XZG

[2021] NSWCATGD 26

NSW Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

XZG [2021] NSWCATGD 26

Hearing dates:

7 October 2021 and 10 December 2021

Date of orders:

10 December 2021

Decision date:

10 December 2021

Jurisdiction:

Guardianship Division

Before:

L Organ, Senior Member (Legal)
E Love, Senior Member (Professional)
M Watson, General Member (Community)

Decision:

Review of an Enduring Guardianship Appointment:

In relation to the enduring guardian appointment made by XZG on 6 February 2019 appointing SAG the Tribunal orders, directs or declares:

The appointment of SAG as an enduring guardian is confirmed.

Review of an Enduring Power of Attorney:

In relation to the enduring power of attorney made by XZG on 6 February 2019 which appointed SAG as attorney(s) the Tribunal determines, orders or declares:

to carry out a review of the making and operation and effect of the enduring power of attorney.

Not to make an order under section 36 of the Powers of Attorney Act 2003 and dismiss the application.

Catchwords:

REVIEW OF ENDURING GUARDIANSHIP – statutory framework for review of an enduring guardian appointment – subject person diagnosed with dementia – whether subject person had capacity to make an enduring guardianship appointment – conflict between family members – joint appointment not in subject person's best interests – no decisions to be made which cannot be made under existing appointment – appointment of sole enduring guardian confirmed – no orders made.

REVIEW OF ENDURING POWER OF ATTORNEY – operation of s 36 of the Powers of Attorney Act 2003 (NSW) – Tribunal exercises discretion to review the making and operation and effect of the enduring power of attorney – whether subject person had capacity to make a power of attorney – duties and obligations of an attorney – fiduciary duty – duty to keep records – joint accounts – no evidence of mismanagement of financial affairs – no need for independent audit – no orders made – application dismissed.

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW), s 36(1)

Guardianship Act 1987 (NSW), ss 3, 3(2), 4, 4(a), 4(d)-(e), 6, 6A(1)(a), 6E(1)(a), 6J(1), 14, 16(2)

Powers of Attorney Act 2003 (NSW), Div 4, Pt 3; ss 12(1), 36, 36(1), 36(3)-(9), 37(1)

Cases Cited:

Banks v Goodfellow (1870) LR 5 QB 549 at 564-565

Gibbons v Wright (1954) 91 CLR 423

Ranclaud v Cabban (1988) NSW ConvR 55-385

Scott v Scott [2012] NSWSC 1541

Susan Elizabeth Parker v Margaret Catherine Higgins & Ors [2012] NSWSC 1516

Szozda v Szozda [2010] NSWSC 804

Tulloch (deceased) v Braybon (No 2) [2010] NSWSC 650

Texts Cited:

JD Dal Pont, Powers of Attorney in Australia (2010, Lexis-Nexis Butterworths)

Berna Collier and Shannon Lindsay, Powers of Attorney in Australia and New Zealand (1992, Federation Press)

Category:

Principal judgment

Parties:

001: Review of an Enduring Guardianship Appointment

XZG (the person)
KFG (applicant)

SAG (enduring guardian, spouse)
Public Guardian
NSW Trustee and Guardian

003: Review of an Enduring Power of Attorney

XZG (the person)
KFG (applicant)
SAG (attorney)
NSW Trustee and Guardian

Representation:

J Winslow, Solicitor, as separate representative for XZG
G Hoddle, Solicitor, as legal representative for SAG

File Number(s):

NCAT 2021/00189164

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: Civil and Administrative Tribunal Act 2013 (NSW), s 65.

REASONS FOR DECISION

Background

1. XZG is a 73-year-old man who resides at an aged care facility in regional NSW. XZG’s wife is SAG who lives in regional NSW. XZG and SAG have been married since 1997 and lived together for some years before that. XZG has three children from a previous relationship, KFG, Mr Z and Mr Y. As this hearing involved multiple members of the same family, for clarity but with no disrespect intended, we have referred to members of XZG’s family by their first names throughout these reasons.

2. XZG is reported to have a diagnosis of dementia.

3. On 6 February 2019 XZG made enduring guardian and enduring power of attorney appointments. He appointed his wife, SAG, as both his enduring guardian and as his attorney.

4. Applications for the review of the enduring power of attorney and enduring guardian appointments made by XZG on 6 February 2019 have been made by KFG.

5. The Tribunal has ordered that XZG be separately represented.

The hearing

6. At the end of these Reasons for Decision are lists of the parties to the applications and the witnesses who attended the hearing. [Appendix removed for publication.]

7. The hearing took place over two days on 7 October 2021 and 10 December 2021.

Standing to bring application for reviews of the appointments of enduring guardian and attorney

8. The Tribunal must review the appointment of an enduring guardian at the request of any person who has a genuine concern for the welfare of the appointor. The Tribunal may review on the application of an interested person the making or operation and effect of a reviewable power of attorney. An ‘interested person’ includes a person who has a proper interest in the proceedings or a genuine concern for the welfare of the principal. KFG is XZG’s son. KFG has raised legitimate matters of concern to him about his father’s welfare and interests in both his applications to the Tribunal. These are referred to in more detail below. We were satisfied that KFG has standing to make the applications before the Tribunal.

