NGK [2024] NSWCATGD 12

The hearing

1. The hearing took place at Sydney and was conducted in person and by video.
2. Attending were:

• NGK (the person) - video
• Ms Sarah Khau (Solicitor for NGK's family) - in person
• ECK (Son of person/Attorney) - video
• MBK (Applicant /Spouse of person/Attorney) - video
• QNK (Son of person/Attorney) - video

Review of power of attorney

1. The preliminary question which had to be decided by the Tribunal was:

• Does the Tribunal have jurisdiction to review the power of attorney.

The review

1. The short answer is that the Tribunal does not have power to examine, vary or otherwise make declarations or confirmations in respect of a Power of Attorney or General Power of Attorney. That is that unless as expressed on the face of the document the Power of Attorney is taken to be enduring, that is to operate notwithstanding that the Principal has lost capacity.
2. The Tribunal examined the Powers of Attorney Act (POA Act) which enlivens the Tribunal's jurisdiction in respect of powers of attorney. That Act relevantly provides: Division 2 Enduring powers of attorney 19 Creation of enduring power of attorney (1) An instrument that creates a power of attorney creates an enduring power of attorney for the purposes of this Act if: (a) the instrument is expressed to be given with the intention that it will continue to be effective even if the principal lacks capacity through loss of mental capacity after execution of the instrument, and (b) execution of the instrument by the principal is witnessed by a person who is a prescribed witness (not being an attorney under the power), and (c) there is endorsed on, or annexed to, the instrument a certificate by that person stating that: (i) the person explained the effect of the instrument to the principal before it was signed, and (ii) the principal appeared to understand the effect of the power of attorney, and (iii) the person is a prescribed witness, and (iv) the person is not an attorney under the power of attorney, and (v) the person witnessed the signing of the power of attorney by the principal.
3. Section 19 of the POA Act sets out what constitutes an Enduring Power of Attorney. In our view having examined the matter in some detail, the document executed on 14 December 2021 is not an Enduring Power of Attorney in accordance with s 19 of that Act.
4. Sections 38(1) and 38(2) of the POA Act sets out the jurisdiction of the Supreme Court and the Tribunal to review such Instruments. The sections provides: Division 4 Review of enduring powers of attorney and other powers 33 Reviewable powers of attorney (cf 1919 No 6, s 163G (1)) (1) A power of attorney is a reviewable power of attorney for the purposes of an application under this Division if the review tribunal to which the application is to be made has jurisdiction to deal with the application as provided by this section. (2) Both the Civil and Administrative Tribunal and the Supreme Court have jurisdiction to deal with an application under this Division in respect of an enduring power of attorney (including a revocation of an enduring power of attorney). (Emphasis added)
5. Whilst the POA Act provides provisions for the Supreme Court of NSW to review and deal with applications concerning powers of attorney, the only jurisdiction of the Tribunal as a review Tribunal under s 26 is provided in s 38(2) of the POA Act. As such the Tribunal only has jurisdiction concerning Enduring Powers of Attorney.
6. As such we do not have jurisdiction to deal with the application and it must be dismissed under s 55(1)(b) of the Civil and Administrative Tribunal Act 2013 (NSW) as the lack of jurisdiction ultimately means that the application is misconceived.
7. In addition, due to the lack of jurisdiction the Tribunal is unable to treat the application as a Financial Management Order application under s 37 of the POA Act which provides: 37 Review tribunal may treat certain applications for review of power of attorney as application for management order (1) If, on a review of the making, revocation or operation and effect of a reviewable power of attorney under section 36, the Civil and Administrative Tribunal decides not to make an order under that section in respect of the power of attorney, 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 (Financial management) of the Guardianship Act 1987. (2) If such a decision is made, the application is taken to be an application for such a financial management order duly made in respect of the principal under that power. (3) If, on a review of the making, revocation or operation and effect of a reviewable power of attorney under section 36, the Supreme Court decides not to make an order under that section in respect of the power of attorney, it may (if it considers it appropriate in all the circumstances to do so) proceed instead as if an application for a declaration and order under section 41 of the NSW Trustee and Guardian Act 2009 had been duly made in respect of the principal under that power. (emphasis added)
8. The parties advised that the reason for the application to the Tribunal was on the basis that banks and other entities were no longer prepared to deal with the Attorneys as NGK had lost capacity and the instrument was not considered 'Enduring'.

