LEB v ABB

Before the Court in these proceedings (2023/00353857), “the Protective List proceedings”, is an application by the plaintiffs (LEB and CMB, siblings of the defendant) for a declaration, pursuant to section 41 of the NSW Trustee and Guardian Act 2009 NSW, that the defendant (ABB) is incapable of managing his affairs and an order, under the same section in combination with section 40 of the Act, that management of his estate, be committed, in whole or part, to the NSW Trustee.

These Protective List proceedings were commenced by a summons filed on 7 November 2023 and formally amended on 8 November 2023.

The summons was filed in aid of an application made by LEB and CMB (as defendants) for the appointment of a tutor for ABB (as the plaintiff) in associated proceedings (numbered 2023/00260818), “the Family Provision proceedings”, instituted by ABB seeking orders under Chapter 3 of the Succession Act 2006 NSW affecting the estate of their late mother, EJB (“the deceased”), who died on 7 April 2019 aged 83 years.

The Family Provision proceedings were commenced by a summons filed on 16 August 2023, more than four years after the death of the deceased and well beyond the time limit of 12 months from the date of death prescribed by section 58(2) of the Succession Act 2006, necessitating (if an order for Family Provision is to be made) an extension of time “on sufficient cause being shown”.

Such a cause might be shown in the fact that LEB and CMB did not obtain a grant of probate (of the will of the deceased dated 10 October 2018) until 4 September 2023 and intermeddled in the estate in the meantime.

I proceed upon an assumption that an extension of time will in due course be granted although, because of the context in which delay occurred, the question whether ABB can establish a “sufficient cause” for an extension of time must, in these proceedings, remain an open question.

The application made by LEB and CMB in the Family Provision proceedings was made by a notice of motion filed on 14 September 2023 and amended on 15 September 2023.

The orders sought in the motion fell into two classes. The first class sought (by reference to rule 23.4 of the Uniform Civil Procedure Rules 2005 NSW) orders requiring ABB to submit to a medical examination by Dr Jane Lonie, a clinical neuropsychologist. The second class sought (by reference to UCPR rule 7.18) a declaration that ABB is a person under a legal incapacity and an order for the appointment of a tutor to represent him in the Family Provision proceedings.

In a judgment, B v B, published at [2003] NSWSC 1192 on 4 October 2023 Kunc J, having determined that ABB had capacity to commence the Family Provision proceedings and to give instructions to his solicitor (TG) for that purpose (including in relation to the preparation of his affidavit in chief), was concerned about the absence of evidence about the capacity of ABB to make decisions about the conduct of the proceedings or settlement of them involving “a more nuanced or complex evaluation than the initial decision to commence proceedings”.

It is not necessary in this judgment to consider whether, on the evidence now available or which in the future might become available, Kunc J’s interlocutory determination (I assume made without the benefit of oral evidence from ABB personally) that ABB had capacity to commence the Family Provision proceedings and to give instructions ancillary to a commencement of the proceedings should stand. If that view of ABB’s capacity is to be challenged the practical reality is that it is likely to be challenged, if at all, on a consideration of what, if any, cost orders should be made in the Family Provision proceedings. It is sufficient for the purpose of these proceedings to record that, having heard evidence from ABB, I regard the question of whether ABB had capacity to commence the Family Provision proceedings as an open one. It is not free of doubt.

Based upon his concern about the absence of evidence about the capacity of ABB to make decisions about the conduct or settlement of the Family Provision proceedings, Kunc J made an order that ABB submit to a medical examination with Dr Lonie and directed that Dr Lonie provide a report addressing questions to the following effect:

The focus for attention in this judgment is upon the capacity of ABB to manage his own affairs (including, incidentally, the Family Provision proceedings), not directly upon questions relating to accounting for his estate or any competing claims of an accounting nature that might be made between ABB and his siblings in working out their entitlements vis-à-vis each other.

Although, in the course of giving reasons for findings on questions of capacity, observations are made by me about accounting questions, for example, arising from intermeddling by LEB and CMB in the estate of EJB or from CMB’s stewardship of funds held on trust for ABB (sourced, via EJB, from BB’s estate) at the suggestion of EJB this judgment is not intended to be determinative of accounting questions.

In the ordinary course, competing claims between the three siblings could not be authoritatively determined until such time as any dispute between them can be determined in a contest between ABB (if found to have capacity), or a duly appointed representative of ABB (if he is found to lack capacity), and his siblings. I do not, in this judgment, intend to be diverted from an assessment of ABB’s capacity by important, but collateral accounting questions.

By the same token, I do not intend, by this judgment, to make adverse findings about any of the people (the solicitor TG and the siblings LEB and CMB) who appear, in good faith, to have endeavoured to assist ABB. Still less do I intend to be critical of ABB who, I am satisfied, has done his best to manage his affairs. Upon an exercise of protective jurisdiction, questions about capacity for self-management (whether relating to estate management or the appointment of a tutor), in a case such as the present one, focus upon functional capacity, not mental capacity.

This approach is governed by the purposive character of an exercise of protective jurisdiction (in this case, governed by the NSW Trustee and Guardian Act 2009, informed by the Court’s inherent, protective jurisdiction) and an appreciation that, where a person has or assumes a protective role in the nature of a guardian vis-à-vis an incapable person, his or her liability to account for funds of the incapable person may (as discussed in Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 420-423 and Clay v Clay (2001) 202 CLR 410 at 428 [37]-433 [49]) depend upon whether the protective purpose of the guardianship role has been served. Prudence dictates that the Court’s present, primary focus be on questions of (in)capacity.

