Victorian Civil and Administrative Tribunal|2007-06-29

XYZ (Guardianship) [2007] VCAT 1196 (29 June 2007)

Guardianship and Administration Act 1986 - rehearing of application for reassessment of administration order - disability - whether represented person unable by reason of disability to make reasonable judgments about the whole or part of his estate - whether represented person in need of an administrator - less restrictive options - wishes of represented person - best interests of represented person - discretion to appoint administrator

MNC: XYZ (Guardianship) [2007] VCAT 1196

P.Y. v. R.J.S. [1982] 2 N.S.W.L.R. 700

Moore v. Guardianship and Administration Board [1990] VicRp 80; [1990] V.R. 902

McDonald v. Guardianship Board [1993] VicRp 36; [1993] 1 V.R. 521

Re C (TH) and the Protected Estates Act [1999] NSWSC 456

EMG v. Guardianship and Administration Board of Victoria [1999] NSWSC 501

Public Advocate v. RCS (Guardianship) [2004] VCAT 1880

Re GHI (a protected person) [2005] NSWSC 581

XYZ v. State Trustees Limited and anor [2006] VSC 444

XYZ, who is aged in his mid-fifties, retired from the police force several years ago on stress related grounds. In 2002, after his retirement, he suffered a major stroke while living in Queensland. Lawyers acting for him and his then estranged wife applied for an administration order mainly to deal with matrimonial property in Victoria. Medical evidence at the time established that XYZ had a disability that made him unable to manage his financial and legal affairs. It also indicated that he believed that he should not make decisions about his affairs himself.

The Tribunal appointed XYZ's lawyer to be his administrator but a year later, in 2003, when the lawyer became unable to continue in his role, appointed Mr. L. Papaleo in substitution. (Mr. Papaleo's practice was subsequently acquired by FTL Judge & Papaleo Pty. Ltd. It is convenient for me to refer to Mr. Papaleo and that company simply as "Papaleo"). Papaleo was administrator until October 2005 when, following the rehearing of XYZ's application for reassessment of the administration order, the Tribunal appointed State Trustees Limited ("STL") instead.

By the time Papaleo was appointed, XYZ had travelled to Perth. He spent time there as a voluntary mental health patient. A discharge summary dated 30 January 2003 referred to a 30 year history of alcohol dependence, among other things, and dysfunctional personality traits of stubbornness and untruthfulness. Although a MMSE score of 29/30 was said to disclose no abnormalities, neuropsychological testing pointed to some deficits in executive functioning.

In April 2003 the Tribunal appointed the Public Advocate as guardian. The guardianship order was later revoked, essentially on the grounds that XYZ's failure to cooperate with the guardian had made guardianship unworkable.

After STL was appointed, XYZ appealed to the Supreme Court of Victoria. Judgment was given on 22 November 2006: see XYZ v State Trustees Limited and anor [2006] VSC 444. The appeal was allowed and the proceeding remitted to be heard and decided again with further evidence to be permitted.

On 21 December 2006, at a Directions hearing attended by XYZ and his counsel, Mr. Sharp, I approved STL releasing funds to enable XYZ to obtain up to date medical or other expert evidence. I also referred the proceeding to the Public Advocate for investigation and report under the Victorian Civil and Administrative Tribunal Act 1998 Schedule 1 clause 35. On 31 January 2007 I reheard XYZ's application for reassessment of the administration order.

I have mentioned medical evidence at the time of XYZ's stroke. This was a report dated 12 February 2002 by Dr. A. Andrews, Hospital Medical Officer.

In a report dated 28 August 2003 Dr. P. Sandery (presumably a General Practitioner) noted XYZ's stroke and adjustment disorder with mild depression and anxiety that was temporarily partially disabling but did not significantly interfere with his social functioning. Dr. Sandery stated that he could find no medical reason to say that XYZ was incapable of managing his own affairs.

A report dated 12 December 2003 by a psychiatrist, Dr. Calder-Potts, indicated that XYZ had capacity to manage his financial affairs. XYZ was aware of his financial circumstances, although Dr. Calder-Potts noted that he had only XYZ's version about that. Dr. Calder-Potts considered that alcohol binges continued to be a problem for XYZ.

On 19 May 2004 a General Practitioner in Ballarat, Dr. Meakin, reported the results of a MMSE (Mini Mental Status Examination) to be 30/30.

A year later, on 18 May 2005, another GP, Dr. Brooke, made a report expressing the opinion that XYZ had no cognitive dysfunction.

