ZUS is an 86-year-old man of Polish heritage, who lives alone in a privately rented unit in Sydney following the sale of his own property in February 2020. ZUS has two children, Mr ZUR and Ms ZUU. Ms ZUU's husband is Mr ZUT.
On 24 July 2017, ZUS appointed ZUR as his enduring guardian and enduring attorney pursuant to instruments of that date. On 28 November 2017, ZUS appointed ZUU and ZUT as his enduring power of attorneys to act jointly and severally, with the power to commence immediately. Subsequently, in January 2018, ZUS revoked the enduring power of attorney he had previously given to ZUR.
On 15 February 2018, on the application of ZUR, the Tribunal appointed ZUU and ZUT as joint financial managers of ZUS's estate. In doing so, of course, the Tribunal reached a state of satisfaction that ZUS was unable to manage his own financial affairs: Guardianship Act 1987 (NSW), s 25G.
On 20 November 2018, the Tribunal dealt with a further application by ZUU and ZUT to revoke the financial management order made by the Tribunal in respect of ZUS's estate. The Tribunal also dealt with an application to review the revocation of the enduring power of attorney communicated by ZUS to ZUR on 25 January 2018.
The Tribunal determined to carry out a review of the purported revocation of the enduring power of attorney but not to make any order under s 36 of the Powers of Attorney Act 2003 (NSW) and to revoke the financial management order.
Importantly, in its reasons for that decision, the Tribunal noted, at [41]:
"[ZUT and ZUU], applicants, particularised that they sought the financial management order be revoked on the basis that it was in the best interests of ZUS even though ZUS was not capable of managing his affairs".
The Tribunal decided to revoke the financial management order on the basis of "ongoing practical utility in burdening [ZUS]'s estate with the administrative infrastructure necessarily involved in protective estate management" (at [56]) and noted at [57] that "[w]e decided that it was in [ZUS]'s best interests that the financial management order be revoked…" Further, at [59], "[h]aving concluded a balancing exercise we came to the view that it was in [ZUS]'s best interests that the order be revoked. We decided at that it was in [ZUS]'s best interests that he be permitted to rely upon the 2017 power of attorney appointing [ZUT and ZUU] as his attorneys."
Throughout the history of this matter there have been allegations and counter allegations between ZUR on the one hand and ZUU and ZUT on the other, about financial abuse, inappropriate use of powers of attorney, and neglect of ZUS.
Those concerns and allegations did not abate upon the revocation of the financial management order in 2018. Subsequently, ZUR brought a further application for the review of the operation and effect of the enduring power of attorney appointing ZUT and ZUU as ZUS's attorneys. That application was determined on 11 November 2020.
The Tribunal appointed a separate representative for ZUS in respect of the application.
In summary, the Tribunal decided to conduct a review of the operation and effect of the enduring power of attorney but not to make any order under s 36 of the Powers of Attorney Act. It is from that decision which ZUR has lodged his appeal, within time.
The New South Wales Trustee and Guardian elected not to participate in the appeal. At a prior directions hearing in preparation for the appeal, each of ZUR, ZUT and ZUU advised the Tribunal that ZUS would be unable to participate in the hearing of the appeal due to his disability. ZUS made no attempt to participate and, given the evidence referred to below and the submission of the other parties, we were satisfied that we should proceed in his absence.
[2]
Publication of the names of the parties
The publication or broadcast of the name of any person, who is mentioned or is otherwise involved in an internal appeal against decisions made by the Guardianship Division of NCAT, is prohibited under s 65(1) of the Civil and Administrative Tribunal Act 2013 (NSW). Being an official report of the appeal proceedings, that prohibition does not apply to these reasons for decision due to s 65(3) of that Act. Nonetheless, because of the sensitive nature of the matters raised in these proceedings, we have decided to order, pursuant to ss 65(1)(a)-(c) of that act that the publication of these reasons, or any part of them, either by sound recording or transcript which includes any details that may identify the parties is prohibited.
