P v NSW Trustee and Guardian

NCAT Guardianship|2016-08-23

What the Tribunal decided

The Tribunal ordered that the financial management order made on 23 July 2012 in relation to the estate of Mr KDP be revoked.

Background

Mr KDP resides at a nursing home in Western Sydney, NSW. Mr KDP has a number of siblings (some of who have recently died) including his sister, Mrs TZE, who resides at regional NSW. Mr KDP was born with cerebral palsy and an intellectual impairment.
On 23 July 2012, the former Guardianship Tribunal of NSW made a financial management order in relation to Mr KDP. Mrs TZE was appointed as her brother's financial manager pursuant to the authorities and directions of the NSW Trustee and Guardian ("NSWTG"). At that time, Mr KDP's mother, who was the primary carer for Mr KDP, had recently died in May 2012. Prior to his mother's death, Mr KDP resided in the family home with his mother.
On 20 May 2016, the Tribunal received an application from Mrs TZE to review or revoke the financial management order. In her application, Mrs TZE advised that Mr KDP only received a disability pension and that the recently introduced requirement of the NSWTG to enter into a surety bond in relation to management of the estate was a cause of concern for the family.

The hearing

At the end of these Reasons for Decision are lists of the parties to the application and the witnesses who attended the hearing.
Whenever possible, the Tribunal seeks to convene in a manner that promotes the participation of the person the subject of the application. The Applicant informed the Tribunal that her brother had been non-verbal since birth, would not be able to understand the proceedings of the Tribunal, or express any view. The Tribunal had also been provided with a communication from the Director of Nursing at the nursing home where Mr KDP resides. That communication confirmed that Mr KDP is non-verbal. I accepted the evidence on this point and determined it was appropriate to proceed with the hearing in the absence of Mr KDP.

What did the Tribunal have to decide?

Mrs TZE, as the manager of Mr KDP's estate, has standing to apply for the subject order to be varied or revoked (s 25R(c) of the Guardianship Act 1987 (NSW) ("the Act")). The Tribunal must review a financial management order upon receipt of an application under s 25R of the Act: s 25N (4)(b).
S 25P of the Act outlines the action the Tribunal must take on reviewing a financial management order: 25P Action on review (1) On reviewing a financial management order under section 25N, the Tribunal: (a) must vary, revoke or confirm the order, and (b) if it considers it appropriate to do so - may take such action with respect to the appointment of the manager of the protected person's estate as the Tribunal could take on a review of such an appointment under Division 3. (2) The Tribunal may revoke a financial management order only if: (a) the Tribunal is satisfied that the protected person is capable of managing his or her affairs, or (b) the Tribunal considers that it is in the best interests of the protected person that the order be revoked (even though the Tribunal is not satisfied that the protected person is capable of managing his or her affairs). (3) In this section, vary, in relation to a financial management order, includes to exclude (or remove an exclusion of) a specified part of the protected person's estate from the order.
In conducting the review, the Tribunal is under a duty to observe the following principles outlined in s 4 of the Act: 4 General principles It is the duty of everyone exercising functions under this Act with respect to persons who have disabilities to observe the following principles: (a) the welfare and interests of such persons should be given paramount consideration, (b) the freedom of decision and freedom of action of such persons should be restricted as little as possible, (c) such persons should be encouraged, as far as possible, to live a normal life in the community, (d) the views of such persons in relation to the exercise of those functions should be taken into consideration, (e) the importance of preserving the family relationships and the cultural and linguistic environments of such persons should be recognised, (f) such persons should be encouraged, as far as possible, to be self-reliant in matters relating to their personal, domestic and financial affairs, (g) such persons should be protected from neglect, abuse and exploitation, (h) the community should be encouraged to apply and promote these principles.
In this matter, given the Applicant requested that the financial management be revoked, the matters to be decided were:

Is Mr KDP capable of managing his affairs?; or
Is it in the best interests of Mr KDP that the order be revoked?

Should the order be revoked because Mr KDP has the capability to manage his affairs?

