BPY v BZQ

NCAT Appeal Panel|2015-01-21

zopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 Mifsud v Campbell (1991) 21 NSWLR 725 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 SAB v SEM [2013] NSWSC 253 Category: Principal judgment Parties: AP 14/51960 BZR (Appellant) BPY (1st Respondent) BZQ (2nd Respondent) NSW Trustee and Guardian (3rd Respondent) Public Guardian (4th Respondent)

AP 14/51727 BPY (Appellant) BZQ (1st Respondent) S Stuart, guardian ad litem for BZR (2nd Respondent) NSW Trustee and Guardian (3rd Respondent) Public Guardian (4th Respondent) Representation: Counsel: M Merkel (BPY) N Jackson (Guardian ad litem for BZR) BZQ (in person) NSW Trustee and Guardian (no appearance) Public Guardian (no appearance) File Number(s): AP 14/51727AP 14/51960 Publication restriction: The publication of the name of any of the parties or other people referred to this decision including the publication of any information picture or other material that identifies them or is likely to lead to their identification is prohibited. Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Guardianship Division Citation: 2014/7592 Date of Decision: 04 September 2014 Before: B Crowley Dr L Tong L Manns File Number(s): C/57225

Background

On 22 October 2014 BPY lodged an appeal against several decisions made by the Guardianship Division of the Tribunal in relation to his mother BZR. The next day Stojanovic Solicitors lodged an appeal purportedly on behalf of BZR, but only against the Tribunal's decision to make a financial management order in relation to BZR and to appoint the NSW Trustee and Guardian as the manager of her estate. At the hearing before the Appeal Panel on 21 January 2015, BZR's appeal was withdrawn and dismissed. For the reasons which we give below, we have upheld BPY's appeal and directed that the Guardianship Division reconsider BPY's applications in relation to his mother.
BZR is an elderly woman who had been living with her husband, her son BPY and her son's wife until mid-2014. On 6 June 2014 her son and his wife left for an overseas holiday. On 10 June 2014 BZR's husband had a fall and was hospitalised. The next day BZR moved in to live with her long term friend BZQ and her partner.
In September 2009 BZR had signed an enduring power of attorney appointing her son BPY as her attorney. On 25 June 2014, two weeks after she moved in with BZQ, BZR signed a new enduring power of attorney prepared and witnessed by BZQ's solicitor, Mr Stojanovic, appointing BZQ as her attorney. A few days later BZR signed an enduring guardianship instrument appointing BZQ as her enduring guardian. That instrument was also prepared and witnessed by Mr Stojanovic. Mr Stojanovic told the Guardianship Division at the hearing that BZR had executed a new will recently leaving 90% of the estate to BZQ and 10% to BZQ's partner.
On 27 July 2014 BZR was admitted to hospital with a fracture to her left femur. She was discharged on 6 August 2014. BZR's husband died on 9 August 2014. On the same day BPY and his wife returned from their overseas holiday. BZR told them that she did not want to return to live with them.
On 26 August 2014 BPY applied to the Guardianship Division of the Tribunal for: 1. a review of the making and of the operation and effect of the power of attorney made on 25 June 2014; 2. a review of the appointment of an enduring guardian made on 30 June 2014; 3. a guardianship order in relation to BZR; and 4. a financial management order in relation to BZR.

Tribunal's decision

On the day of the hearing the Guardianship Division gave Mr Stojanovic leave to appear for both BZR and BZQ. Neither BZR nor BZQ attended the hearing but the Tribunal attempted to contact them by phone. BZQ told the Tribunal that she would not be attending and that she had instructed Mr Stojanovic to represent her. She also told the Tribunal that BZR could not speak to the Tribunal by phone as she was 'not ready yet'. The Tribunal decided that as Mr Stojanovic was appearing for BZR it would proceed with the hearing in her absence.
In relation to the application to review the making and the operation of the enduring power of attorney, the Tribunal decided that BZR had the mental capacity necessary to make a valid enduring power of attorney on 25 June 2014. In those circumstances the Tribunal decided not to review the making of the power of attorney: Powers of Attorney Act 2003 (NSW), s 36.
In relation to the application to review the appointment of BZQ as BZR's enduring guardian, the Tribunal reviewed the enduring guardianship appointment and was not satisfied that BZR lacked the necessary capacity at the relevant time to appoint BZQ as her enduring guardian. In those circumstances, the Tribunal confirmed the appointment of BZQ as BZR's enduring guardian: Guardianship Act 1987 (NSW), s 6J and s 6K.
In relation to the application for guardianship, the Tribunal decided that BZR "did not have a disability which prevented her from making important life decisions and therefore she was not a person for whom the Tribunal could make a guardianship order." The application for a guardianship order was dismissed.
In relation to the application for a financial management order, the Tribunal decided that BZR was not capable of managing her own affairs. The reason it gave for reaching that conclusion was that "all of her financial affairs throughout her married life had been managed by (her husband) up to his death in August 2014." The Tribunal committed BZR's estate to the management of the NSW Trustee and Guardian, but excluded from the estate a particular bank account in the name of BZR and her late husband.

