Baker v Biddle

Baker v Biddle - [2014] NSWCATGD 49 - NSWCATGD 2014 case summary — Zoe

[5]

Background

Mrs KWD was at the time of the hearing 89 years of age. She is a widow and lives in a Housing NSW house at Southwest Sydney, with her son Mr SXL, who is currently her carer. The Tribunal understands that Mrs KWD has three other children: Mrs MLQ who lives at West Sydney, and Mrs MMT and Mrs SBC, both of whom live in New Zealand. It is understood that Mrs KWD has a number of grandchildren, two of whom have been raised as Mrs KWD's children since birth. They are Mrs MKC and Mr NVL.
On 15 February 2011 Mrs KWD executed an instrument which purported to be an enduring power of attorney ("the 2011 Power of Attorney"), under which she appointed her granddaughter Mrs MKC as her attorney. The instrument was expressed to have immediate effect.
Shortly before 10 December 2013 Mrs MKC sent an email to Mrs KWD in which she made negative comments about Mr SXL and his influence on Mrs KWD. In that email Mrs MKC informed Mrs KWD that she was making an application to the Guardianship Tribunal concerning Mrs KWD.
On 10 December 2013 the Tribunal received from Mrs MKC an application seeking the appointment of a guardian and a financial manager for Mrs KWD.
On 10 December 2013 Mrs KWD executed an instrument which purported to be an enduring power of attorney ("the Reviewable Power of Attorney") under which she appointed her son Mr SXL as her attorney. That instrument was expressed to have effect upon acceptance by the attorney of his appointment. Mr SXL signed a form of acceptance of his appointment on 10 December 2013.
On 10 December 2013 Mrs KWD also executed an instrument which purported to be an appointment of enduring guardian ("the Appointment of Enduring Guardian") under which she appointed Mr SXL as her guardian, with the functions of making decisions about Mrs KWD's accommodation and health care, medical and dental consents and services. In the instrument Mrs KWD also made an end of life declaration of her wishes.
On 15 January 2014 Mrs KWD executed an instrument ("the Revocation Instrument") under which she declared that she revoked: "The power of attorney dated 20 December 2013…appointing [Mrs MKC]."
The Revocation Instrument was witnessed by Mr SXL. The Tribunal has not been made aware of the existence of any power of attorney executed by Mrs KWD dated 20 December 2013.
On 10 December 2013 the Guardianship Tribunal received from Mrs MKC an application seeking the appointment of a guardian and a financial manager for Mrs KWD. This Tribunal's hearing of this application commenced on 5 March 2014 but the hearing could not be completed on that day and was therefore adjourned for approximately six weeks with a direction to Mr SXL to do all things necessary to facilitate the completion and return of a medical certificate relating to Mrs KWD.
On 4 April 2014 Tribunal received two further applications from Mrs MKC. The first of these was an application for review of the Reviewable Power of Attorney. The second was an application for review of the revocation of the 2011 Power of Attorney.
The purpose of the Tribunal's hearing on 8 May 2014 was to resume the hearing of the financial management and guardianship applications and to conduct the reviews requested by Mrs MKC of the Reviewable Power of attorney and of the revocation of the 2011 Power of Attorney.

[23]

The making of the power of attorney.

The Tribunal was satisfied from the discussion with Mrs KWD as applicant and initial discussions with Mr SXL that there was a genuine dispute as to the validity of the Reviewable Power of Attorney; the central issue being whether or not Mrs KWD had the legal capacity to execute that document when she did so. For those reasons the Tribunal decided that it would review the making of the Reviewable Power of Attorney on 10 December 2013.
The Tribunal took evidence by telephone from Ms Z, a Solicitor with a law firm, who works at that firm's West Sydney office. Ms Z told the Tribunal that the circumstances surrounding the preparation and execution of the Reviewable Power of Attorney were as follows:

Instructions were received by the law firm from Mrs KWD (or possibly from Mr SXL on Mrs KWD's behalf) shortly before 10 December 2013 and by internal memorandum Ms Z was requested to see Mrs KWD accompanied by Mr SXL, to take instructions and to prepare an enduring Power of attorney. Ms Z had had no previous knowledge of or dealings with Mrs KWD or with Mr SXL.
There was a prescribed procedure for solicitors at the law firm to follow when witnessing an enduring Power of Attorney. Ms Z complied with this procedure. Having prepared the instrument she explained it in detail to Mrs KWD and Mr SXL. She recalled going through the document page by page and asking at several points whether either of them had any questions.
Ms Z asserted that she followed the Law Society's recommended practice of having her client repeat their understanding of each of the central features of the enduring power of attorney. Ms Z said that she had explained the date on which the instrument of appointment would take effect and its general effect including the wide powers of the appointee, the fact that the appointment would allow Mr SXL as appointee to do anything in relation to Mrs KWD's money and financial situation which she could do for herself and finally the meaning of an "enduring" appointment.
Ms Z then witnessed the execution of the instrument by Mrs KWD and completed the certificate under s 19 of the Powers of Attorney Act 2003, attached to it.
When asked whether at the time she had any view as to Mrs KWD's legal capacity to sign the document, Ms Z answered that she has a practice of making an immediate file note if any concerns as to capacity arise and she had no file note in relation to her attendance with Mrs KWD. Additionally, prior to the execution of the instrument, the law firm had received a copy of a medical certificate from Mrs KWD's general practitioner Dr Y which indicated that in the doctor's view she was competent to execute legal documentation.
Again when asked whether she had had any suspicions as to undue influence being applied to Mrs KWD to sign the instrument, Ms Z said that she would make a file note at the time if any such suspicions had arisen. Although she could not specifically recall the background to this particular matter, Ms Z confirmed that she had no file note of anything untoward or any suspicions relating to the execution of the enduring power of attorney.
Ms Z confirmed that her instructions had included the preparation of an appointment of enduring guardian and that she had prepared and witnessed the execution by Mrs KWD of the Appointment of Enduring Guardian at the same attendance with Mrs KWD on 10 December2013.
Ms Z confirmed that she had nothing to do with the preparation of the Revocation Instrument but believed that the West Sydney office of her firm may have handled that matter.

The Tribunal had no medical or related professional evidence before it which directly address the issue of whether Mrs KWD, on 10 December 2013, lacked the legal capacity to understand and to execute an enduring power of attorney. Neither Mrs MKC nor any other party or participant put any such evidence to the Tribunal. It is true that the Reviewable Power of Attorney appears to have been executed on the same day on which Mrs MKC wrote to Mrs KWD indicating Mrs MKC's concerns about Mr SXL's management of Mrs KWD's financial affairs and indicating that she, Mrs MKC was making an application to the Guardianship Tribunal concerning Mrs KWD. But that of itself does not establish any undue influence on Mrs KWD by Mr SXL or by any of the other person in relation to the preparation and execution of the Reviewable Power of Attorney and there was no other evidence of this, other than an implied suspicion in Mrs MKC's mind that this might have been the case. Indeed, it seems possible from what Ms Z told the Tribunal (although this point was not tested), that arrangements for the execution of a new power of attorney and appointment of enduring guardian may have been made (possibly by Mrs KWD but more likely by Mr SXL) prior to Mr SXL's receipt of Mrs MKC's email dated 10 December 2013.
The Tribunal accepted the evidence of Ms Z as reliable. Ms Z, in following the procedure laid down by her firm, appeared to have taken reasonable precautions which for the most part were in accordance with the Law Society's recommendations for ensuring that Mrs KWD had the capacity to execute the Reviewable Power of Attorney. It is unfortunate that Ms Z allowed Mr SXL to be present when the instrument was explained to and executed by Mrs KWD. As a general rule solicitors, where possible, should not carry out these important steps in the presence of the appointee. However that circumstance does not alter the Tribunal's conclusion that, on the basis of the evidence and in light of the absence of any substantial or persuasive evidence as to any lack of capacity at the relevant time by Mrs KWD, it should order that Mrs KWD had the mental capacity to make a valid enduring power of attorney when she made the Reviewable Power of Attorney on 10 December 2013.

