NKT [2021] NSWCATGD 31

NCAT Guardianship|2021-04-22

Cited: None cited. Category: Principal judgment Parties: 001: Review of an Enduring Power of Attorney

NKT (the person) WZT (applicant) QAT (attorney) NYT (attorney) NSW Trustee and Guardian

002: Review of an Enduring Guardianship Appointment

Solicitors: T Frater (for the applicants) File Number(s): NCAT 2021/00003406 Publication restriction: Decisions of the Guardianship Division of the Civil and Administrative Tribunal have been anonymised to remove any information that may identify any person involved in the Tribunal's proceedings: Civil and Administrative Tribunal Act 2013 (NSW), s 65.

Background

NKT is an 86-year-old woman who has lived in her family home at regional NSW for many years. At the time of the hearings, she was staying with her son and daughter-in-law, QAT and NYT, in their home at regional NSW.
As well as QAT, NKT has two other adult children, WZT and MBT.
NKT and her husband were from Macedonia and their children were born there. Mr Z and subsequently NKT and the children emigrated to Australia.
In July 2018, NKT appointed QAT and NYT as her joint and several enduring guardians and attorneys.
NKT's husband died on 16 October 2019.
In the period from October 2019 to July 2020, virtually all of NKT's assets were transferred into the name of her son, QAT. This included the family home (subject to NKT retaining certain rights), and over $500,000 in savings and proceeds of shares.
WZT and MBT had major concerns in relation to their access to their mother and management of her finances. On 5 January 2021, MBT applied for a review of the appointment of enduring guardian and WZT applied for a review of the power of attorney.
We part heard this matter in a half day hearing on 22 April 2021 and completed the hearing with a full day on 8 July 2021.

