KY, KX and KW v Protective Commissioner

[2006] NSWADT 197

CITATION:	KY, KX and KW v Protective Commissioner [2006] NSWADT 197
DIVISION:	General Division
PARTIES:	APPLICANTS KY, KX and KW RESPONDENT Protective Commissioner
FILE NUMBER:	063145
HEARING DATES:	14/06/2006
SUBMISSIONS CLOSED:	06/14/2006
DATE OF DECISION:	06/30/2006
BEFORE:	Rees N - Judicial Member
CATCHWORDS:	Protected Estates Act - Protective Commissioner - decision to enter costs agreement with solicitors - Protective Commissioner - decision to enter costs agreement with solicitors
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Administrative Appeals Tribunal Act 1975 (Cth) Administrative Decisions Tribunal Act 1997 Guardianship Act 1987 Powers of Attorney Act 2003 Protected Estates Act 1983 Protected Estates Regulation 2003
CASES CITED:	Alphapharm Pty Ltd v Smithkline Beecham (Aust) Pty Ltd (1994) 32 ALD 71 In Re McHattan and Collector of Customs (NSW) (1977) 1 ALD 67 KV v Protective Commissioner (No 2) [2004] NSWADTAP 48 Protective Commissioner v D (2004) 60 NSWLR 513 Re Control Investments Pty Ltd and Australian Broadcasting Tribunal (No 1) (1980) 3 ALD 74
REPRESENTATION:	APPLICANTS KY and KW in person RESPONDENT C Phang, solicitor
ORDERS:	1. The decision of the Protective Commissioner made on 25 January 2006 to execute a costs agreement with Crichton-Brownes, Solicitors, concerning payment of reasonable legal expenses in relation to an application to the Supreme Court pursuant to s 35 of the Protected Estates Act 1983 on behalf of KZ is set aside.; 2. The matter is remitted to the Protective Commissioner to be dealt with in accordance with these reasons.

Section 126 of the Administrative Decisions Tribunal Act 1997 applies to this decision.
Section 126 provides
(1A) This section applies only to the following:
(a) proceedings in the Community Services Division of the Tribunal,

(b) appeals to an Appeal Panel from a decision made by the Tribunal in the Community Services Division,

(b1) proceedings in relation to an external appeal made under section 67A of the Guardianship Act 1987 or section 21A of the Protected Estates Act 1983,

(b2) proceedings in relation to a reviewable decision made under the Guardianship Act 1987 or the Protected Estates Act 1983

(c) such other proceedings (or class or classes of proceedings) as may be prescribed by the regulations for the purposes of this section.


(1) A person must not, except with the consent of the Tribunal, publish or broadcast the name of any person:
(a) who appears as a witness before the Tribunal in any proceedings, or

(b) to whom any proceedings before the Tribunal relate, or

(c) who is mentioned or otherwise involved in any proceedings before the Tribunal,


whether before or after the proceedings are disposed of.
Maximum penalty: 10 penalty units or imprisonment for 12 months, or both.
(2) This section does not prohibit the publication or broadcasting of an official report of the proceedings that includes the name of any person the publication or broadcasting of which would otherwise be prohibited by this section.
(3) For the purposes of this section, a reference to the name of a person includes a reference to any information, picture or other material that identifies the person or is likely to lead to the identification of the person.

Reasons for Decision

Introduction

1 In this case the applicants, KY, KX and KW, are three of the four children of an 82 year old woman, KZ, whose estate has been managed by the Protective Commissioner pursuant to the Protected Estates Act 1983 for the past two years. The applicants have challenged a decision by the Protective Commissioner to enter into a costs agreement with a firm of solicitors which purports to be acting on behalf of their mother in relation to an application to the Supreme Court of NSW pursuant to s 35 of the Protected Estates Act 1983 to revoke the order made by the Guardianship Tribunal on 2 April 2004 that her estate be committed to management by the Protective Commissioner.

2 KZ has a fourth child, KV, who was not a party to this application even though previously he has been a party to litigation involving his mother’s estate before both the Guardianship Tribunal and an Appeal Panel of this Tribunal. In this case the applicants characterised their ultimate dispute as being one with their brother, KV, concerning the best means of dealing with their mother’s financial affairs.

3 This application reveals that the Protective Commissioner has been caught in the middle of a dispute between KZ’s four children concerning the management of their mother’s financial affairs. The circumstances of this case demonstrate the challenges faced by the Protective Commissioner when there are disagreements amongst the family members of a protected person about the proper management of his or her estate.

