Financial managers of protected estates can still obtain remuneration and costs

The Supreme Court of NSW delivered a significant decision in April 2015 regarding the ability of financial managers of protected estates to obtain remuneration out of the estate, in addition to the costs involved in applying for the remuneration.

The case (Application of Martin Fowler [2015] NSWSC 466) appears to be the first to follow the decision in Ability One Financial Management Pty Ltd v. JB by his tutor [2014] NSWSC 245 and the subsequent guidelines of the NSW Trustee and Guardian that require private managers to apply to the Supreme Court before they are entitled to remuneration.

What is a protected estate?

Financial managers are typically appointed by the Guardianship Division of the New South Wales Civil and Administrative Tribunal for people who are unable to manage their financial matters, often because of a cognitive disability. Once such a financial management order is in place, that person is considered to be a “protected person” and their estate is known as a “protected estate”. The office of financial manager is fiduciary in character and requires that there is no conflict of interest between the financial manager and the protected person, meaning the work should be performed without remuneration. Remuneration can, however, be obtained in some circumstances, as this recent case demonstrates.

Circumstances that allow remuneration

Any application for remuneration and costs by a financial manager requires a report from the NSW Trustee and Guardian regarding the following:

1. the suitability of a private manager
2. the need for security (such as the payment of money into court)
3. the terms for the provision of accounts by the financial manager to the NSW Trustee.

While there are a number of matters that need to be canvassed on such an application, the Court stipulated that adequate insurance arrangements need to be in place by the financial manager seeking reward so that work done for the protected person is adequately covered. Other matters to consider on such applications relate to the reasonableness of the proposed rates (to be considered by the Trustee on the passing of the accounts), the form of the undertakings to be given and how to approach the question of legal costs incurred on such an application.

How Streeterlaw can help you

If you are a private manager of a protected estate and require advice about making a remuneration application because you have not agreed to do that work free of charge and need assistance on how to go about bringing an application, you should contact the Streeterlaw Commercial Dispute Resolution team for more information. Streeterlaw has broad experience in relation to matters in the Supreme Court’s Equity and Protective List and can assist with the formulation of the orders, the preparation of the affidavit evidence and drafting of supporting submissions.

Contact Streeterlaw’s Commercial Dispute Resolution Team by phone on 8197 0105 or by emailing advice@streeterlaw.com.au.

Written by Mark Streeter

The Director of Streeterlaw, Mark has been practicing Law since 1994. He has attained his Masters of Law in 1999 and in 2006 was awarded his Specialist Accreditation in Commercial Litigation. Mark is a member of ARITA, a graduate of the AICD and a member of AICM. A member of STEP, Mark enjoys working in the area of Wills and Estates. In 2020 Mark is the Chair of STEP NSW.

Call us on 02 8197 0105 to book an appointment with Mark Streeter!