Holt v Protective Commissioner

NCAT Guardianship|2016-02-15

APPLICATION TO REVIEW AN ENDURING POWER OF ATTORNEY

Contents

These Reasons for Decision are arranged under the following headings:

What the Tribunal decided
Background concerning Mr MBC
The hearing
The legislative framework governing the Tribunal's power
Evidence before the Tribunal
What did the Tribunal have to decide?
The application to review the enduring power of attorney
The application for a financial management order
THE APPLICATION TO REVIEW THE ENDURING POWER OF ATTORNEY
Should the Tribunal undertake a review of the enduring power of attorney?
Should the Tribunal make an order under s 36 of the Powers of Attorney Act 2003 (NSW)?
If so, what order should the Tribunal make?
If not, should the Tribunal treat the application for the review as an application for a financial management order under Part 3A of the Guardianship Act 1987 (NSW)?
THE APPLICATION FOR A FINANCIAL MANAGEMENT ORDER
Is Mr MBC incapable of managing his own affairs?
Is there a need for another person to manage Mr MBC's affairs and is it in his best interests for a financial management order to be made?

What the Tribunal decided

On the application by Mr TWC, an interested person, the Tribunal decided to review the operation and effect of the enduring power of attorney granted by Mr MBC on 24 June 2009, reviewed the operation and effect of that enduring power of attorney, and decided not to make an order under s 36(4) of the Powers of Attorney Act.
Pursuant to s 37 of the Powers of Attorney Act, the Tribunal decided to treat the application for review of the enduring power of attorney as an application for a financial management order under Part 3A of the Guardianship Act.
Pursuant to Part 3A of the Guardianship Act, the Tribunal ordered that Mr MBC's estate be subject to management under the NSW Trustee and Guardian Act 2009 (NSW) and appointed the NSW Trustee and Guardian as manager of that estate.
The Tribunal included in its order a notation in the following terms: The Tribunal draws to the attention of the NSW Trustee an urgent issue concerning the estate of [Mr MBC] being a dispute with [a commercial bank] concerning an alleged breach of a reverse mortgage agreement entered into by [Mr MBC]'s attorneys on his behalf. A determination has been made in respect of the dispute by the Financial Ombudsman Service. The Tribunal has not been provided with a copy of the determination but understands that decisions and action concerning the determination are required to be taken urgently. The Tribunal recommends that the NSW Trustee takes urgent steps to ascertain the position under the determination and takes any urgent action it considers is required in the interests of [Mr MBC] and his estate.

Background concerning Mr MBC

Mr MBC is an 87-year old man presently residing in Bali, Indonesia. Mr MBC suffers from severe dementia. At the time of the lodgement of the application with the Tribunal, Mr MBC was living temporarily with his son, Mr TWC, in a unit in Inner West Sydney. Mr TWC was providing care for Mr MBC. Prior to that, Mr MCB had, since about 2010, been living in Bali in rented accommodation. He has since returned to his rented accommodation in Bali. Mr MBC's daughter, Ms LDC, lives with him in Bali and provides care for him, as she has done since he moved there. Mr MBC had earlier lived in his own house in Inner West Sydney, which he retains.
On 24 June 2009, Mr MBC granted an enduring power of attorney to his daughter, Ms LDC, and his son, Mr TWC. They were appointed severally. The power of attorney was stated to operate immediately. Both attorneys accepted their appointments on 24 June 2009. The attorneys have been managing Mr MBC's estate for some years now under the power of attorney.
On the same date, 24 June 2009, Mr MBC appointed his children as his enduring guardians. Again the appointments were several. Both guardians accepted their appointments on 24 June 2009. The Tribunal was informed by Mr TWC that he subsequently relinquished his appointment as enduring guardian at his sister's request.
On or about 23 April 2012, Mr MBC was advised by ACAT that he had been approved as eligible to receive permanent residential care at a high-level, residential respite care at a high-level and Extended Aged Care at Home (EACH). He was apparently in Australia again at that point and staying with his son.
On 24 November 2015, the Tribunal received from Mr TWC an application to review the operation and effect of the enduring power of attorney given by Mr MBC.
In his application, Mr TWC stated that the review was needed because (quote): Other Joint POA not willing to work together. No defined POA roles and responsibilities and communication issues makes it difficult to fulfil POA duties. Other POA not reporting finances nor is there a financial plan in place. Have requested financial plans on numerous occasions. Separation of finances an issue with other POA. Principal's financial liquidity currently at risk due to prolonged unnecessary legal action and lack of communicated plan. Other POA not willing to mediate to work on a framework to manage POA jointly. Have requested mediation on several occasions thru CJC, family friend and professional mediator. Other POA currently not operating for principal's best interests - should be concentrating on finding a home for my father instead of legal action.