The next month a report was made by a neuropsychologist, Dr. L. Vowels. In her report, dated 24 June 2005, Dr. Vowels described XYZ as a confused and confusing historian. She found that his new learning was quite impaired, suggestive of organic impairment. Regulation of behaviour was under poor voluntary control. Dr. Vowels found evidence of moderate and significant reduction in several areas of cognitive function likely to be indicative of organic impairment consistent with XYZ's stroke. Her assessment did not enable her to conclude whether alcohol overuse was a factor. The impairment was "unlikely to be disabling to the point of incapacity or incompetence to deal with financial and legal matters (although his lack of insight into the difficulties [did] make him more vulnerable than usual)". More concerning were "executive function alterations". Compromised planning and organisation was a serious disability that needed to be considered as a source of increased vulnerability. Dr. Vowels also said that reassessment in one or two years was warranted for, to the extent that XYZ's impairments were the result of stroke (rather than alcohol overuse), a measure of improvement was possible, though unlikely.

In a report dated 12 July 2005 psychologist Mr. D. Greco set out the history given by XYZ and the result of a self-administered Personality Assessment Inventory, concluding that XYZ was "suffering from no significant psychological impairment that would prevent him from being able to look after his own finances".

Dr. Vowels wrote to Papaleo on 26 July 2005 following her review of Mr. Greco's report. It is sufficient to indicate that she challenged Mr. Greco's methodology and objectivity given XYZ's presentation and medical history.

On 19 May 2006 Queensland GP Dr. Gills wrote that in a MMSE conducted on 4 January 2006 XYZ scored 30/30.

In brief reports dated 18 September and 5 October 2006 Tasmanian GP Dr. W. Johnson stated that he found XYZ to be coping well and "able to conduct his [financial] affairs on his own".

Finally, in a report dated 24 January 2007, Associate Professor M. Saling, neuropsychologist, concluded that XYZ's "post-stroke cognitive abilities constitute[d] an adequate foundation for decision-making capacity". In his opinion XYZ "[did] not suffer from a neuropsychological impairment ... likely to render him incapable of managing his own affairs". At some length and in some detail he set out the basis for saying that he did not agree with certain aspects of Dr. Vowel's interpretation of XYZ's performance in various tests, particularly concerning XYZ's executive function. He then described the results of his own testing before saying that XYZ "presented as a reasonable and competent man [who had] a good understanding of his stroke-related impairments". There was no objective information about XYZ's financial affairs that would enable Professor Saling to pursue or test that matter, but he did not form the impression that XYZ misstated or misunderstood his financial position. He agreed with Dr. Vowels that XYZ's impairment was unlikely to be disabling to the point of incapacity ... to deal with financial and legal matters". He did not agree, however, with her view that he lacked insight. In his opinion, XYZ's executive function was normal - "on appropriate examination".

STL provided a report to the Tribunal dated 22 January 2007 attaching relevant financial information. The Senior Personal Financial Consultant who produced the report wrote that STL had attempted to assist XYZ with his budget but had not been able to because he refused to accept responsibility for his spending. Sometimes he arranged interstate travel on a one-way ticket and STL had to arrange payment for his accommodation and return travel costs. He did not appear to have any concept of spending limits and would go to extraordinary lengths to obtain funds. He would approach anyone whom he thought could help him. At the time STL was appointed his funds were about $70,000 but they had been reduced to about $30,000. This was due to XYZ's "constant" movement and the cost of relocation. It was intended that if the administration order continued STL would apply to the Guardianship and Administration Board of Tasmania for an administrator to be appointed in that State, for XYZ was now a permanent resident there.

The Public Advocate provided a report to the Tribunal dated 30 January 2007. The investigator described XYZ as a man who felt strongly about the imposition of an administration order. He had "pursued his campaign to be free of" the order since its inception. The reduction in XYZ's capital was noted in the context of considering the restriction on XYZ imposed by the order compared with its benefit to him. The comment was also made that Professor Saling's report cast "considerable doubt" as to whether XYZ came within the Tribunal's jurisdiction. XYZ was reportedly difficult and frustrating for the administrator to work with, as may be other persons not wanting to be under administration. There was, however, more here than the issue of his unhappiness about the order: he had been able to reduce his assets substantially over a short period of time and the administrator had been unable to prevent his "cash burn" despite the wish to protect his assets. The investigator suggested that, regardless of any determination about XYZ's capacity, "it could be argued that this situation is unresolvable by administration" and that the Tribunal should consider whether the order is "warranted or workable".

Papaleo, as administrator, provided a number of reports to the Tribunal. I refer to them below, where relevant.

At the hearing XYZ told me that soon after his stroke he formed the intention to travel to a mining town in Tasmania where, according to a television program he had seen while still in hospital, land was "free". Land was not in fact free, he said, but he still wanted to live there. He described himself as "a bit impetuous at times" but he said he knew that he had to have a long-term goal if he was going to survive. He had children living in Melbourne whom he had not seen in a long time. He wanted to live closer to them.

XYZ had resided in Tasmania for four to five months renting public housing. He wanted to stay there. He had met a woman whom he hoped to marry. He attended Church and the local RSL. He had also joined a community "consulting group" and had applied for permanent part time work liaising with government bodies, seeking funding for community youth programs.

XYZ told me how he budgeted the $120 that STL provided him each week.

