P v NSW Trustee and Guardian

Family learns of the sale of the Southwest Sydney property

1. The family of Mr SLG were alerted to the sale of the Southwest Sydney property by a neighbour and long-time friend of Mr SLG. Ms NYG, the member of Ms LBG's family with whom Mr SLG is apparently closest (the widow of Mr SLG's brother and Ms LBG's mother-in-law), became concerned when she had not heard from Mr SLG for some time, despite leaving numerous phone messages. Apparently, Ms NYG and Mr SLG usually spoke by phone every week. Until she became unwell about 12 months ago, Ms NYG and Mr SLG met for coffee on a reasonably regular basis.
2. According to Ms LBG, Mr SLG finally contacted Ms NYG on 7 October 2017, the week before the auction of the Southwest Sydney property and informed her that the house had been put up for sale. The following day members of the family - Ms LBG, her husband (Ms NYG's son and Mr SLG's nephew) and Ms NYG - visited Mr SLG. According to Ms LBG, Mr SLG appeared upset and confused and said he did not want to sell, but it was too late to stop the sale and, if he did, "[Mr CZC] would be unhappy". Ms LBG claims that during that visit Mr SLG said that he had no accommodation arranged, believed no vacancies existed in aged care facilities in his local area and did not want to move in with Mr CZC.
3. Mr CZC arranged for his brothers to assist Mr SLG to prepare the house for sale. According to Mr CZC, the cost of labour and rubbish removal was $11,300.
4. Apparently Mr SLG is a hoarder. Ms LBG reported that during the visit on 10 October 2017, Mr SLG said he was upset seeing his furniture being smashed in front of him and his possessions thrown away. According to Ms LBG, Mr SLG said he lost many treasured possessions in the move and clean-up and could not find his phone book and a collection of $1,000 in coins. Ms LBG reported that she had been told by Mr SLG's neighbour and long-time friend that Mr SLG gave her a box of personal items for safe keeping because he was concerned that he would be left with nothing.
5. According to Ms LBG, on the day of the auction she and other members of the family attempted to raise with Mr CZC their concerns about whether suitable arrangements had been made for Mr SLG's future accommodation. She stated that Mr CZC became verbally aggressive and accused the family of "only wanting money".
6. In these proceedings Mr SLG stated that he wished to live with Mr CZC. He said he trusted and had confidence in Mr CZC. When asked about what he considered to be the motivation of the family in making the Application, Mr SLG stated that he believed that they were acting out of concern for his welfare.
7. At the hearing, Mr SLG handed up a two-page handwritten document, prepared that morning with the help of Mr CZC. In it, Mr SLG wrote that "[Mr CZC] did not influence him to sell the house" and "[Mr CZC] had never taken financial advantage of him". He explained that the two recent withdrawals from his bank account for amounts of $2,500 and $2,300 were for his "share of building plans". He wrote "[Mr CZC] paid about $6,000". (See Dr Z's report below which mentions these transactions.)

Medical opinion

1. A week before the hearing, Mr SLG was assessed by Dr Z, staff specialist geriatrician at a public hospital.
2. In a report dated 24 November 2017, Dr Z recorded that Mr SLG met with an Aged Care Assessment team (ACAT) on 16 November 2017 and is recorded to have:

• said he was not aware of the option of being provided with home services, the financial implications of going into residential care, or, the types of accommodation available
• stated he would return to the aged care clinic in Inner West Sydney for assistance should the living situation with Mr CZC not work out
• disclosed he does not have access to a phone, as he does not have a mobile phone and Mr CZC does not have a land line.

1. Dr Z wrote that, while Mr SLG had expressed to the ACAT officer (on 16 November 2017) his concerns about the sale of the Southwest Sydney property, when he met with geriatric registrar Dr Y (on 22 November 2017) and with herself (on 24 November 2017) he stated that he did not want assistance to intervene in the sale as it was "too late".
2. According to Dr Z, Mr SLG could not recall appointing Mr CZC as his attorney in August 2017 and after "much explanation" was able to understand the meaning and implications of appointing a guardian and attorney. She recorded that he was not able to state whom he wanted to appoint as guardian or attorney as he "did not have anyone he could rely on". In a report dated 17 November 2017, the ACAT officer wrote that Mr SLG said that he wanted to appoint her as the guardian.
3. Dr Z wrote that Mr SLG is socially isolated with limited education. In her opinion there is evidence of "cognitive impairment with main deficits in processing information and memory". She wrote that Mr SLG is increasingly frail with co-morbidities and had little knowledge of either the accommodation options available to him, and/or the financial implications of these options. In Dr Z's opinion, if provided with support and education, Mr SLG would probably be able to make an informed decision about his future accommodation. However, she concluded he lacked capacity to manage his finances, pointing to his inability to perform simple calculations and limited appreciation of the value of money, especially large sums. She wrote that Mr SLG is at "high risk" of undue influence and recommended that a financial manager be appointed as a matter of urgency.
4. Dr Z recorded that while Mr SLG could recall the sale price of the Southwest Sydney property "$10,000 short of $1M", he had difficulties performing simple calculations. When questioned Mr SLG said that after he had given Mr CZC $300,000 towards renovations, he would be left with about $80,000. She wrote that Mr SLG could not recall the amount in his bank account and when he showed her his passbook, he could not recall the purpose for which he had made two separate withdrawals for $1,000 and $2,300 in the past week. Dr Z recorded that Mr SLG's passbook revealed that since May 2017, his expenses exceeded his income except for one month.
5. In a letter to the Tribunal dated 22 November 2017, Dr X, Mr SLG's GP since 2002, wrote that Mr SLG last consulted him on 31 October 2017, saying he had just sold his house, was very confused and did not know what to do next. Dr X wrote given his "age and medical conditions his decision making and memory is affected" and Mr SLG can be easily influenced.

