AS by her tutor SS v NSW Public Guardian (No 2)

The Court published its principal judgment in these proceedings on 22 July 2021: see AS by her tutor SS v NSW Public Guardian [2021] NSWSC 889 (“J”).

The proceedings were commenced by summons filed on 31 March 2021, in which AS was named as plaintiff and the Public Guardian was named as defendant. SS, who is the sister of AS, filed the summons in AS' name relying on a Queensland form of enduring power of attorney dated 6 February 2020, apparently made by AS in favour of SS and CS, the latter being AS' mother.

On 10 May 2021, Lindsay J, the Protective List Judge, made an order that SS be appointed as tutor for AS in these proceedings. I will consider the circumstances in which that order was made in more detail below.

On 16 June 2021, Lindsay J made an order that certain questions be heard and determined separately from the hearing and determination of any other question arising in the proceedings, under Uniform Civil Procedure Rules 2005 (NSW) r 28.2 (UCPR). The questions are set out at J [19] and essentially concerned whether grounds of appeal from a determination made by the Guardianship Division of the New South Wales Civil and Administrative Tribunal (the Tribunal) on 15 March 2021 that the Public Guardian be appointed as the guardian of AS involved any questions of law, and if so, whether any such grounds involved an error on the part of the Tribunal. In respect of any grounds of appeal that did not involve a question of law, the issue was whether the Court should grant AS leave to appeal on such ground.

The Court conducted a hearing of the separate questions on 19 July 2021 and published its reasons for judgment on 22 July 2021. At J [67]-[68], the Court made the following orders:

The effect of those orders is that AS entirely failed in the proceedings.

The Public Guardian has applied for an order against SS personally that she pay the costs of the Public Guardian in these proceedings in the amount of an assessed lump sum.

The NSW Trustee and Guardian was given leave to appear in these proceedings but did not play a substantial role and has not sought any order for its costs. The NSW Trustee and Guardian was initially appointed as AS’ financial manager by the Tribunal. That order has not been challenged. The Court has been told that subsequently AS’ father has been appointed as her financial manager.

The order sought by the Public Guardian in its amended notice of motion filed on 14 March 2022 is as follows:

The Public Guardian retained the Crown Solicitor to act in the proceedings and the Crown Solicitor provided the services of a solicitor to the Public Guardian and retained counsel to appear for it. The Crown Solicitor delivered formal tax invoices to the Public Guardian for payment including counsel’s fees as disbursements.

The Public Guardian’s application for an order against SS that she pay its costs of the proceedings personally is based upon the fact that SS has occupied the office of AS’ tutor in the proceedings since her appointment on 10 May 2021. That makes it necessary for the Court to consider the legal principles that generally apply to the determination of the appropriate order for costs when a party represented by a tutor fails in the proceedings. I will initially consider the general principles, but it will then be necessary to deal with the exceptional factors that may influence costs issues in proceedings that attract the Court’s protective jurisdiction.

In Yakmor v Hamdoush (No 2) (2009) 76 NSWLR 148; [2009] NSWCA 284, Giles JA (Ipp and Tobias JJA agreeing at [48] and [49] respectively) discussed at [17]-[45] the principles governing the liability of a tutor for the costs of unsuccessful proceedings brought by the tutor on behalf of an incapable party. His Honour held that it was an incident of the office of tutor that a tutor is liable to pay costs that the incapable party is ordered to pay, but the Court has power to make the costs order directly against the tutor personally, and that it will often be preferable for such an order to be made to avoid problems in the enforcement of the order; for example, in the assessment of the costs that would be difficult to conduct against an incapable costs debtor. For this purpose, a tutor was to be treated as a party to the proceedings for the purpose of the now repealed UCPR r 42.3.