Background

4 The background facts in this case, which are not in dispute, have been drawn from the earlier decisions of the Guardianship Tribunal (Matter Nos: 2004/6180 and 2004/6181) and an Appeal Panel of this Tribunal (KV v Protective Commissioner (No 2) [2004] NSWADTAP 48) concerning KZ, and from a document prepared on 25 January 2006 by the Deputy Protective Commissioner, Mr Mark Orr, headed ‘Internal Review of Decision’. It is the decision recorded in Mr Orr’s document which is the subject of this application for review.

5 KZ, who was born in Italy in 1924, migrated to Australia in 1955. She and her husband, who has been dead for many years, had four children. KZ still owns the Wollongong house in which those children were reared. KZ has not lived in her home for some time because she has been living in a residential aged care home since 2001. KZ’s oldest child, KV, now lives in the former family home. This arrangement is not supported by KZ’s other three children, the applicants in these proceedings, because they believe that the family home should be sold to pay the admission bond at their mother’s residential aged care home. That bond, which remains largely unpaid, has been attracting interest for many years.

6 KZ is now 82 years of age. As a result of her very limited formal education she has never been able to read and write in English or Italian. There is a dispute about KZ’s current state of health. In 2000, about a year prior to the time when she was admitted to the residential aged care home, KZ was hit by a car whilst crossing a road. She sustained significant injuries, including broken bones. It is unclear whether she sustained any lasting head injuries but she has suffered from some impaired mental functioning since the time of the accident. There is disagreement amongst health professionals concerning the extent of that impairment and KZ’s present cognitive capacity. Some medical practitioners have concluded that she suffers from moderately severe dementia, whilst others have strongly disputed this diagnosis.

7 On 2 April 2004 the Guardianship Tribunal made various orders concerning KZ in response to applications made by the three applicants in these proceedings, KY, KX and KW. The relevant order for the purposes of this case was the order by the Guardianship Tribunal that the Protective Commissioner be appointed as the manager of KZ’s estate. Prior to this order being made KZ’s financial affairs were handled by her elder son, KV, pursuant to an enduring power of attorney. The Guardianship Tribunal’s order had the effect of suspending any powers which KV could exercise pursuant to the power of attorney whilst the Protective Commissioner remained the manager of his mother’s financial affairs.

8 KV appealed from the decision of the Guardianship Tribunal to an Appeal Panel of this Tribunal. That appeal was heard on 8 October 2004 and the Appeal Panel’s decision, orders and reasons were published on 3 November 2004. The Appeal Panel found that KV had been denied procedural fairness at the Guardianship Tribunal hearing and that the challenge by KW, KX and KY to the validity of the power of attorney made by their mother in favour of their brother, KV, had not been properly dealt with by the Tribunal because it misconstrued its powers under the Powers of Attorney Act 2003. The Appeal Panel made orders which had the effect of retaining the Protective Commissioner as the manager of KZ’s financial affairs on an interim basis until the Guardianship Tribunal could re-determine the various applications after conducting a fresh hearing in which it complied with the Appeal Panel’s directions about matters of procedural fairness and findings concerning the meaning of relevant provisions in the Powers of Attorney Act 2003.

9 The Guardianship Tribunal conducted a rehearing on 27 January 2005. It announced its decisions and made orders at the conclusion of that hearing. The Tribunal’s Reasons for Decision, which were published on 2 March 2005, reveal that the Guardianship Tribunal conducted an extremely thorough review of both the circumstances surrounding KZ’s capacity to manage her financial affairs and of the options for financial management in the event that she was found to be incapable of managing her own affairs. The Tribunal heard evidence from 16 witnesses and it admitted 120 documents into evidence. Whilst KZ chose not to attend the Tribunal’s hearing, the Tribunal heard from a solicitor from the Aged Care Rights Service who had earlier been appointed by the Appeal Panel of this Tribunal to ensure that KZ’s interests were properly protected. The Tribunal explained the reasons for its decisions and orders in a document which extends over 33 pages and which canvasses the relevant facts and law in an accessible way.

