AOJ v NSW Trustee and Guardian

[2013] NSWADTAP 38

Administrative Decisions Tribunal

New South Wales

Medium Neutral Citation:

AOJ v NSW Trustee and Guardian [2013] NSWADTAP 38

Hearing dates:

30 May 2013

Decision date:

02 August 2013

Jurisdiction:

Appeal Panel - External

Before:

Magistrate N Hennessy, Deputy President
Ms S Leal, Judicial Member
Dr B Field, Non-judicial Member

Decision:

1. The order of the Guardianship Tribunal committing the management of AOL's estate to the NSW Trustee is affirmed.

2. Leave is refused for the appeal to be made on any ground other than a question of law.

Catchwords:

APPEAL - discretion to appoint suitable person or NSW Trustee as financial manager - whether discretion exercised lawfully - whether facts supported finding of 'major' conflict of interest

Legislation Cited:

Administrative Decisions Tribunal Act 1997
Guardianship Act 1987

Cases Cited:

Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139
Holt v Protective Commissioner (1993) 31 NSWLR 227
House v King [1936] HCA 40
K v K [2000] NSWSC 1052
R v Australian Broadcasting Tribunal; ex parte Hardiman [1980] HCA 13; (1980) 144 CLR 13
Re R [2000] NSWSC 886
S v S [2001] NSWSC 146
SH v Protective Commissioner [2006] NSWADTAP 4

Category:

Principal judgment

Parties:

AOJ (Appellant)
NSW Trustee and Guardian (First Respondent)
AOK (Second Respondent)
AOL (Third Respondent)
Guardianship Tribunal (Decision maker)

Representation:

Counsel
M McCall (Appellant)
S Gardiner (Third Respondent)
G Kee, APJ Law (Appellant)
No appearance (First Respondent)
No appearance (Second Respondent)
James McCaffrey and Associates (for GAL - L Fisher - for Third Respondent)
A Sprouster, legal officer (Guardianship Tribunal)

File Number(s):

138002

 Decision under appeal 

Citation:

2012/1329; 2012/8147

Date of Decision:

2012-11-21 00:00:00

Before:

Guardianship Tribunal

File Number(s):

C/48281

reasons for decision

Introduction

1. The Guardianship Tribunal made a guardianship order and a financial management order in relation to AOL, an 89 year old woman, and appointed the NSW Trustee as her financial manager. Her son, AOJ, has not challenged the making of either of the orders but has appealed against the decision to appoint the NSW Trustee. He put himself forward as a suitable financial manager but the Guardianship Tribunal decided that he had a major financial conflict of interest with his mother.

1. In our view, the Guardianship Tribunal did not make any error of law when deciding who to appoint as financial manager nor should leave be given for AOJ to appeal against the merits of the Guardianship Tribunal's decision. The Guardianship Tribunal made factual findings based on probative evidence and exercised its discretion taking into account all relevant considerations.

Background

1. AOL and her son AOJ are equal partners in a farming business which is run by AOJ. At the time the Guardianship Tribunal made its decisions AOL had been living with her daughter AOK in a rural town for about three years. AOK had raised the possibility that her mother may need to be moved to an aged care facility which would require the payment of a substantial bond. AOJ wanted AOL to return to the farm and live with him. The Guardianship Tribunal described the siblings, AOJ and AOK, as having an extremely negative relationship.

Jurisdiction

1. The Administrative Decisions Tribunal has jurisdiction to hear this external appeal: Guardianship Act 1987 (Guardianship Act), s 67A(1)(e), Administrative Decisions Tribunal Act 1997 (ADT Act), s 118A and SH v Protective Commissioner [2006] NSWADTAP 4 at [10] to [13]. An appeal may be made as of right on a question of law and, with leave, on any other ground: ADT Act, s 118B(1). AOJ identified five "questions of law" but submitted that if any of those grounds were found not to constitute questions of law, leave was sought to appeal on "any other ground".