In Spina v Permanent Custodians Ltd [2009] NSWCA 206; (2009) 14 BPR 26,293, Young JA (Tobias and Campbell JJA agreeing at [1] and [2] respectively) stated at [147] that a tutor is personally liable for costs ordered to be paid by the incapable party but is also generally entitled to an indemnity for those costs from the estate of the incapable party. See also Murray v Kirkpatrick (1940) 57 WN (NSW) 162 where Williams J said at 163: “These considerations lead me to the conclusion that the guardian ad litem is entitled to recover under his indemnity out of the estate of the infant all costs properly incurred on his behalf in connection with the legal proceedings in respect of which he has been appointed the guardian ad litem of the infant”.

The indemnity of the tutor out of the estate of the incapable person will not cover costs that have been unnecessarily incurred, such as where proceedings have been commenced in this Court that could have been prosecuted in the District Court: see Chapman v Freeman [1962] VR 259; Thatcher v Scott [1968] 1 NSWR 556 at 558; (1968) 87 WN (Pt 1) (NSW) 461 at 463 (Reynolds J).

These authorities establish that a successful party in proceedings in which another party appears by a tutor is entitled to an order that the tutor pay that party’s costs in the same circumstances as the incapable party would have been ordered to pay costs if that party had not appeared by a tutor. The liability of the tutor to pay the costs does not rest on the tutor having acted improperly in some manner in conducting the proceedings but is an incident of the office of tutor by having unsuccessfully conducted the proceedings. The propriety of the tutor’s conduct will only be relevant to the issue of whether the tutor should be denied the indemnity or whether the indemnity should be limited out of the incapable party’s estate.

As I have noted above, these proceedings were commenced on 31 March 2021, but Lindsay J did not make the order appointing SS as the tutor for AS until 10 May 2021. That gives rise to the question whether an order may be made against SS that she pay the Public Guardian’s costs for the period before 10 May 2021. Authority that I think I should follow has the effect that this question should be answered in the affirmative if the Court ultimately decides to make a costs order against SS in her capacity as tutor. In Al Mousawy bht Imelda Margaret Dodds v Howitt-Stevens Constructions Pty Ltd (No 2) [2010] NSWSC 1398, Hoeben J (as his Honour then was) followed the old decision of Sir James Parker V-C in Bligh v Tredgett (1852) 5 De G & Sm 73; 64 ER 1024 in holding that, where a number of tutors are appointed in succession after a period in which the proceedings had been conducted solely in the name of the incapacitated person, an order for the whole of a successful opponent’s costs may be made against the last tutor who holds office at the time the costs order is made. That was because (at [25]): “The primary bases for the appointment of a tutor are to ensure that there is a person available to bear the costs of a successful defendant and the protection of the person under the disability and the processes of the court.” His Honour observed (at [25]) that the reasoning in Bligh v Tredgett “is not of itself particularly compelling” but (at [26]) “the rule of practice enunciated by Sir James Parker has continued to be applied until the present time.” It may be that his Honour was influenced by the consideration that the tutor against whom the costs order would be made represented the NSW Trustee and Guardian, who his Honour found (at [27]) “certainly” appreciated the significance of the appointment.

In the present case it is not clear that SS appreciated that she may be held liable for the Public Guardian’s costs incurred before her appointment as tutor, although perhaps the discussion at the directions hearing before Lindsay J that will be summarised below should have informed her that the purpose of her being appointed as tutor was at least to preserve the possibility that someone would be liable with to pay the Public Guardian’s costs if the proceedings had not properly been commenced on behalf of AS.

In her submissions, SS sought to resist a personal costs order being made against her based on a number of considerations arising out of the circumstances in which she was appointed as AS’ tutor.

As I have mentioned above, SS commenced these proceedings on the basis that she claimed to have authority to do so under an enduring power of attorney made by AS in Queensland. SS purported to sign the summons in AS’ name as her attorney. Early in these proceedings, a question arose as to whether the proceedings had properly been commenced with the authority of AS and whether SS could appear for AS. The solicitor acting for the NSW Trustee and Guardian caused the proceedings to be relisted before Lindsay J to consider whether the requirement in UCPR r 7.14(1) that persons under legal incapacity may not commence or carry on proceedings except by his or her tutor had not been complied with. The solicitor also expressed concern that SS may be incurring costs liabilities on behalf of AS that were inconsistent with the NSW Trustee and Guardian’s appointment as financial manager.

