BDN - [2014] NSWCATGD 15

NSW Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation: BDN [2014] NSWCATGD 15
Hearing dates: 27, 28 February and 3 April 2014
Decision date: 27 May 2014
Jurisdiction: Guardianship Division
Before: Redfern J, Principal Member
Martin K, Senior Member (Professional)
Johnston S, General Member (Community)
Decision:
Enduring guardianship appointment confirmed.
Limited guardianship order made for a period of six months; Public Guardian appointed with services, advocacy and access functions.
Financial management order made; NSW Trustee and Guardian appointed reviewable in six months.
Applications for review of enduring power of attorney dismissed.

Catchwords:
GUARDIANSHIP - dispute about capacity - family conflict - deterioration in previously good family relationship - need for independent advocacy.

FINANCIAL MANAGEMENT - capacity to manage finances - inconsistent medical evidence - mismanagement of estate by attorney - suitability for appointment as financial manager - conflict of interest.

ENDURING POWER OF ATTORNEY - review of operation and effect - termination of joint power of attorney on death of one attorney - jurisdiction - whether instrument can be reinstated - not in best interests to reinstate power of attorney.
ENDURING GUARDIANSHIP - appointment suspended pending limited guardianship order - not in best interests to revoke - confirmed.
Legislation Cited: Conveyancing Act 1919 (NSW)
Guardianship Act 1987 (NSW)
Powers of Attorney Act 2003 (NSW)
Cases Cited: Re GHI (a protected person) [2005] NSWSC 581
PY v RJS [1982] 2 NSWLR 70
H v H (Supreme Court Equity Division Protective List (NSW), Young J, 20 March 2000, unreported)
Re D [2012] NSWSC 1006
P v R [2003] NSWSC 819
Holt v Protective Commissioner (1993) 31 NSWLR 227
Texts Cited: Collier and Lindsay, Powers of Attorney in Australia and New Zealand (1992, The Federation Press)
Oxford Concise Dictionary
Category: Principal judgment
Parties: Mrs BDN
Mrs TFX (Applicant)
Mr MPN (Applicant, Enduring Guardian and Attorney)
The NSW Trustee and Guardian
The Public Guardian
File Number(s): 54466
Publication restriction: Decisions of the Guardianship Division of the Civil and Administrative Tribunal have been anonymised to remove any information that may identify any person involved in the Tribunal's proceedings (s 65, Civil and Administrative Tribunal Act 2013 (NSW)).

REASONS FOR DECISION

These Reasons for Decision are for the orders of the Tribunal made on 27 May 2014 concerning Mrs BDN.

WHAT THE TRIBUNAL DECIDED

The Tribunal:

(a) appointed the Public Guardian as guardian for Mrs BDN for a period of six months to make decisions for her about her services, access to others, and to advocate for her;

(b) committed the estate of Mrs BDN to the NSW Trustee and Guardian; and

The Tribunal confirmed the appointment of an enduring guardian made by Mrs BDN on 16 March 2006 appointing Mr MPN as her enduring guardian.

The Tribunal dismissed the applications made by Mrs TFX and Mr MPN for review of the operation and effect of the enduring power of attorney made by Mrs BDN on 25 July 2003.

INTRODUCTION

Mrs BDN is a 96-year-old woman of Italian background living in her own home in Regional NSW. She has a son, Mr MPN, and five grandchildren. She is widowed. Her daughter, Mrs GBE, passed away in March 2013. Mrs GBE was married to Mr DQE and there are three children from this marriage. Mr MPN is married to Mrs OAN and they have two sons.

On 25 July 2003, Mrs BDN appointed Mr MPN and Mrs GBE as her attorneys. The appointment was joint and/or several. On 16 March 2006, she appointed Mr MPN as her enduring guardian. In 2006, the enduring power of attorney was amended by deleting the reference to "several," converting the appointment to a joint appointment. The amendment was reportedly requested by Mrs BDN.

On 18 September 2013, Mrs TFX, granddaughter of Mrs BDN and daughter of Mrs GBE, made an application to review the operation and effect of the power of attorney. She also made applications for guardianship and financial management orders.

On 3 December 2013 the Tribunal granted leave to Mrs BDN, Mrs TFX and Mr MPN, to be legally represented. There were directions made about the preparation of the matter and all applications were listed for hearing on 31 January 2014. The hearing did not proceed on this day and further directions were made about the exchange of evidence. The parties were given leave to file and serve further applications to ensure all outstanding issues identified by the parties during the directions hearing were properly ventilated.

On 11 February 2014, Mrs TFX made an application for the enduring guardianship appointment to be revoked. Mr MPN filed an application to review the enduring power of attorney and, in particular, sought orders to reinstate the power of attorney.

The matter was listed for hearing over two days in regional NSW. Mrs BDN was assisted by an Italian interpreter and the parties were given the opportunity to make written submissions. There was significant dispute about Mrs BDN's mental capacity to make decisions for herself and to manage her finances. There was also dispute about the need for guardianship and financial management orders, the operation and effect of the instruments executed by Mrs BDN in 2003 and 2006 and the nature of Mrs BDN's finances and the extent to which they had been appropriately managed.

A list of parties and the witnesses at the hearing is attached as an appendix to these Reasons for Decision. [appendix removed for publication]

THE STATUTORY FRAMEWORK

The relevant legislation governing the issues raised in these proceedings are the GuardianshipAct1987 (NSW) (the Guardianship Act) and the Powers of Attorney Act 2003 (NSW) (POA Act).

The Tribunal's jurisdiction in relation to the review of the appointment of an enduring guardian and the making of financial management and guardianship orders is set out in the Guardianship Act. The POA Act deals with the review of powers of attorney.

Section 4 of the Guardianship Act sets out the general principles that everyone exercising functions under the Act in respect to persons who have disabilities must observe. Those principles are as follows:

(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;

(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 recognized;

(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 Tribunal must be guided by these principles when exercising its functions under the Guardianship Act. The principles recognise the importance of freedom of action, self-determination and independence for the person with a disability, against which the Tribunal must balance protection from neglect, abuse and exploitation. Relevantly, the welfare and interests of persons with disabilities must be given "paramount consideration" (subs 4(a)).

Section 9 of the Guardianship Act provides that an application for guardianship may be made to the Tribunal by the person, the Public Guardian and "any other person who, in the opinion of the Tribunal, has a genuine concern for the welfare of the person." Section 25I is in similar terms in respect of applications for financial management.

Section 14 of the Guardianship Act provides that the Tribunal may make a guardianship order for a person if it is satisfied that he/she is "a person in need of a guardian." A person in need of a guardian is "a person who because of a disability is totally or partially incapable of managing his or her person" (subs 3(1), Guardianship Act). A person with a disability is a person who is:

(a) intellectually, physically, psychologically or sensorily disabled;

(b) of advanced age;

(d) otherwise disabled;

and by virtue of that fact is restricted in one or more major life activities to such an extent that he or she requires supervision or social habilitation (subs 3(2), Guardianship Act).

Section 25E of the Guardianship Act provides that the Tribunal may make a financial management order and s 25G sets out the grounds on which an order can be made. It provides as follows:

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

Thus, threshold issues for the Tribunal in determining applications for guardianship and financial management are: first, whether an application has been properly made; and, secondly, whether there is relevant incapacity of the person who is the subject of the application to manage either their person or finances.

If these threshold issues are established, the Tribunal has discretion about whether to make orders. In exercising this discretion, the Tribunal must consider the views of the person who is the subject of the application and, importantly, must have regard to the general principles in the Guardianship Act. This may include attempting to give effect to arrangements already made by the person with a disability in respect of substitute decision-making, provided those arrangements are appropriate and in their best interests.

A person may, in anticipation that they may lose capacity in later life, make provision for substitute decision-makers to make decisions for them on important life matters or in respect of their finances. In this case, Mrs BDN made such provision. In 2006 she appointed Mr MPN as her enduring guardian to make decisions for her about her accommodation, health care, services, dental and medical treatments and 'end of life' issues. In 2003, Mrs BDN appointed Mr MPN and Mrs GBE as her attorneys to manage her finances. Both instruments were intended to operate in the event of mental incapacity.

The appointment of enduring guardian was created pursuant to Part 2 of the Guardianship Act and the power of attorney was created under s 163B of the Conveyancing Act 1919 (NSW) (the Conveyancing Act). The Guardianship Act and the POA Act provide for the review of these instruments by the Tribunal.

The Tribunal's jurisdiction in relation to the review of an enduring guardian appointment is set out in sections 6K to 6MA of the Guardianship Act. Section 6J provides that the Tribunal may (on its own motion) and must (at the request of any person who, in the opinion of the Tribunal, has a genuine concern for the welfare of the principal) review the appointment of an enduring guardian.

