CWH v NSW Trustee and Guardian

[2017] NSWCATAD 87

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	CWH v NSW Trustee and Guardian [2017] NSWCATAD 87
Hearing dates:	14 February 2017
Date of orders:	27 March 2017
Decision date:	27 March 2017
Jurisdiction:	Administrative and Equal Opportunity Division
Before:	C Grant, Senior Member
Decision:	The decision of the NSWTG is affirmed with some variation. Orders made that; 1) the property is to be rented out to the applicant at a reduced market rent of $265p/w or such other rate at the discretion of the NSWTG and the applicant and the NSWTG are to execute a formal tenancy agreement, 2) The applicant is to be given 8 weeks from the date of this decision to execute the formal tenancy agreement, 3) Should the applicant not execute the formal tenancy agreement by the expiration of the 8 week period or decide to vacate the property prior to this time, the NSWTG is to consider further options to either rent the property at full market rate or to sell the property.
Catchwords:	ADMINISTRATIVE LAW – review of decision of NSW Trustee and Guardian – the applicant is living rent free in the protected person’s property - whether the decision to lease the property of the protected person to the applicant at a low market rent and if not acceptable to him, to consider alternative strategies such as private lease or selling the property is the correct and preferable decision
Legislation Cited:	Administrative Decisions Review Act 1997 (NSW) NSW Trustee and Guardian Act 2009 (NSW) Civil and Administrative Tribunal Act 2013 (NSW) Guardianship Act 1987 (NSW)
Category:	Principal judgment
Parties:	CWH (Applicant) NSW Trustee and Guardian (Respondent)
Representation:	Applicant - self-represented Crown Solicitor (Respondent)
File Number(s):	2016/00378541, 1610789
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

Introduction

1. This is an application by the adult son of the protected person to review a decision of the NSW Trustee and Guardian (NSWTG) regarding the property owned by the protected person.

2. The protected person suffers from dementia with psychological and behavioural symptoms. She currently resides in an aged care facility. A financial management order was made on the 10 February 2015 in relation to her estate and the NSWTG was appointed to this role. The protected person will be referred to as ‘the mother’ in this decision.

3. The applicant is 51 years old without dependents. The applicant and his sister had been living in the property owned by his mother for many years. The property is the family home situated in Wollongong which has a current value of between $450,000 to $500,000. His mother moved into a nursing home in February 2015 and the applicant and his sister remained living there. In August 2015, his sister moved out and he remained living in the property on his own. Whilst living in the mother’s property the applicant has not paid rent to the mother’s estate. The mother’s full pension will be reduced in April 2017 when her property becomes an assessable asset for the purposes of calculating the pension. To secure the mother’s financial future the NSWTG have proposed the applicant enters a formal tenancy lease and pays a reduced market rental into the protected person’s estate. The NSWTG also decided that if the applicant did not enter the tenancy arrangement or vacate the property after an 8 week period, the NSWTG would then consider other options including a private lease of the property at full market rate or sale of the property. The applicant opposes this decision

Jurisdiction

4. On 1 June 2016 the NSWTG decided to lease the property at a reduced market rate. The applicant requested an internal review of this decision. An internal review was carried out on 28 October 2016. The original decision was confirmed by the NSWTG with some variation on the proposed rental rate. The applicant made application for an administrative review within 28 days pursuant to s.55(1) Administrative Decisions Review Act 1987.

5. 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 protected person and resides in the subject property.

Publication restriction

6. The Tribunal made an order under s.64(1) of the Civil and Administrative 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 decision of NSWTG and reasons

7. The NSWTG internally reviewed the decision and confirmed the following decision with some variation from the original decision:

1. Approved to lease / rent the subject property at a reduced market rental of $315.00 p/w to the applicant on the basis that he enters a formal tenancy agreement.

2. The applicant is to be given until 31 December 2016 (approximately 8 weeks) to enter a formal tenancy agreement.

3. Should the applicant not enter a formal agreement by 31 December 2016 or decide to vacate the property prior, NSWTG will then consider further options to lease the property at full market rate or sell the property.

8. At the commencement of the hearing the NSWTG amended the proposed offer to the applicant and reduced the weekly rent from $315 to $265. The applicant continued to oppose the decision.

9. The NSWTG supported the decision as follows:

1. NSWTG Financial Planning Unit (FPU) provided advice that the estate of the mother will have insufficient funds if there is no income from the property. The mother’s property is valued at between $450,000 to $500,000 and would attract a market rental of $375 per week. The mother’s only other asset are investment funds of $38,496 ($31,636 with NSWTG). The mother is 84 years old with a median life expectancy of another 7.7 years. The FPU calculated that if no income is received from the property there will be a depletion of her funds within 2.5 years. This analysis is set out below:

Income (Centrelink pension $763 f/n)	19,838 pa
Estimated expenditure
Basic daily care fee ($48.44p/d)	17,680pa
Personal Expenditure	3,900pa
Council, Insurance & Water rates	3,500pa
Provision for property maintenance	3,000pa
NSWTG Management Fee	6,952pa
Total recurring expenditure	$35,032pa
Deficit	(15,194pa)

2. The deficit of $15,194 would result in the depletion of the mother’s investment funds in approximately 2.5 years. The analysis includes the decrease in her pension to $763 p/f/n from 1 April 2017.

