ZKK v ZKL

NCAT Appeal Panel|2019-01-16

REASONS FOR DECISION

In February 2018, 80-year-old ZKK (the appellant) was admitted to hospital with a chest infection. Up until that time she had been living alone on a property in rural NSW.
Concerned for the appellant's welfare, in May 2018 a hospital social worker applied to the NSW Civil and Administrative Tribunal (NCAT) for guardianship and financial management orders in respect of the appellant (the Application). In the Application, in answer to the question "Why are you asking for a financial management order?" the social worker wrote: The person is at risk of gifting all her assets and discussed a desire to gift her home to her friends. She is at risk of making poor judgements about her future financial needs, including accommodation needs at residential aged care. Has friends appointed as informal decision-makers to whom she has given full financial control. There is a conflict of interest with said parties. She stated a fear of these friends and a desire to keep giving financially to keep them happy. Please note that there is no formal agreement between [the appellant] and her friends.
Following a hearing on 4 June 2018, the Guardianship Division of NCAT dismissed the application for a guardianship order but made a financial management order in respect of the appellant, committing her estate to the management of the NSW Trustee and Guardian.
The appellant now appeals from that decision. She contends that there was no evidence to support the conclusion reached by the Tribunal that she was not capable of managing her affairs and, further, that the Tribunal failed to give adequate reasons for that conclusion.
For the reasons that follow, we have decided to allow the appeal.

Participants in the appeal

The appellant and the social worker were the only parties to participate in the appeal. The NSW Trustee and Guardian did not play an active role in the appeal.

Should the power to extend the time to lodge the appeal be exercised?

The appellant was required to lodge a Notice of Appeal within 28 days from the day on which she was notified of the decision to be appealed or given reasons for that decision, whichever was later: r 25(4)(c) of the Civil and Administrative Tribunal Rules 2014 (NSW) (the NCAT Rules). She claims, and we accept, that she was not given reasons for the decision until 14 August 2018. Therefore, she was required to lodge the appeal by 11 September 2018: rr 13(4)(a) and 25(4)(c) of the NCAT Rules. However, she did not lodge the appeal until 13 November 2018, 28 days out of time.
As the Notice of Appeal was not lodged until after the statutory deadline had passed, the appeal cannot proceed unless the power conferred by s 41 of the NCAT Act to extend the period of time to lodge an appeal is exercised. That power must be exercised judicially having regard to the "guiding principle" that the Tribunal is to facilitate the just, quick and cheap resolution of the real issues in the proceedings: s 36 of the NCAT Act; Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 (Jackson) at [18].
In Jackson, the Appeal Panel identified at [22], factors generally relevant to the exercise of the discretion to extend time to lodge a Notice of Appeal. They include: the length of and reason for the delay; whether the appellant has a fairly arguable case; and the extent of any prejudice that might be suffered by the respondent(s) to the appeal if leave to extend time to lodge a Notice of Appeal is granted.

Explanation for the delay

Three days after being notified of the decision under appeal, the appellant consulted lawyers. The following week, her lawyers lodged an application with the Legal Aid Commission of NSW for a grant of legal aid. On 20 August 2018, she was notified of the Commission's decision to refuse her application for a grant of aid. She appealed that decision and on 29 October 2018 was notified of the decision of the Legal Aid Review Committee to grant aid under s 69 of the Legal Aid Commission Act 1979 (NSW).
The appellant claims that because of her advanced age and poor health she lacked the ability to prepare the necessary documents to commence the appeal. In addition, she claims that she lacked the financial means to fund legal representation. She contends that if she had not received a grant of legal aid she would have been unable to lodge the appeal.

Conclusion

Time limits are imposed to bring finality to the decision-making process. They are an important, but not an absolute, value. Once the threshold questions of whether there is a reasonable explanation for lodging an appeal out of time and whether a respondent will suffer substantial prejudice are resolved, the question must be asked whether or not justice can be done to all parties if the matter proceeds to an appeal having regard to the need to "facilitate the just, quick and cheap resolution of the real issue in the proceedings". It is to that question that the considerations outlined in Jackson are ultimately directed.
The appellant, in our view, has provided an adequate explanation for her failure to lodge the Notice of Appeal in time. Significantly, promptly after being notified of the decision under appeal, she consulted lawyers who in turn lodged an application for a grant of legal aid within a week of receiving instructions.
The social worker concedes that she is not prejudiced by the appeal being lodged out of time and does not oppose the application for an extension of time to lodge the Notice of Appeal.
On its face the appeal, in our view, could not be characterised as lacking merit. Although out of time, it was not out of time by an excessive period. The balance of considerations favours granting an extension of time to lodge the Notice of Appeal.
The time to lodge the Notice of Appeal is extended to 13 November 2018.

