CJB

[2017] NSWCATGD 28

NSW Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

CJB [2017] NSWCATGD 28

Hearing dates:

27 October 2017

Date of orders:

27 October 2017

Decision date:

27 October 2017

Jurisdiction:

Guardianship Division

Before:

S Roushan , Senior Member (Legal)
Dr M J Wroth, Senior Member (Professional)
D Crowley, General Member (Community)

Decision:

003: Review of an Enduring Power of Attorney

 

In relation to the enduring power of attorney made by CJB on 14 January 1998, which appointed Ms NMB and Ms BJB as attorney(s), the Tribunal determines, orders or declares:

 

Not to make an order under section 36 of the Powers of Attorney Act 2003. The application for review of the enduring power of attorney is treated as an application for a financial management order under Part 3A of the Guardianship Act 1987.

 

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

 

2. Ms NMB 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/she has obtained all necessary authorities from the NSW Trustee and Guardian.

 3. This order be reviewed by the Tribunal within three years.

Catchwords:

ENDURING POWER OF ATTORNEY – application to review the operation and effect of the enduring power of attorney – best interests – duties of attorney – conflict between financial interests – decision to treat as application for the appointment of a financial manager

 

FINANCIAL MANAGEMENT – application to review enduring power of attorney treated as an application for the appointment of a financial manager – best interests – conflict between family members – importance of preserving family relationships – private financial manager appointed

  INTERLOCUTORY – application for adjournment – previous adjournments granted to facilitate conciliation – application refused

Legislation Cited:

Conveyancing Act 1919 (NSW)
Guardianship Act 1987 (NSW), pt 3A, ss 4, 25M
Powers of Attorney Act 2003 (NSW), ss 36, 36(1), 36(2), 36(4), 36(4)(b), 36(4)(c), 36(4)(g)

Cases Cited:

CJ v AKJ [2015] NSWSC 498
HJ v HK & Ors [2008] NSWADTAP 75
P v NSW Trustee and Guardian [2015] NSWSC 579
Susan Elizabeth Parker v Margaret Catherine Harris & Ors [2012] NSWSC 1516

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Review of an Enduring Power of Attorney

  Mrs CJB (the person)
Ms NMB (applicant, attorney)
Ms BJB (attorney)
NSW Trustee and Guardian

Representation:

Nil

File Number(s):

NCAT 2017/00197519

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

Background

1. Mrs CJB is 81 years old. She has two daughters: Ms NMB and Ms BJB.

2. Mrs CJB is a permanent resident of a Retirement Community in Western Sydney. She has been residing at the facility since May 2016. Previously, she lived in her own home in Sydney. For a period of time prior to Mrs CJB’s admission to residential care, Ms BJB and her husband, Mr SOK, moved in with Mrs CJB to provide her with additional support. 

3. Mrs CJB has been diagnosed with dementia. In a written report to the Tribunal, dated 30 January 2017, Dr X stated that Mrs CJB has been under his care since she was admitted to a Retirement Community. She has suffered from non-fluent dysphasia since 2005 and dementia since 2014. She is no longer able to make any decisions regarding medical treatment and has lost insight into financial management. In a further letter, dated 22 May 2017, Dr X stated that Mrs CJB’s condition has deteriorated and she now needs 24 hours nursing care. She is no longer able to feed herself, her mobility is severely limited and she has ‘no reliable yes/no response’ to any questions.

Appointment of Attorneys

4. On 14 January 1998, Mrs CJB executed an instrument of General Power of Attorney, appointing Ms BJB and Ms NMB as attorneys jointly and/or severally. The instrument specifically provided that:

This general power of attorney is given with the intention that it will continue to be effective notwithstanding that after its execution I suffer loss of capacity through unsoundness of mind.

5. The instrument was executed in 1998 under the Conveyancing Act 1919 (NSW) (since repealed) and prior to the commencement of the Powers of Attorney Act 2003 (NSW). However, the Powers of Attorney Act specifically provides for references in that Act to be read as including a reference to any continued Conveyancing Act provisions that correspond (or substantially correspond) to the provision of this Act. Therefore, the Tribunal was satisfied that it had jurisdiction in this matter.

