DSM v NSW Trustee and Guardian

[2019] NSWCATAD 193

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	DSM v NSW Trustee and Guardian [2019] NSWCATAD 193
Hearing dates:	19 June 2019
Date of orders:	16 September 2019
Decision date:	16 September 2019
Jurisdiction:	Administrative and Equal Opportunity Division
Before:	C A Mulvey, Senior Member
Decision:	(1)   Leave is granted for DSM to file the application seeking administrative review of the decision made by the first respondent on 21 December 2018 to 7 February 2019. (2)   The decision of the first respondent made on 21 December 2018 is set aside. (3)   The first respondent is to proceed with the sale of the Family Home. (4)   The first respondent is to provide in principle approval to purchase an apartment for MSD up to $1 million (including purchase costs).
Catchwords:	ADMINISTRATIVE LAW – review under section 62 NSW Trustee and Guardian Act 2009 (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 Act 2013 (NSW) Civil and Administrative Tribunal Rules 2014 (NSW) Guardianship Act 1987 NSW Trustee and Guardian Act 2009 (NSW) Powers of Attorney Act 2003
Cases Cited:	McDonald v Guardianship Administration Board [1993] 1 VR 521 at 530
Texts Cited:	None cited
Category:	Principal judgment
Parties:	DSM (Applicant) NSW Trustee and Guardian (First Respondent) DUA (Second Respondent) DUB (Third Respondent)
Representation:	Counsel: Mr M S Daniels (Applicant) Ms Garcia (Second and Third Respondents)   Solicitors: Turner Freeman Lawyers (Applicant) NSW Trustee and Guardian (First Respondent) Parker Kissane (Second and Third Respondents)
File Number(s):	2019/00041617
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 and the second and third respondent’s, 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

1. This is an application, filed on 7 February 2019 for administrative review of an internal decision made by the NSW Trustee and Guardian (the Trustee) on 21 December 2018 (the Reviewable Decision). The applicant is referred to as ‘DSM’. The Trustee is the first respondent. The Trustee is the financial manager of the estate of DSM’s husband, who is referred to as ‘MSD’.

2. On 18 September 2018, an officer of the Trustee determined to sell the Family Home (Family Home) owned by MSD in the Eastern suburbs of Sydney. The Reviewable Decision was an internal review of the 18 September 2018 decision made by the Trustee, following a request from MSD’s two adult children who are the second and third respondent’s to this application. The second respondent is referred to as ‘DUA’ and the third respondent as ‘DUB’. DUA and DUB oppose a decision that the Family Home be sold.

Background

3. MSD is 80 years of age and has been diagnosed with Alzheimer’s Dementia. DUA and DUB are the children of MSD and his late wife. In about 1999, MSD met DSM after which they commenced a relationship. DSM and MSD have been residing together in the Family Home for many years.

4. The Family Home is estimated to be worth approximately $2,250,000 - $2,500,000.

5. On 17 September 2015, the Guardianship Division of this Tribunal made a financial management order committing the management of MSD’s estate to the Trustee.

6. Following the financial management order being made, MSD and DSM put a proposal to the Trustee for the Family Home to be sold. The proposal included using part of the funds realised from the sale to purchase an apartment up to approximately $1 million, including purchase costs. The main reason for making the proposal was put to the Trustee on the basis that the Family Home is hard to manage, particularly due to MSD’s mobility needs

The Evidence

7. All of the parties were legally represented. The evidence relied upon by each party consisted of:

Evidence of DSM

• Affidavit of DSM sworn 8 May 2019 (A1)

• Affidavit of DSM in reply sworn 17 June 2019 (A2)

• Expert report of Mr David Smart (A3)

• Application filed 7 February 2019 (A4)

• Determination of Guardianship Division of NCAT - 17 September 2015 (A5)

Evidence of the Trustee

• s58 documents filed 9 April 2019 (1R1)

Evidence of DUA and DUB

• Affidavit of DUA sworn 12 June 2019 (2R1)

• Bundle of emails dated 29 May 2019 and 18 June 2019 (2R2)

8. The hearing proceeded by way of submissions only. No person was called for cross-examination.

Application for extension of time

9. In her application for review, DSM states she was first notified of the Reviewable Decision on 11 January 2019. Pursuant to rule 24 of the Civil & Administrative Tribunal Rules 2014, the application is out of time. An oral application to extend the time of filing the application was made by Mr Daniels. The application was not opposed. I granted leave for the late filing of the application to 7 February 2019.

The Issue

10. I am to determine whether the Reviewable Decision is the correct and preferable decision having regard to any relevant factual material and any applicable written or unwritten law.

The Relevant Legislation

11. As set out above, on 17 September 2015, the Guardianship Division of this Tribunal found that MSD was incapable of managing his financial affairs. In these circumstances, there was a need for another person to be appointed as MSD’s financial manager. It was determined to be in MSD’s best interests that a financial management order be made pursuant to the provisions of Part 3A of the Guardianship Act 1987 (NSW) (the Guardianship Act).

12. The estate of MSD was committed to management by the Trustee.

13. 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.' Pursuant to s56(a) of the Act, the Trustee may exercise all the functions necessary and incidental to the management and care of the estate of the managed person.