NKT's capacity and mental state over time

NKT had limited education, is illiterate and speaks Macedonian with very limited English.
In their written statements, WZT and MBT said that NKT had exhibited memory problems over many years. QAT disagreed with this version.
In his letter to the Tribunal of 26 February 2021, Mr Y wrote that he was the solicitor who prepared the enduring documents in 2018. He is fluent in Macedonian and communicated with NKT in that language. He explained the nature of the documents to her and, as an experienced practitioner, was satisfied that she understood the nature and effect of the documents. He had no doubt about her capacity to understand and execute the documents.
In November - December 2019, Ms X acted for NKT and QAT in drawing up a deed whereby NKT transferred the family home to QAT subject to her having a right to live in the property and QAT agreeing to "care for and look after the health and well-being" of NKT for the rest of her life. We had detailed notes that Ms X had taken and in the hearing Ms X said that she was satisfied in relation to NKT's capacity for the transaction. Also, she was stoic and Ms X did not feel that she could have been pressured into the transaction.
In February 2021, at the request of QAT's solicitor, NKT was assessed by Dr W, psychiatrist, who reported as follows. NKT said that she was rarely nervous, anxious or depressed and when it happens it does not last long. She had never had any physical problems except for surgery for kidney stones three years ago.
Contrary to NKT's perception, Dr W reported professional evidence of NKT recovering from a left-sided craniotomy and drainage of a subdural haematoma and subsequently having a domestic fall. NKT also has atrial fibrillation and takes warfarin. Her failure to give an accurate history of significant recent health concerns would be consistent with mild to moderate dementia.
NKT showed no evidence of heightened anxiety.
NKT saw the reason for the assessment as arising from WZT and MBT asking her to give them "this and that" and sign documents giving assets over to them. QAT looks after her. WZT did not come to Mr Z's funeral. There had been a quarrel between WZT and Mr Z. MBT had a good relationship with her but not with Mr Z.
NKT had appointed QAT and NYT as guardians and attorneys as being persons who would look after her and take care of her. She understood that there was a provision that, "If I can't do they would do." She said that WZT and MBT wanted to take over this role but how could they when they were not there before. There had been differences with WZT and MBT since Mr Z died.
NKT was illiterate and did not understand English.
She saw her assets as being money in the bank but she did not know how much.
In conclusion, Dr W saw NKT as having a clear view in wanting QAT and NYT to remain as guardians and attorneys. He saw NKT as understanding the effect of the enduring power of attorney and appointment of enduring guardian. However, her capacity to manage day-to-day financial affairs was potentially compromised by her lack of education and detailed knowledge of her financial assets.
Dr W said that NKT had testamentary capacity. She had an idea of her assets but not an accurate understanding of their value apart from real estate. She had an understanding of the natural objects of her bounty and did not have delusions that would impact on particular bequests.
Dr V, psychiatrist, was not able to see NKT due to her refusing a further assessment but he provided a commentary on Dr W's report. As well as medical conditions noted by Dr W, NKT had a stroke in 2012. Dr V criticised Dr W for not performing a thorough mental state examination. He concluded that NKT did not have financial or effectively testamentary capacity due to her age, various medical problems, the possibility of a dementing process, the possibility of emboli from atrial fibrillation, decline in her cognition observed by her daughter and the probability that she did not understand a complex letter that she had signed in May 2020. Undue influence needed to be excluded and there needed to be a more comprehensive assessment of her medical and neuropsychiatric status. Dr V questioned NKT's capacity to have signed the enduring documents and the documents transferring her home to her son.
Dr W provided a further report responding to Dr V. He was not aware of the transfer of the home. Dr V had commented that NKT had never had to manage her finances but Dr W said this was the norm in terms of her culture and her generation.
When asked in the hearing whether NKT was vulnerable to influence, Dr W said that she had given a detailed account in relation to family relationships which was coherent and logical. She relied on QAT to assist her and trusted him and NYT. Despite having mild to moderate dementia, she knew what she wanted.
Dr W also said that NKT had told him WZT and MBT had asked her to sign over assets to them. She said, "Why should I do that? I'm still alive."
Both Dr W and Dr V had very considerable relevant experience and qualifications.
Dr U is NKT's treating general practitioner. Unfortunately, we were unable to speak to Dr U in the hearing. However, her records had been produced on summons. These records provided no evidence of Dr U conducting a cognitive assessment or having concerns about NKT's cognition.
Dr U had written two relevant letters addressed "to whom it may concern". On 12 May 2020, Dr U wrote that NKT had presented to her practice after being abused by her daughter, in November and December 2019 and May 2020. She was suffering from depression and anxiety due to repetitive verbal abuse by her daughter. She had said on 11 May 2020 that she wanted to poison herself. Her blood pressure was very high 194/64 due to her anxiety and stress.
On 11 March 2021, Dr U wrote that NKT had uncontrolled hypertension. She was very stressed with MBT and WZT. When she was under stress and psychological pressure from family, her blood pressure was very high and uncontrolled. When she was calm and settled, her blood pressure was normal. High blood pressure is the major risk factor for stroke and heart attack. She was currently living with QAT and NYT and needed help with all activities of daily living.
WZT wrote that Dr U had very limited Macedonian.
When we put to Dr W what Dr U had said about NKT's anxiety and depression, Dr W said that in view of NKT's presentation to him he would be surprised if she had generalised anxiety and only extreme anxiety would have impacted on his opinion. He was not aware of NKT having transferred all of her assets to her son. It was difficult to know whether her cognition would have deteriorated in the 12 to 18 months before Dr W saw her, however, in view of her history of stroke and raised blood pressure, he would expect a progressive deterioration over time.
We noted the considerable indications of cognitive deficits that NKT exhibited in the hearing and Dr W said that this may have been related to the difficult circumstances of appearing before a Tribunal.
Dr V told us that he had great doubt about NKT's capacity to have made the large cash gifts that she had made to QAT. From now having seen further medical documentation, he said this fleshed out what he had previously thought. He noted the brain changes that were apparent in five CT scans from March to August 2019. NKT had suffered a number of insults to her brain since 2012 and had atrial fibrillation. The cumulative brain pathology and history suggested that she was unlikely to have capacity. In addition, there was her limited education and experience with finances. It was hard to accept that she was able to understand and sign documents.
Dr V reemphasised his concern that Dr W had not carried out a thorough mental state examination. He could not be sure that NKT has dementia but he strongly suspected she had cognitive decline and dementia needed to be excluded.

The legal framework

On reviewing the appointment of an enduring guardian, we could: 1. revoke the appointment if the guardian requested this or it was in the best interests of NKT; or 2. confirm the appointment with or without varying the functions of the guardian.
If it was in NKT's best interests to do so, we could also deal with the review as if it is an application for guardianship and/or financial management orders: Guardianship Act 1987 (NSW), s 6K.
If we dealt with the review as if it was an application for guardianship we would have to decide: 1. Does NKT have a disability which prevents her from being able to make some important life decisions? 2. Should we make a guardianship order and if so, what order should we make?
To put (1) above more precisely using the words in the Guardianship Act, we have to be satisfied that NKT has a disability which restricts her in one or more major life activities to the extent that she requires supervision or social habilitation, and that, as a result, she is at least partially incapable of managing her person: Guardianship Act, ss 14(1), 3(1) (definition of "person in need of a guardian") and 3(2).
When deciding whether to make a guardianship order, we need to take account of all relevant factors, including those listed in s 14(2) of the Guardianship Act. These are about the views of NKT and any spouse and unpaid carer, preserving family relationships, preserving cultural and linguistic environments and the practicability of services being provided without a guardianship order. We can be guided by the principles in s 4 of the Guardianship Act which cover some of the same issues as s 14(2) of that Act but also emphasise minimum intrusion on a person's freedom, encouragement of self-reliance and a normal life in the community, protection from neglect, abuse and exploitation and the person's interests being paramount. In the end, we have a broad discretion whether to make a guardianship order. (IF v IG & Others [2004] NSWADTAP 3)

We dealt with the matter as an application for a guardianship order

As applicant, MBT had applied for us to revoke the appointment of enduring guardian and make a guardianship order.
During the hearing, without objection from the applicants or enduring guardians, we decided to deal with the review as an application for a guardianship order. Prior to us taking this course, the solicitor for WZT and MBT said that what his clients now sought was for us to make a guardianship order appointing the Public Guardian to make decisions about access to NKT.

