CVR v NSW Trustee and Guardian
[2017] NSWCATAD 167
•25 May 2017
Civil and Administrative Tribunal
New South Wales
Medium Neutral Citation: CVR v NSW Trustee and Guardian [2017] NSWCATAD 167 Hearing dates: 17 March 2017 Date of orders: 25 May 2017 Decision date: 25 May 2017 Jurisdiction: Administrative and Equal Opportunity Division Before: C Grant Senior Member Decision: The respondent’s decision to sell the protected person’s property is affirmed
Catchwords: ADMINISTRATIVE LAW – review of decision of NSW Trustee and Guardian to sell protected person’s property – protected person resides in aged care facility - applicant son opposes the sale – whether decision is the correct and preferable decision Legislation Cited: Administrative Decisions Review Act 1997 (NSW)
Civil and Administrative Tribunal Act 2013 (NSW)
Guardianship Act 1987 (NSW)
NSW Trustee and Guardian Act 2009 (NSW)Category: Principal judgment Parties: CVR (Applicant)
NSW Trustee and Guardian (Respondent)Representation: CVR (Applicant; self-represented)
Crown Solicitor (Respondent)
File Number(s): 2016/0378510, 1610758 Publication restriction: s.64 Civil and Administrative Tribunal Act 2013 (NSW) – no details identifying applicant, protected person or witnesses to be published.
Reasons for decision
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This is an application to review a decision of the NSW Trustee and Guardian (NSWTG) to sell the property, an apartment on the NSW Central Coast, owned by the protected person, Mr DD.
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The applicant, CVR is the adult son of the protected person and opposes the sale. Mr DD has 2 siblings a brother and sister, who did not participate in these proceedings but support the sale of Mr DD’s apartment.
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The Tribunal makes the order that the NSWTG decision to sell the property is affirmed. The reasons are set out below.
Background
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Mr DD was injured in a motor vehicle accident in 1980 and sustained an acquired brain injury. He received a compensation payment of about $403,000 on 23 April 1987 for his injuries. On 25 August 1988, Mr DD became a protected person when the Supreme Court of NSW appointed the NSW Protective Commissioner as his manager pursuant to the Protected Estates Act 1983 (NSW) (which has subsequently been repealed and replaced by the NSW Trustee and Guardian Act 2009 (NSW). His estate is now managed by the NSWTG, being the respondent in these proceedings.
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Whilst under this financial management order, Mr DD had lived for many years on his own, in his apartment. However, in January 2016, the NSWTG discovered that unknown persons or squatters had been living with him, rent free. The NSWTG decided Mr.DD was vulnerable and not coping living on his own, without support. The NSWTG, in consultation with Mr DD, his brother and sister arranged for him to reside in a local aged care facility. He has resided in this facility since January 2016. The apartment has not been lived in or rented out since that time.
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On the 10 August 2016, the NSWTG decided to sell the Mr DD’s apartment. The basis of the decision was to use the proceeds of the sale, together with other funds to pay the Refundable Accommodation Deposit (RAD) for the aged care facility. Payment of the up-front RAD significantly reduces the daily fees. Given Mr DD’s assets and income, the NSWTG decided that payment of lower accommodation fees would enable Mr DD to remain living at the aged care facility.
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The applicant seeks an administrative review of this decision. He opposes the sale as he does not believe an aged care facility is an appropriate place for his father to live out his remaining years. He wants the aged care facility to be a temporary solution only, until he and the family work out other accommodation options.
Jurisdiction
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On the 10 August 2016, the NSWTG decided to sell the apartment. The applicant requested an internal review of this decision. An internal review was carried out on the 30 September 2016. The NSWTG affirmed the decision. The applicant made application for an administrative review of this decision under s.55(1) Administrative Decisions Review Act 1987.
