SC v Ability One Financial Management Pty Ltd

REMUNERATION ORDERS MADE IN FAVOUR OF THE MANAGER

1. The orders made for the appointment of Ability One Financial Management Pty Ltd as manager of JC's protected estate included two orders relating to remuneration of the company as manager. Those orders reflect the fact that the company operates a business as a "private manager for reward" otherwise than as a licensed trustee company.
2. As the office of a protected estate manager (commonly described as a "financial manager") is a gratuitous one, a manager without statutory authority authorising remuneration requires an order of the Court granting authority to charge, receive and retain remuneration for performance of the obligations of a manager: Ability One Financial Management Pty Ltd and Anor v JB by his Tutor AB [2014] NSWSC 245; Re Managed Estates Remuneration Orders [2014] NSWSC 383.
3. The orders made by Slattery J on 15 February 2023 included orders to the following effect: 1. Order, subject to any order of the Court, that the NSW Trustee (upon the passing of accounts of the manager of the estate of a managed person or otherwise) may allow, out of the estate of the managed person, such, if any, remuneration (including expenses) of the manager as may be just and reasonable, subject to being satisfied that: 1. the manager has duly performed the functions of a manager; and 2. it is in the best interests, and for the benefit, of the managed person to do so. 1. Order, subject to: 1. further order; 2. due performance of its obligations as a manager of the protected estate of JC; and 3. its ongoing liability to account for estate property, that Ability One Financial Management Pty Ltd may be allowed out of the estate of the second defendant (including any fees of Ability One Financial Management Pty Ltd) such, if any, remuneration for its provision of services as manager of the estate of JC as may be just and reasonable, not exceeding the amounts of rates disclosed to the Court upon its appointment as manager or such other amounts or rates as may, from time to time, be fixed by the NSW Trustee.
4. The latter of these orders is, in terms, a standard order for a private manager for reward (other than a licensed trustee company) who is deemed to be suitable for appointment as a manager for the purposes of section 41 of the NSW Trustee and Guardian Act 2009 NSW.

THE CURRENT PROCEEDINGS: A PROCEDURAL OUTLINE

1. The current proceedings were commenced by a summons filed on 13 November 2023 in which SC, as plaintiff, sought against Ability One Financial Management Pty Ltd (as the first defendant) and JC (as the second defendant) orders to the following effect: 1. an order that JC's estate remains subject to management under the NSW Trustee and Guardian Act 2009 NSW; 2. an order that Ability One Financial Management Pty Ltd be removed as manager of JC's protected estate; 3. orders for the appointment of Northern Plateau Wealth Management Pty Ltd (a Queensland based corporation) as manager of the estate in lieu of Ability One Financial Management Pty Ltd and that it be authorised to receive remuneration for acting as manager; and 4. an order that the costs of the plaintiff be paid out of JC's estate on the indemnity basis.
2. On 11 December 2023, at a directions hearing, I ordered that FC (the surviving son of JC's two sons) be joined in the proceedings as the third defendant.
3. On 11 March 2024 I made a formal notation that Ability One Financial Management Pty Ltd, in effect, submitted to the orders of the Court but remained prepared to assist the Court by the provision of a report or reports, reserving any right it may have in respect of criticism going to its reputation.
4. JC, as the second defendant, and as a person admittedly incapable of managing his affairs, has played no active role in these proceedings. At no time has he appeared before the Court during the currency of these proceedings. Nobody has filed an affidavit purporting to have been sworn by him. He has not been called by any party to give evidence of any kind he might have given directly and personally about management of his affairs.
5. FC has opposed SC's summons and is his natural contradictor. They have fundamentally different views about JC's best interests.
6. JC's wife and one of their two children (a son) have died. FC is a son of JC and his only surviving child. SC is a nephew of JC with whom JC lives in Queensland.
7. FC believes that SC was the effective cause of JC moving to Queensland away from his family home in Greystanes, Sydney, near FC; that, suffering from dementia, JC lives not only in the care of SC but under his controlling influence; that SC has obstructed his access to JC; and that SC is motivated by a desire to secure JC's wealth for himself, if not during JC's lifetime then, upon JC's death, under a will ostensibly made in favour of SC at the time JC moved to Queensland.
8. SC, for his part, denies any wrongful conduct vis-à-vis JC and maintains that he and his family care for JC without charge and without any motivation to benefit from JC's estate.
9. The NSW Trustee appeared throughout the proceedings to assist the Court.
10. With the benefit of reports prepared by Ability One Financial Management Pty Ltd in its capacity as manager of JC's estate and by the NSW Trustee, as well as affidavits and documentary evidence, the summons was heard on an expedited basis on 2-3 May 2024. With the acquiescence of all parties, the evidence before the Court was adduced without objection save as to relevance. Counsel for SC was anxious that any reference to the judgments of Slattery J be limited by reference to section 91 of the Evidence Act 1995 NSW.
