DEM v NSW Trustee and Guardian

Legislation

1. Section 70 of the NSW Trustee and Guardian Act 2009 makes specific provision for administrative review by this Tribunal, of decisions by the Public Guardian. The section provides: 70 Administrative review by NCAT of decisions by NSW Trustee in relation to managers (1) Each of the following persons may apply to the Civil and Administrative Tribunal for an administrative review under the Administrative Decisions Review Act 1997 of a decision by the NSW Trustee under this Part in relation to the functions of a person appointed as a manager: (a) the person appointed as manager, (b) any other person who, in the opinion of the Civil and Administrative Tribunal, has a genuine interest in the matter to which the NSW Trustee's decision relates. (2) Subsection (1) does not apply if the decision by the NSW Trustee was made in accordance with a direction given by the Supreme Court to the NSW Trustee.
2. This decision does not arise as a result of a direction given by the Supreme Court of NSW to the NSW Trustee.
3. I am satisfied that DEM has standing to make her application as a person who has a genuine interest in the matter to which the NSW Trustee's decision relates. (The Internal Review decision).
4. Sub-section 63 (1) of the Administrative Decisions Review Act 1997 ("the ADR Act") sets out the role of the Tribunal in determining an application for administrative review under that Act. That role is: "... to decide what the correct and preferable decision is having regard to the material then before it, including the following: (a) any relevant factual material, (b) any applicable written or unwritten law."
5. Subsection (2) of section 63 provides that for the purpose of making my decision I may exercise all of the functions that are conferred or imposed by any relevant legislation on the administrator who made the decision.
6. Chapter 4 of the NSW Trustee and Guardian Act 2009 (the 'TAG Act') sets out the management functions relating to persons incapable of managing their affairs. Section 39 provides for the general principles applicable to the exercise of functions under that Chapter. Those functions apply in these proceedings to the Tribunal and how I might arrive at the correct and preferable decision. The section provides: 39 General principles applicable to Chapter It is the duty of everyone exercising functions under this Chapter with respect to protected persons or patients to observe the following principles: (a) the welfare and interests of such persons should be given paramount consideration, (b) the freedom of decision and freedom of action of such persons should be restricted as little as possible, (c) such persons should be encouraged, as far as possible, to live a normal life in the community, (d) the views of such persons in relation to the exercise of those functions should be taken into consideration, (e) the importance of preserving the family relationships and the cultural and linguistic environments of such persons should be recognised, (f) such persons should be encouraged, as far as possible, to be self-reliant in matters relating to their personal, domestic and financial affairs, (g) such persons should be protected from neglect, abuse and exploitation.
7. Both parties made reference to these principles in their submissions at hearing.
8. It is generally uncontested and accepted by the NSW Trustee and Guardian that in making the original decision and the decision under review it was under a duty to comply with s 39 by observing each of these principles. However other than the filing of the documents required under s 58 of the ADR Act, the Public Guardian as first respondent has taken no further active role in these proceedings and did not appear at hearing.

