BFE - [2017] NSWCATGD 45

NSW Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation: BFE [2017] NSWCATGD 45
Hearing dates: 19 April 2017
Date of orders: 24 April 2017
Decision date: 24 April 2017
Jurisdiction: Guardianship Division
Before: J Currie, Senior Member (Legal)
Decision:
1. The financial management order for Mrs BFE made on 18 December 2015 is varied.

2. The appointment of the NSW Trustee and Guardian as the financial manager of the estate of Mrs BFE is revoked.

3. Mrs DAQ is appointed the manager of the estate of Mrs BFE.

NOTE: The financial manager is not authorised to deal with the estate (other than to protect the assets) until the financial manager has obtained all necessary authorities from the NSW Trustee.

4. The NSW Trustee and Guardian is to pay over or hand over the estate to Mrs DAQ.
5. The financial management order for Mrs BFE as varied, is to be reviewed by the Tribunal within 18 months.
Catchwords: FINANCIAL MANAGEMENT – application for revocation of a financial management order –whether subject person has regained capacity to manage affairs – meaning of capability to manage one’s own affairs – conflicting expert evidence – legal tests of capability – additional factors noted by Lindsay J in CJ v AKJ [2015] NSWSC 498 – “support mechanisms” “past experience” “protective nature of the jurisdiction” – subject person victim of fraudulent misappropriation by her solicitor – subject person found not to have regained capability – best interests not to revoke order – financial management order varied – appointment of NSW Trustee and Guardian revoked – suitability for appointment as financial manager – reviewable financial management order made – private manager appointed
Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW), s 36
Guardianship Act 1987 (NSW), ss 4, 4(a), 4(g), 25A(b), 25P(1)(a), 25P(1)(b), 25P(2)
Cases Cited: CJ v AKJ [2015] NSWSC 498
G v G [2016] NSWSC 511
GW v Protective Commissioner [2003] NSW ADTAP 51
McD v McD (1983) 3 NSWLR 81
P v NSW Trustee and Guardian [2015] NSWSC 579
P v R [2003] NSWSC 819
PB v BB [2013] NSWSC 1223
Re D [2012] NSWSC 1006
Re W and L (Parameters of Estate Management Orders) [2014] NSWSC 1106
Category: Principal judgment
Parties: Mrs BFE (subject person)
Ms TED (applicant and appointed attorney)
The NSW Trustee and Guardian
Representation:
Separate Representation:
V Massey (Mrs BFE)
Legal Representation:
D Lalic (Mrs BFE)
K Kelly replacing P Ives (Ms TED)

File Number(s): 61374
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

APPLICATION TO REVOKE FINANCIAL MANAGEMENT ORDER

What the Tribunal decided

The Tribunal decided not to revoke the financial management order which had been made for Mrs BFE on 18 December 2017. It decided to vary that order.
The Tribunal revoked the appointment of NSW Trustee and Guardian as Mrs BFE’s financial manager and instead appointed her granddaughter Mrs DAQ.
The financial management order, as varied, is to be reviewed by the Tribunal within 18 months.

Background

Mrs BFE and her family

Mrs BFE was at the time of the hearing aged 86 years. She has in the past been diagnosed with cognitive impairments and anomic aphasia, and sustained a stroke in November 2015. It is reported that Mrs BFE’s recovery from that stroke was complicated by delirium, atrial fibrillation, chest infection, and significant deconditioning. In late-2015, she had a prolonged period of care in the Intensive Care Unit of public hospital A and was then transferred to public hospital B for a substantial rehabilitation program. Mrs BFE self-discharged from that program on 8 February 2016. Her current diagnosis and cognitive ability is in issue in these proceedings.
Mrs BFE presently lives in western Sydney with her daughter, Ms TED, who is also known as [Ms TED]. Mrs BFE also has another daughter, Ms MED, who lives in Ireland, a brother, Mr FEN, and a granddaughter, Mrs DAQ, who is the daughter of Ms TED.

Previous proceedings, hearings and orders

The current hearing was in a real sense the culmination of important matters concerning Mrs BFE’s financial affairs. Those matters have been before the Tribunal on a number of occasions in the last 18 months, a number interlocutory orders have been made and substantial documentary material has been produced. In order to provide a complete background to the present hearing, I have summarised the various proceedings in greater detail than might normally be expected. However, for completeness these Reasons should be read in conjunction with the Reasons for Decision from the hearings on 4 April 2016, 28 September 2016, and 2 February 2017.
On 18 December 2015, following a hearing, the Tribunal made two orders concerning Mrs BFE. They were:

a guardianship order, under which the Public Guardian was appointed as her guardian for 12 months with authority to make decisions on her behalf about her access to others, accommodation, health care, medical and dental consent, and services; and

a financial management order under which the management of her estate was committed to NSW Trustee and Guardian.

In early 2016, the Registry received from Ms TED two applications. The first of these, received on 14 January 2016, sought the revocation of Mrs BFE’s financial management order. The second application, received on 4 March 2016 sought a review of her guardianship order. The hearing of both applications was adjourned on 3 April 2016 and again on 2 June 2016.
On 2 June 2016, the Tribunal ordered that Mrs BFE was to be separately represented in all proceedings pending before the Tribunal. On 11 August 2016, the Tribunal ordered that Ms TED was to be legally represented in all proceedings pending before the Tribunal.
At a hearing on 28 September 2016, the Tribunal:

reviewed the guardianship order and ordered that it should lapse with immediate effect;

under s 25A(b) of the Guardianship Act 1987 (NSW), refused the request to review the guardianship order on the basis of the order already been lapsed; and

adjourned the requested review of the financial management order for approximately eight weeks to a date to be set by the Registrar.

On 24 January 2017, the Registry received from Mrs BFE’s granddaughter Mrs DAQ a document which purported to be an application for a financial management order for Mrs BFE. Following discussions with Registry staff, Mrs DAQ agreed that, as Ms TED’s application for revocation of the financial management order had already been listed for hearing, the document she had lodged should not be treated as a separate application, but rather as her written submission in relation to Ms TED’s financial management application and in particular as a submission supporting Mrs DAQ’s appointment as financial manager. I treated the document on that basis.
On 2 February 2017, the matter was listed for hearing before me and again it was adjourned. The basis for that adjournment was threefold:

Most of the time allocated for that hearing was devoted to private discussions between the parties and some family members, which had been undertaken at my suggestion with a view to narrowing the issues.

I found that proceeding with a hearing on that day would deny procedural fairness to NSW Trustee and Guardian and to some family members, because an enduring power of attorney dated 8 March, under which Mrs BFE appointed Ms TED as her attorney was produced for the first time at that hearing and NSW Trustee and Guardian and some family members had not previously been aware of it.

Mrs DAQ should be given the opportunity to confirm her wish to be considered for appointment as financial manager for Mrs BFE and if she did confirm this she should have the opportunity to lodge further relevant submissions or documentation.

On 2 February 2017, I also set the matter down for a directions hearing before me on 16 March 2017. At the directions hearing:

I made Legal Representation orders, under which Mrs BFE would be represented by Mr David Lalic, Solicitor and Ms TED would be represented by Mr Keiran Kelly, Solicitor (replacing Mr Peter Ives, Solicitor);

I directed Mrs BFE and Ms TED to identify, file, and serve various documents;

I noted that Mr Vaughan Massey as Separate Representative would lodge certain documents prior to the hearing, that an expert report by Dr Z could be supplied to the other relevant expert, Professor Y and that it was desirable for both Dr Z and Professor Y to be available to participate in the hearing; and

I set the matter down for hearing on 19 April 2017.

The purpose of the hearing on 19 April 2017 was therefore to resume the hearing of Ms TED’s application for the revocation of the financial management order which had been made for her mother Mrs BFE.

Parties and witnesses

The Appendix to these Reasons for Decision identifies the parties to the application and the witnesses who gave evidence at the hearing. [Appendix removed for publication.]

Issues for determination

Under s 25P(1)(a) of the Guardianship Act, when the Tribunal reviews a financial management order, it must vary, revoke or confirm the order.
By her application, Ms TED seeks revocation of the financial management order made for Mrs BFE. Under s 25P(2), I can revoke that order only if:

I am satisfied that Mrs BFE is capable of managing her affairs. This is often called the “regained capability” ground; or

I consider that it is in Mrs BFE’s best interests that the order be revoked (even though I am not satisfied that she is capable of managing her affairs). This is often called the “best interests” ground.

At the opening of the hearing, Mr Kelly confirmed, on Ms TED’s behalf, that she sought revocation on both these grounds.
Under s 25P(1)(b), when the Tribunal is reviewing a financial management order it can also consider whether to revoke the appointment of the current financial manager if it is appropriate to do so. Obviously, that issue will only arise if the original order is to continue; that is, if I decide not to revoke it.
It follows that the issues for my determination were:

Has Mrs BFE regained the capability to manage her own affairs?

