NSW Civil and Administrative Tribunal New South Wales Medium Neutral Citation: QNH [2022] NSWCATGD 9 Hearing dates: 20 January 2022 Date of orders: 20 January 2022 Decision date: 20 January 2022 Jurisdiction: Guardianship Division Before: A R Boxall, Senior Member (Legal) Associate Professor C Willcox, Senior Member (Professional) P J McGirr, General Member (Community) Decision: 001: Review of an Enduring Power of Attorney In relation to the enduring power of attorney made by QNH on 16 January 2018 which appointed EYH and NAH as attorney(s) the Tribunal determines, orders or declares: to carry out a review of the operation and effect of the enduring power of attorney. Not to make an order under s 36 of the Powers of Attorney Act 2003 (NSW). The application for review of the enduring power of attorney is treated as an application for a financial management order under Pt 3A of the Guardianship Act 1987 (NSW). 003: Review or Revoke Financial Management Order The Financial Management order for QNH made on 28 July 2021 has been reviewed. The order now is as follows: 1. The estate of QNH is subject to management under the NSW Trustee and Guardian Act 2009 (NSW). 2. The management of the estate of QNH is committed to the NSW Trustee and Guardian. Catchwords: REVIEW OF ENDURING POWER OF ATTORNEY– where the subject person is now a permanent resident of another state – power of attorney made under the laws of NSW – Tribunal found to have jurisdiction – review of the operation and effect of an enduring power of attorney – whether an order under s 36 of the Powers of Attorney Act should be made – decision to treat application to review an enduring power of attorney as an application for a financial management order – subject person is of advanced age – subject person with Alzheimer's type dementia – subject person not capable of managing their own affairs – significant conflict within subject person's family – no private person suitable to be appointed – NSW Trustee and Guardian appointed – order made. FINANCIAL MANAGEMENT – requested review of an interim financial management order – whether financial management order should be revoked – in the subject person's best interests for the financial management order to continue – decision not to revoke financial management order – application dismissed. Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW), s 36 Guardianship Act 1987 (NSW), ss 4, 4(a), 25H Powers of Attorney Act 2003 (NSW), ss 5(f), 36, 36(1)-(2) Victorian Guardianship and Administration Act 2019 (Vic) Cases Cited: Burns v Corbett [2018] HCA 15 NBL [2019] NSWCATGD 5 Zistis v Zistis [2018] NSW 722 Texts Cited: None cited. Category: Principal judgment Parties: 001: Review of an Enduring Power of Attorney QNH (the person) FZN (applicant) NAH (attorney) EYH (attorney) NSW Trustee and Guardian 003: Review or Revoke Financial Management Order QNH (the person) EYH (applicant, appointed financial manager, carer) NSW Trustee and Guardian Representation: Nil. File Number(s): NCAT 2021/00153529 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 REVIEW OF ENDURING POWER OF ATTORNEY APPLICATION TO REVIEW OR REVOKE FINANCIAL MANAGEMENT ORDER Background 1. QNH is 92 years old and lives in regional Victoria with her great-nephew and attorney, EYH, his wife and their child. Before moving there, she lived with EYH at her home in Sydney's lower north shore. QNH, who has been blind since childhood, is unmarried and has no children. QNH has at least one surviving sister, and in addition to EYH, a large extended family, many of whom participated in today's hearing and expressed an interest in her financial welfare. 2. It appears to be common ground amongst all family members that QNH is financially well off, having over the years received a variety of gifts and inheritances from various family members, the objective of which was seemingly to ensure her financial welfare having regard to her disability. In a report dated 20 January 2022, NSW Trustee and Guardian indicates that QNH has a net worth of approximately $2,764,000. 3. On 8 June 2016, QNH executed a Revocation of Power of Attorney, under which she revoked a power of attorney dated 11 November 2015 under which she appointed her niece, Ms Z, as her attorney. This revocation was registered with the NSW Registrar-General on 16 June 2016 as [Information removed for publication.]. 4. On 16 January 2018, QNH granted an enduring Power of Attorney (the EPA) to her sister, NAH and her great-nephew, EYH. The EPA was registered with the NSW Registrar-General on 1 March 2018 as [Information removed for publication.]. 5. On 28 May 2021, the Tribunal received an application from FZN, who is one of QNH's nieces, seeking a review of the EPA. 6. On 28 July 2021, the Tribunal: 1. Decided under s 36(1) of the Powers of Attorney Act 2003 (NSW) to carry out a review of the operation and effect of the EPA: 2. In consequence, decided under s 36(2) of that Powers of Attorney Act not to make an order under s 36(1) of that Act, but rather to treat the matter as an application for a financial management order; 3. Made an interim financial management order for QNH, entrusting the management of her estate for a period of six months to the NSW Trustee and Guardian; and 4. Ordered EYH to provide no later than seven days before this review hearing a report from QNH's treating general practitioner or geriatrician addressing inter alia her capacity to make informed decisions and manage her financial affairs. 