These reasons concern an application (the Transfer Application) made by Mr DVN for the Tribunal to consent to the transfer to the Supreme Court of New South Wales of three applications concerning Mrs MQN made to the Tribunal by Ms NZG.
In summary, for the reasons outlined below, I have dismissed the Transfer Application in relation to all three substantive applications.
[2]
Background
Mrs MQN is 87 years old, and a permanent resident at an aged care facility in northern Sydney, NSW. She has three children: Mr DVN, Ms NZG, and Mrs MBL. It was common ground between Mrs MQN's children that her cognition is severely impaired, so that she would not be able either to follow or usefully contribute to the hearing on 4 May 2017 of the Transfer Application. This position was not inconsistent with a brief, hand-written report dated 16 January 2017 issued by Dr Z. For the limited purposes of the Transfer Application, I was prepared to proceed on the basis that Mrs MQN was cognitively unable to participate in the hearing. In doing so, however, the Tribunal should not be taken to have made a definitive finding as to Mrs MQN's cognitive state, or to have dispensed with the need for further evidence on the issue, in such (if any) of the three substantive applications as the Tribunal eventually hears.
The three substantive applications (which I collectively refer to as the Substantive Applications) are:
1. Number 2017/420, which is a Guardianship Application (the Guardianship Application);
2. Number 2017/421, which is a Financial Management Application (the Financial Management Application); and
3. Number 2017/422, which is an Application for the Review of an Enduring Power of Attorney granted by Mrs MQN on 15 July 2011, appointing Mr DVN as her enduring attorney (the Review Application).
Each of the Substantive Applications is dated 13 January 2017, and was received by the Tribunal on 17 January 2017. The conduct of the three Substantive Applications was originally to be considered at a directions hearing on 31 March 2017, which was adjourned until 4 May 2017.
On 22 February 2017, Mr DVN commenced proceedings in the Equity Division of the Supreme Court of New South Wales seeking, relevantly, orders to the following effect:
1. An order that the Supreme Court concur with the three Substantive Applications "…being referred to the Court pursuant to section 25L of the Guardianship Act 1987...";
2. A declaration that "…upon review of..." the enduring power of attorney dated 15 July 2011, Mrs MQN "…did have mental capacity to make a valid power of attorney...";
3. A declaration pursuant to s 36(4)(g) of the Powers of Attorney Act (NSW) that "… the said power of attorney is valid in operation and effect...";
4. In the alternative to the declarations summarised in (2) and (3):
1. A declaration that Mrs MQN "…is incapable of managing her affairs...";
2. An order that Mrs MQN's estate be subject to management under the NSW Trustee and Guardian Act 2009 (NSW); and
3. An order which either:
1. Appoints Mr DVN as manager of Mrs MQN's estate; or
2. Commits the management of her estate to the NSW Trustee and Guardian; and
1. A costs order against Ms NZG and Mrs MBL.
Self-evidently, it is only the first order sought which is directly relevant to this application.
At a recent directions hearing, the Supreme Court adjourned the matter before it. This, Mr DVN's counsel informed the Tribunal, was so that the Supreme Court knows the Tribunal's decision on the Transfer Application before it further considers the proceedings commenced by Mr DVN. These have been adjourned until 15 May 2017, but counsel for Mr DVN and Ms NZG and Mrs MBL both told the Tribunal that the matter would be stood over by agreement for a further period of two weeks, to allow the Tribunal adequate opportunity to consider its decision, and provide these reasons.
For completeness, I note that the first time that the Tribunal saw a copy of Mrs MQN's power of attorney was when, during the directions hearing on 4 May, counsel for Ms NZG and Mrs MBL handed one to me. Until then, the Tribunal was not able to determine whether the power of attorney was an enduring power of attorney (in respect of which it has jurisdiction under the Powers of Attorney Act) as distinct from any other kind of power of attorney (in respect of which the Tribunal does not). I reviewed what all parties confirmed was a true copy of the power of attorney, and was satisfied that:
1. the instrument had all the characteristics of an enduring power of attorney, and
2. accordingly, it was an instrument in respect of which the Tribunal has jurisdiction under the Powers of Attorney Act.
