NDX

[2017] NSWCATGD 17

NSW Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	NDX [2017] NSWCATGD 17
Hearing dates:	14 February 2017
Date of orders:	14 February 2017
Decision date:	14 February 2017
Jurisdiction:	Guardianship Division
Before:	J Currie, Senior Member (Legal)
Decision:	1.   The financial management order made on 9 June 2015 in relation to the estate of Ms NDX is revoked.  2.   The manager, Mr OVX, is to pay over or hand over the estate to Ms NDX.
Catchwords:	FINANCIAL MANAGEMENT – application to revoke financial management order – consideration of whether subject person recovered capacity – best interests – consideration of principles in section 4 of the Guardianship Act 1987 (NSW) – obligations of private financial manager to NSW Trustee and Guardian
Legislation Cited:	Civil and Administrative Tribunal Act 2013 (NSW), ss 38, 38(5)(c) Guardianship Act 1987 (NSW), ss 4(d), 25P(2)
Category:	Principal judgment
Parties:	Ms NDX (person under consideration) Mr OVX (applicant, appointed financial manager, husband of Ms NDX) The NSW Trustee and Guardian
File Number(s):	59183
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

APPLICATION TO REVOKE FINANCIAL MANAGEMENT ORDER

What the Tribunal decided

1. The Tribunal decided to revoke the financial management order which had been made for Ms NDX on 9 June 2015, on the ground that the Tribunal was satisfied that it was in Ms NDX’s best interests that the order be revoked.

Background

2. Ms NDX is a 62-year-old woman who suffered a brain injury as a result of a motor vehicle accident on 18 March 2015 and who has since then has undergone extensive medical and hospital treatment. She was initially admitted to a public hospital but on 13 May 2015, was transferred to a rehabilitation facility in northwest Sydney, where she was an inpatient until early November 2015, and was reported to have made steady improvement. Unfortunately, Ms NDX’s functional ability apparently deteriorated following her discharge home. She was reported to have reduced cognitive capacity, alertness, and mobility as well as impaired vision. She had a grand mal seizure in January 2016. She was treated for hydrocephalus, commencing in January 2016 and this condition has been reviewed since that date. In August 2016, she was reported to have brain turgor-related persistent hydrocephalus or low pressure hydrocephalus, in which her intracerebral pressure was too low to facilitate drainage with a shunt. She is also reported to have continued difficulty mobilising, memory lapses and to be at substantial risk of falls. However, in October 2016 she was medically cleared to travel to France, where she has real estate investments.

3. Ms NDX’s husband is Mr OVX. They normally live together in inner Western Sydney. Ms NDX and Mr OVX have two adult children who currently live overseas.

4. On 9 June 2015, on the application of Mr OVX, the Tribunal made a financial management order for Ms NDX, under which it appointed Mr OVX as her financial manager, subject to the authorities and directions of NSW Trustee and Guardian. On the same date, the Tribunal consented to the withdrawal of a guardianship application for Ms NDX and it dismissed that application.

5. On 5 August 2016, the Guardianship Division Registry received from Mr OVX an application which sought revocation of Ms NDX’s financial management order on the ground that it would be in her best interests for the order to be revoked. That application was listed for hearing before a Three-member Panel of the Tribunal on 22 November 2016. On that date, the Tribunal adjourned the hearing, on a “not-part-heard” basis, because Ms NDX was unavailable and in order to enable NSW Trustee and Guardian to complete its consideration of further financial material provided by Mr OVX.

6. The purpose of the hearing at Sydney on 14 February 2017 was to resume the hearing of Mr OVX’s application to revoke the financial management order for Ms NDX. The hearing was listed before me as a Single Member.

Parties and witnesses

7. The Appendix to these Reasons for Decision identifies the parties to the application and the witnesses who gave evidence at the hearing and the issues for determination by the Tribunal. [Appendix removed for publication.]

Issue for determination

8. Under subsection 25P(2) of the Guardianship Act 1987 (NSW), the Tribunal may revoke a financial management order only if:

1. it is satisfied that the person who is the subject of the application is capable of managing his or her affairs. That is often referred to as the “regained capability” ground; or

2. the Tribunal considers that it is in that person’s best interests that the order be revoked (even though it is not satisfied that he or she is capable of managing his or her affairs). That is often referred to as the “best interests” ground.

9. Mr OVX’s application indicated that he sought revocation of the financial management order only on the “best interests” ground. At the adjourned hearing on 22 November 2016, Mr OVX confirmed that this was his position. I therefore proposed and the parties agreed that I should proceed by considering firstly whether revocation of the existing order would be in Ms NDX’s best interests. If I was satisfied that this was so, there would be no need for me to consider the “regained capability” ground.

