DRT and DRS v NSW Trustee and Guardian

[2019] NSWCATAD 88

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

DRT & DRS v NSW Trustee and Guardian [2019] NSWCATAD 88

Hearing dates:

8 April 2019

Date of orders:

20 May 2019

Decision date:

20 May 2019

Jurisdiction:

Administrative and Equal Opportunity Division

Before:

C A Mulvey, Senior Member

Decision:

1. The order made on 29 January 2019 to stay the decision of the NSW Trustee and Guardian dated 26 September 2018 and affirmed on internal review on 16 November 2018 is revoked.

2. The decision of the NSW Trustee and Guardian dated 26 September 2018 and affirmed on internal review on 16 November 2018 is affirmed.

Catchwords:

ADMINISTRATIVE LAW – review under section 62 NSW Trustee and Guardian Act 2009 (NSW) – NSW Trustee and Guardian - interests and welfare of protected person – whether to sell a protected persons property – financial management order.

Legislation Cited:

Administrative Decisions Review Act 1997(NSW)
Civil and Administrative Tribunal Rules 2014 (NSW)
Civil and Administrative Tribunal Act 2013 (NSW)
Guardianship Act 1987
Powers of Attorney Act 2003

Cases Cited:

McDonald v Guardianship Administration Board [1993] 1 VR 521 at 530

Category:

Principal judgment

Parties:

DST and DSR (applicant)

NSW Trustee and Guardian (respondent)

Representation:

DRS (applicant)

Mr Mackey - solicitor (respondent)

File Number(s):

2019/00014333

Publication restriction:

Pursuant to s 64(1)(a) of the Civil and Administrative Tribunal Act 2013 the Tribunal restricts disclosure of the name of the applicant, his victims or of evidence given and received in the Tribunal hearing or in relation to the proceedings which is likely to identify those persons.

Reasons for Decision

Introduction

1. The first applicant is a 77-year-old lady who lives with her adult son, the second applicant in the first applicant’s home in Western Sydney New South Wales. In order to maintain their privacy, and in accordance with the publication restriction that applies in this matter, I have referred to the first applicant as ‘DRT’ and the second applicant as ‘DRS’ or collectively as ‘the applicants’.

2. DRT has three other adult children. She has two daughters who live in Sydney and a son who lives in the United States of America. Each of DRT’s other three children are involved in decisions concerning their mother.

3. On 2 October 2017, DRT appointed DRS as her enduring guardian to make decisions concerning accommodation, healthcare, medical and dental consents and services. On the same date DRT also appointed DRS as her attorney under an enduring power of attorney (“the Power of Attorney”).

4. On 9 May 2018, the Guardianship Division of this Tribunal made a financial management order. The applicant in that proceeding was one of DRT’s daughters. DRT’s estate was committed to management by the NSW Trustee and Guardian pursuant to that order. DRT is a protected person within the meaning of s38 of the New South Wales Trustee and Guardian Act 2009 (‘the Act’). The Guardianship Division found that DRT was unable to make and implement decisions about her financial affairs in a reasonable or rational way and is incapable of managing her financial affairs.

5. Operation of the Power of Attorney is suspended upon the making of a financial management order (see - s50(3) Powers of Attorney Act 2003).

6. DRT owns two adjoining parcels of land in Western Sydney. DRT and DRS reside in a dwelling on one of the properties and use a portion of the other as part of their backyard. On 26 September 2018, the NSW Trustee and Guardian (‘the NSW Trustee’) made a decision to sell one of the parcels of land to enable DRT sufficient funds to meet her past liabilities and her current and future needs. The decision was internally reviewed by the NSW Trustee on 16 November 2018. The NSW Trustee affirmed its 26 September 2018 decision. The applicants seek this Tribunal to review the NSW Trustee’s decision to sell the property.

RELEVANT LEGAL MATTERS

7. As set out above, on 9 May 2018, the Guardianship Division of this Tribunal found that DRT was incapable of managing her affairs. As such there was a need for another person to manage DRT’s affairs and it was in her best interests that a financial management order be made. A financial management order was made pursuant to the provisions of Part 3A of the Guardianship Act 1987.

8. The estate of DRT was committed to management by the NSW Trustee.

9. Chapter 4 of the NSW Trustee and Guardian Act 2009 (‘the Act’) is concerned with 'management functions relating to persons incapable of managing their affairs.' Under s 56(a) of the Act, the NSW Trustee may exercise all the functions necessary and incidental to management and care of the estate of the managed person.

10. In managing DRT’s estate, the NSW Trustee is empowered to exercise a series of powers under s16 of the Act. Relevantly, these powers include buying, selling, realising and mortgage (with or without a power of sale) of real and personal property (s16(1)(g) of the Act) and paying rates, taxes, assessments, insurance premiums, debts, obligations, costs and expenses and other outgoings (ss 16(u) of the Act).

11. I am satisfied that the decision of the NSW Trustee to sell the land adjacent to the land in which the applicants reside is a power which the NSW Trustee has (s 16(g) of the Act).

12. Section 62 of the Act empowers an ‘affected person’ to apply to this Tribunal for administrative review of a decision made in connection with the exercise of the NSW Trustee’s functions under the Act.

