence referred to in the applicant's submissions.
The applicant's submissions identified the following matters which were said to be relevant to the ground relied upon to remove the tutor: 1. At the time when the Summons naming the second Plaintiff as a party with a tutor was filed, and at the time when she swore her affidavit of 21 September 2016, the tutor did not have any evidence that the second Plaintiff was a person under a legal incapacity. Without such evidence, she appointed herself as the tutor for the second Plaintiff and commenced proceedings on behalf of the second Plaintiff. This suggested that the tutor had acted in her own interest rather than in the interest of the second Defendant in commencing the proceedings. 2. Whilst the tutor disclosed in her affidavit sworn 21 September 2016 that the second Plaintiff was a discretionary object of the Cummings (Ranvet) Trust, the Rosscarberry Trust and the Cummings Family Trust, she did not disclose, in her affidavit, that she (Ms Casey) was a discretionary object of those same trusts. Reference was made to paragraph 25 of her affidavit in which she had disclosed her knowledge of the ownership of the home in which the second Plaintiff lives, (it is owned by Stopoff Pty Limited as trustee of the Rosscarberry Trust), again, not disclosing that she (Ms Casey) was a discretionary object of that Trust, and paragraph 32 of her affidavit, in which she disclosed her knowledge of the identity of the trustees of the three previously identified trusts, but, again, did not disclose that she was also a discretionary object of those trusts. 3. The tutor did not disclose, in paragraph 38 of her affidavit, a Memorandum of Wishes that had been signed by the deceased and by the second Plaintiff, which revealed the wishes of the second Plaintiff and the deceased. (The Memorandum of Wishes is identified in the affidavit of the first Defendant, Aaron Ross Randell, sworn 27 October 2016).
It was then submitted that these matters led to the conclusion that the tutor had an interest adverse to that of the second Plaintiff and that the Court could not be satisfied that the second Plaintiff's interests would be properly protected by her tutor; that there was a potential conflict of interest between the second Plaintiff and the tutor and that the latter's "interest in the estate may be adverse to the interests of [the second Plaintiff] in these proceedings".
(I should mention that despite the fact that none of the Trust Deeds were tendered on the notice of motion, the parties seemed to accept that each of the relevant trusts is of a character which may conveniently be described as a discretionary trust, that is to say, "another species of express trust, one where the entitlement of beneficiaries to income, or to corpus, or both, is not immediately ascertainable. Rather, the beneficiaries are selected from a nominated class by the trustee or some other person and this power may be exercisable once or from time to time": Re Commissioner of Taxation v Vegners [1989] ATC 5274; [1989] FCA 480, at [12] (Gummow J); affirmed on appeal in Vegners v Federal Commissioner of Taxation (1991) 21 ATR 1347; [1991] ATC 4213. In other words, a discretionary object, prior to any appointment to him, her or it, under a power contained in the trust instrument, has no entitlement to any fixed beneficial interest, or proprietary interest, in the assets held on trust: Kennon v Spry (2008) 238 CLR 306; [2008] HCA 56.)
Mr Harris SC submitted: 1. The tutor is the closest relative of the second Plaintiff, who is not making a claim which is adverse to her in relation to the estate and notional estate of the deceased. In fact, she is not making any claims against the estate or notional estate of the deceased. 2. There has been a significant delay in the application to remove the tutor of the second Plaintiff: the appointment of the tutor had been known since service of the Summons in the substantive proceedings. In addition, the matter had been before the Court on 23 September 2016, 28 October 2016, and 11 November 2016. If the applicant had considered that the tutor was unsuitable for any reason, an application to remove her should have been made promptly. 3. In circumstances where the executors of the deceased's Will to whom Probate has been granted, in whichever capacity they act, employ the applicant, and when they are the Defendants in the substantive proceedings, those persons obviously have an interest adverse to the second Plaintiff and the applicant might be placed in a position where her own interests conflict with the interests of the second Plaintiff. 4. There was evidence of the person who will be responsible (by way of indemnity), ultimately, for the payment of costs incurred by the applicant, as the proposed tutor in the proceedings. He is, of course, a person who has an adverse interest as a competing claimant upon the bounty of the deceased, and one of the plaintiffs in the associated proceedings.

