Re D (No 2)
[2014] NSWSC 724
•04 June 2014
Supreme Court
New South Wales
Medium Neutral Citation: Re D (No 2) [2014] NSWSC 724 Hearing dates: 29/5/2014 Decision date: 04 June 2014 Before: Ball J Decision: Summons be dismissed with no order for costs
Catchwords: GUARDIANSHIP - protected person - financial management - application for revocation of management order - whether plaintiff capable of managing financial affairs Legislation Cited: NSW Trustee and Guardian Act 2009 (NSW) Cases Cited: P v R [2003] NSWSC 819
Re D [2012] NSWSC 1006
Y v Protective Commissioner (Supreme Court (NSW), Hodgson J, 8 February 1996, unreported)Category: Principal judgment Parties: D (Plaintiff)
NSW Trustee & Guardian (Defendant)Representation: Ms L Ventsov, Solicitor, (Plaintiff)
Ms E Barker, Solicitor, (Defendant)
Solicitors:
City Lawyers and Consultants (Plaintiff)
NSW Trustee & Guardian (Defendant)
File Number(s): 2013/322396 Publication restriction: None
Judgment
Introduction
By a summons filed on 25 October 2013, the plaintiff (who for the purpose of these proceedings is to be called "D") seeks a declaration that she is capable of managing her affairs and ancillary orders the effect of which would be to revoke an order made on 1 December 1989 that her affairs be under the management of the Protective Commissioner (now the NSW Trustee & Guardian (NSW Trustee)). This is the third such application by the plaintiff. The first was made on 31 August 1995 and was dismissed by Hodgson J on 8 February 1996. The second was made on 4 April 2012 and was dismissed by White J on 31 August 2012.
Background
The plaintiff was born in Canada. She came to Australia on 5 March 1978. On 28 September 1978, when she was 15, she was involved in a serious motor vehicle accident. Her claim was settled for $519,000. After payment of medical and related expenses and the repayment of amounts due to the Department of Social Security, the total amount received by the plaintiff was $479,625. That amount was paid to Perpetual Trustee Company Limited (Perpetual Trustee) to be held on trust for the plaintiff who, as a result of her accident, had suffered brain stem injury with severe intellectual impairment.
In 1987, Perpetual Trustee purchased a property in Castle Hill for the plaintiff. On 1 December 1989, orders were made for the removal of Perpetual Trustee as trustee of the plaintiff's estate and for the management of the plaintiff's affairs to be committed to the Protective Commissioner.
A history of the plaintiff's financial affairs is set out in White J's judgment (see Re D [2012] NSWSC 1006). It is not necessary to repeat that history here. It is sufficient to observe that, as at November 2013, the plaintiff's assets consisted of the house at Castle Hill, estimated to be worth between $550,000 and $600,000, a trust account balance with NSW Trustee of approximately $5,600 from the plaintiff and a small sum of money held in a personal bank account. The plaintiff has liabilities of approximately $48,000 consisting of amounts lent to her from the common fund by NSW Trustee to pay insurance on her house and to undertake work on it required by order of the Baulkham Hills Shire Council.
The plaintiff's only income is a Centrelink pension which is currently approximately $800 per fortnight. From that amount, NSW Trustee pays the plaintiff an allowance of $110 per week together with a food allowance of $100 per week. From the balance, it pays $15 per week in respect of a debt owed to Aurora Kitchens, water and council rates, quarterly power bills and insurance on the house, which is currently $2,444.59 per annum.
In rejecting the plaintiff's first application, Hodgson J placed considerable weight on evidence given by the plaintiff which is recorded in these terms in his Honour's judgment (Y v Protective Commissioner (Supreme Court of New South Wales, 8 February 1996, unreported)):
However, the plaintiff gives evidence that she knows that the Protective Commissioner is holding $5 million on her account, and that any statements to the contrary have to be lies; and she supports this by the assertion that this is what she has been told by God and the Holy Spirit.
Hodgson J observed that, whatever the source of that belief, there was a high probability that, holding that belief, the plaintiff would "incur substantial expenses with the almost inevitable result that her house will be lost".