11. Upon an assumption that section 91 applies without qualification upon an exercise of protective jurisdiction, I have endeavoured not to contravene the strict letter, or spirit, of the section. No party has made submissions to the effect that a fact that was in issue in the Slattery J proceedings can be taken as having been proved for the purpose of these proceedings by a finding of fact made by his Honour.
12. Section 91 of the Evidence Act 1995 is in the following terms: "Exclusion of evidence of judgments and convictions (1) Evidence of the decision, or of a finding of fact, in an Australian or overseas proceeding is not admissible to prove the existence of a fact that was in issue in that proceeding. (2) Evidence that, under this Part, is not admissible to prove the existence of a fact may not be used to prove that fact even if it is relevant for another purpose. Note - Section 178 (Convictions, acquittals and other judicial proceedings) provides for certificate evidence of decisions."
13. It is not necessary to notice in this judgment the "exceptions" specified in section 92 and the "savings" noted in section 93 of the Evidence Act.
14. It is common ground for the purpose of these proceedings that JC is and at all material times has been a person incapable of managing his own affairs at least from the time he was declared by Slattery J to be incapable of self management. His Honour's determination of incapacity is not challenged in these proceedings. The central focus of the proceedings is upon the identification of a manager of his protected estate, predicated upon an acceptance that he lacks capacity.
15. A number of affidavits were read in support of SC's summons. Of them, only two deponents have had substantial personal contact with JC. One is SC himself. The other is SR, JC's committee of the person. Other affidavits relied upon by SC are those relating to his proposed new "financial manager". They are, in a sense, formal at least in circumstances in which I have formed the view that, for the time being, it is not in the best interests of JC for there to be any change in the identity of the manager of his protected estate.
16. SC was cross examined by counsel for FC. There was no cross examination of SR or any of SC's other deponents.
17. Ability One Financial Management Pty Ltd prepared for the Court a report dated 31 January 2024 which was admitted into evidence, and an affidavit of the principal of the company and its related company (Ability One Pty Ltd), Mr Grant White. Mr White was cross examined by counsel for SC.
18. FC swore an affidavit in opposition to SC's summons but it was not read on the hearing of the summons, counsel announcing that he did not regard it as relevant to the issues ultimately to be determined in the current proceedings. No party challenged that announcement or sought to read, or tender, any part of FC's affidavit.
19. The NSW Trustee provided a report to court dated 1 March 2024 which was admitted into evidence.

THE PRINCIPLES TO BE APPLIED

1. There is no dispute about the principles to be applied on an application for a change in the identity of the manager of a protected estate.
2. Informed by the judgment of the Court of Appeal in Holt v Protective Commissioner (1993) 31 NSWLR 227, guideline principles were summarised in M v M [2013] NSWSC 1495 at [49]-[50] in the following terms: "ENDURING VALUES IN THE APPOINTMENT OF A MANAGER OF A PROTECTED ESTATE [49] In a decision-making environment undergoing a process of change, attention needs to be given to identification of what can change, and what must remain constant, to serve the ends for which decisions are made. [50] As presently advised, and subject to reconsideration in light of further experience and argument in contested cases, I adopt the following propositions as non-exhaustive "guidelines" (or, in deference to Kirby P's observations in Holt v Protective Commissioner (1993) 31 NSWLR 227 at 241E-F and 243E-F, a "framework of approach" or a "checklist of considerations") that might be borne in mind when the Court is called upon to make a decision about the identity of a manager of a protected estate or the substitution of one manager for another: (a) First, the jurisdiction the Court is called upon to exercise is not a "consent jurisdiction". An order for the appointment, removal or replacement of a particular manager is not to be made merely because a party, or some other person, seeks it, consents to it or acquiesces in it: JJK v APK (1986) Australian Torts Reports 80-042 at 67, 881 (first guideline); JMK v RDC and PTO v WDO [2013] NSWSC 1362 at [60]-[62]. The Court is bound to exercise an independent judgment because of the public interest element in the decision to be made and the possibility, if not the fact, that the protected person lacks the mental capacity requisite to informed decision-making. (b) Secondly, the governing purpose of the jurisdiction exercised by the Court is protection of the welfare and interests of the particular protected person concerned: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238B-C and 241A-B and F-G. (c) Thirdly, any decision made affecting the welfare or interests of a protected person must be made in a manner, and for a purpose, calculated to be in the best interests, and for the benefit, of the protected person: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238D-F and 241G-242A. (d) Fourthly, care needs to be taken in all decision-making affecting a protected person to focus on the facts of the particular case, preferably with due consultation with the protected person, his or her family and carers who may be well placed to inform