[3]
Procedural applications
Mrs MBL requested that she be joined as party to all three Substantive Applications, and I granted her request at the hearing on 4 May 2017. Ms NZG supported that request, and Mr DVN indicated that he had no objection.
At that hearing, I heard two requests for legal representation:
1. the first was for Mr Todd Alexis S.C. to represent Mr DVN; and
2. the second was for Mr Paul Blackburn-Hart S.C. to represent Ms NZG and Mrs MBL,
in relation to the Transfer Application. I granted both requests, taking the view that the Tribunal would be assisted by the involvement of both counsel in considering the specific issues raised by the Transfer Application, and that senior counsels' involvement - at least, for this purpose - was not inconsistent with the guiding principle applicable to proceedings before the Tribunal under s 36 of the Civil and Administrative Tribunal Act 2013 (NSW). The consents are only for representation in relation to the Transfer Application, and do not extend to representation for any other aspect of or incidental to the Substantive Applications.
[4]
The Tribunal's authority to refer matters to the Supreme Court
There are three statutory provisions which allow the Tribunal to refer matters before it to the Supreme Court:
1. The first of these is s 25L of the Guardianship Act 1987 (NSW):
1. This is found in Part 3A of the Guardianship Act, concerning financial management. The section provides as follows:
The Tribunal may, if it considers it appropriate to do so, and with the concurrence of the Supreme Court, refer a proceeding relating to a person's capability to manage his or her own affairs to that Court.
1. The only proceeding of which it authorises referral is a proceeding which relates to a person's "…capability to manage his or her own affairs...". That expression reflects the central test which underlies the Tribunal's jurisdiction to appoint financial managers, and it self-evidently follows that s 25L is limited, in the authority which it confers on the Tribunal, solely to the referral to the Supreme Court of financial management applications. It does not authorise the referral of guardianship applications or of applications for the review of enduring powers of attorney.
2. Hence, the terms in which the first order is sought suggest some misconception as to the provisions of the Guardianship Act and the Powers of Attorney Act concerning the transfer of matters, since they appear to proceed on the basis that s 25L is a source of authority for the Tribunal generally to refer matters to the Supreme Court. This misconception does not, however, affect the application to the Tribunal with which I have to deal.
3. Nothing in the Guardianship Act provides specific guidance as to the matters which the Tribunal is to consider in exercising its discretion under s 25L. The general directions set out in s 4 of the Guardianship Act and s 36 of the Civil and Administrative Tribunal Act, however, inform the Tribunal's decision making under s 25L.
1. The second is s 34 of the Powers of Attorney Act:
1. This provides as follows in sub-section (1):
Whether or not on its own initiative, the Supreme Court may refer an application made to it under this Division in respect of an enduring power of attorney or a revocation of an enduring power of attorney to the Civil and Administrative Tribunal and the Civil and Administrative Tribunal may refer such an application made to it to the Supreme Court.
The relevant division is Division 4 of Part 5 of the Powers of Attorney Act, which provides a mechanism for the review by the Supreme Court or the Tribunal of enduring powers of attorney, and by the Supreme Court (but not the Tribunal) of other powers of attorney.
1. Unlike the Guardianship Act, s 34 offers the Tribunal some specific guidance as to the exercise of its referral power under sub-section (1). Sub-section (2) provides as follows:
34 Referral of application to different review tribunal
…
Without limiting the matters that a review tribunal may take into account in deciding whether or not to refer such an application, the review tribunal may take into account any one or more of the following matters:
(a) whether the application relates to the effect of the enduring power of attorney or revocation of enduring power of attorney on third parties,
(b) whether the application is likely to raise for consideration complex or novel legal issues that the Supreme Court is better suited to determine,
(c) any other matter it considers relevant.
