QNH [2022] NSWCATGD 9

Jurisdictional issues

When the Tribunal made the interim financial management order under review, it concluded that it had jurisdiction to hear the review application since, amongst other reasons: 1. The review was made under the Powers of Attorney Act, in relation to an enduring power of attorney granted in accordance with the provisions of that Act; 2. The Tribunal's jurisdiction is protective in nature; and 3. There was no evidence as to the permanency or otherwise of QNH's presence in Victoria.
Although the evidence at today's hearing suggested that QNH was now permanently resident in Victoria, that does not detract from the underlying jurisdictional facts that: 1. the EPA is governed by, was made and takes its force under the laws of New South Wales, 2. one of the attorneys appointed under it, Ms NAH, is resident in New South Wales, and 3. its enduring quality is derived from the Powers of Attorney Act of this state. Those jurisdictional facts are sufficient to establish the Tribunal's jurisdiction in this case, notwithstanding what appear to be QNH's permanent move to Victoria.
Moreover, as the Tribunal noted in its decision in NBL [2019] NSWCATGD 5, applications such as the present ones do not involve matters which engage the so-called diversity jurisdiction considered by the High Court of Australia in Burns v Corbett [2018] HCA 15. This is because: 1. The Tribunal's function in the present case is not characterizable as a judicial power under the criteria summarised by Latham J in Zistis v Zistis [2018] NSW 722; and 2. In particular, the powers exercised by the Tribunal in the present case are administrative in nature rather than judicial, consistently with the considerations outlined by the Tribunal in [38] to [41] of its reasons for decision in NBL.