3. The proposed rental income of $265 p/w is an annual income to the estate of $13,780pa and this income would mean the mother’s funds are estimated to last for approximately 7.8 years.

4. The NSWTG noted the applicant’s financial circumstances but equally, noted the financial benefit he has received by remaining in the property rent free.

5. The NSWTG referred to the reasons set out in the decision by NCAT on 10 February 2015 making a financial management order appointing the NSWTG in the role. The Tribunal stated; “there is a clear conflict of interest between the (applicant’s) interests in remaining rent-free in his mother’s home, while it may be in the best interests of the (mother) for her to have a residential placement, with the expenditure of her funds to ensure that her life is comfortable”.

6. The NSWTG is of the view that the decision is in the best interests of the mother and will assist greatly with her care and lifestyle.

Applicant’s position

10. The applicant provided a written statement attaching information from the Department of Social Security. He appeared by telephone during the hearing and made submissions. He was not legally represented.

11. The Applicant told the Tribunal that the property was purchased by the applicant’s mother in the 1970’s and the mother, himself and his sister have lived there since that time. The mother moved into an aged care facility in early 2015 and his sister moved out in August 2015. The applicant continues to live in the property. He does not pay rent but maintains the property himself and pays the water account.

12. The applicant opposes the NSWTG decision stating that he cannot afford to pay any rent. He previously earned his income from trading shares. However, in November 2016 he started receiving $537.00 per fortnight from the Newstart allowance. He was asked by the Tribunal whether he would be eligible for rent assistance. He stated that he had not made those enquiries and did not disclose any other assets. He stated his own expenses included food, electricity, health insurance, bus tickets, grass cutting service fees and other expenses. He did not provide any supporting documents regarding his financial position to the Respondent or the Tribunal.

13. The applicant believed his mother clearly intended that her children be allowed to live in the property and be looked after by her estate. The aged care facility is a fifteen minute drive from the property and this means the applicant can visit her regularly. The applicant states that if he was required to leave the property, he would need to move to the outer suburbs where there is cheaper accommodation. He indicated this would impact on his ability to visit his mother regularly He also indicated that this would be a very sad situation for his mother and himself and would not be in her best interests.

14. Prior to entering the aged care facility, the mother was assessed as not being required to pay the refundable accommodation deposit. All her aged care facility fees are paid for by the government and she has a cash surplus in her account. The applicant is of the view that with some flexibility the NSWTG can manage her estate so that he can remain living in the property which he believes is consistent with his mother’s wishes.

15. The applicant did not agree with the NSWTG proposal as follows:

1. He did not agree that his mother’s fortnightly pension will automatically decrease from $877 to $763 after 1 April 2017 being 2 years after his mother entered the aged care facility as he had received contradictory departmental advice. He provided no basis or authority for this contrary view or any supporting documentation.

2. He believed the NSWTG annual management fees of over $6,000 could be reduced to $500 if they followed the Department of Human Services (Cth) procedure and did not include the property or family home as a ‘chargeable asset’. He provided no authority or supporting documentation for this view.

3. The applicant disagreed with the yearly allowance of personal expenditure for his mother of $3,900. He stated the nursing home pays for most expenses and he or his sister can pay for clothes, haircuts, extra items and outings. He also stated his mother does not go on outings and does not incur these expenses.

4. The applicant disagreed with any provision being made for property maintenance as he stated there is no urgent work to be done. He has been maintaining the property and is agreeable to continue to do so.

5. The applicant is concerned that leasing or selling the property may have detrimental financial consequences for his mother’s estate. These include; the possible imposition of the refundable accommodation deposit, payment of a means tested care fee, and reduction in his mother’s pension. The Applicant suggested these possible consequences in his written submissions but provided no supporting documentation. He also suggested that retaining the property would be a better investment than investing the proceeds in the share market as that market is more volatile than property.

16. The applicant was opposed to enter any lease/rental agreement on the property for either himself or a private party. The applicant submitted that a formal rental agreement would require the NSWTG to incur a large capital outlay to make the property fit for renting. The property was built in 1933 and the applicant believes it would be too costly to repair. The applicant told the Tribunal that the house was in poor condition with possible termite damage, fibro wall damage and holes in the kitchen floor. He indicated to the Tribunal that he was prepared to live in the property in this condition without any expenditure for repairs as long as he lived rent free.

