Supreme Court New South Wales

• Medium Neutral Citation: Ability One Financial Management Pty Limited and Anor v JB by his Tutor AB [2014] NSWSC 245
• Hearing dates: 12 August 2013, 13 and 23 September 2013, 25 November 2013 and 4 February 2014 (with written submissions)
• Decision date: 17 March 2014
• Jurisdiction: Equity Division
• Before: Lindsay J

Decision

Order that Short Minutes be brought in to give effect to a decision that a manager of a protected estate be allowed remuneration out of the estate on terms to be administered by the NSW Trustee.

• Catchwords: GUARDIANSHIP - Protected person - Financial management - Appointment of manager - Private manager - Terms of appointment - Remuneration - Regulatory regime - Financial services licence, issued by Australian Securities and Investment Commission, required - Subject to regulation by public authorities (by ASIC as licence holder, by NSW Trustee as financial manager) and supervision by Court (in exercise of Protective jurisdiction) - Public interest considerations; MENTAL HEALTH - Protected person - Appointment of manager of estate - Private manager - Remuneration - Regulatory regime - Public interest considerations; PRACTICE - NSW Trustee & Guardian Act - Protected person - Appointment of manager of estate - Private manager - Terms of appointment - Remuneration - Regulatory regime - Public interest considerations
• Legislation Cited: Administrative Decisions Review Act 1997 NSW); Corporations Act 2001 Cth chapter 5D, ss 601RAA, 601RAB(1)(b), 601RAB(2A), 601RAC (2), 601RAC (2)(d), 601RAC(2)(e), 601SAA; 601TBA(1), 601TBC, 601TBD, 601TBE; chapter 7, 760A; Part 5D.5 ss 601VAA - 601VCC, s 601RAE (4)(b); ss 601RAE (1) 601RAC (1)(a), 601RAC (2)(d)-(e), 601RAA, 601SBB(3); Corporations Regulations 2001 Cth, clause 5D.1.04 (3) and Schedule 8AD, item 4, 5D.1.04(2)(3), Schedule 8AC items 2-3, Schedule 8AD item 2; Guardianship Act 1987 NSW ss 25E, 25M(1)(b), 25M(1)(a); 25G, 25M(1); Interpretation Act 1987 NSW; NSW Trustee and Guardian Act 2009 NSW ss 71, 111, 113, 114; 43-52; ss 11(2), 11(4); NSW Trustee and Guardian Regulation 2008 NSW Part 4.5, Division 1 (ss 55-62), Division 2 ss 63-70, Division 3 ss 71-84, s 115, s 64, s 115(1)(b), ss 11, 41(1)(b) and 52; Probate and Administration Act 1898 NSW, s 86A; Protected Estates Act 1983 NSW, ss 77, 8; Public Trustee Act 1913 NSW s 9; Public Trustee (Further Amendment) Act 1989 NSW; Trustee Companies Act 1964 NSW, s 34
• Cases Cited: Adsett v Berlouis (1992) 37 FCR 201 at 208-212; Allen v Union-Fidelity Trustee Co of Australia Limited (1986) 6 NSWLR 341 at 343F-344B; Baker v H [2009] EWHC B31; Beverley's Case (1603) 4 Co Rep 123b; 76 ER 1118; Boardman v Phipps [1967] 2 AC 46; Brown v Smith (1878) 10 Ch D 377, p 386; Caltex Refining Co Pty Limited v Maritime Services Board of NSW (1995) 36 NSWLR 552 at 563G-564F); CC v RAM [2012] NSWSC 1555 at [4]-[6]; Christiansen v Christiansen (Queensland Court of Appeal, 2 July 1999) BC 9904473 at [18]-[19]; Clay v Clay (2001) 202 CLR 410 at 428 [37] - 430 [40] and 432 [46] - 433 [49]; Crout v Beissel (1909) VLR 207 at 213-214; Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 420-423; Crossingham v Crossingham [2012] NSWSC 95 at [2], [17] - [28], [55] and [64]-[65]; David by her Tutor The Protective Commissioner v David (1993) 30 NSWLR 417 at 436F-437B, 433F-434C, 436E-F, 437D-438F and 440D-E); E (Mrs) v Eve [1986] 2 SCR 388 at 412-414 and 426-427; (1986) 31 DLR (4th) 1 at 18-19 and 28-29; 411; 31 DLR (4th) 1 at 17; Estate Gowing; Application for Executor's Commission [2014] NSWSC 247; Ex parte Warren (1805) 10 Ves Jun 622; 32 ER 985; Fomsgard v Fomsgard [1912] VLR 209 at 212-213; Forster v Ridley (1864) 4 DeGJ&S 452; 46 ER 993; GDR v EKR [2012] NSWSC 1543 at [36], [37]-[42]; [10]-[28]. [43] -[48]; Gell v Gell (2005) 63 NSWLR 547 at 553-554 [21]-[23]; Gibbons v Wright (1954) 91 CLR 423 at 437-438; Gray v Hart [2012] NSWSC 1435 at [31]-[320], [140]-[142] and [319]-[336]; Griffin v Union Trustee Company of Australia Limited (1947) 48 SR (NSW) 360 at 363, 364 and 365; Guazzini v Pateson (1918) 18 SR (NSW) 275 at 285-286; Hastings) Limited v Gulliver [1967] 2 AC 134 (note); Holt v Protective Commissioner (1993) 31 NSWLR 227, 238B-D, 241G-242A; Ide v Ide [2004] NSWSC 751; 184 FLR 44 at [19] and [36]-[50]; In the Goods of Darke (1859) 1 Sw&Tr 516; 164 ER 839; In Re Allison Johnson & Foster Limited; ex parte Birkenshaw [1904] 2 KB 327 at 330-331; In Re Brooks (1904) 21 WN (NSW) 4 at 5-6; In re Darling [1925] SASR 262 at 265-266; In Re Duke of Norfolk's Settlement Trust [1982] Ch 61; In Re Farnham (a lunatic) (1895) 2 Ch 799 In Re Farnham (a lunatic) (No 2) [1896] 1 Ch 836; In Re Freeman's Settlement Trust (1887) 37 Ch D 148; In Re French (1868) LR 3 Ch App 317; In re Morish [1939] SASR 305 at 319-320; In Re Rhodes (1890) 44 Ch D 94 at 103, 104; In Re Weld (a person of unsound mind) (1882) 20 Ch D 451; In the Will of James Greer (1911) 11 SR (NSW) 21 at 23; In the Will of Henry Sherringham (1901) 1 SR (NSW) (B&P) 48; JJK v APK (1986) Aust Torts Reports 80-042 at 67, 881; JMK v RDC and PTO v WDO [2013] NSWSC 1362 at [38]-[50]; Keech v Sandford (1726) Sel Cas Ch 61; 25 ER 223; Law Society of NSW v Harvey [1976] 2 NSWLR 154); McLaughlin v Freehill (1908) 5 CLR 858 at 862 and 863; MB v Protective Commissioner (2000) 50 NSWLR 24 at 46 [126] - 47 [129], 32 [36] - 33 [37] and 37 [64]; M v M [2013] NSWSC 1495 at [10]-[20]; Macedonian Orthodox Community Church St Petka Incorporated v Bishop Petar (2008) 237 CLR 66 at 93 [69]; Marion's Case (Secretary, Department of Health and Community Services v JWB and SMB) (1992) 175 CLR 218 at 258-260; Mayne v Jaques (1960) 101 CLR 169, 179-183; PB v BB [2013] NSWSC 1223 at [4]-[9]; Pisak v Hegedus [1983] 2 VR 386 at 388 and 392-393; Plomley v Shepherd (1896) 17 NSWR (Equity) 215 at 217; Plumpton v Burkenshaw [1908] 2 KB 572, In Re EG, a person of unsound mind not so found by inquisition [1914] 1 Ch 927; Protective Commissioner v D (2004) 60 NSWLR 513 at [12], [149]-[157] and [164]-[169]; R v P (2001) 53 NSWLR 664 at 683 [63] - [65]); RL v NSW Trustee and Guardian (2012) 84 NSWLR 263 at 285 [96], 310 [212]; Re D [2012] NSWSC 1006 at [46]-[62], [69]-[70]; Re DJR and the Mental Health Act, 1958 [1983] 1 NSWLR 557; Re Elizabeth [2007] NSWSC 729 at [16]-[19].; Re M and the Protected Estates Act 1983 (Supreme Court of NSW, 17 February 1988) at pp 46-47; (1988) 12 NSWLR 96; Re Queensland Forests Limited (In Liquidation) [1966] Qd R 180 at 186-187 and 188.; Re Sutherland [2004] NSWSC 798; 50 ACSR 297 at [11]-[17; Re Westbrooke (1848) 2 Phil 631; 41 ER 1087; Re Victoria [2002] NSWSC 647 at [31] and [36]-[40]; Richards v Gray [2013] NSWCA 402; Roberts v Balancio (1987) 8 NSWLR 436; Robinson v Pett (1734) 3 P Wms 249; 24 ER 1049; Saywell v Permanent Trustee Company of NSW Limited (1931) 44 CLR 564 at 571; Secretary, Department of Health and Community Services v JWB and SMB) (1992) 175 CLR 218 at 258-260; Strangwayes v Read [1898] 2 Ch 419; W v B [2001] NSWSC 503 at [15]; Walley v Walley (1687) 1 Vern 484; 23 ER 609; Willett v Futcher (2005) 221 CLR 627, 642 [49], 631 [8], 632 [12]-[13], 636 [28] and 644 [54]
• Texts Cited: HS Theobald, The Law Relating to Lunacy (Stevens & Sons, London, 1924); p 219-221, pp 51-53, 47 and 50, 380-382, 48; PW Young, C Croft and ML Smith, On Equity (Law Book Co, Sydney, 2009), para [6.1380]; JD Heydon and MJ Leeming (ed), Jacobs' Law of Trusts in Australia (Lexis Nexis Butterworths, Australia, 7th ed, 2006), paras [1739]; paras [1704]-[1705] and [2214]-[2224]; Jordan Chapters on Equity in NSW (6th ed, 1947), p 124 note (m); LI Rotman, Fiduciary Law (Thompson, Canada, 2005) at p 62; K Mason, JW Carter and GJ Tolhurst (ed), Mason and Carter's Restitution Law in Australia (Lexis Nexis Butterworths, Australia, 2nd ed, 2008), paras [819]-[820], [831], [1030] and [1040]
• Category: Principal judgment
• Parties: Ability One Financial Management Pty Limited and Anor (Plaintiff); JB by his Tutor AB (Defendant)
• Representation: Counsel: MJ Heath (Plaintiffs); E Brooks, solicitor, of Maurice Blackburn (Defendant); CA Webster SC (Council of the Law Society of NSW, Amicus Curiae); J Williams (Financial Services Council Limited, Amicus Curiae); C Phang (NSW Trustee & Guardian, Amicus Curiae); Solicitors: Matthews Folbigg (Plaintiffs); Maurice Blackburn (Defendant); Herbert Smith Freehills (Financial Services Council Limited)
• File Number(s): 2013/00214490

Judgment

INTRODUCTION

1 This judgment addresses the basis, and terms, upon which a private corporation conducting a business of management of protected estates might be appointed, or permitted to act, and be remunerated, as manager of the estate of a person incapable of managing his or her own affairs. In these proceedings, such a corporation stands in contrast to a licensed trustee company, not only because it does not hold such a licence, but because it is privately owned and controlled.

2 The immediate focus is on the availability of allowances from a protected estate for remuneration, and expenses, of an identified manager of a particular estate.

3 However, broader questions (including a question about the true character of remuneration allowed to a manager) have been, and must be, canvassed because the current case is but one of a number of cases, pending and foreshadowed, involving similar questions affecting the plaintiffs. They, and the NSW Trustee and Guardian ("the NSW Trustee"), have invited the Court to consider general principles governing private management of protected estates for reward.

4 Each of the NSW Trustee and a licensed trustee company has a statutory "right to charge fees" in relation to its management of a protected estate. A private manager, not being a licensed trustee company, has no similar "right" unless it is conferred by an order of the Court or, within the limits of the section, pursuant to the NSW Trustee and Guardian Act 2009 NSW, s 115: Gray v Hart [2012] NSWSC 1435 at [319]-[320].

5 Whether conferred by legislation that governs the NSW Trustee (NSW Trustee and Guardian Act 2009, ss 111, 113 and 114) or a licensed trustee company (Corporations Act 2001 Cth, chapter 5D, including ss 601TBA(1), 601TBC, 601TBD and 601TBE), or by a court order to the same effect, any "right to charge fees" in relation to management of a protected estate depends for its operation upon an appointment of the prospective fee-earner to the office of manager by the Court (pursuant to s 41(1) of the NSW Trustee and Guardian Act or upon an exercise of the Court's inherent jurisdiction); the Civil and Administrative Tribunal, "NCAT" (pursuant to ss 25G and 25M(1) of the Guardianship Act 1987 NSW); or the Mental Health Review Tribunal (pursuant to Pt 4.3 Div 1 (ss 43-52) of the NSW Trustee and Guardian Act).

6 I leave to one side the provisions of the NSW Trustee and Guardian Act pursuant to which the NSW Trustee may undertake management of the estate of a voluntary patient at a mental health facility (Pt 4.3, s 53) and the Court can make a management order in relation to the estate of a missing person (Pt 4.4, s 54(1)). Section 38 uses the expression "managed person" in a compendious way as referring to a "protected person" (a person incapable of managing his or her own affairs in respect of whom a management order has been made by the Court, NCAT or the Mental Health Review Tribunal); a person declared to be a missing person in respect of whose estate a management order is made under s 54(1); and a voluntary patient in a mental health facility whose estate is under management pursuant to s 53.

7 Although similar considerations may apply in the management of the estate of a "managed person", this judgment is directed towards management of the estate of a "protected person" as defined by s 38.

8 Only the Court and NCAT have power to appoint a private manager of a protected estate. The Mental Health Review Tribunal has power only to commit management of such an estate to the NSW Trustee: NSW Trustee and Guardian Act, s 52.

9 Every appointment of a manager of a protected estate under the NSW Trustee and Guardian Act or the Guardianship Act 1987 is accompanied by an order that the estate be subject to management under the NSW Trustee and Guardian Act.

10 Section 39 of that Act, and s 4 of the Guardianship Act, expressly provide that "[it] is the duty of everyone exercising functions [under the legislation, with respect to protected persons or the like] to observe [specified] principles" that include, as a primary principle, that "the welfare and interests of such persons should be given paramount consideration".

11 Those statements of principle are not an exhaustive statement of the objectives that should be advanced by decisions relating to administration of the estate of a protected person: RL v NSW Trustee and Guardian (2012) 84 NSWLR 263 at 285 [96]. The operation of the legislative regime relating to management of a protected estate in NSW is informed, and supplemented, by general law principles derived from the Court's inherent (parens patriae) jurisdiction, chief amongst which is the principle that, in administration of a protected estate, the paramount consideration is the welfare of the protected person: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238B-D and 241G-242A.

12 Such entitlement as a manager of a protected estate may have to remuneration from the particular estate under management takes the form of an allowance out of the estate under management, of remuneration which is: (a) just and reasonable; and (b) open to review by the Court to ensure that it serves the best interests, and is for the benefit, of the protected person. A "right to charge fees" does not of itself carry an entitlement to charge, or appropriate moneys from, a protected estate unqualified by the protective jurisdiction of the Court. It is not, by itself, an absolute or indefeasible entitlement to remuneration. An allowance of remuneration in favour of a protected estate manager is, ultimately, within the discretion of the Court, albeit a discretion to be exercised judicially.

13 A statutory right to charge fees, such as licensed trustee companies enjoy, may operate differently in the administration of a deceased estate than it does in relation to management of a protected estate. In the context of a probate case, significance attaches to nomination of a trustee company as an executor in a will, and to a grant of probate or administration by a court, knowing that such a company has a statutory right to charge fees and that it operates a commercial business: Saywell v Permanent Trustee Company of NSW Limited (1931) 44 CLR 564 at 571; Allen v Union-Fidelity Trustee Co of Australia Limited (1986) 6 NSWLR 341 at 343F-344B. In a probate case, a licensed trustee company's right to charge fees, coupled with a grant of probate or administration, implicitly carries with it an entitlement to remuneration, subject to the jurisdiction of the court (such as presently found in the Probate and Administration Act 1898 NSW, s 86A) to order that excessive remuneration be reduced.

14 By contrast, every appointment to the office of a private protected estate manager subjects the manager (with his, her or its consent) to an exercise of protective jurisdiction, governed by the purposive nature of that jurisdiction. In practice, the Court relies heavily on an acceptance that a licensed trustee company can be counted on to operate responsibly, subject to oversight of its operations by the NSW Trustee and the Australian Securities and Investment Commission. However, that practice does not translate into an absolute or indefeasible entitlement in a licensed a trustee company to remuneration as a protected estate manager. All managers of protected estates are governed by the constraints of the protective jurisdiction.

15 There is a symbiotic relationship between (on the one hand) any entitlement a manager of a protected estate may have to an allowance for remuneration from the estate under management and (on the other hand) the nature of the office, and the duties, of a manager of such an estate.

16 To ask whether a manager of a protected estate has, or ought to be granted, an entitlement to remuneration from the estate is to make an inquiry about the nature of protected estate management, and the subject-matter and purpose of an allowance of remuneration in favour of such a manager.

17 In keeping with the nature of the jurisdiction exercised by the Court (in its parens patriae jurisdiction or under legislation) affecting people in need of protection, because of infancy or incapacity for self-management, in this judgment some names are anonymised.

18 The judgment has been prepared with the benefit of submissions, written and oral, from:

(a) a private corporation holding appointments as a manager of protected estates (the first plaintiff), and a related corporation routinely retained by it, in its management of protected estates, to provide financial advice (the second plaintiff).

(b) the protected person whose estate is the immediate subject of the proceedings (the defendant), acting by his father as tutor in circumstances in which, because of a conflict between interest and duty, the manager of his estate (the first plaintiff) cannot do so.

(c) the NSW Trustee, as amicus curiae.

(d) Financial Services Council Limited, as amicus curiae.

(e) the Council of the Law Society of NSW, as amicus curiae.

19 The first plaintiff is a wholly owned subsidiary of the second plaintiff. Both are managed by Mr GA White, a solicitor based in Queensland. He is admitted to practise in NSW and is thus an officer of the Court, but he holds a Queensland practising certificate, not a NSW one.

20 The NSW Trustee is a statutory corporation with responsibilities for management of protected estates, and for monitoring private managers of protected estates, in New South Wales.

21 At the invitation of the NSW Trustee, the Financial Services Council (which has a membership that includes the NSW Trustee, similar public corporations in other Australian jurisdictions and licensed trustee companies) took on responsibility for submissions in the interests of licensed trustee companies as managers of protected estates.

22 Because the plaintiffs are managed by a solicitor who, at times, has held out his professional status as a ground for acceptance of the plaintiffs as entities associated with the management of protected estates, I invited the Law Society of NSW to assist the Court (and its Council resolved to provide that assistance) on the relevance, if any, to the questions before the Court of the fact that the plaintiffs are managed by a solicitor.

23 The plaintiffs and the defendant acquiesced in the involvement in the proceedings of the NSW Trustee, the Financial Services Council and the Law Society, with each participant in the proceedings playing a constructive role.

24 The defendant's involvement in the proceedings has been relatively formal. According to the terms of an undertaking given to the Court in earlier proceedings (GDR v EKR) the plaintiffs have accepted responsibility for payment of the reasonable costs of the defendant's tutor in these proceedings.

25 As it happened, the submissions made on behalf of the defendant have been confined, in large measure, to a submitting appearance, coupled with a watching brief, consistent with an ongoing satisfaction in the defendant's family with involvement of the plaintiffs in management of his estate.

26 The proceedings require the Court, and entities actively involved in the administration of protected estates in NSW, to confront questions of principle, practice and procedure relating to the administration of protected estates in the current environment.

27 During the course of the proceedings there was a change in the legislative regime governing the administration of protected estates in NSW in that the Guardianship Tribunal was abolished, and was replaced by NCAT, on 1 January 2014. For present purposes, the change is not functionally significant. The provisions of the Civil and Administrative Tribunal Act 2013 NSW governing the Guardianship Division of NCAT (Schedule 6) are substantially similar to those (formerly in Part 6 of the Guardianship Act 1987 NSW) that governed the business of the Guardianship Tribunal. It is generally sufficient to conceptualise the Guardianship Tribunal as having been reincarnated as NCAT's Guardianship Division.

FRAMEWORK PRINCIPLES

28 Some of the questions under consideration in the proceedings, as then perceived, were brought to public notice in JMK v RDC and PTO v WDO [2013] NSWSC 1362 (19 September 2013) at [32].

29 In that judgment, at [33]-[37], attention was drawn to the following points, which continue to provide a framework within which the questions before the Court must be addressed:

(a) Under the sway of fiduciary law, the office of a manager of a protected estate must generally be regarded as a gratuitous one unless, by an order of the Court or by legislation, a special arrangement to the contrary is made: GDR v EKR [2012] NSWSC 1543 at [32] and [38]; JJK v APK (1986) Australian Torts Reports 80-042 at 67,881-67,882; Gell v Gell (2005) 63 NSWLR 547 at 553 [21].

