XYZ v State Trustees Ltd [2006] VSC 444

Overview

1 The plaintiff[1] challenges an order made by the Victorian Civil and Administrative Tribunal ("VCAT") requiring that his property continue to be subject to administration under the Guardianship and Administration Act 1986 ("the Act"). He does so under s 148 of the Victorian Civil and Administrative Tribunal Act 1998 ("the VCAT Act"), a provision which is limited to questions of law. He says that although he still suffers certain residual effects of a stroke, he no longer wants or needs an administrator. He contends that the Tribunal failed to give effect to the relevant statutory requirements in four ways: by failing to take into account the objects of the Act, particularly as they applied to his liberties and wishes; by misapplying the statutory criterion of being "unable to make reasonable judgments" about his estate; by failing to give proper consideration to all of the evidence; and by making procedurally unfair use of certain parts of the evidence.

2 I am satisfied that, as developed, the plaintiff's contentions raise questions of law; and I am satisfied that VCAT's decision was vitiated by errors of law.

3 In summary, VCAT did not properly complete its task of hearing and determining, in accordance with the requirements of the Act and the VCAT Act, the plaintiff's challenge to the appropriateness of continuing the administration order.[2]

4 Accordingly the plaintiff is entitled to an order that VCAT's decision be set aside and that the matter be reconsidered in accordance with law.

5 The plaintiff has asked the Court to go further and to make an order finally terminating the administration. However an order of that kind would be inappropriate in this case. I cannot say that it would not have been open to VCAT, acting on proper principles, to have continued the administration on the materials which were before it at the time. Nor can I say that, on remittal, it would not be open to VCAT to continue the administration on the materials which may then be available.

6 On the other hand, VCAT might think it appropriate that a Presidential Member conduct the rehearing of this matter. The plaintiff's case has raised important and difficult issues of general significance for the guardianship and administration jurisdiction of VCAT. It has not been necessary for me to decide finally all of those issues, and it is desirable (as well as necessary) that the case be remitted for reconsideration and redetermination by the Tribunal, because -

• the matter has proceeded before me without a contradictor[3];

• although the plaintiff was capably represented by counsel and a solicitor both acting pro bono in accordance with the honourable tradition of the legal profession, not all of the plaintiff's contentions were supported by fully researched and developed submissions;

• the matter should be determined on up-to-date evidence[4];

• it is preferable that, where possible, issues of general significance be determined in the first instance by VCAT itself, with the benefit of its specialised experience and expertise in guardianship and administration matters and with access to input from bodies such as the Public Advocate.[5]

Factual background and earlier proceedings at VCAT

7 The plaintiff retired from his employment some years ago on stress grounds. Subsequently, in January 2002, while involved in family law proceedings, he suffered a serious stroke. It was feared that he may not survive. In February 2002 the solicitor acting for the plaintiff in the family law proceedings applied to VCAT under s 43 of the Act for the appointment of himself as administrator of the plaintiff's estate. An order to that effect was made under s 46 of the Act, the order to be re-assessed (under s 61 of the Act) no later than 21 February 2003.

8 By January 2003 the solicitor had become unable to continue as administrator. A re-assessment of the order took place on 17 January 2003. The Tribunal was satisfied that there was an ongoing need for an administrator and, by order made on that day, Luigi Adrian Papaleo, of the legal firm of Judge and Papaleo, was appointed as an independent, paid administrator.

9 After that time the plaintiff made several applications under s 61 of the Act for re-assessment of the administration order. Each resulted in an order that the administration be continued. The most recent application for re-assessment was determined by a Member of VCAT on 27 July 2005.[6] At some stage FTL Judge & Papaleo Pty Ltd, of which Mr Papaleo is a principal, was substituted for Mr Papaleo as the nominated administrator.

The proceeding at VCAT under challenge

10 The Act provides not only for re-assessment of orders, but also, by s 60A, for the rehearing of applications made under the Act, including applications for re-assessments. Generally, a rehearing is conducted by a member of the Tribunal more senior than the member who originally dealt with the application.

11 In the present case, shortly after the making of the order of 27 July 2005 which further continued the administration, the plaintiff applied under s 60A for a rehearing of the application which had led to that order. A rehearing by a Senior Member of the Tribunal took place accordingly on 27 October 2005. The plaintiff was represented pro bono by Mr Sharp of counsel (who later appeared before me also). The plaintiff sought an end to the administration. Failing that, he requested a change of administrator. The hearing occupied approximately two hours. Towards the end the Senior Member announced that an order would be made substituting State Trustees Limited as administrator instead of FTL Judge & Papaleo Pty Ltd but otherwise continuing the administration on similar terms. She gave some indication of her reasons orally and was requested to provide written reasons under s 117 of the VCAT Act. An order in writing dated 27 October 2005 was produced under s 116 of the VCAT Act. On 10 December 2005 written reasons were supplied as requested.

12 It is necessary that I set out VCAT's reasons in full (edited only so as to anonymise the plaintiff):

On 15 April 2005, the Tribunal reassessed an order appointing Flinders Trustees Limited Judge and Papaleo ('Flinders Trustees') as administrator for the represented person. On 27 July 2005, following further evidence, the administration order was again reassessed and the Tribunal ordered that it remain in effect. The represented person sought a rehearing of that reassessment. I reheard the assessment on 27 October 2005.

The Tribunal considered the expert reports, which were already on file: A brief standard form report from Dr RG Brooke, Clayfield Queensland dated 18 May 2005 said that the represented person had partial paralysis, that a physical examination had been performed, that he suffered only mild mobility impairment and had no cognitive dysfunction, that [XYZ] had capacity to make decisions and sign an Enduing Power of Attorney and that Dr Brooke had known him for three months.

A report from Dr Lindsay Vowels, neuropsychologist, of her assessment of [XYZ] conducted on 24 June 2005 detailed the neuropsychological tests given of language and lifelong intellectual abilities, memory, flexibility of thinking, new learning, regulation of behaviour, problem solving and organisation and objective assessment of mood and affect. Dr Vowels had not met [XYZ] before and she reported that the tests took three hours. In conclusion her report stated that the results suggested [XYZ] showed evidence of 'moderate and significant reduction in several areas of cognitive function which is likely to be indicative of organic impairment of the right side of his brain and consistent with his severe CVA suffered in January 2002'. It went on to say that executive function alterations and impairment in new learning and behavioural regulation were more concerning than the moderate alterations in memory, attention and speed of information processing. The executive function, and new learning impairments were not, she considered, able to compensated and managed. The report went on 'His compromised planning and organisation is also a serious disability which needs to be considered as a source of increased vulnerability and possible manipulation by others'.

A report from Domenic Greco, psychologist, dated 12 July 2005 recorded [XYZ's] history as related by [XYZ] and described a 'psychometric assessment', described as a self-administered, objective inventory of adult personality and psychopathology, which was conducted. It concluded that [XYZ] suffered no significant psychopathologies. Mr Greco said no other psychometric assessments were conducted as he considered they were not warranted. He said he believed [XYZ] to be suffering no significant psychological impairment that would prevent him being able to look after his own finances. Mr Greco said he had not seen any medical report and presumably had not seen Dr Vowels report as he did not comment upon it. His report also noted that [XYZ] 'indicated he has undergone about six impairment assessments ... all indicating that he is suffering no cognitive impairment'.

There was also a letter from Dr Vowels dated 26 July 2005, which commented on Mr Greco's report. Dr Vowels said that since her own report she had received information (from an officer of the Office of the Public Advocate) about [XYZ's] health and finances which confirmed her own evaluation of cognitive disability and her impression that [XYZ] was not reliable as a historian. The letter expressed concern that Mr Greco had apparently accepted [XYZ's] own relation of his own history as valid, without undertaking objective assessment to check for cognitive dysfunction. The letter considered the 'psychometric' measure used by Mr Greco and commented: ' ... in the literature of which I am aware relating to the measure, there is no mention that it is correlated to any of the attributes which would be considered necessary for competence to manage one's own affairs'.

There was also a brief letter dated 19 May 2004 from Dr Meakin of Ballarat who saw [XYZ] once. It said he had scored 30/30 - on a mind-mental test. It was too cursory to be of any weight given the other more detailed reports.

The Tribunal also considered the financial report dated 22 July 2005 provided by FTL Judge and Papaleo for the hearing on 27 July 2005. This was a report about [XYZ's] financial position at that time. It indicated [XYZ] had a trust balance of just over $74,000 and income of a centrelink pension and some interest but was at that stage overspending (against the administrator's advice).

[XYZ] spoke at the hearing about his previous career and events since his stroke in early 2002. His counsel Mr Sharp said this was relevant as it showed he was lucid and comprehensible.

[XYZ] said he wanted to move to North-Western Tasmania. He said he had seen a financial planner and was advised he could purchase a property in that area for about $60,000. He said he was currently living in a Queensland hostel and moving to his own property would improve his finances. He said he was capable of managing his moderate income.