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The applicant is eligible to make an application under s.62 NSW Trustee and Guardian Act 2009 being a person who, in the opinion of the Tribunal, is an ‘affected person’, adversely affected by the decision. The applicant is the son of the Mr DD and has an interest in the matter.
Publication restriction
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The Tribunal made an order under s.64(1) of the Civil and Administrative Tribunal Act 2013 prohibiting the disclosure of the name of any person, whether or not a party to the proceedings in the Tribunal or a witness summoned by, or appearing before the Tribunal.
The capacity of the protected person
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Mr DD is 67 years old and is subject to a financial management order made by the NSW Supreme Court in 1988. The applicant or the NSWTG did not provide the Tribunal with any historical or up to date medical evidence as to the status of the Mr DD’s disability and his mental and physical capacity. The NSWTG material stated that NSW Health had assessed him as requiring supervised accommodation and there was considerable doubt about him returning home. During the hearing, the applicant agreed that his father had a serious brain injury and this affected his capacity to look after himself and make financial decisions.
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Mr DD also appeared in the hearing and was asked questions by the Tribunal about the proceedings and his own wishes for the future. In his response to the Tribunal questions, Mr DD agreed with all the propositions put to him, even those that contradicted his previous answers. It appeared to the Tribunal from Mr DD’s responses, that he was vulnerable to suggestion and his capacity for understanding his situation was likely, at best, limited.
The financial situation of the protected person
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Mr DD owns the apartment on the NSW Central Coast and this was valued by a real estate agent in July 2016 at between $210,00 to $230,000. The appraisal was limited as the agent was unable to gain internal access. Both the applicant and the NSWTG agree the apartment requires substantial repairs being previously lived in by ‘squatters’. The applicant believes the apartment has a higher valuation and should be properly valued by a certified practising valuer.
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Mr DD is also the sole beneficiary in a discretionary trust created from the estate of his mother, with his brother and sister as trustees. The current value of the trust is $167,548.
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Mr DD receives a pension from Centrelink of $820.61 per fortnight. The discretionary trust also pays him an income of $70.00 per week.
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Mr DD also holds cash funds with NSWTG which as at September 2016 were approximately $18,000. The only debt he owes is to the aged care facility for outstanding fees which as at September 2016 were $18,660. This debt would now be much higher given the time passed.
The NSWTG reasons to sell the property
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On 30 September 2016, the NSWTG internal reviewer affirmed the decision to sell the apartment but requested a valuation from a registered valuer be obtained and made available to the applicant and Mr DD’s siblings.
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The NSWTG provided the following reasons for their decision:
That Mr DD has requested the property be sold in order to make significant contribution towards the RAD due to the aged care facility.
Mr DD does not have sufficient funds to renovate the property, in order for it to be leased.
Sale of the property will also eliminate any further property related expenses and therefore leave more funds for Mr DD to spend on other items.
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The NSWTG stated that Mr DD supported the sale of his apartment. The NSWTG reported on their discussions with Mr DD about his situation. The NSWTG officer had spoken to Mr DD separately on the 18 May 2016, 20 July 2016 and 28 September 2016. In summary, Mr DD was happy that the people living in his property rent free had moved out. He was happy for his property to be sold as it would give him more spending money and he liked living in the aged care facility. He said the accommodation was reasonable and the food was very good. He stated he had no complaints about the facility. On 28 September 2016, Mr DD told the NSWTG that “he can see himself moving back to his unit on the Central Coast or to a nicer place. He would still like to sell his unit so that he can move up the coast and afford to settle somewhere nice”.
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The NSWTG officer had spoken to a registered nurse at the aged care facility who stated that Mr DD “gets on well with staff and seems comfortable at the facility. There is no indication that he is unhappy at the facility”.
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The NSWTG officer had spoken to the brother and sister of Mr DD who are the trustees of the discretionary trust. The trustees supported the sale of the apartment to pay the RAD. They were also willing to provide the capital funds held in trust but only once the sale of the apartment had been completed.