Parties

1. The appellant, AOJ, was represented by counsel. We appointed a guardian ad litem (GAL) to represent his mother, AOL: ADT Act, s 71(4). The GAL instructed solicitors and counsel who adopted the appellant's submissions. AOL's daughter, AOK, was the original applicant for a guardianship and a financial management order. She was a party to the appeal but chose not to appear. The Guardianship Tribunal elected to be a party and, in accordance with the principles in R v Australian Broadcasting Tribunal; ex parte Hardiman [1980] HCA 13; (1980) 144 CLR 13 at 35, its role is limited to making submissions in relation to the powers and procedures of the Guardianship Tribunal: ADT Act, s 67(2B).

Legal framework

1. Before making a financial management order, the Guardianship Tribunal must be satisfied, under s 25G of the Guardianship Act, that:

(1)   the person is not capable of managing his or her financial affairs, and

(2)   there is a need for another person to manage those affairs on the person's behalf, and

(3)   it is in the person's best interests that the order be made.

1. There was no dispute about the Tribunal's finding that a financial management order should be made. AOJ challenged the Guardianship Tribunal's decision to commit the management of AOL's estate to the NSW Trustee. Section 25M provides that:

If the Tribunal makes a financial management order in respect of the estate (or part of the estate) of a person, the Tribunal may, by order:

(a) appoint a suitable person as manager of that estate, or

(b) commit the management of that estate to the NSW Trustee.

1. Anyone exercising functions under the Guardianship Act has a duty to observe the principles in s 4 including that the welfare and interests of the affected person are given paramount consideration.

Tribunal's decision

1. The Guardianship Tribunal summarised the law in relation to the appointment of a financial manager in the following terms:

Who should be appointed financial manager?

The Tribunal needed to consider whether it could appoint a suitable person to the role of financial manager and otherwise needed to appoint the NSW trustee. This issue needed to be determined in accordance with [AOL's] best interests. The Tribunal has a broad discretion here. It needed to take into account all relevant circumstances and could be guided by the principles in section 4 of the Guardianship Act. (Holt v Protective Commissioner (1993) 31 NSWLR 227; SH v Protective Commissioner [2006] ADTAP 22; LA v Protective Commissioner [2004] NSWADTAP 39.)

While there is no absolute bar on appointing a financial manager who has a conflict of interest, it is an issue that the Court of Appeal has said should be approached carefully and that ordinarily a person with a conflict of interest would not be appointed (Holt v Protective Commissioner (1993) 31 NSWLR 227 at 242. See also H v H, Supreme Court Protective Division, unreported, Hodgson J, 31 March 1994, Re R [2000] NSWSC 886 and Re L [2000] NSWSC 721.

1. The Guardianship Tribunal went on to consider whether AOJ should be appointed as financial manager:

[AOJ] has the advantages of knowing his mother's finances very well and has her confidence in relation to financial matters. However, the interconnectedness of [AOL's] and [AOJ's] affairs created a major issue of conflict of interest. This was especially so in view of the spending issues that may arise over time from decisions of the guardian about accommodation and services.

1. Finally, the Guardianship Tribunal sought to allay AOJ's concerns about the NSW Trustee managing his mother's interests in the farming business. Ms Drew, a manager at the NSW Trustee's office, gave evidence that the Trustee would seek to understand the history of the business arrangements and then establish an agreement with AOJ about how the farm would operate in the future. If good arrangements were in place for the running of the properties, the Trustee would leave those in place.