Later during the hearing [XYZ] said he owned a property at Mission Beach and still had an extensive share portfolio although he had not corresponded with his broker since January 2002. Mr Papaleo said that these assets had been dealt with as part of a family law settlement.

It was clear at the hearing that [XYZ] did not accept he had diminished capacity to make reasonable decisions about his estate and did not accept his need for an administrator. He and his counsel were critical of Mr Papaleo's management of the estate although there was no supporting evidence that Mr Papaleo had done anything but act in [XYZ's] best interests. [XYZ] indicated he did not want Mr Papaleo's firm as his administrator.

Mr Papaleo indicated that, given [XYZ's] attitude, if the Tribunal approved an administrator after the reassessment Mr Papaleo would be happy for a different administrator to be appointed, subject to the Tribunal's view.

The Guardianship and Administration Act 1986 provides, among other things, that the Tribunal cannot make an administration order unless satisfied that the order would be in the best interests of the proposed represented person: section 46(3). The Tribunal must be satisfied that the proposed represented person -

(a) is a person with a disability; and

(b) 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

(c) is in need of an administrator: section 46(1).

('Disability' means intellectual impairment, mental disorder, brain injury, physical disability or dementia: section 3(1)).

In determining whether or not a person needs an administrator, the Tribunal must consider whether the needs of the person could be met by other means less restrictive of their freedom of decision and action: section 46(2).

Concerning the choice of administrator the Act provides that the Tribunal may appoint as an administrator any person who consents to act as administrator if the Tribunal is satisfied that that person -

(a) will act in the best interests of the proposed represented person; and

(b) is not in a position where the person's interests conflict or may conflict with the interests of the proposed represented person; and

(c) is a suitable person to act as the administrator of the estate of the proposed represented person; and

(d) has sufficient expertise to administer the estate (or there is a special relationship or other special reason why that person should be appointed as administrator): section 47(1).

In determining whether a person is suitable to act as the administrator of a represented person, the Tribunal must take into account, in particular -

(a) the wishes of the proposed represented person; and

(b) the compatibility of the person proposed as administrator with the proposed represented person and with the guardian (if any) of the proposed represented person: section 47(2).

Mr Sharp submitted that the Tribunal should be persuaded by the evidence of [XYZ's] lucidity and comprehension that he was capable of managing his own finances. It is certainly true that the Tribunal must be satisfied that a person needs an administrator (section 46(3)(c)) before appointing one. Expert reports of disability and its effect on capacity can not however be ignored. The Tribunal should not substitute its own inexpert views on these matters for expert opinion. In some cases, a person who lacks capacity may recover it. The Tribunal would usually need expert evidence about this. In other cases a person who needed an administrator may no longer need one, even where his or her disability persists. Evidence about the change to the represented person's needs would not necessarily be expert evidence. It might come from a service provider, family or friends. There was however no such evidence before me.

In the present case, Mr Sharp submitted that the Tribunal should form its own view of the represented person's capacity and that the view should differ from the expert opinion of Dr Vowels. I was not persuaded I should substitute my own view, although in any case to my non-medical eye [XYZ] appeared to lack the capacity to make reasonable decisions about his finances.

I was satisfied after weighing and considering the expert reports that [XYZ] has a disability as defined and as a result is unable to make reasonable decisions about his estate. I accepted the evidence of Dr Vowels whose report was thorough and detailed. It indicated that [XYZ's] disability deprived him of the ability to make reasonable decisions about his estate. I preferred Dr Vowels report to Mr Greco's for the reasons Dr Vowels herself identified in her letter of 26 July 2005: that Mr Greco did not address the issue of cognitive dysfunction (as opposed to psychopathology) and that the issues his report did address were not apparently related to competence to manage financial affairs. The reports of Drs Meakin and Brooke which also reached conclusions different to Dr Vowels were not sufficiently detailed and did not display sufficient relevant assessment to cast any doubt on Dr Vowels conclusions. They were obviously based on fairly cursory assessment.

I was also satisfied that [XYZ] needs an administrator. At the hearing, he appeared to me to be confused about financial issues. Even allowing that he might not have been aware of all the administrator had done, [XYZ] appeared to me to have an unrealistic view of financial issues, exemplified by his assertion that he owned a share portfolio and a house at Mission Beach, even in the face of advice that these were no longer his. In addition, Mr Papaleo's report of 22 July 2005 indicated that [XYZ] had incurred $1,347.30 in telephone charges in one month and had behaved erratically. [XYZ] did not deny this. I noted also Dr Vowels advice that [XYZ] was vulnerable and susceptible to manipulation by others. This indicated that he needs an administrator. In his current circumstances, no less restrictive option was available.

Having regard to [XYZ's] expressed wish and considering that although he does not want an administrator at all it is not in his interests to appoint one to whom he particularly objects, I revoked the order appointing FTL Judge and Papaleo and appointed State Trustees Limited as administrator.

Section 47(1) and (2) guide the Tribunal in appointing an administrator. Given [XYZ's] antipathy to Mr Papaleo's firm, even though I saw no reasonable cause for that antipathy, it is likely that [XYZ] is not compatible with FTL Judge and Papaleo.

For these reasons the Tribunal made the order set out above."

The proceeding in this Court

13 The matter comes to this Court as an application under s 148 of the VCAT Act for leave to appeal, on questions of law, from the order made by VCAT on 27 October 2005. Applications for leave to appeal in cases where VCAT was constituted otherwise than by a Presidential Member must be made on summons to a Master under Part 2 of Order 4 of Chapter II of the Supreme Court Rules. The named respondents, State Trustees Limited and FTL Judge & Papaleo Pty Ltd, were both served with the originating motion and the summons. The Court was informed that neither of them wished to take any part in the proceedings. They took no further part in the matter. No attempt was made to secure any other contradictor.

14 Rule 4.14(3) of Chapter II provides that a Master may, if satisfied that the justice of the case so requires, order that an application for leave to appeal be heard and determined by the Court which, if leave is granted, is to hear and determine the appeal. On 14 February 2006 an order was made by a Master fixing this proceeding for hearing by a judge, without a grant of leave to appeal. Presumably the order is to be read as an order pursuant to r 4.14(3). On that basis I heard submissions from the plaintiff's counsel not only in support of the application for leave to appeal but also in support of the proposed appeal itself. No other party appeared.

15 The absence of a proper contradictor was unfortunate. As things have transpired, it has required the Court to carry out a great deal of independent research and consideration.[7] If a similar situation arose again, I would give serious consideration to directing the moving party to serve appropriate notice on the Public Advocate and/or the Attorney-General in the hope that some such representative of the public interest might appear to assist the Court.[8]

16 I presume that the plaintiff's solicitor ensured that the plaintiff complied with his obligation under s 148(6) of the VCAT Act to notify the principal registrar of VCAT of this appeal. No representative of VCAT has made contact with the Court. However it is arguable that in the absence of any other contradictor VCAT itself could properly choose to take a limited role in a proceeding of the present kind.[9]

Leave to appeal

17 On the principles stated in the authorities[10], this is a clear case for the grant of leave to appeal. The plaintiff has identified questions of law involved in VCAT's decision (see further below). As is indicated by my foreshadowed conclusions on the proposed appeal itself, I consider that VCAT's order (as well as its reasoning) is attended with sufficient doubt to warrant its reconsideration on appeal. Although the order is interlocutory in that it is subject to re-assessment[11], there would be substantial injustice in leaving the order unreversed supposing it to be wrong. For practical purposes it is a final order.[12] Although subject to re-assessment, it is not subject to further rehearing.[13] In addition, some of the questions of law raised are of public or general importance. I will grant leave to appeal accordingly.

The questions of law and the grounds of the appeal

18 In the plaintiff's draft notice of appeal, which accords with the originating motion in this regard, the following appears with respect to the questions of law and the grounds of appeal:

"The questions of law upon which the appeal is brought are:

1. whether in reaching the conclusions on which the orders were based by accepting medical reports that the Plaintiff lacked capacity when the Tribunal had received medical reports to the contrary and rejecting and not considering adequately the latter medical reports the Tribunal thereby failed to consider adequately or comply with the requirements of sections 97 and 98 of the Act.

2. whether by reason of the failure of the Tribunal to comply with the above provisions of the Act the decision and orders of the Tribunal are not valid and/or ought to be set aside.

The Plaintiff seeks leave to appeal on the following grounds:

1. The conduct of the hearing was such that it was not conducted fairly and/or according to the substantial merits of the case contrary to section 97 of the Act.

2. It failed properly to define the requirement of need and in particular to proceed on the basis that the appointment of an Administrator was a measure of last resort.

3. It failed properly to give full force and effect to the requirement of Section 4(2)(c) of the Guardianship and Administration Act that the wishes of a represented person be effected wherever possible."

