PROTECTIVE JURISDICTION - Incapacity for self-management - Power of attorney - Financial management - Management of estate - Appointment of NSW Trustee and Guardian
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PROTECTIVE JURISDICTION - Incapacity for self-management - Power of attorney - Financial management - Management of estate - Appointment of NSW Trustee and Guardian
Judgment (3 paragraphs)
[1]
Solicitors:
Penhall & Co (Plaintiff), 10-22 December 2015
Beazley Boorman Lawyers (Defendants)
File Number(s): 2015/298011
[2]
Judgment (EX TEMPORE)
The proceedings before the Court involve concentric circles of disputation within a family comprising elderly parents presently resident in an aged care facility (the first and second defendants) and four adult children, three of whom (the plaintiff, the third defendant and the fourth defendant) have been actively involved in the proceedings to date. For the time being at least, the fourth child has remained above the fray. He is not a party to these proceedings.
The third and fourth defendants have represented the first and second defendants in the proceedings. They hold an enduring power of attorney from the first defendant. They have been appointed financial managers of the second defendant by subsisting orders of the Guardianship Division of the Civil and Administrative Tribunal of NSW (NCAT). They were joined in the proceedings by the plaintiff in order to represent the first and second defendants pursuant to those appointments. With their consent, and with no opposition from the plaintiff, I made orders formally appointing them as tutors of the first and second defendants for the purpose of the proceedings. They remain parties in their personal capacities, but their joinder in the proceedings in those capacities is not necessary for a determination of the question to be determined by this judgment.
J v J [2015] NSWSC 1984 | Case summary | Zoe
The present judgment is narrowly focused upon a determination of the question whether the plaintiff, a resident of the family home since July 2006, has an equitable life estate in that property (owned by the parents as joint tenants), or an entitlement to equitable compensation, in the event she is required to leave the property consequentially upon departure of her parents for the aged care facility.
During the course of the final hearing of that question, larger questions emerged about whether an exercise of the Court's protective jurisdiction is required to protect the estates, if not also the person, of the parents, and, incidentally, to forestall further rounds of litigation that have occupied the attention of NCAT over the past year or so.
The plaintiff was born in 1957 and is presently aged 58 years. As a result of personal injuries suffered in a motor vehicle accident in the United States of America in 1999, she is physically and, to an extent, mentally disabled. Since her accident she has lived on the borders of an exercise of protective jurisdiction; but the prevailing view, supported by medical evidence, is that she is well able to manage her day-to-day affairs, and able, with the assistance of lawyers, to conduct the present proceedings without a tutor. Personally, she actively asserts that view of her capacity, and her contradictors (the third and fourth defendants) have acquiesced in it as well.
At the commencement of the hearing of the immediate question as to the plaintiff's equitable entitlements in or in relation to the family home, if any, the plaintiff was represented by a solicitor (Mr Garry Penhall) and counsel (Mr David Raphael). They added their voices to a submission that the plaintiff was capable of conducting the proceedings without the intervention of a tutor.
Given the unanimity in favour of the plaintiff's capacity for self-management, I acquiesced in an assessment that, with allowances made for her disabilities in her presentation of evidence, the plaintiff was well able to conduct the proceedings without a tutor.
At her request, the third and fourth defendants (of whom she has consistently expressed fear of intimidation) voluntarily absented themselves during her evidence. Each of them also remained outside the Court during evidence given by the other.
The question whether the plaintiff has property entitlements defined by reference to the family home has been fairly tried upon the basis that the plaintiff is able to manage her own affairs.
An expedited hearing of that question has been necessary because, the first and second defendants having entered an aged care facility, the third and fourth defendants (who have management of their affairs) have contended that a sale of the family home is necessary to fund payment of refundable accommodation bonds required by the aged care facility.
The hearing occupied most of 10 December 2015 (after my dismissal of an adjournment application made by the plaintiff), 11 December 2015 and 21 December 2015.
On the latter date, the evidence was concluded; counsel for the plaintiff addressed the Court with her final submissions; counsel for the defendants addressed; and the hearing was adjourned overnight to allow counsel for the plaintiff to address in reply the next day, 22 December 2015.
Shortly before the commencement of the adjourned hearing, counsel for the plaintiff delivered to the Court written submissions in aid of the oral submissions he proposed to make "in reply".