14. In managing MSD’s estate, the 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)) and paying rates, taxes, assessments, insurance premiums, debts, obligations, costs and expenses and other outgoings (s16(u) of the Act).

15. I am satisfied that the Reviewable Decision is a power which the Trustee has (s16(g) of the Act).

16. 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 Trustee’s functions under the Act.

17. An ‘affected person’ includes:

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

2. the spouse of a managed person in respect of whose estate the decision was made,

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

18. It is not in contest that DSM is MSD’s spouse. I make that finding and I am satisfied that DSM falls within the definition of an affected person.

19. In determining application to review the Reviewable Decision, the Tribunal ‘stands in the shoes’ of the 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) (the ADR Act).

20. 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 Trustee.

21. In exercising its functions under the Act, the Trustee and, on review, this Tribunal must give paramount consideration to the interests of MSD. 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.’

The Assets of MSD

22. The parties agreed that the estimated summary of MSD’s assets are:

2010 motor home -             $87,191

Motor vehicle -             $16,000

SMSF Queensland property -       $300,000

Family Home -            $2,200,000 – 2,450,000

Queensland units -             $1,700,000

Trustee Trust Account -          $20,877

St George Bank Account -          $648.15

St George Bank Account -          $32,553.70

Total:                  $4,407,269.85 – 4,657,269.85

The Evidence of DSM

23. DSM in her Statutory Declaration (Exhibit A1) at paragraph 15 refers to an assessment of MSD’s capacity undertaken by Dr Thi Yen Hill, Geriatric Specialist, dated 24 January 2019 (Exhibit A1, Annexure E). MSD is described by Dr Hill as having ‘moderate Alzheimer’s Dementia’. DSM submits that this finding is supported by two cognitive assessments undertaken by Dr Hill where he achieved a score of 12/30 on a mini-mental state examination and 10/30 on a MOCA. In conclusion Dr Hill opined that MSD is slowly declining with his mixed dementia but believes his scores at the time of his examination in January 2019 were affected by his current stress.

24. DSM says that it is clear from the report of Dr Hill that MSD was aware of the involvement of his children concerning the decision to sell the Family Home and downsize into a smaller apartment. Dr Hill makes the following statement in relation to MSD’s wishes in this regard:

‘I interviewed them together and separately and MSD was consistent with his wishes. He recalls that he has wanted to sell the home for some time because it is ‘too large’. He has had at least one fall in the house (possibly two) because there are so many stairs to negotiate.

He plans on purchasing a smaller unit ‘like a Meriton’ with a lift. He also acknowledges that he might need a ‘care home’ one day so he would like to ensure that there is significant cash for that.

MSD could not tell me how much his current home is worth but believes it would be a ‘couple of million at least’. Depending on how much is made available following the sale of the home, he would also like to have a final holiday to England.’

25. The evidence of Dr Hill was not challenged. I accept the opinion contained in the report.

26. DSM was appointed as the Enduring Guardian for MSD on 24 December 2018 (Exhibit A1, Annexure K). She was provided authority to make decisions for MSD in the areas of accommodation, services, medical and dental consents and health care. By operation of the instrument DSM has authority to make decisions about where MSD may live in circumstances where he lacks capacity to make that decision himself. Further, I have no evidence before me to indicate that the Appointment of Enduring Guardian is invalid. However, I was told during the hearing that an application to review the making of the instrument has been filed in the Guardianship Division. Unless proven otherwise, MSD is presumed to have capacity to make lifestyle decisions. Based upon the opinion of Dr Hill, and findings of the Guardianship Division in referencing Dr Lonnie (see below), I make this finding.

27. DSM admitted into evidence an occupational therapy assessment concerning MSD dated 29 January 2019. The author of that report is Ms Linda Maher (Exhibit A1, Annexure B). The report was requested by the internal reviewer of the Trustee, Mr Pound, to ensure that material which was to be considered in determining the Reviewable Decision, included appropriate recommendations in respect of the physical environment of the Family Home . The conclusions of Ms Maher included a recommendation that a structural engineer be retained to determine the removal of the existing front veranda of the Family Home, and, to replace it with an accessible ramp. Ms Maher opines ramp access to the bathroom of MSD’s home is not be possible due to the width of the hallway. A trip hazard would also be created by constructing a ramp in to the bathroom when accessing other areas of the home through the hallway. She said builders would need to consider whether the height of the floor could be increased to overcome the trip hazard. Ms Maher also considered that the existing internal staircase be blocked off to prevent MSD accessing the upper level of the home and decreasing the falls risk. She said pavers would need to be removed from the rear courtyard and replaced with level flooring to increase safety for MSD and decrease the risk of him falling.

28. In response to the recommendations of Ms Maher, DSM obtained three quotations (Exhibit A1, Annexures G, H and I) setting out the cost of works referred to in the report. The total costs vary up to approximately $40,000 -$80,000, depending on which builder is retained.

29. The alternate proposal, and the preferred option for DSM and MSD, is for the Family Home to be sold and an apartment be purchased for approximately $864,000. The plan is to purchase the apartment in a location which MSD is familiar. DSM submitted that the alternative proposal would meet the recommendations as set out in Ms Maher’s report and provide the most suitable alternative taking into considerations MSD’s current mobility and care needs. DSM states that should such a proposal be accepted, MSD will not need to change the location of his doctors, hospital, bus access, shopping facilities and other access to areas of the community with which he is familiar. I accept her evidence.