The Reasons for Decision for the order of the Guardianship Tribunal of 23 July 2012 provided as follows in relation to whether Mr KDP was a person incapable of managing his financial affairs: [Dr Z], Senior Resident Medical Officer, advised in a report prepared on 6 June 2012 that [Mr KDP] now has severe dementia, as well as a severe intellectual disability and type 2 diabetes mellitus. [Dr Z] reported that [Mr KDP] has had cerebral palsy since childhood. [Dr Z] also noted that [Mr KDP] is unable to read or write. [Ms Y], a Social Worker at [a public hospital in Western Sydney], confirmed in a report prepared on 13 June 2012 that [Mr KDP] has a history of cerebral palsy, and has severe cognitive, speech and physical deficits. … After considering the available evidence, the Tribunal concluded that [Mr KDP] is not capable of managing his financial affairs.
I was not provided with any contemporaneous evidence from healthcare professionals as to the status of Mr KDP's disability. The Applicant did advise me however that her brother's cognitive abilities had only declined since the order was made as a result of dementia. She advised that her brother cannot talk and in no way could manage his financial affairs.
I was satisfied that Mr KDP remains a person incapable of managing his financial affairs. The financial management order cannot be revoked on the ground that Mr KDP is capable of managing his affairs.

Should the order be revoked because it is in Mr KDP's best interests?

This was the primary issue for determination before the Tribunal given the basis of the application.
The Reasons for Decision for the Guardianship Tribunal's previous order appointing the Applicant as her brother's financial manager stated as follows in relation to the need for the order: The applicant, [Mrs TZE], informed the Tribunal that her brother's Centrelink pension has been paid into an account in the name of their late mother. Accordingly, it has not been possible for anyone to gain access to his pension entitlements. [Mrs TZE] estimated that [Mr KDP] would have some thousands of dollars currently held in the account in the name of their late mother. … [Mrs TZE] has recently opened an account in her name as trustee for her brother. … [Mrs TZE, [Mr HAP] and [Mr UBP] each confirmed that they have a very supportive family, and they thought it likely that their late mother would realise that [Mr KDP]'s siblings would continue to take care of him. In these circumstances, the Tribunal found that there is quite clearly a need for someone to manage [Mr KDP]'s financial affairs on his behalf. The Tribunal also found that it would be in [Mr KDP]'s best interests for the Tribunal to make a financial management order.