Mr DD’s financial position if RAD is not paid
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The NSWTG confirmed the applicant had not provided them with any alternative accommodation options for his father, Mr DD. These proceedings were adjourned in November 2016 to allow the applicant further time to provide these options but none had been forthcoming.
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Mr DD’s is paying the higher daily accommodation rate at the aged care facility as he has not paid the RAD. He is currently accumulating debts and his annual cash flow shortfall is $24,940 which is more than his current available funds held by the NSWTG. As at September 2016 his annual income and expenditure is as follows:
Annual Income
Pension ($820 p/f/n)
21,335
Less Expenses
Accommodation Fees
(Basic Care $48.25 p.d, MTFC $5.10 p.d, DAP $42.60)
35,020
Personal expenses
3,700
Property expenses for apartment
7,300
NSWTG fees
255
Total recurring expenses
46,275
Cash flow shortfall
24,940
It is noted the analysis does not include the income from the discretionary trust payable to Mr DD of approximately $3,640 per annum.
Option of Leasing out Mr DD’s apartment at the market rental
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Mr DD does not have the funds to repair the apartment but on the assumption that the funds could be found and the apartment be leased out at the market rent, the NSWTG calculates there will still be a significant shortfall.
Annual Income
Pension ($820 p/f/n)
Rental income ($260 p/w less real estate fees of 7%)
Total income
21,335
12, 570
33,990
Less Expenses
Accommodation Fees
(Basic Care $48.25 p.d, MTFC $5.10 p.d, DAP $42.60)
35,020
Personal expenses
3,700
Property expenses for apartment
7,300
NSWTG fees
200
Total recurring expenses
46,220
Cash flow shortfall
12,220
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Without any other alternative options, the NSWTG submits the correct and preferable decision is to sell Mr DD’s apartment and the proceeds be used to pay for part of the RAD payment. The sale price is estimated at $220,000 and the net sale proceeds of $209,900 after allowing for selling, legal and cleaning expenses. Assuming the property took 12 months to sell, the proceeds would be used to pay off the aged care facility debt of approximately $44,400 and partial RAD payment of $135,000 leaving Mr DD with financial assets of $48,600. The NSWTG propose to request the trustees of the discretionary trust to pay $115,000 to make up the remaining RAD balance.
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By selling the apartment Mr DD would incur lower accommodation fees and have additional funds to absorb any shortfall and cover any future expenditure or costs. The annual income and expenses would be as follows:
Annual Income
Pension ($869 p/f/n)
Total income
22,600
22,600
Less Expenses
Accommodation Fees
(Basic Care $48.25 p.d, MTFC $5.10 p.d,)
20,230
Personal expenses
3,700
Property expenses for apartment
7,300
NSWTG fees
680
Total recurring expenses
24,610
Cash flow shortfall
2,010
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The cash flow shortfall will be funded by the financial assets held with the NSWTG of approximately $48,600 from the proceeds of the sale.
Applicant’s position
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The applicant submitted that over the years he has not seen his father, Mr DD on a regular basis. Last year, he found out that Mr DD had been moved from his apartment to an aged care facility. He was not informed or consulted about the move. He has since visited Mr DD at the aged care facility a few times and taken him out for drives. He did not complain about the care offered by the facility. The purpose of his application is that he does not believe that Mr DD should live out the rest of his life in an aged care facility. He is 67 years old and the applicant believes he is capable of living a more independent life with support. This would be preferable to him residing in an aged care facility.
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The applicant apologised to the Tribunal for not having provided any alternative accommodation proposals. He submitted that his plan was to renovate and tidy up the apartment and arrange to lease it out. He believes it would attract high rental as it is in an excellent location. This would enable Mr DD to retain his only asset and earn a good income from the asset. From this income and with further funds from the discretionary trust the applicant would then find suitable accommodation for Mr DD that provided independent living but with the necessary and appropriate level of support.