Preliminary issue: Application for leave for legal representation by SAG

9. Mr George Hoddle, Solicitor, sought leave to represent SAG. None of the other parties objected to leave being given to Mr Hoddle. The Guardianship Division has issued a procedural direction setting out guidelines for when the Division will grant leave for legal representation. The procedural direction provides that the Division will take into account the following matters when exercising its discretion to grant leave:

• Whether representation will promote the principles in s 4 of the Guardianship Act 1987 (NSW) (“the Act”), in particular the paramount concern being the interests of the subject person;

• The guiding principle set out in s 36(1) of the Civil and Administrative Tribunal Act 2013 (NSW) (“the CAT Act”) to facilitate the just, quick and cheap resolution of the real issues in the proceedings;

• Any disability or other factor that impedes the party’s capacity to fully participate in the hearing;

• The nature and seriousness of the interests of the party that are affected by the proceedings;

• Whether the party’s interests and point of view conflict with those of other parties;

• Whether the proceedings involve complex legal or factual issues;

• Fairness between the parties. It may be unfair if one party is represented but another is not, particularly if the subject person is unrepresented or the parties are in conflict;

• Whether representation may assist a party to focus on the relevant issues and may promote a conciliatory approach in the proceedings.

10. In brief, Mr Hoddle said SAG feels under particular emotional pressure and strain as a result of the proceedings commenced by KFG. He said she does not feel she is able to adequately present her case without assistance. He noted there is some legal complexity in relation to the issues under consideration by the Tribunal and that he could assist the Tribunal in focusing on the real issues in dispute. He noted that the other parties had been on notice of his intention to seek leave to appear and could have made similar applications, therefore there was no procedural unfairness.

11. We were satisfied it was appropriate to give leave to Mr Hoddle to represent SAG in the circumstances of this case as we considered that it would give effect to the guiding principles in s 36(1) of the CAT Act, assist the parties to focus on the real issues in dispute and was in keeping with the principles in s 4 of the Act, in particular that XZG’s welfare and interests should be our paramount consideration. We had regard to the fact that the other parties and XZG’s separate representative did not object to leave being given.

The statutory framework

Review of an Enduring Guardian Appointment

12. In exercising our power to review the appointment of an enduring guardian, we are obliged to observe the statement of general principles in s 4 of the Act. These are:

1. the welfare and interests of such persons should be given paramount consideration,

2. the freedom of decision and freedom of action of such persons should be restricted as little as possible,

3. such persons should be encouraged, as far as possible, to live a normal life in the community,

4. the views of such persons in relation to the exercise of those functions should be taken into consideration,

5. the importance of preserving the family relationships and the cultural and linguistic environments of such persons should be recognised,

6. such persons should be encouraged, as far as possible, to be self-reliant in matters relating to their personal, domestic and financial affairs,

7. such persons should be protected from neglect, abuse and exploitation,

8. the community should be encouraged to apply and promote these principles.

13. A person of or above the age of 18 years may, by instrument in writing, appoint a person as his or her guardian: the Act, s 6. To be valid, the instrument of appointment must comply with a number of requirements, which include that the instrument is in the prescribed form, is signed by the appointor, is endorsed with the appointee’s acceptance of the appointment, and the execution of the instrument by the appointor and appointee is witnessed by one or more eligible witnesses. Subject to its terms, the instrument appointing a person as an enduring guardian, authorises the appointee, while the appointment has effect, to exercise a number of functions. These include deciding the place (such as a specific nursing home, or the appointor’s own home) in which the appointor is to live: the Act, s 6E(1)(a).

14. An appointment of an enduring guardian has effect only during such period of time as the appointor is a “person in need of a guardian”: the Act, s 6A(1)(a). Section 3 of the Act defines a “person in need of a guardian” to mean a “person who, because of a disability, is totally or partially incapable of managing his or her person”. In turn, s 3(2) of the Act states that a reference to a person who has a disability is a reference to a person:

3 Definitions

(a)      who is intellectually, physically, psychologically or sensorily disabled,

(b)       who is of advanced age,

(c)       who is a mentally ill person within the meaning of the Mental Health Act 2007, or

(d)       who is otherwise disabled,

and who, by virtue of that fact, is restricted in one or more major life activities to such an extent that he or she requires supervision or social habilitation.

15. By making an instrument of appointment, the appointor, gives to the enduring guardian(s) the power to make decisions on their behalf, in respect of the functions conferred by the Act, or the instrument of appointment, throughout any period or periods, the appointor is a “person in need of a guardian”.

16. The Act gives the Tribunal the power to review the appointment (or purported appointment) of an enduring guardian: the Act, s 6J(1). The Tribunal must, at the request of any person who, in the opinion of the Tribunal, has a genuine concern for the welfare of the appointor review the appointment or purported appointment of an enduring guardian. On review, the Tribunal may, among other things, revoke or confirm the appointment, with or without varying the functions of the enduring guardian. Alternatively, if the Tribunal considers that it is in the best interests of the appointor to do so, the Tribunal may deal with a review of the appointment of an enduring guardian, as if an application has been made for a guardianship order.

17. The Act does not expressly define when the appointor’s best interests would justify the revocation of an enduring guardian appointment. Unlike the review of the appointment of an enduring power of attorney, the law does not provide that a person’s lack of capacity to make the appointment of an enduring guardian is a specific reason for revoking the appointment. Nevertheless, concerns about the circumstances in which an appointment was made may be relevant to the Tribunal's overall consideration of orders in the best interests of the person who made it.

18. The Tribunal must apply the principles in s 4 of the Act, when exercising its function of reviewing an enduring guardian appointment. In identifying the workability of the appointment relevant to the person’s best interests the Tribunal should be guided by the objects of the Act.