FINANCIAL MANAGEMENT APPLICATION

1. Having discussed the options open to the family and the Solicitor we noted that the current application had been before the Tribunal for over six months awaiting a hearing. In those circumstances having regard to the guiding principle of the Tribunal under s 36 of the Civil and Administrative Tribunal Act (to resolve matters in a just, quick and cheap manner), it appeared appropriate to canvas a desk application for Financial Management from the family. Alternatively, they could consider their position and make a Financial Management application in due course or have the Supreme Court consider the Power of Attorney.
2. We gave the parties time off record to consider their position and obtain advice from their Solicitor with a brief adjournment. When we recommenced, the parties advised that they sought a desk Financial Management application which we duly accepted.

What did the Tribunal have to decide?

1. The questions to be considered by the Tribunal are:

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

1. The Tribunal noted the affidavit evidence tendered by family members. We also noted NGK's presentation and demeanour at hearing and the oral evidence of the family that the Bank would not deal with them on behalf of NGK. In order to make a financial management order there is no requirement that a person have a disability. Instead, the criteria are set out at s 25G of the Guardianship Act 1987 (NSW) which provides: 25G Grounds for making financial management order 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 - (a) the person is not capable of managing those affairs, and (b) there is a need for another person to manage those affairs on the person's behalf, and (c) it is in the person's best interests that the order be made.
2. The basis of the original application was quite clear. In our view the first criteria of s 25G of the Guardianship Act (s 25G(a)) is clearly met on the available evidence. NGK's inability to manage his own affairs is the basis of the initial request in November 2023 for a review of the Power of Attorney by the Tribunal.
3. When the Tribunal explained the basis for financial management orders and the lack of any legal requirement of the presence of a disability, we also noted the medical evidence before us from Dr Z.
4. The Tribunal also explained to the family how private management works with a private manager or managers operating under the supervision and oversight of the NSW Trustee and Guardian. This is an important difference from a Power of Attorney (enduring or general).

Is NGK incapable of managing his affairs?

1. As noted above, whilst NGK does not need to demonstrate disability for the purposes of meeting s 25G of the Guardianship Act, it was clear from the evidence of the family and the report referred to above that NGK is unable to manage his affairs due to his disability.
2. The need for Financial Management was demonstrated by the need to access NGK's funds and there is a need to sell real estate and deal with the other aspects of NGK's living estate in respect of aged care fees and bonds. MBK advised that she had been looking after all of the accounts for some time but was not able to pursue matters because of the impasse over the Power of Attorney instrument as set out above. Recently, BFK had taken on most of the role.
3. The Tribunal accepts that on the basis of the evidence in the application and the information provided at the hearing that NGK is currently a person who needs assistance in managing his affairs because he is not able to manage these matters successfully himself. On the current available evidence, it appears that it would be in his best interests that he receives assistance in that area.
4. The test for determining a person's capability to manage his or her affairs has been described as follows (P v NSW Trustee and Guardian [2015] NSWSC 579, [307]-[308]): "Is a person reasonably able to manage his or her own affairs in a reasonably competent fashion, without the intervention of a [financial manager] charged with a duty to protect his or her welfare and interests? … [A] focus for attention is whether the person is able to deal with (making and implementing decisions about) his or her own affairs (person and property, capital and income) in a reasonable, rational and orderly way, with due regard to his or her present and prospective wants and needs, and those of family and friends, without undue risk of neglect, abuse or exploitation."
5. In considering whether the person is "able" in this sense, consideration may be given to:

• past and present experience as a predictor of the future course of events;
• support systems available to the person; and
• the extent to which the person, placed as he or she is, can be relied upon to make sound judgments about his or her welfare and interests: see Lindsay J in CJ v AKJ [2015] NSWSC 498, [38], and P v NSW Trustee and Guardian [2015] NSWSC 579, [309].

