Susan Elizabeth Parker v Margaret Catherine Higgins & Ors

NCAT Guardianship|2020-10-12

What the Tribunal decided

The Tribunal decided, under s 36(1) of the Powers of Attorney Act 2003 (NSW) ("POA Act"), to carry out a review of the enduring power of attorney made by FJH on 11 August 2005.
As a consequence of reviewing the enduring power of attorney, the Tribunal decided under s 36(2) of the POA Act not to make an order under s 36 of that Act but to treat the application for review as an application for a financial management order.
The Tribunal committed the estate of FJH to the management of the NSW Trustee and Guardian. Background
FJH is 89 years of age and has been living at an aged care facility since 28 June 2018. She has a son, SGH, three grandchildren and 10 great grandchildren. She has advanced dementia.
On 11 August 2005 FJH appointed SGH has her enduring power of attorney.
On 2 September 2020, Ms Z lodged an application for review of the enduring power of attorney. Ms Z did not specify a particular outcome but rather requested that the Tribunal make "any other order". Ms Z is an employee of a financial institution, at which FJH has two accounts.
On 6 October 2020, the Tribunal received a request for the applicant to be substituted. The request was signed by Ms Z (who confirmed that she was no longer able to continue as applicant) and WZN. WZN accepted the role of substitute applicant. WZN is the legal and compliance manager for the financial institution.
On 12 October 2020, the Tribunal heard the application.

What did the Tribunal have to consider?

The Tribunal may, on the application of an interested person, decide to review the making or the operation and effect of a reviewable power of attorney, or not to carry out such a review: POA Act, s 36(1). As a consequence of reviewing the making or operation and effect of a reviewable power of attorney, the Tribunal may decide whether or not to make an order under s 36 of the POA Act (s 36(2)).
The Tribunal may make a number of orders relating to the making of a power of attorney including the following:

An order declaring that FJH did or did not have mental capacity to make a valid power of attorney
An order declaring that the power of attorney is invalid (either in whole or in part) if the Tribunal is satisfied: 1. FJH did not have the capacity necessary to make a valid enduring power of attorney; 2. The enduring power of attorney did not comply with the requirements of the POA Act; 3. the enduring power of attorney is invalid for any other reason, for example, dishonesty or undue influence.

The Tribunal may make a number of orders relating to the operation and effect of a power of attorney if it is satisfied:

that it would be in the best interests of FJH to make the order;
that it would better reflect the wishes of FJH to make the order.

These orders include:

An order varying a term of, or a power conferred by, the power of attorney
An order removing a person from office as attorney
An order appointing a substitute attorney to replace an attorney who has been removed from office or who otherwise vacates the office
An order reinstating a power of attorney that has lapsed by reason of any vacancy in the office of power of attorney and appointing a substitute attorney to replace the attorney who vacated office
An order directing the attorney to: 1. Furnish accounts to the Tribunal or someone nominated by the Tribunal; 2. Lodge a copy of all records and accounts of dealings and transactions made under the power; 3. Requiring that the records and accounts be audited and that a copy of the report of the auditor be furnished to the Tribunal; 4. Submit a plan of financial management for approval.
An order revoking all or part of the power of attorney
Such other orders as the Tribunal thinks fit

If on a review of the enduring power of attorney, the Tribunal decides not to make an order under s 36 of the POA Act, it may, if it considers it appropriate in all of the circumstances to do so, decide to treat the application for review as an application for a financial management order under Pt 3A of the Guardianship Act 1987 (NSW) ("the Act").

Does WZN have standing to make the application?