Now XYZ was on the waiting list for surgery involving amputation of his arm. He rated his chances of surviving surgery as "50/50". The arm was a dead weight and he was in constant pain yet he travelled alone to see Professor Saling. He gave me very precise details about how he arranged his transport and travelled by the cheapest means available.

I asked XYZ whether he accepted statements in STL's report about the depletion of his funds. He mentioned that his parents owed him $30,000 for furniture that they took from his home about 20 years ago. He had not mentioned that matter to Papaleo or to STL. He also told me that solicitors in Queensland were pursuing a claim for compensation against a person who had caused or contributed to the problems with his arm by assaulting him. Those solicitors were acting on a "no win no fee" basis. XYZ had not told his administrators about that, either. He said later that he believed that despite the formal conclusion of Family Court proceedings he was entitled to pursue a claim against his ex-wife relating to the sale of a property in Queensland. As to the depletion of his savings, he said that he did not know the exact figures but agreed that he had asked STL for more money. He had spent a lot on travel and accommodation, including attending the Tribunal and the Supreme Court.

Without telling STL, XYZ had - "against the odds" - successfully applied for a credit card with a $2,000 limit. He did not owe anything on that card. His aim was to show the bank that he could be relied on to make repayments.

I asked XYZ about his reported plan to purchase property in Tasmania. He said he was interested in purchasing a unit in Launceston in the $300,000 price range. Since he was aged 17 he had bought and sold about a dozen properties and calculated his overall profits at about $500,000, the figure he mentioned to Professor Saling. (He maintained that he had not told Dr. Vowels that his assets had totalled $5,000,000, which figure appeared in her report).

XYZ said he had made some poor decisions with regard to women who had been "ripping [him] off". Later he remarked that he had been a "poor selector of partners". He agreed that, as reported by Papaleo at the end of 2004, one partner had gained access to his bank account and so Papaleo had redirected his income to a new bank account. He saw no prospect for this kind of thing happening in future. He said in effect that he was much more cautious nowadays.

When he was a police officer he had problems with alcohol, he agreed. During the 1990s he had also been prescribed antidepressants but he said that after the stroke he had not had any alcohol problem and he had not taken any antidepressants. When he was in Western Australia he had been admitted as a voluntary mental health patient but he discharged himself. He said that he had never had any psychiatric illness.

XYZ told me that he did not want an administrator - not even one to manage any property transaction he might enter: he saw no benefit. He thought he had made an EPA (enduring power of attorney) soon after having his stroke but had no intention now of giving anyone an EPA, not even one to cover the anticipated period of his hospitalisation and recovery following surgery.

Mr. Turner, STL's representative at the hearing, stated that STL had been frustrated in trying to manage XYZ's affairs because he had often travelled without notifying the administrator. There were also sizeable telephone bills and $3,000 had to be paid for damage done to a unit occupied by XYZ in Queensland. (XYZ explained that a unit owner in Queensland had sought $5,000 compensation for damaged walls. STL paid this without discussing the claim with him, he said at first, but he then conceded that STL had sent him a copy of the letter of demand and conceded that STL may have negotiated payment of $3,000. He agreed too that he had incurred substantial telephone and travel expenses, including attending medical appointments).

I asked Mr. Turner whether he considered administration to be workable, or likely to provide practical benefit to XYZ. Mr. Turner said that this was possible if XYZ could settle in Tasmania. STL could consider paying XYZ his allowance in smaller amounts to prevent him incurring travel expenses and could, as Papaleo reportedly had done, write to credit card providers, for instance, to inform them of the administration order.

Cross-examined by Mr. Sharp, Mr. Turner agreed that in addition to paying the Tribunal $100 in annual administration fees each year, XYZ had paid commissions of approximately $4,000 to STL that would continue at the rate of about $1,000 per year.

I asked Mr. Doran (the Office of the Public Advocate investigator) whether the evidence given at the hearing led him to qualify his report. Essentially it did not. Mr. Doran expressed the view that the administrator did not appear to have any plan to arrest the depletion of his savings. Despite Professor Saling's findings, there were concerns as to how XYZ would manage his affairs but even if he did lack capacity it was not certain that the administrator could curb his spending without resorting to Draconian measures. Administration had been unworkable since 2002 and one could not be confident that it would be workable now. XYZ's best interests could be served by an administration order that was workable but he was diametrically opposed to it and would continue to subvert it, passively or actively. In this regard XYZ had shown himself able to be inventive, Mr. Doran said. Mr. Doran also observed that XYZ's decision, made before the stroke, to take a lump sum when retiring from the police force may indicate that he had a greater tendency to take financial risks than other people.

Mr. Sharp submitted that, based on the whole of the evidence, the Tribunal should find that XYZ had capacity to make reasonable decisions about his financial affairs. His evidence was sometimes tangential, but that may indicate that he was avoiding certain issues and so show he was capable of looking after himself. He was not perfect and his "faults" were within the "normal range". He should not be deprived of the freedom to manage his own financial affairs. The administration order had been frustrating and debilitating for him, detrimental to his self-esteem and his health. His personality was such that he had an aversion to someone managing his affairs. He was not a person who would benefit from having an administrator. The administration order could not work and could not fulfil any real need. If he had had access to his savings over the years and been able to invest in property he would have been hard pressed to have made a loss. (This was no reflection on the administrators, Mr. Sharp added, for they were not in a position to invest in the manner that XYZ could have done).

