KA v Protective Commissioner
[2009] NSWADT 66
•6 February 2009
CITATION: KA & anor v Protective Commissioner & anor [2009] NSWADT 66 DIVISION: General Division PARTIES: FIRST APPLICANT
KASECOND APPLICANT
KCFIRST RESPONDENT
Protective CommissionerSECOND RESPONDENT
KBFILE NUMBER: 083337 HEARING DATES: 6 February 2009 SUBMISSIONS CLOSED: 6 February 2009
DATE OF DECISION:
6 February 2009BEFORE: Hennessy N - Magistrate (Deputy President) CATCHWORDS: Sale of property, subject person’s wishes, emotional attachment LEGISLATION CITED: Protected Estates Act 1983
Administrative Decisions Tribunal Act 1997CASES CITED: Commissioner v D & Ors (2004) NSWCA 216 REPRESENTATION: FIRST APPLICANT
In personSECOND APPLICANT
In personFIRST RESPONDENT
SECOND RESPONDENT
C Phang, solicitor
D Burwood, barristerORDERS: The decision of the Protective Commissioner to sell KB’s share of the property belonging to KB, KC and Brother B is affirmed.
REASONS FOR DECISION
1 Below are the reasons for this decision delivered orally on 9 February 2009.
2 KB is a 93 year old man who was born on 12 April 1915. He has a mild cognitive impairment, which is age related. He is also profoundly deaf and has extremely poor eyesight. He communicates with others by writing on a whiteboard. He is residing at the moment in a nursing home and has done so since late 2003. Prior to that he was living in the family home in Sydney, a home in which he had lived almost all his life with his family.
3 KB has two brothers, KC and Brother B. The three brothers are tenants in common in the family property. KA is KC’s daughter and KB’s niece. She was the applicant in these proceedings and I appreciate, from the submissions that she gave to the Tribunal today, that she has a very close relationship with her uncle and that she has a very strong interest in his welfare.
4 Just some formalities now. The applicants in these proceedings were KA and KC. The subject person, KB is a respondent in these proceedings and was represented by a barrister, Mr Burwood. The other respondent is the Protective Commissioner. The Protective Commissioner was represented by Ms Phang. I am satisfied that both KA and KC have sufficient interest in these proceedings to be applicants. The test in relation to that is set out in s 28A of the Protected Estates Act 1983, in particular, subs (3)(c) says that a person may apply to the tribunal for a review of a decision if the person is a person whose interests are, in the opinion of the Tribunal, adversely affected by the decision. KA is the beneficiary under KB’s estate and would stand to gain the one-third interest that her uncle has in that property on his death. KC is a one-third tenant in common in the property, so he also has an interest.
5 The decision that is the subject of review is the decision pursuant to s 24(2)(f) of the Protected Estates Act 1983 to sell KB’s share of the property. The Tribunal has jurisdiction to review the decision under s 28A of that Act. The Tribunal’s role is to determine whether the Protective Commissioner has made the correct and preferable decision: s 63 of the Administrative Decisions Tribunal Act 1997. There is no guidance in the Protected Estates Act 1983 as to how the decision should be made. However, s 4 of the Guardianship Act 1987 sets out the considerations that are relevant when making decisions relating to financial management and guardianship. I wish to highlight the first of those, that is, that the welfare and interests of such person should be given paramount consideration. Of importance also are the view of the people concerned and the protection of their estate.
6 The test was set out succinctly by the Court of Appeal in Protective Commissioner v D & Ors (2004) NSWCA 216 per McColl JA at 173, where her Honour said:
The manager stands in the shoes of a person who is unable to manage his/her affairs by virtue of circumstances beyond his/her control. The manager exercises a protective and benevolent function, protective in the sense that the manager’s task is to ensure the estate is managed in a manner to secure the protected person’s estate for that person’s continued maintenance. In this respect the 1983 Act and its predecessors reflected the "parental and protective" jurisdiction historically exercised by the Crown both in exercise of its prerogative and pursuant to the Prerogative Statutes.
7 Keeping that test in mind, I want to briefly set out the background to the Protective Commissioner’s decision which has been taken, to some extent, from the Commissioner’s internal review decision, dated 16 October 2008.
8 KB’s estate was committed to the Protective Commissioner by an order of the Guardianship Tribunal, made on 15 November 2005. That order was confirmed recently on 22 January 2009. As I have said, KB is the co-owner, with his two brothers, of a property in Sydney. I will not mention the address of the property because the parties have been anonymised and I do not want to provide any information that could lead to their identification. The premises are currently vacant and in need of substantial repairs. All parties agreed that the property is not habitable and that, rather than spend money repairing it, the better course would be for it to be demolished.
9 It was alleged that in 2004, KB was induced to execute a transfer of his one-third interest in the property by, or on behalf of, Brother B and Brother B’s son. KB commenced proceedings in the Supreme Court of New South Wales in 2007, on instructions from the Protective Commissioner, as his tutor. The Legal Aid Commission acted for KB. On 23 November 2007 the Supreme Court ordered that KB be restored as one-third owner, as tenants in common in equal shares of the property. The Supreme Court also ordered that Brother B and his son pay the legal costs. Those costs have been the subject of some discussion in these proceedings. As it turns out, those costs have not yet been paid and Legal Aid is pursuing its party/party costs against both Brother B and his son. As I understand it, the brother has agreed that if the property were sold, his costs would be paid from the proceeds of sale. It should be made clear, however, that KB has no current debt to the Legal Aid Commission. The only potential debt which may arise in the future is if Legal Aid decides to pursue KB for any shortfall between the party/party costs and the solicitor/client costs in those proceedings. There is no indication to date that they intend to do so. Consequently, although the Protective Commissioner mentioned that one of the reasons for the decision to sell the property was that money was owed to the Legal Aid Commission, I have not taken that matter into consideration in coming to my conclusion.