19 These formulations lack precision and do not sit happily with each other. In other circumstances it may have been necessary to insist that the stated questions and grounds be formally amended.[14] However, at the hearing before me Mr Sharp refined the plaintiff's attack on the decision by advancing the four contentions to which I have referred in the opening paragraphs of this judgment. Questions of law were thereby sufficiently identified. They are broadly covered by the draft notice of appeal. There was no contradictor to be taken by surprise or disadvantaged. Important issues are involved. So I am prepared to deal with the plaintiff's contentions.[15]

The objects of the Act and the plaintiff's liberties and wishes

20 Mr Sharp opened his argument by drawing my attention to three decided cases, Moore v Guardianship & Administration Board[16], McDonald v Guardianship & Administration Board[17] and Daynes v Public Advocate.[18] Mr Sharp said that these cases have a dual significance. First, they emphasise the seriousness of an order for guardianship or administration, in view of the impact on the civil liberties of the person concerned. Second, in each case the Court specifically refers to and takes into account the statement of Parliamentary intention contained in s 4(2) of the Act, namely:

"(2) It is the intention of Parliament that the provisions of this Act be interpreted and that every function, power, authority, discretion, jurisdiction and duty conferred or imposed by this Act is to 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; and

(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."

21 Mr Sharp pointed out that, by contrast, VCAT did not mention either the impact of administration on the plaintiff's civil liberties or the provisions of s 4(2) in its reasons for decision in the present case. He placed particular emphasis of the provisions of s 4(2)(c) to the effect that the wishes of a person with a disability should be given effect to wherever possible. He invited me to infer that the Tribunal had overlooked the provisions of s 4(2)(c) and the importance of the impact of administration on civil liberties, and had failed to take these matters into account.

22 During argument I put to Mr Sharp that the mere failure by an administrative tribunal or a court to mention a relevant matter in terms does not necessarily indicate that the tribunal or court has overlooked it.[19] He agreed, but submitted that the inference could properly be drawn in relation to s 4(2) in this case, because, he said, a specific argument had been put to the Tribunal with respect to section 4(2), the Tribunal had purported to list all of the relevant provisions of the statute, and yet it made no mention of s 4(2). He said that there was no other indication, direct or indirect, that the section had been addressed.

23 As a result of further discussion about this point, Mr Sharp was given leave to carry out a survey of recent decisions of the VCAT in the Guardianship List and to report in writing to the Court as to the extent to which s 4(2) was specifically mentioned in reasons for decision. The survey as reported was inconclusive, mainly due to the apparent fewness of comparable, publicly accessible decisions.

24 It is true that VCAT made no mention of s 4(2) in its reasons in the present case despite setting out other relevant provisions. On the other hand, on my reading of the transcript of the hearing before VCAT, neither Mr Sharp nor anyone else referred specifically to s 4(2) at the hearing.

25 However before VCAT Mr Sharp did twice[20] refer to relevant pronouncements by courts and, although he did not mention names or citations, his references were readily to be understood as references to Moore, supra and McDonald, supra[21]. In both of those cases, in turn, there were significant references to s 4(2)(c).[22]

26 More generally, in Moore Gobbo J said[23]:

"Moreover, as is said in the report relied upon by Parliament in framing the legislation and referred to in Hansard, it must be a very rare case that will see an order made against the wishes of a represented person."

27 In McDonald, the Appeal Division said[24]:

"A guardianship order appointing a plenary guardian confers on the guardian in respect of the represented person all the powers and duties which the plenary guardian would have if he or she were a parent and the represented person his or her child: s. 24(1). The authority that may be conferred on an administrator is derived from s. 48 of the Act. It is sufficient to say, without elaboration, that the authority may effectively commit to the administrator total control over the property of the represented person, but the control and its extent may be limited.

It is fair to say that the Board Act provides a charter for administered officiousness. Guardianship and administration orders are calculated to achieve, at the instance of any person at all, a far-reaching deprivation of the freedom of action not only of represented persons but of near relatives of such persons. This is not to deny that there may be cases in which the jurisdiction of the board may be justifiably invoked. The Board Act, however, prescribes very important safeguards against the making of inappropriate guardianship and administration orders."

The Appeal Division then set out the provisions of sub-sections (2) to (5) of s 22 and the corresponding provisions of sub-sections (2) to (4) of s 46, followed by the provisions of s 4(2). Immediately thereafter, the Appeal Division said[25]:

"The tribunal has itself recognised that the appointment of a plenary guardian under the Board Act, since it officially and formally removes the whole of a person's legal rights over person and circumstances, is to be made only as a last resort: Re M. & R. and Guardianship and Administration Board (1988) 2 V.A.R. 213, at pp. 219-21. The appointment of an administrator under the Board Act is also obviously capable of being gravely intrusive upon the rights of a represented person, as the Act itself impliedly recognises. Consideration must be given to the question whether other and less restrictive means than an administration order might meet the needs of the propositus. Moreover, if an administration order is made, the order must be that which is in the circumstances the least restrictive of the freedom of decision and action of the propositus. Plainly enough, the Board Act recognises that administration orders may be designed to vary in their reach and their intrusiveness; and it is expected that any administration order made will be tailored to the circumstances, being privative only to the extent actually required."

28 The principles set out in s 4(2)(c) of the Act and in Moore and McDonald should have been familiar to a Senior Member sitting in the Guardianship List (which is within the "Human Rights Division") of VCAT. I would not readily infer that the Senior Member overlooked them altogether merely because she made no reference to them in her reasons. I note that in McDonald the Appeal Division said of the Guardianship Board[26]:

"It is to be supposed that, in making an order appointing an administrator of P's estate, the board duly considered all the matters to which it was required to have regard before doing so."

29 By contrast, in Moore, Gobbo J considered that there was "weight"[27] and "some substance"[28] in an argument that in the case before his Honour the Guardianship Board "did not heed the direction of Parliament in s 4(2)(c) that the wishes of a person with a disability are wherever possible given effect to." In Qumsieh v Guardianship and Administration Board[29], the Court of Appeal of the Supreme Court of Victoria specifically noted, with obvious approval, that:

"In exercising its powers the Board reminded itself of its obligations, prescribed by s 4 of the Act, to perform its functions so that, inter alia, the best interests of the person with the disability are protected and the wishes of that person are, wherever possible, given effect to."

30 On the other hand, in DH v NS and State Trustees[30], the Court of Appeal rejected, on the facts, a submission that a Deputy President of the AAT had failed to act in accordance with the principles set out in Moore and McDonald.

31 Allegations of the present kind must often be determined as a matter of impression, albeit by reference to the proceedings in question as a whole, including the whole of the decision-maker's reasons[31]. It is not enough to show that the decision-maker's reasons are so expressed as to suggest the possibility that the decision-maker proceeded on a wrong view of the law. The Court is not entitled to interfere with the decision unless it is satisfied that there was, in fact, a vitiating error of law.[32]

32 However, in the present case, it can at least be said that the transcript of the discussion between counsel and the tribunal gives no indication that the Senior Member appreciated the full force of the relevant principles. The same may be said of the Senior Member's oral and written reasons. Given the emphasis placed on these matters by Mr Sharp before her, one would have expected something more.

33 Moreover, the written reasons suggest strongly, and I find, that the Senior Member believed that the person's wishes were relevant only to the choice of administrator, and not to the question whether an administrator should be in place at all. In the fourth paragraph under the heading "The Law", the Senior Member says that in determining whether a person is suitable to act as the administrator of a represented person the Tribunal must take into account the wishes of the proposed represented person, and she cites s 47(2) for that proposition (correctly, as far as it goes). The Senior Member then says nothing more about the plaintiff's wishes until the third last paragraph of the reasons, at which stage she is dealing only with the choice of administrator.

34 Although s 46 does not mention the person's wishes and s 47 does, I consider that s 4(2)(c), like the rest of s 4(2), applies generally, including in relation to the whole of s 46. Section 4(2) is expressed to apply to every function, power, authority, discretion, jurisdiction and duty conferred or imposed by the Act. Section 46 confers a discretionary power (" ... The Tribunal may make an order ...").[33] When Gobbo J said in Moore, supra, that " ... it must be a very rare case that will see an order made against the wishes of a represented person", his Honour was not confining himself to decisions about the choice of administrator. The immediate context was the matter of "need" referred to in s 46(1)(a)(iii).