Representation of parties in appeal proceedings

On 3 November 2014 the Appeal Panel refused leave for Mr Stojanovic to represent BZR and granted leave for BPY to be represented by A Jelliffe, solicitor. At the hearing we granted leave for BPY to be represented by counsel, Ms J Merkel.
On 16 December 2014, the Appeal Panel appointed a guardian ad litem for BZR, Mr Stuart. An affidavit from him dated 21 January 2015 was admitted into evidence. The Appeal Panel granted leave to Mr Jackson of counsel to represent Mr Stuart.
BZQ appeared in person. Because her solicitor was not available on the day of the hearing, we invited BZQ to apply for an adjournment if she wished. She declined to do so saying that she wanted the matter to proceed to hearing.

Grounds of Appeal

BPY may appeal 'as of right on any question of law or with leave of the Appeal Panel on any other ground": Civil and Administrative Tribunal Act 2013 (NSW), s 80(2)(b). BPY appealed against each of the Tribunal's decisions but in relation to the decision to make a financial management order, BPY only appealed against that part of the decision which appointed the NSW Trustee and Guardian as the financial manager. The grounds of appeal on a question of law were expressed as follows: 1. error in the exercise of discretion in granting leave to Mr Stojanovic to appear for BZR at the hearing; 2. failure to give reasons for the exercise of the above discretion; and 3. error in finding that there was no evidence of dementia in face of the views of BZR's late husband and a family friend who is a registered medical practitioner.
The ground of appeal on questions other than questions of law were expressed as follows: 1. factual error in finding that BZR was living with BZQ only after the death of BZR's husband which led to the Tribunal failing to recognise that there was a reason to review the enduring power of attorney made on 25 June 2014 and the appointment of enduring guardian made on 30 June 2014.
We deal firstly with the grounds of appeal that relate to the substantive decisions of the Tribunal and then consider the grounds relating to the interlocutory decision to grant leave for Mr Stojanovic to represent BZR and BZQ.

Application for a guardianship order, review of appointment of enduring guardian and the making of the power of attorney