[24]

The evidence

As the Reasons for Decision relating to the Tribunal's hearing on 5 March 2014 indicate, there was at that hearing a dispute between Mrs MKC and Mr SXL as to the propriety of Mr SXL's assumption of a principal role in the management of Mrs KWD's financial affairs. It was clear that the present hearing that that dispute continues.
As the Reasons for Decision of the previous hearing confirm, Mrs MKC (who at that time was the appointed attorney under the 2011 Power of Attorney) caused an amount, which is disputed but which appears to be either $342,074 or $390,000, to be transferred from a bank account in Mrs KWD's name at Bank A in suburban Auckland, New Zealand, to an account in Mrs MKC's own name at Bank B in suburban Sydney. At the previous hearing Mrs MKC confirmed that she regarded herself as holding that amount in trust for Mrs KWD and it appeared to the Tribunal's satisfaction that Mrs MKC had consulted her solicitor for advice about transferring that money before she did so. The evidence before the Tribunal on the previous occasion indicated that the reason for this transfer was Mrs MKC's concern that Mr SXL was misusing all was at these capable of misusing Mrs KWD's assets and money. Mrs MKC had asserted Mr SXL had obtained a gift of $20,000 to pay certain expenses he had incurred when the police in Thailand had closed down a bar which he owned and operated.
Mrs MKC asserted in her written evidence to the previous hearing that Mr SXL's: "…sole purpose now is to obtain control of [Mrs KWD's] money leaving (her) without real financial support. We are concerned that once he has access and control of [Mrs KWD's] money he will pack up and leave…To live in the house he has built in the Philippines where his wife now lives…"
At the hearing on 5 March 2014 Mr SXL denied adamantly that he has acted in any way other than in the best interests of his mother Mrs KWD and he asserted to the Tribunal on 5 March 2014 and again at this hearing that his intention was to remain in Australia and act as the carer for his mother for the foreseeable future.

[25]

Should the Tribunal review the operation and effect of the Enduring Power of Attorney and should orders under s36 of the Powers of Attorney Act be made?

Having heard this evidence and the contentions of the parties as to these matters, the Tribunal could not be satisfied that a decision as to whether or not:

to conduct a review of the operation and effect of the Enduring Power of Attorney; or
to make any orders under s 36 of the Powers of Attorney Act 2003

If a financial management order were to be made, that order could comprehensively provide for the management of Mrs KWD's affairs and such an order would have the additional advantage that it would ensure the involvement of NSW Trustee and Guardian, either as financial manager itself or as the body whose authority and direction will govern the management by the appointed private financial manager. Although the Tribunal made no present finding as to whether the involvement of NSW Trustee and Guardian in this capacity was a necessary step, that could well be an outcome of the Tribunal's consideration of the financial management application and the evidence relating to it.
If a financial management order were not made by the Tribunal, that would be an appropriate point for it to revisit this issue as to whether it should revisit the operation and effect of the Enduring Power of Attorney and whether any orders under s 36 of the Powers of Attorney act 2003 should be made.
In those circumstances the Tribunal satisfied that conducting a review of the operation and effect of the Reviewable Power of Attorney and the making of any particular orders under s 36 would be premature. Accordingly, the Tribunal decided to reserve the issues of whether it would review that instrument and whether it would make any orders under s 36(4) or (5) of the Powers of Attorney Act 2000 (NSW), until the determination of the financial management application.
As appears below, the Tribunal did ultimately decide to make a financial management order and on that basis it decided not to conduct a review of the Reviewable Power of Attorney and it followed that no orders under s 36 of the Powers of Attorney Act 2000 would be made in respect of that instrument.

[29]

Was the Revocation Instrument effective in revoking the 2011 Power of Attorney?