The Surety Bond Scheme

In her application seeking revocation of the order, the Applicant stated: The estate of [Mr KDP] (his pension) has been managed for the last four years without problems and his care and needs have been managed by family. Now a surety bond is required to guarantee his care is paid for. This is an invasion of the family (financial manager) finances which in [Mr KDP]'s case is not necessary.
The Applicant first became aware of the Surety Bond Scheme when she received a letter from the NSWTG, which stated, in part: The [NSWTG] is changing the security requirements for all estates. As part of this change the [NSWTG] is introducing a Surety Bond for the protection of people whose finances are managed by Private Managers. The Surety Bond acts as a guarantee to pay for any financial losses suffered by the managed person only if a Private Manager fails to perform their duties. Currently, if a managed person suffers financial loss, civil action can be commenced in court. However, this can take many years and is often very costly. Whereas the Surety Bond provides a mechanism for the managed person to be reimbursed immediately while the insurer pursues the Private Manager to recover the loss. A right of recovery already exists. The Surety Bond will be underwritten and managed on behalf of the [NSWTG] by Willis Towers Watson. The fees payable from the managed person's estate will be charged to reflect the value of the estate (excluding real estate, motor vehicle, furniture and accommodation bond) and will be either a one-off payment or ongoing premium payable from the estate….. All Private Managers must complete the Surety Bond application form included and return to the [NSWTG] within 14 days of receipt of this letter via one of the methods listed below.
The Applicant also provided the Tribunal with a document provided to her by the NSWTG entitled "Surety Bond Application" which required the private manager to provide the contact details for themselves and the managed person as well as provide the estate's value excluding any accommodation bond, real property, motor vehicle, and furniture. The document then required the signature of the private manager with the following terms: 1. I have read and understood the terms and important information relating to the bond 2. acknowledge the right of recovery 3. provide consent for my personal information as discussed on this form to be collected and used for the purposes of issuing the bond periodically 4. agree to pay the bond fee out of the estate of the managed person.
A further document provided to the Applicant by the NSWTG entitled "Surety Bond - Frequently asked questions" provided the following statement as to whether the bond was compulsory: Q9: Is the Surety Bond compulsory? The Surety Bond is compulsory as it is a security requirement for most private managers. Some private managers may be exempt if it is proven their actions are adequately covered by indemnity insurance (see Q3) or it is demonstrated the managed person's estate cannot pay the Surety Bond premium (see Q18). Decisions about Surety Bond exemptions are made by NSW Trustee & Guardian on a case by case basis. If a private manager disagrees with NSW Trustee & Guardian's decision about a Surety Bond, they can request a review of the decision (see Q27).
The Applicant made the application for the revocation of the management order as a result of the communications she received from the NSWTG regarding the implementation of the Surety Bond Scheme. She expressed the view to me that: I was shocked, insulted and found the whole thing very upsetting….we are a loving and caring family who has always cared for [Mr KDP]…all of a sudden we are asked to guarantee our brother's financial future.
Ms Rovina Krishna of the NSWTG apologised during the hearing to the Applicant for the impact the communications from the NSWTG about the Surety Bond Scheme had caused her and her family. She advised that that the communications were not meant to represent a mandatory application process to enter into the scheme: The information sent out (by the [NSWTG]) should have been worded better to say that we were gathering information in order to decide on a case by case basis if the Surety Bond would be applicable to each estate…it could have been worded better.
Ms Tracey Burgess, also of the NSWTG, informed me that: We sent out (the communications) to get a correct and up to date asset list but it was not worded well. Once we get that information an assessment is made in each case if a Surety Bond is required. If a manager does not agree with our decision they can seek an internal review from a senior officer. If the same decision is made, then the manager has further rights to apply to NCAT's Administrative Division (sic) for review.
In the early stages of the hearing, Ms Krishna told the Applicant that on the information available as to the size and nature of Mr KDP's estate, the Surety Bond Scheme would involve a one-off payment of $150 for the life of the order.
Ms Burgess later advised that in the case of Mr KDP's estate, the matters that the NSWTG would take into account when determining if a Surety Bond was required in respect of the estate included: (1) that the Applicant had provided care to Mr KDP for most / all of his life; (2) that the Applicant had provided care and management assistance to both Mr KDP and their mother (prior to her death); (3) any hardship issues that would indicate the cost of the Surety Bond was prohibitive; and (4) any other matters relevant.
Later in the hearing, after hearing the evidence as to the extent of Mr KDP's estate, Ms Burgess advised that so long as she received a letter from the Applicant confirming the details of the managed estate, the NSWTG would "waive the requirement for the Surety Bond on this estate".
In response, the Applicant made it clear that she nonetheless wished to proceed with her application requesting that the order be revoked. Whilst the cause for her application had now seemingly been negated, she had formed a firm view that she did not require the order to manage her brother's affairs and submitted that it was in his best interests that it be revoked

Evidence as to Mr KDP's Best Interests

The Applicant advised that she sought the order shortly after her mother died as the family thought it was necessary to provide "the legal protection to do the things we need to do for [Mr KDP]". She said that she has since realised that the order is not necessary and simply creates a burden due to the tasks required by the supervision of the NSWTG. She noted that she is a signatory on her brother's account, that she is his recognised nominee with Centrelink, and that most of his expenses are paid through a "comfort fund" she keeps topped up at his residential facility.
The Applicant informed me that Mr KDP currently has a number of health problems and is soon to have an operation to remove a cancerous growth from his nose. She explained that she was keen to be able to have "free and quick access" to her brother's limited funds given his health needs without the concern of the administrative requirements of the NSWTG.
Mr KDP's estate is very modest. Mr KDP has no other income other than a disability pension provided by Centrelink. In terms of assets, the Applicant informed me that she had recently deposited $4,000 into his comfort fund at the nursing home in Western Sydney, he had a pre-paid funeral plan worth around $7,000, and a bank account with approximately $13,000. That is, assets totalling approximately $24,000.
I enquired of the Applicant as to whether there was anything she might not be able to do for her brother without the management order being in place. She responded by stating that nothing would change apart from the family being free of the requirement to report to the NSWTG and pay the relevant fees and charges. She said that she and other family members would continue to buy her brother's clothes and incidentals, take him on outings, and provide all the care and support that his family had provided to him since his birth.
The NSWTG did not express any view on whether it was in Mr KDP's best interests to revoke the order.