35 The proposition that s 4(2) is of general operation gains further support from the leading case in the Australian Capital Territory on the corresponding legislation of the Territory. In A v Guardianship and Management of Property Tribunal[34], Miles CJ examined closely the Guardianship and Management of Property Act 1991 (ACT) in a factual context quite similar to that of the present case. The ACT Attorney-General had said, in introducing the Bill for the ACT Act, that the Victorian Act had served as a model for the Bill.[35] There are in fact some important differences between the two Acts[36] but there are also numerous similarities. In particular, the ACT Act has an "objects" or "principles" section, s 3, which corresponds to a significant extent with s 4(2) of the Victorian Act. It provides that a person exercising power or performing a duty or function under the Act in relation to another person shall observe certain principles, of which the first stated is "that the person's views and wishes, so far as they can be ascertained, should receive paramount consideration". Miles CJ commented that s 3 "states that paramount consideration is the person's own views and wishes and not what the Tribunal or anyone else thinks is in the person's best interests or for the person's welfare".[37] On the other hand, I acknowledge that the Victorian provision does not expressly state that the person's freedom and wishes shall be "paramount" over the person's "best interests" (to which s 4(2) also refers).

36 One other important difference between the ACT Act and the Victorian Act is that the former imposes a differently expressed test for "management of property orders" (the ACT's equivalent of administration orders) as compared with guardianship orders. The test for management of property orders requires legal incompetence to enter into transactions relating to the property, whereas the test for guardianship orders requires that the person be "unable ... to make reasonable judgments about matters relating to his or her heath or welfare". In Victoria the "unable to make reasonable judgments" test is used for both purposes.[38] In A, Miles CJ held that the legal incompetence test was not merely different in form but stricter in substance, ie that it is more difficult for the authorities to satisfy. However, this had not been recognised by the ACT Guardianship Tribunal below. It had made a management of property order in relation to A merely on the basis that he was found to be "unable to make reasonable judgments about matters relating to his financial affairs"[39] and had treated this as the equivalent of legal incompetence. Miles CJ held that it had thereby erred in law. I will return to this aspect of A in later parts of this judgment, but for present purposes, despite the significant differences between the ACT Act and the Victorian Act, it is well worth noting the importance that Miles CJ attached to s 3 in explaining his interpretation and application of the other provisions of the ACT Act generally and of the provisions relating to the making of management of property orders in particular[40]:

"It may not be easy to understand how or why A's views and wishes as to the management of his property should prevail over the opinion of the Tribunal as to how his welfare and interests should be protected when his condition is such that he continues to be subject to guardianship under the Guardianship Act and to a mental health order under the Mental Health Act, and when the Tribunal considers him incapable of making reasonable decisions about his financial affairs. But that is exactly the outcome which s 3 of the Guardianship Act tends to encourage and to bring about. It discourages the notion that simply because a person is affected by some mental disorder, he or she should be deprived of the practical means of enjoying his or her property. It dispels the notion that mental illness necessarily means the loss of the right to use or misuse one's own property. It emphasises the distinction between a person who needs a guardian for his or her welfare and a person who needs a manager for his or her property, or some of it, because he or she is legally incompetent to enter into a transaction relating to that property. It recognizes the fallacy as pointed out by David Carson in Disability Progress: The Law Commission's proposals on mentally incapacitated adults' decision-making (1993) JSWLF 304:

This person, the reasoning is likely to run, is severely mentally disordered. Therefore it is reasonable to conclude that he or she is incapable."

37 In the present case, the absence of reference to s 4(2) of the Act or to the principles set out in Moore and McDonald, standing alone, may not have demonstrated error of law in VCAT's decision. However, when that absence is combined with my finding that the Senior Member believed that the person's wishes were not relevant to the question whether an administrator should be in place, I am satisfied that error of law is revealed, and that the error vitiates VCAT's decision.

Inability to make reasonable judgments

38 So far as relevant, s 46 of the Act provides:

(a) the person in respect of whom an application for an order appointing an administrator is made-

(ii) 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; and

(iii) is in need of an administrator of her or his estate; and

the Tribunal may make an order appointing an administrator of that person's estate.

(2) In determining whether or not a person is in need of an administrator of her or his estate, the Tribunal must consider-

(a) whether the needs of the person in respect of whom the application is made could be met by other means less restrictive of the person's freedom of decision and action; and

(b) the wishes of the person in respect of whom the application is made, so far as they can be ascertained.

(3) The Tribunal cannot make an order under sub-section (1) unless it is satisfied that the order would be in the best interests of the person in respect of whom the application is made.

(4) Where the Tribunal makes an order appointing an administrator of a person's estate, the order made must be that which is the least restrictive of that person's freedom of decision and action as is possible in the circumstances."

39 The plaintiff contends that the Tribunal misapplied s 46(1)(a)(ii) of the Act by equating reduced capacity or ability to make reasonable judgments with incapacity or inability to do so. On that basis he contends that the evidence on which VCAT relied to find, under s 46(1)(a)(ii) of the Act, that he was "unable[41] to make reasonable judgments in respect of the matters relating to all or any part of [his] estate" did not support that finding.

40 The evidence in question was the detailed report of the neuropsychologist, Dr Vowels[42], dated 24 June 2005 to which reference is made in VCAT's reasons. Mr Sharp submitted that Dr Vowels' report went no higher than to opine that the plaintiff, because of his disability, had reduced capacity to manage his financial affairs. It did not say that he was incapable. It said that he was at increased risk of not being able to make reasonable decisions, not that he was unable to make reasonable decisions. In support of this submission Mr Sharp, quoted the following two paragraphs from the part of Dr Vowels' report which is headed "Conclusion":

"The alterations in memory, attention and speed of information processing are at the moderate level of impairment and can be compensated in part and are 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 does make him more vulnerable than usual)

The executive function alterations of which the impairment in new learning and behavioural regulation are much more concerning and [sic] do not seem to be able to reliably compensated and managed in all situations. His compromised planning and organisation is also a serious disability which needs to be considered as a source of increased vulnerability and possible manipulation by unscrupulous others as well as likely to be the source of incompetence to take responsibility for his financial and legal affairs."

41 It is true that Dr Vowels' report did not say in terms that the plaintiff had absolutely no capacity to manage his financial affairs. Nor, I think, did the author mean to indicate this. On the other hand, I consider that the report went beyond saying that the plaintiff was at risk of not being able to make reasonable decisions. Rather, it expressed a definite opinion that, to an extent, perhaps a large extent, his ability to make reasonable (financial and legal) decisions was compromised (or reduced) by his disability.[43] I would read the quoted paragraphs in that way, and I would see confirmation of this in certain other statements in the report, such as the following:

• "New Learning is quite impaired in a pattern strongly suggestive of organic impairment of the executive function. ...". (page 5)

• "Regulation of Behaviour is under poor voluntary control with signs of reduced monitoring of performance to identify errors or inappropriate reactions and to inhibit them selectively". (page 5)

• "... his organic impulsivity is a major disability". (page 6)

• "These results suggest that [XYZ] is showing evidence of moderate and significant reduction in several areas of cognitive function which is likely to be indicative of organic impairment of the right side of his brain and consistent with his severe CVA suffered in January 2002". (page 7)

• "I would be concerned that [his unrealistic insight and his failure to recognise the implications of some of his difficulties] make him more vulnerable in everyday situations". (page 7).

42 Mr Sharp's submission assumes that the standard set by s 46(1)(a)(ii) is one of total and complete "incapacity", or something similar. The assumption is not justified. Whatever the standard may be, it is not that high.[44] However, it is not clear what VCAT itself thought it was. During the argument, the Senior Member said at one stage[45] that she was required to determine whether the plaintiff's disability "affects" his capacity to make reasonable decisions about his legal and financial affairs. In her written reasons[46], she observed that the plaintiff did not accept that he had "diminished" capacity to make reasonable decisions etc. These references may indicate that the Tribunal set the bar too low. In any event, arguably, it was incumbent on the Tribunal to address the issue of the statutory standard in its reasons, particularly in view of the fact that Mr Sharp repeatedly submitted that the standard was very strict. The Tribunal did not do so. A failure by a Tribunal to address in its reasons a submission which is worthy of consideration and is seriously advanced to the Tribunal may in itself amount to an error of law for the purpose of a provision like s 148 of the VCAT Act.[47]

43 However that may be, I consider that there was at least one clear error of law in VCAT's approach to the application of s 46(1)(a)(ii). It falls under the general rubric of the plaintiff's second contention, although it was not actually articulated by Mr Sharp. Indeed, in fairness to the Senior Member, counsel's submissions to her, in this particular respect, may have contributed to the problem.[48] The error lay in failing to distinguish properly between the concept of being "unable to make reasonable judgments etc" referred to in s 46(1)(a)(ii) and the concept of being "in need of an administrator" in s 46(1)(a)(iii). I will develop this in a moment. I think that, even though Mr Sharp did not articulate the particular point, I should give effect to my view that VCAT erred in law in this regard. This is not ordinary civil litigation. It involves an attempt by a represented person to escape the constraints of statutory administration. It affects his civil liberties and his dignity.[49] It is in the area of public law rather than private law. The outcome of the case necessarily involves interests wider than the individual interest of the plaintiff. In all of these respects, the case is comparable with Nguyen v Minister for Immigration, Local Government and Ethnic Affairs[50] in which, for similar reasons, Merkel J decided to grant leave to certain asylum seekers to raise arguments which the Court, rather than they or their counsel, had identified. It might be added that the proceeding before VCAT was essentially inquisitorial, rather than adversarial, in nature; and that, unlike in Nguyen, no party appeared before me to oppose the relief sought by the plaintiff.