13. An ‘affected person’ includes:

1. a managed person in respect of whose estate the decision was made, …

2. any other person whose interests are, in the opinion of the Tribunal, adversely affected by the decision.

14. I am satisfied that the applicants fall within the definition of an affected person given that DRT is the managed person and DRS is adversely affected by the decision of the NSW Trustee as he currently enjoys the use of part of the land which the NSW Trustee proposes to sell (see below).

15. In their application for review filed 15 January 2019, the applicants state that they were first notified of the decision by the NSW Trustee to sell the relevant land on 27 September 2018. The application for review was received by this Tribunal on 15 January 2019. Pursuant to rule 24 of the Civil & Administrative Tribunal Rules 2014, the application is out of time. However, on 6 February 2019 the Tribunal extended the time to lodge the application to 15 January 2019.

16. Also on 15 January 2019, the applicants sought a stay of the decision of the NSW Trustee to sell the subject property (made by the NSW Trustee on 26 September 2018 and affirmed after internal review on 16 November 2018). On 29 January 2019, the Tribunal made orders, inter alia, to stay that decision until further order.

17. In reviewing the decision, the Tribunal ‘stands in the shoes’ of the NSW Trustee and is required to make the ‘correct and preferable decision’ having regard to any relevant factual material and any applicable written or unwritten law (s63 of the Administrative Decisions Review Act 1997).

18. The review is to be conducted ‘without any presumption as to the correctness of the decision’: McDonald v Guardianship Administration Board [1993] 1 VR 521 at 530. On review the Tribunal may exercise all of the functions that are vested in the NSW Trustee.

19. In exercising its functions under the Act, the NSW Trustee and, on review, this Tribunal must give paramount consideration to the interests of DRT. Section 39 of the Act provides that it is the duty of everyone exercising functions under Chapter 4 of the Act (management functions relating to persons incapable of managing their affairs) 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.’

ISSUE

20. In this case the following issue must be considered:

1. whether the decision made by the NSW Trustee on 26 September 2018 and affirmed by internal review of the NSW Trustee on 16 November 2018, to sell the property adjacent to where the applicants reside is the correct and preferable decision having regard to any relevant factual material and any applicable written or unwritten law.

EVIDENCE

21. The applicants’ evidence consisted of:

• application filed 15 January 2019, together with a bundle of documents (A1);

• bundle of documents filed 29 January 2019 (A2);

• document list filed 15 March 2019 (A3);

• email of 15 March 2019 (A4);

• statements of the applicants filed 8 April 2019 (A5);

• supplementary evidence - email filed 8 April 2019 (A6).

22. The respondent’s evidence included:

• s58 bundle filed 19 February 2019 (R1);

• supplementary s58 bundle filed 2 April 2019 (R2);

• Reasons for Decision Guardianship Division 9 May 2018 (R3).

23. All of the exhibits were tendered absent objection.

The Family Circumstances

Uncontroversial Facts

The relevant properties

24. DRT lives in property 1 in Western Sydney. The adjacent land property 2 is used by the applicants, partly as their extended garden. Properties 1 and 2 were inherited by DRT from her late husband who died approximately 12 years ago. It was submitted that the two properties are separately registered. It is uncontroversial that the properties have been in the family for over 100 years. For the last 46 years, a portion of the land at property 2 has been used as part of the backyard of property 1. The backyard portion of property 2 is used as a garden, has a shed for storage and provides off street parking for property 1.

25. Property 2 also has a dwelling situated upon it. That dwelling was previously occupied by one of DRT’s daughters but is said to have fallen into disrepair. It has not been tenanted since 2008. DRS in his evidence submitted that the property could be upgraded to a standard for lease with some renovation, predominantly concerning the kitchen.

26. DRT is a self-funded retiree and is not eligible for a pension under the assets test. It is uncontroversial that all funds which she held in a term deposit have been exhausted. She has no other assets or financial resources to draw upon apart from the abovementioned properties 1 and 2.

27. From June 2018 to 28 February 2019, DRT was paid a weekly allowance by way of an overdraft provided by the NSW Trustee. The NSW Trustee provided that overdraft on the understanding that property 2 was going to be sold. Part of the proceeds from the sale of property 2 were to be used to reimburse the NSW Trustee in satisfaction of the subject overdraft. As a result of the uncertainty which now exists as to whether property 2 will be sold, the NSW Trustee ceased providing the overdraft beyond 28 February 2019. In the result DRT is no longer being paid any weekly allowance.

The evidence and submissions of the applicants

28. Absent objection, DRS requested that he be granted leave to act for DRT during the hearing. DRS appeared by telephone. I considered and accepted the submissions made by DRS that his mother has found the circumstances of this matter extremely stressful such that it has caused her increased anxiety. DRT provided her views in writing, which evidence is contained in joint submissions of the applicants and a statutory declaration (Exhibits A1, A2, A3, A4, A5 and A6). I considered the provisions of s45 Civil and Administrative Tribunal Act 2013, which allows a party to be represented by another person in proceedings with leave of the Tribunal. I granted leave for DRS to appear on behalf of his mother.

