Epo v NSW Trustee and Guardian

[2021] NSWCATAD 220

Civil and Administrative Tribunal

New South Wales

• Amendment notes

Medium Neutral Citation:

EPO v NSW Trustee and Guardian [2021] NSWCATAD 220

Hearing dates:

19 July 2021

Date of orders:

27 July 2021

Decision date:

27 July 2021

Jurisdiction:

Administrative and Equal Opportunity Division

Before:

Dr J Lucy, Senior Member

Decision:

(1) The decisions of the respondent are affirmed.

(2) The application is dismissed.

Catchwords:

ADMINISTRATIVE REVIEW — financial management — where private financial manager appointed to manage estate of protected persons — where respondent made decisions to approve proposed sale of protected person’s home and modification of home for sale — where protected person’s daughter and former carer living in home — whether correct and preferable decision

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW)

Guardianship Act 1987 (NSW)

Administrative Decisions Review Act 1997 (NSW)

NSW Trustee and Guardian Act 2009 (NSW)

Cases Cited:

Protective Commissioner v D [2004] NSWCA 216

BEY v NSW Trustee and Guardian [2014] NSWCATAD 87

Texts Cited:

None cited

Category:

Principal judgment

Parties:

EPO (Applicant)
NSW Trustee and Guardian (First Respondent)
EQS (Second Respondent)
FBE (Third Respondent)

Representation:

Counsel:
S Bell (Second Respondent)

Solicitors:
Applicant in person
NSW Trustee and Guardian Legal (First Respondent)
S Stuart (Guardian ad litem for Third Respondent)

File Number(s):

2021/00067178

Publication restriction:

The disclosure of the names of the applicant, the second respondent, the third respondent and their family members is prohibited.

REASONS FOR DECISION

1. The applicant sought review of a decision of the NSW Trustee and Guardian (“NSW Trustee”) to approve the sale of her mother’s home. The applicant is currently residing in that home and has done so for many years.

2. The mother is a protected person in respect of whom financial management orders have been made. She has advanced dementia, is living in a nursing home and needs funds to pay her accommodation expenses.

3. The decision of the NSW Trustee will likely have the effect that the applicant will have to move out of the family home.

4. Notwithstanding this, having regard to the interests and welfare of the mother, I have decided that the correct and preferable decision is to approve the proposal to sell the mother’s home.

Background

5. The applicant, to whom I will refer as the daughter, was the carer for the third respondent, her elderly mother (“the mother”) for many years. She has lived in the mother’s home since about 2003.

6. The mother is in her nineties. In August 2020, Dr Chris Dedousis diagnosed her as suffering from severe dementia and stated that she had been suffering from dementia for ten to twelve years. The mother also suffers from other medical conditions.

7. The daughter is in her sixties and suffers from ill health.

8. On 4 February 2015, the mother appointed the daughter to be her enduring guardian.

9. The mother moved into a nursing home in about May 2016. She returned home to live with the daughter in April 2018 but was admitted to the nursing home again in February 2019, where she remains.

10. The daughter continues to live in the mother’s home with her own daughter (“the granddaughter”) and the granddaughter’s infant son (“the great grandson”). The daughter’s evidence is that the granddaughter is mentally ill. The daughter does not pay any rent but pays for electricity, gas and water at her mother’s home.

11. On 1 March 2018, the Tribunal, sitting in the Guardianship Division, made orders pursuant to s 25M of the Guardianship Act 1987 (NSW). Those orders were that the estate of the mother be subject to management under the NSW Trustee and Guardian Act 2009 (NSW) and that the second respondent (the mother’s son and the applicant’s brother (“the son”)) be appointed as private manager for the mother.

12. The mother’s home is her only significant asset. On 15 April 2019, the mother’s property was valued at $2,550,000 by a valuer engaged by the daughter.

13. In March 2020, the son sought the approval of the NSW Trustee and Guardian (“NSW Trustee”) for the proposed sale of the mother’s home to enable payment of the refundable accommodation payment for the nursing home.

14. On 1 April 2020, the NSW Trustee gave approval in principle to sell the mother’s home, to commence vacant possession proceedings and to carry out renovations of up to $100,000. The terms of the decisions were as follows:

1.   “Approval given in principle to the Private Manager to sell the real property [address] subject to the Private Manager obtaining vacant possession of the property and complying with NSWTG requirements for the Sale of Real Estate. Formal approval will be provided upon the Private Manager providing two updated real estate appraisals for the property or one licensed valuation of the property.