The Evidence of DUA

30. In her Affidavit sworn 12 June 2019, DUA says that she and DUB are the only children of the marriage of their parents, being MSD and his late wife who died on 18 August 1999. DSM and MSD were married on 17 July 2015, having been dating since 2000 before they were married. Both DUA and DUB are married and each have children. MSD and his late wife first purchased the Family Home in 1980. Both DUA and DUB grew up in the Family Home and moved out to start their own families. DUA says that she and DUB have a close relationship with their father. DUA nursed her terminally ill mother for 3 years from 1996 to 1999 at the Family Home whilst MSD worked. On 28 April 2015, MSD was diagnosed with dementia by Geriatrician Dr Chalkley. She says that MSD welcomed his children’s involvement, working with DSM and himself to manage the diagnosis. However, a deterioration in the relationship between DSM and DUA, commenced after MSD’s diagnosis of dementia. DUA says this happened as a result of DSM’s dissatisfaction with MSD’s Will written in 2007. The following conversation allegedly took place on 3 June 2015 between DUA and DSM:

DSM:   ‘Your dad talked around me at the meeting with the solicitor and that he was only interested in looking after the future of his children. Your dad wants you children to have [the Family Home]. And the super fund has been left to me in the Will, but it will be used up to take care of [MSD]. Do you think I’m stupid!’

DSM:   ‘I would need to secure my future now as it isn’t secured in the Will as all the super money will be used up looking after your dad.’

DUA:   ‘What do you need [DSM] to feel more secure?’

DSM:   ‘I can’t discuss it with you.’

31. DUA said on or about 29 June 2015, the longstanding solicitor for MSD sent a letter to enact an Enduring Power of Attorney. DSM allegedly refused to cooperate and enact the Enduring Power of Attorney and made it clear to DUA and DUB that she would not enact the Enduring Power of Attorney and that they were no longer to come to the Family Home. DUA says from this point on she and DUB have ‘never been allowed to be with our dad on his own.’

32. From June 2015, DUA and DUB have endeavoured to remain in contact with their father but say they have encountered much resistance from DSM. DUA sets out a number of different events which in her view demonstrates the resistance and estrangement from DSM.

33. DUA states that MSD in 2007 went to great lengths to draft a Will and an Enduring Power of Attorney, together with an Appointment of Enduring Guardian. The three documents are said by DUA to consistently have named DSM, MSD’s grandson and his two children to make certain decisions for him. DUA deposes that her father made a Will in 2007 which is annexed to (Exhibit 2R1 marked ‘E’). The copy of the Will annexed to the Affidavit does not appear to contain the signature page and the date. However, this was not put in issue during the hearing and I accept the evidence of DUA that the Will was indeed made in 2007. The Executors of the Will are DSM and MSD’s godson. Should either of the two named Executors decline to act MSD’s son is appointed to substitute either of the two named Executors. In the event that DSM or MSD’s son has declined, or predeceases MSD, DUA is appointed as an Executor.

34. The Will provides for a number of gifts to various people. Those gifts include various sums of money, jewellery and other personal effects. An amount of $5,000 is also gifted to a well-known charity organisation.

35. The shares in a corporate trustee managing MSD’s superannuation fund are left to DSM. The Queensland units are left on trust to DSM for her lifetime, such that she is responsible for paying all rent and taxes and keeping the said properties insured. Those Queensland units on the death of DSM are left jointly and severally to DUA and DUB and their respective spouses. The Family Home, if owned by MSD at the time of his death, entitles DSM to reside in the property for twelve months from the date of MSD’s death and thereafter the property is gifted to DUA and DUB. A mechanism should either of MSD’s children predecease him is found in the Will but it is not relevant for the purposes of this application.

36. In circumstances where the Family Home has been sold prior to the death of MSD, the residue of MSD’s estate as to 10% is gifted to DSM and as to 90% equally for DUA and DUB providing they survive him by 30 days. There are mechanisms in place in the event that DSM and MSD’s two children predecease MSD, which again are not relevant in the determination of this matter.

37. In the event that the Family Home has not been sold at the date of MSD’s death, the residue of MSD’s estate is gifted to DSM as to 70% and 30% equally for each of MSD’s two children that survive him. The Will provides certain powers to the Trustees in respect of the trust created in the Will. The powers include mortgage, transpose, realise, invest, hold, and deal with property subject to the trust to the same extent as the Trustees of the Will are authorised to do so pursuant to paragraph 13.

38. DUA said that whilst her father was of sound mind it was always his wish that he wanted to keep the Family Home and it was never his intention to sell the property. She said it has always been very clear that this is what he intended to do. She says that the Family Home is the cornerstone to fond family memories and special time spent with both of her and DUB’s parents. She refers to this intent as being referred to in clause 8 of the Will where it is noted ‘If and only if my property … has been sold prior to my death …’. I reject this submission. The drafting of the Will clearly foreshadows a situation where the sale of the Family Home could be contemplated at some point in time. The words ‘if’ and ‘only if’ do not extend as far as to making a positive finding that MSD had no intention to sell the Family Home.