The Revocation Instrument is a simple and straightforward document and it is clear at law that, at least in New South Wales, a Power of attorney may be revoked orally as well as in writing: see GE Dal Pont, Powers of Attorney, (2011, LexisNexis Butterworths) [11.12].
The Revocation Instrument appears to be signed by Mrs KWD and witnessed by Mr SXL and dated 15 January 2014. It is clear that law however that an instrument as important as a revocation of a power of attorney, which purports to remove the very substantial powers of the appointee, must clearly revoke the specific appointment.
In this case the Revocation Instrument states, relevantly, as follows: "I, [Mrs KWD]… Hereby revoke the Power of Attorney Dated: 20 December 2013… appointing [Mrs MKC]."
Mr SXL's case is that the date of the power of attorney stated is a mistake and that that phrase should be read as a reference to a Power of Attorney dated 15 February 2011; that is, the 2011 Power of Attorney. None of the parties was able to provide information as to whether Mrs KWD may have made a Power of attorney on 20 December 2013 and there was no independent information available to the Tribunal in this regard. It therefore remains possible that Mrs KWD did make a Power of attorney dated 20 December 2013.
The contention that the stated date should be read as a reference to the 2011 Power of Attorney amounts to a proposition that the Revocation Instrument impliedly (but not expressly) revokes the 2011 Power of Attorney. The High Court case of Baker v Biddle (1923) 33 CLR 188; [1923] HCA 26 is authority for the proposition that for revocation to be effected by conduct, that conduct must be inconsistent with the continuation of the attorneyship and that given the substantial consequences of any revocation, there is a need for more than conduct "reasonably understood" as amounting to revocation, rather, that the conduct must be unambiguous in its effect. For the purposes of the current consideration, we see the "conduct" in this case as involving, principally, Mrs KWD's execution of the Revocation Instrument using the form of words quoted above.
The rule in Baker v Biddle was confirmed in the English case of Re E (Enduring Power of Attorney) [2001] Ch 364373; [2000] 3All ER 1004; [2000] 3 WLR 1974 per Arden J, and in a leading South Australian case: Estate of Evans [2010] SASE 193 where His Honour Justice Gray stated, at [24]: "Where a party alleges that a power has been impliedly revoked the Court will be reluctant to impute to the (person making the instrument) an intention to revoke the power of attorney in the absence of conduct [or words] unambiguously inconsistent with the continued operation of the power." (Emphasis added).
The Tribunal was not made aware of any conduct of Mrs KWD at the relevant time which was unambiguously inconsistent with the continued operation of the 2011 Power of Attorney. The relevant parties rely exclusively on the Revocation Instrument in their assertion that the 2011 Power of Attorney has been revoked and that, confronted with the actual wording of that instrument, their contention effectively is that the 2011 Power of Attorney has been revoked impliedly. On the basis of the cited authorities, the Tribunal cannot share this view.
For those reasons the Tribunal was satisfied that the Revocation Instrument made by Mrs KWD on 15 January 2014 did not revoke the 2011 Power of Attorney which she had made dated 13 February 2011, and the Tribunal would order accordingly.

[30]

Was the 2011 Power of Attorney revoked in some other way?