(b) Caution is required in making a departure from the traditional stance of the law of fiduciaries, informed, as it is, by hard experience and a desire to maintain standards of conduct.

(c) When the Court is called upon to make, or sanction, a special arrangement relating to the remuneration of a manager particularly careful attention must be given to the existence, effective operation and ongoing effectiveness of a regulatory regime designed to protect the protected person from any risk of exploitation by a manager whose interests, ostensibly, conflict with the duty of a manager.

(d) The rationale for any order made for remuneration of the manager of a protected estate is, ultimately, that such an order is necessary for the benefit of the protected person - not for the benefit of the manager: Ex-parte Fletcher (1801) 6 Ves Jun 427; 31 ER 1127; Re Walker, a Lunatic (1848) 2 Phil 631; 41 ER 1087; Re Westbrooke (1848) 2 Phil 631; 41 ER 1087; G v B (Powell J, 27 May 1992) BC 9201855 at 13; Anson v Anson [2004] NSWSC 766; 12 BPR 22,303 at [76].

(e) Any manager engaged in a business of estate management may be apt to forget this or, at least, to be distracted by his, her or its own financial imperatives. Hence the need for a regulatory regime to counterbalance those natural tendencies that are addressed (as explained in LI Rotman, Fiduciary Law (Thomson, Canada, 2005) at pp 56-66, 303-305, 318, 339-340, 343, 736-738 and 747-748) by the fiduciary law's strictures against: (i) a fiduciary occupying territory where his, her or its duty as a fiduciary and his, her or its personal interests are in conflict; and (ii) a fiduciary benefiting from profits accruing from his, her or its office as a fiduciary.

30 In another judgment, written with these proceedings in mind, attention was drawn to institutional and social changes which seemed then, and still seem, to point to a fundamental shift (since the seminal judgment of the Court of Appeal in Holt v Protective Commissioner (1993) 31 NSWLR 227) in the mindset of government about the optimal administrative framework for the administration of protected estates in New South Wales: M v M [2013] NSWSC 1495 (11 October 2013).

31 At paragraph [46] of that judgment I made the following observations:

"If I am not mistaken [the NSW Trustee's] current attitude to estate management... includes a working assumption that, although ever present to serve as manager of any protected estate management of which is committed to it, [it] should endeavour to facilitate deployment of private managers and to focus attention on its supervisory function in the monitoring of management of protected estates by private managers. Whereas once the Protective Commissioner [a predecessor of the NSW Trustee] may have been viewed as a manager of 'first resort', the NSW Trustee is more inclined to see itself as a manager of 'last resort'".

32 In the course of these proceedings, the NSW Trustee expressly embraced those observations as accurate.

33 This underscores the importance of the Court, in consultation with affected interests, working out how best to adapt to change. In a decision-making environment undergoing a process of change, attention needs to be given to identification of what can change, and what must remain constant, to serve the ends for which decisions are made.

34 With that objective in mind I set out in M v M, at [50], a series of propositions as non-exhaustive "guidelines" that might be consulted upon a consideration by the Court of questions about the identity of a manager of protected estate.

35 As each of the participants in these proceedings has accepted those propositions as correct, I reproduce them here:

"As presently advised, and subject to reconsideration in light of further experience and argument in contested cases, I adopt the following propositions as non-exhaustive 'guidelines' (or, in deference to Kirby P's observations in Holt v Protective Commissioner (1993) 31 NSWLR 227 at 241E-F and 243E-F, a "framework of approach" or a 'checklist of considerations') that might be borne in mind when the Court is called upon to make a decision about the identity of a manager of a protected estate or the substitution of one manager for another:

(a) First, the jurisdiction the Court is called upon to exercise is not a 'consent jurisdiction'. An order for the appointment, removal or replacement of a particular manager is not to be made merely because a party, or some other person, seeks it, consents to it or acquiesces in it: JJK v APK (1986) Australian Torts Reports 80-042 at 67, 881 (first guideline); JMK v RDC and PTO v WDO [2013] NSWSC 1362 at [60]-[62]. The Court is bound to exercise an independent judgment because of the public interest element in the decision to be made and the possibility, if not the fact, that the protected person lacks the mental capacity requisite to informed decision-making.

(b) Secondly, the governing purpose of the jurisdiction exercised by the Court is protection of the welfare and interests of the particular protected person concerned: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238B-C and 241A-B and F-G.

(c) Thirdly, any decision made affecting the welfare or interests of a protected person must be made in a manner, and for a purpose, calculated to be in the best interests, and for the benefit, of the protected person: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238D-F and 241G-242A.

(d) Fourthly, care needs to be taken in all decision-making affecting a protected person to focus on the facts of the particular case, preferably with due consultation with the protected person, his or her family and carers who may be well placed to inform the Court of the protected person's particular circumstances: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238C-239B, 240D, 241B-F and 243E-F; Re L [2000] NSWSC 721 at [10].

(e) Fifthly, in the choice of a manager consultation of the welfare and interests of a protected person may favour appointment of a member of his or her family over the appointment of an institutional manager: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238G-239B.

(f) Sixthly, decisions need to be made in the context of a prudential management regime that can be administered, without strife in the simplest and least expensive way, in the interests of the protected person: HS Theobald, The Law Relating to Lunacy (Stevens and Sons, London, 1924), pp 380 and 382.

(g) Seventhly, regard needs to be had to the value and nature of the property comprising a protected person's estate in deciding upon the identity of a manager or an appropriate management plan: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 242E and 243D-F.

(h) Eighthly, recognition needs to be given to the status and obligations of a manager of a protected estate as the holder of a fiduciary office. This means that the Court, managers and other affected persons need to be alive to the importance of avoiding, or at least minimising, exposure of a protected person to dangers associated with a manager having a conflict between a duty owed to the protected person and the manager's personal interests: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 239B and 242B-C; Re L [2000] NSWSC 721 at [12]. Nevertheless, it must also be recognised that the liability of a manager of a protected estate to account may differ from that of a trustee of an ordinary trust to the extent necessary to accommodate the protective purpose of the manager's appointment: Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 420-423.

(i) Ninthly, in conformity with fiduciary law, the office of a manager of a protected estate must generally be regarded as a gratuitous one unless, by an order of the Court or by legislation, a special arrangement to the contrary is made: Gell v Gell (2005) 63 NSWLR 547 at 553-554 [21]-[23]; Macedonian Orthodox Community Church St Petka Incorporated v Bishop Petar (2008) 237 CLR 66 at 93 [69].

(j) Tenthly, in deciding whether, when and on what terms a manager of a protected estate is to be allowed remuneration out of the estate, care needs to be taken not to shift the focus of decision-making from what is in the best interests, and for the benefit, of the protected person to a perceived "right" on the part of any, or any prospective, manager to remuneration. If a manager is to be allowed remuneration, a decision to that effect must be driven by the perspective of the protected person, not the perspective of the manager: Fletcher, Ex parte (1801) 6 Ves Jun 427; 31 ER 1127; Re Walker (1848) 2 Phil 630; 41 ER 1087; Re Westbrooke (1848) 2 Phil 631; 41 ER 1087; G v B (Powell J, 27 May 1992) BC 9201855 at 13.

(k) Eleventhly, the primacy given to the protective purpose of the Court's jurisdiction carries with it, as a correlative, the absence in any manager (public or private) of a legal entitlement to be, or to remain, manager of a particular protected estate: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 237F-238F.

(l) Twelfthly, a decision about whether a manager should be replaced may need to be approached differently from one made about the identity of an appointment as an initial manager because of a perceived need to identify an acceptable reason (ie, one governed by the purpose of the protective jurisdiction and consideration of the best interests of, and benefits available to, the protected person) for change. Depending on the facts of the particular case this may, but will not necessarily, involve recognition that an applicant for change bears, at least, a forensic onus to establish a case for change: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 237F, 238B-F, 239C-G and 242A-B.

(m) Thirteenthly, a manager, or prospective manager, of a protected estate needs to have given thoughtful attention (in the case of a private manager, in consultation with the NSW Trustee and, in the context of the Corporations Act, the Australian Securities and Investments Commission) to the development, and operation, of a plan for management of the protected person's estate: Re L [2000] NSWSC 721 at [11]-[12]; Re McL [2001] NSWSC 280 at [3]-[5].

(n) Fourteenthly, although disputes about the management of a protected estate may at times need to be determined in an adversarial setting, an exercise of protective jurisdiction is not inherently, or necessarily, adversarial in nature. That reality finds expression in the Court's approach to orders for costs in protective list proceedings. The Court ordinarily exercises its discretion, not by reference to a rule that costs follow the event, but having regard to what, in all the circumstances, seems proper: CCR v PS (No 2) (1986) 6 NSWLR 622 at 640.

(o) Fifteenthly, part of the role of the Court in its exercise of protective jurisdiction is to give consideration to the manner and form of a decision-making process calculated to ensure that the protective purpose of the jurisdiction is duly served.

(p) Sixteenthly, in the context of the current legislative and administrative regime for management of protected estates, the Court will ordinarily require that any substantial decision it may be called upon to make affecting a protected estate, beyond the routine, is made on notice to the NSW Trustee, allowing the NSW Trustee to be heard in an appropriate case and inviting its assistance where necessary."

36 MB v Protective Commissioner (2000) 50 NSWLR 24 at 46 [126] - 47 [129] should be added to the list of authorities here cited, as a demonstration that a manager (in that case, the Protective Commissioner) may be replaced, simply, on the ground of a breakdown in personal relationships between the manager, the protected person and the protected person's carer. Hodgson CJ in Equity's judgment also illustrates that, in serving the interests of the protected person, an incoming manager may have an obligation to hold an outgoing manager to account: 50 NSWLR 32 [36] - 33 [37] and 37 [64].

THE PLAINTIFFS' APPLICATION FOR "REMUNERATION"

37 The plaintiffs' application in the current proceedings (by an amended summons filed on 25 November 2013) includes claims for relief to the following effect:

(a) an order, under s 115(1)(b) of the NSW Trustee and Guardian Act 2009 NSW, that the entitlement of the first plaintiff (as manager of the protected estate of the defendant) to retain remuneration it has appropriated to itself from the estate be confirmed.

(b) an order, under s 115(1)(a) of the NSW Trustee and Guardian Act 2009, that the Court confirm:

(i) the entitlement of the second plaintiff to retain remuneration it has received, from the first plaintiff as manager of the defendant's protected estate, for the provision of financial advice to the first plaintiff in management of the estate; and

(ii) the entitlement of the first plaintiff to charge against the defendant's estate the costs of the second plaintiff's services.

(c) an order, under s 115(1)(b) of the NSW Trustee and Guardian Act, that the first plaintiff, as manager of the defendant's protected estate, be authorised to receive remuneration from the estate on a continuing basis as set out in an affidavit filed in support of the summons.

(d) an order, pursuant to s 64(3) of the NSW Trustee and Guardian Act, that the first plaintiff submit to the NSW Trustee annual accounts in a form prescribed or approved by the NSW Trustee.

(e) an order that the plaintiffs, jointly and severally, be granted relief against any personal liability which they might otherwise have for a breach of trust arising from their receipt of remuneration from the defendant's protected estate.

38 Section 115 of the NSW Trustee and Guardian Act is in the following terms:

"115 Supreme Court or NSW Trustee may order certain costs to be paid out of managed estate

(1) The Supreme Court or the NSW Trustee may order that the following costs be paid, in accordance with the order, from the estate of a managed person:

(a) costs with respect to actions taken for the purposes of complying with any order or direction under this Act, or any transfer or conveyance under Chapter 4,

(b) remuneration, of a specified amount, to the manager of the estate.

(2) The NSW Trustee may make an order under this section only in relation to costs arising from an order or direction given by the NSW Trustee under Chapter 4 or work carried out by the manager of an estate of a managed person in connection with any such order or direction. [Emphasis added] "

39 Although the amended summons invokes s 115, submissions also canvassed the inherent jurisdiction of the Court (including the Court's parens patriae and general equitable jurisdiction) to allow remuneration to a manager.

40 That such a jurisdiction exists is clear: Willett v Futcher (2005) 221 CLR 627 at 636 n 26; Re Sutherland [2004] NSWSC 798; 50 ACSR 297 at [11]-[17]. Section 115 is not expressed in terms indicative of a legislative intention to abrogate it. Absent a clear intention to displace it, it subsists: In Re WM (A person alleged to be of unsound mind) (1903) 3 SR (NSW) 552.

41 Whether, in anything other than an exceptional case, the inherent jurisdiction should be exercised outside the parameters of s 115 is a separate question. There is an established pattern, in the several branches of protective jurisdiction exercised by the Court, that the inherent jurisdiction is generally exercised only in circumstances that are exceptional or may have not been anticipated by legislation that applies generally: E (Mrs) v Eve (better known as Re Eve) [1986] 2 SCR 388 at 411; 31 DLR (4th) 1 at 17 (approved by Marion's Case (Secretary, Department of Health and Community Services v JWB and SMB) (1992) 175 CLR 218 at 258-260 and followed in Christensen v Christensen (Queensland Court of Appeal, 2 July 1999) BC 9904473 at [18]-[19]); Re Victoria [2002] NSWSC 647 at [31] and [36]-[40]; Re Elizabeth [2007] NSWSC 729 at [16]-[19].

42 The relief sought by the plaintiffs from any liability they may have for breaches of trust invokes the Court's general parens patriae jurisdiction (Brown v Smith (1878) 10 Ch D 377 at 386); its statutory power to grant relief from liability for breaches of trust under the Trustee Act 1925 NSW, s 85, which, by virtue of the definition of "trust" in s 5 of the Act, extends to constructive trusts (In re Darling [1925] SASR 262 at 265-266; In re Morish [1939] SASR 305 at 319-320); and the Court's general, inherent jurisdiction over the due administration of trusts and the like: JD Heydon and MJ Leeming (ed), Jacobs' Law of Trusts in Australia (Lexis Nexis Butterworths, Australia, 2006), paras [1704]-[1705] and [2214]-[2224]; Fomsgard v Fomsgard [1912] VLR 209 at 212-213.

43 The amended summons also invites the Court to note undertakings proffered to the Court by the plaintiffs in the form which White J, in CC v RAM [2012] NSWSC 1555 at [4]-[6], held necessary where the manager of a protected estate proposes to retain a financial adviser or fund manager to assist it in management of the estate:

(a) an undertaking by the manager that any payment or other reward that might be paid to the manager by a third party as a result of an investment of the protected person's estate in a financial product will be accounted for to the protected person's estate; and

(b) a separate, similar undertaking by the adviser.

44 In requiring such undertakings from the manager of a protected estate, and a financial adviser routinely retained by it, White J (at [4]) made the following observations, which bear repetition:

"It is not clear to me precisely what it is that [a nominated adviser to a proposed manager] would do which would amount to the management of the investment of [an award of personal injury compensation made to a person in need of protection, whose entitlement to compensation triggered an application for the appointment of a manager of his estate]. Where a person is appointed as a manager of an incapable person pursuant to s 41(1)(b) of the NSW Trustee and Guardian Act, it is the person who is so appointed as manager who has the responsibility for the management of the estate. That person can seek the assistance of others, subject to complying with any order or direction of the NSW Trustee and Guardian or the Court, but the Act does not contemplate a delegation of management to third parties. The precise role that [the proposed adviser] would play in determining the assets in which the [protected person's damages] would be invested, and the role that [the proposed manager] would play in deciding upon or approving of investments, should be clarified."

45 The operations of the plaintiffs in the current proceedings, like those of the proposed manager and financial adviser in CC v RAM, involve deployment of a manager and a financial adviser acting in tandem.

46 The practice within the estate management industry (to which, in this respect, the plaintiffs adhere) appears to be that two companies work in tandem in the management of a protected estate. One occupies the office of manager of the estate and, as such, administers the estate and liaises with the protected person, his or her family and carers, and reports to the NSW Trustee. The other, engaged by the manager and subject to decisions made by the manager, provides financial and investment advice to the manager, in consultation with the protected person and his or her family and carer.

47 Whether, and to what extent, this practice is driven by, or only by, the financial interests (including taxation arrangements) of the manager and associated commercial interests the evidence does not enable me to determine. The plaintiffs contend that their corporate structure represents a functional reality. No participant in these proceedings has contended otherwise. As, at day's end, any remuneration allowed to a manager coupled with a financial adviser, in this structured environment, must be assessed having regard to the claims made on the protected estate by both types of entity, I do not here pause to consider this topic further.

STATUTORY FRAMEWORK : PROTECTED ESTATES and MANAGMENT ORDERS

48 This judgment deals, specifically, with rights and obligations of a manager appointed by the Court under s 41(1)(b) of the NSW Trustee and Guardian Act 2009 NSW. However, its focus is, more broadly, on the management of an estate subject to management under that Act.

49 In several separate proceedings the first plaintiff in the current proceedings (and, in one case, the second plaintiff) has been appointed as manager of protected estates by the Court (pursuant to s 41(1)(b) of the NSW Trustee and Guardian Act 2009) and by the Guardianship Tribunal (pursuant to ss 25E and 25M of the Guardianship Act 1987 NSW). The effect of both types of order has been to subject each of the protected estates the subject of such an order to management under the NSW Trustee and Guardian Act.

50 Section 41(1) of the NSW Trustee and Guardian Act provides as follows:

"41. Orders by Supreme Court for management of affairs (cf PE Act, s 13)

(1) If the Supreme Court is satisfied that a person is incapable of managing his or her affairs, the Court may:

(a) declare that the person is incapable of managing his or her affairs and order that the estate of the person be subject to management under this Act, and

(b) by order appoint a suitable person as manager of the estate of the person or commit the management of the estate of the person to the NSW Trustee."

51 Section 25E of the Guardianship Act 1987 provides that NCAT may, in accordance with Part 3A of that Act (entitled "Financial Management"), order that the estate of a person be subject to management under the NSW Trustee and Guardian Act. In the context of Part 3A, s 25F defines particular circumstances in which such an order (defined, by s 25D, as a "financial management order") may be made.

52 For present purposes, the flavour of the jurisdiction exercised by the Tribunal (formerly the Guardianship Tribunal, now NCAT) can be discerned from s 25G and 25M of the Guardianship Act, which are in the following terms:

"25G Grounds for making financial management order

The Tribunal may make a financial management order in respect of a person only if the Tribunal has considered the person's capability to manage his or her own affairs and is satisfied that:

(a) the person is not capable of managing those affairs; and

(b) there is a need for another person to manage those affairs on the person's behalf, and

(c) it is in the person's best interests that the order be made ....

25M Tribunal may commit estate of protected person to management

(1) If the Tribunal makes a financial management order in respect of the estate (or part of the estate) of a person, the Tribunal may, by order:

(a) appoint a suitable person as manager of that estate, or

(b) commit the management of that estate to the NSW Trustee.

(2) Despite section 68(1), an order under subsection (1)(a) does not authorise the person appointed as manager to interfere in any way with the estate concerned unless:

(a) such directions of the Supreme Court as are relevant to the management of the estate have been obtained, or

(b) the NSW Trustee has, under Division 2 of Part 4.5 of the NSW Trustee and Guardian Act 2009, authorised the person to exercise functions in respect of the estate.

(3) However, the person appointed as manager may take such action as may be necessary for the protection of the estate (including action specified by the Tribunal) pending the directions of the Court or authorisation by the NSW Trustee."

53 The reference in s 25M to s 68(1) is a drafting error, a slip of the Parliamentary draftsman. Section 68 (along with the rest of Part 6 of the Guardianship Act) was repealed upon the establishment of NCAT by the Civil and Administrative Tribunal Act 2013. The topic dealt with in s 68(1) of the Guardianship Act is now dealt with in s 61 of the Civil and Administrative Tribunal Act. A formal legislative amendment can confidently be expected. In the meantime, it can be noted that s 68(1) provided, in substance, that a decision of the Guardianship Tribunal generally took effect immediately an order arising out of the decision was made. The effect of s 25M(2) is to confirm that a financial management order operates to place management of a protected person's estate under the control of the NSW Trustee (also known as the NSW Trustee and Guardian) subject to the supervisory jurisdiction of this Court.

54 Consistently with that intendment, upon appointment of a manager under s 41(1)(b) of the NSW Trustee and Guardian Act, the Court customarily makes an order (pursuant to s 64 of that Act and r 57.7(2)(c) of the Uniform Civil Procedure Rules 2005 NSW) that the newly appointed manager "may not do anything in reliance on [the manager's] appointment as manager of the estate of ['the protected person] until the NSW Trustee has authorised [the manager] to assume management of [the protected person's] estate."

55 The public administrative regime that underpins the Court's exercise of protective jurisdiction has the NSW Trustee at its core. The Court looks to the NSW Trustee to play a leading role, either as a manager or as a monitor of managers, in ensuring due management of the estate of a protected person.

