The Tribunal decided to dismiss the financial management application and to revoke the interim financial management order which was made for Ms TXC on 30 May 2016.
[2]
Background
Ms TXC is a 23-year-old woman who is reported to live in social housing in Western Sydney, managed by a housing organisation. Ms TXC is reported to have substantial vision impairment and no family support. She receives support services from service provider A and the housing organisation, and case management through another service provider. Ms TXC is pregnant and is expecting her first child in the near future.
Ms TXC has a close friend, Mr QMD. She is reported to have met Mr QMD in early 2016. They have spent considerable time together but do not live together on a permanent basis.
Ms TXC is also reported to have received a significant inheritance. The Tribunal understands that the full inheritance is held in an interest-bearing deposit.
On 24 May 2016, the Guardianship Division Registry received from Ms NBI, Case Manager at service provider A, an application which sought the appointment of a financial manager for Ms TXC. In the application and supporting material, Ms [NBI] indicated that she had made the application because of concerns about Ms TXC's vulnerability to exploitation and the changes in the way she had been managing her financial affairs since meeting Mr QMD.
On 30 May 2016, the application was heard. The Tribunal, as then constituted, made an interim financial management order for Ms TXC, under which it committed the management of her estate to NSW Trustee and Guardian for six months. It adjourned the further hearing of the application to a date to be fixed. The Tribunal on that occasion also ordered that Ms TXC be separately represented in all proceedings pending before the Tribunal.
The purpose of the Tribunal's proceedings at Sydney on 8 November 2016 was to resume the hearing of the financial management application made in respect of Ms TXC and to review the interim financial management order.
[3]
Parties and witnesses
The Appendix to these Reasons for Decision identifies the parties to the application and the witnesses who participated in the hearing. [Appendix removed for publication.]
[4]
Issues for determination by the Tribunal
The issues which had to be determined by the Tribunal were:
1. Is Ms TXC incapable of managing her affairs?
2. If she is incapable of managing her affairs, is there a need for another person to manage her affairs and would it be in her best interests for a financial management order to be made?
3. If an order is to be made on the basis of the answers to those questions, who should be appointed as financial manager?
[5]
THE TRIBUNAL'S ASSESSMENT OF THE EVIDENCE AND DETERMINATION OF THE ISSUES
[6]
The legal principles and authorities
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 ordinary everyday affairs of 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.
However, that approach has been reviewed and altered in more recent cases. In 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 particular circumstances of the person under consideration.
More recently, in CJ v AKJ [2015] NSWSC 498, Justice Lindsay said that a Court or Tribunal dealing with this issue should focus on whether the person is able to deal with (making and implementing decisions about) his or her own affairs (person and property, capital and income) in a reasonable, rational and orderly way, with due regard to his or her present and prospective wants and needs, and those of family and friends, without undue risk of neglect, abuse, or exploitation. His Honour went on to say that in considering whether a person is "able" in this sense, the Court or Tribunal may give attention to:
1. past and present experience as a predictor of the future course of events;
2. support systems available to the person; and
3. the extent to which the person, placed as he or she is, can be relied upon to make sound judgments about his or her welfare and interests.
There is substantial authority for the proposition that the Tribunal must exercise care in making a finding of incapability. The need for care arises from the very substantial consequences of a financial management order. That is the loss, in most cases completely, of the subject person's right to control their own financial affairs: see particularly David, by her Tutor The Protective Commissioner v David (1993) 30 NSWLR 417 (Court of Appeal); s 71 of the Guardianship Act 1987 (NSW) and s 23A of the NSW Trustee and Guardian Act 2009 (NSW). It is obvious that such a consequence will severely restrict the subject person's freedom of decision and freedom of action; yet the Tribunal is required by s 4(b) of the Guardianship Act to observe the principle that those freedoms should be restricted as little as possible. A finding of incapability is usually a critical element in the making of an order. A financial management order cannot be made if there is no finding of incapability: s 25G(a), Guardianship Act.
[7]
The evidence and views of Ms TXC
Ms TXC attended the hearing and participated actively in it. She expressed her views clearly. She made her assertions and submissions in what appeared to be a logical and systematic manner.
Ms TXC told us that, after some delay in medical analysis of her condition, she had been diagnosed with bilateral optical atrophy with possible retinal nerve damage. Ms TXC told us that she can see some colours and light against dark and that she can usually make out facial features but that she cannot read. She said that she is reasonably independent when using public transport but that she finds that she is often tired.
