TNL

[2016] NSWCATGD 25

NSW Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	TNL [2016] NSWCATGD 25
Hearing dates:	20 September 2016
Date of orders:	20 September 2016
Decision date:	20 September 2016
Jurisdiction:	Guardianship Division
Before:	C Fougere, Principal Member
Decision:	1. The financial management order made on 12 March 2015 in relation to the estate of Ms TNL is revoked.  2. The manager, Mr EFJ is to pay over or hand over the estate to Ms TNL.
Catchwords:	FINANCIAL MANAGEMENT – application to revoke financial management order – requirements of the NSW Trustee and surety bonds – enduring power of attorney appointment – revocation in best interests of the protected person
Legislation Cited:	Guardianship Act 1987 (NSW), s 4
Category:	Principal judgment
Parties:	Ms TNL (protected person) Mr EFJ (son of Ms TNL and applicant) The NSW Trustee and Guardian
Representation:	Nil
File Number(s):	58348
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

What the Tribunal decided

1. The Tribunal revoked the financial management order made in relation to Ms TNL on 12 March 2015.

Background

2. Ms TNL is an 82-year-old woman who is a resident of an aged care facility in regional NSW. Ms TNL has two sons from her first marriage: Mr EFJ and Mr MBV.

3. On 12 March 2015, the Tribunal made guardianship and financial management order in relation to Ms TNL. Mr EFJ was appointed as his mother’s guardian for 12 months. Mr EFJ was also appointed as his mother’s private financial manager.

4. At a review of the guardianship order on 28 January 2016, Mr EFJ was reappointed as his mother’s guardian for five years with decision-making authority about her healthcare and medical and dental treatment.

Application to revoke financial management order

5. On 26 July 2016, Mr EFJ applied to have the financial management order revoked. In that application, and in other evidence to the Tribunal, Mr EFJ gave the following reasons as to why it is in his mother’s best interest for the order to be revoked.

6. First, subsequent to being appointed as his mother’s guardian and financial manager in March 2015, whilst cleaning out his mother’s home in June 2015, Mr EFJ found documents signed by his mother in 2007 appointing him as her attorney pursuant to an enduring power of attorney and also as her enduring guardian. These appointments had been accepted by Mr EFJ on 17 April 2007.

7. Mr EFJ told the Tribunal that he had completely forgotten about these appointments and his acceptance of them when the hearing took place before the Tribunal in March 2015. However given their existence, he no longer believes that a financial management order is needed as he would be able to manage his mother’s financial affairs pursuant to the enduring power of attorney.

8. Second, Mr EFJ submitted that it is in his mother’s best interests to revoke the financial management order because of advice from the NSW Trustee and Guardian that a surety bond fee would need to be paid from Ms TNL’s estate. A number of matters relating to this issue are set out at paragraph 3.2 (2) of his application and are summarised as follows:

• Mr EFJ advised that in her will dated 1 August 2012, his mother left her estate to her two sons in trust with 60% to Mr MBV and 40% to Mr EFJ. The will makes a specific request to set up a special disability trust in relation to Mr MBV, who has an intellectual disability, to protect and preserve her assets and provide for him financially upon her death;

• the introduction of the Surety Bond Scheme as per letter from the NSW Trustee and Guardian dated 14 April 2016 will significantly impact on the intentions of Ms TNL to provide financially for her sons, in particular Mr MBV, who needs substantial financial assistance for the rest of his life. The creation of a special disability trust was to protect and preserve Ms TNL’s assets upon her death and to provide this financial assistance. The Surety Bond Scheme will reduce the assets available to Mr MBV’s future care;

• the cost of this Surety Bond Scheme was not known to Ms TNL or Mr EFJ at the time that the financial management order was made. Mr EFJ would have not have agreed to this financial management order if he had known at that time the cost involved and the impact of this on Ms TNL’s assets;

• based on advice provided by the NSW Trustee and Guardian, Ms TNL would be charged an annual surety bond fee of $3,416. In addition, the last audit invoice from the NSW Trustee and Guardian to accept and approve the previous 12 months’ management of Ms TNL by Mr EFJ was $1,711. This equates to $5,325 of expenditure that, according to Mr EFJ, adds no value to the estate and runs parallel to the previously arranged power of attorney and an enduring guardianship that holds no such annual fee.

9. The Tribunal did not attempt to speak with Ms TNL during the hearing. The Tribunal had evidence before that due to the extent of her dementia, Ms TNL would be confused and distressed by attempts to speak with her on the telephone. Mr EFJ informed the Tribunal that due to her condition, Ms TNL becomes very anxious with any changes to her daily routine. In deciding not to directly seek Ms TNL’s views, the Tribunal noted that by making the enduring power of attorney appointment in 2007, the Tribunal had evidence before it as to Ms TNL’s intentions at that time and her desire to have her son manage her financial affairs on the basis of that appointment.

What did the Tribunal have to decide?

10. On reviewing a financial management order, the Tribunal must confirm, confirm and vary, or revoke the financial management order.

11. The Tribunal may revoke a financial management order only if:

1. it is satisfied that Ms TNL is capable of managing her affairs; or

2. it considers that it is in Ms TNL’s best interest that the order be revoked.

12. The focus of this hearing was whether it was in Ms TNL’s best interests to have the order revoked.

13. In all of its proceedings, including when deciding whether or not to revoke a financial management order, the Tribunal is required to act in accordance with the principles set out in s 4 of the Guardianship Act 1987 (NSW), which in respect of persons with disabilities requires that:

• The person’s welfare and interests are to be given paramount consideration;

• The person’s freedom of decision and freedom of action should be restricted as little as possible;

• The person should be encouraged as far as possible to live a normal life in the community;

• The person’s views should be taken into account as much as possible;

• The importance of preserving the person’s family relationships and the person’s cultural and linguistic environment should be recognized;

• The person should be encouraged to be as self-reliant as possible in respect of the person’s personal, domestic and financial affairs;

• The person should be protected from neglect, abuse and exploitation.

Evidence and submissions

14. The evidence before the Tribunal was that Ms TNL’s estate is made up of the following:

• a retirement trust, $260,000;

• rent, $182,682;

• savings, $11,888;

• an allocated pension, $229,662;

• a unit trust, $165,667;

• regional NSW property – rented, $440,000.

15. In her submission to the Tribunal, Ms Tracey Burgess, Director of Specialist Services at the NSW Trustee and Guardian, made the following observations concerning the matters raised by Mr EFJ in his application concerning the Surety Bond Scheme.

16. Ms Burgess gave evidence that the Surety Bond Scheme introduced by the NSW Trustee and Guardian is an agreement between a private manager, the NSW Trustee and Guardian, and the surety bond company. It ensures the estates of privately managed people are protected against mismanagement and fraud by the private manager. The NSW Trustee and Guardian makes a decision on a case by case basis as to whether a surety bond is required for the estate. If a surety bond is imposed, then it is charged at a rate of 0.4% on the liquid assets in the estate. Real property, for example, is excluded from the estate for the purposes of calculating the value of the surety bond.

17. Ms Burgess noted that if the NSW Trustee and Guardian decides that a surety bond needs to be imposed, a private manager who disagrees with that decision can request an internal review of the decision. If the private manager remains unhappy with the outcome of the review, they are entitled to seek a further review of the decision by the Administrative and Equal Opportunity Division of the NSW Civil and Administrative Tribunal.

18. Ms Burgess indicated that on the basis of the written material provided in this matter and the evidence provided at the hearing and with liquid assets amounting to approximately $195,000 then, should the order continue, this would attract a surety bond payment of approximately $780 per year from Ms TNL’s estate.

19. The Tribunal sought evidence from Mr EFJ as to how he intended to manage his mother’s financial affairs should the financial management order be revoked. Mr EFJ gave evidence that he has consulted with a financial services organisation and a detailed financial plan has been developed and implemented to protect his mother’s assets and investments.

20. Mr EFJ gave evidence that his mother has an allocated pension through a financial company giving a monthly income stream. Short-term investments through another financial services company have been wound up and invested in an annuity from another financial institution to ensure a monthly income stream. In addition, Ms TNL’s home in regional NSW is rented and managed through a real estate agent.

21. Mr EFJ gave evidence that he intends to manage his mother’s financial affairs in the same way that he has been managing them as her financial manager. The report from the NSW Trustee and Guardian dated 6 September 2016 indicated that Mr EFJ had been compliant with all directions and authorities of the NSW Trustee and Guardian. In addition, he provided a private manager’s plan on 22 June 2015 and the NSW Trustee and Guardian approved his investment proposal on 14 December 2015.

22. Mr EFJ also gave evidence that even with the information provided by Ms Burgess as to the precise amount of the surety bond that would need to be paid from his mother’s estate, which was significantly less than the amount indicated in earlier correspondence to him from the NSW Trustee and Guardian, he still wished to have the order revoked. Mr EFJ gave evidence that he does not believe that he needs oversight as a financial manager and that had he recalled the making of the documents in 2007, it is unlikely that a financial management order would have been sought at all. Mr EFJ indicated that his primary concern is to ensure that his mother’s estate is maximised to ensure her needs are met but also that, in accordance with her wishes, the estate is maximised as much as possible so that his brother can benefit upon his mother’s death.

Discussion

23. Mr EFJ presented as an honest witness who gave cogent evidence. The Tribunal accepted that he had overlooked the existence of the appointments made by his mother in 2007 and it was not until his mother had been in supported accommodation and he was working through her paperwork that he came across the relevant documents. The evidence before the Tribunal, which is consistent with the information and investment plans Mr EFJ has provided to the NSW Trustee and Guardian, indicates that he has a detailed plan in place to manage his mother’s finances as an attorney and that he has sought and will continue to seek professional advice in order to maximise her investments and returns. The Tribunal accepted that Mr EFJ has taken this course of action not only to maximise his mother’s estate for her benefit in her lifetime but also to ensure that Mr MBV’s needs are met upon her death.

24. The Tribunal finds that Mr EFJ has been a diligent and prudent financial manager for his mother since the financial management order was made in March 2015. Although one of the prompts for the application for revocation appears to have been Mr EFJ receiving advice from the NSW Trustee and Guardian that a surety bond would be required to be paid from his mother’s estate, the evidence given by Ms Burgess on behalf of the NSW Trustee and Guardian indicated that the amount of surety bond levied against her estate was significantly less than initially indicated.

25. Even with clarification from the NSW Trustee and Guardian as to the surety bond amount that would be payable from Ms TNL’s estate, Mr EFJ still wished to have the order revoked. After balancing the considerations set out in s 4 of the Guardianship Act, the Tribunal was satisfied that it is now in Ms TNL’s best interests for the order to be revoked given that Mr EFJ can manage her affairs as attorney pursuant to an enduring power of attorney. This will ensure that her financial affairs are managed in the least intrusive way and reflect her wishes as expressed in 2007.

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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: 23 December 2016