Appeal Panel - Internal CITATION: FX v NSW Trustee and Guardian (GD) [2009] NSWADTAP 61 FIRST APPELLANT FX PARTIES: SECOND APPELLANT FW RESPONDENT NSW Trustee and Guardian FILE NUMBER: 099007 HEARING DATES: 14 October 2009 SUBMISSIONS CLOSED: 14 October 2009 DATE OF DECISION: 23 October 2009 BEFORE: O'Connor K - DCJ (President); Leal S - Judicial Member; Field B - Non-Judicial Member CATCHWORDS: Protected Person - Decision to Sell Business - Appeal - New Material - Extended to Merits - Appeal Allowed DECISION UNDER APPEAL: FW and FX v Protective Commissioner [2009] NSWADT 36 FILE NUMBER UNDER APPEAL: 083133 DATE OF DECISION UNDER APPEAL: 02/19/2009 LEGISLATION CITED : Administrative Decisions Tribunal Act 1997 CASES CITED: FW and FX v Protective Commissioner [2009] NSWADT 36 FIRST APPELLANT In person REPRESENTATION: SECOND APPELLANT – RESPONDENT T Tunbridge, legal officer 1. Leave to extend the appeal to the merits granted. ORDERS: 2. Appeal allowed. 3. Decision of NSW Trustee to wind up the protected person's farming business set aside. REASONS FOR DECISION 1 The NSW Trustee and Guardian ('NSW Trustee') (formerly Protective Commissioner) has, since 17 April 2002, been the financial manager of the affairs of a protected person, FW. FW and her son, FX, each own a half share in a farm. She is the owner of the business of the farm. 2 The Trustee decided on 25 February 2008 to wind up the business for the reason that 'as sole trader FW is personally liable for all debts and her personal property may be vulnerable for debts and other business liabilities.' The son, FX, made an application to the Tribunal for review of the decision in which both he and his mother were named as applicants. The filing included a letter written by his mother supporting the application for review. By decision delivered 19 February 2009, the Tribunal affirmed the decision: see FW and FX v Protective Commissioner [2009] NSWADT 36. 3 FX now appeals, as allowed by ss 112 and 113 of the Administrative Decisions Tribunal Act 1997 (ADT Act). His notice of appeal names his mother as a party. There is no letter from his mother similar to the one that accompanied the original review application. In our view, FX is the practical appellant in this matter. The Appeal Panel made an attempt to have FW independently represented for the purpose of the appeal, but that proved ineffective, as explained below. 4 The decision of 25 February 2008 has been stayed pending the resolution of these proceedings. It has now been stayed for over 18 months. 5 In this instance the appeal has been before the Appeal Panel on three separate occasions. On the first two occasions (1 May 2009, 21 July 2009), the presiding member was part-time Deputy President Handley, and the appeal was adjourned part-heard. Following his resignation to take up a full-time position with a Commonwealth Tribunal, the President, Judge O'Connor, has replaced him as the presiding member: see ADT Act, s 79(1). 6 An appeal of the present kind may be made, as of right, in relation to questions of law and, with the leave of the Appeal Panel, may be extended to the merits. The Appeal Panel has proceeded to deal with this appeal on a broad basis without requiring, as is usually the case in appeals relating to reviewable decisions, that the appellant first identify any errors of law before assessing whether any application to extend the appeal to the merits should be granted. This less exacting approach has usually been seen as a more appropriate way to deal with appeals of Tribunal decisions that bear on the rights of protected persons. 7 After the second day of hearing, Deputy President Handley on behalf of the Appeal Panel directed the Registrar to take steps to have an independent person appointed to represent the protected person. A solicitor in the region where the farm is located agreed to an appointment. However, after reading the papers, the solicitor indicated that he had a conflict as FX had been his client in connection with issues to do with the financial management of his mother's affairs. In the time that remained available before the hearing, it was not possible to find another suitable person. 8 So the appeal has been conducted without FW having an independent representative. FX participated in the final hearing on 14 October 2009 by telephone from the family home, and Mr Tunbridge, legal officer, NSW Trustee, was present in the hearing room. FX and his mother both reside in the family home. FX advised that FW was within earshot of the telephone during the hearing. 