Shortly after those submissions were delivered, the plaintiff instructed her solicitor that her counsel's retainer be terminated. The solicitor declined to continue acting for her without counsel. The long and short of this development was that the lawyers sought the leave of the Court to withdraw from the proceedings; the plaintiff accepted that she had effectively terminated the lawyers' retainers; she did not oppose a grant of the leave they sought; and neither did the defendants. The leave sought was granted.
For the balance of the hearing - not more than 45 minutes or so - the plaintiff represented herself with the benefit of assistance from a friend (Ms JP) acting as a McKenzie friend.
Ms JP had attempted to be heard during the hearing on 21 December 2015, interrupting counsel for the plaintiff for that purpose, but, on that occasion, I declined to allow her to address the Court. The plaintiff was at the time represented by counsel.
I infer from the course of events leading to summary dismissal of the plaintiff's lawyers, and from the manner in which the plaintiff conducted the proceedings with Ms JP as her McKenzie friend, that the plaintiff dismissed the lawyers under the active influence of Ms JP.
At all events, having taken over the conduct of her own submissions in reply, the plaintiff adopted the written submissions in reply that had been delivered to the Court by her counsel, and she importuned the Court to allow Ms JP an opportunity to address the Court directly.
With reluctance, I allowed brief opportunities to Ms JP to address the Court.
Contrary to her own assessment, I am sure, Ms JP did not say anything of substance that had not earlier been advanced by counsel. During the course of her address she momentarily, emotionally faltered, evidencing her close personal commitment to the plaintiff's cause and an antipathy towards the plaintiff's siblings shared with the plaintiff. Her objectivity, and judgment, are open to question.
Nevertheless, her intervention did permit me to reopen the question whether, in order to forestall further proceedings in NCAT, to afford more complete protection of the first and second defendants, and to facilitate management of the affairs of the first and second defendants vis-à-vis the plaintiff, the Court should (after determination of the question whether the plaintiff has any equitable entitlement defined by reference to the family home) appoint the NSW Trustee as a protected estate manager, or receiver, of the respective estates of the first and second defendants.
The plaintiff acquiesced in this suggestion, despite reservations earlier expressed by her counsel on her behalf. Understandably, counsel for the defendants (then at court without his solicitor or clients) requested an opportunity to confirm earlier instructions which had been favourable to such a suggestion.
In these circumstances, I foreshadowed that I would deliver judgment on the question fairly tried (namely, the plaintiff's claims to equitable relief vis-à-vis the family home) and then, subject to allowing the parties an opportunity to be heard, turn attention again to whether the NSW Trustee should be appointed as a manager, or receiver, of the estates of the first and second defendants.
Each of the parties (the plaintiff personally and the defendants by their solicitor) has today confirmed that he or she will submit to orders for the appointment of the NSW Trustee as protected estate manager of the respective estates of the first and second defendants.
For the present, there is not the same degree of urgency attaching to whether the Court should intervene in management of the person of the first and second defendants. Nevertheless, that question does need the Court's attention.
The first defendant is in the aged care facility of his choice. He commenced occupation there on 11 March 2015, and personally signed a "Resident Agreement For Residential Care", a contract with the aged care facility, on 17 May 2015.
Under orders made by the Guardianship Division of NCAT on 22 December 2014, and varied by the Tribunal on 20 July 2015, the third defendant, the fourth defendant and the Public Guardian are joint guardians of the second defendant. The Public Guardian's function is to determine who may have access to the second defendant and where she may reside. The second defendant is a resident of the aged care facility where the first defendant resides because the Public Guardian has determined that that be so.
There has been no necessity to date for the Public Guardian to be called upon to appear before the Court, but that may change in the future if disputation about the second defendant's residency continues. The plaintiff has continued to agitate within NCAT her objection to the second defendant residing otherwise than at the family home and under her care.
I hold grave doubts about whether the plaintiff could presently care for the second defendant at home. Nor do I exclude the possibility that the plaintiff's insistence that the second defendant return home is an adjunct to her claim for an entitlement, herself, to continue living in her parents' home.
The plaintiff's claim to relief in equity is a claim in estoppel arising, she contends, from her reliance upon a promise she says her mother (the second defendant) made to her that, if she (the plaintiff) returned from the United States to care for her parents at the family home, her mother (the second defendant) would allow the plaintiff to live there for the rest of her (that is, the plaintiff's) life.