Does NKT have a disability which prevents her from being able to make some important life decisions?

We note all of the evidence above in relation to NKT's cognition and mental state and Dr U's view that she needed to live with family and have help with all activities of daily living.
In the two hearings, we spoke with NKT by phone with the assistance of an interpreter. She was forthright and did not show indications of anxiety or stress that would affect her ability to answer our questions.
At the April 2021 hearing, NKT said that she was able to look after herself and acknowledged some health problems including with her blood pressure.
At the July 2021 hearing, NKT said that she could communicate adequately with the doctor who spoke Serbian. She was not on ongoing medications and only took medication for flu or painkillers when needed. When asked about why she had been to hospital in the past, she said it was once for a tummy problem and once for blistering on her head. When asked about sores on her legs, she said that she had once sprained her legs. She said she was totally independent. QAT and NYT assist by mowing the lawn, taking her to the doctor and taking her shopping.
In the hearings, QAT said that his mother needed help with shopping, gardening and going to the doctor.
QAT attributed his mother's obvious problems with memory at the July 2021 hearing to stress and not having slept.
The contentious guardianship related issue was whether NKT should have contact with her children WZT and MBT. From detailed statements, we had starkly different evidence as to whether this contact was not occurring due to behaviour of WZT and MBT, and NKT then not wanting contact with them, or whether actions by QAT and NYT had undermined contact.
We note particularly Dr W's view that NKT had dementia, Dr V's views about her cognitive limitations, the very limited understanding she has shown about her health conditions and history (both to Dr W and to us) and the evidence that she needs assistance with at least some personal activities.
We were cautiously satisfied that NKT has a cognitive impairment and significant support needs, particularly in relation to her health care, so that she is unable to make some important life decisions and otherwise partially incapable of managing her person.
This meant that we could make a guardianship order. However, there was a difficult issue as to whether we should make a guardianship order.

Should we make a guardianship order?

