Mental Health - Certificate of disability filed by Public Trustee - Incapable person recipient of damages award - Sum incorporated for gratuitous services - Whether sum payable - Whether payment may be authorised - Powers of Public Trustee to make payment. Mental Health Act 1963, ss 84(1), 94(3). Public Trust Office Act 1930. Beasley v Marshall (No 4) (1986) 42 SASR 407 considered. Re D J R and the Mental Health Act 1958 (1983) 1 NSWLR 557 considered. Re E S and the Mental Health Act 1958 (1984) 3 NSWLR 341 considered.

CRAWFORD J Recently I approved a compromise of the plaintiff's claim for damages for personal injuries in the sum of $1,000,000 and ordered that the judgment sum be paid to the Public Trustee. The plaintiff is aged 24 years. The action, so far as it concerned his claim, was brought in his name by his next friend, his father.

2. The application to approve the compromise was made in the form of an interlocutory application within the action. The application was expressed to be made in the name of the plaintiff by his next friend. One of the orders sought was that the Public Trustee be authorised and directed to pay to the plaintiff's parents out of the fund the sum of $80,000 for past services, care, accommodation and expenses. The genesis of that application was that the damages included the value of gratuitous services provided to the plaintiff by his parents between the date of the accident and the date of the compromise, under the principles established by Griffiths v Kerkemeyer (1977) 193 CLR 161. Another component of the damages was the value of services which will be needed by the plaintiff in the future. Much of those services is likely to be provided by the parents once again.

3. When the application first came before me it was apparent that the next friend had a conflict of interest. His duty as next friend was to manage the action on behalf of the plaintiff and to endeavour to recover for him as much money by way of damages as were reasonably obtainable. To seek to have paid to himself part of the damages in circumstances in which he has no legal or equitable right to it (see re D J R and The Mental Health Act 1958 (1983) 1 NSWLR 557 at 561; Beasley v Marshall (No 4) (1986) 42 SASR 407 at 410) displays a clear conflict of interest. For this reason I adjourned that part of the application which sought payment to the parents and directed that notice of it be given to the Public Trustee. Subsequently the Public Trustee filed a certificate of disability under the Mental Health Act 1963, s88(2). The effect of that is, by virtue of s93, that the plaintiff is deemed to be a patient within the meaning of Part VI and the Public Trustee is deemed by s93(1) to have been appointed the committee of his estate under s86.

4. Counsel for the Public Trustee informed me that it is the view of the Public Trustee that without a court order he has no power to make a payment to the plaintiff's parents for gratuitous services provided by them before the funds came under the control of the Public Trustee. However the Public Trustee is not opposed to the making of an order that such a payment be made.

5. The Public Trust Office Act 1930 does not directly confer on the Public Trustee power to make a payment of the nature sought. However, that power is conferred by the Mental Health Act 1963, s94(3) which states that the Public Trust Office Act 1930 has effect as if the powers conferred on the Public Trustee by s32(1) of that Act included powers:

"(a) to apply any property of the patient for any of the

purposes specified in paragraph (a), paragraph (b), or

paragraph (c) of subsection (1) of section 84;

(b) to reimburse out of the property of the patient, with or

without interest, any money applied by any person for the

purposes specified in paragraph (i) of subsection (1) of

section 85".

6. The purposes specified in s84(1)(a)(b) and (c) are:

"(a) for the maintenance or other benefit of the patient;

(b) for making provision for other persons (whether or not

they are members of the patient's family) for whom the

patient might be expected to provide if he were not mentally

disordered;

(c) for making provision for any purposes for which the

patient might be expected to make provision if he were not

mentally disordered;

or

(d) otherwise for administering the patient's affairs."

7. The Public Trustee therefore has power to apply the property of the plaintiff for the purpose of "making provision for other persons (whether or not they are members of the patient's family) for whom the patient might be expected to provide if he were not mentally disordered". When considering whether to exercise this power it will be necessary for the Public Trustee to determine whether or not the plaintiff might be expected to make the provision if he were not mentally disordered. Further, the Public Trustee has the power to apply the property of the patient "for the maintenance or other benefit of the patient". In Beasley v Marshall (No 4) (1986) 42 SASR 407 at 409 and 410, King CJ, with whom the other members of the Full Court agreed, considered the power of a manager under the Aged and Infirm Persons Property Act 1940-1984 (SA) s13 "to apply any moneys ..... for the maintenance of the protected person" and held that a trustee with power to maintain is authorised to make payments which would not be legally recoverable by the person providing the maintenance and to make such payments with respect to past as well as to future maintenance. Further again, the power to make "provision for any purposes for which the patient might be expected to make provision if he were not mentally disordered" can also form the basis for a payment of the nature sought. The power given to the Public Trustee by virtue of the Mental Health Act 1963, s94(3)(b) to reimburse out of a patient's property any money applied by any person for the purposes specified in s85(1)(i) would also enable the Public Trustee to make a payment to any person in respect of maintenance or some other benefit provided for the plaintiff, but only to the extent that the payment be in reimbursement of money so applied. It can therefore be seen that the Public Trustee has a discretionary power to make a payment of the nature sought.