A person may apply for an enduring power of attorney to be reviewed if he or she is: 1. an attorney (including an attorney whose appointment has been purportedly revoked); 2. the principal; 3. any person who is: 1. a guardian of the principal (whether under the Act or any other Act or law); or 2. an enduring guardian of the principal under the Act; 1. any other person who, in the opinion of the review tribunal, has a proper interest in the proceedings or a genuine concern for the welfare of the principal.
The Tribunal found that WZN has standing to bring the application because her employer, the financial institution, holds funds in two accounts in the name of FJH and the financial institution held a genuine concern for the welfare of FJH and her exposure to possible financial exploitation given the significant withdrawals made on the two accounts in recent months. It is uncontroversial that SGH has withdrawn a total of approximately $78,000 from FJH's accounts between 10 June 2020 and 2 September 2020.

Should the Tribunal conduct the review?

In Susan Elizabeth Parker v Margaret Catherine Higgins & Ors [2012] NSWSC 1516, Slattery J stated [at 80]: "On an application for s 36 review such as this the Court must first exercise a discretion under Powers of Attorney Act, s 36(1) to decide whether or not to conduct a s 36 review. In my view the Court does not have to conduct a full review of all documents associated with the operation of the subject power of attorney to do this. Something short of a full review must be able to justify the exercise of the s 36(1) discretion as to whether or not the Court should conduct a full s 36 review. In the circumstances of this case the Court can glean sufficient information to exercise the s 36(1) discretion by undertaking a general survey of what... (a party )...has produced."
The Tribunal decided to conduct a review of the enduring power of attorney for the following reasons.
The enduring power of attorney made on 11 August 2005 appointed SGH with not only the authority to make decisions about FJH's financial affairs, irrespective of her retaining mental capacity, but in addition, SGH was able to:

give reasonable gifts as provided by s 11(2) of the POA Act; and
confer benefits on the attorney to meet the attorney's reasonable living and medical expenses as provided by s 12(2) of the POA Act.