29. DRT in a Statutory Declaration made 25 January 2019, contained in the bundle of documents (exhibit A2) states the following in relation to the properties.

30. In January 1973, DRT with her late husband and four children moved into the house in which she now resides with DRS (property1). Modifications to the two properties had been made such that the family enjoyed the use of part of property 2 as a backyard and car parking area. This arrangement still continues today. That part of property 2 which is used as backyard is described as being an L shaped fenced off area which does not have any dividing fence between the two properties. The arrangement allows DRS and DRT to remain free in their movement across the property boundaries and is described by them as being ‘one home’.

31. DRT states that DRS has lived at property 1 and used for his own benefit all parts of property 2 continuously for the last 46 years, with only having for a few years lived elsewhere. Various improvements have been made on property 2, which include a garage and workshop, gardens, an aviary, garden shed and part of the double gates and driveway access is used for accessing property 1. DRT says it was the wish of her late husband that their youngest son, DRS, be able to continue to use the property in the way in which it had been used for the 46 plus years without any significant change.

32. The applicants set out in their joint evidence that DRS has a disability related to a social phobia (agoraphobia) similar to one that his late father was also affected by. It is said that DRS’s anxiety and symptoms are ameliorated by having the ability to use the large space provided by that part of property 2 as the extended backyard of property 1. The applicants describe how DRS, and to some extent DRT, utilise the space provided by the extended backyard for, amongst other things, walking, peace and tranquillity. It is submitted that such use of the property promotes DRS being able to access the community.

33. The applicants submit that the decision of the NSW Trustee to sell property 2 is not the correct decision. The applicants submitted that the exploration of a reverse mortgage should be undertaken and be exhausted before any decision is made to sell property 2 particularly given the long history of how the properties has been used by the family for over the years. DRS said a reverse mortgage will allow funds being made available to meet the daily needs of DRT.

34. DRS also submitted that property 2 could be subdivided so that part of it could either be sold or leased to earn an income for DRT, and that part of property 2 which is used as a backyard could remain for the exclusive use of property 1, and that it be recorded on a separate title. DRS said this second proposal could only be achieved if a reverse mortgage is obtained to fund the subdivision. He acknowledged that there would be a financial cost involved in carrying out and registering the subdivision.

The evidence and submissions of the NSW Trustee

History of the decision of the NSW Trustee subject to review

35. The following decisions have been made by the NSW Trustee in relation to the decision to sell property 2.

36. On 11 July 2018, NSW Trustee received a report from its Financial Planning Unit recommending the sale of property 2.

37. On 25 July 2018, a letter was sent to all relevant parties advising them of the decision and requesting a response within 14 days.

38. On 6 August 2018, one of DRT’s daughters advised the NSW Trustee by email that she agreed with the sale.

39. On 8 August 2018, the second daughter of DRT advised the NSW Trustee by email that she agreed with the sale.

40. On 19 August 2018, the son of DRT who resides in the United States of America advised the NSW Trustee by email that he agreed with the sale.

41. On 7 September 2018, a request was made by the NSW Trustee Client Services Manager to approve the sale of property 2 upon the recommendation of the Financial Planning Unit and the Property Section.

42. On 25 September 2018, the Client Service Manager approved the sale of the property.

43. On 26 September 2018, letters were sent to each of the parties advising them of the decision approving the sale.

44. On 24 October 2018, DRT and DRS requested a review of the decision to sell property 2.

45. On 25 October 2018, the parties were advised that an internal review would be made by the NSW Trustee of its decision to sell property 2.

46. On 16 November 2018, the internal review of the decision to sell property 2 was completed and the decision was affirmed.

47. On 16 November 2018, emails were sent to one of DRT’s daughters and DRT advising them of the internal review decision.

48. On 28 November 2018, DRS telephoned the NSW Trustee to advise he had not received the internal review decision.

49. On 4 January 2019, DRS telephoned the NSW Trustee to advise that he and his mother proposed to bring an application to NCAT for a stay of implementation of the decision to sell property 2.

50. On 15 January 2019, the application for a stay was filed by the applicants.

Submissions of the NSW Trustee

51. The NSW Trustee submitted that the advice of the Financial Planning Unit of the NSW Trustee has recommended that it not continue with a proposal for an application of a reverse mortgage for DRT. It has been considered not appropriate for DRT to incur further debt at this stage in her life. Further, most major financial institutions have discontinued offering reverse mortgages. The NSW Trustee submits that the only manner in which DRT’s urgent financial needs can be met and for her financial future to be secured is for property 2 to be sold in its present condition without any subdivision and without attempting to excise the rear yard as proposed by DRS. A proposal to renovate the dwelling on property 2 and lease the premises is also not considered by the NSW Trustee as being a viable option. This is partly due to the scarcity of funds to renovate the property and partly due to the expected rental income not being sufficient to meet DRT’s financial needs.