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 of the application on 18 January 2016 and 15 February 2016. [Appendix removed for publication.] The hearing was conducted in person and by telephone. Mr MBC attended the hearing on 18 January 2016 by telephone from Bali in the company of his daughter, but took no active part in the hearing due to his condition. Indeed, he was reported to have been sleeping through some of the hearing. Mr MBC did not attend the further hearing on 15 February 2016. He had remained in Bali, while his daughter came to Sydney.
The hearing was adjourned part heard on 18 January 2016. During the hearing on 18 January 2016, the Tribunal indicated to the parties that, in the circumstances, it may be minded, pursuant to s 37 of the Powers of Attorney Act, to treat the application for the review of the enduring power of attorney given by Mr MBC as an application for a financial management order. The Tribunal published reasons for its decision to adjourn. Those reasons for decision record, in part, that: The Tribunal ordered that the hearing of the application for review of an enduring power of attorney given by [Mr MBC] on 24 June 2009 be adjourned for a short period, part heard, to allow the parties the opportunity: to give consideration to proposing a private financial manager in case the Tribunal decides to treat the application as an application for a financial management order, to prepare any evidence about any such proposal, and to arrange to have available for questioning by the Tribunal any private financial manager to be proposed. The parties indicated that they may also wish to put further material before the Tribunal concerning a [complex] refinancing proposal made by [Ms LDC], one of the attorneys, just before the hearing, which proposal had not been able to be considered properly [by the other attorney] in the time available.
The Tribunal's reasons for its decision to adjourn also noted that: As there was an ongoing dispute between [Mr MBC]'s estate and his existing financiers, which was well advanced, only a short adjournment could be granted without exposing the estate to undue risk. Nothing more was sought by the parties.
The Tribunal did not consider it appropriate in the circumstances of these proceedings to use resolution processes other than those inherently available to it during its informal hearing process. During the hearing the Tribunal endeavoured to draw out agreement from the parties in respect of the issues or, otherwise, to narrow those issues.

