P v R

The hearing

1. A list of the parties to the review and witnesses at the hearing is attached as an Appendix to these Reasons for Decision [Appendix removed for publication]. At the commencement of the hearing the Presiding Member outlined to the functions and obligations of the Tribunal, the issues which would need to decide and the procedures which would be adopted to conduct a hearing.
2. The Guardianship Act 1987 (NSW) requires that before the Tribunal makes a decision on any application, it must bring the parties to a settlement or use its best endeavours to do so. This is not required if the Tribunal considers that it is not possible, or appropriate, to attempt to bring the parties to a settlement. At the hearing the Tribunal used its best endeavours to identify and to resolve any issues in dispute between the parties. Although NSW Trustee and Guardian did not express a formal view as to whether Mr NES needed a financial manager for a further period, there were clear differences between the parties as to how Mr NES' best interests could be protected in relation to the management of his affairs. It was not possible for the Tribunal to bring the parties to a settlement of these issues.

The issues which the Tribunal had to decide

1. Under s 25P of the Guardianship Act 1987 the Tribunal, on reviewing a reviewable financial management order, must vary, revoke or confirm the order. However the Tribunal may revoke a financial management order only if: 1. it is satisfied that the protected person is capable of managing his or her affairs, or 2. it 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 own affairs).
2. Accordingly, the issues which had to be decided by the Tribunal were:

• Does Mr NES remain incapable of managing his affairs?
• Would it be in the best interests of Mr NES for the existing financial management order to be revoked?
• If there are insufficient grounds for the existing financial management order to be revoked, should nevertheless the financial management order be confirmed or should it be varied, and if the latter, what variations should be made?

Participation in the hearing by Mr NES and his views

1. Mr NES participated actively in the hearing.
2. He was adamant that he was capable of managing his own affairs. He told the Tribunal that it was his view that the original proceedings for a financial management order [was made for] financial motives and to ensure his return to Australia. Whilst he provided a frank account of his diagnosed mental illness, Mr NES urged to Tribunal not to make its decision on the basis of that diagnosis but rather to have regard to whether he was currently managing his own affairs and could be trusted to do so in the future. He said that the Tribunal should take into account the fact that he had a Bachelor of Economics degree and had bought and sold houses in the past.
3. Mr NES asserted that he was operating his own bank account and paying his own bills, that he had never been a credit risk and had no current outstanding accounts. He also outlined a proposal, whereby if the current order were to be revoked, he would place all his income into a joint account opened with his father at a commercial bank which would require the authorisation of both account holders for withdrawals.
4. Mr NES said that he was currently paying $150 per week in rent and he was managing to do this but had very little money over for living expenses. He estimated these to be about $250 per week. He said that he still engaged in recreational drug use but that this was limited to marijuana and that he still drank alcohol, but he said that his marijuana and alcohol were usually purchased for him by others. Mr NES asserted that he had employment as an online operator for accounts records and an assistant with marketing and surveys. He said he that he had been on leave without pay for six months but was returning to work on the week following the hearing. Mr NES asserted that upon return to work he would earn approximately $700 per fortnight before tax and that he was in receipt of the disability support pension in a total amount of $680 per week.
5. Mr NES outlined his plans to rent new premises. He said that he had managed to save approximately $2000 which would be used for the payment of a bond on those rental premises. He asserted that continuation of the current order, even on the basis that he was permitted to manage part of his own estate, would prevent him from having sufficient disposable income to pay his rent, cover his living expenses and demonstrate that he could save money.

THE TRIBUNAL'S ASSESSMENT OF THE EVIDENCE AND DETERMINATION OF THE ISSUES

Does Mr NES remain incapable of managing his affairs?

