Financial Management Order for Incapacitated Person with Dementia

The Tribunal ordered a financial management order for an incapacitated individual with advanced dementia, committing the estate to the management of a designated financial manager, with a review period set for one year.

NSW Civil and Administrative Tribunal New South Wales Medium Neutral Citation: NIU [2016] NSWCATGD 77 Hearing dates: 8 November 2016 Date of orders: 08 November 2016 Decision date: 08 November 2016 Jurisdiction: Guardianship Division Before: [NAME], Senior Member (Legal) [NAME], Senior Member (Professional) [NAME], General Member (Community) Decision: The Tribunal orders that:

1. The estate of [NAME] is subject to management under the [NAME] Act 2009 (NSW).

2. The management of the estate of [NAME] is committed to the [NAME].

3. This order be reviewed by the Tribunal within 12 months. Catchwords: GUARDIANSHIP – application for a financial management order – best interests – conflict of interest between financial interests of subject person and attorney – discretion to make a financial management order – power of attorney not operating to meet subject person's best interests – consideration of who to appoint as financial manager – reviewable financial management order made – appointment of the [NAME] as financial manager Legislation Cited: Guardianship Act 1987 (NSW), ss 4, 25M Cases Cited: Application by AMAM; Re SAM [2011] NSWSC 503 CJ v AKJ [2015] NSWSC 498 Holt & Anor v Protective Commissioner (1993) 31 NSWLR 227 M v M [2013] NSWSC 1495 McD v McD (1983) 3 NSWLR 81 P v NSW Trustee and Guardian [2015] NSWSC 579 Re W and L (Parameters of Protected Estate Management Orders) [2014] NSWSC 1106 Texts Cited: Nil Category: Principal judgment Parties: [NAME] (subject person) [NAME] (applicant) [NAME] (a person appointed by a power of attorney) [NAME] (a person appointed by a power of attorney) The [NAME]: Nil File Number(s): 62890 Publication restriction: Decisions of the Guardianship Division of the Civil and Administrative Tribunal have been anonymised to remove any information that may identify any person involved in the Tribunal's proceedings (s 65, Civil and Administrative Tribunal Act 2013 (NSW)).

REASONS FOR DECISION

FINANCIAL MANAGEMENT APPLICATION

What the Tribunal decided 1. The Tribunal committed the estate of [NAME] to the management of the [NAME]. The Tribunal ordered a review period of one year.

Background 1. [NAME] is an 86-year-old woman, who has been diagnosed with advanced dementia. She lives in a [NAME]. Her husband, [NAME], passed away in June 2016. She has two sons: [NAME] and [NAME].

2. The Tribunal has been advised that on 17 August 2004, [NAME] appointed [NAME] and [NAME] with her power of attorney.

3. On 14 June 2016, the General Manager of the [NAME], lodged an application for the appointment of a financial manager for [NAME]. The application states that [NAME]'s accommodation fees were significantly in arrears and that the contract, required by law, for [NAME] to enter permanent care and other paperwork has not been completed by the [NAME], despite numerous requests.

4. The matter was initially listed on 2 September 2016. On that date, the Tribunal adjourned the hearing for a period of approximately seven weeks to a date to be fixed by the Registrar. The Tribunal also made directions that [NAME] provide to the Tribunal, by no later than 16 September 2016: 1. a copy of any power of attorney executed by [NAME]; 2. a copy of [NAME]'s bank statements from 1 May 2015 to date; 3. copies of any and all pleadings pertaining to [NAME] in the Supreme Court; and 4. written submissions explaining the nature of any such proceedings.

1. The matter was adjourned because [NAME] told the Tribunal that proceedings were pending in the Supreme Court in relation to the estate of the late-[NAME]. He also indicated that he believed there was an application before the Supreme Court for the appointment of a financial manager for [NAME]. The Tribunal, therefore, decided that it was appropriate to adjourn the hearing so that that issue might be clarified.

2. No further documents have been received by the Tribunal and [NAME] has not complied with the Tribunal's directions to produce documents.

3. This is the adjourned hearing of the financial management application.

The hearing 1. At the end of these Reasons for Decision are lists of the parties to the application and the witnesses who attended the hearing. [Appendix removed for publication.]