Legal Principles

I have dealt with some of the principles relating to the appointment of a tutor in Rappard v Williams [2013] NSWSC 1279 at [62] - [84]. It is not necessary to repeat all of what I wrote in that case, but the following principles stated in that case and otherwise appear to be particularly relevant: 1. A person under legal incapacity may not commence, or carry on proceedings, except by his or her tutor: UCPR rule 7.14(1). 2. UCPR rule 7.15(1) contemplates that a person may become the tutor of a person under legal incapacity without the need for any formal instrument of appointment, or any order of the Court. Nor is the approval of the Court of the nominated tutor required. A Court order is only required where it is sought to substitute one tutor for another (UCPR, r 7.15(5)). However, the Court retains overall supervision over a party's conduct of proceedings through a tutor: Coffey v Coffey (No. 2) at [4] (Slattery J). 3. A person not being under a personal incapacity to sue, not being an accounting party, not having an interest adverse to the person under a legal incapacity and not relevantly connected with any other party to the proceedings may be a tutor: R v Registrar of Melbourne County Court [1927] VLR 406; (1927) 33 ALR 270. 4. The tutor represents the person and does not pursue a personal interest in the proceedings.
In Yakmor v Hamdoush (No 2) [2009] NSWCA 284 at [45], Giles JA succinctly summarised the position of the tutor as follows: "A tutor represents the person under incapacity, and does, on the person's behalf in relation to the conduct of the proceedings, whatever the person could do. A tutor is on the record at least in the sense that consent to act has been filed. The person under incapacity is named on the record, but cannot do anything for him or herself. The tutor cannot have any conflicting interest. There is practical identity between the tutor and the represented party in bringing and conducting the proceedings, albeit the name on the record as plaintiff or defendant (in this case as appellant) is the name of the person under incapacity. The costs liability of the tutor, as an incident to the office, is legal identity for costs purposes, on the rationale that one of the reasons a tutor is required is that there should be a person answerable for costs. For costs purposes, then, the tutor is to be regarded as a party."
In relation to the issue presently before the Court, there was no dispute that it is not appropriate for a person to be appointed as tutor where the proposed tutor has an adverse interest to that of the person to be represented and that the existence of a conflicting interest is a basis on which a tutor may be removed: Varma v Varma [2010] NSWSC 785 at [24] (Ward J, as her Honour then was).
In Douglas v Douglas [2004] NSWSC 279 at [18], Dowd J noted: "Tutors are appointed in all manner of proceedings before this Court and very often have an interest which is inconsistent with that of a defendant or other parties to proceedings. However, the Rules provide that clearly a tutor to a disabled person must not have an interest adverse to the interests of the disabled person and the Rules do not provide that constraint concerning other parties. Clearly, within this family there are going to be difficult matters to resolve, not only in relation to the occupation of the subject premises but matters of management of the estate, and very difficult matters to resolve between the parties in the event of the death of the plaintiff."
There was also no dispute that, where possible, the Court prefers to appoint a family member as tutor in preference to a stranger unless the interest of that family member is adverse to that of the incapacitated person: Deputy Commissioner of Taxation v P (1987) 11 NSWLR 200; Saravinovska v (Chris) Saravinovski; Saravinovski v Saravinovski at [34] (Kunc J).
That the tutor did not have any medical evidence to support the need for her to have a tutor seems, to me, to be irrelevant to the present application, since there does not appear to have ever been any dispute that the second Plaintiff is a person who requires a tutor. One might have thought if it had been in serious dispute that she required a tutor when the substantive proceedings had been commenced, that a notice of motion would have been filed by the second Plaintiff herself, upon ascertaining that the substantive proceedings had been commenced with a tutor, or by one, or more of her other children, seeking the removal of the tutor on the basis that the second Plaintiff did not require a tutor.
The applicant did not disclose in the written submissions how the fact that the tutor was a discretionary object of a number of the trusts in which the trustee was a company controlled by the Defendants, was an interest adverse to the second Plaintiff who was also a discretionary object. Nor did the argument become clearer during the oral submissions.
It cannot be in dispute that a discretionary object does not have a legal, or equitable, interest in any of the trust's assets unless the provisions of the trust instrument create that result: see, CPT Custodian Pty Ltd v Commissioner of State Revenue of the State of Victoria (2005) 224 CLR 98; [2005] HCA 53. But a discretionary object does have a right to enforce the trustee's obligation properly to exercise its discretionary powers and to compel proper administration of the trust: Gartside v Inland Revenue Commissioners [1968] AC 553, at 617-618; Spellson v George [1987] 11 NSWLR 300; Schmidt v Rosewood Trust Ltd [2003] 2 AC 709; Avanes v Marshall [2007] 68 NSWLR 595.