9 The fundamental responsibility of the NSW Trustee, and this Tribunal as substitute administrator, is to ensure that the best interests of the protected person are preserved and maintained by any decision in relation to management of the financial affairs of the protected person. In that regard it is desirable to have regard to the wishes or likely wishes of the protected person. It will often be difficult to ascertain with clarity the wishes of the protected person where the protected person has a cognitive impairment. In its reasons, the Tribunal below, para [1], described FW as a '79-year-old woman with mild dementia, memory problems and some physical disabilities.' In this case, as explained, the Appeal Panel was unsuccessful in having an independent representative appointed, who might have assisted in ascertaining the wishes of FW, and in challenging, if appropriate, the case put by FX for a different decision. 10 Our conclusion, for the reasons which follow, is that it is appropriate to make a different decision. 11 It is plain, we think, as the Tribunal noted in its reasons, that the appellant, FX, has a contentious and difficult relationship with the Office of the NSW Trustee. Clearly he is not happy with the fact that the Trustee has control of his mother's financial affairs. We agree with the observation of the Tribunal below that FX would like to be in control of her financial affairs. 12 In the years since the administration order was made by the Guardianship Tribunal, FX has been primarily responsible for the management of the farm. He is, as the Tribunal below noted, in effect a servant of his mother's business (either as employee or agent) – a business which historically had been carried on jointly by his mother and his late father. 13 As noted, the NSW Trustee gave as her reason for moving to dispose of the farming business, the financial risk to which FW's estate was exposed. In our view, that risk has existed ever since the original Guardianship Tribunal order was made back in 2002. At hearing Mr Tunbridge was unable to point to any particular conduct or activities on the part of FX or others that had increased the risk to the estate over the seven year period. Nor was he able to point to anything in the time that has now passed since the decision was made, and is stayed, which suggests that the level of risk is any higher than it was during the seven year period. 14 The fact that the business was allowed to be conducted in this way for several years suggests to us that the NSW Trustee is not intolerant of the possibility that a protected person's trading activities may continue to be undertaken in the name of the protected person by a third party. Our view is that the more likely explanation for the NSW Trustee's decision to dispose of the business is the difficult, if not impossible, way in which the day to day manager, FX, deals with the NSW Trustee. His submissions at the appeal hearing were often derisory of the Trustee's performance. It would clearly be easier for the Trustee to have the business disposed of, and then be left simply with the financial management of FW's estate, without the need to have an ongoing business relationship with FX. 15 In December 2007, three months before the decision under review was taken, a Commonwealth scheme came into operation under which a farmer who sells up his or her interest in the farm may be eligible to receive a substantial amount of cash compensation. The scheme is intended to provide a means whereby drought affected farmers may leave the land 'with dignity'. The scheme is called the Exceptional Circumstances Exit Package 2007. The Policy Guidelines (as revised June 2009) formed part of the material before the Appeal Panel. The scheme is administered via regional offices of Centrelink. The scheme is described as a time-limited, one-off assistance measure for farmers in declared areas. FW and FX's farm is in a declared area. 16 The real issue in this case is whether FW should be left in place as the owner of the trading business of the farm so that any disposal of the business and her interest in the farm can proceed within the framework of the scheme. On the following matter the appellant and Mr Tunbridge were agreed – i.e. that the farmer needed still to be in business as a farmer when the application was made. The relevant eligibility requirement is at point 1.5(d) of the Policy – 'immediately before the sale the person was effectively in control of the farm enterprise'. If the farming business had been dissolved ahead of sale, both FW and Mr Tunbridge were of the view that the applicant would be ineligible. 17 The Appeal Panel was assisted in understanding this scheme by material prepared by a solicitor (Ms Hazleton of North & Badgery) who has been assisting FX in dealing with Centrelink over this issue. The material included a letter from Ms Hazleton dated 20 July 2009 and a copy of a letter of about the same date from her to the NSW Trustee on the issue. At hearing Mr Tunbridge tendered a briefing note prepared by the NSW Trustee estate officer, Ms Neate, dated the day before the hearing. This note was read out to the appellant. 