Grounds of appeal

The appellant relies on the following grounds of appeal, said to raise questions of law: 1. That the Tribunal failed to give adequate reasons for concluding that the appellant was not capable of managing her affairs and that there was a need for another person to manage her affairs. 2. That there was "no evidence for the finding" made by the Tribunal that the appellant was not capable of managing her affairs. 3. That the Tribunal misapplied s 25G of the Guardianship Act by asking whether the appellant is "capable of managing her affairs" rather than, whether the appellant is "not capable of managing her affairs".

Making a financial management order: statutory framework

The Tribunal's power to make a financial management order is conferred by Division 1 of Part 3A of the Guardianship Act 1987 (NSW) (headed "Making of financial management orders").
That power can only be exercised if, after considering the person's capability to manage his or her own affairs, the Tribunal is satisfied of the three matters listed in paras (a), (b) and (c) of s 25G of the Guardianship Act: 25G GROUNDS FOR MAKING FINANCIAL MANAGEMENT ORDER The Tribunal may make a financial management order in respect of a person only if the Tribunal has considered the person's capability to manage his or her own affairs and is satisfied that: (a) the person is not capable of managing those affairs, and (b) there is a need for another person to manage those affairs on the person's behalf, and (c) it is in the person's best interests that the order be made.
If the Tribunal makes a financial management order in respect of the estate (or part of the estate) of a person, the Tribunal may appoint a suitable person as manager of the estate, or commit management of the estate to the NSW Trustee: s 25M of the Guardianship Act.