Before making a guardianship order, the Tribunal must first be satisfied that the person is a "person in need of a guardian": Guardianship Act, s 14. That term is defined in s 3 as "a person who, because of a disability, is totally or partially incapable of managing his or her person." In s 3(2) , a "person who has a disability" is defined in the following terms: In this Act, a reference to a person who has a disability is a reference to a person: (a) who is intellectually, physically, psychologically or sensorily disabled, (b) who is of advanced age, (c) who is a mentally ill person within the meaning of Chapter 3 of the Mental Health Act 1990, or (d) who is otherwise disabled, and who, by virtue of that fact, is restricted in one or more major life activities to such an extent that he or she requires supervision or social habilitation.
The Tribunal decided, in relation to the application for guardianship, that BZR did not have dementia or any other disability which resulted in her being totally or partially incapable of managing her person. As the Tribunal based its decision on a finding that BZR was not "a person in need of a guardian" it did not need to embark on the second step of determining whether to appoint a guardian for BZR.
In relation to the application to review the appointment of BZQ as BZR's enduring guardian, the Tribunal reviewed the enduring guardianship appointment but was not satisfied that BZR lacked the necessary capacity at the relevant time to appoint BZQ as her enduring guardian. One issue for the Tribunal when reviewing the appointment of an enduring guardian was whether BZR understood the effect of the instrument. Similarly, in relation to the review of the making of the power of attorney, an issue in the application before the Guardianship Division was whether BZR "did or did not have mental capacity to make a valid power of attorney".
Mr Stojanovic was the person who prepared and witnessed both the power of attorney and the enduring guardianship instrument. In the power of attorney document he certified that he had explained the effect of the power of attorney to BZR before it was signed and that she "appeared to understand the effect of this power of attorney." Mr Stojanovic also certified in relation to the enduring guardianship instrument that BZR "executed the instrument voluntarily on 25 June 2014 and appeared to understand the effect of the instrument."
BPY submitted that on the basis of the evidence before it, the Tribunal should have been satisfied that BZR was a person in need of guardian and that she did not have capacity when she signed the instruments on 25 and 30 June 2014. That evidence was: 1. an email dated 31 August 2014 from Dr J Rogley, a general practitioner who had been acquainted with BZR for more than 20 years, stating, in part, that: [BZR] began to exhibit behavioural characteristics consistent with dementia about three years ago. Such behaviour included, but did not only exclusively involve, hoarding, accessing and appropriating personal belongings such as clothing from other family members, as well as questionable practices of hygiene. Her cognitive and physical decline was buffered by the consistency of the care and support she received from her husband, a medical doctor only recently retired, and her only surviving child, her son [BPY], along with his wife . . . who was at home full-time. . . My professional opinion based on this lady's previous history in the context of the events of the previous three months, is that her mental ability and testamentary capacity is significantly impaired and that she is not capable of making any legally binding decision. 1. an undated statement from BZR's granddaughter filed on 25 August 2014 documenting certain behaviours of BZR since June 2014; 2. oral evidence from BPY that his father (BZR's husband who was a general practitioner) had told him "a couple of years ago that his mother had dementia" and that "evidence of this was her playing with dolls and her poor memory"; 3. discharge summary from Bankstown Hospital dated 6 August 2014 in which it was written that BZR was admitted on 27 July 2014 for a broken left NOF (neck of femur). She underwent surgery on 28 July 2014 and was discharged on 6 August 2014; and 4. Mr Stojanovic's "instructions from BZR that she had capacity to sign the document appointing BZQ as her enduring guardian and that her only disability was physical".
In relation to the email from Dr Rogley, the Tribunal's conclusion was that her observations appear to be based on her relationship with BZR's family as a friend and not through a doctor/patient relationship. As the email does not state that Dr Rogley examined BZR, the Tribunal did not accept the email as evidence that BZR had dementia or that she lacked capacity to sign documents.
In relation to the granddaughter's statement that she "gave evidence about the lack of capacity of BZR based on her observations, especially on 10 June 2014 when [BZR's husband] had his fall at home." The Tribunal gave no weight to those observations but did not given any reason for rejecting that evidence. Similarly, the Tribunal gave no weight to BPY's evidence that his late father had told him that BZR had dementia and gave no reason for rejecting that evidence.
The Tribunal noted that the Discharge Summary did not refer to any disability other than physical injuries.
Failing to give weight to particular evidence does not constitute a question of law. It is only where a Tribunal makes a finding without any probative evidence to support that finding that a decision maker is said to fall into legal error: Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 155-156. Similarly, whether or not a Tribunal has failed to give adequate reasons will depend on the circumstances of the individual case. It is not necessary for a decision maker to refer in detail to all the evidence and indicate which of it is accepted or rejected: Mifsud v Campbell (1991) 21 NSWLR 725 Samuels J at 728.
In relation to the applications for a guardianship order, the review of the appointment of an enduring guardian and the making of the power of attorney, the Appeal Panel is not satisfied that the Tribunal made an error either by making a finding of fact without any evidence to support that finding or by failing to give adequate reasons for its findings.

Application for financial management order

Section 25G sets out the matters about which the Tribunal must be satisfied before making a financial management order including that "the person is not capable of managing those affairs".
The Tribunal decided that BZR was not capable of managing her own affairs. The reason the Tribunal gave was that, "[A]ll of her financial affairs throughout her married life had been managed by (her husband) up to this death in August 2014." BPY did not appeal against this part of the decision but we have decided to set is aside because the reasoning is not adequate. Having found that BZR had capacity in relation to other matters, it is not clear from the Tribunal's reasons how it came to the view that she lacked capacity to manage her own financial affairs.
Subject to some exceptions which are not applicable to these proceedings, the Guardianship Tribunal has a duty to provide each party with "a written statement of reasons" for its decisions: NCAT Act, Sch 6 cl 11. A statement of reasons must set out (a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, (b) the Tribunal's understanding of the applicable law, (c) the reasoning processes that lead the Tribunal to the conclusions it made: NCAT Act, Schedule 6, cl 11(4) and NCAT Act s 62(3).
In addition, at common law, there is a judicial duty to give adequate reasons: Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 269-70. That duty applies to tribunals as well as courts: Absolon v NSW TAFE [1999] NSWCA 311 at [66].
In our view, the reasons do not adequately explain how the Tribunal reached the conclusion that BZR did not have capacity to manage her financial affairs. In addition, the Tribunal gave no reasons for excluding a particular account from the estate which it committed to the NSW Trustee and Guardian. Those errors justify the decision to make a financial management order being set aside.