If she has not, would it nevertheless be in her best interests for the current order to be revoked?

If I decide not to revoke the order, should the appointment of NSW Trustee and Guardian as financial manager be revoked?

If the NSW Trustee and Guardian’s appointment is revoked, who should be appointed as Mrs BFE’s financial manager?

If I decide not to revoke the order, should it be varied in any other way?

Preliminary issues

Ms TED’s position as to the orders sought

Ms TED and her Legal Representative confirmed that her primary request was that I should revoke the financial management order, but that if I decided not to do so, I should nevertheless revoke the appointment of NSW Trustee and Guardian as financial manager and appoint her.

The order in which the issues were to be considered

The order of consideration of the issues is of some importance in these matters, particularly where, as here, there is conflicting expert evidence. Mr Massey as Separate Representative submitted that in light of the nature of the evidence and in particular the divergence between the conclusions of Dr Z and Professor Y as to Mrs BFE’s capability of managing her own affairs, I should commence by considering the “best interests” ground, which is set out at [17(2)] above and only then, if necessary (that is, if I conclude that it would not be in Mrs BFE’s best interests to revoke the order) should I consider the “regained capability” ground, which is set out at [17(1)] above.
Mr Lalic and Mr Kelly disagreed with Mr Massey. Both of them urged me to consider the “regained capability” ground first as that was the principal ground upon which the application was made.
Ultimately I decided that the “regained capability” ground should be considered first, because:

that reflected the order in which both the applicant, Ms TED, and the person under management, Mrs BFE, wished to pursue the application;

the issue of her capability had always been and was clearly the issue of greatest importance to Mrs BFE herself; and

even though such a course would involve consideration of competing expert reports (which might not be necessary if I adopted the reverse order and concluded that the “best interests” ground was satisfied), the issue of Mrs BFE’s capability was in my estimation at the heart of the matter. It was the most important of the real issues in the proceedings. It followed that giving that issue priority would be more consistent than any other course with my obligation (which extends to the parties and their legal representatives) under s 36 of the Civil and Administrative Tribunal Act 2013 (NSW) to facilitate the resolution of the real issues justly, quickly and cheaply.

The unavailability of Professor Y and the treatment of the expert reports

Arrangements had been made for both Professor Y and Dr Z to participate in the hearing by telephone. On the day prior to the hearing, the Registry received telephone and email messages from an Administrative Officer of a medical school reporting that Professor Y had become seriously ill, was unable to participate in the hearing and would not be available for at least the rest of the week. I accepted that this was so.
I put it to the parties that, as both Professor Y and Dr Z had provided substantial written reports, that they had reached inconsistent and in some instances conflicting views as to Mrs BFE’s capability and capacity and because Professor Y was now unavailable to answer any questions from the Tribunal or the Separate Representative or by way of cross examination, it seemed to me to be unfair and incorrect to proceed by subjecting Dr Z to that process. I explained that in these circumstances I proposed to assess the written reports of both Professor Y and Dr Z as submitted in writing, subject of course to any submissions which any of the parties wished to make, but not to require Dr Z to give oral evidence and to excuse him. Only in that way could the evidence two conflicting professional witnesses be considered on an equal footing. I emphasised that the only alternative way by which the two witnesses could be treated equally was to adjourn the hearing yet again and that that would be most undesirable and inconsistent with the interests of Mrs BFE, given the prior adjournments and the need to resolve all issues.
There was no objection to my suggestion and no request for an adjournment. I therefore decided to treat the expert evidence of Professor Y and Dr Z in the manner set out above. I excused Dr Z from further participation.

Participation in the hearing by Mrs BFE and her views

Mrs BFE attended the hearing. She participated with the assistance of her daughter Ms TED. She was also assisted, appropriately, by her Legal Representative, Mr Lalic, and of course by the participation of her Separate Representative, Mr Massey.
Mrs BFE expressed her views in some substantial detail in her written statements and also by way of answers to my questions at the earlier hearing on 2 February 2017. It was patently clear from her more recent statements and her views expressed at this hearing that Mrs BFE wants the financial management order to be revoked. She cannot understand why the order was made and she does not wish anyone, in particular a government body such as NSW Trustee and Guardian, to have a right to “interfere” in her affairs.
Mrs BFE’s further views, particularly in relation to the identity of any financial manager, are recorded in more detail below.
For completeness I record that I saw no particular need for Mrs BFE to be subject to an in camera session at the present hearing, during which she could provide her views to me in the presence of her Legal Representative and her Separate Representative but in the absence of the other participants. Mr Lalic, Mr Massey, and Mr Kelly agreed with me.

THE TRIBUNAL’S ASSESSMENT OF THE EVIDENCE AND DETERMINATION OF THE ISSUES

HAS MRS BFE REGAINED THE CAPABILITY TO MANAGE HER OWN AFFAIRS?

The legal principles and authorities

The Supreme Court of New South Wales has provided guidance in several decisions as to how the Tribunal should assess a person’s capability to manage his or her affairs. In earlier cases the Court based its test predominantly on the ability of the subject person to conduct the ordinary everyday affairs of people. It was said that if by reason of an inability to do this the person would be disadvantaged or there would be a real risk that they would be disadvantaged or that their money or assets would be at risk of dissipation, then they would properly be treated as being incapable of managing their affairs.
However, that approach has been reviewed and altered in more recent cases. In P v R [2003] NSWSC 819, Re D [2012] NSWSC 1006, and PB v BB [2013] NSWSC 1223, it has been emphasised that the Tribunal should not be relying just on hypothetical notions such as “the ordinary affairs of people” but rather should focus on the capability of the particular person to deal with his or her actual assets and to do what he or she is proposing to do with them. In P v R, Justice Barrett said that the task of the Tribunal in these circumstances:

“…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. …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.”

In PB v BB and subsequently in P v NSW Trustee and Guardian [2015] NSWSC 579, Justice Lindsay confirmed that the question focuses attention on the particular circumstances of the person under consideration.
In CJ v AKJ [2015] NSWSC 498, Justice Lindsay set out his preferred approach in considering whether a person is or is not capable of managing his or her own affairs. He said that a court or tribunal dealing with this issue should focus on whether the person is able to deal with (that is to make and to implement decisions about) his or her own affairs (person and property, capital and income) in a reasonable, rational and orderly way, with due regard to his or her present and prospective wants and needs, and those of family and friends, without undue risk of neglect, abuse or exploitation.
His Honour went on to say that in considering whether a person is “able” in this sense, the Court or Tribunal may give attention to:

past and present experience as a predictor of the future course of events;

support systems available to the person; and

the extent to which the person, placed as he or she is, can be relied upon to make sound judgments about his or her welfare and interests.

His Honour also noted:

“Consideration of the question of a person’s capacity to manage their affairs depends upon an assessment of his subjective circumstances, including the support available to him from his family and the extent to which he, placed as he is within a benign domestic environment, can be relied upon to make sound judgements about his welfare and interests…(and whether) within the community of his family, and with their ongoing support, he is able to take care of himself, his property and his finances” (At [54].)

Disability in the guardianship sense is not an element of the test for incapability for the purposes of considering a financial management application: GW v Protective Commissioner & Ors [2003] NSW ADTAP 51.

The relevant time for considering whether a person is incapable of managing his or her affairs is not merely the day of hearing but the reasonably foreseeable future: McD v McD (1983) 3 NSWLR 81, 86. In Re W and L (Parameters of Estate Management Orders) [2014] NSWSC 1106, Justice Lindsay accepted that proposition and adopted earlier observations in P v NSW Trustee and Guardian, that:

“Any decision to make, or to revoke, a financial management order, by its very nature, requires a backward glance designed to elucidate the present and the future; a firm grasp of present realities; and an element of anticipation of future problems and solutions. Management of the estate of a person in need of protection involves an exercise in risk management.”

Application of those principles in the present case

The Tribunal had received two detailed expert reports dealing with Mrs BFE’s capability of managing her own affairs. These were a report from Professor Y, Forensic Psychologist of a medical school at a university in Sydney, dated 13 September 2016 (based on an assessment on 31 August 2016); and a report from Dr Z, Clinical Neuropsychologist, dated 14 March 2017 based on an assessment of Mrs BFE on 3 March 2017.
For completeness I should add the following.

Other medical reports had been provided at earlier hearings. They included two reports dated 29 and 31 March 2016 from a Neurologist of public hospital A, a very short report dated 12 February 2016 from Dr X, Mrs BFE’s general practitioner, and some handwritten notes and a scoresheet for a Mini-Mental State Examination undertaken on that day. I took those reports into account but because of their relative age and the standing of Professor Y and Dr Z I gave their considerable greater weight than the earlier reports.

