APPEAL - whether factual finding made in absence of evidence
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Catchwords
APPEAL - whether factual finding made in absence of evidence
Judgment (7 paragraphs)
[1]
Background to decision under appeal
On 31 July 2017, in the first of a series of financial management orders made in respect of the Appellant, the Tribunal committed the Appellant's estate to the management of the NSW Trustee and required that that order be reviewed within 12 months ("the original financial management order").
On 18 July 2018, after reviewing the original financial management order in accordance with s 25N, the Tribunal (differently constituted) ("the 2018 review Tribunal") varied that order by exercising the power conferred by s 25E(2) of the Guardianship Act to exclude from the varied order the sum of $25,000 together with the Appellant's Centrelink benefits ("the July 2018 order").
In September 2019, the Caseworker made an application to NCAT seeking review and variation of the July 2018 order. On 3 December 2019, following a hearing to review that order attended by the Appellant, the Caseworker and a representative of the NSW Trustee, the Tribunal (again differently constituted), decided not to confirm or revoke that order but to vary the order by reducing the amount of money excluded from it from $25,000 to $1,000. In addition, the Tribunal decided to continue to exclude the Appellant's Centrelink benefits from that order. This is the decision now under appeal.
In its reasons for that decision, the Tribunal recorded that when the original financial management order was made, the Appellant was an involuntary patient detained in a mental health facility, having been diagnosed with "chronic schizoaffective disorder": Re ZOL (NCAT, SM Moir, 3 December 2019, unrep, at [14]) ("Reasons"). The Tribunal noted that the Tribunal that made the original financial management order ("the original Tribunal") recorded that the Appellant had a "history of frivolous expenditure" and had been removed as co-executor of her late mother's estate. In addition, the original Tribunal had found that the Appellant had a "substantial telephone debt" which she had refused to pay because she believed that she had not accrued that debt: Reasons at [14]. The original Tribunal had concluded that a financial management order was needed so that arrangements could be made in relation to that debt and to ensure that the Appellant was not disadvantaged in the administration of her mother's estate: Reasons at [14].
Shortly before the July 2018 order was reviewed, the Appellant received about $230,000 from her mother's estate. The 2018 review Tribunal, having reviewed the original order, decided to exclude from the financial management order the Appellant's Centrelink benefits together with $25,000, reasoning at [15]:
"While leaving the bulk of her lump sum to the management of the NSW Trustee, this will provide [the Appellant] with the opportunity of demonstrating her capacity to manage a lump sum above her Centrelink payments. [The Appellant] said she wanted to take a holiday, as she had never had one, but she would not spend all the lump sum on this."
In reaching that conclusion, the 2018 review Tribunal considered it relevant that direct debits had been put in place for the payment of the Appellant's rent and utilities; that the Appellant had been, and would continue to receive support and training with budgeting; and that over the previous year there had been no evidence of the Appellant being exploited or spending impulsively: Reasons at [15].
In addition, the Tribunal recommended to the NSW Trustee that it release funds to the Appellant to enable her to purchase a car provided that "service providers confirmed that she had been assessed as ready to drive, and her budget showed that she could afford the upkeep of a car".
In the application made in September 2019 seeking review of the July 2018 order, the Caseworker asked the Tribunal to vary that order, by excluding from it an unspecified amount to enable the Appellant to take a holiday and to purchase a car. At the review hearing, the Appellant urged the Tribunal to revoke the July 2018 order asserting that she is and always has been capable of managing her financial affairs. In support she pointed to the evidence of most of her bills now being paid by direct debit: at [16]. She stated that she disagreed with the opinion of her treating psychiatrist that she had a mental illness and required medication for that illness: at [18].
The Tribunal noted at [17] that while the Appellant's treating psychiatrist remained of the opinion that the Appellant requires "ongoing financial management", in his view it would be beneficial if she could have money released to enable her to take a "holiday for a few days". The Tribunal recorded at [19] that the Caseworker agreed with the view of the treating psychiatrist that the Appellant was incapable of managing her affairs and stated that the "lump sum needs to be protected". Pointing out that when the Appellant was last reviewed by the treating psychiatrist, apparently in November 2019, she announced that she is reluctant to continue taking medication, the Caseworker stated that if this were to occur, it is likely that the Appellant would become unwell and "quickly spend" the money remaining from her inheritance: Reasons at [19].