Leave to appeal on other grounds

Although BPY has not established that the Tribunal made an error of law, he applied, in the alternative, for leave to be granted for the appeal to proceed on other grounds.
The principles for granting leave were summarised by Wright J in Collins v Urban [2014] NSWCATAP 17. Included in that summary were the principles expressed by White J in relation to appeals from the Guardianship Division to the Supreme Court in the following passage in SAB v SEM [2013] NSWSC 253 at [8]. Without intending to be exhaustive, the considerations governing a determination as to whether leave should be given will include whether or not a question raised involves a matter of administration or policy which might have general application, whether or not the Tribunal's decision has been arrived at after the Tribunal members have directed themselves properly and fairly on the facts and not gone wrong in law, whether there is an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand, and whether the factual error was unreasonably arrived at and clearly mistaken.
The Guardianship Division's jurisdiction is essentially protective with the focus being on the person who is the subject of an application. The role of the Tribunal is not to resolve a dispute between parties but to consider applications made in relation to the subject person. The Tribunal is under several duties when exercising its functions including a duty to give the subject person's welfare and interests paramount consideration and to protect him or her from exploitation: Guardianship Act, s 4.
The Tribunal was aware of the chronology of events which culminated in BZR appointing BZQ as her new guardian and attorney, although the Tribunal mistakenly found that that BZR moved in with BZQ after the death of her husband when in fact she moved in after her husband had been admitted to hospital. Significantly the appointment of BZQ as her new guardian and attorney were made a few weeks after BZR moved in with BZQ and at a time when BPY, her son and previous attorney, was overseas.
As well as this evidence, the Tribunal had evidence that BZR had dementia. That evidence was not as reliable as it would have been it if had come from a treating doctor, or from BZR's late husband himself but it was evidence nevertheless. The Tribunal gave it no weight . Instead it uncritically accepted Mr Stojanovic's statement that he had instructions from BZR that her only disability was physical. BZR was not at the hearing and Mr Stojanovic had a potential conflict of interest.
The evidence as a whole should have alerted the Tribunal to the risk that BZR was being exploited. While we make no finding of exploitation, there was sufficient evidence to put the Tribunal on notice of that risk. In those circumstances, the Tribunal had a duty to give BZR's welfare and interests paramount consideration and to protect her from exploitation. To fulfil that duty the Tribunal should have adjourned the proceedings so that further evidence of BZR's capacity as well as her views could be obtained. That evidence includes, most significantly, evidence from BZR herself and, if possible, evidence from a medical specialist who could provide an opinion as to BZR's capacity at the relevant times. Considering the evidence before it, it was unjust and unfair for the Tribunal to proceed to determine each of the applications. Those orders should be set aside.