19. Section 14 of the Act gives the Tribunal the power to make a guardianship order in respect of a person, if the Tribunal is satisfied that the person is a “person in need of a guardian”. Among other things the Tribunal must specify in any guardianship order made which of the functions of a guardian the guardian shall have in respect of the person under guardianship: the Act, s 16(2).

Review of an Enduring Power of Attorney

20. The Tribunal’s jurisdiction in relation to the review of powers of attorney is set out in Div 4, Pt 3 of the Powers of Attorney Act 2003 (NSW) (“PoA Act”).

21. A person may, in anticipation that they may lose their capacity later in life make provision for a substitute decision-maker to make decisions for them in respect of their finances. In this case XZG made such provision. On 6 February 2019 he appointed SAG as his attorney (the EPoA). This instrument was intended to operate in the event of mental incapacity. The EPoA provided that it was to take effect upon the attorney deciding XZG needed assistance in managing his affairs.

22. The Tribunal may, on the application of an interested person, decide to review the making, revocation or operation and effect of a reviewable power of attorney: PoA Act, s 36(1).

23. The scope of the Tribunal’s powers on review include the making of declarations as to the mental capacity of the principal to make a valid power of attorney or otherwise declaring the power of attorney invalid due to the principal's lack of capacity to make it: PoA Act, ss 36(3) and (5).

24. When reviewing the operation and effect of a power of attorney, the Tribunal has a broad discretion to make orders in the terms of those set out in ss 36(3) to (9) of the PoA Act if it is satisfied that it would be in the best interests of the principal to do so or that it would better reflect the wishes of the principal. For instance, the Tribunal may remove a person from office, vary a term or power, revoke all or part of the power of attorney and direct an attorney to lodge accounts.

25. In the alternative, the Tribunal may decide not to make any orders in respect of the review and, if so, may treat the application as an application for a financial management order under Pt 3A of the Act “if it considers it appropriate in all the circumstances to do so” (refer s 37(1) of the PoA Act). The Tribunal may consider this would be appropriate if there are concerns about the making and/or operation and effect of a power of attorney but to revoke the instrument would leave the principal without a financial manager.

26. We have included considerable detail in relation to the possible outcomes in relation to applications of this sort to indicate that the Tribunal’s powers are determined by the legislation and that options open to the Tribunal are concrete and focussed on XZG’s interests.

REVIEW OF AN ENDURING GUARDIANSHIP APPOINTMENT

Enduring guardian appointment made by XZG on 6 February 2019

27. This instrument appoints SAG as XZG’s enduring guardian to make decisions about his accommodation, health care, medical and dental consent and services. SAG accepted her appointment on the day of execution of the instrument by XZG on 6 February 2019.

The views of the parties and overview of the evidence

XZG

28. XZG was initially present on the first day of the hearing for a brief period. However there was general agreement by the participants that he would not be able to contribute in a meaningful way and that his participation may not be in his interests. The separate representative agreed. XZG left the hearing with the nurse who was supporting him during the hearing, when lunch was being served at the facility and did not return. He was again present on the second day of the hearing, however, he again left after a period of time. It was not possible to obtain his views as a result of the impact of his dementia.

Health professional evidence

29. We were assisted by written evidence from a number of health professionals regarding XZG’s current circumstances.

30. Dr X, General Practitioner, in a report dated 17 August 2021, said that XZG has been a resident at the aged care facility since July 2020 for his progressive and rapid onset severe Alzheimer’s disease. He notes that XZG’s management has not been easy as he has difficult and confronting manifestations of behavioural and psychological symptoms of dementia. He describes SAG as XZG’s ‘rock’ and says SAG is :

“a constant companion who has continuously supported [XZG] through his illness and acted as his advocate as well as liaising well with nursing and medical staff.”

31. Dr X says XZG is now settled and familiar with his environment at the aged care facility and seems to be accepting and at peace with his surroundings. He says XZG’s current care needs have been fully met and that any alteration to this would be disorienting and de-stabilising as well as risk the diminution of therapeutic relationships that exist between SAG and XZG, his care givers and medical staff.

32. Dr W, Geriatrician in a report dated 10 September 2021 says he reviewed XZG at the aged care facility on several different occasions since October 2020. Consistent with Dr X’s report he says XZG has Alzheimer’s dementia which Dr W describes as being moderate to severe with behavioural and psychological symptoms. XZG scored 18 out of 30 on a Mini-Mental State examination (MMSE) in October 2020. Dr W says

“Due to this, moving him to a new environment is likely to worsen his cognition and exacerbate his behaviour. He is also visited regularly by his wife, as she lives close to his current residence, which is a very important component of his behavioural management. Without distraction from his wife and her routine visits, there is also likely to be further impact on the ability to manage his behavioural symptoms successfully.”

33. In conclusion Dr W recommends XZG stays in his current residence to optimise management of his dementia and behaviour.

34. Ms V, who is the Deputy Service Manager at the aged care facility, says in a report of 14 September 2021 that XZG lives in the dementia support unit of the facility. His wife is noted to have looked after his affairs since his admission. His fees are covered by a direct debit each month. Ms V says XZG’s care needs are met by the facility.

The making of the enduring guardian and power of attorney appointments

35. Both the enduring guardian appointment and the enduring power of attorney were made on 6 February 2019. The Solicitor who prepared and witnessed the signatures on the instruments was Mr U. Mr U provided an affidavit dated 20 August 2021 and also gave oral evidence at the hearing.