Following a directions hearing on 26 April 2021, Lindsay J made orders in which he noted that on 15 March 2021 the Tribunal had made a guardianship order in favour of the Public Guardian in respect of AS which was the subject of an appeal, that SS had filed the summons in AS’ name, and that “upon an assumption that the summons was filed with due authority, clause 14(5) of Schedule 6 to the Civil and Administrative Tribunal Act 2013 prima facie has the effect the Guardianship Order made on 15 March 2021 is stayed pending the determination of the appeal.” His Honour then made the following note:

Lindsay J gave the Public Guardian leave to file a notice of motion and supporting affidavit whereby the Public Guardian sought an order that the stay of the Tribunal’s order be lifted. That application was made on grounds that do not need to be stated in these reasons as to why AS’ circumstances urgently required the stay to be lifted so that it was clear that the Public Guardian had the necessary power to act in AS’ interests and for her protection. By order 11, his Honour lifted the stay, subject to further order.

His Honour also recorded a note that SS had declined an invitation made by the NSW Trustee and Guardian to be joined in the proceedings in her personal capacity.

Lindsay J said to the parties at a subsequent directions hearing on 10 May 2021 that, in cases where there is a bona fide appeal to this Court from the Tribunal by a person who has been found to be in need of protection, it is not normally required that they have a tutor [T 10/05/21 4.41-4.48]. His Honour said that he did not see any harm if SS were to be appointed as tutor for AS subject to further order, although he did not see the appointment to be necessary [T 10/05/21 5.4]. The representative for the NSW Trustee and Guardian raised the issue of whether the controlling mind in the proceedings was not in fact AS but SS. She noted that costs were being incurred in AS’ name [T 10/05/21 6.3-6.6]. Lindsay J then referred to the possibility that the Court could make an order for costs against SS personally if the proceedings were being run by SS in the name of AS [T 10/05/21 6.8-6.15]. His Honour then asked SS directly whether she accepted that if the proceedings were dismissed SS would be personally liable for a costs order [T 10/05/21 6.20-6.22]. Asked by his Honour whether it would be prudent for him to appoint SS as tutor, SS replied: “You can appoint me as tutor, your Honour. However, I would be acting under enduring guardian powers which I have, which places me in the position of a tutor in any event” [T 10/05/21 6.37-6.39]. His Honour then observed that, in the light of the conversation that had occurred, he should appoint SS as tutor “subject to further order” [T 10/05/21 6.49-6.50]. Order 1 made by Lindsay J was an order that SS be appointed as tutor for AS in the proceeding, subject to further order.

Although it has been put to the Court that SS is legally qualified, there was no evidence that she has a practising certificate or experience in litigation. In practical terms, SS was appearing as a layperson with a greater than average understanding of legal principles and practices. Although it must have been obvious to SS from the terms of her conversation with Lindsay J that there was a risk that she would be liable to pay the costs of the proceedings personally if they were unsuccessful, it would not be fair to treat her response to his Honour’s question as an agreement to be subject to a personal costs order if the proceedings failed. SS appeared to believe that she had power to commence the proceedings in the name of AS as her enduring attorney. The problem with this stance, which SS may not have appreciated, was that if the determination of the Tribunal to appoint the Public Guardian was upheld, the order suspended the enduring power of attorney. The decision of the Tribunal that its order had that effect was upheld by me in the principal judgment at J [50]-[55].

Before I continue, I should record that in this case SS accepted that AS suffered disabilities that justified the Tribunal making a guardianship order. The only issue was as to the identity of the guardian, as SS contended for the reappointment of her mother, CS, who had formerly been the guardian. Although in this case the identity of the guardian was the only matter at issue, the problem to which I will now turn will also arise in cases where there is a dispute as to whether the making of a guardianship order is justified at all.