the Court of the protected person's particular circumstances: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238C-239B, 240D, 241B-F and 243E-F; Re L [2000] NSWSC 721 at [10]. (e) Fifthly, in the choice of a manager consultation of the welfare and interests of a protected person may favour appointment of a member of his or her family over the appointment of an institutional manager: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238G-239B. (f) Sixthly, decisions need to be made in the context of a prudential management regime that can be administered, without strife in the simplest and least expensive way, in the interests of the protected person: HS Theobald, The Law Relating to Lunacy (Stevens and Sons, London, 1924), pp 380 and 382. (g) Seventhly, regard needs to be had to the value and nature of the property comprising a protected person's estate in deciding upon the identity of a manager or an appropriate management plan: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 242E and 243D-F. (h) Eighthly, recognition needs to be given to the status and obligations of a manager of a protected estate as the holder of a fiduciary office. This means that the Court, managers and other affected persons need to be alive to the importance of avoiding, or at least minimising, exposure of a protected person to dangers associated with a manager having a conflict between a duty owed to the protected person and the manager's personal interests: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 239B and 242B-C; Re L [2000] NSWSC 721 at [12]. Nevertheless, it must also be recognised that the liability of a manager of a protected estate to account may differ from that of a trustee of an ordinary trust to the extent necessary to accommodate the protective purpose of the manager's appointment: Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 420-423. (i) Ninthly, in conformity with fiduciary law, the office of a manager of a protected estate must generally be regarded as a gratuitous one unless, by an order of the Court or by legislation, a special arrangement to the contrary is made: Gell v Gell (2005) 63 NSWLR 547 at 553-554 [21]-[23]; Macedonian Orthodox Community Church St Petka Incorporated v Bishop Petar (2008) 237 CLR 66 at 93 [69]. (j) Tenthly, in deciding whether, when and on what terms a manager of a protected estate is to be allowed remuneration out of the estate, care needs to be taken not to shift the focus of decision-making from what is in the best interests, and for the benefit, of the protected person to a perceived "right" on the part of any, or any prospective, manager to remuneration. If a manager is to be allowed remuneration, a decision to that effect must be driven by the perspective of the protected person, not the perspective of the manager: Fletcher, Ex parte (1801) 6 Ves Jun 427; 31 ER 1127; Re Walker (1848) 2 Phil 630; 41 ER 1087; Re Westbrooke (1848) 2 Phil 631; 41 ER 1087; G v B (Powell J, 27 May 1992) BC 9201855 at 13. (k) Eleventhly, the primacy given to the protective purpose of the Court's jurisdiction carries with it, as a correlative, the absence in any manager (public or private) of a legal entitlement to be, or to remain, manager of a particular protected estate: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 237F-238F. (l) Twelfthly, a decision about whether a manager should be replaced may need to be approached differently from one made about the identity of an appointment as an initial manager because of a perceived need to identify an acceptable reason (ie, one governed by the purpose of the protective jurisdiction and consideration of the best interests of, and benefits available to, the protected person) for change. Depending on the facts of the particular case this may, but will not necessarily, involve recognition that an applicant for change bears, at least, a forensic onus to establish a case for change: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 237F, 238B-F, 239C-G and 242A-B. (m) Thirteenthly, a manager, or prospective manager, of a protected estate needs to have given thoughtful attention (in the case of a private manager, in consultation with the NSW Trustee and, in the context of the Corporations Act, the Australian Securities and Investments Commission) to the development, and operation, of a plan for management of the protected person's estate: Re L [2000] NSWSC 721 at [11]-[12]; Re McL [2001] NSWSC 280 at [3]-[5]. (n) Fourteenthly, although disputes about the management of a protected estate may at times need to be determined in an adversarial setting, an exercise of protective jurisdiction is not inherently, or necessarily, adversarial in nature. That reality finds expression in the Court's approach to orders for costs in protective list proceedings. The Court ordinarily exercises its discretion, not by reference to a rule that costs follow the event, but having regard to what, in all the circumstances, seems proper: CCR v PS (No 2) (1986) 6 NSWLR 622 at 640. (o) Fifteenthly, part of the role of the Court in its exercise of protective jurisdiction is to give consideration to the manner and form of a decision-making process calculated to ensure that the protective purpose of the jurisdiction is duly served. (p) Sixteenthly, in the context of the current legislative and administrative regime for management of protected estates, the Court will ordinarily require that any substantial decision it may be called upon to make affecting a protected estate, beyond the routine, is made on notice to the NSW Trustee, allowing the NSW Trustee to be heard in an appropriate case and inviting its assistance where necessary."