I also took into account the written statements and contentions as to Mrs BFE’s capability at this hearing by and on behalf of Mrs BFE herself, Ms TED, Mrs DAQ, and Ms Tatiana Bochin, Acting Manager NSW Trustee and Guardian. I accorded those statements, especially those of Mrs BFE herself, appropriate weight, but took into consideration the lay nature of their views and preferred the reports of the experts.

The reports of Professor Y and Dr Z reached conflicting conclusions as to Mrs BFE’s capability to manage her own affairs. They therefore merit detailed consideration and analysis.

The report of Professor Y

Professor Y is a Forensic Psychologist and is a Professor Emeritus in a medical school in a university in Sydney. She is a Fellow of the International Association for the Scientific Study of Intellectual Disability, a Member of the Australian Psychological Society College of Forensic Psychologists, and is a registered psychologist and has been practising as a forensic psychologist for over 25 years. Professor Y states that she is nationally and internationally recognised as an expert in forensic psychology, especially in the field of people with intellectual disability in the justice system and that she has published widely in this field.
Professor Y saw Mrs BFE on 31 August 2016. Significantly, her report records that she was asked expressly to address particular aspects of Mrs BFE’s capability of managing her own affairs. She was asked to consider whether Mrs BFE could deal with her affairs in a reasonable, rational and orderly way, with due regard to her present and prospective wants and needs without undue risk of neglect, abuse or exploitation. That of course is a digest of the tests of capability applied by Justice Lindsay in CJ v AKJ as cited at [35] above. Professor Y appears to have directed her analysis to issues based upon those tests and other established legal tests, namely whether Mrs BFE:

“can manage the ordinary affairs of living, including banking, buying and selling, and keeping track of her assets and liabilities and income and expenditure;

has a reasonably sound understanding of her assets, liabilities, sources of income and financial obligations,

has a reasonably sound understanding of the complications, pitfalls and risks of what she or others proposed to do with their assets and money (and whether there is a substantial risk that assets or money will be lost as a result); and

has the ability to identify situations where others may attempt to benefit from her assets or money through unfair dealing (and thereby create a real risk that she will be disadvantaged or will suffer loss).”

Professor Y applied certain psychological tests to Mrs BFE: the Kaufman Brief Intelligence Test, 2nd edition and the Vineland Adaptive Behaviour Scales-II.
In summary, Professor Y concluded as follows:

The tests indicated that Mrs BFE was functioning in the range of low average cognitive reasoning for both verbal and non-verbal tasks at a level lower than 82% of her age peers.

They also indicated that her adaptive behaviour was in the range of borderline intellectual ability and lower than 95% of her age peers.

Mrs BFE had a disability, namely a decline in cognitive functioning most likely as a result of her stroke, with resulting low average cognitive reasoning, borderline impairment for skills of adaptive behaviour, aphasia, and memory impairment. She was partially incapable of managing her person and required supervision and social habilitation.

Specifically in relation to financial management, Professor Y observed that Mrs BFE relied almost exclusively on her daughter Ms TED as her source of information about NSW Trustee and Guardian generally and the management of her assets.

Mrs BFE did not and could not manage the ordinary affairs of living and lacked an understanding of her assets and liability and her income and expenditure.

Mrs BFE lacked a sound understanding of the complications, pitfalls and risks of what she and her daughter Ms TED proposed to do with her assets and money. Significantly she reported that neither Mrs BFE nor Ms TED expressed a clear plan further managing Mrs BFE’s assets or money, except that they had a vague discussions about selling some of her properties. In Professor Y’s opinion there is a substantial risk that Mrs BFE’s assets and money may be dissipated or lost unless an independent financial manager continues to manage her affairs.

Mrs BFE did not have the ability to identify possible situations of unfair dealing, as indicated by her transfer of the quasi-entirety of her cash assets to her solicitor and their subsequent alleged misappropriation. (I summarise those circumstances at [65] to [72] and deal with them further below.)

Mrs BFE needed a financial manager.

The report of Dr Z

Dr Z is a Clinical Neuropsychologist and his report states that he has 15 years of experience with neuropsychological assessment and the evaluation of cognitive capacity in adults suffering from a range of cognitive disorders, that he has been involved in various research projects and has presented findings from his research at national and international conferences. He is a Master of Clinical Neuropsychology and a doctor of philosophy (Psychology). Dr Z is a registered psychologist and has specialist endorsement as a Clinical Neuropsychologist. He is a Senior Clinical Neuropsychologist at public hospital C and Lead Clinical Neuropsychologist at an Institute of neurological disorders. He is also an Adjunct Fellow at a university in Sydney.
Dr Z saw Mrs BFE for assessment on 3 March 2017; that is approximately six months after she had been seen by Professor Y and about six weeks prior to this hearing.
Dr Z saw Mrs BFE at the request of her solicitor Mr Lalic. Mr Lalic provided a copy of his letter of instruction, which I note is also dated 3 March 2017. The letter seeks Dr Z’s expert opinion as to whether Mrs BFE is able to manage her own financial and legal affairs. The letter of instruction is notable in the following particular respects:

It does not specify the legal tests of capability of managing one’s affairs in the way in which Professor Y addressed those tests, as referred to in [44] above or indeed in any way by reference to recent authorities. Dr Z is merely asked the general question as to whether Mrs BFE “is able to manage her own financial and legal affairs in a responsible and rational way.” It is true that the letter apparently attached a copy of the Tribunal’s Reasons for Decision for the orders made on 28 September 2016, but those Reasons, understandably, did not include the specific tests of capability which have emerged from recent authorities.

The letter of instruction is not directed entirely to the issue of Mrs BFE’s capability to manage her affairs. It places substantial emphasis on other issues. They are:

whether Mrs BFE has capacity to express an opinion as to who should manage her affairs; and

whether she has the capacity to instruct lawyers in the current proceedings. The letter contains substantial citation of authorities on the latter issue; but, as I say, none on the critical issue of capability to manage one’s affairs.

The letter of instruction did not attach a copy of the expert opinion of Professor Y and there is no reference to it in Dr Z’s report, so I infer that he was not made aware of it or provided with a copy of it.

Dr Z states that he selected certain tests in order to target the cognitive abilities most pertinent to the main issues identified in Mr Lalic’s letter of instruction rather than what he described as “a comprehensive battery covering all cognitive abilities”. The tests applied to Mrs BFE were the orientation-qualitative test, the Wechsler Adult Intelligence Scale 4th edition-selected subtests, the Hopkins Verbal Learning Test-Revised, the Colour-Form Sorting Test, a clock-drawing test and a semi-structured clinical interview for financial capacity (Marson et al, 2009).
Dr Z also conducted what appears to have been a substantial interview with Mrs BFE.
As a result of his neuropsychological testing Dr Z reached the following conclusions relevant to my consideration of the issues of capability.

Mrs BFE’s verbal comprehension was in the Low Average range for her age. Dr Z commented:

“Qualitatively, [Mrs BFE]’s word finding difficulty interfered with her performance on the general knowledge and verbal abstract reasoning tests when she was not able to retrieve the precise words to gain credit. Consequently, her true Verbal Comprehension is potentially higher than Low Average.”

Qualitatively, Mrs BFE appeared slower than expected for her age to answer a number of questions, although Dr Z notes that her questionable eyesight “rendered quantified assessment of her processing speed invalid”.

Mrs BFE’s immediate auditory attention span was in the Borderline to Extremely Low range. Working memory (the ability to mentally hold and manipulate information) was in the Low Average to Borderline range.

In relation to her executive functioning, Mrs BFE’s judgement and understanding of social convention was in the Average range. However her abstract reasoning on a task requiring her to discern the conceptual link between pairs of words was in the Low Average range. (Dr Z asserts that this score was reduced by Mrs BFE’s word-finding difficulties).

In relation specifically to her financial capacity, on the Semi-Structured Clinical Interview for Financial Capacity Mrs BFE demonstrated “mostly intact” basic monetary skills, but had some difficulty distinguishing between five and 10 cent coins and between one and two dollar coins. She was however able to read a mock bank statement and to identify the key elements such as balance, deposits, and credits.

As a result of the neuropsychological testing and his interview with Mrs BFE, Dr Z responded to the question of whether Mrs BFE is “able to manage her own financial and legal affairs in a reasonable and rational way” with findings that:

she performed well on the Semi--Structured Clinical Interview and that “her intact functioning in these cognitive domains is reflected in her answers on interview”;

She demonstrated “an excellent and detail understanding of her personal financial affairs and a well-considered plan for ensuring she has sufficient finances for the future”; and

she “utilises informal support from her daughter [Ms TED] (who reportedly has power of attorney) in some areas of financial management and plans to continue to use her support. For example, she is leaving the organisation of leasing one of her houses to [Ms TED].”