2.   Approval given in principle to the Private Manager to carry out modifications to the real property [address] to prepare property for sale. Formal approval will be given once the Private manager has obtained vacant possession of the property and provides NSWTG with updated real agents [sic] marketing strategy and quotations for the property renovations.

3. Approved for the Private Manager under the provisions of section 65 of the NSW Trustee and Guardian Act 2009 to provide [the daughter] an allowance of up to $50,000 to support her with her relocation costs.

4.   Approved for the Private Manager to see legal advice or commence action to formalise agreement for [the daughter] to vacate the property and acknowledge the financial support provided on behalf of [the mother]. If an agreement cannot be reached the manager is authorised to commence formal eviction proceedings and pay the reasonable legal costs in relation to these proceedings.

5.   Investment proposal on net sales proceeds following payment of sale costs and Refundable Accommodation Deposit (RAD) to be reviewed upon the sale of the property and updated Statement of Advice.

6.   Approved to pay the outstanding RAD of $500,000 to [nursing home] as per the resident’s agreement.”

15. On 24 November 2020, the NSW Trustee affirmed the decisions of 1 April 2020 and made an additional decision to provide the daughter with an allowance of up to $50,000 to support her with relocation costs.

16. The daughter applied for an internal review of the NSW Trustee’s decision to sell the mother’s home. In December 2020, as part of her internal review application, the daughter offered to purchase the mother’s home for two million dollars, with a 42-day settlement period.

17. A staff member of the NSW Trustee conducted an internal review and affirmed the original decision on 12 February 2021.

18. The daughter applied to the Tribunal for a review of the NSW Trustee’s decision on 9 March 2021. There is no dispute that this application was made within the statutory time frame.

19. It is not entirely clear from the daughter’s application whether she is only challenging the decision to sell the mother’s home or whether she is also challenging the other decisions made on 1 April 2020. I have assumed that all of those decisions are the subject of the review application.

20. On 22 May 2021, Andrew Bodner made a statutory declaration affirming that he was willing to sign as guarantor up to the amount of $2,500,000 as a loan towards the mother’s home so that the daughter could stay in her home until the purchase of the property was finalised.

21. On 9 June 2021, the brother received notification from Centrelink that the mother is no longer eligible to receive her pension as her assets exceed the allowable limit.

22. On 15 June 2021, Mr Stephen Stuart was appointed as guardian ad litem for the mother. He visited the mother in the nursing home on 17 June 2021.

23. As at 25 June 2021, the mother owed $46,744 in fees to the nursing home and had $3,070 in her bank account. An accommodation bond of $550,000, payable to the nursing home, was also outstanding. Her nursing home fees are approximately $4,020 per month.

Joinder of the mother as a party

24. As indicated above, the Tribunal appointed Mr Stephen Stuart as guardian ad litem for the mother on 15 June 2021. The Tribunal has power to appoint a person to act as guardian ad litem for a party under s 45(4)(a) of the Civil and Administrative Tribunal Act 2013 (NSW) (“NCAT Act”). The mother was not a party when the Tribunal made an order appointing Mr Stuart as guardian ad litem.

25. At the hearing, I raised with the parties the question of whether the mother should be joined as a party. None of the parties objected to this course. I decided to join the mother as a party under s 44(1) of the NCAT Act as I considered that she should be joined as a party. She is a proper party as the decision concerns the sale of her major asset.

26. There is no dispute that the mother lacks capacity to make financial decisions or to participate in the proceedings, and I so find. If necessary to do so, I affirm the appointment of Mr Stuart as the mother’s guardian (now that she is a party).

Non-publication order

27. The NSW Trustee and Guardian (“NSW Trustee”) submitted that because the mother was a protected person, the identities of the parties should be suppressed by way of an order under s 64 of the NCAT Act. I asked the daughter and the other parties’ representatives, at the hearing, whether there was any objection to making an order prohibiting the disclosure of their names (other than the name of the NSW Trustee and Guardian) and the names of their family members. None of the parties objected to the making of such an order.