[3]
The Grounds of Appeal
ZUR relies upon several grounds of appeal:
1. That the decision was against the weight of the evidence;
2. That the Tribunal failed to properly undertake a review of the operation and effect of the power of attorney (that is, on our understanding, that the Tribunal failed to properly engage with his case);
3. That the Tribunal erred by failing to consider the power of attorney which was the subject of the application (given that the wrong date for the document was referred to throughout the Reasons for Decision);
4. That the Tribunal erred in respect of assessing the credibility of ZUR in its decision;
5. That the Tribunal failed to consider a submission by ZUR that, on the principles outlined in Jones v Dunkel (1959) 101 CLR 298, the failure of ZUT and ZUU to produce evidence in respect of the application should have led to an inference that the evidence, if produced, would not have assisted their position; and lastly
6. That there was evidence that ZUT and ZUU have mixed their financial affairs as attorneys with those of ZUS.
It would be unhelpful to reproduce the Tribunal's reasons for its decision at length. Other than for an unfortunate typographical error, repeated throughout the Tribunal's reasons, wherein it appears to have transposed the date upon which ZUS revoked ZUR's power of attorney with the date of the power of attorney it actually reviewed, the Tribunal's reasons for decision follow a logical path of reasoning consistent with the provisions of s 36(1) of the Powers of Attorney Act, and clearly detail the following:
1. The history of the proceedings between the parties;
2. That ZUR has ongoing concerns about the management of ZUS's estate by ZUU and ZUT;
3. The recent history in relation to ZUS's affairs, including the sale of his home; where and how those monies were applied;
4. Concerns raised by ZUR about other spending from ZUS's accounts including, particularly, on gifts to ZUU and ZUT's family members and on other expenses which ZUR asserted were incongruous given ZUS's position as a single man renting a small unit and his lifestyle.
The Tribunal also recorded in its reasons for decision that the separate representative, Mr Wheeler, submitted that some of the spending "incurred by the attorneys" was unreasonable (at [27]), and that the Tribunal should consider making a financial management order appointing ZUU and ZUT as financial managers for ZUS with the advantage that they could be supervised as financial managers by the NSW Trustee and Guardian: at [28].
At [23] the Tribunal found that "[i]n our view, the evidence revealed that the spending by [ZUU] and [ZUT] was reasonable in the circumstances, particularly, given that the majority of that spending was for the benefit of [ZUS]." (emphasis added)
The Tribunal went on to find later, at [28], "…that if the predominant reason for appointing [ZUU] and [ZUT] as financial managers is for them to be supervised, then the two attorneys are not suitable to be appointed in that role," and, at [29], "[h]aving considered the submissions of each of the parties and the documentary evidence before us, we are not persuaded that the current attorneys have been acting inappropriately such that they should be removed from their positions of attorneys. Given this finding there is no need to consider making a financial management order. We are not satisfied that we should order [ZUU] and [ZUT] to provide an account or other information as sought by [ZUR]."
[4]
Determination
The basis upon which a more thorough exposition of the Tribunal's reasons for decision would be unhelpful, for reasons we detail below, is that the reasons are notable not for what they contain but for what they do not.
We had before us various medical records and reports related to ZUS, which were before the Tribunal when it made its decision. They included:
1. A Mini Mental State Examination completed by ZUS on 1 March 2018, wherein he returned a score of 27/30;
2. A report apparently related to that examination by Dr M, dated 11 September 2018, which reported on the result of that score and noted that ZUS "does not show any signs of memory loss according to the mini-mental state test today. The score is very good for his age. He has been living alone since his wife passed away three years ago. He is coping well;
3. Discharge referral notes from a period ZUS spent at the Gosford Hospital in June 2018 which indicated that "from a medical and allied health perspective it is advised that [ZUS] have 24-hour care provided either at a high-level nursing home or by family members able to provide appropriate intensive care. This is due to [ZUS's] ongoing cognitive impairment, impulsivity and lack of insight in addition with his increased care needs due to right humerus fracture, reduced mobility and pain in the arm," and later "[d]ifficult to assess patient's pain needs to fluctuating delirium, cognitive decline and NESB, however at time of discharge still requiring PRN endone" and "[r]eportedly had episodes of agitation and violence towards nursing staff towards end of the day. Likely sun downing impact on dementia";
4. A report by Dr R, a senior clinical medical officer in geriatric medicine at the hospital, dated 4 May 2018, wherein the doctor reported, in part:
[ZUS] has had persistent challenging behaviours of wandering, intrusiveness and afternoon-evening agitation and requires assistance of staff for all ADLs … We noted previously that he has had a cognitive assessment done by means of a RUDAS during that admission which he scored 20/30. I was not involved with this man's care at the time but it was felt that he was lacking in capacity… [ZUS] has had an alcohol-related delirium and likely post-operative delirium on a background of non-English speaking background and significant communication difficulties. There have been several attempts at reassessing his cognition this admission. However this has been unsuccessful with the assistance of an independent interpreter. We reattempted this on Friday 11/5 with the interpreter, however, although [ZUS] recognised the interpreter from previously he was unable to complete the assessment. Rather he chatted about his family and became quite tangential.
