BXC

[2022] NSWCATGD 2

NSW Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

BXC [2022] NSWCATGD 2

Hearing dates:

17 May 2022

Date of orders:

17 May 2022

Decision date:

17 May 2022

Jurisdiction:

Guardianship Division

Before:

A R Boxall, Senior Member (Legal)
M Bain, Senior Member (Professional)
Dr J M Green, General Member (Community)

Decision:

1. The estate of BXC is subject to management under the NSW Trustee and Guardian Act 2009 (NSW).

2. NBI, [Address removed for publication.], is appointed as the financial manager of the estate.

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

3. This order be reviewed by the Tribunal within 12 months.

4. The following specified part of the estate is excluded from this financial management order:

All of BXC’s estate other than (1) her interest in the real property which is [Address removed for publication.], and (2) the proceeds of sale of that property.

Catchwords:

FINANCIAL MANAGEMENT – application for a financial management order – subject person has dementia and cognitive impairment – member of religious order – evidence of personal commitment to the congregation – communitarian and collective regime for dealing with wealth – vow of poverty – property to be placed under the management of the congregation in accordance with the congregation’s rules and practices – need for someone with legal authority to dispose of interest in the property – private person suitable to be appointed as financial manager – private financial manager appointed – order made – order to be reviewed in 12 months.

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW), s 36

Guardianship Act 1987 (NSW), ss 4, 4(b), 4(e)-(g), 25M, Pt 3A

Cases Cited:

None cited.

Texts Cited:

None cited.

Category:

Principal judgment

Parties:

001: Financial Management Application

BXC (the person)
NBI (applicant, proposed financial manager)
NSW Trustee and Guardian

Representation:

Nil.

File Number(s):

NCAT 2022/00055914

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: Civil and Administrative Tribunal Act 2013 (NSW), s 65.

REASONS FOR DECISION

FINANCIAL MANAGEMENT APPLICATION

Background

1. BXC is 97 years old and is a permanent resident at residential aged care home in regional NSW. She is (and has been for over 70 years) a member of a religious order, [the Congregation] although she is retired from active participation in the works of the Congregation.

2. BXC is one of several children in a large family, and on the death of her brother was left a half interest, along with her sister, Miss Z, in a property located at another suburb in regional NSW (the Property). Miss Z’s affairs are under the management of NSW Trustee and Guardian pursuant to a financial management order made by this Tribunal.

3. In order to permit the implementation of certain proposals made by NSW Trustee and Guardian as manager of Miss Z’s estate for the disposal of the Property, the Applicant, who is the Prioress of the Congregation, made the present application on 25 February 2022.

4. The purpose of today’s hearing is to decide that application.

The hearing

5. At the end of these Reasons for Decision are lists of the parties to the application and the witnesses who attended the hearing. [Appendix removed for publication.]

6. Because of her age and disabilities, the Tribunal was satisfied that there was little utility in seeking to have BXC participate in the hearing.

Does NBI have standing to bring this application?

7. A person has standing to bring an application if he or she is:

1. the person who is the subject of the application;

2. the NSW Trustee and Guardian; or

3. any other person who, in the opinion of the Tribunal, has a genuine concern for the welfare of the person.

8. The Tribunal found that NBI has standing to make the application for a financial management order because, as the Prioress of the Congregation of which BXC is a long-standing member, she can reasonably be considered to have the necessary concern.

Applicable general principles

9. Section 4 of the Guardianship Act 1987 (NSW) provides as follows:

4 General Principles

It is the duty of everyone exercising functions under this Act with respect to persons who have disabilities to observe the following principles:

(a)    the welfare and interests of such persons should be given paramount consideration,

(b)    the freedom of decision and freedom of action of such persons should be restricted as little as possible,

(c)    such persons should be encouraged, as far as possible, to live a normal life in the community,

(d)    the views of such persons in relation to the exercise of those functions should be taken into consideration,

(e)    the importance of preserving the family relationships and the cultural and linguistic environments of such persons should be recognised,

(f)    such persons should be encouraged, as far as possible, to be self-reliant in matters relating to their personal, domestic and financial affairs,

(g)    such persons should be protected from neglect, abuse and exploitation,

(h)    the community should be encouraged to apply and promote these principles.

10. Section 36 of the Civil and Administrative Tribunal Act 2013 (NSW) provides as follows:

“The ‘guiding principle’ for this Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.”

11. These two sets of principles together inform the approach taken by the Tribunal in this hearing.

What did the Tribunal have to decide?

12. The questions to be considered by the Tribunal are:

• Is BXC incapable of managing her affairs?

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

• If so, who should be appointed financial manager?

Is BXC incapable of managing her affairs?

