Secretary, NSW Department of Communities and Justice and Anor v ZYM and Anor [2022] NSWSC 935
Ability One Financial Management and Anor v JB by his tutor AB [2014] NSWSC 245
Holt v Protective Commission (1993) 31 NSWLR 227
M v M [2013] NSWSC 1495
Re Managed Estates Remuneration Orders [2014] NSWSC 363
The District Court’s orders were amended on 15 June 2022 to make provision for the first defendant’s compensation award to be paid into court for investment pending the appointment of a financial manager.
On 30 June 2022 the sum of $11,671,036.46 was paid into court, in the compensation proceedings, on the account of the first defendant.
At the time the first plaintiff applied for a financial management order in the Tribunal (on 9 February 2022) the first defendant was without any substantial assets (other than his as yet unresolved compensation claim) and his only financial resource was an entitlement to a disability pension.
The first plaintiff's application to the Tribunal was made with a sense of urgency because of a need to put in place arrangements for the first defendant’s care before he attained the age of majority.
The sense of urgency attending the first plaintiff's application has not wholly dissipated. The first defendant having attained his majority, and having acquired an entitlement to a substantial sum of money, which cannot be accessed until firm arrangements are in place for a financial management regime, the first plaintiff is currently bearing the burden of the first defendant’s maintenance on an interim basis.
At the time of the hearing before the Tribunal on 19 April 2022 the first plaintiff had not quite obtained the evidence (including evidence of the consent of the second plaintiff to act as a financial manager) necessary to ground the appointment of the second plaintiff.
That evidence is now available.
In those circumstances, it is appropriate that the preference of those who have been intimately involved in the first defendant’s care (including his mother) for the appointment of a private manager (more particularly, a licensed trustee company) as the first defendant’s financial manager be respected: Holt v Protective Commission (1993) 31 NSWLR 227; M v M [2013] NSWSC 1495 at [50]; Ability One [2014] NSWSC 245 at [35].
It would have been open to the Tribunal on 19 April 2022 to have appointed the second plaintiff as the first defendant’s financial manager had evidence of its consent and its suitability been available. As a licensed trustee company, the second plaintiff can generally be regarded as suitable to manage a protected estate of significant value. An institutional manager was plainly required to manage such an estate.
Because the second plaintiff is a licensed trustee company with all the safeguards inherent in that status, it was not necessary for the Tribunal to have before it a report from the second defendant of the nature of that described in paragraph 290(m) of Ability One [2014] NSWSC 245. Such a report is generally required by the Court as a pre-condition to the appointment of a private manager for reward who is not a licensed trustee company.
The Tribunal’s hesitancy about appointment of a manager for reward, not qualified as a licensed trustee company, was quite appropriate.
The plaintiffs have expressed concern that the second plaintiff’s entitlement to remuneration for acting as the manager of a protected estate be confirmed, notwithstanding that, as explained in Ability One [2014] NSWSC 245 at [90]-[112], a licensed trustee company has a statutory “right to charge fees” under the Corporations Act 2001 Cth.
An advantage of the Court, rather than the Tribunal, making decisions about management of the first defendant’s estate in the circumstances of the current case is that the Court can authorise remuneration of a manager whereas the Tribunal cannot, and the Court can order that funds in court be paid out to a manager: Ability One [2014] NSWSC 245 at [269]-[272]; Re Managed Estates Remuneration Orders [2014] NSWSC 363; Civil Procedure Act 2005 NSW, s 77(3).