31. DUA also relies upon a handwritten note allegedly made by her father on 15 December 2015 to a Century 21 real estate agent where it is stated: ‘We will sell [the Queensland property] … as far as [the Family Home ] is concerned, we will consider renting it out …’. She says at this time MSD was still not succumbing to any pressure to sell the Family Home. I note the entire paragraph reads: ‘As far as [the Family Home ] is concerned, we will consider renting it out once we have arranged to buy a property in [Sydney suburb], from the sale of [the Queensland property]. The financial from rental property at [the Family Home ], will cater for our wellbeing.’ The document is signed by both DSM and MSD.

32. I find that MSD has been consistent in his view that he is willing to look at re-evaluating his investment portfolio to ensure his needs into old age are met. MSD has for some years been evaluating his options which is evidenced by his consideration to use rental income from the Family Home to support his future. The use of the words ‘..we will consider’ are not absolute. MSD has shown an intention to deal with his assets in a variety of ways to provide for his future. As is the case now, and in the past year at least, MSD wishes are for the Family Home to be sold for the reasons provided. Therefore, I am unable to positively find that the intention of MSD was to never sell the Family Home as submitted by DUA.

33. DUA states that the Family Home is ‘in a very unique location, prime beachfront with uninterrupted views and dad always commented on how special it was and what an incredible investment the property turned out to be. Importantly for our father the [Family Home] and the area, is one he is very familiar with and comfortable in.’ She goes on to say that there is some concern about the stress that any move or sale of the property would cause MSD and his strong stance previously not wanting the Family Home sold. I am unable to find that the sale of the Family Home would cause MSD stress. To the contrary, the evidence is that an apartment is to be sourced in the local area so that MSD is in surroundings he is familiar with. He can retain the same healthcare and other services as set out by DSM. I find that MSD is no longer comfortable in the Family Home and reject DUA’s submission in this regard.

34. DUA has annexed to her Affidavit a quote of a builder setting out the cost of works to make the home more accessible and liveable for MSD. Those costs total $19,450. The estimates provided by DUA do not refer to the proposed engineering works to remove the front veranda and installation of a ramp. The builder proposed not to demolish the existing structure. However, the builder did not inspect the property. He provided a quote based upon his memory of the Family Home from when he carried out work there over the last 25 years. I prefer the evidence of DSM in this regard as the builders providing the quotations have inspected the site.

35. DUA’s Affidavit annexes a number of financial scenarios and options that could be adopted by MSD in relation to the funding of his remaining years. The scenarios are set out below under the heading ‘Expert Report of Dianne Vigors, Accountant’.

The Evidence of the Trustee

44. The Trustee has not filed any affidavit or statement in relation to the application. No submissions were made as to the preferred decision to be made by the Tribunal. The documents which have been filed on its behalf have been done so pursuant to s58 of the Act and are marked (Exhibit 1R1).

45. It is uncontroversial that the Guardianship Division of NCAT on 17 September 2015 made a financial management order committing the management of the estate of MSD to the Trustee. The order was made following an application lodged by MSD’s son to review an Enduring Power of Attorney made on 9 October 2007. The Power of Attorney appointed DSM and MSD’s godson as joint Attorneys. DUA and DUB were appointed as substitute Attorneys. The Guardianship Division treated the application to review a Power of Attorney as a financial management application pursuant to the relevant provisions of s36 of the Powers of Attorney Act 2003. The Tribunal’s Reasons for Decision indicate that MSD’s godson sought to resign from his position as Attorney in light of him residing overseas. In the application to review the Power of Attorney, DUB was seeking an order to be able act as joint Attorney with DSM. However, there was a dispute between DSM and DUB about the need to enact the Power of Attorney which prompted the application before the Guardianship Division.

46. The Guardianship Division was also requested to consider an application for the making of a Guardianship order concerning MSD. In that respect the Guardianship Division made the following determination as to whether MSD met the definition of having disability as defined by s3 of the Guardianship Act. The Tribunal concluded:

‘In his report dated 26 June 2015, Dr Chalkley refers to [MSD’s] cognitive impairment as preventing [MSD] from managing his finances. It does not indicate [MSD] lacks capacity to make decisions about his personal affairs. In his subsequent report, prepared on 1 September 2015 for the purposes of the Tribunal proceedings, Dr Chalkley expresses an opinion that [MSD’s] disability does affect his capacity to make informed decisions about his accommodation and care, services and treatment. However, the evidence of [MSD’s] children is that Dr Chalkley had informed them that [MSD] is still able to make informed lifestyle decisions, and that it was not necessary for the appointment of enduring guardianship to be activated at this point in time.

Moreover, the Tribunal took into account the most recent expert evidence namely, Dr Lonie’s neuropsychological report of 13 September 2015. Dr Lonie’s opinion is that [MSD] does, at the present time, retain capacity to make decisions pertaining to his lifestyle, medical care and treatment. The Tribunal preferred the evidence of Dr Lonie as to MSD’s capacity to make lifestyle decisions.’