Dr Z did raise with Mrs BFE the loss of substantial money due to her deposit of a substantial part of her life savings into a solicitor’s trust account which Dr Z notes was done “with the intention of keeping this money out of the reach of NSW Public Trustee”. Significantly, Dr Z acknowledges that this was an “ill-fated decision” but adds that: “… it seems that they were defrauded by an elaborate scam”. Notwithstanding these matters and Dr Z’s express acknowledgment that “cognitive capacity must be proportional to the risk that an individual faces”, he concludes as follows:

“It seems to me that [Mrs BFE]’s trust in her daughter reflects their close family relationship and that [Mrs BFE]’s risk of financial exploitation is very low.”

He states as a general conclusion (which I read as one based his psychological testing, the interview and the account of the solicitor’s alleged fraud and the conclusion that the risk of financial exploitation is very low):

“For those reasons, it is my opinion that [Mrs BFE] does have the cognitive capacity to manage her own financial affairs.”

For completeness, I should add that:

Dr Z appears to have reached those conclusions partially on the basis of putting some hypothetical situations concerning fraud to Mrs BFE. They appeared to have revolved around people knocking on her door and asking for her details or neighbours requesting to borrow money. He says that she “demonstrated solid financial judgement” when presented with these hypothetical situations.

Dr Z also concludes that Mrs BFE does have the capacity to express an opinion as to who should be responsible for managing her financial and legal affairs. He observes that: “she would probably have [Ms TED] manage her affairs in the event she became incapable of managing these herself.”

Submissions by Mr Lalic on behalf of Mrs BFE on these expert reports

Mr Lalic submitted that I should “adopt Dr Z’s report in its entirety” and in particular I should prefer Dr Z’s expressed conclusions in every important respect to those of Professor Y. As I understood it, he asked me to do this for the following reasons.

Dr Z’s report represents the most recent expert assessment of Mrs BFE’s capability. It is the report of an assessment some six weeks before this hearing, whereas Professor Y’s report reflects her assessment made nearly eight months ago.

The views and conclusions of Dr Z are to be preferred to those of Professor Y because Dr Z is a clinical neuropsychologist and has therefore undergone special training and has substantial experience in applying and interpreting psychological testing, in a way in which only a registered clinical neuropsychologist can. Professor Y, on the other hand is a forensic psychologist and Mr Lalic put to me that she was qualified to provide an assessment and opinion in relation to general psychological matters but could not and did not apply the appropriate neuropsychological tests in assessing Mrs BFE’s capability.

In particular, the application by Professor Y of the Kaufman Brief Intelligence Test, 2nd edition (or “KBIT-2”) and the conclusions drawn from it were in Mr Lalic’s view questionable because the test relies on one-word answers. In Mr Lalic’s contention that this was “fundamentally unfair” to Mrs BFE because of her established word-finding difficulties.

Mr Lalic asserted that, when read as a whole, Professor Y’s report discloses a breakdown of relations between Professor Y and Mrs BFE’s daughter, Ms TED during Professor Y’s consultation. Mr Lalic contended that this must have impacted on the overall environment in which the testing and interview was conducted and may well have made things uncomfortable for Mrs BFE, so that her performance might have been affected. Mr Lalic was careful to put his position no higher than that.

In his contention, Mrs BFE’s overall condition and in particular her memory and her cognitive performance had improved substantially since her stroke in November 2015.

Mr Lalic contended that I should rely on Dr Z’s conclusions to the exclusion of Professor Y’s conclusions. These include relevantly of course his conclusion that Mrs BFE has the cognitive capacity to manage her own financial affairs, that she “demonstrates an excellent and detail understanding of her personal financial affairs”, that “she utilises informal support from her daughter, Ms TED in some areas of financial management and plans to continue to use her support” and that “Mrs BFE’s risk of financial exploitation is very low.”

Submissions by Mr Kelly on behalf of Ms TED on these expert reports

Mr Kelly submitted that Dr Z’s report and opinion should be preferred to that of Professor Y. He based that principally on his agreement with Mr Lalic that Professor Y’s report reflects that there occurred some breakdown in the relationship between Professor Y and Ms TED during the consultation. Mr Kelly said this was demonstrated by Professor Y’s statement on page 8 of the report that: “[Ms TED] expressed some over-valued, suspicious and inaccurate beliefs about the management of her mother’s assets.”
Mr Kelly contended that Dr Z’s report should also be preferred because it represented a more recent assessment and because it reflected a substantial improvement in Mrs BFE’s cognitive ability since her assessment by Professor Y. As an example of this Mr Kelly pointed to the statement in Professor Y’s report on page 9 to the effect that Mrs BFE could not state what her assets were, whether she had any liabilities or financial obligations, or the source of her income; whereas Dr Z found that she demonstrated a good understanding of the history and details of these Tribunal proceedings and was able to list her assets in substantial detail (section 5.5 of the report). I understood Mr Kelly to be contending that these findings reflected not only an improvement in Mrs BFE’s cognitive and expressive ability since her appointment with Professor Y, but also that she was more relaxed and forthcoming when interviewed by Dr Z.
Mr Kelly submitted that Mrs BFE was capable of managing her financial affairs.

The views of NSW Trustee and Guardian

Ms Tatiana Bochin, Acting Manager NSW Trustee and Guardian, whilst not expressing a view directly on either of the two expert reports under consideration, told me that based on her knowledge of the matter and dealings with Mrs BFE, at present and for the conceivable future Mrs BFE would not find it easy to manage any fairly complex account or financial transaction and that she believed that Mrs BFE would definitely require assistance with the management of her financial affairs.

Submissions by Mr Massey as Separate Representative

Mr Massey suggested that it was important for me not simply to weigh up the relative merits of these two experts reports. He contended that I must also compare their conclusions (and in particular the conclusions by Dr Z that Mrs BFE was fully capable of managing her affairs) with what had actually occurred. He was alluding to the circumstances which led to substantial losses to Mrs BFE’s estate as a result of alleged misappropriation by a solicitor of moneys (comprising nearly all her cash reserves) transferred by Mrs BFE and Ms TED to the solicitor’s account in breach of the earlier financial management order.
Given the significance of those circumstances to the issues presently before the Tribunal, I digress slightly to set out below my understanding of them.

The losses to Mrs BFE’s estate by way of transfer of funds to a solicitor

My understanding of the circumstances relating to these losses is as follows. The essential background is of course that the Tribunal had made a financial management order on 18 December 2015 under which management of the whole of Mrs BFE’s estate was committed to NSW Trustee and Guardian.
In mid to late-January 2016, Ms TED sought from her finance broker a recommendation of a suitable lawyer to advise her in relation to her mother’s estate and, it appears, particularly as to the position of NSW Trustee and Guardian. The finance broker recommended a solicitor who, because of the current investigations, claims and proceedings concerning him should not be named, but who I shall refer to as “Mr QRB”.
In a written statement, Ms TED confirms that she first spoke to Mr QRB by telephone from the office of her finance broker on 23 January 2016. Her written statement of 2 March 2016 (apparently originally prepared for the appointed receiver of Mr QRB’s practice) indicates that Ms TED was impressed with Mr QRB and understood that he was in her words “well-connected to Parliamentary officials who would get a Bill passed in Parliament” relating to the supposed misuse by NSW Trustee and Guardian of its power generally.
It is plain from Ms TED’s statement and also the evidence of Ms Bochin of the NSW Trustee and Guardian that on 29 January 2016 there was a substantial discussion between them, during which Ms Bochin attempted to explain the workings of the financial management order and the role of the NSW Trustee and Guardian as financial manager of Mrs BFE’s estate. Significantly, on Ms TED’s own account of it, immediately following that discussion she telephoned Mr QRB to report on that conversation and to obtain his advice on how best to deal with the NSW Trustee and Guardian.
According to Ms TED, on 8 February 2016 her finance broker (presumably at the instigation of Mr QRB) told Ms TED to arrange the immediate withdrawal of a substantial sum from the account in Mrs BFE’s name in a credit union and to deposit it into Mr QRB’s trust account. I understand the amount to be $273,000. Although I am not sure of the date on which the transfer occurred, it appears clear from Ms TED’s written statement that it was either on 8 February 2016 or shortly thereafter because, commencing on 14 February, Ms TED and her finance broker made a series of unsuccessful attempts to contact Mr QRB concerning the funds.
In the proceedings in this Division before Senior Member Boxall on 28 September 2016, he found that the $273,000 represented the “quasi-totality” of Mrs BFE’s cash resources.
It is alleged that Mr QRB misappropriated those monies. A receiver has been appointed to Mr QRB’s practice. The NSW Trustee and Guardian has been successful in negotiating a transfer from the appointed receiver into Mrs BFE’s trust account with the NSW Trustee and Guardian of $98,959.85 but that leaves a deficit of over $174,000.
The NSW Trustee and Guardian has also lodged, on behalf of Mrs BFE, a claim against the Law Society’s Fidelity Fund. In its report dated 1 February 2017, the NSW Trustee and Guardian confirmed that depending on the outcome of the fidelity fund claim, further recovery action would be considered against the credit union who held the account for Mrs BFE (presumably on the basis that the credit union was on notice of the NSW Trustee and Guardian’s appointment as financial manager at the time of the withdrawal) and, significantly, against Ms TED.