Can a financial management order be made?

1. Section 25G of the Guardianship Act 1987 (NSW) (the Act) provides that the Tribunal may make a financial management order in respect of Mr SLG only if we have considered his capability to manage his own affairs and are satisfied, to the relevant civil standard, of three matters: 1. (1) That Mr SLG is not capable of managing his affairs; 2. (2) That there is a need for a person to manage those affairs on behalf of Mr SLG; 3. (3) That it is in Mr SLG's best interests that the order be made.

Is Mr SLG not capable of managing his affairs?

1. In P v NSW Trustee and Guardian [2015] NSWSC 579, Lindsay J commented at [308] and [309] on the meaning of the phrase "capable of managing those [the subject person's] affairs" in s 25G(a) of the Act: [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. In considering whether the person is "able" in this sense, attention may be given to: (a) past and present experience as a predictor of the future course of events; (b) support systems available to the person; and (c) the extent to which the person, placed as he or she is, can be relied upon to make sound judgements about his or her welfare and interests: CJ v AKJ [2015] NSWSC 498 at [38].
2. As a first step in determining whether Mr SLG is capable of managing his affairs, it is necessary to identify the nature of his "affairs". The available material indicates that Mr SLG receives no income apart from the Age Pension. On the day of the hearing, the proceeds of the sale of the Southwest Sydney property was to be deposited into his bank account. The amount in his bank account before the deposit is unknown.
3. In the short term, a key decision that will need to be made, is what to do with the proceeds from the sale of the Southwest Sydney property. Ms LBG claimed that during their conversation in early October 2017, Mr SLG appeared confused about the impact of the sale of the Southwest Sydney property on his pension entitlements and said words to the effect "So, even if I give [Mr CZC] all my money, I still won't get the pension." In these proceedings, Mr SLG said that he "had no idea" whether receiving the proceeds from the sale of the property would impact upon his pension entitlements.
4. Mr Nyman stated that in his opinion, while Mr SLG had capacity to execute the power of attorney in August 2017, since that time there has been a significant deterioration in his condition. He stated that he doubted Mr SLG could now manage his finances.

Conclusions

1. There is some evidence to suggest that Mr SLG may have had some difficulties managing his financial affairs even before the sale of the property. See for example the history taken by Dr Z which reveals that since May 2017, Mr SLG's expenditure has exceeded his income. However, there is no evidence to suggest that Mr SLG was unable to fund the necessities of daily living or suffered any adverse consequence as a result of that pattern of expenditure.
2. However, the weight of evidence is that Mr SLG is no longer capable of managing his affairs. His estate is now complex and a number of significant decisions need to be made. The evidence he gave in these proceedings reveals that Mr SLG lacks even the basic understanding of the impact of the sale of his property and the proposed contribution towards Mr CZC's property on his Centrelink entitlements. Significantly, it is apparent that he lacks the ability to obtain that information and make a reasoned decision based on that information. That finding is consistent with Dr Z's report that Mr SLG was unable to estimate the amount he would be left with, if he gave Mr CZC $350,000 towards renovating his property. It is also consistent with Ms LBG's observation that Mr SLG was troubled by the fact that he owed Mr CZC money for preparing the Southwest Sydney property for sale and appeared unable to appreciate that the proceeds from the sale would far exceed the amount owed to Mr CZC.
3. We find that Mr SLG probably lacks the capacity to manage his enlarged estate.

Is there a need for a person to manage his affairs on behalf of Mr SLG and is it in Mr SLG's best interests that a financial management order be made?

