Supreme Court New South Wales

• Medium Neutral Citation: Re S [2011] NSWSC 536
• Hearing dates: Thursday, 19 May 2011
• Decision date: 19 May 2011
• Before: White J

Decision

Refer to paras [29], [31] and [32]

• Catchwords: PRACTICE AND PROCEDURE - notice of motion - plaintiff under legal incapacity - proceedings concluded by consent orders without appointment of tutor - absence of tutor irregularity waived by defendants - subsequent application for appointment of tutor - where plaintiff's solicitor seeking to recover costs incurred in the proceedings - recoverability of costs unaffected by whether tutor now appointed - where plaintiff seeking to enforce consent orders made in the proceedings - orders sought to be enforced not expressed as orders of the court and are agreement between the parties - enforcement of agreement would be by way of claim for specific performance - appointment of tutor not necessary or appropriate for enforcement of consent orders - notice of motion dismissed with no order as to costs
• Legislation Cited: Civil Procedure Act 2005; NSW Trustee and Guardian Act 2009; Guardianship Act 1987; Legal Profession Act 2004
• Cases Cited: Ex parte Brocklebank (1877) 6 Ch D 358; Yakmor v Hamdoush (No. 2) [2009] NSWCA 284; (2009) 76 NSWLR 148
• Category: Procedural and other rulings
• Parties: Deleted by reason of orders for anonymity of proceedings
• Representation: D D Knoll AM (Plaintiff); M V Dawson (2nd & 3rd Defendants); Ms C Phang (NSW Trustee); Konstan Lawyers (Plaintiff); Cara Marasco (2nd & 3rd Defendants)
• File Number(s): 2010/423600

Judgment

1 HIS HONOUR: This application is expressed to be made pursuant to reg 7.4 (sic) of the Uniform Civil Procedure Rules for the appointment of a tutor to the plaintiff. The application relates to the affairs of a protected person and I order that the proceedings hereafter be known as Re S .

2 The application is out of the ordinary because the proceedings were resolved by consent orders made on 23 December 2010. The summons was dismissed. The proceedings had been commenced without the appointment of a tutor and orders were made by consent without any order having been made expressly under s 76 of the Civil Procedure Act 2005 approving of the settlement of the proceedings.

3 On 21 August 2008 the Guardianship Tribunal appointed the second and third defendants as joint financial managers of the plaintiff whom I will call "S". That appointment was subject to the supervision of the Protective Commissioner. The second and third defendants are the daughters of S.

4 At the same time the Tribunal appointed the second and third defendants as joint guardians of S.

5 On 4 February 2010 the Tribunal reviewed the guardianship order of 21 August 2008 concerning S. The order was varied by appointing a lady whom I will call "F", who is said to be the de facto partner of S, as his guardian for a limited period. In those proceedings concerning the review of the guardianship order S had legal representation with the approval of the Tribunal.

6 Because S is a protected person within the meaning of the NSW Trustee and Guardian Act 2009 he is a person under legal incapacity for the purposes of the Civil Procedure Act and the Uniform Civil Procedure Rules. Rule 7.14 provides that a person while under incapacity may not commence or carry on proceedings except by his or her tutor.

7 I take it that the application before me today for the appointment of a tutor to S is made under r 7.18. That rule provides that in any proceedings in which a party is under legal incapacity, if the person does not have a tutor, the court may appoint a tutor. Rule 7.15 provides in the case of proceedings with respect to the estate of a person whose estate is subject to management under the NSW Trustee and Guardian Act the tutor of that person is to be the person who has management of the persons' estate under that Act. That rule does not apply if the court orders otherwise. Rule 7.15 (2) also provides that any person is eligible to be a tutor unless, amongst other cases, the person has an interest in the proceedings adverse to the interests of the persons under legal incapacity.

8 The order made by the Tribunal on 21 August 2008 was made pursuant to s 25E of the Guardianship Act 1987, which provides that the Tribunal may order that the estate of the person be subject to management under the NSW Trustee and Guardianship Act .