6. There was no dispute between the parties that the appointments were valid for the purpose of the applications for review before this Tribunal. 

Applications for Review

7. On 22 March 2017, the Tribunal received applications for guardianship and financial management from Ms NMB.

8. On 17 May 2017, Ms NMB also lodged an application for review of an enduring power of attorney. In her application, Ms NMB requested a review of the operation and effect of the enduring power of attorney. She stated that Ms BJB ‘is a recovering alcoholic and has many issues of her own’. She requested the removal of her sister as attorney.

9. On 22 May 2017, the Tribunal adjourned the hearing.

10. On 1 June 2017, the Tribunal again adjourned the hearing for approximately two weeks.

11. On 19 June 2017, the Tribunal consented to the withdrawal of Ms NMB's applications for guardianship and financial management. On the same day, the Tribunal adjourned the proceedings in relation to the application for review of an enduring power of attorney for approximately four months in order to give Ms NMB and Ms BJB an opportunity to put into place the arrangements agreed upon during discussions which were held in the course of the hearing.

12. On 12 October 2017, Ms NMB advised a Tribunal officer that no progress had been made since the previous hearing. However, she also advised that she wished to request an adjournment to allow Ms BJB further time. In a subsequent email, dated 13 October 2017, Ms NMB requested an adjournment for approximately six months.

13. On 17 October 2017, Ms BJB advised a Tribunal Officer that she supported the request for adjournment. She said things are moving forward and that herself and Ms NBM are both communicating.

14. On 19 October 2017, the Tribunal adjourned the proceedings until 27 October 2017.

The Hearing

15. The hearing was held on 27 October 2017. Ms NMB and Mr SOK attended the hearing in person. Ms BJB gave evidence via telephone.

16. At the previous hearing on 19 June 2017, the Tribunal was informed by Ms Y, Clinical Services Manager of the Retirement Community, that Mrs CJB's dementia and dysphasia is such that she would be unable to comprehend the matters being discussed or participate meaningfully in the hearing.

17. Given the evidence concerning the extent of her cognitive impairment, the Tribunal did not attempt to seek Mrs CJB’s views about the application before it. No-one participating in the hearing felt that it would be in Mrs CJB’s best interests for the Tribunal to attempt to speak with her about these matters. 

18. At the hearing, Ms NMB did not pursue her request for adjournment. However, at the commencement of the hearing, Ms BJB requested a further adjournment on the basis that she had received 58 pages of information from the Tribunal two days prior to the hearing and she had not had the opportunity to read this information. She told the Tribunal that she did not know anything about the ‘last matter’ until she had looked and realised that there was a new hearing. She then requested information from the Tribunal and, subsequently, received the papers she had referred to earlier.

19. As it was explained to Ms BJB at the hearing, the matter has been adjourned on multiple occasions since 22 May 2017 and no new documents, information or evidence had been lodged by any party prior to the present hearing. It was noted that the Tribunal would be relying on the same documents, information or evidence previously filed and considered by the parties. Therefore, the material referred to by Ms BJB contained no new documents or information that would not have been included in the papers she had received and considered in the past. The Tribunal reminded Ms BJB that her husband, Mr SOK, had represented her at the previous hearing, which was held on 19 June 2017. At that hearing, as a result of discussions between Mr SOK and Ms NMB, the Tribunal had agreed to adjourn the proceedings for four months to enable her and her sister to reach a mutually satisfactory resolution that would serve the best interests of Mrs CJB.

20. Ms BJB did not dispute that she had been put on notice of the present hearing. Evidently, the previous adjournment was designed to enable Ms NMB and Ms BJB to arrive at a conciliated outcome. This desired outcome was not achieved and the attempt had not been successful. The evidence before the Tribunal did not inspire confidence that, in light of the ongoing dispute and the previous adjournments, a conciliated outcome that is in the best interests of Mrs CJB is likely to be reached if a further adjournment were to be granted. The Tribunal was not persuaded that an adjournment would be in Mrs CJB’s best interests. The Tribunal, therefore, declined the request. At the end of these Reasons for Decision is a list of the witnesses who attended the hearing. [Appendix removed for publication.]