1. This guidance is supplementary to the general directions set out in s 36 of the Civil and Administrative Tribunal Act, which remain relevant.
1. The third is s 54 of the Civil and Administrative Tribunal Act:
1. In sub-section (1), this allows the Tribunal to "…refer a question of law arising in the proceedings to the Supreme Court for the opinion of the Court...";
2. Sub-section (2), however, provides that this may be done only with the written consent of the President of the Tribunal;
3. Mr DVN has neither sought nor obtained the President's consent. That can, however, be addressed in any referral order which the Tribunal may choose to make, by conditioning its order on the President's subsequent consent.
1. There is no other provision, whether in the Guardianship Act, the Civil and Administrative Tribunal Act or any other statute, which is potentially applicable to the Guardianship Application, so any referral of that application to the Supreme Court can only be on a question of law, and not (as the orders sought by Mr DVN from the Supreme Court appear to assume) by way of general referral.
[5]
Transfer Application: the Guardianship Application
In the event, counsel for Mr DVN told the Tribunal that Mr DVN did not press for the Guardianship Application to be referred to the Supreme Court. He and counsel for Ms NZG and Mrs MBL agreed that the Transfer Application, so far as it related to the Guardianship Application, should be dismissed, whilst reserving the ability to seek its referral in the future should appropriate circumstances arise for doing so. I therefore dismissed the Transfer Application, to that extent and on that basis. No further consideration of the Guardianship Application is therefore necessary.
[6]
Transfer Application: general considerations
The Transfer Application raises for consideration an important issue. Inherent in the conferral on the Tribunal of jurisdiction to review enduring powers of attorney and to make financial management orders is a policy choice by Parliament, to allow for matters of that kind to be dealt with:
1. Under the relatively informal procedural and evidentiary principles which the Civil and Administrative Tribunal Act requires the Tribunal to adopt;
2. In the relatively low-cost environment for parties which the Tribunal's procedures are designed to foster; and
3. In the relatively speedy way which those procedures encourage.
Section 36 (concerning procedural guiding principles), s 38 (disapplying the rules of evidence, subject to certain exceptions), s 45 (which permits legal representation before the Tribunal only with consent, subject to limited exceptions) and s 60 (which provides that, subject to limited exceptions, parties to proceedings in the Tribunal bear their own costs) of the Civil and Administrative Tribunal Act are all reflective of the relatively benign procedural and costs regime which applies in the Tribunal.
Paralleling that policy choice is another one, that the ability of members of the public with a legitimate interest in the welfare of vulnerable persons to seek such reviews or orders should not be unnecessarily constrained by concerns as to the cost or complexities involved in doing so. The generous rules as to standing set out in s 25I of the Guardianship Act and s 35(1) of the Powers of Attorney Act reflect this choice
For Ms NZG to be required to pursue before the Supreme Court (as would likely be the case if the Tribunal made the orders sought by Mr DVN) the concerns as to her mother's welfare which, she says, underlie the Financial Management Application and the Review Application would impose on her significant costs and risks which do not necessarily attach to the pursuit of those concerns before the Tribunal. For the Tribunal to make a referral which is so diametrically at odds with Parliament's clear policy choices outlined above requires it to be satisfied that there are special circumstances to justify such a referral.
[7]
Transfer Application: special circumstances
Are there any such circumstances? Mr DVN's counsel argued that there are, and I will consider his arguments below.
[8]
Review Application
As for the Review Application specifically, he argued that:
1. it required consideration of two broad issues:
1. the making of the enduring power of attorney, which came down to a determination of Mrs MQN's capacity to grant the enduring power of attorney to her son in 2011; and
2. the operation and effect of the enduring power of attorney, which required an investigation of Mr DVN's conduct as attorney;
1. These enquiries necessitated the consideration of "…complex or novel legal issues that the Supreme Court is better suited to determine...", as contemplated by s 34(2) of the Powers of Attorney Act; and
