CTS v NSW Trustee and Guardian

NCAT Administrative and Equal Opportunity|2017-02-28

Overview

The NSW Trustee has asked the Tribunal to refer two questions of law to the Supreme Court. Those questions arise because CTS, who is the manager of his wife's estate, has challenged a decision of the NSW Trustee. The decision is that "a surety bond should apply" to CTS's wife's estate. CTS says that the NSW Trustee has no power to require him to apply for a surety bond. Even if the NSW Trustee does have that power, he says it should not apply to his wife's estate.
The two "questions of law" that the NSW Trustee has asked to be referred to the Supreme Court are: 1. whether the provisions of Part 4.5 of Division 2 of the NSW Trustee and Guardian Act 2009 enable the NSW Trustee to impose security requirements upon private financial managers in the absence of an order of the Supreme Court or NCAT pursuant to s 68 of that Act; 2. If the answer to (1) is in the affirmative, is a surety bond an authorised form of security, legitimately required by NSW Trustee.
NCAT has power to refer a question of law to the Supreme Court under s 54 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act): References of questions of law to Supreme Court (1) The Tribunal (including when constituted as an Appeal Panel) may, of its own motion or at the request of a party, refer a question of law arising in the proceedings to the Supreme Court for the opinion of the Court. (2) The Tribunal may refer a question of law under this section only if the President has consented in writing to the question being referred. (3) The Supreme Court has jurisdiction to hear and determine any question of law referred to it under this section, but may decline to exercise that jurisdiction if it considers it appropriate to do so.
For the reasons given below, I have decided not to refer either of these questions to the Supreme Court.

Context

The NSW Trustee provided the following information about the need for a surety bond scheme. On 30 June 2016 about 16,040 people in NSW were under a financial management order. Of those 3,946 had a private financial manager appointed. The number of private financial management orders being made by the Supreme Court and NCAT is increasing and it is expected that this trend will continue. Historically, the NSW Trustee had attempted to ensure that the assets of a protected person's estate were secure. Methods used to achieve that purpose included holding the Certificate of Title to real estate or seeking a letter of undertaking from a professional or financial institution. The NSW Trustee found the letter of undertaking scheme difficult to enforce and decided to investigate the best way to secure the assets which were regarded as being 'at risk'.
Steps towards the 'surety bonds scheme' were commenced in 2013 following discussions with the Insurance Council of Australia. Expressions of interest were called for in 2014 and Willis Tower Watson, insurance brokers acting on behalf of Aviva Insurance Limited, was the successful tenderer. In all cases the fee for the surety bond, which can be paid from the estate, is to be paid to Willis Towers Watson.
The NSW Trustee acknowledged that the surety bond scheme has been the subject of some criticism. Nevertheless, the NSW Trustee maintains that it is a sensible measure to protect persons incapable of managing their own affairs. It is said to be a form of insurance designed to protect the most vulnerable members of the community by insuring against loss or harm to their assets.

Power to require security

CTS submitted that the NSW Trustee has no power to make the decision under review. I understand from the proposed questions, that the NSW Trustee wishes to clarify whether he has the same power as the Supreme Court and NCAT to require a manager to give security to the NSW Trustee in respect of the management of the estate. The power of the Supreme Court and NCAT is set out in s 68 of the NSW Trustee and Guardian Act: (1) The Supreme Court or the Civil and Administrative Tribunal may require a manager it appoints to give security (including security comprising the assets of the managed estate) to the NSW Trustee in respect of the management.
Sub-sections 68(2), (3) and (4) describe the role of the NSW Trustee when the Supreme Court or NCAT require a manager to give security: (2) A manager is not taken to have complied with a requirement under subsection (1) unless the security given has been approved by the NSW Trustee. (3) The NSW Trustee is to ensure that the conditions of any security provided under this section, or before the commencement of this section, in respect of the management of the estate of a managed person are complied with. (4) The NSW Trustee must report any failure to comply with any such condition to the Supreme Court or the Civil and Administrative Tribunal (as the case requires) immediately on becoming aware of the failure.
I understand that the provision on which the NSW Trustee relies to require a manager to purchase a surety bond is s 66(1)(b) of the NSW Trustee and Guardian Act; (1) The NSW Trustee may, by order: (b) give a manager such directions in respect of the orders, authorities and directions authorised by this subsection as the NSW Trustee thinks fit.
An order made under s 66(1)(b) is subject to any order of the Supreme Court or NCAT (in the case of a person under guardianship).