Mr. Sharp further submitted that the Tribunal's function was not to protect people from folly or mistake: otherwise the Tribunal would have to protect everyone. STL's fees and commissions had also imposed a financial cost to XYZ. It was true that XYZ had been exploited by a female partner and by a person who arranged for him to make an EPA in Queensland. However, XYZ was now not prepared to entrust anyone with an EPA. The chances that he would be exploited were no more or less than for the rest of the population.

Concerning both the lay and expert evidence as to XYZ's capacity, Mr. Sharp submitted that it was overwhelmingly favourable. Professor Saling's opinion should be preferred where there was disagreement between him and Dr. Vowels.

Finally, Mr. Sharp submitted that XYZ's best interests required that the order be revoked, even though that might not be done without some trepidation.

Having considered the evidence and submissions at the hearing I revoked the administration order. I was concerned to make the order without delay. I now state my reasons.

Guardianship and administration are separate but related concepts. This case now concerns administration only but, where relevant, I will refer to reports and other materials that deal with guardianship.

The Tribunal's power to appoint an administrator to manage another person's financial and legal affairs is given by the Guardianship and Administration Act 1986. Section 1 provides that the purpose of the Act is to enable persons with a disability to have a guardian or administrator appointed when they need a guardian or administrator. Section 4 (1) provides that the objects of the Act include "to enable the making of guardianship orders and administration orders". Section 4 (2) provides that it is the intention of Parliament that the Act be interpreted and that every function, power, authority, discretion, jurisdiction and duty conferred or imposed by the Act be exercised or performed so that (a) the means which is the least restrictive of a person's freedom of decision and action as is possible in the circumstances is adopted; (b) the best interests of a person with a disability are promoted; and (c) the wishes of a person with a disability are wherever possible given effect to: see XYZ v. State Trustees Limited and anor [2006] VSC 444.

The Tribunal cannot make an administration order unless satisfied that, among other things, the order would be in the best interests of the "proposed represented person": section 46(3). The Tribunal must be satisfied that the person has a disability; is unable to make reasonable judgments in respect of the matters relating to all or any part of their estate by reason of the disability; and is in need of an administrator: section 46(1).

On 15 July 2006 amendments to the Act came into operation. They included an amendment to section 46 (2) by the insertion of a new paragraph (b). Section 46 (2) now provides that in determining whether or not a person is in need of an administrator the Tribunal must consider (a) whether the needs of the person ... could be met by other means less restrictive of the person's freedom of decision and action; and (b) the wishes of the person ..., so far as they can be ascertained".

Then, as noted by Morris J in Public Advocate v. RCS (Guardianship) [2004] VCAT 1880 in the context of guardianship, "the existence of [disability, incapacity and need] are preconditions for appointment; but such an appointment is still discretionary" and "the discretion is confined by [the] section ...: it must not be exercised unless the tribunal is satisfied that the order would be in the best interests of the disabled person."

At the time of the hearing XYZ had assets in Victorian managed by STL. That was sufficient to give the Tribunal jurisdiction even though he said in effect that he now permanently resides in Tasmania: Guardianship and Administration Act 1986 section 43 (2).

Some general remarks about administration orders

Towards the end of the judgment in XYZ v. State Trustees and anor. His Honour Cavanough J made important comments about matters for the Tribunal to consider. I will refer to these before stating my findings. I begin by making some general observations.

Just as each person is unique so is each proceeding under the Guardianship and Administration Act 1986 unique.

When the statutory definition of "disability" is considered (intellectual impairment, mental disorder, brain injury, physical disability or dementia: section 3(1)), it can be recognised immediately that disability can be mild, moderate or severe. So too can the impact of the disability on a person's cognitive or decision-making capacity be mild, moderate or severe. Then, depending on the person's circumstances (including not only family or other support or the existence of an EPA but also the person's actual exposure to risk of exploitation), there may be greater or lesser need for an administrator. Even the person's wishes, if the person can express them, may be more or less strongly held. And what the person's best interests require may change over time.

When it is also considered that the person's condition can be static, progressive, fluctuating or improving it will be obvious that, as the legislation requires, an administration order should never be made "once and for all" but should be reassessed later on.

Even where an administrator has been appointed, the legislation recognises that the issues may still not be totally clear. The Tribunal may make a limited administration order, tailored to the needs of the person with a disability. Whether or not the order is limited, the administrator must exercise power in such a way as to encourage and assist the represented person to become capable of administering his or her estate: section 49(2)(a). This indicates a realisation that there will be people on the verge of no longer needing an administrator but who for the time being still do need one.