By the time of the hearing on 3 December 2019, the Appellant had spent all but $200 of the $25,000 excluded from the July 2018 order. The Tribunal recorded the Appellant's claim that most of that money had been spent on replacing whitegoods destroyed in a kitchen fire, purchasing televisions, furniture for her home and a kitten. The Tribunal recorded the Appellant's stated opinion, that apart from expenditure on cigarettes ($50 per day), the expenditure was neither "unnecessary nor excessive": Reasons at [20].
The Tribunal noted the Appellant's stated plan to go on a cruise and purchase a new car: Reasons at [23]-[24]. The Tribunal recorded that the Appellant estimated the purchase price of the car to be about $22,000 but was unable to estimate its likely running costs. Nor was she able to estimate the cost of the cruise.
The Tribunal went on to consider whether the power to revoke the July 2018 order could be exercised. The Tribunal stated at [25] that it was not satisfied that the Appellant is capable of managing her financial affairs, reasoning:
"[A]lthough some of the $25,000 lump sum was spent on whitegood items which she needed to replace, a substantial proportion was spent on day to day living. Even so, she needed to access additional funds from the NSW Trustee for essential expenses such as pharmacy. This does not support the conclusion that [the Appellant] is able to plan and live within her budget in a reasonable, rational and orderly way,with due regard to her present and prospective wants and needs."
In addition, the Tribunal concluded that it was not in the Appellant's best interests to revoke the July 2018 order, reasoning that to do so would give the Appellant "free access to over $230,000 inheritance": Reasons at [25]. The Tribunal concluded that it is likely that the Appellant would spend this sum "impulsively" without a view to her future needs.
Having decided that the preconditions to the exercise of the power to revoke the July 2018 order had not been satisfied, the Tribunal proceeded to consider whether to exercise the discretion to exclude part of the Appellant's estate from that order: Reasons at [28]-[35]. We consider below the reasons for that decision.
[2]
Grounds of appeal
The Appellant has a right to appeal against a decision made by the Tribunal on any question of law or, with the leave of the Appeal Panel, on any other ground: s 80(2)(b) of the NCAT Act.
The following questions of law may be discerned from the Notice of Appeal:
1. Was the finding that the Appellant lacked capacity to manage her affairs made in the absence of evidence?
2. Did the Tribunal fail to give real and genuine consideration to whether the power to vary the financial management order should be exercised?
If the answer to each question is "no", we will consider whether leave to appeal should be granted.
[3]
Was the finding that the Appellant lacked capacity to manage her affairs made in the absence of evidence?
The Appellant contends, in effect, that there was no evidence to support the finding by the Tribunal that she is not capable of managing her affairs.
A decision reached in the absence of evidence to support it constitutes an error of law: Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32; 241 CLR 390 at [91]-[92]. Where, as in this case, the rules of evidence do not apply, to establish a "no evidence" error there must be an absence of material, whether strictly admissible according to the rules of evidence or not: Smith & Anor v Collings Homes Pty Ltd & Anor [2004] NSWCA 75 at [32]; South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16 at [129].
The Tribunal correctly identified at [7] that the power to revoke the July 2018 order could only be exercised if it were satisfied of one of two things: that the Appellant is capable of managing her affairs or that it is in the best interests of the Appellant that the July 2018 order be revoked.
The Tribunal correctly identified the principles relating to the task of evaluating whether a person is capable of managing their affairs, referring at [10] to the test formulated by Lindsay J in P v NSW Trustee and Guardian [2015] NSWSC 579 at [308]:
Is a person reasonably able to manage his or her own affairs in a reasonably competent fashion, without the intervention of a protected estate manager charged with a duty to protect his or her welfare and interests?
In addition, the Tribunal referred to the statement made by Lindsay J at [311] that the concept of a person's capability to manage their affairs is "directed to the reasonably foreseeable future as well as to the present time".