47. The s58 documents of the Trustee include a file note requiring a decision to be made for MSD and DSM to sell the Family Home in which they live and downsize into a smaller apartment. MSD’s views are recorded in that form as being ‘… is very eager to sell his current home and buy a smaller unit in and around the same area.’ I accept this as evidence supporting a finding that MSD has consistently said he would like to sell the Family Home and downsize.

Occupational Therapist Assessment

48. As part of the internal review undertaken by the Trustee, the recommendation was for an occupational therapist be retained to review the Family Home and assess its suitability for MSD to remain living at that property. Ms Linda Maher’s, report was admitted as part of the s58 documents absent objection. Four problems were identified by the occupational therapist. First, MSD mobilises without aids and has a cautious shuffled gait. He has experienced two falls within the home, one of which occurred on loose carpet in the hallway. The current ramp which is in place at the front of the home has a gradient which does not provide sufficient length at the top and bottom for turning. The front veranda of the home would need to be removed to facilitate a ramp to ensure compliance with Australian Standards which would require an engineering report. The rear entrance of the property is not suitable for modification. Second, the ramp into MSD’s bathroom is too steep to negotiate with mobility aids. Rectification of the ramp would result in a trip hazard when accessing other rooms in the Family Home from the hallway. Third, MSD has 15 steps to access the upper level of his home. MSD’s staircase was observed to have a large facing window. When descending the stairs the window poses a dangerous situation of MSD falling through it should he become unbalanced whilst on the staircase. Four, the rear courtyard of the home has uneven paving posing a trip hazard.

49. Ms Maher provides four recommendations to rectify and modify the four matters referred to above. She concludes in the report by stating: ‘Alternatively relocation to an accessible building with level access would reduce falls risk, increase safety and allow usage of mobility aids to enable [MSD] to maintain independence and live in his own home for as long as possible.’

Valuation of the Family Home

50. A property appraisal of the Family Home was undertaken and completed by Century 21 in February 2016. In the appraisal dated 18 February 2016 the real estate agent provides a market opinion of the property estimated as between $2,200,000 to $2,400,000.

51. A valuation report contained in the s58 documents undertaken by Value 1 which is dated 5 July 2018 provides an estimated value of the land of the home as being $2,350,000 with an improvement value of $100,000, totalling $2,450,000. This is the only valuation which has been undertaken in relation to the Family Home. I accept this evidence and find that the estimated value of the Family Home is between $2,200,000 - $2,450,000.

Evidence of David Smart

52. DSM relies upon a report of Mr David Smart, Accountant, which is dated 9 May 2019. The report was admitted absent objection and is marked (Exhibit A3). The report itself does not include Mr Smart’s qualifications. This was not put in issue during the hearing. I accept he is qualified to provide the expert evidence relied upon by DSM.

53. The report refers to a Statement of Advice (SOA) - limited, which was prepared on behalf of MSD by the Financial Planner of the Trustee on 4 February 2019. Mr Smart raises the following criticism of the assessment which was relied upon by the Trustee in determining the reviewable decision. He states:

‘… accordingly, this financial plan does not address the most significant issues, which are now being investigated:

the suitability of [the Family Home], for the immediate, and long term living arrangement of MSD

the capital requirement necessary in the event that MSD should need to enter a nursing home as a result of his medical condition’

54. Mr Smart refers in his report to the four recommendations and conclusions made by Ms Maher. He takes into consideration the quotations obtained by DSM to fund the four recommendations proposed by Ms Maher to make the Family Home suitable for MSD to reside in. He makes the following conclusion ‘It is unsure whether any of these costs would be able to be met from reserves in the financial plan without affecting MSD’s lifestyle requirements. … further none of the above shows how, if necessary, funding of a nursing home facility both capital and ongoing costs would be met.’

55. Mr Smart says that the proposal of MSD and DSM to downsize ‘would be a normal consideration for an elderly couple (particularly where a medical condition is evidence).’

56. Mr Smart refers to the three significant assets available to MSD, being: the Family Home (estimated value $2,500,000), the Queensland units (estimated value $1,400,000) and the SMSF investment (estimated value $541,750).

57. The report goes on to note the income stream provided in the limited financial plan of the Trustee as being, income $84,368, expenses $78,000 leaving a balance of $6,368 available for savings and unforeseen expenses.

58. Mr Smart concludes that the balance left provides little reserve for savings, unexpected expenditure or funding MSD’s anticipated future needs given his ongoing medical condition. He notes that the superannuation fund to meet the current SMSF pension standards is paying mostly capital as a complying pension, so in his view the fund is depleting its capital. He states: ‘The super fund and the investment property are the basis of the income stream currently supporting MSD’s needs.’ The super fund balance is too small to cover both the capital cost of a refundable accommodation deposit (RAD) of a nursing home and the monthly costs.

59. Mr Smart goes on in his report to set out the assumed sale of the Queensland units, which would realise a fund of approximately $1,180,000. Following the payment of a RAD ($500,000), projected amount available for investments would be approximately $600,000. He provides a table in Appendix A indicating a shortfall of income should MSD be required to reside in an aged care facility of $70,437 per annum.

