SMH

[2017] NSWCATGD 8

NSW Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	SMH [2017] NSWCATGD 8
Hearing dates:	26 April 2017
Date of orders:	26 April 2017
Decision date:	26 April 2017
Jurisdiction:	Guardianship Division
Before:	E Connor, Senior Member (Legal) M Matheson, Senior Member (Professional) R Fela, General Member (Community)
Decision:	1. The estate of Mr SMH is subject to management under the NSW Trustee and Guardian Act 2009. 2. The management of the estate of Mr SMH is committed to the NSW Trustee and Guardian.
Catchwords:	FINANCIAL MANAGEMENT – application for financial management order – possible mismanagement of estate by attorney – need for an order – NSW Trustee and Guardian appointed ANCILLARY – request to transfer proceedings to Supreme Court under s 25L of the Guardianship Act – jurisdiction and utility of order – request refused
Legislation Cited:	Civil and Administrative Tribunal Act 2013 (NSW), s 54 Guardianship Act 1987 (NSW), ss 4, 25L, 25M
Category:	Principal judgment
Parties:	Mr SMH (subject person) Ms BDT (applicant) Ms OBE (carer and attorney appointed pursuant to a suspended power of attorney) The NSW Trustee and Guardian
Representation:	Separate Representation: B Gelonesi (subject person)   Legal Representation: A Norrie of counsel (Ms OBE)
File Number(s):	64534
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 FOR FINANCIAL MANAGEMENT ORDER

What the Tribunal decided

1. The Tribunal committed the management of the estate of Mr SMH to the NSW Trustee and Guardian.

Background

2. Mr SMH is a 94-year-old man who has been in respite accommodation at a nursing home in northern Sydney since 7 April 2017. Mr SMH previously resided with his carer, Ms OBE, also in northern Sydney. Ms OBE’s former partner, Mr CXE, reportedly also resides in the property in northern Sydney with Ms OBE.

3. On 27 November 2014, Mr SMH executed an enduring power of attorney and an enduring guardianship instrument appointing Ms OBE as his attorney and enduring guardian respectively.

4. Mr SMH previously received home care services from a disability service provider and on 19 December 2016, the Tribunal received an application for the appointment of a guardian and financial manager for Mr SMH from Ms BDT, Manager at said service provider.

5. On 4 January 2017, the Tribunal appointed the Public Guardian as Mr SMH’s guardian for six weeks to make decisions about access to or by him; his accommodation; legal services and the services he should receive. The Tribunal adjourned the hearing of the financial management application for approximately six weeks.

6. On 6 February 2017, the Tribunal adjourned the hearing of the review of the guardianship order made on 4 January 2017 to a date in March 2017 and made a number of directions. The Tribunal made an interim financial management order committing the management of Mr SMH’s estate to the NSW Trustee and Guardian. On this date the Tribunal also ordered that Mr SMH be separately represented in all proceedings before the Tribunal and gave leave for Ms OBE to be legally represented in the proceedings pending before the Tribunal.

7. On 10 February 2017, the Tribunal issued a summons (2017/1276) by its own motion requiring a financial institution to produce documentation.

8. On 31 March 2017, the Tribunal made a further interim financial management order for four weeks committing the management of Mr SMH’s estate to the NSW Trustee and Guardian. On 31 March 2017, the Tribunal reserved its decision in relation to the review of the guardianship order made on 4 January 2017 and on 5 April 2017 ordered that the guardianship order is renewed and varied such that Public Guardian is appointed as guardian for Mr SMH for 12 months with the functions of access, accommodation and services.

The hearing

9. 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.]

10. Mr SMH participated in most of the hearing, however, Dr Z reported that he was becoming tired and distressed and he was then taken back to his room.

Settlement

11. The Tribunal may, where it considers appropriate, use resolution processes to bring the parties to a settlement. The parties did not oppose the making of a financial management order appointing the NSW Trustee and Guardian.

Documentation

12. As noted above, on 10 February 2017 the Tribunal issued a summons (2017/1276) by its own motion requiring the financial institution to produce documentation. We noted at the commencement of the hearing that this documentation had not been produced.

13. We also noted that a large amount of financial material, which had been sent to the parties, had unfortunately not been provided to the Tribunal members prior to the hearing.

14. Mr Andrew Norrie, counsel representing Ms OBE, stated that the making of a financial management order was unopposed by his client. We therefore decided to proceed to hear the matter in the absence of the above documentation.

Preliminary jurisdictional Issue – requested referral to Supreme Court

15. Mr Bruno Gelonesi, separate legal representative for Mr SMH, submitted that the matter should be referred by the Tribunal to the Supreme Court of New South Wales for determination. There were two bases for Mr Gelonesi’s request.

Validity of will signed by Mr SMH

16. Mr Gelonesi believes there are serious concerns that Mr SMH was subject to undue influence when he executed a will in favour of Ms OBE in September 2014 and that the validity of the will is therefore questionable. Mr Gelonesi reported that when he spoke to Mr SMH on his own, he told him that there is no relationship between him and Ms OBE other than that she is his carer, and that he never wanted to marry her.

17. Mr Gelonesi asserted that the statement of Mr HMA, solicitor, signed on 23 March 2017 provides evidence that all instructions in relation to the preparation of Mr SMH’s will were provided by Ms OBE and that at no stage did Mr HMA interview Mr SMH on his own. Mr Gelonesi submitted that the will is invalid because Mr HMA accepted instructions from a beneficiary and Mr SMH was subject to undue influence. As the Tribunal has no jurisdiction in relation to Mr SMH’s will, Mr Gelonesi submitted that the matter should be referred to the Supreme Court.

Ownership of the property in northern Sydney

18. Mr SMH was until recently living in a property in northern Sydney which was purchased in the sole name of Mr SBE, Ms OBE’s son. The purchase was financed by a loan taken out by Mr CXE with the assistance of Mr Z of a mortgage group and $700,000 allegedly won by Ms OBE from gambling. It is noted in the statement of Mr HMA that Mr SMH had $328,108.46 in his account on 5 July 2013. Ms OBE acknowledged that she had gambled at least some of this money and stated that she had as a result won substantial amounts on two occasions. There was no evidence before the Tribunal to substantiate that the wins on poker machines was the source of the funds that were then invested in the northern Sydney property. It is not known whether, in fact, Mr SMH had other investments or assets which were accessed by Ms OBE. It was uncontested that Mr SMH has been contributing to the cost of the mortgage taken out by Mr CXE, even though it is not in his name and he has no registered interest in the property. A ‘Declaration of Trust’ has reportedly been entered into by Ms OBE and her son to reflect Ms OBE’s interest in the property; however, this does not extend to Mr SMH.

19. Mr Gelonesi asserted that Ms OBE has sought to deceive the Tribunal. He referred as an example to the email evidence of Mr Z dated 16 March 2017 tabled at the last hearing. This is an email which was tendered to explain why the loan in relation to the northern Sydney property was taken out solely by Mr SBE. Mr Gelonesi stated that he telephoned Mr Z, who said that he had never heard or Mr SMH.

20. Mr Gelonesi stated that Mr SMH has no security in relation to the northern Sydney property and that the title ought to be amended to reflect his interest in the property. He submitted that, given that the Tribunal does not have jurisdiction to order that the title should be amended, this provides a further reason why the matter should be referred to the Supreme Court.

21. Mr Andrew Norrie of counsel, representing Ms OBE, opposed any attempt to transfer the matter to the Supreme Court. He asserted that Mr HMA has provided a signed statement addressing the circumstances surrounding the signing of the will and the purchase of the property at northern Sydney. Mr Norrie submitted that his client does not oppose the making of a financial management order and that there was no reason for the matter to be delayed further.

22. Mr Gelonesi and Mr Norrie agreed that the relevant legislative provision regarding the referral of matters to the Supreme Court is s 25L of the Guardianship Act 1987 (NSW) which provides as follows:

25L Tribunal may refer proceeding to Supreme Court

The Tribunal may, if it considers it appropriate to do so, and with the concurrence of the Supreme Court, refer a proceeding relating to a person’s capability to manage his or her own affairs to that Court.

23. This section provides that the Tribunal can, with the agreement of the Supreme Court, refer a proceeding relating to a person’s capability to manage his or her own affairs to that Court. There is no dispute in this matter about Mr SMH’s capability to manage his own affairs. It is agreed that he is unable to do so and Mr Gelonesi did not seek to argue that the Tribunal should give a broader meaning to section 25L of the Guardianship Act.

24. Section 54 of the Civil and Administrative Tribunal Act 2013 (NSW), by which the Tribunal was established, provides for references of questions of law to the Supreme Court. We are not satisfied that there is any question of law to be resolved. Mr Gelonesi conceded that this is the case.

25. We were satisfied that this Tribunal is the appropriate body to determine the issues and we proceeded to hear the matter.

26. We note that issues concerning Mr SMH’s will are not within the purview of the Guardianship Act and the application for the appointment of a financial manager for Mr SMH before the Tribunal.

FINANCIAL MANAGEMENT

What did the Tribunal have to decide?

27. The questions to be considered by the Tribunal are:

• Is Mr SMH incapable of managing his affairs?

• Is there a need for another person to manage Mr SMH’s affairs and is it in his best interests for a financial management order to be made?

• If so, who should be appointed financial manager?

Is Mr SMH incapable of managing his affairs?

28. The Tribunal was provided with a report from Dr Y, consultant psychiatrist/psychogeriatrician, dated 20 March 2017. Dr Y notes that Mr SMH has significant short-term memory deficits; is very poorly oriented; and believes he owns his own home which he thinks costs him about $1400 annually. He was unaware of what income he receives or what his expenses are. He referred to his ‘tenant’ (Ms OBE) as having access to his accounts which she looks after. Dr Y states that Mr SMH has very limited insight into his cognitive deficits. She concludes that:

[Mr SMH] has a moderately severe dementia affecting a number of cognitive domains most prominently short-term memory, orientation, and fronto-executive functioning.

I do not feel he has the capacity to make informed decisions in his best interests in relation to his finances…He is highly vulnerable to exploitation should he not have both a financial guardian and general guardian and I do feel it is in his best interests for his current FMO and Guardianship orders to be continued.

29. It was agreed by all participants in the hearing that Mr SMH has disabilities as a result of which he is incapable of managing his own affairs.

30. We accepted the evidence of Dr Y that Mr SMH has moderately severe dementia and are satisfied that he is not capable of managing his affairs.

Is there a need for a financial management order and is it in Mr SMH’s best interest that an order is made?

31. Mr Norrie submitted that Ms OBE is not opposed to the making of a financial management order.

32. Mr SMH stated during the hearing that ‘in my opinion you should do nothing’ and that he is happy for ‘his wife to be, [Ms OBE]’ to manage his affairs.

33. We noted that this was not consistent with Mr SMH’s views when he was interviewed by Mr Gelonesi, as outlined above, or the reference to Ms OBE as his ‘tenant’ when he spoke to Dr Y. Ms OBE stated that she had spent the day before the hearing with Mr SMH participating in Anzac Day activities, which may have influenced his views on the day of the hearing.

34. A number of issues were raised in the documents before the Tribunal, and by Mr Gelonesi at the hearing, which satisfied us that there is clearly a need for a financial management order and that it is in Mr SMH’s best interest that an order is made.

35. Mr SMH is currently residing in respite care in an aged care facility where his costs are being met for 63 days by the Department of Veterans’ Affairs. Once the period of respite ends, if the Public Guardian decides Mr SMH should remain in the aged care facility, he will be required to pay fees, and possibly a Refundable Accommodation Deposit. Discussions will need to be conducted with Centrelink in relation to these matters, and consideration be given to complex issues such as whether or not Mr SMH ‘gifted’ the $328,108.46 he previously had to Ms OBE; whether Mr SMH has an equitable (and potential legal) interest in the northern Sydney property which will need to be considered in his assets assessment; or whether Ms OBE obtained the $328,108.46 by exercising the enduring power of attorney in breach of her fiduciary duties. These are complex matters which will require resolution.

36. There is clearly a need for Mr SMH’s interest in the northern Sydney property to be resolved. It is undisputed that when he commenced cohabiting with Ms OBE he had savings of $328,108.46 and he now has none. As noted above, Ms OBE gave evidence that she gambled at least some of this money and made $700,000 which she used to partly fund the northern Sydney property. As previously noted, there was no evidence before the Tribunal to verify this information, and it is possible that Mr SMH had other funds which were utilised. This needs to be investigated.

37. It is accepted that the balance of the property was funded by a mortgage taken out by Mr SBE which Mr SMH and Ms OBE have been repaying. There is reported to be a Declaration of Trust between Mr SBE and Ms OBE but nothing recognising Mr SMH’s interest in the property. At the very least, it would appear arguable that Mr SMH’s interest in the property should be proportionate to the $328,108.46 of his funds which have been dissipated. Decisions will need to be made about whether or not it is in Mr SMH’s best interest for the title of the northern Sydney property to be amended to reflect his interest; whether the property needs to be sold such that his share is available to fund any future supported accommodation costs; or whether other action to fund his accommodation costs may be preferable.

38. A report from the NSW Trustee and Guardian dated 20 April 2017 states that Mr SMH had total assets of $2,901.70 on that date. Mr SMH is in receipt of a DVA pension of $1,423.20 per fortnight which has been directed to the NSW Trustee and Guardian since 31 March 2017. It is noted that:

[Mr SMH] has incurred $30,380.16 overpayment to the Department of Veterans Affairs (DVA) for none (sic) reporting of [Ms OBE], [Mr SMH]’s partner, income, sale of home, purchase of new home and car. The current balance of the overpayment is $27,487.73.

[Mr SMH] is paying $750.00 per fortnight towards his overpayment to DVA. The repayment was renegotiated with DVA by this office but declined as this is the hardship rate.

39. A financial manager can also give consideration to whether there is any criminal or other legal action which should be taken in Mr SMH’s best interest.

Who should be appointed as financial manager?

40. In appointing a financial manager, as in making all other orders under the Guardianship Act, the Tribunal must act with the interests of the person concerned as the paramount consideration and in accordance with the other principles set out in s 4 of the Guardianship Act.

41. Section 25M of the Guardianship Act provides that, if the Tribunal makes a financial management order, it may appoint a suitable person to manage the person’s estate or may commit the management of the estate to the NSW Trustee and Guardian.

42. Given the seriousness of the allegations before the Tribunal, and the complexity of the issues, there is no suitable private person to manage the estate of Mr SMH and we committed the management of his estate to the NSW Trustee and Guardian. This was unopposed.

43. Actions which the NSW Trustee and Guardian might consider taking include, but are not limited to:

• Ensuring funds are available for the payment of Mr SMH’s residential accommodation fees and, if necessary, a Refundable Accommodation Deposit.

• Ensuring that DVA and/or Centrelink are fully appraised of Mr SMH’s situation; that an accurate assets assessment is undertaken; and that he is receiving an appropriate pension.

• Investigating the circumstances of Mr SMH incurring the debt to DVA and whether any action can be taken against Ms OBE in relation to this overpayment.

• Investigating the alleged winnings Ms OBE asserts she made through gambling and then used to partially fund the purchase of the northern Sydney property and whether or not Mr SMH had any other assets or savings which have been dissipated or used by Ms OBE.

• Investigating the repayment by Mr SMH of the loan taken out by Mr SBE.

• Taking legal action to ensure that Mr SMH’s interest in the northern Sydney property is recognised on the title, and/or that other appropriate action is taken to ensure that he benefits from the funds that he provided which were utilised to purchase the property.

• Considering whether or not it is in Mr SMH’s best interest for any criminal or civil legal action to be initiated on his behalf.

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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: 04 July 2017