Tribunal's determination

This application is but one of scores of applications private financial managers have lodged with the Tribunal seeking revocation of management orders due to the introduction by the NSWTG of the Surety Bond Scheme. The Applicant in this matter would not have made her application but for the communications she received from the NSWTG regarding the scheme.
However, whilst the scheme may have caused the application, by the conclusion of the hearing it was not a live issue as the NSWTG had indicated that the requirements of the scheme would be waived in relation to Mr KDP. The communications regarding the scheme had clearly caused the Applicant anxiety. The initial form provided to the Applicant clearly by its terms did not only seek information as to whether the bond would be applied, but indicated that by signing the application the private manager was entering into the scheme arrangements and was to be exposed to personal liability. The NSWTG acknowledged this was not the intention of the communication received by the Applicant and apologised to her.
As Mr KDP is incapable of managing his own affairs, the only basis on which I could revoke the management order as requested by the Applicant was if I concluded to do so was in Mr KDP's best interests.
In Re W and L (Parameters of Protected Estate Management Orders) [2014] NSWSC 1106, Lindsay J comments upon the parameters of an order for protected estate management. The judgment provides useful guidance as to the circumstances in which management orders may be revoked despite the protected person remaining incapable of managing his or her affairs: 14. The Court can, as a matter of jurisdiction, appoint a manager to a presently unpropertied estate in anticipation of a protected person's receipt of property for management. 15. A manager does not cease to hold office as a protected estate manager merely because property presently under management is exhausted or otherwise rendered non-existent. 16. That said, the practical utility of the office of a protected estate manager does generally depend upon the existence of property under management. Without property, or at least the prospect of property, there is no "estate" to manage. Without property, there is no fund from which to allow a manager, as an accounting party, to draw remuneration, and indemnification for expenses, to which the manager may be entitled: Ability One Financial Management Pty Ltd v JB by his Tutor AB [2014] NSWSC 245 at [74] - [77]. 17. The utility of a management order must, like other features of the protective jurisdiction, be measured by reference to whether it is of benefit to, and in the interests of, the protected person. 18. Ordinarily, an absence of property under management is likely to tell decisively against the making of management orders, or decisively in favour of an order for revocation of management orders.
The facts of this matter were that L, a 46-year-old man as at the time of hearing, was born with Down's syndrome and it was stated that he had never been, and in all likelihood never would be, capable of managing his own affairs. L became a protected person on 30 July 2003 when the Supreme Court of NSW appointed his mother as his manager pursuant to the Protected Estates Act 1983 (NSW) (which has subsequently been repealed and replaced by the NSW Trustee and Guardian Act 2009 (NSW)). The impetus for the order was that L was hit by a motor vehicle and subsequently was awarded compensation. In 2014, L's mother sought revocation of the orders on the basis that the property under management having been substantially consumed, the orders no longer served a useful purpose. The evidence before the Court was that the settlement funds had been exhausted for the benefit of L and now his only income was a disability pension provided by Centrelink.
In compliance with a direction of the Court in this matter, the NSWTG provided a report which concluded (at [72]): "in this case it is in the interests of and for the benefit of [L] for the Court to use its inherent jurisdiction to revoke the orders made on 30 July 2003 as: (a) [L's] estate now consists only of the Centrelink payment [he periodically receives]. (b) [L's mother] can continue to be involved to [assist L] in managing the Centrelink payment without the need for a financial management order. (c) there appears to be a loving and caring family relationship [between L, his parents and his siblings] such that there does not appear to be any real risk that [L] will be disadvantaged in the conduct of his affairs or that money or property may be dissipated".
His Honour was satisfied that he should grant the orders sought by L's mother: 89. In all the circumstances, I am satisfied that the Court does have jurisdiction to revoke the management orders made on 30 July 2003 (as part of its inherent jurisdiction and, independently, by virtue of SCA s 23) and that (for the reasons advanced by the NSW Trustee in its Report) it is in the interests, and for the benefit, of L that they be revoked.
In reaching this conclusion His Honour stated: 99. Any decision about whether to make, or revoke, management orders affecting the property of a person incapable of managing his or her own affairs must, ultimately, be guided by an assessment of whether each particular order proposed is for the benefit, and in the interests, of the individual in need of protection. 100. As in the cases considered in these proceedings, the Court may, from time to time, make or decline to make management orders, or decide or decline to revoke management orders, by reference to considerations of practical utility. 101. The fact that a person is incapable of self-management necessarily engages the attention of the Court. It does not dictate a particular outcome.