The procedural problem that confronted Lindsay J was a serious one. The appointment by the Tribunal of a guardian of a person very seriously circumscribes that person’s exercise of rights uniformly regarded as personal. The order is, of course, made only where necessary and in the interests of the person. However, it ought to be practicable for a person the subject of a guardianship order to challenge it. The effect of s 60(1) of the Civil and Administrative Tribunal Act 2013 (NSW) (the Act) will generally be that no costs order will be made against the person the subject of the guardianship order or that person’s family for proceedings within the Tribunal (including internal appeals under Pt 6 Div 2 of the Act). However, the position may be different where the appeal is brought to this Court under Pt 6 Div 3 and cl 12 of Sch 6 of the Act. This Court’s power to make costs orders under s 98 of the Civil Procedure Act 2005 (NSW) will be engaged. Persons, including the person the subject of a guardianship order that the person disputes, will in principle become subject to the risk of adverse costs orders being made if any appeal to the Court fails.

It may be implicit in the making of a guardianship order by the Tribunal that the person who is the subject of the order suffers a disability that would deny the person the capacity to commence proceedings in this Court of their own motion. Strictly, the circumstances that justify the making of a guardianship order may differ from the criteria that govern capacity to institute proceedings in this Court. However, there will often be real doubt about whether a person the subject of a guardianship order has the capacity to commence and prosecute proceedings in the person’s own name.

Even though cl 14(5) of Sch 6 of the Act effects an automatic stay of the guardianship order when an appeal to this Court is commenced, that does not necessarily protect the right of the person the subject of the order to conduct the appeal. If in fact the person lacks capacity, then the stay of the guardianship order will not circumvent the operation of UCPR r 7.14 that prohibits the person from commencing or carrying on the appeal except by his or her tutor.

Consequently, at some stage of the proceedings on appeal in this Court, the competence of the proceedings may come to be an issue. That possibility creates a conundrum. If the ultimate issue on the appeal is whether a person sufficiently lacks capacity to justify the appointment of a guardian, what is the Court to do at an early stage of the proceedings when the issue is whether the person lacks the capacity to have commenced them?

If it is accepted, as I believe it should be, that no person who is the subject of a guardianship order by Tribunal should be deprived in principle or practice from the right and ability to conduct a meritorious appeal in this Court, this Court must either dispense with the operation of UCPR r 7.14 in a particular case or resolve the problem by the appointment of a tutor where a person comes forward who will volunteer for that office.

The next problem to be faced is the potential that the possibility that the failure of the appeal will lead to the making of an adverse costs order against the person, or that person’s tutor, will inhibit the exercise of the right of appeal. This is a serious problem because the exercise of the personal rights that are circumscribed by the making of a guardianship order should be regarded as more valuable and deserving of the protection of the law than the preservation of ordinary property rights. Further, as a practical matter, persons who are in apparent need of guardianship will often lack the material resources to conduct proceedings where they are at risk of adverse costs orders. Finally, many who are the subject of guardianship orders will not be capable of conducting their own appeals, irrespective of their desire to do so, and they will only be able to act effectively by a tutor. Candidates for tutorship will often be family members. If the Court visits on tutors in these circumstances the application of the generally applied principles concerning the making of costs orders against tutors, the effect may be in practice to deny the subjects of guardianship orders their right of appeal, or to require family members to risk the ruinous consequences of adverse costs orders.

It remains necessary to consider whether a costs order should be made against SS personally and if so, what that order should be, given that these proceedings have been commenced in the exercise of the Court’s protective jurisdiction.

In CCR v PS (No 2) (1986) 6 NSWLR 622 at 640, Powell J (as his Honour then was) wrote:

In CAC v Secretary, Department of Family and Community Services [2014] NSWSC 1855, Lindsay J wrote at [128]-[134] (emphasis added):

The applicant in P v NSW Trustee and Guardian [2015] NSWSC 579 appealed against orders of NCAT that her estate be subject to management under the NSW Trustee and Guardian Act 2009 (NSW) and that that management be committed to the NSW Trustee and Guardian: at [4]. She did not appear by a tutor. The two defendants were the NSW Trustee and Guardian and the applicant’s son.