44 Section 46(1)(a) of the Act imposes three separate and cumulative requirements. The question whether the person is "in need of an administrator" does not arise unless and until VCAT is duly satisfied, first, that she or he is a "person with a disability" (as defined) and, second, that she or he is "unable to make reasonable judgments etc by reason of the disability". Generally speaking, the question of "need" will be answered primarily by reference to the availability or otherwise of alternative arrangements outside administration (such as family support) to compensate for or deal with the person's identified "inability".

45 However, VCAT conflated and confused those three requirements during discussions with the parties[51] and, more importantly, in its written reasons. This is evident from the second last paragraph within the section headed "The Law", especially the first two sentences, which read:

"Mr Sharp submitted that the Tribunal should be persuaded by the evidence of [XYZ's] lucidity and comprehension that he was capable of managing his own finances. It is certainly true that the Tribunal must be satisfied that a person needs an administrator (section 46(3)(c)) [sic] before appointing one.

The confusion is also apparent from the first and second paragraph under "Findings". The first paragraph purports to deal with both disability and "inability". However it is restricted to findings on the professionals' evidence. It makes no reference at all to the lay evidence going to the question whether the plaintiff was "unable to make reasonable judgments etc". The second paragraph purports to deal with the question whether the plaintiff was "in need" of an administrator. However it refers only to matters which in truth go exclusively or at least primarily to "inability" rather than "need". Those matters should have been considered under s 46(1)(a)(ii).

46 My concern is not merely with "looseness in the language" or "unhappy phrasing" of VCAT's reasons.[52] VCAT was required to consider the evidence that went to "inability" (including the lay evidence) separately, and to make distinct findings of fact about it.[53] It did not do so. This might have made a difference. Had VCAT appreciated its true task, it might have evaluated the lay evidence differently. Indeed it might have determined that it needed more lay evidence. The error was of a vitiating kind. Further, it links up with the plaintiff's third main contention, to which I now turn.

VCAT's consideration of the evidence

47 The plaintiff's third contention is that VCAT failed to give adequate or proper consideration to all of the evidence. More particularly, the plaintiff says that VCAT placed undue reliance on the neuropsychological report of Dr Vowels and gave inadequate attention to the lay evidence. Submissions of that kind usually get short shrift in appeals confined to questions of law. But in the present case they have merit as complaints of error of law.

48 Before VCAT, Mr Sharp submitted repeatedly[54] that a neuropsychological assessment could only be a part (and a small part at that) of a full and proper assessment by VCAT of real life capacity or ability. The Senior Member apparently disagreed. Within minutes of the plaintiff beginning to give evidence, she stopped the examination in chief to say that she was not sure that it was relevant to hear the plaintiff's life story.[55] Mr Sharp responded that the evidence was relevant to show that the plaintiff was perfectly lucid and perfectly capable of looking after his own affairs. The Senior Member replied[56]:

"Mr Sharp, he appears pretty lucid to me, but I'm not a neuropsychologist and I'm not testing [XYZ]."

Shortly afterwards, she appeared to accept a submission from Mr Papaleo that Dr Vowels' assessment was the only piece of evidence which was "remotely persuasive" and which ought to be taken into account by the Tribunal[57], although she added that hearing from the plaintiff as to how he managed his legal and financial affairs might assist her on the issue of need (only).[58] Mr Sharp contested this strongly. The Senior Member responded[59]:

"I accept that my hearing from [XYZ] is going to be relevant to the issue of need but because disability and effect on capacity are matters for expert opinion I don't believe that I am going to be able to decide, after hearing from [XYZ], that Dr Vowels is wrong."

Mr Sharp protested again, and the Tribunal said[60]:

"All right. Well I'm not going to insist on that. I mean, if you've really got evidence that you want me to hear that you think goes to the question of capacity I'll listen to it, but I don't want to be here for too long listening to [XYZ] tell his life story because it's not going to help me."

49 After hearing more evidence and more debate, the Tribunal said[61]:

"While I agree that it's not absolutely cut and dry that the only evidence I can have about capacity is expert evidence, all the same, any evidence about capacity is going to have to deal with the evidence of Dr Vowels. I'll read you the bit of Dr Vowels' report that I think is really pretty much conclusive on the issue of (indistinct)."[62]

50 At a later stage[63], Mr Sharp sought to rely on the medical and psychological reports that had been filed on behalf of his client. The Senior Member was dismissive of them. She said that comparing Mr Greco's report with Dr Vowels' report was like comparing apples and oranges. Mr Sharp replied that that "must be based on judicial notice because there is no evidence ... before the tribunal ... of what a neuropsychologist is able to do or is able to tell the tribunal ...". The Senior Member responded, in effect, that the neuropsychologist's report spoke for itself. Earlier[64], the Senior Member, after observing that she was a lawyer and not a doctor had said: "but I do sit in a number of lists where I hear evidence about competence for one reason or another and I am aware of the distinction between a neuropsychological test and a psychological test".

51 Turning to the Tribunal's written reasons, they confirm that the Tribunal had a strong pre-disposition to accept and act on neuropsychological assessments to the exclusion of other evidence. Under the heading "The Law" the Tribunal said:

"Expert reports of disability and its effect on capacity can not however be ignored. The Tribunal should not substitute its own inexpert views on these matters for expert opinion.

In the present case, Mr Sharp submitted that the Tribunal should form its own view of the represented person's capacity and that the view should differ from the expert opinion of Dr Vowels. I was not persuaded I should substitute my own view, although in any case to my non-medical eye [XYZ] appeared to lack the capacity to make reasonable decisions about his finances."

I acknowledge that, under "Findings", the Tribunal gave more specific reasons for accepting the particular report of Dr Vowels over the other expert evidence, essentially adopting the criticisms of Mr Greco's report made in Dr Vowels' letter of 26 July 2005.

52 In judicial review, generally speaking, the Court cannot interfere with a tribunal's assessment of the weight to be given to particular pieces of (relevant) evidence. However the present case involves more than a debatable allocation of weight as between pieces of evidence.

53 To adapt the language used by the Appeal Division in McDonald[65], VCAT was obliged to "consider for itself, against the objections raised by [the plaintiff], whether on the material before the tribunal the decision [in question] was the 'correct or preferable one'."[66] Just as, under the review regime then in place, the AAT had not been entitled to regard the decision of the Guardianship and Administration Board under review as "presumptively correct"[67], VCAT was not, in my opinion, entitled to regard any neuropsychological report as presumptively correct, whereas I think it did so in the case of Dr Vowels' report.

54 Although VCAT was not bound by the rules of evidence, it was under a statutory obligation to state its reasons for decision and its findings of fact. However, VCAT effectively ignored Mr Sharp's submission that there was no evidence to show that neuropsychological reports are accurate instruments for measuring real life incapacity. If VCAT was acting on information or evidence to that effect, it should have referred to the same in its reasons. There was nothing of substance to this effect in Dr Vowels' letter of 26 July 2005. Although the Senior Member had referred during the hearing to her experience in other cases, I am not aware of any general understanding that neuropsychological assessments are so accurate as instruments for measuring the capacity of a person to handle property and financial affairs that any other kind of evidence tending to the contrary can be discounted, much less ignored. An entire chapter of Freckleton and Selby's loose leaf service, "Expert Evidence"[68] is dedicated to Forensic Neuropsychology. The learned author asserts that neuropsychology has significant relevant limitations. He explains that neuropsychology only measures a person's deficit at the level of impairment, as distinct from what he describes as "disability" and "handicap". He says[69]:

"Because test data can only provide at best a moderate prediction of the individual's real world functioning, it is unable reliably to address the functional deficits, or disabilities, which may prevent a person from performing certain functions in society."

55 I agree with Mr Sharp that VCAT effectively abdicated its role as decision-maker in favour of Dr Vowels.[70] This went beyond legitimate use by VCAT of expert evidence and involved an inappropriate delegation of the "ultimate issue" to the expert.[71] VCAT treated Dr Vowels' report as being virtually conclusive of all the issues presented by the plaintiff's application, including, in particular, capacity. This is confirmed by VCAT's omission to make any findings of fact on capacity by reference to the lay evidence. Indeed, VCAT failed to make any firm findings of fact at all by reference to the lay evidence. Rather it made passing observations of an indefinite kind, such as the statement that to the Senior Member's non-medical eye the plaintiff "appeared" to lack the capacity to make reasonable decisions about his finances, and the statements that he "appeared" to be confused about financial issues and that he "appeared" to have an unrealistic view of financial issues. I appreciate that the Guardianship List of VCAT may be very busy[72], this was not a routine case. It was hotly contested, and the issues called for careful consideration and decision.

