We made a financial management order in relation to DXH and committed the management of his estate to the NSW Trustee and Guardian.
[2]
Background
DXH is 36 years of age. He currently resides in Community Housing at regional NSW. DXH moved to his current accommodation earlier this year following an admission to the mental health unit at a public hospital. DXH has a diagnosis of schizophrenia and has had previous admissions to mental health units. DXH receives a disability support pension.
KZE, Social Worker and Mental Health Case Manager, brings an application for a financial manager to be appointed for DXH. KZE states that DXH is still recovering from the relapse of his schizophrenia leading to his admission and which impacts on his ability to manage his financial affairs. In particular, KZE is concerned about rental arrears accumulated by DXH and that he is at risk of losing his accommodation.
[3]
The hearing
At the end of these Reasons for Decision are lists of the parties to the application and the witnesses who attended the hearing. [Appendix removed for publication.]
[4]
What did the Tribunal have to decide?
The questions to be considered by the Tribunal are:
Is DXH incapable of managing his affairs?
Is there a need for another person to manage DXH's affairs and is it in his best interests for a financial management order to be made?
If so, who should be appointed financial manager?
[5]
Is DXH incapable of managing his affairs?
In Re D [2012] NSWSC 1006, White J assessed the history of case law in relation to financial management and noted that initially the issue of capability was approached by referring to hypothetical or abstract notions of the ordinary affairs of man. However, the Court now assesses the person's own capacity to do what they are proposing to do [58]. White J used a "rational appreciation" of assets test to determine a person's capability to manage his or her affairs. He adopts the reasoning of Barrett J in P v R [2003] NSWSC 819, who said that the task of the Court 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 [26]."
In PB v BB [2013] NSWSC 1223, Justice Lindsay confirmed that the question focuses attention on the special circumstances of the person. His Honour stated, at [7]:
"Of central significance is the functionality of management capacity of the person said to be incapable of managing his or her affairs, not: (a) his or her status as a person who may, or may not, lack 'mental capacity' or be 'mentally ill'; or (b) particular reasons for an incapacity for self-management."
The test for determining a person's capability to manage his or her affairs has been described as follows (P v NSW Trustee and Guardian [2015] NSWSC 579, [307]-[308]):
"Is a person reasonably able to manage his or her own affairs in a reasonably competent fashion, without the intervention of a [financial manager] charged with a duty to protect his or her welfare and interests?
…
[A] focus for attention is 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."
In considering whether the person is "able" in this sense, consideration may be given to:
past and present experience as a predictor of the future course of events;
support systems available to the person; and
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: see Lindsay J in CJ v AKJ [2015] NSWSC 498, at [38], and P v NSW Trustee and Guardian [2015] NSWSC 579, at [309].
The relevant time for considering whether a person is incapable of managing his or her affairs is not merely the day of the hearing but the reasonably foreseeable future (McD v McD (1983) 3 NSWLR 81 at 86). See Lindsay J in Re W and L (Parameters of Protected Estate Management Orders) [2014] NSWSC 1106 at [20].
Before us is a report from Dr Z, Psychiatrist, dated 3 August 2020. Dr Z states that DXH has a history of schizophrenia and experiences persecutory and delusional beliefs which impair his judgment. Dr Z considers that DXH's beliefs are a barrier to him accessing services, securing his financial situation and reintegrating with employment. His beliefs have led to him being socially isolated from his family. In Dr Z's view, it is likely that his persecutory and delusional beliefs have been a factor in him recently not paying rent and the risk of eviction he faces.
Dr Z states that DXH is still symptomatic and following a slow recovery trajectory. His treatment for his mental illness is under a community treatment order. Losing his accommodation at this stage is likely to lead to increased stressors and insecurity and a deterioration in his mental state.
Also before us is a letter from KZE dated 28 May 2020 and report dated 3 August 2020. KZE also gave oral evidence at the hearing. In KZE's view, DXH's schizophrenia affects his capacity to make informed decisions about his financial affairs. KZE agrees that DXH is still experiencing psychotic symptoms of his illness, DXH's medication is still being reviewed to optimise his treatment and to assist in minimising symptoms to improve his mental state and overall wellbeing.
KZE details that DXH has been experiencing difficulties managing his financial affairs and not paying his rent. She pointed to his psychotic symptoms and the impact of his illness on his organisation and ability to plan. KZE said the Community Housing organisation through which he has his tenancy issued a Notice of Termination and proceedings in the NSW Civil and Administrative Tribunal's (NCAT) Commercial and Consumer Division due to DXH not paying his rent.