3. These guideline principles were confirmed in Ability One Financial Management Pty Limited and Anor v JB by his Tutor AB [2014] NSWSC 245 at [34]-[35] and supplemented by the following observation in [36]: "MB v Protective Commissioner (2000) 50 NSWLR 24 at 46 [126] - 47 [129] should be added to the list of authorities here cited, as a demonstration that a manager (in that case, the Protective Commissioner) may be replaced, simply, on the ground of a breakdown in personal relationships between the manager, the protected person and the protected person's carer. Hodgson CJ in Equity's judgment also illustrates that, in serving the interests of the protected person, an incoming manager may have an obligation to hold an outgoing manager to account: 50 NSWLR 32 [36] - 33 [37] and 37 [64]."
4. A determination of these proceedings can be accommodated (without recourse to the Court's inherent jurisdiction) within the statutory framework focused upon the NSW Trustee and Guardian Act 2009 NSW, sections 39-41 and the Interpretation Act 1987 NSW, section 47.
5. Sections 39-41 of the NSW Trustee and Guardian Act 2009 NSW are in the following terms: "39 General principles applicable to Chapter It is the duty of everyone exercising functions under this Chapter with respect to protected persons or patients to observe the following principles - (a) the welfare and interests of such persons should be given paramount consideration, (b) the freedom of decision and freedom of action of such persons should be restricted as little as possible, (c) such persons should be encouraged, as far as possible, to live a normal life in the community, (d) the views of such persons in relation to the exercise of those functions should be taken into consideration, (e) the importance of preserving the family relationships and the cultural and linguistic environments of such persons should be recognised, (f) such persons should be encouraged, as far as possible, to be self-reliant in matters relating to their personal, domestic and financial affairs, (g) such persons should be protected from neglect, abuse and exploitation. 40 Orders for management may apply to part of estate An order may be made under this Chapter for the management of the whole or part of the estate of a person. Note - Orders for the financial management of the estates of persons under guardianship may also be made under Part 3A of the Guardianship Act 1987. Such persons are protected persons for the purposes of this Act. 41 Orders by Supreme Court for management of affairs(cf PE Act, s13) (1) If the Supreme Court is satisfied that a person is incapable of managing his or her affairs, the Court may - (a) declare that the person is incapable of managing his or her affairs and order that the estate of the person be subject to management under this Act, and (b) by order appoint a suitable person as manager of the estate of the person or commit the management of the estate of the person to the NSW Trustee. (2) The Supreme Court may make an order on its own motion or on the application of any person having a sufficient interest in the matter. (3) For the purposes of this section - (a) evidence of a person's capability to manage his or her own affairs may be given to the Supreme Court in any form and in accordance with any procedures that the Court thinks fit, and (b) the Court may personally examine a person whose capability to manage his or her affairs is in question or dispense with any such examination, and (c) the Court may otherwise inform itself as to the person's capability to manage his or her own affairs as it thinks fit. (4) Subsection (3) also applies to an application arising out of the operation of section 37 (2) of the Powers of Attorney Act 2003."
6. Section 47 of the Interpretation Act 1987 NSW is in the following terms: "Powers of appointment imply certain incidental powers (1) If an Act or instrument confers a power on any person or body to appoint a person to an office - (a) the power may be exercised from time to time, as occasion requires, and (b) the power includes - (i) power to remove or suspend, at any time, a person so appointed, (ii) power to appoint some other person to act in the office of a person so removed or suspended, (iii) power to appoint a person to act in a vacant office, whether or not the office has ever been filled, and (iv) power to appoint a person to act in the office of a person who is absent from that office, whether because of illness or otherwise. (2) The power to remove or suspend a person under subsection (1) (b) may be exercised even if the Act or instrument under which the person was appointed provides that a holder of the office to which the person was appointed shall hold office for a specified period of time. (3) The power to make an appointment under subsection (1) (b) may be exercised - (a) as occasion requires, (b) in anticipation of a particular event, so as to provide that the appointment shall take effect when that event occurs, or (c) in anticipation of a particular state of affairs, so as to provide that the appointment shall have effect while that state of affairs exists."
