CITATION: JI and anor v Protective Commissioner [2005] NSWADT 55 DIVISION: General Division APPLICANTS PARTIES: JI and JK RESPONDENT Protective Commissioner FILE NUMBER: 033353 HEARING DATES: 14/07/2004 & 19/08/2004 SUBMISSIONS CLOSED: 08/19/2004 DATE OF DECISION: 03/16/2005 BEFORE: Innes G - Judicial Member APPLICATION: Protected Estates Act - Protective Commissioner - powers as to property - Protective Commissioner - powers as to property MATTER FOR DECISION: Principal matter LEGISLATION CITED : Protected Estates Act 1983 CASES CITED: Re R (2000) NSWSC 886 APPLICANT REPRESENTATION: R Pepper, Counsel RESPONDENT T Tunbridge, Solicitor ORDERS: The decision of the respondent to sell the property in Turramurra owned by the first applicant, made on 29 August 2003, is affirmed. Section 126 of the Administrative Decisions Tribunal Act 1997 applies to this decision. Section 126 provides (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 This is a review of a decision of the Protective Commissioner pursuant to s 28A of the Protected Estates Act 1983. The decision relates to the first applicant, a person whose financial affairs have been placed in the hands of the Commissioner. It was made on 15 June 2001, and confirmed in a letter from the respondent to the applicants on 29 August 2003. The decision was to sell a property owned by the first applicant at Turramurra. 2 The review of the decision is sought by the person whose financial affairs are dealt with by the Commissioner (the first applicant), and by her husband (the second applicant). BACKGROUND 3 The first applicant in these proceedings was injured in a motor vehicle accident in 1985. The first applicant has some level of brain injury. She uses a wheelchair and is almost blind. She requires constant care which is currently provided by her husband, the second applicant. The first applicant was 67 years of age at the time of the hearing. 4 The second applicant was 76 years of age at the time of the hearing, and had had a pacemaker installed several years before following a heart attack. He is otherwise in good health for a man of his age. 5 In 1991, following an application by the first applicant's daughter, the Protective Commissioner was appointed by the Supreme Court to control the first applicant's financial affairs. The litigation arising from the motor vehicle accident was settled in 1999, and the money from that settlement was paid to the first applicant in January 2000. The first applicant was already the sole owner of the Turramurra property, following a divorce settlement with her first husband. 6 The relationship between the applicants and the Office of the Protective Commissioner has been a difficult one. There have been several attempts to remove the Protective Commissioner from his responsibilities, and interactions with the office have been volatile at times. Evidence from the applicants contains numerous references to their unhappiness with the way the funds have been administered. However, such references are of little relevance to the Tribunal's decision in this matter. 7 Following the settlement payment from the motor vehicle accident the applicants, with the support of the respondent, began looking for a property which would better suit their needs. The Turramurra property was on two levels, with no access for the first applicant to the upper floor. 8 After unsuccessful attempts to purchase a number of properties (caused in the applicants view by the tardiness and inflexibility of the respondent), the applicants found a suitable property at Peats Ridge. This property was purchased using funds from the settled motor vehicle litigation. 9 The respondent in these proceedings asserted that it agreed to the purchase of the Peats Ridge property on the proviso that the Turramurra property would be sold within twelve months of the purchase of the Peats Ridge property. The respondent asserted in the proceedings that the first applicant had agreed to this proviso. 10 The applicants asserted that this agreement had not occurred, and that in the alternative the agreement only occurred under the duress of needing a prompt decision by the respondent in order to secure the Peats Ridge property. They asserted that they did not wish to sell the Turramurra property, as they may wish to return to it at a later stage. 11 The agreement alleged to exist by the respondent arose out of a mediation or discussion between the parties following the purchase of the Peats Ridge property. The purpose of this "mediation" was to resolve proceedings which were on foot before the Supreme Court, and find a basis for settlement of the issues surrounding the Turramurra property. The applicants argued that - because the event concerned was a mediation - details of the discussion should remain confidential. The respondent argued that it was a discussion rather than a mediation, and that therefore evidence of the first applicant's agreement to sell the Turramurra property - provided by a staff member of the respondent - should be taken into account. 12 The applicants sought a review of the respondent's decision to sell the Turramurra property. The respondent had previously argued that this was not a decision they had made, but an agreement between the parties as a proviso to the respondent purchasing the Peats Ridge property. However, the Tribunal - at a previous hearing on 9 March 2004 - had determined that it did constitute a decision for the purposes of the Act, and was thus reviewable by the Tribunal. 13 Following the determination of this jurisdictional point, the hearing of the substantive issues took place on 14 July and 19 August 2004. ISSUES IN DISPUTE 14 The conclusion drawn from an analysis of the evidence put before the Tribunal in this matter is that much of it was not central to the issues in dispute. 