All this justifies an approach by the Tribunal, in appropriate cases, to make or continue an administration order even though the person's disability may be mild, or the impact of the disability on the person's capacity may be mild, or the need for an administrator may not be absolute. The Tribunal has discretion that it must exercise in the person's best interests having taken into account matters including the person's wishes. If the Tribunal makes an administration order, nevertheless the circumstances may soon warrant reassessment of the order. Any person can apply for a reassessment. This may actually be the administrator who, if properly exercising power under the Act, would be especially well placed to see that the order may no longer be necessary or in the person's best interests.

Is the test for incapacity subjective or objective?

Under section 46(1)(a)(ii) of the Act the Tribunal must be satisfied that the person "is unable to make reasonable judgments in respect of the matters relating to all or any part of her or his estate by reason of the disability".

Cavanough J referred to an apparent divergence of judicial opinion expressed in Victorian and New South Wales cases involving similar legislation, as to whether the test for incapacity is subjective or objective. The question is this: is it necessary to measure the person's capacity against his or her actual property and affairs, however extensive, complex or demanding they may be (the subjective test), or should it be measured against an objective standard such as "the ordinary routine affairs of man"?

In Re McGregor [1985] VicRp 85; [1985] V.R. 861 Starke J applied a subjective test and so did not follow Powel J in P.Y. v. R.J.S. [1982] 2 N.S.W.L.R. 700. (The legislation in Re McGregor contained the words "incapable of managing his affairs." The NSW legislation was similar). At p. 866 Starke J observed that the Act itself appeared to lay down a subjective test by speaking of "'managing his affairs', not the 'ordinary routine affairs of man'" and, he pointed out, the Court was "exercising its protective jurisdiction in respect of individuals, not a class of persons". Subsequent New South Wales authorities have followed P.Y. v. R.J.S.: see Re C (TH) and the Protected Estates Act [1999] NSWSC 456; EMG v. Guardianship and Administration Board of Victoria [1999] NSWSC 501: P v. R. [2003] NSWSC 819; and Re GHI (a protected person) [2005] NSWSC 581.

If it were open but also necessary for me to choose between these Victorian and New South Wales decisions, I would respectfully prefer Re McGregor for the reasons set out in that case. However, section 46(1)(a)(ii) of the Guardianship and Administration Act 1986 contains further words that really distinguish these cases and reinforce the subjective nature of the test. Those words are "all or any part of her or his estate" (emphasis added). This surely involves the Tribunal considering the person's capacity in relation to his or her actual estate and not "ordinary routine affairs".

The issue whether the subjective or objective test was applied was important in the context of the legislation being interpreted in the above cases, because it was considered that applying the subjective test would make it more difficult for a person to establish that he or she was capable: see Re GHI (a protected person), at paragraph 7. On the other hand, in the context of the Guardianship and Administration Act 1986, the need to resolve the issue is not so strong. A person who has capacity in relation to that part of his or her estate comprising ordinary routine affairs may lack capacity in relation to certain complex aspects of his or her estate. However, depending on "need" and the other usual matters, an administration order could be made that limited an administrator's power to managing only the complex part of the estate.

In the Report of the Minister's Committee on Rights and Protective Legislation for Intellectually Handicapped Persons dated December 1982, which report is cited by Cavanough J in his decision, there is this discussion:

"A person might have a proven ability to manage a small sum of money such as $500 or $1,000 and yet be at risk of exploitation if he came into a larger sum or if he inherited valuable property or a majority shareholding in a company. In addition, it may be in the interests of the person to encourage him to continue to exercise control over a small but growing portion of his estate. A tailor-made order could reflect these needs by ensuring that the ... person retains some limited residual control over his property while at the same time protecting him from financial exploitation." (paragraph 21 on page 86)

It is interesting to note the formulation in section 12 of the Queensland Guardianship and Administration Act 2000 which provides that the Tribunal in that jurisdiction may appoint an administrator for a financial matter if the adult "has impaired capacity for the matter" (emphasis added). Section 5 of the Queensland Act is also noteworthy. It provides:

... (c) the capacity of an adult with impaired capacity to make decisions may differ according to -

(i) the nature and extent of the impairment;

(ii) the type of decision to be made, including, for example, the complexity of the decision to be made; and

(iii) the support available from members of the adult's existing support network".

To one more familiar with the Victorian legislation, section 5 (c)(iii) of the Queensland legislation appears to merge capacity and need. (Section 46(2)(b) of the Victorian Act appears to merge need and wishes: see paragraph 43, above). What this shows is that there is more than one possible legislative approach that may be taken. Similarly, under the Victorian legislation questions can be approached in more than one way - emphasising disability, capacity, need, wishes, best interests or discretion.