10 The Guardianship Tribunal found that KZ was not capable of managing her financial affairs and it made an order committing the management of her estate to the Protective Commissioner. It dismissed the application for review of the power of attorney. In the course of its reasons the Guardianship Tribunal stated:

The Tribunal was satisfied that [KZ] is incapable of managing her affairs. Her illiteracy, lack of mathematics and limited English contribute to this, but the Tribunal also accepted that she has a substantial cognitive impairment, in particular of memory, that is at least a major cause of her incapability. The tribunal also took into account concerns raised by [KV] about interpreter limitations. Also, [KZ’s] presentation in situations may have been affected by factors such as stress and cultural differences. However, the Tribunal was faced with a very strong weight of evidence from neurologists, aged care workers and others, demonstrating that [KZ] has a substantial cognitive problem…

The Tribunal was also clear that it should make a financial management order. The Power of Attorney to [KV] is of doubtful validity. It contains a clause which could lead to [KZ] being alienated of her assets. The issue of her bond being unpaid at Scalabrini Village, and the related issue of what should happen with her house, need to be resolved. Informal arrangements have not been able to resolve these issues. Whether and on what terms it is appropriate in [KZ’s] interests for [KV] to continue living in her house needs to be resolved. There is enormous conflict and mistrust between [KZ’s] children and [KV] faces a conflict of interest under the Power of Attorney. [KV] also owes his mother money for rent. There have been issues about bills going unpaid.

The Tribunal was clear that it should make a financial management order so that it is clear where authority lies in relation to [KZ’s] affairs and so that outstanding issues are resolved in her interests.

The Tribunal felt it had to take this path despite the evidence of [KZ] wanting to leave things in the hands of her son. Her wishes are important, as are any cultural factors that may be affecting her wishes, but her best interests ultimately need to prevail…

The appointment of the Protective Commissioner is not necessarily permanent. Once the current complexities and contentious issues facing [KZ’s] financial affairs are resolved, it might be appropriate for a family member to take over as financial manager. This would involve an application to the Tribunal and the central issue would be whether it was in [KZ’s] best interests for this change to occur. [KZ’s] views would be significant but ultimately her best interests would need to prevail. If a family member was appointed, he or she would then act under the supervision of the Protective Commissioner.

11 There was no appeal from the decision and orders of the Guardianship Tribunal by any party to those proceedings. Section 67 of the Guardianship Act 1987 grants a right of appeal to the Supreme Court, whilst s 67A of the same Act provides for a right of appeal to an Appeal Panel of this Tribunal. It is not possible to exercise both avenues of appeal (ss 67(1A) and 67A(3) Guardianship Act 1987 ). It is also important to note at this stage that the Guardianship Tribunal may review the continuing need for a financial management order on its own motion at any time (s 25N(4)(a) Guardianship Act 1987 ), that it must review the continuing need for a financial management when an application for variation or revocation is made by the protected person, the Protective Commissioner, or “any other person who, in the opinion of the Tribunal, has a genuine concern for the welfare of the protected person” (ss 25R and 25N(4)(b) Guardianship Act 1987 ), and that it must review the desirability of maintaining a particular person, including the Protective Commissioner, as the manager of a person’s estate in similar circumstances (s 25S Guardianship Act 1987 ). None of these powers have been invoked by any interested person since the Guardianship Tribunal made its order on 27 January 2005 committing the management of KZ’s estate to the Protective Commissioner.

12 On 14 April 2005, however, KV filed a Notice of Motion in the Supreme Court seeking a declaration pursuant to s 35 of the Protected Estates Act1983 that KZ was capable of managing her affairs. Section 35 is a grant of jurisdiction to the Supreme Court to hear and determine an application at any time by a “protected person” that he/she is capable of managing his or her affairs and no longer requires the assistance of the Protective Commissioner, or any other financial manager. The Notice of Motion filed in the Supreme Court listed KV as the first plaintiff, his mother KZ as the second plaintiff and the Protective Commissioner as the respondent. It appears that this document was prepared and filed by KV personally.

13 On 15 September 2005 a firm of solicitors, Crichton-Brownes, contacted the Protective Commissioner by fax and advised that they acted for both KV and KZ in relation to these Supreme Court proceedings. In this communication the solicitors inquired about funds held by the Protective Commissioner on behalf of KZ and advised that their hourly rate for the legal services in question was $300 plus GST. On the following day the Protective Commissioner advised Crichton-Brownes that “the current application had no merit and should be struck out with costs”. On 19 September 2005 Windeyer J made an order which removed KV as a party to the application pursuant to s 35 of the Protected Estates Act 1983 because he did not have standing. Such applications may only be brought by the “protected person” him or herself.