Ms TXC asserted strenuously that she was capable of managing her affairs and that she wished to have full control over all her assets and that she did not want a financial manager appointed. She asserted that her interests and welfare could be cared for without such an appointment. In a lengthy and detailed oral submission, she asked us to make a finding to that effect based on the following factors:
1. She has managed her own money and property independently for some time. She was able to provide us with details of her assets including the substantial term deposit which includes her inheritance. She was able to describe in some detail the regular bills which are incurred and the way in which she managed those bills, including for example a recent change of energy provider, which she initiated in order to take full advantage of an energy rebate and to save on this important item of expenditure.
2. Ms TXC asserted that most of the bills were paid through Centrepay and that others, including mobile telephone, ADSL, and the cost of running two digital tablet devices were paid by direct debit. She also asserted that she used to do her own shopping but she now does it with the help of her friend, Mr QMD.
3. Ms TXC conceded that the way in which her money was managed had changed over the last five months but said that that was because the services which she was supposed to have been provided with had not been fully provided to her because the original provider, service provider A, did not have available funding and she was awaiting contact from a community-based charity. Accordingly, many important services such as her pregnancy tests and other medical tests had been postponed. She said that the allowance of $200 fortnight paid to her by NSW Trustee and Guardian was consumed by the purchase of food and other household expenses and was insufficient to cover other important living and health care expenses. We noted that these assertions appeared to be supported by Ms NBI.
4. Ms TXC asserted that she used to budget carefully and believed that she could continue to do so, with assistance. She said she had made an attempt to return to budgeting courses provided by a charitable institution, which she had previously attended but the staff had changed and she found them unsatisfactory. She asserted, however, that she has recently made contact with a financial services firm, who can assist her with budgeting.
5. Ms TXC also asserted that in the period since the making of the existing interim financial management order, the NSW Trustee and Guardian had indicated to her that particular bills had been paid, when it emerged that they had not in fact been paid. She provided us with some detail of these payments and how she proposed to cover them in the future.
6. Significantly, in answer to our questions as to how she proposed to deal with the substantial sum held in the term deposit, Ms TXC confirmed that her primary intention was to use the inheritance to establish a small business and to pay for a better accommodation for herself and her baby. She conceded that her income from the pension may not be sufficient for her everyday needs once her child has been born and there may be a need to use some small part of the capital of the term deposit and its income to ensure that she and the baby are comfortable and healthy.
7. Most significantly, Ms TXC emphasised that she would under no circumstances use the term deposit monies to pay off any debts of Mr QMD or to make gifts to him. She said that she regarded the monies on term deposit as her own personal property being her inheritance, for the purpose of ensuring her own well-being and that of her child.
8. In closing submissions, Ms TXC asked the Tribunal to take into account that Mr QMD was undertaking rehabilitation for his alcohol abuse problems and had made some arrangements to repay his debts and that she did not regard herself as being vulnerable to exploitation by him.
[8]
The evidence and views of Mr QMD
Mr QMD told us that he was 27 years of age, that he was presently on the "work for the dole" scheme, that he had in the past attended a painting and decorating course at TAFE and that he presently lived with his father. Mr QMD revealed that he had in the past been sentenced to six months imprisonment for a mid-range drink-driving charge and had incurred debts of approximately $8000 which he was paying off. He said that his father permitted Ms TXC to stay with him at his father's home from time to time but that he and Ms TXC did not permanently live together.
Mr QMD conceded that he had a problem with alcohol consumption and asserted that he was undergoing appropriate rehabilitation for it.
Mr QMD asserted that Ms TXC appeared to be quite capable of understanding the money that she had and how to use it. He said that he had assisted her with shopping and in other ways particularly because of her vision impairment.
[9]
The evidence and views of Ms NBI, the applicant
Ms NBI told us that at the time of making her application in late May 2016, she believed that Ms TXC needed urgent assistance in managing her money and in being protected from possible exploitation. Ms NBI conceded that she had had little contact with Ms TXC over the last four or five months and that she would have little contact in the immediate future as Ms TXC has chosen another service provider. Ms NBI conceded that for that reason she could not say that Ms TXC was incapable of managing her money. Ms NBI conceded that she believed Ms TXC to be capable to manage everyday expenses through the pension which she receives.