36. Mr U’s evidence was that he has been in practice as a Solicitor for nearly 40 years. He has particular specialisation in the areas of wills, powers of attorney and guardianship, amongst other things. His affidavit sets out in detail his recollection of the discussion at the conference he had with XZG on 6 February 2019. XZG disclosed to Mr U that he had some memory loss which XZG was told by his doctor was mild signs of Alzheimer’s dementia. XZG told Mr U this could worsen over time and he wanted to put in place arrangements for a power of attorney and guardianship. As a consequence of that disclosure by XZG, Mr U took a full history from XZG to determine if XZG had the requisite capacity to make the appointments.

35. Mr U’s evidence indicated that he asked XZG a series of questions to determine if XZG had understood what he was empowering his wife SAG, as his attorney and guardian, to do on his behalf. Mr U specifically raised with XZG that he should consider speaking to his children noting that SAG was his second wife and that it might be advisable for her to share the roles with one of his sons.

36. XZG was said to be very clear that he wanted SAG alone to be appointed. According to Mr U XZG said:

“No I have already thought about that. My kids don’t live at [regional NSW]. They are miles away. I want SAG to be the sole attorney and guardian. I love her. I trust her. She can make any decision on my behalf because I trust her. After all, we’ve been married for the past 22 years”

39. Mr U said later in the conference with XZG he revisited the issue of whether XZG was sure he did not want to take the opportunity to speak to his children about the appointments and XZG was again clear that he did want to do this.

40. Mr U concluded, based on his interview with XZG and his replies to the questions he asked XZG, that XZG had capacity to make both instruments. Mr U gave specific consideration to the legal test set out by the leading cases in the High Court and Supreme Court on the issue. He said he saw no evidence that XZG had been pressured by SAG into making the appointments.

41. Mr U presented as a measured, frank and truthful witness. We found his evidence credible.

KFG

42. KFG’s principal motivation for bringing the application to review the enduring guardian appointment made by XZG was, in brief, because he believes the appointment is not operating in his father’s best interests. His main issues of concern can be broadly summarised as follows:

1. He believes his father was pressured to sign both the enduring guardian and enduring power of attorney appointments by SAG and was not competent to understand what he was signing;

2. He does not believe that the aged care facility is the most appropriate choice of accommodation and care for his father. By the time of the hearing KFG conceded that it was now probably too late to contemplate moving XZG elsewhere given this would be disruptive to his father. He said he would need to seek expert advice about this. He remains unhappy that arrangements were made for XZG to live at the aged care facility instead of a facility, also in regional NSW, which he regards as being a better standard of accommodation and more appropriate for his father’s care needs;

3. He says SAG’s decision to sell the home she and XZG owned in regional NSW to move to a villa style complex, a retirement estate, is another example of poor decision-making by SAG. That particular accommodation he says, was not appropriate given the progressive nature of his father’s illness as it could not provide the level of care XZG would ultimately require;

4. Lack of communication by SAG about their father’s health and care. He says SAG did not consult with either him or his two brothers prior to making arrangements for XZG to live at the aged care facility. This led to a very distressing situation for him and his brothers when they did not know what was happening with their father and could not visit him due to travel restrictions imposed as a result of the COVID-19 pandemic;

5. A breakdown in the relationship between SAG and XZG’s three sons has occurred. This is to the point where KFG says SAG is either uncontactable or abusive when she speaks with KFG and his brothers regarding their father. As a result they have been hampered in their attempts to get regular updates on their father’s condition. He says that he now seeks updates directly from staff at the aged care facility, however, at times they are not always kept informed of what he regards as significant issues regarding his father’s health. He is working on establishing more reliable communication channels between the facility and himself about his father;

6. SAG has restricted XZG’s contact with his three sons. For example, refusing to allow them to take him out of the aged care facility into the community when they visited him there once travel restrictions eased in 2021. This is on a background of SAG attempting to undermine the relationship between XZG and his sons following his diagnosis of dementia;

7. Concerns that SAG has not made adequate provision for his father’s clothing since XZG has been at the aged care facility. Shortly after commencing to live there KFG was contacted about inadequate/threadbare clothing being provided for XZG. As a result he and his brothers purchased some clothing items for XZG to have.

8. He contacted the Ageing and Disability Commission regarding concerns he had over his father’s situation. He says he was advised he could seek review of the current decision-making arrangements for his father by making an application to the Tribunal.

43. KFG’s preferred outcome was for he, Mr Z and Mr Y to be appointed as his father’s guardians. He was willing to consider a joint appointment of he and his brothers with SAG.

44. Mr Z and Mr Y’s position was broadly aligned with that of KFG. Mr Z gave evidence of his frustration and concern about what he says was the lack of adequate information being provided about XZG to Mr Z and his brothers. This was particularly so at the time of XZG’s admission to hospital and subsequent discharge to the aged care facility in July 2020 when Mr Z said they were unable to get in contact with SAG and did not know what was going on. Mr Z said he previously had what he thought was a good relationship with SAG but this deteriorated following their father’s diagnosis of dementia when he questioned their proposed move to the retirement estate.

45. Mr T, who is XZG’s brother, also gave evidence. He also had concerns about decisions made by SAG both in relation to XZG’s health care and the decision to move to the retirement estate from their home in regional NSW.

SAG

46. SAG believes the current decision-making arrangements in place for XZG are working well. She wants to continue in the role of XZG’s enduring guardian as this is what he wanted. She acknowledged that the relationship between her and XZG’s sons had broken down saying that she thinks it has ‘gone too far’ for the relationship to be repaired or for her to be able to communicate freely with them. She does not have any issue, however, with XZG’s sons seeing him at the aged care facility or being provided with updates and information about him by staff at the facility.

