Narayan bhnf Wignall v Morphett [2010] ACTSC 9 (3 February 2010)

Last Updated: 22 February 2010

JUDITH KATHRYN NARAYAN BHNF JANE WIGNALL V MICHAEL JOHN MORPHETT

[2010] ACTSC 9 (3 FEBRUARY 2010)

Court Procedures Rules 2006 (ACT) r 1015

Public Trustee Act 1985 (ACT) s25

Trustee Companies Act 1947 (ACT)

Singh by her next friend Singh v Calvary Hospital ACT Incorporated and Anor [No 2], [2009] ACTSC 57

Guardianship and Administration Tribunal v Perpetual Trustees Queensland Limited [2008] 2 Qd R 323

EX TEMPORE JUDGMENT

No. SC 236 of 2001

Judge: Refshauge J

Supreme Court of the ACT

Date: 3 February 2010

IN THE SUPREME COURT OF THE )

) No. SC 236 of 2001

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: JUDITH KATHRYN NARAYAN BHNF JANE WIGNALL

Plaintiff

AND: MICHAEL JOHN MORPHETT

Defendant

ORDER

Judge: Refshauge J

Date: 3 February 2010

Place: Canberra

THE COURT ORDERS THAT:

1. The balance of the Plaintiff’s judgment sum presently paid into Court be paid to Perpetual Trustee Company (Canberra) Limited as trustee to hold such funds on trust for the Plaintiff as trustee and to invest and manage such funds on her behalf pursuant to the terms of the Deed of Declaration of Trust annexed to the Affidavit of Ivan Douglas Holyman sworn on 21 August 2009 as amended in order 4.

2. The trust be established after signing the Deed of Declaration of trust, or the payment of the judgment sum by the Court to Perpetual Trustee Company (Canberra) Limited.

3. The Deed of Declaration of Trust annexed to the Affidavit of Ivan Douglas Holyman sworn on 21 August 2009, with the amendments set out below, be approved:

(i) The words, “Other than the principal beneficiary” be inserted in the definition of ‘ineligible person’ in sub-clause 1.1 after the words, “any person”

(ii) The words, “Including but not limited to the exercise of any powers under clause 6 of this deed”, be inserted at the end of paragraph 7.4(a).

(iii) The words and numerals for sub-clauses 8.8, 8.10 and 8.11 be omitted and replaced by the words, figures, and numerals, “Sub-clause 8.8” in paragraph 8.6(a).

(iv) A new sub-clause 9.3 be added as follows, “So long as a person other than the trustee is appointed as administrator of the principal beneficiary’s financial affairs, or equivalent under legislation relating to the guardianship of persons under a legal disability, a trustee shall provide accounts to that person at least annually”.

(v) The addition of a new subparagraph 11.3(d) as follows, “(d) to paragraph 8.6(a) without the prior consent of the Supreme Court of the Australian Capital Territory.”

4. The costs of this application be the plaintiff’s costs in the proceedings, unless the defendant seeks to be heard within seven days after the plaintiff serves on the defendant a sealed copy of this order.

1. On Saturday 29 November 1997, the plaintiff, Judith Kathryn Narayan was seriously injured in a motor vehicle accident. Subsequently, proceedings were commenced in this court. The matter was resolved and judgment was entered following a settlement, which was approved by me on 19 May 2009. The settlement provided for judgment to be entered for the plaintiff in the sum of $5 500 000 in costs. A judgment that I approved on that day.

2. Rule 1015 of the Court Procedures Rules 2006 (ACT) requires that money recovered by a party with a legal disability, as was Ms Narayan, must be paid into Court. This is also required by the Public Trustee Act 1985 (ACT), (Public Trustee Act) which also deals with the disposition of the money. Section 25 of the Public Trustee Act provides:

25. Payment of money etc to public trustee on behalf of person under disability

(1) Where, in the proceedings, it is adjudged or ordered, or it is agreed, that money, not being money to which subsection (3) applies, be paid to a person under disability (whether or not that person is a party to a cause or matter), the money—

(a) shall be paid into court; and

(b) shall, unless the court otherwise directs, be paid out to the public trustee.

(2) Where money, not being money to which subsection (3) applies—

(a) is paid into court—

(i) before the commencement of this Act; or

(ii) after the commencement of this Act under a judgment, order or agreement given, entered or made before the commencement of this Act; and

(b) the money is being held in court on behalf of a person under disability; the court may, by order, direct that the money be paid out to the public trustee

(3) Where—

(a) money payable as compensation under the Workers Compensation Act 1951 is paid into court, whether before or after the commencement of this Act; and

(b) the money is being held in court on behalf of a person under disability; the court may, by order, direct that the money be paid out to the public trustee.