10 It is agreed that there is no prospect of KB returning to live in the home because he is now living in the nursing home and has been for some years. He has also told the disability adviser who visited him that he was satisfied with his accommodation and that he intends to remain there.
11 I should also make it clear that there is no life interest in the property and, although there was some discussion of that matter in the Supreme Court proceedings and in these proceedings today, a review of the documents satisfies me that there was no life interest ever granted and that the only interest is the interest as tenants in common that the three brothers share. However, it is important to note that KB understands that he is entitled to live in the property if he wished to do so and that the property should remain in his name until he dies. It is his firm expectation that he should be able to keep the property for his life.
12 I want to briefly outline KB’s financial situation contained in some documents from the Office of the Protective Commissioner. By a file note dated 27 November 2008, Mr Nicholas Kearns of the Protective Commissioner’s Office recommended that KB’s one-third interest be sold. The document supporting that recommendation sets out KB’s assets, namely liquid assets in cash of approximately $10,000, his entitlement to the pension and the value of his one-third interest in the property. The property has been valued at between $420,000 and $500,000, so his share would be approximately $150,000. The file note of Mr Kearns also sets out KB’s expenses and arrives at a shortfall of $522 a year when his income and expenditure are compared. There are some items on that list which were questioned and which are basically predictions and may not be entirely accurate. Nevertheless, I am satisfied that there would be a small shortfall between KB’s income and expenditure if he retains the property.
13 The general considerations that the Protective Commissioner has taken into account in its recommendation included the low level of liquidity of the house, as distinct from having the money in other investments, and the opportunity cost of the continued retention of the property. I also note that there would be no effect on his pension if the property is retained. There was no detail provided of the effect on his pension if the property is sold.
14 I turn now to consider the pros and cons of selling KB’s share in the house. In favour of selling the house is the fact that the property is in a derelict condition and it is agreed that it would need to be demolished. There are obviously potential health and safety concerns about leaving the property in that condition and the Protective Commissioner made a comment that it may not be able to be insured for public liability purposes. Secondly, the property is not producing any income at the moment as it has no tenants, so that is another factor in favour of selling. From KB’s financial point of view, he is losing a small amount of money at the moment every year while he keeps the property.
15 The arguments in favour of not selling KB’s share of the house are that KB could just survive financially if the property was not sold. I have been told that he does not have a great deal of expenses. He lives a very frugal existence and he does not require some of the things that the disability adviser suggested that he might need. I am satisfied, even though evidence was given from the bar table, rather than in any more formal form, that there are wheelchairs available at the hostel in which he lives, so that there is no immediate need for him to purchase a wheelchair. The question about podiatry services was not so clear, but I am not satisfied that that is a significant expense that would justify the sale of a house. Furthermore, although the disability adviser suggested that KB would benefit from a carer, KA has told us, and I accept, that KB’s health has deteriorated in recent times and that he has expressed a view not to leave the nursing home. Indeed, KA found it difficult to get KB to agree to go out into the garden of the hostel when she visited him recently. Consequently, the need for a carer to facilitate increased socialisation and community contact may not be an expense that needs to be incurred.
16 The strongest argument against selling the property is that KB’s wish is that it not be sold. Again, I accept his niece’s evidence from the bar table about his strong attachment to the property, the fact that he grew up there and lived there almost all of his life, that he grew vegetables and had chooks there, which he had a strong association with and that even now he asks to go and visit the house, even though he cannot go inside it at the moment because it has been locked up. He no doubt has a very strong emotional attachment to the house and I see this as perhaps the single strongest factor against the sale. Also, in general, I should respect a person’s wishes and not make decisions that are against those wishes, unless there is a need to do so.
17 In addition to that, the emotional attachment has been heightened by the fact that KB instituted proceedings in the Supreme Court to get back his one-third share of the house, which had been taken from him through undue influence. The psychological stress associated with those court proceedings and with him ultimately being successful are obviously very significant. I also take into account the fact that, although again there is no formal evidence of this, it may not be the best time to sell a property at the moment. However, it is very difficult to predict what property values are going to do in the short or long term. I also take into account that a factor against selling the house is KB does not desperately need the money at the moment and that any financial shortfall would be relatively small.
18 Nevertheless, looking back to the test that I have to apply, keeping in mind both the welfare and interests of KB and the fact that the manager’s task is to ensure that the estate is managed in a manner to secure the protected person’s estate for that person’s continued maintenance, my view is that the Protective Commissioner has made the correct and preferable decision in deciding to sell the property.
Costs
19 Mr Burwood applied for the Protective Commissioner to pay his costs pursuant to s 88 of the Administrative Decisions Tribunal Act 1997. As the Protective Commissioner has not had an adequate opportunity to respond to that application, the decision on that question will be the subject of separate reasons.
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