On reviewing the appointment of an enduring guardian, the Tribunal may revoke or confirm the appointment, with or without varying the functions of the guardian (subs 6K(1)). The Tribunal must not revoke the appointment unless the enduring guardian requested the revocation or it is satisfied that it is in the best interests of the principal that the appointment be revoked (subs 6K(2)). If the Tribunal revokes the appointment, it may proceed as if an application for guardianship, financial management or both has been made (subs 6K(3)).

The Tribunal's jurisdiction in relation to the review of powers of attorney is set out in Division 4, Part 5 of the POA Act. Even though the power of attorney was created under the Conveyancing Act, its operation and effect may be reviewed by the Tribunal by reason of subs 6(5) of the POA Act.

Section 36(1) of the POA Act provides that the Tribunal may, on the application of an interested person, decide to review the making, revocation or operation and effect of a reviewable power of attorney. Section 35(1) of the POA Act identifies when a person will be an "interested person" for the purposes of making an application for the review under s36(1) and includes "any other person who, in the opinion of the review Tribunal, has a proper interest in the proceedings or a genuine concern for the welfare of the principal."

When reviewing the operation and effect of a power of attorney, the Tribunal has a broad discretion to make orders in the terms of those set out in subs 36(3) to (9) of the POA Act if it is satisfied that it would be in the best interests of the principal to do so or that it would better reflect the wishes of the principal. For instance, the Tribunal may remove a person from office, vary a term or power, revoke all or part of the power of attorney, and direct an attorney to lodge accounts.

Relevant to the facts of this case and the submissions of the parties, the Tribunal may, pursuant to section 36(4)(d) of the POA Act, make "an order reinstating a power of attorney that has lapsed by reason of any vacancy in the office of an attorney and appointing a substitute attorney to replace the attorney who vacated office." Furthermore subs 36(9) provides as follows:

If the review Tribunal makes an order under this section reinstating a power of attorney that has lapsed by reason of a vacancy in the office of an attorney, the order may also direct that it has effect from the time at which the power of attorney originally lapsed.

Mrs GBE passed away on 7 March 2013. There was no contest, either at the hearing or in the written submissions of the parties, that Mrs BDN amended her power of attorney in 2006 to make the appointment of her attorneys joint rather than joint and/or several. There was evidence about these amendments from Mr NDL and Mr MPN, however, there was no evidence about the date or circumstances leading to the amendment, other than that Mrs BDN wished her attorneys to act jointly and not severally.

Section 5 of the POA Act provides that there is a vacancy in the office of any attorney if the attorney dies. Section 46 provides as follows:

Effect of vacation of office of joint and several attorneys

(1) If a power of attorney appoints 2 or more persons as joint attorneys, the power of attorney is terminated if the office of one or more of the attorneys becomes vacant.

(1A) However, such a power of attorney is not terminated if:

(a) the power of attorney provides otherwise; and

(b) at least one of the attorneys or a substitute attorney remains in office.

(2) If a power of attorney appoints 2 or more persons as attorneys either severally or jointly and severally, a vacancy in the office of one or more attorneys does not operate to terminate the power of attorney in relation to the other attorneys.

Given the power of attorney was created before the commencement of the POA Act, these provisions do not apply. The Conveyancing Act was repealed on the commencement of the POA Act and the only provisions that continue to apply are those set out in Schedule 1 of the POA Act. None of these provisions deal with the effect of the death of one of the appointees on a power of attorney where there is a joint appointment.

At the directions hearing on 31 January 2014, there was an issue raised about whether the Tribunal had power to review the power of attorney given there was evidence it was amended in 2006 to provide for joint appointment and one of the appointees, Mrs GBE, had passed away. There was an assumption made by the parties that s 46(1) applied and that the power of attorney was thereby terminated at the time of Mrs GBE's death. Section 6(2) of the POA Act provides that the Act does not apply to any power of attorney created before the commencement of the POA Act, except as provided by subs (5). Section 6(5) provides that certain provisions of the POA Act apply to instruments created before the commencement but s 46 of the POA Act is not one of those provisions. As such, the power of attorney was not terminated by reason of subs 46(1) of the POA Act and the effect of Mrs GBE's death on the power of attorney is governed by the general law.

For the reasons later outlined, the Tribunal is of the view that the power of attorney was terminated when Mrs GBE died. The question of whether a power of attorney that has been terminated by the death of one of the joint appointees can nonetheless be reviewed under Part 5 of the POA Act was a threshold issue for determination of the applications made by Mrs TFX and Mr MPN to review the power of attorney.

ISSUES IN DISPUTE, SUBMISSIONS OF THE PARTIES AND QUESTIONS FOR DETERMINATION

Mrs TFX made her applications because of concern about how Mrs BDN's finances and social and health care matters were being managed following the death of her mother. According to Mrs TFX, Mrs GBE was the primary provider of non-financial assistance to Mrs BDN but following her mother's death these matters had been undertaken by Mr MPN with "total alienation" of Mrs GBE's family to the detriment of Mrs BDN. In her application, Mrs TFX stated that concern was expressed by a family member (Mr DQE) in relation to the financial resources and capacity of Mrs BDN and Mr MPN took offence to this. Mrs TFX contended that Mr MPN refuses to allow any contact between Mrs BDN and Mrs GBE's family after this incident. Mrs TFX also expressed concern that Mrs BDN did not understand the power of attorney and enduring guardian appointment instruments, they were not operating in her best interests and should be revoked. Mrs TFX requested that she be jointly appointed as guardian and financial manager with Mr MPN or that the NSW Trustee and Guardian be appointed to manage Mrs BDN's estate and that the Public Guardian be appointed to make decisions for Mrs BDN about important life matters.

It was submitted, on behalf of Mrs BDN, that she was able to make decisions about her person and to manage her finances. While it was acknowledged Mrs BDN had difficulties in understanding and reading English, it was contended this did not result in her having a disability or incapacity within the meaning of the relevant statutory provisions. Mrs BDN has managed her finances with assistance from her family, in particular Mr MPN, and has made decisions about her health, medical needs and where she lives for many years. To the extent that she needs assistance with decision making, her son, Mr MPN provides this assistance. There was no need for financial management or guardianship orders to be made by the Tribunal. Furthermore, the Tribunal should not disturb the enduring guardianship appointment made by her in March 2006 and, to the extent it is empowered to do so, the Tribunal should reinstate the power of attorney, making Mr MPN the sole attorney.

Mr MPN submitted that his mother lived by herself, made her own decisions about her health care, medical treatments and accommodation and used an interpreter when required. She could make financial decisions but needed assistance to implement those decisions. He provided this assistance. The Tribunal should reinstate the power of attorney made in July 2003, making him sole attorney. He had not alienated Mrs BDN from Mrs GBE's family. This is a decision she had made herself after unwarranted interference by members of the family, particularly Mr DQE.

The issues for determination in respect of the guardianship matters, being the application for guardianship and the review of the appointment of an enduring guardian, are interrelated. The appointment of an enduring guardian only has effect at the time when the appointor is "a person in need of a guardian" (s 6A of the Guardianship Act). Similarly, the Tribunal may only make a guardianship order if it is satisfied that the person who is the subject of the application is "a person in need of a guardian" (subs 14(1) of the Guardianship Act). If the Tribunal is satisfied it has jurisdiction to consider applications for a guardianship order and for the review of the appointment of enduring guardian and is satisfied Mrs BDN has a disability and cannot manage her person, the Tribunal may nonetheless decide not to make a guardianship order if it is satisfied about the operation of the appointment of enduring guardian. If the Tribunal is not so satisfied, it may revoke the appointment. Alternatively, the Tribunal may decide not to revoke the appointment but make a guardianship order, thereby suspending the operation of the appointment for the period of the order.

When considering the review of the appointment of enduring guardian and the application for guardianship orders, the following questions arise:

(a) Is there jurisdiction to consider the applications? Does Mrs TFX have a "genuine concern" for Mrs BDN? If so, the Tribunal must review the appointment of enduring guardian. If not the Tribunal may only review the appointment on its own motion. This question is also relevant to the application for guardianship as the Tribunal will not have jurisdiction to entertain an application unless it is satisfied that the applicant has a genuine concern for the welfare of Mrs BDN;

(b) Does Mrs BDN have a disability which prevents her from being able to make important life decisions?

(d) In considering (c), and assuming (a) is answered in the affirmative, it is also relevant to consider the operation of the appointment of enduring guardian. Given the appointment can only be revoked if the Tribunal is satisfied it is in the best interests of the appointor to do so, the key issue for determination in respect of this application is whether it is in the best interests of Mrs BDN that Mr MPN's appointment be revoked.

(e) If a guardianship order is made, the following questions arise:

(i) who should be the guardian? and

(ii) how long should the order last?