Grounds of appeal

1. Five grounds of appeal were listed in the Amended Notice of Appeal. A sixth was added in the written submissions. In summary, the grounds of appeal on a question of law were that the Guardianship Tribunal:

(1)   misdirected itself in relation to the correct legal test to be applied when it stated that "ordinarily a person with a conflict of interest would not be appointed" as a financial manager;

(2)   erred by characterising the appellant's conflict of interest as "major" with the effect that it prohibited his appointment as financial manager;

(3)   relied excessively on the perceived conflict of interest and failed to consider other relevant factors;

(4)   failed to take into account a material consideration being the previous appointment of the Public Guardian;

(5) failed to observe the principles in s 4 of the Guardianship Act;

(6)   failed to consider making a 12-month financial management order and reviewing the appointment after that time.

1. Grounds 1, 3, 4 and the second proposition in ground 2 [ground 2(b)] relate to the exercise of the discretion in s 25M to appoint a "suitable person" or the NSW Trustee as financial manager. Those grounds raise questions of law.

1. The fifth ground is that the Tribunal failed to observe the principles in s 4 of the Guardianship Act when exercising the discretion in s 25M. That ground also identifies a question of law and will be addressed separately.

1. The first proposition in the second ground of appeal [ground 2(a)] relates to a finding of fact. Whether or not a conflict of interest can be characterised as "major" is a matter of judgment based on the evidence. It is only where there is no evidence at all on which a 'primary finding of fact' could be based, that there is an error of law: Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 155-156. Similarly, the sixth ground of appeal does not identify a question of law. This ground goes to the merits of the Guardianship Tribunal's decision to make the order that it did rather than some other order. We will consider the first proposition in ground 2 and ground 6 when we determine whether to give leave for the appeal to proceed on any ground other than a question of law.

Grounds 1, 2(b) and 3

1. The first ground of appeal is, in effect, that the Tribunal relied too heavily on the proposition that "ordinarily a person with a conflict of interest would not be appointed" and did not go on to consider other relevant matters. That is how the third ground is expressed and we cannot identify any practical difference between the two grounds.

1. Grounds 1, 2(b) and 3 rely on the decision of Kirby P in Holt v Protective Commissioner (1993) 31 NSWLR 227 at 241-243. That case interpreted a now repealed provision which was essentially the same as s 25M. The parties urged Kirby P to provide guidelines to assist decision makers in future cases to decide who to appoint as financial manager. Kirby P did not think it appropriate to confine that discretion by "rigid rules or even 'guidelines' expressed in general terms." The President made the point that the only guideline when exercising a discretionary power, is to consider all relevant circumstances.

1. Kirby P went on at p 241 and 242 to set out some of the circumstances which may be relevant in a particular case. His Honour described the points he made as a "framework" or a "checklist of considerations to be kept in mind." Kirby P noted that the exercise of a discretion is involved. Because that discretion is exercised in the context of a protective jurisdiction, the "abiding rule" is the achievement of the best interests of the person concerned.

1. The following passage in Kirby P's judgment, at 242, was the focus of this appeal:

5 Ordinarily, a person who would face a conflict of interest and duty would not be appointed a manager of a protected person's estate. However, in some family situations, inter-related property interests may present such conflicts. Sometimes they will be more apparent than real. They do not necessarily present an absolute bar to appointment as a manager for otherwise this would exclude from consideration a range of family members in every other way appropriate;

1. The Guardianship Tribunal echoed these words in the paragraph quoted above at [9]. Kirby P went on to list some of the competing advantages and disadvantages of appointing a family member or the NSW Trustee.

1. Counsel for the appellant submitted that the Guardianship Tribunal failed to determine whether any conflict of interest was "more apparent than real" and failed to take into account the family's circumstances. Those circumstances include the special characteristics of AOJ who has the day-to-day conduct of the farming business. It was submitted that the Guardianship Tribunal needed to go further than making a finding that the financial affairs of the appellant and his mother were intertwined. That fact alone was said not to support a finding that there was a 'major' conflict of interest warranting the appointment of the NSW Trustee.

1. Counsel for AOL supported the appeal and adopted the submissions made by the appellant's counsel. He said that the error of law was clear and that the Guardianship Tribunal had misdirected itself when applying s 25M. When a conflict of interest is asserted the Guardianship Tribunal must determine whether the conflict is apparent or real. The Guardianship Tribunal did not do so in this case.