13. Accompanying the application were:

1. A medical certificate dated 15 March 2022, issued by Dr X who practises in regional NSW; Dr X states that BXC “… is suffering from Dementia and Cognitive Impairment. She is unable to participate in the current inherited real estate and sale process”;

2. An email dated 6 April 2022 from Ms Y, care manager at the aged care facility where BXC is a resident; Ms Y observes that by reason of her cognitive impairment, BXC “... would not be able comprehend her interest in real estate and sales process” [sic]; and

3. An ACAT assessment dated 24 December 2021, which records a MOCA score of 14/30 for BXC in November 2021, while noting that it may have been lowered by a resolving delirium, and a general decline in BXC’s cognitive condition, with short-term and long-term memory loss, and confusion.

14. The Tribunal was satisfied from this evidence that BXC is, in part at least, incapable of managing her affairs.

Is there a need for a financial management order?

15. The Applicant said that:

1. Several months ago, she had received an approach from NSW Trustee and Guardian, acting as the financial manager for BXC’s sister, Miss Z.

2. NSW Trustee and Guardian informed the Applicant that:

1. BXC and her sister were the co-owners of the Property which had been left to them by their late brother;

2. the Property was unoccupied, the residence on it was in a bad condition and insurance cover for the improvements on the Property was not readily obtainable;

3. the Trustee’s decision, as manager of BXC’s estate, was to realise the Property’s current market value by selling it, and to invest BXC’s share of the net sale proceeds for her benefit;

4. because of the two sisters’ co-ownership of the Property, BXC’s interest could not be realised without the simultaneous realisation of BXC’s interest; and

5. accordingly, it requested that the Applicant, as prioress of the Congregation, join BXC’s interest into the sale of the Property.

3. The Applicant said that while she held an appointment as BXC’s enduring guardian, she had no legal authority to dispose of BXC’s interest in the Property.

4. She sought advice on the matter and was informed that in order to effect the sale of the Property on behalf of BXC, she would need to obtain a financial management order allowing her to sell BXC’s interest in the Property and deal on her behalf with her share of the net proceeds of sale. Hence this application.

16. The Applicant told the Tribunal that:

1. members of the Congregation took vows of poverty, obedience and chastity on joining it, and in accordance with their vow of poverty entered the Congregation without material wealth;

2. the Congregation undertook the complementary responsibility of ensuring that its members’ material needs for housing, sustenance and care were met; this included, on the member’s retirement from active participation in the work of the Congregation, continuing to house and sustain the member in one of the Congregation’s properties in a community with other members and, if the member’s health deteriorates to the point that her continued residence in a Congregation community is no longer possible, ensuring her accommodation and care in a suitable aged care facility; this is what has occurred in the case of BXC;

3. the overall result is that from the profession of her vows until her death, a member of the Congregation’s material well-being is ensured by the Congregation, in what might be described as a system of profession to grave welfare;

4. this is consistent the relationship of the wider Dominican community of which the Congregation is a part towards its individual members, and reflects the moral and spiritual values which inform the Dominican community;

5. it was, however, entirely foreseeable that members of the Congregation members might during their membership acquire valuable property, typically by inheritance, and had established procedures to address this contingency; this is what occurred in the case of BXC;

6. these procedures were as follows:

1. the member placed her property under the management of the Congregation;

2. the member’s continuing interest in her property was recognised in the Congregation’s financial records to which the member’s interest was credited; this is known as the member’s “Patrimony Account”;

3. the member was entitled to dispose of the amount standing to the credit of her Patrimony Account by will and, if she left the Congregation, the departing member was entitled to receive payment in full of her Patrimony Account;

4. if the member wished to expend her Patrimony Account for the benefit of a third party, she was able to do so, and her Patrimony Account would be debited accordingly; a recent example was of a member of the Congregation who applied her Patrimony Account towards the purchase of a suitable residence for a homeless relative;

5. members may be entitled to receive the aged pension or other Centrelink benefits; the Congregation’s financial managers liaise with Centrelink in order to manage the members’ entitlements and to ensure compliance by members with asset and income reporting requirements.

7. If the Property is sold, BXC’s share of the net proceeds of sale will be credited to her Patrimony Account and dealt with under the arrangements summarised.

17. Mr W, who is the Congregation’s solicitor, participated as a witness in the hearing. He said that:

1. the Congregation is a community within the meaning of section 2 the Roman Catholic Church Communities’ Lands Act 1942;

2. its property and financial affairs are conducted by a statutory trust created under sections 3 and 4 of that Act as a body corporate with perpetual succession;

3. money and other property received by a member which is under the management of the Congregation is held and managed by the Congregation’s statutory trust; and

4. the member’s Patrimony Account is thus a ledger account in the member’s name in the accounts of the Congregation’s statutory trust.

