HLT

Case [2014] NSWCATGD 5 7 February 2014

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NSW Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation: HLT [2014] NSWCATGD 5
Hearing dates: 16 September 2013, 4 November 2014 and 20 January 2014
Decision date: 07 February 2014
Jurisdiction: Guardianship Division
Before: Boland J, Senior Member (Legal)
Wroth M, Senior Member (Professional)
Porter L, General Member (Community)
Decision:
Declaration that principal did not have mental capacity to make a valid enduring power of attorney on 17 January 2012.
Financial management order made; NSW Trustee and Guardian appointed.

Catchwords:
ENDURING POWER OF ATTORNEY - review of making - capacity to make enduring power of attorney - no independent advice - undue influence - multiple instruments - review of operation and effect - best interests - solicitor appointed as attorney - transfer of property and assets to attorneys - attorney charging remuneration - fiduciary duties - family trust - company arrangements - other litigation - attorney acting as tutor - conflict of interest.
FINANCIAL MANAGEMENT - application for financial management order - sale of property - capacity to instruct - Supreme Court litigation - complex estate - suitability for appointment as financial manager - conflict of interest - conflict between proposed manager and family - recovery action may be required - remuneration of private financial manager - whether order should specify review.
Legislation Cited: Powers of Attorney Act 2003 (NSW)
Guardianship Act 1987 (NSW)
Civil and Administrative Tribunal Act 2013 (NSW)
Conveyancing Act 1919 (NSW)
Corporations Act 2001 (Cth)
Cases Cited: Banks v Goodfellow (1870) LR 5 QB 549
Gibbons v Wright (1954) 91 CLR 423
McD v McD (1983) 3 NSWLR 81
Ranclaud v Cabban (1988) NSW Conv 55 -385
Kennon v Spry [2008] HCA 56
Szozda v Szozda [2010] NSWSC 804
Scott v Scott [2012] NSWSC 1541
M v M [2013] NSWSC 1495
Category: Principal judgment
Parties: Mrs HLT
Mr GAU (Applicant)
Mr KCC (Applicant)
Mr BES (Attorney)
Ms MMR (Attorney)
The NSW Trustee and Guardian
File Number(s): 52523
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 (s 65, Civil and Administrative Tribunal Act 2013 (NSW)).

reasons for decision

On 20 January 2014 the New South Wales Civil and Administrative Tribunal, Guardianship Division ("the Tribunal") reserved its decision in respect of an application to review an enduring Power of Attorney dated 17 July 2012 granted by Mrs HLT to her solicitor, Ms MMR, and her son, Mr BES. The proceedings commenced in the NSW Guardianship Tribunal ("the GT") but by reason of the of the Civil and Administrative Tribunal Act 2013 (NSW) ("the Civil and Administrative Tribunal Act"), which statute came into force on 1 January 2014, the Guardianship Tribunal was abolished, and pursuant to the transitional provisions in that Act the matter continued in the Tribunal.

On 7 February 2014 the Tribunal made a declaration under s 36(3)(a) of the Powers of Attorney Act 2003 (NSW) ("the Powers of Attorney Act")…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: HLT [2014] NSWCATGD 5
Case: [2014] NSWCATGD 5
Decision Date: 07 February 2014

CaseChat Overview and Summary

In this case, the court was asked to review the validity of an enduring power of attorney and make a financial management order for the principal, who is now deceased. The dispute arose due to concerns about the principal's mental capacity at the time of making the enduring power of attorney and the subsequent conduct of the attorneys under it. The court was also asked to address the validity of financial management orders and the appointment of a financial manager.

The court had to determine whether the principal had the mental capacity to make the enduring power of attorney, whether the attorneys acted within their powers, and whether the appointment of the financial manager was appropriate. It also needed to consider whether the NSW Trustee and Guardian was a suitable financial manager, given the complex estate and potential conflicts of interest.

The court found that the principal did not have the mental capacity to make the enduring power of attorney. It also found that the attorneys had breached their fiduciary duties by transferring the principal's property and assets to themselves and charging remuneration. The court concluded that the NSW Trustee and Guardian was the appropriate person to be appointed as the financial manager, despite the complex estate and potential conflicts of interest. The court considered that the order should include a review to ensure the suitability of the financial manager.