1. The relevant time for considering whether a person is incapable of managing his or her affairs is not merely the day of the hearing but the reasonably foreseeable future (McD v McD (1983) 3 NSWLR 81 at 86). See Lindsay J in Re W and L (Parameters of Protected Estate Management Orders) [2014] NSWSC 1106 at [20].
2. 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.

Is there a need for a Financial Management Order?

1. The Tribunal was satisfied on the basis of the evidence given at hearing, that there is a need for a Financial Management Order. The situation with respect to accessing income was quite clear. These matters will require someone with legal authority to do so. The Power of Attorney is no longer useful in managing NGK affairs.

Is it in NGK's best interest that a Financial Management Order be made?

1. The Tribunal was satisfied, for the reasons outlined above, that it is in the best interests of NGK that a Financial Management Order be made.

Who should be appointed as financial manager?

1. In appointing a financial manager, as in making all other orders under the Guardianship Act, the Tribunal must act with the interests of the person concerned as the paramount consideration and in accordance with the other principles set out in s 4 of the Guardianship Act.
2. 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.
3. In Holt & Anor v Protective Commissioner (1993) 31 NSWLR 227, the Court said that the dominant consideration in making orders about financial managers was the welfare of the person. The President of the Court of Appeal emphasised the Court's broad discretion in deciding who should be financial manager but also set out possible considerations as to the competing advantages of the then Protective Commissioner and a family member as the manager of an estate. The NSW Trustee and Guardian now exercises the role of the Protective Commissioner.
4. On the side of the then Protective Commissioner 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.
5. The advantages of the appointment of a family member were a greater capacity of a person with a disability to interact with the manager so as to exercise a greater influence over the broad directions of the management of the estate, love and affection for and knowledge of the protected person and concern for his or her quality of life, and particular qualities or qualifications enabling family members to act as managers.
6. The Court considered that interrelated property interests in a family situation, where a conflict of interest and duty may be "more apparent than real," should not necessarily present an absolute bar to appointment of a family member who is otherwise appropriate. However, when appointing a family member, a decision maker must be satisfied that the estate, income and capital assets, will be utilised to advance the interests and quality of life of a protected person rather than to eventually increase the assets of the family.
7. In Application by AMAM; Re SAM [2011] NSWSC 503, Hallen AsJ stated: "[34] It would be unwise to attempt any definition of the matters that may legitimately be enquired into to determine whether the applicant is suitable. Each case must depend on its own circumstances. Needless to say, however, the Court must consider, at least, the proposed manager's character, honesty and ability to manage, diligently, the managed person's property in the managed person's best interests."
8. The matters or "guidelines" that should be considered when determining who to appoint as financial manager, as established in Holt & Anor v Protective Commissioner (1993) 31 NSWLR 227, are discussed and expanded upon by Lindsay J in M v M [2013] NSWSC 1495 at [50].
9. In the current matter a family appointment seemed the most logical approach noting that they were all listed on the Power of Attorney instrument. The applicant had nominated all of the family to take on that role. All of the family who attended the hearing were supportive of that position and answered the mandatory probity questions satisfactorily.
10. In addition, the Tribunal learnt that BFK did not attend the hearing, mainly because it was the middle of the night in Europe where he was currently located. We had received an affidavit from BFK and noted that he had provided an SMS Text to one of his brothers but was unable to be raised again during the hearing. The family advised that in practice it was BFK who managed NGK's living estate and did the vast majority of the work due to his professional expertise. Whilst he was not present to be vetted by the Tribunal, we noted his affidavit and the evidence of the family that BFK holds a position as Chief Executive Officer of a publicly listed company.
11. On the basis of all of the evidence concerning his ethical and professional background and history of managing NGK's affairs, we determined to appoint him as a financial manager with the other members of his family who were Attorneys on the Power of Attorney.
12. The Tribunal determined to commit the estate of NGK to Financial Management under the management of his wife, MBK, and sons BFK, ECK, and QNK on a joint and several basis.

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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: 02 October 2024