XYZ v State Trustees Ltd [2006] VSC 444

XYZ v State Trustees Ltd [2006] VSC 444 - VSC 2006 case summary — Zoe

[3]

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 -

[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):

[33]

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:

[46]

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]:

[57]

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]:

[75]

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:

[77]

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]:

[88]

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]:

[90]

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]:

[92]

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:

[94]

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:

[104]

[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].

At a glance

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Judgment (104 paragraphs)

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Cases Cited (18)