By a report dated 22 October 2023 Dr Lonie addressed the first of Kunc J’s questions separately and then addressed the second and third of his Honour’s questions globally.

In relation to the first question (an opinion as to “current mental capacity”) Dr Lonie made observations to the following effect in paragraph [139] of her report:

In relation to Kunc J’s second and third questions Dr Lonie made observations to the following effect in paragraphs [140]-[142] of her report:

These (Protective List) proceedings were commenced following the parties’ receipt of the Lonie Report.

The Family Provision proceedings and the Protective List proceedings were, for a time, case managed together in the hope that a family settlement of the two sets of proceedings would emerge.

Directions hearings were held before me on 10 November, 4 and 14 December 2023; 1 and 19 March and 23 July 2024, with (at the request of the parties) postponement of a directions hearing scheduled for 19 June 2024.

On 14 December 2023 the solicitor acting for ABB in the Family Provision proceedings (TG) appeared in the Protective List proceedings for the limited purpose of assisting ABB to obtain (as was granted) an adjournment for the purpose of:

At the directions hearing on 1 March 2024, ABB appeared by counsel instructed by him on a “direct brief” without the intervention of a solicitor. TG does not act for him in the Protective List proceedings.

On 19 March 2024 ABB, through counsel, applied to the Court for an opportunity to adduce medical evidence in support of the proposition that he has capacity to manage his own affairs, including the two sets of proceedings.

On 23 July 2024 ABB, through counsel, produced to the Court a report dated 21 July 2024 prepared by Dr Richa Rastogi, a Consultant Psychiatrist. The report was based upon Dr Rastogi’s interview with ABB on 13 July 2024, although the report records that “[ABB] has been attending “Medimind” (Mental Health Specialists) [a clinic of which Dr Rastogi is the director] for the purpose of his treatment since 2018”. The report also specifically records that Dr Rastogi had taken into consideration the report of Dr Lonie dated 22 October 2023.

Dr Rastogi’s report makes observations to the following effect (correcting clerical errors):

At the directions hearing on 23 July 2024 I made the following notations ancillary to an order appointing 9 August 2024 as the date for hearing of the summons in the Protective List proceedings:

This protocol for a determination of the summons was followed at the hearing conducted on 9 August 2024. Without objection by any party the evidence adduced included, not only the affidavits filed in the Protective List proceedings, but also substantially the whole of the affidavits filed to date in the Family Provision proceedings, with a primary focus on the respective medical reports of Dr Lonie and Dr Rastogi.

Within the framework of the documentary material, ABB was invited to give evidence or simply sit at the bar table. He readily chose to give evidence in a setting in which questions were put to him, primarily, by his counsel, with supplementary questions put to him by counsel for LEB and CMB and myself. Having regard to the course of ABB’s evidence, the solicitor for the NSW Trustee declined an opportunity to put further questions to him. Throughout the hearing ABB presented as calm and fully engaged.

At the commencement of the hearing, before ABB gave evidence, I reminded all present (myself included) that the focus of the hearing was upon ABB’s capacity for self-management, not the Family Provision proceedings, and care needed to be taken by all present not to enter upon territory that might infringe such, if any, legal professional privilege as might subsist in communications between ABB and TG.

The questions put to ABB were crafted by all concerned to allow ABB to give evidence of his own story and his state of mind unhindered by leading questions on topics of significance. In my assessment he freely and voluntarily embraced that opportunity.

At the conclusion of the hearing, with assistance from the Bar table, I identified three topics upon which I invited LEB and CMB to provide further information:

Information of that character was subsequently provided on notice to counsel for ABB and the NSW Trustee. It has not been utilised in further, personal examination of ABB but it places some of his evidence in context and clarifies his financial circumstances, particularly as regards the estate of BB.

An opportunity has been allowed to the parties to adduce further evidence or to make supplementary submissions arising from the additional information provided by LEB and CMB. It was not taken up.

The title to the Toongabbie property (Lot 17 in Deposited Plan 201064, being the land contained in folio identifier 17/201064) presently records CMB and LEB as registered proprietors (as joint tenants) pursuant to a Transmission Application, dealing number AT526307, executed by them in their capacity as executors of the estate on 17 October 2023, following the grant of probate made to them on 4 September 2023. The title is unencumbered.

On the information provided by LEB and CMB, it appears that all but a nominal sum of the superannuation entitlements of the deceased were paid out to her before her death.

A statement (dated 14 August 2024) provided to the Court by CMB records that, by an informal arrangement between the deceased (EJB) and her children (including ABB), the principal asset of BB (a property known within the family as the “New Berrima Property”) was renovated by CMB (at his expense, for which he was reimbursed from sale proceeds) and sold, leaving net proceeds of sale totalling $440,000 which was in October 2018 (before the death in April 2019 of EJB, the person beneficially entitled to the estate of BB) distributed four ways:

In his statement CMB records that he undertook management of ABB’s share of BB’s distributed estate as proposed by the deceased (EJB) “because she was concerned about [ABB’s] ability to manage large sums of money”. He records that he initially kept ABB’s funds in a separate bank account but, on 31 March 2022, he transferred those funds to another account merged with his own in order to minimise ABB’s exposure to bank fees. He acknowledges an obligation to account for funds held on trust by him for CMB, presently said to be a sum of $97,000. He records that he “was reluctant to put the money into a fixed term in case it was needed for [ABB] during settlement of [EJB’s] estate, which [he] expected to happen in the coming months”.