56 Division 2 of Part 4.5 of the NSW Trustee and Guardian Act (referred to in s 25M(2)(b) of the Guardianship Act) contains provisions (in ss 63-70) designed to permit the NSW Trustee to monitor, and the Supreme Court to supervise, the performance of managerial functions by a person appointed to manage a protected person's estate.

57 Both the Court and the NSW Trustee have express powers to make orders in relation to the administration and management of the estates of protected persons (s 64(1)) and, as they think necessary or desirable, for the care and management of a protected estate (s 65). An order by the NSW Trustee is subject to any direction by the Court: s 64(4). And the Court may also make such orders as it thinks fit in connection with supervising the exercise of the functions of managers under the NSW Trustee and Guardian Act: s 64(3).

58 Those powers are both extensive and confined by the protective purposes of the jurisdiction exercised: RL v NSW Trustee and Guardian Pty Ltd (2012) 84 NSWLR 263 at 284 [93]-[94].

59 Section 25G of the Guardianship Act, in terms, requires that NCAT not make a financial management order unless it is satisfied that: (a) the person the subject of an order is not capable of managing his or her own affairs; (b) there is a need for another person to manage those affairs on the person's behalf; and (c) it is in the person's best interests that the order be made.

60 Although s 41(1) of the NSW Trustee and Guardian Act is not expressed in similar terms, the nature of the jurisdiction exercised by the Court by reference to that section is comparable. That is because the statutory jurisdiction of the court is informed by the Court's inherent jurisdiction (as explained in PB v BB [2013] NSWSC 1223, and noted in parliamentary debate, leading to enactment of s 13 of the Protected Estates Act 1983 NSW, extracted in David by her tutor the Protective commissioner v David (1993) 30 NSWLR 417 at 436F-437B), reinforced by s 39 of the NSW Trustee and Guardian Act.

61 Section 39 (which appears in chapter 4 of the NSW Trustee and Guardian Act, entitled "Management functions relating to persons incapable of managing their affairs") is in the following terms:

"39 General principles applicable to Chapter

It is the duty of everyone exercising functions under this Chapter with respect to protected persons or patients to observe the following principles:

(a) the welfare and interests of such persons should be given paramount consideration,

(b) the freedom of decision and freedom of action of such persons should be restricted as little as possible.

(c) such persons should be encouraged, as far as possible, to live a normal life in the community.

(d) the views of such persons in relation to the exercise of those functions should be taken into consideration,

(e) the importance of preserving the family relationships and the cultural and linguistic environments of such persons should be recognised.

(f) such persons should be encouraged, as far as possible, to be self-reliant in matters relating to their personal, domestic and financial affairs,

(g) such persons should be protected from neglect, abuse and exploitation."

62 Section 39 is in substantially the same terms as the Guardianship Act, s 4, which reads as follows:

"4. General principles

It is the duty of everyone exercising functions under this Act with respect to persons who have disabilities to observe the following principles:

(a) the welfare and interests of such persons should be given paramount consideration,

(b) the freedom of decision and freedom of action of such persons should be restricted as little as possible,

(c) such persons should be encouraged, as far as possible, to live a normal life in the community,

(d) the views of such persons in relation to the exercise of those functions should be taken into consideration,

(e) the importance of preserving the family relationships and the cultural and linguistic environments of such persons should be recognised,

(f) such persons should be encouraged, as far as possible, to be self-reliant in matters relating to their personal, domestic and financial affairs,

(g) such persons should be protected from neglect, abuse and exploitation,

(h) the community should be encouraged to apply and promote these principles."

63 A prominent feature of the jurisdiction to appoint a manager of the estate of a person incapable of managing his or her affairs is the need to ensure that whatever decisions are taken in management of his or her estate are guided by reference to his or her best interests and what is, or may, be of benefit to him or her.

PROTECTED ESTATE "REMUNERATION" : NATURE AND GOVERNING PRINCIPLES

64 A key question in the current proceedings is whether the manager of a protected estate, who accepted appointment as manager upon an erroneous assumption that it was entitled to receive remuneration, should be entitled to retain money hitherto appropriated as remuneration and, hereafter, to charge remuneration for work done in performance of the functions of a manager.

65 In deciding whether the plaintiffs should be granted relief against any liability they may have for breaches of trust or other fiduciary obligations arising from their appropriation of funds, as remuneration or expenses, from a protected estate under the first plaintiff's management, a significant question may be, "What does the Court now judge that it would have allowed if the plaintiffs had applied for an order for remuneration at the time of the first plaintiff's appointment as manager?": Brown v Smith (1878) 10 Ch D 377 at 386.

66 An answer to this question requires an exploration of the nature of "remuneration", and an order allowing it, in management of a protected estate.

"Remuneration" as an Allowance in favour of an Accounting Party

67 The expression "remuneration" here refers to an allowance, in the nature of profit, in excess of an amount for reimbursement of expenses.

68 One should hesitate before equating the concept of "remuneration" here examined with a right arising, at common law, under a contract between parties possessed of contractual capacity: Brockwell v Bullock (1889) 22 QBD 567 at 571 and 572; cf, 573.

69 An illustration of the need to tread carefully may be found in cases dealing with an entitlement, under the general law, to recover a reasonable price for "necessaries" supplied to a mentally incompetent person, by way of the provision of goods or services, for his or her maintenance.

70 Any such entitlement is probably grounded in the law of restitution rather than contract: McLaughlin v Freehill (1908) 5 CLR 858 at 862 and 863 citing, inter alia, In Re Rhodes (1890) 44 Ch D 94 at 103, 104; In Re Brooks (1904) 21 WN (NSW) 4 at 5-6; Re D [2012] NSWSC 1006 at [69]-[70], citing Powell J in Re M and the Protected Estates Act 1983 (Supreme Court of NSW, 17 February 1988), at p 45, in a passage not included in the report at (1988) 12 NSWLR 96; HS Theobold, The Law Relating to Lunacy (1924), pp 219-221. Cf, K Mason, JW Carter and GJ Tolhurst (ed), Mason and Carter's Restitution Law in Australia (Lexis Nexis Butterworths, Australia, 2nd ed, 2008), paras [819]-[820], [831], [1030] and [1040].

71 Although an entitlement may be asserted against an incompetent person personally it is, having regard to that person's disability, generally aimed at a recovery from his or her estate.

72 Where property available to a protected person is necessary for his or her maintenance, the Court (acting in the best interests, and for the benefit, of the protected person) may decline to apply, to the satisfaction of a "debt" of the protected person, such property as is within its control (subject to such, if any, operation as must be afforded to legislation such as the Bankruptcy Act 1966 Cth): In Re Farnham (a lunatic) [1895] 2 Ch 799; cf, In Re Farnham (a lunatic) (No 2) [1896] 1 Ch 836. Conversely, even in the absence of a legally enforceable entitlement, the Court may authorise, or direct, that an ex gratia payment be made out of a protected estate in the interests, and for the benefit, of the protected person: Griffin v Union Trustee Company of Australia Limited (1947) 48 SR (NSW) 360 at 363, 364 and 365; Protective Commissioner v D (2004) 60 NSWLR 513 at [12], [149]-[157] and [164]-[169].

73 Subject to such (if any) legislation as may govern a case, the Court's protective jurisdiction includes a discretionary power to determine (by reference, inter alia, to a protected person's welfare) when, how and on what terms a protected estate is to be applied in satisfaction of "debts": cf, RL v NSW Trustee and Guardian (2012) 84 NSWLR 263 at 285 [96] and 310 [212].

74 The availability of property held by or on behalf of a protected person is critical to such, if any, entitlement his or her committee, or manager, of his estate might have to "remuneration". When the Court approves an arrangement for remuneration of a manager, its approval ultimately takes the form of an allowance out of the protected person's estate. Use of that terminology reflects the liability of a manager to account for his, her or its dealings with the protected estate. Technically, "remuneration" (including "expenses") is "allowed" in favour of the manager on, or subject to, the passing (that is, approval) of the manager's accounts.

75 In the protective jurisdiction, the form and frequency of accounts being submitted to a regulatory authority for review (whatever label may attach to the process of review, and whether or not it is described as accounts being taken, vouched or passed or is described as a process of inquiry in lieu of a formal accounting) depends on the circumstances of the particular protected estate. The object of such an accounting exercise (by whatever name known) is to ensure that the estate is being duly managed and that the protected person is being properly maintained: HS Theobold, The Law Relating to Lunacy (1924), pp 51-53 and 468-471.

76 Subject to any applicable legislation, a manager has no legal right to remuneration, but, in the ordinary course, may, at most, have a reasonable expectation that, upon a due exercise of protective jurisdiction, a discretionary concession (allowance) will be made in his, her or its favour as an accounting party. The fact that the Court can, in an appropriate case, allow a manager remuneration provides no justification for a manager to presume an entitlement to take, or keep, remuneration or to self-assess an allowance for remuneration without authority conferred by the Court or, subject to supervision by the Court, another competent authority: Crout v Beissel [1909] VLR 207 at 213-214.

77 The position of a manager of a protected estate is, in this respect, not unlike that of an executor or administrator who makes a claim for "commission" out of a deceased estate: Nissen v Grunden (1912) 14 CLR 297; In the Will of Sheldon [1972] 1 NSWLR 196 at 199F, 199G-200A, 200E-F; Probate and Administration Act 1898 NSW, s 86 (read with ss 85 and 86A); Re Estate Gowing; Application for Executor's Commission [2014] NSWSC 247. "Executor's commission" is allowed out of estate assets on the passing of accounts.

78 Different considerations may apply to a liquidator who asserts an equitable claim to remuneration from trust assets for work done in administering them (Re French Caledonia Travel Service Pty Limited (In Liq); [2003] NSWSC 1008; 48 ACSR 97 at [198], [207] and [211]-[212]) but such differences are a function of legislation, the nature of a liquidator's office, the purposes served by a liquidator's appointment and the nature of assets administered by a liquidator.

79 Much the same can be said of a trustee in bankruptcy: Mayne v Jaques (1960) 101 CLR 169, especially at 179-183 (including the reference to In Re Allison Johnson & Foster Limited; ex parte Birkenshaw [1904] 2 KB 327 at 330-331); Adsett v Berlouis (1992) 37 FCR 201 at 208-212.

80 Neither a liquidator nor a trustee in bankruptcy is, by the nature of his or her office, administering the estate of a person who, by reason of death or incapacity, is unable to protect his or her interests. The scope of a fiduciary duty (including the duty of a guardian in the broad sense of that term as discussed by Dixon J in Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 420-423) depends on the nature of the underlying fiduciary relationship and the facts of the case: Clay v Clay (2001) 202 CLR 410 at 432 [46] - 433 [48].

81 This analysis of a manager's "entitlement" to remuneration from a protected estate is consistent with the general law governing fiduciaries. It also accommodates the need, arising out of the nature of the protective jurisdiction, to accommodate standards of accounting to the personal circumstances of a protected person: Countess of Bective v Federal Commissioner of Taxation, ibid; Clay v Clay (2001) 202 CLR 410 at 428 [37] - 430 [40] and 432 [46] - 433 [49]; W v B [2001] NSWSC 503 at [15]; Crossingham v Crossingham [2012] NSWSC 95 at [2], [17] - [28], [55] and [64]-[65]; HS Theobold, The Law Relating to Lunacy (1924), pp 51-53.

82 This may be seen in the following observations of Dixon J in Countess of Bective v Federal Commissioner of Taxation at 47 CLR 420-423:

"[420]... an obligation to apply moneys in the maintenance of children or others does not involve the liability which arises from an ordinary trust. It is a general rule that guardians of infants, committees of the person of lunatics, and others who are entrusted with funds to be expended in the maintenance and support of persons under their care are not liable to account as trustees. They need not vouch the items of their expenditure, and, if they fulfil the obligation of maintenance in a manner commensurate with the [421] income available to them for the purpose, an account will not be taken. Often the person to be maintained is a member of a family enjoying the advantages of a common establishment; always the end in view is to supply the daily wants of an individual, to provide for his comfort, edification and amusement, and to promote his happiness. It would defeat the very purpose for which the fund is provided, if its administration were hampered by the necessity of identifying, distinguishing, apportioning and recording every item of expenditure and vindicating its propriety. Although these considerations furnish an independent foundation for the general rule, yet, after all, it is a doctrine regulating the application of moneys payable under an instrument, whether a will, a settlement or an order of a Court of equity, and the operation of the doctrine must depend upon the provisions contained in the instrument, both express and implied. But the effect of the instrument will often be governed by the circumstances to which it was intended to apply, and, in particular, by a consideration of the nature of the actual abode, the condition of the household and the state of the family of the infant or other person to be maintained. Courts of equity have not disguised the fact that the general rule gives to a parent or guardian dispensing the fund an opportunity of gaining incidental benefits, but the nature and extent of the advantages permitted must depend peculiarly upon the intention ascribed to the instrument... Statements to be found in some authorities that any surplus remaining after adequate maintenance has been provided belongs to the person having the care of the infant or of the lunatic cannot be safely used unless careful attention is given to the scope and purpose of the instrument under which the moneys arise and the conditions to which its operation is directed. A confusion appears to have arisen out of the decision in Grosvenor v Drax, a lunacy appeal to the Privy Council in which no reasons were given ... [422] But the difficulty relates to the application rather than to the nature of the rule, and in any case it is evident that to reach the conclusion that savings belong to the guardian is much easier if the allowance is meant to include some inducement to the recipient to undertake the care of the person to be maintained, or if the intention is that the guardian should be associated with a child in a mode of life, or standard of living or in the enjoyment of pursuits which, otherwise, he would not adopt. The conclusion is less easy when the fund is meant simply to provide the proper charges of the infant.

A guardian is not permitted to receive moneys for maintenance without liability to account except upon the condition that he discharges his duty adequately to maintain and not otherwise. Upon his default the Court will administer the fund or intercept the payments and has jurisdiction to order an account or an inquiry... Where, however, the condition is performed the Court does not inquire whether the money has been completely expended or whether the recipient has spent small sums for his personal benefit, but, nevertheless, it [423] remains an allowance to a person in a fiduciary capacity and for a definite purpose [Emphasis added]."

83 Cases cited in support of these observations include In Re French (1868) LR 3 Ch App 317, Brown v Smith (1878) 10 Ch D 377, In Re Weld (a person of unsound mind) (1882) 20 Ch D 451 and Strangwayes v Read [1898] 2 Ch 419.

84 Dixon J expressly spoke of a committee (of the person) of a lunatic as one of the subjects of his observations (420), and described such officers as dealing with funds in a fiduciary capacity (423) and for a definite purpose associated with maintenance of a protected person (421 and 423). His entire discussion was structured around "allowances" and a liability to account. He noted that, in this context, a fiduciary might be permitted, in aid of the protective purpose of the law, to enjoy "incidental benefits" associated with an "allowance ... meant to include some inducement to the recipient to undertake the care of the person to be maintained..." (421 and 422). Any enjoyment of such benefits, or inducements, is conditional upon the fiduciary discharging his, her or its duty to the protected person (422-423).

85 Conceptually, this analysis is able to accommodate analysis of remuneration allowed to a manager of a protected estate under the legislative regime governed by the NSW Trustee and Guardian Act and the Guardianship Act. A prospect of remuneration may serve as an inducement to act as a manager, and to encourage the due discharge of managerial functions as a fiduciary.

86 Characterisation of a claim of remuneration or expenses as a "commission" or "percentage" does not alter the nature of inquiries that must be made about the reasonableness, or otherwise, of the claim.

87 An allowance for remuneration may take the form of a "commission or percentage" or a lump sum without altering its character as remuneration. Remuneration in the form of a commission or percentage may be allowed as a means of facilitating an objective assessment of an entitlement, in a relatively summary way, without a need for an application of a rate of remuneration to an itemised statement of work done or services supplied: Re Estate Gowing; Application for Executor's Commission [2014] NSWSC 247. In any event it may be appropriate, in light of the nature or amount of work done or services supplied, to moderate a figure based on a commission or percentage calculation in order to ensure that the bounds of reasonableness are not exceeded. In each case, an element of judgment is required to ensure that there is a just reconciliation of the competing interests of a manager and the protected estate under management.

88 This is not a call for a wholesale departure from agreed rates of remuneration, or market forces, in the assessment of remuneration allowed to managers of protected estates, but a reminder: first, that there is a divergence of interests in the realm of remuneration allowed to a manager out of a protected estate under management; and, secondly, an exercise of protective jurisdiction must consult the welfare and interests of the protected person.

89 Mindful, particularly, of the protective nature of the jurisdiction exercised on an inquiry into the reasonableness, or otherwise, of a claim for remuneration, the Court (or, in exercise of their legislative powers, the NSW Trustee and, on an appeal from an administrative decision of the NSW Trustee, NCAT), must look to the substance of the claim, whatever its form. Where (as commonly now occurs) a manager routinely, or ostensibly, outsources a financial advice function to an entity with which it has a corporate, or commercial, connection an inquiry about the reasonableness of a claim for remuneration and expenses must have regard to their global claim on the protected estate under management.

A "right to charge fees" distinguished from an entitlement to remuneration

90 Introduction: A general "right to charge fees" in relation to the NSW Trustee's performance of estate management functions (NSW Trustee and Guardian Act, s 111, read with NSW Trustee and Guardian Regulation 2008 NSW, clause 38 and cognate provisions) or for the provision of traditional trustee company services (Corporations Act s 601 TBA (1) read, relevantly, with ss 601 RAC (1)(a) and 601 RAC (2)(d)-(e)) does not, of itself, carry with it an absolute or indefeasible entitlement to be paid, or to retain, remuneration out of a particular protected estate under management by the corporation in which the right to charge fees resides.

91 The NSW Trustee as a Manager: If a protected estate is committed to the NSW Trustee's management it has, as manager, the same rights, immunities and liabilities as a private manager, and is similarly subject to the control of the Court: NSW Trustee and Guardian Act, ss 11(2) and 11(4). Its statutory right to retain or pay out of the estate of a protected person any "costs... incurred [by it] in the care and management of the estate... or in the supervision of the management of the estate..." (s 113) does not detract from this. Nor does the NSW Trustee's statutory entitlement (under s 114) to recover as a debt any "costs" due or payable to it.

92 A study of the legislative history of the provisions that now confer on the NSW Trustee a right to charge fees (principally, the NSW Trustee and Guardian Act, s 111) requires an appreciation that the functions now performed by the NSW Trustee were, in former days, performed by the Public Trustee and the Protective Commissioner: M v M [2013] NSWSC 1495 at [17]-[19].

93 The Protected Estates Act 1983 NSW, s 8, conferred upon the Protective Commissioner a right to charge fees, as prescribed for the purposes of the section, and provided for those fees to be "charged upon and payable out of the estate" of a protected person. Importantly, though, s 8(4) provided as follows:

"Where it appears to the Protective Commissioner to be just and reasonable to do so, the Protective Commissioner may, at the discretion of the Protective Commissioner, waive, remit or reduce any of the fees chargeable under [s 8]".

94 The comparable provision of the Public Trustee Act 1913 NSW (s9) provided, until enactment of the Public Trustee (Further Amendment) Act 1989 NSW, that fees fixed by regulations made under the Act "shall be charged" against an estate under administration by the Public Trustee. In 1989, Parliament substituted the word "may" for the word "shall" in s 9(1) for the express purpose of making it "discretionary rather than mandatory, for the Public Trustee to recover fees and expenses from the trust property in respect of which those fees and expenses are charged": Hansard, Legislative Assembly, 26 July 1989, p 8551.

95 Accordingly, since the 1980s provisions conferring on a public authority a statutory "right to charge fees" have been uncoupled from a mandatory requirement that, in every case, that right be satisfied out of an estate under administration.

96 Licensed Trustee Companies:The legislative warrant for a licensed trustee company to charge fees (found principally in s 601 TBA (1) of the Corporations Act) is expressly subject to Part 5D.2 of the Act, which includes s 601 SAA, the terms of which read as follows:

"Jurisdiction of courts not affected etc.

(1) Any inherent power or jurisdiction of courts in respect of the supervision of the performance of traditional trustee company services is not affected by anything in this Chapter.

(2) A licensed trustee company that is performing traditional trustee company services of a particular kind is subject in all respects to the same control and to removal or restraint from acting, and generally to the jurisdiction of courts, in the same manner as any other person who performs traditional trustee company services of that kind."

97 Section 20 of the Trustee Companies Act 1964 NSW is to the same effect. It provides as follows:

"20 Removal from office

A trustee company which has been appointed executor, administrator, trustee, receiver, committee, manager, guardian or attorney, whether before or after the commencement of this Act, shall be subject in all respects to the same control and to removal or restraint from acting and generally to the jurisdiction of the courts, in the same manner as any other executor, administrator, trustee, receiver, committee, manager, guardian or attorney."

98 There is a separate legislative warrant, in ss 601 SBB (3) and 601 TBC of the Corporations Act for a licensed trustee company to charge a reasonable fee for providing, on application by a person with a proper interest in an estate managed by the company, accounting statements relating to that estate. Section 601 TBD also expressly provides that "[nothing in Part 5D.2] prevents the reimbursement to a licensed trustee company of all disbursements properly made by the trustee company in the provision of a traditional trustee company service."