Reasoning

When the Tribunal made the interim financial management order under review, it found that: 1. The evidence before it gave rise to the possibility that her estate was at risk; but 2. There was a lack of evidence concerning her capability to manage her affairs.
The consequences of these findings were fourfold: 1. Firstly, in view of the findings summarised in [18(1)] it decided under s 36(1) of the Powers of Attorney Act to undertake a review of the operation and effect of the EPA; 2. Secondly, having regard to those findings it decided not to make orders under s 36 of the Powers of Attorney Act, but rather to treat the application as one for a financial management order; 3. Thirdly, having regard to the findings in [18(2)], it decided to make an interim financial management order only under s 25H of the Guardianship Act, "pending the Tribunal's further consideration of the capability of the person to whom the order relates to manage his or her own affairs"; and 4. Finally, it ordered EYH to obtain a medical report concerning QNH's capacity.
EYH provided on or about 14 January 2022 a report concerning QNH's cognitive capacity, prepared by Dr Y, a specialist geriatrician who practises in regional Victoria. The report is dated 6 January 2021, but EYH confirmed that this is a typographical error and the report was in fact issued on 6 January 2022. Dr Y refers to a report which was provided to him from a geriatrician who saw QNH nearly six years before and diagnosed at that time an early Alzheimer's type dementia. Dr Y's report is clear as to QNH's current position: "[QNH] clearly does not have the capacity to make any decisions regarding her financial affairs, her future medical care and accommodation. She was unable to understand any conversation that I attempted to have with her regarding her financial affairs and could not respond appropriately at home regarding her understanding of her own financial affairs. I understand that her hearing to determine decision-making powers is due shortly and I am happy for my letter to support the fact that [QNH] currently does not have the capacity to make decisions regarding these affairs as mentioned above".
The Tribunal's own experience during the hearing of attempting to engage with QNH to ascertain her views and wishes was not dissimilar to that reported by Dr Y. Indeed, after minimal contribution to the hearing, QNH eventually fell asleep.
In view of Dr Y's report, the Tribunal was therefore satisfied that QNH lacks the capacity to manage her affairs.
When the Tribunal made the order under review, it noted evidence in the form of bank statements which indicated a pattern of intermittent (but quite frequent) large cash withdrawals from her bank account which occurred at licensed premises with gaming machines, such as clubs. EYH explained these transactions in terms which the Tribunal found less than entirely convincing as it set out in its reasons: "[34] The applicant to the family members have accused [EYH] of mismanagement of QNH's accounts. They also state that the other attorney, [NAH], has dementia and is not capable of acting as attorney and that in any event, she plays no role as attorney leaving it all to [EYH]. He disputes these allegations and states that [QNH] makes her own decisions and manages her own financial affairs. In relation to the large daily bank withdrawals outlined above, he states that [QNH] used the funds to play bingo and other games. He was also present when the withdrawals were made from the ATMs and assisted [QNH] in the process. [35] We make no findings about the large and repeated withdrawals from [QNH]'s personal account as we have been unable to speak to [QNH] about the matter and obtain her evidence. However, we found [EYH]'s evidence to be vague and unsatisfactory, particularly his limited explanation as to how his aunt could operate the gaming devices as a blind person spending large sums of money to play these games. His limited recall is also more perplexing and concerning given he was present with [QNH] at the licensed premises when she was playing these games and assisted her to make withdrawals from the ATMs. Based on this evidence, we are satisfied that there is a need to conduct a review of the EPOA made by [QNH] on the 16 January 2018."
Nothing in the evidence or submissions provided in connection with the present reviews gave the Tribunal any reason to question either the reservations expressed, or the conclusions reached by the Tribunal in those reasons.
Indeed, information provided by NSW Trustee and Guardian in its report concerning QNH's financial affairs reinforced the concerns which underlay the remarks quoted above from the Tribunal's reasons: 1. This report noted that QNH's assets totalled $2,746,067.63 as at 20 January 2022. Included in these assets was a loan to a Ms X with a balance of $51,501.16 which, according to the report, was being repaid by QNH in fortnightly instalments of $200, the first of which was made on 5 October 2021. These instalments amount to $5,200 per annum, which offers QNH the prospect of having her loan repaid in full by the time she is aged 102. 2. Ms U, representing NSW Trustee and Guardian, said that her organisation has no information as to who Ms X is or her relationship with QNH. 3. EYH was able to enlighten the Tribunal, stating that: 1. Ms X is his daughter, 2. The loan was made to her in order to assist her in placing a deposit on her property in Melbourne, and 3. The loan was made on 22 February 2021 and reflected QNH's wishes to carry into a further generation the family of QNH's tradition of intergenerational family support. 1. EYH did not consider that there was any room to perceive even the appearance of a conflict of interest in substantial financial support being provided to his daughter in circumstances where: 1. not only was he QNH's attorney but also appeared to have a degree of preferred practical access to her financial affairs; 2. Ms W was one amongst many family members who might enjoy the benefit of QNH's intergenerational largesse; and 3. her cognitive decline which had been identified at least five years previously - see [20] above - had progressed to the point that, less than 12 months later, Dr Y was able to reach the firm and unqualified conclusions set out above.
Again, following the restrained approach of the earlier panel, the Tribunal refrains from making any specific findings about the precise circumstances of the loan to Ms X. The fact of the loan transaction does, however, reinforce the earlier panel's conclusion at [41] of its reasons, that "… The evidence before us gives rise to the possibility that [QNH]'s estate may be at risk".
Mr V, QNH's longstanding financial advisor, provided evidence concerning the composition and management of QNH's affairs. A matter of some interest to the Tribunal was the strong bias in her portfolio towards cash or cash equivalent investments, the returns from which are in the current environment likely to be modest. Mr V that QNH's investment portfolio had previously had a strong weighting towards residential property, but these had been sold and the proceeds largely invested in cash or cash equivalent investments, as set out in NSW Trustee and Guardian's report. This orientation towards cash reflects, he said, the investment instructions provided by QNH and EYH, although it eventually emerged from Mr V's evidence that, at least over the past year or so, the instructions primarily emanated from EYH, rather than QNH herself.
Numerous members of QNH's extended family participated in the hearing. All of them expressed concern to ensure that she was not financially exploited. The Tribunal could not but note that in some cases at least their interest in her financial welfare did not appear to be matched by a correspondingly lively interest in her personal well-being. In any event, the overall weight of views within her extended family was to support the continued management of her affairs by NSW Trustee and Guardian.
EYH's application seeks the revocation of the financial management order. His reasons for doing so are threefold: 1. QNH is now resident in Victoria. The registration of the order by the Victorian Civil and Administrative Tribunal, as noted in [8] above, in any event addresses this issue (if in fact it ever had any merit, which the Tribunal does not accept). 2. QNH has a financial adviser and an accountant. That may well be the case, but as Mr V's evidence indicated QNH or somebody on her behalf must from time to time instruct her financial adviser and accountant as to matters within the scope of their respective professional responsibilities. The fact that she has the services of appropriate professional advisers of itself creates this need and if she is incapable of providing instructions (as Dr Y's report indicates) somebody must be authorised to do so on her behalf. 3. He (EYH) is her enduring attorney under the EPA, so there is no need for a financial manager. This proposition is unconvincing for two reasons: 1. The EPA appoints both EYH and NAH as QNH's attorneys, but (1) it does not specify that their appointment is joint and several, so that the attorneys' appointment must logically be a joint one, requiring them to act together on all decisions, and (2) it does not provide for the appointment of an attorney to continue even if the other ceases to have capacity to perform his or her duties. Although there was no medical evidence concerning NAH's cognitive health, various family members were adamant that she too is affected by (and has been diagnosed with) dementia, although there appeared to be some debate as to whether the extent of her illness is currently such as to prevent her performing her duties as attorney under the EPA. There is, therefore, a possibility - to put it at its lowest - that (1) NAH may have vacated office as joint attorney by reason of a loss of capacity in accordance with s 5(f) of the Powers of Attorney Act, and (2) if so, that the appointment of joint attorneys under the EPA has failed. The Tribunal makes no finding to that effect; rather, it notes that there is at the very least a plausible argument to this effect, the existence of which recommends the continuation of the financial management order in order to avoid any risk of QNH's very substantial estate being left without clear and accountable management arrangements. 2. The reservations noted above as to certain aspects at least of EYH's historical involvement with QNH's estate emphasise the desirability in her financial interest of having an independent financial manager.
Nothing in EYH's application, therefore, is sufficient to convince the Tribunal to revoke the financial management order.
There is one final issue to be considered, which is the annual cost of independent financial management. Ms U indicated that the annual financial management costs of NSW Trustee and Guardian acting as QNH's financial manager are in the order of $15,000 per annum, given the size of her estate. While the Tribunal is loath to subject QNH's estate to these fees without good reason, it is satisfied that: 1. The costs of independent management are not disproportionate to the size of her estate and the amount potentially at risk from mismanagement; to put matters in perspective, these annual fees represent less than a third of the loan advanced to Ms X in February 2021; and 2. the concerns identified by the earlier panel and reinforced at today's hearing concerning QNH's estate being at risk, justify it in doing so prioritising independence and accountability of financial management over the fees payable to an independent manager.
Accordingly, bearing in mind its primary obligation under s 4(a) of the Guardianship Act to give paramount consideration to QNH's welfare and interests, the Tribunal has decided to confirm the financial management order, appointing NSW Trustee and Guardian as QNH's financial manager, and to dismiss EYH's review application

At a glance

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Judgment (8 paragraphs)

Legislation Cited (5)

Cases Cited (2)