Julie (a pseudonym) v John (a pseudonym)

Case [2024] NSWSC 964

Supreme Court


New South Wales

Medium Neutral Citation: Julie (a pseudonym) v John (a pseudonym) [2024] NSWSC 964
Hearing dates: 14 June 2024
Date of orders: 9 August 2024
Decision date: 09 August 2024
Jurisdiction:Equity - Protective List
Before: Meek J
Decision:

Appeal allowed.

Catchwords:

PROTECTIVE JURISDICTION — Appeal from Guardianship Division of the NSW Civil and Administrative Tribunal (“Tribunal”) — Appeal from making of financial management order under Civil and Administrative Tribunal Act 2013 (NSW) (“NCAT Act”), Sch 6, cl 14(1)(b) — Appeal limited to questions of law — Appeal allowed

ADMINISTRATIVE LAW — Questions of law — Discussion of meaning within NCAT Act, Sch 6, cl 14(1)(b)

ADMINISTRATIVE LAW — Jurisdictional error — Discussion of requirement of materiality

PROTECTIVE JURISDICTION — Standing to bring application for financial management order under Guardianship Act 1987 (NSW), s 25I(1)(b) — Whether the Tribunal had formed the opinion that the applicant had a “genuine concern” for the welfare of the person the subject of the application (his mother), being a subjective jurisdictional fact — Discussion of meaning of “genuine concern” for the welfare of the person — Whether issue of standing raised — Whether finding on standing was “inherent” in the Tribunal’s reasons — Whether Tribunal’s rejection of summary dismissal application was a finding on standing — Held that issue of standing was raised before the Tribunal and it had not formed the opinion that the applicant had a “genuine concern”

PROTECTIVE JURISDICTION — Grounds for making financial management order — Discussion of test to be applied in determining whether the person is not capable of managing her affairs under Guardianship Act, s 25G(a) — Whether “affairs” include directorship of a family company — Whether test requires the person to be able to “weigh complex information” regarding a significant property and business portfolio managed by the family company, in circumstances where she relies on her daughter (who is a co-director) and her son-in-law to manage those complex financial matters — Discussion of the relevance of assistance from the person’s support system in determining whether the person is capable of managing her affairs — Held that the Tribunal applied the incorrect legal test under s 25G(a)

ADMINISTRATIVE LAW — Ground of review other than procedural fairness — Legal unreasonableness — Discussion of requirements for legal unreasonableness — Whether conclusions of the Tribunal that the person was not capable of managing her own affairs and it was in her best interests for a financial management order to be made lacked an evident and intelligible justification — Held that the Tribunal’s findings on those issues were unreasonable

ADMINISTRATIVE LAW — Procedural fairness — Whether the Tribunal afforded the plaintiff procedural fairness in rejecting evidence from the person’s general practitioner on Makita grounds, in circumstances where no objection was taken to that evidence at the hearing and no issue was raised with the parties — The Tribunal is not obliged to give the parties a “running commentary” of its assessment of the evidence — Held that the plaintiff was afforded procedural fairness

ADMINISTRATIVE LAW — Procedural fairness — Whether the Tribunal afforded the plaintiff procedural fairness in drawing conclusions from certain payments made from the person’s bank accounts, in circumstances where the evidence of the payments was produced by the plaintiff herself but no issue as to the payments was raised with the parties — Whether conclusions of the Tribunal were “obviously open on the known material” — Held that the plaintiff was aware that the matters to which the payments related were in issue before the Tribunal and the plaintiff was afforded procedural fairness

ADMINISTRATIVE LAW — Ground of review other than procedural fairness — Irrelevant and relevant considerations — Whether the Tribunal took into account the principle in Guardianship Act, s 4(b) in concluding that it was in the person’s best interests to make a financial management order — Whether principles set out in Guardianship Act, s 4 are “mandatory considerations” in the Peko-Wallsend sense — As a matter of statutory construction, the principles in s 4 may not be “mandatory considerations” in that sense — Nonetheless, the Tribunal took into account, in substance, the principle in s 4(b) when it excluded the person’s personal bank accounts and credit card from the order

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW)

Civil Procedure Act 2005 (NSW)

Corporations Act 2001 (Cth)

Court Suppression and Non-publication Orders Act 2010 (NSW)

Guardianship Act 1987 (NSW)

Migration Act 1958 (Cth)

NSW Trustee and Guardian Act 2009 (NSW)

Powers of Attorney Act 2003 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

ACJ [2007] NSWGT 15

Applicant WAEE v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 236 FCR 593; [2003] FCAFC 184

Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] 2 All ER 680

AW v WW (No 2) [2024] NSWSC 146

AYX17 v Minister for Immigration and Border Protection (2018) 262 FCR 317; [2018] FCAFC 103

BAK15 v Minister for Home Affairs [2018] FCA 1173

Berejiklian v Independent Commission Against Corruption [2024] NSWCA 177

BFT [2014] NSWCATGD 51

Bovaird v Guardianship Tribunal [2009] NSWSC 452

Briggs v Aboriginal Heritage Council [2019] VSC 25

C v W [2015] NSWSC 1774

C v W (No 2) [2016] NSWSC 945

Castro v Minister for Immigration and Ethnic Affairs [1997] FCA 40

CCR v PS (No 2) (1986) 6 NSWLR 622

Chand v Azurra Pty Ltd (in liq) [2011] NSWCA 227

CJ v AKJ [2015] NSWSC 498

Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576

Commissioner of Victims Rights v Dobbie [2019] NSWCA 183

DRJ v Commissioner of Victims Rights (No 2) (2020) 103 NSWLR 692; [2020] NSWCA 242

EB v Guardianship Tribunal [2011] NSWSC 767

EYN [2020] NSWCATGD 10

Hossain v Minister for Immigration and Border Protection (2018) 264 CLR 123; [2018] HCA 34

Housing Commission of New South Wales vTatmarPastoral Co Pty Ltd [1983] 3 NSWLR 378

Huynh v Minister for Immigration and Border Protection (2020) 280 FCR 451; [2020] FCAFC 153

ICW [2017] NSWCATGD 43

KTC [2011] NSWGT 23

Lo v Chief Commissioner of State Revenue (2013) 85 NSWLR 86; [2013] NSWCA 180

LPDT v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2024] HCA 12; (2024) 98 ALJR 610

Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705; [2001] NSWCA 305

MCQ [2014] NSWCATGD 29

Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24; [1986] HCA 40

Minister for Home Affairs v Omar (2019) 272 FCR 589; [2019] FCAFC 188

Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30

Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18

Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611; [1999] HCA 21

MZI [2020] NSWCATGD 75

MZU [2020] NSWCATGD 14

Nathanson v Minister for Home Affairs (2022) 276 CLR 80; [2022] HCA 26

Navoto v Minister for Home Affairs [2019] FCAFC 135

OKK [2015] NSWCATGD 42

Orrv Cobar Management Pty Ltd (2020) 103 NSWLR 36; [2020] NSWCCA 220

P v NSW Trustee and Guardian [2015] NSWSC 579

Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 244 CLR 144; [2011] HCA 32

Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69

QAG [2007] NSWGT 12

Rawson Finances Pty Ltd v Commissioner of Taxation [2013] FCAFC 26; (2013) 296 ALR 307

Re Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 214 CLR 1; [2003] HCA 6

Re T and the Protected Estates Act [2000] NSWSC 1022

Re W and L (Parameters of Protected Estate Management Orders) [2014] NSWSC 1106

SAB v SEM [2013] NSWSC 253

Small v Phillips (No 3) [2020] NSWCA 24

Snedden v Minister for Justice for the Commonwealth of Australia [2014] FCAFC 156; (2014) 315 ALR 352

Sowmi v Master Electrical Services Pty Ltd [2024] NSWSC 176

Stowers v Minister for Immigration and Border Protection (2018) 265 FCR 177; [2018] FCAFC 174

SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152; [2006] HCA 63

SZRAE v Minister for Immigration and Citizenship [2012] FCA 916

Tarbes v Taleb [2023] NSWSC 565

“V V” v District Court of New South Wales [2013] NSWCA 469

Wang v Australian Securities and Investments Commission [2019] FCA 1178

ZXA v ZXB [2022] NSWCATAP 97

Texts Cited:

Aronson, Mark, Matthew Groves and Greg Weeks, Judicial Review of Administrative Action and Government Liability (7th ed, 2022, Lawbook Co)

Halsbury’s Laws of Australia

Lindsay J, “A Struggle for Perfection in an Imperfect World: Dignity of the Individual, Incapacity for Self-Management, Rights, Duties and Conflicts of Interest” (Paper), Society of Trust and Estate Practitioners Western Australia Incapacity Conference, 26 October 2018

Lindsay J, “Roles in Protective Management of Person and Property” (2018) 92 AIAL Forum 36

Macquarie Dictionary, online ed

NSW Civil & Administrative Tribunal, “Financial management” (URL reference below) accessed 16 July 2024

Oxford English Dictionary, online ed

The Corporate Governance Institute, “The different types of company directors” (URL reference below) accessed 29 July 2024

Category:Principal judgment
Parties: “Julie” (a pseudonym) (Plaintiff)
“John” (a pseudonym) (First Defendant)
NSW Trustee and Guardian (Second Defendant)
“Olivia” (a pseudonym) (Third Defendant)
Representation:

Counsel:
O Jones (Plaintiff)
A Poukchanski (First Defendant)

Solicitors:
Clear Lawyers (Plaintiff)
SLF Lawyers (First Defendant)
File Number(s): 2023/177002
 Decision under appeal 
Court or tribunal:
Civil and Administrative Tribunal
Jurisdiction:
Guardianship Division
Date of Decision:
14 December 2022, 22 March 2023
Before:
M Tibbey, Senior Member (Legal)
Dr J Law, Senior Member (Professional)
I Ferreira, General Member (Community)
File Number(s):
NCAT 2022/314883

JUDGMENT

Introduction

  1. HIS HONOUR: The application before the Court is an appeal from the decision of the Guardianship Division of the New South Wales Civil and Administrative Tribunal (Tribunal) to make a financial management order in respect of the affairs of the third defendant, an elderly woman, pursuant to the provisions of the Guardianship Act 1987 (NSW) (Guardianship Act).

Terminology

  1. The terminology that is used to describe persons who are the subject of applications under the Guardianship Act include variously: “the person to whom the application relates” (s 3F(2)(b)); “such persons” (s 4); “a person” (e.g. ss 3 [1] and 25E(1)); “the person concerned” (e.g. s 25F(a)); “the person” (e.g. s 25F(c)); the “person who is the subject of the application” (e.g. ss 25H(2)(b), 25I(1)); and “the person the subject of the application” (e.g. s 25I(2)).

    1. See, for example, the definition of “estate”.

  2. The Tribunal’s approved form for making a financial management application is the form titled “Financial management application” made available on the Tribunal’s website. [2] That form uses similar terminology in respect of an application for financial management, making reference to “the person” and “person this application is about”.

    2. See NSW Civil & Administrative Tribunal, “Financial management” accessed 16 July 2024.

  3. For the purposes of the Guardianship Act, the term “protected person” is only used in relation to a person whose estate (or part of whose estate) is subject to a financial management order that is in force: s 25D Guardianship Act. The “estate” of a person is given to mean “the property and affairs of the person”: s 3 Guardianship Act.