The issues for determination in respect of the financial management matters, namely the applications for review of the enduring power of attorney and for financial management, are also interrelated. If the Tribunal is satisfied it has jurisdiction to consider applications for a financial management order and for the review of the enduring power of attorney and is satisfied Mrs BDN cannot manage her finances, the Tribunal may nonetheless decide not to make a financial management order. This would be the case if, the Tribunal is empowered by subs 36(4)(d) of the POA Act to reinstate the power of attorney and is satisfied it would be in Mrs BDN's best interests to do so. If the Tribunal is not so satisfied, it may review the power of attorney but decide to make no order and to make financial management orders pursuant to s 25E of the Guardianship Act.

When considering the application for financial management orders and for the review of the enduring power of attorney, the following questions arise:

(a) Is there jurisdiction to consider the applications? Do Mrs TFX and/or Mr MPN have a "genuine concern" for the welfare of Mrs BDN?

(b) Does the Tribunal have the power to review the power of attorney?

(c) If the Tribunal does have the power to review the power of attorney, should it do so and, if so, what order should be made? In particular, should the Tribunal reinstate the power of attorney?

(d) Is Mrs BDN capable of managing her affairs?

(e) Is there a need for another person to manage the affairs of Mrs BDN on her behalf and is it in the best interests of Mrs BDN that a financial management order be made?

(f) If so, who should be appointed financial manager?

BACKGROUND FACTS AND EVIDENCE

The Tribunal was provided with a 'record of interview' between Mrs BDN's lawyer, Mr NDL, and Mrs BDN, several brief statements from Mr NDL and statements from Mrs TFX, Mr NSE, Mr EFE, Mr DQE, Mrs OAN, Mr EJN and Mr MPN. The Tribunal was also provided with reports from Mr Z, accountant for Mrs BDN, Mr MPN and the partnership, and Mr Y, forensic accountant retained by Mrs GBE's family, financial documents relating to Mrs BDN and the partnership and medical reports.

While there was significant dispute about the nature and effect of the evidence, many of the key matters were not in dispute.

Mrs BDN's husband died approximately 10 years ago. She has five grandchildren: Mrs TFX, Mr EFE and Mr NSE (being the children of Mrs GBE and Mr DQE) and Mr EJN and Mr EWN (the sons of Mr MPN and Mrs OAN). She also has great grandchildren from Mrs GBE's side of the family.

Mrs BDN has a one third interest in a partnership with Mr MPN and Mrs OAN. The partnership owns a block of nine units in regional NSW, which generates rental income. According to tax returns lodged for the partnership for the period 2007 to 2013, the partnership made profits for each of the financial years as follows:

2007 $36,241

2008 $39,001

2009 $45,134

2010 $36,294

2011 $38,737

2012 $27,337

2013 $58,320

Mr MPN and Mrs OAN were each distributed 43% of the profits for the partnership from at least 2007 to 2013 and Mrs BDN was distributed 14% of the profits. These distributions were reflected in Mrs BDN's tax returns for the relevant period.

Until the commencement of these proceedings there were no financial statements prepared for the partnership. Mr Z prepared financial statements for the partnership for the year ended 30 June 2013 for purposes these proceedings. Relevantly, the financial statements record the following:

(a) The total value of property, plant and equipment for the partnership was $1,917,956;

(b) Partners' funds total $1,980,186, being $666,861 each for Mr MPN and Mrs OAN and $646,463 for Mrs BDN;

(d) Rents received totalled $93,492, expenses totalled $35,169 and the partnership made a profit of $58,322.

Mrs BDN receives both the Italian and Australian pension. According to Centrelink records, Mrs BDN had a debt to Centrelink for $12,630 as at 6 December 2012 representing an overpayment in her Australian pension for the period 1 November 2007 to 6 November 2012. The overpayment arose from an error in the significantly under-declaration of receipts for Mrs BDN's Italian pension in the period. The debt is being repaid by instalment deductions from Mrs BDN's current pension payments. Mrs BDN's pension is assessed by reference to her income and assets. According to the Centrelink income and asset details recorded for Mrs BDN for the relevant period, the market value of the partnership property was $1 million and Mrs BDN's share was 14% (or $140,000). The gross income changes from year to year and Mrs BDN's assessed income is recorded as representing 14% of the gross income. Mrs OAN is Mrs BDN's Centrelink nominee.

Mrs BDN has modest savings.

On 25 July 2003, Mrs BDN executed a power of attorney appointing Mrs GBE and Mr MPN as her attorneys. The appointment was "joint and/or several." According to Mr NDL, Mrs BDN requested that the appointment be changed to a joint appointment in about 2006. Mrs GBE was not notified about the change but there was no contest that the power of attorney was amended sometime after 2003 and at the time of Mrs GBE's death it was joint.

Mrs BDN had a close relationship with both her children, although it is clear that there was some tension between members of Mrs GBE's family, in particular Mrs BDN's son-in-law Mr DQE, and Mr MPN.

Until the illness of her daughter in early 2013, Mrs BDN enjoyed a good relationship with Mrs GBE's family. She also had a good relationship with her daughter-in-law and her grandsons from Mr MPN's side of the family.

In June 2013 Mr DQE discussed certain aspects of Mrs BDN's financial affairs with her. In particular, Mr DQE discussed the rental being received from the units owned by the partnership. This caused some anxiety and while there is dispute about why this is so, it is common ground that a complaint was made to the police at the suggestion of Mr EJN. Mrs GBE's family and Mr MPN's family, including Mrs BDN, have been estranged since this time.

Mr Y prepared two reports, the first dated 24 January 2014 and the second dated 19 February 2014. He also gave evidence at the hearing. Mr Y is a forensic accountant with over 25 years' experience in audit, financial statement preparation and the conduct of financial investigations.

Mr Z provided a letter dated 28 January 2014, responding to some of the issues raised in Mr Y's first report. He explained why the income distributed to Mrs BDN from the partnership was 14% as opposed to one third. Mr Z stated that Mrs BDN's allocation of income was reduced by 11% because Mr EJN lived rent free in one of her units and as this unit did not generate income; her share of the income was reduced accordingly. A further amount representing 8% was deducted from Mrs BDN's entitlement and reallocated to Mrs OAN and Mr MPN as recompense for Mr MPN's caretaker role.

Mr Y reviewed financial records relating to the partnership and the bank account details for Mrs BDN. He prepared his second report after reviewing the information provided, including the information provided by Mr Z in his letter dated 28 January 2014. Mr Y's observations and opinions can be summarised as follows:

There is no written partnership agreement between Mr MPN's family and financial statements have not been prepared for the partnership. The instructions received by Mr Z were solely to prepare the income tax returns for the partnership and the partners;

The partners are equal but over the five years ended 30 June 2009 to 30 June 2013, the income reported to have been distributed to Mrs BDN in this period was $28,815, which reflected 14% of the net income from the partnership. If Mrs BDN was entitled to one third of the income from the partnership the amount payable to her would have been in the vicinity of $68,607;

On 19 November 2012 an account was opened with Bank A and $40,000 was withdrawn from the partnership account and was deposited into this new account. The account holders were Mr MPN and Mrs OAN. There were further deposits into this account from the partnership but on 12 July 2013 the entire balance of the account, being $50,082.51, was transferred back to the partnership account. The new account was closed at that time;

Mr Y reviewed the statements for the bank accounts in the name of Mrs BDN. One account was with Bank B, in respect of which the majority of the deposits comprised her Australian pension benefits. The second account was with Bank A and comprised interest on the account and deposits for an Italian pension paid from Bank C. He identified $17,300 in the financial year ended 30 June 2013 which represented "unexplained drawings;"

Mr Y was concerned that correspondence from Centrelink revealed Mrs BDN's interest in the partnership property was disclosed as 14%, or $140,000, which was an undervalue of her interest. He noted that a valuation provided by Mr MPN for the property was in the vicinity of $1,890,000. If this valuation was applied, Mrs BDN's interest in the partnership property would be in the vicinity of $630,000. Even assuming the lower valuation of $1 million recorded in the Centrelink documents, her interest should have been disclosed as $330,000. Mr Y expressed concern that the amount disclosed to Centrelink is a misrepresentation of the true position and this may result in a reduction in her current pension entitlement and/or possible recovery by Centrelink for any amounts overpaid. In particular Mr Y recommended an audit of Mrs BDN's financial affairs be undertaken by an independent party and that Centrelink be approached to ensure that the correct information is provided;

It was unclear whether the caretaker expenses referred to in the letter of Mr Z were included in the rental deductions. If they were not included, the real cost of expenditure would be in the vicinity of $39,303, representing 42% of gross income. This was high. The net return on capital for the partnership was in the vicinity of 2.9%. The gross return was 4.9%. Both of these returns were below the expected rate for residential property, which should be in the vicinity of 5% and 6% on the gross basis;

Having regard to the reduction in Mrs BDN's distributions, she appeared to be disadvantaged by the arrangements. It may be better for Mrs BDN to sell her interests in the partnership and invest her funds in a term deposit. She could be self-funded and receive adequate funds to live on without recourse to the Australian pension.

