KZB

[2020] NSWCATGD 35

NSW Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

KZB [2020] NSWCATGD 35

Hearing dates:

17 March 2020

Date of orders:

17 March 2020

Decision date:

17 March 2020

Jurisdiction:

Guardianship Division

Before:

S G McCarthy, Senior Member (Legal)
Dr A Baird, Senior Member (Professional)
M McCalman, General Member (Community)

Decision:

In relation to the enduring power of attorney made by KZB on 25 January 2002 which appointed FCT and SKB as attorney(s) the Tribunal determines, orders or declares:

to carry out a review of the operation and effect of the enduring power of attorney.

FCT is removed from office as an attorney.

BYT is appointed to replace FCT.

Catchwords:

GUARDIANSHIP – application to review operation and effect of enduring power of attorney – application for replacement of attorney unopposed – attorneys appointed on a joint and several basis – attorney made withdrawals totalling $180,000 from subject person’s account, later re-depositing them – acts apparently not in accordance with fiduciary obligations – enduring power of attorney reviewed - attorney removed and substituted – new attorney appointed on a joint and several basis.

Legislation Cited:

Guardianship Act 1987 (NSW), Part 3A

Powers of Attorney Act 2003 (NSW), ss 12(1), 36(1)-(2)

Cases Cited:

Susan Elizabeth Parker v Margaret Catherine Higgins & Ors [2012] NSWSC 1516

Category:

Principal judgment

Parties:

KZB (the person)
BYT (applicant)
FCT (attorney)
SKB (attorney)
NSW Trustee and Guardian

Representation:

Nil

File Number(s):

NCAT 2020/00028942

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: Civil and Administrative Tribunal Act 2013 (NSW), s 65.

REASONS FOR DECISION

REVIEW OF ENDURING POWER OF ATTORNEY

What the Tribunal decided

1. The Tribunal decided, under s 36(1) of the Powers of Attorney Act 2003 (NSW) to carry out a review of the enduring power of attorney made by KZB on 25 January 2002.

2. As a consequence of reviewing the enduring power of attorney, the Tribunal decided under s 36(2) of the Powers of Attorney Act to make the following orders under s 36 of that Act.

3. The Tribunal ordered that FCT be removed from the office of attorney for KZB.

4. The Tribunal ordered that BYT be appointed to replace FCT under the enduring power of attorney made by KZB on 25 January 2002.

Background

5. KZB is aged 86 years who is resident of an aged care facility in regional NSW. KZB’s husband is SKB who resides in the same care facility. She has two children being FCT and HB, and a grandson, BYT. On 25 January 2002, KZB made an enduring power of attorney appointing SKB and FCT as her attorneys jointly and severally. BYT made an application to review the enduring power of attorney made by KZB.

The hearing

6. 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.]

Settlement

7. The Tribunal may, where it considers appropriate, use resolution processes to bring the parties to a settlement. There was no significant conflict in this matter during the hearing.

What did the Tribunal have to consider?

8. The Tribunal may, on the application of an interested person, decide to review the making or the operation and effect of a reviewable power of attorney, or not to carry out such a review: Powers of Attorney Act, s 36(1). As a consequence of reviewing the making or operation and effect of a reviewable power of attorney, the Tribunal may decide whether or not to make an order under s 36 of the Powers of Attorney Act: s 36(2).

9. The Tribunal may make a number of orders relating to the operation and effect of a power of attorney if it is satisfied:

• that it would be in the best interests of KZB to make the order;

• that it would better reflect the wishes of KZB to make the order

10. These orders include:

• An order varying a term of, or a power conferred by, the power of attorney;

• An order removing a person from office as attorney;

• An order appointing a substitute attorney to replace an attorney who has been removed from office or who otherwise vacates the office;

• An order reinstating a power of attorney that has lapsed by reason of any vacancy in the office of power of attorney and appointing a substitute attorney to replace the attorney who vacated office;

• An order directing the attorney to:

1. furnish accounts to the Tribunal or someone nominated by the Tribunal;

2. lodge a copy of all records and accounts of dealings and transactions made under the power;

3. require that the records and accounts be audited and that a copy of the report of the auditor be furnished to the Tribunal;

4. submit a plan of financial management for approval.

• An order revoking all or part of the power of attorney;

• Such other orders as the Tribunal thinks fit.

11. If on a review of the enduring power of attorney, the Tribunal decides not to make an order under s 36 of the Powers of Attorney Act, it may, if it considers it appropriate in all of the circumstances to do so, decide to treat the application for review as an application for a financial management order under Part 3A of the Guardianship Act 1987 (NSW).

Does BYT have standing to make the application?