Consideration of grounds 1, 2(b) and 3

1. The words of Kirby P in Holt are not a substitute for the statutory discretion in s 25M. Failing to refer to or rigidly apply the 'guidelines' in that case does not constitute an error of law. When determining whether a decision maker has made an error of law in the process of exercising a discretion, the principles articulated by Evatt and McTiernan JJ in House v King [1936] HCA 40; (1936) 55 CLR 499 at 505 still apply:

If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so.

1. The Guardianship Tribunal acknowledged that there was no absolute bar to appointing a family member who has a conflict of interest but that the issue should be approached carefully. The Guardianship Tribunal expressly took into account the fact that AOJ had the advantage of knowing his mother's finances very well and having her confidence in relation to financial matters. But the Guardianship Tribunal found, by implication, that the conflict of interest outweighed all other considerations. While not using the words "apparent" or "real", the Guardianship Tribunal was satisfied that the conflict of interest was significant enough to justify the appointment of the NSW Trustee. Whether there was enough probative evidence to support that finding is not a question of law and will be considered when determining whether leave should be granted to appeal on "other grounds".

Ground 4 - existence of a guardian

1. The fourth ground of appeal was that the Guardianship Tribunal erred by failing to take into account the fact that a guardianship order had been made appointing the Public Guardian and the effect of that order. The appellant's solicitor hypothesised that the effect of that appointment was that if AOL needed funds for accommodation or services and the appellant refused to provide those funds, the guardian could apply for the NSW Trustee to be appointed as manager. This was described as an "independent safeguard" to ensure that the Guardianship Tribunal's future concerns about the appellant's conduct did not become a reality.

1. The Tribunal will only make an error of law by failing to take into account a relevant consideration if that consideration is a consideration that the Tribunal is bound to take into account: Minister for Aboriginal Affairs v Peko Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24. Whether or not a decision maker is bound to take into account or ignore any particular matter is to be determined from the "subject-matter, scope and purpose" of the legislative scheme: Peko Wallsend, per Mason J at 39-40. There is nothing in the legislative scheme currently before us which suggests that the consequences of appointing the Public Guardian to make lifestyle decisions is a consideration that the Guardianship Tribunal is bound to take into account when determining whom to appoint as financial manager.

Ground 5 - failing to observe the principles in s 4

1. Section 4 of the Guardianship Act states that:

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.

1. The appellant submitted that the Guardianship Tribunal failed to "adhere" to these general principles. The decision to appoint the NSW Trustee was said to be inconsistent with the principles in s 4(b), (c), (d), (e) and (f). For example, AOL expressed the view that by AOJ managing her financial affairs, that outcome would, in AOJ's opinion, preserve family relationships and assist AOL to be self-reliant.

1. The Tribunal expressly referred to the principles in s 4 when describing the task of determining who to appoint as financial manager:

The Tribunal has a broad discretion here. It needed to take into account all relevant circumstances and could be guided by the principles in s 4 of the Guardianship Act

1. The Tribunal acknowledged that it "could be guided" by the principles in s 4. We understand the Tribunal to mean that it would be guided by those principles if they were relevant and consistent with AOL's best interests. In a previous decision, the Appeal Panel made the following observations in relation to s 4:

. . . when making a decision about whether to revoke a financial management order, or to exercise any other function under the Guardianship Act, a decision maker is bound to observe any relevant principle in s 4. The decision maker may demonstrate that he or she has observed those principles either by referring to them expressly or by writing reasons for decision which demonstrate that all relevant principles have been observed.

However, the principles are not expressed in absolute terms. Phrases such as "as little as possible" and "as far as possible" make it clear that observing a principle does not mean that, where a discretion exists, a decision maker must make a particular decision: Ms A v Public Guardian & Ors [2006] NSWADTAP 55 (27 October 2006).