Consideration

Section 54 of the NCAT Act allows the Tribunal to refer a question of law arising in the proceedings to the Supreme Court for the opinion of the Court. There is no restriction on the nature of the question that may be referred except that it must be a question of law.
Factors in this case which suggest that the questions should be referred include that there is no existing authoritative statement from an appellate court on these questions, many clients of the NSW Trustee will potentially be affected by the decision and, regardless of the outcome, an appeal is likely: Urban Consolidation and Development Pty Ltd v Commissioner of State Revenue [2010] VCAT 2124 at [15] - [16].
Despite these considerations, the questions, as currently drafted, are not appropriate for referral. The first proposed question contains a term ("security requirements") which is not defined in the legislation. One way of avoiding this difficulty would be to re-draft the question in the following terms: Does s 66(1)(b) of the NSW Trustee and Guardian Act 2009 (NSW) give the NSW Trustee power to require a manager to give security (including security comprising the assets of the managed estate) to the NSW Trustee in respect of the management of the estate of a managed person?
If that question is answered in the affirmative, then the question arises as to whether requiring a manager to purchase a surety bond from Willis Tower Watson, insurance brokers, is requiring a manager to give security to the NSW Trustee in respect of the management of the estate of a managed person. CTS submits that it is not. As this is a question of fact, or a mixed question of fact and law, it is not a question that the Tribunal has power to refer to the Supreme Court. Even if the re-framed question is referred to the Supreme Court, and answered in the affirmative, it does not resolve the question as to whether the NSW Trustee has power to make the decision under review.
A further reason for declining to refer the proposed questions or a different question to the Supreme Court is that all the issues, including questions of fact, can be resolved justly, quickly and cheaply by NCAT: NCAT Act, s 36. After the Tribunal makes its decision, either party has the right to appeal to the Appeal Panel of NCAT. That panel may be constituted by members including the President who is a Supreme Court judge.
Having decided not to refer a question of law to the Supreme Court, or it is not necessary to address a submission by the NSW Trustee that the Tribunal is not the appropriate forum for CTS to challenge the lawfulness of the surety bond scheme. But because that submission is, in my view, incorrect, I have addressed it briefly below.
The Tribunal has "administrative review jurisdiction" over a decision of an administrator if enabling legislation provides that applications may be made to the Tribunal for an administrative review under the Administrative Decisions Review Act: NCAT Act, s 30 and ADR Act, s 9. The NSW Trustee and Guardian Act is enabling legislation. Section 70 allows a person appointed as a manager to apply for a review of a decision by the NSW Trustee under Part 4.5 of that Act in relation to the functions of a person appointed as a manager.
Section 63(2) of the Administrative Decisions Review Act provides that, for the purpose of reviewing a decision, "… the Tribunal may exercise all of the functions that are conferred or imposed by any relevant legislation on the administrator who made the decision". The Tribunal's powers on review are set out in s 63(3): (3) In determining an application for the administrative review of an administratively reviewable decision, the Tribunal may decide: (a) to affirm the administratively reviewable decision, or (b) to vary the administratively reviewable decision, or (c) to set aside the administratively reviewable decision and make a decision in substitution for the administratively reviewable decision it set aside, or (d) to set aside the administratively reviewable decision and remit the matter for reconsideration by the administrator in accordance with any directions or recommendations of the Tribunal.
Contrary to the NSW Trustee's submission, the Tribunal has power to review a decision even if that decision was beyond the power of the administrator to make it. Section 6(3) of the Administrative Decisions Review Act provides that: (2) Decision made under enabling legislation For the purposes of this Act, a decision is made under enabling legislation if it is made in the exercise (or purported exercise) of a function conferred or imposed by or under the enabling legislation. (3) Decisions made without power For the purposes of this Act (and without limiting subsection (2)), a decision that purports to be made under enabling legislation is taken to be a decision made under the enabling legislation even if the decision was beyond the power of the decision-maker to make it.
The NSW Trustee submitted that it is significant that these provisions use the word "decision-maker" rather than "administrator" which is defined in s 8 of the Administrative Decisions Review Act. The argument was put that the purpose of s 6(3) of the Administrative Decisions Review Act is to remedy the actions of an individual who exceeds their authority or makes an "error of law on the face of the record" as opposed to a "jurisdictional error" which goes to the existence or not of the power of the decision making. For the reasons given below, I do not accept that the use of the word 'decision-maker' in s 6(3), or any other provision of the relevant legislation, has that effect.
Section 6(3) of the Administrative Decisions Review Act applies to any decision that purports to be made under enabling legislation, such as the NSW Trustee and Guardian Act, but which was "beyond the power of the decision maker to make". There is no basis in the text of s 6(3) for concluding that the phrase "beyond the power of the decision maker" should be restricted to non-jurisdictional errors.
Support for that conclusion can be found in cases interpreting s 25(1)(a) of the Administrative Appeals Tribunal Act 1975 (Cth). That provision gives the Administrative Appeals Tribunal power to review decisions "made in the exercise of powers conferred by that enactment". In Re Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 2 ALD 1 at [12] - [16] the Federal Court (Bowen CJ and Smithers J) held that the Administrative Appeals Tribunal had jurisdiction to review a decision made in "purported exercise of powers conferred by an enactment."
Like the Administrative Appeals Tribunal, NCAT has power to decide questions of law, including questions about the proper interpretation of the provisions in enabling legislation: Re Adams and Tax Agents Board (1976) 1 ALD 251; Peter Cane, Administrative Tribunals and Adjudication, (2010, Oxford and Portland Oregon) at 162-166.
I follows from this conclusion that the issues to be determined at the hearing are: 1. What is the decision that CTS has applied to have reviewed? 2. Does the NSW Trustee have power to make that decision? 3. Does the Tribunal have jurisdiction to review that decision? 4. If so, what is the correct and preferable decision?

Orders and directions (1) The application by NSW Trustee to refer two questions of law to the Supreme Court is refused. (2) These proceedings are listed for a directions hearing on 19 April at 10:00 am.

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: 13 April 2017

Trustee and Guardian Act 2009(NSW)

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