Tribunal Finds Claimant Incapable of Managing Affairs Due to Financial Exploitation

The Tribunal found the claimant incapable of managing her affairs due to financial exploitation and appointed the NSW Trustee and Guardian to manage her estate.

NSW Civil and Administrative Tribunal New South Wales Medium Neutral Citation: FZM [2020] NSWCATGD 79 Hearing dates: 20 November 2020 Date of orders: 20 November 2020 Decision date: 20 November 2020 Jurisdiction: Guardianship Division Before: [NAME], Senior Member (Legal) [NAME], Senior Member (Professional) [NAME], General Member (Community) Decision: HPM is joined as a party.

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

2. The management of the estate of FZM is committed to the [NAME]. Catchwords: [NAME] MANAGEMENT – application for a [NAME] management order – no medical evidence on ability to manage affairs – victim of online scams – loss of significant sums of money – risk of further [NAME] exploitation – [NAME] appointed INTERLOCUTORY – joinder of party – party has genuine concern for subject person – applicant supports joinder – father joined Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW), s 44(1), cl 7(1) of Sch 6 Guardianship Act 1987 (NSW), ss 4, 25E, 25G, 25M Cases Cited: CJ v AKJ [2015] NSWSC 498 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: 001: [NAME] Management Application

FZM (the person) [NAME] (applicant) HPM (joined party) [NAME]: Nil File Number(s): NCAT 2020/00273662 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

What the Tribunal decided 1. HPM was joined as a party to the application. 2. The Tribunal committed FZM's estate to the management of the [NAME].

Background 1. FZM is a 42-year-old woman who lives with her brother, Mr Z, in a home they inherited from their mother in the Upper North Shore of Sydney. Their father, HPM, and [NAME], live in Spain.

2. On 21 September 2020, [NAME] lodged an application for [NAME] management for FZM. He said FZM has been the victim of an online scam, which has resulted in her transferring most of her money to a fraudulent [COMPANY]. [NAME] said his [NAME] is planning to start selling her properties.

3. On 8 November 2020, HPM applied to be joined as a party to the proceedings.

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.]

2. The hearing was conducted in Sydney. Unfortunately, due to the COVID-19 pandemic a face-to-face hearing was not possible. FZM, Mr Z and HPM participated in the hearing by telephone. [NAME] attended by video conference. The Tribunal was assisted by a telephone interpreter in the Spanish language for [NAME].

Application by HPM to be joined as a party 1. The Tribunal may order that a person be joined as a party to proceedings if the Tribunal considers that the person should be joined: Civil and Administrative Tribunal Act 2013 (NSW), s 44(1). For proceedings in the Guardianship Division of the Tribunal, the Tribunal must be satisfied that the person should be joined (whether because of the person's concern for the welfare of the person the subject of proceedings or for any other reason): Civil and Administrative Tribunal Act, cl 7(1), Sch 6.

2. HPM told us he has daily contact with his daughter and is very concerned about her. FZM did not object to the request and [NAME] strongly supported it.

3. We were persuaded that HPM has a close and continuing relationship with his daughter and is genuinely concerned about her welfare. We considered that FZM may well benefit from the involvement of her father in the proceedings. There was no objection from the other parties and we could not see that there was any private, sensitive, or confidential material available to which HPM should not have access. The Tribunal ordered that HPM be joined as a party to the application.

[NAME] MANAGEMENT APPLICATION

What did the Tribunal have to decide? 1. Section 25E of the Guardianship Act 1987 (NSW) ("the Act") provides that the Tribunal may make a [NAME] management order and s 25G of the Act sets out the grounds on which an order can be made.

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

Is FZM 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 [[NAME] 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 be considered on its own facts, including not only actual facts presently known but also, so far as they can be known, prospective developments.

2. We were not provided with any evidence from medical or allied health professionals regarding FZM's ability to manage her affairs. FZM advised a Tribunal registry officer prior to the hearing that she could not get an appointment with a psychiatrist until after the hearing.