Section 11(2) of the POA Act permits a power of attorney to give gifts as prescribed within Sch 3 of the POA Act. Section 12(2) of the POA Act permits the power of attorney to confer benefits on him or herself as prescribed within Sch 3 of the POA Act. Relevant to our enquiry, Sch 3 of the POA Act is set out below - Schedule 3 - Prescribed expressions and authorisations for prescribed powers of attorney (ss 11(2), 12(2) and 13(2)) 1 Authority to give gifts (1) The prescribed expression for the purposes of section 11(2) is as follows: I authorise my attorney to give reasonable gifts as provided by section 11(2) of the Powers of Attorney Act 2003. (2) The prescribed expression authorises an attorney to give a gift only if: (a) the gift is: (i) to a relative or close friend of the principal, and (ii) of a seasonal nature or because of a special event (including, for example, a birth or marriage), or (b) the gift is a donation of the nature that the principal made when the principal had capacity or the principal might reasonably be expected to make, and the gift's value is not more than what is reasonable having regard to all the circumstances and, in particular, the principal's financial circumstances and the size of the principal's estate. (3) In this clause: close friend of a principal means another individual who has a close personal relationship with the principal and a personal interest in the principal's welfare. relative of a principal means: (a) a mother, father, spouse (including wife or husband), daughter, son, step-daughter, step-son, sister, brother, half-sister, half-brother or grandchild of the principal, or … 2 Authority to confer benefits on attorney (1) The prescribed expression for the purposes of section 122) is as follows: I authorise my attorney to confer benefits on the attorney to meet the attorney's reasonable living and medical expenses as provided by section (2) of the Powers of Attorney Act 2003. (2) The prescribed expression authorises an attorney to confer a benefit on the attorney only if: (a) the benefit meets (whether in whole or in part) any expenses incurred (or to be incurred) by the attorney in respect of any of the following: (i) housing, (ii) food, (iii) education, (iv) transportation, (v) medical care and medication, and (b) the benefit is not more than what is reasonable having regard to all the circumstances and, in particular, the principal's financial circumstances and the size of the principal's estate.
SGH submitted that "what is her's ([FJH's]) is mine and what is mine is her's" and that they had operated their accounts and assets in that way for many years. The Tribunal heard that SGH had been his mother's carer for some years and for a period of time, they had lived together in her home in South West Sydney until she commenced residing at the aged care facility in 2018. To pay for the residential accommodation deposit ('the RAD'), he had arranged for the home in South West Sydney to be sold last year. From the sale proceeds, $370,000 had been paid for the RAD and the balance deposited into FJH's S5 account held with the financial institution.
SGH did not dispute the assertion contained within the application that a total of $78,000 had been withdrawn from FJH's S1 account with the financial institution between 10 June 2020 and 2 September 2020. It was common ground that FJH's estate now consisted of the RAD, $169,932 held in the S5 account and $6.62 in the S1 account. The Tribunal observed that if SGH had continued his pattern of withdrawals, in about six or seven months' time, FJH would have minimal cash reserves.
The Tribunal heard that on 27 August 2020 the financial institution had limited access to the S5 account, permitting only $250 to be withdrawn/transferred into the S1 account each week. SGH was very unhappy about this decision and in summary the Tribunal heard that this reduced access to cash had constrained his financial circumstances.
SGH said that his mother had previously given her family cash at Christmas - $500 to each of her three grandchildren and $300 to each great grandchild. SGH said that he had made those gifts last year and if he was able to, he intended to honour his mother's wishes in the future. SGH also said that when he visited his children he would also pay for outings and he considered these expenditures to be gifts too.
The Tribunal noted that Sch 3 of the POA Act does not include great grandchildren within the definition of "relative" and that at least some of his gifts were unauthorised.
Noting the definition as contained within Sch 3 of the POA Act referred to above, the Tribunal explored with SGH how funds from his mother's accounts had been used, focussing specifically on the S1 account over the period 1 June 2020 to 22 August 2020 (for which a transaction statement had been provided to the Tribunal). SGH's explanation for the total of $78,000 was unsatisfactory. He could not say how much of the withdrawals were for his mother's direct benefit, how much were for gifts and how much was for his benefit. SGH said he had a lot of receipts but not all of them. It did not appear that any proper accounting or consistent record keeping had been undertaken by SGH. Focusing on the last significant day of withdrawals identified in the transaction statement, SGH could not explain how he had spent a total of $1950 (withdrawn in lump sum amounts of $550, $500, $500 and $400).

Should the Tribunal make any orders under section 36?

The Tribunal then proceeded, pursuant to s 36(2) of the POA Act, to consider whether or not to make an order under s 36 of that Act.

The operation and effect of the enduring power of attorney

Fiduciary duty

An attorney is in a fiduciary relationship with the person whose affairs they manage. An attorney must act in the best interests of the principal and must not obtain a personal benefit other than specifically provided for in the executed enduring power of attorney: POA Act, s 12(1).

Duty to keep records and to account

There is no statutory requirement that the attorney keep records and accounts. However, a general law obligation exists. This was considered by Slattery J in Susan Elizabeth Parker v Margaret Catherine Higgins & Ors [2012] NSWSC 1516 as follows: "The attorney's obligation is really one to keep accurate primary accounting records, for which the principal can call, if necessary, for the principal's examination. If the principal then wishes to produce secondary accounts, or full financial accounts, that is a matter for the principal [at 64]."
On the basis of the findings above, the Tribunal decided not to make any orders under s 36 of the POA Act. It was satisfied, however, that it was appropriate in all of the circumstances to treat the application for review of the enduring power of attorney as an application for a financial management order.

What did the Tribunal have to decide?