1. On 13 August 2021, the Tribunal received from EYH an application seeking the revocation of that interim financial management order. 2. On 29 September 2021, the Victorian Civil and Administrative Tribunal made an order in which, at the request of NSW Trustee and Guardian, it registered that interim financial management order under the Victorian Guardianship and Administration Act 2019 (Vic). 3. On or about 14 January 2022, EYH provided to the Tribunal a medical report in apparent compliance with the order summarised in [6(4)] above. 4. The purpose of today's hearing is to resume the review of the EPA on the expiry of the interim financial management order, and to undertake the review of the interim financial management order requested by EYH. 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.] Jurisdictional issues 1. When the Tribunal made the interim financial management order under review, it concluded that it had jurisdiction to hear the review application since, amongst other reasons: 1. The review was made under the Powers of Attorney Act, in relation to an enduring power of attorney granted in accordance with the provisions of that Act; 2. The Tribunal's jurisdiction is protective in nature; and 3. There was no evidence as to the permanency or otherwise of QNH's presence in Victoria. 1. Although the evidence at today's hearing suggested that QNH was now permanently resident in Victoria, that does not detract from the underlying jurisdictional facts that: 1. the EPA is governed by, was made and takes its force under the laws of New South Wales, 2. one of the attorneys appointed under it, Ms NAH, is resident in New South Wales, and 3. its enduring quality is derived from the Powers of Attorney Act of this state. Those jurisdictional facts are sufficient to establish the Tribunal's jurisdiction in this case, notwithstanding what appear to be QNH's permanent move to Victoria. 1. Moreover, as the Tribunal noted in its decision in NBL [2019] NSWCATGD 5, applications such as the present ones do not involve matters which engage the so-called diversity jurisdiction considered by the High Court of Australia in Burns v Corbett [2018] HCA 15. This is because: 1. The Tribunal's function in the present case is not characterizable as a judicial power under the criteria summarised by Latham J in Zistis v Zistis [2018] NSW 722; and 2. In particular, the powers exercised by the Tribunal in the present case are administrative in nature rather than judicial, consistently with the considerations outlined by the Tribunal in [38] to [41] of its reasons for decision in NBL. Applicable general principles 1. Section 4 of the Guardianship Act 1987 (NSW) provides as follows: 4 General Principles It is the duty of everyone exercising functions under this Act with respect to persons who have disabilities to observe the following principles – (a) the welfare and interests of such persons should be given paramount consideration, (b) the freedom of decision and freedom of action of such persons should be restricted as little as possible, (c) such persons should be encouraged, as far as possible, to live a normal life in the community, (d) the views of such persons in relation to the exercise of those functions should be taken into consideration, (e) the importance of preserving the family relationships and the cultural and linguistic environments of such persons should be recognised, (f) such persons should be encouraged, as far as possible, to be self-reliant in matters relating to their personal, domestic and financial affairs, (g) such persons should be protected from neglect, abuse and exploitation, (h) the community should be encouraged to apply and promote these principles. 1. Section 36 of the Civil and Administrative Tribunal Act 2013 (NSW) provides as follows: 36 Guiding principle to be applied to practice and procedure … … The "guiding principle" for this Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. 1. These two sets of principles together inform the approach taken by the Tribunal in this hearing. Reasoning 1. When the Tribunal made the interim financial management order under review, it found that: 1. The evidence before it gave rise to the possibility that her estate was at risk; but 2. There was a lack of evidence concerning her capability to manage her affairs. 1. The consequences of these findings were fourfold: 1. Firstly, in view of the findings summarised in [18(1)] it decided under s 36(1) of the Powers of Attorney Act to undertake a review of the operation and effect of the EPA; 2. Secondly, having regard to those findings it decided not to make orders under s 36 of the Powers of Attorney Act, but rather to treat the application as one for a financial management order; 3. Thirdly, having regard to the findings in [18(2)], it decided to make an interim financial management order only under s 25H of the Guardianship Act, "pending the Tribunal's further consideration of the capability of the person to whom the order relates to manage his or her own affairs"; and 4. Finally, it ordered EYH to obtain a medical report concerning QNH's capacity. 