In a supplementary statement dated 23 August 2024 (prepared in response to questions raised by counsel for ABB) CMB explains that of the $110,000 earmarked for ABB $10,000 was paid to ABB and $3,000 was paid to LEB for the benefit of ABB.

In the same statement CMB explains that he did not place ABB’s funds in an interest-bearing deposit because he held the view that the funds should be kept available “on call” because of a possibility that they would be required on short notice for the assistance of ABB. On what I presently know of the facts of the case, that approach was not unreasonable.

CMB’s mixing of the trust funds of ABB with his own funds was imprudent and in breach of the obligations of a trustee, albeit that he has maintained ABB’s funds and kept an account of what he maintains is ABB’s separate entitlement. Although irregular, I accept that the course CMB took has been motivated by a desire to conform to his mother’s proposal for an informal type of “protective management” for his disabled brother.

On what I presently know of the facts of the case, I am inclined to the view that any technical breach of trust on the part of CMB in not keeping ABB’s funds separate and in an interest-bearing account could be excused upon an application of section 85 of the Trustee Act 1925 NSW or the analogous protective jurisdiction of the Court identified in C v W (No 2) [2016] NSWSC 945.

In the event that protective management orders are made affecting ABB his siblings invite the Court to commit management of his protected estate to the NSW Trustee.

No alternative person (either a natural person or an institutional manager) has been nominated as a person “suitable” for appointment. That leaves the NSW Trustee as the only option should a decision be made under section 41 of the NSW Trustee and Guardian Act for ABB’s estate to be subject to protective management. The NSW Trustee is the State’s “manager of last resort” in the sense that, by convention, it accepts an appointment as a manager in the absence of a suitable alternative: M v M [2013] NSWSC 1495 at [46]; Ability One Financial Management Pty Ltd and Anor v JB by his tutor AB [2014] NSWSC 245 at [30]-[36]; A v A [2015] NSWSC 1778 at [15]-[17].

In correspondence between counsel in the lead up to the hearing of the summons in the Protective List proceedings, counsel for LEB and CMB proposed that, reading sections 40 and 41 of the NSW Trustee and Guardian Act in combination, any order made under section 41 affecting ABB exclude from its operation management by ABB of the disability support pension which, for many years, has been his sole, regular source of income.

As ABB has no substantial assets other than his interest in the deceased estates of his parents, and there is no known prospect of him acquiring any other substantial asset, the practical effect of such an order would be that a regime of protected estate management would be limited in its operation to management of his interest in those estates, including any entitlement he may have to additional provision in the Family Provision proceedings and the fruits, if any, of those proceedings.

ABB was born in May 1965 and is presently aged 59 years. He is the oldest of three children of the marriage between the deceased (EJB) and BB, who died in March 2015 aged nearly 78 years.

The other children of the marriage, in order of birth, are LEB (born in July 1967 and presently aged 57 years) and CMB (born in January 1970 and presently aged 54 years).

The parents (EJB and BB) were married in August 1959 and separated in about 1991-1993, when EJB and LEB moved out of the family home at Greystanes and into rental accommodation, leaving BB, ABB and CMB living at the Greystanes home. In November 1996 they sold the family home at Greystanes and effected a property settlement which funded EJB’s purchase of her home at Old Toongabbie, where she lived until her death in April 2019. That property forms the principal asset of her estate. The inventory of property annexed to probate of her will attributed to it an estimated value of $1.1 million. In a recent “Administrator’s affidavit” (sworn on 31 July 2024) LEB attributed to it an estimated value of $1.27 million.

At the time of his death and for a considerable time before then BB lived separately from EJB. They were “separated" but not divorced.

Although BB may have contemplated updating his will in favour of his children and grandchildren, he died leaving a will dated 17 June 1976 which left the whole of his estate to EJB, his estranged wife. With the consent of EJB the will was admitted to probate on 1 June 2017, upon which date letters of administration with the will annexed were (with the consent of her children, including ABB) granted to CMB. As earlier explained, CMB acknowledges that he presently holds $97,000 on trust for ABB as ABB’s share of the EJB’s estate pursuant to an informal family arrangement agreed between EJB and her children, ABB, LEB and CMB.

ABB has never married or had children. He suffered a traumatic brain injury in a motor bike accident in 1985, aged 20 years. He continues to suffer disabilities as a consequence of that accident.

He had moved out of the family home at Greystanes, into his own rental property, nearly a year before his accident. After several months or more in hospital following the accident he returned to the Greystanes home to live with his father until, turned out by his father, he commenced living with the deceased, at first in her rental unit and, upon its purchase, her home at Old Toongabbie. He has continued to live at “the Toongabbie property” since that time. He is, and has been for many years, a disability support pensioner, in his own words, with “limited employment prospects”. He has not been in paid employment for about 20 years.

On a contested hearing of ABB’s family provision claim there may be a live issue as to the extent to which ABB lived independently of EJB, and was dependent upon her, before her death. There may also be a live issue about the extent to which, since the death of EJB, he has been dependent upon his siblings for financial support (supplementing his pension) and assistance from LEB in the performance of routine domestic tasks.