In a subsequent matter before Lindsay J, P v NSW Trustee and Guardian [2015] NSWSC 579, at [319], his Honour provided further elaboration of his conclusion in Re W and L: One illustration of a case where it may be appropriate to dispense with a protected estate manager despite a finding of incapacity for self-management may be, by analogy with the Court's inherent jurisdiction, where there is no practical utility in burdening a person or his or her estate with the administrative infrastructure necessarily involved in protected estate management: Re W and L (Parameters of protected estate management orders) [2014] NSWSC 1106 at [87]-[89] and [95].
Whilst the Tribunal, unlike the Court, is limited by legislation, in what actions it might take upon an application to revoke a management order, the legislative test of "best interests" combined with the duty to observe the principles of s 4 of the Act, in my view, means the Tribunal can and should follow the reasoning provided by the Court that it may be appropriate to revoke management orders in circumstances whereby there is no practical utility for the order despite the person being incapable of managing their affairs. This must be determined on a case by case basis to ascertain whether revocation would be in the person's best interests. Factors to take account of in reaching this determination include, but are not limited to: the size and nature of the managed estate; the history and calibre of support provided to the person in the management of their estate; and the impact of the administrative infrastructure of private management orders, both in terms of cost to the estate and upon the person and those who support them.
Whilst it would be incorrect to conclude that there is an absence of property in Mr KDP's estate, the estate he has is very limited and there was no evidence before me to suggest there was the prospect of any significant increase of his estate in the future. His estate consists of a trust fund maintained by his nursing home, a funeral fund, and a bank account into which his disability pension is received. There is no complexity to the estate and no evidence that a formal order is currently required to permit his estate to be managed prudently.
The Applicant assisted her brother and their mother with their financial affairs prior to their mother's death, and has continued to manage her brother's affairs with the support of family since their mother's death in May 2012. The evidence that she provided made it clear to me that she provides such assistance in continuation of the love and the devotion that Mr KDP's family has provided to him since his birth. I also note the findings of the Guardianship Tribunal in concluding the suitability of the Applicant to be appointed as a financial manager when so appointed on 23 July 2012: [Mrs TZE] proposed that she be appointed as her brother's private financial manager. [Mr HAP] and [Mr UBP] each strongly supported the appointment of their sister to manage their brother's financial affairs. During the hearing, the Tribunal made enquiries of [Mrs TZE] to ascertain whether she is a "suitable person", for the purposes of the Act, to be appointed as her brother's financial manager. [Mrs TZE] confirmed that: • she is not, and has never been, bankrupt; • she has not been convicted of any offences involving dishonesty; • there is no intermingling of her own funds with those of her brother; and • she is aware of, and accepts, the accounting and reporting requirements of the Office of the NSW Trustee. The Tribunal had no difficulty in finding that [Mrs TZE] is a suitable person to be appointed as her brother's private financial manager. She has a close relationship with her brother, and has acted in his interests by taking steps to set up a trust account for his benefit.
As to the matter of the administrative infrastructure of private management, if the Applicant were required to continue her role under an order of the Tribunal, she would continue to be required to provide annual reports to the NSWTG, provide information and liaise with the NSWTG in relation to the Surety Bond scheme, and the estate would be subject to fees charged by the NSWTG in supervision of the estate. It was evident from the tenor of Mrs TZE's application and the evidence she provided at the hearing that the role of the NSWTG to date, particularly in relation to the Surety Bond Scheme, has caused a level of stress and anxiety to the Applicant and her family.
In examining all of these circumstances I have concluded that to confirm the current financial management order would not provide any practical utility and therefore it is in Mr KDP's best interests that the order be revoked. Mr KDP's very modest estate has been, and no doubt will continue to be, managed very ably by his sister, the Applicant, with the support of family generally. To continue the current order in those circumstances to ensure that the Applicant's actions are supervised (by the NSWTG) would, in my view, have no practical utility and the costs associated with such, whilst minimal, are an unnecessary cost upon the estate.
I was satisfied that the financial management order in relation to the estate of Mr KDP should be revoked in his best interests.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 13 December 2016

Trustee and Guardian Act 2009(NSW)

Protected Estates Act 1983(NSW)

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Judgment (10 paragraphs)

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