14 It appears that the Supreme Court application continued in KZ’s name alone and that Crichton-Brownes subsequently filed notice that they were her acting as her solicitors. On various occasions those solicitors appeared for KZ at directions hearings in the Supreme Court and they provided the Protective Commissioner with a number of new medical reports concerning KZ’s cognitive functioning. On 17 October 2005 Mr Paul Marshall, a member of the Protective Commissioner’s staff, wrote to KV and advised him that “[s]hould Mr Crichton-Browne wish to continue acting for your mother then he will need to contact OPC’s legal branch to obtain approval to act for KZ”. Shortly afterwards Crichton-Brownes responded to that letter and informed the Protective Commissioner that they were in possession of medical reports which established that KZ was capable of giving instructions to solicitors and managing her financial affairs.

15 Crichton-Brownes subsequently provided the Protective Commissioner with a costs agreement dated 1 November 2005 between itself and KZ. The legal work to be undertaken was described as: “To research the provisions of the Guardianship Act relative to your application to the Supreme Court and to appear before that Court”. The document contained an estimate of costs and disbursements of $5995. The Protective Commissioner was asked by Crichton-Brownes to execute this costs agreement on behalf of KZ. On 29 December 2005 Mr Tim Tunbridge, the Protective Commissioner’s Assistant Director, Legal Services, informed Crichton-Brownes that the costs agreement was “not approved” and that “this office does not accept that [KZ’s] estate is liable to pay your fees”.

16 On 4 January 2006 Crichton-Brownes sought a review of the Protective Commissioner’s decision. This review was conducted by Mr Mark Orr, the Deputy Protective Commissioner, pursuant to s 53 of the ADT Act. As Mr Orr does not appear to have considered whether Crichton-Brownes had standing to seek the review pursuant to s 53 of the ADT Act, and as this matter was not raised with me on the hearing of the application to review the Protective Commissioner’s decision, there is little point in doing more than noting that the issue of Crichton-Brownes’ standing to seek that review is not beyond contention.

17 The review was completed by Mr Orr on 25 January 2006. In his document titled ‘Internal Review of Decision’ Mr Orr set out the history of this matter in some detail and he paid particular attention to medical reports which had been prepared since the Guardianship Tribunal ordered on 27 January 2005 that the management of KZ’s estate be committed to the Protective Commissioner. Mr Orr decided to set aside the decision which had been communicated to Crichton-Brownes by Mr Tunbridge on 29 December 2005 and he recorded his decision as “an approval to execute the costs agreement with Crichton-Brownes Solicitors submitted on 1 November 2005 and the subsequent payment of reasonable legal expenses with the s 35 Application”. This decision was communicated to Crichton-Brownes on 27 January 2006 by the Protective Commissioner. On 2 February 2006 Ms Phang, a legal officer with the Protective Commissioner, provided Crichton-Brownes with a copy of the costs agreement which she had signed on behalf of the Protective Commissioner.

18 Mr Orr explained his decision to approve the costs agreement with Crichton-Brownes in the following paragraphs from his document titled ‘Internal Review of Decision’:

4.10 OPC’s original decision seems to revolve around the application being made by [KV] acting alone, even though [KZ] is mentioned as the second plaintiff. On that basis any payment from [KZ’s] estate was declined and it was suggested that any decision in relation to costs should be determined by the Court in due course.

4.11 As there is no evidence that the legal advice was sought by [KZ] and the application was not lodged by her, or with her consent (from what I can see), I think there are grounds upon which an argument to deny payment from her estate could be made.

4.12 However, that said, I am conscious of professional reports that highlight [KZ’s] cultural background and illiteracy. These aspects, as well as [KZ’s] age, could improperly conspire to deny her access to judicial review of her circumstances, if that is indeed what she wishes.

4.13 Many of the professional reports currently available suggest that [KZ] has the ability to manage her affairs. However it must be noted that an incapability to manage one’s financial affairs does not necessarily mean that there is a concurrent incapacity in relation to providing instructions to a legal practitioner in relation to a s 35 Application…

4.15 The Court recommended that if the s 35 Application was to proceed that the advice and assistance of a legal practitioner be sought.

4.16 Crichton-Brownes Solicitors in their letter dated 4 January 2006 note that the involvement of a legal practitioner is of assistance to the court in these matters and this also serves the interests of justice.