  4. The nature of the jurisdiction is such that one might expect a more endearing descriptor for the person who is the subject of a financial management application, being something more reverential than the relatively detached and depersonalised terminology of “person” in its various forms.

  5. To dignify the third defendant, but to preserve her anonymity, I will give her the name “Olivia” (a pseudonym). To preserve her family and her community’s anonymity, I will assign other pseudonyms to the family members.

Outcome

  1. I have determined to allow the appeal. The appeal was argued by reference to seven separate grounds. The first ground (as argued) was a question of standing. My findings on the standing issue are sufficient to allow the appeal and set aside the orders of the Tribunal. On one view, it would not be necessary to address the other grounds. However, if I be incorrect in respect of my findings on the standing issue or any of the other sequential grounds which I have upheld, I have dealt with and made findings on all of the grounds of appeal.

  2. On the hearing of the application, Mr Jones of counsel appeared for the plaintiff (Julie) and Ms Poukchanski of counsel appeared for the first defendant (John).

  3. The Court was considerably assisted by their advocacy, for which I am most grateful.

  4. Counsel provided outlines of submissions and supplemented and elaborated upon those submissions during the course of the hearing. I will cite the materials in the proceedings by reference to the Court Book (CB), transcript pages and exhibit numbers, and cite the submissions by reference to Mr Jones’ opening written submissions dated 7 June 2024 (POS), Ms Poukchanski’s opening written submissions dated 10 June 2024 (D1OS) and transcript pages.

Family and associated parties

  1. Olivia is aged in her mid 80s. She married Oscar. There are three children of their marriage: John, Julie and Jane. John and Julie are in their late 50s. Jane passed away in 2012. [3] Oscar passed away a year later in 2013. John is married to Kylie and they have a child, Susan. Julie has a child from her first marriage, James. Julie is married to Robert.

    3. The Tribunal refers to the death as being in 2013 (CB 45[4]). Julie’s evidence is that the death occurred in 2012: CB 146[16] (see also CB 116B recital L). The year of death, whilst important to the family, is not relevantly an issue on the appeal.

  2. John is estranged from his mother, Julie and Robert: CB 46[8].

  3. The family have corporate interests and there are various professionals who assist, or have assisted, the family in respect of those interests.

  4. Relevantly, in respect of Olivia’s affairs, the evidence refers to her involvement in two companies, Company A and Company B.

  5. Company A was established by Oscar in the late 1960s. Olivia was appointed as a director of Company A in 1973 and Julie was appointed as a director in 2015: CB 298. Julie was also appointed as secretary of Company A in 2010: CB 298. Olivia and Julie are the only two directors of Company A. Company A has two ordinary shares, both of which are owned by Company B non-beneficially: CB 298-299.

  6. Company B is a corporate trustee for four discretionary trusts which are named after Olivia, John, Julie and Jane, respectively. Olivia was appointed as a director of Company B in 2008 and Julie was appointed as a director and secretary in 2015: CB 315. Olivia has also been a secretary of Company B since 1973. Olivia and Julie are the only two directors of Company B. Company B has four ordinary shares, all of which are owned by Olivia beneficially: CB 315-316.

  7. According to Julie, Company A is a company that was founded to sell craft supplies. While the company is still engaged in the sale of craft supplies, it also manages a property portfolio and other investments: CB 145[4]. The value of that portfolio appears to be in the tens of millions of dollars. Julie’s evidence indicates, and the Tribunal appears to have acknowledged (CB 50[25], 52[28], 59[57], 61[64]), that the purpose of Company A is to “perform as an income generating asset for the beneficiaries of the [trusts]”: CB 153[72], see also CB 137[71], 149[37].

  8. Other professionals associated with Olivia include:

  1. Mr L – an accountant and tax agent for “the family”: CB 26[9];

  2. Mr H – a former solicitor for “the family”: CB 29[19]; and

  3. Dr M – Olivia’s general medical practitioner: CB 28[14], 116E.

  1. The trust deeds for the four discretionary trusts were not in evidence on the hearing before me. Nonetheless, Ms Poukchanski submitted, and it does not appear to be disputed, that the beneficiaries for each of the trusts are the same four family members, and the trusts are used as vehicles to distribute money (income or capital) to the named individuals.

Disclosure by counsel

  1. The hearing was conducted on the basis of the evidence that was before the Tribunal. The evidence before the Court and the submissions during the hearing made particular reference to Olivia being a director of Company A and Company B and holding the shares in Company B.

  2. At the conclusion of the hearing, Mr Jones drew to my attention to the fact that Olivia had resigned from her directorships of the companies at the end of last year and the beginning of this year, and that the shares in Company B had been transferred to Julie: T 74.23-.40. His reason for doing so was connected to a matter that I had raised at the commencement of the hearing, namely that, in light of the fact that the appeal was being heard approximately 15 months after the Tribunal had made its decision, I had wondered whether there was anything material that had occurred since that time of which I needed to be aware. Mr Jones (understandably) did not wish the Court to be misled with an incorrect impression that nothing material had occurred. For her part, Ms Poukchanski indicated that there was no trouble (i.e. difficulty) with the Court being made aware of those facts, but submitted that the Court was not entitled to take them into account: T 74.50-75.18. [4]

    4. I note that the transcript incorrectly attributes Ms Poukchanski’s responses at T 75.5-.18 to Mr Jones.

  3. Mr Jones submitted, and Ms Poukchanski did not dispute, that the appeal must be assessed by reference to the position (i.e. the circumstances prevailing) as at the date on which the decision was made: T 3.39-.41.

  4. I have determined the appeal accordingly, without reference to the facts disclosed by Mr Jones.

Tribunal application, hearings and decisions

  1. On 8 October 2022, John signed an application seeking a financial management order in relation to Olivia (application). On 21 October 2022, the application was filed with the Tribunal: CB 70-108 (including attachments).

  2. On 5 November 2022, Julie and Robert lodged a submission form with the Tribunal seeking an order that John’s application be dismissed on the basis that it was vexatious, spurious, lacking in substance and misconceived: CB 113-116. The submission was accompanied by two attachments, consisting of a letter from Olivia dated 5 November 2022 and a video recording of Olivia taken on 5 November 2022: CB 116.

  3. On 24 November 2022, a Senior Member of the Tribunal made the following directions and orders (CB 17):

1. All parties are to give to the Tribunal and all other parties, any further evidence they rely upon, by 5 December 2022.

2. The parties are to provide to the Tribunal and all other parties, copies of relevant financial records including [Olivia’s] assets and liabilities and bank records, for the last 12 months, by 5.12.22

3. The parties are to provide to the Tribunal and all other parties, any evidence from a health professional in relation to [Olivia’s] ability to manage her financial affairs, by 5.12.22.

4. The request by [Robert] to be joined as a party is refused.

  1. Two hearings were held in relation to the application.

  2. The first hearing was held on 14 December 2022 (first hearing). On that day, the Tribunal made orders committing Olivia’s estate to management under the NSW Trustee and Guardian Act 2009 (NSW) (NSWTG Act) and appointing the NSW Trustee and Guardian (NSWTG) as financial manager under an interim financial management order for a period of six months (first orders): CB 20. The Tribunal provided reasons for the first orders on 19 January 2023 (first reasons): CB 22.

  1. In addition to the first orders, on 14 December 2022 the Tribunal made the following procedural orders and directions:

1. The date for listing the hearing at John Maddison Tower, Level 10, 86-90 Goulburn Street, Sydney is to be confirmed by the Registrar.

2. This matter is adjourned part-heard to a date to be notified by the Registry after 28 February 2023 with the following Orders and Directions:

1. [Olivia] and [Julie] are directed to provide the following documents to the Tribunal for the period 1.7.2017 - 20.6.22:

a) copies of the tax returns of [Company A] and [Company B] (referred to here as ‘the companies’)

b) copies of the tax returns of any trust of which [Olivia] is a beneficiary (referred to here as ‘the trusts’);

c) personal tax returns of [Olivia];

2. Details of any and all wages and/or other benefits that any family member has received from either the companies or the trusts between 1.7.2017 and 30.6.22;

3. Copies of the Trust Deeds for the trusts;

4. Details of all distributions from the trusts since 1.7.2017 to date;

5. Any other documents that would assist the Tribunal to understand the nature and extent of the estate of [Olivia].

Notation: The parties are encouraged to attend in person for the hearing.

3. Financial Management order made

  1. The first hearing appears to have been listed on the basis that it would potentially be a final hearing of the application. However, while Julie had previously sought a summary dismissal of John’s application, at the commencement of the hearing she made an application for adjournment. The hearing in substance became a form of interlocutory hearing dealing with the issues that I note below. It is clear that the Tribunal formed the view that an adjournment of the application was appropriate: CB 30[23]. The Tribunal considered that there was sufficient evidence that Olivia may lack capacity to manage her own financial affairs, and that a financial manager may need to be appointed to manage them, to require “a full hearing of the application take place, rather than the application be summarily dismissed”: CB 33-34[38]. The evidence from Olivia, Julie and Robert disputing some of that evidence was considered not to be sufficient to displace the need for a contested hearing where “these matters” (seemingly a reference to Olivia’s capacity to manage her own affairs and whether a financial manager may need to be appointed) “are properly ventilated and assessed on the evidence at hearing”: CB 34[39].

  2. The second hearing was held on 22 March 2023 (second hearing). On that day, the Tribunal made orders committing Olivia’s estate to management under the NSWTG Act and appointing the NSWTG as financial manager. The orders specifically excluded part of Olivia’s estate from the financial management order, consisting of two bank accounts and a credit card. While the orders had the appearance of being fresh orders, it is unnecessary to determine whether the orders made were in fact a continuation and extension of the first orders or a discharge of the first orders and the making of fresh orders. The Tribunal provided reasons for the second orders on 5 May 2023 (second reasons): CB 43.

  3. The Tribunal stated that the first reasons and the second reasons should be read together: CB 47[13].

Issues identified by the Tribunal

  1. There was no formal listing of issues before the Tribunal. However, the Tribunal’s reasons give some indication of the issues raised.

  2. In the first reasons, the following issues were identified (as indicated by the bold capitalised heading at CB 24, and the bold headings at CB 25, 31).

  1. Should the proceedings be adjourned?

  2. Should the proceedings be summarily dismissed?

  3. Should a financial manager be appointed on an interim basis?

  1. In the second reasons, the following issues were identified (CB 45[1]).

  1. What does Olivia’s estate consist of?

  2. Is Olivia incapable of managing her affairs?

  3. Is there a need for another person to manage Olivia’s affairs and is it in her best interests for a financial management order to be made?

  4. If so, who should be appointed financial manager?

  1. Issues (2) and (3) in the second reasons reflect the grounds for making a financial management order under s 25G of the Guardianship Act.

Evidence and submissions

  1. The statutory framework which principally governs the practice and procedures of the Tribunal is set out in the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act).

  2. In hearing an application for a financial management order, the Tribunal is:

  1. not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice: s 38(2) NCAT Act; and

  2. to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms: s 38(4) NCAT Act.