28. It is desirable to make an order prohibiting the disclosure of the names of the mother and her family members, because the mother is a protected person within s 38 of the NSW Trustee and Guardian Act. Pursuant to s 65 of the NCAT Act, the publication or broadcast of the name of a person to whom proceedings in the Guardianship Division of the Tribunal relate is prohibited. That reflects a policy of protecting the identities of persons, such as the mother, who do not have decision-making capacity. It is desirable to make a non-publication order in these proceedings to give effect to that legislative policy. Accordingly, I made an order at the hearing prohibiting the disclosure of the name of the mother, the daughter, the son and their family members.

Relevant law

29. An order appointing a person as manager of a person’s estate, under s 25M(1) of the Guardianship Act, does not authorise the person appointed as manager to interfere in any way with the estate concerned unless, relevantly, the NSW Trustee has, under Division 2 of Part 4.5 of the NSW Trustee and Guardian Act, authorised the person to exercise functions in respect of the estate (NSW Trustee and Guardian Act, s 25M(2)).

30. The brother is the manager of the mother’s estate. The manager of the estate of a protected person “stands in the shoes of a person who is unable to manage his/her affairs by virtue of circumstance beyond his/her control. The manager exercises a protective and benevolent function, protective in the sense that the manager's task is to ensure the estate is managed in a manner to secure the protected person's estate for the person's continued maintenance” (Protective Commissioner v D [2004] NSWCA 216 at [173]; BEY v NSW Trustee and Guardian [2014] NSWCATAD 87 at [36]).

31. Chapter 4 of the NSW Trustee and Guardian Act is entitled “Management functions relating to persons incapable of managing their affairs.” It is the duty of everyone exercising functions under Chapter 4 with respect to protected persons (such as the mother) to observe certain principles (NSW Trustee and Guardian Act, s 39). One of those principles is that the welfare and interests of protected persons should be given paramount consideration (NSW Trustee and Guardian Act, s 39(a)). Another principle is the importance of preserving the family relationships of protected persons (NSW Trustee and Guardian Act, s 39(e)).

32. Division 2 of Part 4.5 of Chapter 4 of the NSW Trustee and Guardian Act applies in respect of the estate of a managed person for whom a manager (other than the NSW Trustee) has been appointed under s 25M of the Guardianship Act 1987 (NSW Trustee and Guardian Act, s 63). The mother is a “managed person” because she is a “protected person,” being a person in respect of whom an order is in force under the Guardianship Act 1987 that the person’s estate be subject to management under the NSW Trustee and Guardian Act (NSW Trustee and Guardian Act, s 38). That is, Division 2 of Part 4.5 applies in respect of the mother’s estate.

33. The NSW Trustee may make such orders as appear to it necessary for rendering the property and income of a managed person available for the purpose of the payment of the debts and engagements of, and otherwise for the benefit of, the person (NSW Trustee and Guardian Act, s 65(1)). The NSW Trustee may make such orders as it thinks fit in connection with authorising, directing and enforcing the exercise of the functions of managers under the NSW Trustee and Guardian Act (NSW Trustee and Guardian Act, s 64(2)). Most relevantly, the NSW Trustee may order that any property of the person be sold (NSW Trustee and Guardian Act, s 65(2)).

34. A person who, in the Tribunal’s opinion, has a genuine interest in a matter to which a decision of the NSW Trustee in relation to the functions of a person appointed as manager relates, may apply to the Tribunal for an administrative review under the Administrative Decisions Review Act 1997 (NSW) of the decision (NSW Trustee and Guardian Act, s 70(1)).

35. There was no dispute that the daughter is entitled to make an application to the Tribunal for review of the NSW Trustee’s decision to sell her mother’s home, and related decisions. In my opinion, she has a genuine interest in a matter to which the NSW Trustee’s decisions relate, in circumstances where she is living in her mother’s home.

36. In determining the administrative review application, the Tribunal is to decide what the correct and preferable decision is having regard to the material then before it, including any relevant factual material and any applicable written or unwritten law (Administrative Decisions Review Act, s 63(1)).

Hearing

37. The hearing was conducted by audio-visual link.

38. The daughter gave evidence and was cross-examined.

39. The son also gave evidence and was cross-examined by the daughter.

40. All parties were given an opportunity to make oral submissions.

Daughter’s application and submissions

41. The daughter opposed the sale of her mother’s home, except insofar as it could be sold to her, on terms that she proposed.