Internal Review

1. The internal review occurred on 31 July 2017. That concerned a review of a decision of the delegate of the first respondent dated 8 June 2017 to sell the protected person's property (residence) located in a suburb of Sydney. The applicant's daughter (DEM) sought the review and submitted that the sale is against the protected person's expressed wishes and that there is no financial imperative to sell the property. It was also submitted that the sale (at this time) would benefit the beneficiaries (of the future estate) and not benefit the protected person. In addition a submission was made that the protected person could visit the property, and he could enjoy it with family and carers. A number of other minor grounds were also submitted.
2. The original decision to approve the sale was based on financial information provide by the financial manager (second respondent) that annual expenses currently exceeded income by $15,346 as calculated in June 2017. As a result it was submitted that the financial manager would need to assess the best alternative to realise unproductive assets into cash to provide the necessary funds for the ongoing care expenses. An aged care specialist was engaged and provided six financial scenarios with the status quo (leaving the house vacant) resulting in a $24,855 per annum shortfall.
3. The decision maker was cognisant of the protected persons wishes that the house not be rented out, however the earlier projections of the aged care specialist were based on the availability of rental income. The protected persons wishes were conveyed when he had capacity. Since that time the protected person (who is now 100 years old) has been assessed to have a level of dementia.
4. The decision maker also had regard to the reasons of the Guardianship Division of the Tribunal in appointing the second respondent financial manager. The Tribunal concluded that the protected person was not capable of managing his financial affairs. In addition the Tribunal concluded that the appointment of a financial manager was necessary over and in addition to the existing arrangements whereby the second respondent and his brother have been enduring attorneys for their father since 2010.
5. The Tribunal also had regard to the fact that a decision needed to be made about the future of the property, the daughter (applicant) was challenging those decisions, and that there was a need to provide clarity in the decision making power / role.
6. The decision maker also had regard to the Tribunal's suitability considerations for the financial manager's appointment. In addition the decision maker had regard to evidence before the Tribunal that as at 25 March 2015 and in March 2017 the protected person supported the sale of his home. Based on all of the above considerations the reviewer affirmed the original decision.

Background before the Tribunal

1. The applicant lodged her application within time and there is no dispute that the Tribunal has jurisdiction to hear the matter. When the matter first came before the Tribunal the second respondent was joined as a party to the proceedings. In addition, the decision of the first respondent dated 31 July 2017 was stayed pending further order of the Tribunal.

Written material

1. The first respondent filed the material required under s 58 of the ADR Act on 20 September 2017. That material comprised 23 tabs of folios and included the NCAT financial management order and reasons, the internal review and related financial management documents relating to the protected person and their last will and testament (Will)
2. The second respondent filed a sworn statutory declaration dated 26 September 2017 (Exhibit 'R-1'), and a bundle of material (Attachments A-L inclusive) and statements of interested parties.
3. The applicant filed a significant amount of material in support of her application. The application for administrative review (Exhibit 'A-1'), material in support of the Interim Order (Stay) (Exhibit 'A-2') with associated attachments (A-N inclusive), and a further bundle of material in support (attachments tabbed A-W inclusive) comprising the transcript of previous hearings, reports and written submissions.
4. At hearing the parties agreed that not all of the material could be considered in detail but the representatives for both parties took the Tribunal to the particular material that they wished to reply upon. Both sides relied to differing extents and on differing basis on similar portions and aspects of the transcript of the hearing before the Guardianship Division of the Tribunal.
5. The applicant set out in her application for review the following grounds: The intended sale of my father's home by the newly appointed Financial Manager, (son and beneficiary) is based on AN UNLAWFUL REASON TO SELL in that it is in order to bypass the executor's fees and thereby benefit the beneficiaries. It is AGAINST THE WISHES, INSTRUCTIONS and HUMAN RIGHTS OF THE OWNER (the protected person) expressed strongly, by him on several occasions when fully cognisant. MISLEADING EVIDENCE had been submitted to NCAT Guardianship Division and elide upon by the CEO Executive Committee of the NSW Trustee. NO FINANCIAL IMPERITIVE for the sale exists.

Protected person's attitude to the proceedings

1. Section 39 of the TAG Act requires me to have regard to their views and to give paramount consideration to the welfare and interests of such persons. No input had been formally sought from the protected person. The evidence of the Guardianship Division attempts to involve the protected person in those proceedings was tabled in this hearing. Both active parties gave general, statements and some evidence (albeit lay evidence) that their father had no interest in the proceedings and did not wish to participate in any way.
2. References to his advanced age (100 years) and some presentation of dementia were set out by the parties as to why involving him in the proceedings would be futile. When the Tribunal challenged the parties on this point both active parties submitted that they wished to proceed in their father's absence and the recent Guardianship Hearing as evidence of the futility of an active approach. No arrangements had been made by the parties or their representatives to have him available by telephone. I also note that the protected persons proposed or suggested lack of participation had not been formally raised with the Tribunal prior to hearing.
3. In addition the applicant's representative submitted at the outset that it was in the protected person's interests that he not be involved in the proceedings.
4. Having regard to the oral and written material submitted at the start of this hearing, and the fact that there is documented evidence of the protected persons views and wishes which I can directly address, I am satisfied that the matter can proceed without any formal participation of the protected person, and satisfactorily acquit section 39 of the TAG Act.