47. In relation to the decision for XZG to live in permanent residential care, she says that she followed the advice and recommendations of health professionals she received following XZG admission to a public hospital. Her evidence was that XZG experienced delirium in June 2020 and that this was quite rapid in onset. He was admitted to hospital and had a lengthy stay. Arrangements had to be made very quickly for his accommodation as she was told he needed to be discharged from hospital. She acknowledged that she had not told XZG’s sons but says this was because of the way things moved very quickly with her being required to put in place accommodation arrangements for him as a matter of urgency. She made enquiries of a number of different aged care facilities and the aged care facility where XZG currently resides, was able to offer a bed for XZG.

48. SAG agreed she did not want XZG to be taken out of the facility for an outing by his sons when they came to visit him when lockdown restrictions eased. She said this was due to her concerns around COVID-19. She reiterated she has not sought to prevent KFG, Mr Z and Mr Y from seeing their father or spending time with him and does not object to the facility passing on information about his health to them.

Relevant law relating to capacity to make an enduring power of attorney and enduring guardianship appointment

49. A person’s capacity to make a power of attorney has been considered in many previous cases. We are satisfied that similar principles apply to the making of an appointment of enduring guardian.

50. The authors of Powers of Attorney in Australia and New Zealand, Federation Press, Berna Collier and Shannon Lindsay refer at page 68 of their text to the seminal decision of the High Court in Gibbons v Wright (1954) 91 CLR 423. The authors note:

“The High Court in Gibbons preferred to avoid prescribing a standard of capacity for the execution of any particular instrument and instead held:

The mental capacity required by the law in respect of any instrument is relative to the particular transactions which is being effected by means of the instrument, and may be described as the capacity to understand the nature of that transaction when it is explained.”

51. The authors go on to note that the High Court held “that in order to possess the requisite capacity, the person executing the instrument must be capable of understanding not only the general purport of the instrument, but the effect of a wider transaction which the instrument is a means of carrying out”.

52. The principle enunciated by the High Court in Gibbons has been discussed (and followed) in many matters. The High Court's statement remains the definitive authority on this topic.

53. Particularly helpful on this topic however is the discussion by Young J in Ranclaud v Cabban (1988) NSW ConvR 55-385. His Honour expands, in a practical way, the meaning of the principles pronounced by the High Court in Gibbons.  In Ranclaud his Honour said:

“Such a power permits the donee to exercise any function which the donor may lawfully authorise an Attorney to do. When considering whether a person is capable of giving that sort of power one would have to be sure not only that she understood that she was authorising someone to look after her affairs but also what sort of things the Attorney could do without further reference to her.”

54. Two decisions of the NSW Supreme Court are instructive. The trial Judges in these cases both adopt the test used by Young J in Ranclaud but appear to differ in their reasoning as to whether or not the test of capacity to grant a Power of Attorney is identical to the test of testamentary capacity (to make a will). In Szozda v Szozda [2010] NSWSC 804,Barrett J expressed the view that a different consideration of capacity is necessary when considering the appointment of an attorney. He said (referring to the granting of a power of attorney) “an understanding of the transaction to be facilitated is indispensable to an understanding of the power of attorney”.

55. By contrast, in Scott v Scott [2012] NSWSC 1541, Lindsay J explained that the “standard” test for capacity to make a will (as described in Banks v Goodfellow (1870) LR 5 QB 549 at 564-565) may be the appropriate test.

56. In brief the combined effect of these leading cases is that a person will have the capacity to make a power of attorney if the person understands they are authorising someone to look after their affairs (understands the nature of the document), and the person understands what sort of acts and transactions the attorney or guardian can undertake without reference to the person (understands the effect of the document).

Findings and conclusions on the issue of XZG’s capacity to make the appointments the subject of review

57. On their face, the appointments have been validly made. A Solicitor, Mr U, has certified that XZG appeared to understand the effect of the instruments and voluntarily executed the instruments in his presence. The medical evidence available to us does not directly address the issue of whether XZG had capacity to make the appointments in 2019. We accept that XZG had been diagnosed with dementia by the time of the making of the appointments. According to his instructions to Mr U it was because of this diagnosis that he wanted to make these appointments.

58. The fact that a person has been diagnosed with dementia and cognitive impairment is not evidence in itself of that person lacking capacity to make an enduring power of attorney appointment.

59. There was no compelling evidence available that supported a conclusion that the appointments were not validly made by XZG due to either a lack of capacity or for any other reason including undue influence by SAG.

60. The Tribunal accepted the evidence of Mr U as reliable. He is a very senior and experienced Solicitor. We placed considerable weight on the evidence of Mr U as a balanced, professional witness with particular expertise in the areas of enduring powers of attorney and enduring guardian appointments. We accept that he explained the EPoA and enduring guardian appointments to XZG and that he was satisfied he understood the effect of the documents and what powers he was conferring on SAG. There is no compelling evidence which refutes Mr U’s evidence that he was satisfied that XZG understood the effect of the instruments and potential operation of the clauses in the instruments. Mr U gave particular consideration and advice to XZG that he should consider whether he wanted to appoint one of his sons along with SAG. XZG indicated clearly on two occasions during the consultation that he did not wish to do so.

61. Mr U appeared to have taken a reasonable and cautious approach to the consultation with XZG. He has documented the discussion and advice given to XZG at the time by way of detailed file notes. The evidence of KFG, Mr Z and Mr Y is not in our view sufficient to persuade us as to any lack of capacity at the relevant time by XZG.