42. The daughter stated that she had “contributed to many aspects of the improvements of the home’s valuation and contributions to [the mother’s] welfare in personnel items, food, clothing, personnel basis of hygiene and petrol cost in cleaning of clothes from the nursing home.” She said that she had been caring for several family members for thirteen years (including the mother) and had not worked during this time.

43. The daughter also stated that the mother will occasionally visit the home on weekends once the current Covid restrictions are lifted.

44. The daughter made many criticisms of the way the son has fulfilled his role as financial manager. For example, she said that he should have rented out the top floor of the mother’s home and that this could have brought in $1,000 to $1,200 per week. The top floor of the home had been rented out before and is set up as a separate granny flat. However, it has not been approved by council for use in this way.

45. The daughter submitted that selling the mother’s home would leave her and the granddaughter homeless and that it would be detrimental to the great grandson. She referred to various medical conditions from which she suffered and the difficulties which she would face if she had to move.

46. The daughter also gave evidence that the mother had expressed the view in the past that she did not want her home to be sold until after her death. According to the daughter, the mother said she wanted to be able to visit her home as much as possible.

47. The daughter put forward several alternative proposals to the sale of the home in the way approved by the NSW Trustee.

48. At the hearing, the daughter stated that she obtained an apprehended violence order in respect of the granddaughter’s former de facto partner some months ago. On 15 July 2021, according to the daughter, the former de facto partner had engaged in domestic violence towards the granddaughter and had breached the apprehended violence order. The daughter said that her mother’s home was a “safe house” for her and for the granddaughter and that was an additional reason why the Tribunal should not affirm the NSW Trustee’s decisions.

49. The daughter reiterated, at the hearing, her offer to purchase her mother’s home as an alternative to the NSW Trustee’s decision to require vacant possession of the home then to sell it in accordance with “NSWTG requirements for the Sale of Real Estate.” However, at the time of the hearing, the daughter said that she could offer $2.5 million for the property.

50. The daughter said that sale of the mother’s home to her would save real estate costs and avoid the delay caused by her having to move out. The daughter submitted that it would cost between $200,000 and $300,000 to renovate the home for sale, and this is another cost which would be saved by sale of the home to her. She also submitted, prior to the hearing, that part of the deposit she paid could be put towards payment of the Refundable Accommodation Deposit (“RAD”) for the aged care facility in which her mother is residing.

51. The daughter also provided information about the possibility of obtaining a reverse mortgage. At the hearing, she raised the possibility of loaning the money for the RAD to the estate.

Submissions of respondents

52. The NSW Trustee submitted that its decisions were made on the following bases:

1. The mother is permanently placed in an aged care facility and is unlikely to return home. (It may be noted that the daughter accepted this at the hearing).

2. The mother has an outstanding RAD of $500,000 and accruing debt due to insufficient cashflow to meet the full accommodation costs.

3. Sale of the property will increase the mother’s liquidity. She will be able to pay the RAD and invest the balance for her ongoing needs.

4. The mother will be able to assist the daughter financially to relocated.

53. The NSW Trustee submitted, at the hearing, that the mother is no longer receiving the pension so does not have a source of income. The brother provided evidence to this effect, which I accept.

54. The NSW Trustee stated, in respect of the daughter’s proposal to purchase the mother’s home, that she had only provided limited evidence of her capacity to do so, being the statutory declaration of Mr Bodnar. There was no other evidence of the daughter’s capacity to finance the purchase. In any event, it did not consider that sale of the property under market value was a decision which gives paramount consideration to the welfare and interests of the mother.

55. As for a reverse mortgage, the NSW Trustee did not consider any loan greater than the short-term financing to improve the condition of the property prior to sale was feasible. It stated the reverse mortgages are usually repayable when the owner moves from the home (as the mother had done). It was not in the mother’s interests for her property to become encumbered and for the estate to incur long-term costs and interests associated with a mortgage.

56. The NSW Trustee submitted that the only decision which gave paramount consideration to the welfare and interests of the mother was the decision to approve the proposal to sell the mother’s home.

57. The brother adopted the NSW Trustee’s submissions.

58. The mother’s guardian ad litem supported the NSW Trustee’s decisions.

Consideration

59. The Tribunal’s task is to decide what is the correct and preferable decision having regard to the material before it.