If we made a guardianship order, it would suspend the appointment of enduring guardian that NKT signed in 2018. The appointment of enduring guardian provides that, if NKT lacks capacity, either guardian may make decisions in relation to her accommodation, health care and consents and services. The appointment does not cover decisions about access to NKT.
Considering the overall professional evidence from doctors and Mr Y and the lack of any specific health professional evidence concerning NKT's cognition in 2018, we could not be satisfied that she lacked capacity to have made the appointment of enduring guardian.
However, WZT and MBT wanted us to make a guardianship order in relation to the issue of their access to their mother.
Their statements painted a picture of their having limited contact with their mother prior to their father's death in the context of poor relationships with their father who had also been abusive and controlling of NKT, but NKT being quite open to their visits in the period after their father's death. However, QAT and NYT had been very hostile towards their contact so that it stopped occurring. QAT had taken control of NKT to the detriment of the other children's relationship with their mother.
The statements of QAT and NYT on the other hand painted a picture of WZT and MBT being aggressive and harassing to NKT in the period after her husband's death including in trying to get control of the house and have the enduring documents changed, leading to distress, anxiety and increased blood pressure for NKT. QAT denied that he had taken control of his mother but did write that he would act to protect her if necessary.
QAT painted a more positive picture of his father but described him as person who did not "forgive and forget very easily".
MBT specifically alleged a conversation with QAT in around November 2019 where MBT proposed that the three children should discuss how to look after their mother. QAT responded to the effect that he had already made arrangements. It should only be one of the children and the house was his. QAT allegedly said, "I already told her to make the choice, whether she's with me or else I'm not going to be involved, so I'm going to be the one looking after her."
In his statement, QAT gave a very different version of what appeared to be the same conversation. QAT alleged that MBT said that he and WZT had been planning how to divide all of their father's assets between the two of them to which QAT replied, "There is nothing to be divided or distributed as our mother is still alive."
On either version, there had been considerable acrimony at NKT's home when WZT or MBT visited at times when QAT or NYT was present. The two versions varied markedly as to whether the fault for the acrimony lay with WZT and MBT or with QAT and NYT.
Statements by NKT herself since about May 2020 have been negative in relation to WZT and MBT. This included in a letter dated 18 May 2020 translated by Ms X solicitor in which she said that she wanted WZT and MBT to leave her alone. She wanted to live her life in peace. She loved all the children as their mother "but I cannot get along with all of them in the same way and cannot rely on all of them". Taking into account the character and attitude of each of the children, she has decided to live only with QAT for the rest of her life. He had always stood by her and by his father. She believed that WZT and MBT would not look after her but would continue to make problems in the family and argue with her. She did not need that.
The Ageing and Disability Commission reported on a complaint made to it in May 2020 that QAT was isolating his mother from other adult children for financial gain. In August 2020, a Commission staff member spoke to NKT by telephone with the assistance of her GP Dr U. NKT denied any abuse by QAT or his wife and said that she was happy with the current arrangements. She was happy not to have contact with WZT or MBT. She appeared to understand the allegations that had been made and was able to express her views clearly. The Commission had contacted local police and a Macedonian speaking officer visited NKT and she denied any abuse and said she did not want contact with MBT or WZT because, "Whenever she saw them after 10 minutes they started asking about money, and she said 'there is no money'." The Commission was satisfied that NKT was not subject to abuse, neglect or exploitation as alleged by the complainant.
On 13 April 2021 NKT told the Tribunal case officer that WZT and MBT had not been involved as much as QAT and NYT who had been looking after her. She trusted QAT and NYT.
In the April hearing, NKT told us that she did not want to see WZT and MBT and spoke positively about QAT and NYT.
In the July hearing, NKT said that she was very happy with QAT who had looked after her husband and was now looking after her. She was very happy with her daughter-in-law. Her husband had been very disappointed with the other children. When the husband died, WZT had visited and asked for money but NKT had said she was old and needed the money. She did not want to rebuild her relationship with WZT. When her husband died, MBT had said that he did not care. For the children to do "something like this to me is terrible", they had embarrassed her. She did not want them to visit. She trusted QAT.
WZT and MBT strongly denied to us having asked their mother for money and emphasised their concern for her.
At the April hearing, QAT told us his mother had been staying at his home for about two months following an injury. She could stay there or go back to her place. When she was at her place, he had been sleeping there every night to give her security; she was old and grieving.
At the July hearing, QAT said that his mother had continued to stay at his place for most of the last three months.
There was an argument for making a guardianship order aimed at restoring NKT's relationships with MBT and WZT.
However, NKT's consistent wishes over a considerable time have been not to have contact with WZT and MBT. To what degree these views were affected by a cognitive impairment, propensity to anxiety and any influence by QAT and NYT was very difficult for us to determine.
We noted the evidence of Dr U in relation to NKT's high blood pressure and propensity for mental distress in the context of family conflict. Whatever the contributors to the current family conflict, we saw any attempt by a guardian to impose access as likely to lead to conflict and stress for NKT.
We were conscious of the inherent difficulty in making an access function in a guardianship order work when the person is living in a private home with considerable involvement by one or more family members who have a very negative relationship with family members seeking contact.
Weighing these circumstances, we were not satisfied that we should make a guardianship order. Whatever the basis of NKT's views, they were strongly against contact with MBT and WZT. Any attempt to impose contact was likely to lead to distress and physical health risks for NKT and unlikely to lead to positive contact.

The legal structure

In dealing with an application to review an enduring power of attorney, we first need to decide whether or not we should carry out a review: Powers of Attorney Act 2003 (NSW), s 36(1).
When we do review a power of attorney, we have to decide whether or not to make any order under s 36 of the Powers of Attorney Act. There is a wide range of orders we can make, including: 1. An order that the principal did, or did not, have the mental capacity to make a valid power of attorney. (The principal is the person who made the power or attorney.) 2. An order declaring that a power of attorney is invalid.
If we are satisfied that it would be in the best interests of the principal or better reflect the principal's wishes, we may make orders in relation to the operation and effect of the power of attorney, for example: 1. Revoke or vary the power of attorney; 2. Remove an attorney and appoint a replacement; 3. Direct an attorney to provide records and accounts, and that these be audited.
If we decide not to make any order under s 36 of the Powers of Attorney Act, we may decide to treat the application as an application for a financial management order.
If we dealt with the matter as an application for financial management, we would have to decide: 1. Is NKT incapable of managing her financial affairs? 2. Is there a need for another person to manage those affairs and is it in NKT's interests that a financial management order be made? 3. Who should any financial manager be? (Guardianship Act, ss 25G and 25M)
In considering these issues, we can obtain guidance from the general principles in s 4 of the Guardianship Act. (P v NSW Trustee and Guardian [2015] NSWSC 579 at [207])
Guided by the s 4 principles of the Guardianship Act, we can also consider excluding part of an estate from management.
A person's capability to manage his or her affairs is considered in the context of the person's particular circumstances and the purpose of the Guardianship Act as reflected in the s 4 principles of that Act. The Tribunal looks at whether the person is "reasonably able to manage his or her own affairs in a reasonably competent fashion". A focus is whether the person is able to make and implement decisions about his or her 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". The availability of family or community support is relevant. The concept of capability focuses on the reasonably foreseeable future as well as the present time. A disability may underpin incapability but the focus is the person's functional capacity to manage his or her affairs, not the disability. (P v NSW Trustee and Guardian [2015] NSWSC 579 at [301], [307]-[310]; Re X [2016] NSWSC 275 at [29])
In Re R [2001] NSWSC 886, Justice Young carefully considered the issue of when a financial manager should be appointed in a situation where there is a power of attorney but the attorney has a conflict of interest. Young J said that, to allow a person with conflicts of interest to continue using a power of attorney is something that has to be watched carefully. It was "a question of fact and degree as to whether in all the circumstances it is in the best interests of the incapable person that that situation continue".
A financial management order generally suspends the operation of any power of attorney: Powers of Attorney Act, s 50.

