SC v Ability One Financial Management Pty Ltd [2024] NSWSC 637
Private funds management for protected persons is an important role that demands diligence, ethical integrity, and a deep commitment to the well-being of vulnerable individuals.
One of the significant challenges in managing funds for protected persons is balancing autonomy with the need for protection. Financial managers must strive to empower the protected person to make decisions wherever possible, while also safeguarding their financial interests.
The primary duty of a financial manager is to act in the best interests of the protected person.
Case Overview
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SC filed an application to remove Ability One Financial Management Pty Ltd (“Ability One”) as the financial manager of JC’s estate, proposing Northern Plateau Wealth Management Pty Ltd (“Northern Plateau”) as a replacement financial manager.
SC’s primary argument was a purported breakdown in the relationship between Ability One and JC, allegedly impacting JC’s welfare and interests.
Key Issues
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Alleged Relationship Breakdown
SC claimed a breakdown in the relationship between Ability One and JC. The court found the actual breakdown to be between SC and Ability One, not between JC and the company.
JC, who lacks mental capacity, was found to be heavily influenced by SC, thus undermining the credibility of JC’s purported complaints about Ability One.
Allegations Regarding Conduct of Ability One
SC alleged mismanagement of JC’s estate, excessive fees, and a refusal to meet JC personally. These allegations were rejected by the court.
Ability One, under Mr White’s management, was found to have acted diligently and reasonably.
Mistakes made by Ability One were acknowledged but were not deemed severe enough to constitute mismanagement.
Financial Management and Fees
SC’s claims of overcharging were dismissed. Ability One’s fees were found to be just and reasonable. Indeed, the Court found that Ability One’s voluntary moderation of fees in response to SC’s complaints demonstrated professionalism.
Proposed Replacement with Northern Plateau
SC’s preference for Northern Plateau to be appointed as the manager was based on its proximity to JC’s current residence.
The NSW Trustee had no experience with Northern Plateau as a financial manager.
The court found that key management tasks related to JC’s estate were centred in New South Wales, making Northern Plateau less practical compared to Ability One, which operates in both Queensland and New South Wales.
The Decision
The court concluded that Ability One is capable of professionally managing JC’s affairs despite SC’s objections.
SC was found to lack independence and insight, with his behaviour often motivated by personal financial advantage rather than JC’s best interests. Examples of SC’s self-interested conduct included not disclosing reduced rent arrangements for JC’s property and resisting the sale of JC’s car, which SC routinely used.
SC’s past actions and resistance to Ability One’s management efforts suggested an underlying expectation of benefiting from JC’s estate.
Read the full decision here: SC v Ability One Financial Management Pty Ltd [2024] NSWSC 637
Conclusion
The court dismissed the summons seeking a change of the manager of the protected estate and emphasised the necessity of cooperation from SC for the best interests of JC.
Ability One was encouraged by the Court to consult with JC’s guardian, SR, and FC, despite SC’s resistance.
The court highlighted that harmonious co-operation among interested parties is required for JC’s welfare.
Written by Karina Goodall
Karina Goodall is a Practice Group Leader and Director at Stacks Goudkamp specialising in protective division applications, financial management applications for protected persons, motor vehicle accident claims, and superannuation and TPD claims.