2. In consequence, the Review Application should be referred to the Supreme Court.
The Review Application requests the Tribunal to review the making of the enduring power of attorney, and a central element in that review is likely to involve consideration of Mrs MQN's capacity in July 2011 to grant an enduring power of attorney. I do not accept that, on the information provided to me, this raises any complex or novel legal issues. As things progress, matters may emerge which alter this view, but if that happens the appropriateness or otherwise of referring the issue to the Supreme Court can be considered at that time and in the light of those matters. For the moment, however, the Tribunal is faced with a claim as to Mrs MQN's historical mental capacity and her linguistic ability, as a native Italian speaker, to understand what was involved. This is no different from many similar claims which are considered by the Tribunal during any year, and is precisely the sort of claim in respect of which the legislature has decided to confer jurisdiction on the Tribunal.
Counsel for Mr DVN also argued that:
1. for the Tribunal to find that Mrs MQN lacked the relevant understanding necessarily implied a criticism of the professional conduct of the solicitor who witnessed her execution and in doing so endorsed on the instrument a certificate stating that, in the words prescribed by s 19 of the Powers of Attorney Act:
19 Creation of enduring power of attorney (cf 1919 No 6, s 163F (2))
…
(i) the [solicitor] explained the effect of the instrument to the principal before it was signed, and
(ii) the principal appeared to understand the effect of the power of attorney,
and
1. the gravity for the solicitor of an implied criticism of this kind was such that the matter should be referred to the Supreme Court.
I do not accept that argument, for two reasons:
1. A finding that Mrs MQN lacked the necessary understanding does not imply any such criticism. The certification is not that the principal did understand the effect of the instrument, but rather that the principal appeared to understand it.
2. By conferring on the Tribunal jurisdiction to review the granting of an enduring power of attorney, Parliament clearly accepted that the Tribunal is an appropriate body to consider the circumstances in which the statutory certification was issued. This is because the certification is an essential element of an enduring power of attorney.
During the hearing, I noted on both sides a subtle but recurrent theme, which might suggest that these applications are not entirely unconnected, at least in the minds of the parties, with matters relevant to Mrs MQN's will and the eventual disposition of her estate following her death. It is not, I think, a controversial proposition that in determining whether a person had capacity to grant an enduring power of attorney the review tribunal - whether this Tribunal or the Supreme Court - is required to consider matters which are quite distinct from those relevant to testamentary capacity, and that the tests to be applied are different. This is discussed at some length in Barrett J's judgment in Szoda v Szoda [2010] NSWSC 804 and the cases to which His Honour there refers. What follows is that any decision by the Tribunal as to Mrs MQN's capacity in 2011 to grant her enduring power of attorney cannot be determinant of any eventual dispute concerning her testamentary capacity at that time.
Counsel for Mr DVN argued that consideration of the operation and effect of the enduring power of attorney should in fact be a relatively straightforward matter, since:
1. It would be limited to the period beginning on 15 July 2011;
2. The only relevant dealings by Mr DVN for consideration were those entered into by him:
1. as attorney, and
2. during that period;
1. The dealings in question were simple: to receive rent on a rental property, to pay outgoings connected with the property, and to account for the balance.
He then appeared to suggest that:
1. because Ms NZG and Mrs MBL have - for example, in Ms NZG's covering letter dated 17 January 2017 which accompanied her original applications, in her further letter dated 24 January 2017 and Mrs MBL's "statement" dated 24 January 2017 - sought to raise family financial matters going back to the mid-1990s, the Review Application will be diverted into a consideration of complex property and financial arrangements over many years which the Supreme Court is better placed to consider; and
2. because of that risk, it is appropriate - despite his confident assurances outlined above, that the issues are really quite straightforward - for the Review Application to be referred to the Supreme Court now.