9 From the course of submissions and from the evidence on the application before me today I infer that had an application been made when proceedings were commenced for an order under r 7.18, or for an order to displace what would otherwise be the operation of r 7.15(3), then an order would have been made at that time for the appointment of Mr Noel Charlton as S's tutor. Notwithstanding material in an affidavit read by the second and the third defendants relevant to Mr Charlton's fitness, ultimately no submission was made that he is not a fit person to be appointed.

10 Proceedings were commenced on 22 December 2010 when orders were made for the short service of the summons and an interlocutory injunction was made ex parte to restrain inter alia the second and third defendants from dealing with a certain property of the plaintiff. The matter was returned before Pembroke J sitting as vacation judge the following morning. On that occasion his Honour was asked to make, and made, orders by consent. His Honour dismissed the summons and made orders in relation to the application of payments to be received in respect of the sale of the property. The orders made by consent included.

" 6. The second and third defendants agree to not object to the plaintiff receiving a minimum sum of $500 per week and such additional amount in respect of any other needs as the NSW T&G shall determine is reasonable.

7. The second and third defendants agree to the plaintiff making application to the NSW T&G and to not object to the plaintiff receiving reimbursement or payment of his legal expenses for past guardianship proceedings and these proceedings, as the NSW T&G determines is reasonable. "

11 The absence of a tutor to represent the plaintiff was an irregularity that could be waived by the defendants (see, for example, Ex parte Brocklebank (1877) 6 Ch D 358 at 360; and Yakmor v Hamdoush (No. 2) [2009] NSWCA 284; (2009) 76 NSWLR 148 at [20]).

12 In the present case that irregularity was waived by the defendants. No-one submits that the orders made on 23 December 2010 are a nullity because of the irregular constitution of the proceedings or because no order was made, at least expressly, under s 76 of the Civil Procedure Act . No party to the present application seeks to set aside the orders. To the contrary the plaintiff seeks to enforce what are said to be orders made in accordance with paras 6 and 7 of the short minutes. Counsel for the second and third defendants made it plain that his clients did not resile from their agreement expressed in those paragraphs. What then, is the purpose of appointing a tutor today for the plaintiff?

13 Counsel retained for the plaintiff or the putative tutor submitted that the order should be made in order to bring regularity to the proceedings. But what underlies that desire appears to be threefold. First, it appears from an affidavit of Mr Simon Konstantinidis who acted, or purportedly acted, as the plaintiff's solicitor and acts for the proposed tutor, that it was thought that the appointment of a tutor would be relevant to further aspects of proceedings before the Guardianship Tribunal. There are two pending or likely applications. A hearing is scheduled in the Tribunal tomorrow for what I am told is a review of the guardianship order made in 2010. There was a hearing in connection with that application before the Tribunal on 13 May 2011. The Tribunal was asked to give leave for S to be represented by a legal practitioner at the hearing. That application was not successful. In the course of the Tribunal's reasons the Tribunal member referred to the present application that had then been filed in this Court. The Tribunal member indicated that the outcome of that application might be relevant to an application under s 58 of the Guardianship Act for the appointment of a person to act as guardian ad litem for S. However, the appointment of the tutor by this court would be made only for the purposes of the proceedings in this court as no issue has been ventilated in relation to the fitness of Mr Charlton. I cannot see, that the appointment of him as tutor, or a refusal to appoint him as tutor, should have any relevance to, or affect in any way, the Tribunal's approach to the foreshadowed application under s 58 of the Guardianship Act for the appointment of a guardian ad litem .

14 The other matter foreshadowed to arise before the Tribunal is that Mr Konstantinidis deposed that if Mr Charlton is appointed tutor, it is proposed that he would apply to the Tribunal for it to review the appointment of the second and third defendants as financial manager of S's estate, to revoke that appointment, to appoint him as financial manager of the estate and also to replace them as enduring guardian of S. Again, as any appointment of Mr Charlton as tutor would only be for the purpose of proceedings before this court, I do not think that the order would be of any relevance to any such foreshadowed application.

15 The second ground upon which the appointment of Mr Charlton as S's tutor is said to have utility goes to the recoverability of costs for Mr Konstantinidis and for Mr Charlton out of S's estate and to the reimbursement of S of moneys of $8,300 he has paid towards costs.