10. Accordingly, the issue to be determined by me was whether it would be in Ms NDX’s best interests for the current order to be revoked.

Absence of Ms NDX and her recorded views

Absence of Ms NDX

11. The Tribunal seeks to hold its hearings in a way which promotes the participation of the person who is the subject of the application or review and we do our best to obtain the views of the subject person whenever possible.

12. At the outset, Mr OVX confirmed that Ms NDX was currently in Paris and was not available to participate directly in this hearing. He asserted that this was because of Ms NDX’s ongoing medical condition and care arrangements would limit the extent of her participation and that in any case she would find the hearing upsetting and stressful.

13. I noted that some preliminary arrangements had been made for Ms NDX’s participation, either by telephone or by videoconference, but that, somewhat unfortunately, the matter had been set down for an afternoon hearing, commencing at 2:00 PM, which was midnight, Paris time. Mr OVX indicated that Ms NDX may well be asleep and would need to be disturbed in order to participate in the hearing in the very early hours of the morning, local time.

14. There was nothing before me which led me to doubt that, because of Ms NDX’s condition, as well as the late hour in Paris, it was quite likely that she would be disturbed and distressed if required to state her views directly or otherwise to participate directly in the hearing. There was no objection by NSW Trustee to the hearing proceeding in the absence of Ms NDX.

Sound recordings of Ms NDX’s views

15. Mr OVX indicated that he could replay to this hearing two brief sound recordings made by Ms NDX on 9 and 13 February 2017.

16. There was no objection raised by the other party, NSW Trustee and Guardian, to my hearing and taking into account these sound recordings.

17. Section 38 of the Civil and Administrative Tribunal Act 2013 (NSW) deals with the procedure of the Tribunal generally. Particular subsections of section 38 are relevant to the issue of whether I should listen to these sound recordings.

1. Subsection (1) allows the Tribunal to determine its own procedure in relation to any matter for which the Act or procedural rules do not otherwise make provision. I am unaware of any provision of the Act or the procedural rules which would limit or prevent my hearing of the sound recordings.

2. Subsection (2) confirms that the Tribunal is not bound by the rules of evidence:

“and may enquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice.”

I was satisfied that in the circumstances listening to the recordings would not infringe the rules of natural justice.

3. Subsection (3) requires the rules of evidence to be observed in particular proceedings, none of which appear to be relevant here.

4. Subsection (4) requires the Tribunal:

“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.”

5. Significantly, paragraph (c) of subsection (5) requires the Tribunal:

“to take such measures as are reasonably practicable to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings.”

18. Additionally, section 4 (d) of the Guardianship Act imposes a duty on me to take the views of people in Ms NDX’s life into consideration, wherever this is possible. In all the circumstances I was satisfied that I should listen to the two recordings, for the following reasons:

1. the provisions of section 38 of the Civil and Administrative Tribunal Act permit me to proceed to obtain the views of Ms NDX by listening to the recordings;

2. listening to the recordings was a “reasonably practicable measure” within the meaning of section 38(5)(c) and in the circumstances paragraph (c) imposed an obligation on me to listen to the recordings, as that was the only practicable way for me to obtain and consider Ms NDX’s submissions, at least in the absence of a further adjournment, which seemed unreasonable and impracticable; and

3. there was no objection to my proposed course of action and it was a fair, reasonable and sensible method of obtaining Ms NDX’s views in the particular circumstances of this case.

19. Mr OVX played the two recordings. He then repeated the words that he understood Ms NDX to have used. I did not rely on Mr OVX’s version of the words but made notes of my own understanding of them. My notes are reflected below. There was no suggestion or indication that Ms NDX had been influenced by anyone else to say what she did: the views she expressed appeared to be her own. Although the recordings were somewhat difficult to hear, Ms NDX appeared to speak clearly and I was satisfied that I had recorded reasonably accurately what she had said.

1. The first recording was reported to have been made on 9 February 2017, that is the some five days prior to hearing. I understood Ms NDX to say:

“Good afternoon. My name is [Ms NDX]. I asked him to record this for me. We agreed to help our kids. We don’t (need) the financial order any more. Please revoke it. Thank you.”

2. The second recording was reported by Mr OVX to have been made on 13 February 2017, that is, the day prior to the hearing. I understood Ms NDX to say:

“Good afternoon. We don’t need a financial order any more. I am happy just to work with my husband. I was aware that $60,000 was used to help the kids in Edinburgh.”

WOULD IT BE IN MS NDX’S BEST INTERESTS OF FOR THE ORDER TO BE REVOKED?