Before his withdrawal from the proceedings, counsel for the plaintiff conceded (in my opinion, correctly) that:
1. if the promise said by the plaintiff to have been made to her by her mother (the second defendant) was made, it was not at any time adopted by her father (the first defendant), and it is not binding on him;
2. any entitlements the plaintiff might have to a life estate or the like, or to compensation, in equity are entitlements against the estate of the second defendant only; and
3. were the Court not to be satisfied that the second defendant made the promise for which the plaintiff contends, the plaintiff's case must fail altogether.
As it happens, I am not satisfied that the second defendant made any promise to the plaintiff such as that for which the plaintiff contends. I find that no such promise was made.
I ground that finding on several bases.
First, I do not accept the plaintiff's evidence that her mother offered her a home for life, come what may. The plaintiff's evidence shifted in cross-examination, from her affidavit evidence of a single conversation, to evidence of many conversations to the same effect. During cross-examination, she also insisted that the second defendant had told each of her siblings of the promise said to have been made to her. Despite a forewarning of a Browne v Dunn submission, counsel for the plaintiff did not confront the third defendant with any such suggestion; and, when confronted with it in her cross-examination, the fourth defendant firmly rejected it. I accept the evidence of the fourth defendant.
When the plaintiff recounted her evidence of promises made by the second defendant, that evidence came almost as an afterthought of the plaintiff following upon lengthy protestations of a loving relationship between mother and daughter. In my assessment, it is more likely than not that the plaintiff has persuaded herself of a motherly promise consequent upon her own need for charity at home, a place to live, and her close filial relationship with her mother.
Secondly, there is no written evidence corroborative of the second defendant's alleged promise, despite the fact that:
1. on 12 November 2011 the second defendant signed a note, written in the hand of the plaintiff, which recited that she (the second defendant) had requested the plaintiff to come home and that she wanted the plaintiff to continue living at home and to be taken care of financially.
2. on 19 November 2014, the second defendant signed what purports to be a statutory declaration in which she recited that she (the second defendant) had asked the plaintiff to return home to live with her and to help her and to care for her and the first defendant.
Against this, on each of 25 October 2011 and 25 September 2012 (evidently under the influence of the plaintiff) the second defendant executed a will that favoured the plaintiff to the exclusion of her siblings. These wills, likely in time to be contested, purport to revoke a will of the second defendant, made on 5 February 1997, which (in terms similar to a will made by the first defendant on 4 February 1997) favour the plaintiff but do not exclude the siblings.
Each of the 1997 wills granted to the plaintiff a right of residency for up to one year after the death of the will-maker (subject to her payment of rates, taxes and insurance premiums) for the express purpose of allowing her "sufficient time to find alternative accommodation".
None of the wills provides, in terms, confirmation that the plaintiff holds an existing ownership interest in the family home, at all material times the principal asset of the first and second defendants. Each will is consistent with the plaintiff's occupancy of the family home being nothing more than a personal licence.
Thirdly, evidence of a friend of the plaintiff (Ms W) of telephone conversations with the second defendant, well after the plaintiff's return to Australia, stopped short of confirmation of any promise of a life estate or the like. Admittedly, the second defendant is said to have told Ms W that she wanted not to go to a nursing home, but to remain in her home, without anybody "throwing" her or the plaintiff "out". However, that sentiment stopped short of an admission that the plaintiff has a property right in the family home binding on the second defendant.
Fourthly, as evidenced by a letter written by the plaintiff to family members on or about 3 February 2006 (the authorship of which the plaintiff denies) the plaintiff came home because, disabled as she was, she needed the assistance of her family.
Fifthly, the fact that the first defendant built "a shed" at the back of the family home for the plaintiff to sleep in, and to store her personal possessions, can be explained by her parents' familial love for her, not corroborative of a promise that she would, upon her return to Australia, acquire an entitlement to the whole property.
In weighing up the evidence, I take into account the plaintiff's oft-expressed fears of her father and her siblings. I do not doubt that, subjectively, she has such fears. However, I am far from persuaded that any such fears are reasonably based. They seem to me, more likely than not, to be an incident of her disabilities, and her resistance to help from time to time offered to her by her siblings.