3. FZM told us she is able to manage her own affairs. She believes her [NAME] is overreacting and there has been a misunderstanding regarding the money she has transferred to her [COMPANY]. FZM said she and her brother inherited a home in the Upper North Shore of Sydney from their mother when she passed away eight years ago. FZM was unsure if the home was owned jointly or as tenants in common. FZM said she and her brother share utility bills and household expenses. She does not have any debts.

4. In response to questioning regarding her [COMPANY], FZM said she opened an account with a Swiss bank ([Bank name removed for publication.] based in Geneva) after being advised to do so by her then United Kingdom bank. FZM and her brother received a cash inheritance from their mother from her superannuation, although FZM could not recall the specific amount. She thought it was around $56,000. Her father said he understands FZM received around $250,000. FZM deposited the money into her [COMPANY]. Around 12 months ago, Mr Y became her accounts manager. He advised FZM in around July 2020 that her [COMPANY] had been closed and she needed to transfer 39,000 Swiss francs (approximately AU$58,000) to enable the account to be reopened. FZM advised Mr Y she did not have that much money, so Mr Y reduced the sum required to 10,000 Swiss francs (AU$15,000). FZM transferred the reduced amount to her [COMPANY] around two weeks before the hearing. FZM expressed concern that the money she transferred two weeks ago has not yet arrived in her account.

5. FZM confirmed she has never been able to withdraw money from her [COMPANY]. When asked about an email from Mr X, chief operating officer, to [NAME], (date indecipherable), which said an employee by the name of [NAME] has never worked at the bank and FZM is the victim of a "relatively common scam", FZM replied her account manager's name is Mr Y, not [NAME], and the bank is very guarded about the privacy of its employees. Mr X also said in his email that the bank does not have any clients living in Australia. FZM said she has not made any direct enquiries with her Swiss bank about her account being closed. Mr Y telephones her regularly and she has no doubt whatsoever that he works for the bank. FZM said she had a number of accounts with [COMPANY] that were also closed by the bank a few weeks before the hearing. The total in her [COMPANY] accounts was less than $1,000. FZM also has two accounts with [COMPANY], one that she has had for 25 years with a balance of $700, and a credit card account with a nil balance. She receives a Jobseeker payment from [NAME] and works part-time at a supermarket chain. FZM's [NAME] and employment income is paid into her [COMPANY] savings account. FZM also owns an apartment in Madrid, which her father purchased for her. HPM currently lives in the apartment. FZM told us she has never visited the apartment.

6. The Tribunal was provided with numerous emails between FZM and Mr Y. We were also provided with emails from FZM to her family members, requesting additional funds to reactivate her [COMPANY]. FZM told us she withdrew money from her superannuation fund and deposited into her [COMPANY], as well as her brother's superannuation, although she had difficulty recalling the sums involved. FZM could not be sure how much she had transferred to her [COMPANY] in total. She appeared reluctant to discuss the figures involved, but at one stage indicated it was around $50,000. Her father and [NAME] believe that FZM has transferred more than $250,000 to various fraudulent accounts. We were not provided with copies of FZM's banks statements so were unable to determine the sum involved.

7. The Tribunal was also provided with copies of emails between Mr V and FZM. Mr V first contacted FZM in April 2017, claiming she may benefit from an inheritance of more than USD$62 million. The letterhead indicated he worked for [COMPANY], but did not include an address. It appears FZM responded to the letter and now speaks regularly with Mr V. In an email from Mr V to FZM on 19 November 2019, he calls himself [NAME] and advises FZM that she should "…go ahead with the payment [to her [COMPANY]] to avoid further complications, it shall be well my sister we have worked hard for this money and we will surely enjoy it…"

8. Mr Z was unable to provide any additional information. He indicated the amount his sister has sent to her [COMPANY] is significant, but seemed content that FZM trusts her accounts manager, Mr Y. 9. [NAME] noted the money his [NAME] transferred two weeks ago was deposited to an account in Indonesia, not Switzerland. He believes FZM has been the victim of a scam, although she has cannot see it.