The plaintiff served more extensive evidence in support of her application before White J. The application was supported by reports from Dr Peter Hansen and Dr Pickering, a psychiatrist, who both had assessed the plaintiff's capacity to be a kidney donor. The application was also supported by Dr John Jacmon, a psychologist. The evidence given by those witnesses is set out in some detail in White J's judgment. Again, it is not necessary to repeat it here. There can be little doubt that the effect of the evidence given was that the plaintiff was capable of managing her financial affairs.
White J observed that the plaintiff did not repeat the claims she had made before Hodgson J that the Protective Commissioner had $5 million of her assets under its control. However, his Honour said that he was satisfied that the plaintiff still believed that NSW Trustee had control of her assets for which it had not accounted. White J also referred to evidence that the plaintiff had incurred a number of debts without the consent of NSW Trustee. One of those is the debt to Aurora Kitchens which is still being paid off at the rate of $15 per month.
In support of her present application, the plaintiff relies on the medical reports that were before White J. She also relies on affidavits from her solicitor, Ms Lana Ventsov, an affidavit of Dr Pickering and an affidavit of Dr Jacmon.
Dr Pickering expressed the following opinion:
In my opinion and based on my extensive medical experience/expertise, detailed history, medical knowledge and mental state examination of [the plaintiff] in 2011 and 2013 I believe that she has the cognitive ability and judgment of such a degree that she can manage her own finances, banking, ie. ie [sic] pay bills herself, attend bank, make an informed decision what to purchase and how to prioritise purchases, she is capable of planning investment strategies.
Dr Jacmon expressed a similar opinion:
In my opinion [the plaintiff] is capable of managing her own financial affairs. Her cognitive capacity enables her to manage money, pay bills, make an informed decision as to what to purchase, discuss and plan how to spend money ie on food, and clothing.
Ms Ventsov gave the following evidence:
6. Based on my medical knowledge (previous Degree in Medicine) and 13 years of legal experience [the plaintiff] is able to provide coherent and clear instructions. On 2 occasions I observed her being capable of making telephone calls to telephone company provider arranging payment by instalments out of her very limited portion of the Centrelink pension only.
7. I say [the plaintiff] has recovered from her injuries, which she received when she was 13 [sic]. She is now 50 and is capable of managing her own Centrelink pension on day to day basis without any difficulty.
NSW Trustee neither consented to nor opposed the application. It did, however, provide the court with relevant evidence concerning the management of the plaintiff's affairs.
On 28 March 2013, NSW Trustee received a letter from Joen Financial Services Pty Ltd, commercial agents, who were acting for Mr Nayef Jaafar. The letter enclosed a statement of claim issued out of the Local Court claiming $5,600 from the plaintiff for landscape gardening work performed by Mr Jaafar. Following submissions from NSW Trustee, that claim was dismissed on or about 9 April 2014 on the basis that the proceedings had been dormant because no tutor had been appointed.
The plaintiff denies that she has any knowledge of Mr Jaafar and denies that she had any landscaping work done on her garden since work was done in September 1987. She volunteered the view that "[t]he only logical thing I can think of, your Honour, is that they are getting work done to their personal homes and yards and I'm paying for it. They are charging to my account". There is, however, some evidence that work has been done on the garden. Mr Caldwell and Mr Farmer, who are employed by NSW Trustee, visited the plaintiff's house on 12 September 2013. The plaintiff was not at home. According to a file note prepared by Mr Caldwell, "the rear yard looked impressive" and it appeared that new grass had been laid.
Shortly before these proceedings were heard, it came to the attention of NSW Trustee that default judgment had been obtained against the plaintiff in favour of Fouad Mouawad t/as Fred's Landscaping Services for an amount of $8,933.07. It appears from evidence before the court that Australian Debt Recoveries Pty Ltd, acting for the solicitors for Mr Mouawad, wrote to the plaintiff on 27 March 2014 seeking to recover that amount. The plaintiff denies receiving the letter and denies having any knowledge of Fred's Landscaping Services.