It is clear that section 46 does not require total and complete incapacity or something similar to be established: XYZ at paragraph 42. At paragraph 71 of the decision Cavanough J expressed the view that the Tribunal should give further consideration to the extent to which a person must be "unable to make reasonable" judgments, referring to the previously cited Report of the Minister's Committee especially paragraph 14.2 (which appears to be a reference to paragraph 14.3 on page 74) and pp. 95-96. At paragraph 18 on page 95 the report states: "It is the person whose capacity is lacking or is severely impaired who may be in need of this type of protection" (emphasis added).

In interpreting the legislation consideration can be given to the report: Interpretation of Legislation Act 1984 s 35(b)(iv). A fair reading of the whole report does not indicate that the Committee intended to deal only with the protection of persons whose capacity was lacking or severely impaired. The Committee noted at p. 74 that the "simplicity of [the] formulation ['unable to make reasonable judgments'] should not be allowed to mask the considerable difficulties which face its practical implementation" then went on to discuss susceptibility to undue influence and even asked how reasonable (or unreasonable) the person's judgment must be.

A number of examples given in the report suggest that the Committee actually did not intend to limit its recommendations to persons whose capacity was lacking or severely impaired. At page 20 of the Report there is the example of an intellectually impaired man living in a "special accommodation house". There is evidence that the proprietor refuses to hand over his pension and is requiring him to work long and tedious hours cleaning the premises. The man is "too frightened to leave of his own free will. He does not even seem to be aware that he has this right". To the Committee, "guardianship would help to ensure that the exploitation of the ... man ceased". This scenario appears to me to involve a person whose capacity is impaired in a material way to a significant degree (rather than a person whose capacity is lacking or is severely impaired) and whose best interests require the appointment of a guardian or administrator (depending on other options available for him).

I have already mentioned (at paragraph 57) the example of the person able to manage $500 or $1,000 but not larger amounts or more complex matters. At page 25 there is the example of the person who is able to decide with whom he shall live and yet be unable to consent to medical treatment. And there is another who might be capable of understanding the ramifications of minor medical treatment and so of consenting to it but be incapable of consenting to a major procedure. Consent to medical treatment is now dealt with in Part 4A of the Act, but the discussion acknowledges that capacity may be lacking or impaired in relation to only one or a small number of decisions or categories of decision. (A discussion of "global, domain specific and decision specific capacity" is to be found in Who can decide? The six step capacity assessment process. Darzins et. al (eds) Memory Australia Press Alzheimer's Association (SA) Inc, Glenside, S.A., 2000 at pp. 4 ff.) The point of referring to the example is this: it seems doubtful that the Committee, in referring to a person able to understand at least the ramifications of minor medical treatment, considered that it was referring to a person whose capacity was lacking or severely impaired.

I acknowledge that the same person could be said to lack capacity or to have severely impaired capacity to make a decision about the major or more complex procedure. Notwithstanding that acknowledgement, I cannot discern in this example (or in the Report generally, the Second Reading speech, or the Act itself) an intention that guardians or administrators would be appointed only for those persons whose capacity is lacking or severely impaired. Certainly it is to be expected that a person with a disability whose capacity is only mildly impaired will not lightly be found to be "unable to make reasonable decisions". Putting to one side what "reasonable" means in this context, it is still possible that the person will be found to be "unable to make reasonable decisions". Whether, among other things, that person needs an administrator must also be determined, of course.

The Tribunal must not delegate the "ultimate issue" of capacity to the expert but must make findings of fact about capacity by reference also to the lay evidence: XYZ, at paragraph 55.

Cavanough J referred to a chapter in Freckleton and Selby's loose-leaf service Expert Evidence entitled Forensic Neuropsychology, written by Professor Stephen Crowe. The author argues there that neuropsychology has significant limitations and states that "test data can only provide at best a moderate prediction of the individual's real world functioning". Although, as His Honour noted, that chapter had not been updated since the year 2000 (see paragraph 54 footnote 68 of the judgment) it is apparent that research and debate has continued: see Crowe, The parallel universe: Does neuropsychological assessment tell us anything about the real world? InPsych highlights, June 2005 (www.psychology.org.au/publications/inpsych/). There the same author stated that:

"it seems fair to suggest that neuropsychological examination has moderately good success in predicting money management ability and performance on an important component of instrumental activity of daily living in the form of automated machine usage. It may, however, fall down on other quality of life type issues ... [T]he most appropriate way to assess how someone functions in the real world after an injury is to move in with them for a month and watch how they cope in their daily lives; but how many clinicians have the time, patience or interest to undertake such an assessment?"

It is not surprising to find that there have been advances in neuropsychology over the years: see Mental Capacity Powers of attorney and Advance Health Directives, Collier et al. (eds) The Federation Press, Annandale, N.S.W., 2005 at pp. 119 ff. The passage quoted in the preceding paragraph incidentally highlights that since the legislation was enacted increasingly sophisticated technology, especially in the banking system, may give greater scope for financial exploitation of a person whose capacity is only mildly impaired. This is important when the need for a protective order is being considered.