62. We note the general concerns held by KFG and Mr Z regarding undue influence by SAG.

63. In the matter of Tulloch (deceased) v Braybon (No 2) [2010] NSWSC 650 at [39] and [40], Brereton J considered the concept of undue influence as that concept applies to dispositions made in circumstances of undue influence:

“it must go beyond one of mere confidence and influence, to one involving dominion or ascendancy by one over the will of the other, and correlatively dependence and subjection on the part of the other. …But more is required than the ‘influence’ that any person might have on another by making a recommendation or giving advice. What is required, as a minimum, is that one have some element of authority or superiority (which may be moral or practical as distinct from legal) over the other.”

64. Mr U saw XZG on his own in the absence of SAG. Apart from KFG and Mr Z’s assertions and concerns about undue influence there was nothing in the evidence to support a conclusion that SAG exercised undue influence over XZG to make the appointments. Mr U said he saw no evidence of this in his consultation with XZG which extended over a period of approximately one and a half hours.

65. For the above reasons we were not satisfied that XZG lacked capacity to make the appointments of an enduring guardian and enduring power of attorney on 6 February 2019 or that the instruments were not valid for any other reason. On this basis we were satisfied that there is no need to make any orders regarding the making of the enduring guardianship appointment or the making of the enduring power of attorney on 6 February 2019.

Should the Tribunal make any orders regarding the enduring guardianship appointment?

66. For the following reasons we were not satisfied on the evidence available to us that there is a need to make any orders regarding the enduring guardianship appointment:

1. At a time when he had decision-making capacity, XZG appointed his wife, SAG, to act as his guardian. This is a powerful factor which weighs against the exercise of the power to make orders which have the effect of varying the enduring guardian appointment unless those arrangements are not operating in XZG’s best interests.

2. We are not persuaded as contended by KFG that SAG has not sought to act in XZG’s best interests as his enduring guardian. The fact that KFG, Mr Z and Mr Y have disagreed with some decisions about their father’s care and treatment does not warrant the exercise of the power to disrupt the current decision-making arrangements that have been put in place by XZG under the enduring guardian appointment.

3. Reasonable minds will differ as to the most appropriate way for a loved one to be cared for when their health declines and they are longer able to live independently in the community. It is not for this Tribunal to decide whether the aged care facility is the most appropriate place for XZG to live. The evidence available does however satisfy us that XZG is in permanent residential care where his care needs are being met. That conclusion is supported by the evidence of Dr X and Dr W which is referred to earlier in these reasons.

4. There was nothing in the evidence available to us to support a finding that as a result of decisions made or not made by his enduring guardian, XZG’s health and medical needs are currently not being met. That conclusion is again supported by the evidence of Dr W and Dr X.

5. We accept SAG’s evidence that she does not seek to prevent XZG’s sons from visiting him or having contact with him. The aged care facility has a duty of care to residents at that facility and it would be incumbent on staff to give advice where appropriate about whether it was in XZG’s interests from a health perspective to have visits/outings. However we emphasise that the clear evidence of SAG, which we accept, is that she does not seek to prevent XZG’s sons from seeing him or from being able to communicate directly with staff at the age care facility about their father. In any event the enduring guardian appointment does not authorise her to make decisions about the access that XZG has to other people and the conditions, if any, of that access. We note that XZG’s sons are also not prevented from contacting the aged care facility and making enquiries about their father’s health or his welfare more generally.

6. The statement of principles listed in s 4 of the Act require the enduring guardian when making substitute decisions on behalf of the appointor, to balance a number of potentially competing considerations. These include, restricting the appointor’s freedom of decision making and action as little as possible, encouraging, as far as possible, the appointor to live a normal life in the community, protecting the appointor from neglect, abuse, and exploitation. At all times the paramount consideration is the welfare and interest of the appointor: the Act, s 4(a). While s 4(d) of the Act instructs that an enduring guardian must take into account the views of the appointor in the exercise of the functions conferred by the instrument of appointment, the Act does not require the enduring guardian to make decisions in accordance with the wishes of the appointor or any third party.

7. There are no outstanding decisions to be made for XZG now or in the foreseeable future that cannot be made by his appointed enduring guardian SAG.

8. The conflict and deterioration in the relationship between SAG and XZG’s sons, while unfortunate, is not of itself a sufficient reason for us to make orders which would impact on the arrangements put in place by XZG under the enduring guardian appointment he made. Further, while s 4(e) of the Act requires us to observe the importance of preserving the family relationships we are not satisfied that any orders which could be made would resolve this conflict.

9. We gave consideration to whether we should treat the application for review of the enduring guardian appointment as if it were an application for guardianship. XZG’s separate representative submitted that the Tribunal should consider a joint appointment of SAG and one of XZG’s sons. A guardianship order made by the Tribunal is time-limited unlike the appointment of an enduring guardian. To make a guardianship order we would have to be satisfied that it would be appropriate to exercise our discretion to do so. We looked at whether there were any decisions in the foreseeable future that could not be made under the enduring guardian appointment and as already indicated we reached the conclusion there are not. We were of the view that a joint appointment of any combination of SAG and XZG’s sons would not be in his best interests given the current state of the relationship between them. Moreover, a joint appointment does not reflect XZG own wishes which were that SAG be appointed solely as his enduring guardian.

1. We therefore confirmed the appointment of SAG as XZG’s enduring guardian.

REVIEW OF ENDURING POWER OF ATTORNEY

Should the Tribunal conduct the review?