The hearing

1. The applicant relied on all her material filed in the proceedings but in particular the statement of 24 April 2017 and specific material from within the section 58 documents.
2. The respondent relied upon the s 58 material and also filed a large amount of material much of which had been prepared for the earlier Guardianship Division hearing.

Second Respondent's evidence at hearing

1. The second respondent gave evidence at the hearing. In evidence in chief he adopted his statutory declaration sworn 26 September 2017 as true and correct (Exhibit 'R-1'). The respondent referred to material dated 9 May 2017 whereby the protected persons assets were listed as being approximately $350,000.00 in shares and $1,400,000.00 as the cash value of the property.
2. The respondent's evidence was that he had discussed with his father over many years the issue of one day selling the house. There had been an agreement to hold onto the house because of the growing capital gain. The current income from the shares was a $19,000.00 - $20,000.00 annual dividend. The protected person's expenses were up to $40,000.00 per annum. The second respondent provided evidence that the cash reserves were no longer able to cover the balance of the shortfall.
3. The second respondent gave evidence that by selling the house there would be cash to invest and as a result it would be income producing and would easily cover the current shortfalls. Approximately $470,000.00 worth of shares had already been liquidated in order to cover the nursing home / facility bond. The second respondent's repeated evidence was that as part of his role as financial manager the appropriate approach was to: 'Always pay expenses out of income'.
4. The Tribunal inquired into the reason that the property was never rented over the last six or so years. The respondent advised that his father had always refused to have the property rented out and would never change his position on that. The respondent advised that his father would only ever sell the house for one of two specific reasons. The first being that there was no further capital gain, and the second being the presence of good market conditions. The respondent's evidence was that in 2015 his father had agreed to sell the house based on good market conditions.
5. The protected person's cash balance is now down to $10,000. In 2011 the protected person entered the nursing home and the respondent and his brother cleared the property up to either rent or sell. The reason that they did this at that time was explained as: 'Being in a position to act should dad want to.'
6. The respondent's evidence was that they received a dementia diagnosis in November 2015. The respondent gave further evidence that in October 2016 despite his father's diagnosis 'P' (the brother) and he felt the need to respect their father and put the sale proposal to him, even though there was no requirement to do so. As a result they commissioned the independent Balanced Age Care financial report in February 2017.
7. During cross-examination the respondent was asked whether he had received any advice about his father's life expectancy. The respondent answered that he had not, and that from a physical perspective his father remained in quite good health. He asked the financial planner what was the best approach, and that was what he acted on.
8. The respondent denied any tension between his role as financial manager and being a beneficiary to the protected person's will? The respondent answered that he did not need his father's money, but that he had a responsibility to manage his finances.
9. It was put to the respondent that he had previously advised that selling the property now would save $20,000 - $30,000 in legal fees that would otherwise accrue with managing probate. The respondent denied ever saying this in these terms and pointed out that the fees are based on a percentage of the entire value of the estate at that time.
10. It was also put to the witness that the six-year 'delay' in selling the house was done in order to accede to the protected person's interests. The respondent denied that this was the sole reason and stated that his earlier oral and written evidence had already addressed this. The house was to be sold when necessary and when the market conditions were right.
11. The respondent added to his evidence concerning the affection for his father and stated how he had looked after his father for six years at home by himself after his father became a widower.