Having a mere hope, or expectation, that a trust will be exercised in her favour, does not mean that the interests of the tutor and the second Plaintiff are adverse. It is the trustee, of each trust, which, presumably, has the complete discretion as to distributions of income or capital. Any given discretionary object has no more than the equal right, with any other discretionary object, to be considered by the trustee of the relevant trust, as a potential recipient of distributions from the relevant trust.
As was written by Brereton J in Cypjayne Pty Ltd v Sverre Rodskog [2009] NSWSC 301 at [41]: "Thus a discretionary trust does not have beneficiaries in the traditional sense, whose interests together aggregate the beneficial ownership of the trust property. Instead, there is a class of persons, usually described in wide terms, who are the objects of a trust power to appoint either income or corpus or both to selected members of the class. The members of the class are objects of a trust power, rather than beneficiaries in the strict sense. They do not have a proprietary legal or equitable interest in the trust fund, though they have a right to due administration of the trust [Re Smith [1928] Ch 915; Gartside v IRC [1968] AC 553; Jacob's Law of Trusts in Australia, 5th ed, 649 [2315]]. They have no beneficial interest in the trust property; they are not persons for whose benefit the trust property is held by the trustee; at the highest they are members of a class of persons for the benefit of some one or more of whom the trustee may in due course hold property if it so determines. At best, they are potential beneficiaries, not beneficiaries."
Furthermore, there was no evidence that the tutor has any present claim in respect of the second Plaintiff's property. As the second Plaintiff is alive, assuming that she is a beneficiary named in the second Plaintiff's Will, there is no evidence that she currently has any claim against the second Plaintiff's estate, as a beneficiary, or under the Succession Act 2006 (NSW), or any interest to protect such future rights under that Act.
As was written by Kunc J, at [50], in Saravinovska v (Chris) Saravinovski; Saravinovski v Saravinovski (No 5) at [50] - [51]: "…if these kinds of future possible rights were a disqualification to being a tutor, then the law's preference to appoint family members would be seriously undermined. The same conclusion can be reached by an alternative route. Insofar as Chris' assets are concerned and, assuming again for the sake of the argument that Louie is a beneficiary under Chris' will, Chris' and Louie's interests align rather than conflict in relation to Chris' assets. In other words, they share a common interest in ensuring that Chris' assets are not depleted by reason of the litigation or any settlement."
The evidence relied upon, in my view, does not disclose that the tutor has any adverse interest in the proceedings, or any other conflict, which would prevent her continuing to act as the second Plaintiff's tutor. The application for the removal of the tutor and the appointment of the applicant as her tutor, therefore, was dismissed.
I should also mention that s 80 of the Civil Procedure Act 2005 (NSW) provides that on the application of the tutor for a person under legal incapacity, the Supreme Court may give directions with respect to the tutor's conduct of proceedings, whether before the Supreme Court, or any other court, on behalf of that person. This power has been described by Slattery J as "a special power of advice and supervision between the tutor of a person under legal incapacity and the Supreme Court": Smilevska v Smilevska [2015] NSWSC 1794 at [35].
Accordingly, if the tutor has any concerns regarding the conduct of the second Plaintiff's proceedings, she may seek the directions of the Court.
Had I formed the view that the tutor did have an adverse interest, I would have had some difficulty appointing the applicant in any event as I am not satisfied that she has no interest adverse to that of the second Plaintiff. Where her employers are the Defendants named in the substantive proceedings, or where they are the directors of the company that is her employer, and where she is being indemnified as to her costs of the notice of motion and of the proceedings by a competing claimant upon the bounty of the deceased who has, himself, commenced proceedings, it seems to me that the applicant might very well find herself with a conflict of interest.
It has not been necessary to formally relist the matter to hand down these reasons as the applicant and the parties in these and the associated proceedings, requested that the Court should simply provide to each of the legal representatives who appeared a copy of these reasons. Each of the legal representatives has been advised when these reasons will be published and of the medium neutral citation.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 23 April 2018

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