1. A reading of the Tribunal's decision as a whole satisfies us that the Tribunal was mindful of the principles in s 4 when it made its decision. Those principles do not all suggest that AOJ should have been appointed as his mother's financial manager. While AOL's views and the importance of preserving family relationships may be consistent with AOJ being appointed, the Tribunal considered that it was in AOL's best interests to appoint an independent financial manager. That view was based on the finding that AOJ had a major conflict of financial interest with his mother.

Grounds 2(a) and 6 - leave to appeal on "other grounds"

1. While AOJ may appeal as of right on any question of law, leave is required before an appeal on any other ground can proceed. The ADT Act does not contain any guidance on the relevant matters to be taken into account in determining whether leave should be granted. The Supreme Court has provided some guidance on this question in the cases of K v K [2000] NSWSC 1052; S v S [2001] NSWSC 146 and Re R [2000] NSWSC 886 (17 August 2000). Those cases interpret s 67 of the Guardianship Act which is the equivalent provision in relation to appeals from Guardianship Tribunal decisions to the Supreme Court. In K v K, Young J observed at [10] that 'it has never been clearly decided what the circumstances are that should lead the Court to grant leave to appeal under s 67', but went on to make a number of observations on this point: see paras [10]-[15]. After considering the relationship between the Court and the Tribunal, Young J observed at [15]:

It would seem to me that s 67 of the Guardianship Act operates so that broad questions of administration and policy and the applicability of policy to individual cases, even if they are not questions of law, may well be subjects on which the Court will grant leave to appeal. On the other hand, it is very unlikely that the Court will grant leave to appeal when there is a problem with a fact finding exercise unless there are clear indications that the Tribunal has gone about that fact finding process in such an unorthodox manner or in a way which is likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed.

1. Ground 2(a) challenges the Tribunal's finding of fact that the appellant's conflict of interest was "major" and that that meant he was not a suitable person to be appointed as financial manager. The appellant also said that the Guardianship Tribunal did not make clear findings about the nature and extent of the conflict - only three lines were devoted to that issue:

[The appellant] has the advantages of knowing his mother's finances very well and has her confidence in relation to financial matters. However, the interconnectedness of [AOL's and AOJ's] affairs created a major issue of conflict of interest. This was especially so in view of the spending issues that may arise over time from decisions of the guardian about accommodation and services.

1. While the reasons are brief, the Guardianship Tribunal also addressed the issue of conflict of interest when deciding whom to appoint as AOL's guardian. Those findings are also relevant to the issue of who should be appointed as financial manager:

[AOJ] also had a conflict of interest in that the guardian may face choices about accommodation or services that would involve considerable financial outlay. [AOL's] assets are largely tied up in the farming land and business that she owns with [AOJ]. [AOJ] had written that his mother could not afford an accommodation bond although in the hearing he was less adamant on this. In the hearing, he was adamant that selling or mortgaging any of the farming property was not an option. He said that any care costs would need to come from his mother's money. If she didn't have enough money, then he would look after her personally. He also said that, if she needed a full time carer, she may be able to use any money she gets from her sister's estate.

1. This passage summarises the following evidence beginning at page 28 of the transcript:

Member:... Look, the other thing I just need to get you to respond to is that if you were guardian, maybe you've got a conflict of interest because - and no one seems to be real keen on this idea, but if - if your mum did need to go into some facility and there was a big bond to be paid that the money would have to come from somewhere and so it could put you in a conflict of interest situation if you were Guardian and having to make decisions about where your mum lived when the only way to pay the bond would be to somehow get it out of the farm.

Appellant: Well selling the farm as far as I'm concerned is not an option.

Member: What about mortgaging it?

Appellant: I'm not interested in mortgaging it either. There is no mortgages on it. We worked there all the time to - all this time to keep it free of any mortgages and I don't want any mortgages on at this stage.

