ZU v Protective Commissioner

[2007] NSWADT 111

CITATION:	ZU v Protective Commissioner [2007] NSWADT 111
DIVISION:	General Division
PARTIES:	APPLICANT ZU RESPONDENT Protective Commissioner
FILE NUMBER:	063443
HEARING DATES:	28 February 2007
SUBMISSIONS CLOSED:	28 February 2007
DATE OF DECISION:	25 May 2007
BEFORE:	Britton A - Deputy President
CATCHWORDS:	Protected Estates Act - Protective Commissioner - disposition of money - Protective Commissioner - disposition of money
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Protected Estates Act 1983
CASES CITED:	GJ and Ors v Protective Commissioner [2005] NSWADT 66 Grevett v McIntyre [2002] QSC 106 Huet v Irvine [2003] QSC 387 Jones v Moylan [2000] WASCA 361 The Protective Commissioner v "D" & Ors [2004] NSWCA 216
REPRESENTATION:	APPLICANT In person RESPONDENT C Phang, solicitor
ORDERS:	The decision of the Protective Commissioner is affirmed.

(1A) This section applies only to the following:

(a) proceedings in the Community Services Division of the Tribunal,

(b) appeals to an Appeal Panel from a decision made by the Tribunal in the Community Services Division,

(b1) proceedings in relation to an external appeal made under section 67A of the Guardianship Act 1987 or section 21A of the Protected Estates Act 1983,

(b2) proceedings in relation to a reviewable decision made under the Guardianship Act 1987 or the Protected Estates Act 1983

(c) such other proceedings (or class or classes of proceedings) as may be prescribed by the regulations for the purposes of this section.

(1) A person must not, except with the consent of the Tribunal, publish or broadcast the name of any person:

(a) who appears as a witness before the Tribunal in any proceedings, or

(b) to whom any proceedings before the Tribunal relate, or

(c) who is mentioned or otherwise involved in any proceedings before the Tribunal,

whether before or after the proceedings are disposed of.

Maximum penalty: 10 penalty units or imprisonment for 12 months, or both.

(2) This section does not prohibit the publication or broadcasting of an official report of the proceedings that includes the name of any person the publication or broadcasting of which would otherwise be prohibited by this section.

(3) For the purposes of this section, a reference to the name of a person includes a reference to any information, picture or other material that identifies the person or is likely to lead to the identification of the person.

REASONS FOR DECISION

1 ZU applies to the Administrative Decisions Tribunal for review of the decision made by the Protective Commissioner to refuse to pay him for expenses that he claimed were incurred in the course of repairing and maintaining his mother’s house. ZU’s mother, Mrs A, suffers from advanced dementia. Following an order made by the Guardianship Tribunal in 2004, her estate has been under the management of the Protective Commissioner.

Background

2 It is necessary to briefly set out the background to ZU’s application.

3 ZU moved into his mother’s house in 1992 after the death of his father. He continued to reside in the property after his mother moved to a nursing home in 2004.

4 In September 1999, Mrs A conferred on her son a general power of attorney. In November 2003, acting as attorney for his mother, ZU secured a bank loan using his mother’s house as security. That month he drew down about $20,000 on the loan and six months later, a further $40,000. By March 2005, the loan stood at just under $65,000.

5 In November 2004, a delegate of the Protective Commissioner decided that the loan be recorded as a liability against Mrs A’s estate and repaid on her death. The delegate also decided that ZU be permitted to remain in the house rent-free, to be reviewed if additional funds were needed to meet Mrs A. On review the Commissioner set that decision aside and determined:

That the circumstances surrounding the $65,000 loan be referred to the Commissioner’s Legal Branch for investigation of possible misappropriation of funds by ZU.

That a sales and rental report on the property be obtained.

That ZU be required to pay market rent and if he refused to do so, that he be evicted.

6 The Protective Commissioner ordered ZU to leave the house in June 2005. Later that year the house was sold at the instruction of the Commissioner and the proceeds of sale used to repay the loan taken out by ZU.

7 In these proceedings, ZU told the Tribunal that his mother was a gambler and had instructed him to borrow the money so she could pursue her gambling interests.

Decision the subject of ZU’s application

8 In 2006, ZU claimed an amount of about $50,000 from the Protective Commissioner for work on his mother’s property that he claimed he had paid for.

9 In a decision dated 13 November 2006, a delegate of the Commissioner decided not to approve that request because ‘there is no evidence that he used his funds to pay for the expenditure and there is no evidence that the $60,000 was applied for [Mrs A’s] benefit’.