99 Section 601 TBE provides for the payment of fees charged by a licensed trustee company, for the performance by the company of an estate management function relating to a particular estate, out of that estate, subject to regulatory decisions that can be made by the Australian Securities and Investments Commission, not presently relevant.

100 The extent to which the Court is empowered by s 601 TEA (1) to review fees charged by a licensed trustee company in respect of an estate depends on whether, and to what extent, those fees are charged pursuant to s 601 TBB: s 601 TEA (2)(a). Section 601 TBB permits a trustee company to charge fees that have been agreed with "a person or persons who have authority to deal with the trustee company on matters relating to the provision of the service": s 601 TBB (1)(b) and 601 TBB (2)(a).

101 The scope for such an agreement is limited in a case in which the estate that is, or is proposed to be, under management by the trustee company is the estate of a person who lacks contractual capacity and does not have, at the time of the agreement, a duly appointed manager. In any event, the power conferred on the Court by s 601 TEA (1) supplements, rather than displaces, the jurisdiction that the Court has in relation to protected estates by reason of the parens patriae jurisdiction, the NSW Trustee and Guardian Act or the Guardianship Act: Corporations Act, ss 601 RAE (4)(b) and 601 SAA.

102 Supervision by the Court: Although each of them has a right to charge fees as a manager of a protected estate, any entitlement that the NSW Trustee or a licensed trustee company may have to be paid, or to retain, remuneration out of an estate under management is subject to the supervision of the Court.

103 A right to charge fees does not, of itself, relieve a manager of a protected estate of an obligation, grounded in a fiduciary relationship with the protected person, to account for estate property on the basis that, unless otherwise authorised by an order of the Court, or another competent authority, a manager is entitled to an allowance for remuneration no greater than an amount that is just and reasonable. Nor does it displace the jurisdiction of the Court (both inherent and statutory) to protect the interests, and welfare, of a person in need of protection.

104 Each manager of a protected estate, not excepting the NSW Trustee or a licensed trustee company, is a fiduciary (with an obligation to account for a protected estate under its management) from which remuneration may be allowed, by the Court, provided that: (a) it duly performs its obligations as a manager, an important one of which is that it treats the welfare and interests of the protected person as a paramount consideration (Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 422-423; In the Will of Henry Sherringham (1901) 1 SR (NSW) (B&P) 48; In the Will of James Greer (1911) 11 SR (NSW) 21 at 23); (b) it remains liable to account for estate property as and when called upon so to do; and (c) subject to the terms of any order made by the Court, its remuneration is no more than a just and reasonable allowance for its provision of services as manager.

105 As a matter of practice, and taking comfort from the existence of a regulatory regime for their supervision, the Court generally proceeds on the footing that, subject to any order to the contrary, and to their ongoing liability to account for their dealings with estates under their management as and when called upon to do so, each of:

(a) the NSW Trustee; and

(b) a licensed trustee company,

is allowed remuneration from an estate under management by it, being no more than an allowance for just and reasonable remuneration, quantified as no more than an amount calculated in accordance with its statutory right to charge fees.

106 In the light of these proceedings, it may be expedient, from time to time, to make an order or orders, under the NSW Trustee and Guardian Act s 64, to formalise this practice, or some variant of it, so as to facilitate the conduct of proceedings, not only in the Court, but also in NCAT. That is a question to be reserved for further consideration.

107 If that course were to be followed care should be taken not, unwittingly, to limit (via the NSW Trustee and Guardian Act, ss 62(2) or 70(2)) the right of interested parties to apply to NCAT under s 70 of the Act (read with the Administrative Decisions Review Act 1997 NSW), for a review of decisions made by the NSW Trustee passing accounts that contain an allowance for remuneration, or quantification of remuneration, of a private manager.

108 The practice of the NSW Trustee, backed by orders made by it under s 66 of the NSW Trustee and Guardian Act, with s 115(2) of the Act in mind, is to require private managers to prepare accounts for its consideration at regular intervals and otherwise as required. Prudential performance of its function as monitor of private managers dictates that this be done. It can be counted on to continue, and to adapt as circumstances may require, regulatory requirements for estate accounts to be submitted to it for review.

109 The availability to all interested parties of a right to apply to NCAT for a review of decisions made by the NSW Trustee in this context provides an important safeguard against excessive claims to remuneration, not only by private managers (s 70), but also by the NSW Trustee when it itself manages a protected estate (s 62).

110 The supervisory jurisdiction of the Court continues to operate, grounded on more than one foundation. Its inherent jurisdiction is preserved. Under the NSW Trustee and Guardian Act, it can make orders about the management of protected estates or give directions to the NSW Trustee. NCAT decisions are subject to rights of appeal. As statutory bodies, NCAT and the NSW Trustee may also be susceptible to judicial review proceedings.

111 Ordinarily, one might expect that, while the Court may remain centrally involved in a determination whether, in principle, a private manager can have an entitlement to charge fees or be allowed remuneration out of a protected estate, disputes about the quantum of any remuneration to be allowed out of an estate can, and should, be dealt with by the NSW Trustee in a process of passing a manager's accounts, and by NCAT on an application for a review of any such decision made by the NSW Trustee.

112 It may be necessary for the Court, in light of ongoing experience, to adapt its practices. In the meantime, however, the NSW Trustee, licensed trustee companies, NCAT and all persons dealing with them can proceed on the basis that, subject to such (if any) orders as may be required in a particular case, the Court will adhere to established practice as regards licensed trustee companies at least.

Protected Estate Managers As Fiduciaries

113 At a high level of abstraction, the principles to be applied in analysis of a claim to remuneration, or reimbursement of expenses, made by a manager of a protected estate are, essentially, those applied to all fiduciaries. A fiduciary has a foundational duty to act, in the interests of a beneficiary, in good faith. From that duty flow: (a) precepts about avoidance of conflicts of interest and duty; and (b) the duty not to make an unsanctioned profit from the office of a fiduciary.

114 Not uncommonly, discussion about the remuneration of trustees, executors and administrators of deceased estates, managers of protected estates and other fiduciaries(and associated topics) traverses all types of fiduciary office without distinguishing between them.

115 Willett v Futcher (2005) 221 CLR 627 at 631 n 15 and 636 n 26 provides one illustration of this. Although the Court there was mindful that its observations about protective jurisdiction were made in the context of a primary focus on an assessment of damages on a common law cause of action in tort (as appears at 221 CLR 644 [54]), its discussion of an allowance of remuneration to a manager of a protected estate proceeded by reference to cases involving trustees (In Re Freeman's Settlement Trust (1887) 37 Ch D 148; In Re Duke of Norfolk's Settlement Trust [1982] Ch 61) and cases involving executors and administrators (Robinson v Pett (1734) 3 P Wms 249; 24 ER 1049; Forster v Ridley (1864) 4 DeGJ&S 452; 46 ER 993), with a degree of overlap between those categories.

116 That an executor or administrator of a deceased estate may become a trustee on completion of executorial duties (Estate Wight; Wight v Robinson [2013] NSWSC 1229 at [10]-[22]; Riccardi v Riccardi [2013] NSWSC 1655 at [8]-[12]) underscores a close affinity, in practice, between those different types of fiduciary office.

117 Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238D and 242A provides an illustration of the analytical affinity between trustees and protected estate managers. There Kirby P drew a parallel between a manager's duty to act in the best interests of a protected person and the duty of a trustee (and others in a "quasi-trust relationship") to be guided always by the welfare of a beneficiary as the dominant consideration. He relied, particularly, on Letterstedt v Broers (1884) 9 App Cas 371 at 387 and Miller v Cameron (1936) 54 CLR 572 at 575, 579, 580 and 581.

118 Drawing upon NSW caselaw about the proper exercise of the Court's probate jurisdiction, the Financial Services Council submits that the Court should not, at all, countenance the appointment of a private corporation as the manager of a protected estate. This submission is based upon the following observation of Hutley JA in Government Insurance Office v Johnson [1981] 2 NSWLR 617 at 625 D-E:

"...Except where specially authorised by statute, a corporation cannot be appointed as an administrator, though it has the power to designate by instrument under its seal one of its officers (a syndic) to take a grant on its behalf: In the Goods of Darke (1859) 1 Sw&Tr 516; 164 ER 839; Mortimer on Probate, 2nd ed, (1927) 205."

119 The forensic force of this submission is to highlight that licensed trustee companies have the benefit of legislation (Corporations Act 2001 Cth, chapter 5D; Trustee Companies Act 1964 NSW, especially s 11(1), 11(6) and 20) that both governs their operations and provides a foundation for their appointment, inter alia, to the office of a manager of a protected estate without any inquiry by the Court, on a case-by-case basis, about their fitness for office. The NSW Trustee, also, has statutory authority to act, inter alia, in the management of a protected estate: NSW Trustee and Guardian Act 2009, ss 11, 41(1)(b) and 52; Guardianship Act 1987, s 25M(1)(b).

120 A private corporation, such as the plaintiffs, has no such legislative warrant or presumptive fitness for the office of a protected estate manager.

121 The Council's submission lacks force in four respects.

122 First insofar as legislation providing for the appointment of a private manager (NSW Trustee and Guardian Act, s 41(1)(b); Guardianship Act, s 25M(1)(a)) refers simply to the appointment of "a suitable person" as manager of a protected estate, and s 21 of the Interpretation Act 1987 NSW defines a "person" as including "an individual, a corporation and a body corporate or politic", it is untenable to suggest that a private corporation cannot be appointed to manage a protected estate.

123 Secondly, s 34 of the Trustee Companies Act 1964 NSW stands in the way of any suggestion that a "trustee companies" (now defined, by s 3 of the Trustee Companies Act, as "a licensed trustee company within the meaning of chapter 5D of the Corporations Act 2001 Cth) have monopoly rights over the performance of estate management functions. It reads as follows:

"34 Other companies may apply for similar powers

Nothing in this Act shall entitle a trustee company to oppose the granting of powers similar to those conferred upon trustee companies by this Act to any other company or to corporations generally, or to claim or to seek compensation in consequence of such powers being conferred upon any other company or upon corporations generally, or in the event of the repeal of this Act."

124 Thirdly, the continuing operation of the Trustee Companies Act 1964, including s 34, is confirmed by the Corporations Act, s 601 RAE (4)(b), read with the Corporations Regulations 2001 Cth, clause 5D.1.04 (3) and Schedule 8AD, item 4. The State and Federal legislation operates concurrently, each in aid of the other. Section 3(2) of the Trustee Companies Act provides that powers conferred on a trustee company by the Act are in addition to, and not in derogation of, any power conferred on it by any other (State) Act or the Corporations Act.

125 Fourthly, the Corporations Act does not, by chapter 5D or otherwise, grant a monopoly to licensed trustee companies, or detract from the operation of the NSW Trustee and Guardian Act 2009 NSW or the Guardianship Act 1987 NSW (Corporations Act, s 601 RAE (4)(b), read with the Corporations Regulations, clauses 5D.1.04 (2)(3), Schedule 8AC items 2-3 and Schedule 8AD item 2) or the parens patriae jurisdiction of the Court (Corporations Act, s 601SAA).

126 To similar effect, s 601RAE(3) provides, subject to any contrary provision in regulations made under the Corporations Act (of which there are none), the "trustee company provisions" contained in the Act (defined by s 601RAE (1), read, relevantly, with ss 601RAC (1)(a) and 601 RAC (2)(d)-(e)) are not intended to apply to the exclusion of laws of a state or territory (defined, by s 601 RAA, to include rules of common law or equity) that require a company to have, or to have staff who have, particular qualifications or experience if the company is to provide traditional company services of a particular kind.

127 In addition to its parens patriae jurisdiction, the Court has power to appoint a private corporation as a manager, as does NCAT - subject only to being satisfied as to "suitability".

128 The concept of suitability brings into play a full range of factors informed by the nature of the protective jurisdiction exercised by the Court and NCAT, and the availability of a regulatory regime (including, under current administrative arrangements, the NSW Trustee) designed to provide practical support for, and administrative oversight of, all parties interested in the due administration of a protected estate.

129 In all but exceptional cases the identity of a "suitable person" is likely to depend on considerations of "practice" rather than bright line jurisdictional constraints.

130 What is true of the area of protective jurisdiction under examination in these proceedings is also true of probate law practice as described in Government Insurance Office v Johnson. That can be seen upon an examination of the principal authority on which Hutley JA relied. Doubts in In the Goods of Darke about whether a corporation could be an executor were circumvented by a grant of administration, with the will annexed, to an individual appointed by the corporation as its nominee.

131 If the only impediment to the appointment of a private manager of a protected estate, for reward, were the prospective manager's corporate status, it would be open to the Court or NCAT (as the case may be) to appoint as a manager a natural person associated with the corporation.

132 Larger questions are: First, how, in the absence of a public regulatory regime underpinned by legislation such as that which governs a licensed trustee company, can the conduct of a business of management of protected estates for reward be reconciled with a manager's obligation, as a fiduciary, not to take an unauthorised profit from the office? Secondly, in the absence of such a regulatory regime, what amount and form of security, if any, should be required of a private manager as a condition of the manager's appointment to, or continuation in, the office?

133 An examination of 19th century English case law, in which equity judges struggled to justify the appointment of committees of the estate (managers) and committees of the person (guardians) for reward, is instructive. Witness the following extract from HS Theobold, The Law Relating to Lunacy (Stevens & Sons, London, 1924), p 46:

"Remuneration of Committees.

Lord Chancellors were at one time very unwilling to contemplate the possibility of allowing remuneration to committees of the estate, and various devices were adopted to avoid the grant of remuneration eo nomine. Sometimes a receiver was appointed with remuneration. Sometimes the allowance for maintenance was increased. As time went on expenses were allowed, or a percentage on repairs, or a commission for collecting rents. Annesley, Amb 78; Anon., 10 Ves 103; Walker, 2 Ph 630; Westbrooke, ib 631; Powell v Bonner, 9 LJ (NS) Ch 139.

It is now settled that in a proper case remuneration may be allowed to the committee of the estate and also to the committee of the person. Fletcher, 6 Ves 427; Warren, 10 Ves 622; Ratcliffe, 1 J & W 639; Fermor, Jac 404; see Latouche v Danvers, Ll & G t P 503."

134 Lord Eldon's pragmatism in this is illustrated by Ex parte Warren (1805) 10 Ves Jun 622; 32 ER 985. The headnote of a very short case report reads as follows:

"Where no one could be procured to act as Committee of a Lunatic, a Receiver was appointed, with a salary, but to be considered, and give security, as Committee".

135 Eldon said that "If [the proposed appointee] gave such security, as is satisfactory to the Attorney General, as a Committee does, it was not material whether he is called Committee or Receiver", and he made an order accordingly.

136 A further extract from Theobald, at p 54, illustrates the flexibility of the protective jurisdiction and a means whereby, in England, the court accommodated tension between recognition of the office of a committee (manager) as gratuitous and the need to pay to have some work done on behalf of a protected person:

"Receivers were often appointed in inquisition cases, as well as committees. There might be divers reasons for doing this. The committee might not have sufficient knowledge or leisure to superintend the management of the property. Or, in earlier times, when it was not the practice to remunerate committees, a receiver with remuneration was appointed to do the work. Or, again, it might be desirable to appoint a relation to be a committee, but undesirable to let him have control of money."

137 The fact that, as far back as 1924, a standard text on the law and practice of the protective jurisdiction recognised that "in a proper case" remuneration may be allowed to the committee (or manager) of a protected estate does not, however, displace the law's starting point that, prima facie, the office of manager is a gratuitous one unless a special arrangement to the contrary is made.

138 Pragmatism and principle are needed in equal measure, with the particular challenges of management of a protected estate, when surveying statements about the content, and operation, of the law of fiduciaries generally.

Distinctive Features of Protected Estate Management

139 There are several distinctive features of the management of a protected estate that need to be accommodated in the application of general principles governing the remuneration or reimbursement of fiduciaries. In combination, they compel a conclusion that, absent legislation that confers on a manager a larger right to remuneration, any entitlement a manager of a protected estate may have to charge fees is, essentially, a right to have his, her or its claim to remuneration out of the estate considered on a due exercise of a discretionary power residing, ultimately, in a court administering protective jurisdiction. The word "entitlement" here rises higher than a mere hope or expectation, but falls short of a common law right in contract or on a quantum meruit, restitutionary claim.

140 A due exercise of a discretionary power to allow remuneration out of a protected estate requires that the decision-making process be guided by an assessment of what is in the best interests, and for the benefit, of the protected person whose estate is under management, taking into account all facts material to the decision that has to be made, when it is made.

141 This does not mean that a manager has no real right to speak of. Rather, it points to a need for a manager to identify his, her or its terms as to remuneration before or at the time of appointment as a manager so that an informed decision can be made about the prospective appointment. Implicitly, if a protected person's best interests are to be served, a criterion of "reasonableness" must govern all claims for remuneration and the implementation of orders allowing remuneration.

142 Within the limits of what may be reasonable, the Court needs an opportunity to decide whether to accept a prospective manager's terms and the prospective manager needs an opportunity to consider whether, working within the constraints of the protective jurisdiction, to accept an appointment in which, by the nature of the jurisdiction, any entitlement to remuneration may, at least in theory, be qualified: F Jordan, Chapters on Equity in NSW (6th ed, 1947), p 124 note (m), reprinted in Select Legal Papers (Legal Books, Sydney, 1983). As a practical matter, a reconciliation of these competing perspectives, will depend upon the present, and anticipated, availability of property under management from which remuneration may be allowed.

143 What are some of the distinctive features of management of a protected estate that need to be accommodated?

144 First, there is the general inability, in fact, of a protected person to manage his or her own affairs. Not all such persons lack the mental capacity to transact business spoken of in Gibbons v Wright (1954) 91 CLR 423 at 437-438. Nevertheless, even allowing room for debate about the standard of incapacity to be applied in deciding whether a person is, or is not, capable of managing his or her own affairs (Re D [2012] NSWSC 1006 at [46]-[62]; PB v BB [2013] NSWSC 1223 at [4]-[9]), there must be a factual, functional deficiency in a person's capacity for self-management in order to qualify for an exercise of protective jurisdiction.

145 Secondly, by operation of law the contractual capacity of a protected person is generally, pending the operation of protective orders, suspended: NSW Trustee and Guardian Act, s 71; David by her tutor the Protective Commissioner v David (1993) 30 NSWLR 417; In re Walker (A Lunatic so Found) [1905] 1 Ch 160 at 170-174.

146 Thirdly, in the management of a protected estate, special consideration must be given to the personal circumstances of the protected person including, but not limited to: (a) medical disabilities of the protected person; (b) the full range of needs, and demands, of the protected person and his or her family, and friends, insofar as their lives intersect; and (c) uncertainty attaching to the life expectancy of the protected person and people within his or her domestic circle upon whom he or she may be dependent for assistance in meeting life's challenges.

147 Fourthly, the management of a protected estate by a private manager must, under the current legislative regime for the management of protected estates in New South Wales, be subject to the administrative oversight of the NSW Trustee under the NSW Trustee and Guardian Act (especially Part 4.5 Division 2), and the possibility of involvement in proceedings under the Guardianship Act, or dealings with the NSW Trustee in its capacity as the Public Guardian.

148 Fifthly, the management of a protected estate is subject to supervision by the Supreme Court in exercise of its protective jurisdiction.

149 A hallmark of that jurisdiction is the Court's insistence upon, and endeavour to give practical effect to, a requirement that protective proceedings be "directed to administration without strife in the simplest and least expensive way": Theobald, The Law Relating to Lunacy (1924), p 382. This is an important consideration, not only for the Court, but also for the Guardianship Division of NCAT, the workload of which is phenomenal.

150 Sixthly, in cases in which the practical necessity for an invocation of protective jurisdiction arises (as it did in cases such as Willett v Futcher (2005) 221 CLR 627 and Richards v Gray [2013] NSWCA 402) from a convergence between: (a) the suffering of a disabling personal injury by a person now in need of protection; and (b) an award of compensation to that person by a court after a process of adversarial litigation, there is, not uncommonly, a dynamic between the protective jurisdiction and common law proceedings for damages, on a cause of action in negligence, that cannot be ignored by anybody participating in management of the affairs of the person in need of protection. There can be a clash of cultures between adversarial common law litigation, in which participants in the process may be under pressure to maximise an award of compensation, and the insistence of those exercising protective jurisdiction that protective proceedings are non-adversarial in character.

151 Seventhly, management of a protected estate needs to retain flexibility in both: (a) the removal and replacement of a manager for the convenience of the protected person and his or her estate; and (b) revocation of management orders in pursuit of the best interests of the protected person: M v M [2013] NSWSC 1495 at [30]-[33]; NSW Trustee and Guardian Act, s 86.

152 A manager of a protected estate must be able, and willing, to manage the estate with a philosophical acceptance that: (a) his, her or its management role might come to an end without warning or fault in any quarter; and (b) the duty of a manager may be to assist the protected person to bring the management of the protected estate to an end as soon as may be practicable.