15 Firstly, it is the Tribunal's view that the question of whether or not the first applicant agreed to the sale of the Turramurra property is not germane to the matters which the Tribunal must determine. The task of the Tribunal is to review the decision of the respondent to sell the Turramurra property. Whilst one construction of this "decision" may be that it arose from an agreement between the parties that the Peats Ridge property could be bought on the proviso that the Turramurra property would be sold within twelve months, it is the respondents decision, rather than any such agreement, which the Tribunal must review. 16 The Tribunal accepts and applauds the practise of the respondent in consulting with its "clients" and members of their family as part of its ongoing decision-making process. However, at the end of the day, such consultation cannot derogate from the fact that it is the respondent who must make the decision, and it is only the respondent's decision which the Tribunal must review. The first and/or second applicant's agreement may be a factor in the Tribunal's review of the decision, but it could only be one among a number of factors. The Tribunal will return to this point. 17 Secondly, the Tribunal accepts the submissions of the respondent - adopted by the applicants - that the test for review of the decision is whether the decision is in the best interests of the person concerned. The meaning of "best interests" was discussed by young J., in Re R (2000) NSWSC 886 at 35. He said- "I would agree with the Victorian AAT that "best interests" must involve the welfare health and well being of the person in a wider sense than is suggested by protection from neglect, misuse or exploitation. ( Re Mc (1989) 3 VAR 87) … In the report in Brown at 29 ER 869, again the reporter stresses that what is important is what is for the benefit of the lunatic, and what may be for the benefit of his heir or his personal representative is not a matter that comes into account…. What is in the interests of the incapable person under the general cases has been taken to mean what is for the benefit of the lunatic personally and not for his family or his friends or his estate." 18 The impact of this submission is that what is in the best interests of the second applicant is not a matter for the Tribunal's consideration. The interests of the second applicant, the husband of the first applicant, should be discounted to the extent that they are inconsistent with the best interests of the first applicant who is the protected person. 19 These matters narrow the issues for the Tribunal to whether it is in the best interests of the first applicant to sell - or not to sell - the Turramurra property. 20 Finally, in clarifying the issues, the Tribunal does not accept the submission of the applicant that it must assess the decision of the respondent at the time that it is made. It would certainly not be in the best interests of the first applicant for the Tribunal to limit its consideration in that way, and not take into account information, market trends, etc which have occurred since the respondent made its decision on 29 August 2003. There is nothing in the legislation which suggests this restriction. Further, the objects of the legislation are in broad terms to act in the best interests of protected persons. To so restrict the Tribunal's decision-making could - in some circumstances - cause most unfortunate unintended consequences if circumstances changed between the time of the decision and the time of the review hearing. For these reasons the Tribunal rejects the applicants submissions on this point. DECISION IN THE BEST INTERESTS OF THE PERSON CONCERNED 21 The respondent's reasons for the decision to sell the Turramurra property were set out in a letter from the Office of the Protective Commissioner to Mooney and Kennedy (the applicants' solicitors) dated 29 August, 2003. "... the financial advice in relation to the future of Turramurra property is strongly to the effect that leasing is not a viable option. Indeed that will simply ensure that rapid depletion of the remaining funds. We therefore have to move to a sale. ..." 22 In its final submissions the respondent expanded on these reasons. Mr Tunbridge said- 4,1 Views of first applicant The first applicant has not given evidence in these proceedings in support of the application. An inference should therefore be drawn that such evidence would not assist the case argued by the second applicant resisting a sale. Further the evidence of Mr Gulline (Affidavit of Kenneth Gulline of 6 May, 2004, paragraph 6) is that the first applicant is in favour of sale in order to make improvements to Peats Ridge property. It is submitted that that evidence be accepted. 4,2 Depletion of the estate At current rate of expenditure the estate will be depleted of liquid funds within 18 months. Even if property is leased estate depletion will occur within the next two years. JI has no other income apart from pension. 4,3 Superior income return In the event that Turramurra property is sold and net proceeds of sale invested, the estimate is of an income return of $39275 per annum together with capital growth on investment estimated at 3 % per annum (OPC financial plan page 28). By comparison if property is leased the estimated income return is only $17177 at best. (Affidavit of Kenneth Gulline 1 June, 2004, paragraph 14). This rental figure is likely to be even lower given recent downturn in rental market (letter from Maurice Pepper of 23 July, 2004). The estimated capital growth of Turramurra property is 3 % per annum (OPC financial plan page 13). 4,4 Future care needs The likelihood is that the second applicant, because of his advanced age and poor health will be unable to provide care in the future for JI. In the event that JK is not able to provide care then JI will require 24 hour per day care at an estimated cost of $125000 per annum. (see exhibit 7) JI is entitled to have paid care in her own home and not be relegated to a nursing home. It is essential for JI's future care and well being that she have sufficient liquid funds readily available to meet change of circumstances and to pay for her future care needs. 