We dealt with the matter as an application for a financial management order

In view of the range of evidence in relation to NKT's cognition and financial capability and with nearly all of her assets having been transferred to her son QAT, we were clear that we should carry out a review of the power of attorney.
At the commencement of the second hearing day, the solicitor for the applicants said that what they sought was a financial management order appointing the NSW Trustee and Guardian. There was subsequently no dispute by the attorneys that we should not make an order under s 36 of the Powers of Attorney Act but rather treat the application as an application for a financial management order. We were clear that we should take this course in view of the evidence suggesting that NKT was incapable of managing her financial affairs and the evidence of virtually all of her assets being handed over to her son QAT.

Was NKT incapable of managing her financial affairs?

NKT's financial affairs include receipt of a part pension and ownership of a Bank ZZ account containing approximately $5,600 and shares noted on a Centrelink statement as valued at approximately $6,400. Under the deed that led to the transfer of the house to her son QAT, she has an occupancy right in the house until she and QAT agree that she should move to his home due to deterioration in her health or until she needs care in an aged care facility. QAT undertook to care for her for life. The house was transferred on the basis of a value of $625,000.
As discussed below, NKT's financial affairs may also include consideration of whether she should pursue retransfer of her home or recoupment of savings that are now in the name of QAT.
We note the professional evidence set out earlier in these reasons including Dr W's view that NKT's capacity to manage day-to-day financial affairs was potentially compromised by her lack of education and detailed knowledge of her financial assets.
At the April hearing, NKT told us as follows. She needed money for her future. She recalled signing a power of attorney appointing QAT and NYT. This only allowed money to be spent on her. QAT now owns her home because he had put in a lot of effort to look after her and her husband. Asked what would happen if she needed to go to an aged care facility and needed money for this, she said that QAT would not put her in a nursing home.
Asked what she owned, she said that she owned her home and savings. She said that the savings were sufficient for her happiness and bills but when asked how much she had in savings she said that she was illiterate and QAT monitored things for her. When shares were explained to her, she said that "we" have shares. She said that she receives a pension but when asked about the amount said that she was illiterate and QAT looks after this for her. When asked if she had made any other gifts since her husband died, she said that everything will go to QAT. Later she said that the house was owned by herself and QAT.
At the second hearing, NKT said that she could take care of her finances. Asked what she owned, she said that her house was deteriorating and needed repairs and where would she find $20,000? She said that savings had gone towards paying bills. She still had enough to pay the bills but she was unaware how much as she was "not that literate". If needs be, she could pay for repairs on the house.
NKT denied having made gifts to her son from about the time her husband died. She said that the house had belonged to her and her husband and was now hers. It will go to QAT who looked after her husband who had died sad because of the other two children.
The lawyers for the applicants and attorneys agreed that NKT was incapable of managing her affairs.
In view of the professional evidence and NKT's own evidence in the hearing, we were clear that she is incapable of managing her financial affairs and needs someone else to do so. We saw this as being so irrespective of whether she has any legal rights to pursue property or money transferred to QAT.

Was it in NKT's interests that we make a financial management order?