7. Standard orders made on a change of manager follow the template set out in M v M [2013] NSWSC 1495 at [55]: "(1) Declare, pursuant to s 41(1)(a) of the NSW Trustee and Guardian Act 2009 NSW, that the defendant remains incapable of managing his affairs. (2) Order, pursuant to s 41(1)(a) of the NSW Trustee and Guardian Act 2009, that the estate of the defendant continue to be subject to management under the Act. (3) Order, pursuant to s 41 of the NSW Trustee and Guardian Act and s 47 of the Interpretation Act 1987 NSW, that the NSW Trustee be removed as manager of the estate of the defendant. (4) Order, pursuant to s 41(1)(b) of the NSW Trustee and Guardian Act and s 47 of the Interpretation Act 1987, that the plaintiff be appointed manager of the estate of the defendant subject to the orders and direction of the NSW Trustee and Guardian. (5) Order that the plaintiff may not do anything in reliance on her appointment as manager of the estate of the defendant until the NSW Trustee has authorised her to assume management of the defendant's estate. (6) Order, pursuant to s 68 of the NSW Trustee and Guardian Act, that the plaintiff give such, if any, security in respect of her management of the defendant's estate as the NSW Trustee may determine to be appropriate. (7) Order, pursuant to ss 61(1) and 64 of the NSW Trustee and Guardian Act, that the NSW Trustee take such steps as may be necessary or expedient to transfer management of the estate of the defendant from itself to the plaintiff. (8) Order that the costs of the plaintiff, the defendant and the NSW Trustee be paid out of the estate of the defendant on an indemnity basis. (9) Order that all parties be at liberty to apply as they may be advised."
8. Additional orders are routinely made in the appointment of an institutional, private manager for reward which is not a licensed trustee company but obtains the Court's approval for remuneration.
9. Where a "private manager for reward" (other than a licensed trustee company) is appointed to manage a protected estate then (in conformity with Ability One Financial Management Pty Limited and Anor v JB by his Tutor AB [2014] NSWSC 245 and Re Managed Estates Remuneration Orders [2014] NSWSC 383) orders and a notation to the following effect are generally included in the Court's orders: 1. ORDER, subject to further order of the Court or any order or direction of the NSW Trustee, that XYZ [the manager] submit to the NSW Trustee annual accounts in a form prescribed or approved by the NSW Trustee. 2. ORDER, subject to further order, that XYZ, as manager of the estate of the defendant, provide to the NSW Trustee, or as the NSW Trustee may in writing direct, an accounting for its management of the estate of the defendant as and when directed by the NSW Trustee so to do. 3. NOTE the orders and notations made in the judgments reported as Ability One Financial Management Pty Limited and Anor v JB by his Tutor AB [2014] NSWSC 245 and Re Managed Estates Remuneration Orders [2014] NSWSC 383. 4. ORDER, subject to: (a) further order; (b) due performance by it of its obligations as a manager of a protected estate; and (c) its ongoing liability to account for estate property, that XYZ be allowed out of the estate of the defendant such, if any, remuneration for its provision of services as manager of the estate of the defendant (including any fees of a financial adviser approved by the NSW Trustee from time to time) as may be just and reasonable, not exceeding the amount or amounts disclosed to the Court upon its appointment as manager or such other amounts or rates as may, from time to time, be fixed by the NSW Trustee.

CONSIDERATION

1. SC's application for removal of Ability One Financial Management Pty Ltd as JC's financial manager is closely connected with his application that Northern Plateau Wealth Management Pty Ltd be appointed as manager in substitution for Ability One Financial Management Pty Limited.
2. His primary case for removal of Ability One Financial Management Pty Ltd is that there is a breakdown in the relationship between the company and (he submits) JC such that the welfare and interests of JC, as the paramount consideration, require the company's removal.
3. That there has been a "relationship breakdown" of sorts is common ground between Ability One Financial Management Pty Ltd and SC; but, in my assessment, the material breakdown in relationships is that between Ability One Financial Management Pty Ltd and SC, not the company and JC.
4. In my assessment, SC has not accepted that he is not in complete and effective control of JC's affairs. I have formed that view despite the fact that SC has adduced evidence of a letter (ostensibly written by JC in his own hand) complaining about Ability One Financial Management Pty Ltd's alleged mismanagement of his affairs. On the whole of the evidence I am satisfied that JC (a person deficient in mental capacity) lives under the close, day-to-day influence of SC, whose disparagement of Ability One Financial Management Pty Ltd and identification of JC's interests with his own, I infer, undermines the objectivity, and reliability, of views ostensibly expressed by JC as his own.
5. SC's primary case for removal of Ability One Financial Management Pty Ltd is supported by allegations to the effect that the company has mismanaged JC's estate (particularly in pursuing arrangements for sale of JC's principal assets, two contiguous blocks of land at Greystanes in outer Sydney); declined to meet with JC personally; and charged excessive fees.
6. I reject these allegations. In my assessment, Ability One Financial Management Pty Ltd (under the management of Mr Grant White) has, on the whole, acted diligently and reasonably in management of JC's affairs. It has taken responsible, legal, valuation and real estate advice about steps to be taken towards a sale of JC's land and, in doing so, it has been responsive to suggestions made by SC without surrendering the independent judgement required of it as manager. As Mr White conceded in cross examination some mistakes had been made along the way but none of those is of a nature or order to warrant the pejorative label of "mismanagement".