The court made a declaration that the principal did not have mental capacity to make a valid enduring power of attorney on 17 January 2012. It also made a financial management order appointing the NSW Trustee and Guardian as the financial manager. The order includes a review to ensure the suitability of the financial manager.

Orders

Orders of the court

Declaration that principal did not have mental capacity to make a valid enduring power of attorney on 17 January 2012.

Financial management order made; NSW Trustee and Guardian appointed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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Actions

Citations

HLT [2014] NSWCATGD 5

Cases Citing This Decision

No citing cases yet.

Cases Cited

M v M [2013] NSWSC 1495
Citation 1 (Para 1)

…e matters or "guidelines" which a Tribunal should consider when determining who to appoint as a financial manager are discussed by Lindsay J in M v M [2013] NSWSC 1495 at [50]. There his Honour, albeit in the context of an application to replace a financial manager, said:…
JMK v RDC and PTO v WDO [2013] NSWSC 1362
Citation 2 (Para 60)

…seeks it, consents to it or acquiesces in it: JJK v APK (1986) Australian Torts Reports 80-042 at 67, 881 (first guideline); JMK v RDC and PTO v WDO [2013] NSWSC 1362 at [60]-[62]. The Court is bound to exercise an independent judgment because of the public interest element in the decision to be made and the possib…
Scott v Scott [2012] NSWSC 1541
Citation 3 (Para 1)

…By contrast, in Scott v Scott [2012] NSWSC 1541 Lindsay J explained that the "standard" test for capacity to make a will (as described in Banks v Goodfellow (1870) LR 5 QB 549 at 564-565) may be the appropriate test. At paragraphs 199 to 201 of his reasons Lindsay J refers to the necessity to examine each case on it…
Szozda v Szozda [2010] NSWSC 804
Citation 4 (Para 1)

…ether or not the test of capacity to grant a Power of Attorney is identical to the test of testamentary capacity (to make a will). In Szozda v Szozda [2010] NSWSC 804 Barrett J expressed the view that a different consideration of capacity is necessary when considering the appointment of an attorney. He said (referr…
Kennon v Spry [2008] HCA 56
Citation 5 (Para 1)

…he appointment and removal of the trustee, the directors of Company A have a fiduciary duty as trustees to the named beneficiaries (see Kennon v Spry [2008] HCA 56 per French CJ at [75]-[77 ). The Tribunal notes the trust deed contains no provision for the appointment of a substitute appointor in the event of th…
Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar the Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42
Citation 6

…the contrary is made: Gell v Gell (2005) 63 NSWLR 547 at 553-554 [21]-[23]; Macedonian Orthodox Community Church St Petka Incorporated v Bishop Petar (2008) 237 CLR 66 at 93 [69].…
Gell v Gell [2005] NSWSC 566
Citation 7

…erally be regarded as a gratuitous one unless, by an order of the Court or by legislation, a special arrangement to the contrary is made: Gell v Gell (2005) 63 NSWLR 547 at 553-554 [21]-[23]; Macedonian Orthodox Community Church St Petka Incorporated v Bishop Petar (2008) 237 CLR 66 at 93 [69].…
Re McL [2001] NSWSC 280
Citation 8 (Para 11)

…Commission) to the development, and operation, of a plan for management of the protected person's estate: Re L [2000] NSWSC 721 at [11]-[12]; Re McL [2001] NSWSC 280 at [3]-[5].…
Re L [2000] NSWSC 721
Citation 9 (Para 10)

…rt of the protected person's particular circumstances: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238C-239B, 240D, 241B-F and 243E-F; Re L [2000] NSWSC 721 at [10].…
Gibbons v Wright [1954] HCA 17
Citation 10 (Para 1)

…and, Federation Press, Berna Collier and Shannon Lindsay refer at page 68 of their text to the seminal decision of the High Court in Gibbons v Wright (1954) 91 CLR 423. The authors note:…
Countess of Bective v Federal Commissioner of Taxation [1932] HCA 22
Citation 11

…st to the extent necessary to accommodate the protective purpose of the manager's appointment: Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 420-423.…
Shorter v Hodges 5 QB 549
Citation 12 (Para 1)

…cott v Scott [2012] NSWSC 1541 Lindsay J explained that the "standard" test for capacity to make a will (as described in Banks v Goodfellow (1870) LR 5 QB 549 at 564-565) may be the appropriate test. At paragraphs 199 to 201 of his reasons Lindsay J refers to the necessity to examine each case on its own fa…
Banks v Goodfellow (1870) 5 QB 549
Citation 13 (Para 1)