The legislative framework governing the Tribunal's power

It is helpful as an aid to understanding the Tribunal's decision to set out the legislative framework within which it is acting in considering the application before it to review the operation and effect of an enduring power of attorney.
The Tribunal is the Civil and Administrative Tribunal of New South Wales in its Guardianship Division. The Guardianship Division has been assigned the functions of the Tribunal in relation to the Powers of Attorney Act, the Guardianship Act and some other specified Acts.
Pursuant to s 36(1) of the Powers of Attorney Act, the Tribunal may, on the application of an interested party, decide to review the operation and effect of an enduring power of attorney, or not to carry out such a review. An interested person includes an attorney under the enduring power of attorney - s 35(1)(a).
If the Tribunal decides to review the operation and effect of an enduring power of attorney it may, following the review, decide whether or not to make an order under s 36 of the Powers of Attorney Act (s 36(2)).
Section 36(4) sets out the orders the Tribunal may make under s 36 following a review of the operation and effect of an enduring power of attorney. It states: A review tribunal may, if satisfied that it would be in the best interests of the principal to do so or that it would better reflect the wishes of the principal, make any one or more of the following orders relating to the operation and effect of a power of attorney: (a) an order varying a term of, or a power conferred by, the power of attorney, (b) an order removing a person from office as an attorney, (c) an order appointing a substitute attorney to replace an attorney who has been removed from office by a review tribunal or who otherwise vacates the office, (d) an order reinstating a power of attorney that has lapsed by reason of any vacancy in the office of an attorney and appointing a substitute attorney to replace the attorney who vacated office, (e) an order directing or requiring any one or more of the following: (i) that an attorney furnish accounts and other information to the tribunal or to a person nominated by the tribunal, (ii) that an attorney lodge with the tribunal a copy of all records and accounts kept by the attorney of dealings and transactions made by the attorney under the power, (iii) that those records and accounts be audited by an auditor appointed by the tribunal and that a copy of the report of the auditor be furnished to the tribunal, (iv) that the attorney submit a plan of financial management to the tribunal for approval, (f) an order revoking all or part of the power of attorney, (g) such other orders as the review tribunal thinks fit.
Section 37 of the Powers of Attorney Act provides, in part, that if on the review of the operation and effect of an enduring power of attorney under s 36, the Tribunal decides not to make an order under that s, it may (if it considers it appropriate in all the circumstances to do so) decide to treat the application for the review as an application for a financial management order under Part 3A of the Guardianship Act. If such a decision is made, the application is taken to be an application for a financial management order duly made in respect of the principal under that power. [See also s 25F(d) of the Guardianship Act].
The making of a financial management order is a function under the Guardianship Act and is governed by the legislative framework set out in that Act.
It is the duty of everyone exercising functions under the Guardianship Act, including the Tribunal, with respect to persons who have disabilities, to observe the following principles set out in s 4 of the Act: 1. the welfare and interests of such persons should be given paramount consideration, 2. the freedom of decision and freedom of action of such persons should be restricted as little as possible, 3. such persons should be encouraged, as far as possible, to live a normal life in the community, 4. the views of such persons in relation to the exercise of those functions should be taken into consideration, 5. the importance of preserving the family relationships and the cultural and linguistic environments of such persons should be recognised, 6. such persons should be encouraged, as far as possible, to be self-reliant in matters relating to their personal, domestic and financial affairs, 7. such persons should be protected from neglect, abuse and exploitation, 8. the community should be encouraged to apply and promote these principles.
A similar duty applies to appointed financial managers pursuant to s 39 of the NSW Trustee and Guardian Act.
These principles reflect the protective nature of the guardianship jurisdiction (which includes the financial management jurisdiction) but seek to strike a balance between providing necessary protection and promoting empowerment of persons with disabilities, including by intruding no more than is necessary on their rights and liberties. Strictly speaking, the financial management regime under the Guardianship Act, unlike the guardianship regime under that Act, focuses on incapability per se without the requirement to base that incapability on a person's disability. Nevertheless, it will usually be the case that the incapability is so based. In that case, the duty in s 4 is enlivened, including the principle that the welfare and interests of the person are to be given paramount consideration.
A "person who has a disability" is defined in s 3(2) of the Guardianship Act as a person: 1. who is intellectually, physically, psychologically or sensorily disabled, 2. who is of advanced age, 3. who is a mentally ill person within the meaning of Chapter 3 of the Mental Health Act (Forensic Provisions) 1990 (NSW), or 4. who is otherwise disabled, 5. and who, by virtue of that fact, is restricted in one or more major life activities to such an extent that he or she requires supervision or social habilitation.
Section 25G of the Guardianship Act provides that: The Tribunal may make a financial management order in respect of a person only if the Tribunal has considered the person's capability to manage his or her own affairs and is satisfied that: 1. the person is not capable of managing those affairs, and 2. there is a need for another person to manage those affairs on the person's behalf, and 3. it is in the person's best interests that the order be made.