16 The third ground upon which the appointment is sought is, it is said, to allow S to enforce what were described as orders 6 and 7 made on 23 December 2010.

17 It is common ground that as S was at all material times a protected person he did not have the capacity to enter into a costs agreement or a contract of retainer of his solicitor. Where a tutor is appointed, the tutor is liable as a general rule to pay the solicitor retained to act for the incapable person, but is entitled to an indemnity in respect of costs properly incurred. I do not think that the appointment of a tutor today would render him personally liable for the costs occasioned in December 2010 in these proceedings, let alone in respect of costs arising in earlier proceedings in the Tribunal. Nor do I think it necessary for a tutor to be appointed for Mr Konstantinidis to recover such costs as he might be entitled to in the absence of a costs agreement in accordance with s 319(1)(c) of the Legal Profession Act 2004. Nor do I consider that the appointment of Mr Charlton as tutor would be necessary, or indeed relevant, to whether there should be payment from S's estate of any moneys to reimburse him for the costs he has incurred on behalf of S.

18 So far as the ability to recover costs under s 319 is concerned, it appears to me that given the failure to appoint a tutor was an irregularity that was waived, the ability of Mr Konstantinidis to recover costs according to the fair and reasonable value of the legal services provided should be the same whether a tutor is now appointed or not. Likewise, I do not see that Mr Charlton's ability to seek reimbursement from the estate would be in any way affected by whether he was now appointed as tutor.

19 That takes me to the claim that Mr Charlton should be appointed as tutor to allow enforcement of what are described as orders 6 and 7. The first thing to observe is that paras 6 and 7 of the short minutes of order are not expressed as orders of the court. The court made orders in accordance with paragraphs 1, 2 and 3 of the short minutes including orders dismissing the summons. In para 4 of the short minutes the court noted an agreement between the parties in relation to the mode by which the second and third defendants should apply for payment as financial managers. Paragraph 5 of the short minutes noted a further agreement between the parties in respect of that matter. Paragraphs 6 and 7 contain a further agreement between the parties. Enforcement of that agreement would be by way of a claim for specific performance to the extent that the agreement could be properly enforced.

20 There are difficulties with the agreement to which the parties came on 23 December 2010. The NSW Trustee and Guardian was not a party to the agreement. It does not have the general financial management of S's estate. Currently that financial management has been given to the second and third defendants, but is subject to the supervision of the NSW Trustee. The NSW Trustee has also, in the exercise of its powers under s 66 of the NSW Trustee and Guardian Act , made orders authorising the second and third defendants to have specified functions in the management of the estate and giving directions as to how those functions are to be exercised. One of the orders is in substance that the second and third defendants are authorised to retain a lawyer when appropriate to carry out necessary legal work in connection with the management of S's estate. But that authority is limited. It is expressly provided that the second and third defendant's authority does not extend to the retaining of lawyers for the commencement of legal proceedings. But for that provision, it could be said that the second and third defendants would have been themselves authorised to retain Mr Konstantinidis as solicitor for S, and that they may be taken to have ratified his purported retainer by their agreement recorded in para 7. But in the light of the limitation on their authority, it was, I think, ultimately common ground that that was not the position.

21 However, under the supervision of the NSW Trustee there is no reason that the second and third defendants as financial managers could not pay proper amounts for legal expenses to reflect Mr Konstantinidis' prima facie entitlement to be paid for the fair and reasonable value of the services provided, or to reimburse both the plaintiff and Mr Charlton for legal expenses already paid. The NSW Trustee has no objection to retaining a costs consultant to provide advice as to what would be a proper sum to be paid as the fair and reasonable value of legal services provided. In so acting, it would be exercising the supervisory function given to it by the Tribunal's orders. Through its legal representative the NSW Trustee sought a direction from this court as to whether or not, in carrying out that function, it would be proper for it, or a consultant retained by it, to have regard to the terms of a client service agreement purportedly entered into on 18 June 2009 between S and Konstan lawyers.