What did the Tribunal have to decide? 1. The questions to be considered by the Tribunal are: * Is [NAME] incapable of managing her affairs? * Is there a need for another person to manage [NAME]'s affairs and is it in her best interests for a financial management order to be made? * If so, who should be appointed financial manager?

Is [NAME] incapable of managing her affairs? 1. The test for determining a person's capability to manage his or her affairs has been described as follows (P v NSW Trustee and Guardian [2015] NSWSC 579, [307]–[308]): Is a person reasonably able to manage his or her own affairs in a reasonably competent fashion, without the intervention of a [financial manager] charged with a duty to protect his or her welfare and interests? … [A] focus for attention is whether the person is able to deal with (making and implementing decisions about) his or her own affairs (person and property, capital and income) in a reasonable, rational and orderly way, with due regard to his or her present and prospective wants and needs, and those of family and friends, without undue risk of neglect, abuse or exploitation.

1. In considering whether the person is "able" in this sense, consideration may be given to: * past and present experience as a predictor of the future course of events; * support systems available to the person; and * the extent to which the person, placed as he or she is, can be relied upon to make sound judgments about his or her welfare and interests: see Lindsay J in CJ v AKJ [2015] NSWSC 498, [38], and P v NSW Trustee and Guardian [2015] NSWSC 579, [309].

1. The relevant time for considering whether a person is incapable of managing his or her affairs is not merely the day of the hearing but the reasonably foreseeable future (McD v McD (1983) 3 NSWLR 81, at [86]). See Lindsay J in Re W and L (Parameters of Protected Estate Management Orders) [2014] NSWSC 1106 at [20]: Each case must, of course, be considered on its own facts, including not only actual facts presently known but also, so far as they can be known, prospective developments.

1. The Tribunal was provided with a report of Dr Z, Consultant Geriatrician, dated 7 December 2015. Dr Z reported that [NAME] was known to her General Practitioner, Dr Y, who was treating her for advanced dementia. Dr Z also noted that [NAME] is living in a dementia specific unit and that her recent significant weight loss reflects her advanced dementia.

2. A more recent report of Dr X, dated 10 June 2016, corroborates the diagnosis of dementia.

3. The applicant is the General Manager of the [NAME]. She confirmed that [NAME] lives in the dementia specific unit and does not communicate very much. She expressed the view that it would be impossible for [NAME] to manage her own finances. 4. [NAME], son and attorney pursuant to a power of attorney, agreed with the applicant's assessment in this regard.

5. On the basis that the applicant's assessment was consistent with the medical evidence, and because it was not contested, the Tribunal accepted the applicant's evidence.

6. On the basis of that evidence, the Tribunal determined that [NAME] is incapable of managing her affairs.

Is there a need for a financial management order? 1. When the application was made, the applicant indicated that [NAME]'s [NAME] fees were over $12,000 in arrears. This was still the case when the matter was most recently before the Tribunal on 2 September 2016.

2. However, the applicant told the Tribunal that [NAME] paid the accommodation fees shortly after that hearing. There is a more recent account for almost $1600, which is not due until 17 November 2016, outstanding.

3. The applicant said that the [NAME] has a statutory obligation to ensure that the contract in relation to [NAME]'s placement of the [NAME] has been completed. Furthermore, there is a need for a financial manager to elect whether [NAME] should pay the refundable lump sum (bond) or an extra $35 per day accommodation fee.

4. She said that Centrelink has assessed [NAME]'s assets and has determined that, were she to pay a refundable lump sum, she would be required to pay $209,000 for her current room. In the alternative, the extra daily fee is payable.

5. The applicant said that she has made numerous attempts to have the [NAME] make that decision and complete the necessary paperwork. 6. [NAME] attended the hearing. He told the Tribunal that he could not understand why Centrelink had assessed [NAME]'s assets to be sufficiently high that she is required to pay a refundable deposit. He gave evidence that the house in which [NAME] previously lived belongs to him because he exercised an option to purchase the property in 2004. He told the Tribunal that [NAME] does not have any assets apart from her bank accounts and whatever she is due to inherit from her late-husband's estate.