10 This decision is the subject of ZU’s application to the Tribunal.

Evidence given by ZU

11 ZU’s evidence is that when he moved in to his mother’s house, it was in a state of disrepair. According to ZU, shortly after he moved in, he commenced a program of repairs to the property, engaging tradespeople to carry out that work. He claims that from 1992 to about 2005 he spent about $50,000 on this work and received no contribution from made out to him, purportedly issued by the tradespeople he had engaged. (On the day of hearing, ZU told the Tribunal that he had withdrawn his claim for payment for expenses incurred after the loan was taken out on his mother’s property, i.e. November 2003. This reduced the amount claimed by about $4000.)

12 ZU tendered in these proceedings, bank records dating back to 1997 in support of his claim that he, not his mother, had paid for the work on the property. Those records reveal that ZU regularly took out small loans of around $2,000, all of which were repaid. His evidence is to the effect that the repair work was a ‘work in progress’, undertaken when funds became available. He claims all payments were made in cash.

13 In support of his claim that these loans were used to fund repairs to his mother’s property, ZU called credit union manager, Megan Johnson. Ms Johnson confirmed that the credit union had approved a number of loans to ZU and, from 1993 to 1999, she had been involved in their approval. She said records of the loans were no longer available. It was her recollection that the reason given by ZU for borrowing money was so he could pay for ‘household bills, car repairs and work around the house’. She said that it had not been the credit union’s practice to require loan applicant to provide evidence on how the loan money was spent when, like ZU, they were in secure employment, were borrowing relatively small amounts and had a good credit history.

14 He said he had never discussed with his mother being repaid for the work to her house.

15 ZU has been in full-time employment with the one employer since 1986. According to ZU, throughout the period he lived in his mother’s house he paid board of $75, in cash. He is the sole beneficiary of his mother’s will.

Issues

16 In determining whether the Protective Commissioner made the ‘correct and preferable’ decision two key issues must be addressed. First, does the Protective Commissioner (or the Tribunal) have the power to pay the alleged expenses, the subject of ZU’s application from Mrs A’s estate, and, if so, was the refusal to approve ZU’s application for reimbursement the ‘correct and preferable decision’?

Power to make payment to ZU

17 Section 24(1) of the Protected Estates Act 1983 (the Act) vests the Protective Commissioner with all functions necessary and incidental to manage and care for the estate of ‘a protected person’ when the management of that estate is committed to the Protective Commissioner.

18 Section 24(2)(g) provides that the Protective Commissioner may settle, adjust and compromise a demand made by or against the estate.

19 Section 28 of the Act is headed ‘Disposition of money in hands of Protective Commissioner’ and provides that the Protective Commissioner may apply money comprising the whole or any part of the estate of a protected person towards any one or more of the following purposes:

(a) the payment of the debts and engagements of the protected person and the repayment of expenses chargeable to the state of the protected person

…

(d) the payment of all proper costs incurred in or about the care, protection, recovery, sale, mortgage, leasing, disposal and management of the estate of the protected person or protected missing person,

(e) the preservation and improvement of the estate of the protected person or protected missing person,

…

20 For the purpose of determining whether the Protective Commissioner has power to make the payment sought, I have taken ZU’s evidence at its highest and accepted his claim that over a period of about 11 years he expended just under $50,000 of his own money on the repair and upkeep of his mother’s house.

21 My tentative view is that neither paragraph (d) nor (e) of s 28(1) give the Commissioner the power to make payment to ZU. While the expenses claimed are in the nature of costs ‘in or about the care, protection’ or ‘the preservation and improvement’ of Mrs A’s estate, all predate the management of the estate being committed to the Commissioner, i.e. September 2004. It is my view that these provisions do not extend to costs incurred before the estate was committed to the Commissioner.

22 It is, therefore, necessary to explore whether the expenses the subject of ZU’s claim constitute a ‘debt or engagement’ (s 28(1)(a)), ‘an expense chargeable’ to Mrs A’s estate (s 28(1)(a)) or ‘a demand against’ the estate (s 24(2)(g)).

A debt?

23 The evidence reveals that there was no express agreement between ZU and his mother about the terms under which he would undertake repairs to the property. There is no evidence that his mother agreed to repay him for that work. ZU’s evidence is that the matter was simply never discussed.

24 Nor, in my view, is there any evidence to support a finding that an implied agreement existed between ZU and his mother.