56 In my view, it was incumbent on the Tribunal to make definite findings of fact about the plaintiff's actual past and present conduct of his property and financial affairs so far as reasonably possible.[73] The Tribunal should have used such findings, together with its assessment of the medical evidence, and of the plaintiff's presentation and of all other readily available relevant material, to make predictions, as far as reasonably possible, about the plaintiff's future with and without an administrator. This may have required the making of further inquiries.[74] One obvious line of inquiry was to test the plaintiff's proposal to purchase a property in North-West Tasmania. The Tribunal could have invited the plaintiff to supply details to enable the Tribunal to obtain evidence directly from the real estate agent. Had he refused, inferences might have been drawn accordingly. The Tribunal needed to determine exactly what likely challenges and risks lay ahead of the plaintiff. If incapacity were found, did it extend to all or only some parts of the plaintiff's affairs? Should any administration order be moulded accordingly?

57 It seems that, appropriately, findings which take into account lay evidence are usually made in comparable cases, even where neuropsychological evidence is also available.[75] Indeed it is not unknown in cases relating to mental capacity for a court to prefer indications in favour of capacity based on lay evidence over neuropsychological or medical evidence tending to the contrary.[76]

58 The privileging of the neuropsychological evidence in the present case may be thought to bear out a warning included in the article by David Carson to which Miles CJ referred in A, supra.[77] The article was written in 1993. It commented on the then proposals of the Law Commission in England and Wales concerning mentally incapacitated adults' decision-making. Carson was critical of the proposal to include a threshold test of (medical) disability. He feared that this would lead to unwarranted discrimination against people suffering from mental disorders. Further, and more pertinently for present purposes, he predicted that it would lead to inappropriate decision-making, and paternalism, because it would bring about the undue involvement of medical professionals in non-medical issues. He said[78]:

"It will be perfectly human, and understandable, when courts and tribunals take advantage of expert witnesses to learn about how the disabled person has problems which could so easily be sorted out by the court or tribunal authorising someone to tidy up the individual's life. It is a recipe for paternalism. It is very unfair to insist, as a formal rule, that expert witnesses must only give evidence on their specialist area and then expect them to fudge that rule in order to help the legal system out with a difficult client group. It is unfair to criticise psychiatrists and other clinicians for 'medicalising' issues and then devise a scheme which encourages them to do it again."

59 I am satisfied that the plaintiff's third contention has been made out and that it reveals error of law on the part of VCAT, comparable with the error identified by the Appeal Division in McDonald[79], in that VCAT misunderstood its fact-finding task and failed to complete it properly.

Procedurally unfair use of evidence

60 The plaintiff's fourth contention is that the hearing involved procedural unfairness. In particular, the plaintiff says that from time to time during the hearing he raised claims or queries about assets he believed he owned or had owned; that Mr Papaleo criticised those claims or queries; that the Tribunal repeatedly indicated a disinclination to inquire into the matters raised on the ground of irrelevance; that this prevented the plaintiff from putting forward all he might have put forward on the matters; but that, nevertheless, the Tribunal used the raising of the matters against him as showing that he was unrealistic about financial affairs.

61 It is unnecessary for me to go through the instances relied on by the plaintiff or to make findings on them under this heading of complaint. I have already held that the Tribunal did not deal appropriately with the evidence adduced by the plaintiff (including his own oral evidence) in that it failed to take the plaintiff's evidence into account properly and failed to make definite findings of fact on the issues to which that evidence was relevant.

62 The case will need to be reheard in any event and there is no need for me to say any more about the plaintiff's fourth contention.

Need for remittal and concluding observations

63 As indicated earlier, I do not accept Mr Sharp's submission that the Court should make a decision finally terminating the administration in substitution for VCAT's decision. Notwithstanding that s 148(7) of the VCAT Act empowers the Court to make various kinds of order on an appeal including "(b) an order that the Tribunal could have made in the proceeding", the proceeding is by way of judicial review rather than by way of appeal in the usual sense. Section 148:

"...is concerned with the invocation of judicial power to examine for legal error what has been done in an administrative tribunal."[80]

64 Generally speaking, it would not be appropriate to substitute a new decision for VCAT's decision unless it were the only decision open to VCAT as a matter of law. That is not this case. The material that was before VCAT was certainly not all one way. Parliament has reposed in VCAT, not this Court, the responsibility for assessing the relevant material and for making the correct or preferable decision on the facts and the merits.

65 There is no doubt that the plaintiff is suffering from at least some residual disability as a result of his stroke. In addition to Dr Vowels' report, there was material before VCAT which could legitimately be thought to raise real questions about the plaintiff's ability to make reasonable judgments about his estate. The Tribunal referred to some of it in its reasons, and there was considerably more in the reasons of the Member who had made the decision of 27 July 2005. There were matters contained in reports of the administrator and of other parties referred to in the reasons of 27 July 2005 that suggested that the plaintiff may have been quite seriously incapacitated in relation to managing his own financial affairs and quite vulnerable to financial abuse by others. And, as I pointed out to Mr Sharp during the hearing, there was even material of serious concern in the annexure to Mr Greco's report, not noticed by VCAT. The whole file was potentially available to VCAT for the rehearing. On remittal, VCAT will need to update this material and consider it all afresh.[81]

66 On the other hand, VCAT's reasoning in this case shows that there may be a need for VCAT to re-examine the exercise of its guardianship and administration jurisdiction generally to determine whether the balance has swung too far in favour of paternalism or protection as against individual autonomy.[82] In that regard, VCAT may need to remind itself of the philosophy of the Act as expressed in Moore and McDonald and as indicated by s 4(2) of the Act.[83]

67 More particularly, on remittal, VCAT may need to consider carefully what kind and what degree of "inability" is covered by s 46(1)(a)(ii). I would offer the following additional observations on this important issue.

68 It seems clear that an administration order may be made even if the person's inability extends only to a part of the person's estate. In this respect, at least, the provision is consistent with its predecessor, namely s 28 of the Public Trustee Act 1958 (now repealed).[84]

69 In Re Macgregor[85], a case decided only about a year before the transition to the current legislative regime, Starke J held that the test under s 28 of the Public Trustee Act 1958, which referred to a person being "incapable of managing his affairs", was subjective rather than objective. It was necessary to measure the person's ability against his actual property and affairs however extensive, complex or demanding they may be, rather than against an objective standard such as "the ordinary routine affairs of man". The latter, objective test had been adopted in New South Wales in respect of the equivalent New South Wales provision: see PY v RJS.[86]

70 Thus, in this respect, the Victorian provision was held to be applicable to a broader range of persons than the equivalent New South Wales provision. In New South Wales, where the relevant provision has not been repealed, the difference of approach is still maintained: see the detailed discussion of the different approaches in Re GHI (a protected person)[87].

71 In Moore v Guardianship and Administration Board[88], Gobbo J said:

"It cannot be said that there was no evidence of disability. The same conclusion applies to the second element, namely ability to make reasonable judgments. Here again it needs to be noted that the legislation is in very wide terms and now appears to attract power even where the inability relates only to a part of the person's estate."

With respect to his Honour, Re Macgregor indicates that this feature was not new for Victoria. Gobbo J went on immediately to refer to the requirement to show that the person is in "need" of an administrator, and his Honour saw much strictness in this requirement[89], as I have already mentioned. And it may be that in many cases that is where the emphasis should remain. However it seems to me to be desirable for VCAT to give further consideration to the meaning of the separate "second element", and in particular to consider to what extent the person must be "unable to make reasonable judgments" in respect of the relevant subject matter, and, indeed, to consider what may amount to a "reasonable" judgment.[90]

72 In that regard, assistance may be gained from the comprehensive report entitled "Report of the Minister's Committee on Rights and Protective Legislation for Intellectually Handicapped Persons" dated December 1982. This is the report which, as Gobbo J noted in Moore[91], was relied upon by Parliament in framing the Victorian legislation and which was referred to in Hansard. I would draw attention in particular to paragraphs 14.2 (on page 74) and especially to Section D "Towards a Generic Scheme" (on pages 95-96). The latter includes the following:

"A determination that a person is incapable of managing his financial affairs would be influenced by observation of his financial dealings over, say, the previous 12 months. This does not mean, of course, that the bad investor or unsuccessful entrepreneur should lose control of his estate, nor should the person who simply lacks an interest in money matters be the subject of an estate administration order. It is the person whose capacity is lacking or is severely impaired who may be in need of this type of protection." (My emphasis)

73 However, these are matters of difficult and sensitive judgment, which in Victoria are for VCAT, not the courts, to decide, subject only to the limits of the law.[92]

Order

74 For the reasons given, it is necessary to allow this appeal to the extent of requiring VCAT to hear and determine again, according to law, the plaintiff's application for a rehearing of the reassessment of the administration order.