Subject to one qualification, the third and fourth defendants presented their evidence in a credible manner. On the whole, I prefer their evidence over that of the plaintiff. By nature, the fourth defendant appears to be a more emphatic person than either the plaintiff or the third defendant; but I did not discern, in either the third defendant or the fourth defendant, the antagonism towards the plaintiff that the plaintiff insists is there. On the whole, I accept their evidence and, where it is in conflict with evidence of the plaintiff, I prefer it over that of the plaintiff.
The qualification that calls for notice is evidence that the third defendant (he says, at the direction of his father, the first defendant) accepted from his parents substantial gifts, the effect of which has been to diminish the resources now available to them.
Two periods need to be noticed.
Early in 2014 the third defendant received $15,000 to assist him with renovations to his house. I accept that that was a gift. I accept also that he has a disabled child, and that the pressures within a family that that involves could provide an explanation for generosity towards him on the part of his parents.
Later in 2014 (in about October and November 2014) the third defendant, he says at the direction of the first defendant, withdrew a total of about $41,000 from the joint account of his parents by multiple daily withdrawals of $800 from a diversity of Flexi Teller machines. He says that only $26,942.80 of that amount remains, and that the balance of the sum withdrawn was expended by him for the benefit of his parents.
It may be that he should be called upon formally to account for that balance. It is not necessary for me to do more at this time than to notice this possibility for the attention of the NSW Trustee or the Court at a later time.
Two matters do, however, require present notice.
First, the third defendant's evidence is that he holds the balance of the funds gifted to him ($26,942.80) for the benefit of his parents. In an affidavit sworn by him on 10 December 2015, he recorded that sum as an asset of the first and second defendants, and it should be so regarded. Although, colloquially, he described it as having been "gifted" to him, his evidence is to the effect that he holds that sum, keeping it aside, to use for his parents. It should be treated as part of their estates.
Secondly, and without making any finding adverse to the third defendant, I notice that the fact and manner of the third defendant's receipt of gifts from his parents (but more particularly the $41,000) is a point of friction between the plaintiff and the third defendant that tells in favour of an independent person (such as the NSW Trustee) being appointed to manage the affairs of the first and second defendants.
In my assessment, the plaintiff's true relationship with the family home was at all material times that of a licensee, with a personal licence determinable at will. She has not paid rent. She has not been requested to do so, even now. What is sought is possession of the property as part of a process of moving towards a sale designed to fund the parents' transition to their aged care facility.
The plaintiff has been given formal notice to quit her occupation of the family home. That was done by a letter dated 30 June 2015. That letter was signed by the first defendant personally, and by the third and fourth defendants as financial managers of the second defendant. It gave the plaintiff two months to vacate the property. It was expressly predicated upon a need to sell the property to fund the entry of the first and second defendants into their aged care facility.
In their capacity as the first defendant's agent under an enduring power of attorney, and as his tutor in these proceedings, the third and fourth defendants have advised the Court that it can, and should, proceed on the basis that, although the family home is owned by the first and second defendants as joint tenants and proceeds of sale of the home would in the ordinary course be likely to be split between the first and second defendants equally, any proceeds that would ordinarily come to the first defendant can be applied, not only in payment of the accommodation bond payable by him, but also in payment of the larger bond that has been fixed for payment by the second defendant. I propose to proceed on that basis which, in the context of the marriage between the first and second defendants, is entirely appropriate.
During the course of the hearing I drew to the attention of the parties that, although the plaintiff's summons was predicated upon a contest as to whether the plaintiff had entitlement to remain in possession of the family home, the defendants have not filed a cross-claim.
Counsel accepted that, if the plaintiff's claim were to be dismissed, it would be appropriate for the Court, on the plaintiff's summons and statement of claim, to make "reverse orders" having the effect (under s 63 of the Supreme Court Act 1970 NSW) of determining all questions in dispute between the parties, viewed in a substantive perspective.
Accordingly, on the plaintiff's summons, elaborated by her statement of claim, and reserving to the parties an opportunity to make any submissions about the form of the relief to be granted, I propose to make orders to the following effect:
1. Declare that the plaintiff has no right, title or interest in the land contained in folio identifier [...].
2. Order that the caveat of the plaintiff (dealing number [...]) be withdrawn forthwith.
3. Order that the plaintiff deliver up vacant possession of the property to the first and second defendants no later than 23 February 2016 or such later date that might be appointed by the Court or agreed to in writing by the NSW Trustee as manager of their respective estates.