The legal principles

1. The Supreme Court of New South Wales has provided guidance in several decisions as to how the Tribunal should assess a person's capability to manage his or her affairs. In earlier cases the Court had based its test predominantly on the ability of the subject person to conduct the everyday affairs of ordinary people. It was said that if by reason of a failure to do this the person would be disadvantaged or there would be a real risk that they would be disadvantaged or that their money or assets would be at risk of dissipation, then they would properly be treated as being incapable of managing their affairs.
2. In three more recent Supreme Court decisions; P v R [2003] NSWSC 819, Re D [2012] NSWSC 1006, and PB v BB [2013] NSWSC 1223, it has been emphasised that the Tribunal should not be relying just on hypothetical notions such as "the ordinary affairs of people" but rather should focus on the capability of the particular person to deal with his or her actual assets and to do what he or she is proposing to do with them. In P v R, Justice Barrett said that the task of the Tribunal in these circumstances: "…is to make a judgment as to the capacity and ability of the person concerned to cope with the ordinary routine affairs of living, particularly so far as they concern the person's property. …The requisite judgment is to be made in the light of objective physical facts concerning the relevant person's property, money and other assets and the way the person is able to look after them. If there is a lack of capacity, the reason for it does not matter."
3. In PB v BB, Justice Lindsay confirmed that the question focuses attention on the special circumstances of the person. His Honour stated, at paragraph [7]: "Of central significance is the functionality of management capacity of the person said to be incapable of managing his or her affairs, not: (a) his or her status as a person who may, or may not, lack "mental capacity" or be "mentally ill"; or (b) particular reasons for an incapacity for self-management."
4. So, as a result of these authorities, the Tribunal will look at the functionality of management capacity of the person concerned rather than their mental capacity or the particular reasons for their incapacity for self-management. It will look at the actual assets of the person concerned, how they are proposing to manage their ordinary affairs of living, whether they can look after their assets and what they are proposing to do with them.
5. If the Tribunal finds that the person under consideration: 1. cannot manage their ordinary affairs of living; or 2. does not have a reasonably sound understanding of what their assets, liabilities and sources of income are, or what needs to be done to preserve them, and for that reason is unlikely to be able to preserve their money or assets or is likely to be disadvantaged in their dealings; or 3. does not have at least some basic understanding of the complications and risks of what is proposed to be done (by themselves or others) with their assets or money and it is unlikely that those proposals will be achieved or there is a substantial risk that they will result in the person's money or assets being dissipated or lost; or 4. lacks the ability to identify situations where others may be attempting to benefit from the person's assets or money and consequently there is a real risk that the person will be disadvantaged or that their money or assets will be dissipated or lost;
6. then the Tribunal can be satisfied that the person is incapable of managing their affairs.

The evidence

1. In deciding this most important issue the Tribunal took into account the following items of evidence.

The views of Mr NES and supporting contentions from Mr Z and Mr Y.

1. Mr NES' own views as to his competence and capability of managing his affairs were considered carefully by the Tribunal. His views were supported by those of Mr Y who observed that any issues which Mr NES had had incompetently managing his own affairs and his difficulties in budgeting in particular, had only arisen since the imposition of the financial management order. In Mr Y's view, Mr NES had previously been quite capable of managing his affairs and was "intelligent and capable".
2. Mr Z contended that the Tribunal could not properly draw a nexus of any sort between Mr NES' diagnosed mental illness and his capability or otherwise of managing his affairs. Mr Z said that he was a Doctor of Philosophy candidate and that his field of study was social policy. He contended that Mr NES had clear plans for his future but that these could not possibly be fulfilled if he were under any form of financial management order. He submitted that a proper application of the factors set out in section 39 of the NSW Trustee and Guardian Act 2009 (NSW) (which he referred to as section 38) would lead to the current financial management order being revoked.
3. The Tribunal gave these views and contentions some weight. However, in relation to section 39 the Tribunal noted firstly that under that section it was the duty of the Tribunal to protect Mr NES from neglect abuse and exploitation and that his welfare and interests had to be given paramount consideration. The Tribunal confirmed that it would not conclude that Mr NES remain incapable purely on the basis of his diagnosed mental illness but that it would analyse and apply the relevant legal authorities to determination of this important question.
4. The Tribunal gave substantial weight to the views of Mr NES. It considered but gave less weight to the views of Mr Y and Mr Z as to Mr NES' capability, as their views were based on personal observation, there was no element of critical analysis and the views were lay views. The Tribunal could not accept that Mr Z's academic qualifications justified his being treated as an expert witness.

The expert evidence at the previous hearing on 28 October 2014

1. The Tribunal noted that at the hearing of the financial management application on 28 October 2014 Mr X, Mr NES' Case Manager with a Community Mental Health Centre gave evidence confirming Mr NES' diagnosis of a schizoaffective disorder and observed that he was non-compliant with his medication and had little insight into his need to medication. Mr X gave evidence during the hearing that Mr NES' decision-making capacity was very impaired by his delusions and that Mr NES becomes particularly delusional after he has consumed alcohol.
2. Although these views were expressed at a hearing less than three months prior to the previous hearing, and were accepted by the Tribunal on this occasion, the Tribunal noted that was no current independent evidence of Mr NES continuing to suffer delusions.