On the same basis as in relation to the appointment of enduring guardian, we were not satisfied that NKT lacked capacity to have signed the enduring power of attorney in 2018.
The power of attorney provides for QAT or NYT to be able to manage NKT's affairs in her interests. There is no tick in the boxes next to the optional additional powers in the power of attorney but nor are they deleted. Even if these additional powers are operative, they only grant a constrained power for the attorney to give reasonable gifts and confer benefits on themselves to meet their reasonable living and medical expenses in accordance with ss 11 and 12 of the Powers of Attorney Act.
The predominant issue in relation to whether it was in NKT's best interests to make a financial management order related to most of her assets having been transferred to her son QAT in the period around her husband's death.
These transfers included: 1. $80,000 transferred from NKT's Bank ZZ account on 11 October 2019, five days before her husband's death. At the July 2021 hearing, QAT told us that at that time both his parents were in hospital and he did not know who would go first. They had said that he would need money for things afterwards and so to get money. He did this by electronic access which he had. Subsequently, the bank wanted further documentation and so his mother signed a piece of paper on 16 October 2019 stating her "wish to gift my son [QAT] $80,000 from my [bank] account". A copy of this piece of paper was in evidence. 2. On 11 November 2019, there was a transfer of approximately $159,000 in a CUA account from NKT to QAT. The copy transfer slip was signed by both NKT and QAT with the letters "POA" written next to QAT's signature. QAT told us that this money had come from a joint account of his parents and it was the "same story" of his mother wanting to "fix this before I go". QAT had explained lots of things and then his mother had made a decision. He acknowledged that he may have signed the form as attorney for his mother. 3. On 18 December 2019, NKT entered into a deed of agreement with QAT whereby she transferred the family home to him subject to an ongoing occupancy right and agreement from QAT to care for her. This deed is discussed further below. 4. Following receipt of approximately $190,000 from her husband's estate in April 2020, NKT signed a transfer of this amount to QAT. At the July 2021 hearing, QAT said that this transfer had occurred because NKT did not want to spend money on solicitors after she dies. It was her idea. However, he acknowledged that he had told her about the financial implications of things including warning her of the possibility of WZT and MBT claiming money after she had died. 5. Following receipt of a further $106,000 from sales of shares in the estate in May 2020, NKT's signed transfers of $38,000 and then $70,000 to QAT. In relation to the $38,000 transfer, QAT told us at the July 2021 hearing that NKT wanted to transfer the money to him. He had again explained the options including the possibility of his siblings making a claim.
At the April hearing, QAT had initially told us that none of his mother's money had been gifted to him. In relation to the proceeds of shares going into his name, he said this was because his father gave him this responsibility. He then explained it was his mother's wish to transfer money to him to avoid expenses including probate costs. He said that money was in his name. He then said the money was in in his mother's name. It would remain in his mother's name until she dies because her future was unknown. In the future, she may need to live in a nursing home.
It is fair to acknowledge that QAT appeared to have some difficulty understanding some of our questions and legal concepts of ownership and the like that we were discussing with him.
In total, NKT signed over to her son over $530,000. QAT now holds in his own name savings totalling approximately $446,000. At the July hearing, he told us that this was his money but for spending on his mother and it would not be touched otherwise before she dies. He later acknowledged that he had used some of the money towards expenses on the property transfer including stamp duty and legal fees (despite a provision in the transfer deed that he was personally responsible for any costs and disbursements in relation to the transfer). He has also paid legal fees and disbursements of himself and his wife in relation to the current proceedings.
From Centrelink documents produced by QAT, it appeared that Centrelink is aware of the deed in relation to the house. Also, the May 2021 Centrelink statement notes assets including "gifted cash/loans" of approximately $399,000.
We had documentary and oral evidence from the Macedonian speaking solicitor Ms X in relation to the transfer of the family home from NKT to QAT: 1. Ms X was initially approached by QAT and NYT in relation to the matter (which evolved from a proposal to transfer the property to QAT's children to a transfer to QAT himself). Ms X was clear that she could not accept instructions from QAT and NYT on NKT's behalf and would need to see her alone to get instructions. She would need to be satisfied that NKT had capacity and that there was no unconscionable conduct. 2. On 29 November 2019, Ms X spoke alone with NKT who said that she wanted to transfer the property to QAT on condition that he "looks after me and buries me honourably". Ms X advised NKT to obtain independent legal advice from another lawyer but NKT declined to do so. 3. Ms X's notes record a meeting with NKT and QAT on 5 December 2019. NKT had decided to transfer title to QAT if there was no other way of ensuring that WZT and MBT could not contest his ownership. 4. Ms X noted that NKT had "mental capacity absolutely; she is also very independent and to my surprise knows fractions and fully understands the advice and information I have provided." In the hearing, Ms X also said that NKT presented as stoic and she did not feel she could be pressured. 5. Ms X prepared the deed of agreement which was signed on 18 December 2019. It included recitals in relation to QAT having made equal financial contribution towards the purchase of the property and building of the residence and repayment of a bank loan, whereas the other two children had not made any financial contribution towards the property. The accuracy of these recitals was hotly contested by WZT and MBT. Ms X said that she had obtained information for these recitals from NKT and QAT. 6. Whereas the deed provided for QAT to "care for and look after the health and well-being" of his mother for the rest of her life, there was no specific provision in relation to the considerable fees which may be payable if NKT ultimately needs to move into an aged care facility. Ms X said that she had told QAT that he needed to be responsible for this but she had overlooked putting it in the deed. 7. Ms X said that she had told NKT and QAT to make their own enquiries at Centrelink in relation to any implications there. 8. Ms X reiterated that she had seen NKT alone and had asked QAT to wait outside while she was doing so. 9. Ms X told us that QAT was the only one his mother trusted. It was also in accordance with old Macedonian custom for the eldest son to stay with his parents and it was not unusual in Australia for Macedonian people to sign over their assets to their eldest son.
In the hearing we also spoke to Mr Y, another solicitor of Macedonian heritage. Mr Y said that a large proportion of his clients over many years have been Macedonian. In about 90% of cases, the eldest son would be appointed in enduring documents. However, he did not see it as in accordance with Macedonian culture to transfer a person's home to their son during their lifetime.
On 13 April 2021, NKT told the Tribunal case officer that WZT and MBT had not been involved as much as QAT and his wife who had been looking after her. She trusts QAT and NYT. She and her late husband were happy with the care they were receiving from QAT and NYT and had mutually agreed to sign over their house to QAT and NYT.
NYT told us that she loves looking after her mother-in-law and will do so until she dies. She will do her best to avoid the need for an aged care facility. If there was not enough money to pay for an aged care facility, then she and QAT would access money from their own home if necessary. They both work part time. They own their own home and had no significant savings.
QAT had also told us that the money from his mother was available if she needed an aged care facility and if there was not enough money, he would look at options.