23 The applicants challenged all of these reasons. The Tribunal will assess these reasons - and the evidence relating to them - in its review of this decision. VIEWS OF FIRST APPLICANT 24 The first applicant did not give evidence in these proceedings. The evidence of her husband is that she was unable to give evidence. However, there was no medical evidence put before the Tribunal to assist it in assessing her ability to do so. 25 Clearly the first applicant gave instructions to her solicitor Mr Kennedy in June 2001 when he prepared correspondence to the respondent (dated 12 June of that year) agreeing that the Peats Ridge property would be purchased on the proviso that the Turramurra property was sold. Further, Mr Guilline - the staff member of the respondent who attended the mediation-discussion in 2002 - gave evidence that the first applicant was capable of indicating her wish that the Turramurra property should be sold, and that she so indicated. 26 This evidence must be balanced against the evidence of the second applicant that the first applicant does not wish to sell the Turramurra property. However, his evidence is potentially coloured by his clearly held strong wish that the property should not be sold. 27 Bearing in mind the first applicant's disabilities, and the fact that the evidence of her wish to sell the property are some years ago, the Tribunal is not prepared to accede to the respondent's submission that it should draw an inference from the fact that the first applicant did not give evidence, that her evidence would not have assisted her case. However, balancing this against the high probability that the second applicant's evidence only held views, the Tribunal will not give any weight to his evidence on this point. The Tribunal is of the view that it cannot take into account any of the evidence relating to the wishes of the first applicant regarding the Turramurra property. DEPLETION OF THE ESTATE 28 The respondent's evidence on this issue, given by Mr Gulline, and supported by the respondent's financial plan for the applicant, was that if the Turramurra property were not sold the first applicant's estate would be depleted in eighteen months. Mr Gulline is a Principal Estate Manager for the respondent, and has worked for the respondent for ten years. He further stated that even if the Turramurra property were leased, the estate would only support the first applicant's needs for a period of two years. Mr Gulline deposed that the expenses from the estate in the twelve months prior to his affidavit had amounted to just over $100000, and that the income from invested funds had totaled around $10000. This is a very concerning issue for the respondent and the Tribunal. It is concerning for the respondent who bears the financial responsibility for the first applicant's affairs. It is concerning for the Tribunal because - bearing in mind the age of the second applicant - the first applicant's care needs may become far more expensive in the near future. Both parties accept that the first applicant requires 24 hour care seven days a week. Whilst the second applicant provides much if not all of this, he will become unable to do so at some time in the future. Ms Wendy Blaxland, the court visitor who saw the applicants in 2001, said in her evidence that the second applicant had told her he was "worn out" from all the care which he had been providing. 29 The second applicant, in his evidence, argued that retention of the Turramurra property would be a better form of investment. He asserted that the expected rent from the property could be $100 to $200 a week higher, and that it would appreciate in value. His evidence in various pieces of correspondence was a little confused in regard to the uses that the property would be put to, but it finally came down to acceptance by him that he and his wife would not wish to visit or use the Turramurra property, and that the whole property could be rented out. He suggested, however, that in three to four years he and his wife may want to sell both properties and buy a unit closer to shops and medical facilities than the Peats Ridge property. 30 It is unfortunate that the Turramurra property has not been rented during the period prior to and during the hearing. This would have minimized the depletion of the first applicant's estate. Further, it seems that the renovations to the property to meet the specific needs of both applicants have made it a less rentable proposition, and have perhaps reduced its resale value. 31 The decision about the investment merits of retaining or selling the Turramurra property is a difficult one. It is dependent not only on rent but on increase in capital value. It must be compared with the amount that liquid funds invested can achieve. 32 However, there is little doubt that she will be better served by liquid funds than by having all of her investment tied up in assets which, by their nature, take some time to turn into cash. 33 On balance the Tribunal is concerned by the rate of depletion of the estate, and views it as a factor in favour of disposing of the Turramurra property. SUPERIOR INCOME RETURN 34 Mr Gulline's evidence for the respondent - and the financial plan prepared for the applicant - indicates an expected income from the investment of funds from the sale of the Turramurra property as just under $40000 per annum. On top of this it estimates a capital growth of 3% per annum. 35 On the other hand, the respondent's evidence suggests a return from rental of the property of around $17000, plus a 3% increase in the value of the property if retained. 