  1. In that statutory context, “evidence”, a term used in civil litigation, means the whole of the material before the Tribunal: Rawson Finances Pty Ltd v Commissioner of Taxation [2013] FCAFC 26; (2013) 296 ALR 307 (Rawson Finances) at [83] per Jagot J (Nicholas J agreeing).

  2. The evidence and submissions which were before the Tribunal on the first hearing were not expressly listed in its reasons. However, it is possible to discern from the first reasons some of the materials which the Tribunal had before it.

  3. On the first hearing, the Tribunal noted that the following people attended by videoconference and/or telephone and gave evidence: Olivia, John, Julie, Robert, Mr H and Mr L: CB 35-36.

  4. On that occasion, the Tribunal had the following evidence and submissions before it:

  1. the content of John’s application and an attached statement (CB 74-76) referenced in paragraph 6A of the application, as well as another attached statement (CB 78) relating to Olivia’s income, expenses, assets and debts;

  2. what was said by John to be copies of:

  1. offers to purchase Olivia’s property (CB 81-87);

  2. the details of a boat apparently owned by Olivia, John, Kylie and Susan, as well as copies of their fishing licences for 2021 and 2022 (CB 88-100);

  3. Olivia’s gutter cleaning invoices (CB 101-103);

  4. a customer order form “with wanting to retire advert” (CB 104-105); and

  5. invoices for Olivia’s insurance claim (CB 106-108);

  1. the content of the application to dismiss the proceedings from Julie and Robert dated 5 November 2022 (CB 113-116);

  2. a letter from Olivia addressed to the Registrar dated 5 November 2022 (CB 109-112);

  3. a video recording of Olivia taken on 5 November 2022 (referenced at CB 116; see also T 54.21-.22 [5] );

    5. I note that the Tribunal appears to have incorrectly stated that the video recording took place on 8 November 2022 in its second reasons at CB 53[32].

  4. a submission from Julie and Robert dated 3 December 2022 (CB 116A-116G);

  5. a two page document from Julie dated 3 December 2022 (CB 167-168) and filed on 5 December 2022, which outlined Olivia’s assets and liabilities and attached various financial statements (CB 169-227, referenced in the Tribunal’s first reasons at CB 26[8]); [6]

  6. notes received “for” John on 12 December 2022 (referenced in the Tribunal’s first reasons at CB 32[33]);

  7. a document from Mr L dated 14 December 2022 which appears to have given some information about the arrangements between the companies, the discretionary trusts and the family members (referenced in the Tribunal’s first reasons at CB 26[9], 27[10], 32[30]); and

  8. a medical certificate from Dr M dated 17 November 2022 (referenced in the Tribunal’s first reasons at CB 28[14]).

    6. These are referred to by Julie’s solicitor as being “documents produced to the Tribunal” by her on 5 December 2022 under cover of her letter dated 3 December 2022: CB 117[5(e)].

  1. In its first reasons, the Tribunal stated that it had been notified by Mr L that he did not wish the information in the document dated 14 December 2022 to be relied upon as, in providing the information, he had not fully taken note of the fact that John had asked him to file the document, rather than the Tribunal, he had not cleared it with the directors first and the information was or may be out of date: CB 28[11]. The Tribunal indicated that, given its obligation to act “in the paramount best interests” of Olivia, it could not simply ignore the “significant information” provided by Mr L: CB 28[12].

  2. On the second hearing, the Tribunal noted that Olivia, Julie and Robert attended the hearing and gave evidence. It was further noted that John and Kylie were contacted by the Tribunal during the course of the hearing and gave evidence by audio-visual link: CB 68.

  3. On that occasion, the Tribunal had the following evidence and submissions before it:

  1. affidavits from Julie (CB 144-155), Olivia (CB 156-160) and Robert (CB 161-166), each affirmed on 28 February 2023 (referenced at CB 117);

  2. an enduring power of attorney from Olivia to Julie dated 9 November 2022 (CB 327-332, referenced at CB 117);

  3. the documents produced to the Tribunal by Julie on 5 December 2022, referred to above;

  4. a hearing report to the Tribunal dated 7 December 2022 (CB 228-233, referenced at CB 117);

  5. documents produced to the Tribunal by Julie on 28 February 2023, being tax returns for Company A and Company B as well as trust deeds (referenced at CB 117);

  6. written submissions from Mr Clear, the solicitor for Julie, dated 20 March 2023 (CB 117-123); and

  7. written submissions from Mr Schmidt-Liermann, the solicitor for Olivia, filed on 20 March 2023: CB 124-139.

Second reasons

  1. In its second reasons, the Tribunal referred to the factual and procedural background to the application, including its refusal to grant an adjournment to John at the commencement of the second hearing. By reference to the issues identified by the Tribunal in its second reasons (referred to above), the findings of the Tribunal were, in summary, as follows.

  2. Olivia’s “estate” consisted of two personal bank accounts with ANZ, a superannuation account, an ANZ credit card, a Mercedes Benz car, an interest in a home purchased to house John and Kylie, the right to reside at a retirement complex and “a set of assets and liabilities arising from a trust and company” (being a reference to Company B and Company A, respectively): CB 48-49[19].

  3. While Olivia was able to manage her “day to day” needs, the Tribunal was not satisfied that she was capable of “weighing complex information regarding the very significant property and business portfolio in relation to which she has significant formal legal responsibilities”: CB 56[44], 57[48]. In so finding, the Tribunal considered that Olivia’s directorships of Company A and Company B “must be taken into account in considering whether or not she is able to manage her own finances in her own best interests”: CB 56[44], 57[47]. Olivia was found to rely on Julie “almost completely” in the management of the companies, with a significant role also being played by Robert: CB 56-57[45]. That conclusion was drawn from Olivia’s responses to questions from the Tribunal, as the medical certificate of Dr M (opining that Olivia “is still capable of living independently and able to handle her finances, with support of her daughter”: CB 326) was not given “much weight”: CB 54[36].

  4. The Tribunal found that there was a need to appoint someone to manage Olivia’s affairs “to ensure that her resources are well managed and used for her welfare and benefit”: CB 60[60]. Reference was made to: certain payments from Olivia’s bank accounts to John and one of the companies, in respect of which it was said that Olivia would not be capable of fully assessing or understanding the implications of (CB 58[51]-[52]); the failure by the “estate” to respond to requests from the NSWTG as interim financial manager, “bespeaking of a lack of transparency” (CB 59[55]); and Company A’s generation of tax losses, which caused the Tribunal to doubt that the company was “necessarily being well managed and managed in the interests of [Olivia]” (CB 59[57]-[59]).

  5. Drawing on those matters and the “imbalance in the present arrangements” (specifically, the apparent imbalance in the benefits paid from Company A and the trusts) which were said to greatly advantage Julie and Robert’s family “to the relative near exclusion” of John and his family (CB 64[75]), “contributing to or exacerbating family division” (CB 63-64[74]) and “adversely impacting upon family relationships” (CB 64[76]), the Tribunal was satisfied that it was in the bests interests of Olivia that a financial management order be made: CB 61[64]-65[80]. That was despite Olivia expressing her satisfaction with the prior arrangements, and the fact that Julie and Robert adequately assisted her at a personal “day to day” level: CB 60[63]. As noted above, Olivia’s two personal bank accounts and credit card were excluded from the order: CB 65[81]-[82].

Appeal

Parties and initial and procedural orders

  1. This appeal was commenced on 2 June 2023 by a notice of appeal filed on behalf of Julie in the Court of Appeal. On 2 August 2023, the proceedings were transferred to the Protective List in the Equity Division.

  2. Julie is the plaintiff and John is the first defendant. The NSWTG is the second defendant and Olivia is the third defendant. The active parties in the proceedings are Julie and John. The NSWTG has not filed any appearance in the proceedings and, according to Mr Jones, has never indicated any intention to participate on the hearing of the appeal: T 2.39-.41. Mr Schmidt-Liermann, solicitor, filed a submitting appearance on behalf of Olivia on 1 February 2024: CB 15.

  3. On 28 June 2023, procedural orders were made by the Court of Appeal. A notation was made that, pursuant to the Court Suppression and Non-publication Orders Act 2010 (NSW) (CSNPO Act), the names of the parties be suppressed until the conclusion of the proceedings: CB 39. That appears to have been made as an interim order: s 10 CSNPO Act. There is no appropriate reason to continue to suppress the name of the NSWTG and I do not continue the order in that respect.

  4. On 14 August 2023, other procedural orders were made by Registrar Walton.

  5. On 4 September 2023, pursuant to leave given on 14 August 2023, Julie filed an amended summons. The amended summons seeks the following relief (CB 3):

1. Appeal from the decision of the NSW Civil & Administrative Tribunal on 22 March 2023 allowed.

2. Orders of the Tribunal dated 22 March 2023 be set aside.

3. Orders of the Tribunal dated 14 December 2022 be set aside.

4. In lieu thereof, order that the Application before the Tribunal is dismissed.

5. First Respondent to pay the appellants costs.

  1. Appended to the amended summons were points of claim which (omitting formal parts) set out seven grounds of appeal. The grounds of appeal are detailed and span over six pages: CB 7-12. I will summarise those grounds below.

Character of the appeal

  1. Julie appeals pursuant to cl 14(1)(b) of Sch 6 to the NCAT Act from the decision of the Tribunal to make a financial management order in respect of the affairs of Olivia.

  2. An appeal to this Court exists as of right on any question of law, or with leave of the Court, on any other grounds: cl 14(1)(b) Sch 6 NCAT Act.

  3. In the case of a “final” decision (strictly speaking, any decision other than an ancillary or interlocutory decision), an appeal must be instituted within the period of 28 days after the day on which the written statement of reasons for the decision is given to the person seeking to appeal: cl 14(2)(b) Sch 6 NCAT Act.

  4. This appeal was instituted on 2 June 2023. As noted above, the appeal was actually commenced in the Court of Appeal. However, that irregularity has been addressed and no defendant contends that the appeal has not been properly instituted.

  5. In dealing with an appeal, the Court may decide to do so by way of a new hearing if it considers that the grounds for the appeal warrant a new hearing: cl 14(3)(a) Sch 6 NCAT Act. However, no party contended that the Court should do so in this case.

  6. In outlining the nature of the jurisdiction, Mr Jones made particular reference to the decision of Lindsay J in P v NSW Trustee and Guardian [2015] NSWSC 579 (Re P) at [52]-[54].

  7. Mr Jones emphasised the profound effects that a financial management order has on the person upon whom it is imposed, as it changes the status of that person, who was once regarded as being legally autonomous and able to choose how he or she manages his or her estate, to a ”protected person” and suspends by law his or her ability to deal with his or her own estate: T 15.27-16.5, citing Re P at [186].

Stay

  1. An appeal to this Court operates to stay the decision under appeal: cl 14(5) Sch 6 NCAT Act. A “decision” includes the making of an order: s 5(1)(a) NCAT Act. Thus, in practical terms, Olivia’s estate had been subject to management by the NSWTG for a period of approximately 6.5 months, from 14 December 2022 until 2 June 2023. The stay suspended financial management by the NSWTG. Thus, since June 2023 (i.e. essentially for the previous year), Olivia has been managing her own estate (whether or not she has done so with assistance from others being a matter for her).