In her December 2020 statement, WZT alleged that around early December 2019, her mother told her that she did not understand some documents that she had signed at a solicitor's office. QAT had kept on telling her that if she gave him "most of everything" he would look after her. In fact she wanted to treat the three children the same. She did not want to give anything to anyone before she died. NKT agreed to see another solicitor if WZT arranged it but had then declined to attend the appointment.
Noting all the evidence of conflict and NKT's letter to WZT and MBT of 18 May 2020, we formed the impression of her feeling the need to choose which of her children to align herself with so as to live in peaceful circumstances.
In her December 2020 statement, WZT wrote at paragraph 10 that her father was very controlling of NKT and this meant she had little to no life experience or skills. QAT responded to that paragraph by saying "that's the way people of that age, culture live both back then and now. All that's important to them is their family, house and garden. This does not mean they do not know anything or are uneducated."
WZT's statement went on to allege that NKT had had very limited understanding of financial matters or control of money. QAT responded that NKT in fact always had access to money and could spend it as she wished. She was capable of reading numbers. As noted above, Ms X said that NKT understood fractions.
Concerns that we had in relation to the transfer of NKT's assets to QAT were: 1. She has gone from outright ownership of her home and over $500,000 in investments to having no substantial investments and a right of occupation of her home with a general obligation for her son to care for her. 2. Whether NKT had capacity for the transfers of assets that she made. 3. NKT had limited education and is illiterate. 4. NKT has a history of limited control over her own life, 5. The background of fierce family conflict between QAT and his siblings in relation to their respective roles in their mother's life. 6. Dr U's report of NKT suffering depression and anxiety due to reported verbal abuse by her daughter in November and December 2019 and May 2020. 7. The first $80,000 having been transferred by QAT when NKT and her husband were in hospital and there being an issue about which of them would die first. 8. The next $159,000 being transferred only a month later and with the transfer document being signed not just by NKT but also by QAT as attorney. 9. Although QAT strongly asserted that all decisions were his mother's, he also acknowledged having explained things to her before decisions including warning her of the possibility of WZT and MBT making claims after she dies. 10. QAT's varying evidence in relation to who he now saw as the owner of the transferred money. 11. Although solicitor Ms X handled the home transfer and deed quite carefully and was satisfied of NKT's capacity, she had acted for both parties to it. Recitals in the deed in relation to past contributions to the property were hotly contested by WZT and MBT. The deed did not include specific provisions in relation to potential aged care fees.
In view of the above factors, there were legal issues about whether NKT had capacity for the home transfer deed and cash gifts to QAT, about whether these transactions were brought about by unconscionable bargaining or undue influence, about whether relief could be sought under the Contracts Review Act 1980 (NSW) in relation to the home transfer deed, about whether the transfer of $159,000 involved a breach of QAT's role as attorney and about whether QAT's conflicting evidence in relation to whether money was his or his mother's gave rise to a legal claim for it to be returned into her name.
See DVB v NSW Trustee and Guardian [2021] NSWCATAD 105 for a detailed discussion of some of these legal remedies in a case involving an aged person who had made a large property transfer to a relative.
In Mentink v Olsen [2020] NSWCA 182, the Court of Appeal (Meagher and Payne JJA) at [2] listed the elements necessary to set aside a transaction on the basis of unonscionable conduct: "(1) that one party to the transaction is placed at a "special disadvantage" vis-à-vis the other in the sense that the disabling condition or circumstance is one which seriously affects the ability of that party to make a judgment as to his or her own best interests; and (2) that the other party understood the plaintiff to be at a special disadvantage and its effect with respect to his or her not being in a position to look after his or her interests. Where those circumstances make it prima facie unfair or "unconscientious" that the "stronger party" procure or accept the weaker party's assent to the impugned transaction, the onus is cast on the stronger party to show that it was fair, just and reasonable: Commercial Bank of Australia v Amadio [1983] HCA 14; (1983) 151 CLR 447 at 461-462 (Mason J), 474 (Deane J, Mason and Wilson JJ agreeing); [1983] HCA 14."
A special disadvantage can arise because "illness, ignorance, inexperience, impaired faculties, financial need or other circumstances" affect a person's ability to conserve their own interests. (Blomley v Ryan (1956) 99 CLR 362)
It is arguable that NKT was at a special disadvantage in view of factors including her age, limited education and illiteracy, limited English, history of being under her husband's control, one transaction being instigated when she was in hospital, two transactions occurring shortly after her husband's death and her being subjected to family conflict. Except in relation to the home transfer, there was no evidence of her receiving professional advice whereas she did receive advice from QAT. The one solicitor acted for both her and QAT on the home transfer.
These factors suggesting disadvantage would have been apparent to QAT and so the onus may pass to him to show that some or all of the transactions were fair, just and reasonable. It may be hard for QAT to fulfill this onus in view of the extent of the transfers of money and property to him, his mother being left with very limited assets and the factors listed above as potentially giving rise to special disadvantage.
In relation to NKT's capacity for the transactions, we had varying evidence about her cognition at the time of the transactions. The only significant contemporaneous professional evidence was the positive view of Ms X in relation to the home transfer. However, we do note that the test for capacity to divest oneself of a very large proportion of one's assets may set a high bar.
In Re Beaney [1978] 2 AllER 595, the English High Court quoted the classic Australian test in Gibbons v Wright (1954) 91 CLR 423 and then said: "The degree or extent of understanding required in respect of any instrument is relative to the particular transaction which it is to effect. …. At one extreme, if the subject matter and value of a gift are trivial in relation to the donor's other assets, a low degree of understanding will suffice. But, at the other, if its effect is to dispose of the donor's only asset of value and thus for practical purposes to pre-empt the devolution of his estate under his will or on his intestacy, then the degree of understanding is as high as that required for a will, and the donor must understand the claims of all potential donees and the extent of the property to be disposed of."
In these circumstances, there was a clear argument for appointing a financial manager who could consider legal negotiations or proceedings with a view to securing NKT's financial situation and future.
On the other hand, NKT's expressed views over the last year or more have been negative about WZT and MBT and positive about QAT including in trusting him in relation to financial matters. Ms X also told us that QAT was the only child NKT trusted. In 2018, NKT appointed QAT and NYT as her attorneys.
QAT and NYT were adamant about their commitment to NKT including in relation to providing any money required for aged care accommodation if it is needed in the future. We accepted that QAT and NYT do have a general commitment to NKT but only time would tell whether this commitment would lead to NKT's needs being met in an optimal manner.
We were also concerned about the psychological and possible resultant physical health impact on NKT of a financial management order though we saw QAT and NYT as having the opportunity to considerably shield her from this.
We also noted that the capacity of a financial manager to pursue legal action will be influenced by NKT's lack of significant savings in her name.
On balance, we decided that the extent of money and property that has been transferred to QAT, the very limited money and property rights that this left with NKT and the existence of at least unconscionable bargaining as a legal avenue that can be explored, meant that it was in NKT's best interests that we make a financial management order.