Notwithstanding the failure of the Revocation Instrument to revoke the 2011 Power of Attorney, the Tribunal clearly needed to go on to consider whether that power of attorney may have been revoked in some other way.
In the discussion by Professor Dal Pont in his seminal work "Powers of Attorney," as cited above, he discusses the circumstances in which a power of attorney will be deemed to have been revoked by the execution of a subsequent power of attorney. He refers to the leading English decision of Re E (Enduring Power of Attorney), as cited on page 13 above. Her Ladyship Justice Arden in that case opined that: "A later instrument does not automatically revoke an earlier instrument… (and to generate that outcome) the principal must have intended to revoke the earlier power and this must also be the effect of the (principal's) words or conduct": [2001] Ch 364 at 373.
In the Prof Dal Pont's view, what Her Ladyship says does not mean that an earlier and later power must necessarily coexist in their entirety. However if there is an inconsistency between the operation of each power: "...it stands to reason that, to the extent of that inconsistency, they both cannot inhabit the same sphere."
The Tribunal respectfully adopts that view. The 2011 Power of Attorney and the Reviewable Power of Attorney executed on 10 December 2013 are similar in every respect except two. The first of these is the somewhat inconclusive omission by the drafter of the Reviewable Power of Attorney to adequately complete the section in clause 2 headed "Additional powers (optional)". That leaves open the question of whether the stated additional powers do or do not apply. In the circumstances of this case that is inconsequential. The second and major inconsistency between the two instruments is of course that the 2011 Power of Attorney appoints Mrs MKC solely as attorney, whereas the Reviewable Power of Attorney of 10 December 2013 appoints Mr SXL, solely.
Clearly, to the extent of that inconsistency the two powers of attorney cannot, as Prof Dal Pont says "inhabit the same sphere." They are quite inconsistent. On that basis Tribunal is satisfied that the 2011 Power of Attorney was revoked by the action of Mrs KWD in executing the Reviewable Power of Attorney on 10 December 2013.

[31]

The legal principles

The Supreme Court of New South Wales has provided guidance in several decisions as to how the Tribunal should assess a person's capability to manage his or her affairs. In earlier cases the Court had based its test predominantly on the ability of the subject person to conduct the everyday affairs of ordinary people. It was said that if by reason of a failure to do this the person would be disadvantaged or there would be a real risk that they would be disadvantaged or that their money or assets would be at risk of dissipation, then they would properly be treated as being incapable of managing their affairs.
In three more recent Supreme Court decisions; P v R [2003] NSWSC 819, Re D [2012] NSWSC 1006, and PB v BB [2013] NSWSC 1223, it has been emphasised that the Tribunal should not be relying just on hypothetical notions such as "the ordinary affairs of people" but rather should focus on the capability of the particular person to deal with his or her actual assets and to do what he or she is proposing to do with them. In P v R, Justice Barrett said that the task of the Tribunal in these circumstances: "...is to make a judgment as to the capacity and ability of the person concerned to cope with the ordinary routine affairs of living, particularly so far as they concern the person's property…The requisite judgment is to be made in the light of objective physical facts concerning the relevant person's property, money and other assets and the way the person is able to look after them. If there is a lack of capacity, the reason for it does not matter."
In PB v BB, Justice Lindsay confirmed that the question focuses attention on the special circumstances of the person. His Honour stated, at paragraph [7]: "Of central significance is the functionality of management capacity of the person said to be incapable of managing his or her affairs, not: (a) his or her status as a person who may, or may not, lack "mental capacity" or be "mentally ill"; or (b) particular reasons for an incapacity for self-management."
So, as a result of these authorities, the Tribunal will look at the functionality of management capacity of the person concerned rather than their mental capacity or the particular reasons for their incapacity for self-management. It will look at the actual assets of the person concerned, how they are proposing to manage their ordinary affairs of living, whether they can look after their assets and what they are proposing to do with them.
If the Tribunal finds [that] the person under consideration: 1. cannot manage their ordinary affairs of living; or 2. does not have a reasonably sound understanding of what their assets, liabilities and sources of income are, or what needs to be done to preserve them, and for that reason is unlikely to be able to preserve their money or assets or is likely to be disadvantaged in their dealings; or 3. does not have at least some basic understanding of the complications and risks of what is proposed to be done (by themselves or others) with their assets or money and it is unlikely that those proposals will be achieved or there is a substantial risk that they will result in the person's money or assets being dissipated or lost; or 4. lacks the ability to identify situations where others may be attempting to benefit from the person's assets or money and consequently there is a real risk that the person will be disadvantaged or that their money or assets will be dissipated or lost; then the Tribunal can be satisfied that the person is incapable of managing their affairs.