Mr Y opined that the affairs of the partnership had not been well-managed, there were serious questions to be resolved in respect of Mrs BDN's Centrelink benefits and disclosures made, there was no evidence that any income of the partnership directly flowed to Mrs BDN or that she receives any direct benefit from a valuable investment., The majority of funds drawn from the partnership were withdrawn in cash with no supporting financial records and there were substantial cash drawings made on the personal accounts of Mrs BDN. Mr Y recommended an independent audit of Mrs BDN's financial affairs.

Mrs TFX stated that she first became concerned about Mrs BDN's finances after a conversation she had with Mrs BDN following her mother's death. She said that Mrs BDN complained her pension had been greatly reduced and she did not understand why. Mrs BDN said she could not afford to spend money. Mrs TFX was also concerned about Mrs BDN's health and whether she could properly communicate with her doctor. She noted that Mrs OAN now accompanied Mrs BDN to appointments but because she did not speak the same dialect as Mrs BDN, she was concerned there may be miscommunication on matters relating to Mrs BDN's treatment.

After the incident involving the police, Mrs TFX found continuing contact with her grandmother difficult. She believed Mrs BDN was being denied contact and was frightened of upsetting Mr MPN by seeing members of Mrs GBE's family. Mrs TFX related an incident when Mrs BDN had declined to attend her great-granddaughter's first Communion, which was said to be uncharacteristic.

Mr EFE told the Tribunal that he was an accountant and lawyer and was currently general counsel for the company that operated the family business, which was based in Regional NSW. Mr DQE was the managing director of the company. Mr DQE said that he tried not to get involved in any conflict or to provide advice to Mrs BDN even though she had raised with him a desire to prepare a new will. He recommended that she speak to another lawyer. Mr EFE said he supported the applications made by Mrs TFX because of concern for Mrs BDN. He also said he would be prepared to act as financial manager or to be appointed jointly with another, such as Mrs TFX or Mr MPN, if the Tribunal decided to make a financial management order.

Mr NSE attended the hearing and gave evidence in support of Mrs TFX's applications. He gave evidence about difficulties he had experienced in seeing his grandmother from June 2013 and expressed concern about the escalation of tension between Mrs GBE's family and Mr MPN's family following the complaint to police in June 2013.

Mr DQE denied that Mrs BDN was upset by her discussions with him in June 2013 and said he was surprised when he later learned that a complaint had been made to the police. He said that he was concerned about the management of Mrs BDN's finances because he did not believe she was earning enough income from the partnership. Mrs BDN raised her finances with him on one occasion when he visited her in June 2013. She told him they were not earning enough money from the partnership. He discussed this with her and questioned the rental and management of the units. Mr DQE said that he visited Mrs BDN regularly and had done so for about 50 years until the recent conflict. She was like a mother to him but after the police were called their relationship deteriorated. He stopped visiting her because he did not wish to create further conflict. Mr DQE said that Mrs GBE's family had no motive in raising these matters with Mrs BDN other than concern about her welfare. Mrs GBE's family was independently wealthy and he was the managing director of a company which had assets in the vicinity of $40 to 50 million.

Mr MPN provided written statements to the Tribunal and gave evidence. He noted that "over many years there has been and still is" friction between him and Mr DQE. He said that he carried out repairs and maintenance on the partnership units and this was the reason for the distribution of additional income to him and to Mrs OAN. His son, Mr EJN, had occupied unit XYZ for approximately 17 years without paying rent. He stated that Mrs BDN agreed to this and while Mr EJN was not a member of the partnership he has been of considerable assistance to Mr MPN in the management of the units. According to Mr MPN, Mr EJN was well educated and had a responsible job in the field of information technology.

Mr MPN said he would not be prepared to jointly manage Mrs BDN's finances with any member of Mrs GBE's family. He was asked about the possibility of being jointly appointed with Mr EFE. He said that even though he had no concerns about Mr EFE, he would not manage Mrs BDN's finances with him. He would prefer the NSW Trustee and Guardian to be appointed. Mr MPN denied that he had prevented or attempted to prevent Mrs GBE's family from having a meaningful relationship with Mrs BDN. This was his mother's wish. He would not be able to work with Mrs TFX as guardian for Mrs BDN. In any event, Mrs BDN did not need a guardian and could make decisions for herself.

Mrs OAN said that she had caused partnership monies to be transferred into a new account in her and Mr MPN's name in November 2012 on the advice of Bank A. This was discussed with Mrs BDN. It was intended that these funds remain partnership funds and in July 2013 she transferred the funds back into the partnership account. She denied that Mr MPN had attempted to alienate Mrs BDN from her grandchildren and great-grandchildren. Mrs OAN agreed that she was Mrs BDN'snominee for Centrelink and would have reviewed copies of correspondence from Centrelink about Mrs BDN's entitlements. She could not explain how the under-declaration of Mrs BDN's Italian pension had occurred but said this issue had now been resolved.

Mr EJN stated that after a visit from Mr DQE in June 2013, he visited Mrs BDN. She was "shaking" and told him she was concerned about the discussion she had with Mr DQE in relation to her finances. She wanted Mr DQE to stop discussing her financial situation. Mr EJN said that he suggested the police be contacted and that Mrs BDN agreed. He recommended the involvement of the police at this time because he thought this was "the only alternative in the circumstances." He said that he never thought about talking directly with Mr DQE about the matter.

Mrs BDN made a significant contribution during the hearing. The Tribunal was provided with a brief 'record of interview' rather than a detailed statement from Mrs BDN. This record did not address all of the issues raised and was translated by another client of Mrs BDN's lawyers. Given the importance of Mrs BDN's evidence and views, the Tribunal questioned Mrs BDN about her views on the applications made and the orders sought, her relationship with Mrs GBE's family and Mr MPN's family and about her finances and health. Mrs BDN expressed her views with the assistance of an interpreter and demonstrated impressive stamina and attentiveness to the proceedings for a woman of her advanced age. The key aspects of her evidence have been considered in more detail later in these Reasons.

CONSIDERATION

Jurisdiction: Do Mrs TFX and/or Mr MPN have a genuine concern for the welfare of Mrs BDN?

This is a threshold issue for determination of the review of the appointment of enduring guardian, the review of the enduring power of attorney and the applications for guardianship and financial management orders.

Mrs TFX is the granddaughter of Mrs BDN. Until the death of her mother, she had a close and longstanding relationship with Mrs BDN. Since her mother's death, and more particularly since the incident involving the police in June 2013, this relationship has become strained and more remote but primarily because of the increasing conflict between Mrs GBE's family and Mr MPN and his family. This has, in turn, unfortunately had a detrimental impact on the relationship between Mrs TFX and Mrs BDN. Mrs BDN resents the commencement of the proceedings and believes that Mrs GBE's family have made incorrect allegations against Mr MPN.

The Tribunal was satisfied Mrs TFX has a genuine concern for the welfare of Mrs BDN. Mrs TFX has raised legitimate concerns about the management of Mrs BDN's finances and about the increasing alienation between members of the Mrs GBE's family and Mrs BDN. Given the uncontradicted evidence of the previously close relationship between Mrs BDN and various members of Mrs GBE's family, the Tribunal was satisfied that Mrs TFX's applications to this Tribunal were motivated by her desire to resolve the various issues in dispute for the benefit of Mrs BDN.

The Tribunal is therefore satisfied it has jurisdiction to consider Mrs TFX's applications for review of the power of attorney and the appointment of enduring guardian and her applications for financial management and guardianship orders.

The Tribunal is also satisfied it has jurisdiction to consider Mr MPN's application for review of the power of attorney. He is an interested person within the meaning of s 35(1) of the POA Act. He was an attorney under the power of attorney but even if there is an argument Mr MPN was no longer an attorney at the time he made his application because the power of attorney was terminated, the Tribunal is nonetheless satisfied he is a person who has a proper interest in the proceedings and a genuine concern for the welfare of Mrs BDN.

The Tribunal notes that there was no contest about these matters.

Capacity: Is Mrs BDN incapable of managing her person and/or her finances?

Introduction

As already noted, the Tribunal can only make a guardianship order if it is satisfied that the person who is the subject of the application is a "person in need of a guardian," being a person who, because of disability, is totally or partially incapable of managing his or her person.

The test for whether a person is incapable of managing their finances will involve different considerations to those relevant to management of their person.