1. These two issues are intertwined. Each requires consideration of the effect of the operation of the power of attorney made by Mr SLG in August 2017.
2. As a consequence of Mr SLG's appointment of Mr CZC as his attorney, Mr CZC will take on the role of managing Mr SLG's affairs at the point at which he "lacks the capacity through loss of mental capacity". However, if the power to make a financial management order is exercised, the power of attorney will be suspended: s 50(3) of the Powers of Attorney Act 2003 (NSW).
3. An evidentiary difficulty posed in this matter, is determining whether four months ago when Mr SLG executed the power of attorney, he was capable of making an informed decision to appoint Mr CZC as his attorney. While the weight of medical evidence is that Mr SLG now lacks the capacity to manage his affairs, there is little available contemporaneous material about Mr SLG's decision-making capacity in early August 2017. Mr Nyman's opinion that he had capacity is unsupported by medical evidence. Dr X's recollection of Mr SLG's presentation when he saw him about ten weeks after the power of attorney was executed, tends to suggest that Mr SLG may have lacked capacity to make a power of attorney. However, without better evidence we could not be positively satisfied that Mr SLG lacked capacity to make the power of attorney in mid-August 2017. For current purposes we will assume but not decide that Mr SLG had capacity when he made the power of attorney.
4. Nonetheless for the reasons that follow we have decided that notwithstanding the existence of the power of attorney, there is a need for a person to be appointed to manage Mr SLG's affairs and it is in his best interest that a financial management order be made.
5. First, as is apparent from the history given by Ms LBG and Dr Z, the available evidence indicates that the full range of accommodation options available to Mr SLG has not been explored. This is relevant as the issues of Mr SLG's future accommodation and the management of his financial affairs are intertwined. At its highest, the evidence about the steps taken by Mr CZC to assist Mr SLG to consider his accommodation options is that he accompanied Mr SLG to inspect a number of aged care facilities. No details were provided about the number or type of facilities inspected or the basis upon which Mr SLG purportedly concluded they were unsuitable. Notably, an ACAT assessment, a pre-condition to acquiring a place in residential aged care or supported living, was not undertaken until three weeks before settlement on the Southwest Sydney property. In addition, there is no evidence that Mr SLG has been given the opportunity to explore other accommodation options, such as, living independently in rental accommodation with the support of services. According to Mr CZC, the current living arrangement where he is "paying for everything" is unsuitable as his property is too small and in need of renovation. No evidence was given about how long the proposed renovation would take to complete and whether interim accommodation arrangements have been made for Mr SLG, while building work is undertaken.
6. Second, self-evidently Mr CZC's financial interests and those of Mr SLG are in direct conflict. Mr CZC's only source of income is the carer's pension and he has a $600,000 mortgage on his property. On his own account, Mr CZC's property is in dire need of renovation which he cannot fund. While in these proceedings Mr CZC claimed that he intended to "put Mr SLG on the title", a claim supported by Mr Nyman, the practical reality is that there is no guarantee that this will occur. Of course, the mere fact of a relevant conflict of interest does not mean that Mr CZC will prefer his interests over those of Mr SLG. Nonetheless, in our view it is not in Mr SLG's interests for the potential for such conflict to arise.
7. Third, it is concerning that Mr CZC, who has provided Mr SLG with assistance and apparently encouragement to sell the Southwest Sydney property, appears to have taken no steps to inform either himself or Mr SLG of the consequences for Mr SLG's pension entitlement as a result of the sale of the property and the foreshadowed contribution to the renovation costs of his own home. His failure to make this most basic enquiry raises concerns about his ability and/or commitment to the prudent management of Mr SLG's estate.
8. We have decided there is a need for a person to manage Mr SLG's estate and that it is in Mr SLG's best interests that a financial management order be made.

Should a financial management order be made?

1. The pre-conditions to the making of a financial management order are satisfied. In deciding whether to make a financial management order the statement of principles contained in s 4 of the Act requires us to balance a number of competing considerations. On the one hand, we must observe the principle that Mr SLG must be protected from neglect, abuse, and exploitation. On the other hand, we must restrict his freedom of decision making and action as little as possible and encourage him as far as possible to live a normal life in the community. The paramount consideration at all times is Mr SLG's welfare and interests.
2. Ms LBG, Mr CZC, and Mr Nyman support the making of a financial management order. While a cautious approach should be taken to disturbing a power of attorney, we have decided that the circumstances of this case, in particular the potential risk to Mr SLG's security of accommodation and his estate, leads us to conclude that the power to make a financial management order should be exercised. In reaching that decision we have taken into account the view expressed by Mr SLG in these proceedings that he trusts Mr CZC and he wishes for Mr CZC to make decisions about his finances.

Who should be appointed to manage Mr SLG's estate?

1. At the hearing we explored with the parties the feasibility of making a financial management order and appointing Mr CZC and Ms LBG as joint managers of the estate. After discussion, they advised that in their opinion the proposal was unworkable.
2. There being no individual willing to undertake the role of manager, we have no option but to commit the management of Mr SLG's estate to the NSW Trustee and Guardian.

Should a specified part of Mr SLG's estate be excluded from any financial management order?

1. In P v NSW Trustee and Guardian [2015] NSWSC 579 at [363], Lindsay J emphasised that while s 25E(2) of the Act permits a specified part of an estate of a protected person to be excluded from a financial management order, the power to make a partial management order needs to be exercised with caution, lest due management of a protected estate be prejudiced: Re Application for partial management orders [2014] NSWSC 1468.
2. We think it unlikely that due management of Mr SLG's estate will be prejudiced if Mr SLG's pension is excluded from the subject of the financial management order. In our view, it is desirable that Mr SLG retain the ability to manage his pension in the short term. For that reason, we have decided to exclude his pension from the estate under management.
3. Because of our concerns about the potential for conflict to arise between the interests of Mr SLG and those of Mr CZC, we have decided not to exercise the power conferred by s 50(4) of the Powers of Attorney Act to order that the power of attorney is to remain in force in respect of Mr SLG's pension.

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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: 05 July 2018