The Separate Representative’s submissions in relation to Mrs BFE’s capability

Mr Massey submission was to be effect that the scale and the circumstances of this apparent loss to Mrs BFE’s estate (effectively all her cash assets less the amount recovered from the receiver) and the fact that this occurred with her apparent consent are most important in my assessment of whether, currently and for the foreseeable future, Mrs BFE remains incapable of managing her own affairs.
Mr Massey emphasised that the proper analysis is not that Mrs BFE is to be considered reckless or incapable of managing her affairs simply because she wished to transfer the funds to a solicitor’s trust account. Rather, the focus should be the fact that Mrs BFE (and of course Ms TED) were prepared to transfer those funds on the basis of the incredible and fanciful representations by Mr QRB, which included assertions that:

because of his personal influence on the Liberal Party of NSW and the State Government, he could arrange to have an Act of Parliament passed to prevent the NSW Trustee and Guardian (and apparently the Tribunal) from continuing their alleged misappropriation of the money and assets of protected persons (Ms TED’s statement to the Receiver, page 7);

because Mr QRB’s cousin was the “right-hand person” to the Premier of New South Wales, Mr QRB had been able to make appointments to meet Parliamentary officials to have the appointment of the financial manager for Mrs BFE quashed. (Statutory declaration of the finance broker, 4 March 2016, page 3); and

if the funds were transferred to Mr QRB’s account as proposed the money “would be safe…: not even the Supreme Court could touch it.” (Statutory declaration of the finance broker, 4 March 2016, page 3).

It appears that no verification of the matters represented by Mr QRB was sought by Mrs BFE, by Ms TED or by the finance broker. Mr QRB’s fanciful story appears to have been “swallowed whole”. The direct result of that was a devastating loss to Mrs BFE’s cash assets.
In relation to the specific issue of Mrs BFE’s capability to manage her affairs, Mr Massey urged me to find that she remained incapable of doing so. He based that submission on the following factors.

The matters set out above in relation to the transfer of funds to Mr QRB’s account;

Mrs BFE’s apparent lack of understanding as to the role of the NSW Trustee and Guardian and her refusal to cooperate with the NSW Trustee and Guardian notwithstanding the circumstances of her substantial loss by reason of the transfer to Mr QRB’s account.

Her apparent delay in administering the estate of her late husband who died in 2013, which, I note was prior to Mrs BFE’s stroke in late 2015. In relation to that matter, Mr Massey had obtained searches indicating that the Notice of Intended Application for Probate had not been published until 7 July 2015.

Mrs BFE’s intention to make a gift of $120,000; that is, approximately half of her cash savings to her daughter Ms TED for no stated reason. (As revealed in Ms TED’s statement dated 7 April 2017, [6]).

My analysis and conclusions as to Mrs BFE’s capability of managing her own affairs

Dr Z’s report

I accept that Dr Z’s report represents the most recent available expert evidence of Mrs BFE’s capability to manage her affairs. It must of course be given substantial weight for that reason. I also accept that as a registered neuropsychologist Dr Z is qualified to administer and draw conclusions from particular psychological tests which may be valuable in reaching a conclusion as to a person’s capability of managing their own affairs and that those were not the particular tests administered by Professor Y.
However, it does not necessarily follow that the tests administered by Professor Y or her conclusions on the issue should be discounted. Nor does it follow that I should accept Dr Z’s report in its entirety, as I was invited by Mr Lalic to do. Nor would my acceptance and reliance on parts of Dr Z’s report or some of his conclusions preclude my acceptance of and reliance upon of some parts of Professor Y’s report or my acceptance of Professor Y’s ultimate conclusion as to Mrs BFE’s capability.
In my view, Dr Z’s observations and conclusions are subject to the following important limitations.

As noted at [49(1)] above, Dr Z was not provided with and did not apply the relevant legal tests of capability of managing one’s affairs as summarised at [32] to [39] above. I accept that Dr Z may have been independently aware of those legal tests, but he does not cite them in his report and does not appear to rely upon them in order to reach his ultimate conclusion that Mrs BFE is capable of managing her affairs. Professor Y on the other hand provided an accurate summary of the principles governing this critical issue in [2] of her report and made specific reference to the tests as enunciated by Justice Lindsay in the leading case of CJ v AKJ in reaching her ultimate conclusion that Mrs BFE lacks the capability to manage her affairs.

I do not accept that Dr Z fully explored Mrs BFE’s vulnerability to exploitation or drew accurate conclusions about it. As noted above, he did not refer to that as an element of the legal concept of capability. He put hypothetical examples to Mrs BFE as noted at [5.5] on page 8 of his report, but these were quite simplistic, and bore no resemblance to the very real losses recently experienced by Mrs BFE from Mr QRB’s trust account. Dr Z reports, in the concluding paragraph of section 7.8, that Mrs BFE’s “knowledge of her personal assets expenses and debts was excellent”, but I could find no further detail of her account of these matters or any verification that it was accurate. He did apply the “Semi-Structured Clinical Interview for Financial Capacity” but again the elements of that assessment described in section 7.8 of his reports seem quite simplistic and do not relate to exploitation of the nature or degree actually experienced by Mrs BFE.

Dr Z’s characterisation of Mrs BFE’s decision to transfer $273,000 to a solicitor as merely “questionable” and “ill-fated” and ascribing the loss to the fraud of the solicitor misses the point. ([8(i)] on page 12 of his report) That was the point raised by Mr Massey: it was not the fact of the transfer of the $273,000 itself which demonstrates Mrs BFE’s naivety and vulnerability to exploitation, but rather her reliance on the solicitor’s purported reputation and her unquestioning acceptance of his fanciful claims about his connections with the New South Wales government and what he could achieve. Seen in that light Dr Z’s conclusion that “[Mrs BFE]’s risk of financial exploitation is very low” seems to me unfounded and I cannot accept it. In reaching that conclusion I of course mean no discourtesy to Dr Z himself and I take into account the fact that he was excused at the Tribunal’s instigation from giving evidence at the hearing. It may well be the case that he was not fully briefed as to the circumstances or as to the representations made by Mr QRB.

Dr Z based his conclusions as to Mrs BFE’s cognitive capacity and her capability to manage her own affairs partly on the support she can expect to receive from her daughter Ms TED. As Justice Lindsay explained in CJ v AKJ, a court or tribunal in assessing a person’s capability may have regard to support systems available to the person. For the reasons I have provided below in [90] and [91] and in the section headed: “Can [Mrs BFE]’s affairs be managed by her daughter [Ms TED]?”, I find that any support which can be offered by Ms TED will not be sufficient to protect Mrs BFE from undue risk of future exploitation.

I do not accept the comments made by Dr Z in the second paragraph of section 7.2 of his report as nullifying or making less valid Mrs BFE’s score in the WAIS-IV test of intellectual functioning. While it was of course proper and understandable for Dr Z to have raised Mrs BFE’s word-finding difficulties, the purpose of applying the WAIS-IV was to determine the level of her intellectual functioning, including Verbal Comprehension. Mrs BFE’s word-finding difficulties may be an important element in the Tribunal’s assessment of her overall capability of managing her affairs.

I note the specific findings of Dr Z which are adverse to a conclusion that Mrs BFE is capable of managing her affairs, as summarised in [52] above.
Those matters, taken in conjunction with my findings as to Mrs BFE’s undue vulnerability to exploitation, lead me to conclude that Dr Z’s report does not persuade me that Mrs BFE is capable of dealing with her affairs in a reasonable, rational and orderly way without undue risk of exploitation.

Professor Y’s report

I accept that proper account must be taken of the fact that Professor Y’s report was at the time of the hearing some eight months old. I also accept that Professor Y is not a clinical neuropsychologist and therefore is not authorised to conduct the specific types of psychological testing undertaken by Dr Z.
But, even taking those matters into account, I do give particular weight to some of Professor Y’s findings.