A person's capability to manage his or her affairs was discussed by Campbell J in the NSW Supreme Court in Re GHI (a protected person) [2005] NSWSC 581. The approach enunciated by Powell J in PY v RJS [1982] 2 NSWLR 70 and applied on many occasions was affirmed. Powell J said:

It is my view that a person is not shown to be incapable of managing his own financial affairs unless, at the least, it appears:

(a) that he is incapable of dealing, in a reasonably competent fashion with the ordinary routine affairs of man; and

(b) that by reason of that lack of competence there is shown to be a real risk that either;

(i) he may be disadvantaged in the conduct of such affairs; or

(ii) that such moneys or property that he may possess may be dissipated or lost ...........

it is not sufficient in my view merely to demonstrate that the person lacks the high level of ability needed to deal with complicated transactions or that he or she does not deal with even simple or routine transactions in the most efficient manner.

However, Young J in H v H (Supreme Court Equity Division Protective List (NSW), Young J, 20 March 2000, unreported) in dealing with the capacity test as it has been enunciated in NSW, said that dealing with the "ordinary affairs of man" does not simply mean being able to go to the bank and draw out housekeeping money. Most people's affairs, his Honour said:

.. are more complicated than that that, and the ordinary affairs of mankind involve at least planning for the future, working out how one will feed oneself and one's family and how one is going to generate income and look after capital. Accordingly, whilst one does not have to be a person who is capable of managing complex financial affairs, one has to go beyond just managing household bills.

In Re D [2012] NSWSC 1006, White J considered the relevant authorities and adopted the formulation of Barrett J in P v R [2003] NSWSC 819, namely that the capacity of a person to cope with the "ordinary routine of living" needed to be assessed by reference to the person's assets and the objective facts about how the person is able to look after these assets.

It should be noted that the relevant time for considering whether a person is incapable of managing his or her affairs is not merely the day of the hearing but the reasonably foreseeable future (McDvMcD (1983) 3 NSWLR 81 at 86).

Evidence and findings

The Tribunal was provided with medical reports from Dr X dated 22 November 2013 and 14 January 2014. Dr X also gave evidence at the hearing.

Dr X first saw Mrs BDN in July 2013. In her report of 22 November 2013, Dr X recounted Mrs BDN's medical issues, being chronic pain from degenerative arthritis, a vagina pessary requiring surgery and a resulting urinary tract infection. Dr X opined that she could not make an assessment of Mrs BDN's capacity at this time because of her recurrent physical health problems. She noted that she had performed a mini mental state examination in August 2013 but this assessment was a "baseline" after Mrs BDN's recent admission to the hospital for delirium and was "not truly reflective of Mrs BDN's cognition." Dr X noted that it would be more appropriate for Mrs BDN's cognition to be assessed by administering the Rowland Universal Dementia Assessment Score (RUDAS) which was better for people from a non-English-speaking background. Dr X also noted that she was proposing to undertake such assessment in the New Year.

It appears that Dr X did not take undertake a RUDAS assessment but made a capacity assessment after downloading the "Capacity Toolkit" from the website of the New South Wales Government, Attorney General's Department.

Dr X used a telephone interpreter service and asked Mrs BDN a series of questions, based on an extract from the Capacity Toolkit, which were recorded in her report. Dr X recorded the following questions, together with a summary of Mrs M BDN's response, in her report:

(3) What bank accounts do you have?

(4) How much money do you have in the bank at the moment?

(5) Do you keep any money anywhere else, such as at home? Where?

(6) Do you own any property?

(7) How much do you think the property is worth? Are you the only owner or does someone else own it with you?

(8) How much are your bills each month? What sort of bills do you have to pay?

(9) Have you ever given money to, or bought things for, your family or friends? What types of things? Have they ever asked you for money or influenced you to spend your money on a certain way?

Dr X opined as follows:

I felt very confident from the promptness and the strength of her replies to the interpreter and her body language that Mrs BDN certainly has capacity to manage her own matters in her own way. She stated repeatedly that she felt this matter that has arisen is shameful and is distressing her greatly given her age. She was very firm that she did not want to sell her property and was happy with things being managed as they are.

Dr X gave evidence at the hearing and was questioned by the Tribunal and by the legal representatives for the parties.

According to Dr X, Mrs BDN made decisions about her medication and health care and based on her various interactions with Mrs BDN since July 2013, she concluded Mrs BDN could make decisions about these matters. Dr X also concluded that Mrs BDN could manage her finances because she was able to provide a strong and spontaneous view on the questions asked. Dr X did not administer any other testing such as a mini mental state examination or RUDAS testing because she believed using the Capacity Toolkit would be "more applicable to the task" of assessing Mrs BDN's capacity. Dr X said she formed a view that Mrs BDN could manage her finances because Mrs BDN was happy with the way they were being managed. Mrs BDN knew about the different levels of her finances and had made decisions about how she wanted them managed. Mrs BDN identified her assets as being her Italian pension, two bank accounts and her property.

Dr X said that she believed she had been given a full account of Mrs BDN's finances but accepted she had not undertaken any independent verification. When Dr X was asked whether she would alter her opinion if it was established Mrs BDN had not given her a full or accurate account of her finances, she said "this was difficult to answer." Dr X also said it would depend on whether a person was "happy and comfortable with the way their finances were being managed." In Dr X's opinion, if a person was able to identify their assets and how they wanted those assets managed, she would conclude the person was able to manage their finances.

It is relevant to note that in Mrs BDN's response to Dr X's questions she was unable to give any detail about the value of the partnership assets, the monies in her bank accounts and the rental income. She did not mention the Australian pension or the Centrelink debt and told Dr X she was concerned that Mrs GBE's family wanted her to sell her property.

Mrs BDN gave evidence. She was able to give a general account of her financial affairs. She said that she had an interest in a partnership with her son and his wife. She owned three units and the house she lived in. Her husband had been ill with dementia for about 10 years before his death. After the onset of his dementia her son and daughter assisted Mr and Mrs BDN in managing their finances. This continued after his death.

Mrs BDN was asked about the power of attorney executed by her in 2003 and apparently amended in 2006. She said that Mr MPN was appointed as power of attorney because he had "done a lot for her husband." Mrs BDN was not sure what an attorney could do but it was clear from her answers that she considered the power of attorney was an instrument that would be of benefit to the attorney and, in particular, Mr MPN, who had been unable to work after an injury. She said that Mrs GBE was better off financially than Mr MPN and this was said by Mrs BDN to be relevant, although it was not clear to the Tribunal why this was so. Mrs BDN said that the partnership had not produced any income for "a very long time." Mr MPN gave her $1,000 per month from the partnership. Mr MPN, Mrs OAN and Mrs BDN shared costs equally. Mrs BDN was questioned about the arrangement with Mr EJN. She said she was certain he paid rent. Mrs BDN knew she had a few bank accounts but was unable to tell the Tribunal about the balances held in these accounts. She said she had borrowed $15,900 from her daughter and son to repair a leaking roof a number of years ago but had since repaid these monies. She also borrowed money to renovate her husband's Monument. Mrs BDN said she received about $600 per month for the Australian pension and about €600 every month for the Italian pension. She gave her grandchildren and great grandchildren $100 each for their birthdays but reduced this to $50 as she was worried she could no longer afford it.

Mrs BDN also gave evidence about her dealings with her extended family and her understanding about the matters before the Tribunal. She said that Mrs GBE's family were "telling lies about her and Mr MPN" and they had said "terrible things" in these proceedings.

Notwithstanding the evidence from Dr X about Mrs BDN's capacity, the Tribunal was satisfied that Mrs BDN was, at least partially, unable to make important decisions about her person. While Mrs BDN demonstrated a good understanding about many matters, she was confused about why Mrs TFX had made the application and was apparently of the belief, as also expressed to Dr X, that Mrs GBE's family wanted her to sell her property and that they had stopped talking to her. This was inconsistent with the evidence, which was to the effect that Mrs GBE's family was concerned about whether Mrs BDN's finances were being managed properly. There is no evidence that they suggested that the units or Mrs BDN's house be sold. All members of Mrs GBE's family gave consistent evidence that they had attempted to see Mrs BDN on many occasions after Mrs GBE'S death but those attempts had been rebuffed, culminating in a complaint to the police in June 2013. The Tribunal also noted that Mrs BDN was particularly upset during evidence from Mr NSE about what he considered to be Mrs BDN's out-of-character refusal to see him and his daughter, who was seriously ill. There was evidence that Mrs BDN previously had a close relationship with this great-granddaughter.

There is no evidence that Mrs BDN directly made the complaint to police in June 2013, although she is said to have authorised the complaint. According to Mr DQE it was Mrs BDN who raised with him concerns about the financial burden of the units. We accept this evidence. Mr NSE gave evidence that Mrs BDN was shocked when she was later advised by him about the complaint to police. After the conversation between Mr DQE and Mrs BDN, a police officer came to visit Mr DQE but there was no further action taken. There was correspondence from Mr NDL dated 26 June 2013 threatening a court order if Mr DQE continued to criticise Mr MPN and attempted to influence Mrs BDN "in relation to financial matters." Mrs BDN did not refer to this incident in her evidence. Nor was it referred to in the 'record of interview.' Mrs BDN either did not make or could not recall this complaint, even though the incident was only about eight months prior to the hearing.