A report dated 3 December 2014 from Ms W, Occupational Therapist at a public hospital

1. This report was compiled by Ms W on the basis of her file review and observations in detail of Mr NES, particularly in an observation of his shopping and cooking tasks made on 2 December 2014 and his results on a Kohlman Evaluation of Living Skills Assessment ("KELS") on 1 December 2014. Although Mr NES' occupational performance was considered to be within the "competent" description in relation to some basic tasks his performance was noted as "only partially competent" in relation to others.
2. For example, [it] was reported that Mr NES was competent in calculating change accurately and in his basic numeric skills, that he could analyse bills and identify payment methods, that he could orientate himself to a supermarket layout and was conscious of a given budget on a shopping expedition (although he slightly exceeded the budget) and that he interacted appropriately with customer service at the supermarket.
3. However, in relation to his access to money Mr NES was noted to have completed ATM tasks with two incorrect steps, he had been unable to recall his fortnightly income from the disability support pension and he was unable to calculate expenses on food and leisure. He was also reported not to be putting money aside for food and rent and to report that "he does not save money." He was also reported to eat only one meal a day whenever he feels hungry. In her recommendations, Ms W stated: "During the functional assessment, he demonstrates tendency to overspend on illicit substance and alcohol regularly and unable to give account for exact amount he spends. Therefore he is highly likely to benefit from financial counselling such as the ones available at Lifeline, Mission Australia and Wesley Mission to enhance his understanding of principles of budgeting and work towards managing his finances independently." [Emphasis added]
4. In a tabular formalisation at the conclusion of her report, Ms W stated that Mr NES had: "limited insight into his illness, history of non-adherence with medication… does not perceive his substance use as an issue. Limited understanding of principles of budgeting and tendency to spend large amount of money on illicit substances and alcohol."
5. Ms W's report was received by the Tribunal on the day prior to the hearing. At the hearing the Tribunal Member read out the relevant parts of the report and indicated that the Tribunal was likely to place some reliance on Ms W's conclusions.
6. Although Ms W was not available to give evidence at the hearing, the Tribunal gave her conclusions substantial weight because they represent a recent independent professional assessment of Mr NES' capability, based on critical analysis and stated criteria. To the extent that Ms W's observations as to Mr NES' substance use vary from the account given by Mr NES himself, the Tribunal preferred the former because Ms W's observation is the result of an independent professional observation, analysis and assessment.

The observations and views of Mr NES' mother, Mrs IMS, and his sister, Ms KPS.

1. Mrs IMS thought that her son Mr NES was making some attempts to fit his spending to his income but she was of the view that he does have some problems in managing his own money and would have what she described as "a slight problem" in protecting his assets against" influences" which might diminish their value.
2. Ms KPS told the Tribunal that her brother Mr NES was capable of managing his daily financial affairs when he was completely well, but that he had not been completely well for the last 12 months. Ms KPS reminded the Tribunal that for seven or eight of the last 12 months Mr NES had been involuntarily detained. She concluded that she was "not convinced that he is capable of managing his own money".
3. The Tribunal gave some significant weight to these views, limited by the fact that they were personal observations rather than observations based on professional analysis.

The observations of NSW Trustee and Guardian

1. A representative of the NSW Trustee and Guardian told the Tribunal that her office had found it difficult to communicate with Mr NES and that he had not responded to queries raised by her office and that he had not previously canvassed with NSW Trustee and Guardian some of the views he had expressed at the hearing. The representative of the NSW Trustee and Guardian observed that Mr NES might well be capable of managing small amounts of money and of managing a limited part of his estate.
2. Significantly the representative of the NSW Trustee and Guardian also confirmed that the NSW Trustee and Guardian may well regard Mr NES' case as one in which it would be appropriate for an authorisation to be made, under s 71 (2) of the NSW Trustee and Guardian and Guardian Act 2009 (NSW), allowing Mr NES to manage a reasonable part of his estate on some sort of test basis for a period.
3. The Tribunal gave significant weight to the views of NSW Trustee and Guardian and particularly the representative of the NSW Trustee and Guardian's suggestions that this might be a case where a s 71 (2) authorisation might be applied.

The Tribunal's analysis and conclusion

1. On the basis of its assessment of the evidence, and in particular the weight which the Tribunal gave to the professional occupational therapy assessment by Ms W, the Tribunal could not be comfortably satisfied that Mr NES had regained the capability to manage his affairs. There seemed to be consensus amongst the witnesses, including the written evidence of Ms W, that Mr NES could manage small sums, for a limited period, and make decisions on immediate matters, for example which items to buy at a supermarket. However the Tribunal could not be persuaded that even these levels of ability would not be eroded should Mr NES have a relapse of some of the unstable behaviour associated with his schizoaffective disorder. Mr NES himself appeared to have recognised that a relapse is possible. He stated his preference was to remain in Australia (rather than to return to China) for the foreseeable future because if he should again become unstable he wished to be treated by the Australian medical and hospital system rather than the Chinese system.
2. In deciding this question the Tribunal is required to consider the capability of the person under consideration at the time of the hearing and for the reasonably foreseeable future. The Tribunal could not be persuaded that within that timeframe Mr NES would be fully capable of managing his ordinary affairs of living or that he would be able to identify situations where others may be attempting to benefit from his assets or money. Those conclusions indicate that the legal tests described in paragraphs (i) and (iv) on page 5 above are applicable.
3. On that basis the Tribunal was satisfied that Mr NES remains incapable of managing his affairs.