Applying those principles, the Tribunal went on to consider the question of whether the Appellant is now capable of managing her affairs. Much of the limited material before the Tribunal was historic. A report prepared by the NSW Trustee shortly before the December 2019 hearing and tendered in those proceedings revealed that over the previous 18 months, in addition to spending her Centrelink benefits, the Appellant had spent all but $200 of the $25,000 excluded from the July 2018 order. The Appellant did not provide any particulars, or independent evidence, to support her claim that she was now capable of managing her financial affairs. Apart from the information elicited by the Tribunal through questioning of the Appellant, it had no information about how she had used the $25,000. Nor was there any material to support the Appellant's assertion that her treating psychiatrist had erred in his diagnosis of a chronic schizoaffective disorder or in concluding that that condition impaired her ability to manage her finances. Nor was there any material before the Tribunal which arguably cast doubt over the reliability of the finding made by the original Tribunal that when unwell the Appellant had a tendency to be frivolous in expenditure.
Notably, at the December 2019 hearing the Caseworker did not contend that the Appellant was capable of managing her affairs. Pointing to the Appellant's mental health progress notes from 26 November 2019, the Caseworker stated that there was a real risk that the Appellant would discontinue taking medication prescribed for her psychiatric condition and, if that were to occur, it is likely that the Appellant would quickly become unwell and spend any funds that were not the subject of a financial management order.
Apart from the Appellant's uncorroborated self-report and the evidence that direct debit arrangements were in place for the payment of the Appellant's regular expenses, there was no material before the Tribunal to support the appellant's claim that she was capable of managing her financial affairs. Her spending of nearly $25,000 with little ability to account for it and her inability to estimate the likely costs that would be incurred in running a car and taking a holiday, told against her. We reject the contention that there was no material before the Tribunal to support its finding that it could not be satisfied that the Appellant is capable of managing her affairs.
This ground of appeal is rejected.
[4]
Did the Tribunal fail to give real and genuine consideration to whether the power to vary the financial management order should be exercised?
We understand the Appellant to assert that the Tribunal failed to consider, or to properly consider, the request made by the Caseworker in the application seeking review of the July 2018 order that the Tribunal exercise the power to vary that order, by excluding from it an unspecified amount of money to enable the Appellant to purchase a car and to take a holiday. Such failure could amount to an error of law: Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 73 ALD 321; [2003] HCA 26; 77 ALJR 1088 at [24], [25]; Ali v AAI Limited [2016] NSWCA 110 at [66].
In reviewing the July 2018 order, the Tribunal was obliged to consider whether to make the form of order proposed by the Caseworker. Nonetheless, the Tribunal was not restricted to considering whether to exercise the power to make an order in those terms. Once seised of the power to review the financial management order, the Tribunal was required by s 25P(1) of the Guardianship Act to decide whether to make one of three possible orders: to vary, revoke or confirm the July 2018 order.
In contrast to the power to revoke a financial management order, it is not a precondition to the exercise of the power to vary a financial management order that the Tribunal be satisfied that the protected person is capable of managing their affairs, or that the Tribunal considers that it is in the best interests of the protected person to do so: s 25P(2). The only constraint on the exercise of the power to vary an order is the requirement to have regard to the principles listed in s 4 of that Act.
While the focus of the Tribunal's reasons for decision was on the question of whether the preconditions to the exercise of the power to revoke a financial management consideration had been met, the Tribunal did not only consider that question. It also considered whether the power to vary the July 2018 order should be exercised, as requested by the Caseworker, by excluding from that order an amount of a money to enable the Appellant to purchase a car and take a holiday: see Reasons [28]-[33].
The Tribunal noted that while the Appellant stated that she was "ready to go", there was no evidence that the Appellant had undertaken "all her driving lessons" or had given "any thought to how she will pay for the running costs of a car from her current income": Reasons at [29]. The Tribunal considered it relevant that, despite the recommendation made by the 2018 Tribunal that the NSW Trustee release funds to enable the Appellant to buy a car on receipt of information evidencing the Appellant's ability to drive and to fund the running costs of car, the Appellant had failed to provide that information to the NSW Trustee: Reasons at [30]. The Tribunal concluded that if money was made available to enable the Appellant to purchase a car, "it might not be used for that purpose": Reasons at [30].