4.17 On balance, given the professional evidence available about [KZ’s] capability in relation to the management of her affairs, I think it appropriate that she be provided with assistance to challenge any orders made removing her ability to manage those affairs.

4.18 In saying this I note that there is conflicting professional opinion. The question of which professional opinion to rely on in the end is one for the Court. Even though all of the reports are not to hand I believe it is sufficient for my purposes to identify that there is an extreme difference of opinion between suitably qualified professionals about the question of whether [KZ] is able to manage her affairs. That is a matter for the Court to resolve.

4.19 In the absence of legal representation I do not believe [KZ] would be able to challenge the current orders.

4.20 I do not believe the (sic) [KZ’s] interests would be promoted if she was prevented from arguing before the Court that she is no longer incapable and should have her affairs returned to her. To do so requires a costs agreement to be entered into with a legal practitioner and appropriate and reasonable legal expenses paid for by [KZ’s] estate.

The current application

19 The application before the Tribunal to review the decision made by Mr Orr on 25 January 2006 has been made by KY, KX and KW pursuant to s 55(1) of the Administrative Decisions Tribunal Act 1997 (the ADT Act). The applicants have sought an order that the decision in question be set aside.

20 Section 55(1)(a) of the 1997 the ADT Act permits “an interested person” to apply to the Tribunal for “a review of a reviewable decision”. “Reviewable decision” is defined in s 8 to mean “a decision of an administrator that the Tribunal has jurisdiction under an enactment to review”.

21 Section 38(1) of the ADT Act confers jurisdiction on the Tribunal to review a decision made by an administrator in the exercise of a function conferred or imposed by an Act or statutory rule if the particular Act or statutory rule grants the Tribunal jurisdiction to do so. Section 28A(1) of the Protected Estates Act 1983 provides that an application may be made to the Tribunal for review of “a decision” by the Protective Commissioner that “is made in connection with the exercise of the Commissioner’s functions” under Division 3 of Part 3 of that Act if that decision is declared by the regulations to fall within the class of decisions that may be reviewed. The relevant regulation does not limit in any way the class of decisions that may be reviewed. Clause 9 of the Protected Estates Regulation 2003 provides that all decisions made by the Protective Commissioner “in connection with the exercise of the Protective Commissioner’s functions under Division 3 of Part 3 of the Act” may be reviewed pursuant to s 28A. A number of people, including “the protected person in respect of whose estate the decision was made”, may seek review of the Protected Commissioner’s decisions in the Tribunal (s 28A(3)).

22 The office of Protective Commissioner is established by s 5 of the Protected Estates Act 1983. Division 3 of Part 3 of that Act, which comprises sections 24 to 28A, is headed ‘Management of Estates by Protective Commissioner’. Section 24(1) vests the Protective Commissioner with all functions necessary and incidental to manage and care for the estate of “a protected person” when the management of that estate is committed to the Protective Commissioner. In various circumstances the Supreme Court, the Guardianship Tribunal, the Mental Health Review Tribunal and Magistrates may order that a person become “a protected person” and that the person’s estate be managed by the Protective Commissioner.

23 Section 28 of the Protected Estates Act 1983 is headed ‘Disposition of money in hands of Protective Commissioner’. Section 28(1)(a) gives the Protective Commissioner the following power:

(1) The Protective Commissioner may apply money comprising the whole or any part of the estate of a protected person towards any one or more of the following purposes:
(a) the payment of the debts and engagements of the protected person and the repayment of expenses chargeable to the state of the protected person
24 Whilst Ms Phang did not identify any particular statutory power which the Protective Commissioner relied upon when entering into the costs agreement with Crichton-Brownes, it appears that s 28(1)(a) is a power of sufficient breadth to support that action.

Issues for determination

25 Ms Phang, who appeared for the Protective Commissioner on the hearing of this application, filed written submissions in which she challenged the applicants standing and in which she submitted that the decision under review was the correct and preferable decision in the circumstances. She also submitted that there was no useful purpose to be served by determining the application because, first, the Supreme Court proceedings were due to commence in a matter of days, secondly, that it was too late for Crichton-Brownes to withdraw from those proceedings and, thirdly, that some source of funds, most likely KZ’s estate, would need to be drawn upon to pay the legal fees which had been incurred to date whatever the outcome of this application.