153 In the management of a protected person's estate there is no room for a manager (any manager) to have a vested interest in continuation of the management role. A manager of a protected estate for reward cannot, in this sense, bank on it continuing. In each case, the interests of the protected person are paramount.

154 Eighthly, management of protected estates is likely, increasingly, to have to accommodate diversity in the means of effecting a succession of property from one generation to the next. The pendency of a management order is not necessarily inconsistent with a protected person having testamentary capacity (Perpetual Trustee Company Limited v Fairlie-Cunninghame (1993) 32 NSWLR 377) but, now, the prospect of a "statutory will" being made for a person who lacks testamentary capacity may need to be taken into account in estate planning exercises affecting a protected person: Succession Act 2006 NSW, ss 18-26; Re Fenwick; Application of JR Fenwick; Re "Charles" (2009) 76 NSWLR 22; RL v NSW Trustee and Guardian (2012) 84 NSWLR 263 at 281 [82].

155 Ninthly, the availability of the NSW Trustee as a public manager, bound to accept the role of manager of any estate committed to its care by the Court (under the NSW Trustee and Guardian Act, s 41(1)(b)) or NCAT (under the Guardianship Act, s 25E and 25M(1)(b)), might be thought to undermine the rationale of earlier case law allowing remuneration to committees in the name of necessity. Whereas, once, remuneration may have been allowed because, without it, there was no-one able and willing to act as manager (Ex parte Warren (1805) 10 Ves Jun; 32 ER 985; F Jordan, Chapters on Equity in NSW (6th ed, 1947), p 124 note (m); Fomsgard v Fomsgard [1912] VLR 209 at 212-213), now there is. ... subject, of course, to the statutory (discretionary) entitlement of the NSW Trustee, under the NSW Trustee and Guardian Act and the NSW Trustee and Guardian Regulation 2008 NSW, to charge for its services.

THE OFFICE OF A PROTECTED ESTATE MANAGER

A Starting Point

156 Speaking of the office of a trustee in Macedonian Orthodox Community Church St Petka Incorporated v Bishop Petar (2008) 237 CLR 66 at 93 [69] spoke of the 19th century English legal system as one that operated against a "background conception" that "the office of trustee is a gratuitous one unless a special arrangement to the contrary is made".

157 It described that "background conception" as one which continues to possess vitality. The same is true of the office of manager of a protected estate.

158 Confidence that this is so can be taken from the terms of the High Court's judgment in Willett v Futcher (2005) 221 CLR 627, a decision which confirmed that a person rendered incapable of managing his or her own affairs by the negligence of another may be entitled, upon an assessment of damages on a cause of action in negligence against that other person, to an allowance for the remuneration and expenses of a fund manager: 221 CLR 642 [49]. The Court's judgment is predicated on an acceptance that the manager of a protected estate, like a trustee, is not entitled to remuneration absent a grant of authority grounded in legislation or a court order: 221 CLR 631 [8], 632 [12]-[13], 636 [28] and 644 [54].

159 The Court (at 221 CLR 631 note 15) cited Robinson v Pett (1734) 3 P Wms 249; 24 ER 1049 as the foundational authority for "the general rule that trustees are not entitled to remuneration for their labours in the trust". That that case is foundational to that proposition is evident in references to it in current editions of equity texts: eg, PW Young, C Croft and ML Smith, On Equity (Law Book Co, Sydney, 2009), para [6.1380]; JD Heydon and MJ Leeming (ed), Jacobs' Law of Trusts in Australia (Lexis Nexis Butterworths, Australia, 7th ed, 2006), para [1739].

160 The report of Robinson v Pett attributes the following statement to Lord Chancellor Talbot:

"It is an established rule that a trustee, executor, or administrator, shall have no allowance for his care and trouble: the reason of which seems to be, for that on these occasions, if allowed, the trust estate might be loaded, and rendered of little value. Besides, the great difficulty there might be in settling and adjusting the quantum of such allowance, especially as one man's time may be more valuable than that of another; and there can be no hardship in this respect upon any trustee, who may choose whether he will accept the trust, or not. The defendant's renouncing the executorship is not material, because he is still at liberty, whenever he pleases, to accept of the executorship: otherwise, if both the executors had renounced, and the ordinary [ie, the court] had thereupon granted administration. ... and if this were to make any difference, it would be an art practised by executors to get themselves out of this rule, which I take to be a reasonable one, and to have long prevailed. But further, in the present case, the testator has by his will expressly directed what should be the defendant's recompense for his trouble, in case of his refusing the executorship, viz. that he still should have the £100 legacy, to which I can make no addition. However, it being a hard case, let the defendant take back the deposit. ..."

161 The report concludes with an editorial note to the effect that "... it appears, the Master of the Rolls directed generally, that all parties should have just allowances; and on appeal by the defendant Pett, this decree was affirmed, but the particular gravamen is not stated" in the available records.

162 Professor Rotman, in Fiduciary Law (Thompson, Canada, 2005) at p 62, describes Robinson v Pett as one of the earliest known applications of the fiduciary concept, which he traces back to Keech v Sandford (1726) Sel Cas Ch 61; 25 ER 223 and, before that, Walley v Walley (1687) 1 Vern 484; 23 ER 609.

163 Despite its antiquity and its residence in a different social setting, the tensions evident in the report of Robinson v Pett continue to resonate in the here and now. There is a continuing search for rules based on reason, justice and practicality in a world in which estates are liable to be absorbed by the costs of their administration and administrators' interests may govern the performance of their duties.

164 Difficulties attending an assessment by the Court of a just and reasonable allowance for work done by a fiduciary have been the subject of comment in many different contexts, including in relation to: contested litigation relating to the remedy of an account of profits (Warman International Limited v Dwyer (1995) 182 CLR 544 at 556-557, 561-562 and 567); claims for executor's commission (ES Vance, Executors Commission (LBC, 1969), Preface and chapter 9); approval of remuneration of a liquidator (Re DS Millard & Son Pty Ltd (1997) 24 ACSR 71); and approval of remuneration of a receiver and manager appointed by the Court (Ide v Ide [2004] NSWSC 751; 184 FLR 44 at [19] and [36]-[50]).

165 Where an allowance for remuneration is to be assessed as an ongoing process of orderly management of an estate, importance attaches to identification of both principles to be applied and processes to be pursued leading to a determination of quantum. That requires an appreciation of the nature of the particular fiduciary office, and underlying fiduciary relationships, that need to be accommodated.

Characterisation of the office of a Manager

166 Whilst agreeing that the office of a manager of a protected estate attracts the obligations of a fiduciary, in JJK v APK (1986) Aust Torts Reports 80-042 at 67, 881, Powell J (possibly following Theobald, The Law Relating to Lunacy (1924) at pp 47 and 50) likened the office of such an office holder to that of a bailiff and, in GDR v EKR [2012] NSWSC 1543 at [36], White J described the relationship between a protected person and the manager of his or her estate as that of principal and agent rather than a trustee and beneficiary.

167 The concept of a bailiff is not entirely apposite to current usage because it is, historically, associated with the idea of an officer of the Court, perhaps appointed by the Sheriff, in the service of the Crown. The concept of a principal and agent is not entirely apposite either because a manager is appointed by the Court or a statutory tribunal (perhaps without the knowledge or consent of the protected person) and, for reasons already noticed, a protected person may lack the capacity to engage in an agency relationship.

168 Nevertheless, the bailiff analogy has an impeccable historical foundation in Coke's seminal report of Beverley's Case (1603) 4 Co Rep 123b; 76 ER 1118. The headnote (at 76 ER 1119) contains the following statement: "One provided by the King to take charge, &c of non compos mentis, is but a bailiff, and accountable as such".

169 In Re M and the Protected Estates Act 1983 (Supreme Court of NSW, 17 February 1988) at pp 46-47, in a passage not included in the report published at (1988) 12 NSWLR 96, Powell J accepted that a private manager of a protected estate (appointed to that office under an equivalent of s 41(1)(b) of the NSW Trustee and Guardian Act) is a "statutory agent" for the protected person.

170 In adopting that characterisation his Honour relied upon Plumpton v Burkenshaw [1908] 2 KB 572, In Re EG, a person of unsound mind not so found by inquisition [1914] 1 Ch 927 and Pisak v Hegedus [1983] 2 VR 386 at 388 and 392-393.

171 I note, in passing, that in the most recent of these three cases the Full Court of the Victorian Supreme Court (at 388) accepted that the term "bailiff", and the bailiff analogy, may have been derived from language used in Drury v Fitch (1619) Hutton 16; 123 ER 1068. That report records that "... the opinion of the Court was, that the committee [of the estate of a lunatic] was but a bayliff, and hath no interest, but for the profit and benefit of the lunatick, and is as his servant...". There follows a reference to Beverley's Case.

172 A point made by Theobald, The Law Relating to Lunacy (1924) at p 48, that may throw light on this subject is that the "...powers of [a] committee of the estate have never been precisely defined". Insofar as a committee (or its modern equivalent, a manager of a protected estate) may act as a surrogate of the Court, or under its direction, this is an orthodox statement as to the scope of protective jurisdiction generally, but it needs to be read against the Courts' concern to ensure that an exercise of such jurisdiction is governed by its informing principles (including, particularly, the requirement that the jurisdiction must be exercised in the interests, and for the benefit, of a person in need of protection: E (Mrs) v Eve (better known as Re Eve) [1986] 2 SCR 388 at 412-414 and 426-427; (1986) 31 DLR (4th) 1 at 18-19 and 28-29, approved in Marion's Case (Secretary, Department of Health and Community Services v JWB and SMB) (1992) 175 CLR 218 at 258-260 and followed in Christiansen v Christiansen (Queensland Court of Appeal, 2 July 1999) BC 9904473 at [18]-[19].

173 These observations remain true for a manager of a protected person's estate in NSW. The powers of a manager are governed by the purpose of his, her or its appointment, the legislation and administrative regime that regulates those powers and the supervisory jurisdiction of the Court.

174 It may be best to regard the office of a manager of the estate of a protected person as unique, but taking colour from the terms of his or her appointment, governed by the Court's protective jurisdiction and informed by the nature, purpose and historical origins of that jurisdiction. This is consistent with the decision of Hodgson CJ in Equity in MB v Protective Commissioner (2000) 50 NSWLR 24 at 32 [34] and 33 [38]. It is also consistent with the High Court's analysis in Clay v Clay (2001) 202 CLR 410 at 428 [37] - 429 [38] and 430 [40]. The relationship between a manager of a protected estate and the protected person is "a fiduciary relationship with particular characteristics".

175 Seen in that light there may be utility, in particular contexts, in likening the office of a manager to that of a bailiff and in describing the relationship between a manager and a protected person by reference to an agency relationship. One of the points made by Powell J by reference to the concept of a bailiff, was that a manager of a protected estate has duties defined by reference to public interest considerations as well as those that inform an exercise of equity jurisdiction; and the point made by White J is that the scheme of the NSW Trustee and Guardian Act is that a protected person ordinarily retains title to property managed on his or her behalf by the person appointed as manager of his or her estate. Both points were correctly made.

Public and Private Management of Protected Estates

176 It has been customary to recognise the public nature, and statutory foundations, of the NSW Trustee and its public predecessors, by characterising as a "private manager" any other party appointed to manage the estate of a protected person. The distinction is borne out by reference to both s 41(1)(b) of the NSW Trustee and Guardian Act and s 25M of the Guardianship Act. Both provisions present the option of appointment of "a suitable person" as manager of an estate or committal of management of an estate to the NSW Trustee.

177 A "private manager" is one who, the Court is satisfied, is a "suitable person" for appointment as a manager.

178 The Court, exercising jurisdiction under s 41(1)(b), or NCAT (formerly the Guardianship Tribunal), exercising jurisdiction under s 25M(1) must be satisfied that a prospective appointee as a private manager is a "suitable person". The mere fact that the appointee is a holder of an Australian Financial Services Licence (or, indeed, is a licensed trustee company) is not enough, even presumptively, to justify its appointment as a manager.

179 Conversely, no licensed trustee company or other holder of an Australian Financial Services Licence is obliged to accept appointment as manager of a protected person's estate without its consent to the appointment having been first sought and obtained.

180 Unlike the NSW Trustee, a private manager can, at least in principle, decline to accept an appointment. It might, by conduct, bind itself to accept an appointment and expose itself to legal obligations should it then decline to accept an appointment. However, absent considerations of that type, a party nominated for appointment as a private manager of a protected estate is not bound to acquiesce in the appointment.

181 Only the NSW Trustee can be, and is, entrusted with management responsibilities without inquiry by the Court into whether: (a) it consents to that entrustment; and (b) is qualified for committal of an estate to its management. I leave aside, in this context, questions that might arise about whether, and particular case, a private manager might better serve the interests of the particular protected person: Holt v Protective Commissioner (1993) 31 NSWLR 227.

182 As a matter of practice, because of the regulatory regime that has historically covered the activities of what are now called "licensed trustee companies", companies of that character have generally been viewed as a true, practical alternative to committal of an estate to the NSW Trustee. M v T [2005] NSWSC 303 provides an illustration of that; Windeyer J declined to appoint a private manager in chambers because uncertain whether the nominee was a statutory trustee company. Appointments of a licensed trustee company as a manager are routine chamber work for the Protective List Judge. Not so, applications for the appointment of other types of private managers for reward. Only in the cases of the NSW Trustee and a (licensed) trustee company do the Uniform Civil Procedure Rules 2005 NSW ("UCPR") not require affidavits of fitness to be filed in support of an application for appointment of a manager: UCPR r 57.5(c). On the whole, subject to the availability of evidence that such a company consents to its appointment as a manager (UCPR 5 57.5(1)(d)) and that it has prepared a financial plan for management of an estate, an appointment of such a company as a manager is routine.

183 The same level of assurance that attends appointment of a licensed trustee company as a manager may not be available upon consideration of appointment to the office of manager of a private manager qualified only by its conduct of a business of estate management under cover of an Australian Financial Services Licence.

184 Each application for appointment of such a manager, upon an exercise of protective jurisdiction, requires close scrutiny, if only to confirm the currency and terms of its licence.

185 That is particularly so in a situation where: (a) the licence holder may have participated in the personal injury compensation proceedings leading to an award of damages that constitutes the protected person's principal asset; (b) a question for consideration, upon an exercise of protective jurisdiction, may be whether the prospective manager can realistically cap and be required to cap, its entitlement to remuneration as a manager to a predetermined amount over the lifetime of the protected person; and (c) questions about whether, and how, the prospective manager can and will continue to provide quality management services to a protected person after such a cap has been reached are necessarily attended by an element of speculation, particularly if the prospective manager does not have insurance cover to safeguard the interests of the protected person after the money available for payment of its remuneration has run out.

186 This latter point - the risk of exposure of a protected person to a period of "unfunded" management - might need, in the present case or the future, to be addressed by a requirement that a manager in the position currently occupied by the first plaintiff provide security in the form of an insurance policy (eg, on the life of a protected person) or by the maintenance of a prudential level of net assets.

187 Section 68 of the NSW Trustee and Guardian Act 2009 NSW expressly empowers the Court or the Guardianship Tribunal to require a manager it appoints to give security to the NSW Trustee and Guardian "in respect of the management" of an estate. That power is routinely invoked by the Court in the form of an order that a manager "give such security in respect of management of [a protected person's estate] as the NSW Trustee and Guardian determines to be appropriate".

188 The power for which s 68 provides is reinforced, and more generally so, by the express powers conferred in s 64 of the Act.

189 Section 64 is in the following terms:

"64 Orders by Supreme Court and NSW Trustee as to management of estates

(1) The Supreme Court or the NSW Trustee may make such orders as it thinks fit in relation to the administration and management of the estates of managed persons.

(2) The Supreme Court or the NSW Trustee may also make such orders as it thinks fit in connection with authorising, directing and enforcing the exercise of the functions of managers under this Act.

(3) The Supreme Court may also make such orders as it thinks fit in connection with supervising the exercise of the functions of managers under this Act.

(4) An order by the NSW Trustee is subject to the regulations or to any direction by the Supreme Court or to any order of the Guardianship Tribunal (in the case of a person under guardianship).

190 These provisions are sufficiently broad to accommodate orders for, or in the nature of orders for, the provision of security against the possibility that a private manager whose entitlement to remuneration is capped might be unable to fund ongoing management services after its capped entitlement to remuneration is reached.

Involvement of a solicitor in protected estate management

191 In the several proceedings in which the first plaintiff in the current proceedings has been appointed as manager of a protected estate (by the Court or the Guardianship Tribunal) the plaintiffs, by Mr White, have been at pains to emphasise Mr White's standing, training and experience as a solicitor. It has been said, with some justification, that the involvement of a senior solicitor in management of the affairs of the plaintiffs can be taken as comfort in reaching a determination that the first plaintiff is "a suitable person" for appointment to the office of manager of a protected estate.

192 When challenged on the significance, if any, of the involvement of a solicitor in the conduct of the affairs of a protected estate manager, counsel for the plaintiffs stepped back from an attribution of great significance to it. Its real significance, if any, is that the affairs of the plaintiffs are in the hands of a person who, by virtue of professional training and experience, is familiar with principles governing the maintenance of trust accounts and the like, and (in the case of Mr White) the conduct of personal injury compensation litigation of the type that has generated the plaintiff's business of protected estate management.

193 Historically, the involvement of solicitors in the conduct of business affairs has come with costs and benefits for the community at large. The ready availability of expert legal advice to entrepreneurs and business managers can be taken, generally, to have been a positive factor. On the other hand, problems can emerge when lawyers themselves become entrepreneurs. This has been a lesson underlying divergent types of experience that have arisen, for example, in discipline of the legal profession (in cases such as Law Society of NSW v Harvey [1976] 2 NSWLR 154) and in dealing with solicitors as fiduciaries (as in the classic cases of Regal (Hastings) Limited v Gulliver [1967] 2 AC 134 (note) and Boardman v Phipps [1967] 2 AC 46). The involvement of a practising lawyer in a commercial enterprise brings a layer of complication which eschews generalisations about its desirability or prudence.

194 In the present context, I am disinclined to attribute any particular significance to Mr White's status, training or experience as a solicitor. The questions for determination in the current proceedings do not require me to dwell on the topic in the context of the first plaintiff's "suitability" for appointment as a protected estate manager, although it is not irrelevant to the plaintiffs' application for relief against the consequences of any breach of fiduciary obligations in their appropriation of remuneration from the defendant's protected estate.

195 There has not yet developed, and there may not develop, in NSW, a practice of appointing solicitors to the office of manager of a protected estate. Local experience differs, in this respect, from recent English experience, illustrated by Baker v H [2009] EWHC B31.

196 NSW experience counsels caution against the involvement of solicitors in dealing with a client in need of a protective order (R v P (2001) 53 NSWLR 664 at 683 [63] - [65]), as it does in the appointment of an accountant to the office of protected estate manager: Gray v Hart [2012] NSWSC 1435 at [140]-[142] and [319]-[336]. Special care is required to avoid, or minimise, conflicts of duty and interest or the like arising from the professional work or connections of a solicitor or accountant.

197 If NSW were to move in a direction similar to that of the English, it would be necessary for the NSW Trustee, in consultation with the Law Society of NSW and the legal profession generally, to develop protocols to permit that to happen. There would be substantial questions about the interaction of professional, regulatory and commercial standards; the availability and terms of professional indemnity insurance and other forms of security for the performance of estate management functions; training programmes for solicitors involved in estate management; and administrative structures for the inspection and monitoring of solicitors performing estate management functions.

THE JUDGMENT IN GDR v EKR

198 The current proceedings arise out of the judgment of White J in GDR v EKR [2012]NSWSC 1543 (14 December 2012), a judgment to be read together with his Honour's observations in CC v RAM [2012] NSWSC 1555 at [4]-[6].

199 In GDR v EKR his Honour considered whether (and, if so, on what terms) Ability One Financial Management Pty Limited (the first plaintiff in the current proceedings) should be appointed, under s 41(1)(b) of the NSW Trustee and Guardian Act, as manager of the estate of a person incapable of managing her affairs.

200 The first plaintiff (a wholly owned subsidiary of Ability One Pty Limited, the second plaintiff) is not, and never has been, a "trustee company" within the meaning of the Corporations Act.

201 In GDR v EKR [2012] NSWSC 1543 at [10]-[28] White J determined that, insofar as the first plaintiff seeks to carry on a business of financial management of the estates of protected persons, it requires an Australian Financial Services Licence issued under chapter 7 of the Corporations Act.

202 His Honour deferred making an order under s 41(1)(b) of the NSW Trustee and Guardian Act appointing it as manager of a protected estate pending the determination of an application by it to ASIC for the issue of such a licence. ASIC granted it a licence on 4 April 2013. It did so with notice of his Honour's judgment.

203 As foreshadowed in GDR v EKR [2012] NSWSC 1543 at [43] -[48], on 17 June 2013 his Honour made an order in those proceedings for appointment of the first plaintiff as manager of the estate of the defendant in those proceedings.