Materials in respect of the appeal

  1. The materials relied upon on the hearing of the appeal were included in the Court Book. The Court Book was arranged to include:

  1. the amended summons and submitting appearance on behalf of Olivia;

  2. the Tribunal’s orders and reasons for its decisions;

  3. John’s application, the submissions on behalf of John, Julie and Olivia and related documents forming part of the evidence before the Tribunal;

  4. the affidavits of Julie, Olivia and Robert, including annexures;

  5. documents produced to the Tribunal; and

  6. transcripts of the Tribunal hearings on 14 December 2022 and 22 March 2023, as well as directions hearings.

  1. Excluding the amended summons and submitting appearance, the materials in the Court Book were marked as Exhibit P1 on the basis that they were accepted as constituting evidence of the nature of the Tribunal’s decision that is under appeal, the “evidence” that was before the Tribunal and the reasons for the decision: T 1.

Grounds of appeal

  1. Julie contends that, in making the financial management order, the Tribunal erred in law because, in summary:

  1. in considering whether Olivia was capable of managing her own affairs, the Tribunal fell into error by:

  1. failing to afford Julie procedural fairness in rejecting the evidence of Dr M: Ground 1 (Capability - evidence issue);

  2. applying the incorrect legal test: Ground 2 (Capability - legal test issue); and

  3. acting in a legally unreasonable way: Ground 3 (Capability - reasonableness issue);

  1. in determining that there was a need for another person to manage Olivia’s affairs, the Tribunal failed to afford Julie procedural fairness by reaching conclusions about issues relating to Olivia’s knowledge and understanding of certain payments which were not raised with the parties: Ground 4 (Need for another manager issue);

  2. in determining that it was in Olivia’s best interests for a financial management order to be made:

  1. the Tribunal failed to have regard to the mandatory relevant consideration that the freedom of decision and freedom of action of Olivia should be restricted as little as possible: Ground 5 (Best interests - restriction of freedom issue); and

  2. the Tribunal’s conclusion was legally unreasonable: Ground 6 (Best interests – reasonableness issue); and

  1. the Tribunal failed to consider, form and express an opinion on the standing of John to bring the application for a financial management order, in particular on the issue of whether John had a “genuine concern” for the welfare of Olivia: Ground 7 (Standing - genuine concern issue).

  1. In his submissions, Mr Jones addressed the grounds of appeal in a slightly revised order which was said to reflect the order in which they logically arose. Thus, the genuine concern issue in relation to standing (Ground 7) was addressed first.

Financial management orders

  1. Mechanisms to assist people who are incapable of managing or looking after their own affairs are ancient in life and long established in law: see e.g. Lindsay J, “A Struggle for Perfection in an Imperfect World: Dignity of the Individual, Incapacity for Self-Management, Rights, Duties and Conflicts of Interest” (Paper), Society of Trust and Estate Practitioners Western Australia Incapacity Conference, 26 October 2018 at [73]-[77]. This Court has an inherent jurisdiction to address that concern by appointing someone to manage the person’s affairs; historically, such an order was designated as an appointment of a “committee of the estate”: Re P at [50]-[51]; C v W [2015] NSWSC 1774 (C v W) at [99] per Lindsay J.

  2. In New South Wales, there is also a statutory jurisdiction given to the Tribunal which provides for the making of financial management orders principally under Pt 3A of the Guardianship Act and Ch 4 of the NSWTG Act.

  3. The legislative framework within which the Guardianship Division of the Tribunal operates underpins a broader institutional framework that assigns complementary roles to: (a) the Tribunal itself; (b) this Court (though not limited to the Court’s inherent jurisdiction); (c) the Mental Health Review Tribunal; (d) the NSWTG; (e) the Public Guardian; (f) licensed trustee companies; and (g) appointees to the office of “enduring attorney” (governed by the Powers of Attorney Act 2003 (NSW)) and “enduring guardian” (governed by the Guardianship Act): see Lindsay J, “Roles in Protective Management of Person and Property” (2018) 92 AIAL Forum 36 at 39.

What is a financial management order?

  1. A “financial management order” is an order that the estate of a person be subject to management under the NSWTG Act: s 25D, read with s 25E(1), Guardianship Act. The order may relate to the whole or only part of the person’s estate: s 25E(2) Guardianship Act.

  2. The principal effect of a financial management order is that the power of the protected person (alternatively defined in the NSWTG Act as the “managed person”: s 38 NSWTG Act) to deal with his or her estate is suspended in respect of so much of that estate as is subject to management under the NSWTG Act: s 71(1) NSWTG Act.

Power to make a financial management order

  1. A financial management order may be made by the Tribunal on the application of the NSWTG or the person who is the subject of the application: ss 25I(1)(a)-(a1) Guardianship Act. Relevantly, an application for a financial management order may also be made by any person who, in the opinion of the Tribunal, has a genuine concern for the welfare of the person who is the subject of the application: s 25I(1)(b) Guardianship Act.

  2. That power may be contrasted with the power of this Court to order the appointment of a “manager” (defined in s 38 of the NSWTG Act) of the estate of a person, if the Court is satisfied that the person is incapable of managing his or her affairs: s 41(1) NSWTG Act. This Court may make such an order on its own motion or on the application of any person having “a sufficient interest in the matter”: s 41(2) NSWTG Act.

  3. The Mental Health Review Tribunal has a similar power (albeit a mandatory one) in that, if it orders that a person subject to a mental health inquiry be detained in a mental health facility, it must (a) consider whether the person is capable of managing his or her own affairs, and (b) if satisfied that the person is not capable of managing his or her own affairs, order that the estate of the person be subject to management under the NSWTG Act: s 44 NSWTG Act.

  4. An application under s 25I(1) of the Guardianship Act must specify the grounds on which it is claimed that the person the subject of the application is not capable of managing his or her own affairs: s 25I(2) Guardianship Act.

  5. An application made under s 25I enlivens a power in the Tribunal to make a financial management order: s 25F(c) Guardianship Act.

  6. The Tribunal may make a financial management order in respect of a person only if the Tribunal has considered the person’s capability to manage his or her own affairs and is satisfied that: (a) the person is not capable of managing those affairs; (b) there is a need for another person to manage those affairs on the person’s behalf; and (c) it is in the person’s best interests that the order be made: s 25G Guardianship Act.

  7. However, despite s 25G, the Tribunal may make an “interim financial management order” pending its further consideration of the person’s capability to manage his or her own affairs: s 25H Guardianship Act.

  8. If the Tribunal makes a financial management order in respect of a person’s estate, it may commit the management of that estate to the NSWTG: s 25M(1)(b) Guardianship Act.

Considerations

  1. The Tribunal, when exercising its Division functions in relation to persons who have disabilities, is under a duty to observe the principles referred to in s 4 of the Guardianship Act: cl 5 Sch 6 NCAT Act.

  2. Under s 3(2) of the Guardianship Act, a reference to a person who has a “disability” is a reference to a person:

(a) who is intellectually, physically, psychologically or sensorily disabled,

(b) who is of advanced age,

(c) who is a mentally ill person within the meaning of the Mental Health Act 2007, or

(d) who is otherwise disabled,

and who, by virtue of that fact, is restricted in one or more major life activities to such an extent that he or she requires supervision or social habilitation.

  1. The principles referred to in s 4 of the Guardianship Act apply to everyone exercising functions under the Guardianship Act with respect to persons who have disabilities, and are as follows:

(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,

(h) the community should be encouraged to apply and promote these principles.

  1. Mr Jones referred to Re P in which Lindsay J noted at [311] that paragraphs (b), (c), (d) and (f) of s 4 place a “strong emphasis on a person’s autonomy and dignity”, submitting that the effect of a financial management order is to take away a person’s autonomy and freedom of action “by paternal action of the State”: T 17.7-.12.

  2. In Re P, Lindsay J observed at [56] that the general principles set out in s 4 must inform an application for a financial management order, even if the Tribunal ultimately finds that the person is not, in fact, a “person who has a disability” within the meaning of s 3(2).

  3. Precisely how the Tribunal might determine whether a person is “capable of managing his or her own affairs” was considered further by Lindsay J in CJ v AKJ [2015] NSWSC 498 (CJ v AKJ), where his Honour stated the following at [39]:

39. … Drawing upon the legislation that governs the Guardianship Division of NCAT in determining whether or not to make a financial management order (Guardianship Act, Part 3A, particularly sections 25E and 25G, read with sections 3(2) and (4)), it might be said that, in common experience, whether a person is or is not “capable of managing his or her own affairs” might be determined by reference to the following questions:

(a) whether the person is “disabled” within the meaning of sections 3(2) (a)-(d). That is, whether the person is: intellectually, physically, psychologically or sensorily disabled; of advanced age; a mentally ill person; or otherwise disabled;

(b) whether, by virtue of such a disability, the person is (within the meaning of section 3(2)) “restricted in one or more major life activities to such an extent that he or she requires supervision or social habilitation”; and

(c) whether, despite any need he or she has for “supervision or social habilitation” (section 3(2)):

(i) 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 (sections 4 (a)-(c), 4(f), 25G(b) and 25G(c)).

(ii) he or she is in need of protection from neglect, abuse or exploitation (sections 4(a), 4(g), 25G(b) and 25G(c)).

Reasons

  1. The extent of the judicial duty to give reasons  will depend upon the circumstances of the case and the function to be served by the giving of reasons: Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378 at 386A-B per Mahoney JA, affirmed sub nom Tatmar Pastoral Co Pty Ltd v Housing Commission of New South Wales (1984) 54 ALR 155 (Privy Council).

  2. In respect of the judicial duty to gives reasons, I noted the following in Tarbes v Taleb [2023] NSWSC 565 at [68]-[70]:

68. However, such a duty does not exist in respect of every matter, of fact, or of law, which was or might have been raised in the proceedings. It is not the duty of the judge to decide every matter which is raised in argument. The judge may decide a case in a way which does not require the determination of a particular submission: in such a case he may put it aside or, as Lord Scarman said, merely salute it in passing: Tatmar Pastoral at 385E-F citing R v Barnet London Borough Council; Ex parte Nilish Shah [1983] 2 AC 309 at 350.

69. The law does not require that a judge make an express finding in respect of every fact leading to, or relevant to, his final conclusion of fact; nor is it necessary that he reason, and be seen to reason, from one fact to the next along the chain of reasoning to that conclusion: Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 (Soulemezis)at 271 per Mahoney JA; Yates Property Corp Pty Ltd (in liq) v Darling Harbour Authority (1991) 24 NSWLR 156 (Yates Property v Darling Harbour)at 160D per Kirby P.

70. The weight which a judge gives to a particular fact may be affected by the judge’s experience and, in particular, his experience of the significance of that fact in the order of things and “general human experience”. Reasons may partake as much of intuition based on experience as on formal and deductive reasoning: Soulemezis at 274A-B per Mahoney JA citing Morgan v Babcock and Wilcox Ltd (1929) 43 CLR 163; [1929] HCA 25 at 173 per Knox CJ and Dixon J and Martin v Osborne (1936) 55 CLR 367; [1936] HCA 23 at 375 per Dixon J, Latham CJ agreeing.