NSW Trustee and Guardian’s refusal to pass the estate’s accounts and the unapproved $60,000 transfer

20. NSW Trustee and Guardian refused to pass Ms NDX’s estate accounts for the period 9 June 2015 to 8 June 2016, as provided by Mr OVX as financial manager. The principal reason for doing so was Mr OVX’s failure to obtain prior approval for a transfer of $60,000 from an account in Ms NDX’s name to their joint account. Mr OVX asserted that that sum was used, with Ms NDX’s prior knowledge and consent, to provide for the payment of airfares and other expenses for a dance company from Cuba in which their children had involvement and in particular to enable the members of the dance company to attend and appear in an arts festival in Edinburgh and to travel by air from Cuba to Edinburgh and to return.

21. It seems likely that if I were to revoke the financial management order, Mr OVX would, as a practical matter, retain a substantial role in the management of Ms NDX’s affairs. To the extent that NSW Trustee and Guardian’s failure to pass the accounts may reflect adversely on Mr OVX’s suitability to do this (and Mr OVX himself clearly believes that the decision does reflect poorly on him), it is important and fair to all parties that I set out the basis of NSW Trustee and Guardian’s refusal, the established facts regarding the transfer of the $60,000 and Mr OVX’s contentions in some detail.

22. A written report from NSW Trustee and Guardian dated 15 November 2016 was made available to the Tribunal prior to the hearing on 22 November 2016. In summary, that report noted that Ms NDX’s estate was a “complex estate valued at over $1 million with a share in real estate in rural France and Family Trust”. Significantly, the NSW Trustee and Guardian’s report included the following comment:

“Expenditure of $60,000 disclosed as ‘Other Payments’ represented by six $10,000 withdrawals between 18 and 24 August 2015 from the client’s [online bank] a/c has not been accounted for. No details provided on what the expenditure was for.”

23. I was provided with an exchange of email correspondence between Mr OVX and officers of NSW Trustee and Guardian dating from mid-November 2016. In summary, I was satisfied that the following facts emerged from this email exchange.

1. In his email to NSW Trustee and Guardian dated 16 November 2016, Mr OVX complains that the NSW Trustee and Guardian had produced “a negative report about my management of accounts for my wife… without reference to me”. That was apparently a reference to NSW Trustee and Guardian’s report of the previous day, referred to in [22] above. Mr OVX confirms that he was “very busy with my still very sick wife” and that he was providing an explanation of the accounts he had lodged and the transfer of the $60,000 “under duress”. He confirmed that the accounts which had lodged with NSW Trustee and Guardian were “rudimentary” and that at the time of lodgement of the estate accounts with the NSW Trustee and Guardian he “did not think it necessary” to explain the movement of funds ($60,000) from his wife’s account to their joint account. Significantly, paragraph 5 of that email explains the purpose of the $60,000 transfer in the following terms:

“The purpose of the funds was part of reimbursement for expenditure totalling over $100,000 pursuant to performances at the [arts festival] in August 2015, by our daughter’s dance company from Cuba, [name removed for publication], which also involved our son. This had been agreed to prior to my wife’s accident in March 2015 and I had mentioned support for our children’s artistic activities in my original financial plan. It is normal for us to move money from one account to another in this manner…”

2. Mr John Connell, Senior Liaison Officer at NSW Trustee and Guardian responded to Mr OVX on 17 November 2016. That email contains what I consider to be a reasonable and clear explanation of the respective obligations of the NSW Trustee and Guardian and of any private financial manager in relation to the management of an estate pursuant to a financial management order. The email directs Mr OVX’s attention to clause 13 of the Directions & Authorities issued to him by the Trustee on 19 June 2016 and in particular the direction that he is to:

“keep proper accounts and vouchers relating to the management of the managed person’s estate, to file the accounts annually in accordance with the NSW Trustee and Guardian’s Requirements…”

3. Mr Connell goes on to express some sympathy for the pressure which Mr OVX had been under in caring for his wife and his efforts to seek the revocation of the financial management order over the previous 12 months. He then deals specifically with the $60,000 transfer in the following terms:

“I also note your comments with regard to the part reimbursement of a commitment made prior to your wife Michelle’s accident for performances at [the arts festival] by your daughter’s dance company. Whilst it is not the NSW Trustee & Guardian (sic) to interfere in such commitments it is pointed out that receipts were received during the period of the order and as such require an accounting.”

4. It appears from the correspondence and internal NSW Trustee and Guardian file notes cited by Mr Connell in his email that as at late September 2016, Mr OVX did not understand the need to lodge accounts and believed that that would attract a substantial additional fee and that he did not appreciate that as the private financial manager he had an obligation to explain the movement of the $60,000 from his wife’s account to their joint account.

