These reasons concern an elderly woman who has been living in an aged care facility in regional NSW since October 2013 (the protected person). Shortly after moving into care, the (then) NSW Guardianship Tribunal, decided to commit the management of the protected person's estate to the NSW Trustee and Guardian (the Trustee), having found she was suffering from dementia and was incapable of managing her affairs.
In May 2014 the Trustee decided to sell the property owned by the protected person, where she had been living immediately before moving into care (the family home). That decision was affirmed on internal review.
BLB challenges that decision and applies to the NSW Civil and Administrative Tribunal (NCAT) for review. BLB has lived in the family home for a number of years and was apparently caring for the protected person before she moved to the aged care facility where she now resides. He has standing to bring this application because he is a person whose interests are adversely affected by the Trustee's decision (s 62(1) of the NSW Trustee and Guardian Act 2009 (NSW) (the Trustee Act)).
[2]
Reconstitution of Tribunal
In November 2014 a hearing was held to consider BLB's application. After reserving but before making her decision, the member who conducted that hearing became unavailable. Exercising the power conferred by s 52 of the Civil and Administrative Tribunal Act 2013 (NSW), NCAT President, Justice Robertson Wright, decided to reconstitute the Tribunal and to assign me to replace the original member.
As directed by s 52(3) of the Civil and Administrative Tribunal Act, in reviewing the decision the subject of BLB's application, namely the decision to sell the family home, I have had regard to all evidence given and submissions made before the Tribunal was reconstituted. Having considered that material and after listening to a sound recording of the hearing made by NCAT's transcription services, I decided it was appropriate to proceed to determine BLB's application on the available material.
[3]
Decision to sell the family home
In May 2014 the Trustee decided to sell the family home, and dispose of its contents in consultation with the protected person's stepdaughter and BLB. Apparently the trigger for that decision was a debt of just over $5,000 owed by the protected person to the aged care facility where she now resides.
In a letter dated 15 April 2014, responding to the Trustee's invitation to comment on the proposed sale, BLB stated that when the protected person moved to the aged care facility he had been living in the family home for about six years and for most of that time acted as her "sole carer". He claimed that throughout that period he paid all outgoings, water rates and "performed and paid for many aspects of home maintenance and repair at a not inconsiderable cost".
He wrote that as a disability support pensioner, if the sale proceeded he would be left without a place to live. He stated that the protected person promised, "I would always be able to live in the property and that the property would be left to me". He asserted it would be "against [her] wishes to displace me from my home".
In a letter to the Trustee dated 29 April 2014, the protected person's step-daughter wrote that BLB had preyed on her stepmother to change her will and furthermore, has had "a free ride for way too long". [The Trustee holds a copy of the protected person's will. Made six months before she moved into care, it makes BLB the sole beneficiary of the protected person's estate.] The stepdaughter argued that BLB should pay "market rent", which she estimated to be at least $300 per week, backdated to when her stepmother moved into care.
After being notified of the Trustee's decision to sell the property, BLB and the stepdaughter in separate applications, sought internal review of that decision.
In a letter to the Trustee dated 17 June 2014, BLB urged the Trustee to reconsider the decision to sell the family home. He wrote that his concerns are wider than the protected person's "financial requirements" and, as her "primary carer" for a number of years, it is in her interests that they continue to live in close proximity. He wrote that if the sale proceeds he would be forced to relocate to another city to live with family members and, as a consequence, the protected person will "hav[e] no family or friends able to visit her as I do on a daily basis". He wrote that each week he takes the protected person to the family home for lunch, which allows her to spend time with her "beloved companion animal [dog]". He stated that that contact would stop if he were forced to move away.
BLB argued that, given his undertaking to cover any "shortfall in expenditure requirements", the proposal he advanced did not leave the protected person "exposed in any way to a risk of not being able to cover her care costs".
In a letter dated 22 June 2014 the stepdaughter again urged the Trustee to place the family home on the private rental market. She asserted that this would result in her stepmother's income exceeding expenditure by about $10,000 per annum. She proposed that her two sons, both experienced builders, could undertake any repairs necessary to place the property on the private rental market. She wrote that they were prepared to defer their costs until they could be recouped from rental income.
[4]
Trustee affirms decision to sell family home
In reasons for deciding to affirm the original decision, a delegate of the Trustee set out the rationale for the original decision-maker's assessment that the decision to sell the family home was in the protected person's "best interests":
[the protected person] had been placed in an aged care facility and "will not return to her former home …". It has been assessed that there will be a shortfall of approximately $6,720 between her estimated annual income and expenditure.
there is an "outstanding … liability" of $5,900. Full payment of this amount will leave the protected person with minimal funds for medical and other urgent needs.
BLB has offered to meet the annual $6720 shortfall but not "market rent" of $300 pw, which he contends as a pensioner he cannot afford. In addition, BLB points out that "significant expenditure" would be necessary before the property could attract weekly rent of $300.
renting the property has inherent risks including "periods of vacancy, default of rent and unexpected major repairs". The protected person does not have sufficient funds to undertake major repairs to the property or cover any period where rent is not received.
