KDH

[2016] NSWCATGD 17

NSW Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	KDH [2016] NSWCATGD 17
Hearing dates:	26 February 2016
Date of orders:	26 February 2016
Decision date:	26 February 2016
Jurisdiction:	Guardianship Division
Before:	J Kearney, Senior Member (Legal) R Yuvarajan, Senior Member (Professional) S Rylands, General Member (Community)
Decision:	Financial management order confirmed.
Catchwords:	FINANCIAL MANAGEMENT – application to revoke financial management order – consideration of whether subject person recovered capacity to manage finances – financial vulnerability – incapable to manage financial affairs – NSW Trustee and Guardian confirmed as financial manager
Cases Cited:	CJ v AKJ [2015] NSWSC 498 McD v McD (1983) 3 NSWLR 81 P v NSW Trustee and Guardian [2015] NSWSC 579 P v R [2003] NSWSC 819 PB v BB [2013] NSWSC 1223 Re D [2012] NSWSC 1006 Re W and L (Parameters of Protected Estate Management Orders) [2014] NSWSC 1106
Category:	Principal judgment
Parties:	Mr KDH (the protected person and applicant) Ms DPC (person appointed as attorney) Mr UKH (person appointed as attorney) The NSW Trustee and Guardian
Representation:	Nil
File Number(s):	49879
Publication restriction:	Decisions of the Guardianship Division of the Civil and Administrative Tribunal have been anonymised to remove any information that may identify any person involved in the Tribunal's proceedings (s 65, Civil and Administrative Tribunal Act 2013 (NSW)).

REASONS FOR DECISION

What the Tribunal decided

1. The Tribunal confirmed the financial management order it made on 15 June 2012.

APPLICATION TO REVOKE FINANCIAL MANAGEMENT ORDER

Background

2. Mr KDH is a 61-year old man who lives in private rental accommodation at West Sydney. Prior to this, Mr KDH lived with his mother in her home but she passed away and her house was sold as part of her estate. Mr KDH received an equal share of his late mother’s estate with his seven siblings.

3. Mr UKH (his brother) and Ms DPC (his sister) are Mr KDH’s attorneys (joint and several) under an enduring power of attorney executed on 24 February 2009.

4. On 15 June 2012, the Tribunal made a financial management order appointing the NSW Trustee and Guardian as Mr KDH’s financial manager. The financial management order excluded the management of Mr KDH’s Centrelink benefits and his St George bank accounts. The history recorded was that Mr KDH had received an inheritance from his mother’s estate but spent a substantial proportion of it in a short period of time between December 2010 and June 2012. Prior to that time his rental property had been sold. He received $80,000 and said that he gambled it all away.

The hearing

5. At the end of these Reasons for Decision are lists of the parties to the application and the witnesses who attended the hearing. [Appendix removed for publication].

Prior applications

6. Mr KDH has made a number of applications to revoke the financial management order made on 15 June 2012.

7. On 19 February 2013. the Tribunal dismissed an application by Mr KDH to revoke the previous financial management order. On that occasion the Tribunal confirmed the previous order and in its reasons said that there was no evidence before the Tribunal at that time that Mr KDH had regained his capacity to manage the whole of his financial affairs. The bulk of Mr KDH’s assets were held by the NSW Trustee and Guardian, as is the case today.

8. At that time, the Tribunal also said that Mr KDH was not able to live within his means and had dissipated the savings in his bank account. The Tribunal said that Mr KDH’s evidence to the Tribunal indicated that he has limited understanding of how to manage his term deposit (which is his sole remaining substantial asset) for his medium to long-term use. The Tribunal was satisfied that if the order were revoked Mr KDH would dissipate the assets in a short period of time as he had done previously when he had access to substantial assets.

9. Mr KDH brought another application to revoke the financial management and that application was withdrawn on 9 July 2014.

10. The circumstances of the withdrawal were that a legal practitioner had been given leave to represent Mr KDH in the application to revoke the financial management order. In its decision on 9 July 2014, the Tribunal recorded that Mr KDH’s legal representative sought consent to withdraw the application to revoke the financial management order. The reason recorded was that Mr KDH had been reviewed by Dr Z, consultant psychiatrist on 27 July 2014; however, Dr Z’s assessment was not helpful to Mr KDH’s application. The Tribunal consented to the withdrawal of the application on that occasion.