Evidence before the Tribunal

The Tribunal had before it a report concerning Mr MBC dated 7 December 2015 and prepared by Dr Z, Senior Staff Specialist Geriatrician at a public hospital in Inner West Sydney. In his report, Dr Z stated: I assessed [Mr MBC] on the 14th September 2015. He presents with a history of cognitive decline over 7 to 8 years. His past history includes diabetes requiring insulin Lantus. Other medications include Lipitor 80mg, Nitrodur 5mg, Perindopril 5mg and Clopidogrel daily, escitalopram 10mg. Past history includes Alzheimer's disease diagnosed in 2008, carotid stenosis in 2010, TIA in 2010, TURP in 2002. He smokes 10 cigarettes per day. He requires assistance with ADLs [activities of daily living] and has urinary and faecal incontinence. He has a tendency to agitation. He frequently refuses to shower. At assessment he scored 5/30 on his MMSE [Mini-Mental State Examination]. This is consistent with severe dementia. I do not believe [Mr MBC] is capable of making informed financial decisions or decisions about his medical care and accommodation needs. I would support the appointment of a financial and enduring guardian.
Mr MBC's financial affairs have been managed for some years by his several attorneys appointed on 24 June 2009. The evidence before the Tribunal is that that management has been, and is, beset with conflict between the attorneys.
Indeed, it was the view of the attorneys that the existing attorney arrangements have not worked, are not working and will not work in the future because of the conflict between them. The Tribunal confirmed this in terms with the attorneys.
Mr MBC's estate is embroiled in a dispute with a commercial bank concerning an alleged breach of the terms of a reverse mortgage entered into by Mr MBC's attorneys on his behalf in July 2014. The breach alleged by the commercial bank concerned Mr MBC not residing in the house the subject of the reverse mortgage. That house is Mr MBC's former home in Inner West Sydney. Mr MBC has been living for some time in rental accommodation in Bali. He is cared for there by his daughter, Ms LDC, who also resides in the rental accommodation. The expenses including rent are paid from Mr MBC's estate. Ms LDC told the Tribunal that she was a full-time carer for her father and so did not contribute to the accommodation and household expenses.
Mr MBC's former Inner West Sydney home, is divided and let. There are three tenancies. The total gross rental income is approximately $5,500 per month (or approximately $70,000 per annum). These figures are as given to the Tribunal. Precise figures were not available to the Tribunal. In addition to the rental income, monies have been drawn down under the reverse mortgage - refer to [40] below.
The attorneys retained solicitors on behalf of the estate in relation to the entry into the reverse mortgage, and other solicitors in relation to the dispute when it arose.
As the Tribunal understands it, the nub of the dispute is the circumstance that the terms of the reverse mortgage include one requiring Mr MBC to be, and remain, in residence at the property. The attorneys say that it was made clear to the commercial bank, through the estate's broker, that Mr MBC was intending to live in Bali and not remain in Inner West Sydney. The Tribunal has not seen the reverse mortgage or its terms but presumes from all of the circumstances that the residence requirement is included therein, and that the attorneys executed the document in that form.
A cognate dispute exists between Mr MBC's estate and the broker who arranged the reverse mortgage on its behalf.
Two separate complaint/dispute resolution services have been engaged to endeavour to facilitate the resolution of these disputes. The Financial Ombudsman Service (FOS) has been engaged in relation to the dispute between Mr MBC's estate and the commercial bank. The Credit and Investments Ombudsman (CIO) has been engaged in relation to the dispute between Mr MBC's estate and the broker. The Tribunal was not provided with details of the processes and procedures of these services.
The dispute with the commercial bank, which is the most relevant or pressing for present purposes, arose in or about June 2015.
Apparently in accordance with its procedures, in December 2015, FOS issued a 'recommendation' about the resolution of the dispute. The attorneys told the Tribunal that that 'recommendation' favoured the commercial bank. Mr MBC's estate escalated the matter in accordance with the procedures and very recently, and since the Tribunal's hearing on 18 January 2016, FOS issued its 'determination' in relation to the dispute. The Tribunal was informed that that 'determination' again favoured the commercial bank.