Firstly, in the circumstances of the case I regard Professor Y’s application of the Kaufmann Brief Intelligence Test, 2nd edition and the Vineland Adaptive Behaviour Scales-II as appropriate. Even though they are not the same as psychological tests usually carried out only by a neuropsychologist and particularly those applied by Dr Z, those tests in the circumstances appear to have been appropriate and reliable in measuring the present and likely future capability of Mrs BFE to manage her own affairs. That applies particularly insofar as the non-verbal aspects of the Kaufman intelligence test are specifically designed to measure a person’s ability to solve new problems by perceiving relationships. Significantly, Mrs BFE scored only 85 in that test, less than 84% of the average score of her age peers. That result must provide some guide to Mrs BFE’s vulnerability to exploitation.

Secondly, I accept that Professor Y’s findings which I have summarised above, and particularly Mrs BFE’s performance in the tests when measured against the mean scores of aged peers, provides reasonable justification for the Professor’s conclusions which I summarised at sub-paragraphs (4) to (7) of [46].

Most significantly, the tests which Professor Y applied and her detailed interview with Mrs BFE, as reported, provide a reasonable basis for the Professor’s conclusions as to Mrs BFE’s vulnerability. Professor Y concluded relevantly:

“In my opinion, [Mrs BFE] lacks a sound understanding of the complications, pitfalls and risks of what she and [Ms TED] propose to do with her assets and money. She has already been defrauded of a substantial amount of her assets…
In my opinion, there is a substantial risk that [Mrs BFE]’s assets and money may be dissipated or lost, unless an independent financial manager continues (to be appointed for her)…
[Mrs BFE] does not have the ability to identify possible situations of unfair dealing, as indicated by the allegations of fraud against a lawyer…”

Conclusions as to the two expert reports

Notwithstanding the relative ages of the two reports, for the reasons above I conclude that in many respects Professor Y’s report is to be preferred to that of Dr Z.
In addition to the matters raised above, I emphasise the following :

Professor Y’s consideration and conclusions appear to me to be more clearly directed towards the specific legal tests of incapability than appears from Dr Z’s report; and Professor Y gives sustained attention to Mrs BFE’s vulnerability to exploitation, particularly in light of the recent substantial losses she had suffered. As noted above, Dr Z appears to miss the real indicia of Mrs BFE’s vulnerability: namely her bland acceptance of the solicitor Mr QRB’s representations and fabrications.

Although Mr Lalic did not put it to me on this basis, I am not persuaded that Professor Y’s conclusions were affected by the suggested “breakdown in relations” with Ms TED during her consultation. I do not draw an imputation from the contents of Professor Y’s report that there was a “difficult” atmosphere because of the presence of Ms TED which led to Mrs BFE herself being uncomfortable and therefore not performing well.

It follows that I am not persuaded by Dr Z’s conclusions as to Mrs BFE’s capability to manage her own affairs and for the reasons set out above I prefer the approach and give greater weight to the conclusions of Professor Y.

Other factors influencing a decision about capability identified by Justice Lindsay

As noted above, in his analysis of the tests for capability of managing one’s affairs in CJ v AKJ [2015] NSWSC 498, Justice Lindsay said that in considering whether a person is able to deal with his or her own affairs in a reasonable, rational and orderly way, attention could be given to:

past and present experience as a predictor of the future course of events;

support systems available to the person; and

the extent to which the person, placed as he or she is, can be relied upon to make sound judgements about his or her welfare or interests.

Past and present experience as an indicator

In relation to this indicator, I give substantial weight to the loss by Mrs BFE of the substantial part of her cash savings as a result of alleged misappropriation by a solicitor, Mr QRB, which I have outlined in some detail in [65] to [72] above. In particular I give considerable weight to the naivety of Mrs BFE in apparently accepting without question or demur Mr QRB’s representations and fabrications.
Nothing in the evidence or submissions before me, including my acceptance that Mrs BFE’s has basic familiarity with her assets and ability to make basic everyday decisions, persuades me that she would no longer be vulnerable to fabrications, misleading statements and exploitation of this type.
For those reasons the circumstances surrounding the very substantial losses suffered by Mrs BFE can in my view be relied upon as a predictor of any future course of events.

“Support mechanisms” for Mrs BFE

It was put to me by Mr Lalic and Mr Kelly and it was also indicated by Dr Z in his report that Ms TED could provide appropriate support for her mother Mrs BFE in managing her financial affairs. I do not doubt that Ms TED has very considerable affection and concern for her mother. That has been obvious to me on each of the occasions in which Ms TED has appeared before me. However, a “support mechanism” for the purposes of Justice Lindsay’s tests clearly needs to be one which will, realistically, mitigate any likelihood that the managed assets will be at undue risk of exploitation.
Ms TED’s actions were a significant element in the loss of Mrs BFE’s money to Mr QRB. She appears to have readily accepted both her finance broker’s recommendation of Mr QRB and Mr QRB’s fabrications and misrepresentations as to how such a transfer could assist Mrs BFE. She either misunderstood or deliberately tried to subvert the proper operation of the financial management order for Mrs BFE in arranging the transfer of funds to Mr QRB’s account. (In that regard I note the concern expressed by the Separate Representative as to the evidence, including in Ms TED’s own statement, that shortly before transferring the funds Ms TED had a meeting with Ms Bochin of the NSW Trustee and Guardian and, on Ms Bochin’s account the workings of the financial management order were explained to Ms TED at that time.) So I cannot accept that Ms TED would provide an adequate or acceptable “support mechanism” for the purposes of the test laid down by Justice Lindsay.
I have also considered whether other family members may be able to perform the “support mechanism” function. A letter was submitted to the Tribunal on 20 September 2016 from Mr FEN and his wife Mrs HEP. Mr FEN is the brother of Mrs BFE. The letter outlines briefly the items of financial assistance which Mr FEN and Mrs HEP have provided to Mrs BFE but also confirms that Mr FEN and Mrs HEP have had only limited contact with Mrs BFE since she was discharged from public hospital B at western Sydney in February 2016.
Ms MED, daughter of Mrs BFE, participated by telephone in the hearing on 2 February 2017 from Ireland. Shortly before the present hearing, the Registry received two letters from Mrs MED. These express her support and her natural affection for her mother. They also express her wish to be part of her mother’s life and “to assist in decisions that will make her life happy and fulfilled”. However, the remainder of the letter dated 11 April 2017 makes it clear that her relationship with her sister, Ms TED, has been a difficult one over a substantial period. The additional factor is a geographical one in that Ms MED is a permanent resident of Ireland. I find as practical matter Ms MED cannot this considered as a sufficient “support mechanism” the purposes of assessing Mrs BFE’s capability. (Of course, in making this finding I do not in any way doubt the genuine concern and affection which Ms MED has for her mother)

I have considered as a separate matter below whether Mrs DAQ, Mrs BFE’s granddaughter, is suitable for appointment as financial manager. However, it was clear to me, particularly from Mrs BFE’s prevarication as to whether she wished her granddaughter to have a role in managing her affairs and Mrs DAQ’s own evidence that she cannot be regarded as part of a current “support mechanism” for the purposes of assessing Mrs BFE’s capability.
No other family members were identified to me as being available to take on the role of managing Mrs BFE’s affairs. Even if one or more family members were available, the unacceptable barrier to treating any one or more of them as an adequate “support mechanism” is that Mrs BFE has appointed Ms TED as her attorney under an enduring Power of Attorney. So if I were to revoke the financial management order on any ground, including that Mrs BFE has regained her capability to manage, Ms TED herself would retain full legal authority to manage her mother’s affairs. Both Ms TED and Mrs BFE have expressed a preference for the Power of Attorney to remain effective.
In the circumstances, particularly in light of the mutually-reliant relationship between Mrs BFE and Ms TED, I find that in reality the existence of the Power of Attorney is most likely to be a disincentive to the involvement of other family members. It has certainly not been demonstrated to me how in those circumstances the level of support from other family members would be sufficient to protect Mrs BFE from the undue risk of exploitation.

Protective purpose of the jurisdiction and the welfare and interests of Mrs BFE

In G v G [2016] NSWSC 511, Justice Lindsay emphasised that in considering what order should be made a tribunal must be mindful of:

the protective purpose of the jurisdiction; and

in light of that protective purpose of the need to ensure that whatever is done, or not done, by the Tribunal is in the interests and for the benefit of the person under consideration as a person in need of protection.

I have taken careful note of those factors. It is my duty, in accordance with s 4(a) of the Guardianship Act to give my paramount consideration to the welfare and interests of Mrs BFE. That consideration outweighs other principles and factors to which s 4 requires me to have regard, including the views of Mrs BFE herself and the need to restrict Mrs BFE’s freedom of decision and freedom of action as little as possible. I am also required by s 4(g) to ensure that she is protected from neglect, abuse and exploitation.

Conclusion

In light of all the above findings and having considered the factors which I am required to take into account, I cannot be satisfied that placed as she is, now and for the foreseeable future, and even with such support as is realistically likely to be available from family members, Mrs BFE can be relied upon to make sound judgments about her welfare and interests or to be able to take care of herself and her assets, particularly by reason of her vulnerability to exploitation.
It must follow that she has not regained the capability to manage her own affairs.