52. In the written submissions of the NSW Trustee, it is said that the views of DRT’s other three children are that they support the NSW Trustee’s view that the property be expedited for sale for the following reasons:

1. the delays in addressing DRT’s urgent financial problems have exacerbated her health problems;

2. DRT is no longer able to make independent decisions, becomes anxious and confused about her financial situation and looks to others and, particularly, DRS, on whom she is dependent for advice;

3. DRS exercises a controlling influence over DRT and the Tribunal should view with scepticism any statement that is made by her through DRS concerning her views on the proposed sale of property 2;

4. DRS has difficulty making decisions, puts undue emotional pressure on DRT and blocks attempts to manage her assets in such a way as to generate an income for her;

5. concern is held that DRS is seeking to preserve DRT’s assets for his own purposes.

53. In exhibit R2, the financial position of DRT (as at 1 April 2019) is set out as follows:

Income

None

Assets

Property 1         $700,000

Property 2         $1,300,000

Trust account      -$8,130.39

Savings         $12.81

Total            $1,991,882.50

Liabilities

Family debt*         $1,417,677.50

Other            $47,622.30

*The applicants dispute the family debt is $1,417,677.50 but rather $62,486.

54. As indicated below, the applicants dispute the family debt recorded in the schedule is accurate. Mr Mackey was unable to provide any explanation as to what this amount relates to. In the applicants’ submissions (A5), DRS states that there is a debt due to him of $62,486. DRS submits the total outstanding liabilities of DRT are $110,108.39. In relation to DRT’s estate, I find that DRT has no income (this is not in dispute). Her debts and liabilities are between an amount of at least $47,622.30 to $110,108.39 and increasing each day.

54. The NSW Trustee provided an estimate of DRT’s yearly expenses which total $37,920. The assessment appears modest in all circumstances.

55. I accept the value of DRT’s assets as contained in the schedule which was not in dispute.

56. An estimate of the value of property 2 has been provided as $1,300,000. This is not in dispute. I accept this approximate valuation.

57. The NSW Trustee submits that the estimate of funds being made available following the sale of property 2 will allow in excess of approximately $1,020,000 for DRT after selling and other expenses are deducted. I accept this submission.

58. I find based on this evidence, DRT’s ongoing liabilities cannot be met due to her earning no income. A fund of approximately $1,020,000 will ensure her past and future financial needs are met upon the sale of property 2.

The applicants’ evidence and their response to submissions made by the NSW Trustee

60. The Tribunal had before it a number of statements from DRT setting out the reasons she opposes the sale of property 2. Her views are contained in a Statutory Declaration made 25 January 2019, which forms part of Exhibit A2. I have taken all of these submissions into consideration and treated them as joint submissions and evidence on behalf of both applicants.

61. The applicants have set out the following 13 grounds in support of the application:

1. The Trustee has ignored in its decision the fact that DRT and DRS live at property 1 which goes over two-thirds of property 2 and have done so for 46 years. Most of property 2 is our home and future. The Trustee has ignored alternative financial solutions, which DRS was achieving when the financial management order was made. This alternative financial solution would fund DRT and her estate to enable the back one-third part of property 2 to be adjusted formally onto property 1. This would sacrifice half of what at property 1 we use on property 2. And would save the essential, functional back one-third part of property 2, keeping property 1 with a functional property in her future.

2. We disagree that property 2 is an investment property.

3. We intend to sell the remainder of property 2, after saving essential functional parts of it.

4. This functional part is essential for both our future protection and wellbeing given DRS’ disability.

5. Given the small size of the backyard of property 1, after items are moved from property 2 there would be little to no space. We need this space provided for by this back one-third functional part of property 2. DRS’ disability requires space for wellbeing that is private and at home, to manage his disability, to remain high functioning, to exercise and walk, in private gardens, lawns, and natural space, enabling him then to be able to access the community. DRS spends as much time outside in their back one-third part of property 2 if not more, than in the house. This is essential for his wellbeing and confidence and fitness, which further enables him to access the community.

6. DRT’s late husband provided this space for his wife and his son with both DRT and her late husband allowing DRS to continue living there as they did.

7. This property was originally one property and has been used as if it is for 46 years.

8. The back one-third part of property 2 has space for a garage and workshop, garden shed, aviary for pet birds, gardens, plants, lawn, trees, side property car access to the rear of property 1, off street parking, emergency access (being used already 3 times for this) secure, safe, unique, chemical free environment (for DRT’s late husband and DRS).

9. Without saving this one-third part of property 2, it would force a lifestyle change which would be extremely detrimental for both DRT and DRS, their wellbeing, health and protection. We have lived this lifestyle for 46 years and it was very beneficial for DRT’s late husband who also had a similar disability to DRS, enabling him and DRS to regularly do outside jobs.

10. Three generations of the family have lived on this property, and the preceding generation has provided it for the next, thanks to God, in Jesus’ name. This property came out of four generations of family, acknowledging God and is a blessing to the last three generations, and as such it is inexplicably tied to our religious Christian beliefs, providing for protection of family, given the Jewish background of the last two generations and the Christian belief of the last three generations. Given our Jewish background, (and Christian) we have many natural enemies. Our home at property 1 is going over onto property 2, provides us private space for protection, and respite from any oppositions.