I do not disagree with the first two propositions summarised in 21(1) and (2) above. Since the Review Application is, relevantly, for a review of the operation and effect of the enduring power of attorney, they follow axiomatically. I cannot (and do not) form or express any view on the third proposition. However, I do not accept that the possibility of Ms NZG and Mrs MBL seeking to expand the scope of the Review Application beyond the boundaries outlined by counsel for Mr DVN is of itself sufficient to justify the referral of the Review Application to the Supreme Court. Like any other determinative body, the Tribunal regularly in the ordinary course of its hearings:
1. is presented with varying claims by parties as to both the matters which it should consider, and the relevance to those matters of evidence put before it, and
2. assesses those claims.
There is nothing evident in the circumstances of the Review Application which might cause the Tribunal to consider the claims made or evidence submitted by any party with anything less than the rigour and healthy scepticism which it generally applies in doing so in its proceedings. There is therefore no circumstance which overrides the clear policy choices outlined above, at least so far as the Review Application is concerned. In any event, it is always open to party who is dissatisfied with a decision of the Tribunal either to engage the Tribunal's internal or external appeals processes in order to correct the error into which it believes the Tribunal has fallen.
The issues which I consider (and the conclusions which I reach) below concerning the Financial Management Application are equally relevant should the Tribunal decide under s 36 of the Powers of Attorney Act to treat the Review Application as one for a financial management order.
[9]
Financial Management Application
Counsel for Mr DVN referred me to s 25K(1) of the Guardianship Act, which provides relevantly as follows:
The Tribunal does not have jurisdiction to make a financial management order other than an interim financial management order in respect of a person if the question of the person's capability to manage his or her own affairs is before the Supreme Court.
The orders sought by Mr DVN in the Supreme Court include, relevantly:
1. a declaration that Mrs MQN "...is incapable of managing her affairs...", and
2. a declaration that at 15 July 2011, Mrs MQN "...did have mental capacity to make a valid power of attorney...",
together in each case with certain consequential substantive orders. There is therefore, counsel argued, a question before the Supreme Court as to Mrs MQN's capacity to manage her affairs and in view of the limited jurisdiction which in consequence the Tribunal has, it is appropriate that the Financial Management Application be referred to the Supreme Court.
I do not accept that the declaration sought in the Supreme Court concerning Mrs MQN's historical capacity to grant the enduring power of attorney raises a relevant question for purposes of s 25K(1). This is for two reasons:
1. First, the Guardianship Act looks to a subject person's present circumstances only, not his or her historical mental condition.
2. Secondly, the matters which Part 3A of the Guardianship Act requires the Tribunal to investigate are not necessarily the same as those which require consideration in an application under s 36 of the Powers of Attorney Act.
Moreover, I do not accept that that there is in fact a relevant question before the Supreme Court as to Mrs MQN's current capacity to manage her own affairs:
1. In Bovaird v Bovaird [2007] NSWSC 146, Gzell J considered a request for the referral of a financial management application from the then Guardianship Tribunal to the Supreme Court. More particularly, His Honour considered what amounted to a question before the Supreme Court as to person's capacity to manage his or her own affairs for the purposes of s 25K(1) of the Guardianship Act. His Honour's observations are directly on point:
14 In my view, what is required to exclude the jurisdiction of the Tribunal is a real question in issue in the proceedings before the Supreme Court. There is no real question in issue in this Court as to Mrs Bovaird's ability to conduct her affairs because it is common ground that she is incapable of managing her affairs and a concession has been made to that effect.
15 It would be a strange result indeed if the mere filing of a document in this Court alleging an incapacity to manage affairs, when that was no real issue in dispute in that respect, could deprive the Tribunal of jurisdiction.
1. In the present case, it was (to use Gzell J's expression) "…common ground…" between all three of Mrs MQN's children that, whatever may have been her cognitive condition in July 2011, their mother currently has no capacity to manage her own affairs. That being the case, it follows that consistently with the reasoning in Bovaird v Bovaird, there is no relevant question of capacity before the Supreme Court sufficient to trigger the operation of s 25K(1) of the Guardianship Act. That section, therefore, has no application in considering the Transfer Application.
