VM v NSW Trustee and Guardian

Application for financial management order 5 The Guardianship Tribunal had before it two applications: an application for a financial management order and an application to review the making of the power of attorney. The Tribunal made a financial management order but decided not to carry out a review of the power of attorney. 6 The Guardianship Tribunal's power to make a financial management order is set out in s 25G of the Guardianship Act 1987. In summary, before making a financial management order, the Tribunal must be satisfied that: (a) the person is not capable of managing his or her financial affairs; (b) there is a need for another person to manage those affairs on the person's behalf, and (c) it is in the person's best interests that the order be made. 7 If the Guardianship Tribunal decides to make a financial management order, it may either: (a) appoint a suitable person as manager of that estate, or (b) commit the management of that estate to the NSW Trustee: s 25M.

Capacity to manage affairs 8 The Guardianship Tribunal was satisfied, on the basis of evidence including medical evidence, that VN was incapable of managing her financial affairs. No ground of appeal relates to this finding.

Need for another person to manage affairs and best interest considerations 9 The Tribunal found that VN needs someone to manage her financial affairs. The real question was whether it was in her best interests for a financial management order to be made, rather than allowing VM to continue to manage his mother's affairs pursuant to a power of attorney. The reasons the Tribunal gave for finding that it was in VN's best interests for a financial management order to be made appear under the heading "Is there a need for another person to manage [VN's] affairs and is it in her best interests for a financial management order to be made?" Although [VM] is currently managing [VN's] financial affairs, the Tribunal has sufficient concerns about [VN's] capacity at the time of the creation of the power of attorney and [VM's] management of [VN's] financial affairs, including an intermingling of [VN's] and her husband's finances, to be satisfied that there is a need to appoint someone to manage [VN's] affairs and it is in her best interests that an order be made.

Identity of financial manager 10 Having decided to make a financial management order, the Guardianship Tribunal went on to consider whom to appoint as VN's financial manager. The Tribunal pointed out some of the pros and cons of appointing the NSW Trustee rather than a private financial manager. The Guardianship Tribunal concluded that the NSW Trustee should be appointed for the following reasons: There is a great deal of ongoing conflict between [VM] and [VO] and communication remains an issue. The tribunal considered that it was in [VN's] best interests for an independent person to be appointed to manage her financial affairs as this would provide greater transparency and would give both son and daughter an opportunity to contribute to discussions about the management of their mother's financial affairs. The Tribunal was hopeful that this would improve relationships between all the parties and ensure that [VN's] personal and financial needs and interests were better satisfied.

Application to review the power of attorney 11 Next, the Tribunal considered the application to review the making of the power of attorney. The Tribunal's powers are set out in sub-sections 36(1) and (2) of the Powers of Attorney Act 2003: Tribunal may review making or operation and effect of power (1) A review 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. (2) As a consequence of reviewing the making or operation and effect of a reviewable power of attorney, a review tribunal may decide whether or not to make an order under this section. 12 If a person applies under s 36 for a review of the making or the operation and effect of a power of attorney, the Guardianship Tribunal must decide, as a threshold matter, whether or not to carry out such a review: Szozda v Szozda [2010] NSWSC 804 per Barrett J at [17]. In accordance with s 36(1), the Guardianship Tribunal decided not to carry out a review of the power of attorney "as it was not necessary given the findings and orders" it had made in relation to the application for a financial management order. VM has not appealed against this decision.