Applicant's evidence at hearing

1. In evidence in chief the applicant adopted her statement / reasons for stay (Exhibit 'A-2'). The applicant stated that the reference on page 2 refers to an e-mail of 25 March 2015 concerning the fact that the second respondent had stated that the protected person had agreed to the sale of the house.
2. The applicant stated that several days later she went to the nursing home and as a result the e-mail dated 29 March 2015 was generated concerning the protected person saying that he had not 'authorised (the second respondent) to sell the house. The applicant stated that she believed that when her father (the protected person) was talking about 'the house', he thought it was the second respondent's house that was being discussed, not his own.
3. Reference was made to one instance in 2016 when the protected person became or was upset at the thought, discussion or prospect of the house being sold, and one other similar instance in 2017.
4. Under cross-examination the applicant was taken to the transcript of the Guardianship Division hearing. The relevant passage is relied upon by both parties and concerns a discussion about the protected person's understanding of his financial position and what to do to improve the financial position. The hearsay evidence implies that the protected person was not 'doing very well with stopping the sale of the house'. The applicant maintains that the protected person would refer to two words to rebut the sale discussion: 'the shares' meaning in her evidence that the protected person wanted the shares sold rather than sell the house.
5. The applicant's evidence was that 'dad did not want this to destroy the family'. In her view her father (the protected person) wants to go home. She gave evidence that he does not wish to be in care and does want to return home and was going to live with his daughter (the applicant). In her view this arrangement was stopped by her brother (the second respondent).
6. In addition the applicant referred in her evidence to the protected person's solicitor arranging for a 'capacity test' to be conducted. In her view the NCAT proceedings (before the Guardianship Division) proceeded on the basis of an assumed existence of dementia.

Applicant's submissions

1. The applicant relied on the case of Re W and L (Parameters of Protected Estate Management Orders) [2014] NSWSC 1106 and in particular paragraph 20 of that decision. 20. Each case must, of course, be considered on its own facts, including not only actual facts presently known but also, so far as they can be known, prospective developments. That submission was repeated in their written submissions.
2. In further written submissions the applicant stated that there was no financial imperative to sell the home. The applicant submitted that with the limited life expectancy of the protected person the existing funds would suffice from selling the shares and cash reserves.
3. In addition critical of the financial report, the applicant submitted that the planner had only prepared the six scenarios based on the specific options or questions put to them by the second respondent. The applicant submitted that the review decision placed weight on the financial planning report but omitted to understand that a scenario concerning not selling the shares had not been considered. The applicant submitted that: 25. It is respectfully submitted that no significant changes should be made to the Concerned Persons estate. The proportionate sell-down of shares to fund the next couple of years is proportionate and certainly adequate to address the stated need.
4. The applicant resubmitted matters concerning the protected person's wishes that he consistently advised that he did not wish to sell the home. It was submitted that these matters under s39 (a), (b) and (d) of the TAG Act should guide the Tribunal in refusing the authority to sell the home. Further submissions were made about the protected person's fond memories of the home and other personal matters.
5. A number of critical submissions were made concerning an alleged bad faith and conflict of interest in the second respondent's actions. Various references to the timing of the sale impacting on the cost of the sale were made. This was addressed in the evidence at hearing. However the applicant closed their written submissions asserting a view that: 'there is no need to "preserve" capital above all things and it is reasonable and proportionate that the shares be sold to fund the remaining few years (optimistically speaking) of (the Concerned Person's) life'.