18 Ms Neate advised that FW is currently in receipt of Exceptional Circumstances scheme fortnightly relief payments. The note emphasises the requirement that eligibility also depends on there being an arms length sale on commercial terms. The note addresses a point that was raised by FX before the Tribunal below and in the course of the present Appeal Panel proceedings, i.e. whether there can be offset against the sale price wages foregone by him were he to be the purchaser. The note advises that this can not occur within the framework of the scheme. However, consideration can be given to the situation as part of the calculation of the assets of a person who is entitled to a pension such as the aged pension or the disability pension. 19 In the note Ms Neate advised that a senior officer responsible for administration of the scheme was available to participate in the hearing. 20 The Appeal Panel held a telephone conference with that officer, Ms Nash. Ms Nash confirmed a number of the points made above. She explained that the scheme was designed to provide financial support to people leaving farming. She indicated that the actual applicant must be the vendor, or a person acting on behalf of the vendor with appropriate authority. The most fundamental feature of the scheme is that the sale of the farming property (the land, and such things as stock, equipment, crops) must be for market value and at arms length. Consequently where there is a sale within a family or to a close relative, care is taken to ensure that the consideration is adequate. Where a sale meets the scheme's requirements, the vendor is eligible for special compensation up to $150,000. 21 It will be seen, therefore, that if FW's interest in the land and other things connected with the farm were to be sold while this scheme is in operation (presently due to expire 30 June 2010), her estate stands to be enhanced by a sum of up to $150,000. 22 FW is now about 80 years old. While her health is deteriorating, she has a life expectancy of several years. It is likely that her care needs will increase. It is desirable that her estate be maximised to assist in that regard. 23 In addition, there appears to be no dispute that over many years FX has worked the farm without receiving wages in the usual way. It may be that, as he asserts, he has a claim against the estate in relation to wages foregone. If that is so, then again it is in the interests of his mother that her estate be enhanced to the maximum degree. 24 The major difficulty for accomplishment of a sale within the framework of the exit scheme is the confrontational way FX deals with the NSW Trustee and its staff. He referred to a long history of differences, confirmed by Mr Tunbridge. In his submissions to the hearing he continually made hostile and abusive comments about the competence of the NSW Trustee and the staff. 25 At hearing he indicated a preparedness to pay a purchase price at market value as assessed by the Australian Valuation Office. But then he drew attention to a series of offsets he considered should be taken into account, being improvements which he said he had funded over many years (sheds, fencing, et cetera). In light of FX's way of dealing with the Office in the past and these qualifications to his original statement that he would pay market value, the Appeal Panel is inclined to the view that it may prove ultimately to be the case that a sale price may not be able to be agreed that meets the scheme criteria. 26 On the other hand, there is one development which gives us some cause for optimism that a satisfactory sale may be able to be achieved. FX has engaged the solicitor mentioned, Ms Hazleton, in his dealings with the scheme administrators. Based on the documents generated by the solicitor that were before us at hearing, the solicitor appears to have a clear understanding of the scheme's requirements and has the confidence of FX. While it is regrettable that she was not able to appear in these proceedings (not holding instructions for that purpose), there is, we think, a reasonable possibility that if she is left to undertake negotiations with the NSW Trustee's responsible officer, a sale that meets the scheme criteria may be achievable. 27 It is against this background that we have concluded that the preferable course is to set aside the decision of the NSW Trustee. 28 Based on the advice given to the appeal hearing by Ms Nash, the entire process (from pre-sale agreement to the making of a compensation payment after the sale is completed) takes about three to five months. 29 If a sale that meets the scheme criteria can not be accomplished within that time period, then in our view it would be appropriate for the NSW Trustee to re-make its decision, or earlier if events occur in the meantime which raise any immediate threat to the personal liability or vulnerability to debts of the protected person's estate. 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