In the present case there are conflicting views between neuropsychologists but also opposing conclusions by one of the neuropsychologists, Dr. Vowels, on the one hand and a number of medical practitioners and a psychologist on the other. In many of the medical reports it does not appear whether any and what tests formed the basis for the opinions expressed. In a significant number, however, they refer to the results of a MMSE. It is relevant, therefore to observe this:

"The MMSE was not developed to assess capacity, although it has often been used to document "general cognitive' abilities as part of capacity assessment in clinical and other contexts ... The use of the MMSE for capacity assessments is the subject of ongoing debate ". Mental Capacity Powers of attorney and Advance Health Directives, at pp. 116 ff.

The general need for caution in capacity assessments is expressed by Darzins et. al. in this way:

"If capacity assessments place too much weight on cognitive function tests, like the [MMSE] or the cognitive capacity test, poor performance on these tests may be interpreted as evidence of incapacity. These tests are primarily language based and influenced by education, culture and language. If tests of cognition are used to determine capacity, some people who are capable, but who score poorly on these tests because of ignorance, lack of education or language difficulties, will be inappropriately labelled as incapable. Conversely, incapable people who have received more education and have well developed language skills, may erroneously be judged capable by these tests". Who can decide? The six step capacity assessment process. Darzins et. al., cited above, at p. 8.

This supports the proposition that, if there is expert opinion that a person lacks capacity but there is also lay evidence that indicates the person has capacity, the Tribunal may decline to find that the person is incapable. On the other hand - depending on the circumstances - if there is expert opinion that a person has capacity but there is also lay evidence that indicates the person lacks capacity, the Tribunal may elect to obtain further and better medical or other expert evidence rather than reach an immediate conclusion. Any paradox here can be explained, I think, by considering the presumption that a person has capacity but, at the same time, the protective nature of the jurisdiction.

Not always will the wishes of the person with a disability be able to be ascertained but, if they can be, they must always be considered: sections 4(2) and now section 46(2)(b) of the Act. In XYZ Cavanough J referred to the decision of the Supreme Court of the Australian Capital Territory in A v. Guardianship and Management of Property Tribunal [1999] ACTSC 77 where legislation, in a general section headed "Principles to be observed", provided that "the person's views and wishes, so far as they can be ascertained, should receive paramount consideration".

It is important to contrast the words of section 4(2)(c) of the Victorian Act: "the wishes of a person with a disability are wherever possible given effect to" (emphasis added).

I consider first whether the Victorian Parliament intended (in the general provision that section 4(2) is) that the wishes of the person with a disability should receive paramount consideration: see paragraph 41 above. As His Honour noted, the Act does not expressly state that the person's freedom and wishes shall be "paramount" over the person's best interests. I cannot discern that intention. Section 4(2) lists three important considerations, the person's interests being stated last without any indication that it ranks above either or both of the other considerations, and the express purpose and objects of the Act do not indicate an intention that the person's wishes receive paramount consideration.

In the relevant Second Reading speech the Minister said this:

"...[T]he Bill ... is designed to benefit a person with [a] disability ... The main aim of the Bill is to establish an administrative process for the appointment of guardians, or administrators of the estates, of persons who have reached adulthood and, because of a disability, it is in their interests to do so. Needless to say, the vast majority of disabled people are capable of looking after their own affairs and are not, and are never likely to be, in need of guardianship or estate administration ..." (Hansard, Legislative Assembly, 30 May 1985, at p. 85).

"In accordance with the fundamental principle of the whole proposed legislative package, the Bill specifically requires that the board, in determining whether a person is in need of a guardian, consider whether the person's needs could be met by other means less restrictive of his or her freedom of decision and action." (at p. 86)

Although the Minister also stated there that "there is no suggestion in the proposed legislation, inherent or implied, that any person will be compelled to apply for guardianship", he did not make any mention, let alone special mention, of the requirement to give effect wherever possible to the wishes of the person with the disability. Similarly, the Report of the Minister's Committee gives no special emphasis to the person's wishes.

I say at once that I do not suggest here that what I have just mentioned would somehow reduce the importance of the requirement to give effect to the person's wishes. The person's wishes are obviously of very special importance. It simply supports the view that, while clearly intending that the person's wishes be given effect to wherever possible, the Victorian Parliament did not intend that the person's wishes would be the paramount consideration.

It is one thing to consider Parliament's intention in the context of section 4(2). It is another thing to consider Parliament's intention when recently amending section 46. I can find no indication there that the person's wishes be a paramount consideration - although, obviously, here too the person's wishes must be given proper consideration. There was no specific reference to the new section 46(2)(b) in the part of the relevant Second Reading speech that addressed what were described there as "minor and technical amendments" (Hansard, Legislative Assembly, 16 November 2005, at p. 2193).