26 There are two major issues to determine in this case: first, do the applicants have standing to maintain this challenge to the Protective Commissioner’s decision, and, secondly, if the applicants do have standing was the decision made by the Protective Commissioner on 25 January 2006 to enter into a costs agreement with Crichton-Brown’s in relation to KZ’s pending proceedings in the Supreme Court pursuant to s 35 of the Protected Estates Act 1983 the correct and preferable decision.

The hearing

27 Two of the applicants, KY and KW, gave evidence at the hearing of this application. Both expressed the view that their mother was incapable of managing her own affairs and that the pending Supreme Court litigation was not in her best interests. They tendered various medical reports in which the opinion was recorded that KZ was incapable of managing her own financial affairs. Both women indicated that their mother had no understanding of this application to the Tribunal to set aside the Protective Commissioner’s decision and that she had no wish to attend any courts or tribunals because she saw them as places which people attended when they had done something wrong. They also tendered a typed letter to Crichton-Brownes, dated 24 March 2006 and signed by their mother in a very shaky hand, in which KZ states that she has no recollection of providing that law firm with any instructions and does not want the pending Supreme Court litigation to proceed. In view of the overwhelming evidence that KZ cannot read and write in English or Italian, and in view of the conflicting evidence concerning her current level of cognitive functioning, the Tribunal cannot attribute any weight to this letter.

28 KZ is not automatically a party to this application by three of her four children to review a decision by the Protective Commissioner concerning her estate. The parties to this application are determined by s 67(2) of the ADT Act. By dint of that provision the three applicants and the Protective Commissioner are parties to this application. Section 67(4) of the ADT Act gives the Tribunal a discretionary power to order on its own motion that a person be made a party to an application if the Tribunal is satisfied that the interests of the person are affected by the reviewable decision. Ordinarily, a person in KZ’s position should be made a party to an application to review a decision made by the Protective Commissioner concerning the management of her estate. In this case, however, the Tribunal decided not to exercise this power to make KZ a party because of the evidence from her daughters concerning her lack of interest in this application and her general unwillingness to be involved in any cases before courts and tribunals.

29 Ms Phang called one witness, Ms Kardiasmenos, who is a recently admitted solicitor employed by Crichton-Brownes. Subject to supervision by Mr Crichton-Browne, Ms Kardiasmenos has the carriage of the pending application to the Supreme Court. Ms Kardiasmenos did not know whether consideration had been given to proceedings in the Guardianship Tribunal rather than in the Supreme Court, she said that counsel had been briefed for the Supreme Court proceedings but she was unaware whether agreement had been reached concerning a brief fee and she said that her firm had prepared an estimate that the total costs of the Supreme Court application would be in the vicinity of $12,000 to $13,000.

Standing

30 The people who may apply to this Tribunal for review of the decision in question in this case are set out in s 28A(3) of the Protected Estates Act 1983. They are: (a) the protected person him or herself, (b) the spouse of the protected person and (c) “any other person whose interests are, in the opinion of the ADT, adversely affected by the decision”. As Ms Phang has argued, the only category into which the three applicants in this case may fall is (c). She submitted that in this case the applicants had no interests which were adversely affected by the decision in question.

31 A standing test of “interests affected” is quite common in Australian administrative law. Section 27 of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act) provides that a person “whose interests are affected by [a] decision” may apply to the Administrative Appeals Tribunal for review of various administrative decisions. There have been a number of decisions concerning s 27 of the AAT Act in which attempts have been made to contrast the breadth of that provision with common law rules concerning standing. In Re McHattan and Collector of Customs (NSW) (1977) 1 ALD 67 at 69-70 Brennan J held that “the relevant ‘interests’ do not have to be pecuniary interests or even specific legal rights” and that familial interests can suffice. In Re Control Investments Pty Ltd and Australian Broadcasting Tribunal (No 1) (1980) 3 ALD 74 Davies J make similar remarks and noted that the AAT should be more generous than the common law courts when considering questions of standing. More recently, when discussing the general issue of standing under administrative law statutes, Gummow J stated in Alphapharm Pty Ltd v Smithkline Beecham (Aust) Pty Ltd (1994) 32 ALD 71 at 91:

“The day is long gone when there was any general presumption that in such statutes the ‘interests’ concerned must be proprietary or even legal or equitable in nature, or that the affectation be of a nature as understood in private law”.
32 There is no reason why standing in this Tribunal should be treated any differently from standing in the AAT when the governing statutory provision uses the language of “interests affected”. The statements reproduced in the previous paragraph concerning the proper approach to questions of standing under s 27 of the AAT Act were made by judges of considerable seniority. In this case the applicants have familial interests which were adversely affected by the decision in question. They also have possible financial interests. KW was honest enough to inform the Tribunal that she and her sister and brother felt that their “inheritance” was affected by the decision of the Protective Commissioner to fund the Supreme Court proceedings from their mother’s estate. In the circumstances I am satisfied that the applicants are people whose interests are adversely affected by the decision in question. The challenge to their standing to maintain this application is rejected.

Correct and preferable decision

33 The Tribunal’s task, which is stipulated in s 63 of the ADT Act, is to determine whether the Protective Commissioner made the “correct and preferable” decision having regard to any relevant factual material and any applicable written or unwritten law. When undertaking this task the Tribunal may exercise all of the functions that are vested in the Protective Commissioner. The Tribunal may affirm, vary, or set aside the Protective Commissioner’s decision. If the decision is set aside the Tribunal may substitute its own decision for that of the Protective Commissioner, or it may remit the matter to the Protective Commissioner together with any directions or recommendations that it chooses to make.

34 I am not satisfied that the decision under review was the correct and preferable decision having regard to the facts of this case and the relevant law. It is important that this conclusion be explained and justified. The Protected Estates Act 1983 does not stipulate any matters which the Protective Commissioner is required to take into account when he exercises his general function under s 24 of that Act of managing the estate of a protected person and when he exercises any of his specific powers under s 28 concerning expenditure of money which is held on behalf of a protected person.

35 Recently, in ProtectiveCommissioner v D (2004) 60 NSWLR 513, the NSW Court of Appeal considered the history of the role of the Protective Commissioner in the course of determining whether s 28 of the Protected Estates Act1983 permitted the Protective Commissioner to make payment for past gratuitous care out of the estate of a protected person. The leading judgment was written by McColl JA (with whom Mason P and Giles JA agreed) who described the role of the Protective Commissioner in the following terms:

[173]…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 Protected Estates Act and its predecessors reflected the “parental and protective” jurisdiction historically exercised by the Crown both in the exercise of its prerogative and pursuant to the Prerogative Statutes.
36 The relationship between the Protective Commissioner and a protected person is clearly, as the Commissioner’s title implies, a protective one in which the Protective Commissioner must exercise his powers in the best interests of the person whose estate he manages. I acknowledge that the concept of ‘best interests’ is one which is often not easy to apply because reasonable minds may differ as to what action may be in a person’s best interests. But, as it is the Protective Commissioner’s task “to ensure the estate is managed in a manner to secure the protected person’s estate for that person’s continued maintenance” (per McColl JA in ProtectiveCommissioner v D ), this must mean that the Commissioner is obliged to ensure that a protected person’s money is expended prudently.

37 In the context of agreeing to pay private lawyers to conduct litigation on behalf of a protected person there are, in most cases, at least two issues which are likely to require consideration when determining whether that person’s money is being expended prudently. They are, first, in most circumstances it will be in the person’s best interests for the manager of the estate to support the cheapest and most efficient form of litigation and, secondly, in view of the unpredictable nature of most litigation there must be reasonable contractual mechanisms in place to monitor expenditure on the litigation in order to ensure that the legal costs bear a proportionate relationship to the issues at stake.

38 Neither matter was addressed in this case. The Protective Commissioner was quite correct to respond positively to any suggestion supported by reasonable evidence that KZ no longer required his services because she was capable of managing of her own financial affairs. That evidence existed in this case. After the Guardianship Tribunal made its orders on 27 January 2005 the Protective Commissioner was provided with medical reports which suggested that KZ’s cognitive abilities may be better than recorded in earlier reports. It was quite correct to decide that an external tribunal should be asked to rule on the dispute which existed between KZ’s children and various health professionals concerning KZ’s capacity to manage her own financial affairs.

39 I do not accept, however, that it was a correct and preferable exercise of the Protective Commissioner’s discretionary powers to agree to enter into a costs agreement with private solicitors to provide funds from KZ’s estate for Supreme Court litigation to determine whether KZ was capable of managing her own affairs. There were cheaper and more efficient means of determining whether KZ is capable of managing her own affairs than taking action pursuant to s 35 of the Protected Estates Act 1983. The Guardianship Tribunal could have been asked to consider whether KZ was still in need of a financial management order.