12. A person may apply for an enduring power of attorney to be reviewed if he or she is:

1. an attorney (including an attorney whose appointment has been purportedly revoked);

2. the principal;

3. any person who is:

1. a guardian of the principal (whether under the Guardianship Act or any other Act or law), or

2. an enduring guardian of the principal under the Guardianship Act;

3. any other person who, in the opinion of the review tribunal, has a proper interest in the proceedings or a genuine concern for the welfare of the principal.

13. The Tribunal found that BYT has standing to bring the application because he has a genuine concern for the welfare of KZB.

Should the Tribunal conduct the review?

14. In Susan Elizabeth Parker v Margaret Catherine Higgins & Ors [2012] NSWSC 1516, Slattery J stated [at 80]:

On an application for s 36 review such as this the Court must first exercise a discretion under Powers of Attorney Act, s 36(1) to decide whether or not to conduct a s 36 review. In my view the Court does not have to conduct a full review of all documents associated with the operation of the subject power of attorney to do this. Something short of a full review must be able to justify the exercise of the s 36(1) discretion as to whether or not the Court should conduct a full s 36 review. In the circumstances of this case the Court can glean sufficient information to exercise the s 36(1) discretion by undertaking a general survey of what... (a party )...has produced.

15. The Tribunal decided to conduct a review of the enduring power of attorney for the following reasons.

16. KZB seeks that BYT be appointed as her attorney. There are a series of transactions on KZB’s account which require review.

Should the Tribunal make any orders under section 36?

17. The Tribunal then proceeded, pursuant to s 36(2) of the Powers of Attorney Act, to consider whether or not to make an order under s 36 of that Act.

The operation and effect of the enduring power of attorney

18. The Tribunal did not review the making of the enduring power of attorney by KZB on 25 January 2002 as KZB had the mental capacity to make the legal instrument.

19. KZB suffered an acquired brain injury in 2010. Dr Z, GP stated in a report dated 10 March 2020 that KZB has moderate dementia as a result of a brain injury and subdural haemorrhage in 2016 and is not able to make informed decisions.

20. BYT stated that there are concerns held that FCT and her ex-husband CT have made multiple withdrawals from KZB’s account totalling around $180,000. BYT stated that this money has since been returned to KZB’s account on 23 January 2020. KZB’s account with a financial institution shows that there have been multiple withdrawals of around $1,000 each totalling around $180,000. KZB receives an age pension.

21. KZB stated that she wishes for BYT to look after her finances.

22. SKB also seeks that BYT be appointed under KZB’s enduring power of attorney and that FCT is removed as attorney.

23. FCT sent an email to the Tribunal indicating that she did not object to BYT dealing with KZB’s financial matters. She stated that SKB had indicated that moneys from KZB’s joint account should be withdrawn and to put the money into safekeeping. FCT did not attend the hearing.

24. BYT stated that he is agreeable to taking over as attorney for KZB. In response to questioning from the Tribunal he stated that he has no criminal convictions for dishonesty, is not bankrupt and none of his finances are intermingled with KZB’s financial affairs.

Fiduciary duty

25. An attorney is in a fiduciary relationship with the person whose affairs they manage. An attorney must act in the best interests of the principal and must not obtain a personal benefit other than specifically provided for in the executed enduring power of attorney: Powers of Attorney Act, s 12(1).

Duty to keep records and to account

26. There is no statutory requirement that the attorney keep records and accounts. However, a general law obligation exists. This was considered by Slattery J in Susan Elizabeth Parker v Margaret Catherine Higgins & Ors [2012] NSWSC 1516 as follows:

The attorney's obligation is really one to keep accurate primary accounting records, for which the principal can call, if necessary, for the principal's examination. If the principal then wishes to produce secondary accounts, or full financial accounts, that is a matter for the principal [at 64].

27. The Tribunal decided to review the operation and effect of the enduring power of attorney made by KZB dated 25 January 2002 as it is in her best interests to do so. KZB lacks the mental capacity to make a new enduring power of attorney because of her brain injury and dementia. There have been multiple cash withdrawals made from KZB’s building society account by FCT and another person totalling around $180,000. These moneys have since been redeposited into KZB’s account. It is in the best interests of KZB that her enduring power of attorney be reviewed in light of these multiple cash withdrawals as they do not appear to have been made in accordance with the fiduciary requirements of attorneys acting under an enduring power of attorney.

28. The Tribunal decided to remove FCT as attorney under the enduring power of attorney made by KZB on 25 January 2002. The Tribunal decided to appoint BYT as a substitute attorney for KZB to replace FCT who has been removed from office by the Tribunal. SKB and BYT are now appointed jointly and severally as the attorneys for KZB under her enduring power of attorney dated 25 January 2002.

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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: 16 February 2021