Currently it is believed that [ZUS] does not have capacity to make any decisions around his medical, financial or accommodation needs. I believe that this is likely to be his ongoing level of function.
… He I believe has a significant cognitive impairment which may be further impacted upon by his intercurrent delirium. However, I suspect that we are at his new baseline of cognition and function and he certainly would be unable to legally provide testamentary capacity in a sitting of review of his financial trustee. I would also be concerned that he had the pre-morbid capacity to undertake any legal matters; and
1. A report from the Hamilton Medical Centre, dated 23 June 2018, which indicated a past history on 16 January 2018 of "dementia or Wernicke encephalopathy?"
In addition to that medical evidence, the Tribunal had from ZUR transcripts of recordings he made of conversations with ZUS in June 2020, wherein ZUS's responses could best be described as tangential, and photographs taken in the unit where ZUS was living in June 2020. In those photographs there are various labels and signs depicted which had been affixed, apparently for ZUS's benefit. Those included, in covering over the stove buttons necessary to turn on his gas stove, a sign which said, in Polish, "Do not turn on the stove (gas)!" and a further sign near the kitchenette saying, again in Polish, "boil water only in the kettle" and nearby, "boil water for coffee in the kettle".
It was against this background that ZUR raised his concerns that, on the version of ZUT and ZUU, ZUS had of his own agency sold his home and decided to invest monies into a term deposit, and had also made decisions to reimburse ZUT and ZUU for various expenses they say they incurred on his behalf and to make gifts of a reasonably significant nature to ZUT and ZUU's children.
ZUT and ZUU's position, which they maintained before us at the hearing of the appeal, was that ZUS maintains the ability to make all financial decisions for himself, that he does so, and that on that basis there is no appropriate cause for concern as to what has occurred in relation to his financial affairs. They say that, whilst they act under the power of attorney to facilitate ZUS's decisions, they do not make substitute decisions for him. They maintained that position, despite acknowledging that ZUS would be unable to participate and express a meaningful view in respect of the appeal, even with an interpreter.
If ZUT and ZUU's position in that regard is correct, then there was no proper basis for any challenge to the operation and effect of the enduring power of attorney and the ultimate conclusion reached by the Tribunal, not to make any order under s 36 of the Powers of Attorney Act, would be uncontroversial.
We also accept that, on the application before it, the Tribunal was not required to make a specific finding as to whether ZUS could manage his own financial affairs at any particular point in time. The position, of course, would have been different if it moved to treat the application as one for a financial management order.
However, it is an error on a question of law for the Tribunal to fail to properly engage with a party's clearly articulated case. The error may be described as a failure to afford procedural fairness or a constructive failure to exercise jurisdiction: Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; 77 ALJR 1088, per Gleeson CJ at [24], Kirby J at [87] and Callinan J at [95].
There were a number of factors which, in our view, made it critical that the Tribunal engage with the question of ZUS's capacity to make his own financial decisions and whether it was him or his attorneys who was doing so, in determining the application and exercising its broad discretion whether to make orders under s 36 of the Powers of Attorney Act. They included:
1. The Tribunal's prior finding that the ZUS lacked capacity to manage his finances;
2. The medical evidence before it;
3. The competing versions of the parties on this issue;
4. The fact that the power of attorney being reviewed gave no power to the attorneys to benefit themselves or others, nor to give gifts;
5. The Tribunal's implicit finding referred to at [17] above, that not all of ZUS's spending was for his benefit; and
6. The views of the separate representative, appointed to represent ZUS's welfare and interests, that there were issues warranting the making of some other order.