11. On 2 March 2015, the Tribunal dismissed an application for review of a financial management order. There were no written reasons for that decision (as none were requested within the time frame) so the reasons for the dismissal are not known to the current Tribunal.

12. On 25 November 2015, Mr KDH made another application to revoke the financial management order and this is the matter that is currently before the Tribunal. The application was adjourned on 22 January 2016 when the Tribunal made directions.

What did the Tribunal have to decide?

13. On reviewing the financial management order the Tribunal must confirm, confirm and vary or revoke the financial management order.

14. The Tribunal may revoke the financial management order only if:

1. it is satisfied that Mr KDH is capable of managing his affairs; or

2. it considers that it is in the best interests of Mr KDH that the order be revoked.

15. Thus in this matter the issues for the Tribunal were:

• Is Mr KDH capable of managing his affairs?

• Is it in the best interests of Mr KDH that the order be revoked?

Should the order be revoked because the person has regained the capability to manage his affairs?

16. Mr KDH attended the Tribunal hearing in person. He said his reasons were all written down. He said, after prompting from the Tribunal, that he is relying on the grounds that he had recovered his capacity to manage the whole of his estate.

17. Mr KDH had an advocate through the Multicultural Advocacy Services, Ms WFT, who participated by telephone in the early part of the hearing. Ms WFT said that she had not prepared a proper budget but that the hand written document (document number 671773) had been prepared by her upon information provided to her by Mr KDH.

18. The Tribunal asked Mr KDH questions about this document because these proceedings were adjourned on 22 January 2016 when the Tribunal made directions. One of the directions was that Mr KDH should provide to the Tribunal a budget to show the Tribunal how he proposes to manage his money. Document number xx73 was the only document that purports to be a budget or a plan.

19. In relation to that document, Mr KDH said that there was a loan repayment each fortnight of $60. When asked about the loan Mr KDH said that he borrowed this money from his bank and was paying it off slowly. The reason for the borrowing he said was for a hernia operation. He was unclear about when this had occurred or whether the operation involved his kidney.

20. He said of the other entries in the “budget”:

1. As to electricity, he was asked why the NSW Trustee and Guardian appeared to be paying electricity when it should be part of his budget that he pays from his regular Centrelink benefits. He said he was not sure and “how can anyone budget properly anyway”.

2. As to “personal choices” of $200 per fortnight, Mr KDH said that this money was used to pay for sex with prostitutes. While Mr KDH is free to spend his money as he wishes, it appears to be a luxury that he can ill afford since he cannot save for holidays or even pay his electricity accounts.

3. On the other details of the “budget” Mr KDH was vague in his evidence, underestimating his Centrelink benefit, and initially omitting to mention the money he receives from the NSW Trustee and Guardian.

21. As to the large sum the NSW Trustee and Guardian is presently holding (about $97,000 as at 30 December 2015), Mr KDH said that if he had access to it, a friend from his bank would put some away for three months and give him a small amount. He was uncertain of the exact amounts to be controlled in that way. Mr KDH said it was his inheritance and he should have control of it. Mr KDH told the Tribunal “if you want something you must buy it” and “if I don’t spend it – if I kick the bucket tomorrow – who will spend it?”

22. When asked what would happen if he spent all his money he said “if I run out of money then that’s just my luck”.

23. Mr KDH told the Tribunal that he had applied to the NSW Trustee and Guardian for $5,000 for a holiday at the end of 2015. After negotiations he was given $2,000 but he did not go on a holiday and spent the money on other things such as clothing and entertainment.

24. A representative from the NSW Trustee and Guardian attended the Tribunal hearing by telephone. There was an email from him dated 9 December 2015 in the Tribunal’s papers which outlined for the past 12 months that the NSW Trustee and Guardian had paid a number of expenses detailed therein. The representative said that Mr KDH should have paid his electricity account himself considering he is managing his Centrelink pension.

25. The NSW Trustee and Guardian representative also said that he had advised Mr KDH not to take a bank loan for medical treatment since he would be paying commercial rates of interest, whereas he could use his capital held with the NSW Trustee and Guardian for that purpose without paying interest. The representative said the $5,000 borrowed from Mr KDH’s bank had been done without the NSW Trustee and Guardian’s consent.