25 In the absence of any express or implied agreement, the expenses claimed by ZU could not be said to constitute a debt for the purposes of s 28(1)(a).

An engagement?

26 The meaning of the word ‘engagement’ in the context of s 28(1)(a) was considered by the Court of Appeal in The Protective Commissioner v "D" & Ors [2004] NSWCA 216. The Court of Appeal decided that the Protective Commissioner had power under the Act to make payment for past gratuitous care from the estate of a protected person.

27 In the leading judgement, McColl JA concluded that the term engagement ‘is not limited to legally enforceable obligations’. Her Honour referred at (par. [161]) to the consideration of the term by Drummond J in The Wik Peoples v State of Queensland (1996) 63 FCR 450 in the context of s 2 of the NSW Constitution Act 1855 (Imp) and said:

His Honour found (at 464 - 465) that in the first half of the nineteenth century the term “engagement” was “in common use” like the term “promise” to “describe government undertakings with respect to grants of interest in Crown land that did not amount to arrangements legally binding on the Crown.” Drummond J’s historical researches revealed the term “engagements” to refer to something in the nature of a commitment, but not necessarily a legal obligation. It might be presumed that the meaning of the term did not undergo a limitation between 1855 and 1878. That that is so is borne out by the dictionary meaning given to “engagement” which includes both “a formal promise, agreement, undertaking, covenant” and a “moral or legal obligation”: The Shorter Oxford English Dictionary (3rd Ed). It seems sensible to assume, therefore, that when the word “engagements” was used in s 151(a) of the 1878 Act [ Lunacy Act 1878], where, it will be recalled, it was used in contradistinction to the word “debts” (“debts or engagements”) it was intended to refer to something which may not amount to a legally enforceable obligation.
28 Her Honour went on to say (at pars [163] and [164]):
When “engagements” was carved out of s 81 of the 1958 Act and inserted into s 28(1)(a) the drafter connected it to the word “debts” with the conjunction “and”. That word should be given its ordinary meaning: Victims Compensation Fund Corporation v Brown [2003] HCA 54; (2003) 201 ALR 260 at [13] per Heydon JA (with whom McHugh ACJ, Gummow, Kirby and Hayne JJ agreed). In the present context, the use of “and” to join the two terms indicates a legislative intention to list purposes towards which the Protective Commissioner could apply money comprising part of the protected person’s estate. There was no point to using the word “engagements” if it had the same meaning as “debts”. The word was added to the word “debts” because it carried a different meaning. It is not superfluous. It must be given a meaning: Project Blue Sky Inc v Australian Broadcasting Authority, above, at [71].

In my opinion, therefore, the expression “debts and engagements” is not a hendiadys [that is, the two words linked by ‘and’ meaning the same thing]. “Engagements” is not a synonym for “debts”: cf Victims Compensation Corporation Fund v Brown [2003] HCA 54; (2003) 201 ALR 260 at [34]. Its use in s 28(1)(a) indicates the legislature’s intention that the moneys in the protected person’s estate could be applied by the Protective Commissioner not only to discharge legally enforceable obligations, but also to meet a commitment which was a moral obligation only.

29 Applying that reasoning, the question to be asked is, does Mrs A have a moral obligation to reimburse her son for the money spent on her property?

30 If ZU’s account is accepted it would appear that his mother derived a benefit from the improvements to her home. Presumably the quality of her immediate environment was improved or, at least prevented from deteriorating further. In addition she probably received a financial benefit. While difficult to quantify without further evidence, it is it is reasonable to assume that the improvements to the property increased its ultimate sale price.

31 It does not follow that because Mrs A derived a benefit from the work that she has a moral obligation to repay ZU. All relevant circumstances need to be taken into account including, any other arrangements that might have existed between Mrs A and ZU for example, the terms under which ZU was allowed to reside in Mrs A’s home. All that is known is that he paid board of $75 per week throughout the period of his residency.

32 From the evidence before me it is simply not possible to discern what Mrs A thought of her son’s financial contribution to the property. Over the period of his residency the expenses he now claims, average out to be about $80 per week. It may be that Mrs A considered this to represent an advance investment on the family property, which he stood to inherit. Alternatively, she might have thought it represented nothing more than a ‘fair price’ for board and lodging. Another possibility is that she gave the matter no thought and simply had no idea of the total amount spent.