[32]

Application of those principles in the present case

As noted in the Reasons for Decision of the Tribunal's hearing on 5 March 2014, at that hearing the Tribunal considered to medical reports which indicated that Mrs KWD was in fact capable of managing her affairs. The first of these was a brief medical certificate dated 18 February 2014 from Mrs KWD's general practitioner Dr X this stated that, in Dr Y's view Mrs KWD was not suffering from a cognitive impairment and was capable of managing her own affairs. The second report was dated 12 February 2014 and completed by Dr W, Urologist. It was a report from Dr W to Dr Y. In it Dr W reported that Mrs KWD was lucid and fully aware of situations, orientated in time and place and had a good memory. He said that there was no suggestion of significant cognitive decline. Prior to the present hearing, Dr Y completed a Health Professional Report Form which is dated 21 March 2014 and reports that Dr Y last saw Mrs KWD on 18 March 2014. That report asks whether the person's disability affects their capacity to make informed decisions about certain matters, including (relevantly for the present issue) financial affairs. Dr Y answered "No" to each of these questions.
However on 5 March 2014 the Tribunal was unable to reach a decision as to Mrs KWD's capability. That was largely because it also received a report dated 2 January 2014 from Ms V, Chronic Care Clinical Coordinator for the South-Western Sydney Local Health District. Ms V indicated that she had known Mrs KWD since August 2011 and stated that she had recently become concerned about her vulnerability to financial abuse and exploitation not only from different family members but also from "any unscrupulous salespeople and members of the public." Ms V added that from her own observations (as well as accounts from Mrs MKC and Mr SXL) unfortunately Mrs KWD had a very poor understanding of her finances and the value of items. For example, Mrs KWD had told Mr SXL that an attractive house was on the market for $6000. When this was checked it turned out that the offer price of the house was $629,000. Mr SXL had reported to Ms V that Mrs KWD often gets her zeros confused when considering amounts and indeed this was the Tribunal's observation in its discussions with Mrs KWD on 5 March 2014 and again at the present hearing.
Ms V was contacted during the current hearing and gave further evidence by telephone. She confirmed that although she had not seen Mrs KWD since late December 2013 she had received nothing to change her view that Mrs KWD was very substantially vulnerable to people such as door-to-door salespeople, based on her lack of understanding of the value of property including personal items and her generous and accepting nature. Ms V had read Dr W's report referred to above and she suggested that in considering this issue the Tribunal should take into account Mrs KWD's vulnerability, the fact that she had only elementary education and that in practice she had not been responsible for making financial decisions for herself but had relied on family members.
At the hearing on 5 March 2014 family members, and particularly Mrs MKC and Mr SXL had outlined Mrs KWD's problems in making financial decisions. Each of Mr SXL, Mrs MKC and Mrs MLQ (Mrs KWD's daughter) had indicated to the Tribunal at that hearing that they would agree from their observations that Mrs KWD was now not fully capable of managing her own affairs.
In considering this issue the Tribunal place considerable weight on what it regarded as the reliable and persuasive views of Ms V. The Tribunal also accepted the value of the professional views of Dr W and Dr Y, but their reports focused on measurable cognitive decline of Mrs KWD rather than the broader considerations which are encompassed by the legal tests outlined above. In particular neither of the doctors apparently considered the issue of Mrs KWD's understanding of her assets or what needs to be done to preserve them, or her ability to identify situations where others may be attempting to benefit from her assets or money. Essentially these are the issues reflected in the legal tests summarised in paragraphs (ii) and (iv) on pages 15 and 16 above. On the basis of its reliance on Ms V's evidence and also the observations of family members in this regard, the Tribunal was satisfied that Mrs KWD does not satisfy those tests and for that reason it is satisfied that she is not capable of managing her financial affairs.

[33]

Is there a need for another person to manage the affairs of Mrs KWD and is it in her best interests for a financial management order to be made?