22 I do not think it appropriate to give any particular direction in that respect. I think a costs consultant in providing advice to the NSW Trustee can be expected to have regard to any matters that he or she considers relevant. I do not think it would be appropriate for me to express any view as to the relevance of, for example, the hourly charges provided for in that client service agreement to an assessment of the fair and reasonable value of the legal services provided.

23 There are difficulties with the agreement recorded in para 6 of the short minutes of order of 23 December 2010. As the solicitor for the NSW Trustee submitted, the parties purported to, in effect, delegate to the NSW Trustee a determination of what amount in addition to $500 per week is reasonable to be paid to the plaintiff. That assessment would doubtless require consideration of the particular circumstances of S and his needs and desires. It is far from clear to me that that is a function that the NSW Trustee should be required to perform. It was not open to the parties to confer such functions on it.

24 I gave consideration during the course of the argument as to whether matters should be regularised by my making an order under s 64 of the NSW Trustee and Guardian Act authorising the NSW Trustee to make a determination of what amounts in addition to $500 per week would be reasonable amounts to be paid to the plaintiff and the conditions, if any, on which such payments should be made, and to make a further order under that section directing the second and third defendants to pay such amounts and on such conditions as the NSW Trustee might determine. However, I am of the view that I ought not to make such an order. The question of the effect of such an order on the Tribunal's jurisdiction to make a financial management order under s 25E would require consideration that has not been possible today (see s 25K(2) of the Guardianship Act ).

25 In any event I do not think that the NSW Trustee requires any direction as to whether or not it would be justified in carrying out such a task. It seems to me that such a task would be within the supervisory function that it is allowed to exercise pursuant to the Tribunal's order of 21 August 2008, but that it should be a matter for it as to how that supervisory function should be exercised.

26 In short, I do not think that the appointment of Mr Charlton as tutor is necessary or appropriate for the enforcement of paras 6 and 7 of the short minutes of order of 23 December 2010.

27 These proceedings, having been dismissed on 23 December 2010, I do not think that the foreshadowed application to enforce what were described as "orders" would in truth, fall within the jurisdiction of the court. The orders of 23 December finalised the present proceedings. It is true that the court may, and often does, have jurisdiction to make orders after final orders had been made so as to regulate the working out of the court's orders. Orders for specific performance are a paradigm example. But as I have said, paras 6 and 7 do not reflect orders of the court, and if it were necessary for proceedings to be instituted to enforce those proceedings they would need to be commenced by fresh action for which the appointment of a tutor would be required.

28 As matters presently stand it does not appear to me that there is any imminent need for such a fresh action.

29 For these reasons I order that the notice of motion, filed on 12 May 2011 be dismissed. That order would extend also to the orders sought in para 3 of the notice of motion. Because for the reasons I have given, paras 6 and 7 of the short minutes do not contain orders of the court, it would in any event be inappropriate to make an order in the terms sought in that paragraph. I will hear the parties on costs.

[Parties addressed on costs.]

30 The second and third defendants seek an order for costs. The general rule is that costs follow the event, unless there is some reason otherwise. In this case I think there is a reason why costs should not follow the event. The application for the appointment of the tutor was precipitated by breaches by the second and third defendants of the agreements recorded in paras 6 and 7 of the short minutes of order. In relation to order 6, those defendants have not paid a sum of $500 a week to the plaintiff. Rather, they have made payment to the plaintiff's mother. In relation to para 7, I think it is clear from the correspondence that the second and third defendants have objected not only to the quantum of costs claimed by Mr Konstantinidis, but to his right to receive payment of costs. But for those matters I think it likely that these proceedings would have been unnecessary. On the other hand, it does not follow that the costs should be paid out of the plaintiff's estate. Ultimately that order was not sought. An application that a tutor be appointed should have been made before the proceedings were commenced or when the proceedings were commenced on 22 December 2010. Also, the application has not been successful.

31 For these reasons I make no order as to costs. The question as to whether or not the second and third defendants will be entitled to recover their costs as expenses of financial management out of the estate is not a question I can decide. It is a matter which will no doubt fall for determination in due course if there is not agreement either in the Tribunal or by the NSW Trustee.

32 Exhibits may be returned after 28 days.

Decision last updated: 14 June 2011