With respect to the question of whether to exercise the power to vary the July 2018 order by excluding from it an amount of money to enable the Appellant to take a holiday, the Tribunal stated that the Appellant had only "the vaguest plans in a mind for holiday and no sense of how much this would cost". The Tribunal concluded that there was a risk that the Appellant would use that money to fund day-to-day living expenses: Reasons at [31].
The Reasons reveal that in considering whether to exercise the power to vary the July 2018 order by excluding from it an amount to enable the Appellant to purchase a car and take a holiday, the Tribunal applied the correct legal test and engaged in the balancing exercise required to be undertaken in applying the s 4 principles of the Guardianship Act. In addition, the Reasons demonstrate that the Tribunal took account the material relied upon and the submissions made by the Appellant, in support of that variation to the July 2018 order. The contention that the Tribunal failed to give genuine consideration to whether the power to vary the July 2018 order should be exercised is not made out.
This ground of appeal is not established.
[5]
Should leave to appeal be granted?
In Collins v Urban [2014] NSWCATAP 17 (Collins), an Appeal Panel of NCAT noted at [84] that to grant leave to appeal under s 80(2)(b) of the NCAT Act, there must be a "sound basis" for granting leave. The Appeal Panel stated that ordinarily it is appropriate to grant leave to appeal only in matters that involve:
(a) issues of principle;
(b) questions of public importance or matters of administration or policy which might have general application; or
(c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand;
(d) a factual error that was unreasonably arrived at and clearly mistaken; or
(e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed.
(Citations omitted)
None of the grounds listed in Collins apply in this case. The decision under appeal is understandably of great importance to the Appellant, but does not raise any issues of principle or public importance. The Tribunal went about its fact finding role in an entirely orthodox manner. Objectively assessed, there is nothing to suggest from either the Tribunal's conduct of the hearing or the decision it made that an "injustice which is reasonably clear" has occurred.
Nonetheless, the factors listed in Collins relevant to the exercise of the discretion to grant or withhold leave to appeal from a decision "is not an exhaustive list": AHB v NSW Trustee and Guardian [2017] NSWCATAP 79 at [58]; Edwards v Commissioner for Fair Trading, Department of Finance, Services and Innovation [2019] NSWCATAP 208 at [34]. Where, as here, the decision under appeal was made by the Guardianship Division of NCAT, a relevant consideration in the exercise of the discretion is the protective character of the jurisdiction exercised by that Division: C v W [2015] NSWSC 1774 at [44]-[46]; P v NSW Trustee and Guardian at [198]; AHB v NSW Trustee and Guardian at [58]; ZII v ZIJ [2018] NSWCATAP 255 at [60].
While she did not put it in these terms, the Appellant contends that leave to appeal should be granted on the ground of new evidence, namely her straitened financial circumstances. She claims that she can no longer manage on the Disability Support Pension and has insufficient money for food and basic expenses. When asked in this appeal what had changed since the decision under appeal was made, the Appellant claimed that her expenses had increased as a result of now owning a kitten and a dog. She estimates that she is spending about $70 per fortnight on the kitten and probably more on the dog. In addition, she claims that because of the COVID-19 pandemic, she has become increasingly anxious and is smoking more, which adds to her expenses.
At the appeal hearing, the NSW Trustee confirmed that for the 12 months prior to 26 February 2020, the Appellant had been paying $126 per fortnight for pre-prepared meals. Apparently that arrangement has stopped and the Appellant is now receiving NDIS funding to assist her to upgrade her cooking skills.
It goes without saying that the Disability Support Pension is modest and recipients have little discretionary expenditure. We accept the Appellant's claim that she is finding it difficult to fund her ongoing living expenses. We also accept that the Appellant's expenses have probably increased to some extent since the decision under appeal was made. It would appear that she is experiencing particular problems as a result of the transition from being provided with pre-prepared meals to being provided with assistance to develop her cooking skills.
