UE and UD v NSW Trustee and Guardian and Guardian
[2011] NSWADT 150
•21 June 2011
Administrative Decisions Tribunal
New South Wales
Medium Neutral Citation: UE & UD v NSW Trustee and Guardian & Guardian [2011] NSWADT 150 Hearing dates: 28 March 2011; 14 June 2011 Decision date: 21 June 2011 Jurisdiction: General Division Before: S Leal, Judicial Member Decision: The decision of the NSW Trustee and Guardian & Guardian is varied
Catchwords: NSW Trustee and Guardian and Guardian - protected person - Commercial Management Plan Legislation Cited: Administrative Decisions Tribunal Act 1997 (NSW)
Guardianship Act 1987 (NSW)
NSW Trustee and Guardian and Guardian Act 2009 (NSW)
Guardianship Regulation 2005 (NSW)Category: Principal judgment Parties: UD (Applicant)
UE (Applicant)
NSW Trustee and Guardian & Guardian (Respondent)
UA (Respondent)Representation: McCooe & McCooe (Applicants)
NSW Trustee & Guardian (Respondent)
File Number(s): 103278 Publication restriction: Section 126 of the Administrative Decisions Tribunal Act 1997 applies.
REasons for decision
Introduction
ADP is an 85 year old woman with a diagnosis of dementia who lives at the Windsong facility at Manly Nursing Home. Her husband, with whom she had four children UE, UD, UA and ADQ, died in 1992.
On 4 February 2010, UE applied to the Guardianship Tribunal for a guardian and financial manager be appointed for ADP under the Guardianship Act;
UA subsequently made the following applications to the Guardianship Tribunal:
- that the appointment of UD as enduring guardian for her mother, ADP, be reviewed;
- that the enduring power of attorney made by ADP in favour of UD be reviewed.
Each of the above applications were dealt with at a hearing before the Guardianship Tribunal on 7 April 2010 and the following orders were made:
- The Tribunal appointed the Public Guardian as ADP's guardian for a period of 12 months to make decisions on her behalf about her accommodation, health care, medical and dental treatment and services as set out in the Tribunal's Order;
- The Tribunal appointed the NSW Trustee and Guardian as ADP's financial manager;
- The Tribunal revoked UD's appointment of an enduring guardian;
- The Tribunal determined not to carry out a out a review of the operation and effect of the power of attorney made by ADP in favour of UE and UD on the basis that the effect of the financial management order made by the Tribunal appointing the NSW Trustee and Guardian is to make any Power of Attorney made by ADP inoperative during the term of the financial management order.
On the basis of reports submitted at hearing which stated that ADP was suffering from dementia, depression, anxiety hypertension, AF and non-insulin dependent diabetes, the Guardianship Tribunal found ADP to be a person with a disability in need of a guardian and that it was in her best interests that a financial management order be made.
On 1 September 2010, the NSW Trustee and Guardian made a decision to approve a Commercial Management Plan to address ADP's commercial assets, including her interests in the Goldston Family Trust, for whom she and her four children are beneficiaries, and in Sunsit Pty Ltd, for which UD and ADQ are directors and ADP and ADQ are shareholders. Following an internal review, this decision was affirmed on 11 October 2010.
On 8 October 2010, the applicants, UE and UD, lodged an application with this Tribunal for review of the internal review dated 11 October 2010.
On 14 December 2010, UA was joined as a party to the proceedings. As UA lives in the United Kingdom, was unrepresented and participated in the subsequent Tribunal hearings by telephone, the Tribunal allowed ADQ, who attended the hearings in person, to act as UA's agent in accordance with s71 of the Administrative Decisions Tribunal Act 1997.
Jurisdiction
Section 62 of the NSW Trustee and Guardian Act 2009 provides that an application may be made to this Tribunal for a review of a decision of the NSW Trustee and Guardian that is made in connection with the NSW Trustee and Guardian's functions. Such an application may be brought by 'any...person whose interests are, in the opinion of the ADT, adversely affected by the decision.'