204 The Australian Financial Services Licence (numbered 434704) issued to the first plaintiff, pursuant to s 913B of the Corporations Act, is subject to multifarious conditions.

205 The licence itself is expressed to be "subject to the conditions and restrictions which are prescribed, and to the conditions contained in this licence and attached schedules." The balance of the document following that statement appears to comprise only two sections. One is headed "Authorisation", and comprises one numbered paragraph. The other is headed "Schedule of Conditions" and comprises paragraphs numbered 2-21, on just over nine pages, with just under 10 further pages of "Terms and Definitions".

206 Paragraph 1 of the licence (under the heading "Authorisation") is in the following terms:

"This licence authorises the licensee to carry on a financial services business to:

(a) provide financial product advice for the following classes of financial products:

(i) deposit and payment products limited to:

(A) basic deposit products;

(B) deposit products other than basic deposit products;

(ii) general insurance products;

(iii) debentures, stocks or bonds issued or proposed to be issued by a government;

(iv) life products including:

(A) investment life insurance products as well as any products issued by a Registered Life Insurance Company that are backed by one or more of its statutory funds; and

(B) life risk insurance products as well as any products issued by a Registered Life Insurance Company that are backed by one or more of its statutory funds;

(v) interests in managed investment schemes including:

(A) investor directed portfolio services;

(vi) securities; and

(vii) superannuation; and

(b) deal in a financial product by:

(i) applying for, acquiring, varying or disposing of a financial product on behalf of another person in respect of the following classes of products:

(A) deposit and payment products limited to:

(1) basic deposit products;

(2) deposit products other than basic deposit products;

(B) general insurance products;

(C) debentures, stocks or bonds issued or proposed to be issued by a government;

(D) life products including:

(1) investment life insurance products as well as any products issued by a Registered Life Insurance Company that are backed by one or more of its statutory funds; and

(2) life risk insurance products as well as any products issued by a Registered Life Insurance Company that are backed by one or more of its statutory funds;

(E) interests in managed investment schemes including:

(1) investor directed portfolio services;

(F) securities; and

(G) superannuation;

to retail and wholesale clients."

207 In essence, the licence authorises the licensee (the first plaintiff) "to carry on a financial services business" for two purposes. One purpose is "to provide financial product advice" for specified classes of financial products. The other is "to deal in a financial product by applying for, acquiring, varying or disposing of [it] on behalf of another person in respect of" specified classes of products "to retail and wholesale clients".

208 Leaving aside the Schedule of Conditions (and relying upon the analyses of the underlying provisions of the Corporations Act 2001 Cth in GDR v EKR and, more recently, Richards v Gray [2013] NSWCA 402), two things are evident. First, as necessary as an Australian Financial Services Licence may be to the conduct of the business of the plaintiffs, the licence lends little, if any, support to characterisation of a licensee as a person "suitable" for appointment as a manager of a protected estate within the meaning of the NSW Trustee and Guardian Act, s 41(1)(b) or the Guardianship Act, s 25M(1)(a). Secondly, the focus of the licence is such that this Court, and others interested in a due administration of protective jurisdiction, should be slow to assume that the regulatory regime administered by ASIC under chapter 7 of the Corporations Act is, or could reasonably be expected to be, tailored to protection of a protected person or his or her estate. The focus is entirely different.

209 The regulatory regime for which the Corporations Act provides, in relation to the holder of an Australian Financial Services Licence not also a licensed trustee company, may be taken into account upon an exercise of state jurisdiction for the appointment of a manager of a person unable to manager his or her own affairs, but it is not, of itself, determinative of any question about whether (and, if so, how) that jurisdiction should be exercised.

210 That being so it is necessary, in this judgment, to return to first principles governing an exercise of the Court's protective jurisdiction.

211 In GDR v EKR [2012] NSWSC 1543 White J, at [5] and [32]-[34] made observations of a general character that bear directly on questions relating to remuneration of a private manager of a protected estate. I agree, in substance, with those observations.

212 To the extent that a course is taken here that differs from the one chartered by his Honour, the difference reflects the course of proceedings following publication of his Honour's Judgment, from which all concerned in its implementation have greatly benefited.

213 I agree, in particular, with his Honour's analysis of s 115(1)(b) of the NSW Trustee and Guardian Act but, having reviewed the "Ability One" judgments of the Guardianship Tribunal to which his Honour drew attention in GDR v EKR [2012] NSWSC 1543 at [5](6) and [35], and having entertained submissions from all participants in the current proceedings, I have formed the view that a broader approach to the question of remuneration of a private manager for reward is required than the terms of s 115 alone allow.

214 In practice, the NSW Trustee has adapted its procedures, to live within the constraints of s 115(2) affecting it, by a requirement that a manager seeking remuneration apply for authority to undertake remunerative work which, if authorised, can be made the subject of an order or direction designed to empower the NSW Trustee to make an order for remuneration of a specified amount.

215 In these proceedings, no such expediency is available to the Court, and an order for remuneration in a "specified amount" does not sit comfortably with the general nature of the relief claimed by the plaintiffs.

216 Upon a consideration of questions reserved by his Honour for further consideration, it has been necessary to consider processes leading to payment of an allowance of remuneration out of a protected estate and the relationship between both an allowance for remuneration and those processes (on the one hand) and (on the other) a right to charge fees such as that already enjoyed by each of the NSW Trustee and licensed trustee companies and that now sought by the first plaintiff as a private manager. That necessity has led down different paths, but it has reinforced in my mind the essential correctness of the general observations made in GDR v EKR.

217 In paragraph 5 his Honour incorporated the following observations from an interim judgment he published in GDR v EKR:

".... 'It appears that if appointed financial manager, [the current first plaintiff] would propose to charge an establishment fee and an ongoing management fee. The NSW Trustee and Guardian and trustee companies have a statutory entitlement to charge fees (NSW Trustee and Guardian regulation 2008; Corporations Act 2001 (Cth), s 601TDA). [The first plaintiff] is not a licensed trustee company. Subject to any submissions that may be made, I should have thought that a private manager is not entitled to payment of remuneration (as distinct from reimbursement of expenses) out of the estate of a protected person unless the Court (or in limited circumstances, the NSW Trustee and Guardian) so orders (NSW Trustee and Guardian Act, s 115; The Lady Mary Cope's Case (1677) 2 Ch Cas 239; 22 ER 926; Ex parte Femor; the matter of Errington (1821) Jac 404; 37 ER 903; Re Westbrook (1848) 2 Phil 631 [41ER 1087]; JJK v APK (1986) Aust Torts Reports 80-042 at 67, 881; G v B (Supreme Court of NSW, Powell J, 27 May 1992, unrep) [BC9201855])).

In the last case, Powell J said that 'it is contrary to long established practice... to appoint a private manager with remuneration, and such a manager will be appointed only where absolutely necessary'."

218 In paragraph 32 his Honour wrote the following:

"... It has been long established that a private manager is not entitled to payment of remuneration out of the protected person's estate, although the Court may authorise payment of remuneration where it is in the protected person's interest so to do. The position concerning remuneration of financial managers (apart from the NSW Trustee and Guardian and trustee companies that have a statutory right to remuneration) is analogous to that of trustees. Unless the trust deed otherwise provides, a trustee is required to act gratuitously, but the Court has inherent jurisdiction to allow remuneration where it is advantageous to the trust estate to allow such remuneration (Anson v Anson [2004] NSWSC 766 at [76]; (2004) 12 BPR 22,303 at 22,316). Powell J's observation in G v B as to the practice of the Court in appointing a private manager for remuneration is not to be understood as precluding such an appointment if the appointment is in the best interests of the protected person, but recognising that, generally, a private manager is not to expect remuneration."

219 Having set out the terms of s 115 of the NSW Trustee and Guardian Act, White J made the following observations in paragraph 34:

"... I accept that s 115 authorises the Court to make an order for the payment of remuneration of a specified amount in advance of the work being done as well as retrospectively. Such orders authorising remuneration in advance were made from time to time in the exercise of the Court's inherent jurisdiction (eg, ex parte Femor; In the matter of Errington (1821) Jac 404 at 406; 37 ER 903; Re Walker (1848) 2 Phil 630 [; 41 ER 1087]). If it is otherwise fitting to appoint [the first plaintiff'] as financial manager of the defendant's estate, I shall exercise the power under s 115 to make the orders sought (by the first plaintiff and the party which, in those proceedings, applied as plaintiff for its appointment as manager of the defendant's estate] for remuneration."

220 The reference to "chapter 4" is a reference to chapter 4 of the NSW Trustee and Guardian Act, entitled "Management functions relating to persons incapable of managing their affairs. Its provisions include, in particular, those contained in Part 4.5,entitled "Management of 'estates". Division 1 (ss 55-62) of that Part is entitled "management of Estates by NSW Trustee". Division 2 (ss 63-70) is entitled "Management of Estates by other persons. Division 3 (ss 71-84) is entitled "Management of estates generally). Sections 63-70 (Division 2) are the primary source of legislative power for the NSW Trustee to monitor private managers.

GDR v EKR : THE ORDERS MADE

221 In GDR v EKR, upon an assumption that the first plaintiff would in due course obtain an Australian Financial Services Licence, White J appears to have been motivated to appoint the first plaintiff as manager of a protected person's estate by three considerations:

(a) First, his Honour was satisfied that it would be possible to avoid a conflict between the first plaintiff's own interests and its duty as the manager of a protected person's estate by procuring from the first plaintiff an undertaking to the Court that it would pay into the estate any commission or reward paid to it by third parties as a result of investments in financial product on behalf of the protected person: [2012] NSWSC 1543 at [37]-[42], esp [42];

(b) Secondly, the first plaintiff agreed to submit to an order that capped its remuneration to an amount which had been allowed in settlement of the protected person's claim for damages as a sum for financial management; and

(c) Thirdly, the plaintiff in the proceedings before his Honour [the father of the protected person] urged upon his Honour that the first plaintiff and its parent company (the plaintiffs in the current proceedings) offered the best available service and, in particular, a personalised service which would be in the interests of the protected person.

(d) Fourthly, the plaintiffs undertook to the Court that they would (as they have done in the current proceedings) bring applications before the Court for orders, under s 115 of the NSW Trustee and Guardian Act or otherwise, to regularise their entitlements to remuneration in management of other protected estates in respect of which the first plaintiff had been appointed as manager, and had appropriated estate property in the mistaken belief of the plaintiffs that it had an entitlement to do so, without the benefit of an order under s 115.

222 The orders made by his Honour on 17 June 2013 were to the following effect:

"1. Declare pursuant to s41(1)(a) of the NSW Trustee and Guardian Act 2009 that the defendant is incapable of managing her affairs.

2. Order that the estate of the defendant be subject to management under the NSW Trustee and Guardian Act.

3. Order that the plaintiff's costs be paid from the estate of the defendant.

4. Order that [an interlocutory order made for appointment of the NSW Trustee and Guardian as] Receiver and Manager of the defendant's estate be discharged.

5. Order that [the first plaintiff in the current proceedings] be appointed as manager of the estate of the defendant subject to the orders and direction of the NSW Trustee and Guardian.

6. Order pursuant to s 68 of the NSW Trustee and Guardian Act that [the first plaintiff] give such security in respect of management of the defendant's estate as the NSW Trustee and Guardian determines to be appropriate.

7. Subject to the provision of any such security and the order or direction of the NSW Trustee and Guardian that [the first plaintiff] commence management of the defendant's estate, order that as soon as practicable, the NSW Trustee and Guardian transfer the defendant's estate to the control and management of [the first plaintiff].

8. Order pursuant to s 64(1) of [the Trustee and Guardian] Act that [the first plaintiff] be authorised to exercise any of the functions set out in s 16(1)(a)-(y) of the Act that the NSW Trustee and Guardian could exercise if it were appointed as manager of the defendant's estate.

9. Order pursuant to s 64(3) of the [NSW Trustee and Guardian] Act that [the first plaintiff] submit to the NSW Trustee and Guardian annual accounts in the form prescribed or approved by the NSW Trustee and Guardian.

10. Order pursuant to s 115(1)(b) of the [Trustee and Guardian] Act that [the first plaintiff] be entitled to remuneration from the managed estate in respect of an establishment fee and an annual management and administration fee in accordance with [an identified schedule of fees] and approve the reimbursement of [the first plaintiff] out of the managed estate of the establishment and other fees to be charged to [the first plaintiff] by [the second plaintiff] in accordance with [that schedule].

11. Order that [the first plaintiff's] total entitlement for remuneration and reimbursement under Order 10 be capped at and must not exceed [the dollar amount allowed to the defendant upon settlement of her claim for personal injury damages, against a third party in other proceedings, as a sum for financial management] over the lifetime of the defendant.

12. Note the undertaking of [the first and second plaintiffs] to the Court that any commission paid to [the first plaintiff] or any adviser of the defendant as the result of an investment in any financial product from moneys forming part of the defendant's estate is to be paid to the defendant to form part of her managed estate.

13. Order that [the first plaintiff] provide a copy of these orders to the NSW Trustee and Guardian.

14. Give liberty to the parties to restore the proceedings to the Protective List.

15. [Note the undertakings of the first plaintiff to the Court set out in paragraph 7 of the Affidavit of the Chief Executive Officer, a director, of the first plaintiff sworn on 13 June 2013].

16. Note the undertaking [of the same officer of the first plaintiff] to the Court set out in paragraph 10 of [that affidavit]."

223 The undertakings referred to in paragraph 15 of these Orders were to the following effect:

(a) The first plaintiff would commence as soon as possible any appropriate application to seek a specific order for remuneration pursuant to s 115(1)(b) of the NSW Trustee and Guardian Act in relation to each of the matters in respect of which the first plaintiff had been appointed as manager of a protected estate, and appropriated estate property as remuneration, without the benefit of an order under s 15.

(b) The first plaintiff would formally advise, and draw to the attention of, the NSW Trustee and Guardian the reasons for judgment of White J published as GDR v EKR [2012] NSWSC 1543, in particular paragraph [35], in which his Honour concluded that the first plaintiff, as a private manager, had no entitlement to remuneration absent an order for remuneration under s 115.

(c) The first plaintiff would advise the NSW Trustee and Guardian that it will pay the reasonable costs of the appointment of a Tutor for those matters in respect of which an application for a s 115 order was to be made in accordance with the first of these undertakings.

224 The undertaking to the Court referred to in paragraph 16 of the Orders was an undertaking by the Chief Executive Officer of the first plaintiff (Mr White) to provide a personal guarantee, in a nominated amount, to meet a contingent liability of the first plaintiff if called upon.

225 The current proceedings have been instituted, and maintained, in performance of the undertakings to the Court recorded in paragraph 15 of the Orders made by White J on 17 June 2013.

GDR v EKR: VARIATION OF STANDARD ORDERS

226 Since those orders were made the NSW Trustee and the plaintiffs have invited the Court to reconsider their terms in two respects (referable to orders 8 and 9 respectively) and, taking into account particularly the variation sought in respect of order 11, additional attention needs to be given to order 9.

Order 8: A blanket conferral of functions not appropriate

227 As noted in JMK v RDC and PTO v WDO [2013] NSWSC 1362 at [38]-[50], the NSW Trustee takes exception to an order expressed in terms of Order 8 of the orders made on 17 June 2013, and the plaintiffs invite the Court to set aside any such order made in favour of the first plaintiff.

228 The NSW Trustee's objection is well taken, and the plaintiffs' invitation should be taken up.

229 An order expressed in terms of Order 8 has the potential to allow a private manager to carry out a function which has not been authorised by the NSW Trustee and, thereby, to undermine the public regulatory regime underpinned by the NSW Trustee and Guardian Act (including, particularly, ss 64-68) and cognate legislation.

230 Section 66(2) confers on the NSW Trustee an express power to authorise a private manager to have functions of a kind specified in s 16 of the Act, the subject matter of order 8. That power can be exercised as and when necessary. A general conferral of functions on a private manager by an order in terms of order 8 is not necessary.

Order 11: Capping of remuneration

231 An order expressed in terms of order 11 of the orders made on 17 June 2013 has three features worthy of particular notice. First, it is an attempt to give effect to the requirement that any remuneration allowed to a manager of a protected estate be limited to an amount that is just and reasonable. Secondly, it recognises the interrelationship between claims for compensation in common law personal injury litigation (especially since Willett v Futcher (2005) 221 CLR 627) and the working out of the practical implications of an award of compensation (including a component for anticipated remuneration of a manager of a protected estate) in the protective jurisdiction. Thirdly, by capping the total remuneration at a total dollar amount it meets the criterion of a "specified amount" for which the NSW Trustee and Guardian Act, s 115(1)(b) provides.

232 As has become apparent during the course of these proceedings, the form of the order is problematical from more than a single perspective.

233 First, a fundamental problem with it is that it is based on a debatable assumption that an estimate of future remuneration made in compensation proceedings, between parties who may or may not include the entity ultimately appointed to manage a protected estate, can serve as a useful guide to subsequent quantification of remuneration claims over an indefinite, possibly lengthy period.

234 Secondly, it does not address the question of what happens when the money runs out, or is perceived as likely to run out, during the course of management of an estate. Is the manager obliged not to reduce the quantity or quality of services provided, but to continue in office on a gratuitous basis? If so, how can the due performance of the manager's continuing obligations effectively be policed? By what means can a "cap" be enforced prospectively without orders for the provision of security (such as an insurance policy) for the cost of any unfunded management services that may need to be provided, or a speculative rationing of the remuneration and expenses to be allowed, from time to time, in favour of a manager bound by the cap?

235 Thirdly, quantification of a "cap" without allowing in favour of a manager a factor for interest accruing on the capital component of the protected estate notionally allocated to claims for future remuneration may operate unfairly to the manager.

236 Fourthly, if that problem were to be addressed by directions for part of the protected estate to be literally set aside for the payment of future remuneration claims, prospective entitlements of a manager could be elevated above the interests of the protected person and, in effect, operate as a charge on the estate.

237 Fifthly, given that the Court's inherent jurisdiction extends to making provision, or an allowance, for future remuneration adapted to the needs of the particular case, there is no necessity for orders for remuneration to be confined to the language of s 115(1)(b), directed, as it appears to be, to confirmation of the Court's jurisdiction to make a summary order for the payment of remuneration. I do not apprehend that s 115(1)(b) is subject to procedural constraints that may attend other legislation that makes provision for a summary assessment of a "just and reasonable" award, in a "specified" amount, in an adversarial setting (as, for example, illustrated by Caltex Refining Co Pty Limited v Maritime Services Board of NSW (1995) 36 NSWLR 552 at 563G-564F); but the need to "specify" an "amount" of remuneration in an order made under s 115 is a constraint that must be respected if there is no resort to the Court's inherent jurisdiction.

238 In my assessment, there is, or in many cases may be, utility in maintenance of a practice that requires disclosure to the Court, and all persons interested in the due management of a protected estate, of the amount of a personal injury damages award calculated by reference to estimated future management costs. This may operate as a guide to what is to be assessed as a just and reasonable allowance of remuneration to be allowed to a protected estate manager.

239 However, the concept of a "cap" is too problematical to justify a standard form of order in orders making provision for an allowance of remuneration to a manager.

240 The better course, in my assessment, is to confirm that any allowance made for remuneration of a manager is governed, and limited, by a requirement that any such remuneration be no more than a just and reasonable amount, assessed by a process in which competing interests can be fairly accommodated, so far as available estate property may permit.

Order 9: Timing of Accounts

241 Viewed as an allowance out of the estate of a protected person, in favour of a fiduciary liable to account to that person, an order for remuneration should be tied to an obligation of the manager to have his, her or its accounts "passed" or otherwise approved in a formal way.

242 In the due administration of an estate that does not mean that a payment of remuneration must necessarily await an order for the passing of accounts made by the NSW Trustee (or the Court or, on a review from the NSW Trustee, NCAT) but any payment of remuneration out of an estate must be made, on notice to the NSW Trustee, in an orderly process and subject to an accounting process monitored by the NSW Trustee in the first instance. A private manager cannot prudently, and should not, take or retain remuneration from a protected estate without the NSW Trustee's authorisation to do so.

243 With that in mind, an order such as that for which order 9 of the orders made on 17 June 2013 provides should be expressed in terms of an obligation to account as and when a manager is called upon to do so, including the provision of annual accounts in a form prescribed or approved by the NSW Trustee.

244 Whether this, or some other form of order, will require the NSW Trustee to adapt its procedures or forms is a question that may need to be addressed following publication of these Reasons for Judgment. Ordinarily, however, as has been noticed already, the NSW Trustee deals with this topic by orders made by it, in relation to each estate under private management, pursuant to the Trustee and Guardian Act, s 66, with s 115(2) in mind.

FACTORS AFFECTING THE GRANT OF AN ALLOWANCE FOR REMUNERATION

A decision to allow remuneration

245 Section 115(1)(b) of the NSW Trustee and Guardian Act provides a summary procedure for the Court (and, within the limits set by s 115(2), the NSW Trustee) to order that a manager be allowed a specified amount of remuneration from the estate of a protected person.