60. The Tribunal is to undertake this task “standing in the shoes of” the NSW Trustee. This means that the Tribunal is also to have regard to the principles in Chapter 4 of the NSW Trustee and Guardian Act and, in particular, the principle that the welfare and interests of protected persons (such as the mother) should be given paramount consideration (NSW Trustee and Guardian Act, s 39(a)).

61. It is in the mother’s interests that the RAD be paid and that her ongoing accommodation costs be paid. There is no dispute about the amount of the RAD or the amount of the accommodation costs. It is also in the mother’s interests that she have a sum of money available in case she needs it for medical expenses.

62. It would not be in the mother’s best interests to decide to sell the home to the daughter for $2.5 million. There is insufficient information before the Tribunal to establish that the daughter has capacity to pay this amount. The statutory declaration of Andrew Bodner states that he is willing to sign as guarantor for the amount of $2.5 million, but there is no evidence about his capacity to pay the amount of this guarantee if called upon to do so. The daughter has provided no evidence that she has the capacity to pay $2.5 million to purchase the mother’s home.

63. Even if there were evidence of the daughter’s capacity to purchase the home for $2.5 million, that is more than likely below the market value of the home. The daughter stated, at the hearing, that she had obtained the valuation of $2.55 million “when the market was down” and accepted that prices in Sydney had risen substantially since that time. I could not be satisfied that sale to the daughter at $2.5 million would not be under market value.

64. There may be some benefit to the mother in being able to visit her former home, once Covid restrictions have lifted. I am prepared to accept, for present purposes, that the mother told the daughter she did not want her home sold until after her death. I have had regard to those wishes (NSW Trustee and Guardian Act, s 39(d)). Even assuming that a sale of the home to the daughter would not be inconsistent with those wishes (as it would be, on its face), I do not consider that this course is in her best interests, having regard to all of the material before me.

65. I have considered the importance of preserving the mother’s family relationships, but there is nothing to suggest that the daughter could not continue to see the mother, or have a relationship with her, if the home were to be sold (NSW Trustee and Guardian Act, s 39(e)).

66. The proposal that the brother obtain a reverse mortgage, on behalf of the mother’s estate, to finance the RAD, is not in the mother’s best interests. There is insufficient evidence to satisfy me that the brother would be able to obtain such a mortgage on behalf of the mother, even if to do so were in the mother’s best interests. However, I do not consider that, even if it were possible to obtain a reverse mortgage, this would be the preferable decision. As the NSW Trustee submitted, it is not in the mother’s best interests for her estate to incur long-term costs and interest charges.

67. I considered the possibility of whether a sale could be avoided by renting out the upper floor of the mother’s home. This, however, would not provide the funds for the RAD. Further, the parties appeared to accept that the upstairs part of the house could not lawfully be rented to tenants as a separate residence (there being no council approval for this). The evidence also indicated that the income from rental may not be enough to pay the ongoing nursing home fees, once costs and possible taxation were taken into account.

68. The daughter has provided no evidence of her ability to make a loan to the estate for the amount of the RAD. Further, the terms of such a loan have not been negotiated. In these circumstances, a decision to enter into such a loan arrangement as a way of financing the RAD, is not the preferable decision.

69. The sale of the mother’s home is likely to be very stressful for the daughter. It will mean that the granddaughter and great grandson will also have to move out of the home. That may be difficult given the daughter’s health issues and the granddaughter’s mental health condition. Nevertheless, the amount of $50,000 which has been made available to the daughter may assist her with this process. Whilst the daughter regards her present home as a “safe home,” the apprehended violence order could be amended (if necessary) such that the protection extends to a different residence. Further, a different place of residence, unknown to the granddaughter’s former de facto partner, may provide the daughter and granddaughter with greater protection.

70. Ultimately, however, the paramount consideration is the mother’s welfare and interests and not those of the daughter.

71. The decisions made by the NSW Trustee best promote the mother’s welfare and interests. For the reasons given above, they are the correct and preferable decisions and, accordingly, I have decided to affirm those decisions.

Orders

1. The decisions of the respondent are affirmed.

2. The application is dismissed.

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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

Amendments

27 July 2021 - Coversheet amended

Decision last updated: 27 July 2021