7. In my assessment, Mr White has not declined to meet personally with JC, but he has met resistance from SC and he has been concerned to allow management steps to be taken in an orderly way before meeting personally with JC. He has approached this part of the duties of Ability One Financial Management Pty Ltd with mature thought and discretion. It must, of course, be remembered that Ability One Financial Management Pty Ltd is a manager of JC's estate, not his person.
8. Mr White has recognised an obligation, as manager of JC's financial manager, to consult with JC and (significantly, bearing in mind JC's mental incapacity) JC's "significant others". As a "significant other" who presents himself as a gateway to contact between JC and his financial manager, SC has contributed to a lack of personal contact between JC and Ability One Financial Management Pty Ltd. Notably, when he brought JC to Sydney (ostensibly to view his old home at Greystanes) SC failed to take an opportunity for him to meet with Mr White. His explanation for this (that JC was unwilling to meet with Mr White and just wanted to get back to Queensland) was disingenuous.
9. In my assessment, SC's allegations of overcharging against Ability One Financial Management Pty Ltd are without foundation. The company has complied with the regulatory regime (contemplated by Slattery J's orders) supervised in the ordinary course by the NSW Trustee. It is not to the point that SC contends that his nominee for JC's replacement financial manager, may have supplied a quotation for a "cheaper" fee regime. The NSW Trustee, with institutional oversight of remuneration charged by managers of protected estates of all descriptions, has determined that Ability One Financial Management Pty Ltd's fees are just and reasonable. The NSW Trustee's oversight of those fees is ongoing.
10. Ability One Financial Management Pty Ltd's preparedness, voluntarily, to moderate its fees in response to SC's persistent complaints, upon an assumption that the company would wind down its management of JC's affairs in an orderly transition to a replacement manager, to my mind illustrates the measured, professionalism of the company's approach to management of JC's affairs whilst under provocation of a stream of complaints by SC.
11. In my opinion, Ability One Financial Management Pty Ltd is entitled to adhere to rulings made by the NSW Trustee about its remuneration and is free to do so. The integrity and practical operation of the NSW Trustee's administrative system for reviewing remuneration procedures is not under challenge in these proceedings. In my opinion, the maintenance of a regular administrative system for orderly supervision of the remuneration of financial managers is in the interests of all protected persons, including JC. I am not satisfied that Ability One Financial Management Pty Ltd has charged, or will in the future charge, remuneration which (under the supervision of the NSW Trustee) is otherwise than just and reasonable.
12. SC's case for removal of Ability One Financial Management Pty Ltd as JC's financial manager is supported by his application for the appointment of Northern Plateau Wealth Management Pty Ltd as its replacement. An attraction of that company, in the eyes of SC, is that it is comparatively local to his residence, where JC currently lives, and is therefore thought to be more accessible than Ability One Financial Management Pty Ltd.
13. I leave to one side that the NSW Trustee (as expressed in its formal "report to Court") has no experience of Northern Plateau Wealth Management Pty Ltd as a financial manager.
14. Whatever (if any) benefit might accrue from a "local" Queensland-based corporate financial manager, a practical consideration is that, apart from management of a Cairns home unit ostensibly bought by JC as an investment when he moved to Queensland to live with SC's family, the major management tasks required to be undertaken in the foreseeable future (resolving costs assessments arising from the litigation that culminated in Slattery J's orders and arranging a sale of JC's Greystanes properties) focus substantially on work to be undertaken in New South Wales. SC's proposed Queensland-based corporate financial manager has no presence in NSW.
15. By comparison, Ability One Financial Management Pty Ltd has a presence in both Queensland and New South Wales and, in an earlier professional life, Mr White was a Queensland solicitor. FC, JC's closest living relative, lives in Sydney, although, under the influence of SC, JC now lives in Queensland and, to his deep concern, has no contact with FC.
16. Despite conflict between SC and Ability One Financial Management Pty Ltd, I am satisfied that, under the stewardship of Mr White, Ability One Financial Management Pty Ltd can be relied upon to perform the functions of JC's financial manager in a professional and independent way.
17. In my assessment, SC has no real insight into his lack of independence in dealing with questions relating to management of JC's affairs. Nor can the Court readily rely upon him not to interfere with the proper management of the affairs of JC in the absence of an independent, professional, financial manager prepared to endure his displeasure and to resist his apparent determination to insist that JC's affairs be managed in a manner congenial to him personally.