In reasons for deciding to affirm the original decision, a delegate of the Trustee set out the rationale for the original decision-maker's assessment that the decision to sell the family home was in the protected person's "best interests":
[the protected person] had been placed in an aged care facility and "will not return to her former home …". It has been assessed that there will be a shortfall of approximately $6,720 between her estimated annual income and expenditure.
there is an "outstanding … liability" of $5,900. Full payment of this amount will leave the protected person with minimal funds for medical and other urgent needs.
BLB has offered to meet the annual $6720 shortfall but not "market rent" of $300 pw, which he contends as a pensioner he cannot afford. In addition, BLB points out that "significant expenditure" would be necessary before the property could attract weekly rent of $300.
renting the property has inherent risks including "periods of vacancy, default of rent and unexpected major repairs". The protected person does not have sufficient funds to undertake major repairs to the property or cover any period where rent is not received.
The delegate went on to examine the analysis undertaken by the Trustee's financial planning unit, which compared the protected person's financial position under three scenarios: (i) the status quo, that is, receiving no income from the property (ii) renting the property at $300 per week and (iii) selling the property. After setting out the assumptions used to estimate the protected person's income and expenditure under each scenario, the planning unit estimated the difference between her annual income and expenditure to be:
Option 1 Option 2 Option 3
Status quo Private rental Sale of property
Deficit/surplus pa ($6720) $2706 $3369
[5]
In rejecting Option 2, the delegate reasoned that it would only modestly improve the protected person's cash flow and possibly not at all "once the cost of repairing the property had been repaid".
The delegate noted that BLB had offered to cover the "cash shortfall" but concluded that "it so doubtful that this would improve the client's financial circumstances". Noting that BLB stated he is unable to pay "market rent" she wrote: "I am not sure he will be able to meet the additional costs of the cash shortfall".
[6]
Views of the protected person
As noted, BLB claims that he was given a promise by the protected person that he would always be able to live in the property.
An officer of the Trustee spoke to the protected person in May 2014 and recorded that the protected person:
appeared a little confused
said she was happy at the nursing home
responded "yes" when asked if she wanted the family home to be sold.
The officer recorded that she was not confident that the protected person's stated view was an "informed view".
[7]
The correct and preferable decision
In determining whether the decision to sell the family home is the "correct and preferable" decision, the Tribunal must have regard to the material before it, including any relevant factual material and applicable written or unwritten law (s 63(1) of the Administrative Decisions Review Act 1997 (NSW)). When undertaking this task the Tribunal may exercise all of the functions that are vested in the Trustee (s 63(2) of the Administrative Decisions Review Act). The Tribunal may affirm, vary, or set aside the Trustee's decision. If the decision is set aside, the Tribunal may substitute its own decision for that of the Trustee, or remit the matter to the Trustee together with any directions or recommendations (s 63(3) of the Administrative Decisions Review Act).
Section 39 of the Trustee Act instructs that any person, including the Tribunal on review, exercising functions under Chapter 4 of that Act (management functions relating to persons incapable of managing their affairs) must observe the following principles:
General principles applicable to Chapter
…
(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.
The Trustee argues that the protected person's interests will be best served by the sale of the family home. The Trustee contends that this will allow for the debt owed to the aged care institution to be discharged and leave sufficient funds to pay recurrent and any additional unforseen expenses. BLB disagrees. He contends that if the sale proceeds he will be forced to relocate and, as a consequence, will probably be unable to continue to visit the protected person on a regular basis. In these proceedings he repeated the assurance he gave to the Trustee that he is willing to pay the shortfall between the protected person's budgeted income and expenditure together with any future unanticipated expenses. In closing submissions, he announced that he had money invested in superannuation, which could be used to use to fund any shortfall.
The protected person currently receives no income from her principal asset, the family home. After payment of the debt to the aged care facility, she will be left with cash reserves of about $1,500. Her estimated annual expenditure currently exceeds her annual income by about $7,000. The Trustee estimates that the protected person's position will deteriorate further, when in October 2015 (24 months after moving into aged care), the family home will no longer be treated by Centrelink as an "exempt asset" and, as a consequence, her rate of age pension, will decrease. In short, the protected person is currently unable to fund budgeted expenditure and over time the gap between her budgeted income and expenditure will progressively increase. Notably, the unchallenged assumptions made by the Trustee to estimate the protected person's expenditure contain little fat. A modest amount, $34 per fortnight, has been allocated to pay for clothing, "comforts" and "discretionary expenditure".
The parties agree that the current situation is unsustainable. The difference between them lies in which of the available options should be adopted. Three have been considered:
selling the family home (Option 1)
renting the family home on the private rental market (Option 2)
allowing BLB to remain in the family home, on the condition that he meets any shortfall between income and expenditure (Option 3).