1. Later at page 30, from line 15 of the transcript, the following exchange is recorded:

Member: If - if your mum does go to the farm and she goes downhill, and so that she needs a very high level of professional care, either in an aged care facility or at the farm, so you might be faced with a choice of, I don't know, $100,000 a year of paid care or an aged care facility; what would you do then?

Appellant: We'd cross that bridge when we came to it.

Member: So can you - I mean can you see any situation where she'd need to go to an aged care facility?

Appellant: Not at - not at the moment. When they go into those aged care facilities you don't get one on one care.

. . .

Member: How would you organise to pay for it, if you needed the care?

Appellant: Well, it'll have to come out of what money mother's got and if these others hadn't taken mother to the Tribunal

. . .

Member: So you wouldn't be opposed to paying for care if it came up, you wouldn't - if it was needed?

Appellant: If mother's got the money to pay for it.

Member: And what happens if she doesn't hypothetically speaking?

Appellant: Well I'd have to look after her wouldn't I?

Member: Have to look after her why?

Appellant: (indistinct), that's what I intend to do.

1. We are satisfied, on the basis of these exchanges, that there was probative evidence to support the Guardianship Tribunal's finding that AOJ had a major conflict of financial interest with his mother. His evidence demonstrates reluctance to use any partnership money to pay for his mother's accommodation bond if that became necessary. We are also not persuaded that the Guardianship Tribunal made an unfair finding or took an unorthodox approach by not taking into account the appellant's "so-called flexibility." His lawyer gave two examples: the fact that after seeing Dr Williams' report the appellant agreed that his mother needed a guardian and secondly that when his mother did go into an aged care facility he was able to renegotiate a bond of $250,000 down to $170,000. The second example is not relevant because it occurred after the Guardianship Tribunal's hearing. The first example does not detract from AOJ's clear evidence that rather than spend money on a bond for an aged care facility, even if that was seen as in his mother's best interests, AOJ would look after her himself.

1. Even if there was some evidence to support the Guardianship Tribunal's finding of a "major" conflict of interest, AOJ submitted that it was unfair to make that finding because:

(1)   the issue of costs for future accommodation was a hypothetical matter - such accommodation may not be necessary and if it was the cost was unknown;

(2) the appellant's interests and those of his mother largely coincide - both want to make a profit from a farming business;

(3) the partnership had a significant amount of cash that would be available for the payment of any bond required by an aged care facility;

(4)   AOL stood to inherit a significant amount of money from her sister's estate; and

(5)   there was no evidence that AOJ has done anything other than act in the best interests of his mother.

1. Hypothetical or not, AOL's daughter, AOK, had foreshadowed the possibility that her mother may need to move to an aged care facility. Payment for that accommodation was a real issue. Of course it was in AOJ's and AOL's best interests for the farming business to make a profit but if AOL needed money for accommodation it was overwhelmingly in her interest for the money to be provided from partnership sources if necessary. Whether or not the partnership had cash available, AOJ indicated to the Guardianship Tribunal that an accommodation bond would be paid, "if mother's got the money to pay for it". The money AOL stood to inherit from her sister is the subject of Supreme Court proceedings. Finally, any lack of evidence that AOJ had acted against his mother's interests does not necessarily detract from the evidence that she would have to spend her own money to pay for accommodation and partnership money would not be available.

1. The appellant submitted that the Guardianship Tribunal erred by failing to consider making a 12-month financial management order and reviewing the appointment after that time. The error was said to be failing to consider that option. The Tribunal may order that a financial management order be reviewed within a specified time: Guardianship Act, s 25N(1). Failing to consider this option does not justify leave being granted to appeal against the merits of the decision.

Orders

1. The order of the Guardianship Tribunal committing the management of AOL's estate to the NSW Trustee is affirmed.

2. Leave is refused for the appeal to be made on any ground other than a question of law.

Decision last updated: 02 August 2013