7. When the Tribunal asked him why the documentation had not been completed in accordance with the request from the [NAME], he said that he did not have the forms and that he would be prepared to sign the documentation. He requested an adjournment to enable him to attend the [NAME] and complete those forms.

8. The Tribunal advised [NAME] that the matter had been previously adjourned in order to enable him to seek advice and provide further information to the Tribunal. The Tribunal reminded [NAME] of the Tribunal's guiding principles, which makes it undesirable that hearings should be delayed unless there are exceptional circumstances. [NAME] did not provide any evidence of any such circumstances in this instance. The Tribunal asked [NAME] why he had not complied with the directions of the Tribunal. He said that he had provided all the necessary documentation to his solicitor, [NAME], and had expected that [NAME] would provide the documentation to the Tribunal.

9. The Tribunal notes that it has not received any application for [NAME] to be legally represented. 10. [NAME] did not attend the hearing on this occasion, or on 2 September 2016. He did, however, contact [NAME] during the course of the hearing by telephone. The Tribunal granted [NAME] two brief adjournments so that he could confer with [NAME]. 11. [NAME] told the Tribunal that during the second adjournment, [NAME] drove to the venue in which the hearing was being conducted and handed [NAME] a bundle of papers. These papers included the power of attorney document that had been previously requested by the Tribunal. On the basis of that document, the Tribunal is satisfied that [NAME] appointed [NAME] and [NAME] jointly as her [NAME] on 17 August 2004.

12. The documents that [NAME] tendered to the Tribunal following the short adjournment included copies of an Affidavit submitted to the Supreme Court with respect to probate proceedings pertaining to the estate of the late-[NAME]. There was no evidence of any application in the Supreme Court for the appointment of a financial manager for [NAME]. In the absence of any such evidence, the Tribunal found that it was appropriate for it to proceed with the hearing before it.

13. The Tribunal considered [NAME]'s application for a further adjournment and decided not to grant it. [NAME] told the Tribunal that he had been overseas for five weeks during the previous adjournment, that does not, in the view of the Tribunal, provide satisfactory explanation for his failure to comply with directions, particularly in circumstances where he has the assistance of a solicitor. 14. [NAME] told the Tribunal that the other attorney, [NAME], does not have a great deal of involvement in the management of [NAME]'s affairs. The Tribunal notes that [NAME] did not attend the hearing on either occasion, or did he provide an explanation for his absence.

15. The applicant told the Tribunal that she had sent a copy of the forms to [NAME] on no fewer than two occasions and that she had also sent mail to him by registered post on three further occasions. She said she did not receive any response. 16. [NAME] did not dispute that evidence. The Tribunal, therefore, accepted the applicant's evidence. The Tribunal notes that it is also consistent with the fact that [NAME] appeared to find it difficult to comply with the Tribunal's directions.

17. In the Affidavit that was tendered by [NAME], the Tribunal notes that the [NAME], who are seeking to be appointed as executors to the estate of the late [NAME], testified that a property in regional NSW, formed part of the estate of the late-[NAME]. Despite having signed that Affidavit, [NAME] told the Tribunal that that property belongs to him, not to his late father's estate or to [NAME].

18. Because of this apparent discrepancy, the Tribunal is satisfied that there is a need for a financial manager to ascertain the nature and extent of [NAME]'s estate and the benefits to which she may be entitled from her late-husband's estate.

19. The Tribunal also accepts that there is a need for a financial manager to liaise with Centrelink to ensure that a correct assets assessment has been conducted. It appears that Centrelink have formed the view that the property forms part of [NAME]'s assets and she is being charged accordingly in accordance with that assessment. This has produced the result that [NAME] is being penalised as a result of the uncertainty around the ownership of the property in regional NSW. This is a matter, which needs to be resolved in [NAME]'s best interests. The Tribunal also accepts that there is a need for the contracts to be signed at the [NAME].

20. For those reasons, the Tribunal was satisfied that there is a need to appoint someone to manage [NAME]'s affairs and that it is in her best interests that a financial management order be made.

Who should be appointed as financial manager? 1. In appointing a financial manager, as in making all other orders under the Guardianship Act 1987 (NSW), the Tribunal must act with the interests of the person concerned as the paramount consideration and in accordance with the other principles set out in s 4 of the Guardianship Act.