Would it be in the best interests of Mr NES for the existing financial management order to be revoked?

1. Mr NES urged the Tribunal to "give (him) a chance to prove (himself)" by revoking the financial management order. This contention was made against the background of Mr NES' view, supported by the views of Mr Y and Mr Z, that he was fully competent and capable. The Tribunal found that that was not the case.
2. Mr NES also strongly asserted that even a limited form a financial management order would not allow him to demonstrate an ability to pay rent, manage his expenses of ordinary living and save money. Despite Mr NES' strong assertions to this effect the Tribunal could not be satisfied that it would be fulfilling its obligation to protect him from neglect or exploitation or its obligation to have Mr NES' welfare and interests as it is paramount concern (within the meaning of section 4 of the Guardianship Act 1987 and the parallel provision in section 39 of the NSW Trustee and Guardian and Guardian Act 2009) by revoking the current order entirely. The Tribunal's conclusions on the evidence as outlined under the also applied to this issue of whether the best interests of Mr NES might be served by a revocation. The Tribunal could not be satisfied that a revocation of the order was a course which would best preserve and protect Mr NES' welfare and interests.
3. Having said that, the Tribunal was persuaded a persuasive case had made for some form of a trial period, during which Mr NES could have a greater amount of financial independence and the opportunity to demonstrate that he could manage his affairs independently.
4. The Tribunal discussed with the participants the proposal for an "interim safety net" arrangement whereby:

• Mr NES' income from his employment would be excluded from the scope of the order and so would be managed directly by him;
• the NSW Trustee and Guardian would give early and active consideration to the making of an authorisation under s71(2), so as to allow Mr NES to manage directly some other parts of his income; and
• the renewed and varied financial management order which would result could be reviewed again within six months. The Tribunal reminded the participants that Mr NES himself or anyone with a genuine concern for his welfare could bring forward the application for review.

1. Mr NES himself, Mr Y and Mr Z appeared to object to this interim safety net arrangement, indicating that only a complete revocation of the order would provide an effective test of Mr NES' capability. Unfortunately the Tribunal cannot see that as being a safe or reliable test. If the test were unsuccessful it would require a new application for a financial management order to be brought. The Tribunal understood Mrs IMS and Ms KPS to indicate that a new application would cause considerable stress to family members including Mr NES himself. In the Tribunal's view, on the basis of its analysis of the evidence above, the likelihood of Mr NES being unable to satisfy a "test" based on immediate revocation of the order would be low. As a result of any failure to meet that test he might well be at a very low point in terms of confidence and self-esteem. It seems clearly preferable and clearly more protective of his welfare and interests that he should rather have a test period based on the "safety net" of a continuing order, but one which excluded a substantial part of his income, and perhaps the additional independence which a s71 authorisation would allow.
2. Ultimately, the Tribunal was satisfied that the interim safety net proposal, in combination with the amount which Mr NES asserted he had saved to pay a bond for new rental accommodation would provide him with sufficient to secure rental of suitable premises. It would also appear to allow him to provide for his everyday expenses, and possibly allow some amount to be saved (particularly bearing in mind that the NSW Trustee and Guardian has been paying regular weekly allowances from the balance of his trust account).
3. It followed that the Tribunal was not satisfied that a revocation of the current financial management order would be in the best interests of Mr NES.

Should the financial management order be confirmed or should it be varied, and if the latter, what variations should be made?

1. It followed from the discussion under the previous heading that the financial management order should be renewed as a reviewable order, reviewable within six months and that Mr NES' income from his employment should be excluded from management under the order. The Tribunal would recommend to NSW Trustee and Guardian that some early consideration be given to implementation of a s71 (2) authorisation. The Tribunal's notation and recommendations in this regard are set out in Appendix 2 to these Reasons. The Tribunal would also recommend that further professional evidence of Mr NES' current capability be obtained and made available to the Tribunal prior to the next hearing. This recommendation also appears in Appendix 2 below.

Notation

1. It is noted that the NSW Trustee and Guardian may consider making an authorisation under s 71((2) of the NSW Trustee and Guardian Act 2009, authorising Mr NES to deal with part of his estate under management. The Tribunal recommends that early consideration be given to the making of such an authorisation.

Recommendation

1. It is recommended that prior to the next hearing Mr NES should arrange for an updated assessment of himself by a neuro-psychologist or similar professional. A report of such an assessment should be obtained and made available to the Tribunal. The report should include an opinion as to Mr NES' capability: 1. to manage daily financial affairs of living; 2. to understand the extent and nature of his money and property; and 3. to be aware of risks and threats to his estate, including by exploitation.

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: 30 June 2015