WOULD IT BE IN MRS BFE’S BEST INTERESTS OF FOR THE ORDER TO BE REVOKED?

The parties’ submissions

The Legal Representative of Mrs BFE

Mr Lalic submitted that it would be in Mrs BFE’s best interests for the financial management order to be revoked. As I understood it he relied on the following grounds:

I should place great reliance on Mrs BFE’s own views, which were that she should be allowed to manage her own affairs with family assistance and that the NSW Trustee and Guardian should play no further part in that.

Mrs BFE’s best interests would be served by allowing her affairs to be managed with the assistance of what Mr Lalic described as the family network, without a financial management order.

I should take into account the fees that currently paid to the NSW Trustee and Guardian, the liability for which would continue if the financial management order were not revoked. I understood Mr Lalic to contend that those fees were an unnecessary drain on Mrs BFE’s estate.

Mr Lalic also asserted that one of Mrs BFE’s properties had now been fully renovated and a tenant was being sought. I understood him to contend that this demonstrated that major decisions concerning the estate could be made informally without a financial management order.

Mr Lalic also urged me to take into consideration the likelihood that Mrs BFE’s cognitive ability would continue to improve.

The Legal Representative of Ms TED

Mr Kelly also submitted that the order should be revoked in Mrs BFE’s interests. As I understood it he relied on the following grounds:

Despite her stroke Mrs BFE is relatively independent and capable at least up to the level that is required for effective management of her usual affairs.

His client Ms TED and Mrs BFE are the two closest members of the family and rely upon each other. I should take into account the support which would be continuously available from Ms TED, including in situations where Mrs BFE were faced with a decision which she could not make by herself.

It is clear that Mrs BFE cannot co-operate with the NSW Trustee and Guardian and any continuation of the role of NSW Trustee will cause substantial stress to Mrs BFE. I should consider these matters in giving consideration to Mrs BFE’s welfare and interests.

NSW Trustee and Guardian

Ms Bochin observed that the relationship between the offices of the NSW Trustee and Guardian and Mrs BFE had been a difficult one, given Mrs BFE’s attitude of non-co-operation with what she regards as “government interference”.
In Ms Bochin’s view, continuation of the order would not be in Mrs BFE’s best interests if management continued to be committed to the NSW Trustee and Guardian. .Instead a family member should manage Mrs BFE’s affairs. Her personal view was that Mrs BFE’s granddaughter Mrs DAQ was best placed to be appointed to manage those affairs. I understood Ms Bochin to suggest that the order should continue but Mrs DAQ should replace the NSW Trustee and Guardian as financial manager.

The Separate Representative

Mr Massey submitted that I should continue the financial management order but should appoint Mrs DAQ as financial manager.
I understood Mr Massey to confirm that he would have considerable concerns if the management of Mrs BFE’s affairs were left in the hands of Ms TED. He indicated that he based that not only upon Ms TED’s role in the substantial loss of Mrs BFE’s savings through the alleged misappropriation by Mr QRB, but also on the fact that it was clear that only a short time prior to arranging the transfer of her mother’s money is to Mr QRB’s account Ms TED had received a detailed explanation of the financial management order and the role of the NSW Trustee and Guardian as financial manager from Ms Bochin of the NSW Trustee and Guardian.
I also understood Mr Massey to have been concerned by Ms Bochin’s evidence to the effect that the NSW Trustee and Guardian’s records show a history of transfer of amounts from Mrs BFE’s account to Ms TED and the fact that those transfers were in the process of being investigated at the time of the payment of Mrs BFE’s savings to Mr QRB.

Can Mrs BFE’s affairs be managed by her daughter Ms TED?

In [92] above I concluded that Ms TED’s actions were a significant element in the loss of Mrs BFE’s savings to Mr QRB on the basis that she appears to have readily accepted both her finance broker’s recommendation of Mr QRB and Mr QRB’s representations as to how such a transfer could assist Mrs BFE. I share the concerns expressed by Mr Massey, as summarised in paragraph 107 above.
In assessing the suitability of Ms TED to manage her mother’s estate, either in the absence of a financial management order (in which case she would have the authority of the Power of Attorney available to her) or as the appointed financial manager, my appraisal of the facts must be a realistic one. In doing so I must give appropriate weight to each of the following factors:

the close relationship of mutual reliance which clearly exists between Ms TED and her mother Mrs BFE;

the existence of the Power of Attorney in favour of Ms TED.

the fact that there is no persuasive evidence of other family members becoming involved in the management of Mrs BFE’s affairs, as I found and recorded at [96] above;

the concerns expressed by Mr Massey as Separate Representative as outlined in [105] and [106] above; and

the size and complexity of the estate. In that regard I note that the estate is a reasonably large one. On the basis of the NSW Trustee and Guardian’s report dated 1 February 2017 the estate consisted of three substantial residential properties in north-western Sydney, 1995 Ford Falcon Fairmont sedan, small balances in account with two banks and the balance in the NSW Trustee and Guardian’s trust account (which largely represents the portion of the money is lost to Mr QRB which have been recovered so far and which on one February 2017 were approximately $77,600. At the hearing Ms Bochin also indicated that a financial institution had frozen some $10,000 of funds previously held in two separate accounts. I understood from Ms Bochin’s evidence that there had been no substantial change to the assets since one February 2017.

However, the most substantial factor in my opinion is Ms TED’s direct involvement in the events surrounding the loss of nearly all Mrs BFE’s savings to Mr QRB, including in particular:

The fact that she either completely misunderstood or deliberately tried to subvert the proper operation of the financial management order for Mrs BFE in arranging the transfer of funds to Mr QRB’s account; and

her naivety the in accepting the representations made by Mr QRB, as discussed in detail above.

I give substantial weight to each of those factors.
I also rely on the findings and observations as to Ms TED made by Senior Member Boxall in his Reasons for his decision on 28 September 2016. They merit citation in full. He said, commencing at [15(3)] of the Reasons:

“(The statement submitted by Ms TED to the receiver to Mr QRB’s practice) suggests that questions may arise if any such proposal involves the appointment of [Ms TED] to manage [Mrs BFE]’s finances and property. These could include (but are not necessarily limited to) the following:
(a)   …[Ms TED] appears to suggest that she was instrumental in making the decision to place the quasi-totality of [Mrs BFE]’s cash resources -some $273,000, of which about $175,000 remains missing -with the solicitor, in orchestrating the arrangements for the money’s withdrawal from [Mrs BFE]’s bank account, and in arranging its payment to the solicitor. She their outlines the reasons for adopting this course of action and to choosing this particular solicitor and the investigations which she undertook in relation to him. These disclosures may well raise questions for the Tribunal as to:
(i)   [Ms TED]’s judgement generally;
(ii)   in particular, her commercial and financial acumen; and
(iii)   whether by her actions [Ms TED] deliberately sought to subvert both this Tribunal’s order and the authorities conferred on it by the NSW Trustee and Guardian,
and in consequence whether [Ms TED] can properly be considered as a suitable financial manager for her mother.

(b) If [Mrs BFE]’s bank had been put on notice at or before the time the relevant withdrawals were made of the appointment of the NSW Trustee and Guardian as [Mrs BFE]’s financial manager, one possible source of compensation for [Mrs BFE] may be her bank. The Tribunal notes this purely as a logical possibility, without expressing any view as to its substantive merits. If in fact this is a possible course of action, any proposal as to [Mrs BFE]’s future financial management might usefully address how such a claim could reasonably be made on [Mrs BFE]’s behalf by a financial manager who, in his or her personal capacity, had been instrumental in procuring performance by the bank of the very act for which compensation is sought.”

In my view there is nothing before the Tribunal currently which undermines or reduces the significance of the observations made by Senior Member Boxall.
I should add that I was not persuaded by my discussion with Ms TED at the hearing that she yet has a complete understanding of the effect of the financial management order or the role of a financial manager. I commenced by asking Ms TED what she understood to be the effect of the financial management order. She did not answer that question. I then asked her whether she now accepted that the making of the financial management order for her mother meant that her mother’s money was under the sole control of the NSW Trustee and Guardian . Ms TED replied to the effect that she did but that she “was advised by the solicitor to place it in the account and my mother wanted to keep it safe.” I regarded that answer is either equivocal or as indicating ongoing uncertainty about the role and authority of a financial manager.
I asked Ms TED to consider a hypothetical situation under the present financial management order, in which she located a previously unknown account in her mother’s name which had a credit balance of $20,000. I asked what she would do in those circumstances and she replied: “Disclose it”. I asked whether she meant that she would disclose it to the NSW Trustee and Guardian and she said: “If they were overseeing it”.
I was not persuaded by this exchange (in which to a substantial extent I felt I needed to assist her with prompts) or by anything else which Ms TED said or produced, that she yet has a substantial understanding of the role of a financial manager or the effect of a financial management order.
In addition, I find that if the financial management order is revoked:

the Power of Attorney in favour of Ms TED will again have effect. Ms TED is the sole appointee under the instrument. Ms TED will thereby have unfettered legal authority to manage Mrs BFE’s affairs. I note that clause 3 of the Power of Attorney is printed in block capitals and expressly provides that as attorney Ms TED will have ”UNLIMITED POWER WITH NO CONDITIONS OR LIMITS”.