Summary of grounds 13 VM is entitled to appeal on a question of law and, with leave, on any other ground: ADT Act, s 118B. VM appealed only on questions of law. He said that the Tribunal had erred by: (a) refusing the application of VM and/or VN to be legally represented; (b) failing to give him a reasonable opportunity to respond to adverse material and/or to offer him an adjournment; ( c) failing to take into account his mother's views; and (d) incorrectly making certain findings of fact. 14 In addition, at the hearing, the Appeal Panel expressed a preliminary view that the Guardianship Tribunal may have given inadequate reasons for its finding that it was in VN's best interests for a financial management order to be made. The Tribunal's reasoning on this issue is quoted above at [9]. In that passage the Guardianship Tribunal expressed concerns as to whether VN had capacity to execute the power of attorney at the relevant time and whether VM's management of his mother's financial affairs had been in her best interests. 15 The Appeal Panel may intervene in matters involving self-represented to protect their rights and to ensure the proceedings are fair and just: Barghouthi v Transfield Pty Ltd [2002] FCA 666 at [10]. The Supreme Court of Victoria has done so in relation to an appeal against a decision of the Victorian Civil and Administrative Tribunal made under the Guardianship and Administration Act 1986 (Vic): XYZ v State Trustees Limited & Anor [2006] VSC 444 per Cavanough J at [43]. Cavanough J identified a potential error of law which the lawyer for the appellant had failed to identify. 16 16We provided VO with a full copy of the transcript and invited her to make submissions on the question raised by the Appeal Panel. No submissions were received. Below we deal in turn with each of the grounds of appeal as well as the potential ground the Appeal Panel raised during the hearing.

Refusal of legal representation 17 Section 67A of the Guardianship Act exhaustively lists the kinds of decision which are appealable to the Appeal Panel. A decision made under s 58 of Guardianship Act, to refuse leave for a party to be represented by a lawyer, is not in that list. Consequently VM is not entitled to appeal to the Appeal Panel against a decision to refuse his application for himself or his mother to be legally represented.

Bias 18 According to VM, the legal member of the Guardianship Tribunal hearing the applications had made up her mind about the application prior to the hearing on the basis of unsworn evidence submitted by his sister, VO. He also said that members of the Tribunal cut him off when he was speaking and nodded approvingly when listening to other people. VM gained the impression that members of the Tribunal had a closed mind and were not open to being persuaded to his point of view. 19 In IS v Public Guardian [2009] NSWADTAP 24 at [23], the Appeal Panel set out its understanding of the rule against actual bias: The rule against bias requires that a decision-maker must be, and be seen to be, impartial. In this matter actual bias has been alleged. Actual bias will be established where a decision-maker is shown to have been committed to a particular conclusion and had a closed mind to the issues raised: Minister for Immigration & Multicultural Affairs v Jia Legeng (2001) 205 CLR 507. Drummond J in Li v Minister for Immigration and Multicultural Affairs [2000] FCA 19; (2000) 96 FCR 125 (at pp133-134), usefully summarised the principles in regard to actual bias as follows: (a) Actual bias exists where the decision-maker has prejudged the case against the applicant, or has acted with such partisanship or hostility as to show that the decision-maker had a mind made up against the applicant and was not open to persuasion in favour of the applicant. (b) The emphasis is upon the state of mind which affects the decision-making rather than elements of the process of decision-making taken in isolation. (c) Proof of an intentional state of mind adverse to the party is not the only way of proving actual bias. Such bias may be subconscious, provided it is real. (d) It is not sufficient proof of actual bias to show that the decision-maker has expressed views adverse to the party's position at an early stage of the proceedings unless there is also proof that those views were incapable of being changed in the course of the proceedings. … 20 The onus of demonstrating actual bias lies with the appellant and is a heavy onus to discharge: Jia v Minister for Immigration and Multicultural Affairs (1998) 84 FCR 87 at pp 106 - 107, per French J. Having read the transcript and listened to VM's submissions, we are not satisfied that any of the Tribunal members had a closed mind prior to the hearing or that their views were incapable of being changed in the course of the proceedings. The Tribunal gave each person in attendance an opportunity to speak and questioned the participants on relevant issues.