The Tribunal was informed that Mr MBC's estate has until 3 March 2016 to accept that 'determination'. If the estate accepts that determination, it will be allowed two months from the date of acceptance to refinance the loan (reverse mortgage) or to sell the property. The apparent intention is that by one of these courses, the commercial bank's loan will be repaid, that is. from the proceeds of the refinancing or the proceeds of sale. It is presumed that to accept the determination would require the signatures of both attorneys as they are both parties to the dispute. As the Tribunal understands it, if Mr MBC's estate does not accept the determination by 3 March 2016 or, presumably, if it does but does not refinance or sell within the two months allowed, the commercial bank will be free to pursue its remedies at law, including foreclosure and forced sale of the property. At the same time, it is presumed that Mr MBC's estate will be able to pursue any legal avenues considered open to it, at least if it has not accepted the determination.
Prior to the 'recommendation' and 'determination' by FOS, a settlement of the dispute was proposed in or about September 2015, along the lines that the commercial bank would allow Mr MBC's estate two months to refinance the loan or, if unsuccessful, four months thereafter for the estate to sell the property on its own terms. One of Mr MBC's attorneys, Ms LDC, would not agree to that proposed settlement. The other attorney, Mr TWC, said that he wanted to avoid foreclosure but signatures from both attorneys were required by the commercial bank. Accordingly, the dispute had continued.
As best the Tribunal could ascertain from the attorneys, there may have been three receipts of principal by the estate under the loan (reverse mortgage) from the commercial bank. The first, in the amount of approximately $174,000, was, presumably, received at inception to repay an earlier reverse mortgage secured over the property. That earlier reverse mortgage had been arranged through a reverse mortgage provider in 2007. Subsequently, two drawdowns of principal were made by Ms LDC, one for approximately $40,000, and another for $14,000. The total of the three amounts is approximately $228,000. The Tribunal was also told that the balance owing to the commercial bank is approximately $257,000. The reasons for the difference were not explored. The difference could, conceivably, be interest or other expenses relating to the loan. The Tribunal was informed in the application that Mr MBC's house had a value of approximately $2,400,000. Mr MBC's estate clearly has substantial equity in the house. Clearly also, if the house is to be sold, it would be better for it to be sold in an orderly fashion by Mr MBC's estate rather than as a mortgagee sale, to maximise the potential sale price and the return to the estate.
The Tribunal was informed that it was sought to use the equity in Mr MBC's home to help finance his care and accommodation needs while retaining the house in the estate. The reasons for wanting to retain the house in the estate were not given. One possible reason was that the house was considered a good, appreciating, income-producing asset. There may have been other reasons. As the Tribunal understands it, Mr TWC initially pushed for the retention of the house, and, hence, the obtaining of a loan (reverse mortgage) to support Mr MBC's accommodation and care needs.
The attorneys indicated to the Tribunal at the first hearing on 18 January 2016, that there were difficulties in endeavouring to refinance to pay out the commercial bank. The Tribunal was told that they could not arrange a reverse mortgage if their father was not living in the property, nor could they obtain a traditional mortgage. The Tribunal was told that Ms LDC was exploring obtaining a loan for a year from some private lenders, before selling the house. At the 18 January 2016 hearing, Mr TWC told the Tribunal that details of the proposed loan had 'finally' been provided to him by Ms LDC three days before the hearing. He said that he had not had time to consider the proposal properly given its complexity - but that it involved setting up a company, transferring title to Mr MBC's property to the company, the establishment of a trust and the payment of a high rate of interest. At the further hearing on 15 February 2016, Mr TWC told the Tribunal that the proposal from Ms LDC was costly and complex and he did not want to be involved with it. He noted as well that they would not be able to work together as directors of the company.