(4) Where, as a result of a direction given under subsection (1), money in court is not paid out to the public trustee, the court may, by order, direct that the money be paid out to the public trustee and may make such other order as it thinks fit.

(5) Where a court adjudges or orders that property (whether real or personal) be delivered up or transferred to a person under disability (whether or not that person is a party to a cause or matter), the court—

(a) may order that the property be delivered up or transferred to the public trustee on behalf of that person; and

(b) may give such directions for the service of the order on the public trustee as it thinks fit.

(6) Where an order under subsection (5) is served on the public trustee, the public trustee shall accept delivery or transfer of the property to which the order relates and the acceptance of the property shall be a sufficient discharge to the person delivering or transferring the property.

(7) Nothing in this section applies in relation to—

(a) money ordered or agreed to be paid in proceedings in the Magistrates Court, being money due to a person who has not attained full age as salary, wages or otherwise in respect of the person’s employment; or

(b) money payable as compensation under the Workers Compensation Act 1951 by way of a weekly payment.

3. In this case, the plaintiff’s litigation guardian wished that the money not be managed by the public trustee, but be paid into a trust fund to be managed by Perpetual Trustee Company (Canberra) Limited, a trustee company regulated by the Trustee Companies Act 1947 (ACT). This is permitted under the Public Trustee Act, which although makes payment to the Public Trustee the default and apparently preferred recipient of the funds for protection and management for the benefit of the person under disability, also permits the money to be dealt with otherwise.

4. I dealt with those matters in the decision of Singh by her next friend Singh v Calvary Hospital ACT Incorporated and Anor [No 2], [2009] ACTSC 57. In that case, I indicated as follows (at [33] – [35]:

There is no doubt that the court may instead appoint a trustee company (Smith v Reynolds (No 2), Morris v Zanki).

When considering whether to appoint such a company, one of the important issues about which the court needs to be informed is the financial and structural security of the company. As noted in Morris v Zanki at 293, satisfactory evidence is required. Nevertheless, the court can take notice of the fact that such companies are regulated. Safeguards in such legislation is relevant and should be noted by the court (Jones v Moylan at 496) The regulation may include the regulation of fees and charges (Willett v Futcher at 637-9).

5. In this case, the material before me included helpful affidavits from Ivan Douglas Holyman, a director of Perpetual Trustee Company Canberra Limited, and Stanley Edward Rickert, a senior financial consultant in the Private Wealth, Private Client division of Perpetual Trustee Company Limited. In Mr Rickert’s affidavit, he set out in detail the circumstances of the company, its organisation, the investment philosophy proposed to be followed by the company and the arrangements for the investment of the money.

6. To some extent, the appointment of Perpetual Trustee Company Canberra Limited is supported by a decision of the Supreme Court of Queensland, in Guardianship and Administration Tribunal v Perpetual Trustees Queensland Limited [2008] 2 Qd R 323. This is relevant for two reasons. First, because Ms Narayan is currently a resident in Queensland, and second, there is an order in existence under the Guardianship and Administration Act 2000 (QLD) appointing the Public Trustee of Queensland as the administrator of her estate under that Act.

7. That decision was in relation to the administration of the affairs, by Perpetual Trustees Queensland Limited, of a person in a similar situation to the plaintiff in this proceeding. The fact that, in that decision, the Court had no hesitation in finding that it was acceptable for Perpetual Trustees to be the administrator of the estate, although there were some issues about fees and other matters that were dealt with in that decision, reinforces my view that it is appropriate to make the orders sought.

8. I have seen a copy of the trust deed which is proposed to be made to regulate the administration of the estate. Naturally, the concern of the Court is to ensure that over a long period of time, which this estate may need to be administered, there are protections to ensure that the trust funds are able to discharge the intent of the judgment, that is, to look after Ms Narayan’s affairs for that period of time.

9. I have looked carefully at the trust deed, and I have been much assisted by the submissions by Mr Mossop, who appeared for the applicant in the proceedings, and by the evidence of Mr Rickerts, who in addition to his affidavit gave oral evidence. I am satisfied that, with certain amendments, the trust deed will provide the appropriate protection for Ms Narayan and the trust fund to discharge the intention of the judgment.

10. These amendments deal with matters ensuring that the trustee company being the regulated entity, retains control of the trust, that changes cannot be made that would deprive Ms Narayan of the benefit of the trust, restricting amendment and enhancing accountability.

11. Accordingly, I am satisfied that I should make orders that will provide for Perpetual Trustee Company Canberra Limited to be the trustee.

I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Refshauge.

Associate:

Date: 15 February 2010

Counsel for the applicant: Mr D Mossop

Solicitor for the applicant: Maliganis Edwards Johnson

Date of hearing: 3 February 2010

Date of judgment: 3 February 2010