Leave to allow Mr Stojanovic to represent BZR and BZQ

Before a lawyer may represent a party in proceedings in the Guardianship Division, the Tribunal must grant leave: NCAT Act, s 45. A decision to grant or refuse leave is an interlocutory decision. Leave is required before a person may appeal against an interlocutory decision: NCAT Act, s 80(2)(a).
Because the Guardianship Division was constituted by three Division members when it made the decision to grant leave to Mr Stojanovic to represent BZR and BZQ, it was obliged to provide a written statement of reasons, for that interlocutory decision: NCAT Act, Schedule 6, cl 11. As we have said, a statement of reasons must set out the findings on material questions of fact, referring to the evidence or other material on which those findings were based, the Tribunal's understanding of the applicable law and the reasoning process that lead the Tribunal to the conclusions it made: NCAT Act, Schedule 6, cl 11(3) and NCAT Act s 62.
Because the Guardianship Division was obliged to provide written reasons for its decision to grant leave but did not do so, it is appropriate to grant leave for BPY to appeal against that decision. In some cases the reasons for the Tribunal's decision will be apparent without reasons having been provided but in this case reasons are required in order to explain why the Tribunal granted leave in circumstances where Mr Stojanovic had a potential conflict of interest.
Mr Stojanovic purported to represent two current clients, whose interests were not identical, in the same proceedings. Under Cl 11.1 of the New South Wales Professional Conduct and Practice Rules 2013 (Solicitors' Rules): 11.1 A solicitor and a law practice must avoid conflicts between the duties owed to two or more current clients, except where permitted by this Rule.
Without reasons, the parties do not know whether the Tribunal took into account the possibility that there was a conflict between the duty Mr Stojanovic owed to BZQ and that which he owed to BZR. In addition, without reasons, the parties do not know whether the Tribunal took into account the possibility that there was a conflict between Mr Stojanovic's duty to serve the best interests of his client and his own interests to act for a client in circumstances where he will be required to give material evidence. Clauses 12.1 and 27.1 of the Solicitor's Rules state that: 12.1 A solicitor must not act for a client where there is a conflict between the duty to serve the best interests of a client and the interests of the solicitor or an associate of the solicitor, except as permitted by this Rule. 27.1 In a case in which it is known, or becomes apparent, that a solicitor will be required to give evidence material to the determination of contested issues before the court, the solicitor may not appear as advocate for the client in the hearing
The lack of reasons for the Tribunal's decision to grant leave to Mr Stojanovic to represent both BZR and BZQ in circumstances where the relevant considerations outlined above should have been addressed, satisfies us that the decision should be set aside.

Consideration of the original applications

The Appeal Panel has power to deal with an internal appeal by way of a new hearing and to permit fresh evidence to be given: NCAT Act, s 80(3). That is the course which BPY and BZR advocated.
The Appeal Panel gave the parties permission to obtain a report from a psycho-geriatrician as to BZR's capacity. A report was subsequently obtained from Dr Sharon Reutens, consultant psychiatrist, dated 28 November 2014 and was admitted as evidence in these proceedings. BYP's representative submitted that we should hear the application for guardianship and review the appointments made in June 2014 on the basis of all the evidence that was before the Guardianship Division and the new evidence.
Rather than follow that course, we have decided to direct the Guardianship Division to reconsider BPY's applications: NCAT Act, s 81(1)(e). We make that decision because we are not satisfied that all the relevant evidence in relation to each of those applications is now before the Tribunal. In particular, there is no direct evidence of BZR's views nor has Mr Stojanovic been given an opportunity to address the issues raised in these proceedings about the effect, if any, on his representation and evidence of a potential conflict of interest.
We make the following orders: 1. 1. In proceedings BZR v BPY (AP 14/51960) the appeal is dismissed. 2. 2. In proceedings BPY v BZQ (AP 14/51727) the following orders are made: 3. 3. Leave is granted to Mr Neil Jackson, barrister, to represent Mr Stephen Stuart, guardian ad litem for BZR in the appeal proceedings. 4. 4. Leave is granted to Ms Jane Merkel, barrister, to represent BPY in the appeal proceedings. 5. 5. The following orders of the Guardianship Division made on 4 September 2014 are set aside but not until the time that the Guardianship Tribunal re-determines BPY's application for financial management and application for review of the making of the enduring power of attorney: 1. The estate of BZR is subject to management under the NSW Trustee and Guardian Act 2009 2. The management of the estate of BZR is committed to the NSW Trustee and Guardian, 3. This order be reviewed by the Tribunal within 12 months. 1. The following orders of the Guardianship Division made on 4 September 2014 are set aside: 1. pursuant to section 25E(2) of the Guardianship Act the account in the name of BZR and her late husband with ANZ Bank known as V2 PLUS, account (number deleted) is excluded from the estate for the purposes of the financial management order; 2. not to carry out a review of the making of the enduring power of attorney made by BZR on 25 June 2014 which appointed BZQ; 3. the application made by BPY for a review of the making of the abovementioned enduring power of attorney (Matter No 2014/7592) is dismissed; 4. the application by BPY for a guardianship order to be made for BZR is dismissed; 5. the application by BPY for a review of the enduring guardianship appointment made by BZR on 30 June 2014 appointing BZQ as her enduring guardian is dismissed. 1. The following applications by BPY are remitted to the Guardianship Division for determination in accordance with law: 1. the application for financial management; 2. the application for a guardianship order; 3. the application for review of the enduring guardianship appointment; and 4. the application for review of the making of the enduring power of attorney. 1. The Appeal Panel suspends the appointment of BZQ as the enduring guardian for BZR until the Guardianship Division determines BPY's application for a review of the enduring guardianship appointment and the application for guardianship.

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: 05 March 2015

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