FYM v NSW Trustee and Guardian

Background

1. At the time of their marriage in 1978, the husband had few assets and the couple's first house was purchased by the wife and held in her name. Subsequent properties were also held in the wife's name until 2021 when an apartment was purchased with the wife and husband listed as joint tenants on the title.
2. The NSW Trustee and Guardian agreed to the husband's request that the apartment be sold and that he be given half the proceeds of the sale. This decision was affirmed on internal review on 1 August 2023. After an application to stay the decision was refused, the apartment was sold in late August for $1 800 000.00. After expenses, the sale proceeds were $1 625 5960.00.
3. The applicants, FYM and GBD, then sought a review of the second part of the NSW Trustee and Guardian's decision on 1 August 2023, namely to divide the sale proceeds between the wife and the husband.

What are the needs of the wife and the husband in the context of their financial position?

1. Early in their marriage, the wife bought a house that she registered in her name alone. Some years later, the house was sold and another house purchased before this house was also sold and an apartment purchased as a home for the wife, husband and their son. A title search for the apartment confirms that, prior to its sale, the title was held by the wife and the husband as joint tenants.
2. A statutory declaration by the wife, dated 21 February 2021, confirms that she wished the apartment to be in both names. Throughout the marriage, the couple shared joint bank accounts where all income was deposited and from which household expenses were paid.
3. Both the wife and the husband receive an aged pension of approximately $1000.00 a fortnight. When, in late 2021, the husband moved into full-time aged care, he withdrew $175 000.00 from the couple's joint bank account, with the wife retaining the balance of approximately $220 000.00
4. The husband now has approximately $110 000.00 in the bank, pays a weekly fee of $105.00 for private health insurance and owes $16500.00 in legal fees. He estimates his general weekly expenses to be $320.00.
5. Both the wife and the husband have costs to meet for their accommodation and the care they receive in their aged-care residence. The cost of the husband's care at the aged-care residence is approximately $38 000.00 per annum. The husband has paid no Refundable Accommodation Deposit and it is his wish, conveyed through his two older sons, who hold a Power of Attorney for him, that proceeds from the sale be put towards paying it.
6. The Refundable Accommodation Deposit is a lump sum amount paid or payable by eligible care recipients and is a method by which they may choose to pay their accommodation payment. Any balance left in the Refundable Accommodation Deposit is refunded to either the care recipient should they leave the care residence or to their estate. The lump sum payment is not counted as an asset for the calculation of eligibility for an aged-care pension.
7. The cost of the wife's care at her aged-care residence is approximately $110 129.00 per annum, which includes the basic daily fee, a daily accommodation payment, a means test fee and an additional services fee. Were the wife to pay an $850 000 Refundable Accommodation Deposit, however, the cost of her care would drop to $65859 per annum.
8. According to the Services Australia website, the following limits apply in relation to a person's eligibility for an aged care pension. A non-homeowning couple, such as the wife and husband in these proceedings, can hold combined assets up to $693 500.00 in order to be eligible for a full aged pension; or up to $1 245 000.00 combined to be eligible for a part pension.
9. As at December 2022, the wife had outstanding accommodation and care debts of approximately $14000. The material before me suggests that her debt has now increased.
10. The wife, who is not allowed out of her secure dementia unit unsupervised, has a paid companion twice a week for a total of six hours. The fees for the paid companion are $66.05 per hour for weekdays and $105 per hour on weekends. Should the wife have two weekly supervised outings each of three hours duration and each on a weekday, the annual expense would be $20 607.60. For three similar sessions a week, during weekdays, the estimated annual expense would be $30 911.40. This would be in addition to her accommodation and care fees.
11. As financial manager for the wife, the NSW Trustee and Guardian charges an annual 1.4% management fee, capped at $15 000, in addition to account keeping fees and financial planning fees.
12. The wife resides in the high-care dementia section of the same aged care facility as her husband. Although the husband's health concerns have also required full-time care in an aged-care facility, his accommodation and care fees reflect the fact that he requires less care than his wife. He also has more freedom of movement than his wife and I accept the evidence before me that he enjoys swimming. Given he is thirteen years older than his wife, she may well outlive him and so require care for a longer period of time.
13. On the basis of the undisputed accommodation and care fees paid by the wife, I am satisfied that the annual expenses for her accommodation and care are currently $110 000.00, without factoring in outdoor excursions with a supervised companion. On the evidence before me, I am satisfied that these excursions give her a lot of pleasure as she delights in the outdoors and finds it difficult to be residing in a secure dementia unit.
14. Like her husband, the wife has the option to pay a full or part Refundable Accommodation Deposit which would reduce her daily care and accommodation fee.
15. In its statement of advice dated 12 December 2022, the NSW Trustee and Guardian has recommended that the wife pay the full Refundable Accommodation Deposit of $850 000.00. Because such a lump sum payment is not assessable for Centrelink purposes, the wife would continue to be eligible for the aged pension and may receive increased payments.

Did the husband have a beneficial interest in the apartment and, accordingly, a beneficial interest in the proceeds from its sale?

