CD v Protective Commissioner and ors [2008] NSWADT 33

Set aside by Appeal :

CITATION: CD v Protective Commissioner and ors [2008] NSWADT 33

DIVISION: General Division

APPLICANT CD

PARTIES: FIRST RESPONDENT Protective Commissioner

SECOND RESPONDENTS ED and EE

FILE NUMBER: 073258

HEARING DATES: 16 November 2007

SUBMISSIONS CLOSED: 16 November 2007

DATE OF DECISION: 21 January 2008

BEFORE: Millar J - Judicial Member

CATCHWORDS: Protected Estates Act - Protective Commissioner - powers as to property

MATTER FOR DECISION: Principal matter

Administrative Decisions Tribunal Act 1997 LEGISLATION CITED : Guardianship Act 1987 Protected Estates Act 1983

APPLICANT In person

REPRESENTATION: FIRST RESPONDENT T Tunbridge, solicitor

SECOND RESPONDENTS In person

ORDERS: The decision of the Protective Commissioner that the sale of the Winston Hills property be discontinued and that the Toongabbie property be sold instead of leased is set aside and the Winston Hills property is to be sold and the Toongabbie property is to be leased.

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 Introduction 1 CA is about 92 years of age. She resides in a nursing home at Penrith. According to a previous decision of the Guardianship Tribunal CA has dementia. 2 On 29 July 2005 the Guardianship Tribunal made a Guardianship Order by which the Public Guardian was appointed as CA's guardian. On 14 July 2006 the Guardianship Tribunal reviewed the Guardianship Order previously made and brought the Order to an end. The Tribunal also conducted a review of the operation and effect of an enduring power of attorney given on 30 June 2000 to the applicant CD. On that occasion the Tribunal decided not to make an order under Section 36 of the Powers of Attorney Act 2003 but treated the application as an application for a financial management order under Part 3A of the Guardianship Act 1987. As a result of dealing with that matter the Tribunal appointed the Protective Commissioner as CA's financial manager. 3 CA owned several properties being a home at Toongabbie at which she had previously resided, land at Winston Hills and land at Tumbi Umbi, which is also referred to in the documents provided to the Tribunal as land at Berkeley Vale. CA had lived at the Toongabbie property until about July 2005 when she was admitted to hospital and subsequently transferred to a nursing home. She has not resided at the Toongabbie property since about July 2005. 4 Significant debts have been incurred by or on behalf of CA as a result of which it has become necessary to consider the sale of one or more of her properties. These proceedings have come about as a result of decisions made in relation to the sale of those properties. 5 On 10 May 2007 a decision was made in the office of the Protective Commissioner to sell the Winston Hills property and to lease the property at Toongabbie. This was done in order to provide funds to pay CA's debts and to provide an income to assist in meeting her ongoing day to day needs. 6 Following an internal review of the decision requested by the second respondents ED and EE, on 30 July 2007 the review officer decided to replace the initial decision with a decision to discontinue the sale of the Winston Hills property and to sell the Toongabbie property. 7 On 30 August 2007 the applicant CD filed an application for review of the decision by the Tribunal. Issue 8 The issue is whether the decision of the Protective Commissioner to sell the Toongabbie property and to discontinue the sale of the Winston Hills property is the correct and preferable decision: Administrative Decisions Tribunal Act 1997 (ADT Act) Section 63. In determining that issue, CA's welfare and interests are to be given paramount consideration: The Guardianship Act 1987, Section 4. Other considerations include CA's views, the views of her family and the financial circumstances of her estate. Applicant's Views 9 The applicant attended the hearing and made submissions to the Tribunal. She also provided her views in a letter dated 14 August 2007. The applicant told the Tribunal that she wanted to respect her mothers wishes and that her mother knew the Toongabbie property as her home and wanted it to be retained as her home. In the applicant's opinion the Winston Hills and Berkeley Vale properties should be sold as she recognises that it necessary to sell one or more of the properties having regard to the substantial debts which are outstanding. In her letter to the Tribunal dated 14 August 2007 the applicant indicated that, in her opinion, her mother is adamant that she did not want her Toongabbie property to be sold. The applicant proposed that the Toongabbie property should be rented and maintained for her mother. In this way her mother would have peace of mind knowing that her home is being looked after and that her possessions in the home would be preserved. 10 The applicant advised that until her enduring power of attorney was suspended on 14 July 2006 the applicant and her husband had maintained the home. However she said that after 14 July she had been told that her husband could only mow lawns and collect mail. The applicant said that her husband was at the property two to three times a week and that they keep a close eye on the property. They had been unable to perform the regular maintenance needed for the property, which they had previously done for her mother once the financial management order came into effect. 