5. In Mr OVX’s response email to Mr Connell dated 21 November 2016 he provides further details of the $60,000 transfer and the disbursement of those funds. He asserts that the funds were to cover air fares, accommodation, and other daily expenses for a dance company of some 16 artists from Cuba (including the children of Mr OVX and Ms NDX) to perform at the arts festival in Edinburgh. It appears that the $60,000 was amalgamated with other amounts to a total of approximately $120,000 and that a substantial proportion of this amount needed to be transferred urgently to the purchase new airline tickets for members of the dance company when their original airline bookings had fallen through.

6. By her email of 16 December 2016 to Mr OVX, Ms Annick Picot, Acting Manager Compliance and Auditing at the NSW Trustee and Guardian, confirmed that the $60,000 transfer was regarded by the NSW Trustee and Guardian as “unauthorised expenditure” because Mr OVX did not seek prior approval from the NSW Trustee and Guardian for it. Ms Picot appears to accept the explanation given by Mr OVX as to the purpose of the transfer and the disbursement of the $60,000 but concludes in the following terms:

“However unfortunately as you did not seek prior approval from this office for this expense, the accounts decision cannot be changed from not passed to passed, as it did not meet NSWTG’s accounting requirements. The process of not passing a set of annual accounts means that we acknowledge that accounts did not meet our requirements and informed the private manager of reasons so they comply to providing clear and transparent accounts in future…All NSWTG would expect of you going forward should the financial management order not be revoked, is to seek approvals for large one off expenses and to provide detailed and supporting documents of these transactions for transparency purposes when lodging accounts…I can confirm that the matter regarding the 2015-2016 accounts is complete and there is nothing more that we need or require from you, the information that you have provided has been suffice”. (sic)

24. On the basis of this exchange of correspondence and my examination of the other written material made available and my consideration of the evidence and contentions of Mr OVX, the following is a summary of my findings of fact as to this aspect of the matter.

1. For unknown reasons, Mr OVX did not appreciate the necessity to obtain prior approval from NSW Trustee and Guardian for the transfer of $60,000 from his wife’s personal account to their joint account.

2. I accept as reliable Mr OVX assurance (as discussed in [26] below) that this sort of transfer was common practice between him and his wife.

3. I also accept, on the basis of the two sound recordings of Ms NDX’s views (the contents of which were uncontested) that she understood in advance of the transfer of the $60,000 that it was to be used by Mr OVX to assist their children to facilitate the appearance of the Cuban dance company at the arts festival in Edinburgh. In reaching that view, I rely particularly on Ms NDX statement in the recording made the day prior to this hearing that: “I was aware that $60,000 was used to help the kids in Edinburgh.”

1. It appears that NSW Trustee and Guardian, having received Mr OVX’s explanation of the transfer accepts that explanation but, as Ms Picot made clear in her evidence (as noted at [30] below), it was not the fact of the transfer which caused the NSW Trustee and Guardian to refuse to pass the estate’s annual accounts, but rather the fact the absence of any prior notification or approval of the transfer.

2. As explained in Ms Picot’s email of 16 December 2016, the NSW Trustee and Guardian’s decision not to pass the accounts cannot be changed, notwithstanding that the NSW Trustee and Guardian now accepts the explanation for the transfer and now regards “the matter regarding the 2015-2016 accounts (as) complete”. It is equally clear however that there is nothing more that the NSW Trustee and Guardian requires from Mr OVX in relation to those accounts.

The testimony and submissions of the applicant Mr OVX

25. Mr OVX outlined to me the basis upon which he had originally applied for the financial management order. I accept his account of these matters and that at the time of the original hearing of his application on 9 June 2015 he sought appointment as financial manager for the limited purpose of arranging a transfer of shares to a superannuation fund. Mr OVX also confirmed that at the time he lodged his application for revocation of the order in early August 2016, Ms NDX’s condition had been improved substantially. He anticipated that there would not be any substantial impediment to the processing and granting of that application, but it then became apparent that the NSW Trustee and Guardian questioned the completeness of the 2015-16 accounts.

26. Mr OVX asserted that he and his wife had worked closely together in relation to their financial affairs for 36 years. He described the movement of funds between their respective accounts and their joint account as “a normal routine part of our daily life”. I accepted Mr OVX’s uncontroverted explanation of these matters as genuine and reliable. Although he did not specifically raise this point, I observe that his familiarity with and acceptance of this “normal routine” may well provide the basis of an explanation for his omission to obtain the NSW Trustee and Guardian’s prior approval for the $60,000 transfer.