40 In paragraph [11] of these reasons I have set out the relevant provisions in the Guardianship Act 1987 which permit various people, including the Protective Commissioner, to apply to the Guardianship Tribunal to vary or revoke a financial management order. Ms Kardiasmenos, the solicitor from Crichton-Brownes with the carriage of the current Supreme Court proceedings, was unable to tell the Tribunal whether an application to the Guardianship Tribunal had even been considered. The possibility of returning to the Guardianship Tribunal was foreshadowed by the Guardianship Tribunal itself in the passage from its reasons which has been reproduced at paragraph [10]. It is readily apparent from looking at the relevant history of this matter, which is set out in paragraphs [7] to [10] of these reasons, that the Guardianship Tribunal has responded quickly to any applications concerning KZ and that it has reached decisions, made orders and published reasons in a timely fashion. It also published comprehensive reasons in support of the orders which it made on 27 January 2005. The Guardianship Tribunal is an expert body comprised of lawyers, health professionals and others who have considerable experience in dealing with complex evidence concerning people’s cognitive abilities and their capacity to manage their own financial affairs. It was established to deal with matters of this nature swiftly and economically.

41 Nothing was put to me by Ms Phang on behalf of the Protective Commissioner, or by Ms Kardiasmenos when she gave evidence, which persuades me that it was appropriate in the circumstances of this case to litigate the question of KZ’s capacity to manage her own financial affairs in the Supreme Court. The Guardianship Tribunal is the most convenient and cost efficient forum in which to resolve this matter.

42 The costs agreement which the Protective Commissioner signed with Crichton-Brownes does not adequately deal with the second issue concerning the prudent expenditure of a protected person’s money on litigation which is that there are reasonable contractual mechanisms in place to monitor that expenditure in order to ensure that the legal costs bear a proportionate relationship to the issues at stake. The costs agreement which the Protective Commissioner signed contains nothing more than an hourly rate for a solicitor and a non-binding estimate of total costs. The agreement does not contain any provisions concerning limits on disbursements, such as medical reports, or on fees for counsel. Ms Kardiasmenos gave evidence that counsel had been briefed to appear in the Supreme Court but she was unaware whether agreement had been reached on a brief fee. Ms Kardiasmenos was unable to inform the Tribunal of the costs to date but she said that her firm had provided an estimate that total costs would be in the vicinity of $12,000 to $13,000. I do not believe that it was the correct and preferable decision for the Protective Commissioner to enter into the costs agreement in question in this case for it does not contain reasonable mechanisms to monitor expenditure on the litigation in the Supreme Court.

43 I am mindful of the proximity of this application to the date scheduled for the commencement of the Supreme Court proceedings. After careful deliberation I do not believe that this matter should affect the Tribunal’s decision in this case. The orderly conduct of litigation in the Supreme Court is an important matter and, wherever possible, pending litigation ought not to be disrupted. On the facts of this case, however, the proper management of KZ’s estate by the Protective Commissioner must be the primary consideration.

44 The pending litigation will greatly dissipate KZ’s estate if it proceeds because, as Ms Phang informed the Tribunal, the Protective Commissioner is opposing KZ’s application. Whatever the outcome of the litigation it is highly likely that KZ will be ordered to bear the legal costs of the Protective Commissioner as well as her own costs because this is the usual order in such circumstances. The applicants are entitled to a proper determination of their application to review the Protective Commissioner’s decision even though it may disrupt the Supreme Court proceedings.

Decision and order

45 The application to review the Protective Commissioner’s decision is successful. The Protective Commissioner’s decision to enter into a costs agreement with Crichton-Brownes must be set aside. The matter will be remitted to the Protective Commissioner in order to determine what impact this decision has on the pending application to the Supreme Court and to decide what further action, if any, to take in light of these reasons.

46 The Tribunal makes the following orders:

1. The decision of the Protective Commissioner made on 25 January 2006 to execute a costs agreement with Crichton-Brownes, Solicitors, concerning payment of reasonable legal expenses in relation to an application to the Supreme Court pursuant to s 35 of the ProtectedEstates Act 1983 on behalf of KZ is set aside.

2. The matter is remitted to the Protective Commissioner to be dealt with in accordance with these reasons.