The reality of ABB’s life is that he lives alone in his late mother’s home without family or friends other than his siblings (only one of whom, LEB, lives locally) to call upon in times of need. His social contact with others than his siblings is limited to casual acquaintances he meets at his local shops when shopping for supplies and, should he consult a general practitioner for medical treatment (which he does only irregularly), a doctor allocated to him on a roster at the Medimind Clinic. He disclaims any regular connection with a particular doctor (including Dr Rastogi) but maintains that his only medical problem is “anxiety”, a condition he says was diagnosed for him by Dr Rastogi.

LEB is married with two teenage children, respectively aged 16 and 13 years. She is employed as a High School teacher and lives with her family in Arncliffe.

CMB is married with four children, ranging in age between 19 and 12 years. He is by occupation a sales manager. He lives with his family in Melbourne.

By her will EJB appointed LEB and CMB as joint executors and trustees, referring to them jointly throughout the will as “my Trustee”.

The substantive provisions of the will (here reproduced with editorial amendment and emphasis added) are found in clauses 3 to 6 inclusive:

The scheme of the will warrants notice in circumstances in which:

The scheme of the will is consistent with an assessment on the part of EJB that ABB, on account of his disability, might need support through the agency of his siblings.

In the affidavits filed to date in the two sets of proceedings (not the subject of cross-examination in these Protective List proceedings but likely to be the subject of cross-examination in any contested hearing of the Family Provision proceedings) LEB and CMB assert that, notwithstanding that they did not take out a formal grant of probate until after the commencement of the Family Provision proceedings, they have administered the estate of the deceased on the basis that (on account of his disability) ABB needs support, allowing him to continue living at EJB’s Toongabbie property, “without rent”, and meeting expenses from estate funds (and their personal resources).

Confirmation of that can be found in a comparison between the inventory of property annexed to the grant of probate made in favour of LEB and CMB (on the one hand) and the Administrator’s affidavit sworn by LEB on 31 July 2024.

Between the date of EJB’s death (on 7 April 2019) and 31 December 2023, LEB, in particular, paid from her own funds a total of $30,730.46 in provision of funds to ABB “to cover the shortfall of his pension payments” (a sum totalling $3,202) and in payment of outgoings on the Toongabbie property: council rates; water rates; electricity, gas and Telstra accounts; maintenance; and insurance. A consequence of ABB’s commencement of the Family Provision proceedings (and, perhaps, the issue to LEB and CMB of a grant of Probate) is that LEB has felt obliged to step back from paying these outgoings from her own resources. Since 1 January 2024, council rates, water rates and electricity and gas accounts have been paid from the deceased’s estate. ABB continues to live in the Toongabbie property “rent free” in circumstances, according to LEB, the property could be rented out for approximately $665 a week.

The terms and conditions upon which ABB has received, is receiving and hopes to continue to receive a disability support pension have not been made the subject of evidence in these proceedings. It is, in these proceedings, an open question whether the availability of a disability support pension for ABB has influenced decision-making in EJB’s management of her affairs, in the drafting of her will or in administration of her deceased estate in a manner that needs to be taken into account in assessing how best, in ABB’s interests, to manage the Family Provision proceedings.

An unintended consequence of the failure of the parties to reach an agreement about the future administration of EJB’s estate may be that the present estrangement between ABB and his siblings as a consequence of the pendency of the Family Provision proceedings has limited opportunities for informal family support for ABB and may render a sale of the Toongabbie property inevitable.

ABB’s perception that he is, and always has been, able to manage his own affairs appears likely to have been formed in the context of the informal support given to him, first, by his mother and, after her death, by his siblings. The institution and pendency of the Family Provision proceedings has, unremarkably, led to a breakdown in the personal relationships between ABB and his siblings, with him rejecting conciliatory overtures by them and they being forced by his rejection to retreat into formal dealings.

Without attributing blame to any family member, there has been a loss of congeniality and, from the perspective of ABB, a loss of family support. Unless there is a reconciliation between ABB and his siblings there is a risk, made manifest in his oral evidence but which he appears not to comprehend, that he may not be able to establish a comparable support network to replace “family”.

In written submissions made by counsel on behalf of ABB the attention of the Court was properly drawn to the fact that “there was no attempt made [by LEB and CMB] to appoint a [financial] manager over [ABB] before he filed the Family Provision proceedings” and that “[the] Court should be alert to a possible forensic advantage to be gained by the executors [LEB and CMB] should [the] NSW Trustee be appointed as [ABB’s] tutor”.

On the evidence presently available to me (and despite criticism about their informal administration of their parents’ estates that may be warranted), I am not inclined to attribute bad faith or adversarial motives to LEB or CMB. In their written submissions they have, for example, expressly disclaimed any entitlement they might otherwise have to seek an order for their costs of the Protective List proceedings to be paid by ABB or the estate of the deceased. Their decision to defer a sale of the Toongabbie property and to allow ABB to live there (“rent free” and with ordinary living expenses paid on his behalf) has kept them out of their own inheritance, to the benefit of ABB in a way unlikely to translate into any benefit available to him in the Family Provision proceedings. CMB has held funds from BB’s estate on trust for ABB and acknowledges an obligation to account to him for those funds.

