CITATION: JZ v Office of the Protective Commissioner [2009] NSWADT 54 DIVISION: General Division APPLICANT JZ PARTIES: RESPONDENT Office of the Protective Commissioner FILE NUMBER: 083334 HEARING DATES: On the papers SUBMISSIONS CLOSED: 4 February 2009 DATE OF DECISION: 13 March 2009 BEFORE: Britton A - Deputy President CATCHWORDS: Protective Commissioner - powers as to property LEGISLATION CITED : Administrative Decisions Tribunal Act 1997 Protected Estates Act 1983 APPLICANT JA, agent REPRESENTATION: RESPONDENT T Tunbridge, solicitor ORDERS: The decision of the Protective Commissioner to sell JZ's apartment is affirmed. REASONS FOR DECISION 1 The applicant who, to protect her privacy, will be referred to in these reasons by the pseudonym, 'JZ', has applied to the Administrative Decisions Tribunal for review of the decision made by the Protective Commissioner to sell her apartment. In April 2007, by order of a Magistrate, JZ's estate was committed to the management of the Protective Commissioner and remains under management to this day. 2 The apartment, the subject of this application had been purchased by JZ in February 2006 for $260,000 and sold in November of last year for $255,000. 3 On 18 November 2008, three days before settlement, an application made by JZ for a stay of the decision to sell the property was determined and refused. 4 JZ was represented in these proceedings by her brother acting as agent. In these proceedings he will be referred to as 'JA'. The Protective Commissioner was represented by solicitor, Mr Tim Tunbridge. Background to subject decision 5 The subject apartment is a two-bedroom ground floor apartment located on Gardener's Road, Eastlakes in Sydney's eastern suburbs. It is one of 24 apartments in a three-storey brick complex that was built in 1965. 6 In a file note dated 30 August 2007, a delegate of the Protective Commissioner recorded that she had been contacted by JZ, advised that she had been discharged from Hospital and requested that her Eastlakes apartment be sold. At that time there was a $160,000 mortgage of over the property. 7 The following month, the Protective Commissioner sought the opinion of a local real estate agent about the sales and rental potential of the property. In a report dated 24 September 2007, agent Terry Zakis of LJ Hooker Eastlakes, estimated the value of the property to be in the range of $250,000 to $275,000. The rental potential of the property was not addressed. 8 On 29 February 2008 the Protective Commissioner notified JZ of the decision to sell the property and gave written reasons for that decision. The main stated reason for that decision was JZ's inability to meet her mortgage repayments, which at the time of the decision had apparently been unpaid for some months. The Protective Commissioner did not consider renting to be a viable option as JZ could not afford 'to maintain the property or carry out necessary repairs'. In the Reasons for Decision it was noted that JA had been notified of the sale proposal, provided with a copy of the LJ Hooker report and invited to comment but no response was received. It was also noted that JZ had advised the Protective Commissioner that she supported the sale. 9 It would appear that no further action was taken until 17 June 2008 when the Protective Commissioner entered into an Agency agreement with LJ Hooker, Mascot. The agreement recorded that the Agent's estimate of the purchase price was between $250,000 and $275,000. 10 On 25 June 2008, JZ wrote to the Protective Commissioner and advised that she was concerned that the sale was proceeding on the basis of out of date information and requested that a further valuation be undertaken. 11 Following that request, the Protective Commissioner commissioned a further valuation. In a report dated 3 July 2008, licensed valuer, Paul Robinson of MVS Valuers Australia, certified that the market value of the property was $250,000. 12 While not entirely clear from the documents filed by the parties it would appear that JZ and her brother did not discover until late October that contracts had been exchanged and settlement was imminent. JZ claims that she had been ignorant of this development until when in need of accommodation, she attempted to enter the property and found that she had been barred from entry. 13 In an email dated 30 October 2008, JA advised Ms Marianne Drew of the Office of the Protective Commissioner that the decision to sell the property for $255,000 was a 'big surprise' and that both he and his sister had told the LJ Hooker agent, that they 'definitively disagreed' with that price. In a detailed letter dated 29 October 2008, JZ echoed those concerns. She pointed to what she saw as the many qualities of the apartment, which in her view included being situated in a quiet and peaceful environment. She contended that recent issues of the 'local newspaper, The Southern Courier and Internet websites had carried reports of two bedroom units on Gardeners Road… sold for $425,000'. She asserted that some of these properties were five minutes from her property. She also claimed that a number of two bedroom units in the Eastlakes area had been listed in the $585,000 to $600,000 price range. 