1. EYH provided on or about 14 January 2022 a report concerning QNH's cognitive capacity, prepared by Dr Y, a specialist geriatrician who practises in regional Victoria. The report is dated 6 January 2021, but EYH confirmed that this is a typographical error and the report was in fact issued on 6 January 2022. Dr Y refers to a report which was provided to him from a geriatrician who saw QNH nearly six years before and diagnosed at that time an early Alzheimer's type dementia. Dr Y's report is clear as to QNH's current position: "[QNH] clearly does not have the capacity to make any decisions regarding her financial affairs, her future medical care and accommodation. She was unable to understand any conversation that I attempted to have with her regarding her financial affairs and could not respond appropriately at home regarding her understanding of her own financial affairs. I understand that her hearing to determine decision-making powers is due shortly and I am happy for my letter to support the fact that [QNH] currently does not have the capacity to make decisions regarding these affairs as mentioned above". 1. The Tribunal's own experience during the hearing of attempting to engage with QNH to ascertain her views and wishes was not dissimilar to that reported by Dr Y. Indeed, after minimal contribution to the hearing, QNH eventually fell asleep. 2. In view of Dr Y's report, the Tribunal was therefore satisfied that QNH lacks the capacity to manage her affairs. 3. When the Tribunal made the order under review, it noted evidence in the form of bank statements which indicated a pattern of intermittent (but quite frequent) large cash withdrawals from her bank account which occurred at licensed premises with gaming machines, such as clubs. EYH explained these transactions in terms which the Tribunal found less than entirely convincing as it set out in its reasons: "[34] The applicant to the family members have accused [EYH] of mismanagement of QNH's accounts. They also state that the other attorney, [NAH], has dementia and is not capable of acting as attorney and that in any event, she plays no role as attorney leaving it all to [EYH]. He disputes these allegations and states that [QNH] makes her own decisions and manages her own financial affairs. In relation to the large daily bank withdrawals outlined above, he states that [QNH] used the funds to play bingo and other games. He was also present when the withdrawals were made from the ATMs and assisted [QNH] in the process. [35] We make no findings about the large and repeated withdrawals from [QNH]'s personal account as we have been unable to speak to [QNH] about the matter and obtain her evidence. However, we found [EYH]'s evidence to be vague and unsatisfactory, particularly his limited explanation as to how his aunt could operate the gaming devices as a blind person spending large sums of money to play these games. His limited recall is also more perplexing and concerning given he was present with [QNH] at the licensed premises when she was playing these games and assisted her to make withdrawals from the ATMs. Based on this evidence, we are satisfied that there is a need to conduct a review of the EPOA made by [QNH] on the 16 January 2018." 1. Nothing in the evidence or submissions provided in connection with the present reviews gave the Tribunal any reason to question either the reservations expressed, or the conclusions reached by the Tribunal in those reasons. 2. Indeed, information provided by NSW Trustee and Guardian in its report concerning QNH's financial affairs reinforced the concerns which underlay the remarks quoted above from the Tribunal's reasons: 1. This report noted that QNH's assets totalled $2,746,067.63 as at 20 January 2022. Included in these assets was a loan to a Ms X with a balance of $51,501.16 which, according to the report, was being repaid by QNH in fortnightly instalments of $200, the first of which was made on 5 October 2021. These instalments amount to $5,200 per annum, which offers QNH the prospect of having her loan repaid in full by the time she is aged 102. 2. Ms U, representing NSW Trustee and Guardian, said that her organisation has no information as to who Ms X is or her relationship with QNH. 3. EYH was able to enlighten the Tribunal, stating that: 1. Ms X is his daughter, 2. The loan was made to her in order to assist her in placing a deposit on her property in Melbourne, and 3. The loan was made on 22 February 2021 and reflected QNH's wishes to carry into a further generation the family of QNH's tradition of intergenerational family support. 1. EYH did not consider that there was any room to perceive even the appearance of a conflict of interest in substantial financial support being provided to his daughter in circumstances where: 1. not only was he QNH's attorney but also appeared to have a degree of preferred practical access to her financial affairs; 2. Ms W was one amongst many family members who might enjoy the benefit of QNH's intergenerational largesse; and 3. her cognitive decline which had been identified at least five years previously – see [20] above – had progressed to the point that, less than 12 months later, Dr Y was able to reach the firm and unqualified conclusions set out above. 1. Again, following the restrained approach of the earlier panel, the Tribunal refrains from making any specific findings about the precise circumstances of the loan to Ms X. The fact of the loan transaction does, however, reinforce the earlier panel's conclusion at [41] of its reasons, that "… The evidence before us gives rise to the possibility that [QNH]'s estate may be at risk". 