I am not sufficiently alive to forensic decisions made by or on behalf of ABB in his decision to commence Family Provision proceedings to judge why a road to that form of litigation, in isolation from other courses, was chosen. Nor am I aware why (as appears to be the case) the Family Provision proceedings were commenced without a prior demand by ABB (invoking the rule in Saunders v Vautier (1841) 41 ER 482) for a distribution to him of his entitlement to 60% of the deceased’s estate. An assumption appears to have been made that a family provision claim was a necessary and appropriate “remedy” for ABB rather than, say, an administration suit to compel completion of administration of the deceased’s estate or engagement with ABB’s family, without a peremptory threat of litigation, to corroborate ABB’s instructions. To his credit, though, TG identified concerns about EJB’s superannuation entitlements and BB’s estate that have, in the current proceedings, required investigation in the interests of ABB.

Supplementing evidence of correspondence between solicitors, an affidavit sworn by TG on 22 September 2023 in the Family Provision proceedings (ostensibly in support of his strongly held view that ABB has at all times had, and has, the requisite capacity to instruct him in those proceedings) relates the course of events leading to his acceptance of instructions from ABB for the commencement of the Family Provision proceedings and the preparation of a substantive affidavit sworn by ABB (on 21 August 2023) in support of his claim for a Family Provision order.

So persuaded is TG of ABB’s capacity to instruct him in the Family Provision proceedings that he has prepared further affidavits sworn by ABB (on 18 June and 24 July 2024, albeit that the latter is a formal affidavit) in support of a Family Provision claim despite his receipt, first, of a letter dated 11 September 2023 from the solicitors for LEB and CMB disclosing the concerns of ABB’s siblings about ABB’s capacity and, secondly, the report of Dr Lonie dated 22 October 2023.

Dr Lonie’s report is extracted above. The solicitors letter dated 11 September 2023 (addressed to TG at his firm) is here extracted (with editorial adaption):

On LEB’s estimate of the current value of the estate, if administration of EJB’s estate were to be finalised upon a sale of the Toongabbie property, and final administration of the estate, ABB could receive about $720,000, supplemented by the $97,000 held on trust for him from BB’s estate (but he would be required to obtain and fund fresh accommodation), subject to presently unknowable costs orders and any entitlements LEB and CMB may have to be indemnified out of the deceased’s estate in reimbursement of estate expenses paid by them.

Even if he were to be given the whole of the EJB’s estate, subject to costs being paid out of the estate, he may not be able (as a pensioner) to maintain the Toongabbie property, necessitating a sale of the property with a consequent need to find (and fund) alternative accommodation.

In mentioning these scenarios, I do not intend to reflect in any determinative way on the competing entitlements of ABB and his siblings in the Family Provision proceedings but only to reflect upon some of the questions that appear to arise for management of ABB’s affairs (whether by himself or through an estate manager and tutor) looking forward.

If, as LEB and CMB (as I accept genuinely) believe there has always been an objective doubt about ABB’s ability to manage his own affairs a question of capacity would inevitably arise whether ABB sought to displace the trust established by the deceased’s will by a demand for his share of the estate to be transferred to him, in proceedings for administration of the estate, or on an application for family provision relief. This may not have been fully appreciated by TG, from whom (in fairness to him, it must be said) I have not heard on the hearing of these (protective) proceedings, but in case management of the two sets of proceedings.

On the case sought to be advanced by or on behalf of ABB in the Family Provision proceedings his disability is counted as a factor in his favour, warranting preferential treatment vis-à-vis siblings who are ostensibly materially better off and settled in a family environment. In one guise or another questions about ABB’s capacity for self-management are likely to be encountered in the Family Provision proceedings with or without a regime protective of ABB as a vulnerable person.

The legal principles to be applied in disposition of LEB and CMB’s application for protected estate management orders affecting ABB are not in dispute.

By their amended summons LEB and CMB seek orders to the following effect:

Section 41 is the principal provision invoked in the amended summons. Section 40 falls to be considered, particularly, if a partial management order is to be made rather than an order for the management of ABB’s whole estate.

A partial management order might be made, for example, to exempt a pension from protective estate management so as to permit a pensioner to manage his or her pension without the intervention of a manager. A similar outcome might, in practice, be embraced by a management order under section 41 (without invoking section 40), leaving a manager to decide (by reference to section 71 of the NSW Trustee and Guardian Act) whether the managed person (a.k.a. the protected person) should be authorised, by the manager, to deal with pension proceeds.

All these sections are part of Chapter 4 (sections 38-100) of the NSW Trustee and Guardian Act, entitled “Management functions relating to persons incapable of managing their affairs”. That fact brings to mind section 39 of the Act which guides decision-making functions.

In the application of sections 39, 40, 41 and 71 regard must be had to the following definitions in section 38 which (with emphasis added) provides, inter alia, that in Chapter 4:

So far as may be material, sections 39 and 40 (in Part 4.1 of the Act), section 41 (in Part 4.2), and section 71 (in Part 4.5) are in the following terms (with emphasis added):

The pivotal provision in section 41(1) is the expression “[if] the Supreme Court is satisfied that a person is incapable of managing his or her affairs”.

The concept of incapacity for self-management is not, in terms, defined in the NSW Trustee and Guardian Act but takes its colour from the Court’s inherent parens patriae (protective) jurisdiction (explained in Secretary, Department of Health and Community Services v JWB and SMB (Marion’s Case) (1992) 175 CLR 218 at 258-259), upon which Chapter 4 is modelled.