On 18 January 2016, Mr TWC told the Tribunal that he thought it was inevitable that they would have to sell the property, and the dispute with the commercial bank constrained the timing. At that point they were expecting the 'determination' by FOS would be made soon. He noted that he had done some preliminary work preparing for the sale of the property.
Mr TWC also noted on that occasion that his father did not have other significant assets besides the property. There were no shares and only a car of low value (in Sydney). He said that he did not know his father's bank balances - he had no access to his father's accounts and Ms LDC was not keeping him informed about the estate. He said that Mr MBC was no longer on the part-pension (since October or November 2015).
On 18 January 2016, the Tribunal informed Ms LDC that it had read the two lengthy emails sent by her to the Tribunal in relation to the application. The first email was an omnibus email dated 7 January 2016 sent to the Tribunal and to FOS and CIO. The second email was dated 12 January 2016, and was addressed only to the Tribunal.
On 18 January 2016, Ms LDC told the Tribunal that Mr MBC's house in Inner West Sydney had to be kept until new rental accommodation was obtained in Bali. She said that the lease on the present accommodation was due to expire at the end of January 2016, and that new, more suitable accommodation needed to be found. She indicated that a longer term lease would be required (four or five years) so as to make worthwhile the modifications that would be required to make the accommodation suitable for Mr MBC. She also noted that, in Bali, rents are paid yearly in advance.
Mr TWC told the Tribunal that Mr MBC's present accommodation in Bali was not suitable for his needs and that Mr MBC had stayed there longer than was desirable. He said that this was one reason why he brought the application, to ensure suitable, longer term accommodation for his father. He said that Ms LDC wanted to deal with the disputes before turning her mind to finding more suitable accommodation. He said that he wanted to have his father's finances managed prudently, with planning, and to have reporting by Ms LDC. He said things seemed to be going nowhere.
On 15 February 2016, Ms LDC told the Tribunal that the present power of attorney arrangements were not working. She said the situation of difficulty with her brother was longstanding and that it must not continue. She noted that she had a physical reaction (of shaking) being around her brother. She said that once the immediate problem of the loan was solved, the problem of she and her brother working together had to be solved.
Ms LDC also told the Tribunal that it was essential to refinance to get the 'bank off our back' before looking at permanent accommodation and care arrangements for her father. She said she was looking at a number of different refinancing solutions. She said that a standard mortgage was possible but needed accounting work (two years' tax returns) to be done which would take time. [The Tribunal notes that it was apparent from this that the estate's tax affairs were at least two years behind.] She also said another reverse mortgage might be obtainable without the residence requirement. Finally, there was the possibility of private loans. In relation to the private loans she mentioned 8% interest plus fees for a six (or perhaps 12)-month loan to pay out the commercial bank with interest paid up front. The house would be sold in six (or 12) months to repay the private loan. The principal amount would be sufficient to repay the commercial bank and to have money to pay for accommodation in Bali. A figure of $400,000 was mentioned. She said that her father 'needs certainty before the house is sold'. She also stated that if the house was liquidated 'the situation will remain a hell if we have to manage the proceeds'. She added that if the house was liquidated they 'will never get a home'.
As far as the Tribunal was aware, as at 15 February 2016, Mr MBC was still living in his old rented accommodation in Bali, notwithstanding the previously foreshadowed expiry of the lease at the end of January 2016. Details of the present arrangements were not provided.
The Tribunal notes that it had difficulty eliciting from Ms LDC clear answers to its questions. Ms LDC did not appear able to provide a clear explanation to the Tribunal, for example, as to why Mr MBC's house could not be sold before his accommodation issues in Bali were resolved, given that access to the proceeds of the sale would presumably facilitate the accommodation decisions and enable their timely implementation, at the same time as possibly avoiding or minimising the need for any stopgap measures. The Tribunal tried on a number of occasions to ascertain Ms LDC's reasons for her position. It did not succeed in eliciting a clear or cogent response.