246 Any larger or differently expressed form of allowance of remuneration, or a grant of authorisation to charge fees in anticipation of payment of an allowance of remuneration, not independently authorised by other legislation, requires an exercise by the Court of its general, inherent jurisdiction.

247 Starting from the twin propositions that the office of manager of a protected estate is prima facie gratuitous and that such a manager will be allowed remuneration only if such an allowance is in the interests, and for the benefit, of the protected person, a primary inquiry by the Court on an application for an allowance for remuneration is whether, and how, the appointment, or continuation in office, of a manager for reward can be said to be beneficial to the protected person.

248 In moving towards an answer to that question the Court is obliged to take into account all circumstances material to the decision to be made, at the time the decision has to be made.

249 Factors that may, ordinarily, be material include the following:

(a) The availability or otherwise of a prospective manager able, and willing, to manage the protected person's estate without an allowance for remuneration.

(b) The size, composition, whereabouts and complexity of the protected estate.

(c) The personal circumstances of the protected person, including his or her age; the nature of his or her incapacity for self-management; his or her present health and prognosis; and arrangements for his or her care, and family connections, present and prospective.

(d) The views, if any, of the protected person, his or her family and others (including carers) who may be well placed to express an informed view as to the protected person's welfare and best interests.

(e) The training in, experience of, and verifiable aptitude for the performance of management functions of the protected person's circle of family, friends and carers.

(f) Real, perceived and potential conflicts of interest and duty that might affect the performance of managerial functions by potential candidates for appointment as a manager.

(g) Whether the nature and size of any claim, or prospective claim, for remuneration appears to be within the range of fees established by market conditions so far as they can, without undue inquiry, be ascertained.

(h) Such, if any, views as may be expressed by the NSW Trustee in fulfilment of its role as monitor of due management of protected estates in NSW.

250 If those people closest to a protected person in terms of established and enduring personal relationships have responsibly made inquiries (and, on reasonable grounds, formed a consensus) about the course that should be followed in relation to the appointment, and remuneration, of a manager of the protected person's estate, the Court will ordinarily be slow to differ, although it must remain free to do so in order to discharge its own protective functions.

251 If an order for remuneration is sought prospectively it should, ordinarily, go no further than is necessary, and be limited to an authorisation for the manager to charge fees in a specified amount, or at a specified rate, on the basis that remuneration (limited to a just and reasonable allowance) may be allowed out of the estate of the protected person on, or subject to, the passing of accounts of the manager for the period the subject of the claim for remuneration.

252 The due administration of protected estates, jointly and severally, requires that a tight (but carefully managed) rein be kept on all allowances for remuneration out of a protected person's estate. The NSW Trustee is right, and acting well within its powers, to monitor claims for remuneration closely.

253 Nevertheless, absent a necessity to do so, prudence dictates that the Court not lay down guidelines for the quantification of remuneration to be allowed to a protected estate manager that are unduly prescriptive.

254 It may acknowledge a schedule of fees (similar in nature, for example, to those routinely charged by the NSW Trustee or licensed trustee companies) as a foundation for a prospective allowance of remuneration, but an allowance of remuneration to a manager is ordinarily contingent upon the manager's due performance of managerial functions and, in particular, the manager's obligation, on accounting for an estate, to limit any claim to remuneration to an amount that is just and reasonable for work done.

255 Save in exceptional circumstances, the preferable course for the Court is: (a) to clarify the general principles governing an allowance of remuneration to a protected estate manager; (b) to allow market conditions, with a prospect of moderation such as may be necessary to ensure that any remuneration allowed is just and reasonable, to operate within a flexible administrative regime; and (c) to establish, or point to, a process, or processes, for disputes as to the quantum of remuneration to be allowed out of a particular protected estate to be resolved in a constructive, summary, but fair way, taking into account the particular circumstances of each case. This approach is consistent with that taken by Young CJ in Equity (in relation to an assessment of remuneration of a receiver and manager appointed by the Court) in Ide v Ide [2004] NSWSC 751; 184 FLR 44 at [19] and [36]-[50].

256 Notice might be taken here of the observations of the Court of Appeal in Richards v Gray [2013] NSWCA 402 at [152] - [160] where Bathurst CJ (with the concurrence of Beazley P and McColl and Meagher JJA) analysed a protected estate manager's fees by reference to what is "reasonable" having regard to competitive rates of other private managers (licensed trustee companies) in a market which, because of public disclosure of fees, can be assumed to have been competitive and informed.

257 Notice might also be taken of the significance that may be attached by the Court to fee scales published by independent, professional associations: Ide v Ide [2004] NSWSC 751; 184 FLR 44 at [49], citing the Full Court of the Queensland Supreme Court in Re Queensland Forests Limited (In Liquidation) [1966] Qd R 180 at 186-187 and 188.

258 Observations of this character do not necessarily apply with equal force to a private manager which is not a licensed trustee company - because such a manager does not have all the attributes of a licensed trustee company, its fees are not the subject of the same degree of public disclosure as fees of a licensed trustee company and its conduct is not governed by an independent professional association - but they point towards a solution of questions under consideration in these proceedings.

259 However, the Court is not presently involved in any process of taking accounts or matching rates of remuneration against verifiable tasks to be performed or work actually done.

260 Any determination in these proceedings that the plaintiffs be at liberty to charge fees, by way of remuneration or expenses on the account of the first plaintiff, must be subject, in due course, to accounts of the first plaintiff, as a manager, being passed, with a demonstration that fees actually charged are just and reasonable when measured against work actually done.

261 Within the present legislative, and administrative regime, if the Court determines that a private manager be allowed remuneration it is open to the NSW Trustee (on its approval of the accounts of a protected estate manager who is authorised to charge fees) to allow an amount of remuneration that is just and reasonable for the work done by the manager in the period covered by the accounts in question.

262 A decision by the NSW Trustee in quantification of the remuneration to be allowed to a manager, in accordance with a manager's authority to charge fees, is amenable to an application for a review of the decision made to NCAT (pursuant to s 70 of the NSW Trustee and Guardian Act) or to the Court (by reference to ss 64-65 of the Act or, in an exceptional case, an exercise of parens patriae jurisdiction).

263 Section 115 of the NSW Trustee and Guardianship Act does not stand in the way of this process because the role of the NSW Trustee (outside the limited operation of s 115(1)(b) allowed by s 115(2)) is to give effect, on the passing of a manager's accounts, to an order of the Court authorising fees to be charged, and remuneration to be allowed out of the protected estate, on, or subject to, the passing of accounts.

264 Strangwayes v Read [1898] 2 Ch 419 at 426-427 is an illustration of the need, and a means of satisfying the need, to review remuneration allowed to a protected estate manager by reference to the standard of what is just and reasonable for work done. It is consistent with the broader statements of principle about the nature of an accounting, in this area of the law, found in Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 420-423. It is consistent, also, with the principles enumerated in the NSW Trustee and Guardian Act, s 39 and the Guardianship Act, s 4, informed by the purposive character of the Court's parens patriae jurisdiction.

SUMMARY OVERVIEW

265 The general rule to be applied in management of a protected estate is that, absent a legislative warrant, a manager has no entitlement to remuneration out of the estate of a protected person unless a determination is made by the Court that such remuneration be allowed.

266 An order that remuneration be allowed out of a protected estate is not routinely made outside the realm of managers who conduct a business of protected estate management for reward, and particular caution is exercised, within that realm, in the supervision of a manager which is not a licensed trustee company.

267 A right to charge fees, conferred by legislation or a grant of authority by the Court, is not, of itself, an absolute or indefeasible entitlement to have remuneration allowed out of a protected estate.

268 Where a protected estate manager is allowed remuneration out of the estate under management, remuneration is ordinarily to be allowed only subject to:

(a) due performance by the manager of his, her or its obligations, including the obligation to treat the welfare and interests of the protected person as a paramount consideration;

(b) the manager remaining liable to account for estate property as and when called upon to do so; and

(c) the manager's remuneration not exceeding a just and reasonable allowance for services actually provided.

269 Under the current legislative regime, an order that a private manager (not a licensed trustee company) be allowed remuneration out of the estate of a protected person must be made, if at all, by the Court. NCAT and the NSW Trustee are not, independently of a court order, empowered to make such an order. The NSW Trustee's power under s 115 of the NSW Trustee and Guardian Act is constrained by s 115(2).

270 Where the Court makes an order that permits a private manager to be allowed remuneration out of a protected estate, it will, ordinarily, do so on the basis that administration of that order (including quantification of what, if anything, is a just and reasonable allowance for services actually provided) is entrusted to the NSW Trustee as monitor of all protected estate managers.

271 An administrative decision made by the NSW Trustee on such a question is open to review on an application, by any interested person, to NCAT (in the ordinary course) or (in an exceptional case) the Court.

272 A manager of a protected estate who takes, receives or retains remuneration out of an estate under management without authority duly granted by the Court, and the NSW Trustee, may be held to have acted in breach of the fiduciary obligations of such a manager, and be held to account for it as a constructive trustee for the protected person.

273 The Court may grant relief from such a liability to a manager who has acted honestly and reasonably.

274 On an application by a manager for such relief, an important factor for consideration is whether (and, if so, to what extent) the manager has acted openly and fairly in all dealings with the protected person, his or her family and carer and the NSW Trustee, and complied with regulatory requirements of the NSW Trustee.

275 Consideration might usefully be given to the question whether Parliament should be invited to amend s 115 of the NSW Trustee and Guardian Act so as to conform to the model established by the Probate and Administration Act 1898 NSW, s 86, including an express provision for any allowance of remuneration out of a protected estate to be governed by a criterion of what is just and reasonable.

276 Consideration might also be given, in the meantime, to the question whether the same, or a similar, end might be achieved by the Court making an order (under s 64 of the NSW Trustee and Guardian Act) to the effect that, subject to any order of the Court, the NSW Trustee be authorised (upon the passing of accounts of a protected estate manager or otherwise) to allow, out of the estate of a protected person, such remuneration (including expenses) of the manager as may be just and reasonable, subject to being satisfied that: (i) the manager has duly performed the functions of a manager; and (ii) it is in the best interests, and for the benefit, of the protected person to do so.

277 A need for consideration of these questions arises from the possibility that the NSW Trustee may, from time to time, have stepped outside the constraints imposed on its power under s 115(2).

PRACTICE RULINGS

278 Experience of the current proceedings, including (by reference, largely, to reasons for decision published by the Guardianship Tribunal) a high level review of other cases in which the plaintiffs have sought and obtained appointment of the first plaintiff as a manager of a protected estate, points to a need to take stock of procedures governing the appointment of a private corporation, not a licensed trustee company, as a private manager of a protected estate for reward.

279 In the context of the current administrative arrangements for the supervision of management of protected estates, an appointment of such a manager cannot be, and has not been, treated as routine.

280 An aspiration of the plaintiffs appears to be that the first plaintiff's appointment to management of a protected estate should be treated on a par with the appointments routinely made of licensed trustee companies to the office of a protected estate manager. Unless and until their affairs are as closely regulated as are those of licensed trustee companies, it is difficult to see how that aspiration can be fulfilled.

281 In each case in which the first plaintiff has been appointed manager there appears to have been, as one would expect, a need for detailed evidence about the plaintiffs' organisational structure, the terms of their prospective appointments as manager and financial adviser to the manager, and the availability of security for the due performance of management functions.

282 In each case, a disproportionate allocation of resources of the Court, or the Guardianship Tribunal, has been required to canvass the respective claims to preference of the plaintiffs, vigorously asserted by or on behalf of the plaintiffs, through Mr White.

283 In each case, the identity and qualities of the prospective manager have been a major, if not the major, focus for attention. To that extent, decision-making processes appear unnecessarily to have been diverted from their true focus on the welfare and interests of a protected person. This does not sit well with the traditional boast of those exercising protective jurisdiction that "practice [in the jurisdiction] should be directed to administration without strife in the simplest and least expensive way": HS Theobold, The Law Relating to Lunacy (1924), p 382.

284 Evidence adduced by the plaintiffs in the current proceedings indicates that they currently have under management assets valued in excess of $90 million. Theirs is no small business.

285 This, the plaintiffs contend and I accept, demonstrates that the plaintiffs' operations are established, substantial and responsibly conducted. All that can readily be accepted. However, it comes with a corresponding concern about the extent to which the ongoing affairs of any business of protected estate management, of those dimensions, can be conducted without exposure to risk.

286 An appointment of a manager to a protected estate focuses attention on a particular point of time, the time of appointment. Neither the Court nor NCAT has administrative responsibility, or resources, for close, ongoing supervision of a manager once appointed. That role belongs to the NSW Trustee. It is one thing for the Court, or NCAT, to say, on evidence placed before it at a single point of time, that a candidate for appointment as a private manager is "a suitable person". It is quite another to administer a regulatory regime consequent upon, and subsequent to, the appointment of a manager.

287 If, as it does, the NSW Trustee anticipates that there will be a greater deployment of private managers (including private managers for reward) in the management of protected estates in NSW in the future, than has been experienced in the past, it will be necessary for the development of an administrative regime to accommodate such change.

288 From the Court's perspective, what is required, here, is a consideration of questions of practice and procedure affecting not only the current proceedings, but also other, proceedings of a similar nature pending in the Protective List involving the present plaintiffs and other cases in which an application is made for appointment as a manager of an entity engaged, or seeking to engage, in a business of management of protected estates.

289 By their nature, determinations about practice and procedure must yield to the facts of the particular case, and they are liable to be modified, abandoned or departed from where necessity, or convenience, dictate in the administration of justice. The Court reserves a right to adapt practice and procedure to meet the ends served by the jurisdiction it is called upon to exercise.

290 With that caveat firmly in view, I venture the following observations about the practice and procedure of the Court in its exercise of protective jurisdiction in the Protective List:

(a) A claim for remuneration by a private manager (including, but not limited to, a licensed trustee company) should generally be foreshadowed to the Court, if not formally made, at the time of the claimant's appointment as a manager is under consideration. It should, generally, be brought to the attention of the Court, on notice to the NSW Trustee, without delay: F Jordan Chapters on Equity in NSW (6th ed, 1947), p 124 note (m); Plomley v Shepherd (1896) 17 NSWR (Equity) 215 at 217; Guazzini v Pateson (1918) 18 SR (NSW) 275 at 285-286.

(b) The Court will not in every case make a determination on a claim for remuneration at the time of appointment of a manager, but disclosure of such a claim permits the Court and all interested parties to take the claim into account in determining whether or not to acquiesce in an appointment of the claimant as a manager, and the prospective manager will have protected himself, herself or itself against criticism if and when a formal determination about an allowance for remuneration must be made.

(c) In the absence of special circumstances, and a reasonable explanation for earlier non-disclosure of a claim for remuneration, no manager will, generally, be granted an allowance for remuneration the basis of which has not been disclosed to the Court at the time of the manager's appointment to that office.

(d) If and to the extent a prospective manager proposes to retain a financial adviser or fund manager to assist him, her or it in management of a protected estate, that fact should be disclosed to the Court and undertakings of the type identified in CC v RAM [2012] NSWSC 1555 at [4]-[6] should be offered to the Court, or the absence for such an undertaking explained.

(e) Undertakings of that character will not necessarily be noted in formal orders or notations made by the Court, but: (i) they will be taken into account by the Court in its making of a decision about the appointment of a manager; and (ii) when appointed, a manager and his, her or its assistant will be held to account on the basis of the undertakings given or such, if any, orders as may be made in lieu of, or as a supplement to, such an undertaking.

(f) Even in the absence of any such formal undertaking, a manager of a protected estate, a financial adviser or fund manager who receives collateral benefits from management of a protected estate that are not disclosed to, and approved by, the Court may be liable (under the general law governing fiduciaries) to account for those benefits to the estate. A failure to appreciate, or to do, that may be indicative of a lack of suitability to be, or remain, a protected estate manager or otherwise involved in the management of a protected estate.

(g) If a protected person has received an award of damages for personal injuries that includes a component for the costs of fund management (including remuneration of a manager and/or a financial adviser) each applicant for appointment of a manager, and any prospective manager, will be expected to disclose to the Court, and the NSW Trustee, in an affidavit: (i) the fact, amount and basis of calculation of the funds management component of the damages award; and (ii) whether the prospective manager and financial adviser had any (and, if so, what) involvement in the process that led to the award of damages.

(h) An application for remuneration made to the Court by a manager should, ordinarily, be made by a notice of motion filed in the proceedings in which the manager was appointed to that office (thereby facilitating the Court's reference to papers earlier filed in relation to the particular protected estate).

(i) All applications to the Court for remuneration should, ordinarily, be served on the NSW Trustee so as to facilitate the NSW Trustee's performance of its role as monitor of all privately managed protected estates, and its associated role as a public authority upon which the Court can call for assistance if need be.

(j) An application for remuneration made to the Court by a manager should, ordinarily, be served by the applicant on at least one person (such as a spouse, other close member of family or carer of the person whose estate is under management) who might reasonably be regarded as having a genuine interest in being heard by the Court on a consideration of the application, and on such (if any) other persons who might be identified by the Court or the NSW Trustee as falling within that category.

(k) It is not necessary, in every case, on an application by a manager for remuneration that the NSW Trustee, or some other person, be formally joined as a respondent to the application. The Court may, however, direct that notice of the application be given to identified parties, or published, before proceeding to a determination.

(l) Any order made by the Court for remuneration of a manager out of a protected estate under its management is predicated upon: (i) the manager duly performing its obligations as a manager; (ii) the manager remaining liable to account for an estate as and when called upon to do so; and (iii) subject to the terms of any order of the Court, the remuneration being quantified in an amount that is no more than a just and reasonable allowance for the manager's provision of services in that capacity.

(m) The Court will not, ordinarily, appoint a private manager for reward, not being a licensed trustee company, without first receiving a report from the NSW Trustee as to: (i) whether there is known to the NSW Trustee any (and, if so, what) fact or circumstance which may reasonably ground an objection to appointment of the candidate as manager of the protected estate in question; (ii) whether any (and, if so, what) suitable arrangements have been made, or are proposed to be made, for the provision by the prospective manager of security for protection of the particular protected estate, and generally, against defaults on the part of the prospective manager; and (iii) what, if any, terms should be imposed on a manager for the provision, and passing, of accounts by the proposed manager, if appointed.

(n) Accordingly, where an application is made to the Court for the appointment of a non-trustee company, private manager for reward, the Court may, in the ordinary course, determine to decline, or defer dealing with, the application and proceed, instead, to appoint the NSW Trustee as the manager, or as a receiver, of the protected estate, reserving to the NSW Trustee and all interested parties liberty to apply for appointment of the proposed, private manager if and when a report from the NSW Trustee on the availability of security is to hand.

(o) Save in exceptional cases, the determination of proceedings for the appointment of a manager will not be delayed for the purpose of engagement by the Court in a complex, or detailed, examination of whether a prospective appointee is "suitable" for appointment as a manager.

(p) So far as may be practicable, but at all times reserving a right and duty to make decisions in the interests, and for the benefit, of the person in need of protection, the Court will endeavour to give substantial weight in decision making about the identity of a manager (and the terms upon which remuneration may be allowed) to views that might be expressed by that person and any family, friends and carers well placed to express an informed view about his or her welfare.

THE PARTICULAR CASE

The First Plaintiff's Appointment as Manager of the Defendant's Estate

291 The defendant was born in June 1983. He suffered brain damage in August 1983 following a cardiac arrest.

292 In 2008 (by his father acting as his tutor) he commenced proceedings in the Common Law Division of this Court (numbered 20193 of 2008) seeking an award of damages, for negligence, against a hospital in which he had been treated. He subsequently joined the doctor who treated him.

293 On 30 July 2010 a judge approved a settlement of those proceedings, pursuant to s 76 of the Civil Procedure Act 2005 NSW, on terms that awarded him (the defendant in the current proceedings) damages of $283,750 against the hospital and $5,391,250 against the doctor, together with an award of costs against those parties jointly in the sum of $300,000.

294 The defendant's father made an application to the Court (in proceedings numbered 44/2010) for management orders against his son, in the Protective List of the Equity Division, by a summons filed on 15 October 2010. An amended summons was filed on 27 April 2011, but nothing presently turns on the nature of the amendment.

295 In both forms of originating process, the defendant's father sought an order that the defendant be declared to be a person incapable of managing his affairs; an order that his estate be subject to management; an order that Ability One Financial Management Pty Limited (the present first plaintiff) be appointed, without security, as manager of the defendant's estate; and an order that funds then held in court on behalf of the defendant in connection with the Common Law proceedings, be paid out to the first plaintiff as manager of the protected estate.

296 The evidence filed in support of the application for management orders included affidavits sworn or affirmed by the defendant's father; medical practitioners; a solicitor who had acted for the present defendant and his father in the Common Law proceedings and then, in formal terms, acted for the father against the son on the application for management orders; a formal consent to act as manager signed by Mr White and a co-director of the present first plaintiff; affidavits by both directors deposing to the nature of the business conducted by each of the present plaintiffs and their relationship; and an affidavit by a financial planner engaged by the present second plaintiff.