Breach of hearing rule and failure to offer an adjournment 21 At 9.30 am on the morning of the hearing, VM says he was given 51 pages of written submissions and documents that had been filed by VO two days previously. The material includes a 6 page submission from VO together with several attachments. In order to understand the context in which this material was provided, we set out below a summary of some of the material filed in the proceedings. 22 On 23 December 2009 VO applied to the Guardianship Tribunal for a financial management order. The proceedings were adjourned to allow VO to file an application to review the enduring power of attorney that VN had executed. That application was made on 30 April 2010. VM's lawyer filed the power of attorney and a six page undated statement from VM. VO responded with a copy of VM's statement on which she had made various annotations. LD Rogers, solicitor, provided documents relating to the power of attorney under cover of a letter dated 16 June 2010. On 17 June, VM filed further documents including a second 12 page statement responding to the allegations his sister had made as well as a 4 page statement recording his recollection of the events surrounding his mother's signing of the power of attorney. 23 Two days before the hearing VO filed further material including a response to her brother's statements filed on 17 June. We accept VM's evidence that he was given 20 minutes to read those documents before the hearing started. He said he did not address the allegations raised in these documents at the hearing because he did not have the relevant evidence with him to respond to many of the assertions. VM said he wished to provide a full audit of his parents' accounts for the last two years to demonstrate that his sister's concerns were unfounded. 24 VO's written response to this ground of appeal was that if VM felt disadvantaged by receiving a late response from her he could have requested an adjournment. She says that he had legal representation and his lawyer could have advised him of that option.

Reasoning 25 Procedural fairness in the context of Guardianship Tribunal proceedings requires disclosure to those whose rights or interests may be affected, at least the substance of any adverse, credible and significant information and a reasonable opportunity to respond: TP v TR (No 2) [2006] NSWADTAP 12; KV v Protective & Ors; KW & Ors v KV & Ors (No.2) [2004] NSWADTAP 48. Ensuring that each party is given "a reasonable opportunity" to present its case includes, where appropriate, offering a party an adjournment: Italiano v Carbone [2005] NSWCA 177 at [105], per Basten J. 26 Prior to the hearing, VM had filed two sets of documents responding to his sister's allegations. When he received the third set of documents from his sister on the morning of the hearing, he was fully aware of the adverse allegations she had made about him and had been given a reasonable opportunity to respond to them. The fact that his sister had the 'last word' does not mean that VM was denied procedural fairness. There were no new credible, relevant allegations of significance in the third set of material. If VM had wished to provide a full audit of his parents' accounts for the last two years he had a reasonable opportunity to do so at any time prior to the hearing. There has been no denial of procedural fairness, either by not giving VM more time or by not granting him an adjournment.

Views of subject person 27 The Guardianship Tribunal is required to take into consideration the views of the subject person when exercising its functions: Guardianship Act, s 4(d). VM said that the Tribunal did not obtain his mother's views as to who should be her financial manager. VM noted that during the course of the previous hearing in relation to his father, the legal member asked his mother who should look after her money. 28 Contrary to VM's submission, the transcript indicates at p 57 and 58 that the legal member asked VN the following question: Legal member: [VN], if we are to appoint a manager for your finances, who would you wish that to be? VN: My husband. Legal member: Thank you. Thank you and you've heard what your son and your daughter have said about the need for a financial manager, what do you think about that? Do you feel like you need some help with your finances? VN: Yes, my husband. Interpreter: May I point out that when [VN] says "My husband", she points to her son. 29 In their reasons for decision at p 2, the Tribunal said that it was "confident that it would be able to ascertain [VN's] views as she was present and was able to speak to the Tribunal, with the assistance of an interpreter if necessary." The Tribunal also noted that VN "also appeared to confuse her son [VM] with her husband who was not present." While the Tribunal did not mention that VN had indicated that she wanted her son to manage her financial affairs, that failure does not constitute an error of law. It is clear from the transcript and the reasons that the Tribunal complied with its duty to take into consideration the views of the subject person.

Errors in fact finding 30 VM alleged that the Tribunal made several errors in the process of making findings of fact. He said that: a) the Tribunal failed to take into account the fact that the Guardianship Tribunal had made a financial management order in relation to his father's estate on 23 March 2010 and appointed him as the financial manager; and b) the Tribunal found, incorrectly, VM's management of his mother's financial affairs was of concern on the basis that there had been an "intermingling" of his parents' finances. 31 An error in relation to fact finding will not constitute an error of law unless, for example, the finding was made on the basis of 'no evidence': Azzopardi v Tasman UEB Industries Ltd (I985) 4 NSWLR 149 at I5; Haines v Leves (1987) 8 NSWLR 442. Even perverse findings of fact, or findings contrary to the overwhelming weight of the evidence, do not give rise to an error of law. As Mason CJ put it in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 356: So long as there is some basis for an inference - in other words, the particular inference is reasonably open - even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for judicial review because no error of law has taken place.