The application to review the enduring power of attorney

The questions to be considered by the Tribunal on an application to review an enduring power of attorney are:

Should the Tribunal undertake a review of the enduring power of attorney?
If so, and following such a review, should the Tribunal make an order under s 36 of the Powers of Attorney Act?
If so, what order should the Tribunal make?
If not, should the Tribunal treat the application for the review as an application for a financial management order under Part 3A of the Guardianship Act?

The application for a financial management order

The questions to be considered by the Tribunal on an application for a financial management order are:

Is Mr MBC incapable of managing his affairs?
Is there a need for another person to manage Mr MBC'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?

THE APPLICATION TO REVIEW THE ENDURING POWER OF ATTORNEY

Should the Tribunal undertake a review of the enduring power of attorney?

It was not in dispute before the Tribunal that the enduring power of attorney was not operating effectively in the interests of Mr MBC and that there was irresolvable conflict between the several attorneys. The evidence before the Tribunal confirmed this. In these circumstances the Tribunal was satisfied that the interests of Mr MBC required that it undertake a review of the operation and effect of the power of attorney.

Should the Tribunal make an order under section 36 of the Powers of Attorney Act 2003 (NSW)?

The Tribunal reviewed the operation and effect of the enduring power of attorney. On the evidence before it, the Tribunal was satisfied to the requisite degree that: 1. There was longstanding conflict between the several attorneys that prevented effective cooperation and communication between them in the management of Mr MBC's estate. That situation was entrenched and unlikely to change. 2. That lack of effective cooperation and communication: 1. included the non-sharing of information about the estate, including, for example, in relation to the income and expenses of the estate and bank balances [1] . This limited effective involvement in the management of the estate by the other attorney; 2. prevented the development of any plan of management for the estate; 3. hindered the proper and timely consideration of issues confronting the estate and the development of strategies for dealing with those issues in the interests of the estate; 4. prevented the proper and prudent management of the estate and rendered it dysfunctional; and 5. potentially compromised the estate and the interests of Mr MBC including his necessary care and accommodation.
The Tribunal considered whether the situation could be adequately remedied by the making of an order under s 36 of the Powers of Attorney Act. In the circumstances it decided that it could not. Accordingly, it decided not to make an order under that s.
The Tribunal noted that its jurisdiction was a protective one and that its concern was the protection and proper management of Mr MBC's estate in his interests. It noted that effective progress did not appear to be being made in the face of the critical point looming in the dispute with the commercial bank concerning Mr MBC's principal asset. The attorneys had acknowledged that they could not work together. The Tribunal noted that, in the circumstances, it seemed that the appropriate course was to suspend the power of attorney by making a financial management order appointing an independent financial manager to make decisions in Mr MBC's interests. It noted that the NSW Trustee and Guardian would be suitable and appropriate for appointment and that no private manager had been proposed as an alternative, despite the adjournment given partly for that purpose.
The Tribunal was concerned that it had been unable to garner a clear picture of the plan for management of Mr MBC's estate, starting with a plan for managing the dispute with the commercial bank which had been running for eight months and which had reached a critical point. It was not possible for the Tribunal to have any confidence that matters would be dealt with in a manner that was well thought through and timely under the current arrangements. In its protective jurisdiction, and in the interests of Mr MBC's estate, the Tribunal did not consider it could allow the management of that estate to drift along dysfunctionally any longer while deadlines loomed that would likely have significant consequences for the estate. It felt compelled to act in Mr MBC's interests to appoint a manager who would act decisively to protect the estate and to manage it effectively for his benefit and to support his care and accommodation needs. Clear-sightedness was required, unclouded by irresolvable conflict, the source of which appeared deep in the past.
The Tribunal did not consider it appropriate in the circumstances to remove one or other of the attorneys leaving the other to manage Mr MBC's estate. The Tribunal had no confidence that that would be a workable solution leading to more effective management of the estate. For example, the possible removal of Ms LDC as an attorney while she remained her father's guardian, would reorient the conflict without resolving it. Nor was the possible making of orders about accounting or development of a plan of management likely to be effective either at all or in any timely way so as to meet the needs of the estate to deal with the disputes it was involved in and other matters.

If so, what order should the tribunal make?

As stated, the Tribunal decided not to make an order under s 36 of the Powers of Attorney Act.

Should the Tribunal treat the application for the review as an application for a financial management order under Part 3A of the Guardianship Act 1987 (NSW)?

As indicated, the Tribunal considered that Mr MBC's interests required intervention by it in the circumstances that had arisen. In the Tribunal's judgement, appropriate intervention could be achieved by treating the application for the review as an application for a financial management order. The Tribunal, therefore, considered it appropriate in all the circumstances to treat the application for review that way. It proceeded accordingly.

Is Mr MBC incapable of managing his affairs?

The evidence before the Tribunal was that Mr MBC was not capable of managing his affairs. He had severe dementia. His affairs had been being managed for him for some years by his attorneys. The Tribunal did not understand there was any dispute on this front. The Tribunal was also satisfied that Mr MBC was a person with a disability within the meaning of the Guardianship Act.

Is there a need for another person to manage Mr MBC's affairs and is it in his best interests for a financial management order to be made?