At common law, there is a rebuttable presumption that once a person is found to be incapable of managing their financial affairs, that state continues until a court or tribunal is satisfied otherwise. Generally, a finding of regained capability would only be made on the basis of evidence equally cogent and probative to that which led to the earlier finding to the contrary: The Attorney General against Parnther and Others (1792) 29 ER 632. On one view, the common law position has been adopted into the Guardianship Act by virtue of the effect of s 25P of that act, which provides, relevantly:
25P Action on review
(1) On reviewing a financial management order under section 25N, the Tribunal -
(a) must vary, revoke or confirm the order …
(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).
This issue was not argued before us. It does, however, indicate the potential complexity of the matters the Tribunal needed to deal with in determining the application. If ZUS cannot manage his financial affairs, as the Tribunal previously found, then ZUU and ZUT's operation on the power of attorney may have been inappropriate to the extent that they benefitted themselves and others or conferred gifts. Even if they say they were unaware that they were doing more than implementing decisions made by ZUS, the question arises as to the bona fides of that position and the extent of any obligation on them to be able to demonstrate that they are correct or to have investigated the issue to meet their duty to ZUS.
Given the background which we have set out and the allegations of concern made by ZUR, with some support from the separate representative, the Tribunal's lack of any reference to those issues, in our view, indicates that it either:
1. failed to properly engage with the case put by ZUR; or
2. failed to give sufficient reasons for its decision.
For that reason, given the need to focus on the welfare and interests of ZUS and protect him from exploitation, the appeal must be allowed.
Having allowed the appeal on that basis, we do not intend to deal with the other grounds of appeal raised by ZUR.
Firstly, in our view, it is unnecessary to do so.
Secondly, the other allegations of error by ZUR largely relate to the Tribunal's treatment or failure to treat with evidence it had before it. We have considered whether we are in a position to re-determine the matter on the material before us. We are not satisfied that we can properly do so, particularly where findings are required which depend on the credibility of witnesses whom we have not heard: Hall v van der Poel [2009] NSWCA 436. Given that we intend to remit the application for further consideration by the Tribunal, it would be inappropriate for us to make findings in respect of those issues.
We do not intend to remit the entire application, however. Rather, we are satisfied that the Tribunal had ample evidence before it to appropriately decide to conduct the review of the enduring power of attorney, and that aspect of the decision is unchallenged. A review of the operation and effect of the power of attorney should be conducted. We will only remit the actual review of the operation and effect of the enduring power of attorney and not the question of whether it needs to be undertaken.
We will remit the application to the Tribunal, differently constituted, for determination. To avoid doubt, we will also order the re-appointment of a separate representative for ZUS in respect of the remitted proceedings.
We shall not place any limitation on the evidence the parties may rely upon. Things will have moved on for ZUS since the decision was made. To paraphrase what was said by Gleeson CJ in Waterways Authority v Fitzgibbon [2005] HCA 57; (2005) 221 ALR 402; (2005) 79 ALJR 1816 at [20] on this topic, albeit in a different context, "at a new [hearing], [the Tribunal] will have to hear evidence, and make findings… The evidence will not necessarily be the same as the evidence at the first [hearing]. It could be significantly different. It is in the interests of justice that the [Tribunal] hearing the second trial should be in a position to make a fresh appreciation of the whole of the relevant evidence, unconstrained by an artificially isolated assumption that reflects the [appellant's] forensic success in the … Appeal." Of course, once it is apprised of the issues the parties intend to agitate, the Tribunal in its Guardianship Division is free to make any directions it thinks appropriate to focus the parties, and the evidence they rely upon, on the real issues for determination.
Finally, we note that ZUR, ZUU and ZUT remain in disagreement about whether ZUS needs to have any, or more appropriate, decisions made about his personal, health and lifestyle matters, such as receiving services into his home. Despite this, none of the parties at the hearing could tell us whether ZUR remains appointed as enduring guardian for ZUS by the appointment signed by ZUS on 24 July 2017, except to the extent that ZUR says he has had no notice that his appointment has been revoked. The parties should consider this issue now, to avoid any unnecessary or unhelpful delays in the resolution of the remitted application, brought about by the late lodgement of any other relevant applications regarding ZUS.
[5]
Orders
We will make the following orders:
1. The appeal is allowed.
2. The conduct of the review of the operation and effect of the enduring power of attorney executed by ZUS on 28 November 2017 is remitted to the Tribunal, differently constituted, for determination according to law.
3. A separate representative for ZUS is appointed in the remitted proceedings.
[6]
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: 17 June 2021