In accordance with s 86 of the NSW Trustee and Guardian Act2009 (NSW) (the Act), I asked the plaintiff a number of questions.
When asked about her assets, the plaintiff acknowledged that she owns the house in Castle Hill. She said she did not know what other assets were held on her behalf because NSW Trustee had not provided her with that information. In her affidavit evidence, she gave evidence that she was misquoted by Hodgson J in relation to the $5 million. When asked how she had been misquoted, she said that she had been asked how much money was in her account and she replied that it was more than $300. She continued:
I said "if there is 5 billion (with a B, billion) dollars in my account I would be closer to the truth than they are". And now, for some reason, and I received it, it says "the plaintiff claims that there is $5 million in her account", and I never said "million", your Honour. I said "billion", with a B.
When asked about how she would manage her affairs, the plaintiff gave the following evidence:
A. Okay. I am going to use pretend numbers to make it easy for quick calculation. I will let the banks use their calculators and computers to get exact figures. So pretend numbers your Honour, okay.
Q. Yes I understand that?
A. With the moneys transferred I will put a large amount, I will think of a number at the time, into a monthly account and just leave it there for say five years with the interest, monthly interest, just rolling over every month. And another smaller amount, I would put into a monthly account to pay my cheque account as I need the money, groceries, vet bills, Telstra, I would take over water and electricity and council rates etcetera. So the monthly account would be paid into my cheque account as I need.
Now pretend the monthly account earned $100 in a month. Pretend. Really pretend, really really pretend I only need $25 a month to live. That would cover everything: Cab charge to Dr's appointments; vet bills; phone; water; electricity, and the rates. Gardening, groceries, everything. Okay.
So I would instruct the bank, from the $100 earned this month put $25 into my cheque account and reinvest into the monthly account the remaining $75. So that keeps growing.
Now should the monthly account that pays my cheque account ever run low, then I would say to the bank okay, now take from the long term deposit, which would have skyrocketed by the time I need it, take from there a certain amount, put it into my monthly account so that it never runs low. ...
The plaintiff also said that she wanted the certificate of title to her house. On that topic, she gave this evidence:
Your Honour, I just put it all down to the spirit of Jesus Christ does not dwell in their hearts [ie. NSW Trustee]. I can't live with them. They have to go. And my house deeds, your Honour. I can't trust them with the house deeds should I go to visit relatives, loved relatives, in Coffs Harbour. If I go visit them and then I come back and my house is sold. That's why I ask for my house deeds to be returned to me in my name.
It is not easy to reconcile this evidence with evidence given by the plaintiff in her affidavit that "I do not have relatives in Australia".
Relevant legal principles
Section 41(1) of the Act provides:
If the Supreme Court is satisfied that a person is incapable of managing his or her affairs, the Court may:
(a) declare that the person is incapable of managing his or her affairs and order that the estate of the person be subject to management under this Act, and
(b) by order appoint a suitable person as manager of the estate of the person or commit the management of the estate of the person to the NSW Trustee.
Section 86(1) of the Act provides:
The Supreme Court, on application by a protected person and if the Court is satisfied that the protected person is capable of managing his or her affairs, may:
(a) revoke any declaration made that the person is incapable of managing his or her affairs, and
(b) revoke the order that the estate of the person be subject to management under this Act, and
(c) make any orders that appear to it to be necessary to give effect to the revocation of the order, including the release of the estate of the person from the control of the Court or the manager and the discharge of any manager.
As White J pointed out in Re D [2012] NSWSC 1006 at [46], ss 41 and 86 require an assessment of whether a person is capable or incapable of managing "his or her affairs". After reviewing the relevant authorities concerning how that question was to be determined, White J adopted (at [61]) the following formulation of Barrett J in P v R [2003] NSWSC 819 at [26]:
The task of the court, upon an application such as this, 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. This is a somewhat shorthand version of the tests laid down by the authorities to which I have already referred. The point to be emphasised is that 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.