Respondent's submissions and evidence

1. The respondent tendered a letter from a Dr Dunlop prepared for the other NCAT proceedings and dated 27 April 2017, concerning the current state of the protected person's dementia. The doctor visited the protected person approximately every six weeks since he entered the nursing home in 2011. The letter refers to the fact that the protected person is 100 years old and suffering from 'significant and advanced dementia and gradually becoming more and more frail'.
2. The letter goes on to give an opinion that due to his situation, it would be an almost impossible struggle to provide the same care outside of a similar facility.
3. The respondent submitted that references in the earlier NCAT decision are pertinent to the current proceedings, namely that at paragraph 21 (The applicant) agreed that (the protected person) is not able to manage his own financial affairs, and at paragraph 22 that: The Tribunal attached particular weight to the evidence concerning the extent of (the protected person's) dementia.
4. The respondent submitted that the sale of the shares would be paying expenses from income producing capital. It was submitted that this was both wasteful and irresponsible as well as being contrary to the protected person's wishes that the shares provide income for his old age. It was submitted that the relevant bank shares were prime investments and any sale would provide short-term funds but diminish income-producing capital.
5. Rental of the property was not an option due to the expressed wishes of the protected person to sell rather then ever rent the property out for income. It was submitted that with other expenses (such as agents fees and land tax), even with the share dividends there would be a slight deficient as the net rental income (if fully tenanted) was projected at $19,000 per annum.
6. The respondent submitted that the applicant had objected and interfered at every instance that a decision was made, or proposed concerning the future care, arrangements or funding of her father's old age. It as submitted that the applicant was refusing to accept the decisions made lawfully by others such as the appointment of the second respondent as the protected person's financial manager.
7. The respondent drew attention to the fact that the applicant had lodged reviews wherever possible and the series of reviews, applications, and most recent stay granted on 12 September 2017 had caused delay and significant costs to the protected person including lost market opportunity and time and effort by those involved.
8. In conclusion the second respondent submitted that there was no valid reasons not to sell the house.

Consideration of the evidence

1. Both parties lodged a large amount of written material for the hearing, much of this was previously prepared for and submitted in the Guardianship Division application and hearing. In my view whilst the evidence of the parties is at times complimentary and at other times in conflict, I do not assess the weight of the applicant's divergent evidence and position as strong. Many of the applicant's points (such as her father's desire and ability to return to the home to enjoy with family and friends) are simply not supported by the available evidence. The independent evidence is that such a situation is now physically and mentally impractical and impossible for the protected person.
2. In assessing these matters I have had particular regard to the medical evidence and the reasoning and analysis of the Guardianship Division. I have also had significant regard to the evidence of the parties as given before me at the hearing.
3. It appears that the applicant is a loving daughter who clearly desires the best for her father in his final years. It is also clear from the material before me that she has always had his interests in mind, and has attempted to ensure that decisions were both appropriate and sound as to his care and wishes.
4. The second respondent likewise presents with positive feelings and attributes towards his father. This is clearly demonstrated in the manner in which he gave his evidence and other statements from the bar table. The manner in which the second respondent has gone about dealing with his father's decisions and financial management are in my view appropriate and (on the available evidence) faultless.
5. Many of the applicant's concerns about conflict of interest, merits of a sale prior to probate being somewhat disingenuous and orchestrated to deliver a greater surplus to beneficiaries of the estate and similar grievances, fell away during the hearing. To the extent that those views however may by maintained by the applicant, there was no evidence before me of financial mischief, unprofessional conduct or decisions made in bad faith and contrary to the Direction and Authorities issued to the second respondent by the Tribunal Order, and I so find.
6. The Tribunal has often observed that when determining how to best assist a family member who might have a disability or relevant condition in the areas of care and financial management, persons with good will often legitimately differ in views and attitudes as to how those needs should be met.
7. Reference was made to the case of CPE v NSW Trustee and Guardian [2017] NSWCATAD 11. It was submitted that the case involved a more exigent or pressing financial imperative to sell the property. However driving that application was a desire by the third party to keep the house, as any sale would leave them without accommodation.
8. Paragraph 27 of that decision sets out how the matter must be approached. When referencing the case of P v NSW Trustee and Guardian [2015] NSWSC 579 27. This protective jurisdiction is governed by the central informing idea that the jurisdiction exists for the care of those who are not able to take care of themselves. The exercise of this jurisdiction must be for the benefit, and in the best interests, of the person in need of protection as an individual, not for the benefit of the state or for the convenience of carers: P v NSW Trustee and Guardian [2015] NSWSC 579
9. I observe that much of the basis for which the sale approval is opposed relates to the applicant's views, and her beliefs in respect of her father's views. I have already referred to the limited views of the protected person due to both his health and his unavailability at hearing. I will return to these matters, however in accordance with the principle from P's case, it is clear that the protected person must benefit from the decision, to the detriment (if necessary) of all others.