18. The purpose of the application is thus to obtain a financial management order for BXC which will allow the sale of the Property and the crediting to her Patrimony Account of her share of the net proceeds of sale.

19. The Tribunal was satisfied that there is a need to appoint a financial manager for BXC, if only for the limited purpose of selling the Property and realising her share of the net proceeds of sale.

Is it in BXC’s best interest that a financial management order be made?

20. This application presents the Tribunal with an unusual, if not novel, situation. It is called upon to apply the provisions of Pt 3A of the Guardianship Act concerning financial management, which predicate an essentially individualistic approach to the holding, management and disposition of wealth, to the affairs of a member of a community of which the foundational principles – as demonstrated by its members’ vow of poverty – incorporate a communitarian and collective regime for dealing with wealth.

21. At the outset, the Tribunal has no doubt that BXC, as a member of the Congregation for over 70 years, was familiar with her community’s approach to matters of finance and wealth, by virtue of both her vow of poverty and her 70 years of personal commitment to the Congregation demonstrated her personal commitment to and acceptance of that approach and, as one whose adult life has been spent almost entirely within the Congregation, had enjoyed the benefits (and accepted the burdens) of that approach. Hence in applying the principles set out in s 4 of the Guardianship Act, the Tribunal considers it reasonable to conclude that the sale of the Property and the application of her share of the sale proceeds towards her Patrimony Account would be in accordance with BXC’s chosen way of life and likely wishes, as contemplated by paragraphs (b) and (g) of s 4 of the Guardianship Act. For those same reasons, however, the consideration of financial self-reliance contemplated by s 4(f) of the Guardianship Act is more appropriately considered through the communitarian prism of the life within a religious order which BXC adopted nearly three-quarters of a century ago.

22. Moreover, for over 70 years the Congregation and its members have been BXC’s family, of election if not of birth and as a member of the Congregation for nearly all her adult life, it can be reasonably concluded that BXC has been acculturated into the Congregation’s traditions and practices. Hence, the considerations in s 4(e) of the Guardianship Act, concerning the preservation of family relationships and cultural expectations can reasonably be applied having regard to the Congregation’s collective and communitarian ethos.

23. Significantly, BXC’s residence in the aged care facility at the expense of the Congregation demonstrates that she continues to enjoy the benefits of the Congregation’s “profession to grave” system of care and material support. This suggests that her welfare and best interests are consistent with her continued observance of the Congregation’s norms and customs, which relevantly is promoted by making a financial management order.

24. Ultimately, the purpose of the financial management order is quite simple: to permit the sale of the Property which produces no income for BXC, incurs costs (such as rates) and, because of its decrepit state, potentially exposes her to liability. That the proceeds will be dealt with in accordance with the Congregation’s rules and practices outlined above does not detract from this conclusion.

25. The Tribunal was satisfied for these reasons that it is in the best interests of BXC that a financial management order be made.

Who should be appointed as financial manager?

26. In appointing a financial manager, as in making all other orders under the Guardianship Act, the Tribunal must act with the interests of the person concerned as the paramount consideration and in accordance with the other principles set out in s 4 of the Guardianship Act.

27. 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.

28. In the particular circumstances of this application, having regard to:

1. BXC’s life-long commitment to the Congregation and its rules and practices;

2. The practical desirability of having her interests as a co-owner on the sale separately represented from those of her sister; AND

3. The Applicant’s satisfactory answers to the Tribunal’s enquiries on probity and related matters;

the Tribunal was satisfied that NBI was a suitable person to be appointed as financial manager for BXC subject to the authorities and directions of the NSW Trustee and Guardian.

Should a reviewable financial management order be made?

29. The Tribunal may determine that a financial management order should be reviewed within a specified time. In this matter, the Tribunal determined that the financial management order should be reviewed within 12 months because of the limited purpose – namely the sale of the Property and the realisation of its proceeds – of the order, which should be achieved within that period.

Should an exclusion be added to the financial management order?

30. Financial management orders apply to the whole of the estate of the person. However, the Tribunal may order that certain parts of the estate should be excluded from the financial management order.

31. The Tribunal determined that all of BXC’s estate, other than her interest in the Property and its sale proceeds, should be excluded from the financial management order. This is because of the considerations outlined above: the relationship between BXC and the Congregation, including in financial matters – is long established and neither this Tribunal nor any order made by it has any business in intervening, except to the minimal extent necessary to achieve the disposal of the Property and the realisation of its value, even inadvertently in the relationship between BXC and the institution to which she has devoted (and in which she has spent) her adult life.

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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: 25 May 2022