I have previously considered the nature of the Court’s jurisdiction and the operation of Chapter 4 in a number of judgments to which I adhere without any present need of elaboration: CJ v AKJ [2015] NSWSC 498 at [14]-[53]; P v NSW Trustee and Guardian [2015] NSWSC 579; and H v H [2015] NSWSC 837.

Suffice for the present case to extract paragraphs [27]-[43] of CJ v AKJ [2015] NSWSC 498:

The questions for determination in the present proceedings focus upon whether protective estate management orders affecting ABB should be made, not directly (but incidentally) upon whether a tutor should be appointed to act on behalf of ABB in the Family Provision proceedings.

One, but not the only reason for consideration of the appointment of a protective estate manager is that, if it be the fact that ABB is in need of a tutor for prosecution of his family provision claim, there is no candidate for appointment to the office of a tutor other than the NSW Trustee, given the responsibilities of a tutor and a tutor’s exposure to a risk of costs orders attached to the office.

In an affidavit sworn on 22 September 2023 TG expressed an opinion that an application for the appointment of a tutor for ABB (which he believed was not necessary) would be futile because he did not believe, from his discussions with ABB, that there is anyone who would consent to being appointed as a tutor (and there is no one in his family who could be a tutor, because of conflicts between duty and interest).

The NSW Trustee is generally unwilling to accept the office of a tutor absent appointment as manager of the protected estate of the “incapable person” in need of a tutor, but it may accept the office if appointed as a manager and given an opportunity to investigate the affairs of the protected person and the prospects of success in the proceedings in which called upon to act as a tutor.

Although the Court has a supervisory jurisdiction over the appointment, and conduct, of tutors (Re P [2006] NSWSC 1082, approved in Bobolas v Waverley Council [2012] NSWCA 126 at [60]-[62]) rules of court provide a legislative framework within which most decisions about the appointment and supervision of tutors can be made: Uniform Civil Procedure Rules 2005 NSW Part 7, Division 4 (entitled “Persons under legal incapacity”), Rules 7.13-7.18, read with the definition of the expression “person under legal incapacity” in section 3 of the Civil Procedure Act 2005 NSW.

In operation, these rules must be read with Part 6 Division 4 (sections 74-80) of the Civil Procedure Act which, inter alia, require Court approval of a settlement of proceedings commenced by or on behalf of, or against, a person who is incapable of managing his or her own affairs. Section 80 specifically provides that “[on] the application of the tutor for a person under legal incapacity, the Supreme Court may give directions with respect to the tutor’s conduct of proceedings, whether before the Supreme Court or any other court, on behalf of that person”.

CPA section 3 defines “Person under legal incapacity” to mean “any person who is under a legal incapacity in relation to the conduct of legal proceedings (other than an incapacity arising under section 4 of the Felons (Civil Proceedings) Act 1981 NSW)” and includes, so far as presently material, “a protected person within the meaning of the NSW Trustee and Guardian Act”.

UCPR rules 7.13-7.18 are in the following terms:

If protected estate management orders are made affecting ABB and management of his protected estate is committed to the NSW Trustee, the usual practice of the Court would be that the proceedings would be adjourned to allow the NSW Trustee an opportunity to consider whether to consent to its appointment as a tutor in related proceedings in which the protected person is an adversarial party and, if so, the terms upon which that consent might be given. That practice emerged from A v A [2015] NSWSC 1778 (a judgment set aside on appeal for in IA v TA [2011] NSWCA 179 for reasons unrelated to the practice under present consideration) and PF v HK [2016] NSWSC 590 at [27] and [29].

The usual practice is to allow the NSW Trustee, after its appointment as protected estate manager, an opportunity: to engage with the protected person personally; to review the evidence adduced in proceedings in which management orders have been made and as may be available as a consequence of the proceedings in which the NSW Trustee is called upon to act as a tutor; to engage with the protected person’s adversaries in any negotiations that might be appropriate; and, in that context, to consider whether it will, or will not, consent to its appointment as a tutor for the protected person.

As a protected estate manager the NSW Trustee has:

I repeat here paragraphs [10]-[12] of H v H which, in terms, relate to the conduct of compensation proceedings by a tutor on behalf of a claimant for compensation but not might be inapt in relation to the conduct of a claim for a family provision order:

As I have been managing both the Family Provision proceedings and the current Protective List proceedings my present intention, if a management order is made in favour of the NSW Trustee, is to continue that case management up to and including the time of any appointment of a tutor and, if appropriate, the conclusion of any mediation then held, reserving to the parties liberty to apply for approval of any settlement.

Having had the benefit of observing ABB personally, as he told his story and responded to questions in the witness box, and having done so with the benefit of the evidence and submissions placed before me in accordance with the agreed protocol for the conduct of the hearing of these (protective) proceedings and supplementary information subsequently provided, I am persuaded that:

Unlike Dr Lonie’s report, Dr Rastogi’s report does not resonate with my observations of ABB in person. Nor does it elaborate the factual foundations upon which Dr Rastogi’s generalised opinions are based. It is not clear from her report what information she had about ABB’s personal circumstances.

In the course of giving evidence before me ABB manifested his vulnerability (to use a general expression) in a number of respects, some of which are here noted.

First, he exhibited a paranoia about his siblings, which manifested itself in a fixed belief that Dr Lonie was part of a conspiracy (a “scam” he called it) on the part of his siblings to keep him out of his inheritance. A factual foundation may be found for his concern about the role of LEB and CMB in their informal management of his affairs but his suspicion of misconduct on their part is grounded in confusion, and an inability to retain information, about his mother’s will and her decision to make provision for him, through CMB, out of her inheritance of his father’s estate.