297 That evidence included a disclosure to the Court that the first plaintiff proposed to charge an "establishment fee" and an "ongoing fee" if appointed to management of the defendant's estate. It also included an express recognition that any such fees "must be approved by the NSW Trustee and Guardian before implementation".

298 In the ordinary course, the proceedings were referred by a registrar of the court to the then Protective List Judge in chambers.

299 On 24 November 2010 that judge, by his associate, wrote to the solicitors for the defendant's father in terms to the following effect:

"The documents have been reviewed by [the Protective List Judge, who] is satisfied that a financial manager should be appointed for [the defendant. His Honour] requires further information, which is to be provided by affidavit on the following issues:

1. Particulars of the qualifications and experience of each of the directors of Ability One Financial Management Pty Limited and Ability One Pty Limited [noting that affidavits thus far filed were regarded as insufficient]?

2. Why is it necessary to appoint Ability One Financial Management Pty Limited as manager of [the defendant's] estate while Ability One Pty Limited is, apparently, actually to manage the estate?

3. Are both companies to charge a fee and, if so, how are they calculated?

4. What relationship has Charter Financial Planning Pty Limited [a company the activities of which were later described in the Judgment of White J in GDR v EKR [2012] NSWSC 1543] to any of the other corporate identities, why are fees payable to it under the Financial Plan prepared by [the financial planner who had provided an affidavit in support of the summons] and why has [that financial planner] prepared his plan as authorised representative of Charter Financial Planning?

5. What part will Charter Financial Planning play in management of [the defendant's] estate?

6. What precisely are the circumstances justifying the payments described [in a specified part of the Financial Plan] as 'Capital/One Off Expenses' other than repayment of legal fees] and how are they said to be for the benefit of [the defendant]?

7. The total fees payable to Charter Financial Planning, Ability One Pty Limited and Ability One Financial Management Pty Limited should be presented in a table which compares them to the fees which would be charged by NSW Trustee and Guardian and another major financial manager such as Perpetual Trustee.

8. The apportionment of 70% of funds invested to 'non-defensive' investments seems high in current market conditions, particularly when the Financial Plan does not specify what proportion of the 'balance' risk investments will be invested in 'growth' and 'high growth' categories.

9. His Honour requires comment on the prudence of the Financial Plan from the NSW Trustee and Guardian. ..."

300 These interrogatories led to the filing of three further affidavits sworn by Mr White as the Chief Executive Officer of the plaintiffs: respectively sworn on 1 February, 11 February and 21 April 2011.

301 Those affidavits deposed to an exchange of correspondence between Mr White and the office of the NSW Trustee, in which Mr White addressed a letter to the following effect to the NSW Trustee's "Manager, Client Private Management":

"Ability One Financial Management is seeking to be appointed as Financial Manager for [the defendant].

The matter came before [the Protective List Judge ...].

Before appointing Ability One Financial Management Pty Limited, [the judge] requires the NSW Trustee and Guardian to consider and approve the Statement of Advice [of Ability One's financial planner].

Therefore we enclose the Statement of Advice now before his Honour.

May we have your consideration of the Statement of Advice and approval in due course. ..."

302 The officer of the NSW Trustee to whom this letter was addressed responded by a letter in terms to the following effect:

"... [The NSW Trustee] cannot approve the Statement of Advice for a person who is not yet a client of this organisation and it would be inappropriate for [the NSW Trustee] to give an opinion on the Investment Proposal prior to the making of the Management Order and being aware of the background and circumstances of the managed person and their estate.

If a request is received directly from the Supreme Court [the NSW Trustee] will, of course, comply with that direction.

The selection of the Investment proposal is a choice to be made by the appointed financial manager. The role of [the NSW Trustee] is not to approve the investments themselves but rather to oversight that the Manager has made a prudent decision by reference to independent advice, the circumstances and wishes of the client and their family. Therefore it would be inappropriate for [the NSW Trustee] to make specific comment regarding the specific types of investments and assumptions contained within the proposal at this time.

It is understood that this letter does not contain the approval you were seeking however please note that this letter should not be interpreted as supporting or not supporting an applicant for financial management. ..."

303 As appears from this correspondence, the plaintiffs have actively pursued (not merely consented to) the first plaintiff's appointment as a manager of protected estates, and the NSW Trustee has been reluctant to engage in a formal process of investigation of prospective managers, confining its formal role to dealing with managers after their appointment.

304 Both tendencies were evident in the current proceedings. The plaintiffs' pursuit of their business interests has been unrelenting. The NSW Trustee has continued to disclaim any formal role in vetting prospecting managers or their proposals for financial management of protected estates.

305 The plaintiffs' supplementary affidavits answered the Protective List Judge's second interrogatory (about the necessity for the involvement of both plaintiffs in management of the defendant's estate) in the following terms:

"The Directors of [the second plaintiff], following discussions with our [Financial Services Licence] licensee Charter Financial Planning Limited and their parent AXA, considered it prudent to separate all aspects of the financial planning advice provided by [the second plaintiff] from the activities undertaken by a financial manager. It was considered that a conflict of interest might arise when [the second plaintiff] was acting as financial manager and providing advice when at the same time acting as financial manager.

Therefore in November 2009 [the first plaintiff] was incorporated to act solely as a financial management company on behalf of persons who suffered a disability and received a large personal injury settlement sum.

The sole activity of [the first plaintiff] is to undertake all tasks of a Court, or Tribunal appointed, or privately created financial manager.

[The first plaintiff] has available to it all the resources and detailed experience of [the second plaintiff].

[The first plaintiff] has a very distinct role as financial manager which is separated from and different from the role of [the second plaintiff] which provides financial planning advice. The roles which the 2 companies perform are very distinct and different. [The second plaintiff] does not undertake any Financial Management tasks as these are all performed by [the first plaintiff]."

306 The Judge's third interrogatory (about whether the plaintiffs both proposed to charge a fee, and if so, how such fees were to be calculated) was answered in the affirmative by Mr White. He explained that "[each] company charges a fee commensurate with the services to be provided by each company", and he disclosed that the fees to be charged to the defendant's estate were as follows:

(a) One off 'Establishment fees' totalling $31,900, comprising:

(i) the second plaintiff's establishment fee of $13,750; and

(ii) the first plaintiff's establishment fee of $18,150; and

(b) ongoing (annual) fees totalling $41,800, comprising:

(i) the second plaintiff's 'ongoing advice fee' of $20,350; and

(ii) the first plaintiff's 'ongoing estate management fee' of $21,450.

307 In summary, the plaintiffs disclosed that their combined fees, in the first year of management of the defendant's estate, would total $73,700, representing establishment fees of $31,900 and an annual fee of $41,800.

308 Mr White deposed that, for every subsequent year in which the defendant's estate might be managed by the first plaintiff, the fee payable to the plaintiffs would be capped at a maximum of $41,800 even if the capital sum under management were to increase. He recorded, also, that the plaintiffs review their fees annually and, if the capital sum under management were to decrease as a result of capital expenditure, then it could be expected that the plaintiffs' fees would reduce "on review".

309 It is not necessary to set out further detail of the evidence offered by the plaintiffs as to their fees, and comparisons of their fees with those of the NSW Trustee and an identified licensed trustee company. Nor is it necessary to canvass responses to each of the List Judge's nine interrogatories.

310 Enough has been set out to demonstrate that the fact, and quantum, of the plaintiffs' prospective fees were disclosed to the Court in response to interrogatories administered by the Protective List Judge in the interests of the defendant.

311 It is, however, important to notice that the plaintiffs' supplementary affidavits disclosed to the Court that, although the first plaintiff had not previously been appointed to act as a financial manager by the Court, it had been appointed to such a role by the Guardianship Tribunal on 10 prior occasions.

312 One of those appointments, as it happens, was of the second plaintiff rather than the first plaintiff. One of the other proceedings awaiting determination of these proceedings involves an application that the first plaintiff be substituted for the second as manager of the affected protected estate.

313 Consequent upon the prospective retirement of the Protective List Judge, the proceedings were ultimately determined, not by him, but by another judge.

314 That judge, in his turn, critically reviewed the Court's file, including the supplementary affidavits. He may be taken to have directed his mind to four topics presently material: first, the first plaintiff was not (as it still is not) a licensed trustee company; secondly, the fact, and quantum, of fees proposed to be charged to the defendant's estate by the plaintiffs; thirdly, the need for the first plaintiff to provide security for the due performance of the functions of a protected estate manager; and, fourthly, the prior experience of the first plaintiff as a protected estate manager.

315 On 6 May 2011 the Court made orders that included orders to the following effect:

(a) A declaration that the defendant is a person incapable of managing his affairs.

(b) An order that the estate of the defendant be subject to management under the NSW Trustee and Guardian Act.

(c) An order that the first plaintiff be appointed, with security, as manager of the estate of the defendant, to act in relation thereto under the order and direction of the NSW Trustee.

(d) An order that the first plaintiff was not to do anything in reliance on that appointment until the NSW Trustee had authorised it to assume management of the defendant's estate.

(e) A direction that the security to be provided by the first plaintiff be to the satisfaction of the NSW Trustee.

(f) A direction that funds in court, in relation to the defendant's Common Law proceedings, be paid out to the first plaintiff upon its being authorised by the NSW Trustee to assume management of the defendant's estate.

316 In conformity with the Court's practice in administration of the Protective List, no formal reasons for judgment were published in support, or explanation, of these orders.

The Guardianship Tribunal Background to the First Plaintiff's Appointment

317 In the course, and for the purpose, of the current and related proceedings, the NSW Trustee and the plaintiffs have provided information about the plaintiffs' appointments to the office of a financial manager by the Guardianship Tribunal between 8 March 2010 (the first of its appointments) and 17 June 2013.

318 I have, by that means, been able to read the confidential "Reasons for Decision" published by the Guardianship Tribunal to parties affected by the Tribunal's decisions to appoint the first plaintiff as a financial manager.

319 Although a court exercising protective jurisdiction may not be bound by formal rules of evidence (Roberts v Balancio (1987) 8 NSWLR 436), s 91 of the Evidence Act 1995 NSW is a salutary reminder that caution should be exercised in making findings of fact based upon reasons for judgment. Section 91(1) is to the effect that "[evidence] of the decision, or of a finding of fact, in an Australian or overseas proceeding is not admissible to prove the existence of a fact that was in issue in that proceeding". Experience also informs a need for similar caution, as does a regard for principles governing procedural fairness.

320 Although no objection has been taken by any participant in these proceedings to the Tribunal's Reasons for Decision being available for use in the current proceedings generally, prudence dictates that I remain conscious of the limitations inherent in treating such material as primary evidence of particular facts.

321 I am, however, both entitled to notice and comfortable in noticing, the following common features upon a review of the Tribunal's Reasons: First, even though the Tribunal did not have (as NCAT does not have) jurisdiction to authorise a manager to receive remuneration, the fact that the plaintiffs intended to charge fees for their services was openly and routinely discussed in the Tribunal proceedings before the first plaintiff's appointment to the office of manager. Secondly, Mr White, on behalf of the plaintiffs, gave evidence in support of the first plaintiff's prospective appointment in each case. Thirdly, the Tribunal, the plaintiffs, the NSW Trustee and all other participants in the Tribunal's decision-making process appear to have proceeded upon the assumption that, independently of a grant of authority by the Court, the functions of the NSW Trustee include the authorisation of the fees payable to a private manager. Fourthly, all participants also (correctly) assumed that any fees payable to the plaintiffs must be subject to approval by the NSW Trustee. Fifthly, a disproportionate amount of time appears to have been spent by the Tribunal, in each case, in wrestling with the question whether the first plaintiff was a person suitable for appointment as a protected estate manager.

322 The observations made by the Tribunal about the plaintiffs in general, and Mr White in particular, must, in fairness, be taken as being, on the whole, positive. However, they are not uniformly so. There is some criticism of Mr White as a witness and of the operations of the plaintiffs. There are, within the Tribunal's reasons, foundations upon which Mr White could be criticised. However, any such criticism must, in fairness, be balanced against the fact that the Tribunal acted favourably to the interests of the plaintiffs by appointing the first plaintiff, more than a few times, as a financial manager.

The NSW Trustee's Practical Regulation of Remuneration Cases

323 The assumption of all concerned in proceedings leading to the appointment of the first plaintiff as a protected estate manager (that any fees payable to the plaintiffs would be subject to the NSW Trustee's approval) appears, in practice, to have been well founded. Evidence before me includes evidence that the NSW Trustee has, on more than one occasion, queried fees charged, or proposed to be charged, by the plaintiffs and, on at least one occasion, expressly disallowed such fees.

324 That same evidence shows that, from time to time, and particularly in connection with its review of the first plaintiff's accounts, the NSW Trustee has expressly granted "authority" for the first plaintiff to remunerate itself from protected estates.

325 A sample of a record evidencing that activity is a file note of the NSW Trustee dated 26 September 2011 on the subject of "management and financial fees". It records, after a brief review of factual material, a "decision" by the NSW Trustee expressed in terms to the following effect:

"(1) It is authorised for [the first plaintiff] to remunerate itself for financial management of the [protected person's] estate at the rate of an initial fee of $... and an ongoing fee of $... annually.

(2) The Manager is to review the level of financial management fee annually to ensure that it is commensurate with the level of capital in the estate.

(3) The Manager is not authorised to pay the financial planning fees without further reference to this office to establish the level of service to [the protected person] and the selection of financial planner is in the best interests of [the protected person]."

326 Procedures of the NSW Trustee have been exposed to view sufficiently to demonstrate that, as a practical matter, the NSW Trustee has experience, and capability, in making decisions about whether (and, if so, in what amounts) private managers should be permitted to remunerate themselves from estates under their management.

327 The possibility that it has, from time to time, strayed beyond the limitation in s 115(2) of the NSW Trustee and Guardianship Act cannot be excluded. The file note decision of 26 September 2011 does not sit comfortably with the terms of the section as the NSW Trustee's only legislative warrant for authorising remuneration.

CONCLUSION

328 Viewed in the context of the plaintiff's claims for relief in these proceedings, I am bound to conclude that:

(a) had the plaintiffs applied for an order for remuneration at the time of the first plaintiff's appointment as manager of the defendant's estate (Brown v Smith (1878) 10 Ch D 377 at 386), the likelihood is that some form of order for remuneration would have been made.

(b) the precise form of such an order for remuneration cannot be known with any certainty, but it may well have taken the form of an order that the plaintiffs be at liberty to charge fees as disclosed, subject to the approval, from time to time, of the NSW Trustee.

(c) insofar as the plaintiffs have been remunerated from the protected estate of the defendant, with the approval of the NSW Trustee, each company has (to paraphrase the Trustee Act 1925, NSW, s 85(2)) "acted honestly and reasonably".

(d) in large measure, that characterisation of the plaintiff's conduct is based on their consistent course of conduct in co-operating with, and subjecting their decision-making processes to the supervision of, the NSW Trustee.

329 I propose, accordingly, to grant to the plaintiffs relief along the lines sought in their amended summons.

330 However, having regard to the general principles identified in this judgment, and the legal and administrative framework within which they are to be applied, I propose to make orders designed to recognise the primary role played by the NSW Trustee in administrative decision making about the quantum of the plaintiffs' fees.

331 If private managers for reward, other than licensed trustee companies, are to be appointed to management of protected estates then, for the time being, it is important that applications for their appointment be brought before the Court (as they presently must be, if remuneration is to be duly allowed from a protected estate), with a report on the proposed appointment prepared by the NSW Trustee.

332 It is equally important that the administrative expertise of the office of the NSW Trustee be brought to bear in decision-making about quantification of any remuneration to be appropriated from a protected estate.

ORDERS

333 Subject to allowing, to all participants in these proceedings, an opportunity to be heard as to the form of orders to be made, I propose (in addition to noting undertakings proffered to the Court by the plaintiffs) to make orders to the following effect:

(1) ORDER, subject to:

(i) further order;

(ii) due performance by it of its obligations as a manager of protected estates; and

(iii) its ongoing liability to account for estate property,

that the first plaintiff be allowed out of the estate of the defendant such remuneration for its provision of services as manager of the estate of the defendant (including any fees of the second plaintiff approved by the NSW Trustee from time to time) as may be just and reasonable, not exceeding the amounts or rates disclosed to the Court upon its appointment as manager or such other amounts or rates as may, from time to time, be fixed by the NSW Trustee.

(2) ORDER that the first plaintiff, as manager of the estate of the defendant, provide to the NSW Trustee, or as the NSW Trustee may in writing direct, an accounting for its management of the estate of the defendant as and when directed by the NSW Trustee so to do.

(3) ORDER, subject to order 4, that the plaintiffs jointly and severally, be relieved of any liability for breach of trust that they might otherwise have had for taking, receiving or retaining remuneration from the estate of the defendant at any time before the commencement of these proceedings (on 15 July 2013).

(4) ORDER that the relief granted by order 3 is conditional upon the first plaintiff having obtained, and acted in accordance with, an order, direction or authority of the NSW Trustee in the taking, receiving or retaining such remuneration.

(5) ORDER that the plaintiffs pay the defendant's costs of and incidental to the proceedings.

(6) RESERVE for further consideration, in these or other proceedings constituted for the purpose, whether any (and, if so, what) orders or directions should be given (pursuant to the NSW Trustee and Guardian Act, s 64, or otherwise) in relation to the practice to be followed in the making of an application, or in the approval of an allowance, for remuneration of a manager of a protected estate.

(7) RESERVE to the plaintiffs, the defendant and the NSW Trustee liberty to apply generally.

334 The only order I presently make is that the plaintiffs, on notice to all participants in the proceedings, bring in short minutes of orders to give effect to these Reasons. I will, on that occasion or as may otherwise be convenient, give consideration to questions reserved by draft Order 6.

335 I thank each of the participants in the proceedings for their assistance, particularly the Financial Services Council and the Council of the Law Society of NSW.

ADDENDUM (2 April 2014)

336 Lindsay J heard submissions as to the form of final orders on 31 March 2014.

337 On that occasion, the NSW Trustee invited his Honour to make an order (under s 64 of the NSW Trustee and Guardian Act) of the type contemplated in paragraph [276] of the Reasons for Judgment.

338 His Honour referred both questions (final orders and a s 64 order) to chambers for further consideration.

339 On 2 April 2014, having allowed the NSW Trustee an opportunity to be heard as to the content and form of the proposed s 64 orders, and having been advised by the NSW Trustee that it did not seek to be heard further, his Honour made the orders published in the judgment reported as Re Managed Estates Remuneration Orders [2014] NSWSC 383.

340 On the same date, his Honour then made the following orders and notations in disposition of these (Ability One) proceedings:

(1) NOTE the orders and notations made in the judgment reported as Re Managed Estates Remuneration Orders [2014] NSWSC 383 (2 April 2014).

(2) ORDER, subject to:

(a) further order;

(b) due performance by it of its obligations as a manager of protected estates; and

(c) its ongoing liability to account for estate property,

that the first plaintiff be allowed out of the estate of the defendant such, if any, remuneration for its provision of services as manager of the estate of the defendant (including any fees of the second plaintiff approved by the NSW Trustee from time to time) as may be just and reasonable, not exceeding the amounts or rates disclosed to the Court upon its appointment as manager or such other amounts or rates as may, from time to time, be fixed by the NSW Trustee.

(3) ORDER that the first plaintiff, as manager of the estate of the defendant, provide to the NSW Trustee, or as the NSW Trustee may in writing direct, an accounting for its management of the estate of the defendant as and when directed by the NSW Trustee so to do.

(4) ORDER, subject to order 5, that the plaintiffs, jointly and severally, be relieved of any liability for breach of trust that they might otherwise have had for taking, receiving or retaining remuneration from the estate of the defendant at any time before the commencement of these proceedings (on 15 July 2013).

(5) ORDER that the relief granted by order 4 is conditional upon the first plaintiff having obtained, and acted in accordance with, an order, direction or authority of the NSW Trustee in the taking, receiving or retaining such remuneration.

(6) ORDER that the plaintiffs pay the defendant's costs of and incidental to the proceedings.

(7) NOTE the undertaking to the Court of the second plaintiff that commission paid to it since 6 May 2011 calculated in the sum of $6,903.00 is to be paid to the defendant and form part of his managed estate.

(8) NOTE the undertaking to the Court of the first and second plaintiffs that any commission (calculated in accordance with the formula set out in paragraph 20 of the Affidavit of Grant Alan White sworn 12 July 2013) paid to them or any advisor of the defendant as the result of an investment in any financial product forming part of the defendant's estate is to be paid to the defendant to form part of his estate.

(9) NOTE the undertaking of the first plaintiff and second plaintiff, as set out in paragraph 17 of the affidavit of Grant Alan White sworn 12 July 2013, not to charge the protected person remuneration greater than the sum of $723,717.00 without further application to the Court, if such an application becomes necessary.

(10) RESERVE to the plaintiffs, the defendant and the NSW Trustee liberty to apply generally

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Amendments

09 May 2014 - A record, and explanation, of final orders.
Amended paragraphs: Addendum (2 April 2014)

Decision last updated: 09 May 2014