[10]
The views of Ms TXC's advocate Ms TBH
Ms TBH contended that Ms TXC had demonstrated that she was capable of managing her day to day expenditure through her pension and that she wishes to have full control over the term deposit which contains her inheritance. Ms TBH conceded that it might be perceived that there is some element of risk for Ms TXC, given her close association with Mr QMD, but she emphasised the importance of not interfering with someone's right to manage their own money merely because of the perceived possibility of a risk to them. Ms TBH referred to the National Disability Insurance Scheme principle of "the dignity of risk"; that is the recognition that people derive individual dignity being allowed to take reasonable risks, including risks with their money.
[11]
The views of the Separate Representative
Mr de Dassell, the appointed Separate Representative, contended that Ms TXC's presentation was eloquent and detailed and that she appeared to have capacity to manage her day-to-day affairs. He noted that Mr QMD had provided a frank account of his relationship with Ms TXC and that he had been forthcoming about his criminal record and his problems related to alcohol.
We understood Mr de Dassell initially to contend that the highest degree of interference with Ms TXC's independence which would be justified in the circumstances was for the term deposit monies to be subject to management and the remainder of her estate excluded from management. However, we understood Mr de Dassell's closing submissions to be to the effect that because Ms TXC will be under additional financial pressure in the near future when her child is born, a full financial management order might be appropriate.
[12]
The Tribunal's analysis and determination of this issue
The foundation for our determination of the issue of Ms TXC's capability of managing her affairs was our acceptance of her evidence at the hearing. We found her evidence to be cogent and eloquent and in particular, we were persuaded by her submission that she could readily manage her day-to-day affairs, perhaps with some assistance which might be necessary due to her disability.
We gave less weight to the evidence of Mr QMD, although we appreciated the fact that he attended the hearing with Ms TXC and gave an open and frank account of his criminal record, his difficulties in dealing with alcohol, and the steps he was taking towards rehabilitation. We accepted that part of his evidence as reliable and persuasive.
We gave substantial weight to the fact that the applicant, Ms NBI, openly conceded that facts may have changed in the five or six months since she prepared and lodged her application and that she had had no recent substantial or ongoing contact with Ms TXC. We record that the application by Ms NBI appeared to be a proper one to have been made at the time, given that she, as a service provider, held quite genuine concerns about Ms TXC's need for protection and the possibility of exploitation.
We found the evidence and assertions by Ms TXC as to the term deposit monies to be particularly compelling. We accept that she firmly regards those monies as hers and hers alone. They have the additional personal value to her because they represent her inheritance. We accept that Ms TXC understands the importance of her financial security at this most important stage of her life, when she is expecting her first child. In particular, we accept that it is her genuine intention that the money presently on term deposit should not be used to repay any of Mr QMD's debts or to make gifts to him.
In order to make a finding that the subject person is subject to a degree of exploitation which would justify a finding that they are incapable of managing their affairs, it seems to us that the source of the exploitation must be clearly identified and that it must be established to the Tribunal's reasonable satisfaction that the risk of exploitation is a real and present one.
On the basis of the evidence, and in particular in reliance on the contentions of Ms TXC herself, that of Mr QMD and the concessions made by the applicant Ms NBI, we cannot be satisfied that there is a real and present risk that Ms TXC is vulnerable to exploitation by Mr QMD or by anyone else, to the extent that she can be regarded as being incapable of managing her affairs.
The legal principles and authorities which we have discussed at [10] to [14] above and particularly the principles considered in David, by her Tutor The Protective Commissioner v David as noted at [14], emphasise that we must exercise considerable caution before making a finding of incapability. That is because such a finding is the key element in the making of a financial management order and such an order will deprive Ms TXC of her basic right to make her own decisions about her money and property. We exercised this necessary degree of caution, particularly when considering whether Ms TXC is vulnerable to exploitation to the extent that she needs a financial manager.
As Justice Lindsay said in CJ v AKJ, cited at [13] above, in considering whether a person is able to deal with his or her own affairs in a reasonable, rational and orderly way we are entitled to take into account past experience as a predictor of future action, the support systems available to the person and the extent to which the subject person can be relied upon to make sound judgements about his or her welfare and interests. We are satisfied that each of these elements supports our finding that Ms TXC is able to deal with her affairs in a reasonable, rational and orderly way presently and for the foreseeable future.
Therefore we are unable to conclude that Ms TXC is incapable of managing her affairs.
[13]
Dismissal of the application and revocation of the interim order
It follows from these conclusions that the application must be dismissed and that the appointment of a financial manager under the interim financial management order must be revoked. We ordered accordingly.
[14]
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