11. My grandfather purchased this property (property 1 and property 2 combined) in 1912. Our family came out of a dispute, with his siblings whereby he was the youngest like DRT’s late husband, and like DRS. Grandfather had to get out from under his elder siblings to survive! This is where our family came from! My father too, had, this happen to him.

12. Our Jewish ancestry goes back to the Spanish crypto Jews who went to England, exiled from Spain, with their prosperity and possessions confiscated by the rules of the day, during the Spanish Inquisition.

13. We have to keep coming back to the question, ‘Why do each person want to take this part of property 2 off DRT and DRS?’

62. A lengthy document which is a combined submission and statement of evidence is relied upon by the applicants (Exhibits A5 and A6). I have considered the material in these documents, and each of the exhibits (A1 – A4). Exhibit A5 which I do not intend to set out in detail, provides a response to the submissions made by the NSW Trustee filed 29 March 2019. I deal with the submissions in summary below.

63. The NSW Trustee has referred at paragraph 2 of its submissions to DRT’s other three adult children seeking to be actively involved in decision making concerning her welfare. The applicants dispute that DRT’s son who resides in the United States has visited the two subject properties within the last 20 years. The applicants state that this son has not had regular contact with DRT despite saying that he would. It is suggested that this son is not aware of DRS’ disabilities and the day to day needs of DRT.

64. The applicants also allege that DRT’s two daughters have not been involved in decision making concerning their mother. It is suggested they have demonstrated no interest in things in the past and only sometimes contributed if anything at all to the keeping of the properties.

65. DRT’s other three children did not give evidence. In this regard I am unable to make a positive finding as to the level of involvement of DRT’s other three children in her life. However, I accept the evidence of the NSW Trustee that each of them, have been in contact with the NSW Trustee. I note that DRT’s other three children have provided their own views in support of the decision of the NSW Trustee to sell property 2. Indeed correspondence contained in R1 evidences an exchange of information between the NSW Trustee and DRT’s other three children concerning the need to sell property 2 and realising funds to meet DRT’s basic daily needs. Each of the three children accept the NSW Trustee’s reasoning for the sale and have provided their consent for the NSW Trustee to proceed with its proposal for the sale of property 2. I also note that two of DRT’s daughters participated in the financial management application in the Guardianship Division of this Tribunal. I have considered their views in determining this application.

66. The applicants correctly set out that the financial management order was made on 9 May 2018 not 2 October 2017. It appears the date of 2 October 2017 is a typographical error contained in the NSW Trustee’s submissions. Nothing turns on this point.

67. In relation to the background as to the two properties, the applicants submit that for 46 years two-thirds of property 2 has been part of the home in which they reside at property 1. This includes established trees, gardens, a large solid aviary with birds, a solid heavy garden shed to maintain the gardens and totally separate from the shed is a garage and workshop combined dating back over 100 years. Off street parking and vehicle access to the rear of property 1, lawn space for walking and space for enjoying sunshine and wellbeing is also achieved from this use. It is submitted by the applicants that there is great functional importance to the them having the combined use of the two properties. I accept that this is their view, which is not in dispute.

68. It is submitted by the NSW Trustee that the dwelling on property 2 has fallen into disrepair. This is disputed by the applicants who submit that the dwelling is liveable and only stopped being liveable when the kitchen renovation was ceased due to a lack of funding. The submission is contradictory. The applicants say that renovations to the kitchen were supposed to proceed but have ceased because the NSW Trustee is in control of DRT’s estate. I find that property is not in a habitable condition for leasing without further improvements. As set out above, there are no funds currently available in DRT’s estate to pay for any renovation work to the dwelling, irrespective of who the manager of DRT’s estate is.

69. The applicants dispute that the NSW Trustee was paying a weekly allowance by way of an overdraft to DRT from the date of the financial management order or from June 2018. File notes of the NSW Trustee, including but not limited to pages 42, 43, 71, 81, 82, 116, and 118 of (R1), evidence requests and approvals internally within the NSW Trustee for the provision of an overdraft to DRT. The balance of the NSW Trustee trust account is $-8,130.39 (R2) which in my mind evidences an overdraft facility has for a period of time been extended by the NSW Trustee to DRT. This finding is consistent with the NSW Trustee’s submissions.

70. The applicants state that the NSW Trustee refused to respond to DRS’ emails outlining necessary steps to complete a Commonwealth Bank of Australia reverse mortgage, which it is said would have provided DRT with an income of $30,000 per year. This decision is said by the applicants to have been made by the NSW Trustee within four weeks of the financial management order being made. It appears on the evidence that the NSW Trustee ultimately refused this proposal. It is alleged that the NSW Trustee’s decision making has caused financial hardship to the applicants and it has not acted in the best interests of DRT in managing her estate. The applicants dispute parts of the assets and liability assessment which is attached to the supplementary evidence referred to in paragraph 10 of the NSW Trustee’s submissions (also found at R2). The main complaint relates to a stated debt of $1,417,677 owed to family members referred to in the statement of assets and liabilities as ‘Sale of Property’. Mr Mackey said he was unsure what this related to. The applicants did not dispute the remaining debts set out in the schedule. These expenses include, Telstra $60.20, Council rates $4,800, legal fees $22,952.29, chemist $121.40, Sydney Water $1,013.60, land tax $4,699. In fairness DRS submitted that the land tax expense was something that may have been improperly excised. He said there is a potential refund due to his mother.