  1. Conversely, the Tribunal must, when deciding whether to make a financial management order, give a written statement of reasons which sets out: (a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based; (b) the Tribunal’s understanding of the applicable law; and (c) the reasoning process that led the Tribunal to the conclusions it made: s 62(3) and cll 11(1), (3) Sch 6 NCAT Act.

Questions of law

  1. As noted above, Julie’s appeal is confined to an appeal on any question of law or, with leave of the Court, on any other grounds. No such leave has been sought.

  2. This begs the question: what is a “question of law” for the purposes of cl 14(1)(b) of Sch 6 to the NCAT Act?

  3. Counsel for both parties made submissions in respect of what constituted a question of law.

  4. Precisely what amounts to a question of law is particularly relevant to dealing with Grounds 3 and 6 of the appeal, which Mr Jones “housed” under the ground of legal unreasonableness, as well as Ground 5. In respect of Ground 6, submissions were also made relevant to the ground of “no evidence”: POS [77], D1OS [61].

Submissions

  1. On the issue of what constitutes a question of law, Ms Poukchanski submitted the following (D1OS [17]-[18], [37]):

17. In AW v WW (No 2) [2024] NSWSC 146, Kunc J held that, properly construed, a “question of law” for the purposes of cl 14(1) of the CAT Act is a “pure question of law” and one that is generally evident on the face of the matter. [7] That conclusion was based on the terms of cl 14(1) itself, as well as the fact of appeal from a specialist division of the Tribunal (the Guardianship Division), which attracted an assumption of finality. [8] His Honour affirmed that a question of mixed fact and law is not a question of law, and that restatement of such a question in other terms cannot make it into a question of law. [9]

18. In defining a “pure question of law”, his Honour expressed agreement [10] with the findings of Young J in Re R, [11] that:

Just what is in the category of a question of law is sometimes hard to decide. However, generally speaking the matter is quite clear. If there is a question as to the meaning of an Act in the circumstances, if there are other questions of construction of the law or vital agreements, if there is a finding of fact made of which there is no evidence to support it or perhaps if so much irrelevant material enters into the decision making process that it is a nullity, then one has a question of law. Outside that field, normally one has a question of fact. This is so even if there is a finding of fact which is against the evidence and the weight of the evidence…

…

37. …The assessment of whether or how much weight is to be placed on a document is a function of the Tribunal’s fact-finding role and not a question of law. [12] In AW, his Honour found that an allegation that the Tribunal did not take into account certain evidence before it did not amount to an error of law. [13]

7. AW v WW (No 2) [2024] NSWSC 146 at [51] – [53] per Kunc J.

8. Ibid at [53].

9. Ibid at [51].

10. Ibid at [55].

11. [2000] NSWSC 886 at [25] per Young J.

12. Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at [40] per Mason J; TCL Air Conditioner (Zhongshan Co Ltd v Castel Electronics Pty Ltd (2014) 232 FCR 361 at [156] per Allsop CJ, Middleton and Foster JJ.

13. AW at [57] – [58] per Kunc J.

  1. For his part, Mr Jones submitted that it is sufficient to sustain an appeal on a question of law if it is demonstrated that the decision was affected by legal error: POS [3], citing C v W at [28] per Lindsay J, EB v Guardianship Tribunal [2011] NSWSC 767 at [181]-[189] per Hallen AsJ (as his Honour then was) and SAB v SEM [2013] NSWSC 253 at [4]-[7] per White J (as his Honour then was). Mr Jones submitted that an error of law in relation to a fact-finding exercise will arise if there is no evidence for a particular factual finding or if the factual reasoning process is legally unreasonable in the sense of lacking an “evident or intelligible” [14] justification, and such error occurred in this case: T 6.30-.33, 7.3-.6.

    14. The transcript did not record these words.

Discussion

  1. In Judicial Review of Administrative Action and Government Liability (7th ed, 2022, Lawbook Co), the learned authors made the following distinction between issues of fact and issues of law (at 208 [5.20]) (footnotes omitted):

An issue of fact involves an inquiry into whether something happened or will happen, which is different from an issue as to its legal effect. An issue of law involves the identification and interpretation of a norm which is usually of general application. That distinction does blur, however, when it comes to applying law to fact, because there is an inseparable interrelationship between delimiting issues of law and fact.

  1. Relevantly, the learned authors also noted that:

… the concept of error of law is not entirely the same as the concept of a question of law. Most obviously, a “question of law” needs to state a question, and that concept’s meaning arises in any context where a court’s appellate or review jurisdiction depends on it being asked to provide an answer. Different statutory contexts result in the concept receiving different meanings, but they all require that a question be propounded. It is semantically possible to reformulate an alleged error of law as a “question” as to whether the decision-maker erred in law, but semantics are not always accepted.

  1. The expression “question(s) of law” and cognate expressions are not deployed uniformly in the statute books and there is no universal meaning or understanding of what is a question of law: Orr v Cobar Management Pty Ltd (2020) 103 NSWLR 36; [2020] NSWCCA 220 at [40] per Bathurst CJ and Bell P (as his Honour then was) (Johnson, Garling and Lonergan JJ agreeing).

  2. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 (Prendergast), the Appeal Panel of the Tribunal was concerned with an appeal in respect of a consumer claim under s 80(2) of the NCAT Act, which provides inter alia that an appeal from an internally appealable decision lies as of right on any question of law. The Appeal Panel set out at [13] a non-exclusive list of possible questions of law, which in summary (and omitting citations) were whether the Tribunal:

  1. failed to provide proper reasons;

  2. identified the wrong issue or asked the wrong question;

  3. applied a wrong principle of law;

  4. failed to afford procedural fairness;

  5. failed to take into account relevant considerations (which the decision-maker was bound to take into account); [15]

  6. took into account an irrelevant consideration;

  7. found facts for which there was no supporting evidence; and

  8. made a decision which was so unreasonable that no reasonable decision-maker would make it.

    15. The Appeal Panel’s language equating relevant considerations which the decision-maker was bound to take into account with mandatory considerations, citing Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39 per Mason J (as his Honour then was); [1986] HCA 40.

  1. In an appeal in respect of orders of the Guardianship Division of the Tribunal under s 80(2) of the NCAT Act, the Appeal Panel in ZXA v ZXB [2022] NSWCATAP 97 (ZXA v ZXB) referred at [13] to the Prendergast non-exhaustive list, in outlining the relevant legal principles, with apparent approval or at least without criticism.

  2. More recently, in AW v WW (No 2) [2024] NSWSC 146 (AW), Kunc J considered the question of what constitutes a “question of law” for the purposes of an appeal under cl 14(1)(b) of Sch 6 to the NCAT Act from a decision of the Guardianship Division of the Tribunal. As noted by Ms Poukchanski, his Honour held that a “question of law” means a pure question of law, and not a question of mixed fact and law or anything else: AW at [9], [53]. In AW, the plaintiff contended that the Tribunal had failed to address relevant evidence and had failed to take into account relevant facts in dismissing the applications for guardianship and a financial management order: AW at [8]. Relevantly, his Honour made the following observations at [9] and [52] (referring to Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] 2 All ER 680):

9. … The question advanced by AW is not a pure question of law because it requires the Court to investigate the facts before the Tribunal in an inquiry which is, first, less and other than the demanding inquiry undertaken to determine jurisdictional error for grounds such as ‘Wednesbury unreasonableness’ or constructive failure to exercise jurisdiction and, consequentially, is in reality an invitation to a merits review.

…

52. … some questions of law, properly framed and understood as such, will require an examination of the facts. However, in my respectful opinion, this latter category is generally and necessarily confined to submissions of jurisdictional error on grounds such as ‘Wednesbury unreasonableness’ or constructive failure to exercise jurisdiction.

  1. In Rawson Finances, Jagot J (Nicholas J agreeing) explained at [83]-[84] the range of questions of law which may (or may not) arise from factual findings as follows:

83. Whether a fact is supported by any evidence is a question of law; so too is the question as to what amounts to material that could support a factual finding (Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 355; Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 32 at [91]). The latter is a question of law because, before a fact may be found, “there is the preliminary question whether the evidence reasonably admits of different conclusions” (Australian Broadcasting Tribunal v Bond at 355 citing Commissioner of Taxation (Cth) v Broken Hill South Ltd (1941) 65 CLR 150 at 155 and 157 and 160). As the reasons in Commissioner of Taxation (Cth) v Broken Hill South Ltd at 155, 157 and 160 disclose if there is some evidence which reasonably admits of different conclusions as to the existence of a fact or not, the finding of that fact or the failure to find that fact does not involve a question of law. Hence, it is only whether the evidence could have supported the factual finding which constitutes a question of law. By contrast, the question whether evidence should or should not have led to a finding of fact is not a question of law. In the present context “evidence”, a term used in civil litigation, means the whole of the material before the Tribunal.

84. The distinction between evidence or material which could support a factual finding and evidence or material which should or should not have supported such a finding is fundamental to the exercise of jurisdiction which is limited to questions of law. When courts refer to there being “no probative” evidence to support a finding or a finding not being “reasonably open” or “open” on the evidence (as in Australian Broadcasting Tribunal v Bond at 359–360) or it being necessary that a finding be based on “some probative material or logical grounds” and that a finding not be “completely arbitrary” (as in Australian Broadcasting Tribunal v Bond at 366 and 367, Kostas v HIA Insurance Services Pty Ltd at [16], Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611; [1999] HCA 21 at [145] and Minister for Immigration and Multicultural and Indigenous Affairs v SGLB (2004) 78 ALD 224; [2004] HCA 32 at [38]) the courts are not inviting consideration of whether a finding should or should not have been made. They are considering the anterior question whether the evidence reasonably admitted the making of the finding; that is, whether the evidence could support the finding. Hence, if there is no probative evidence of a fact and no logical grounds to support the fact, the finding of that fact will involve error of law. But where there is some probative evidence of a fact and some logical ground to support the fact, the finding of that fact will not involve error of law. The formula “some probative material or logical grounds” does not convert questions of fact into questions of law.

  1. “No evidence” in the above sense goes to the question of the capacity of material to be legally probative of a fact, rather than its weight. In Wang v Australian Securities and Investments Commission [2019] FCA 1178, Bromwich J made the following observations relevant to the “no evidence” ground at [68]:

… the “no evidence” ground is not restricted to circumstances where there is, quite literally, no evidence at all. That is because a finding may constitute an error of law if there was no probative evidence to support it, so as to be no evidence in law at all: see Bruce v Cole (1998) 45 NSWLR 163 at 188-189 per Spigelman CJ (Mason P, Sheller and Powell JJA agreeing). It follows that the no evidence ground of review will not always be defeated by identifying a mere “skerrick” of evidence if it can be shown by the party asserting the “no evidence” ground not to have been also legally probative in making the finding in question. However that inquiry is one of capacity, not weight.

  1. The nature of the “no evidence” ground was most recently considered by Bell CJ and Meagher JA in Berejiklian v Independent Commission Against Corruption [2024] NSWCA 177 at [100]-[102].