Like White J, I adopt that formulation. The question is whether, having regard to the plaintiff's objective circumstances, she has the ability to manage her financial affairs.
Consideration
It may be that the plaintiff understands in an abstract way what she must do to manage her financial affairs. It appears that the plaintiff is also able to manage her day to day living expenses on a limited budget. However, I am not satisfied that she is able to manage her financial affairs as a whole.
In my opinion, little weight can be placed on the evidence of Dr Pickering and Dr Jacmon. The difficulty with the evidence they gave is that it is not clear what they knew and did not know about the plaintiff's actual financial position and her behaviour having regard to that financial position. In the absence of that information, it is not possible to know on what facts they based the opinions they expressed.
The plaintiff does not appear to have a realistic grasp of the current state of her financial affairs. In the past, the plaintiff gave evidence that suggested that she believed her assets were considerably greater than they actually were. When giving evidence before me, she was not prepared to concede that that belief was wrong. Instead, she gave an explanation of her evidence concerning the $5 million that I find hard to accept. The plaintiff gave an explanation of what she would do with her assets if the orders that she seeks were made - in particular, the investment strategy that she would follow - which makes little sense having regard to the assets she actually has. She said that she would put "a large amount" into a monthly account and just leave it there accumulating interest. But there is not a large amount to invest in that way. It was apparent from the evidence that the plaintiff gave that one thing she wanted to do was to spend more on food and other household needs. That is understandable, but it is difficult to see how it could be achieved given her limited income and her other liabilities. The debts she has incurred are also consistent with a belief that she has more assets available to her than she actually has.
The plaintiff sought, at least in part, to explain the evidence she gave by saying that she did not know what her assets were because NSW Trustee had never given that information to her and, consequently, she could only speak in hypothetical terms. However, I find that evidence impossible to accept. Ms Barker, an employee in the office of NSW Trustee, gave evidence that statements of account including an assets summary are sent to the plaintiff every 6 months at the end of December and June each year. In addition, a copy of the plaintiff's budget is sent to her every 12 months. I accept that evidence. Ms Barker sets out the plaintiff's current financial position. The evidence is that the plaintiff read the affidavits served by NSW Trustee, including Ms Barker's. But even then, the plaintiff was not able or willing to give an account of how she would manage her affairs in a practical way having regard to the information contained in those affidavits.
The plaintiff also denied that she had incurred debts to Mr Jaafar and Mr Mouawad for landscaping and gardening services. The likelihood, however, is that she did. That is consistent with the pattern of behaviour that has continued for a substantial period of time and which was one of the important matters that caused White J to refuse the orders the plaintiff sought in 2012. If the plaintiff is to be believed, she has been the victim of fraud on the part of Mr Jaafar and Mr Mouawad. That does not seem likely and is a proposition that is undermined at least to some extent by the observations of Mr Caldwell, which suggests that significant sums of money have been spent on the plaintiff's garden.
Equally significantly, I am not satisfied that the plaintiff is capable of dealing with claims against her. The likelihood is that she was served with proceedings commenced by Mr Mouawad, since his solicitors, Wehbe & Co, were successful in obtaining default judgment. The likelihood is that the plaintiff received the letter dated 27 March 2014 from Australian Debt Recoveries, since that letter was addressed to her at her home. However, she did nothing about it and denies receiving it. Whether the claim was justified or not, and for whatever reason, the plaintiff seems to have been unable to deal with it.
It is apparent from the material before the court and from the plaintiff's own evidence that she has made remarkable strides in recovering from the severe injuries from which she suffered. Sadly, for reasons which are not justified on the evidence, she has lost confidence in the ability and willingness of NSW Trustee to act in her best interests. But they are not reasons for granting the orders the plaintiff seeks. For the reasons I have given, I am not satisfied that the plaintiff is capable of managing her own financial affairs. Consequently, the summons must be dismissed.
I do not propose to make any orders for costs. If either party seeks an order in relation to costs, that party should notify my Associate within 14 days of the date of this judgment so that the matter can be relisted to deal with that issue.
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Decision last updated: 12 June 2014