Secondly, he disclaimed the truth of statements made by him to Dr Lonie (as recorded in her report) on the basis that, because she was part of a scam, he deliberately lied to her and saw nothing untoward in his doing so.

Thirdly, although he began his evidence explaining that a primary purpose of his family provision application was to provide him with funds for the purchase of a new residence for himself (part only of the claim articulated in the affidavit prepared for him in support of his family provision claim), he seamlessly departed from that objective in confirming that he wants to continue living at his current address, his mother’s home.

Fourthly, despite his access to legal advice (from TG and counsel, independently retained) he appeared to have no firm grasp of the nature of the Family Provision proceedings (conflating them with the purpose of forcing his siblings to pay him his inheritance, and these protective proceedings) or the costs and benefits involved in the commencement and conduct of those proceedings.

Fifthly, although telling Dr Lonie that he expected to inherit 100% of his mother’s estate (possibly emboldened by his engagement with TG), he could not spontaneously remember the nature or extent of his entitlement to the estate under his mother’s will, but disclaimed an expectation that he receive 100% of the estate and, when shown a copy of the will, he insisted that he should get 60% of the estate and each of his siblings should get 20% (the exact proportions for which the will provides), apparently without an appreciation that that insistent view conflicted with the declared purpose of his family provision claim.

Sixthly, he exhibited a confused understanding of his assumed interest in the estate of his father (BB) and provision he says his mother (EJB) made for him but, he believes, was not made available to him upon her death, but “placed in a bank account” by his siblings for their own purposes. On the evidence presently available to the Court what appears to be the case is that, on notice to ABB, his mother used her unwanted inheritance from her estranged husband’s estate to make a distribution to her children and grandchildren, entrusting ABB’s share to CMB on trust for him on account of a concern on her part that ABB could not responsibly manage a large sum of money.

Seventhly, he appeared not to appreciate the significance of his having “no significant other” in his life other than his siblings, from whom he is presently estranged.

Eighthly, he appeared to have no sound understanding of his medical condition, and no prudent approach to his medical care, illustrated by:

The evidence before the Court includes several text messages in most of which ABB manifested a quotidian dependence upon LEB, not only for small amounts of money to tide him over to “pension day”, but also for help in dealing with socially important but relatively small domestic dilemmas such as a lost mobile telephone. Occasionally, in those texts, ABB is shown to have complained about delay in receipt of his inheritance; but the texts do not evidence what he described in his evidence to the Court as constant complaints about his inheritance. On LEB’s part, the texts evidence a general, familial concern for ABB’s welfare, consistent with LEB’s perception that he has only a limited capacity for self-management.

Corroboration for ABB’s evidence of constant complaints on his part is found in his evidence, and that of TG, that he initiated contact with TG’s firm by responding online to an advertisement of the firm advertising the availability of legal services in will disputes. TG’s response was prompt, forceful and well-meaning but, as events unfolded, unnecessarily confrontational; leading to an unproductive sense of frustration in all concerned and mutual distrust corrosive of the family relationships that constitute ABB’s best hope of a supportive social network.

I am satisfied, on all the evidence, that ABB is, and is likely to remain, incapable of dealing with his affairs in a reasonably competent fashion and that, by reason of that lack of competence, there is a real risk that he may be disadvantaged in the conduct of his affairs or simply exploited, and that such money or property as he may possess may be dissipated or lost because of his lack of insight into his condition; his inability to process and retain information in a consistent manner; and his social isolation. His inability for self-management is present, and likely to remain, absent a form of protective management in which his estate generally is managed for him, reserving to him a supervised freedom to manage a reasonable living allowance (including his pension) with attendant, but socially acceptable, risks of mismanagement of the allowance.

In my assessment, ABB lacks the capacity to make rational decisions about the conduct or settlement of the Family Provision proceedings or management of his affairs consequent upon whatever may be the outcome of those proceedings.

I do not accept, as TG sought to persuade the Court in his affidavit of 22 September 2023, that ABB has no need of a tutor and that the question whether ABB needs a regime of protected estate management can, and should, be seen as wholly distinct from the question whether a tutor should be appointed to represent ABB in the Family Provision proceedings.

I agree that each type of protective order (for the appointment of a manager or a tutor) requires separate consideration (bearing in mind that assessments of “capacity” are task-specific) but due recognition needs to be given, in this case, to the nature of ABB’s affairs. Management of his estate generally and management of his interest in the Family Provision proceedings are inherently interconnected.

For these reasons, I am satisfied that ABB is “a person … incapable of managing his … affairs” within the meaning of section 41 of the NSW Trustee and Guardian Act 2009 NSW and that, having regard to the general principles enunciated in section 39 of the Act (and the terms of section 40, read in conjunction with section 41), the Court should, make a declaration and an order affecting ABB as contemplated by section 41(1)(a) and (b), committing management of ABB’s protected estate to the NSW Trustee and, subject to further order, excluding from protected estate management that part of ABB’s estate comprising proceeds of his disability pension.

I have come to this conclusion independently of the terms of EJB’s will (which are consistent with the belief that ABB has special needs arising from his disability through misadventure) and any subjective opinions expressed by LEB and CMB about particular events. Nevertheless, I accept as consistent with my own observations of ABB the objective assessment of LEB and CMB that ABB cannot manage his own affairs (particularly as regards large sums of money and his family provision claim) and he is in need of the protection available through the services of a protected estate manager and a tutor.