18. Some of the resistance of SC to Ability One Financial Management Pty Ltd's management of the affairs of JC appears to be a function of his desire for financial advantage. In the early days of Ability One Financial Management Pty Ltd's management regime, he did not disclose to the company that his son and the daughter of SR (JC's "guardian") were living in JC's home unit in Cairns at a lower than market rent. He has resisted the company's proposal that JC's car be sold even though JC is no longer able personally to drive it and it is routinely driven by him. On the evidence presented to me, an available inference is that, until the company intervened, SC was appropriating to himself funds transferred by the company to an account in JC's name on account of living expenses.
19. Lurking behind these illustrations of SC's self-interested involvement in JC's affairs is a barely hidden expectation on his part that he will benefit from JC's deceased estate in the fullness of time. He was less than frank in acknowledging that (immediately prior to his taking JC to live with him in Queensland and away from his son FC) JC ostensibly made a will naming him as sole beneficiary. In cross examination he did not readily concede the existence of the will or his part in its execution. It was left to his counsel, in final submissions, to confirm the existence of the will.
20. One cannot exclude the possibility that SC's intervention in arrangements made by Ability One Financial Management Pty Ltd for the sale of JC's Greystanes properties, and his frustration of the company's attempts to obtain vacant possession of the properties (because of non co-operation in removal from the properties of unidentified "personal possessions" of JC located on the properties) have been motivated by a desire to impede an orderly sale of the properties. This, despite the fact that, before Slattery J, SC supported a sale of the Greystanes properties and the costs presently being assessed for payment out of JC's estate cannot be paid without the benefit of proceeds of sale of the Greystanes' properties.
21. All things considered, I am affirmatively satisfied that it is in the best interests of JC for Ability One Financial Management Pty Ltd to remain in office as manager of his protected estate, at least until JC's Greystanes properties are sold and current costs assessment procedures have been completed. I do not, however, intend to suggest that the company should retire or be removed from office or to place a time limit on the company's service as financial manager. It is sufficient for the day that SC's summons be dismissed and that, by that dismissal, the company's occupation of the office of manager be confirmed.
22. Given SC's obstruction of management of JC's protected estate some concluding observations about ongoing management of JC's affairs are necessary.
23. If SC continues to obstruct financial management of JC's protected estate (and to object to contact between JC and FC and between Ability One Financial Management Pty Ltd and FC) his conduct might invite reconsideration of JC's residential and guardianship arrangements. I do not intend to suggest, by this observation, that JC's current living arrangements with SC's family should be disturbed in the foreseeable future, only that a lack of co-operation on the part of SC with JC's financial manager and FC serves nobody's best interests.
24. In proper discharge of its functions as JC's financial manager, Ability One Financial Management Pty Ltd has an obligation, in the absence of exceptional circumstances, to endeavour to consult with all JC's significant others from time to time. That includes FC as well as SC. However, if SC continues to engage in obstructive behaviour, he may, to that extent, relieve Ability One Financial Management Pty Ltd (or any other manager who might, at some future time, be appointed) of any obligation to engage with him in serving JC's best interests.
25. In any event, it seems to me, JC's best interests presently require that Ability One Financial Management Pty Ltd give ongoing consideration to consultation with SR (as JC's "guardian") and FC despite resistance or (in the case of FC) outright opposition on the part of SC.
26. In light of SC's obstructive behaviour to date, it might be prudent for Ability One Financial Management Pty Ltd, in consultation with the NSW Trustee, to consider taking steps, from time to time, for the appointment of an independent Visitor to attend upon JC and to prepare for the Court a report on his personal circumstances and general welfare.
27. Although the welfare and interests of JC are likely to be better served by all interested persons resolving to work together harmoniously than by resort to further proceedings, the door of the Court remains open to an application for directions in management of the affairs of JC, if necessary, for service of JC's welfare and interests as the paramount consideration.
28. For the present, I order that SC's summons be dismissed.
29. As Ability One Financial Management Pty Ltd has foreshadowed an application for costs, and it is necessary that all interested parties reflect on whether any (and, if so, what) burden of costs of the summons can properly be imposed on JC's estate, I will allow all parties an opportunity to make submissions about costs.
