The Application of VS [2011] NSWSC 47

The Nature of the Application 1HIS HONOUR : This is an application, by amended Summons, filed in Court on 7 February 2011, for a declaration that the Plaintiff (whom I shall call "VS") is a person capable of managing her own affairs. Consequential relief is also sought. 2Notice of the application has been given to the NSW Trustee and Guardian (formerly the Public Trustee in, and for, the State of New South Wales). It was appointed, pursuant to a Deed dated 12 November 2001, as a trustee for VS, to hold the amount of $330,000 ("the fund") "for her lifetime, or until the fund is exhausted". 3Pursuant to the Deed (described in correspondence as a "Voluntary Trust Deed"), the income earned by the fund, immediately vested in VS, and the trustee was authorised and empowered, in its absolute discretion, to use the whole, or any part, of the fund, for the maintenance, education, advancement in life, or benefit of VS. 4An order is sought that the Deed be revoked.

Background 5On 12 April 1998, VS was a front seat passenger in a car that was hit from the left side. She was knocked unconscious. She suffered fractures of her pelvis, ribs and her right foot. The accident also caused ligament strains of the cervical, thoracic and lumbar spine. A cerebral CT scan, performed whilst she was in hospital, confirmed no intracerebral pathology. 6VS instructed solicitors to make a claim for damages arising out of the physical injuries sustained in the accident. Her father was appointed her tutor in those proceedings. Through the tutor, VS was represented by solicitors and by counsel, which proceedings were settled in about September 2000, for $500,000, plus costs, calculated on the ordinary basis, of $50,000. 7Orders made by the District Court, in those proceedings, included a notation that the settlement of the proceedings was approved "subject to the provision of evidence concerning the establishment of a method of fund management which will involve a professional manager". The District Court made the order, despite the tutor of VS submitting that the settlement monies should be paid to him directly and placed in a special term deposit pending purchase of a property in the name of VS in accordance with her wishes. 8The fund constituted the balance of the net sum, clear of all costs and outgoings, and was paid to the Public Trustee in about November 2001. 9Subsequently, the Public Trustee purchased a property at Mount Pritchard, in which VS now lives, with her husband and child. 10Following the motor vehicle accident, VS suffered depression. It was reported that her memory and intellectual capacity remained compromised. She was diagnosed as having suffered a closed head injury. She was further diagnosed as suffering from significant short-term memory impairment, impairment of abstract reasoning and concept formation, and impairment in sequencing and spatial relationships. 11More recently, in 2008, a consultant forensic psychologist, Zoran Protulipac, saw VS. He found, and reported, that there remained a presence of depression and anxiety. The testing also revealed that her high executive cognitive functioning was intact. The scores obtained on the Wechsler Abbreviated Scale of Intelligence (WASI - III) suggested a person of average intelligence, who was capable of general functioning in society. Mr Protulipac concluded, because it appeared that her higher order cognitive functioning was intact, that VS was competent for planning, executing and evaluating the outcomes of her actions. He stated that employing simple strategies, such as using a diary and other forms of reminders, would compensate for her memory problems and that she was able to run a household, pay accounts and other expenses and manage her own financial and other affairs. 12In a subsequent report (dated 10 November 2009), Mr Protulipac expressed the opinion that VS was "fully competent to instruct her solicitors and counsel"; and that she also had sufficient capacity to manage her own funds; that she was able to attend to planning and calculation of such funds. He concluded that her psychiatric conditions did not present as an obstacle for adequate reasoning; nor did they, in any way, prevent VS from making sound decisions in relation to her own affairs. 13Mr Protulipac's opinion as to VS' capacity to instruct her legal advisers and competency to manage her own funds was repeated in an affidavit sworn by him on 30 November 2010 and filed at the hearing. He confirmed that he had "subjected [VS] to a range of psychometric assessment instruments. The variables measured involved all aspects of reasoning, planning concentration, memory, organisation, and general knowledge" and that "[T]he results obtained suggested that she has average mental abilities, which are found in 90% of the population". He also stated that there was solid evidence of VS being functional in every regard, including her involvement in parenthood, household organisation, marriage, social life and attending to the needs of others. 14There is also a report, dated 31 August 2010, of Dr Velibor Todorovic, a medical practitioner who commenced treating VS on 21 February 2008. He states that, in his opinion, VS "is competent to provide instructions to her legal advisers" and that she "is competent to manage her own funds". However, the factual basis for his opinion is not expressed in the report. 15Dr Todorovic swore an affidavit on 24 November 2010, a copy of which was also read at the hearing. In that affidavit, he refers to the results of a "mini-mental state examination", but does not state what those results were. 16There is also evidence from VS's present solicitor, Mr Gabriel, that "VS has always presented as a rational and capable client". 