75 There is a complication about the appropriate form of order. VCAT's order, among other things, revoked the prior order made on 27 July 2005. That order had simply provided that "the administration order remains in effect". The "administration order" referred to had applied to FTL Judge & Papaleo Pty Ltd, not State Trustees Limited. The latter company was appointed administrator only under the order of the Senior Member presently under challenge.

76 It would be inappropriate simply to set aside the whole of the Senior Member's order made on 27 October 2005, because that would involve the setting aside of the revocation of the prior order and the setting aside of the appointment of State Trustees Limited. It would effectively restore FTL Judge & Papaleo Pty Ltd as administrator, a result no-one seeks.

77 It is necessary that the appointment of State Trustees Limited should remain in force pending the rehearing and redetermination of the plaintiff's application for reassessment.

78 The order of VCAT under challenge includes a declaration as follows:

"The Tribunal is satisfied that the represented person has a disability; is unable by reason of that disability to make reasonable judgments about their estate; and needs an administrator."

79 It seems to me that the necessary result can be achieved by the Court setting aside (under s 148(7)(b) and/or (d) of the VCAT Act) the order of VCAT insofar as it included that declaration, and by ordering (under s 148(7)(c) of the VCAT Act) that the proceeding be remitted to be heard and decided again, with further evidence to be permitted.

80 Because of the firm views expressed by the Senior Member during the hearing and in her reasons for decision, it will seem fairer to the plaintiff if VCAT be differently constituted for the remitted hearing, and there should be a direction accordingly.[93]

81 There appears to be no occasion to make any order for costs.

82 Accordingly, subject to any submissions which counsel may make as to the appropriate form of the orders, I would make orders as follows:

1. The plaintiff have leave under s 148(1) of the Victorian Civil and Administrative Tribunal Act 1998 to appeal from the order of the Victorian Civil and Administrative Tribunal made on 27 October 2005 in proceeding no. G 35478/09.

2. The appeal be allowed.

3. The said order of the Tribunal be set aside insofar as it included a declaration as follows:

"The Tribunal is satisfied that the represented person has a disability; is unable by reason of that disability to make reasonable judgments about their estate; and needs an administrator."

4. The proceeding be remitted to the Tribunal, differently constituted, to be heard and decided again according to law, with further evidence to be permitted.

5. There be no order as to the costs of the proceeding in this Court.

[1] The plaintiff is referred to in this judgment by letters rather than by name in accordance with ss 18(1)(c) and 19(b) of the Supreme Court Act 1958 and Schedule 1, Part 9, s 37 of the Victorian Civil and Administrative Tribunal Act 1998 ("the VCAT Act"). The latter prohibits the publication by any person of any report of a proceeding under the Guardianship and Administration Act 1986 that might identify a party to the proceeding.

[2] Compare McDonald v Guardianship and Administration Board [1993] VicRp 36; [1993] 1 VR 521 at 533; Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 197 ALR 389 (High Court) at [27] and [32] per Gummow and Callinan JJ.

[3] For reasons explained below.

[4] See McDonald v Guardianship and Administration Board [1993] VicRp 36; [1993] 1 VR 521 at 534; Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 45 per Mason J; Re CMD (Dependent Adult), 2001 ABQB 883 (Court of Queen's Bench of Alberta, Canada, Lee J, 19 October 2001 at [109].

[5] See ss 15 and 16 of the Act and clauses 33 and 35 of Schedule 1 to the VCAT Act; PRA v MA and VCAT [2004] VSCA 20; (2004) 21 VAR 16 at [45].

[6] The facts stated in this section are taken mainly from the Member's reasons for the decision of 27 July 2005, a copy of which was put in evidence before me. Those reasons were referred to in passing at the hearing of the proceeding at VCAT under challenge. See the transcript thereof, page 7.

[7] Compare Daynes v Public Advocate [2005] VSC 485 at [10]- [12]; A v Guardianship and Management of Property Tribunal [1999] ACTSC 77 at [35].

[8] I note from the evidence that an officer of the Public Advocate, a Mr Hoysted, obtained and provided to VCAT the neuropsychological report which has assumed such importance in this matter (see further below).

[9] See Custom Credit Corp Ltd v Lupi [1992] VicRp 8; [1992] 1 VR 99 of 112; Dorf Industries Pty Ltd v Toose (1994) 127 ALR 654 at 671; Nolan v Administrative Appeals Tribunal (1997) 47 ALD 682 at 687; but see and compare Francis-Wright v VCAT [2001] VSC 35; (2001) 17 VAR 306 at 307 (per Gillard J); Attorney-General (Vic) v The Warehouse Group (Australia) Pty Ltd [2002] VSCA 76; (2002) 19 VAR 111 at [21]; Kyrou and Pizer, Victorian Administrative Law at [V5102]; E. Campbell, "Role of Respondents to Applications for Judicial Review" (1998) 6 A J Admin L 5; R. Smith, "Australian Guardianship and Financial Management Boards and Tribunals: Are they Fully Accountable in their Decision-making?" (1995) 3 A J Admin L 23 at 28.

[10] See Secretary of Department of Premier & Cabinet v Hulls [1999] VSCA 117; [1999] 3 VR 331 at 335-337; DH v NS & Ors, Supreme Court of Victoria, Court of Appeal, (Batt and Vincent JJA), 29 April 2005 at [4]-[5]; DH v NS & State Trustees Limited & Ors, Supreme Court of Victoria, Court of Appeal (Chernov JA and Byrne AJA), 10 June 2005 at [4].

[11] See DH v NS & State Trustees Limited & Ors, supra, at [4].

[12] Ibid.

[13] See s 60A(6)(d). Compare the comments of Smith J in Daynes v Public Advocate [2005] VSC 485 at [43]- [44].

[14] See Kyrou and Pizer, Victorian Administrative Law, para [V5102/1] and cases there cited. See also and compare Williams, Civil Procedure Victoria, para [I 58.06.100] and cases there cited; Comcare & Etheridge [2006] FCAFC 27 at [11]- [31].

[15] Compare McDonald v Guardianship and Administration Board [1993] VicRp 36; [1993] 1 VR 521 at 527.

[16] [1990] VicRp 80; [1990] VR 902.

[17] [1993] VicRp 36; [1993] 1 VR 521.

[18] [2005] VSC 485.

[19] cf DH v NS & State Trustees Limited, supra, at [5]-[7]; Kentucky Fried Chicken Pty Ltd v Gantidis (1979) 140 CLR 657 at 679-680 per Barwick CJ; B. Marsh Nominees Pty Ltd v City of Moonee Valley [2004] VSC 237 at [24]- [25].

[20] Transcript pp 10 and 39.

[21] At the date of the hearing before VCAT (27 October 2005) Daynes, supra, had not yet been handed down.

[22] In Moore[1990] VicRp 80; , [1990] VR 902 at 916; in McDonald[1993] VicRp 36; , [1993] 1 VR 521 at 531.

[23] [1990] VicRp 80; [1990] VR 902 at 917.

[24] [1993] VicRp 36; [1993] 1 VR 521 at 530.

[25] [1993] VicRp 36; [1993] 1 VR 521 at 531-532.

[26] [1993] VicRp 36; [1993] 1 VR 521 at 532. It is not clear whether, in making this observation, the Appeal Division had had the benefit of seeing the Guardianship Board's statement of reasons: compare at 523. The Guardianship Board's decision was not directly in issue before the Appeal Division. Rather, the challenge related to the AAT's decision (on review of the Board's decision).

[27] [1990] VicRp 80; [1990] VR 902 at 916.

[28] [1990] VicRp 80; [1990] VR 902 at 917.

[29] [1998] VSCA 45 at [6].

[30] Supreme Court of Victoria, Court of Appeal (Chernov JA and Byrne AJA), 10 June 2005 at [5]-[7].

[31] Kentucky Fried Chicken Pty Ltd v Gantidis (1979) 140 CLR 657 at 678-680 per Barwick CJ; Body Corporate Strata Plan No 4166 v Stirling Properties Ltd (No 2) [1984] VicRp 73; [1984] VR 903 at 911-916 per Ormiston J; Eikin v Housing Guarantee Fund Ltd [2001] VSC 23; (2001) 17 VAR 324 at 335-337 per Eames J; Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 346 [69]; Re MIMIA; Ex Parte Palme (2003) 206 CLR 212 at 224 [41]; B. Marsh Nominees Pty Ltd v City of Moonee Valley [2004] VSC 237 at [24]- [25].

[32] Portland Properties Pty Ltd v Melbourne and Metropolitan Board of Works (1971) 38 LGRA 6 at 18; B. Marsh Nominees Pty Ltd v City of Moonee Valley [2004] VSC 237 at 29.

[33] Compare Public Advocate v RCS (Guardianship) [2004] VCAT 1880 (Justice Stuart Morris, President) at [7].