11 In her evidence to the Tribunal the applicant indicated that she has paid water rates in relation to the property. Second Respondent's Case 12 The second respondents ED and EE attended the hearing and expressed their views to the Tribunal. ED said that the Toongabbie property has been a mess since their mother left the property. She said the neighbours complained about the presence of vermin. ED has not been inside the property since August 2005. She said that she believed her mother would be very concerned about the neighbours concerns arising from the state of the property and that her mother would also be very concerned that her bills are not being paid. ED was of the view that the Winston Hills and Tumbi Umbi properties are likely to grow in value and offers have been made in relation to both properties. In her opinion it is preferable that the Toongabbie property be sold. 13 With respect to her mother's wishes ED was of the view that her mother does not recognise anybody and that her mother does not remember the property. Consequently her mother will be unaware of whether or not the property is sold. 14 EE told the Tribunal that the property has been vacant for over two years and not cleaned out or rented. There is vermin at the property and the property is unsightly by reason of the fact that it has not been maintained. In EE's opinion there is a risk of fire and of vandalism to the property. She said that her mother has very severe dementia that her mother will never return to the property and consequently her mother does not know whether the property is being retained or sold. 15 The second respondents wrote to the Tribunal on 13 October 2007. In their letter they confirmed the views expressed during the hearing, namely that they have felt very strongly that the decision to sell the house at Toongabbie was correct and that the house needed to be sold in order to pay outstanding nursing home fees as soon as possible. They expressed the view that their mother has had dementia for many years, cannot converse or recognise anyone and needs high-level nursing care. As a result the sale of the Toongabbie property would not cause their mother any concern and that the benefit of retaining the blocks of land is that they will have future investment growth, which will allow provision to be made for their mother's future, care. Protective Commissioner's Case 16 Mr Tunbridge solicitor for the Protective Commissioner made submissions to the Tribunal. Mr Tunbridge confirmed the position taken by the Protective Commissioner following the review of the initial decision. He noted the outstanding debts in the estate and that the payment of the debts was a matter of priority. He also submitted that as CA has dementia, according to the Guardianship Tribunal's reasons for decision, it is unlikely that a sale of any of the properties would be distressing to CA. 17 On 21 September 2007 the Protective Commissioner's office had forwarded under cover of a letter from Mr Tunbridge copies of relevant documents in relation to the matter including the financial management order, the Guardianship Tribunals' reasons for decision, statement of the assets and liabilities of the estate, copies of file notes, copies of the initial reason for decision and the review officers reasons for decision and copies of letters from the parties to the Protective Commissioner. This bundle of documents became exhibit A in the proceedings. A statement of assets and liabilities in relation to the estate as at 15 November 2007 was also tendered at the hearing and became Exhibit B. Reasoning 18 It was common ground between the parties that the estate of CA has significant liabilities. Exhibit B, which was a statement of assets and liabilities provided by the Protective Commissioner as at 15 November 2007, indicated that the total liabilities were $93,230.98. These liabilities were increasing as they included nursing home fees, which continue to be incurred while CA remains a resident of the nursing home. The debts include various amounts of arrears of rates in relation to the properties, which have been referred to, a debt to the applicant of $20,199.46, a debt to Centrelink of $41,903.91 and fees of $9,882.53. A nursing home fees account was provided which indicated that the nursing home fee debt had subsequently increased to $24,169.97. Nursing home services continue to be provided to CA and the fees payable for those services are causing the debt to increase even more. 19 The assets of the estate consist of the three properties at Toongabbie, Winston Hills and Tumbi Umbi. These properties are said to be worth $300,000.00, $335,000.00 and $185,000.00 respectively. Although the Tribunal did not have the original valuations or market appraisals in relation to these properties, the reasons for decision of the property manager for the Protective Commissioner who made the original decision on 10 May 2007 disclosed that the Toongabbie property was valued by Elders Real Estate at $350,000.00 and the Winston Hills property was valued at $335,000.00 by PRD Nationwide Real estate. Further, the reasons for decision also indicate that Elders Real Estate expressed the view that the projected rental value for the Toongabbie property was $220.00 to $230.00 per week. 20 The original decision was to sell the Winston Hills property and retain the properties at Toongabbie and Tumbi Umbi. As a result of the review requested by the second respondents ED and EE the decision was changed so that the Toongabbie property would be sold and the other two properties would be retained. 