Previous decision in relation to father's estate 32 The Guardianship Tribunal recorded VM's evidence that he was managing both his father's and his mother's financial affairs. It is apparent from the transcript that the Tribunal was aware that that was the case because the legal member asked VM (at p 45) whether or not the NSW Trustee was aware that he was paying 50% of his mother's household bills from money in his father's account. The Tribunal did not fail to take into account the fact that a differently constituted tribunal had made a financial management order in relation to his father's estate on 23 March 2010 and had appointed him as the financial manager. No error of law is disclosed.

Intermingling finding 33 At pages 49 and 50 of the transcript, VM gave evidence that he had put $40,000 of his 'father's money' into an account in his mother's name to pay for his father's funeral expenses (approximately $15,000) and to cover the cost of repairs and renovations including repairs to the veranda. When asked why he did not leave that money in his father's account, he said that he had been told by a financial adviser that if his father died, his funds would be frozen until such time as probate was granted. VM clarified that he transferred the money prior to the making of the financial management order in relation to his father. 34 The Tribunal recorded the evidence about the so-called 'intermingling' of VN's assets with those of her husband in the following terms: He said that his parents had a number of joint and separate bank accounts and that since taking control of their financial affairs he had moved money between accounts held by his parents, including putting $40,000 of his father's money into an account in his mother's name, had split investments and was currently managing the payment of household bills on a 50/50 basis as between his parents. [VM] said that the house his mother was living in was owned jointly by his parents although his father was no longer living there. 35 The Tribunal's finding about 'intermingling' was based on VM's evidence. It cannot be said that that finding was made without evidence. No error of law is disclosed.