[34] [1999] ACTSC 77.

[35] [1999] ACTSC 77 at [55]. And see Law Reform Commission (Cth), Report No 52 "Guardianship and Management of Property", 1989 at [1.10].

[36] Ibid.

[37] [1999] ACTSC 77 at [57].

[38] The Act, s 22 and s 46 respectively. Compare Law Reform Commission (Cth), op. cit, at [4.15].

[39] [1999] ACTSC 77 at [31].

[40] [1999] ACTSC 77 at [67].

[41] My emphasis.

[42] Dr Vowels has a Ph.D, but is not medically qualified.

[43] Section 3 of the Act, provides: "Disability in relation to a person, means intellectual impairment, mental disorder, brain injury, physical disability or dementia."

[44] There is real uncertainty about what the true standard involves. A, supra, indicates that the standard is something less than legal incompetence. Although it is unnecessary for me to determine this important and difficult issue, I will say more about it in my concluding observations.

[45] Transcript p 19.

[46] Page 5.

[47] See Dennis Wilcox Pty Ltd v Federal Commissioner of Taxation (1988) 79 ALR 267 at 276; Body Corporate Strata Plan No 4166 v Stirling Properties Ltd (No 2) [1984] VicRp 73; [1984] VR 903 at 912-915; cf State Trustees v Transport Accident Commission [2002] VSC 428 at [37]; Brambles Industries Limited v Nisselle [2005] VSC 82. No argument to this effect was put to me.

[48] For example, at transcript 48, Mr Sharp said: "To say that he has a disability and that disability to a certain extent affects his capacity does not make him incapable of looking after his affairs if one moves to the question of need as necessity". See also at p 36.

[49] Compare Marion's Case [1992] HCA 15; (1992) 175 CLR 218 at 238-239 per Mason CJ, Dawson, Toohey and Gaudron JJ and at 277 per Brennan J.

[50] (1996) 66 FCR 239.

[51] See, eg, at pp 16, 19, 34 and 36 of the transcript.

[52] Compare Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 at 271; Medical Practitioners Board of Victoria v McGoldrick [1999] VSCA 215; (1999) 15 VAR 462 at 469; Eiken v Housing Guarantee Fund Ltd [2001] VSC 23; (2001) 17 VAR 324 at 335-337 per Eames J.

[53] Compare Hamilton v White [2000] VSC 28; (2000) 18 VAR 1 at 7-9 per Balmford J.

[54] See, eg transcript 17, 18, 19, 20, 48 and 49.

[55] Transcript p 12.

[56] Ibid.

[57] Transcript p 15, 16.

[58] Compare para 45 above.

[59] Transcript p 19.

[60] Transcript p 20.

[61] Transcript p 34.

[62] My emphasis. The indistinct word was presumably "capacity".

[63] Transcript pp 48-49.

[64] Transcript p 17.

[65] McDonald v Guardianship and Administration Board [1993] VicRp 36; [1993] 1 VR 521 at 533.

[66] [1993] VicRp 36; [1993] 1 VR 521 at 534.

[67] [1993] VicRp 36; [1993] 1 VR 521 at 534.

[68] Chapter 68, by Simon F Crowe. The chapter appears to have been written in the year 2000 and the publishers have apparently not seen any need to update it.

[69] Para [68.1360].

[70] Compare Mok v Minister for Immigration, Local Government and Ethnic Affairs (No 1) [1993] FCA 545; (1993) 47 FCR 1 at 75-79. This aspect was not considered on the appeal: see Minister for Immigration, Local Government and Ethnic Affairs v Mok (1994) 55 FCR 375 at 409.

[71] See Re Proctor and Commissioner of Taxation [2005] AATA 389; (2005) 87 ALD 247 at 249-250; compare Re Firth and Minister for Capital Territory (1979) 2 ALD 183 at 198; Rodriguez v Telstra Corporation Ltd [2002] FCA 30; (2002) 66 ALD 579 at 586 [26]. See also Minister for Immigration and Multicultural and Indigenous Affairs v SGLB [2004] HCA 32; (2004) 78 ALD 224 at 233 [41] per Gummow and Hayne JJ; compare at 250 [90] per Kirby J (dissenting). In relation to these issues as they affect particularly courts as distinct from tribunals, see Transport Publishing Co Pty Ltd v The Literature Board of Review [1956] HCA 73; (1956) 99 CLR 111 at 119; Brodie v Singleton Shire Council [2001] HCA 29; (2001) 206 CLR 512 at 639 [355] per Callinan J; The Hon Mr Justice Glass, Expert Evidence (1987) 3 Aust Bar Review 43; Freckleton and Selby, Expert Evidence, Chapter 10, "The ultimate issue rule".

[72] VCAT Annual Report 2005-2006 at 26-27.

[73] Compare Hamilton v White [2000] VSC 28; (2000) 18 VAR 1 at 7-9 per Balmford J.

[74] See Aronson, Dyer and Groves, Judicial Review of Administrative Action, 3rd edition, 2004 at 268-275 and cases there cited, especially Prasad v Minister for Immigration and Ethnic Affairs [1985] FCA 47; (1985) 6 FCR 155.

[75] See, eg, Pardee v Guardianship and Administration Board, Unreported, AATV (Ms N. Megay, Deputy President, 4 December 1996 (1996/23537); Re WM [2005] QCAAT 43 (25 July 2005); Re MT [2005] QGAAT 81 (19 September 2005); Re HK [2005] WASAT 142 (21 June 2005); Re GHI (a protected person) [2005] NSWSC 581 at [130].

[76] See, eg Shorten v Shorten [2001] NSWSC 100 at [118]- [119] (testamentary capacity).

[77] [1999] ACTSC 77 at [67].

[78] David Carson, "Disabling Progress: The Law Commissions Proposals on Mentally Incapacitated Adults' Decision-Making" (1993) JSWFL 304 at 313-314. Compare Law Reform Commission (Cth), op. cit, at 4.8.

[79] [1993] VicRp 36; [1993] 1 VR 521 at 533-534. See also Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 197 ALR 389 at [27], [32] per Gummow and Callinan JJ.

[80] The Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue [2001] HCA 49; (2001) 207 CLR 72 at [15].

[81] See footnote 4 above.

[82] See Law Reform Commission (Cth), op. cit at pages 5-7; A v Guardianship and Management of Property Tribunal [1999] ACTSC 77, esp at [45], [55]-[67]; cf Mr J Billings, Deputy President, Guardianship List, VCAT, "Protecting the Vulnerable - The Role of VCAT's Guardianship List and the Role of Lawyers", a paper delivered on 4 October 2005 to a conference of the Law Institute of Victoria; Daynes v Public Advocate [2005] VSC 485 at [34].

[83] See also Report of the Minister's Committee on Rights and Protective Legislation for Intellectually Handicapped Persons, December 1982 esp at pages 18, 25-27, 42-46, 69-70, 74-75, 81-86, 95-96; Public Trustee v Blackwood [1998] TASSC 130 at pages 7 and 8 of 11 of Austlii print.

[84] The Public Trustee Act 1958 was repealed in 1987 by legislation cognate with the Act: see Act No 55 of 1987.

[85] [1985] VicRp 85; [1985] VR 861.

[86] [1982] 2 NSWLR 700.

[87] [2005] NSWSC 581 (27 June 2005) at [4]-[21]. See also Brown v Trustee in Bankruptcy [1999] FCA 1569 (Moore J) at [15]-[16].

[88] [1990] VicRp 80; [1990] VR 902 at 915.

[89] As did the Appeal Division in McDonald, supra. The Appeal Division referred to s 46(1)(a)(ii) ([1993] 1 VR 521 at 530) but made no separate comment about it. However, the Appeal Division's cautionary remarks referred to above may be thought to apply to all aspects of s 46.

[90] As to the fear that unprotected persons will unreasonably dissipate their assets, compare, on the one hand, the present case and Pardee v Guardianship and Administration Board (AAT 1996/23537), (Ms N. Megay, Deputy President) and, on the other hand, A v Guardianship and Management of Property Tribunal [1999] ACTSC 77 at [27], [45] and [67] and Malama Guardianship Admin Order [2001] VCAT 2221 (30 November 2001) (Judge Duggan, Deputy President) at [29]-[30].

[91] [1990] VicRp 80; [1990] VR 902 at 917. See para 24 above.

[92] Compare Marion's Case [1992] HCA 15; (1992) 175 CLR 218 at 238-239 per Mason CJ, Dawson, Toohey and Gaudron JJ and at 272-273, 277 per Brennan J.

[93] See Northern NSW FM Pty Ltd v Australian Broadcasting Tribunal (1990) 26 FCR 39 at 43; Kapoor v Monash University [2001] VSCA 247; (2001) 4 VR 483 at 499; Flaherty v DPP [2003] VSC 234 at [10].