LK v NSW Trustee and Guardian [2009] NSWADT 224

CITATION: LK v NSW Trustee and Guardian [2009] NSWADT 224

DIVISION: General Division

APPLICANT LK

PARTIES: FIRST RESPONDENT NSW Trustee and Guardian

SECOND RESPONDENT MS

FILE NUMBER: 093018

HEARING DATES: 27 May 2009

SUBMISSIONS CLOSED: 22 June 2009

DATE OF DECISION: 25 August 2009

BEFORE: Britton A - Deputy President

CATCHWORDS: NSW Trustee-disposition of property

NSW Trustee and Guardian Act 2009 LEGISLATION CITED : Administrative Decisions Tribunal Act 1997 Protected Estates Act 1983

CASES CITED: YG & GG v Minister for Community Services [2002] NSWCA 247 McDonald v Guardianship Administration Board [1993] 1 VR 521

APPLICANT T Cardillo, solicitor

REPRESENTATION: FIRST RESPONDENT T Tunbridge, solicitor

SECOND RESPONDENT No appearance

ORDERS: The Trustee's decision to sell the subject property is affirmed.

REASONS FOR DECISION 1 LK, the applicant in these proceedings, applies to the Administrative Decisions Tribunal for review of the decision made by the NSW Trustee and Guardian (formerly the Protective Commissioner) to sell his mother's house. In February 2008, the Guardianship Tribunal made orders that the estate of LK's mother be committed to the management of the NSW Trustee. 2 LK submits that the NSW Trustee and Guardian has not established that his mother's estate would benefit if the property was sold. He contends that his mother's interests would be best served if the property was to be rented. He also argues that regard ought be given to the sentimental value the property holds for him. 3 LK's brother, MS, sought and was granted leave to be joined to these proceedings. He strongly supports the decision to sell the house and contends that his brother's opposition to the sale is motivated by self-interest. 4 When the application for review was lodged by LK, the Tribunal's jurisdiction to review the decision to sell the property was conferred by the Protected Estates Act 1983, s 28A. That Act has now been repealed with effect from 1 July 2009 and replaced by the NSW Trustee and Guardian Act 2009 (the Trustee Act). Among other things, the Trustee Act abolished the office of Protective Commissioner and replaced it with the office of NSW Trustee and Guardian, which is referred to in that Act as the 'NSW Trustee'. The Tribunal's jurisdiction to review the subject decision is now contained in s 70 of the Trustee Act. 5 The savings and transitional provisions provide that anything done prior to the commencement of the Trustee Act under a corresponding provision of the former Act is taken to be done under the new Act. Similarly anything done by the Protective Commissioner is taken to have been done by the NSW Trustee and Guardian (Sched 1, cll 4 and 5). For convenience in these reasons I refer to both the old and new office as 'the Trustee'. Proceedings before the Tribunal 6 The matter was listed for hearing in Newcastle on 27 May 2009. The applicant and the Trustee each appeared and filed written submissions on 16 April 2009. The applicant's mother did not participate in these proceedings. 7 MS lives in Melbourne and was unable to attend in person. He made written submissions but did not, as directed, provide them to the parties before the hearing. Accordingly, the Tribunal invited the parties to make further written submissions after considering those provided by MS. The applicant filed written submissions in reply to those provided by MS. Review decision 8 By way of letter dated 1 October 2008, the Trustee notified the applicant that a decision had been made to sell his mother's house. The property, a two-bedroom weatherboard and tile house located in Newcastle, had been the mother's place of residence until she moved to a nursing home in June 2007. The property is described in a market valuation report obtained by the Trustee as in reasonable condition with 'average to below average presentation'. 9 At the request of the applicant an internal review was conducted. The review was undertaken by Mr John Neely, Assistant Director, Client Services Division, Trustee. In a decision dated 23 December 2008, Mr Neely affirmed the original decision giving two main reasons: First, the mother's wish that the property be sold; and Second, the opinion of the Trustee's Financial Planning Unit that the sale would provide the mother with increased liquidity, flexibility and regular income. 10 Mother's wishes Included in the documents lodged under s 58 of the Administrative Decisions Tribunal Act 1997 ('the section 58 documents') was a file note made by an officer of the Trustee recording details of a phone conversation with Michelle Clarence, Residential Liaison officer of the nursing home where the mother resided in September 2008. It states: [C]lient is sure about her property being sold. Her relationship with [LK] has been estranged for some time and she does not want [LK] to contact her. Michelle said the reason for the order was because [LK] bullied and intimidated her [sic] mother and also had been physically violent. Michelle said client would not want OPC holding off selling the property because of [LK's] objection. 11 Financial advice Mr Neely had before him advice provided by the Financial Planning Unit. In a report dated 29 July 2008, financial planner, Krishna Kumar, compared the mother's projected financial position if the property was sold, as opposed to leased. He made the following assumptions: That the mother has about $60,000 cash on call; She receives a German and Australian pension. If the property were sold — the German pension would remain unchanged — the Australian pension would decrease by about $3,500 pa; The property would net on sale approximately $180,000; The property would rent for approximately $205 per week; Any cash assets would earn interest of about 5.99% pa. 12 He concluded that the result under either proposal would be 'almost similar'. He calculated that both options would return an annual surplus— if rented — $1,704, if sold — $1,567. He favoured the sale option, as it gave 'additional liquidity, flexibility and regular income'. 13 Mr Neely also had regard to concerns raised by the applicant about a drop in house prices in the area where the subject property was located. He concluded based on information provided from the property information service, RP Data Ltd, that while values had dropped since 2004, they had not decreased to the extent suggested by the applicant. 14 Updated financial information In response to an analysis prepared by the applicant (see applicant's submissions, filed 16 April 2009), Mr Kumar revised his analysis. In an updated report dated 6 May 2009 he: Accepted the applicant's contention that sale costs of approximately $12,000 would be incurred; Included a cost for rental management ― slightly higher than that used by the applicant; Reduced the estimated interest rate on cash assets to 4% pa (previou s estimate ― 5.99%); Increased the estimated market value of the property to $232,500 (previous estimate — $190,000); Increased the estimated rental income to $275 per week approx (previous estimate — $200 to $210 per week) 15 Mr Kumar did not accept all of the propositions advanced by the appellant. For example he believed that the applicant had underestimated the Centrelink benefit payable if the sale were to proceed by about $4,000 and the fees that would be payable to the Trustee under the rental proposal. 16 Comparison of options The parties agree on the market valuation and rental appraisal of the subject property. Both estimate a surplus, however as the summary below reveals the applicant estimates that a higher surplus would be achieved under the sale option. Trustee's Revised Trustee's Revised Applicant's Applicant's Rental Estimate Sale Estimate Rental Sale Estimate Estimate Annual surplus $2,541 $550 $7,286 $2,740