30. In an endeavour to crystallize any such submissions, I draw to attention Slattery J's observations about orders for costs in protective proceedings in FC v SC (No 2) [2023] NSWSC 376 at [17]-[18]: "[17] The applicable legal principles may be shortly stated. In matters in the Court's protective jurisdiction the Court's discretion as to costs may be exercised by reference to what in all the circumstances seems proper rather than to apply the rule required by Uniform Civil Procedure Rules 2005, r 42.1, that costs follow the event: CAC v Secretary, Department of Family and Community Services [2014] NSWSC 1855 at [130]. Costs in the protective jurisdiction have come to be regarded as exceptions to the general principle that costs follow the event because the proceedings are taken in the interest of those thought to be incapable of protecting themselves and their property and that those who would otherwise be concerned to act to protect the mentally ill or the mentally infirm might be deterred from acting if they were to expose themselves to the risk of costs if their application, though reasonably made, were unsuccessful: CCR v PS (No. 2) (1986) 6 NSWLR 622 at 640E-F per Powell J. [18] Relevant considerations in determining a proper costs order in the protective jurisdiction include the following matters. A party conducting proceedings in an unnecessarily adversarial matter may be required to bear the costs of the whole or part of the proceedings: CAC v Secretary, Department of Family and Community Services [2014] NSWSC 1855 at [131]. The making of an order for costs should not impact on the incapable person's security or wealth: Bolton v Sanders (No. 2) [2003] VSC 409 at [2]. The respective resources of the parties to the proceedings are relevant to the exercise of the discretion: P v NSW Trustee and Guardian [2015] NSWSC 579 at [369]. The Court may refrain from imposing an obligation to pay costs, if it could adversely impact on the relationships of or care of the person in need of protection: Re K Statutory Will [2017] NSWSC 1711 at [17]."
31. His Honour's application of these principles in that judgment, the first round of litigation in this Court between FC and SC concerning the welfare of JC, should not necessarily be taken as a guide to what, "in all the circumstances, seem the proper orders for costs", to paraphrase Powell J in CCR v PS (No 2) 6 NSWLR 622 at 640F-G.

ADDENDUM (12 June 2024) Ex Tempore

1. The orders that I propose to make in relation to the costs of these proceedings must, of necessity, be informed by the reasons for judgment that I published on 28 May 2024. In those reasons I foreshadowed the view I take as to the costs jurisdiction in protective matters and I did so by reference to the orthodox statement of principles in the earlier judgment of Slattery J.
2. I am conscious that the approach taken to costs in protective proceedings is governed by the paramountcy principle which governs the exercise of the jurisdiction generally.
3. There is, I think, implicit in at least some of the submissions made by counsel for the plaintiff today that I should take note of the size of the second defendant's protected estate. In my assessment the size of an estate, although possibly relevant to what costs orders should be made, is not of itself a reason for ordering that an estate bear costs.
4. On the findings I made in disposition of the proceedings, the plaintiff's conduct has been essentially obstructive of the proper and due management of the second defendant's protected estate. That in itself might be taken as the foundation for an order that the plaintiff pay the costs of other parties to the proceedings.
5. This is not a case in which the plaintiff could reasonably have proceeded on the basis that he has an entitlement to have his costs out of the estate or that he had a reasonable expectation that that would occur.
6. I am conscious of the problems with the relationship between the plaintiff and the third defendant and how a sound relationship between those parties could positively affect the welfare of the second defendant.
7. I am not sure that the plaintiff has great insight into the obstructive course that he has taken. If I were to make an order that he get his costs out of the estate of the second defendant, I doubt that that would bring home to him the need for him to cooperate with the manager of the estate and, indeed, to co-operate with the third defendant in allowing family relationships to thaw.
8. My attention has been drawn to an exchange of correspondence between the solicitors for the plaintiff and the third defendant proceeding, at least on the part of the plaintiff, upon an assumption that a Calderbank offer could be made as between those parties in terms determining the outcome of the substantive proceedings. The plaintiff says that that correspondence shows that he was flexible in his approach to the proceedings. In fact it was obvious, in my assessment, that he was not flexible. The primary objective of these proceedings from his perspective was to displace the existing manager. During the course of the hearing he did not abandon his application for a Queensland-based corporate manager to replace the first defendant. He maintained that position unfailingly.
9. In my opinion the proper order for costs in relation to the plaintiff is that he pay or bear his own costs without recourse to the estate. I propose to proceed on that basis and to proceed otherwise as foreshadowed at the time I delivered judgment. I decline the third defendant's application that the plaintiff be ordered to pay his costs, but I will grant his application for a lump sum award of costs (out of the estate of the second defendant).
10. I make the following orders for costs, 1. ORDER that the plaintiff pay or bear his own costs of these proceedings without recourse to the estate of the second defendant. 2. ORDER that the costs of the first defendant be paid out of the estate of the second defendant on the indemnity basis. 3. ORDER that the second defendant's costs of the proceedings (if any) be paid out of his estate on the indemnity basis. 4. ORDER that the costs of the third defendant in the sum of $34,614.30 be paid out of the estate of the second defendant. 5. ORDER that the costs of the NSW Trustee of these proceedings be paid out of the estate of the second defendant on the indemnity basis. 6. ORDER that these orders be entered forthwith.

Amendments 12 June 2024 - ADDENDUM (12 June 2024) added at [71] to [80]

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: 12 June 2024