26. At the hearing, the NSW Trustee and Guardian representative submitted that it is clear Mr KDH is unable to properly manage his Centrelink benefits and this shows that he is incapable of managing all of his affairs. The representative said that if he had true budgeting skills then he would be able to pay his bills and save from the Centrelink benefit and thereby demonstrate his financial ability. However the opposite is the case. Mr KDH, he said, is further in debt now than he was 12 months ago.

27. Further, the NSW Trustee and Guardian representative had advised Mr KDH that he should not borrow money from his bank because it will cost him a lot more in the long run in interest. However, Mr KDH took no notice of that. The representative said that if Mr KDH was given access to the money held by the NSW Trustee and Guardian, it would be dissipated.

28. Mr KDH’s brother Mr UKH, who attended the Tribunal by telephone, said that he had had little contact with his brother recently and was unwilling to express a view as to his capacity. However relying on the history, he said that Mr KDH had dissipated money in the past whenever he had access to it.

29. In response to a Tribunal question Mr KDH admitted he had a gambling problem in the past but no longer. Similarly he did not drink alcohol. Mr KDH was adamant and forthright that he should have control over his own money and no one should tell him what to do with it.

30. Mr KDH did provide two items of medical evidence in support of his argument that he has recovered capacity. The first was from a general practitioner, Dr Y, who in a medical certificate of 11 November 2015 said he was capable of managing his funds. However the certificate is very brief. The Tribunal does not know whether Dr Y had considered the history in forming his opinion. Further, Dr Y did not say whether there had been a change since the last Tribunal hearing so as to prove that a recovery had occurred.

31. The second item of medical evidence was a report from Ms X, a registered psychologist, dated 15 February 2016. Ms X concluded that in her opinion, Mr KDH has capacity to manage his affairs. Ms X said that her sources of information for forming that opinion were three sessions with Mr KDH, a GP referral, a financial breakdown sent by Ms WFT, and a phone conversation with Ms WFT. Not all the content of that information is detailed in the report. For instance, the Tribunal does not know the content and purpose of the GP referral.

32. The Tribunal notes that Ms X was not provided with the history and medical evidence which the Tribunal had before it when it made the initial financial management order on 15 June 2012. As stated in the Tribunal reasons, those medical reports had been prepared at the request of the legal aid commission who acted on Mr KDH’s behalf before the Administrative Appeals Tribunal in an application to have his disability support pension reinstated. That application was ultimately successful. While these professional reports were directed to the issue of work capacity some of the reports nevertheless included material that was relevant to the question of Mr KDH’s long-term medical status, including:-

1. a report dated 27 October 2008 from Dr W, a consultant psychiatrist, who concluded that Mr KDH did not have a mental illness but had an intellectual disability that impairs his ability to function successfully in the community. This level of disability was mild. Dr W noted that at that time in his life, Mr KDH had difficulty managing his finances and he could not do so without the support of others;

2. a report of 4 November 2008 from Mr V, consultant clinical psychologist, who expressed the view that based on Mr KDH’s history, his presentation, his personal adaptive functioning and the administration of the Wechsler Adult Intelligence Scale (WAIS-III), that Mr KDH demonstrates a global mild intellectual disability. Mr V referred to specific aspects of Mr KDH’s capacity to manage financial issues. He noted that Mr KDH has poor arithmetic skills, has a reading age of about 8 ½ and had comprehension difficulties. These make Mr KDH vulnerable to financial exploitation;

3. despite the age of these medical opinions, the Tribunal noted that the diagnosis was of a global mild intellectual disability.

33. The significance of this is twofold. First it suggests an identifiable organic reason for Mr KDH’s incapacity to manage his affairs. If he is to recover his capacity then medical evidence addressing this issue would be helpful.

34. Secondly, such a diagnosis was not included in the history given to Ms X for her consideration as part of the process of forming an expert opinion.

35. Indeed Ms X took a history from Mr KDH that “he has never been formally diagnosed with a learning or intellectual disorder”. That suggests she was given an incorrect history.