Consistent with this, is a report from Community Housing organisation dated 6 May 2020 confirming that DXH had ceased rental payments, was in arrears in the amount of $1088.91 and that a Notice of Termination had been issued with the view to a payment plan being ordered by NCAT. DXH is said to show little concern about paying his rent and to be unable to manage his finances.
By the time of the hearing before us, NCAT's Commercial and Consumer Division had made an order dated 21 July 2020, that DXH pay the rental arrears and outstanding payments for utilities by way of instalments. The order notes that failure to pay any instalment will result in the whole of the balance being payable immediately. The order provides for relisting of the proceedings to determine whether the tenancy should be terminated.
DXH was strongly opposed to the application. He did not dispute that the rental arrears had accrued, however, said that an order was not necessary. In DXH's view, an order would be "cruel and invasive". DXH took issue with the evidence of the health professionals regarding his symptoms of mental illness, stating that he was being forced to take medication that is not helping him. DXH said that the tenancy issue had been resolved and that he had seen a financial counsellor through a non-profit community service provider. He said that he is able to manage his own budget.
[6]
Is there a need for a financial management order and is it in DXH's best interests that an order be made?
Dr Z supported an order, stating that this is in his best interests to help maintain stability and his ongoing chances of recovery. KZE expressed similar views, stressing the benefits of stable accommodation for DXH. KZE said there was potential for the Community Housing organisation to transfer DXH's tenancy to a property in Sydney if he chooses to return there, however he will lose this opportunity if the tenancy is terminated.
DXH was strongly opposed to an order, seeking to retain his independence over managing his finances. This was an important factor for us to take into consideration and we were mindful that the making of an order would likely be distressing for DXH. We considered however that this was outweighed by the benefits of the order identified by Dr Z and KZE in helping to maintain stability and his ongoing chances of recovery. Without an order he is at risk of losing his tenancy and homelessness.
[7]
Who should be appointed as financial manager?
In appointing a financial manager, as in making all other orders under the Guardianship Act 1987 (NSW), the Tribunal must act with the interests of the person concerned as the paramount consideration and in accordance with the other principles set out in s 4 of the Guardianship Act.
Section 25M of the Guardianship Act provides that, if the Tribunal makes a financial management order, it may appoint a suitable person to manage the person's estate or may commit the management of the estate to the NSW Trustee and Guardian.
No private person was identified as a potential private manager.
We committed the management of DXH's estate to the NSW Trustee and Guardian.
[8]
Should a reviewable financial management order be made?
The Tribunal may determine that a financial management order should be reviewed within a specified time.
KZE supported the order being reviewable, noting that DXH is still recovering from a relapse of his mental illness. DXHs medications are being reviewed and there are prospects that his symptoms may be alleviated.
Taking this into account, we determined that the order be reviewed within six months.
[9]
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
[10]
Amendments
27 August 2021 - Catchwords amended
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: 27 August 2021
We canvassed with DXH details of his financial circumstances, reasons why the rental arrears had accrued and future intentions regarding his finances. DXH's evidence indicated knowledge of his income and expenses, including previous Centrelink loans. DXH attributed difficulty in part arising due to local food banks and charities on which he relies being shut earlier in the year due to the COVID-19 pandemic. He acknowledges that his smoking habit of a packet a day impacts on his budget. He said that after rent and other payments are taken out from his pension, he has $596 per fortnight. He said that he did not have enough money to cover his rent.
In terms of accommodation, DXH spoke of living in a share household in regional NSW and living in his car prior to his hospital admission. DXH said he planned to stay in his current accommodation for the time being, however, is interested in returning to Sydney where he lived for some years. DXH is originally from Melbourne. His family continues to live there; however he does not want to have contact with them.
DXH's presentation to the Tribunal was consistent with the evidence of the health professionals regarding his symptoms of schizophrenia and that he lacks insight into his mental illness. He expressed considerable paranoia. Whilst we accept that DXH has a knowledge of his income and expenses, we accept the evidence of the health professionals that his symptoms of schizophrenia are impacting significantly upon his capacity to manage his financial affairs.
We take into account DXH's explanation of how the rental arrears accrued and that he has obtained the assistance of a financial counsellor, however, place greater weight on the evidence of the health professionals as to the impact of his illness on his function and capacity to plan, organise and make sound judgments about his finances. We were satisfied that DXH is incapable of managing his financial affairs.