Adequacy of reasons 36 Finally, we consider the issue raised by the Appeal Panel during the hearing. That issue is whether the Tribunal's reasons in relation to its finding that it was in VN's best interests that a financial management order be made, were adequate. The Guardianship Tribunal's reasons for coming to that view are set out above at [9]. 37 Subject to some exceptions which are not applicable to these proceedings, the Guardianship Tribunal has a duty to provide each party with "formal written reasons" for its decisions: Guardianship Act, s 68(1B). However, no decision of the Tribunal will be invalid because of any informality or want of form: s 68(2). Some tribunals, including the Administrative Decisions Tribunal, are bound in its reasons for decision to set out "the findings on material questions of fact, referring to the evidence or other material on which those findings were based": ADT Act, s 89(5)(a). There is no equivalent provision in the Guardianship Act but common law principles are applicable. At common law, there is a judicial duty to give adequate reasons: Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 269-70; Pettitt v Dunkley [1971] 1 NSWLR 376; Public Service Board of New South Wales v Osmond [1986] HCA 7; (1986) 159 CLR 656. That duty applies to tribunals as well as courts: Absolon v NSW TAFE [1999] NSWCA 311 at [66]. 38 A trier of fact is required to determine whether an asserted fact, such as whether VN had capacity to execute the power of attorney or whether VM was mismanaging his mother's affairs, is 'true': Jegatheeswaran v Minister for Immigration and Multicultural Affairs (2001) 194 ALR 263 at 274. It has been held in numerous cases that making findings on material questions of fact is essential if reasons are to be adequate: Nominal Defendant v Kostic [2007] NSWCA 14; Nikolovski v Telstra Corp Ltd [2002] FCA 846. In Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 Meagher JA set out three fundamental elements of a statement of reasons: First, a judge should refer to relevant evidence. There is no need to refer to the relevant evidence in detail, especially in circumstances where it is clear that the evidence has been considered. However, where certain evidence is important or critical to the proper determination of the matter and it is not referred to by the trial judge, an appellate court may infer that the trial judge overlooked the evidence or failed to give consideration to it: North Sydney Council v Ligon 302 Pty Ltd (1995) 87 LGERA 435. Where conflicting evidence of a significant nature is given, the existence of both sets of evidence should be referred to. Secondly, a judge should set out any material findings of fact and any conclusions or ultimate findings of fact reached. The obvious extension of the principle in North Sydney Council is that, where findings of fact are not referred to, an appellate court may infer that the trial judge considered that finding to be immaterial. Where one set of evidence is accepted over a conflicting set of significant evidence, the trial judge should set out his findings as to how he comes to accept the one over the other. But that is not to say that a judge must make explicit findings on each disputed piece of evidence, especially if the inference as to what is found is appropriately clear: Selvanayagam v University of the West Indies [1983] 1 WLR 585; [1983] 1 All ER 824. Further, it may not be necessary to make findings on every argument or destroy every submission, particularly where the arguments advanced are numerous and of varying significance: Rajski v Bainton (Court of Appeal, 6 September 1991, unreported). Thirdly, a judge should provide reasons for making the relevant findings of fact (and conclusions) and reasons in applying the law to the facts found. Those (1997) 48 NSWLR 430 at 444 reasons or the process of reasoning should be understandable and preferably logical as well. 39 The Court of Appeal reiterated these principles in Alchin v Daley [2009] NSWCA 418. Sackville AJA (with whom McColl and Young JJA agreed) noted, among other things, that: The extent and content of the reasons will depend on the particular case and the issues under consideration, but it is essential to expose the reasoning on a point critical to the contest between the parties. This may require the judge to refer to evidence which is critical to the proper determination of the issue in dispute. (citations omitted) 40 The fact that the Tribunal expressed 'concerns' about certain matters, rather than making definite findings of fact, is understandable given the sensitivity of the issues. Nevertheless, however sensitive the issues may be, the Tribunal has an obligation when giving reasons for decision to make material findings of fact. The Guardianship Tribunal elected not to carry out a review of the power of attorney, but the question of whether VN had capacity to execute that power was relevant to a critical issue in relation to the financial management application. That issue was whether it was in VN's best interests for a financial management order to be made. The question of whether VM had been managing his mother's affairs appropriately was also relevant to that question. 41 Having identified those issues, the Tribunal was bound to consider the evidence relevant to those issues and provide reasons for making its findings. In relation to the finding of incapacity, that evidence included, but was not limited to: (a) allegations from VO that VN lacked capacity when she signed the power of attorney (Statement of VO, p 3), (b) a file note from Leslie Rogers, the solicitor who witnessed the power of attorney, and a letter from him indicating his availability to give evidence by phone in relation to that execution; and (c) the statement of VM dated 17 June 2010 setting out his recollection of the discussion between his mother, himself and solicitor Leslie Rogers when the power of attorney was signed. 42 In relation to the finding of mis-management, that evidence included, but was not limited to: (a) allegations from VO that VM has allowed the family home to fall into disrepair and that VM's judgment is skewed because of grudges he holds, (Statement of VO, p 2), (b) correspondence from disability service provider, Chesalon Services that VM always pays his account for services to VN on time; (c ) an allegation by lawyers for VO that VM transferred money into VN's name "for the purpose of deliberately and artificially adjusting the assets attributable to [VM's father] so as to ensure that he remained eligible for assisted care benefits"; (d) two statements from VM setting out the history of his dealings with his parents' finances; and character references in relation to VM and his wife. 43 None of this evidence was referred to in the decision and the Tribunal did not provide reasons for making its findings other than that VM had intermingled his parents' finances. Inadequate reasons does not always justify a decision being set aside: Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 per Meagher JA at 444. However, in this case, the decision should be set aside and made again. The Tribunal did not 'engage' with the evidence in a way that enables the reader to understand the basis on which the factual findings were made: Whalan v Kogarah Municipal Council [2007] NSWCA 5 per Ipp JA at [40]. VM was unable to discern the basis for the Tribunal's conclusions. The decision should be set aside and the matter remitted to be heard and decided again.

Orders (1) The decision of the Guardianship Tribunal to make a financial management order and appoint the NSW Trustee and Guardian as VN's financial manager is set aside. (2) The matter is remitted to the Guardianship Tribunal to be heard and decided again in accordance with these reasons. (3) Order 1 takes effect on the date the Guardianship Tribunal delivers a new decision.

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: 29 March 2011