36. Further, Ms X did not record whether she undertook any cognitive or other testing in forming her opinion.

Analysis of evidence regarding recovery of capacity

37. In Re D [2012] NSWSC 1006, White J assessed the history of case law in relation to financial management and noted that initially the issue of capability was approached by referring to hypothetical or abstract notions of the ordinary affairs of man. However, the Court now assesses the person’s own capacity to do what they are proposing to do [58]. White J used a “rational appreciation” of assets test to determine a person’s capability to manage his or her affairs. He adopts the reasoning of Barrett J in P v R [2003] NSWSC 819 who said that the task of the Court in these circumstances:

… is to make a judgment as to the capacity and ability of the person concerned to cope with the ordinary routine affairs of living, particularly so far as they concern the person's property…the requisite judgment is to be made in the light of objective physical facts concerning the relevant person's property, money and other assets and the way the person is able to look after them. If there is a lack of capacity, the reason for it does not matter [26].

38. In PB v BB [2013] NSWSC 1223, Lindsay J confirmed that the question focuses attention on the special circumstances of the person. His Honour stated, at [7]:

Of central significance is the functionality of management capacity of the person said to be incapable of managing his or her affairs, not: (a) his or her status as a person who may, or may not, lack "mental capacity" or be "mentally ill"; or (b) particular reasons for an incapacity for self-management.

39. The test for determining a person's capability to manage his or her affairs has been described as follows (P v NSW Trustee and Guardian [2015] NSWSC 579, at [307]-[308]):

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

…

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

40. In considering whether the person is “able” in this sense, consideration may be given to:

• past and present experience as a predictor of the future course of events;

• support systems available to the person; and

• the extent to which the person, placed as he or she is, can be relied upon to make sound judgments about his or her welfare and interests: see Lindsay J in CJ v AKJ [2015] NSWSC 498, at [38], and P v NSW Trustee and Guardian [2015] NSWSC 579, at [309].

41. The relevant time for considering whether a person is incapable of managing his or her affairs is not merely the day of the hearing but the reasonably foreseeable future (McD v McD (1983) 3 NSWLR 81, at [86]). See Lindsay J in Re W and L (Parameters of Protected Estate Management Orders) [2014] NSWSC 1106, at [20]:

42. Each case must, of course, be considered on its own facts, including not only actual facts presently known but also, so far as they can be known, prospective developments

43. When making the original decision on 15 June 2012, the Tribunal relied upon the medical evidence of, inter alia, Dr W and Mr V. Implicit in that acceptance is acceptance that Mr KDH has a mild intellectual disability.

44. In making the original order, the Tribunal also relied upon Mr KDH’s financial vulnerability, given that he had dissipated a substantial sum in a relatively short period. The Tribunal also noted Mr KDH’s inability to articulate an effective plan for the remainder of his funds or an effective budget for his longer term needs.

45. The Tribunal does not accept the opinion of Ms X because that opinion is based upon incomplete and incorrect information. The absence of cognitive testing from that opinion places further uncertainty over the reliability of the conclusion.

46. The Tribunal accepted the submissions from the representative from the NSW Trustee and Guardian that Mr KDH has demonstrated that he is not adequately managing his Centrelink benefits and this indicates a wider inability to manage his affairs.

47. The Tribunal has carefully considered the totality of the evidence and finds:

1. the medical evidence does not satisfy the Tribunal that Mr KDH has recovered his capacity to manage his financial affairs;

2. Mr KDH has not articulated an effective plan for the future management of his funds;

3. Mr KDH has not demonstrated a capacity to budget so as to ensure that his funds are available for his long-term needs.

48. The Tribunal was therefore not satisfied that Mr KDH has recovered his ability to manage his financial affairs. The financial management order should not be revoked on this basis.

Should the order be revoked because it is in the best interests of the person?

49. Although Mr KDH did not ask the Tribunal to consider this issue, the Tribunal did so out of fairness to Mr KDH and for completeness.

50. In his evidence detailed above, Mr KDH told the Tribunal that if the order was revoked, he intended to spend the funds presently under management. He has a history of dissipating funds when they are available. It is to his credit (and the Tribunal accepts) that he no longer gambles and does not drink alcohol. However the weight of the evidence is that there is a likelihood the funds would be spent without a sensible plan for the future.

49. The Tribunal accepts that if Mr KDH had access to his funds, there is a real risk that the funds would be dissipated quickly and without regard to his future needs.

50. For those reasons the Tribunal was not satisfied that the financial management order in relation to Mr KDH should be revoked in his best interests.

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

Registrar

Decision last updated: 22 September 2016