In the result, Lindsay J concluded the following (emphasis added):

In A v A [2015] NSWSC 1778, Lindsay J wrote at [24]-[27] (emphasis added):

In Re K’s Statutory Will (2017) 96 NSWLR 69; [2017] NSWSC 1711, Lindsay J wrote at [16]-[17]:

Williams J has recently set out the principles that are generally applied by this Court in determining the appropriate costs order to make when exercising its protective jurisdiction in similar terms to the above authorities in KJ v SJ (No 2) [2020] NSWSC 1100 at [4]-[12].

If the Court were accustomed to making adverse costs orders against unsuccessful appellants against guardianship orders made by the Tribunal on the basis of the usual rule established by UCPR r 42.1 that costs should follow the event, or against their tutors upon the general principles considered above, then that would invite applications for appeals to be stayed by reason of the inability of appellants or their tutors to provide security for costs on applications under UCPR r 42.21.

These considerations invite a careful analysis of the evidence to determine what, if any, costs order is appropriate in the present case.

As appears from the reasons of Tribunal, an order was initially made by the Tribunal appointing AS’ mother, CS, as her guardian, but an order was subsequently made appointing the Public Guardian in her stead. The Tribunal dealt with three applications at the one time. One was an end of term review, and the others were applications for review by CS and AS’ NDIS Specialist Support Coordinator. CS’ application was that she be made the guardian of her daughter. The reasons record that, in a short telephone interview, AS stated that she wanted her mother to be her guardian (at [16]). SS gave evidence to the Tribunal that her sister had told her that she wanted her mother to be guardian (at [93]), but the Tribunal noted that AS’ independent legal representative informed the Tribunal that her client had said that she was happy with the “government guardian” (at [94]), and that the NDIS Coordinator had conveyed the same information to the Tribunal (at [95]).

The Tribunal ultimately appointed the Public Guardian as AS’ guardian because it was not satisfied that CS met the requirements to be appointed guardian (at [124]). The Tribunal concluded at [125]:

SS read an affidavit at the costs hearing of a disability support carer who was providing care to AS at the time of the hearing before the Tribunal. The carer confirmed that he had been told by AS that she wanted her mother to be her guardian. The carer annexed carer shift notes that he had made on the day of the Tribunal hearing that recorded that AS said to him: “that everyone is fighting over guardianship, and that all she wants is for her Mum to be the guardian.” The carer also annexed a letter addressed “Dear Sir/Madam” dated 28 June 2021 and apparently signed by AS, which stated:

This letter was written after the commencement of these proceedings on 31 March 2021.

CS affirmed an affidavit in which in general terms she confirmed that AS asked SS to commence the appeal to this Court and to try to have CS appointed as her guardian. CS gave evidence of her despair at being deprived of the right to be AS’ primary carer after 44 years, and of the personal hardship that SS suffered as a result of giving up employment in large part to care for AS as a result of the serious deterioration of AS’ health in recent years. CS gave evidence of SS’ financial incapacity to pay any significant amount of costs to the Public Guardian and that the making of a costs order would lead to SS’ bankruptcy. CS stated the opinion that if any costs order is to be made it should be made against AS and not SS, as AS had asked her sister to appeal on her behalf from the Tribunal’s determination. CS said, however, that no costs order should be made against AS because of her mental and health disabilities and her impecuniousity.

In her affidavit, SS confirmed that she had commenced the proceedings in this Court at the request of AS (pars 30, 49 and 51-54). SS gave evidence in proper form of a conversation on around 17 March 2021 when AS said to her: “Yes, I want you to ask the Court to have NCAT put mum as my Guardian. I need you to fight for me you got me to walk again I know you fight for me. Thank you…”

SS explained that she had not worked for some years because of the time that she devoted to caring for AS, who suffered a number of life-threatening illnesses. SS is currently only receiving a Centrelink Carers Pension which is only sufficient “to just barely financially survive” (par 6). SS is currently in significant debt with large, deferred loan repayments in excess of $60,000. SS said that she is currently not in any financial position to pay any costs order made against her personally.