71. What is not in dispute is that DRT currently has no available income to pay her expenses as and when they fall due. Without restructuring her assets in some way, DRT does not have any available funds to pay her outstanding or future debts.

72. I have taken into consideration the submissions that relate to paragraphs 11, 12, 13 and 14 of the NSW Trustee’s submissions and the responses provided by the applicants.

73. I have also taken into consideration at paragraph 75 of Annexure A5 the comments of the applicants entitled ‘What DRT and DRS Want’, which I have reproduced below:

‘We want this decision to be set aside. We wish that the Tribunal explain the options available to us in terms of what the Tribunal may decide. We want to continue with the reverse mortgage, and DRT, DRS and the property should not be disadvantaged in any way, just because the FM/TAG set out from the start to bias the decision and to ignore the reverse mortgage. Causing this bad situation and then saying it is regrettable or that now it’s the only solution is not good enough. DRT’s estate should not suffer permanent loss, by allowing this decision. We wish that the FM order be revoked as this order is not working, the FM of TAG has not acted in DRT’s best interests all the way through. Their hostility to DRT and her wishes and her son and representative and advocate, is a testament to the fact that the FM is not acting in DRT’s best interests. The stay should be extended to allow for this FM order to be revoked, as it’s in the person’s best interests to do so, before DRT and her estate suffers financial loss that cannot be reversed. DRT is at risk of financial harm by TAG, and this matter to revoke the order needs to be attended to most urgently. The distress of this matter, the decision and the FM’s behaviour, necessitates, that it is in DRT’s best interests that she be protected from further suffering of overwhelming distress of this experiment of intrusion into her life and that the distress outweighs anything else, given the Guardianship Act, it’s the right thing to do, to correct what is already a bad decision to make the order in the first place, in that DRT’s distress always outweighed any other concerns, and that only someone close to DRT, as close friends and DRS can readily see. The Guardianship Act states that family should be preserved. As the FM reinforces the conflict in the family, it is the opposite, and threatens the survival of the family who live across these two properties, namely DRT and DRS, the affected people of the biased decision. This unmitigated mess of bad decision following bad decision because certain siblings want it that way must be stopped while it still can, before it does permanent damage to the family who lives on these properties. That progress that DRT made financially with much hard work by DRS, is in danger of being squandered altogether due to mismanagement by TAG.

It is incorrect that the property must be sold as soon as possible. This decision is not in her best interests, there are and always were other more practical and more realistic alternatives, and to consider the people affected, then these alternatives become necessary. The solution cannot be disconnected from the person or the affected people. It’s preferable that DRT and DRS as family can contribute to survive at property 1. It is preferable that DRT keep the functional portion of her home that goes over property 2. It is preferable that DRT not be disrupted in keeping hers and her late husband’s wishes providing for their disabled son. It is preferable that DRT’s views be respected. It is preferable in all the reasons of the Guardianship Act presented that the functional part of property 2 is DRT’s home at property 1 be kept, for herself to continue to use and remember her husband by and to pass it on to the next generation, with all its history, blessings and spiritual meaning, for the property to continue to serve the family throughout the generations to come. What has been provided from within the family should not be squandered for future generations, especially by those outside the family.’

Oral evidence of DRS

74. DRS supplemented his written submissions by giving oral evidence. DRS reiterated a number of the submissions which had already been set out in writing. I asked DRS how he intends to proceed with the two proposals he contends would solve his mother’s financial deficiencies, those being: 1. obtaining a reverse mortgage; and, or 2. subdividing that part of property 2 in order to achieve keeping that part of the backyard used to benefit property 1. DRS said that the primary way in which his mother could fund her ongoing expenses is to arrange a reverse mortgage over her properties to provide an income of about $30,000 per year. I asked DRS how this could be achieved if I accept the NSW Trustee’s evidence that most financial lenders have ceased providing a reverse mortgage as a financial product. He conceded that whilst major lenders are not providing reverse mortgages there are other smaller lenders who might be able to provide such a facility. There is no evidence before me as to the likelihood of a reverse mortgage being extended to DRT, nor indeed, the financial projection of how such a facility could meet DRT’s financial commitments now and into the future. In fairness DRS said, he could not provide this evidence as he has no legal authority to investigate such a lending facility given that he is not the financial manager for his mother’s estate. I accept this places DRS in a difficult situation. However, even if I assume that a reverse mortgage could be obtained, the applicants submitted that a reverse mortgage could provide an income of approximately $30,000 per year. Such an income will not satisfy DRT’s outstanding liabilities of between $47,622.30 - $110,108.39 nor indeed her future projected expenses of $37,920.

75. I asked DRS how the proposal to subdivide property 2 could be achieved from a financial perspective. He said that the subdivision could only be financed through a reverse mortgage facility. I accept his evidence.

76. I find that a subdivision of property 2 can occur if funds are made available through a reverse mortgage facility. I refer to my comments above in that regard. I find that the proposal to subdivide the property places an even greater burden on DRT in being able to meeting her outstanding debts and ongoing liabilities, even if such a facility was ultimately approved.