2. Section 25M of the Guardianship Act provides that, if the Tribunal makes a financial management order, it may appoint a suitable person to manage the person's estate or may commit the management of the estate to the [NAME].

3. In Holt & Anor v Protective Commissioner (1993) 31 NSWLR 227, the Court said that the dominant consideration in making orders about financial managers was the welfare of the person. The President of the Court of Appeal emphasised the Court's broad discretion in deciding who should be financial manager but also set out possible considerations as to the competing advantages of the then Protective Commissioner and a family member as the manager of an estate. The [NAME] now exercises the role of the Protective Commissioner.

4. On the side of the then Protective Commissioner was seen to be the manifest independence of the statutory office, the advantages of a dispassionate and neutral approach in situations of family conflict and divided views as to the best interests of the person, expertise, and experience in managing estates, an impeccable reputation and the security provided to an estate against loss or damage.

5. The advantages of the appointment of a family member were more economic management of smaller estates (that is, freedom from fees) and a greater familiarity with assets and liabilities in smaller estates, a greater capacity of a person with a disability to interact with the manager so as to exercise a greater influence over the broad directions of the management of the estate, love and affection for and knowledge of the protected person and concern for his or her quality of life, and particular qualities or qualifications enabling family members to act as managers. 6. [ADDRESS] considered that interrelated property interests in a family situation, where a conflict of interest and duty may be "more apparent than real", should not necessarily present an absolute bar to appointment of a family member who is otherwise appropriate. However, when appointing a family member, a decision maker must be satisfied that the estate, income and capital assets, will be utilised to advance the interests and quality of life of a protected person rather than to eventually increase the assets of the family.

7. In Application by AMAM; Re SAM [2011] NSWSC 503, Hallen AsJ stated: [34] It would be unwise to attempt any definition of the matters that may legitimately be enquired into to determine whether the applicant is suitable. Each case must depend on its own circumstances. Needless to say, however, the Court must consider, at least, the proposed manager's character, honesty and ability to manage, diligently, the managed person's property in the managed person's best interests.

1. The matters or "guidelines" that should be considered when determining who to appoint as financial manager, as established in Holt & Anor v Protective Commissioner (1993) 31 NSWLR 227, are discussed and expanded upon by Lindsay J in M v M [2013] NSWSC 1495 at [50].

2. The applicant proposed that the [NAME] should be appointed. [NAME] initially expressed the view that he could be the financial manager and then asked whether a solicitor, such as [NAME], could be appointed.

3. The Tribunal notes that [NAME] is one of the two [NAME] pursuant to a power of attorney. The Tribunal has found that that appointment has not been successful in ensuring that [NAME]'s financial affairs have been effectively managed. The Tribunal notes that her accommodation fees were in arrears of over $12,000 until this application was made. The [NAME] have not attended to the necessary paperwork.

4. Furthermore, the Tribunal notes that [NAME] has a conflict of interest, which, in the view of the Tribunal, precludes him from consideration as a candidate for appointment. [NAME] claims that he purchased the house, which is referred to in the Affidavit before the Supreme Court. Clearly, Centrelink has considered this house to form part of [NAME]'s assets, as a result of which she is suffering financial detriment.

5. Whilst this situation remains unresolved, the Tribunal has formed the view that [NAME] is not a suitable person to appoint as the financial manager.

6. The Tribunal also notes that [NAME] was not present at the hearing and there was no other evidence before the Tribunal to suggest that he was willing or able or suitable to be appointed as financial manager.

7. There is no other private person proposed. The Tribunal was satisfied that the estate of for [NAME] should be committed to the [NAME].

Should a reviewable financial management order be made? 1. The Tribunal may determine that a financial management order should be reviewed within a specified time.

2. In this matter, the Tribunal notes that the issues that have given rise to the need for the appointment of a financial manager are likely to be resolved within a 12-month period.

3. In accordance with its obligations to make the least restrictive order possible, the Tribunal is of the view that it is in [NAME]'s best interests that the order be reviewed in one year. If the issues requiring the attention of a financial manager are resolved within that one year period, the Tribunal can give consideration to whether the existing power of attorney will be more effective in the future.

********** 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 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 December 2018