Nonetheless, notwithstanding the apparent change in the Appellant's circumstances, we are not persuaded that they warrant exercising the discretion to grant the Appellant leave to appeal. In reaching that decision, we note that in exercising the power to confirm, revoke or vary the current financial management order, we must have regard to the Appellant's views and preferences, restrict her freedom of decision and freedom of action as little as possible, and encourage her, as far as possible, to be self-reliant in matters relating to her financial affairs: ss 4(b), 4(d) and 4(f) of the Guardianship Act. However, those considerations must be balanced with the requirement to give paramount consideration to the Appellant's welfare and interests and to protect her from exploitation: ss 4(a), 4(g). In our view, at this stage, the cautious approach adopted by the Tribunal of protecting the appellant's inheritance remains appropriate.
We note that the decision under appeal does not prevent the Appellant from requesting the NSW Trustee to release additional funds to pay for ongoing and one-off expenditures.
[6]
Orders
1. The appeal is dismissed.
2. Leave to appeal is refused.
[7]
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: 29 May 2020
Part 3A of the Guardianship Act 1987 (NSW) deals with the Tribunal's power to make and review financial management orders.
Contained in Part 3A, s 25E(1) gives the Tribunal power to order that the estate of a person be subject to management under the NSW Trustee and Guardian Act 2009 (NSW): s 25E(1). Section 25E(2) gives the Tribunal power to exclude a specified part of the estate from the financial management order.
The grounds for the making of a financial management order are specified in s 25G of the Guardianship Act, as follows:
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."
Where the Tribunal makes a financial management order, it may appoint a suitable person as manager of that estate: s 25M(1)(a). Alternatively, the Tribunal may commit the management of the estate to the NSW Trustee: s 25M(1) of the Guardianship Act.
The Tribunal must review a financial management order made under Part 3A where:
1. the order is made subject to the requirement that it be reviewed within a specified time: s 25N of the Guardianship Act; or
2. the "protected person" (the person the subject of the financial management order), the NSW Trustee, the manager of the estate or part of the estate of the protected person, or, any other person who, in the opinion of the Tribunal, has a genuine concern for the welfare of the protected person, applies for an order revoking or varying the financial management order: s 25R of the Guardianship Act.
Section 25P sets out the powers of the Tribunal on review:
25P Action on review
(1) On reviewing a financial management order under section 25N, the Tribunal:
(a) must vary, revoke or confirm the order, and
(b) if it considers it appropriate to do so--may take such action with respect to the appointment of the manager of the protected person's estate as the Tribunal could take on a review of such an appointment under Division 3.
(2) The Tribunal may revoke a financial management order only if:
(a) the Tribunal is satisfied that the protected person is capable of managing his or her affairs, or
(b) the Tribunal considers that it is in the best interests of the protected person that the order be revoked (even though the Tribunal is not satisfied that the protected person is capable of managing his or her affairs).
(3) In this section, vary, in relation to a financial management order, includes to exclude (or remove an exclusion of) a specified part of the protected person's estate from the order.
In exercising the power to make a financial management order, or to vary, revoke or confirm a financial management order on review, the Tribunal must observe the principles listed in s 4 of the Guardianship Act:
4 General principles
It is the duty of everyone exercising functions under this Act with respect to persons who have disabilities to observe the following principles:
(a) the welfare and interests of such persons should be given paramount consideration,
(b) the freedom of decision and freedom of action of such persons should be restricted as little as possible,
(c) such persons should be encouraged, as far as possible, to live a normal life in the community,
(d) the views of such persons in relation to the exercise of those functions should be taken into consideration,
(e) the importance of preserving the family relationships and the cultural and linguistic environments of such persons should be recognised,
(f) such persons should be encouraged, as far as possible, to be self-reliant in matters relating to their personal, domestic and financial affairs,
(g) such persons should be protected from neglect, abuse and exploitation,
(h) the community should be encouraged to apply and promote these principles.
The NCAT Act reinforces the obligation to have regard to these principles. Clause 5(1) of sch 6 to the NCAT Act, provides that when exercising its "Division functions for the purposes of the Guardianship Act 1987", the Tribunal is under a duty to observe the principles set out in s 4 of the Guardianship Act. (See P v NSW Trustee and Guardian [2015] NSWSC 579 at [53]-[58], ZGM v ZGN [2018] NSWCATAP 101 at [39]; ZBC v ZBD [2016] NSWCATAP 264 at [101], [105]).