It seems quite unlikely that other family members are available or will be given the opportunity to assist in the management of Mrs BFE’s affairs.

It follows that many decisions in relation to Mrs BFE’s estate will be taken by her daughter Ms TED;

On the basis of those findings and conclusions I am satisfied that it would not be consistent with the welfare and interests of Mrs BFE to allow Ms TED to have the right to manage her affairs, either under the Power of Attorney, or as financial manager under any variation of the financial management order.
It must follow that I should not make an order which allows Ms TED to have that right: that is, an order revoking the financial management order or an order which has the effect of appointing Ms TED as financial manager.

Conclusions

Best interests

It follows from my findings above that it would not be in the best interests of Mrs BFE for the financial management order to be revoked

Application for revocation of the financial management order

It follows from my conclusions in [101] and [121] that I must refuse to revoke the financial management order for Mrs BFE.

SHOULD THE ORDER BE CONFIRMED, OR VARIED?

Should the appointment of NSW trustee as financial manager be revoked?

It appears to be uncontested and I am satisfied that:

Mrs BFE is a lady of strongly-held independent views and she cannot understand why a government body such as the NSW Trustee and Guardian has any proper role in the management and administration of her financial affairs.

The NSW Trustee and Guardian itself (confirmed by the evidence of Ms Bochin) acknowledges that there have been substantial difficulties in dealing with Mrs BFE or her estate, largely because of her strong and independent views.

If there is a suitable candidate for appointment as a private manager, particularly if it is a suitable family member, the management of Mrs BFE’s affairs may be undertaken in a way which is more effective and efficient and which ultimately is in greater accord with her welfare and interests than under the present order.

It follows that if there is a suitable private person who can be appointed as financial manager than the appointment of the NSW Trustee and Guardian should be revoked.

Who should be appointed as financial manager?

The tests of suitability

Before appointing any private person as financial manager I must be satisfied that the person seeking appointment is willing to act and is suitable for appointment. There are no express criteria for determining suitability in the relevant legislation, but the Tribunal normally ensure that the candidate:

is reasonable familiar with the subject person’s estate;

has a reasonable level of understanding of how to deal with and account for other people’s money. This can usually be demonstrated for example, through their having held a relevant position in a business;

has no conflict of interest which would prevent their appointment on the basis that they might not be seen to be acting solely in the interests of the subject person;

has nothing in their public record, in particular by way of any criminal or bankruptcy proceedings or orders, which might render them unsuitable for appointment;

is not for any other reason, such as an inability to understand or to comply with the obligations of a financial manager, their past activities in dealing with other people’s money or the likelihood that they will not for any reason (including lack of availability, interest, competence or diligence), be unable to undertake the functions of a financial manager in the best interests of the protected person.

It had been indicated in the course of this and previous hearings that each of Ms TED and Mrs DAQ wished to be considered for appointment as Mrs BFE’s financial manager. For completeness I should add that at this hearing Ms TED had difficulty reaching a decision as to whether or not she wished to be considered for appointment.

The suitability of Ms TED

For the reasons set out at [109] to [119] above I am satisfied that Ms TED is not a suitable person to be appointed as financial manager.

The suitability of Mrs DAQ

Following some consideration by her at the hearing of this question, Mrs DAQ confirmed that she did wish to be considered for appointment.
For completeness I add that when the possibility of Mrs DAQ’s candidacy was first raised, Mrs BFE indicated clearly to me that she would be happy to have her granddaughter Mrs DAQ as her financial manager. However, following her consideration of the matter during the luncheon adjournment, I was informed by Mr Lalic that she had changed her mind and did not wish Mrs DAQ to be considered. Of course, given Mrs DAQ’s wish to be considered for appointment I did consider it.
As a result of Mrs DAQ’s confirmation of an outline plan for management of the estate, which I accepted as feasible and reasonable, her oral submissions and her answers to my questions, I was satisfied that Mrs DAQ had demonstrated that she was suitable for appointment as financial manager under the criteria described in sub-paragraphs (1) to (5) of [125] above. By her answers to my questions, Mrs DAQ also satisfied me that her relationship with her grandmother Mrs BFE and her mother Ms TED was such that she could effectively undertake the role of financial manager of Mrs BFE. Mrs DAQ also confirmed her understanding of the fact that, if appointed as financial manager, she would be subject to the oversight and direction of the NSW Trustee. There was no indication of any other person being willing to be considered for that appointment.
On that basis I was satisfied that Mrs DAQ is suitable for appointment and on that basis I appointed her as financial manager of Mrs BFE, subject to the authority and direction of the NSW Trustee and Guardian.

The need for a reviewable order

I was satisfied that this was an appropriate matter for a reviewable order to be made. I based this decision on:

the need to allow Mrs DAQ a reasonable time to implement her planned for management of her grandmother’s affairs and estate, but in recognition of the fact that there appeared to be a finite number of major decisions to be made and that these could probably be made and implemented within 18 months; and

the possibility of improvement in Mrs BFE’s overall condition and to assess her acceptance of assistance in making decisions within a reasonable period of say 18 months.

ORDERS

It followed that the following orders would be made.

The financial management order for Mrs BFE made on 18 December 2015 is varied.

The appointment of the NSW Trustee and Guardian as the financial manager of Mrs BFE is revoked.

Mrs DAQ is appointed the manager of the estate of Mrs BFE, subject to the authority and direction of the NSW Trustee and Guardian.

The NSW Trustee and Guardian is to pay or hand over the estate to Mrs DAQ.

The financial management order for Mrs BFE, as varied, is to be reviewed by the Tribunal within 18 months.

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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: 06 July 2018

Medium Neutral Citation:	BFE [2017] NSWCATGD 45
Hearing dates:	19 April 2017
Date of orders:	24 April 2017
Decision date:	24 April 2017
Jurisdiction:	Guardianship Division
Before:	J Currie, Senior Member (Legal)
Decision:	1. The financial management order for Mrs BFE made on 18 December 2015 is varied. 2. The appointment of the NSW Trustee and Guardian as the financial manager of the estate of Mrs BFE is revoked. 3. Mrs DAQ is appointed the manager of the estate of Mrs BFE. NOTE: The financial manager is not authorised to deal with the estate (other than to protect the assets) until the financial manager has obtained all necessary authorities from the NSW Trustee. 4. The NSW Trustee and Guardian is to pay over or hand over the estate to Mrs DAQ. 5. The financial management order for Mrs BFE as varied, is to be reviewed by the Tribunal within 18 months.
Catchwords:	FINANCIAL MANAGEMENT – application for revocation of a financial management order –whether subject person has regained capacity to manage affairs – meaning of capability to manage one’s own affairs – conflicting expert evidence – legal tests of capability – additional factors noted by Lindsay J in CJ v AKJ [2015] NSWSC 498 – “support mechanisms” “past experience” “protective nature of the jurisdiction” – subject person victim of fraudulent misappropriation by her solicitor – subject person found not to have regained capability – best interests not to revoke order – financial management order varied – appointment of NSW Trustee and Guardian revoked – suitability for appointment as financial manager – reviewable financial management order made – private manager appointed
Legislation Cited:	Civil and Administrative Tribunal Act 2013 (NSW), s 36 Guardianship Act 1987 (NSW), ss 4, 4(a), 4(g), 25A(b), 25P(1)(a), 25P(1)(b), 25P(2)
Cases Cited:	CJ v AKJ [2015] NSWSC 498 G v G [2016] NSWSC 511 GW v Protective Commissioner [2003] NSW ADTAP 51 McD v McD (1983) 3 NSWLR 81 P v NSW Trustee and Guardian [2015] NSWSC 579 P v R [2003] NSWSC 819 PB v BB [2013] NSWSC 1223 Re D [2012] NSWSC 1006 Re W and L (Parameters of Estate Management Orders) [2014] NSWSC 1106
Category:	Principal judgment
Parties:	Mrs BFE (subject person) Ms TED (applicant and appointed attorney) The NSW Trustee and Guardian
Representation:	Separate Representation: V Massey (Mrs BFE) Legal Representation: D Lalic (Mrs BFE) K Kelly replacing P Ives (Ms TED)
File Number(s):	61374
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)).