14 In reply to that letter, a delegate of the Protective Commissioner, Mr Peter Facey, acknowledged that there was some doubt over whether the OPC officer with responsibility for the sale had informed JP and her brother about the acceptance of the offer of $255,000. He stated that this was 'contrary to usual practice' and apologised for this 'apparent oversight'. 15 Sales campaign Copies of regular progress reports prepared by LJ Hooker and forwarded to the Protective Commissioner were included in the section 58 documents provided to the Tribunal. They reveal that the property was advertised by email, through the LJ Hooker web site, various other websites and by way of a signboard outside the property; open for weekly inspections throughout the period, 26 July 2008 to 20 September 2008; initially listed for $275,000; and that five offers in the range of $210,000 to $240,000 had been before the offer of $255,000 was accepted. A deposit was taken on 12 September 2008. JZ's submissions 16 JZ contends that the Protective Commissioner's management of her estate reveals a pattern of poor decision-making. Among other things she: Questioned the delay in putting the subject property on the market, pointing out that no action was taken for over twelve months and then only after she had contacted the Protective Commissioner. Asserted that the price achieved was not 'fair and reasonable' and that a higher price could have been achieved had the property been sold in 2007. Claimed that when the property was finally put on the market she was not kept informed of the details of the sale, critically, the final purchase price. 17 She described the sale as a 'secret deal' and claimed that neither she or her brother had been informed of: The rejection of an offer of $230,000 on 25 August 2008. The agent's advise to the Protective Commissioner of an 'agreed selling price of $255,000'. The exchange of contracts on 16 September 2008. 18 JZ asserted that the Commissioner's delegate who authorised the sale failed to exercise due diligence and care. She claims that as a consequence she has lost $303,889. (A breakdown of that figure is set out in the bundle of document filed by JZ on 4 February 2008, p 22.) In support she pointed to the sale price achieved for a large number of what she claims to be comparable properties within a 20 to 30 kilometre radius of the subject property. 19 In a detailed letter dated 26 January 2009, JA criticised a number of unrelated decisions made by the Protective Commissioner. These include the alleged failure by the Protective Commissioner to provide her any assistance with moving her possessions after settlement; the cancellation of her credit cards and the failure to pay various expenses. Correct and preferable decision 20 In reviewing the subject decision the Tribunal 'stands in the shoes' of the Commissioner and is required to make the 'correct and preferable decision' having regard to any relevant factual material and any applicable written or unwritten law (Administrative Decisions Tribunal Act 1997, s 63). This includes any material that postdates that decision (YG & GG v Minister for Community Services [2002] NSWCA 247 at [25]). The review is to be conducted 'without any presumption as to the correctness of the decision': McDonald v Guardianship Administration Board [1993] 1 VR 521 at 530. On review the Tribunal may exercise all of the functions that are vested in the Commissioner. 21 As noted, in these proceedings JZ ventilated her dissatisfaction with a number of decisions made by the Protective Commissioner that relate to the management of her estate but are not directly related to the decision to sell her apartment. The Tribunal does not have power to review all decisions made by the Protective Commissioner but only reviewable decisions that are the subject of an application for review. (See Chapter 5 of the Administrative Decisions Tribunal Act.) 22 It is not in issue that the Protective Commissioner had the power to sell the subject property. Nor is the decision to sell the property challenged. Rather the decision the subject of the review application is the decision to sell the property for $255,000. 23 The Protected Estates Act 1983 does not stipulate any matters which the Protective Commissioner is required to take into account when she exercises her functions under s 24 of that Act of managing the estate of a protected person. In Protective Commissioner v D (2004) 60 NSWLR 513, the Court of Appeal considered the role of the Protective Commissioner in the context of determining whether s 28 of the Protected Estates Act permitted the Protective Commissioner to make payment for past gratuitous care out of the estate of a protected person. McColl JA described the role of the Protective Commissioner in the following terms (at pages 544, 545): …The manager stands in the shoes of a person who is unable to manage his/her affairs by virtue of circumstances beyond his/her control. The manager exercises a protective and benevolent function, protective in the sense that the manager's task is to ensure the estate is managed in a manner to secure the protected person's estate for that person's continued maintenance. In