36 On the other hand, whilst the applicants' evidence does not substantially challenge the predictions of the respondent on income and capital growth on the liquid funds, it assumes a higher income from rental return. Around $10000 per annum. This still leaves a negative variance of $13000 per annum in the income figures. The first applicant asserts that the respondent has also underestimated the capital growth which could be obtained if the property were not sold. This may be true, but is by no means certain bearing in mind the changes which have been made to the property to cater for the specific needs and activities of the applicants. Whilst the renovations to meet the first applicants access needs downstairs, the changes to cater for a carer upstairs, and the loss of the garage, could all be rectified, such changes would come at a cost which would either further deplete the estate, or eat into the profit which could be made from the sale. Mr Willoughby, a Property Services Manager with the respondent and a Licensed Builder, estimated in his evidence that such changes would cost between $30000 and $50000. 37 On balance, taking into account the uncertainty of further growth in the property market, and the cost of renovation to make the property a better rental proposition, the Tribunal is of the view that superior income returns could be gained if the investments were in liquid form. FUTURE CARE NEEDS OF FIRST APPLICANT 38 The Tribunal has already referred to the potential for future care needs for the first applicant. Whilst the second applicant is providing most care at the moment, the respondent's assumption that this may not continue for a long time into the future is a realistic and prudential one. Again, the Tribunal must make assumptions here, but in doing so it must take into account the age of the second applicant, and the comments of Ms Castle-Burton, an occupational therapist who visited the applicants several years before the hearing and provided a report for the respondents. 39 The respondent's evidence, through Mr Gulline and Ms Castle-Burton, was that the cost of such care would be $125000 a year. This was supported by a document from the Cumberland Care Service. The respondent wishes to have liquid funds available to meet this contingency. 40 The applicants, whilst challenging the assumptions of the respondent as to how quickly such care may be required, did not challenge the estimate of its cost if and when it is required. 41 Once again, on balance, the Tribunal views this issue as a factor in favour of selling the Turramurra property and having liquid funds available. LIKELIHOOD OF RETURN TO TURRAMURRA 42 The second applicant, in his affidavit evidence, asserted that there were a number of reasons for retaining the Turramurra property. He had previously asserted that he wished to continue to conduct music lessons in part of the property. In fact, this was the reason for the conversion of the garage, and part of the reason that the property was not rented out - it was not seen as a viable proposition by the respondent to rent out only part of the property. 43 Sadly, the conduct of music lessons by the second applicant at this stage seems more of a hope than a reality. He admitted in his evidence that he had not conducted lessons there for some time. The Tribunal is of the view that he is unlikely to in the future. 44 The second applicant also suggested that the Turramurra property provided a valuable resting place for journeys to the Advent hospital with the first applicant. However, again this had not happened for some time, and even if it had it would be cheaper to hire a motel room for these occasions than to keep the Turramurra property unrented. 45 Finally, the second applicant entertained some hope that his wife and himself may return to the Turramurra property to live at some time in the future. Given his advanced age, the first applicants care needs, and the inaccessibility of the property, the Tribunal again regards this as unlikely. The Tribunal has not taken return to Turramurra into account as a factor in its decision. IMPORTANCE OF APPLICANTS' AGREEMENT WITH RESPONDENT'S DECISION 46 The Tribunal recognised and applauded earlier in this decision attempts by the respondent to consult with its clients and obtain their agreement to its actions where possible. Agreement of the applicants, particularly the first applicant, should therefore be a factor in assessment when reviewing the respondent's decision. 47 The Tribunal has already determined that it would not make a finding with regard to the views of the first applicant. Therefore, her agreement or disagreement does not play a role in the Tribunal's assessment. 48 The view of the second applicant is very clearly against the respondent's decision. However, only his views on what is the correct and preferable decision for the first applicant can be taken into account. The Tribunal has said earlier that the impact on him is not a matter which can be taken into account. 49 The Tribunal assesses the views of the second applicant - in regard to the correct and preferable decision for the first applicant - to be well intentioned but over-optimistic. His plans for various uses of the Turramurra property have already been described as more hope than reality. Whilst not critical of him in any way, and whilst not wishing to imply any self interest, the Tribunal is satisfied that he is too close to the situation to be able to make realistic assessments and predictions on future events involving his wife and himself. This is not surprising in the circumstances. 50 The Tribunal, therefore, gives little weight to his disagreement with the respondent's decision. CONCLUSION 51 In reviewing the decision of the respondent the Tribunal is required by the legislation to make the correct and preferable decision. This will be done as at the present date. 52 Having regard to the various factors set out above, and the evidence on either side, the Tribunal is satisfied that the respondent's decision was the correct and preferable decision, and it affirms that decision. The financial assessments indicate a better return if the Turramurra property is sold. Depletion of the estate is a major concern, as funds must be maintained to provide for the first applicant's future care needs. Such depletion will be minimized with the sale of the Turramurra property. ORDERS The decision of the respondent to sell the property in Turramurra owned by the first applicant, made on 29 August 2003, is affirmed. 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.