Decision under appeal

At a hearing on 4 June 2018, the Tribunal considered the applications made by the social worker for guardianship and financial management orders to be made in respect of the appellant. The appellant, the social worker and the Public Guardian participated in the hearing. In addition, the appellant, the social worker, a mental health case worker with Mission Australia and a manager with Molong HealthOne, gave evidence in the proceedings.
In its reasons for decision, the Tribunal first considered the application for a guardianship order. The Tribunal recorded that the appellant had a long history of depression and post-traumatic stress disorder and, in addition, experienced "severe anxiety attacks when put under pressure to make important decisions". The Tribunal concluded that the appellant was "a person in need of a guardian" within the meaning of s 3(1) of the Guardianship Act, namely a "person who because of a disability is totally or partially incapable of managing his or her person" and therefore the discretion to make a guardianship order could be exercised.
Nonetheless, the Tribunal decided not to exercise that discretion, concluding at [17] that there was no need for a guardian to be appointed as "there are currently no decisions to be made by a formal substitute decision maker that cannot be made by [the appellant] herself". The Tribunal noted at [15] that while the appellant had been reluctant to move to residential care, she had come to accept the opinion expressed by the social worker and the health practitioners involved in her care, that she "requires a level of support and services that she could not receive at home".
Having explained its reasons for not making a guardianship order, the Tribunal proceeded to consider the question of whether to make a financial management order.
Under the heading, "Status of [the appellant's] finances and plans", the Tribunal noted that the appellant's neighbours use her debit card and her PIN to do her shopping, pay her rates and utilities and provide her with receipts: at [21].
The Tribunal went on at [22] to outline the appellant's plans for her home if she were to move to aged care: [The appellant] told us she would like to "give" her house to [the neighbours] because they are "going to get it anyway" under the terms of her Will. She said she would be prepared to accept a nominal payment from them so as not to jeopardise her pension. [The appellant] said she would like her neighbours to live in her house because she does not want strangers living there; her neighbours love her garden and it would mean her pets could stay living in the house. [The appellant] was not sure if [the neighbours] would accept her house on these terms. She said if they did not buy it then she might have to return to live in the house because she would not want to sell it to strangers. When we asked [the appellant] if she could think of other options for financing her aged care accommodation that did not involve selling her house to [the neighbours], she said she could not. [The appellant] acknowledged, "it is an emotional decision… it is what I want and I am stubborn".
The Tribunal then considered whether the preconditions to the exercise of the discretion to making a financial management order were satisfied. The Tribunal referred at [23] to the disclosure made by the appellant that she been financially exploited in the past by a person she had appointed as attorney under an Enduring Power of Attorney, which she revoked in 2015. The Tribunal then went on at [24] to record the concerns expressed by the social worker and others about the neighbours: [The social worker and other health professionals who participated in the hearing] expressed concern [the appellant] has previously placed herself in the position of being financially exploited and may do so again given her desire to please people and reward them for taking care of her. [The social worker] stated [the appellant] had initially been unsure how she could afford to permanently stay in residential care and keep her home. She had wanted to keep her home so her pets could live there and be fed by her neighbours. [The social worker] stated [the appellant] then devised her current plan of either giving or selling her house cheaply to [the neighbours] for a nominal amount. The witnesses also stated [the appellant] had reported at times she was fearful of [the neighbours]. They were concerned that without a financial management order, [the appellant] may be left with insufficient funds to fund her residential aged care accommodation and to provide her with a good quality of life.
The Tribunal referred at [25] to a report prepared by the appellant's GP, dated 2 May 2018, in which he wrote: [The appellant] has been subject to abuse in the past and has severe anxiety attacks when put under any pressure … to make important decisions. She is vulnerable as a result and can be swayed to make decisions by external events and personnel, and although cognitively intact, I believe that her anxiety and depression would be best helped by removing her from day to day decisions regarding her finances.
The Tribunal concluded at [26]: We are not satisfied on the basis of the evidence that [the appellant] is capable of managing her affairs or making financial decisions that are in her best interests. She has been financially exploited in the past and exercised poor judgement in trusting others with her financial affairs. We were also concerned [the appellant] expressed the view she would not stay in residential aged care (which she had acknowledged her needs now required) if she could not sell her house to her neighbours. We are satisfied it is very much in [the appellant's] best interests at this stage in her life for her finances and her main asset, her house, to be utilised in such a way to provide her with the level of supported accommodation her needs require.

Did the Tribunal fail to give adequate reasons for its conclusion that the preconditions to the making of a financial management order were met and make a finding of fact (that the appellant was not capable of managing her affairs) on the basis of "no evidence"?