21 It appears from the Guardianship Tribunal's reasons for decision in relation to the making of the financial management order on 14 July 2006 that CA has dementia. It appears to be clear that CA is likely to remain a nursing home resident and is unlikely to take up residence again in the Toongabbie property. Having regard to her dementia the Tribunal is satisfied that CA is not aware of whether or not the Toongabbie property has been retained or sold. Further, there is no direct evidence of CA's wishes in relation to the sale of any of the properties and having regard to her dementia condition it seems unlikely that she would be able to express any meaningful wishes in relation to that matter. 22 According to the reasons given by the officer who reviewed the original decision of the Protective Commissioner it was thought that the sale of the Toongabbie property would be a more appropriate option to achieve medium financial security for CA. This was said to be so because the Toongabbie property was currently un-rentable and would require considerable investment of funds to make it rentable. However, there is no evidence before the Tribunal that the Toongabbie property is presently un-rentable. It appears that a valuation or market appraisal was obtained by the Protective Commissioners office, which gives a projected rental value for the property of $220.00 to $230.00 per week. This alone suggests that the property is capable of being rented. Further during the hearing some 44 photographs were tendered to the Tribunal, which became exhibit C. One of these photographs was of CA. Three others were wedding photographs. 40 other photographs were in relation to the Toongabbie property and were taken on 7 August 2005. These photographs showed that the grounds around the home were overgrown and that the home was untidy. The photos showed that the interior of the property and showed a number of household contents inside the property which may be of little or no value and which appeared to be piled on the floor as if they were rubbish. To refer to them in that way is not meant to be offensive but simply to describe what was depicted in the photographs. What was noticeable from the photographs is that they do not show damage or significant disrepair of the property. 23 The review officer referred to the need for considerable investment of funds to make the Toongabbie property rentable. However, there is no evidence before the Tribunal as to why funds need to be invested in the property to make it rentable when it has been appraised as being able to earn a rental of between $220.00 to $230.00 per week at the present time. There is no evidence that the property requires substantial renovation. One would think it would not cost significant money to have the overgrowth outside of the property removed and the contents inside the property removed to provide vacant possession to a tenant. 24 A further matter, which appears to have motivated the review officer to change the initial decision, is the opinion that the Winston Hills and Tumbi Umbi properties will in all likelihood appreciate in value faster than the Toongabbie property. This also was the opinion of the second respondents as expressed in their letter to the Tribunal dated 13 October 2007. However there is no expert opinion to support that view and one would think it would be difficult for a valuation expert to express such an opinion since it would require some speculation with regard to the real estate market in three different areas in and around Sydney. 25 In the Tribunal's view it is significant that the Toongabbie property is a residential property and the Winston Hills and Tumbi Umbi properties are both vacant land. If the latter two properties are retained they cannot earn rent since there is no residence constructed on either of them. The Toongabbie property can earn rental income since there is a residence constructed on that property. The evidence shows that it has a potential rental value of between $220.00 and $230.00 per week. If the Toongabbie property was retained and the Winston Hills property sold and if the latter property achieves a price on sale, which is consistent with the valuation advice, then there will be proceeds of sale of $335,000.00 less costs of sale. The debts of the estate at present are approaching $100,000.00. If the Winston Hills property sold for $335,000.00 and costs of sale were paid and all debts were paid there may be net proceeds left of about $230,000.00. In addition to that sum there is the Tumbi Umbi property, which is said to be worth $185,000.00. 26 Accordingly after the sale of the Winston Hills property the estate should be debt free, there should be over $200,000.00 in cash to invest and there should be the Tumbi Umbi property available to be retained as an investment. There will also be income from the Toongabbie property once it is leased following perhaps some cosmetic improvement to the interior and exterior of the property. As a result of the Winston Hills property being sold there will also be a reduction in outgoings for rates and land tax. This is of some significance since there are outgoings being incurred in relation to a property, which receives no income. Accordingly, they will no longer be a drain upon the estate. 27 For these reasons the Review Officers decision to replace the original decision with a decision to discontinue the sale of the Winston Hills property and to sell the Toongabbie property should be set aside and a decision substituted to sell the Winston Hills property and to lease the Toongabbie property.