…By contrast, in Scott v Scott [2012] NSWSC 1541 Lindsay J explained that the "standard" test for capacity to make a will (as described in Banks v Goodfellow (1870) LR 5 QB 549 at 564-565) may be the appropriate test. At paragraphs 199 to 201 of his reasons Lindsay J refers to the necessity to examine each case on its own fa…
31 ER 1127 31 ER 1127
Citation 14

…o that effect must be driven by the perspective of the protected person, not the perspective of the manager: Fletcher, Ex parte (1801) 6 Ves Jun 427; 31 ER 1127; Re Walker (1848) 2 Phil 630; 41 ER 1087; Re Westbrooke (1848) 2 Phil 631; 41 ER 1087; G v B (Powell J, 27 May 1992) BC 9201855 at 13.…
41 ER 1087 41 ER 1087
Citation 15

…ective of the protected person, not the perspective of the manager: Fletcher, Ex parte (1801) 6 Ves Jun 427; 31 ER 1127; Re Walker (1848) 2 Phil 630; 41 ER 1087; Re Westbrooke (1848) 2 Phil 631; 41 ER 1087; G v B (Powell J, 27 May 1992) BC 9201855 at 13.…
Holt v Protective Commissioner 38 ER 774
Citation 16

…ases, I adopt the following propositions as non-exhaustive "guidelines" (or, in deference to Kirby P's observations in Holt v Protective Commissioner (1993) 31 NSWLR 227 at 241E-F and 243E-F, a "framework of approach" or a "checklist of considerations") that might be borne in mind when the Court is called upon to make…

Legislation Cited

Civil and Administrative Tribunal Act 2013 (NSW)
1 mention (from Para 1)
Conveyancing Act 1919 (ACT)
1 mention (from Para 1)
Corporations Act 2001 (Cth)
1 mention (from Para 1)
Guardianship Act 1987 (NSW)
1 mention (from Para 1)
Powers of Attorney Act 2003 (NSW)
1 mention (from Para 1)
Succession Act 2006 (NSW)
1 mention (from Para 1)

Medium Neutral Citation:	HLT [2014] NSWCATGD 5
Hearing dates:	16 September 2013, 4 November 2014 and 20 January 2014
Decision date:	07 February 2014
Jurisdiction:	Guardianship Division
Before:	Boland J, Senior Member (Legal) Wroth M, Senior Member (Professional) Porter L, General Member (Community)
Decision:	Declaration that principal did not have mental capacity to make a valid enduring power of attorney on 17 January 2012. Financial management order made; NSW Trustee and Guardian appointed.
Catchwords:	ENDURING POWER OF ATTORNEY - review of making - capacity to make enduring power of attorney - no independent advice - undue influence - multiple instruments - review of operation and effect - best interests - solicitor appointed as attorney - transfer of property and assets to attorneys - attorney charging remuneration - fiduciary duties - family trust - company arrangements - other litigation - attorney acting as tutor - conflict of interest. FINANCIAL MANAGEMENT - application for financial management order - sale of property - capacity to instruct - Supreme Court litigation - complex estate - suitability for appointment as financial manager - conflict of interest - conflict between proposed manager and family - recovery action may be required - remuneration of private financial manager - whether order should specify review.
Legislation Cited:	Powers of Attorney Act 2003 (NSW) Guardianship Act 1987 (NSW) Civil and Administrative Tribunal Act 2013 (NSW) Conveyancing Act 1919 (NSW) Corporations Act 2001 (Cth)
Cases Cited:	Banks v Goodfellow (1870) LR 5 QB 549 Gibbons v Wright (1954) 91 CLR 423 McD v McD (1983) 3 NSWLR 81 Ranclaud v Cabban (1988) NSW Conv 55 -385 Kennon v Spry [2008] HCA 56 Szozda v Szozda [2010] NSWSC 804 Scott v Scott [2012] NSWSC 1541 M v M [2013] NSWSC 1495
Category:	Principal judgment
Parties:	Mrs HLT Mr GAU (Applicant) Mr KCC (Applicant) Mr BES (Attorney) Ms MMR (Attorney) The NSW Trustee and Guardian
File Number(s):	52523
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 (s 65, Civil and Administrative Tribunal Act 2013 (NSW)).