this respect the Protected Estates Act and its predecessors reflected the "parental and protective" jurisdiction historically exercised by the Crown both in the exercise of its prerogative and pursuant to the Prerogative Statutes. The relationship between the Protective Commissioner and a protected person is clearly, as the Commissioner's title implies, a protective one in which the Protective Commissioner must exercise his powers in the best interests of the person whose estate he manages. I acknowledge that the concept of 'best interests' is one which is often not easy to apply because reasonable minds may differ as to what action may be in a person's best interests. But, as it is the Protective Commissioner's task "to ensure the estate is managed in a manner to secure the protected person's estate for that person's continued maintenance. 24 Included in JZ's submissions are lengthy extracts from an unnamed textbook about the functions and duties of real estate agents. While the role of a real estate agent and the Protective Commissioner are not analogous some of the duties are common. For example both are required to perform their respective functions with due care and diligence and act in their 'client's' best interests. I accept the proposition advanced by JZ that absent any countervailing factors in disposing of a property held in the estate of a protected person, the Protective Commissioner is required to take all reasonable steps to obtain the 'best' possible price. 25 Before proceeding to review the subject decision it is necessary to make some preliminary comments about the history to the sale. After JZ's estate was committed to management, over 12 months passed before an agency agreement was entered into, without which the sale of JZ's apartment could not proceed. Throughout that period there was a significant mortgage over the property and it would appear that for most of the time it was unoccupied. On the material filed it would appear there is some strength in JZ's argument that her interests were not best served by this unexplained delay. 26 As conceded by the Protective Commissioner, JA and JZ were not kept informed of key developments surrounding the sale. Given this background it is not surprising that JZ and JA formed the view that the sale represented a 'secret deal' executed in indecent haste. 27 JZ relies on a detailed and carefully prepared bundle of documents filed in the Tribunal on 4 February 2009, which contains information about a number of listed and sold properties, some in close proximity to her apartment. Most were either listed or sold for more that $255,000. Included in the sample are apartments and houses of various sizes, architectural styles and conditions. Also included were details of properties outside the Eastlakes area which, as I understand JZ to suggest, were in less desirable locations. 28 From the information provided it is not possible to determine whether the sample properties are comparable to JZ's apartment. Details such as the size, style and condition of the property have not been provided for each property. In respect of the properties that had been sold, it is not possible to discern how long they were on the market before they were sold. Similarly the information provided does not reveal whether the listed properties were sold, and, if so, whether the listed price was achieved. 29 It goes without saying that property valuation is an inexact science. The estimated price of a property is determined by a range of tangible and intangible factors including the property's location, its size, style, condition, appeal, supply and demand and the prevailing economic conditions at the time of the sale. 30 It could not be said that JZ's concerns about the sale are baseless. Her apartment was sold for $5000 less that what she had paid for it two and a half year earlier. Coupled with the delay in putting the property on the market together with the Protective Commissioner's failure to fully inform her about the progress of the sale, her concerns are entirely understandable. 31 Nonetheless I am satisfied that the decision to sell the property for $255,000 was the correct and preferred decision for these reasons. An independent valuation had been obtained which indicated that the market price was $250,000. That estimate was broadly in line with that provided by the agent nine months earlier. None of the factual assumptions on which the valuation or the agent's estimate were based have been challenged by JZ. The property had been on the market for about two months before an offer was finally accepted. There is nothing before me to indicate that the marketing campaign conducted by LJ Hooker was in some way deficient and nor has this been suggested. While possible that had the offer of $255,000 been rejected a higher price might have been achieved, equally it is possible that a lower price might have been the result. It is also relevant that until such time as settlement occurred, JZ's estate was obliged to carry all costs associated with the mortgage over the property. 32 For these reasons I affirm the decision of the Protective Commissioner. 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.