Applicant’s Proposal

17. The Applicant proposed 3 possible options. All three proposals are based on the applicant paying the water account of $800 and the house insurance and council rates each year. These payments total approximately $4,200pa and the applicant indicated that if he obtained full time employment he would make a greater contribution. The first option is based on the financial management role being removed from the NSWTG and given to the applicant or his sister. The second option is based on the NSWTG fees being assessed without including the property. The third option is based on the NSWTG including the property and charging full fees. The applicant provided the following details:

Option 1 (NSWTG gives financial management role to applicant or sister)

Income
pension	867 x 26	22,542
Interest	317 x 2	634
23,176
Expenses – nursing home	17,520
NSWTG	220
Medication	328 x 2	656
NIB	123 x 12	1,476
19,872
Surplus estimate	3,304

Option 2 (NSWTG decide not to include property as an assessable asses in determining its fees)

Income
pension	867 x 26	22,542
Interest	317 x 2	634
23,176
Expenses – nursing home	17,520
NSWTG	506
Medication	328 x 2	656
NIB	123 x 12	1,476
19,872
Surplus estimate	3,018

Option 3 (NSWTG includes the property as an assessable asset and charge full fees)

Income
pension	867 x 26	22,542
Interest	317 x 2	634
23,176
Expenses – nursing home	17,520
NSWTG	6459
Medication	328 x 2	656
NIB	123 x 12	1,476
26,111
Deficit estimate	-2,935

Respondent’s position

18. The Respondent rejects all the options proposed by the Applicant, stating they are not financially viable and do not provide financial security to the mother. They are based on incorrect information particularly that the mother’s pension will not reduce after 1 April 2017. That is, the applicant includes the current pension of $867 but after 1 April 2017 it will be reduced to $763. There is no prospect of the applicant becoming financial manager given the comments made by the Tribunal on the 15 February 2017 in relation to the conflict of the applicant’s interests and his mother’s best interests. There is also no scope or discretion to reduce NSWTG management fees as they are set by a statutory formula. The Respondent stated that it was not possible for the applicant to arrange insurance as only the NSWTG has responsibility for insuring the property. The options make no provision for personal expenditure and this is not in the interests of the mother as she requires available funds to meet any contingencies or other unexpected expenditure. The applicant has provided no documentation to support his own financial circumstances and his proposed options.

Consideration

19. The Tribunal is required to consider whether or not the NSWTG decision regarding the mother’s property 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)).

20. In managing the estate the NSWTG may exercise the functions set out in s.16 of NSW Trustee and Guardian Act 2009. Relevantly this includes:

…

(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,

21. 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.

22. The stated aim of NSWTG is to secure the financial future for the mother. That is, the primary asset of the mother’s estate is the property and without any additional income or funds from the property, the mother’s estate will be depleted in a few years. This is based on an analysis put forward by the Financial Planning Unit of the NSWTG. The analysis appears sound. It accounts for the decrease in the mother’s pension after 1 April 2017. It also makes provision for personal expenditure of $3,900pa ($75p/w). This will ensure the mother can meet any unexpected expenses or contingencies into the future. The analysis also includes an allocation for property maintenance. As the applicant acknowledges, the property is in poor condition and it is in the mother’s interest to maintain the property and not allow it to deteriorate further.

23. The counter proposal put forward by the applicant is not persuasive. It is based on assumptions and information without supporting authority or documentation. It does not take account of the mother receiving a reduced pension after the 1 April 2017. It makes no provision for personal expenditure or property maintenance for the mother. It provides no details of expenditure. It provides no backup plan or provision for contingencies other than the applicant saying he will make additional contributions if he finds full time employment.

24. The applicant makes the point that leasing or selling the property may attract greater fees and imposts and possibly reduce the mother’s pension. However, the property is currently earning no income and any rental income or proceeds of sale from the property can be put towards the mother’s estate and offset any consequential decrease in pension or other fees and charges.

25. The applicant states that his mother’s intentions are to allow him to remain in the property rent free. This may well be true but given her lack of capacity we are not able to ascertain her views. Further, the interests of the applicant in living rent free may be detrimental to the best interests of the mother. In February 2015, the Tribunal commented on this possible conflict of interest in its reasons for appointing the NSWTG as financial manager. It stated, somewhat presciently given the current application; “There is a clear conflict of interest between (the applicant’s) interests remaining rent free in his mother’s home, while it may be in the mother’s best interest for her to have a residential placement, with the expenditure of her funds to ensure that her life is comfortable”.

26. The applicant also states that if he was required to move out of the property he would not be able to visit his mother as regularly. However, the applicant provided no further information or reasoning to support this submission. The NSWTG has offered him a lease at below market rent to enable him to remain living in the property. He may wish to enquire about his eligibility for government benefits to assist him in paying rent or seek the assistance and advice from a financial counsellor to help him take up the offer.

22. Taking into account all the material before the Tribunal and the principals of s.39 NSW Trustee and Guardian Act 2009 the decision of the NSWTG is affirmed with some variation. The order is as follows:

1. The property is to be leased/rented out to the applicant at a reduced market rent of $265p/w or such other rate at the discretion of the NSWTG and the applicant and the NSWTG are to execute a formal tenancy agreement.

2. The applicant is to be given 8 weeks from the date of this decision to execute the formal tenancy agreement referred to in 1).

3. Should the applicant not execute the formal tenancy agreement by the expiration of the 8 week period, or decide to vacate the property prior to this time, the NSWTG is to consider further options to either lease the property at full market rate or to sell the property.

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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

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: 27 March 2017