60. In contrast, Mr Smart provides an alternative scenario where the sale of the Family Home is realised without the sale of the Queensland investment property or the income flowing from the SMSF, and where MSD is to reside in a nursing home after having purchased the proposed apartment whereby $1 million surplus remains available to earn income for MSD. Mr Smart concludes a shortfall of $437 per annum in income is forecast in this scenario.

The Expert Report of Diane Vigors, Accountant

61. A report of Diane Vigors, Accountant, dated 5 June 2019, is annexed to the Affidavit of DUA and marked (Exhibit 2R1).

62. Ms Vigors sets out in detail a number of different assumptions and the financial impact each of those assumptions would have on MSD. Scenario 1 provides assumptions for the sale of the Queensland units, the Family Home being retained, the Family Home being lived in by DSM and where MSD is residing in a nursing home. Scenario 2 provides an assumption where the Queensland units are sold, the Family Home is retained and rented out and the purchase of a new residence for MSD and DSM to downsize in to, together with a scenario where the unit which is purchased is resided in by DSM and where MSD is placed into a nursing home.

63. Scenario 3 assumes the sale of the Family Home, the Queensland units retained and the purchase of a downsized apartment as proposed by DSM, together with a scenario where MSD and DSM live in the unit. The scenario also includes assumptions where DSM resides in the apartment which has been purchased and MSD is placed into a nursing home.

64. Each of the assumptions provided by Ms Vigors are set out in detail over a 10 year period. They also factor in the SMSF. I do not intend to repeat them and all of the accounting information contained therein, but I have taken each of the scenarios into consideration.

65. In each of Ms Vigors’ three scenarios the majority of the cash flow calculations forecast an income deficit, except for 3 of the assumptions. Indeed, scenario 3, which considers the sale of the Family Home, the Queensland units not being sold and providing an income to MSD, and with MSD and DSM living in a downsized apartment, provides an income surplus of $28,507 per annum. This assumption is based upon MSD not being placed into a nursing home. Should MSD be placed into a nursing home the income deficit is $6,741 per annum. This in my view provides the most suitable outcome from a cash flow perspective for MSD and meets his current needs out of all of Ms Vigors scenarios.

Submissions and Consideration of the Evidence

66. Cross examination of DSM and DUA did not take place. I accept them both as reliable witnesses.

67. Mr Daniels submitted that MSD is currently 80 years of age. On the relevant life expectancy tables, the life expectancy of an 80 year old male is 9.26 years. I reject Mr Daniel’s submission that a realistic reflection of the scenarios set out in the accounting report of Ms Vigors should be 5 years and not 10. The 10 year projection set out by Ms Vigors is consistent with the life expectancy of MSD.

68. Mr Daniel’s invited the Tribunal to pay particular attention to the matters prescribed in section 39 of the Act, particularly, s39(b) pertaining to MSD’s freedom of decision making. He said Dr Hill’s evidence should be carefully considered in terms of MSD being aware of, and able to comprehend the involvement of his children in relation to the sale of the Family Home. Whilst Dr Hill finds the effect of MSD’s dementia demonstrates some decline, he is still able to provide a consistent view about the sale or otherwise of the Family Home and the need to downsize his accommodation. I have placed significant weight on this submission and the findings of both Dr Hill and Dr Lonie. DSM has provided consistent views to the Trustee about selling the Family Home as he did to Dr Hill. I find that despite MSD’s diagnosis of dementia, he is able to make reasoned decisions and provide a view about where he resides. Likewise, I find that he has been able to make a reasonable decision about the need to downsize from a house into an apartment which will better suit his current needs.

69. I accept the uncontested evidence of Ms Maher. I find that without significant alteration of the Family Home, MSD is not suitable placed to remain residing there. I further find, the costs of the alterations are closer to $40,000 - $80,000 preferring the evidence of DSM in this regard. MSD has limited income and resources to fund these improvements which further supports a finding that the Family Home should be sold and a smaller apartment purchased.

70. The two expert accounting reports are similar in nature. The report of Ms Vigors provides projections over a 10 year period as opposed to Mr Smart who has provided a more current projection. Ms Vigors and Mr Smart both provide the most beneficial cash flow scenario for MSD where the Family Home is sold. The two experts have considered this scenario in circumstances where MSD is residing in an apartment, or, in full time care. In my view the only suitable financial arrangement to meet MSD’s financial needs, which also meets his current and future care requirements, is to sell the Family Home and downsize into a more suitable apartment.

71. I address each of the matters set out in s39 as follows:

The welfare and interests of MSD should be given paramount consideration

72. MSD is in his senior years of life. According to the life expectancy tables he has just under 10 years left to enjoy the fruits of his labour, his family and any other pleasures he may have. MSD has been diagnosed with dementia. However, whilst the Guardianship Division of this Tribunal has determined that the diagnosis of dementia renders MSD incapable of making financial decisions, it does not in my view render him incapable of making a decision and having an informed view about where he would like to live. By determining that the Family Home should be sold and adopting the type of scenario as set out in scenario 3 by Ms Vigors, or scenario 2 as set out by Mr Smart, the ongoing welfare and interests of MSD are certainly given paramount consideration. The Family Home is not suitable for MSD to reside in absent modification. I accept Mr Smart’s evidence that MSD does not have the immediately available funds to pay for the modifications. I also find that a new single level apartment, which is of a manageable size and free of trip hazards is a proposal which best promotes the welfare and interests of MSD. I find that by selling the Family Home and downsizing to a smaller apartment, DSM’s welfare and interests are best served.