27. Mr OVX also asserted that everything which he and his wife did with their finances was designed to promote, in his words, “her and our best interests”. I emphasised to Mr OVX that the legal obligation of a financial manager is to act at all times in the best interests of the person whose affairs are in the management; in this case his wife and that in order to revoke the financial management order on the best interests ground I would need to be satisfied that it would be in the best interests of Ms NDX alone for the order to be revoked. I indicated that there would be a system for management of her affairs in the absence of a financial management order which would preserve and protect her best interests, not the “joint best interests” of Ms NDX and Mr OVX. Mr OVX readily acknowledged that such a system would be available. He asserted that everything which he did and which he wishes to do in future in relation to his wife’s financial affairs is and would be governed by her best interests.

28. I asked Mr OVX to consider whether his wife’s affairs might be managed and her best interests protected only by way of a continued financial management order. He rejected that proposition. I understood him to do so firstly on the basis that to the extent necessary he could manage his wife’s affairs and would do so in her best interests and, secondly, on the basis that Ms NDX’s capability to make her own financial decisions, although not complete, was better than it had been in June 2015 when the financial management order had been made. Mr OVX told me that Ms NDX could sign her name to documents and attend corporate and board meetings where, in his view she continued to be, in his words: “pretty good at making her views known”. I asked Mr OVX whether Ms NDX, when asked to sign the document, would have the capacity to understand the purpose and effect of what she was being asked to sign. He answered that that would depend on the complexity of the document and the transaction. He emphasised that at least to the present Ms NDX was not being asked to sign documents of any complexity and that she had demonstrated an understanding of basic business transactions and documentation. He asserted that “on a good day” Ms NDX could conduct a detailed conversation and she seemed to be regaining planning ability, for example she had commenced planning the family Christmas.

29. Mr OVX confirmed that Ms NDX had not executed a power of attorney but he indicated that when she returns to Australia in the near future, he would instruct solicitors to advise whether a power of attorney should be prepared and executed.

The submissions of NSW Trustee and Guardian

30. Ms Annick Picot, Acting Manager, Compliance and Audit in the Private Management section of NSW Trustee and Guardian, was able to participate in the hearing by telephone.

31. Ms Picot conceded that the NSW Trustee and Guardian may not have made it clear to Mr OVX at an early stage that the $60,000 transfer was not of itself a breach of the authorities but rather failure to obtain prior approval for it was.

32. Ms Parker confirmed that the NSW Trustee and Guardian was now satisfied with the explanations provided by Mr OVX as to the accounts and the transfer of the $60,000.

33. Significantly, Ms Picot confirmed that the NSW Trustee and Guardian conceded that Ms NDX was aware of the $60,000 transfer from her account and had given prior approval to it and that, on the basis of Mr OVX’s explanations, it appeared that that transfer was in accordance with Ms NDX’s interests.

34. NSW Trustee and Guardian made no other formal submissions as to whether or not I should revoke the financial management order.

My analysis of the evidence

35. I accepted the evidence given at this hearing by Mr OVX as reliable. I found Mr OVX to be a witness of truth.

36. It was unfortunate that Mr OVX did not have an earlier appreciation of his obligation as financial manager to seek prior approval from the NSW Trustee and Guardian of such a significant transaction as the transfer of $60,000. However, it is quite clear from the evidence that at the time of preparation of the accounts, Mr OVX was under substantial emotional pressure in making arrangements for the proper care of Ms NDX and I accept his assurance that transfers of funds between their relevant accounts, such as the transfer of $60,000, was “normal practice”.

37. In particular, I accept the evidence, particularly Ms NDX’s statements in the second recording, as confirming that at the relevant time (that is, the time of the $60,000 transfer from her account) she understood the nature and the purpose of the transfer and approved it.

38. I also accepted as genuine Mr OVX’s statement of his intention to act in the best interests of Ms NDX if the financial management order is revoked. His evidence and his statements of intention in this regard were not challenged by the NSW Trustee and Guardian.

39. I was also satisfied that if the order is revoked, a substantial “support structure” will be in place to protect the interests and welfare of Ms NDX. That support structure consists principally of the close and compatible relationship which Ms NDX and Mr OVX apparently enjoy, the trust which Ms NDX places in Mr OVX, his own very substantial business experience, the availability of independent advice and Mr OVX’s recognition of the need to continue to act in Ms NDX’s best interests.

Conclusions and order

40. On that basis I was satisfied that it would be in the best interests of Ms NDX for the financial management order made for her on 9 June 2015 to be revoked.

41. It followed that the order should be revoked with immediate effect and I ordered accordingly.

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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: 11 September 2017