77. The applicant conceded that his mother’s financial situation has not been improved or resolved to date because a reverse mortgage facility has not been obtained. He said that if the worst came to the worst and a reverse mortgage could not be obtained then a complete sale of the property would have to be achieved as there is no other option or solution available.

The Tribunals consideration

78. I respond to the 13 grounds put forward in support the applications below:

(i) The Trustee has ignored in its decision the fact that DRT and DRS live at property 1 which goes over two-thirds of property 2 and have done so for 46 years. Most of property 2 is our home and future. The Trustee has ignored alternative financial solutions, which DRS was achieving when the financial management order was made. This alternative financial solution would fund DRT and her estate to enable the back one-third part of property 2 to be adjusted formally onto property 1. This would sacrifice half of what at property 1 we use on property 2. And would save the essential, functional back one-third part of property 2, keeping property 1 with a functional property in her future.

79. I have considered the nature and effect the use of both properties has had on the applicants in the past, and importantly, will have in the future particularly in evaluating whether to affirm the decision of the NSW trustee. I accept that the sale of property 2 will have a major effect on the applicants. Equally so, DRT’s parlous financial position must be placed at the forefront of my mind. Without financial security, DRT could be at risk of defaulting on the payment of her many debts and also her future expenses which may eventually lead to the sale of some or all of her assets. This result would be even more devastating if the applicants have to leave both properties.

(ii) We disagree that property 2 is an investment property.

80. I note the submission. Ultimately, this is a determination to be made by the authority which will assess DRT’s assets according to law.

(iii) We intend to sell the remainder of property 2, after saving essential functional parts of it; (iv) This functional part is essential for both our future protection and wellbeing given DRS’ disability; (v) Given the small size of the backyard of property 1, after items are moved from property 2 there would be little to no space. We need this space provided for by this back one-third functional part of property 2. DRS’ disability requires space for wellbeing that is private and at home, to manage his disability, to remain high functioning, to exercise and walk, in private gardens, lawns, and natural space, enabling him then to be able to access the community. DRS spends as much time outside in their back one-third part of property 2 if not more, than in the house. This is essential for his wellbeing and confidence and fitness, which further enables him to access the community; (vi)   DRT’s late husband provided this space for his wife and his son with both DRT and her late husband allowing DRS to continue living there as they did; (vii) This property was originally one property and has been used as if it is for 46 years; (viii) The back one-third part of property 2 has space for a garage and workshop, garden shed, aviary for pet birds, gardens, plants, lawn, trees, side property car access to the rear of property 1, off street parking, emergency access (being used already 3 times for this) secure, safe, unique, chemical free environment (for DRT’s late husband and DRS); (ix) Without saving this one-third part of property 2, it would force a lifestyle change which would be extremely detrimental for both DRT and DRS, their wellbeing, health and protection. We have lived this lifestyle for 46 years and it was very beneficial for DRT’s late husband who also had a similar disability to DRS, enabling him and DRS to regularly do outside jobs. (x) Three generations of the family have lived on this property, and the preceding generation has provided it for the next, thanks to God, in Jesus’ name. This property came out of four generations of family, acknowledging God and is a blessing to the last three generations, and as such it is inexplicably tied to our religious Christian beliefs, providing for protection of family, given the Jewish background of the last two generations and the Christian belief of the last three generations. Given our Jewish background, (and Christian) we have many natural enemies. Our home at property 1 is going over onto property 2, provides us private space for protection, and respite from any oppositions; (xi) My grandfather purchased this property (property 1 and property 2 combined) in 1912. Our family came out of a dispute, with his siblings whereby he was the youngest like DRT’s late husband, and like DRS. Grandfather had to get out from under his elder siblings to survive! This is where our family came from! My father too, had, this happen to him; (xii) Our Jewish ancestry goes back to the Spanish crypto Jews who went to England, exiled from Spain, with their prosperity and possessions confiscated by the rules of the day, during the Spanish Inquisition; (xiii) We have to keep coming back to the question, ‘Why do each person want to take this part of property 2 off DRT and DRS?’

81. I have considered each and every ground above. In my view the grounds form submissions by the applicants as to the correct and preferable decision that I must determine.

82. It is uncontroversial that DRT has no social security benefit from which she can obtain an income through a pension. She has no savings and no other sources of income apart from the options available to her in relation to her ownership the two properties. In the circumstances, DRT is currently unable to meet her ongoing expenses as and when they fall due.

83. I have considered the proposed alternatives available to DRT in relation to funding her future needs. They include being able to obtain a reverse mortgage, selling one of, or part of her properties, or, renting a dwelling to earn an income.

84. There was no evidence before me that there is a suitable commercial reverse mortgage facility available for DRT. Indeed, no application had been made for such a facility. Even if an application was to be made, there is no certainty the facility would be approved, nor, whether the funds made available could meet DRT’s current liabilities and ongoing expenses. I accepted the uncontested evidence that the major financial lending institutions within Australia have ceased providing reverse mortgage facilities following the recent Banking Royal Commission. DRS said there are smaller lenders in the market that may approve such a facility for DRT.