The freedom of decision and freedom of action of MSD should be restricted as little as possible

73. By its very nature a financial management order restricts the freedom of decision and freedom of action of MSD. However, where decisions can be made which reflect MSD’s views and wishes, and those views and wishes can be taken into consideration in decision making to protect the welfare and best interests of MSD, then they should be duly considered. I accept and have placed great weight on the evidence of DSM as set out in paragraphs 2 to 12 of her Affidavit. In particular:

‘On 28 June 2018, MSD and I had a meeting with the Trustee and Guardian in which it was made known by MSD that he wished to downsize from our current home, … to a smaller property which would be more suitable to his ongoing needs, including those associated with safety, mobility and functionality.’

74. The Trustee made a decision on 19 September 2018 that the Family Home could be sold and a suitable property for MSD and DSM to downsize could be purchased up to $1 million. MSD and DSM started to look for an alternative property. They chose to purchase a new apartment rather than remain in the Family Home which required modifications to make it suitable for MSD given his mobility needs.

74. In her Affidavit at paragraph 5, DSM states:

‘… it was brought to our attention that in order to avoid incurring future ongoing costs due to repair and maintenance we should consider looking for a new apartment. This would also provide peace of mind. This made sense as [MSD] has worked very hard all his life and should reap the rewards of his lifelong efforts and live in relative comfort in retirement. [MSD] always said that he would like to enjoy his retirement in the manner he had become accustomed to living. [MSD] didn’t want to spare anything. Some of our friends also suggested that we should look into Meriton apartments in … Pagewood.

[MSD] and I found suitable alternative accommodation in the form of a 2 bedroom, open plan apartment, floor plan of which is annexed hereto … the apartment we found complies with the occupational therapy initial assessment home visit report of Linda Maher assessed on 29 January 2019 … importantly, the new apartment would provide level access throughout, substantially reducing the risk of falls and room to allow for mobility and increased safety.’

76. DSM goes on in her Affidavit to set out logical financial planning in relation to a budget for the purchase of all household items that may have been required to be purchased for the new apartment. She states that the apartment is to be purchased an area very familiar to MSD. He would not need to change his doctors, hospital, bus access, shopping facilities, walking route, community centre, home care provider, friends, clubs, cinemas, restaurants or anything that he is accustomed to as far as his current lifestyle is concerned. DSM said expenses would be reduced by having no garden maintenance, hedges and other associated costs by moving into an apartment.

77. I have taken into consideration the evidence of DUA as set out in the Affidavit marked Exhibit 2R1. At paragraph 41 she states:

‘My father and late mother purchased the Family Home at [address] it [sic] together in 1980 and brought us up in this home. Whilst my father was of sound mind it was always his wishes that he wanted to keep this home. It was never his intention to sell the property and it was always very clear that this is what he wanted. …’

78. She goes on to state at paragraph 43 ‘Dad’s wish that the Family Home not be sold is also highlighted in my father’s Will of 2007 where at clause 8 it is noted ‘if and only if my property at [address] has been sold prior to my death’.’

79. Paragraph 44 includes the following:

‘This wish is also confirmed in documents held by the Tribunal dad handwrote in December 2015 (on Century 21 letterhead over a typed letter to [the principal of Century 21] ‘We will sell Stone Street … as far as [the Family Home ] is concerned, we will consider renting it out …’ Dad at this time still was not succumbing to pressure to sell [the Family Home ].’

80. DUA goes on to state how important the Family Home is to her father, the history and memories the family hold in respect of that property and how special it is for MSD to remain living in the home as long as possible.

81. Mr Daniels submitted the opinion of Dr Lonie is an important matter to be considered when determining MSD’s freedom of decision making (Exhibit A5) at paragraph 74:

‘Moreover, the tribunal took into account the most recent expert evidence, namely Dr Lonie’s neuropsychological report of 13 September 2015. Dr Lonie’s opinion is that [MSD] does, at the present time, retain capacity to make decisions pertaining to his lifestyle, medical care and treatment. Dr Lonie states:

‘His comprehension abilities are sufficient to allow him to understand the nature of his medical condition and its associated prognosis. He appears to have been able to retain this information. He has complied with his current medication regime, with the assistance of his wife, [DSM]. He appears to be accepting of the care he is currently receiving and of the modifications deemed necessary to ensure he is able to remain in his own home …’’

82. Having accepted this evidence the Guardianship Division refused to make a guardianship order and dismissed that application. Mr Daniels submitted that the reviewer of the Trustee’s decision, Mr Pound, had cherry picked the findings of the Guardianship Division and did not refer to the report of Dr Lonie in considering his determination to find that the Family Home should not be sold. Likewise, Mr Pound did not have evidence or any information about the appointment of an Enduring Guardian made in 2018. There was no new evidence put before me in relation to MSD’s capacity to make lifestyle decisions. At law, it is presumed MSD has capacity unless proved otherwise.