Of these options, the second in my opinion is the least attractive. It is uncontroversial that significant repairs must be undertaken before the family home could be placed on the private rental market. From the available material it is not possible to estimate the scope, cost, or length of time these repairs will take to complete. Even if, as proposed, the stepdaughter's sons were prepared to undertake the necessary repair work and defer payment of their costs, this is not an entirely satisfactory solution. Not only is it not possible to predict the impact the cost of repairs will have on the protected person's future cash flow, but, as pointed by the Trustee, there is a risk that the estimated rental income will not be achieved. In short, this option offers neither the financial certainty of the sale option nor the benefits of the option favoured by BLB.
The primary advantage of Option 3 is that, of the options considered it is the one most likely to enable contact between the protected person and BLB to continue. BLB's claim that he visits the protected person on a daily basis, takes her to visit the family home each week and is her only regular visitor, is uncontradicted and unchallenged. I accept those claims. I also accept that there is a real risk that if the sale proceeds, BLB will be forced to relocate and his contact with the protected person will cease, or, at best, significantly reduce.
In making the correct and preferable decision, I must give paramount consideration to the welfare and interests of the protected person (s 39(a) of the Trustee Act). There is nothing to suggest, from the ordinary meaning of the words "welfare" and "interests", their context, or the purpose for which the Trustee Act was enacted, that they should be given a narrow meaning and construed to mean financial welfare and interests. I accept, as I understand BLB to contend, that in assessing the protected person's interests I must have regard to her interests and welfare at large, including her emotional and physical well-being. On the available material, I accept that it is in her interests to maintain regular contact with BLB.
While the effect of the decision under review on the protected person's financial position is not the sole factor to be taken into account, it is nonetheless relevant to the assessment of her interests and welfare. Her financial position will have a direct bearing on her ability to meet the costs of ongoing care and to fund unbudgeted medical expenses and purchase discretionary goods and services. While it is not possible to predict with any degree of certainty what the protected person's future health needs will be, or the extent to which whether any recommended treatment will be funded by Medicare, a prudent approach demands that she have adequate funds available to fund any future costs.
While BLB stated he is prepared to fund the estimated $6,700 recurrent annual shortfall and any additional necessary and unbudgeted "requirements", it remains unclear whether he has the capacity to do so. In her reasons for affirming the decision to sell the family home, the Trustee's delegate squarely raised the issue of BLB's capacity to fund the "cash shortfall". It was not until closing submissions in these proceedings that he announced that he had money invested in superannuation which could be used to fund any cash shortfall. He provided no evidence to support this claim or particulars about the amount invested or whether those funds could be readily accessed. Even if BLB's commitment to fund the current, and any future shortfall, is genuine, the evidence falls well short of establishing that he has the means to do so. It is no answer, as he suggested in closing submissions, that if at some later date he is unable to fund the shortfall, he will not oppose the sale of the family home. This assurance is dependent on BLB's attitude at some future date and, in addition, given the inevitable delay between placing a property on the market and receiving the proceeds of sale, offers no solution, if the need for funds is urgent.
There is little reliable information about the protected person's views about the sale of the property. As properly conceded by the Trustee, given her advanced dementia, no weight can be given to the comments she made 12 months ago that she does not oppose the sale. In relation to the promise purportedly made to BLB that he could remain in the property, it cannot be inferred from this that the protected person would hold that view in circumstances where she is unable to fund the costs of her care and other costs.
BLB's interests, while not determinative, are also relevant to the assessment of the decision under review. He will not be left destitute by the sale of the property. While not his preferred option, on his account he has the option of moving to Sydney to live with relatives. I accept nonetheless that he will be adversely affected if the sale proceeds.
The task of making the correct and preferable decision requires an evaluation of the relative merits of Options 1 and 3, having regard to the principles listed in s 39 of the Trustee Act and any other relevant considerations. Given the protected person's multiple health problems, impaired decision-making capacity and inability to resume a "normal life in the community", the principles listed in paragraph (a) (best interests) and paragraph (g) (protection from neglect, abuse and exploitation), of s 39, are of particular relevance.
The options favoured by each party bring a degree of risk. Under that favoured by BLB there is a real risk that he will be unable to fund the shortfall between the protected person's income and expenditure and, as a consequence, the protected person will be denied care and services necessary for her health and well-being. Under the option favoured by the Trustee, there is a real risk that the regular contact between BLB and the protected person will come to an end.
The concept of "best interests" is invariably difficult to apply because reasonable minds may differ as to what course may be in a person's best interests. While there is merit in the option favoured by BLB, given my misgivings about his ability to fund, in a timely fashion, the current and future shortfall between the protected person's income and expenditure, I have decided that it poses an unacceptable risk to her interests and welfare. In my opinion her interests will be best served by the sale of the family home notwithstanding the likelihood that as a result, BLB will be unable to continue to visit her on a regular basis.
For these reasons I have decided to affirm the decision under review.
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
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Decision last updated: 23 April 2015