In accordance with s56 of the NSW Trustee and Guardian Act 2009, the NSW Trustee and Guardian has and may exercise all functions necessary and incidental to the management and care of the estate of a managed person. This includes the power to receive money, rent, income and profit of real and personal property; to grant leases of property for a term not exceeding 10 years and give to a lessee an option of renewal if the aggregate duration of the lease and any such renewal does not exceed 10 years; to buy, sell, realise and mortgage real and personal property; to settle, adjust and compromise a demand made by or against the estate; to exercise a power, or give a consent required for the exercise of a power, where the power is vested in a managed person for the benefit of the person or the power of consent is in the nature of a beneficial interest in the person; to take proceedings to cause a company to be placed in liquidation and vote or act by proxy at meetings of creditors or shareholders, whether the company is in liquidation or not; to pay rates, taxes, assessments, insurance premiums, debts, obligations, costs and expenses and other outgoings; do or omit all things, and execute all documents, necessary to carry into effect the functions of the NSW Trustee and Guardian. (s16, NSW Trustee and Guardian Act 2009).
In this case, the Commercial Management Plan deals with the management of ADP's property estate, including her commercial properties and interests in the Goldston Family Trust and the company Sunset Pty Ltd. I am satisfied that, as such, the application by UE and UD is an application made in connection with the exercise of the NSW Trustee and Guardian's function under Part 4.5 Division 1 of the NSW Trustee and Guardian and Guardian Act 2009 and, as such, is an application that may be reviewed by this Tribunal.
I am also satisfied that, as beneficiaries of the Goldston Family Trust and as the potential recipients of advances or loans from ADP, as set out below, UE and UD's interests are adversely affected by the decision of the NSW Trustee and Guardian to affirm the decision to approve the Commercial Management Plan. On this basis, I am satisfied that UE and UD are entitled to made an application to this Tribunal in accordance with s62(3) of the NSW Trustee and Guardian Act.
Evidence
At the hearing of 28 March 2011 before this Tribunal, concerns held by UE, UD and UA with the Commercial Management Plan approved by the NSW Trustee and Guardian were put forward to the Tribunal. In particular, the applicants were concerned by the proposal that Mr Steven Lambert be employed as a consultant by the NSW Trustee and Guardian to advise on matters pertaining to the Goldston Family Trust and to Sunsit Pty Ltd. Concerns were all raised in relation to the extent and status of loans and advances to the children of ADP and the extent of a tax liability owing in respect of the assets of Sunsit Pty Ltd.
The matter was adjourned for further hearing on 14 June 2011. At this hearing, ADQ, in her capacity as Director of Sunsit Pty Ltd, confirmed that tax returns for 1999 to 2010 had been lodged with the Australian Tax Office for Sunsit Pty Ltd and Goldston Family Trust. According to ADQ, an approach will now be made to the Australian Tax Office to waive any interest or penalties that have accrued.
In an affidavit before the Tribunal, UD stated that he, together with his sister ADQ, is a director of Sunsit Pty Ltd. He was unaware that tax returns from 1999 to 2010 had been lodged for Sunsit Pty Ltd and Goldston Family Trust. In submissions before the Tribunal, Mr McCooe for UD and UE expressed his dissatisfaction that the tax returns had been prepared and lodged without UD's knowledge. He submitted that, in order to best protect ADP's interests, the tax returns should have been lodged on behalf of ADP rather than on behalf of Sunsit Pty Ltd. He accepted, however, that the 'horse has now bolted' in this regard.
Mr McCooe requested an amendment to the Commercial Management Plan stating that the 'Directors distribute the balance of entitlements in Sunsit Pty Ltd and the Goldston Family Trust to ADP.' Mr McCooe conceded that on any winding up of Sunsit Pty Ltd, any assets of the company would be divided between the shareholders, namely ADP and ADQ. He submitted that it would be wrong for the assets to go anywhere but to ADP given that all the money in the company had been deposited by ADP.
UA and ADQ wish the balance of the entitlements in Sunsit Pty Ltd and Goldston Family Trust to be distributed either to ADP or equally between the four children, 'depending on how much of the money is in excess of ADP's needs.'
Mr McCooe submitted that it was the duty of NSW Trustee and Guardian to consider the source of the funds and thereby uphold its duty to protect ADP.
