SNU

[2018] NSWCATGD 32

NSW Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

SNU [2018] NSWCATGD 32

Hearing dates:

12 June 2018

Date of orders:

25 June 2018

Decision date:

25 June 2018

Jurisdiction:

Guardianship Division

Before:

J S Currie, Senior Member (Legal)

Decision:

The Financial Management order for Mrs SNU made on 14 December 2017 has been reviewed. The order now is as follows:

 

1. The estate of Mrs SNU is subject to management under the NSW Trustee and Guardian Act 2009.

 

2. Ms LZU of [Address removed for publication.] is appointed as the financial manager of the estate.

 

NOTE: The financial manager is not authorised to deal with the estate (other than to protect the assets) until she has obtained all necessary authorities from the NSW Trustee and Guardian.

 

3. This order is to be reviewed by the Tribunal within nine months.

 

RECOMMENDATIONS

 

The Tribunal recommends that, without limiting the powers or discretions available to NSW Trustee and Guardian under the NSW Trustee and Guardian Act 2009 and the Guardianship Act 1987 and relevant regulations, consideration should be given to an early request for review of this order from NSW Trustee and Guardian or any other person entitled under the Guardianship Act to request such a review, if:

 

(1) any claim is made to or approval sought from NSW Trustee and Guardian for or in respect of payment or reimbursement by the estate of any legal fees incurred by or on behalf of the financial manager or the estate (whether such fees are incurred or relate to legal work performed before or after the date of this order);

 

(2) any litigation involving the estate is or is proposed to be commenced, substantially varied, settled or otherwise discontinued without reasonable prior notification of the same having been given to NSW Trustee and Guardian;

 

(3) the financial manager is in breach of any obligation under the NSW Trustee and Guardian Act or the Guardianship Act or relevant regulations or any obligation arising under an authority or direction issued by NSW Trustee and Guardian; or

 

(4) without limiting the effect of (3) above, the financial manager fails to respond promptly and completely to any request for information or documentation made by or on behalf of NSW Trustee and Guardian; or

 (5) the financial manager changes address or other contact details without reasonable prior notice to NSW Trustee and Guardian.

Catchwords:

GUARDIANSHIP – financial management – application to review or revoke financial management order and review of reviewable financial management order – large and complex estate – numerous current litigation matters before various courts – finding that order should not be revoked – private manager appointed to replace NSW Trustee and Guardian – suitability of existing and proposed new manager and best interests of subject person – role of Case Manager of litigation not necessarily compatible with that of financial manager – recommendations made to encourage early review of order in particular circumstances – 9-month reviewable order made

PRACTICE AND PROCEDURE – application that hearing be conducted partly in private – decision to make an order to that effect under Civil and Administrative Tribunal Act 2013 (NSW), s 49(2)

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW), ss 36, 36(1), 49(2)
Guardianship Act 1987 (NSW), Part 3A, Div 3, ss 3(2), 4, 25N, 25P(1)(b), 25U(4), 101

Cases Cited:

Application by AMAM; Re SAM [2011] NSWSC 503
Holt & Anor v Protective Commissioner (1993) 31 NSWLR 227
M v M [2013] NSWSC 1495

Texts Cited:

Nil

Category:

Principal judgment

Parties:

004: Review of Reviewable Financial Management Order

 

Mrs SNU (person under management)
NSW Trustee and Guardian (financial manager)
Ms LZU (carer)

 

005: Application to Review or Revoke Financial Management Order

  Mrs SNU (person under management)
Mr NYU (applicant)
NSW Trustee and Guardian (financial manager)
Ms LZU (carer)

Representation:

Solicitors:
Yates Beaggi, Lawyers (Applicant)
Streeter Law (Separate Representative of Person Under Management)
NSW Trustee and Guardian, Specialist Services –Legal (NSW Trustee and Guardian)

File Number(s):

NCAT 2016/00391392

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

REVIEW OF A REVIEWABLE FINANCIAL MANAGEMENT ORDER;

AND

APPLICATION TO REVIEW OR REVOKE FINANCIAL MANAGEMENT ORDER

What the Tribunal decided

1. Having heard these two matters in conjunction, I decided to vary the financial management order which had been made for Mrs SNU on 11 January 2017 and which had been varied on 14 December 2017, by revoking the appointment of NSW Trustee and Guardian as financial manager and by appointing Ms LZU as financial manager, subject to the authority and direction of NSW Trustee and Guardian.

2. I decided that this financial management order will be reviewed within nine months.

3. I also recommended that, without limiting the powers or discretions available to NSW Trustee and Guardian under the NSW Trustee and Guardian Act 2009 (NSW) and the Guardianship Act 1987 (NSW) and relevant regulations, consideration should be given to an early request for review of this order from NSW Trustee and Guardian or any other person entitled under the Guardianship Act to request such a review, if:

1. any claim is made to or approval sought from NSW Trustee and Guardian for or in respect of payment or reimbursement by the estate of any legal fees incurred by or on behalf of the financial manager or the estate (whether such fees are incurred or relate to legal work performed before or after the date of this order);

2. any litigation involving the estate is or is proposed to be commenced, substantially varied, settled or otherwise discontinued without reasonable prior notification of the same having been given to NSW Trustee and Guardian;

3. the financial manager is in breach of any obligation under the NSW Trustee and Guardian Act or the Guardianship Act or relevant regulations or any obligation arising under an authority or direction issued by NSW Trustee and Guardian; or

4. without limiting the effect of (3) above, the financial manager fails to respond promptly and completely to any request for information or documentation made by or on behalf of NSW Trustee and Guardian; or

5. the financial manager changes address or other contact details without reasonable prior notice to NSW Trustee and Guardian.

Background

Mrs SNU and previous Tribunal proceedings and orders

4. Mrs SNU, who was aged 64 years at the time of the hearing, is reported to have a mental illness, namely severe anxiety and panic attacks and difficulties with short-term memory and thought organisation. She has recently, on 8 June 2018, been diagnosed as meeting the criteria for Generalised Anxiety Disorder and Social Anxiety. Mrs SNU is divorced. She has two adult daughters, one of whom is Ms LZU.

5. On 11 January 2017, on the application of Ms LZU, the Tribunal made a financial management order for Mrs SNU under which it appointed Ms LZU as her financial manager, subject to the authority and direction of NSW Trustee and Guardian.

6. On 14 December 2017, on the application of NSW Trustee and Guardian, that financial management order was reviewed and varied. The appointment of Ms LZU as financial manager was revoked and management of the estate was committed to NSW Trustee and Guardian. It was ordered that the financial management order be reviewed by the Tribunal within four months

7. That financial management order, as varied, remains in force.

Mrs SNU’s estate

8. Mrs SNU’s estate is a large and somewhat complex one. Her real estate assets are reported by NSW Trustee and Guardian to comprise:

1. a property at northern Sydney (“Property A”) of an estimated value of $1.65 million, which is subject to a claim by her former husband Mr KAU, who alleges that half of the property is held on trust for him and further that the amount of $288,000 is held for him on equitable trust or remedial constructive trust;

2. another property at northern Sydney (“Property B”) of an estimated value of $2.5 million to 3 million, again subject to a claim by Mr KAU that half the property is held on trust for him;

3. a property owned jointly with Mr KAU at south-eastern Sydney (“Property C”), with an estimated total value of approximately $1.5 million;

4. a property jointly owned with Mr KAU also at northern Sydney (“Property D”) with an estimated total value of approximately $2.8 million

5. an interest in the proceeds of a sale of a property at inner city Sydney, (“Property E”), which was jointly owned with Mr KAU, Mrs SNU’s interest comprising an amount of $500,640.21, which is held in the Supreme Court of NSW; and

6. a claimed interest in a separate property also at northern Sydney, the title to which is in the sole name of Mr KAU, in the estimated amount of $750,000.

9. NSW Trustee has indicated that it is not possible to identify Mrs SNU’s interests in the above items of real property “with any accuracy”.

Legal proceedings involving Mrs SNU

10. Mrs SNU is also involved as a party in numerous court proceedings. It was asserted by the Applicant, Mr NYU and as I understood it not disputed, that these proceedings included:

1. proceedings in the Federal Circuit Court, which involve a bankruptcy petition against Mrs SNU by the Deputy Commissioner of Taxation, based on an unpaid taxation liability in an amount in excess of $1.2 million. Mrs SNU denies liability. Mr NYU, in his capacity as Case Guardian for Mrs SNU in the Family Court proceedings described below, has applied to have these proceedings transferred to the Family Court;

2. proceedings in the Federal Court of Australia (“the Liquidation Proceedings”) which were commenced in May 2015 and involve claims against Mrs SNU by the liquidator of Mr KAU’s companies, which are known as the “KAU Companies”, for various alleged breaches and which seek liquidated damages totalling just under $1.9 million and an liquidated summons claiming all property held by Mrs SNU being the property referred to below in relation to the Family Court proceedings, plus costs;

3. proceedings in the Family Court of Australia (“the Family Court proceedings”). Mrs SNU and Mr KAU filed an application for consent orders with this Court for dissolution of their matrimonial property interests on 7 November 2013. Under these consent orders Mr KAU was to receive all of the assets of the business operated by the KAU Companies and Mrs SNU was to receive title to Property D, Property C, Property E, the second property at northern Sydney referred to at [8] (6) above, a property at south-east of the Sydney CBD, Property A and Property B. However in December 2013, the liquidator of the KAU Companies commenced the Federal Court proceedings and in November 2015 Mr KAU presented his own debtor’s petition and filed for bankruptcy appointing a Bankruptcy Trustee. Subsequently the Bankruptcy Trustee, the Deputy Commissioner of Taxation and the liquidator of the KAU Companies sought to set aside the Family Court Consent Orders. The orders were set aside without admission of wrongdoing and the contest between Mrs SNU and her former husband Mr KAU continues.

4. There have been various further actions in relation to each of these proceedings in particular by the Liquidator of the KAU Companies.

5. On 22 November 2017 Mr NYU, Solicitor, as Case Guardian for Mrs SNU filed an Application in a Case in which he sought, amongst other things, a sale of Property C and release of funds held for Mr KAU and Mrs SNU in the Supreme Court of NSW. In his affidavit prepared for the purpose of the present proceedings Mr NYU asserts (at paragraphs 49 to 51) that if the prayers sought in the Application in a Case are pronounced as orders, then effectively the debt due by Mrs SNU to the Liquidator will be paid and separately Mr KAU and Mrs SNU’s joint secured loan to a commercial bank over Property D would be discharged. This would result in the only dispute need to be heard being that in the Family Court as between the interests of Mr KAU and Mrs SNU. Mr NYU asserts that that would leave the majority of the real property pool described in [8] above in which Mrs SNU has an interest intact.

6. There are also several proceedings before the Supreme Court of New South Wales. In brief summary these consist of:

1. an application by Mrs SNU seeking a release of her interest in the funds held by the Court arising from the sale of a joint asset held by her and Mr KAU;

2. an application by the Liquidator of the KAU Companies to take possession and to sell the various properties in which Mrs SNU has an interest and from the proceeds to pay the settlement sum owed to the Liquidator (these are apparently known as the “Liquidator’s Enforcement proceedings”); and

3. an action by a commercial bank for possession and sale of Property D.

7. Mr NYU asserts that the determination by the Family Court of his Application in a Case in in his favour would result in the only disputes between Mrs SNU and her former husband being in contest in the Family Court, in which he is acts as Mrs SNU’s Case Guardian.

11. I should add for completeness that it appears that the position of NSW Trustee and Guardian on these matters and particularly the course of litigation, as reflected by the NSW Trustee and Guardian’s letter dated 5 June 2018, differs from that of Mr NYU as Case Guardian in that:

1. in the NSW Trustee and Guardian’s view there is a live question as to whether the Family Court has (or presumably could have) exclusive jurisdiction in relation to all matters in dispute;

2. the Supreme Court matters remain on foot and various parties have adopted positions at variance with an early settlement of the matters. In particular, in the NSW Trustee and Guardian’s view there is a real issue in relation to the caveat lodged against Property B and a likely challenge to the validity of the letter of instructions pursuant to which the caveat was lodged; and

3. it appears that NSW Trustee and Guardian is the Tutor for Mrs SNU in the Liquidator’s Enforcement Proceedings and has recently filed a defence on her behalf in those proceedings.

The current proceedings in this Division of the Tribunal

12. On 22 February 2018, the Tribunal received from Mr Farshad Amirbeaggi, as the solicitor acting for Mr NYU, an application seeking a review or revocation of the financial management order for Mrs SNU. Although Mr Amirbeaggi was initially identified as the applicant, Mr NYU was subsequently formally substituted as the applicant and I was satisfied that it was always intended that he should be the applicant.

13. On 14 December 2017, the Tribunal had ordered that the financial management order as varied by it was to be reviewed by the Tribunal within four months. Accordingly, the Registry arranged for the concurrent listing and hearing of that review and of the application for review or revocation made by Mr Amirbeaggi on behalf of Mr NYU.

14. Two directions hearings were held in respect of these matters. At the first of these, on 5 April 2018, a separate representation order was made for Mrs SNU and directions were made for the filing and service of submissions. At the second directions hearing on 29 May 2018, I made directions as to the filing and service of further material and the matter was set down for hearing.

15. The purpose of the proceedings before me at Sydney on 12 June 2018 was therefore to conduct a concurrent hearing of the application for review or revocation made on behalf of Mr NYU and the review of the financial management order for Mrs SNU required under the orders made on 14 December 2017.

Parties and witnesses

16. The cover sheet to these Reasons identifies the parties to the application and the Appendix identifies the witnesses who participated in the hearing. [Appendix removed for publication.]

Issues for determination

Statutory issues

17. Under s 25P(1)(b) of the Guardianship Act, when the Tribunal reviews a reviewable financial management order it must vary, revoke or confirm the order. Under s 25P(2) of that Act, it may revoke the order only if:

1. it is satisfied that the protected person is capable of managing his or her affairs, or

2. it considers that it is in the best interests of the protected person that the order be revoked (even though the Tribunal is not satisfied that the protected person is capable of managing his or her own affairs).

18. Accordingly, the issues for determination by me were:

1. Does Mrs SNU remain incapable of managing her affairs?

2. Would it be in the best interests of Mrs SNU for the existing financial management order to be revoked?

3. If there are insufficient grounds to revoke the existing order, should any variations be made to it?

The real issues in the proceedings

19. Under s 36 of the Civil and Administrative Tribunal Act, I am required to seek to give effect to the “guiding principle” stated in sub-s (1) of that section when I exercise any power given to me as the constituted Tribunal under that Act or the procedural rules or in interpreting any provision of them. The guiding principle is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.

20. Mr NYU’s application which seeks the review or revocation of the financial management order for Mrs SNU stated that a review was sought only in order to vary the financial management order by replacing the current financial manager.

21. Mr Amirbeaggi as Legal Representative confirmed that Mr NYU would not be contending that the financial management order should be revoked on either of the grounds stated at [18] (1) and (2) above and that Mrs SNU should continue to have a financial management order. I did not understand Mr Streeter as Separate Representative or Ms Gail Sherlock, representing NSW Trustee and Guardian, to have a different view. I understood each of them to agree that it would not be in Mrs SNU’s best interests for the financial management order to be revoked and that there was clear professional evidence, supported by the observations of family members, to the effect that she had not regained the capability of managing her own affairs. In particular there was a report from Ms Z, Clinical Psychologist, dated 8 June 2018 which confirmed Mrs SNU’s diagnoses and condition as outlined at [4] above.

22. On the basis of these stated positions, my own consideration of the relevant professional evidence including Ms Z’s recent report and my observations of Mrs SNU, I accepted that that was so.

23. Accordingly the real issues for my determination were:

1. whether the appointment of NSW Trustee and Guardian as financial manager should be revoked; and, if so;

2. who should be appointed as financial manager.

Preliminary matters

24. There were a number of preliminary matters which arose and I decided to deal with them before proceeding to consider the real issues outlined above.

Legal Representation of the applicant, Mr NYU

25. Mr Amirbeaggi formally applied to legally represent Mr NYU in these proceedings. There was no objection to such an appointment. I was satisfied on the basis of my consideration of the matter and discussions at the directions hearing on 29 May 2018 that many of the factors set out in the Guardianship Division Guideline on Representation dated August 2017 and particularly at [19] thereof were satisfied. In particular, the proceedings clearly involve complex factual issues and reasonably complex legal issues and it would promote fairness between the parties for the applicant to be represented, given that a Separate Representative had been appointed and that the NSW Trustee and Guardian was represented at the hearing by a senior member of its legal division, Ms Gail Sherlock. I gave particular weight to the fact that legal representation would promote the guiding principle set out in s 36 of the Civil and Administrative Tribunal Act, in that it would assist me to identify and determine the real issues in the proceedings. I was also satisfied that legal representation of the applicant would promote and facilitate the application of the principles set out in s 4 of the Guardianship Act.

25. On that basis I granted the application for legal representation.

26. I should add for completeness that it appeared to me that Ms Sherlock, as an employee of NSW Trustee and Guardian, did not need to be recognised formally as a Legal Representative.

Application for an order that the hearing be conducted partly in private

28. At the commencement of the proceedings Mr Amirbeaggi, on behalf of the applicant, asked that I consider conducting the hearing partly in private. I took Mr Amirbeaggi to intend that I should make an order to that effect under s 49(2) of the Civil and Administrative Tribunal Act. M asserted that:

1. at the opening of the hearing one of the attendees was a solicitor who was acting on behalf of the NSW Trustee and Guardian of the bankrupt estate of Mr KAU. The solicitor involved confirmed to me that that was the case. [I will refer to the solicitor as “the solicitor for the Bankruptcy Trustee”. I have decided not to name her as that appears to be unnecessary.);

2. immediately prior to the opening of the hearing a late document filed that morning, which Mr Amirbeaggi had provided to Ms Sherlock, had been shown by Ms Sherlock to the solicitor for the Bankruptcy Trustee;

3. the information in that document was confidential in the sense that it had been prepared only for the purposes of and related only to these proceedings, and that it had not been intended to be revealed to anyone other than the parties to these proceedings; and

4. the interests and welfare of Mr NYU as applicant and of Mrs SNU herself might be prejudiced by the continued presence at the hearing of the solicitor for the Bankruptcy Trustee or her dissemination of the document which had been revealed to her by Ms Sherlock or of any information contained in it.

29. Ms Sherlock confirmed that she had given or at least showed a copy of the document in question to the solicitor for the Bankruptcy Trustee. The solicitor for the Bankruptcy Trustee confirmed that she had read the document. She asserted that much of the information in it was information in the public domain, in that it was information comprised in evidence in the various court proceedings.

30. However the solicitor for the Bankruptcy Trustee, at my suggestion, undertook to the Tribunal not to distribute the document in question or any of its contents to any other person or to reveal to her client or any other person the contents of that document. In this regard I found the solicitor for the Bankruptcy Trustee to be professionally cooperative. I reminded her of her obligations not to disclose this information which arise under s 101 of the Guardianship Act. She acknowledged that she was bound by that section and agreed to take no further part in the proceedings and withdrew.

31. In these circumstances:

1. I accepted the undertaking given by the solicitor for the Bankruptcy Trustee;

2. I noted that in all the circumstances there was no cause for any criticism of that solicitor or indeed of Ms Sherlock and I made no such criticism;

3. I noted that the solicitor for the Bankruptcy Trustee had left the hearing and intended to take no further part in it, but nevertheless it would promote the interests and welfare of Mrs SNU for me to order, under s 49(2) of the Civil and Administrative Tribunal Act, that the remainder of the hearing be conducted in private, so as to exclude any attendance by or on behalf of the Bankruptcy Trustee, by reason of the likely confidential nature of information which may be provided concerning Mrs SNU or relating to the litigation in which she is currently involved in various courts. I ordered accordingly.

Confirmation of Ms LZU as a party, as carer

32. Although this matter had been discussed at an earlier directions hearing, for completeness I noted that Ms LZU was a party to both the application and the review having been recognised as the carer for her mother Mrs SNU.

Consideration of possible adjournment of the hearing and decision to proceed

33. At the directions hearing on 29 May 2018, I directed that each party give to the Tribunal, the Separate Representative and each other party on or before 4 June 2018, any further material on which that party sought to rely. Notwithstanding that direction, on 12 June 2018 at approximately 8:45 am, Mr Amirbeaggi gave the Tribunal and each other party three important affidavits, being those of Mrs SNU, Ms LZU and Mr NYU and he sought to hand up to me and distribute outlined written submissions on behalf of the applicant and a copy of report dated 8 June 2018 from Ms Z, Clinical Psychologist.

34. Mr Amirbeaggi acknowledged with regret that this documentation had been provided outside the terms of the directions made on 29 May 2018, but explained that their late production had been caused by his client Mr NYU having been delayed in his return to Australia from overseas business and that it had been necessary for him to confer in detail with Mr NYU in order that this important documentation could be finalised and distributed. Additionally, I understood Mr Amirbeaggi to indicate that the report from Ms Z had recently been received

35. The documentation appeared to be relevant to the issues before the Tribunal. It was moderate to substantial in size and would take some time to read. I therefore considered whether the hearing should be adjourned in fairness to the other parties and in particular to NSW Trustee and Guardian. However I determined not to adjourn the hearing for the following reasons:

1. none of the parties had made an adjournment application;

2. Ms Sherlock on behalf of NSW Trustee and Guardian conceded that, whereas the late production of this documentation was inconvenient and may place NSW Trustee and Guardian at some disadvantage, it would clearly not be consistent with the welfare and interests of Mrs SNU for the hearing to be adjourned;

3. the Separate Representative Mr Streeter urged me to the proceed with the hearing, in Mrs SNU’s interests;

4. Mr Amirbeaggi indicated that because of Mr NYU’s busy schedule he might only be available for part of this day and there might be considerable delay occasioned by setting a new hearing date and for that reason he urged me, in the interests of Mrs SNU’s, to proceed with the hearing; and

5. the parties concurred with my suggestion that we allow a brief adjournment, which ultimately was of approximately 40 minutes’ duration, to enable the recently produced documentation to be read.

Statutory and common law considerations relevant to revocation of the appointment of a manager

Guardianship Act provisions

36. Section 25U(4) of the Guardianship Act, which applies to the current application and review by operation of s 25P(1)(b) of that Act, sets out the grounds on which the appointment of a financial manager can be revoked. The subsection is in the following terms:

25U   Action on review

…

(4)     The Tribunal may revoke the appointment under review only if:

(a)     the person appointed seeks the revocation, or

(b)     the Tribunal is satisfied that it is in the best interests of the protected person that the appointment be revoked, or

(c)     the financial management order in respect of the estate concerned is revoked.

37. Mrs SNU herself does not seek revocation of the order and, as outlined above nor does any other party. It must follow that the financial management order is not to be revoked. Accordingly paragraphs (a) and (c) above are not applicable and (b) is the only relevant provision. It follows that I may revoke the appointment of NSW Trustee and Guardian only if I am satisfied that it is in the best interests of Mrs SNU to do so.

38. But there are additional statutory considerations, which arise because Mrs SNU appears to be a person who has a disability for the purposes of the Guardianship Act (see the definition of that term in s 3(2) of that Act), and it follows that I am bound to observe the principles set out in section 4 of that Act. The principles which appeared to be most relevant to the present case are that I should do what I can to protect Mrs SNU from neglect, abuse and exploitation, I should recognise the importance of preserving her family relationships, I should do such things as are necessary to ensure that her freedom of decision and freedom of action are restricted as little as possible and I should give paramount consideration to her welfare and interests.

Principles enunciated in the cases

39. There are other important considerations which have been recognised in the cases and which were summarised by Lindsay J in his extensive and authoritative judgment in M v M [2013] NSW SC 1495 at [50] particularly at paragraphs (d) to (i) and (m), those paragraphs being the ones with particular relevance to whether a manager should be replaced and who should be appointed as manager. Those paragraphs are in the following terms:

(d)   Fourthly, care needs to be taken in all decision-making affecting a protected person to focus on the facts of the particular case, preferably with due consultation with the protected person, his or her family and carers who may be well placed to inform the Court of the protected person's particular circumstances: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238C-239B, 240D, 241B-F and 243E-F; Re L [2000] NSWSC 721 at [10].

(e)   Fifthly, in the choice of a manager consultation of the welfare and interests of a protected person may favour appointment of a member of his or her family over the appointment of an institutional manager: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238G-239B.

(f)   Sixthly, decisions need to be made in the context of a prudential management regime that can be administered, without strife in the simplest and least expensive way, in the interests of the protected person: HS Theobald, The Law Relating to Lunacy (Stevens and Sons, London, 1924), pp 380 and 382.

(g)   Seventhly, regard needs to be had to the value and nature of the property comprising a protected person's estate in deciding upon the identity of a manager or an appropriate management plan: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 242E and 243D-F.

(h)   Eighthly, recognition needs to be given to the status and obligations of a manager of a protected estate as the holder of a fiduciary office. This means that the Court, managers and other affected persons need to be alive to the importance of avoiding, or at least minimising, exposure of a protected person to dangers associated with a manager having a conflict between a duty owed to the protected person and the manager's personal interests: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 239B and 242B-C; Re L [2000] NSWSC 721 at [12]. Nevertheless, it must also be recognised that the liability of a manager of a protected estate to account may differ from that of a trustee of an ordinary trust to the extent necessary to accommodate the protective purpose of the manager's appointment: Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 420-423.

(i)   Ninthly, in conformity with fiduciary law, the office of a manager of a protected estate must generally be regarded as a gratuitous one unless, by an order of the Court or by legislation, a special arrangement to the contrary is made: Gell v Gell (2005) 63 NSWLR 547 at 553-554 [21]-[23]; Macedonian Orthodox Community Church St Petka Incorporated v Bishop Petar (2008) 237 CLR 66 at 93 [69]….

(m)   Thirteenthly, a manager, or prospective manager, of a protected estate needs to have given thoughtful attention (in the case of a private manager, in consultation with the NSW Trustee …. to the development, and operation, of a plan for management of the protected person's estate: Re L [2000] NSWSC 721 at [11]-[12]; Re McL [2001] NSWSC 280 at [3]-[5].

Suitability tests: Who may be appointed as manager?

40. The next level of enquiry is whether any person who has expressed willingness to be appointed is suitable for appointment. In considering a financial management application, or an application made under Part 3A, Division 3 of the Guardianship Act for review of the appointment of a manager, or in reviewing a financial management order under the broad powers in s 25N of that Act, the Tribunal has power either:

1. to appoint as financial manager a private person, in which case their appointment will at all times be subject to their compliance with the authorities and directions of NSW Trustee and Guardian, or

2. to commit management of the subject person’s estate to NSW Trustee and Guardian.

41. Our normal practice, where this is appropriate and it is in the best interests of the protected person, is to investigate whether there is a private person such as a family member or close friend who is suitable for appointment as financial manager before we consider committing the management of the estate of the subject person to NSW Trustee. That approach was approved in Holt & Anor v Protective Commissioner (1993) 31 NSWLR 227.

42. Before appointing a private person as financial manager we must be satisfied that the person seeking appointment is willing to act and is suitable for appointment.

43. The relevant Acts do not prescribe criteria for determining a potential manager’s suitability for appointment. In Application by AMAM; Re SAM [2011] NSWSC 503 at [34], Hallan AsJ suggested that it would be unwise to attempt a precise definition of the matters that may legitimately be enquired into and that each case must depend on its own circumstances, but that an enquiry as to suitability of a potential manager must include at least the his or her character, honesty and ability to manage the managed person’s property diligently and in that person’s best interests. See also Lindsay J’s guidelines in M v M [2013] NSWSC 1495 at [50], as cited above at [39]

44. Consistently with those authorities and guidelines, the Tribunal normally enquires as to whether any proposed manager:

1. is reasonable familiar with the subject person’s estate;

2. has a reasonable level of understanding of how to deal with and account for other people’s money. This can usually be demonstrated through their having held a relevant position in a business (including as an owner or employee), or in a not-for-profit organisation such as an industry association or a trade union, a community or sporting club or association. In some cases this can be satisfied by demonstrating substantial experience in relation to the subject person’s own affairs;

3. has no conflict of interest which would prevent their appointment on the basis that they might not be seen to be acting solely in the interests of the subject person;

4. has nothing in their public record, in particular by way of any criminal or bankruptcy proceedings or orders, which might render them unsuitable for appointment;

5. is not unsuitable for any other reason, such as an inability to understand or to comply with the obligations of a financial manager or the likelihood that they will not for any reason (including lack of availability, interest, competence or diligence) be able to undertake the functions of a financial manager in the best interests of the protected person.

Candidates for appointment as manager

45. It was apparent from the evidence and the submissions of the parties that the possible candidates for appointment as financial manager of Mrs SNU were:

1. NSW Trustee and Guardian. Although it is the policy of the NSW Trustee and Guardian not to make a formal submission in matters such as this that it should continue in office and at this hearing Ms Sherlock did not depart from that practice, it is obvious that I might well come to the conclusion that Mrs SNU’s interests and welfare are served by the continuation in office of the NSW Trustee and Guardian.

2. Mr NYU. Submissions supporting Mr NYU’s appointment were made by Mr Amirbeaggi, as discussed in more detail below.

3. Ms LZU indicated that she wished to be considered for appointment and she answered the questions I put to her on this subject and subsequently by understood Mr Amirbeaggi to suggest that she should be considered and Mr Streeter the Separate Representative supported her appointment.

The parties’ submissions

The views of Mrs SNU

46. Although Mrs SNU was present in person at the hearing she made very little contribution to it. It was apparent to me that her diagnosed disabilities discussed in the opening paragraphs of these Reasons meant that she would be reluctant to express her views either in open hearing or in any “in camera” session. In deciding not to conduct an “in camera” session I took into account that Mrs SNU was represented by Mr Streeter as her Separate Representative. I also took into account the extensive affidavit affirmed by Mrs SNU on 12 June 2018, which was one of the late documents filed by Mr Amirbeaggi. Although it is clear that Mrs SNU received substantial professional assistance in drafting and completing that affidavit I accepted that as a genuine expression of her views. There was no submission by any other party to the contrary.

47. In her affidavit Mrs SNU outlined in substantial detail her personal and medical history, her marriage to Mr KAU and the issues which arose following the breakdown of that marriage. She also described in some detail her current financial means. In paragraph 48 of her affidavit she affirmed that she does not receive any income from wages or salary and that she is supported by her daughter Ms LZU. In paragraph 49 she confirmed that she has incurred significant legal expenses of an amount of approximating $793,000 and that these have been met entirely by her daughter Ms LZU from her own funds.

48. In the concluding section of her affidavit, commencing at paragraph 50, she describes her close relationship with her daughter Ms LZU and the fact that Ms LZU looks after all of her day-to-day personal and financial needs. She expresses her confidence in the ability of Ms LZU to look after her affairs and her personal wishes and that they communicate regularly about her affairs and her wishes. She acknowledges that Ms LZU’ss original appointment as financial manager was revoked because she had failed to meet statutory requirements but asserts that that was largely caused by Ms LZU having changed her telephone number and address. It is clear from the concluding paragraphs of Mrs SNU’s affidavit that she has continued to manage her own affairs in practice with day-to-day assistance from Ms LZU and from Mr NYU. The concluding paragraphs is in the following terms:

I am comfortable and prefer having my affairs managed with the assistance of [Ms LZU] and [Mr NYU]. I do not wish for either of those two to be replaced from that role.”

Submissions on behalf of and by the applicant, Mr NYU

49. I commenced by considering the extensive written submissions made on behalf of Mr NYU by Mr Amirbeaggi. Mr Amirbeaggi contended that NSW Trustee and Guardian should be replaced as financial manager. His principal grounds for this contention are set out in paragraphs 16 of his submissions and in summary are that the NSW Trustee and Guardian:

1. has failed to have any communications directly with Mrs SNU;

2. has failed to understand the complexity of Mrs SNU’s estate and her personal circumstances;

3. has failed to consult with Mrs SNU or with Mr NYU her Case Guardian about her wishes; has sought to make decisions to revoke prior actions and legal settlements that had been properly reached and which had provided substantial financial benefits to Mrs SNU;

4. should not be reappointed because of Mrs SNU’s “clear desire” not to have the NSW Trustee and Guardian act in relation to her affairs and the availability of suitable and appropriate private financial managers. In this regard Mr Amirbeaggi urges the Tribunal to appoint Ms LZU or Mr NYU.

50. I read the concluding paragraphs of Mr Amirbeaggi’s submissions as adopting as his primary position what he terms the “reinstatement” of Ms LZU as financial manager and only “in the alternative” the appointment of Mr NYU.

50. Mr Amirbeaggi expanded on these submissions in his oral address to me, in which he relied upon the principles enunciated by Lindsay J in M v M. He emphasised that Ms LZU had met and could continue to meet the very substantial legal expenses being incurred by her mother and could provide more immediate instructions to Mr NYU as Case Manager than could NSW Trustee and that she could do so in a way which was more reflective of Mrs SNU’s wishes and interests.

51. I also understood Mr Amirbeaggi to submit that I should give substantial weight to the alleged breakdown in communications between NSW Trustee and Guardian and Mr NYU as Case Guardian, that these difficulties appeared unlikely to be resolved in the near future and were detrimental to the interests of Mrs SNU and the conduct of litigation on her behalf.

52. Mr NYU had affirmed a substantial affidavit on 12 June 2018. This set out in some detail his professional relationship and dealings with Mrs SNU and the fact that he felt that he had rapport and a compatible personality with her and that had led to his appointment as her Case Manager. The affidavit also provided the detailed summary of the various current litigation proceedings.

53. The affidavit also outlines Mr NYU’s concerns about the management of Mrs SNU’s estate by NSW Trustee and Guardian. In this regard he asserts that the NSW Trustee and Guardian has taken important litigation steps, including but not limited to the filing of a defence in the Liquidator’s Enforcement proceedings, without due consultation with Mrs SNU or himself as Case Manager. He asserts, at paragraph 67, that because of the filing of that defence contrary to the position taken earlier, the Liquidator now wishes to reinstate the Federal Court proceedings against Mrs SNU and again pursue claims against her.

54. In support of his own appointment as Mrs SNU’s financial manager, Mr NYU confirmed that he is well versed in the operation and management of trust and controlled monies through the financial management of his practice and that he is willing and able to undertake and exercise the functions of a financial manager

55. Significantly, however both in his affidavit (at paragraphs 75 and 76) and in his detailed discussion with me at the hearing Mr NYU was supportive of the appointment of Ms LZU as financial manager. At paragraphs 76 and 78 of his affidavit, Mr NYU stated:

76.   My observations of Ms LZU are that she is completely able to manage the day-to-day affairs of (her mother). Not only does Ms LZU appeared to me to have a close and loving relationship with (her mother) as her daughter, but also appears to me to be extremely proficient with commercial and business enterprise and undertakings I expect she had learnt from her own business and from that of her husband’s (sic)…,

78.    Additionally, Ms LZU has had, and continues to have, a very close working relationship with (her mother) and her father John, and is able to provide specific recollection and record concerning the relevant facts and matters over the term of the history of their relationship which will be critical in the ongoing Family Court proceedings.

NSW Trustee and Guardian’s position and submissions

57. As noted above at [45](1), the policy of the NSW Trustee and Guardian is not to make a formal submission in matters such as this that it should continue in office or as to the identity of the financial manager and at this hearing Ms Sherlock did not depart from that practice. However, in her updated written report to the Tribunal dated 5 June 2018, Ms Sherlock detailed some of the outstanding issues in relation to the pending litigation. Ms Sherlock addressed me in general terms as to the NSW Trustee and Guardian’s concerns about the current administration of Mrs SNU’s estate. In particular she expressed the NSW Trustee and Guardian’s concern about the level of remuneration payable to Mr NYU as Case Manager and confirmed that the NSW Trustee and Guardian saw one of its principal tasks as being the early resolution of the various litigation proceedings, preferably through the Family Court, in a manner which took into account the substantial legal costs which had been incurred to date.

The views of Ms LZU

58. Ms LZU also affirmed a detailed affidavit, made oral submissions and answered several questions which I had for her; as follows:

1. Ms LZU provided an explanation of the circumstances surrounding her replacement as financial manager by the Tribunal on 14 December 2017. She maintained that she had changed her address and her telephone number shortly prior to that hearing and as a consequence did not receive any correspondence from the Tribunal concerning the orders replacing her as manager. In answer to my questions she was a little hesitant as to why the Tribunal Officer’s follow-up emails had not been received. Notwithstanding that hesitancy and uncertainty, on the basis of the consistency of her account and the fact that it was as to these details uncontested, I accepted her account as genuine and truthful.

2. Ms LZU also conceded that she had been under the mistaken understanding that the appointment of Mr NYU as Case Manager superseded her appointment as financial manager and enabled her to continue to make decisions for her mother in conjunction with Mr NYU (where his involvement was relevant). Again on the basis of the consistency of her account the fact that it is uncontroverted, I accept the account as genuine and truthful.

3. Ms LZU provide substantial details as to arrangements she has made for the management and care of her mother and her liaison and communication generally with Mr NYU in relation to her mother’s litigation.

4. Ms LZU provided me with an outline, in some detail, as how she proposed to liaise with Mr NYU as Case Manager in future. She demonstrated to my satisfaction her substantial familiarity with the various current litigation proceedings and she described the strategies which might be adopted in bringing the litigation to a conclusion satisfactory to her mother’s interests.

5. Significantly in paragraphs 7, 27 and 28 of her affidavit, Ms LZU made the following undertakings;

7.   If I am reappointed as Financial Manager I undertake to make approach to the Supreme Court for Declarations and Orders to rectify or ratify any decisions made during my appointment as Financial Manager that were not authorised decisions…

27. I have received advice with respect to and am now aware of the terms and effects of section 25(m) (1)(a) (sic.) Of the Guardianship Act 1987, and would faithfully administer the protected person’s estate in accordance to (sic) the requirements of the New South Wales Trustee and Guardianship Act 2009…

28.    Whilst I am proficient in business with the operation of my business and assistance with my husband’s business I will obtain any advice I require in order to meet the needs of (my mother), or requirements of the NSW Trustee and Guardian, or the Supreme Court including for preparation and provision of a Financial Management Plan for (my mother).

59. There was nothing before me which constituted any proper basis for doubting the sincerity or reliability of Ms LZU’s undertakings.

Submissions by the Separate Representative, Mr Streeter

60. Mr Streeter made oral submissions on these issues. His opening submission, in which he expressed his personal views rather than reflecting those of Mrs SNU, was that I should consider replacing NSW Trustee and Guardian as financial manager, that both Ms LZU and Mr NYU appeared to have the best interests of Mrs SNU as their primary concern and each of them appeared to be trusted by Mrs SNU.

61. Mr Streeter urged me to consider replacing NSW Trustee and Guardian as financial manager and to appoint Mr NYU rather than Ms LZU. IN his view, as I understood it, although Ms LZU and shown that she was suitable for appointment,

1. her appointment may have an adverse effect on the mother/daughter relationship; that is between her and the protected person Mrs SNU, the preservation of Mrs SNU’s existing family relationships being one of the important principles which the Tribunal must consider under s 4 of the Guardianship Act; and

2. there may be substantial efficiencies, including possible saving of costs, particularly in relation to conduct of the current litigation actions, in having a direct line of authority for Mr NYU to conduct the litigation as Case Manager whilst also holding the office of financial manager.

62. Mr Streeter related that as Separate Representative he had also obtained Mrs SNU’s views. It was her preference that NSW Trustee and Guardian should be replaced as financial manager and that her daughter Ms LZU should be appointed.

CONSIDERATION

Is there a need to consider changing the manager?

63. I was satisfied on the basis of the evidence and the submissions, particularly those of Mr Amirbeaggi, Ms LZU and Mr Streeter, as well as Mrs SNU’s own affidavit, that the course of action which would be most conducive best interests of Mrs SNU was for the appointment of NSW Trustee and Guardian as financial manager to be revoked, provided that I found that there was a suitable person who is willing and able to be appointed to that role.

64. In reaching that conclusion I relied on the normal practice of the Tribunal following Holt & Anor v Protective Commissioner as cited at [41] above. I also took into account the s 4 principles of the Guardianship Act particularised at [38] above, particularly the importance of preserving Mrs SNU’s family relationships and the need to minimise any restrictions on her freedom of decision and freedom of action.

65. I also took into account the principles enunciated by Lindsay J in M v M, as discussed at [39] above. In particular I found the principles enunciated by His Honour at the following sub-paragraphs set out at [39] to be relevant and persuasive on the facts of this case: paragraphs (e) (consideration of the welfare and interests of the protected person), (f) (the importance of a prudential management regime that can be administered in the simplest and least expensive way) and (g) (regard needs to be had to the value and nature of the property comprising the estate).

Should Mr NYU be considered for appointment?

66. Having considered the evidence and submissions and particularly those of Mr NYU himself and the submissions of Mr Amirbeaggi on his behalf, I could not be satisfied that his appointment as financial manager would be the one which in all the circumstances would best serve the interests and welfare of Mrs SNU.

67. My principal ground for that conclusion relates to the very considerable legal fees which have accrued by way of Mr NYU acting as the Case Manager for Mrs SNU in the numerous litigation matters outlined earlier in these Reasons particularly at [10] and [11]. In saying this, I make no criticism whatsoever of Mr NYU, or of the fees charged, or of the way in which he has acted as Case Manager. Indeed, it would appear that he has acted professionally and objectively and that he has and will continue to consider properly and actively how the scope of the issues in dispute in the various proceedings might be narrowed and how the proceedings might best be brought to a resolution satisfactory to Mrs SNU.

68. However if Mr NYU were appointed as financial manager his additional fees and expenses for acting in that capacity (which would of course be subject to approval by NSW Trustee and Guardian and perhaps the Supreme Court) would constitute an additional and substantial burden on the estate.

69. By comparison, if Ms LZU is appointed, she has indicated that she will continue to meet, from her own resources, Mr NYU’s fees for acting as Case Manager and there would be no separate fees for professional work as financial manager. Given Ms LZU’s close relationship with her mother, it appears most likely that the overall expense to the estate of her management would be insubstantial.

70. My other concern about the possible appointment of Mr NYU is that in conducting the litigation, which will directly affect the size and composition of the estate under management, he may be placed in a position where the course of action dictated by his obligations as Case Manager might not be identical to those dictated by his obligations as financial manager. I am in no way suggesting that Mr NYU is in position of conflict of interest as between those obligations and his personal interests, merely that the two sets of obligations which would rest on his shoulders in those circumstances may not always be identical or compatible. It seems to me that that is a problem which will not arise if Ms LZU is appointed.

71. For completeness I should add that in his discussions with me and his answers to my questions Mr NYU satisfied me in all other respects that he meets the tests for suitability which are normally applied.

Should Ms LZU be considered for appointment?

Ms LZU previous actions and her previous removal from the role

72. I was satisfied that Ms LZU should be considered for appointment as financial manager, notwithstanding her earlier removal from that office by order of the Tribunal on 14 December 2017. I accepted as genuine and credible Ms LZU’s explanations for her non-participation in the Tribunal’s hearing on that occasion. I also accepted that she had operated on the basis of her misunderstanding that the appointment of Mr NYU as Case Manager in some way overrode or made redundant the previous financial management order and so had made no attempt to maintain contact with NSW Trustee and Guardian or indeed the Tribunal.

Should Ms LZU now be preferred and is she suitable for appointment?

73. Ultimately I was satisfied that Ms LZU should be preferred for appointment as financial manager to Mr NYU, and that she is suitable for appointment.

74. I reached that conclusion on the basis of Ms LZU’s written submissions, contained in her affidavit, her discussions with me, the answers she gave to my questions and to the questions from the Separate Representative and from Mr Amirbeaggi, as well as the views of her mother Mrs SNU as related by the Separate Representative and in Mrs SNU’s own affidavit.

75. Those sources established to my satisfaction that Ms LZU now had a substantial understanding of the role of a financial manager and her obligations in that role, in particular the obligation to comply with the authorities and directions from the NSW Trustee and Guardian and to maintain adequate and proper lines of communication with the NSW Trustee and Guardian. I was further satisfied that she remains close to an compatible with her mother Mrs SNU, that she is familiar in detail with the extent of her mother’s estate and in particular her property interests and (on the basis of Mr NYU’s assessment, which I accept as objective) that she has a detailed knowledge of the issues which have arisen in the complex current litigation being conducted on her mother’s behalf and the significance of that litigation to the preservation of her mother’s estate.

76. As a result of her discussion with me and her answers to our questions Ms LZU demonstrated to my satisfaction that the she was suitable for appointment as financial manager under the criteria described at [44] above.

Conclusions: Ms LZU is suitable and should be appointed

77. It follows that Ms LZU is suitable for appointment and should be appointed in place of NSW Trustee and Guardian and on that basis I appointed her as financial manager of Mrs SNU, subject to the authority and direction of the NSW Trustee & Guardian.

Conditions on Ms LZU’s appointment: the recommendations

78. In light of the fact that Ms LZU had previously been removed from office as financial manager and because of the substantial size of her mother’s estate, her complex property holdings and the complex web of litigation to which her mother is presently a party, I concluded that it was important to reflect, by way of appropriate recommendations, the desirability of arranging an early review of these orders in certain circumstances. For those reasons I made the Recommendations set out in [3] above. In particular a review could be triggered by any lack of proper communication by Ms LZU with NSW Trustee and Guardian.

Should the order be subject to review within a given period?

79. I have the power to make a financial management order reviewable by the Tribunal within a given period. Although that power is not exercised in every case, I was satisfied that a reviewable order was appropriate in this case, particularly because of the complex nature of the estate and the litigation involving the estate and the proposals by the Case Manager for partial reduction of the issues in dispute and possible settlement of at least some of them. For that reason the financial management order is to be reviewed by the Tribunal within nine months of the date of these orders.

80. 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: 04 February 2019