The office of a manager of the estate of a protected person governed by the NSW Trustee and Guardian Act 2009 is unique, taking colour from the terms of the manager’s appointment and the Court’s protective jurisdiction, informed by the nature, purpose and historical origins of that jurisdiction: Ability One Financial Management Pty Ltd and Anor v JB by his tutor AB [2014] NSWSC 245 at [166]-[175].

As properly understood, the office of a protected estate manager is not constrained by a simple binary distinction (as assumed in some jurisdictions) between “assisted” and “substitute” decision-making.

As far back as the judgment of Lord Eldon in Ex parte Whitbread in the Matter of Hinde, a Lunatic (1816) 2 Mer 99; 35 ER 878 at 879 (a judgment accepted as authoritative by the Court of Appeal in Protective Commissioner v D (2004) 60 NSWLR 513 at [152]) it has been clear that the Court, upon an exercise of its inherent protective jurisdiction (and incidentally a manager subject to the Court’s jurisdiction), is required, in making a decision affecting an incapable person, to consider, and respect, what that person would have done himself or herself if possessed of the requisite capacity.

The limits (or scope) of the Court’s inherent jurisdiction have not, and cannot, be defined: Marion’s Case (1992) 175 CLR 218 at 258. To the extent that a distinction drawn between “assisted” and “substitute” decision-making may be deployed as a reminder of the importance of viewing protective management regimes through the prism of, and in respectful consultation with, a person in need of protection, it may serve a constructive purpose, but otherwise if viewed as a jurisdictional constraint on the “welfare (or paramountcy) principle” that the welfare and interests of a person in need of protection are the paramount consideration.

The fundamental need to consult and respect a person in need of protection is reinforced in the context of the exercise of a function under Chapter 4 of the NSW Trustee and Guardian Act, by the general principles identified in section 39 of the Act, informed by the observations of the majority of the High Court of Australia in Marion’s Case (1992) 175 CLR 218 at 258-259 by reference to the Canadian Supreme Court decision of Re Eve [1986] 2 SCR 388; 31 DLR (4th) 1 and the following extract from the judgment of Lord Eldon in Wellesley v Duke of Beaufort (1827) to Russ.1 at 20; 38 ER 236 at 243:

Section 72 of the NSW Trustee and Guardian Act imposes upon the NSW Trustee additional obligations of a consultative nature before taking any action in respect of the estate of a “managed person” (an expression that includes a “protected person”):

In the circumstances of the present case, the NSW Trustee’s obligation to consult requires a nuanced understanding of an interplay between strict legal rights and family relationships bearing in mind the overriding imperatives of section 39 of the Act, the supervisory jurisdiction of the Court, and a requirement (under Division 4 of Part 6 (sections 74-80) of the Civil Procedure Act 2005 NSW) that any settlement of ABB’s claims against the LEB and CMB to be approved by the Court.

As noted in W v H [2014] NSWSC 1696, the judgment of Lord Eldon in Ex parte Whitbread; Re Hinde (1816) offers, upon an exercise of protective jurisdiction, insights into the process of consultation, in the interests of an incapable person, with his or her “significant others”. His Lordship’s observations were made in the context of a question whether an allowance might be made out of the estate of a lunatic (an historical expression for an incapable person which has fallen out of fashion).

With emphasis added, the headnote to Ex parte Whitbread reads as follows at [39]-[40]:

Lord Eldon’s judgment (at 2 Mer 101-103; 35 ER 879) elaborates the specified principle, encased in a precautionary tale about the intersection between human frailty and what is necessary for the due administration of a protected estate (with emphasis here added):

A point to be made by reference to this historical example is that, upon an exercise of protective jurisdiction, a need to consult the “significant others” of an incapable person must be viewed through the prism of the incapable person’s perspective, having regard to the welfare principle (that the welfare and interests of the incapable person are the paramount consideration) and, in a case governed by the NSW Trustee and Guardian Act, more specifically the “general principles” set out in section 39 of the Act.

The requirement for prudential decision-making that is inherent in an exercise of protective jurisdiction does not mean that a protected person, such as ABB will become upon the making of orders giving effect to this judgment, should not be permitted or empowered to give effect to his or her own wishes and preferences (imprudent though they may be), recognising that the freedom to choose a course of conduct may also involve a freedom to fail. The essence of prudential, protective estate management is in each case “risk management”, focussing on the future informed by present and past experience.

Having allowed the parties an opportunity to be heard as to the form of orders to be made, I make orders to the following effect:

I commend to the parties (including the NSW Trustee as manager of ABB’s protected estate) the possibility that, within the framework of these proceedings and the Family Provision proceedings, a family arrangement might be negotiated (subject to the Court’s approval) that might permit ABB to remain in occupation of the family home, with consequential adjustments to the respective entitlements of ABB, LEB and CMB to the estate of EJB.

In the meantime, subject to any direction that might be given by the NSW Trustee, CMB should pay to the NSW Trustee (as manager of ABB’s protected estate) the $97,000 he presently holds on trust for ABB.

One of the obligations imposed on the NSW Trustee as manager of ABB's protected estate is to consider, not only whether to consent to act as ABB’s tutor in the Family Provision proceedings but, more broadly, to consider what, if any, arrangements should be made for representation of ABB in those proceedings.