85. I am not convinced that at this point in DRT’s life that a reverse mortgage is a viable or appropriate arrangement to immediately fund DRT’s past and future financial commitments, particularly given the uncertainty of a product being available to meet her needs, and, where major financial institutions have ceased to offer these products in the market. I have also accepted DRS’s evidence that a reverse mortgage would realise approximately $30,000 a year in income for DRT. Having accepted the evidence of the NSW Trustee concerning outstanding liabilities and the forecasted expenses of DRT, such an amount would not provide a sufficient fund to secure DRT’s current or future financial commitments.

86. The proposal that the dwelling on property 2 be leased to a tenant to enable an income being derived for the benefit of DRT is also not a viable option at this time. Based on the evidence of the parties, certain renovations need to be undertaken, not least being to the kitchen, so as to enable it to be brought to a standard for a domestic tenant’s occupation. DRT has no available funds which could meet the cost of such renovation or improvement to that property. I accept the evidence of the NSW Trustee that the likely income derived from the proposal would be $400 per week ($20,800 per year). On current estimates, such an income would not be sufficient to meet ongoing property related expenses and DRT’s annual expenses which exceed $30,000 per year.

87. The same reasoning is applied with regard to the proposal for property 2 to be subdivided and sold, or otherwise dealt with. DRT has no available funds to proceed with such a proposal. It also remains uncertain as to what affect the subdivision would have on the value of the property once subdivided. DRT requires an immediate solution to her financial arrangements. A subdivision will have many uncertain and unpredictable variances, such as council approval, valuations, redrawing of boundaries, services and the like. All of which may take a significant period of time to resolve and add further expenses to the estate. I find this proposal is too uncertain to ensure the best financial outcome is achieved to meet DRT’s financial needs.

88. The only remaining option available to DRT is for the sale of property 2. I therefore find that this is the correct and preferable decision. The decision will allow DRT’s past and future financial commitments to be met. I acknowledge the emotional attachment that this property has to the applicants. I acknowledge the functional purpose that that part of property 2 is used as a backyard by the applicants. The sale of this property will no doubt cause them some upset. However, I find there is no other suitable and reasonable outcome being proposed, which will ensure the financial security of DRT to enable her past and future ongoing financial and other needs to be met.

89. In determining this matter, I have considered the following principles which are set out in 39 of the Act:

1. The welfare and interests of DRT should be given paramount consideration.

2. I am satisfied that the decision of the NSW Trustee to sell property 2 ensures that the welfare and interests of DRT have been given paramount consideration. The sole purpose of selling the property will ensure that DRT’s past and future financial needs can be met. Without a long term solution such as the sale of the property, DRT’s best interests cannot be protected. I have also considered how the decision to sell the property will affect DRS particularly given the relationship that DRT and DRS have shared for many years. I find that DRT’s financial security is paramount.

3. The freedom of decision making and freedom of action of DRT should be restricted as little as possible.

The affirmation of the decision of the NSW Trustee will allow the ongoing freedom of decision making and the ability of DRT to remain living in the home in which she has lived for many years. It will also ensure that her financial needs can be met to support her remaining in her home.

4. Such person should be encouraged, as far as possible, to live a normal life in the community.

By affirming the decision of the NSW Trustee in selling property 2, DRT will have sufficient funds available to her to ensure that her needs can be met so she can continue to live a normal life in the community where she has lived for a significant number of years.

5. The views of DRT in relation to the exercise of the functions under the Act should be taken into consideration.

I have taken into consideration the views of DRT which are set out above.

6. The importance of preserving the family relationships and the cultural and linguistic environments of such person should be recognised.

There is no doubt that the sale pf property 2 is distressing for both DRT and DRS. The sale of property 2 will have an emotional effect on their relationship and also the relationship with other family members. However, DRT is in a parlous financial position that necessitates an unpopular decision to be made. I have had to balance the effect the sale will have on family relationships whilst also ensuring the protection of DRT’s financial position. The sale of property 2 will enable DRT to achieve her wish to remain residing in her home with her son and also provide affordability to so do.

It is evident to me that the relationship between DRS and his siblings is already somewhat damaged. This decision, in my view, does not damage that relationship to any significant further extent that would outweigh my decision to ensure the financial protection of DRT.

7. Should DRT be encouraged, as far as possible, to be self-reliant in matters relating to their personal, domestic and financial affairs.

DRT is already subject to a financial management order. Unfortunately, DRT is in a difficult financial position. Affirming the decision made by the NSW Trustee will ensure DRT is able to remain self-reliant in respect of her personal, domestic and financial affairs (within the context of a financial management order).

8. such person should be protected from neglect, abuse and exploitation.

By affirming the NSW Trustee’s decision to sell property 2, DRT will have having sufficient funds to ensure her needs are met within the community. She will be protected from neglect, abuse and exploitation.

90. For these reasons I affirm the decision of the NSW Trustee made on 26 September 2018 and affirmed by internal review on 16 November 2018 to sell property 2.

91. I make orders in these terms.

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: 20 May 2019