1. As set out above, throughout the marriage, the couple shared joint bank accounts where all income was deposited and from which household expenses were paid. Earlier properties occupied by the couple were held in the wife's name only, beginning with the property she purchased early in the marriage with money she'd inherited. The apartment they lived in from 2021, however, was held by the wife and the husband as joint tenants, with a statutory declaration signed by the wife confirming this intention.
2. It is not in dispute that the husband attended to the maintenance and upkeep of the couple's homes, and that the wife was the principal home maker. Both worked full-time although according to the husband's elder son, the husband had always been the primary wage earner. Given the paucity of evidence before me in relation to this assertion, I can only be satisfied that the couple both worked full-time, and cannot make a finding as to who was the primary wage earner.
3. Although the husband and wife held the apartment as joint tenants, the applicants assert that this does not in itself confer a beneficial interest on the husband such that the sale proceeds should be divided equally between them. It is the applicants' view that because the wife purchased the first property with an inheritance she received and that this property was then sold to purchase the next property and the one after that - each held in her name only - she retained the full beneficial interest in the sale proceeds from the apartment. This is in keeping with her wish, according to the couple's son, GBD, that the apartment - or the proceeds from its sale - be left to him.
4. It is not in dispute that the wife and husband have had a long and happy marriage and that, during the marriage, they were both in full-time paid employment. It is also not in dispute that, despite their day to day physical separation due to health issues, they remain married and are not separated. As suggested by both the applicant FYM and the NSW Trustee and Guardian, this may preclude an application to the Family Court which requires separation as a prerequisite to a claim being considered by the court. (see Stanford v Stanford [2012] HCA 52)
5. I do not have the jurisdiction bestowed on the Family Court. My role is limited to determining the correct and preferable decision on the evidence before me. I accept the evidence that the couple's first property was paid for by the wife, with money she'd inherited. I accept that this and the two subsequent properties purchased were in the wife's sole name. This changed in 2021, when the apartment was purchased, with both the husband and the wife on the title, as joint tenants, meaning that on the death of one of them, the apartment would belong to the other. That the apartment was placed in joint names and held as a joint tenancy is, I am satisfied, a sign of the wife's wish for her husband to have the benefit of accommodation were she to pre-decease him.

What are the relevant principles to be considered in determining this matter?

1. In making this decision, it is my duty to observe the following principles in relation to the wife, who is a protected person: (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. (s39, NSW Trustee and Guardian Act) .
2. In his submissions, the first applicant, FYM, suggested that an application for spousal maintenance might be an appropriate avenue for the husband. This suggestion seems to imply that the first applicant FYM accepts that the husband may have an entitlement to money otherwise held by his wife. There is no evidence before me as to whether the husband or wife have a will so I cannot make any findings as to whether the husband would benefit financially in the event of the wife's death, or indeed whether the wife would benefit financially from her husband's death.
3. In determining this matter, I have given paramount consideration to the welfare and interests of the protected person, namely the wife. This encompasses not only her financial welfare and interests but also the preservation of family relationships, including the marital relationship.
4. I have also considered the need to restrict the wife's freedom of decision and action as little as possible, the need to encourage her to lead as normal a life as possible and to consider her views when making my decision.
5. For these reasons and for the reasons set out above, I find that the sale proceeds from the apartment should be distributed to: 1. protect the welfare and interests of the wife, so that she can afford appropriate care and accommodation for the rest of her life; 2. give effect to her views as demonstrated by the decision to hold the apartment in both her name and her husband's name as joint tenants, namely that he should also be looked after in terms of his accommodation, and by extension, his care; 3. preserve family relations by recognising what it accepted by all parties to have been a long and happy marriage.
6. The proceeds from the sale of the apartment are $1 625 695.00. As suggested by the first applicant FYM and as considered above, it would benefit the wife to pay the Refundable Accommodation Deposit in full, given that it does not count as an asset for the purposes of calculating eligibility for the aged pension and given that, as she is thirteen years younger than her husband, she may well need care for longer than him and will require the funds for this.
7. Again as suggested by the first applicant FYM and as considered above, it would be beneficial for family relationships and to heed the views of the wife to distribute some of the sale proceeds to the husband to enable him to pay at least part of his Refundable Accommodation Deposit, while retaining his eligibility for the aged pension.
8. The wife has greater care and accommodation costs than the husband, and this should be reflected in the division of the proceeds. In particular, in order to encourage a more normal life for the wife and to give her some freedom of movement, regular outings with a supervised companion are imperative. Assuming three outings each week, on weekdays, this would cost approximately $30 911.40 per annum (as set out above). The wife is now eighty. To ensure these outings for the next three years, $93 000.00 would need to be available.
9. Given the wife's cognitive impairment, her care and accommodation fees are more expensive that those of the husband and the sale proceeds should be distributed to ensure she is able to continue to pay for the care she needs.
10. On this basis and for all the reasons considered above, I am satisfied that the correct and preferable decision is for the sale proceeds to be distributed as follows: 1. To the wife - $1 020 000.00, to enable her to pay a lump sum into her Refundable Accommodation Deposit, to pay for weekly outings and to ensure she is able to meet her care and accommodation costs; 2. To the husband - $605 695, to enable him to pay a lump sum into his Refundable Accommodation Deposit and to ensure he is able to meet his care and accommodation costs.
11. As the final amount of the sale proceeds may differ from the amount provided to me in the course of these proceedings, the division of the proceeds should be in the following percentages: 37.26% to the husband and 62.74% to the wife.

Conclusion

1. For the reasons set out above, the correct and preferable decision is for the sale proceeds of the apartment to be distributed as follows: 1. 37.26% to the husband; 2. 62.74% to the wife.

Orders 1. The decision of the NSW Trustee and Guardian dated 1 August 2023 is set aside. 2. In substitution, the following decision is made: The proceeds of the sale of the apartment are to be divided as follows: 37.26% to the husband; 62.74% to the wife.

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 August 2024