8. Some additional comments are worthwhile. In Beasley v Marshall (No 4) at 410 et seq King CJ indicated his views as to the circumstances in which the power should be exercised. It was pointed out that in a case such as this the plaintiff receives the damages beneficially. The amount received is not impressed with a trust in favour of those who have provided gratuitous services, nor is the plaintiff under any form of legal liability to make payments to those persons. I agree with these remarks. However with the utmost respect, I find myself unable to agree with King CJ when he said:

"Nevertheless there is an expectation upon the part of a

court which awards damages under this head that the

plaintiff will discharge to the best of his ability what

must be regarded as a moral obligation to compensate those

who have assisted him gratuitously, or will do so in the

future, to the extent of the damages which have been awarded

under that head."

9. The inclusion in damages of a Griffiths v Kerkemyer element is based on the principle that where the tortfeasor has created the need for services he must compensate the plaintiff for the valued cost of fulfilling that need. The court which assesses damages does so without any regard to whether the gratuitous provider of the services will be financially rewarded by the plaintiff. Whether a reward will be bestowed is completely irrelevant to the court's consideration of the quantum of damages. I hold the view that as beneficial entitlement to the funds belongs exclusively to the plaintiff, what moral obligations may rest on the plaintiff, and whether he or she should satisfy them, fall to be determined by the plaintiff, or if there is a trustee because of the plaintiff's incapacity, on the trustee if the trustee has the power to make a payment. However I respectfully agree with King CJ that the trustee should regard himself as subject to the same moral obligation as would attach to the plaintiff if he were not under the disability.

10. Having determined that the Public Trustee has the necessary power I do not consider it appropriate, in the circumstances of this application, to make any order but instead will leave the question whether to make a payment to the Public Trustee to resolve. I say this particularly because in this case the application has come to me, not from the Public Trustee, but in the form of an application by the plaintiff, by his next friend who is one of the persons who stands to benefit. In any event, as was said by King CJ in Beasley v Marshall at 411, the application of moneys allowed for gratuitous services in an award of damages requires a broad exercise of the discretion of the person responsible for the decision. That person should take the responsibility for making it.

11. There may however arise cases where a court will need to consider whether a moral obligation exists and whether it should be satisfied and if so, to what extent. If a committee of the estate of a successful plaintiff is appointed by a court under the Mental Health Act 1963 s86(1) then the court might need to consider whether or not to authorise the committee to satisfy such an obligation, or even to make an order or give a direction that a payment be made. In some cases it might be considered appropriate to specify a sum of money either as the sum directed to be paid or as a limit to the committee's authority to make a payment. In 1990 I made an order giving power to a committee, who had been appointed by the court, to make a payment to the parents of a plaintiff for services gratuitously supplied prior to settlement of the claim for damages, limited to a specified maximum sum.

12. In the case of an infant plaintiff different considerations may arise. It is unnecessary for me to determine whether a judge who approves the compromise of an infant's claim for damages has a power to authorise or direct a payment to the provider of gratuitous services. But in the case of an infant who is approaching the age of majority the question of whether a payment should be made would be better left to him or her to decide when reaching that age, regardless of a judge's power. In any event, as a result of the Common Law (Miscellaneous Actions) Act 1986 which abolished awards of damages for the value of services gratuitously provided in respect of causes of actions accruing on or after 18 December 1986, the question will rarely arise in the future both in regard to plaintiffs incapacitated by infancy and by mental disability.

13. In case it is of assistance to the Public Trustee I will express some views concerning the limit to which any payment for past services might extend. My comments will not be binding on him, but as I had the responsibility of approving the compromise, it is appropriate that I give assistance. The amount included in the compromised sum of $1,000,000 for the value of the need created in the plaintiff for services gratuitously provided by the parents to the date of the compromise is incapable of precise calculation. Although some elements of the damages were so capable, others were not. In particular the components for past and future loss of earning capacity and for past and future needs for services were very much at large. I think it appropriate to be conservative when striking a figure and state that $75,000 to $80,000 should be assumed to be the limit of the value of the parents' past services. I express the view that the Public Trustee should take into account the remarks of Powell J in Re E S and the Mental Health Act 1958 (1984) 3 NSWLR 341 at 343-5 concerning the "exquisite dilemma" which arises when endeavouring to determine whether or not to make a payment and if so, its amount. I also refer to the remarks of Powell J in Re D J R and the Mental Health Act 1958 (1983) 1 NSWLR 557.

14. For the reasons I have stated I propose to dismiss the application made in the name of the plaintiff by his father, the next friend, for an order authorising and directing payment to the plaintiff's parents for their past services. My doing so should not be interpreted as a sign of disapproval of the making of a payment to them but instead a determination to leave the decision to the person who at law is responsible for it in his capacity as the committee of the plaintiff.