33 This case can be distinguished from those where the assistance or support the subject of the claim to the Protective Commissioner was provided solely or primarily for the benefit of the protected person. Examples might include the provision of nursing care or the repair and upkeep of the protected person’s property where the claimant did not reside at, or otherwise derive a benefit from the property. In these circumstances it could be argued that a presumption in favour of a moral obligation arises. This is not to say that the receipt of any benefit by the service provider cancels out any obligation the protected person might have to them, but rather, that this is a factor to be taken into account.

34 Although the expenditure (in money and kind) was significant, I am not satisfied on the evidence before me that it gives rise to a moral obligation and constitutes an ‘engagement’ for the purpose of s 28(1)(a).

A demand against the estate?

35 Section 24 gives the Commissioner extremely broad powers in respect of the management of a protected person’s estate. The Commissioner may exercise all functions necessary and incidental to its management and care including to ‘settle, adjust and compromise a demand made…against the estate’ (s 24(2)(g)).

36 The term ‘demand’ is not defined in the Act. It must therefore be given its ordinary meaning, that is, to ask for with authority; claim as a right: a requisition; a legal claim (Macquarie Dictionary 4th ed); an authoritative or peremptory request or claim (The Oxford English Dictionary. 2nd ed. 1989).

37 Whether the claim made by ZU constitutes a ‘demand’, turns in my view, on broadly the same issues discussed above. That is, does the ‘demand’ arise out of a legally enforceable right, entitlement or some moral obligation?

38 Applying the reasoning set out above, in my view the claim made by ZU does not constitute a ‘demand’.

Should ZU be reimbursed for expenditure on the property?

39 In case I am wrong and the claim the subject of the reviewable decision does constitute a debt, engagement or demand, I will proceed to determine what is the ‘correct and preferable’ decision having regard to the material now before me.

40 ZU provided to the Tribunal a large number of receipts and invoices he said had been issued for the work undertaken on his mother’s property. He gave evidence under oath that the work was paid for by him and carried out by reputable tradespeople.

41 The evidence provided by the credit union manager supports, to some degree, ZU’s claim that he funded work on his mother’s property. Her evidence was to the effect that ZU nominated repairs and improvement to the subject property as one of the things the loan money would be used for. As noted, she could not verify that it was used for that purpose.

42 It is apparent from a reading of the decision to refuse ZU’s request for reimbursement, that the Commissioner’s delegate had concerns about the reliability of ZU’s claim that he had used his own money to fund the repairs. Mention was made of the circumstances surrounding the $60,000 loan taken out over Mrs A’s property. ZU’s evidence given in these proceedings that the loan was used almost exclusively to fund his mother’s gambling debts, strikes me as a somewhat implausible explanation. It is surprising that ZU did not provide the Tribunal with any corroborative evidence to support his claim about his mother’s gambling interests, especially given that the Respondent’s material revealed that its decision makers thought the circumstances surrounding the loan to be both suspicious and relevant to the current application. While some allowance must be made for the fact that ZU was not legally represented nevertheless the dearth of evidence on this issue does not assist him.

43 The claim for reimbursement of expenses, the subject of this application, and the loan taken out by ZU over his mother’s property are not one and the same thing. However the evidence about the later is relevant to an assessment of the reliability of ZU’s evidence especially where his evidence is unsupported.

44 It goes without saying that a cautious approach must be taken where a claim is made against the estate of a protected person especially where there is an absence of reliable documentation. As in this case, the protected person is unable to verify whether the money claimed was expended in the manner and for the purpose as claimed. Nor will they be able to comment on whether it was agreed, or at least understood, that the alleged expenses would be reimbursed. O’Connor J in GJ and Ors v Protective Commissioner [2005] NSWADT 66 endorsed the principle that payment from the estate of a protected person for past gratuitous services should only be ordered on proper evidence citing, with approval, Jones v Moylan [2000], WASCA 361 at [119]; Grevett v McIntyre [2002] QSC 106 at [6] and Huet v Irvine [2003] QSC 387 at [10]. That principle, in my view, applies equally to a claim for reimbursement for expenses incurred in respect of a protected person’s estate.

45 I conclude that the Commissioner made the correct and preferable decision for the following reasons. First the evidence does not support a finding that ZU has a legally enforceable right to payment or that his mother had any moral obligation to make payment to him. Second, in the absence of better evidence, I could not be comfortably satisfied that all of expenses claimed by ZU were incurred and/or paid for by ZU.

46 The Commissioner’s decision is therefore affirmed.