Overview of Evidence

21. The evidence before the Tribunal indicated that Mrs CJB is a recipient of an Aged Pension. Her house in Sydney and the land the house is built on are valued at, approximately, between four and five million dollars. She also has a vehicle registered in her name, valued at approximately $1,000.

22. Ms BJB stated that she and her husband are currently residing in Mrs CJB’s house and they do not pay rent. They have been living in the property since 2014 and Mr SOK was Mrs CJB’s paid carer for a period of time. Ms BJB said that she has been paying for utilities, including, gas, water, electricity, telephone, and broadband. However, she had been unable to cover the council rates for three quarters, which were paid by Ms NMB. Ms BJB told the Tribunal that she and her husband own a unit, which has been leased and the lease merely covers the mortgage they owe on the unit.

23. Ms NMB explained that gas and electricity bills were being paid from Mrs CJB’s account through direct debit arrangements and other bills were being forwarded to her for payment. This arrangement was in place until December 2016. She stated that her mother’s pension just covers her accommodation fees, but there is no surplus in Mrs CJB’s account to cover any other expenses, including utilities and expenses associated with the maintenance and repair of the property. Consequently, Ms NMB stopped the direct debit arrangements and asked her sister to pay for gas and electricity. Ms NMB also stated that she has been paying for property insurance in relation to her mother’s house and reimbursing herself from her mother’s account.

24. It was put to Ms BJB that, if her mother’s property was rented, the rental return may cover all expenses associated with the property. Ms BJB initially downplayed the rental value of the property. However, she acknowledged that it would be in Mrs CJB’s best interest if the property was rented out.

25. Ms NMB raised further concerns, stating that her sister had been in rehab for a period of time. Whilst in rehab, she had met another man, an alleged drug addict. She had allowed this man to come and live with her in Mrs CJB’s house and drive Mrs CJB’s car. As a result, he had damaged the car and accumulated traffic fines and toll notices, which Ms NMB had to pay. The man had been in and out of the property since October 2016. He had accumulated ‘rubbish and junk’, which he stored at Mrs CJB’s property, and had tried to sell Mrs CJB’s clothes. He had also broken into the property and had brought others to the house. Eventually, Mr SOK had applied for an AVO against this person. Ms NMB stated that she had arranged for some of the rubbish to be taken away, but there is still expenditure associated with maintaining the property.

26. Ms NMB explained that, following the hearing on 19 June 2017, she and her sister had reached agreement on a number of issues, including Ms BJB moving out and both sorting through their mother’s belongings. However, Ms BJB was admitted to rehab again and no further action was taken.

27. Ms BJB told the Tribunal that she cared for her mother and had looked after her when she was ill. She said, at present, she was in a good place and her relationship with her sister was not good. However, she also stated that she was not prepared to move out of her mother’s house and she did not want any changes with respect to the instrument of the enduring power of attorney.

Application to Review Enduring Power of Attorney

28. The Tribunal may, on the application of an interested person, decide to review the making or the operation and effect of a reviewable power of attorney, or not to carry out such a review (Powers of Attorney Act, s 36(1)). As a consequence of reviewing the making or operation and effect of a reviewable power of attorney, the Tribunal may decide whether or not to make an order under s 36 of the Powers of Attorney Act (s 36(2)).

29. The Tribunal may make a number of orders relating to the operation and effect of a power of attorney if it is satisfied:

• that it would be in the best interests of the person to make the order; or

• that it would better reflect the wishes of the person to make the order (Powers of Attorney Act, s 36(4)).

30. These orders include, but are not limited to:

• an order removing a person from office as an attorney (s 36(4)(b) of the Powers of Attorney Act);

• an order appointing a substitute attorney to replace an attorney who has been removed from office by a review tribunal or who otherwise vacates the office (s 36(4)(c) of the Powers of Attorney Act);

• such other orders as the review tribunal thinks fit (s 36(4)(g) of the Powers of Attorney Act).

31. If on a review of the enduring power of attorney, the Tribunal decides not to make an order under s 36 of the Powers of Attorney Act, it may, if it considers it appropriate in all of the circumstances to do so, decide to treat the application for the review as an application for a financial management order under Part 3A of the Guardianship Act. 