I conclude that in determining the need for an administrator the Tribunal must consider the wishes of the person for whom the application is made, so far as they can be ascertained: section 46(2)(b). In interpreting the Act and exercising jurisdiction under the Act generally, the Tribunal must give effect the wishes of a person with a disability wherever possible: section 4(2)(c). The inclusion of the qualifying words - "wherever possible" - indicates that there will be cases in which it is not possible to give effect to the person's wishes. This may be for practical reasons - for instance, the person may wish to have a family member as administrator but the family member does not consent to appointment. Alternatively, it may be because, in the particular case, the person's best interests, requiring the appointment of an administrator, override the person's wishes not to have an administrator. I am aware that in Moore v. Guardianship and Administration Board [1990] VicRp 80; [1990] V.R. 902 at 917 Gobbo J said "it must be a very rare case that will see an order made against the wishes of a represented person", but I see this as His Honour's expectation or an expression of caution rather than a rule. Obviously, whether or not an administrator will be appointed against a person's wishes will depend on the circumstances of the individual case. The Court recognised in McDonald v. Guardianship Board [1993] VicRp 36; [1993] 1 V.R. 521 at 530 that there "may be cases in which the jurisdiction of the [Tribunal] may be justifiably invoked", adding that the legislation "prescribes, very important safeguards against the making of inappropriate guardianship and administration orders."

It is important to bear in mind that the hearing on 31 January 2007 was in effect a reassessment of the administration order. The Act requires that orders be reassessed because, although the test for making an administration order may be satisfied at the time the order is made, there can later be some material change in circumstances requiring a different order - revoking the administration order altogether; or appointing a new administrator or otherwise varying the terms of the order.

I have noted that the medical report made at the time XYZ suffered his stroke stated his belief then that he should not make decisions about his affairs himself. I also note that XYZ told the Court last year that he no longer wanted or needed an administrator: paragraph 1 of the judgment. The totality of the medical and other expert evidence that is now available tends to show that XYZ has capacity to manage his financial affairs. I have also taken into account the lay evidence, including the reports by STL and Papaleo. Having myself heard XYZ, I understand Dr. Vowel's view that he was a confused and confusing historian. Other professional persons had doubts about the reliability of what he said. Nevertheless, I accept his evidence especially about his successful property transactions before his stroke and the greater caution he had developed in dealing with people who might try to take advantage of him.

If the decision in this case were to turn on issues of XYZ's disability and capacity then it would be necessary to say considerably more about the medical and other expert evidence. Indeed it may have been necessary to hear evidence from both Professor Saling and Dr. Vowels whose conclusions overlapped to some degree but ultimately diverged on crucial issues. Put another way, if I accept Professor Saling's conclusions then I must revoke the administration order, but even if I do not accept his conclusions there are other grounds for revoking the order, and so it is really unnecessary to reach a conclusion about that.

It is established that XYZ has a disability but it is not clear that his capacity is still impaired in a material way to a significant degree. Looking at the whole of the evidence that is now available it appears that he has substantial capacity in a number of areas.

Taking into account his wishes and less restrictive options, I consider that XYZ no longer needs an administrator. He and his counsel expressed his very strong opposition to him having an administration order. In fact he has become able to manage his affairs to some extent. He has indeed been able actively to undermine or circumvent the administration order. He has also, I accept, become cautious in a way that he evidently was not previously.

It cannot be that a represented person who is strongly opposed to an order or who somehow makes an order unworkable will thereby succeed in having the order revoked, but the order in XYZ's circumstances has in recent times been of no real benefit to him. I generally agree with what Mr. Doran wrote and said about this. Despite STL's efforts his funds have been depleted. In addition, there have been fees including the ones properly claimable by STL that he would now be better off not having to pay.

For the same reasons, though approaching the matter in other ways - looking at less restrictive options or XYZ's best interests, or exercising the discretion that the Tribunal has to appoint or not to appoint an administrator - I consider that the order should be revoked.

I mention before concluding that there was no evidence that the EPA made by XYZ soon after his stroke remained active, or that he could not now revoke it if he wanted to do that.

The Report of the Minister's Committee expressed the concern that "inappropriate" guardianship could lead to a denial of civil liberties. In a section beginning at p. 25 (headed "Basic Principles to which the Legislation should conform", under the sub-heading "The Least Restrictive Form of Protection"), the report added that "it is not the quality of a person's decisions but his ability to make those decisions which determines the need for guardianship". The Tribunal must have regard to statements like this and be mindful of the cautions expressed in Moore v. Guardianship and Administration Board and McDonald v. Guardianship Board and referred to in XYZ, and also the cautions in XYZ itself (especially at paragraph 66).

As Cavanough J noted, a proceeding under the Guardianship and Administration Act 1986 can give rise to "matters of difficult and sensitive judgment": at paragraph 73. The legislation permits more than one approach and more or less emphasis to be given to the statutory tests. My conclusion in this case is that the administration order should be revoked.

Administration Act 1986

XYZ (Guardianship) [2007] VCAT 1196 (29 June 2007)

At a glance

Court

Decision date

Source

Judgment (111 paragraphs)

XYZ (Guardianship) [2007] VCAT 1196 (29 June 2007)

Legislation Cited (1)