The relevant legislation governing the issues raised in these proceedings is the Act.
The Tribunal's jurisdiction in relation to the making of financial management orders is set out in the Act.
In making decisions under the Act, the Tribunal is required to have regard to the general principles set out in s 4 of the Act. There are eight principles set out in s 4 of the Act which provide as follows in relation to the person with a disability: 1. The welfare and interests of such persons should be given paramount consideration; 2. The freedom of decision and freedom of action of such persons should be restricted as little as possible; 3. Such persons should be encouraged…to live a normal life in the community; 4. The views of such persons…should be taken into consideration; 5. The importance of preserving the family relationships and the cultural and linguistic environments of such persons should be recognised; 6. Such persons should be encouraged, as far as possible, to be self-reliant in matters relating to their personal, domestic and financial affairs; 7. Such persons should be protected from abuse, neglect and exploitation; 8. The community should be encouraged to apply and promote these Principles
Section 25E of the Act provides that the Tribunal may make a financial management order and under s 25G of that Act, the grounds for doing so are as follows: 1. the person is not capable of managing those affairs; and 2. there is a need for another person to manage those affairs on the person's behalf; and 3. it is in the person's best interests that the order be made.
In anticipation that they may lose capacity in the future, a person may make provision for substitute decision-makers to make decisions for him or her on important life matters. Here, FJH made such provision in 2005 by appointing her son.
Subsection 50(3) of the POA Act provides that a power of attorney is suspended while the subject estate is a managed estate.

Should the Tribunal make a financial management order?

The Legal Principles - financial management order

Section 25E of the Guardianship Act provides that the Tribunal may make a financial management order and section 25G sets out the grounds on which an order can be made. Section 25H of the Act permits the Tribunal to make an interim financial management order for a specified period not exceeding six months, pending further consideration of the capability of the person to whom the order relates to manage his or her own affairs.
The Tribunal had regard to the following reports about FJH, as supplied by staff from The aged care facility -

Myagedcare Assessment conducted from Mr U on 27 April 2018;
Myagedcare Support Plan from Mr U, generated on 27 April 2018;
dated Letter from Dr V, geriatrician, of a public hospital dated 1 October 2019;
Letter from Dr V, geriatrician, of a public hospital, dated 20 January 2020

In summary the reports were consistent with FJH having advanced dementia. Dr V opines that FJH has a long history of aggression and psychotic symptoms and in October 2019 she was becoming paranoid about other people stealing things from her and being suspicious of staff. The Tribunal summarised the medical evidence to the participants and SGH agreed with his mother's diagnosis and her lack of capacity to manager her finances.
Even though she was present, FJH's views were unable to be ascertained and her participation was quite limited, which was consistent with the behaviours identified with the medical reports.
Considering all the evidence, the Tribunal was satisfied that FJH is incapable of managing her affairs.

Is there a need for a financial management order?

FJH's estate consists of the cash sums identified in the reasons above. She is in receipt of an aged care pension and this covers her accommodation fees. Mr Y confirmed that FJH did not owe the aged care facility any fees. The Tribunal heard that SGH provided cash to his mother when and as required for her use at the aged care facility.
The Tribunal heard that the financial institution was of the view that it had a duty of care to exercise caution about (once again) permitting unlimited access to FJH's accounts and subject to the decision of the Tribunal, it intended to continue to restrain access.
The Tribunal had the benefit of written submissions from SGH including handwritten annotations he had made to the application, a copy of the enduring power of attorney with a passage highlighted on it and a completed "Additional Signatory Application" permitting him access to operate FJH's accounts with the financial institution. In summary he wanted the financial institution to reverse its decision and that he was confident that he could ensure that (variously) between $120,000 and $100,000 could be kept safe in his mother's accounts for her future benefit. He did not see the need for a financial manager to be appointed and preferred that his role as power of attorney continue.
FJH's views were not known.
In circumstances where the Tribunal was not satisfied that the enduring power of attorney was being exercised in FJH's best interests, the Tribunal was satisfied that there was a need to appoint someone to manage FJH's affairs and that it was in her best interests for a financial management order to be made.

If so, who should be appointed financial manager?

As there was no appropriate private financial manager available, the NSW Trustee and Guardian was appointed.

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: 27 July 2021

Trustee and Guardian Act 2009(NSW)

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