SS claimed that she had not consented to being appointed tutor in the proceedings and she did not agree to be joined as a party. SS claimed she was entitled to commence the proceedings on behalf of AS as her enduring attorney.

The Public Guardian did not challenge the factual evidence tendered by SS at the costs hearing. The Public Guardian did not require the deponents of the affidavits read by SS for cross examination. The Public Guardian objected to identified paragraphs of the affidavits on the ground that they were in the form of submissions and not evidence. I dealt with those objections at the hearing by stating that parts of the affidavits that were expressed in the form of submissions would only be treated as submissions and not evidence. The paragraphs to which objection was made do largely consist of submissions, but do not include the paragraphs of the affidavits from which I have taken the facts summarised above.

In these circumstances, the evidence justifies findings that SS has commenced and prosecuted these proceedings at the request of AS. I understand that that finding may be disputed by the Public Guardian but the evidence upon which it is based was not challenged. Nor was evidence led to prove the contrary. I am satisfied that SS did not prosecute the proceedings to further any self-interest. SS prosecuted the proceedings out of love and affection for her seriously disabled sister. There are aspects of the evidence that suggest that SS’ passionate desire to achieve what she genuinely believed (together with CS) was in the best interests of AS has led SS to be more astringent in her communications with representatives of the Public Guardian and the NSW Trustee and Guardian than was warranted. That is not in my view factor that disentitles SS or AS from the Court’s consideration (and in fairness the contrary was not put by the Public Guardian). I also find that SS did not in any considered way submit herself to an adverse costs order when she did not resist the order made by Lindsay J that she be appointed as AS’ tutor. It is most probable that, if it had been made clear to SS that she would be ordered to pay the Public Guardian’s costs if the proceedings failed, SS’ financial circumstances would have obliged her to cease to conduct the proceedings for her sister. The consequence would have been that AS was denied the opportunity to make the appeal to this Court that the evidence establishes she wished to make.

Although the proceedings ultimately failed at the stage when the preliminary questions were determined in the principal judgment, I do not think that the appeal was so obviously lacking in merit that the fact of failure alone would justify the imposition of an adverse costs order on SS. As the evidence establishes that the proceedings were brought at the request of AS, the Court could not make a costs order against SS without making the same order against AS. There is no evidence that would justify the Court making an order that deprived SS of her right of indemnity against AS.

The Public Guardian’s response to SS’ evidence and submissions was to make submissions directed at establishing the following propositions: (a) it was not procedurally unfair for the Court to have appointed SS as AS’ tutor; (b) it was not procedurally unfair for the Court to have ordered the hearing of separate questions; (c) the powers in the enduring power of attorney do not protect SS; (d) an order should not be made for AS to indemnify SS; and (e) the evidence of the impecuniousity of SS is irrelevant to the issue of whether an order for costs should be made against her.

There is force in these submissions, but they do not sufficiently respond to the special principles that apply in the exercise of the Court’s protective jurisdiction, and they may assume that SS was the sole effective proponent in the proceedings when a finding to that effect would be contrary to the evidence.

I should record that it is my understanding of the circumstances in which Lindsay J made the order appointing SS as tutor for AS that his Honour did not intend that the appointment would foreclose the issue of whether AS or SS should be ordered to pay the Public Guardian’s cost of the proceedings. Having regard to his Honour’s discussion in the authorities considered above of the special circumstances that apply when the Court is exercising its protective jurisdiction, I consider that his Honour made the order appointing SS as tutor to preserve the issue on the basis that the appropriate costs order would be determined at the end of the proceedings on the basis of all of the evidence that was then before the Court.

In these circumstances I consider that the proper result of the application is that the amended notice of motion be dismissed and that the Court should make no order as to costs with the intent that each party will bear her or its own costs.

In the circumstances it is not necessary for the Court to consider the Public Guardian’s application that the Court determine a gross sum of costs to be payable by SS to the Public Guardian.

The Court’s orders are: