UBK

[2018] NSWCATGD 22

NSW Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

UBK [2018] NSWCATGD 22

Hearing dates:

28 June 2018

Date of orders:

28 June 2018

Decision date:

28 June 2018

Jurisdiction:

Guardianship Division

Before:

J S Currie, Senior Member (Legal)
M J Staples, Senior Member (Professional)
Emeritus Professor P J Foreman, General Member

Decision:

1. The estate of UBK is subject to management under the NSW Trustee and Guardian Act 2009 (NSW).

 

2. KZL 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 he/she has obtained all necessary authorities from the NSW Trustee and Guardian.

 

3. This order be reviewed by the Tribunal within 12 months.

 

RECOMMENDATIONS

 

The Tribunal recommends:

 a) that Mr KZL should consider applying for recognition of this order by the Australian Capital Territory Civil and Administrative Tribunal if at any time during the term of the order it is intended to sell or otherwise dispose of the family home which the Tribunal understands to be located in the Australian Capital Territory.

Catchwords:

GUARDIANSHIP – application for a financial management order – protective nature of Tribunal’s jurisdiction – suitability of proposed financial manager – reviewable financial management order made

Legislation Cited:

Guardianship Act 1987 (NSW), s 4(a)
NSW Trustee and Guardian Act 2009 (NSW), s 39(a)

Cases Cited:

Application by AMAM; Re SAM [2011] NSWSC 503
M v M [2013] NSWSC 1495
CJ v AKJ [2015] NSWSC 498 and P v NSW Trustee and Guardian [2015] NSWSC 579
G v G [2016] NSWSC 511
GW v Protective Commissioner & Ors [2003] NSW ADTAP 51
H v H [2015] NSW SC 837
Holt & Anor v Protective Commissioner (1993) 31 NSWLR 227
McD v McD (1983) 3 NSWLR 81, 86
Re W and L (Parameters of Estate Management Orders) [2014] NSWSC 1106

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Mr UBK (subject person)
Mr KZL (applicant, carer)
NSW Trustee and Guardian(statutory party)

Representation:

Nil

File Number(s):

NCAT 2018/00175785

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

FINANCIAL MANAGEMENT APPLICATION

What the Tribunal decided

1. We decided to make a financial management order for Mr UBK. We appointed Mr KZL as financial manager of Mr UBK, subject to the authority and direction of NSW Trustee and Guardian.

2. This order is to be reviewed by the Tribunal within 12 months of the date of these orders.

Background

3. Mr UBK, who was aged 82 years at the date of the hearing, is presently an inpatient at a major hospital in the regional NSW. On 19 March 2018, he was admitted to another treating hospital in that area after a long lie and stroke. Mr UBK is separated from his wife. He has three adult children and prior to his hospital admission lived with his eldest son, Mr KZL, in regional NSW.

4. On 5 June 2018, the Tribunal received from Mr KZL an application which sought the appointment of a financial manager for his father Mr UBK. In the application Mr KZL proposed himself for appointment as financial manager.

5. The purpose of these proceedings before us at Sydney on 28 June 2018 was to conduct the hearing of that application.

Parties and witnesses

6. The front 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 by the Tribunal

7. The issues which had to be determined by us were:

1. Is Mr UBK incapable of managing his affairs?

2. Is there a need for another person to manage Mr UBK’s affairs and would it be in his best interests for a financial management order to be made?

3. If an order is to be made on the basis of the answers to those questions, who should be appointed as financial manager?

Participation in the hearing by Mr UBK and his views

8. We seek to hold our hearings in a way which promotes the participation of the person who is the subject of the application or review and we do our best to obtain the views of the subject person whenever possible.

9. Mr UBK participated actively in the hearing by telephone. At the outset he told us that he wanted to have his son, Mr KZL, appointed to look after all his financial affairs and he confirmed that he trusted Mr KZL to do this. He said his health was affected by his recent stroke and that he now had about 30% of his functions and that his ability to walk although still intact appeared to be deteriorating. In answer to our further questions Mr UBK asserted that he had no problems with his own oral communication but conceded that occasionally he had difficulty understanding what he had heard. Mr UBK was unable to tell us much about his financial affairs. He could not indicate whether or not he had a bank account and told us that he had had no income for about 24 years. When we asked what money he used to live, he replied that he had nothing only a small amount of “profit from the government”.

10. Mr UBK’s account was somewhat erratic and discursive and he gave inconsistent answers at various times; for example, in describing whether or not he received regular income from a pension

THE TRIBUNAL’S ASSESSMENT OF THE EVIDENCE AND DETERMINATION OF THE ISSUES

Is Mr UBK incapable of managing his affairs?

The legal principles and authorities

11. The Supreme Court of New South Wales has provided guidance in several decisions as to how the Tribunal should assess a person’s capability to manage his or her affairs. In earlier cases the Court had based its test predominantly on the ability of the subject person to conduct the ordinary everyday affairs of people. It was said that if by reason of a failure to do this there would be a real risk that they would be disadvantaged or that their money or assets would be at risk of dissipation, then they would properly be treated as being incapable of managing their affairs. However, that approach has been reviewed and altered in more recent cases in which it has been emphasised that the Tribunal should not be relying just on hypothetical notions such as “the ordinary affairs of people” but rather should focus on the capability of the particular person to deal with his or her actual assets and to do what he or she is proposing to do with them.

12. In two cases in 2015, His Honour Justice Lindsay of the Supreme Court of NSW set out his preferred approach to this issue. Those cases were CJ v AKJ [2015] NSWSC 498 and P v NSW Trustee and Guardian [2015] NSWSC 579 at [307]. His Honour:

1. noted that the concept of a person being incapable of managing his or her own affairs remains “a freestanding idea: governed, in context, by the purposive character of the jurisdiction to be exercised”;

2. suggested that the real question is whether the person under consideration is reasonably able to manage his or her own affairs in a reasonably competent fashion, without the intervention of a manager who is charged with the duty to protect his or her welfare and interests; and

3. confirmed that the focus should be on whether the person is able to deal with (make and implement decisions about) his or her own affairs (person and property, capital and income) in a reasonable, rational and orderly way, with due regard to his or her present and prospective wants and needs, and those of family and friends, without undue risk of neglect, abuse or exploitation;

4. His Honour went on to say that in considering whether a person is “able” in this sense, the Court or Tribunal may give attention to past and present experience as a predictor of the future course of events; support systems available to the person and the extent to which the person, placed as he or she is, can be relied upon to make sound judgments about his or her welfare and interests;

5. In CJ v AKJ Justice Lindsay further noted, at [54]:

Consideration of the question of a person’s capacity to manage their affairs depends upon an assessment of his subjective circumstances, including the support available to him from his family and the extent to which he, placed as he is within a benign domestic environment, can be relied upon to make sound judgements about his welfare and interests… (and whether) within the community of his family, and with their ongoing support, he is able to take care of himself, his property and his finances

The protective element in our task of determining capability

13. Recent Supreme Court cases have emphasised that in considering a financial management application and hence the capability or otherwise of the subject person to manage their own affairs, we are exercising protective jurisdiction. In H v H [2015] NSW SC 837 at [29] and [33]–[34], Justice Lindsay spoke of: the jurisdiction being exercised by us being purposive and protective in nature. Significantly, His Honour noted that the statement of general principles in relevant legislation is consistent with the pre-eminence of that protective element. He referred to the “welfare principle” embodied in s 39(a) of the NSW Trustee and Guardian Act 2009 (NSW) and in s 4(a) of the Guardianship Act 1987 (NSW) to the effect that the welfare and interests of the subject person should be given paramount consideration.

14. In G v G [2016] NSWSC 511 at [10], His Honour emphasised that in considering what order should be made a tribunal must be mindful of the protective purpose of the jurisdiction; and in light of that protective purpose, of the need to ensure that whatever is done, or not done, by us is in the interests and for the benefit of the subject person as a person in need of protection.

Other relevant principles

15. The relevant time for considering whether a person is incapable of managing his or her affairs is not merely the day of hearing but the reasonably foreseeable future: McD v McD (1983) 3 NSWLR 81, 86; Re W and L (Parameters of Estate Management Orders) [2014] NSWSC 1106 at [20].

16. Disability in the guardianship sense is not an element of the test for incapability for the purposes of considering a financial management application: GW v Protective Commissioner & Ors [2003] NSW ADTAP 51.

Application of those principles in the present case

17. We received and considered a number of medical and related clinical reports concerning Mr UBK’s capability.

1. Firstly there was a Social Work Report which was undated but received by the Tribunal on 5 June 2018 from Mr Z, Social Worker at the hospital in which Mr UBK is presently an inpatient. Mr Z confirmed that Mr UBK had had a stroke on 19 March 2018 and as a result he had become increasingly unable to manage at home even with an intense support care package. Mr UBK’s inability to manage was seen as being mainly due to his significant “cognitive communication deficits”. Mr Z pointed out that Mr UBK was also partly vision-impaired. Although no results of cognitive testing our assessment were cited, Mr Z reported that since his stroke, Mr UBK had had significant cognitive communication deficits which impeded successful communication.

2. We also considered an undated report, apparently received on 5 June 2018, from Ms Y, Speech Pathologist at the same hospital. She reported that Mr UBK’s speech was tangential and verbose with poor presuppositional information and incorrect and inconsistent recall of some personal details (for example his own age). Significantly, Ms Y reported that Mr UBK appeared to be unaware of the communication breakdown exemplified by these features and as such did not attempt self-correction.

3. We also considered a Health Professional Support Form dated 4 June 2018 completed by Dr X, Rehabilitation Registrar at the same hospital. In Dr X’s view, the stroke experienced by Mr UBK had left him with communication deficits and there was evidence of his cognitive impairment and these disabilities adversely affected his capacity to make informed decisions about his financial affairs and his ability to live independently.

18. On the basis of that uncontroverted professional evidence we were satisfied that at present and for the reasonably foreseeable future Mr UBK was not reasonably able to manage his own affairs in a reasonably competent fashion, without the intervention of a manager charged with the duty to protect his welfare and interests. We were satisfied that he was unable to deal with his affairs in a reasonable, rational and orderly way, with due regard to his wants and needs without undue risk of neglect, abuse or exploitation and that as a result Mr UBK was someone to whom we should extend the benefit of the protective principles discussed at [13] and [14] above.

19. It followed that Mr UBK was incapable of managing his affairs.

Is there a need for another person to manage the affairs of Mr UBK and would it be in his best interests for a financial management order to be made?

20. The applicant and son of Mr UBK, Mr KZL, contended that there was a present and continuing need for a financial manager to be appointed for his father and that such an appointment would be in his best interests. He based that contention on the following asserted facts:

1. He, Mr KZL, is presently seeking permanent residential care accommodation for his father and his father would not understand the steps which would need to be undertaken in selecting and finalising a suitable place in a suitable facility, or the implications of those steps or the risks involved in this substantial exercise. A major decision would need to be made about whether the family home in the Australian Capital Territory would need to be sold or otherwise disposed of in order to meet the financial obligations arising from this new accommodation. Mr KZL’s mother and younger brother presently lives at that property.

2. Mr UBK has a savings account with a bank with a very substantial balance of approximately $370,000 but it is an old-style savings account which bears a very low interest-rate in the vicinity of 0.2% per annum. Clearly there will need to be some reorganisation of his banking arrangements and the reinvestment of this amount in an account or investment with a better rate of return.

3. There are ongoing enquiries to be made as to Mr UBK’s pension entitlements.

21. We accepted Mr KZL’s uncontroverted account of these matters as reliable. In the absence of any further evidence we were satisfied that there is a need for another person to manage Mr UBK’s affairs and that it would be in his interests for a financial management order to be made.

If an order is to be made on the basis of the answers to those questions, who should be appointed as financial manager?

22. 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 and Guardian. That approach was approved in Holt & Anor v Protective Commissioner (1993) 31 NSWLR 227.

23. 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. 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], (e) to (i).

24. Consistently with those guidelines, we normally enquire as to whether the 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.

25. It was indicated in the application and at the hearing that Mr KZL wished to be considered for appointment as financial manager.

26. As a result of Mr KZL’s discussion with us and his answers to our questions we were satisfied that he demonstrated that he was suitable for appointment as financial manager under the criteria described in [24], (1) to (5) above. We reached this conclusion notwithstanding Mr UBK’s open concession that he had previously been made bankrupt. He confirmed that a bankruptcy order was made on 27 June 2012 and discharged on 27 June 2016 and that the debt which had caused the bankruptcy resulted from imprudent stock exchange trading. He described that as a “one-off mistake”. Mr UBK asserted that since that time he has been fully employed, that he does not have any substantial debts or arrears in payment, although he has a mortgage over his family home which is well managed, that he has no credit card debt and is involved in no litigation and that no claims for payment or other demands have been made upon him. In the circumstances we were satisfied that Mr UBK’s bankruptcy, which was discharged over two years ago, was not an impediment to his being found to be a suitable for appointment as his father’s financial manager.

27. Mr KZL also confirmed his understanding of the fact that, if appointed as financial manager, he would be subject to the oversight and direction of the NSW Trustee and Guardian. There was no objection to the appointment of Mr KZL as financial manager and no indication of any other person being willing to be considered for that appointment.

28. On that basis the we were satisfied that Mr KZL was a suitable person to be a financial manager and on that basis we appointed him as financial manager of Mr UBK, subject to the authority and direction of the NSW Trustee and Guardian.

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

29. We 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, it is appropriate where the appointed financial manager’s role and authority will extend to discrete and clearly identifiable tasks and arrangements which can most probably be completed within a given period.

30. It was apparent from the account provided by Mr KZL that he would probably require authority as financial manager only for a discrete number of matters and that once he had arranged his father’s new accommodation, reorganised his investments and completed his enquiries into this pension entitlements there may be no further arrangements for which he would need authority as financial manager. In short, at that stage any further matters relating to his father’s estate may be able to be managed informally. It seemed feasible that these matters could be finalised within the next 12 months and it was therefore appropriate for us to make the financial management order reviewable within that period.

29. We ordered accordingly.

Recommendation to Mr KZL

32. We noted that a principal asset of Mr UBK’s estate was a residence located in the Australian Capital Territory. We therefore recommended that Mr KZL consider applying for recognition of this financial management order by the Australian Capital Territory Civil and Administrative Tribunal if at any time during the term of the order it is intended to sell or otherwise dispose of the family home, which the Tribunal understands to be located in the Australian Capital Territory.

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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: 21 December 2018