Legal unreasonableness

Submissions

  1. Given that Grounds 3 and 6 of the appeal were based upon legal unreasonableness, both counsel gave detailed submissions as to the precise nature of the test for that ground of review, and its application.

  2. Mr Jones submitted that (POS [42]-[43]):

42. In making its decision, the Tribunal was required to identify an evident and intelligible justification for its decision. [16] It was necessary for there to be probative evidence for findings and for those findings to have a rational basis. [17] The Tribunal’s findings could not be arbitrary or abandon common sense. [18]

43. In considering the question of whether the decision is legally reasonable, the Court must consider the legality of the Tribunal’s approach by reference to the reasons it gave for its decision. [19] The Court should treat what the Tribunal said as a complete explanation for the approach should not go beyond that explanation. [20] An absence of reasoning justifying a conclusion in the Tribunal’s reasons will lead to the result that there is no evident or intelligible justification for the decision and thus that it is unlawful.

16. Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at [76] per Hayne, Kiefel and Bell JJ; EFQ (a pseudonym) v Medical Council of New South Wales [2021] NSWCA 167 at [69] per Bell P (with whom Macfarlan and Brereton JJA agreed); Minister for Immigration and Border Protection v Stretton (2016) 237 FCR 1 at [66] per Griffiths J.

17. LPDT v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2024] HCA 12 (LPDT), [34] per Gageler CJ, Gordon, Edelman, Steward, Gleeson and Jagot JJ.

18. King v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] FCAFC 152 at [54] per Anderson, Feutrill and Raper JJ.

19. Minister for Immigration and Border Protection v Singh (2014) 231 FCR 437 at [47] per Allsop CJ, Robertson and Mortimer JJ (endorsed in ABT17 v Minister for Immigration and Border Protection (2020) 269 CLR 439 at [122]).

20. AFX17 v Minister for Immigration and Border Protection [2018] FCAFC 103 at [60]-[61] per Tracey and Mortimer JJ (with whom Charlesworth J agreed).

  1. In his oral submissions, Mr Jones noted that when one is in the realm of legal unreasonableness, one is engaged in an evaluative process by reference to the particular facts of the case, and it is thus necessary to delve into those facts in some detail: T 6.38-.41. The fact that one is doing so does not mean that one is embarking on merits review; one is still embarking on a question of law: T 6.42-.45.

  2. For her part, Ms Poukchanski submitted as follows (D1OS [43]-[44]):

43. The test of legal unreasonableness has been held to be stringent, [21] “extremely confined”, [22] and “will not be lightly reached”. [23] Decisions unreasonable at law have been described as those which are “plainly unjust”, “arbitrary”, “capricious”, “irrational”, or “obviously disproportionate”. [24]

44. There is a particularly high threshold for characterising the use of discretionary powers (such as, here, fact-finding) as unreasonable. [25] Discretionary power permits for a range of “decisional freedom” where reasonable minds might differ as to the correct decision or outcome, and any decision or outcome within that area is within the bounds of legal reasonableness. [26]

21. Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541 at [10]-[11] per Keifel CJ; [52] per Gageler J; [135] and [140] per Edelman J.

22. Ibid at [52] per Gageler J.

23. Ibid at [135] per Edelman J.

24. Minister for Immigration and Border Protection v Eden (2016) 240 FCR 158 at [65] per Allsop CJ, Griffiths and Wigney JJ.

25. SZVFW at [84] per Nettle and Gordon JJ.

26. Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at [363] per Hayne, Kiefel and Bell JJ.

  1. In oral submissions, Ms Poukchanski made particular reference (at T 58.16-.46) to the judgment of Gageler J (as the Chief Justice then was) in Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30 (SZVFW) at [51]-[52], where his Honour stated the following (omitting footnotes):

51. Having expounded the general and, in its application to the determination of a claim for relief under or by reference to s 75(v) of the Constitution, exhaustive proposition that “[t]he duty and jurisdiction of the court to review administrative action do not go beyond the declaration and enforcing of the law which determines the limits and governs the exercise of the repository’s power”, Brennan J in Attorney-General (NSW) v Quin immediately explained how “‘Wednesbury unreasonableness’ (the nomenclature comes from Associated Provincial Picture Houses Ltd v Wednesbury Corporation)” was consistent with that proposition: “[a]cting on the implied intention of the legislature that a power be exercised reasonably, the court holds invalid a purported exercise of the power which is so unreasonable that no reasonable repository of the power could have taken the impugned decision or action”. His Honour called in aid the exposition of Professor Wade to the effect that, “[w]ithin the bounds of legal reasonableness”, the repository has “genuinely free discretion”; “[i]f it passes those bounds, [the repository] acts ultra vires”.

52. Expression of the standard of legal reasonableness in terms of the minimum to be expected of any “reasonable repository of the power” in the circumstances of the impugned decision or action has the benefit of emphasising both the “extremely confined” scope and context-specific operation of the limitation it imposes. That is not to say that the standard might not be appropriately expressed in another form of words.

  1. Ms Poukchanski’s purpose in referring to this part of Gageler J’s judgment in SZVFW was to identify the nature and extent of an error of law. She submitted that the weight that is ascribed to evidence and the exercise of evaluating that evidence cannot amount to an error of law unless it meets the requisite standard of unreasonableness or illogicality. Specifically, she submitted that it is not an error of law if, on appeal, the reviewing court takes a different view of the evidence than that which the decision-maker has taken or would have drawn different or other conclusions: T 58.48-59.4.

  2. To emphasise this point, Ms Poukchanski then referred to the subsequent comments of Gageler J at [58] in SZVFW (omitting footnotes):

58. References in Li, as in Quin, to legal unreasonableness as an “abuse of power” cannot be read as treating a judicial conclusion of unreasonableness as admitting of a margin of appreciation of the kind involved in a judicial conclusion of “abuse of process”. Except to the extent specifically permitted by statute, a judge undertaking judicial review of administrative action would depart from performance of the judicial function and impermissibly enter the zone of discretion committed to the administrator were the judge to be drawn into forming his or her own conclusion as to whether the administrator had exercised power in a manner which, though lawful, might be characterised as an abuse. So much was recognised in the joint judgment in Li in the statements that “courts are conscious of not exceeding their supervisory role by undertaking a review of the merits of an exercise of discretionary power” and that “[p]roperly applied, a standard of legal reasonableness does not involve substituting a court’s view as to how a discretion should be exercised for that of a decision-maker”.

  1. Ms Poukchanski stressed that the scope of legal unreasonableness is “extremely confined”: T 59.6-.15.

  2. Ms Poukchanski also took issue with Mr Jones’ submission that asking whether no reasonable person could ever have come to the conclusion reached by the decision-maker or whether there is an evident and intelligible justification for the decision are two ways of looking at legal unreasonableness: T 60.40-.45. By reference to the judgment of Hayne, Kiefel and Bell JJ in Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18 (Li) at [76], she submitted that the language of a lack of an evident and intelligible justification does not create any lower threshold for unreasonableness, rather it is another way of phrasing the same (still very high) threshold whereby it is not possible for the Court to comprehend how the decision was arrived at: T 65.34-66.22. That being said, for my part, I did not understand Mr Jones to have contended for some lower threshold by reference to the question of whether there is an evident and intelligible justification arising from the Tribunal’s reasons.

  3. Ms Poukchanski submitted that even though there may be gaps or unsatisfactory reasoning in the Tribunal’s reasons, it was still possible to understand how it arrived at its conclusions and, in that sense, the Tribunal had discharged its legal duty and its reasoning cannot be described as an error of law: T 66.24-.29, 67.4-.7. In particular, she submitted that the Tribunal arrived at its conclusions by accepting, or giving greater weight to, some evidence over other evidence, and that its findings, including those at CB 62[67] and 65[79], need to be contextualised so that the decision is read as a whole: T 68.8-17.

  4. Ms Poukchanski emphasised that the fact that the Tribunal is not bound by the rules of evidence necessarily means that sworn evidence does not in and of itself carry any greater significance than unsworn evidence before the Tribunal, and the Tribunal is required to weigh evidence according to its probative force: T 69.41-.48.

Discussion

  1. The debate on this issue gave rise to a tension between Ms Poukchanski’s submissions that the Tribunal was simply weighing the material before it, which involves questions of fact that are not reviewable by this Court, and Mr Jones’ submissions that the Tribunal came to conclusions in a manner which was legally unreasonable, amounting to jurisdictional error.

  2. In Commissioner of Victims Rights v Dobbie [2019] NSWCA 183 (Dobbie), Basten JA (as his Honour then was) (Leeming JA agreeing) stated at [39] that “legal unreasonableness is a shorthand for the proposition that a statute conferring a discretionary power on an administrative officer impliedly imposes a constraint on the exercise of the power, namely that it be exercised fairly, rationally and reasonably”.

  3. The submissions of counsel outlined above give sufficient guidance to the applicable principles. I merely note that, as Basten JA observed in Dobbie at [40], a standard of reasonableness often raises questions as to the weight given to particular material by a decision-maker. That aspect of the principle was said to have been explained by Mason J (as his Honour then was) in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 41; [1986] HCA 40 (Peko-Wallsend) as follows (footnotes omitted):

It follows that, in the absence of any statutory indication of the weight to be given to various considerations, it is generally for the decision-maker and not the court to determine the appropriate weight to be given to the matters which are required to be taken into account in exercising the statutory power: Sean Investments Pty. Ltd. v. MacKellar; Reg. v. Anderson; Ex parte Ipec-Air Pty. Ltd.; Elliott v. Southwark London Borough Council; Pickwell v. Camden London Borough Council. I say “generally” because both principle and authority indicate that in some circumstances a court may set aside an administrative decision which has failed to give adequate weight to a relevant factor of great importance, or has given excessive weight to a relevant factor of no great importance. The preferred ground on which this is done, however, is not the failure to take into account relevant considerations or the taking into account of irrelevant considerations, but that the decision is “manifestly unreasonable”.

Jurisdictional error and materiality

  1. The parties’ written outlines of submissions exchanged prior to the hearing did not address the issue of whether Julie must demonstrate that the alleged errors of the Tribunal amounted to jurisdictional errors which were material to its decision.

  2. However, in the course of submissions on the hearing, Ms Poukchanski made submissions regarding the requirement for materiality of an error (in particular, in respect of Ground 7). Ms Poukchanski’s position, as I understand it, was that Julie must demonstrate any alleged error of the Tribunal was material so as to constitute jurisdictional error. She submitted that, if the Tribunal made any error in this case, it was not a material error: T 42.7-43.22.

  3. Ms Poukchanski referred to the judgment of Gageler CJ, Gordon, Edelman, Steward, Gleeson and Jagot JJ in LPDT v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2024] HCA 12; (2024) 98 ALJR 610 (LPDT) at [9] and [14]-[16], which was said to bear upon the question of materiality.

  4. It is convenient to set out in full [6]-[16] of their Honours’ judgment in LPDT as follows (omitting footnotes):

6. In some cases, where an error is established, the error will be jurisdictional irrespective of any effect that the error might or might not have had on the decision that was made in fact. In other cases, the potential for an effect on the decision will be inherent in the nature of the error. An example of the former is apprehended or actual bias. An example of the latter is unreasonableness in the final result. In such cases, the error necessarily satisfies the requirement of materiality.

