FNK

[2023] NSWCATGD 11

NSW Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

FNK [2023] NSWCATGD 11

Hearing dates:

15 March 2023

Date of orders:

15 March 2023

Decision date:

15 March 2023

Jurisdiction:

Guardianship Division

Before:

B M Shipp, Senior Member (Legal)
M J Staples, Senior Member (Professional)
J V Le Breton, General Member (Community)

Decision:

1. The estate of FNK is subject to management under the NSW Trustee and Guardian Act 2009 (NSW).

2. The management of the estate of FNK is committed to the NSW Trustee and Guardian.

3. This order is to be reviewed by the Tribunal within two years.

4. The following specified part of the estate is excluded from this financial management order:

Any income from employment or Centrelink payment, and any account into which this income is paid

Catchwords:

FINANCIAL MANAGEMENT – application for a financial management order – whether subject person is incapable of managing their own affairs – 18-year-old subject person – beneficiary of late father’s estate – significant sum spent by the subject person – history of unstable mental health, impulsive decision-making and vulnerability to suggestion – risk of exploitation and wastage of funds – subject person in favour of financial management order being made – no private person available to be appointed – NSW Trustee and Guardian appointed – reviewable financial management order made – decision to exclude employment income and Centrelink payment from the financial management order – order to be reviewed in two years

Legislation Cited:

Guardianship Act 1987 (NSW), ss 4, 25M

Cases Cited:

None cited.

Texts Cited:

None cited.

Category:

Principal judgment

Parties:

Financial Management Application

FNK (the person)
WMC (applicant)
NSW Trustee and Guardian

Representation:

Nil.

File Number(s):

NCAT 2023/00018282

Publication restriction:

Decisions of the Guardianship Division of the Civil and Administrative Tribunal have been anonymised to remove any information that may identify any person involved in the Tribunal’s proceedings: Civil and Administrative Tribunal Act 2013 (NSW), s 65.

REASONS FOR DECISION

What the Tribunal decided

1. The Tribunal made a financial management order appointing the NSW Trustee and Guardian, excluding FNK’s income and the account into which it is paid, with a review in approximately two years.

Background

2. FNK is an 18-year-old man with borderline personality disorder, ADHD, anxiety, depression and drug addiction. He lives with his mother, WMC, in Northwest Sydney. He has had a number of recent hospital admissions in the mental health units of public hospital 1 and public hospital 2, including most recently for two weeks from 25 December 2022. The admissions are often in the context of suicidal ideation and drug overdose.

3. In January 2023, WMC applied for a financial management order. She suggests that FNK was a beneficiary of his late-father’s estate in 2019, and the funds were held by the NSW Trustee and Guardian (NSWTG) as Trustee until FNK turned 18. There was $247,000 in this trust account in 2019. FNK turned 18 in March 2022. WMC states that some of the funds were released to FNK, and have been rapidly and unwisely spent, and used by friends for their own purposes. She seeks the appointment of the NSWTG to manage the remaining funds in FNK’s best interests.

The hearing and participants

4. At the end of these Reasons for Decision are lists of the parties to the application. [Appendix removed for publication.]

5. FNK and WMC attended the hearing. Mr Z participated by phone on behalf of the NSWTG.

What did the Tribunal have to decide?

6. The questions to be considered by the Tribunal are:

• Is FNK incapable of managing his affairs?

• Is there a need for another person to manage FNK’s affairs and is it in his best interests for a financial management order to be made?

• If so, who should be appointed financial manager?

Reason for the Application

7. WMC suggests that about $55,000 of the funds released to FNK have already been spent on a range of items including Uber food and transport, alcohol, drugs, phone apps, and general impulse buying. His friends and ex-girlfriend had also taken advantage of the fact that FNK had some funds available.

8. WMC describes her son as mentally unstable, with a requirement for ongoing weekly therapy. He requires morning and evening medication and often needs PRN medication. WMC helps FNK administer correctly. When left to his own devices, he will often overdose, resulting in multiple hospital admissions. He is a danger to himself with a self-destructive personality. He was an inpatient at the time WMC made her application.