17I have read an affidavit sworn by VS on 7 September 2010. In that affidavit, she reveals that: (a) In 2002, a town house was purchased in her sole name. She has lived in that town house, which remains unencumbered, since then. (b) She states that she believes that her psychological symptoms, including anxiety, depression and stress, have improved, as have her memory and concentration. (c) She married in October 2004 and there is one child of the marriage, who is now 5 years old. (d) She was involved in another car accident in February 2008, which resulted in her having some difficulty with the heavier aspect of domestic chores. 18In relation to the future, she states: (a) It is her wish that the current trust arrangement with the NSW Trustee be terminated. She believes that she would not have difficulty managing her financial affairs. If the orders sought by her are granted, it would be her intention to sell her townhouse and she believes the current market price would be of the order of $300,000. She and her husband would then raise a manageable mortgage and purchase a free standing home. The small amount of about $5,000 that remains invested with the NSW Trustee would assist in relation to the purchase of the new property. (b) Besides attending to the household and caring for her child, she drives, shops and undertakes budgeting on a day to day basis. (c) She says her marriage is strong and stable and, with the exception of the physical problems arising out of her most recent motor vehicle accident, her general health is good. (d) She has a strong desire to purchase a free standing home, in which she and her husband can raise their child. (e) She no longer suffers from the significant problems with memory, concentration and severe psychological symptoms that led to the need to appoint a trustee to manage her previous award of damages. She is confident that she has the capacity to ensure that her assets are not squandered. 19In an affidavit, sworn 19 November 2010, which was also read at the hearing, VS states that she regularly withdraws money from her bank account, to pay household bills; she discusses with her husband how much money she can withdraw; attends to payment of the household bills at the local post office, or, in relation to her strata levies, at the Bank; and occasionally, she attends at Medicare offices and completes claim forms in respect of the medical treatment provided to one, or other, of her family. 20Since her accident, she has also been successful in applying for a driver's licence (which application included completing both a driving test and a road rules test). She was able, with the assistance of a friend, to apply for a passport. She has been able to travel overseas. 21It can be seen that VS considers she is capable of managing her own affairs such that she should have control of the fund. 22I have also read an affidavit, sworn on 7 September 2010, of VS' husband. He is 40 years of age and is employed, on a full-time basis, as a gyprocker. He states: (a) He and his family reside at Elizabeth Drive, Mt Pritchard. This is a unit that is owned by his wife. He and his wife wish to move out of the current residence and into more suitable premises in which to raise their child. They wish to purchase a free standing home. He estimates if they were to sell their current unit in the current market it would be sold in the order of $300,000. He and his wife then intend to obtain a mortgage, which they would be able to manage based on his income, in order to purchase a free standing home. Any mortgage they obtained would be in his, and his wife's, names jointly. (b) His observations of his wife since he has known her, and in particular since their marriage, is that she does not have problems with memory, concentration or any significant psychological problems. She has, since her recent motor vehicle accident of 13 February 2008, suffered from physical injuries with respect to her neck, back and right shoulder, and some stress and anxiety. From his observation, however, these do not affect her memory, concentration or ability to deal with people. Further, these injuries do not prevent her from attending to their household generally or caring for their child. She is able to drive and do the shopping and undertakes the budgeting with respect of finances on a day-to-day basis. As a result of her physical injuries sustained in the recent accident, she does have some restriction with respect to her ability to perform domestic duties and requires his assistance. (c) From his observation, his wife is capable of providing instructions to her legal advisers and to deal with her finances. 23In an affidavit sworn by VS's husband on 22 November 2010, he states that he has read both of the affidavits of VS and believes what she has stated in each to be true and correct. 24I also observed VS at the Bar table, when I asked her some questions. She was able to tell me, generally, about the nature of the proceedings. She was able to tell me what the NSW Trustee and Guardian had done with the fund, and what she proposes to do if the Court make an order that the real estate be transferred back to her. Whilst she may have been a little confused when I first asked her whether she would seek legal assistance to assist her in purchasing another property and to explain any mortgage, that she and her husband were required to obtain, that may have been because of the way in which the questions were posed. When I re-formulated these questions, she explained to me that she intended to do so. 25Mr I.M. Newbrun, counsel for VS, subsequently confirmed her instructions that she would be obtaining legal assistance to achieve what was going to occur. 26The NSW Trustee does not oppose the making of the orders sought. In a letter dated 12 November 2010, it advises "there is no need for a colleague from this office to appear at the proceedings as we have no objection to your summons".