7. In most cases, however, an error will only be jurisdictional if the error was material to the decision that was made in fact, in the sense that there is a realistic possibility that the decision that was made in fact could have been different if the error had not occurred. That is because it is now accepted that a statute which contains an express or implied condition to be observed in a decision-making process is ordinarily to be interpreted as incorporating such a “threshold of materiality” in the event of non-compliance.

8. The reasons of the primary judge and the Full Court in the present case, as well as other trial and intermediate appellate decisions, suggest uncertainty or confusion about the meaning and effect of some of the language used by the Court in identifying the principles to be applied in assessing materiality. It would be unsatisfactory if that uncertainty or confusion persisted. It is desirable to give practical guidance in terms with which all the Court agree. Necessarily, differences of expression and emphasis previously adopted by individual Justices have been set aside in favour of the guidance that is now set out.

Two questions

9. Where it is alleged in an application for judicial review that a decision is affected by jurisdictional error constituted by a breach of an express or implied condition of a conferral of decision-making authority by a statute which incorporates a requirement of materiality, there are two questions: has an error occurred; and, if so, was that error material.

10. The inquiry posited by each question is wholly backward-looking. Both questions are to be answered by reference to the decision that was made and, depending on the nature of the error, how that decision was made. Those are facts in respect of which the applicant for judicial review bears the onus of proof on the balance of probabilities. Proof of these facts ought to be neither difficult nor contentious.

11. What must be proved to show what decision was made and how it was made will depend upon the nature of the error. In a common case — of which the present is an example — where the error alleged is breach of a condition governing the reasoning to be undertaken by the decision-maker, the applicant’s onus of proving the relevant facts is discharged by nothing more than the tender of the decision-maker’s statement of reasons.

92. Wang v Australian Securities and Investments Commission [2019] FCA 1178 at [68] per Bromwich J; Commissioner of Taxation v Pham (2013) 134 ALD 534 at [46] per Katzmann J.

93. At [CB 61[65]].

94. At [CB 62[66]].

95. At [CB 62[67], 63[71] and [73]].

Determination

  1. Under the heading “Is it in [Olivia’s] best interest that a financial management order be made?”, the Tribunal contrasted Olivia’s personal day-to-day financial affairs with her other affairs in the following respect (CB 60-61[63]):

63. [Olivia] has expressed her satisfaction with the arrangements in place before the interim appointment of the NSW Trustee and Guardian. At a personal “day to day” level, her daughter [Julie] and son-in-law [Robert] look after her well, attending to take her to medical appointments and ensuring that she has money in her personal accounts, with all matters of a more serious complex nature in the financial area handled by [Julie] and [Robert]. Yet this arrangement leaves her open to possible financial abuse, exploitation and/or reputational damage, as she does not have the capacity to participate actively in decisions being made in [Company B] and [Company A].

  1. The Tribunal then stated (CB 61[64]):

64. The pattern of distributions to family members from [Company A], the extent of payments to [Robert], arrangements for [James], son of [Julie], to live in one property without disclosure of whether market rent is being paid, all indicate that at present very significant payments and benefits are being made to one side of the family, namely the family of [Julie] (herself, her husband and possibly her son) and significantly less to her brother [John] and his family, who appear to have been pushed to the margins of the family in various ways.

  1. The Tribunal made reference to evidence of Kylie, including assertions of alleged unfair treatment: CB 61[65].

  2. The Tribunal then referred to John’s evidence in the following terms (CB 62[66]):

66. [John’s] evidence was to similar effect. He stated that “other members of family are taking advantage now of Mum’s situation, of the large finances that my Dad left behind” that there were “extraordinary wages being paid to one family member, [Robert], out of proportion” and that “he has tried to take control of everything, for example locking me out of Mum’s place, kicking me out of the business, changing Mum’s solicitor. He wants to take control of Mum and Dad’s business and property.” In the hearing on 14 December 2022 [John] described the situation as “mental abuse”.

  1. The Tribunal then concluded (CB 62[67]):

67. The extent of these arrangements, that provide significantly greater financial benefits to the family of [Julie] than to her brother appear, from [John’s] evidence and that of his wife, to have contributed to the estrangement and isolation of [John] from other family members that estrangement and isolation of [John] is reflected in the affidavits of [Olivia, Julie and Robert].

  1. I accept the submission of Mr Jones that the Tribunal appears to have unduly focused on John’s assertions as to the “pattern of distributions” and other payments to family members providing “significantly greater financial benefits” to Julie’s family than to his own.

  2. I accept Mr Jones’ submission that the Tribunal’s findings on this issue about the so-called “imbalance of payments” to John lacked an evident and intelligible justification.

  3. The unchallenged evidence of the reason for Robert’s employment by Olivia and Julie was stated by Julie as follows (CB 146[18]):

18. In November of 2015, Mum and I decided that [Company A] would employ [Robert] to assist me in managing the operations of the business and to help improve the companies’ strategic planning by developing a financial and tax strategy for the companies and ensuring the realisation of Dad’s wishes for the continued capacity of the family business and asset holdings to provide for the future financial security of the family.

  1. The Tribunal did not refer to any of the detailed evidence that gave an entirely rational explanation for the imbalance of payments. The rational explanation, taken from the evidence, is that Julie had long been heavily involved in Company A’s operations and Robert (the person of whom John primarily complained) had come to be employed by Company A in 2015, in a context in which he had for the better part of two decades held senior managerial positions in large state government and multinational organisations. John, on the other hand, had been dismissed from his employment in Company A in about 2018 and appears to have been paid a very substantial amount of money (though not as much as Robert) while no longer having any involvement in the company’s operations: T 56.33-.40.

  2. Robert gave detailed evidence as to the improvements he had overseen to the operations and overall financial position of Company A since he joined, which included: having fees for his consulting services to clients redirected to be paid to Company A; providing the analysis and drive for a property investment which provided Company A with $425,000 in capital profit, in addition to an annual return of almost four per cent; organising and negotiating the proposed sale of certain properties valued in the tens of millions of dollars; ensuring that Company A meets its regulatory requirements; and establishing the company’s online business operations: CB 163[14]-164[22]. Through implementing better tax planning processes, he has also reduced the costs incurred by Company B by $70,000 per annum, as well as reduced the total tax burdens of Olivia, Julie and John by over $200,000 in 2020 to 2022.

  3. In 2022, being the year in which he made the application to the Tribunal, John was paid over $70,000 for undertaking no work at all, and Kylie was paid over $80,000 for work which approximated to 2-3 hours of sewing per week: CB 152[65]-[66].

  4. In that context, it would not be unusual for there to be a disparity in payments to each of Robert and John. Indeed, it would be unusual if they were paid a comparable amount. Mr Jones emphasised the point by the fact that, when one looked at the wage benefits and additional distributions made to John and Kylie, they were receiving significantly more than Julie, who was the working director of both companies: T 57.34-.44.

  5. John had no actual insight as to the nature and demands of Robert’s employment. The unchallenged evidence of Julie regarding Robert’s involvement was as follows (CB 148[32]-[33]):

32. Since [Robert’s] involvement in the Company as an employee and more particularly as a result of his financial skills and acumen, the Company’s asset holdings and returns on investment as well as the company’s cash flow position have improved markedly.

33. Rather than denuding the asset base of the Company, [Robert’s] involvement has ensured that both the Company’s and [Olivia’s] financial position have improved.

  1. There was no reasonable basis for the Tribunal to conclude that the “imbalance of payments” had itself contributed to the “estrangement and isolation” of John and his family from other family members, as distinct from John’s own personal views of perceived injustice and his conduct towards other family members (including aggressive behaviour which led to an apprehended domestic violence order being taken out against him by Robert and James: CB 292-294). Kylie’s contentions (made orally as pure assertions before the Tribunal) that John has had less and less involvement in the family business since Robert has been involved did not take the matter any further. While it might be said that it is not in Olivia’s best interests that her family is “fractured” and “at loggerheads in relation to financial matters”, the imbalance of payments to family members was not the cause of those issues.

  2. I also accept Mr Jones’ submission that there is no basis in the evidence for the Tribunal’s conclusion that John’s side of the family has had benefits to which they were accustomed “significantly reduced”, which “adversely impacted upon family relationships”: CB 64[76]. The Tribunal did not refer to any evidence in drawing this conclusion. Indeed, on my review, the only evidence of benefits received by the family members from the business and trusts over time was the “[Company A] Family Benefits & Summary 2018-2022” to which Julie referred in her affidavit: CB 325A. Rather than show that the benefits to John and his family have “significantly reduced”, that summary shows that the total benefits received by John and Kylie over that period increased in some years and decreased in others.

  3. Finally, I consider that, for the reasons given by Mr Jones in his written submissions (POS [81]), the Tribunal’s reliance on the accountant’s failure to file tax returns, the unanswered requests of the NSWTG and the tax losses of Company A (CB 65[79]) was misplaced. The Tribunal’s reasoning from those matters to its conclusion that it is not for the benefit of Olivia for the present arrangements to remain in place is not evident.

  4. The Tribunal found that, at a personal “day to day” level, Julie and Robert “look after [Olivia] well, attending to take her to medical appointments and ensuring that she has money in her personal accounts, with all matters of a more serious complex nature in the financial area handled by [Julie] and [Robert]”: CB 60-61[63]. In light of the above, and my findings in relation to Ground 3, it is not at all evident how the Tribunal could have reasonably concluded then that “this arrangement leaves [Olivia] open to possible financial abuse, exploitation and/or reputational damage, as she does not have the capacity to participate actively in decisions being made in [Company B] and [Company A]”: see also CB 65[80].

  5. I reject the submission that the Tribunal’s findings in relation to Olivia’s best interests were within a range of “decisional freedom” where reasonable minds might differ. I consider that the Tribunal’s conclusion that it was in Olivia’s best interests for a financial management order to be made lacked an evident and intelligible justification.

Best interests - restriction of freedom issue (Ground 5)

Submissions

  1. In reaching the conclusion that it was in the best interests of Olivia for a financial management order to be made, Mr Jones submitted that the Tribunal failed to have regard to a mandatory relevant consideration and thereby committed an error of law: POS [3(d)], [66], [71].

  2. He highlighted the statutory provisions as follows (POS [67]-[68]):

67. Clause 5 of Sch 6 to the NCAT Act provides that the Tribunal, when exercising its functions under the Guardianship Act, is under a duty to observe the principles in s 4 of the Guardianship Act. The Tribunal generally acknowledged the s 4 principles at [61]-[62] of its second reasons [CB/8/60].

68. Section 4(b) of the Guardianship Act requires that in exercising the functions under the Act it is the duty of the Tribunal to observe the principle that:

“the freedom of decision and freedom of action of such persons should be restricted as little as possible”.