In response, Ms Phang submitted that Mr McCooe was asking the NSW Trustee and Guardian to perform tasks which are outside its jurisdiction. Ms Phang advised the Tribunal that rent from commercial properties held by ADP that had previously been deposited into an account in the name of Sunsit Pty Ltd was now being deposited in the personal account for ADP held by the NSW Trustee and Guardian. Furthermore, the NSW Trustee and Guardian has received $34500 from the Sunsit Pty Ltd account and $244700 from the Goldston Trust Account which is now been used by the NSW Trustee and Guardian for ADP's benefit, as needed. From the perspective of NSW Trustee and Guardian, what now remains is to determine the status of various loans and advances by ADP to her children.
A letter dated 9 June 2011 to UD from ADQ sets out a list of loans and advances from ADP to her children, with the proviso that the list 'may not be definitive.'
In notes responding to issues raised by ADQ, UE and UD set out what they believe to be inaccuracies and omissions from ADQ's list of loans and advances from ADP to her children.
During the Tribunal hearing of 14 June 2011, substantial agreement was reached by the parties in relation to the preferred wording of a revised Commercial Management Plan to be implemented by the NSW Trustee and Guardian. Variations made to the Commercial Management Plan as set out below incorporate the agreement reached by the parties during the hearing.
At the end of the hearing, only one point of difference remained between the parties. This was whether proposed point 4(h) should read, in relation to Sunsit Pty Ltd, that 'directors distribute balance of entitlements and net assets to ADP', as favoured by NSW Trustee and Guardian and the applicants UD and UE, or whether it should read that 'directors distribute balance of entitlements and net assets as applicable,' as favoured by UA and ADQ.
Findings
In determining an application for review, s.63 of the Administrative Decisions Tribunal Act provides that the Tribunal is to decide what is the correct and preferable decision having regard to the material before it. Such material includes the Application for Review, the s.58 documents provided by the NSW Trustee and Guardian and Guardian, the documents tendered at the hearing by the parties and the evidence and submissions of the parties made at the hearing
For the reasons set out below, I have decided to vary the decision of the NSW Trustee and Guardian to approve the Commercial Management Plan for ADP Goldston dated 1 September 2010.
The decision is varied by amending the Commercial Management Plan approved by the NSW Trustee and Guardian to read as follows:
(1) UD transfers Sunsit Pty Ltd and Goldston Family Trust bank balances to ADP's NSW Trustee and Guardian trust account with the exception of approximately $100 in each account. The cheques will be used to assist the outstanding accommodation bond - Completed 27 August 2010
(2) Commercial real estate agent appointed by the NSW Trustee and Guardian to manage ADP's two commercial properties - Appointed August 2010
(3) New South Wales Trustee and Guardian retires ADP from being a director of Sunsit Pty Ltd
(4) The directors to carry out the following
(a) Cancel all direct bank deposits and payments (if applicable) in regards to ADP's shares, property etc and advise NSW Trustee and Guardian accordingly.
(b) Assess and call on outstanding loans and advances to all family members to the amounts required to pay Sunsit Pty Ltd and the Goldston Family Trust debts prior to each of the company or trust's debt commitment.
(c) Request past bank statements for outstanding tax return years.
(d) Reconcile past bank statements, other available documents and review the following:
(i) Bank interest earned
(ii) Other income and establishment of client's loans accounts
(iii) Outgoings
(iv) Report unresolved discrepancies to NSW Trustee and Guardian and negotiate as applicable.
(e) Appoint an accountant to assist directors in the presentation of the reconciliation of accounts.
(f) Instruct accountant to compile and lodge tax returns for all years in arrears for Sunsit Pty Ltd and Goldston Family Trust.
(g) Finalise outstanding tax, fees and all other liabilities.
(h) Distribute balance of entitlements as is both applicable and equitable, taking as a primary consideration the welfare and interests of ADP.
(i) With the accountant's assistance, apply for de-registration of Sunsit Pty Ltd and wind up the Goldston Family Trust.