32. Attorneys are in a fiduciary relationship with the person whose affairs they manage. An attorney must act in the best interests of the principal and must not obtain a personal benefit other than specifically provided for in the executed enduring power of attorney (Powers of Attorney Act, s 12(1)).

33. The evidence indicated that Ms BJB has taken certain actions that have resulted in her receiving a benefit, namely, residing in her mother’s house without paying rent. By her action, Ms BJB has also effectively prevented the utilisation of the property for the purposes of securing or furthering Mrs CJB’s interests. Ms BJB and her husband had remained in the property, but gas and electricity bills were being paid out of Mrs CJB’s account until December 2016, when Ms NMB had intervened.

34. The Tribunal also notes that, by allowing others to access and take advantage of her mother’s house and other property, Ms BJB had caused additional unnecessary expenses and costs to be incurred, which had been financially detrimental to her mother.

35. The Tribunal did not doubt that Ms BJB is a caring and loving daughter. The Tribunal also appreciated the very difficult personal challenges she has had to face in recent times. However, based on her actions and her evidence at the hearing, the Tribunal formed the view that she has failed to appreciate her role and obligations as one of her mother’s attorneys. The Tribunal also formed the view that, by showing reluctance to vacate her mother’s property and not being in a financial position to pay rent, Ms BJB’s financial interests conflict with those of her mother. The Tribunal was of the view that it was not in Mrs CJB’s best interests for Ms BJB to remain as one of her attorneys. 

36. Given this evidence, the Tribunal decided to review the operation and effect of the enduring power of attorney pursuant to s 36(1) of the Powers of Attorney Act. 

37. The Tribunal was not persuaded, however, that it was in Mrs CJB’s best interests to make any orders under s 36(4) of the Powers of Attorney Act, such as the removal of Ms BJB as attorney.

38. Ms NMB stated at the hearing that she would like her sister to be removed as attorney. The Tribunal, however, questioned the utility of an order to remove Ms BJB as attorney, leaving Ms NMB as sole attorney. Ms NMB told the Tribunal that she had assumed that she might have more ‘authority’ as sole attorney. She also said that she would be able to talk to her sister if her sister was willing to talk. The Tribunal, however, noted that, under the instrument, she had been appointed as attorney with her sister jointly and severally. Attorneys appointed to act jointly and severally may exercise their powers individually (Susan Elizabeth Parker v Margaret Catherine Harris & Ors [2012] NSWSC 1516). Nevertheless, this arrangement had not worked in Mrs CJB’s best interests.

39. In view of the evidence concerning the ongoing dispute concerning Mrs CJB’s property between Ms NMB and Ms BJB, the Tribunal was not persuaded that leaving Ms NMB as the sole attorney would allow the enduring power of attorney to continue to work in Mrs CJB’s best interests. The Tribunal also formed the view that the ongoing management of Mrs CJB’s affairs would benefit from a higher level of transparency and accountability.

40. The Tribunal therefore decided not to make any orders under s 36 of the Powers of Attorney Act. It was satisfied, however, that it was appropriate in all of the circumstances to treat the application for review of the enduring power of attorney as an application for a financial management order. The making of a financial management order suspends the operation of the enduring power of attorney for the duration of the order.

Financial Management Order

41. Before it could make a financial management order in relation to Mrs CJB, the Tribunal had to be satisfied of the following matters:

1. Is Mrs CJB incapable of managing her affairs?

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

3. If so, who should be appointed financial manager?

Is Mrs CJB incapable of managing her affairs?

42. The test for determining a person's capability to manage his or her affairs has been described as follows (P v NSW Trustee and Guardian [2015] NSWSC 579, [307]-[308]):

Is a person reasonably able to manage his or her own affairs in a reasonably competent fashion, without the intervention of a [financial manager] charged with a duty to protect his or her welfare and interests?

…

[A] focus for attention is whether the person is able to deal with (making and implementing 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.

43. In considering whether the person is “able” in this sense, consideration may 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 judgments about his or her welfare and interests: see Lindsay J in CJ v AKJ [2015] NSWSC 498, [38], and P v NSW Trustee and Guardian [2015] NSWSC 579, [309].