9. WMC notes that FNK has no income due to “our income being too high”. Due to his impulsive nature and ongoing mental illness, WMC believes FNK’s remaining funds should be released to him slowly, and in a controlled way. This will enable him to learn how to manage his funds, and will protect him from the risk of further exploitation from others.

Other Evidence

10. The NSWTG writes in December 2019 that it has been appointed Trustee for the estate of the late Mr X, and that an amount of approximately $247,000 was in this trust fund, and would be managed until FNK turns 18. The letter indicates that FNK would be contacted a few weeks before he turns 18 “to complete the necessary paperwork to pay out the funds”. The letter continues:

“However, if there is a diagnosed disability which requires ongoing financial support the funds will be held over for future needs”

11. We were also provided with the following documents:

1. a Discharge Summary dated 13 January 2023 from public hospital 1 confirming that FNK had been admitted following an overdose

2. Discharge summaries from earlier in 2022 confirming the diagnoses and concerns referred to above

3. Reports from FNK’s GP Dr Y, consistent with the above

4. Earlier psychology reports based on assessments of FNK when he was 15, again consistent with the above.

5. Extracts from FNK’s bank account in the period November 2021 to January 2023, indicating large withdrawals from his account following receipt of the trust funds.

12. FNK told us that he was given $50,000 when he turned 18. He agreed with his mother that he has no idea of the value of money. He spent the money on “random stuff. My friends kept asking me for money, and they never paid me back. I wasn’t in the best headspace.”

13. FNK indicated he now does not want the remaining $200,000 paid to him. He would prefer it was released to him slowly. He is currently working as a gardener earning about $600 per week, and is starting to learn how to budget this money. He is paying rent of $200 per week.

14. WMC told us that her main concern was that FNK have the opportunity to learn how to budget in a protected environment. He is currently asking for guidance. He has a lot of medical bills including for a psychiatrist and for counselling. He is now on new medication which is helping him. WMC told us FNK has been very good since he was last discharged from hospital.

15. Mr Z of the Estate Administration section of the NSWTG provided the following information:

1. The NSWTG manages two separate trust funds of which FNK is a beneficiary – the estate of the late-Mr X (FNK’s uncle) and the estate of the late-Mr W (FNK’s father)

2. The estate of the late-Mr W was distributed in full to FNK when he turned 18.

3. The funds from the Mr X estate have remained in trust with the NSWTG, since they have become aware that he may lack capacity.

4. If the Tribunal appoints a financial manager, the manager may approach the trustee for access to the funds. If the entirety of the funds were transferred, this would result in the estate being wound up.

5. Under the terms of the trust fund, the NSWTG (as estate manager) is obliged to apply the funds for the advancement, maintenance and benefit of the beneficiary. There are fees payable for the management of the trust, in accordance with the NSW Trustee and Guardian Regulation. If the trust remains in place, (and no financial management order made) the NSWTG could make a determination to pay a regular amount to FNK to assist with his regular outgoings.

Is FNK incapable of managing his affairs?

16. The leading cases say that in determining whether a person is or is not capable of managing his or her financial affairs, it is necessary to focus attention on the personal circumstances of that person, and the ability of that person to undertake the particular tasks which their circumstances require. The questions to be considered are:

1. Is a person reasonably able to manage his or her own affairs in a reasonably competent fashion, without the intervention of a protected estate manager charged with a duty to protect his or her welfare and interests?

2. Is the person able to deal with (making and implementing decisions about) his or her own affairs (person and property, capital and income) in a reasonable, rational and orderly way, with due regard to his or her present and prospective wants and needs, and those of family and friends, without undue risk of neglect, abuse or exploitation.

In considering whether the person is “able” in this sense, attention may be given to: (a) past and present experience as a predictor of the future course of events; (b) support systems available to the person; and (c) the extent to which the person can be relied upon to make sound judgements about his or her welfare and interests.