  1. Mr Jones’ written submissions were then as follows (POS [69]-[71]):

69. The making of the financial management orders placed a significant restriction on the freedom of decision and freedom of action of [Olivia]. In particular:

(a) [Olivia] stated - repeatedly and persistently - that she did not want the financial management orders to be made. For example, she said that she could not “see any reason why the NSW Trustee and Guardian should manage my estate” [96] and that the making of the interim financial management orders (on 14 December 2022) resulted in her feeling “furious with [John] and incredibly anxious and stressed. I have been crying most days…I just feel so hurt”. [97] At [45] of her affidavit [CB/17/159] she stated that:

96. Affidavit of [Olivia] affirmed 28 February 2023, [CB 158[25]].

97. Affidavit of [Olivia] affirmed 28 February 2023, [CB 159[43]].

“I want to be very clear that:

(a) I want to retain the right to make decisions for myself;

(b) I want to be able to make appropriate decisions regarding my well-being and my financial affairs.

(c) I am scared that someone else’s meddling in my affairs is going to create problems for me; and

(d) I am angry and upset that I have to spend time stressing out over this whole messy affair just because people think that they know better than me or want to listen to silly nonsense and [John’s] lies”.

(b) [Olivia] was not challenged on any of this evidence during the first or second hearings. While the Tribunal evidently had doubts about [Olivia’s] capacity to “weigh complex information”, there was no basis on which the Tribunal could have doubted her capacity to identify and articulate her wishes in this way.

(c) More generally, [Olivia] had determined that the plaintiff should manage her affairs on her behalf through the enduring power of attorney granted to the plaintiff under the Powers of Attorney Act 2003 (NSW). [98] This was a valid and lawful mechanism for [Olivia] to manage her affairs that, by force of the orders made by the Tribunal, was effectively set aside.

70. This evidence was directly relevant to the principle set out in s 4(b) of the Guardianship Act. However, the Tribunal did not identify or apply this principle, despite referring to other aspects of s 4 (see, for example, the reference to s 4(e) at [74] of the second reasons).

71. In those circumstances, it should be inferred that the Tribunal failed to have regard to a mandatory relevant consideration, namely the principle in s 4(b) of the Guardianship Act. There is no basis on which to conclude that the Tribunal gave any consideration to that issue. It should have undertaken an assessment of what course would have restricted [Olivia’s] freedom of decision and action the least in light of this principle. It failed to do so. As a result, the Tribunal committed an error of law.

98. Second reasons, [CB 46[10], 52[31]].

  1. During the hearing of the appeal, Mr Jones drew attention to the decision of Lindsay J in Re P at [319], in which his Honour stated:

319. One illustration of a case where it may be appropriate to dispense with a protected estate manager despite a finding of incapacity for self-management may be, by analogy with the Court’s inherent jurisdiction, where there is no practical utility in burdening a person or his or her estate with the administrative infrastructure necessarily involved in protected estate management: Re W and L (Parameters of protected estate management orders) [2014] NSWSC 1106 at [87]-[89] and [95]. Another, drawing specifically upon the liberal intent of the general principles set out in section 4 of the Guardianship Act, may be a case in which the Tribunal decides to take a risk in allowing a person in need of protection an opportunity to enjoy freedom of decision, freedom of action and the possibility of normal life living in community with an empathetic family: cf, M v M [1981] 2 NSWLR 334 at 336A-B, 336C-D and 337F-338D; CJ v AKJ [2015] NSWSC 498 at [50]-[51] and [54]-[58].

  1. Mr Jones submitted that it was of critical significance that the Tribunal failed to refer at all to the principle under s 4(b) that “the freedom of decision and freedom of action of such persons should be restricted as little as possible” in its second reasons: T 55.10-.35.

  2. That is to be contrasted, Mr Jones submitted, with the Tribunal’s focus in its second reasons on s 4(e), concerning the importance of preserving family relationships: CB 63-64[74]. Mr Jones submitted that the Tribunal appears to have inappropriately focused upon John’s complaints of how he was being treated, rather than the care of Olivia: T 55.37-.43, 56.4-.7.

  3. In response, Ms Poukchanski submitted as follows (D1OS [53]-[56]):

53. The principles in s 4 of the Guardianship Act are made mandatory considerations by schedule 6 of the CAT Act. It is evident from the text and structure of s 4 that these principles are to be balanced against each other [99] – that is why each principle that relates to a person’s agency, being (b), (c) and (f), includes the phrase “as possible”. In particular, the principles in (a) and (g) will need to be balanced with the principles in (b), (c) and (f). If that were not so, orders under the Guardianship Act would have to be made on an exclusively voluntary basis.

54. The purpose of the Guardianship Act must also be taken into account. That purpose includes the making of orders to protect people who are vulnerable, including to exploitation by those close to them, as [Olivia] was found to be. In such scenarios, a person’s freedom of decision or wishes are very likely to conflict with their true interests.

55. Furthermore, the Tribunal clearly did have regard to the principles in s 4. It did so at [61] – [63] [CB/8/60] and [74] [CB/8/63]. It noted [Olivia’s] wishes that current arrangements continue at [32] [CB/8/53], [63] [CB/8/60], [70] [CB/8/62] and [77] [CB/8/64]. It explicitly weighed the wishes of [Olivia] against its findings that [Julie’s] management of [Olivia’s] assets was not consistent with [Olivia’s] interests and welfare, at [63] [CB/8/60], [77] [CB/8/64], and [80] [CB/8/65].

56. Ground 5 is in substance a complaint that the Tribunal did not give more weight to [Olivia’s] wishes. The weight ascribed to evidence cannot amount to an error of law.

99. Peko-Wallsend at [40] per Mason J.

Determination

  1. As a matter of statutory construction, I express some doubt that the principles set out in s 4 of the Guardianship Act are necessarily “mandatory considerations” for the exercise of the power to make a financial management order in the sense explained by Mason J in Peko-Wallsend at 39: see Lo v Chief Commissioner of State Revenue (2013) 85 NSWLR 86; [2013] NSWCA 180 at [9] per Basten JA (as his Honour then was). However, as is evident from Ms Poukchanski’s submissions extracted above, the appeal was argued on the basis that the principles in s 4 of the Guardianship Act are mandatory considerations in that sense.

  2. Assuming that the principle set out in s 4(b) is a mandatory consideration, I consider that the Tribunal did take it into account in making the financial management order which it made. This fact is evident from the Tribunal’s exclusion of Olivia’s two personal bank accounts and credit card from the order. The Tribunal explained the reason for this exemption at CB 65[81]-[82] as follows:

81. … These are to be exempt from the financial management order, to the intent that [Olivia] will be able to use moneys she is accustomed to drawing on, from accounts she is used to using.

82. The Tribunal recommends that, as required, these exempt accounts are replenished by the NSW Trustee and Guardian from time to time from funds under management, so that the longstanding arrangements continue, whereby [Olivia] has some money in her accounts to use for meals out, clothes, fuel for her car, payment of other car expenses and other discretionary spending of a “day to day” nature. This will ensure that there is as little disruption as possible to the peace and comfort of [Olivia] although there are changes in the way in which her estate is managed.

  1. Whilst not employing the precise words in s 4(b), I am satisfied that the Tribunal’s use of the italicised words above indicates that, in substance, it had taken into account that principle.

Costs

  1. Costs are in the discretion of the Court: s 98(1)(a) Civil Procedure Act 2005 (NSW). Generally, if the Court makes any order as to costs, the Court is to order that the costs follow the event unless it appears to the Court that some other order should be made as to the whole or any part of the costs: r 42.1 Uniform Civil Procedure Rules 2005 (NSW).

  2. Although the proceedings involve an appeal from the Guardianship Division of the Tribunal, the proceedings of their nature are analogous to proceedings within the Court’s protective jurisdiction.

  1. The approach for costs in such circumstances is different from ordinary litigation. That approach (in the context of an appeal in relation to a statutory Will) was described by the Court of Appeal in Small v Phillips (No 3) [2020] NSWCA 24 at [2] in the following terms (omitting footnotes):

2. In exercising the protective jurisdiction, the Court does not necessarily apply the principle that costs should follow the event. Rather, the Court should determine the proper order for costs to be made in all the circumstances. When exercising the protective jurisdiction, the welfare and interests of the protected person are paramount. Individuals who would otherwise be concerned to act in the case of a person who is in need of protection should not be deterred from acting by the possibility of a costs order if the application is unsuccessful. Family members of a protected person should not be burdened with an obligation to pay costs in circumstances where the imposition of such an obligation might have an adverse effect on relationships with, or care for, the protected person. That is to say, proceedings in the exercise of the protective jurisdiction are not adversarial in the way that ordinary civil litigation is adversarial. Rather, proceedings in the exercise of protective jurisdiction have a strong public interest element.

  1. That approach is consistent with the approach taken by Lindsay J in C v W (No 2) [2016] NSWSC 945 at [19], in relation to costs of an appeal from the Guardianship Division of the Tribunal and incidental proceedings (citing the decision of Powell J in CCR v PS (No 2) (1986) 6 NSWLR 622 at 640E-G).

  2. My provisional view is that there be no order as to costs, to the intent that each party will bear their own costs of the proceedings.

  3. If the parties wish to contend for any different costs outcome, I will give them the opportunity to address the Court specifically on the question of costs.

Orders

  1. The orders that I make are as follows. The Court orders that:

  1. the appeal from the decision of the Tribunal on 22 March 2023 is allowed;

  2. the orders of the Tribunal dated 22 March 2023 be set aside;

  3. the orders of the Tribunal dated 14 December 2022 be set aside;

  4. there be no order as to costs, to the intent that each party will bear their own costs of the proceedings, unless within 14 days of these orders any party indicates by email to the Associate to Meek J that a different order as to costs is sought, in which case directions will be made to facilitate the determination of any dispute as to costs.

**********

Endnotes

Details
AGLC
Julie (a pseudonym) v John (a pseudonym) [2024] NSWSC 964
Case
[2024] NSWSC 964
Decision Date

CaseChat Overview and Summary

Julie (a pseudonym) appealed to the Supreme Court of New South Wales against a decision of the Guardianship Division of the NSW Civil and Administrative Tribunal, which had made a financial management order in favour of John (a pseudonym). The Tribunal had determined that Julie's mother was not capable of managing her own affairs and that it was in her best interests for a financial management order to be made. Julie argued that the Tribunal had erred in law in making the order, and the appeal was limited to questions of law.

The appeal raised several legal issues, including whether the Tribunal had the standing to make the order, whether it had applied the correct legal test to determine whether Julie's mother was not capable of managing her own affairs, whether the Tribunal's findings were legally unreasonable, and whether the Tribunal had afforded Julie procedural fairness. The appeal also considered whether the Tribunal had taken into account the relevant principles in the Guardianship Act 1987 (NSW).

The court found that the issue of standing had been raised before the Tribunal and that the Tribunal had not formed the opinion that Julie had a "genuine concern" for her mother's welfare. The court also held that the Tribunal had applied the incorrect legal test under the Guardianship Act in determining whether Julie's mother was not capable of managing her own affairs. The court found that the Tribunal's findings on the issues of capacity and best interests were unreasonable and that the Tribunal had not afforded Julie procedural fairness in rejecting evidence from her mother's general practitioner. However, the court held that the Tribunal had taken into account the relevant principles in the Guardianship Act in making its decision.

In conclusion, the appeal was allowed, and the financial management order made by the Tribunal was set aside. The court held that the Tribunal had erred in law in making the order, and the order was quashed. The parties were ordered to bear their own costs of the appeal.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.