Mrs BDN's relationship with Mrs GBE's family has deteriorated significantly since the death of Mrs GBE. This is common ground. However, the Tribunal concluded that the nature and extent of this deterioration could not be explained by the evidence or the events that reportedly took place from March 2013 and, in particular, in June 2013.

In her evidence, Mrs BDN agreed she had previously had a good relationship with Mrs GBE's family. Mrs TFX gave uncontradicted evidence that when her mother was ill and after her death, she had taken Mrs BDN to appointments and spent considerable time with her. There was no evidence to explain why the relationship had become so acrimonious so quickly. Mrs TFX and Mr DQE agree they raised concerns with Mrs BDN about her finances because she had told them her pension had been cut and that there was no or little income from the units. Mr EFE and Mr NSE gave evidence that they did not initiate discussions with Mrs BDN about her finances. Mr EFE said he deliberately avoided discussing contentious or legal issues. Both were cross examined on these matters and did not resile from their evidence. We accept this evidence.

Having regard to this evidence, the Tribunal is satisfied that Mrs BDN is unable to make an informed decision about her access to Mrs GBE's family and has been influenced by a mistaken understanding about their concerns. It was unclear from the evidence whether Mrs BDN was being unduly influenced in these matters by others or whether she has independently formed this view. On any objective view of the evidence, the reaction to the discussions in June 2013 was disproportionate. Mrs BDN does not understand certain important aspects about her finances and this has apparently influenced her thinking about Mrs GBE's family and the present applications before the Tribunal. While Mrs BDN has significant capacity to make decisions for herself, there is evidence of impairment in her cognition as demonstrated by Mrs BDN's evidence to the Tribunal, her presentation during the hearing and her communications with Dr X about her finances.

The Tribunal is therefore satisfied that Mrs BDN has a disability which, at least partially, prevents her making important life decisions. She is a person for whom the Tribunal could make a guardianship order.

The Tribunal is also satisfied that Mrs BDN is incapable of managing her financial affairs.

Dr X concluded Mrs BDN was competent to manage her finances but her assessment was made on the basis of incomplete information. Dr X was not aware that Mrs BDN had a large debt to Centrelink, was not receiving her full entitlement from the partnership and was potentially exposed, as stated by Mr Y, to a further obligation to repay benefits as a result of her entitlements under the partnership. Dr X concluded that Mrs BDN was happy with the way her finances were being managed and that this was appropriate and demonstrated capacity. This assessment was based on the incorrect assumption that Mrs BDN understood all of her finances and that there were no concerns about their management. As such, this evidence is not persuasive and can be given little weight.

It is clear from the evidence that Mrs BDN does not fully appreciate her finances, which are relatively complicated. She told Mr NSE and Mr DQE there is insufficient income from the units. She repeated this evidence to the Tribunal. This is incorrect. In 2013 the partnership earned over $93,000 in gross income. Mrs BDN told the Tribunal that she thought Mr EJN was paying rent. He is not. There is also evidence that Mrs BDN did not know why her pension was reduced and does not understand there may be a problem with the information being provided to Centrelink.

In Re D at [45] - [46], White J found that the plaintiff did not have capacity based on his assessment despite the "unchallenged medical evidence" that she had no cognitive impairment. Barrett J described the role of the court in determining whether a person was incapable of managing his or her financial affairs in P v R at [25] as follows:

The task of the court, upon an application such as this, is to make a judgment as to the capacity and ability of the person concerned to cope with the ordinary routine affairs of living, particularly so far as they concern the person's property. This is a somewhat shorthand version of the tests laid down by the authorities to which I have already referred. The point to be emphasised is that the requisite judgment is to be made in the light of objective physical facts concerning the relevant person's property, money and other assets and the way the person is able to look after them. If there is a lack of capacity, the reason for it does not matter. If the person is subjected to theft, vandalism and victimisation, the causes of those events is unimportant: the court is interested in whether the person is in a vulnerable position and cannot deal with such matters in a manner that is conducive to the person's own welfare.

The Tribunal is not satisfied that Mrs BDN would be able to assess the steps that she needs to take in her further dealings with Centrelink or that she would be able to make informed and appropriate decisions about the partnership.

Guardianship: Should the Tribunal make a guardianship order and if so what orders should be made?

Section 14(2) of the Guardianship Act provides that in considering whether or not to make a guardianship order the Tribunal must have regard to a number of factors, including the views, if any, of the person, the importance of preserving the persons existing family relationships, the importance of preserving the person's particular cultural and linguistic environments and the practicality of services being provided to the person without the need for the making of such an order. The Tribunal must also observe the general principles set out in s 4 in exercising its functions.

Mrs BDN expressed the strong view, on several occasions, that she did not want a guardianship order to be made and wanted things to continue as they had, with Mr MPN as her guardian and financial manager. She further submitted that she was able to make her own decisions about her health care, where she should live and her medical treatment.

The Tribunal accepts that there is no need to make a guardianship order in respect of Mrs BDN's accommodation, health care or medical treatment. Mrs BDN can make decisions for herself on these matters and a guardianship order is therefore not warranted. Dr X uses a telephone interpreter service and was confident she could communicate with Mrs BDN. There is no evidence Mrs BDN has any serious medical problems that are being mistreated or ignored or that her health care is inadequate. Her accommodation is appropriate and there was no evidence to suggest otherwise.

In contrast, there is evidence that Mrs BDN cannot make informed decisions about her access to, and relationship with, Mrs GBE's family. While Mrs GBE was alive, it appears that her family and Mr MPN's families were able to work together sufficiently closely to ensure that Mrs BDN had a good relationship with both families. After Mrs GBE'S death, this relationship quickly broke down, to the detriment of Mrs BDN. Mrs GBE's family have raised concerns about the management of Mrs BDN's finances and this has caused conflict. We accept that these concerns have been raised because of discussions initiated by Mrs BDN, rather than them. It is possible these matters were also raised with Mrs GBE but she made a decision to refrain from causing conflict with her brother. Once Mrs GBE's family raised concerns, Mrs BDN has clearly taken this as criticism of Mr MPN. There is evidence Mr MPN has been sensitive to this criticism. Unfortunately, this has exacerbated an already strained relationship between Mr DQE and Mr MPN to such an extent that complaints were made to the police by Mr EJN. Complaining to police did not assist the situation and this resulted in a significant escalation in hostility, not only between Mrs GBE's family and Mr MPN's families but between Mrs GBE's family and Mrs BDN.

Mrs BDN refuted any criticism of Mr MPN by Mrs GBE's family. From the Tribunal's review of the evidence, it appears that some of these criticisms are justified. For the reasons outlined later, the Tribunal has concluded that Mrs BDN's finances have not been managed appropriately or prudently for a number of years and this has been to her detriment. Notwithstanding this, the Tribunal is also satisfied that Mr MPN has a close and continuing relationship with his mother, he is concerned about her welfare and he has assisted her for many years. It is understandable that Mrs BDN is protective and supportive of him. Against this, Mrs BDN has had a long-standing and close relationship with members of Mrs GBE's family. This relationship has deteriorated significantly and this has caused anguish and sadness not only for the members of Mrs GBE's family but for Mrs BDN herself, who said she would like issues to be resolved. It is unlikely that Mrs GBE's family and Mr MPN's family will reconcile or that they will be able to agree on many of the matters that are currently the subject of dispute.

For this reason, the Tribunal was satisfied that it would be in Mrs BDN's best interests for an independent party to be appointed as guardian to make decisions about services, in particular an independent interpreting service or financial counsellor, so that Mrs BDN can be fully apprised of the real issues in dispute. The Tribunal is not satisfied that Mrs BDN is fully informed about these matters or about her potential financial exposure. The Tribunal is also satisfied that an independent party should be appointed to advocate for her in respect of her dealings with Mrs GBE's family and Mr MPN's family and consideration should be given to the appointment of an independent family mediator to assist Mrs BDN in making decisions about access to Mrs GBE's family.

The Tribunal is not able to appoint the Public Guardian as a person's guardian if there is a private person who can be appointed (subs 15(3) of the Guardianship Act).

The Tribunal has to be satisfied that any person appointed as a private guardian meets the following requirements in accordance with s 17 of the Guardianship Act. He/she must:

have a personality generally compatible with the personality of the person under guardianship;

have no undue conflict of interest (particularly financial) with those of the person; and

be able and willing to exercise the functions of the order.