There is some overlap between the first two grounds of appeal. We will deal with them together.
The appellant contends that the Tribunal failed to give adequate reasons for its findings that she is not capable of managing her affairs and that there is a need for another person to manage her affairs on her behalf (Ground 1). She contends that the Tribunal failed to explain, or to adequately explain, why it was satisfied that she was currently not capable of managing her affairs and that there is a need for another person to manage her affairs on her behalf. She points out that she had informed the Tribunal that she made the discovery that she was being exploited by her appointed attorney and took steps in 2015 to revoke that appointment. This, she asserts, supports her contention that she has the requisite capacity to manage her affairs.
The time for determining whether the preconditions for making a financial management order were met, relevantly whether the appellant was not capable of managing her affairs and whether there was a need for another person to manage her affairs, was the day that determination was made and having regard to the reasonably foreseeable future: EB & Ors v Guardianship Tribunal & Ors [2011] NSWSC 767 (Hallen AsJ) at [136]; P v NSW Trustee and Guardian [2015] NSWSC 579 (Lindsay J) at [274]. However, as Lindsay J explained in in P v NSW Trustee and Guardian at [275], that assessment requires a "backward glance designed to elucidate the present and the future". In short, past conduct may be an indicator of a person's current and future capacity to manage their affairs.
The Tribunal was entitled to take into account the evidence that the appellant had been "financially exploited in the past and exercised poor judgement in trusting others with her financial affairs" and to assess whether it is likely that history would be repeated. However, missing from the Tribunal's reasons is any engagement with the assumption made by the social worker and others involved in the care of the appellant that because of that history, the appellant is now or is likely to be in the future, incapable of managing her affairs. Notably, the Tribunal failed to address the assertion made by the appellant that her actions in taking steps to revoke the appointment of the attorney, supports a conclusion that in 2015 she had capacity to manage her affairs.
In addition, apart from noting the concerns of the social worker and her colleagues, the Tribunal failed to engage with "the elephant in the room", namely the allegation that the appellant was being financially exploited by her neighbours and this was likely to continue.
The Tribunal was not obliged to address each and every allegation raised by a party or consider every piece of evidence presented. It was entitled to determine for itself the matters relevant to the determination of the question of whether the appellant was not capable of managing her affairs. Nonetheless, it was obliged to disclose the reasoning process that led it to conclude that the preconditions to making the financial management order were met.
Section 63(3) of the NCAT Act stipulates that any statement of reasons must contain: (a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, (b) the Tribunal's understanding of the applicable law, (c) the reasoning processes that lead the Tribunal to the conclusions it made.
While not required to give "lengthy or elaborate reasons", the Tribunal was nonetheless required to articulate the "essential ground or grounds upon which the decision rests": Collins v Urban [2014] NSWCATAP 17 at [54] citing Sydney Supermarkets Pty Limited v Xu [2009] NSWADTAP 28 at [60] and Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 per McHugh JA at [280].
On the reasons given, we are left to speculate about the basis for the Tribunal's conclusion that it was satisfied that the appellant was not capable of managing her affairs. While the Tribunal referred to the appellant's past history of exploitation and the allegation concerning the neighbours, it neither explicitly nor implicitly stated whether, and if so how, these factors influenced its reasoning process. It may be that the Tribunal concluded that on the basis of the 2015 incident, the appellant was currently vulnerable to financial exploitation and was therefore now unable to manage her affairs. Alternatively, it may be that the Tribunal found the allegation about the neighbours proven and determinative of the issue of the appellant's current and future capacity to manage her affairs. A third possibility is that the Tribunal gave no weight to that allegation. A further possibility is that the 2015 incident in combination with the allegation about the neighbours, and/or other factor(s) led the Tribunal to be satisfied that the appellant was not capable of managing her affairs. On review of the reasons, it is not possible to know.
It could not be said, as asserted by the appellant, that there was no evidence to support the findings made by the Tribunal that she is not capable of managing her affairs and that there is a need for another person to manage her affairs (Ground 2). The difficulty, however, is that for the reasons outlined above it is not possible to identify from the Tribunal's reasons, the basis for those findings.
Being satisfied the appellant was not capable of managing her affairs and that there was a need for another person to manage her affairs, was a pre-condition to the exercise of the Tribunal's power to make a financial management order. It was central to and not peripheral to its decision to make a financial management order. We have concluded that the reasons given for that finding are inadequate and allow the appeal.
Given this conclusion it is not necessary to address Ground 3.

Remittal of the appeal

We have decided to remit the decision to make a financial management order to the Guardianship Division of NCAT for reconsideration. The decision under appeal is set aside but not until the date the Guardianship Division makes its new decision on the Application. Given that nine months have passed since the decision under appeal was made, it is appropriate that the parties be invited to provide fresh material.
In our view, it would be preferable if the matter is remitted to the original Tribunal. That Tribunal had the benefit of hearing the evidence first hand. However, it may not be possible to list the matter before the original Tribunal because of practical considerations such as member availability. For that reason, in accordance with the usual listing practice of the Guardianship Division of NCAT, we leave the decision about the constitution of the Tribunal to the Head of that Division.

Party status of the neighbours

In the appeal proceedings, the appellant asserted but did not press the contention that the neighbours were carers within the meaning of s 3D of the Guardianship Act and therefore parties to the original proceedings. We did not determine this issue because the neighbours were not available to give evidence in the appeal. The Tribunal must determine this interlocutory issue before proceeding to reconsider whether a financial management order can and should be made.

Orders 1. The time to lodge the Notice of Appeal is extended to 13 November 2018. 2. The appeal is allowed. 3. The decision to make a financial management order is remitted to the Tribunal for determination, with any further material provided by the parties. 4. The decision under appeal is set aside but not until the date the Guardianship Division makes its new decision on the Application.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 05 April 2019

At a glance

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Judgment (14 paragraphs)

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Legislation Cited (4)

Cases Cited (5)

Cited By (1)