67. We clarified at the commencement of the hearing the basis upon which KFG was seeking the review. He confirmed that as set out in his application he was seeking that the Tribunal review both the making of the EPoA and the operation and effect of the EPoA.

68. In Susan Elizabeth Parker v Margaret Catherine Higgins & Ors [2012] NSWSC 1516, Slattery J stated [at 80]:

“On an application for a s 36 review such as this the Court must first exercise a discretion under the Powers of Attorney Act, s(36(1) to decide whether or not to conduct a s 36 review. In my view the Court does not have to conduct a full review of all documents associated with the operation of the subject power of attorney to do this. Something short of a full review must be able to justify the exercise of the s 36(1) discretion as to whether or not the Court should conduct a full s 36 review.”

69. KFG’s application and the material he has submitted in support of that application have been considered. Having reviewed the written evidence produced to the Tribunal we were satisfied we should conduct a s 36 (of the PoA Act) review as there were significant issues of concern and controversy raised regarding the making of the EPoA and management of XZG’s financial affairs.

70. Our findings in relation to making of the EPoA are set out above.

Overview of evidence regarding operation and effect of the EPOA

KFG’s evidence

71. KFG raised a number of concerns about the actions of SAG as XZG’s attorney. His principal concerns can be summarised as follows:

1. There is currently no accountability or transparency in relation to the management of XZG’s affairs by SAG;

2. XZG was tricked or manipulated by SAG into agreeing to leasing a unit at the retirement estate which was not suitable for XZG. This is because this retirement village did not provide for the level of care he required for his increasing care needs;

3. There were concerns by XZG’s sons about the exit fees at the retirement estate and clauses in the contract which enabled the management of the retirement estate to evict a resident if they had behavioural issues. This was a concern because of XZG’s dementia diagnosis;

4. SAG has not kept XZG’s money separate from hers. SAG is also said not to have adequately accounted for what has happened to XZG’s superannuation money. General concerns are held about SAG’s spending and the use of XZG funds;

5. XZG should have the income and assets to provide for the best level of care possible.

72. KFG’s preferred outcome is for he and his brothers to assume responsibility for management of their father’s financial affairs. He also asked the Tribunal to consider making an order for an independent audit of their father’s financial affairs with particular regard to his superannuation.

SAG

73. SAG provided some bank statements to assist the Tribunal in understanding the current financial situation of XZG. She said throughout their marriage she and XZG pooled their money and regarded their funds as joint funds. Some of their bank accounts are in individual names and some in joint. This is reflected in the fact that XZG’s pension of $1900 approximately per month is paid towards his accommodation fees and SAG ‘tops up’ the shortfall of around $700 per month from her superannuation money.

74. The sale price of their property at regional NSW was $390,000 approximately. This was applied towards the lease of a unit in the retirement estate at a cost of $334,000 plus around another $10,000 for renovations to that unit. Bank statements indicate there is around $105,000 in an account in SAG’s name and another $103,000 in SAG and XZG’s names in another account. As at 30 June 2021 there was approximately $11,600 in two other accounts held by SAG and XZG.

75. SAG believes she is well placed to assist XZG to manage his finances and that this also reflects XZG’s preference as to who should manage his financial affairs. She says XZG’s wishes should be respected and upheld.

Findings and Conclusions

Review of operation and effect of EPOA

Fiduciary duty

76. Attorneys are in a fiduciary relationship with the person whose affairs they manage. An attorney must act in the best interests of the principal and must not obtain a personal benefit other than specifically provided for in the EPOA: PoA Act, s 12(1).

Duty to keep records and account

77. Slattery J‘s exposition of the law in the matter of Susan Elizabeth Parker v Margaret Catherine Higgins & Ors [2102] NSWSC 1516 relevant to the type of accounts an attorney is required to keep, has some resonance in this matter. He explained the duty to keep accounts is not the trustee standard. However, at [62] he notes, by reference to JD Dal Pont’s text Powers of Attorney in Australia, Lexis-Nexis Butterworths, 2010, that the attorney is obliged to keep a record of transactions in a readily accessible form, so that when the attorney is called upon, the principal can ascertain with clarity, in what transactions the attorney has been engaged. His Honour also noted an attorney is not required to keep third parties informed of his or her decisions or provide information (for example, accounts and other information) to such persons on his or her management of the principal’s estate.

78. Documents produced to the Tribunal by SAG include bank statements and a handwritten summary of income and expenses for XZG since October 2020. While that summary is brief it is supported by the copies of bank statements from the bank accounts held by XZG in his name and in joint names with SAG, which have also been produced.

Joint accounts

79. The evidence before us does not support a finding of any impropriety by SAG in the management of XZG’s assets and income by virtue of them still having some joint accounts. It is well established that there is a general obligation on an attorney to keep their money separate from that of the principal. As is common in a longstanding personal relationship SAG and XZG’s financial affairs have become intertwined. However as Slattery J said in Susan Elizabeth Parker v Margaret Catherine Higgins & Ors [2012] NSWSC 1516 the management of a person’s affairs

“must be looked at in a realistic framework in the real world of what people do within families with respect to their own affairs, and not with overly legalistic eyes”

80. It seems to us unreasonable to require a person’s finances in a longstanding marriage to be completely separated from that of their spouse who is also their appointed attorney when their property and other assets have been mingled throughout the marriage. This is particularly so in the absence of clear evidence of any impropriety in the management of that person’s affairs by the attorney. XZG’s pension is paid into an account in his name and is applied for his sole benefit towards his accommodation fees.