Counsel for Mr DVN raised two further arguments, which are to some degree linked, as to why the Financial Management Application should be referred to the Supreme Court. In summary, they are:
1. the Financial Management Application risks involving the Tribunal in the consideration of complex property and financial arrangements over many years which the Supreme Court is better placed to consider; and
2. were the Tribunal in the course of such a consideration to make findings concerning those arrangements it would be exceeding its jurisdiction.
The first argument is not dissimilar to one of the arguments made concerning the referral of the Review Application:
1. At the outset, I accept that one can conceive of hypothetical circumstances in which the wider property and financial arrangements established within Mrs MQN's family are relevant considerations in determining the Financial Management Application.
2. The most obvious situation is where:
1. there are credible concerns that Mrs MQN's welfare is adversely affected by the financial consequences of long-standing property or financial arrangements within the family; and
2. because of the various interests which individual family members have in those arrangements, the appointment of an independent financial manager may be necessary in order to explore and implement a resolution of those concerns.
1. Hypothetical situations can be multiplied, but in doing so one risks losing sight of the fundamental issue for the Tribunal which is - as s 4(a) of the Guardianship Act directs - that "…the welfare and interests of [Mrs MQN] should be given paramount consideration…". That is the Tribunal's focus, not the analysis of decades of property and financial dealings, which are at most of incidental relevance only. Numerous outcomes are possible. For example:
1. If it were clear that adequate financial arrangements, whether from Mrs MQN's own assets or family support or a combination of the two, are in place to meet Mrs MQN's care needs for the rest of her life, the Tribunal might take the view that the welfare and interests of a nonagenarian lady with severe dementia do not require the appointment of a financial manager, whatever claims are made concerning historical arrangements, but
2. equally, if it became clear that adequate arrangements are not in place, the Tribunal might take the view that a financial manager was required in order to explore (and eventually to implement) methods of independently ensuring that her care needs could be met.
One can only speculate as to what these methods might eventually involve. Ms NZG's counsel contemplated a financial manager reviewing (and possibly taking steps to reverse) historical property or financial dealings under which Mr DVN enjoys some benefit to his mother's disadvantage, while Mr DVN's counsel alluded to the possibility of a financial manager reviewing (and possibly taking steps to reverse) arrangements under which Ms NZG and Mrs MBL lease apartments belonging to Mrs MQN on sub-market terms. These possibilities, however, are of little relevance to the Tribunal's consideration of the Financial Management Application, which begins and ends at a different point, namely consideration of Mrs MQN's welfare and interests having regard to her present circumstances.
1. I am, therefore, unconvinced by the first argument. There is no reason why the Financial Management Application would necessarily involve the Tribunal in a detailed exploration of historical and complex property or financial dealings within the family of Mrs MQN.
Equally, I am unconvinced by the second argument. Nothing that the Tribunal will be called upon to do in considering the Financial Management Application requires it to make any substantive findings as to the family's property and financial arrangements, which in any case it is neither:
1. statutorily competent, not
2. procedurally equipped,
to do. At most, it may need to consider whether the respective personal and financial interests of family members present such elements of complexity or conflict that Mrs MQN's welfare or interests require the appointment of an independent financial manager in order to protect or promote them.
[10]
The way forward
I dismiss the Transfer Application.
I am conscious that Mr DVN may, as his counsel foreshadowed, wish to take this matter further and elsewhere, whether before the Supreme Court or the Tribunal's internal Appeal Panel. In view of that possibility, I do not consider it appropriate at this point to make any detailed directions concerning the future conduct before the Tribunal of the three Substantive Applications.
Rather, I consider that the Tribunal should for the moment merely monitor matters, and accordingly I direct that:
1. The parties inform the Tribunal within three business days of the outcome of the forthcoming directions hearing in the Supreme Court of New South Wales for Case Number 2017/00056985 in the Protective List of the Equity Division of the Supreme Court.
2. If not transferred to the Supreme Court, Tribunal Applications 2017/420, 2017/421, and 2017/422 be relisted for further directions on a date to be fixed by the Registrar.
[11]
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
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 04 July 2017