10. HPM confirmed he lives in an apartment that he purchased for his daughter. He has also established a bank account in Spain in FZM's name, which has a balance of around €22,000.

11. There was no evidence to suggest that FZM has ever been diagnosed with a disability that would impact upon her decision making. Nonetheless, during the hearing FZM's speech was pressured and her responses repetitive. She was, at times, defensive. In an email to the Tribunal registry, dated 3 November 2020, FZM said "…I am NOT being swindled or scammed and all of the outbound transfers that I have performed have all successfully been deposited into my bank account in Switzerland…"

12. Significantly, FZM demonstrated extremely limited insight into her current predicament. FZM did concede she does not have access to any of the funds in her [COMPANY] and expressed some uneasiness about that.

13. Despite her evidence to the contrary, we were persuaded FZM has been the victim of an online scam and has dissipated all of the cash she inherited from her mother, as well as some or all of her superannuation. The emails to FZM from Mr Y and Mr V contain threats regarding closure of her accounts and repeated demands for more funds. A number of the emails advise FZM she is being sent a final warning from the legal and compliance department of the bank. FZM repeatedly defended the perpetrators of the scam and seemed incapable of linking the loss of her money with Mr Y, whom she genuinely believes is her accounts manager. FZM described Mr V as a close personal friend and business associate who calls her frequently. Importantly, FZM has responded to requests for additional funds by sending more money, rather than contacting the bank directly to check that the requests are legitimate. We have no doubt they are not, and FZM will likely never be able to recover her money. FZM's failure to make contact with the bank or law enforcement agencies is of considerable concern and indicates she is naive and vulnerable. Based on her past conduct, we were not confident FZM could be relied upon to make sound judgements about her welfare and interests.

14. We were persuaded that FZM is incapable of managing her affairs.

Is there a need for a [NAME] management order? 1. In our view, FZM is at high risk of losing her home as she lacks insight that she has been the victim of an online scam. She has been urgently seeking additional funds from her relatives in Spain so her [COMPANY] can be reopened. FZM told us she has less than $700 in her account with [COMPANY], indicating all of her savings are gone. We were troubled that FZM has also dissipated some or all of her brother's superannuation, placing his [NAME] future at risk. [NAME] contacted the police in Spain but was advised that the matter could only be investigated by the Australian authorities. No report has yet been made to the Australian Federal Police or Scamwatch.

2. We were satisfied that there is a need to appoint someone to manage FZM's affairs.

Is it in FZM's best interest that a [NAME] management order be made? 1. FZM wishes to maintain her [NAME] independence and we acknowledge that appointing a [NAME] manager is likely to cause her some distress. Nonetheless, we were satisfied that FZM has been financially exploited through one or more online scams and is at risk of further exploitation due to her gullibility and lack of insight. FZM may dissipate all of her assets unless prevented from sending more money to bogus overseas accounts. While FZM's father and [NAME] are deeply concerned about her conduct, their pleas to stop her sending additional sums have failed. We had no doubt [NAME] are motivated by their genuine concern for FZM's welfare and [NAME] security. Unfortunately, FZM wholly trusts Mr Y and Mr V and cannot be persuaded their motives are deceitful. FZM's future [NAME] security and reputation are at risk. She is also putting her brother's [NAME] security at risk.

2. We were satisfied that it is in the best interests of FZM that a [NAME] management order be made.

Who should be appointed as [NAME] manager? 1. In appointing a [NAME] manager, as in making all other orders under the Act, 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 Act.

2. Section 25M of the Act provides that, if the Tribunal makes a [NAME] 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. FZM's family did not request to be appointed as her [NAME] manager and, in our view, it would be very difficult for her [NAME] to manage her affairs from Spain. Appointing a family member would likely impact on her relationships with them given FZM is opposed to the order. We decided that FZM's estate should be committed to the management of the [NAME].

********** 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: 01 November 2021