There was consensus amongst the participants that because of Mrs KWD's great difficulties in attempting to manage her own financial affairs there was a clear need for another person to manage those affairs for her. The issue arose as to whether this could properly be done by Mr SXL as her attorney under the Reviewable Power of Attorney. More correctly the issue is whether it would best to promote the welfare and interests of Mrs [KWD] to allow her affairs to continue to be managed under the Reviewable Power of Attorney, or alternatively whether her welfare and interests would best be promoted and protected by the appointment of a financial manager.
It is beyond doubt that there has been considerable family discord over the allegations, principally by Mrs MKC, that Mr SXL has obtained advances from Mrs KWD to support his business debts (which the Tribunal understands Mr SXL not to dispute). What is in dispute is Mrs MKC's assertion that Mr SXL has attained a position in which he can unduly influence Mrs KWD in her financial decisions and may use this to advantage himself. The Tribunal is unable to make a finding supporting the second contention, but the fact remains that this is an area of dispute and doubt as between family members. It is also beyond doubt that Mrs KWD herself is aware of this disputation and that it upsets her. That was apparent from the Tribunal's discussions with her at both hearings.
The appointment of a financial manager was seen by Mrs MKC as the appropriate solution because of the oversight of the manager's conduct of Mrs KWD's affairs by NSW Trustee and Guardian which would then be available. The Tribunal understood that Mrs MKC would not object to the appointment of Mr SXL as financial manager for that reason although her strong preference was to be appointed herself. Other family members, including Mrs MLQ, Mrs KWD's daughter, Mr NVL, her son and Mr HDC her son-in-law supported a solution under which an independent person such as NSW Trustee would be available either to manage the estate itself or at least have oversight over the management of the estate by a private manager. Mr SXL opposed any solution other than a continuation of his management under the appointment in the Reviewable Power of Attorney.
Ultimately, although no findings adverse to Mr SXL were made by the Tribunal on the basis of the evidence, the Tribunal could not be satisfied that a continuation of management of Mrs KWD's affairs in a completely unsupervised way solely by Mr SXL under the existing power of attorney was a solution which would best preserve and protect the welfare and interests of Mrs KWD. The solution which, in the Tribunal's view would achieve that objective is the appointment of a private financial manager (if the Tribunal could find a suitable appointee) subject to the oversight and direction of NSW Trustee and Guardian, or alternatively the commission of the management of Mrs KWD's estate direct to NSW Trustee and Guardian.
On that basis the Tribunal was satisfied that there is a need for another person to manage the affairs of Mrs KWD and that it is in her best interests for a financial management order to be made.

[34]

If an order is to be made on the basis of the answers to those questions, who should be appointed as financial manager?

The Tribunal's practice has been to appoint a suitable person such as a family member or close friend as financial manager before considering the appointment of the NSW Trustee where that is appropriate and it is in the best interests of the protected person for that to happen. That order of things was approved in Holt & Anor v Protective Commissioner (1993) 31 NSWLR 227, where the President of the NSW Court of Appeal, Justice Kirby, described it as "a sensible hierarchy of choices." Before appointing a private person as a financial manager the Tribunal needs to be satisfied that the person is willing to act and that he or she is suitable to be appointed.
Neither the Guardianship Act nor the NSW Trustee and Guardian Act specify the criteria for establishing a person's suitability to be appointed. However, in determining person's suitability the Tribunal will normally wish to ensure that the nominated person has and will continue to have no conflict of interest in acting as manager, and that he or she is of sufficient age and has sufficient experience in business, or in record-keeping and decision-making to be suitable in all the circumstances. The Tribunal also normally ensures that there is no impediment to the appointment by way of the nominated person's criminal record or by reason of that person's bankruptcy.
It was indicated at the hearing that each of Mr SXL and Mrs MKC wished to be considered for appointment by the Tribunal as Mrs KWD's financial manager.
Each of Mr SXL and Mrs MKC gave evidence as to their compatibility with Mrs KWD and their respective familiarity with her affairs and property. Each of them also outlined their respective business and employment record and their respective familiarity in dealing with and accounting for other people's money. Finally, each of them confirmed that they understood that, if appointed as financial manager, they would be subject to the oversight and direction of the NSW Trustee. There were no alternative suggestions as to the identity of a suitable private manager.
The Tribunal was satisfied that each of Mrs MKC and Mr SXL was a suitable person to be appointed. In Mr SXL's case the Tribunal was satisfied with his explanation as to the advances which Mrs KWD had in the past made in respect of his business debts in Thailand and was satisfied that the existence of that debt of itself did not constitute a conflict of interest which prohibited his being considered suitable for appointment. Similarly, the Tribunal was satisfied that the transfer by Mrs MKC out of Mrs KWD's account in Auckland to Mrs MKC's own account in Sydney of the substantial amount of over $300,000 constituted a conflict of interest which prohibited her being considered suitable for appointment. The Tribunal accepted Mrs MKC's acknowledgement that she held that money on trust for Mrs KWD. On that basis the amount would form part of Mrs KWD's estate.
Ultimately the Tribunal regarded the views of Mrs KWD herself as decisive on this issue. Section 4 (d) of the Guardianship Act 1987 imposes a duty on the Tribunal to consider the views of people in the position of Mrs KWD in exercising its functions, including of course the important decision of who should be a financial manager.
At the hearing on 5 March 2014, in the absence of other participants, Mrs KWD clearly indicated to the Tribunal that she now wanted her son Mr SXL to manage her money. She explained with some clarity why she had taken the power of attorney away from Mrs MKC. Nothing which Mrs KWD said at the current hearing reflected any change of opinion on her part.
On that basis the Tribunal appointed Mr SXL as the financial manager of Mrs KWD. However there will be three important limitations on Mr SXL's authority under this appointment; namely:

Mr SXL as financial manager will of course be subject to the authority and direction of NSW Trustee and Guardian.
The Tribunal believes that it is important and circumstances of this case for the order to be a reviewable one and accordingly this financial management order will be reviewed by the Tribunal within 6 months.
Mr SXL as financial manager will be directed as follows: 1. to keep Mrs MKC and other family members who participated in the hearing on 8 May 2014 informed in writing of all major decisions which he proposes to make as financial manager and to keep them informed in writing of all major developments relating to Mrs KWD's affairs; and 2. to supply Mrs MKC and other family members who participated in the hearing on 8 May 2014 with copies of all returns and reports he makes to NSW Trustee and Guardian as financial manager.

[36]

Should the Tribunal make a guardianship order?

Following its discussions with Mr SXL and Mrs MKC as to the current arrangements for Mrs KWD's care and activities of daily living it emerged that Mr SXL took the firm position that Mrs KWD could make most decisions for herself and that to a large extent he regarded the Appointment of Enduring Guardian made by Mrs KWD on 10 December 2013 as being a "stop-gap" measure. Mr SXL told the Tribunal that he would respect Mrs KWD's decisions as to her accommodation and that he would endeavour to allow her to remain in her current home as long as possible rather than go to a care facility. Significantly however Mr SXL said that if Mrs KWD needed help or care which could not be provided to at home he would make the necessary decision as her appointed guardian for a change of accommodation. For her part Mrs MKC told the Tribunal that Mrs KWD has a great fear of nursing homes but that there was probably not a current need for a guardianship order. The other family members present indicated that they shared this view and were content that Mrs KWD's interests would be served by Mr SXL continuing to act as guardian under the Appointment of Enduring Guardian.
The Tribunal accepted these views. On that basis it could not be satisfied that there was a current need for the appointment by the Tribunal of a guardian for Mrs KWD.
In reaching this view the Tribunal took into account the relevant factors in sections 4 and 14 (2) of the Guardianship Act 1987, and in particular the requirement in s 14 (2) that in considering whether or not to make a guardianship order the Tribunal must have regard to the practicability of services being provided to the person without the need for the making of such an order. The Tribunal was satisfied that as a practical matter the services which Mrs KWD currently needed could be provided to her under the Appointment of Enduring Guardian and that there was therefore no current need for a guardianship order for her.
It followed that the guardianship application would be dismissed.

At a glance

Court

Decision date

Before

Source

Judgment (37 paragraphs)

Parties

Legislation Cited (4)

Cases Cited (6)