17. Whether a person is or is not “capable of managing his or her own affairs” will usually depend upon whether:

1. He or she is reasonably able to determine what is in his or her best interests, and to protect his or her own welfare and interests, in a normal, self-reliant way without the intervention of a protected estate manager and/or

2. He or she is in need of protection from neglect, abuse or exploitation

18. The relevant time for considering whether a person is incapable of managing his or her affairs is not merely the day of the hearing but the reasonably foreseeable future.

19. We took into account FNK’s recent history of unstable mental health, impulsive decision-making and vulnerability to the suggestions and urges of others, and his actual spending since the lump sum funds were released to him. We also took into account his own evidence indicating a need for further protection of his funds. On this basis we found FNK is not currently reasonably able to protect his own welfare and interests without the intervention of a financial manager, without placing himself at continued risk of exploitation and wastage of funds. He is a person for whom a financial manager can be appointed.

Is there a need for a financial management order? Is it in FNK’s best interest that a financial management order be made?

20. FNK continues to have substantial funds managed for him pursuant to the terms of the trust of Mr X. Given FNK’s unstable mental health and associated vulnerabilities, we were satisfied there is a clear ongoing need for these funds to be carefully managed on his behalf. The question for us to determine is whether it is in his best interests for these funds to remain managed in the current way under the terms of the trust created by his uncle, or whether his interests would be better served by the appointment of a financial manager.

21. We determined that it is in FNK’s best interests to make a financial management order for the following reasons:

1. The NSWTG as trustee is limited to making decisions about the release of funds to FNK under the terms of the trust, which were designed with a view to release at age 18 (subject to capacity). The conditions of the trust relate to the needs and requirements of a minor.

2. A financial management order is not so constrained. The manager can more flexibly respond to changes in FNK’s circumstances as he enters the adult world.

3. By making a financial management order with a fixed review date, the Tribunal will review the need for a financial management order at a particular time. This provides more certainty than the trustee’s review of FNK’s capacity which may or may not occur at a particular time, and is not necessarily based on the same legislative considerations to which the Tribunal must pay heed.

Should an exclusion be added to the financial management order?

22. Financial management orders apply to the whole of the estate of the person. However, the Tribunal may order that certain parts of the estate should be excluded from the financial management order.

23. We discussed this option with FNK and WMC. We determined that FNK’s income, and any income into which it is paid should be excluded from the financial management order. WMC confirmed that she is her son’s main support. She can help him manage his income and to set up a budget for his regular expenses. Her concern is about the lump sum funds from the trust. FNK can better learn how to budget if he has direct access to his income (whether from employment or Centrelink payment).

24. We were satisfied that the focus of the order should be the funds currently held by the NSWTG.

Should a reviewable financial management order be made?

25. The Tribunal may determine that a financial management order should be reviewed within a specified time. In this matter, we determined that the financial management order should be reviewed in two years. FNK is still young, and his circumstances are subject to change. In view of his expressed aim to learn how to budget, it is appropriate for the Tribunal to review his capacity to manage his affairs, and need for an order at the end of this period.

26. If he seeks to manage his own funds at the time of the review, he will need to demonstrate at that time his capacity to budget his own income, his understanding of the funds being held for him and plans for the use of further investment of those funds, and/or how he can be supported to make wise and safe decisions about the use of the remaining funds without the need for a financial management order.

Who should be appointed as financial manager?

27. In appointing a financial manager, as in making all other orders under the Guardianship Act 1987 (NSW), the Tribunal must act with the interests of the person concerned as the paramount consideration and in accordance with the other principles set out in s 4 of the Guardianship Act.

28. Section 25M of the Guardianship Act provides that, if the Tribunal makes a financial management order, it may appoint a suitable person to manage the person’s estate or may commit the management of the estate to the NSWTG.

29. WMC was not seeking to be appointed FNK’s private financial manager, and we knew of no-one else who was seeking or suitable to appoint in that role. In these circumstances, we committed the management of FNK’s financial affairs to the NSWTG.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 30 August 2023