81. The EPoA made by XZG has some explanatory notes at the end of the document for attorneys and principals. Paragraph 4 of those notes states that an attorney should keep the attorney’s own money and property separate from the principal’s money and property unless they are joint owners or operate joint bank accounts.

82. Our view gains support from JD Dal Pont’s text Powers of Attorney in Australia. At [8.48 - 8.50] he discusses the duty not to mix property. He says

“The rule must yield, though, to where the attorney and principal jointly own property, leading a Canadian law reform body to recommend a statutory expression of the relevant law as follows:

An attorney must not co-mingle any property or fund of the donor with any property or fund of the attorney but must hold each legally separate from the other except where:  

(a)    the property was jointly owned or otherwise co-mingled by the donor and attorney before the donor became mentally incapable, or is purchased with the proceeds of disposition of such property after the donor became mentally incapable; or

(b)    the property or fund is subject to an established pattern of co-mingling by the donor and attorney which started before the donor became mentally incapable.”

83. Dal Pont goes on to note that two states in Australia, the Australian Capital Territory and Queensland have enacted powers of attorney legislation, which specifically addresses the ‘no mixing’ point and requires an attorney to keep the attorneys property separate from the principles property, excepting property that the attorney and the principal own jointly or as required by statute.

Superannuation issue

84. There was some lack of clarity in SAG’s evidence around the issue of XZG’s superannuation. In particular it was unclear to us from the time he retired (which was at the latest according to KFG’s evidence in 2018) how much of his superannuation had been spent or used. SAG’s recollection was that it was either spent on travel and house renovations to the property in regional NSW or when he received the superannuation on his retirement to top up the account from which these expenses had been drawn. However SAG’s evidence is that it was treated as joint property and was ‘pooled’ with their other assets. The fact that it was not kept separately appeared to us to be in keeping with the general intertwining of their finances and it was plausible in our view that SAG’s recollection was unclear because those funds had become mingled with their other funds. Further the receipt of the superannuation pre-dates XZG losing capacity to manage his financial affairs and when SAG commenced managing XZG affairs under the EPoA.

85. Mr T said that XZG told him at some point that he was being pressured by SAG to leave his superannuation to both XZG’s children and to SAG’s children and that XZG wanted his sons to have the money alone. We observe that SAG’s evidence is that she and XZG made their wills in 2015 which pre-dates the events being examined by us.

86. KFG and Mr Z believe their father was very careful about his superannuation money and think it unlikely that he would have spent it in the ways indicated by SAG. The evidence available does not however support a conclusion that there has been any breach of SAG’s fiduciary duty as an attorney in relation to the issue of XZG’s superannuation. While XZG’s sons remain suspicious of what happened to the superannuation that suspicion on its own is not a sufficient basis for us to intervene in the way they suggest and order an independent audit of XZG’s finances.

Unit at the retirement estate

87. It is self-evident that a competent person can make whatever decisions they choose when investing their money, even if they seem unusual or unsound to others.

88. We accept SAG’s evidence that the leasing of the unit at the retirement estate in February 2020 was done jointly with XZG and that XZG signed the relevant legal documents in relation to that transaction himself. We also accept her evidence that he signed the documents for the sale of his property in regional NSW which occurred in around May 2020 according to SAG.

Conclusion

89. There is a lack of reliable evidence of any mismanagement of XZG’s financial affairs since SAG has been managing his finances. Her management commenced around the time of his deterioration in June 2020. There is also no reliable evidence XZG has been financially disadvantaged in any way since that time.

90. XZG is settled and cared for at the aged care facility and there is little practical alternative to him continuing to reside at the aged care facility. Both KFG and Mr Z consider the care XZG is receiving is the ‘bare minimum of care’ only. However no concerns are raised in the reports of either Dr X or Dr W regarding the level of care XZG is receiving and nor do they indicate he would benefit from the provision of further care or services which are currently not being provided.

91. XZG’s accommodation charges at the aged care facility are paid regularly by means of a direct debit each month. This was confirmed by the written evidence of Ms V, the Deputy Service Manager at the aged care facility and the bank statements produced by SAG apart from one instance shortly after XZG commenced to live at the aged care facility, when a request was made for the provision of clothes to him which were ultimately provided by his sons, there have not been any ongoing concerns around the issue of adequate clothing being provided to XZG. Ms S, an administration officer at the aged care facility, confirmed this in her brief oral evidence.

92. The Tribunal’s paramount concern is the welfare and interests of XZG. There was no compelling evidence before us that his needs are not being met or that his available income and assets are not being used to advance his welfare and quality of life.

93. XZG’s separate representative, Ms Winslow, supported a continuation of the arrangements put in place for management of his financial affairs by XZG through the EPoA. She said the evidence indicated intertwining of SAG’s and XZG’s finances but also indicates that SAG has been meeting XZG financial needs.

94. We decided following the review that we should not make any orders under s 36 of the PoA Act. In the absence of reliable evidence of any mismanagement or maladministration of XZG’s financial affairs by his appointed attorney we see no reason to disturb the arrangements XZG himself put in place to manage his financial affairs when he no longer had capacity to do so. We are also not satisfied on the evidence available that we should order an independent audit of XZG’s financial affairs. We have reached the conclusion that, so far as the operation of the EPoA is concerned, there is no reason for us to intervene. We are not satisfied that it would be in the best interests of XZG to do so or that it would better reflect the wishes of XZG. The application is therefore dismissed.

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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: 24 May 2022