Preliminary findings

1. On the totality of the evidence and material before me I can find no evidence as to how the sale of the property is in any way detrimental to the protected person. In respect of the evidence relied upon by the applicant, I have weighed up the written and oral evidence, as directed to me by the applicant relying on Items: A, B, E, J, L, P, T, U, UQ, and W from the s 58 documents, the relevant aspect of the Tribunal Transcript and the cited case. Whilst there is some conflict on the crucial issue of whether the sale of the house was supported, having considered all of the evidence and material before me (not just that referred to by the applicant), I find that the weight of evidence supports a finding that the protected person no longer resists the sale of the house.
2. The totality of the evidence submitted by the respondent, and other material filed by both parties before the Tribunal supports a position that the sale of the house is: (a) no longer contrary to the wishes of the protected person. (b) The prerequisite conditions for an approved sale (as ascertained when the protected person's capacity was not in issue), are present. (c) As the property is managed at a loss (in that there are annual expenses and nil income from it) from a financial perspective (based on the detailed financial information provided) the property should be converted to income producing assets. (d) Even though the shares could be sold to fund the expenses, the net effect of this strategy would see a reduction of the protected person's assets, which is contrary to the Directions and Authorities of the First Respondent.

Further consideration

1. I also note that one of the significant basis for the making of the Financial Management order at the Guardianship Division Hearing of 9 May 2017 was in respect of the need to make a decision about the property. (Par 24 9 May 2017 reasons for decision). I also note that the Directions and Authorities issued under Part 4.5 Division 2 of the TAG Act permit the second respondent to manage the financial affairs of the protected person. Whilst the Authorities require that decisions relating to the property to be made only after approval from the NSW Trustee and Guardian, that is the only restriction on the manager in such circumstances. Having obtained the approval (subject to section 39 of the TAG Act) it appears that the basis for the making of the financial management order is discharged.
2. Turning again to section 39 of the TAG Act, I am satisfied that the sale of the property is now in the interests of the protected person. The evidence indicates that it is in his financial interests, and there are no longer any personal factors relevant to maintaining the property in respect of the protected person.
3. On the totality of the evidence I prefer the evidence supporting the sale. I note that there is some contradictory evidence but I also place significant weight on the diagnosis / medical opinion of Dr Dunlop, and the fact that neither party wished for the protected person to be called during the hearing.
4. In reaching this position I have also had regard to paragraph 20 of Re W and L as relied upon by the applicant. In particular the words: including not only actual facts presently known but also, so far as they can be known, prospective developments. (Emphasis added).
5. Dr Dunlop's evidence indicates that the protected persons condition is unlikely to improve and that his need for support will only increase. On this basis it is extremely unlikely and certainly impractical (however well intentioned) that the protected person would return home for visits or on a more permanent basis.
6. I have had regard to the protected persons views as set out in the parties evidence and discussed above. However I have had particular regard to his views as conveyed in the Guardianship Division hearing and reasons. In the absence of any other independent evidence and noting the matters referred to in some detail above, I also take those matters into regard in reaching my decision.

Finding

1. I find that that the sale of the property is now in the interests of the protected person.

Conclusion

1. On the basis of a consideration of all of the material presented to the Tribunal, I am satisfied that the decision to sell the property is the correct and preferable decision.
2. The first respondent's decision will therefore be affirmed and the application will be dismissed.

Orders 1. The decision of the first respondent is affirmed.

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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: 17 January 2018