2. Mr V, QNH's longstanding financial advisor, provided evidence concerning the composition and management of QNH's affairs. A matter of some interest to the Tribunal was the strong bias in her portfolio towards cash or cash equivalent investments, the returns from which are in the current environment likely to be modest. Mr V that QNH's investment portfolio had previously had a strong weighting towards residential property, but these had been sold and the proceeds largely invested in cash or cash equivalent investments, as set out in NSW Trustee and Guardian's report. This orientation towards cash reflects, he said, the investment instructions provided by QNH and EYH, although it eventually emerged from Mr V's evidence that, at least over the past year or so, the instructions primarily emanated from EYH, rather than QNH herself. 3. Numerous members of QNH's extended family participated in the hearing. All of them expressed concern to ensure that she was not financially exploited. The Tribunal could not but note that in some cases at least their interest in her financial welfare did not appear to be matched by a correspondingly lively interest in her personal well-being. In any event, the overall weight of views within her extended family was to support the continued management of her affairs by NSW Trustee and Guardian. 4. EYH's application seeks the revocation of the financial management order. His reasons for doing so are threefold: 1. QNH is now resident in Victoria. The registration of the order by the Victorian Civil and Administrative Tribunal, as noted in [8] above, in any event addresses this issue (if in fact it ever had any merit, which the Tribunal does not accept). 2. QNH has a financial adviser and an accountant. That may well be the case, but as Mr V's evidence indicated QNH or somebody on her behalf must from time to time instruct her financial adviser and accountant as to matters within the scope of their respective professional responsibilities. The fact that she has the services of appropriate professional advisers of itself creates this need and if she is incapable of providing instructions (as Dr Y's report indicates) somebody must be authorised to do so on her behalf. 3. He (EYH) is her enduring attorney under the EPA, so there is no need for a financial manager. This proposition is unconvincing for two reasons: 1. The EPA appoints both EYH and NAH as QNH's attorneys, but (1) it does not specify that their appointment is joint and several, so that the attorneys' appointment must logically be a joint one, requiring them to act together on all decisions, and (2) it does not provide for the appointment of an attorney to continue even if the other ceases to have capacity to perform his or her duties. Although there was no medical evidence concerning NAH's cognitive health, various family members were adamant that she too is affected by (and has been diagnosed with) dementia, although there appeared to be some debate as to whether the extent of her illness is currently such as to prevent her performing her duties as attorney under the EPA. There is, therefore, a possibility – to put it at its lowest – that (1) NAH may have vacated office as joint attorney by reason of a loss of capacity in accordance with s 5(f) of the Powers of Attorney Act, and (2) if so, that the appointment of joint attorneys under the EPA has failed. The Tribunal makes no finding to that effect; rather, it notes that there is at the very least a plausible argument to this effect, the existence of which recommends the continuation of the financial management order in order to avoid any risk of QNH's very substantial estate being left without clear and accountable management arrangements. 2. The reservations noted above as to certain aspects at least of EYH's historical involvement with QNH's estate emphasise the desirability in her financial interest of having an independent financial manager. 1. Nothing in EYH's application, therefore, is sufficient to convince the Tribunal to revoke the financial management order. 2. There is one final issue to be considered, which is the annual cost of independent financial management. Ms U indicated that the annual financial management costs of NSW Trustee and Guardian acting as QNH's financial manager are in the order of $15,000 per annum, given the size of her estate. While the Tribunal is loath to subject QNH's estate to these fees without good reason, it is satisfied that: 1. The costs of independent management are not disproportionate to the size of her estate and the amount potentially at risk from mismanagement; to put matters in perspective, these annual fees represent less than a third of the loan advanced to Ms X in February 2021; and 2. the concerns identified by the earlier panel and reinforced at today's hearing concerning QNH's estate being at risk, justify it in doing so prioritising independence and accountability of financial management over the fees payable to an independent manager. 1. Accordingly, bearing in mind its primary obligation under s 4(a) of the Guardianship Act to give paramount consideration to QNH's welfare and interests, the Tribunal has decided to confirm the financial management order, appointing NSW Trustee and Guardian as QNH's financial manager, and to dismiss EYH's review application ********** 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: 05 August 2022