Mr MBC's affairs had become complicated as a result of the disputes that confronted his estate. His accommodation was also in a state of apparent flux. Decisions and action would be required to be taken imminently in relation to these matters. The Tribunal was satisfied that Mr MBC would be unable to take those decisions and action personally in his present state. The Tribunal was also satisfied, for the reasons already given, that his attorneys could not be relied upon to take those decisions and action in a well-considered and timely manner.
Accordingly, the Tribunal was satisfied that there was a need to appoint someone to manage Mr MBC's affairs and that it was in his best interests to make a financial management order.
Accordingly, the Tribunal made a financial management order in respect of Mr MBC's estate. One effect of that order was to suspend for the time being the enduring power of attorney (s 50(3) of the Powers of Attorney Act). The Tribunal explained this consequence to the attorneys.

Who should be appointed as financial manager?

In appointing a financial manager, as in making all other orders under the Guardianship Act, the Tribunal must act with the welfare and interests of the disabled person concerned as the paramount considerations 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.
Despite the Tribunal's foreshadowing that the making of a financial management order was one possible course open to the Tribunal, and that the NSW Trustee and Guardian and may be the appropriate manager in the circumstances, and the adjourning of the hearing to allow time for any private manager to be proposed by the parties, no proposal was put forward. Indeed, it did not appear that consideration of that matter had been progressed at all during the adjournment. Ultimately, it appeared as another illustration of the parties' inability to progress matters.
In the absence of any proposal for the appointment of a private manager, and for good reason otherwise, the Tribunal appointed the NSW Trustee and Guardian. In the Tribunal's view, the NSW Trustee and Guardian, as an experienced and independent manager, would be best placed to handle the conflict between those interested in Mr MBC's welfare and affairs, and to make considered and timely decisions in Mr MBC's interests. That was what was required.
As indicated by the President of the Court of Appeal in Holt & Anor v Protective Commissioner (1993) 31 NSWLR 227, the advantage of the appointment of the Protective Commissioner, now the NSW Trustee and Guardian, was seen to be the manifest independence of the statutory office, the advantages of a dispassionate and neutral approach in situations of family conflict and divided views as to the best interests of the person, expertise and experience in managing estates, an impeccable reputation and the security provided to an estate against loss or damage.

Notation in the Tribunal's orders

In the circumstances, the Tribunal included the following notation in its orders so as to alert the NSW Trustee and Guardian to the urgency of matters confronting the estate: The Tribunal draws to the attention of the NSW Trustee an urgent issue concerning the estate of Mr MBC being a dispute with [a commercial bank] concerning an alleged breach of a reverse mortgage agreement entered into by [Mr MBC]'s attorneys on his behalf. A determination has been made in respect of the dispute by the Financial Ombudsman Service. The Tribunal has not been provided with a copy of the determination but understands that decisions and action concerning the determination are required to be taken urgently. The Tribunal recommends that the NSW Trustee takes urgent steps to ascertain the position under the determination and takes any urgent action it considers is required in the interests of [Mr MBC] and his estate.

Related matters

The Tribunal explained to the parties that they should liaise closely with the NSW Trustee and Guardian, particularly in the transition period, to ensure the effective management of the estate.
The Tribunal also explained to Ms LDC that the Tribunal's order did not affect her appointment as her father's enduring guardian. It explained that as enduring guardian she would need to work with the NSW Trustee and Guardian in the interests of her father's welfare.
The Tribunal suggested to Ms LDC that she should endeavour to meet with the NSW Trustee and Guardian before she returned to Bali. To that end, immediately after the hearing, the Tribunal introduced Ms LDC to the NSW Trustee and Guardian's representative at the Tribunal's offices.

Endnote

By the one instrument, Mr MBC appointed each of his children as his attorney with the power to act severally. The attorneys accepted their appointments. For the attorneys to be able to exercise the power granted to them, they would each require access to information about the estate including from the other attorney, if necessary. In these circumstances, and in order not to defeat the wishes of Mr MBC in giving each of his children power to make decisions on his behalf, an obligation on the attorneys to share information about the estate should be implied. The question of the form of the information that should be made available has been considered in Parker v Higgins & Ors [2012] NSWSC 1516. The Tribunal notes that that case appears to have proceeded on the assumption that both attorneys were entitled to information about the estate, including from the other. 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: 23 December 2016

Trustee and Guardian Act 2009(NSW)

At a glance

Court

Decision date

Source

Judgment (20 paragraphs)

Parties

Legislation Cited (4)

Cases Cited (2)