Who should be the financial manager?

In view of the task facing the financial manager, clearly it needed to be someone independent of the family. The only independent option available was the NSW Trustee and Guardian whom we therefore appointed.
We recommend to the NSW Trustee and Guardian: 1. To promptly explore and consider pursuing negotiations and/or proceedings to secure NKT's financial position and future, for example by QAT returning cash into NKT's name and entering into a clear legal obligation to meet any high-quality aged care costs that NKT may require in the future. 2. To carry out its role in a way that avoids any unnecessary stress for NKT, including, if practicable, by leaving in her control the part pension that she receives from Centrelink.

Review of the order

The Tribunal will review the order in one year to consider whether it should be revoked or varied in some way.

Who took part in the hearing?

The following people participated by phone or video: 1. Ms NKT (by her choice for parts only of the hearing) with the assistance of an interpreter 2. Mr MBT, son and applicant 3. Ms WZT, daughter and applicant 4. Mr Timothy Frater, lawyer for the applicants 5. Mr QAT, son, attorney and guardian 6. Ms NYT, daughter in law, attorney and guardian 7. Mr T, solicitor for the attorneys and guardians 8. Mr Michael Klooster, barrister for the attorneys and guardians 9. Ms X, solicitor 10. Dr W 11. Dr V 12. Mr Y, solicitor

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 August 2022

Trustee and Guardian Act 2009(NSW)

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Judgment (19 paragraphs)

Legislation Cited (5)

Cases Cited (10)