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The Tribunal asked the applicant how he proposed to fund the renovation and tidying up of the apartment in readiness for leasing it out. The applicant stated he would obtain funds from the discretionary trust that was set up for the benefit of Mr DD. However, he agreed the trustees were unlikely to agree to this request. He then explained to the Tribunal that he was initiating litigation against the trustees to take over the role himself, so that he could carry out his plan. He stated the matter was currently with his solicitor. He provided no supporting documentation or other evidence of how he could access funds from the discretionary trust or the details or timing of the litigation.
Consideration
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The Tribunal is required to consider whether or not, the NSWTG decision to sell Mr DD’s apartment is the correct and preferable decision taking into account all the material before it. This includes all relevant factual information and the applicable written or unwritten law. (s.63 Administrative Decisions Review Act 1997 (NSW).
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In managing the estate the NSWTG may exercise the functions set out in s.16 of NSW Trustee and Guardian Act 2009 (NSW). Relevantly this includes:
(a)…
(d) surrender a lease and accept a new lease,
(e) accept a surrender of a lease and grant a new lease,
(f) execute a power of leasing vested in a person having a limited estate only in the property over which the power extends,
(g) buy, sell, realise and mortgage (with or without a power of sale) real and personal property,
(h) pay interest secured by a mortgage out of capital, if income is insufficient,
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In making its decision the NSWTG must consider the following principals set out in s.39 of NSW Trustee and Guardian Act 2009:
(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.
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The Tribunal finds that Mr DD’s current financial situation is not sustainable. If Mr DD continues to reside at the aged care facility and does not pay the RAD, the higher accommodation fees will continue to accumulate, worsening his financial situation.
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The Tribunal finds that the application was lacking in evidence or details as to Mr DD’s current welfare and needs at the aged care facility and did not provide any realistic or workable alternative plan. That is, the applicant believed that an aged care facility was not a suitable place for his father given his age and abilities. However, he did not elaborate or detail why this was so and provide alternative accommodation options for the NSWTG and the Tribunal to consider. He did suggest the trustees of the discretionary trust release funds to pay for renovations of the apartment, so it could be leased out to provide an additional income. However, the applicant conceded the trustees were unlikely to agree to this proposal. The applicant was apparently preparing litigation to take over as trustee of the fund, but again, there was no supporting evidence of this litigation, prospects of success or timing of the matter.
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Mr DD has a serious brain injury and all parties agree this affects his capacity to look after himself without support. He has resided in the aged care facility since January 2016. The NSWTG submitted that Mr DD is happy to stay in this facility based on their discussions with him. During the hearing the applicant answered the Tribunal’s questions but was agreeable to most propositions even those that were contradictory. It would seem to the Tribunal that Mr DD’s capacity is therefore, limited and gives little weight to these discussions. The Tribunal also noted the applicant has visited his father, Mr DD in the nursing home a few times and made no complaints about the care provided to Mr DD. A registered nurse from the facility also stated to the NSWTG that Mr DD seemed comfortable and there was no indication he was unhappy at the facility.
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The Tribunal agrees with the NSWTG decision to sell the apartment to protect and secure the financial future for Mr DD. As already stated the current situation is not sustainable. This is demonstrated in the income and expenditure analyses provided by the NSWTG. Without additional funds being made available to the estate of Mr DD, he will continue to accumulate debt caused by the higher accommodation fees. There are no other financial assets to absorb this debt. Selling the apartment will enable the proceeds of the sale and the discretionary trust funds to pay off the RAD to reduce Mr DD’s daily accommodation fees. This will also give Mr DD additional funds for any unexpected expenses or contingencies into the future.
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The Tribunal acknowledges the applicant’s concern for his father’s welfare is clearly genuine. However, for the reasons above the Tribunal agrees with the decision of the NSWTG.
Order
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The Tribunal confirms the decision of the NSWTG.
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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 2017
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