In this case, the Tribunal is not satisfied that Mrs TFX or Mr MPN, both of whom were proposed as guardians, would be suitable to be appointed in respect of the decision-making functions identified. While Mrs TFX said that she could work with Mr MPN, Mr MPN said that he could not work with Mrs TFX. This would make any joint appointment unworkable. There is still considerable conflict between the families and the Tribunal was accordingly of the view that it would not be in Mrs BDN's interests for either or both to be appointed. This is likely to exacerbate family tension which would have a detrimental effect on Mrs BDN and existing family relationships. Moreover, any decision about access, services or advocacy would be likely to involve an inherent conflict if one side or the other is appointed. It is unlikely Mrs TFX or Mr MPN could be completely impartial or objective about these matters and this was reinforced by their respective oral and written submissions, which were adversarial in nature.

As such, the Tribunal is not satisfied that Mrs TFX or Mr MPN, while willing, would be able to properly and appropriately exercise the functions under the order. There was no other suitable private guardian identified by the parties who could undertake the role. The Tribunal therefore decided to appoint the Public Guardian.

The Tribunal further decided to make the order for a period of six months, rather than a longer period, to give adequate opportunity for the Public Guardian to assist Mrs BDN on these matters. If these disputes cannot be resolved in this period, there may little benefit to Mrs BDN in lengthy orders. It is therefore appropriate to assess the utility and effectiveness of the order at the end of this period.

In summary, having regard to all of the evidence, the Tribunal is satisfied it is appropriate and in Mrs BDN's best interests to make a guardianship order; that the order should be limited to decision-making functions in respect of services, Mrs BDN's access to others and advocacy; that the Public Guardian should be appointed and that the order should be for a period of six months. While the Tribunal had regard to Mrs BDN's strong views that she did not want a guardianship order to be made, it is nonetheless satisfied that Mrs BDN's previously good family relationships are being damaged, perhaps irretrievably, to her detriment. In these circumstances, the Tribunal concluded that Mrs BDN's interests and welfare should be given "paramount consideration" and intervention was warranted.

Review of appointment of enduring guardian: What order should be made in respect of the appointment of enduring guardian?

The Tribunal can revoke or confirm an appointment of enduring guardian but cannot revoke the appointment of an enduring guardian unless the enduring guardian has requested the revocation or the Tribunal is satisfied it is in the best interests of the appointor that the appointment be revoked.

Based on all of the evidence, the Tribunal decided not to revoke the appointment of enduring guardian. There is evidence that Mrs BDN carefully considered the appointment of Mr MPN as her guardian, wants to him to continue in this role and has a close relationship with him. The guardianship order suspends the appointment during the period of the order. If the key issue of concern, namely the perceived alienation of Mrs GBE's family from Mrs BDN's life, can be resolved or at least managed, there may be no need to disturb the appointment. As such, the Tribunal was not satisfied it would be in Mrs BDN's best interests at this stage to revoke the appointment. Accordingly, the Tribunal decided to confirm the appointment, but notes that the appointment nonetheless remains suspended during the period of the guardianship order.

Review of power of attorney: Does the Tribunal have power to make an order to reinstate the power of attorney and if so, should an order be made?

As already noted, s 46(1) of the POA Act does not apply to this power of attorney and the effect of the death of Mrs GBE is governed by the general law. According to Collier and Lindsay, Powers of Attorney in Australia and New Zealand (1992, The Federation Press) at page 214 where an authority is joint, "the death of one donee necessarily terminates the authority, as all donees must join together in exercising the power." The general law therefore reflects the current provisions of subs 46 (1) of the POA Act.

While none of the legal representatives for the parties identified the general law as the basis, all submitted that the effect of Mrs GBE's death was to terminate the power of attorney.

The parties submitted that the Tribunal had power to review the power of attorney, even though it had been terminated on 7 March 2013 by reason of Mrs GBE's death. Mr MPN's lawyer submitted that the reference to a power of attorney having "lapsed" in subsection 36(4)(d) and 36(9) of the POA Act was analogous to a power of attorney being terminated by operation of law and it was clearly the intention of the legislature to invest the Tribunal with a broad power to review a power of attorney that was no longer in existence and to reinstate the power of attorney if it was in the best interests of the principal for the Tribunal to do so. Mrs BDN's lawyer submitted that there was little difference between termination and lapse. He referred to the Oxford Concise Dictionary, which defines "lapse" as "the termination of a right or privilege through disuse of or failure to follow the applicable procedures." Mrs TFX's lawyer also submitted that the Tribunal had power to review the power of attorney but submitted it should not exercise its discretion under s 36(4)(d) because it would not be in Mrs BDN's best interests to reinstate the power of attorney.

The Tribunal accepts these submissions.

Subsection 36(4)(d) has been drafted in very broad terms. It states that the Tribunal may make an order reinstating a power of attorney that has lapsed by reason of any vacancy in the office of the attorney. The fact there is different terminology used in s 46(1) does not diminish or restrict the broad power, nor is there anything in the POA Act to suggest the power is intended to be so restricted. Furthermore, there is nothing in the Explanatory Memorandum or the second reading speech that supports such a narrow interpretation of the provision. While the reference to "lapse" may connote the termination of an instrument because of the effluxion of time or the happening of an event, the Tribunal was not satisfied that the different terminology was intended to displace the beneficial jurisdiction of the Tribunal to review and reinstate a power of attorney that is no longer in existence, for whatever reason, in the best interests of the principal. In this regard, we note the reference to "any vacancy in the office of the attorney" supports this conclusion.

Thus, the Tribunal is of the view it has jurisdiction to review the power of attorney and could, if considered appropriate, reinstate the power of attorney under subsection 36(4)(d) of the POA Act.

Having regard to all of the evidence, the Tribunal determined that it would not be in the best interests of Mrs BDN to reinstate the power of attorney for the reasons that follow:

There is evidence that Mr MPN and Mrs OAN have been managing Mrs BDN's finances, including her Centrelink pension, and making decisions for her about how partnership assets and income should be distributed. There was also evidence these decisions have not operated in her best interests;

Mrs OAN has been informally managing Mrs BDN's finances as her Centrelink nominee yet neither she nor Mr MPN had taken sufficient care to ensure that declarations made to Centrelink about Mrs BDN's Italian pension were accurate. This resulted in Mrs BDN being overpaid her Australian pension for a number of years. While it was suggested there was some fault by Centrelink in assessing the Italian pension at an annual rather than monthly rate, Mrs OAN should have identified this issue before Centrelink made a claim because she was receiving the correspondence from Centrelink for Mrs BDN;

Mr Y has raised concern about disclosures made to Centrelink in respect of Mrs BDN's interest in the partnership. These matters have been long-standing and it was clear Mrs BDN did not, and still does not, understand the significance of the problems and the potential difficulties that may be created in respect of her Centrelink benefits;

Mr Y has recommended that an independent audit be undertaken in respect of the partnership accounts. He has identified unexplained drawings and has opined that Mrs BDN has been disadvantaged;

There is no dispute that Mrs BDN has been allocated 19% less income than her one third entitlement as equal partner. Mr MPN and Mr Z stated that Mrs BDN's distribution has been reduced by 19% to take into account the rent-free accommodation provided to Mr EJN and recompense for the caretaker role undertaken by Mr MPN. These matters raise a number of concerns. First, the arrangement with Mr EJN would seem to be inappropriate in circumstances where it is agreed he has a responsible and well paid position. Secondly, it was unclear to the Tribunal why Mrs BDN is solely bearing the burden of the caretaker expenses. Thirdly, when these expenses are taken into account together with the expenses disclosed in a financial statement for the year ended 30 June 2013, the expenses in operating the partnership appear to be inordinately high. This is the opinion of Mr Y, who has relevant expertise on these matters. The return on Mrs BDN's investment is 2.9% which Mr Y opines is inadequate and Mr MPN agrees is less than market rates.

Even though Mrs BDN would like Mr MPN to continue to manage her finances, the Tribunal was not satisfied that this would be in her best interests. While the Tribunal may have considered reinstating the power of attorney and appointing Mr EFE as joint attorney, with Mr MPN, Mr MPN made it clear to the Tribunal that he was not prepared to jointly manage Mrs BDN's finances with any member of Mrs GBE's family.

There was a submission made by Mr MPN's lawyer that the power of attorney should be reinstated and that Mr MPN, together with an independent accountant, should be appointed. There was no proposal put forward about any satisfactory independent accountant that could be appointed, apart from the submission made in the initial stages of the hearing that Mr Z be appointed. The Tribunal formed the view Mr Z was not appropriate given his apparent lack of concern about the reduction in Mrs BDN's distribution of partnership income and his potential conflict in acting for Mr MPN and the partnership and, according to Mr MPN, making recommendations about the distribution of income to the partners. In addition, Mr Z was not available to give evidence or to explain why he would be suitable. It is relevant to note that Mr MPN's lawyer did not press for his appointment in his final written submissions.