(5) NSW Trustee and Guardian to investigate the affairs of ADP with specific reference to loans and advances made to the children (or spouses of the children) of ADP. NSW Trustee and Guardian shall report to each of the children the findings of this investigation.
Apart from point 4(h), all other points comprising the amended Commercial Management Plan for ADP represent agreement by all parties in this matter. Some of the points contained in the plan have already been achieved. For the sake of retaining a coherence to the Plan as a whole, this points have been retained in the amended Commercial Management Plan. In considering each of the agreed points in the amended Plan, I am satisfied that it is in the best interests of ADP for each of these points to be included in the Commercial Management Plan as a means of clarifying the extent of her assets and liabilities.
Point 4(h) is the one point upon which the parties have been unable to agree. In considering the evidence and submissions before me, I am satisfied that the distribution of the balance of entitlements and net assets of Sunsit Pty Ltd is a matter for its directors to resolve. Given that ADP is no longer a director of Sunsit Pty Ltd, and the powers of the NSW Trustee and Guardian are limited under s57 of the NSW Trustee and Guardian Act to exercising 'all the functions the person or patient has and can exercise or would have and could exercise if under no incapacity', I find that it is beyond the powers of the NSW Trustee and Guardian to ensure that the balance of entitlements and net assets of the company are distributed to ADP, who is only one of the company's two shareholders.
All the parties have agreed that their motivation for bringing this matter to the Tribunal has been to ensure equity and to ensure that the interests of ADP remain a prime consideration. I am satisfied that this is the case and have made the amendments to the Commercial Management Plan in relation to the division of the assets of Sunsit Pty Ltd to reflect the concerns of all parties without stipulating actions that may be beyond power. It is for this reason that I have determined that point 4(h) of the amended Commercial Management Plan should read that the directors of Sunsit Pty Ltd 'distribute balance of entitlements as is both applicable and equitable, taking as a primary consideration the welfare and best interests of ADP.'
ORDERS
The decision of the NSW Trustee and Guardian to affirm the decision of Mr Facey on 1 September 2010 to approve the 'Commercial Management Plan' proposed for ADP is varied as follows: in lieu of the 'Commercial Management Plan for ADP as at 1 September 2010' approved by Mr Facey, the following 'Commercial Management Plan' is approved:
(1) UD transfers Sunsit Pty Ltd and Goldston Family Trust bank balances to ADP's NSW Trustee and Guardian trust account with the exception of approximately $100 in each account. The cheques will be used to assist the outstanding accommodation bond - Completed 27 August 2010
(2) Commercial real estate agent appointed by the NSW Trustee and Guardian to manage ADP's two commercial properties - Appointed August 2010
(3) New South Wales Trustee and Guardian retires ADP from being a director of Sunsit Pty Ltd
(4) The directors to carry out the following
(a) Cancel all direct bank deposits and payments (if applicable) in regards to ADP's shares, property etc and advise NSW Trustee and Guardian accordingly.
(b) Assess and call on outstanding loans and advances to all family members to the amounts required to pay Sunsit Pty Ltd and the Goldston Family Trust debts prior to each of the company or trust's debt commitment.
(c) Request past bank statements for outstanding tax return years.
(d) Reconcile past bank statements, other available documents and review the following:
(i) Bank interest earned
(ii) Other income and establishment of client's loans accounts
(iii) Outgoings
(iv) Report unresolved discrepancies to NSW Trustee and Guardian and negotiate as applicable.
(e) Appoint an accountant to assist directors in the presentation of the reconciliation of accounts.
(f) Instruct accountant to compile and lodge tax returns for all years in arrears for Sunsit Pty Ltd and Goldston Family Trust.
(g) Finalise outstanding tax, fees and all other liabilities.
(h) Distribute balance of entitlements as is both applicable and equitable, taking as a primary consideration the welfare and interests of ADP.
(i) With the accountant's assistance, apply for de-registration of Sunsit Pty Ltd and wind up the Goldston Family Trust.
(5) NSW Trustee and Guardian to investigate the affairs of ADP with specific reference to loans and advances made to the children (or spouses of the children) of ADP. NSW Trustee and Guardian shall report to each of the children the findings of this investigation.
Decision last updated: 21 June 2011
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