4. Order that the plaintiff pay the costs of these proceedings.
5. Order that the costs of the defendants, to the extent not paid by the plaintiff, be a charge on the respective estates of the first and second defendants, jointly and severally, but that that charge not be enforced without the leave of the Court or the written consent of the NSW Trustee.
6. Declare, pursuant to s 41(1)(a) of the NSW Trustee and Guardian Act 2009 NSW, that the first defendant is incapable of managing his affairs.
7. Order that the estate of the first defendant be subject to management under the NSW Trustee and Guardian Act 2009.
8. Order that management of the estate of the first defendant be committed to the NSW Trustee.
9. Declare, pursuant to s 41(1)(a) of the NSW Trustee and Guardian Act, that the second defendant is incapable of managing her affairs.
10. Order that the estate of the second defendant be subject to management under the NSW Trustee and Guardian Act.
11. Order that management of the estate of the second defendant be committed to the NSW Trustee.
12. Order that the NSW Trustee, as manager of the respective estates of the first and second defendants, be at liberty to sell the family home of the first and second defendants (being the land contained in folio identifier [...]) and, as may be appropriate, to apply proceeds of the sale towards payment of accommodation bonds due to be paid by or on behalf of the first and second defendants in respect of their present occupancy of an aged care facility.
13. Reserve for further consideration the question whether any orders should be made by the Court in respect of the person of the first and second defendants.
14. Order that these orders be entered forthwith.
The outcome of these proceedings is a matter of some regret because of the need for assistance manifested on the part of the plaintiff. However, throughout the pendency of the proceedings, and in circumstances in which she had the benefit of professional assistance, she has made deliberate forensic decisions to claim a property entitlement in, or in respect of, the family home rather than to seek a more modest gratuitous allowance out of the estates of her parents. This is a topic which I raised with the plaintiff's lawyers early in the course of the hearing and they assured me that the plaintiff, having received advice, maintained the case ultimately the subject of dismissal by the Court.
It may be nevertheless appropriate at some future time for there to be an order made for a gratuitous allowance in favour of the plaintiff out of the estates of her parents. However, given the course that these proceedings have taken, it is difficult to see that any such allowance could be made in circumstances that would leave the third and fourth defendants out of pocket for costs incurred by them in the conduct of these proceedings.
(Discussion ensued.)
Following my delivery of these reasons for judgment Mr Beazley, the solicitor for the defendants, informed the Court that the plaintiff's siblings (all three of them) had instructed him to inform the Court that they would have no objection to a reasonable sum being paid out of the estates of their parents in order to assist the plaintiff in moving out of the family home and securing alternative accommodation. The sum specifically mentioned for consideration was a sum of $20,000.
I propose to leave this question to the NSW Trustee for closer consideration in management of the estates of the first and second defendants. However, in doing so, I formally record my view that the NSW Trustee should assess such a proposal sympathetically and, if need be, I would make a formal order authorising such a payment to be made by the NSW Trustee. I do not, at this stage, think that any formal order is required because the NSW Trustee's powers extend to giving effect to such a proposal.
I note, in passing, that the proposal foreshadowed by the plaintiff's siblings contemplates that any moneys paid out of the estates of the first and second defendants in this context should be paid, not to the plaintiff personally, but to the provider of a service designed to assist the plaintiff.
(Discussion continued, as a consequence of which Lindsay J made an additional notation and order, as follows.)
(15) Note that the intention of these orders is that:
1. The protected estate management orders made in favour of the NSW Trustee have the effect of suspending the operation of any otherwise subsisting power of attorney granted by either the first defendant or the second defendant, as well as the financial management orders made in favour of the third and fourth defendants in respect of the second defendant.
2. If the plaintiff persists in her challenge to the guardianship orders made by NCAT, vis-à-vis the second defendant, all parties are at liberty to apply to the Court for an exercise of the protective jurisdiction of the Court vis-à-vis all questions of guardianship affecting the first and second defendants.
1. Order, subject to further order, that the third and fourth defendants by themselves, their servants and agents be restrained from acting, or holding themselves out as entitled to act, as;
1. attorneys on behalf of the first defendant; or
2. financial managers of the second defendant.
(The orders, as made, placed orders 15 and 16 before Order 14, and renumbered all three in their new sequence).
[3]
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Decision last updated: 23 December 2015