Accordingly, having reviewed the operation and effect of the power of attorney, the Tribunal decided not to reinstate the instrument and dismissed both applications for review.

Financial management: Should an order be made and if so what order should be made?

Is there a need for another person to manage Mrs BDN's affairs and is it in her best interests for a financial management order to be made?

For the reasons previously outlined, the Tribunal is satisfied that Mrs BDN is not capable of managing her finances within the meaning of s 25G of the Guardianship Act.

A financial management order can only be made if the Tribunal is also satisfied there is a need for another person to manage and that it is in Mrs BDN's best interests for an order to be made. The Tribunal is so satisfied. The Tribunal placed considerable weight on the evidence of Mr Y. Mr Y has unchallenged expertise in this area and his evidence not contradicted by any evidence to the contrary. His evidence was corroborated by the financial documents provided to the Tribunal and the undisputed facts. Based on this evidence, the Tribunal was satisfied there is a need for another person to manage Mrs BDN's financial affairs and that it is in her best interests for an order to be made. As recommended by Mr Y, and the Tribunal accepts this evidence, there should be an independent review of Mrs BDN's financial affairs to ascertain whether it may be appropriate for any adjustments should be made as between the partners, whether arrangements for the allocation of income should be changed, whether investments should be sold or whether disclosure should be made to Centrelink.

There is clear evidence Mrs BDN cannot undertake these enquiries or make these decisions. These decisions cannot be managed informally. They are complicated and have the potential to affect Mr MPN and Mrs OAN. For the reasons already outlined, the Tribunal is not satisfied that it is in Mrs BDN's best interests to reinstate the power of attorney. This being the case, there is no formal mechanism in place to manage Mrs BDN's finances and it is therefore appropriate for a financial management order to be made.

Who should be appointed financial manager?

Section 25M of the Guardianship Act provides that, if the Tribunal makes a financial management order, it may appoint a suitable person to manage the person's estate or may commit the management of the estate to the NSW Trustee and Guardian.

In Holt v Protective Commissioner (1993) 31 NSWLR 227, the Court said that the dominant consideration in making orders about financial managers was the welfare of the person. The President of the Court of Appeal emphasised the Court's broad discretion in deciding who should be financial manager but also set out possible considerations as to the competing advantages of the Protective Commissioner and a family member as the manager of an estate.

The NSW Trustee and Guardian now exercises the role of the Protective Commissioner.

On the side of the Protective Commissioner was seen to be the manifest independence of the statutory office, the advantages of a dispassionate and neutral approach in situations of family conflict and divided views as to the best interests of the person, expertise and experience in managing estates, an impeccable reputation and the security provided to an estate against loss or damage.

The advantages of the appointment of a family member were more economic management of smaller estates (that is, freedom from fees) and a greater familiarity with assets and liabilities in smaller estates, a greater capacity of a person with a disability to interact with the manager so as to exercise a greater influence over the broad directions of the management of the estate, love and affection for and knowledge of the protected person and concern for his or her quality of life, and particular qualities or qualifications enabling family members to act as managers.

The Court considered that interrelated property interests in a family situation, where a conflict of interest and duty may be "more apparent than real," should not necessarily present an absolute bar to appointment of a family member who is otherwise appropriate. However, when appointing a family member, a decision maker must be satisfied that the estate, income and capital assets, will be utilised to advance the interests and quality of life of a protected person rather than to eventually increase the assets of the family.

The Tribunal is not satisfied that Mr MPN, Mrs TFX or Mr EFE are suitable to be appointed as financial managers for Mrs BDN, either jointly or separately.

Mr MPN is not suitable because of the identified deficits in his previous management and his conflict of interest, or at least potential conflict, which may be in divergence with Mrs BDN's interests. For instance, Mr MPN would not be able to conduct an impartial review of Mrs BDN's finances if the potential outcomes involved an adjustment of the partnership accounts in favour of Mrs BDN, the sale or partial sale of Mrs BDN's investments or the termination of the rent free arrangement with Mr EJN. In particular, the Tribunal had regard to the fact that Mr MPN did not understand or recognise these issues as problems.

The Tribunal considered whether it may be in Mrs BDN's best interests to appoint Mr MPN as financial manager jointly with Mr EFE, who it was satisfied had the appropriate expertise, but Mr MPN vigorously opposed such an appointment. In these circumstances, a joint appointment between Mr MPN and Mr EFE, or indeed any member of Mrs GBE's family, would be unworkable and therefore not in Mrs BDN's best interests. The Tribunal rejected the potential for a joint appointment of Mr MPN and Mrs TFX for similar reasons.

Having regard to these matters, the Tribunal is satisfied that the estate of Mrs BDN should be committed to the NSW Trustee and Guardian so that the matters identified in Mr Y's report and in his oral evidence can be adequately investigated. The Tribunal was mindful of Mrs BDN's strong preference for Mr MPN to be appointed as financial manager but was also satisfied it would not be in her best interests for him to be appointed at this stage, even if he was supervised by the NSW Trustee and Guardian, until the issues raised by Mr Y have been investigated and resolved. The Tribunal therefore determined that the financial management order should be reviewed in six months after the results of those investigations are concluded, or at least significantly progressed.

FORMAL FINDINGS

The Tribunal made the following formal findings:

(1) The Tribunal has jurisdiction to determine all applications;

(2) Mrs BDN has a disability which prevents her making important life decisions and she is a person for whom the Tribunal could make a guardianship order;

(3) The circumstances of the case make it necessary and appropriate in Mrs BDN's interests for a guardian to be appointed for her, with the functions and authorities and for the period referred to in the order;

(4) There is no private person suitable to be appointed as guardian and in those circumstances the Public Guardian should be appointed;

(5) It is not in Mrs BDN's best interests to revoke the appointment of enduring guardian made 16 March 2006;

(6) The Tribunal has jurisdiction to review the power of attorney made on 25 July 2003, as amended, but determined to make no order and to otherwise dismiss the applications for review and reinstatement;

(7) Mrs BDN is not capable of managing her financial affairs;

(8) There is a need for another person to manage those affairs;

(9) It is in the best interests of Mrs BDN that a financial management order be made and that the order be reviewed in six months;

(10) There being no suitable private person to be appointed as financial manager in the circumstances, the NSW Trustee and Guardian should be appointed.

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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

Decision last updated: 20 August 2014

Medium Neutral Citation:	BDN [2014] NSWCATGD 15
Hearing dates:	27, 28 February and 3 April 2014
Decision date:	27 May 2014
Jurisdiction:	Guardianship Division
Before:	Redfern J, Principal Member Martin K, Senior Member (Professional) Johnston S, General Member (Community)
Decision:	Enduring guardianship appointment confirmed. Limited guardianship order made for a period of six months; Public Guardian appointed with services, advocacy and access functions. Financial management order made; NSW Trustee and Guardian appointed reviewable in six months. Applications for review of enduring power of attorney dismissed.
Catchwords:	GUARDIANSHIP - dispute about capacity - family conflict - deterioration in previously good family relationship - need for independent advocacy. FINANCIAL MANAGEMENT - capacity to manage finances - inconsistent medical evidence - mismanagement of estate by attorney - suitability for appointment as financial manager - conflict of interest. ENDURING POWER OF ATTORNEY - review of operation and effect - termination of joint power of attorney on death of one attorney - jurisdiction - whether instrument can be reinstated - not in best interests to reinstate power of attorney. ENDURING GUARDIANSHIP - appointment suspended pending limited guardianship order - not in best interests to revoke - confirmed.
Legislation Cited:	Conveyancing Act 1919 (NSW) Guardianship Act 1987 (NSW) Powers of Attorney Act 2003 (NSW)
Cases Cited:	Re GHI (a protected person) [2005] NSWSC 581 PY v RJS [1982] 2 NSWLR 70 H v H (Supreme Court Equity Division Protective List (NSW), Young J, 20 March 2000, unreported) Re D [2012] NSWSC 1006 P v R [2003] NSWSC 819 Holt v Protective Commissioner (1993) 31 NSWLR 227
Texts Cited:	Collier and Lindsay, Powers of Attorney in Australia and New Zealand (1992, The Federation Press) Oxford Concise Dictionary
Category:	Principal judgment
Parties:	Mrs BDN Mrs TFX (Applicant) Mr MPN (Applicant, Enduring Guardian and Attorney) The NSW Trustee and Guardian The Public Guardian
File Number(s):	54466
Publication restriction:	Decisions of the Guardianship Division of the Civil and Administrative Tribunal have been anonymised to remove any information that may identify any person involved in the Tribunal's proceedings (s 65, Civil and Administrative Tribunal Act 2013 (NSW)).