44. Based on the medical evidence before it, which indicated that Mrs CJB has suffered from non-fluent dysphasia since 2005 and dementia since 2014. She needs 24 hours nursing care and she has no insight into her financial affairs.

45. The Tribunal was satisfied that, at this time and for the reasonably foreseeable future, Mrs CJB does not have the ability to plan for the future, work out how to provide for herself and how to generate income and look after capital. The Tribunal was satisfied that Mrs CJB is incapable of managing her finances in a reasonably competent fashion and that she is incapable of managing her own affairs.

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

46. The evidence before the Tribunal indicated that Mrs CJB is a recipient of an Age Pension. She owns a house of a reasonably significant value and a car of modest value. She has ongoing expenditure relating to the maintenance of her property, which can also serve as a source of income for her. This expenditure includes utility bills, council rates, and maintenance and repairs.

47. The Tribunal was satisfied that there is a need to appoint someone to manage Mrs CJB’s affairs. The Tribunal was satisfied that it was in Mrs CJB's best interests to make a financial management order. The Tribunal was persuaded that it was in Mrs CJB’s best interests for a degree of accountability to be introduced in relation to the management of her affairs by way of the appointment of a financial manager. 

Who should be appointed as financial manager?

48. In appointing a financial manager, as in making all other orders under the 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 Act.

49. Section 25M of the 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.

50. As noted in HJ v HK & Ors [2008] NSWADTAP 75, [14]:

In Re L [2000] NSWSC 721, at [7] and [12], Young J recognised that a responsible family member will often be best placed to manage an incapable person’s affairs provided there are minimal conflicts of interest or, if there are conflicts of interest, that they are properly dealt with. Nevertheless, when a private manager is appointed, the Tribunal needs to be satisfied both of the person’s good fame and character, and of his/her ability to manage funds and understanding of what is required as a financial manager (see also Re R [2000] NSWSC 886, at [48] to [49]). Where there is a close family relationship, consideration must also be given to whether the Protective Commissioner, being an independent statutory office with staff who have expertise and experience in managing estates, would bring a more dispassionate, neutral approach which would better meet the financial management needs of the incapable person: Holt v Protective Commissioner (1993) 31 NSWLR 227, at 242.

51. The Tribunal was not satisfied that it could appoint Ms BJB as her mother’s private financial manager, even with the accountability that is required in this role, given her actions as attorney. The Tribunal was not persuaded from the evidence provided by Ms BJB that she has the necessary understanding of what is required as a financial manager or that the accountability required by the role would overcome the conflict between her interests and her mother’s interest. 

52. The Tribunal also considered Ms NMB’s suitability for the role of private financial manager. 

53. The Tribunal was of the view that appointing Ms NMB as financial manager would, at least in part, maintain the arrangements made by Mrs CJB in 1998 when she appointed her daughters as her attorneys. The evidence indicated that Ms NMB has taken on much of the responsibility for managing Mrs CJB’s affairs. Ms NMB’s evidence satisfied the Tribunal that she has an appreciation of her role as a substitute decision-maker in relation to her mother’s financial affairs and that she is required to act, at all times, with her mother’s interests as the paramount consideration. 

54. The Tribunal also had regard to the presently difficult relationship between Ms NMB and Ms BJB and the obligation placed on the Tribunal to observe the principles set out in s 4 of the Act, including the importance of preserving family relationships. On the evidence before it, the Tribunal formed the impression that the relationship between NMB and Ms BJB has not always been fraught. They have been able to have communication in the past and showed willingness after the previous hearing to work together to resolve some of the issues. Notwithstanding the fact that they were unable to give effect to the agreement they had reached due to Ms BJB’s circumstances, Ms NMB has continued to show a willingness to engage with her sister and appointing her as private financial manager is, in the Tribunal’s view, unlikely to have an impact on Ms BJB’s relationship with her mother.

55. In all of the circumstances, the Tribunal was satisfied of Ms NMB’s good fame and character, her ability to manage funds, and her understanding of what is required as a financial manager. The Tribunal was satisfied that Ms NMB was a suitable person to be appointed as Mrs CJB’s private financial manager. The Tribunal accordingly appointed Ms NMB as her mother’s private financial manager subject to the authority and directions of the NSW Trustee and Guardian.

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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: 12 January 2018