83. I therefore find that in the absence of any evidence to the contrary, and having considered Dr Lonie’s assessment in 2015 and more recently Dr Hill’s opinion in 2018, on the balance of probabilities, MSD is capable of making a decision concerning where he would like to live. In Dr Lonie’s opinion at the time she completed her assessment of MSD, it is noted that he understood ‘modifications deemed necessary to ensure he is able to remain in his own home’. However, I accept DSM’s evidence that MSD has since changed his view and sees the sense in downsizing to a more suitable place of accommodation to meet his current needs. This decision is in line with the recommendations of Ms Maher. MDS’s view in this regard was consistent during his examination with Dr Hill and immediately prior to that in 2018 when discussing these matters with the Trustee.

84. In determining that the Family Home should be sold, the freedom of decision and freedom of action of MSD is restricted as little as possible.

MSD should be encouraged, as far as possible, to live a normal life in the community

85. MSD by moving into more age appropriate accommodation will certainly encourage him, as far as possible, to continue living a normal life in the community. Whilst it can be said that living in the Family Home will also encourage him to do so, I am of the view that by moving into accommodation which is less of a falls risk and more suitable given his age and mobility needs, MSD is encouraged to a far greater degree to continue in living a normal life in the community than he would be in living in the Family Home which is less suitable. Ms Maher’s concluding statement (1R1): ‘…Alternatively relocation to an accessible building with level access would reduce falls risk, increase safety and allow usage of mobility aids to enable [MSD] to maintain independence and live in his own home for as long as possible.’ is a powerful factor evidencing the ability for MSD to live a normal life in the community. I find that the sale of the Family Home and the purchase of an apartment will allow for this to occur, as well as providing a security fund for MSD should he be placed into full time care. The extent of this protection is not available to the same degree by renovating the Family Home .

The views of MSD in relation to the exercise of those functions should be taken into consideration

86. I refer to my comments as set out in the three headings above.

The important of preserving the family relationships and the cultural and linguistic environments of MSD should be recognised

87. There was no evidence in relation to cultural and linguistic environments that required consideration. The preservation of family relationships is certainly a vexed issue in this matter. I have taken into consideration the evidence of DUA, which sets out the strained relationship between her immediate family, MSD and DSM. It is apparent that, even in the absence of a decision to sell the Family Home, there was strain placed on the relationship between DUA and DUB their families. This strained family relationship is clearly set out in the early parts of (Exhibit 2R1).

88. I find that the sale, or not, and/or rearrangement of MSD’s assets in any respect are going to cause some upset amongst family relationships. I have taken into consideration the effect that my decision will have on the family relationships. I recognise the importance of considering the arrangements MSD provided for in his Will (annexed 2R2). Preservation of assets for the benefit of MSD’s beneficiaries is a factor which attracts less weight to my decision than his immediate welfare and interest which are paramount. In that regard MSD’s most pressing current needs and interests are the suitability of his primary residence, the provision of available funds to ensure his care needs can be met, both in the community and also in an aged care setting. In deciding that the Family Home be sold, I am satisfied that MSD’s needs and interest are held paramount. The family relationship will not be damaged to any greater extent than is currently evident.

MSD should be encouraged, as far as possible, to be self-reliant in matters relating to his personal, domestic and financial affairs

89. The decision to sell the Family Home as being the correct and preferable decision in my view achieves all of these criteria. MSD will be able to live safely in the community with the available supports he requires. His financial affairs are adequately protected and there are sufficient reserves to ensure that his future care needs can be met as and when that time may arise. MSD’s personal, domestic and financial affairs are all adequately addressed and balanced by determining that the Family Home be sold and that an apartment be purchased to ensure his paramount welfare and interests are protected.

MSD should be protected from neglect, abuse and exploitation

90. There is no evidence before me relevant to this criteria.

91. It was submitted by Counsel for DUA and DUB that they do not oppose their father moving out of the Family Home into another property. However, they do oppose the Family Home being sold. It can be inferred by this submission that the reason the Family Home should not be sold is to preserve the asset for their ultimate benefit following the death of MSD.

92. The sale of the Family Home and the purchase of another apartment for MSD, in part allows for the views and wishes of DUA and DUB to be realised. It also allows sufficient funds to be made available to adequately provide financial resources being available should he be admitted into fulltime aged care. In my view it is financially unsound for MSD to consider the other scenarios which have been proposed by Ms Vigors which do not include the sale of the Family Home. Ultimately, if a decision is not made to sell the Family Home which allows for MSD to downsize, a greater benefit is provided to MSD’s beneficiaries in preserving assets, rather than protecting MSD’s immediate and medium to longer term care needs. The paramount protection of MSD’s welfare in my view is achieved by deciding that the Family Home be sold and a smaller apartment purchased.

93. I have determined that the correct and preferable decision is to set aside the Reviewable Decision and make orders as set out below.

Orders

94. The Order of the Tribunal is as follows:

1. Leave is granted for DSM to file the application seeking administrative review of the decision made by the first respondent on 21 December 2018 to 7 February 2019.

2. The decision of the first respondent made on 21 December 2018 is set aside.

3. The first respondent is to proceed with the sale of the Family Home.

4. The first respondent is to provide in principle approval to purchase an apartment for MSD up to $1 million (including purchase costs).

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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: 16 September 2019