NSW Civil and Administrative Tribunal New South Wales Medium Neutral Citation: NDT [2014] NSWCATGD 33 Hearing dates: 30 September 2014 Decision date: 30 September 2014 Jurisdiction: Guardianship Division Before: Connor E, Senior Member (Legal) Stone S, Senior Member (Professional) Manga R, General Member (Community) Decision: Financial management order made; private manager appointed. Catchwords: FINANCIAL MANAGEMENT - application for financial management order - enduring power of attorney made - need for an order where enduring power of attorney in place - capacity of attorney - alleged delegation of authority by attorney - sale of property - need for certainty of authority - best interests - financial management order suspends enduring power of attorney - alternate attorney appointed as financial manager. Legislation Cited: Guardianship Act 1987 Category: Principal judgment Parties: Mr NDT (subject person) Mrs WES (applicant) Mrs GKT (spouse and attorney) Mrs POL (substitute attorney) NSW Trustee and Guardian File Number(s): 57376 Publication restriction: Decisions of the Guardianship Division of the Civil and Administrative Tribunal have been anonymised to remove any information that may identify any person involved in the Tribunal's proceedings (s 65, Civil and Administrative Tribunal Act 2013 (NSW)). reasons for decision What the Tribunal decided 1The Tribunal appointed Mrs POL as financial manager for Mr NDT, subject to the authorities and directions of the NSW Trustee and Guardian. Background 2Mr NDT is an 85-year old man who lives in a nursing home in Regional NSW. Mr NDT's wife, Mrs GKT, lives in a retirement village in Regional NSW. They were married in 2004. Mr NDT has three daughters from a previous relationship; Mrs WES, Mrs POL and Mrs BVC. Mrs GKT has six children from a previous relationship. 3On 17 March 2014 Mr NDT executed an enduring power of attorney appointing Mrs GKT as his attorney, and, in the event that she is unable to act as a result of her death or incapacity, Mrs POL, as his attorney. In the instrument, Mrs GKT is referred to by her previous name. 4On 12 September 2014 the Tribunal received an application for the appointment of a financial manager for Mr NDT from Mrs WES. In her application Mrs WES asserts that Mrs GKT is managing Mr NDT's financial affairs as his attorney but that she is 'overwhelmed by the procedures involved' and that 'she [Mrs WES] has serious reservations regarding her mental /cognitive ability'. 5In material submitted with her application, Mrs WES states that a property jointly owned by her father and Mrs GKT was listed for auction on 20 September 2014. The sale of Mr NDT's motor vehicle by Mrs GKT's daughter, Ms DHM, is also raised in this documentation. The Hearing 6Before it makes a decision, the Tribunal must try to bring the parties to a settlement if this is possible and appropriate. There was significant conflict in this matter and the Tribunal was not able to assist the parties to reach agreement. What did the Tribunal have to decide? 7The issues for the Tribunal were: * Is Mr NDT capable of managing his affairs? * Is there a need for another person to manage Mr NDT's affairs and is it in his best interests for a financial management order to be made? * If so, who should be appointed financial manager? Is Mr NDT capable of managing his affairs? 8The Tribunal noted the brief letter of Dr Z, general practitioner, dated 16 September 2014. Dr Z states that: '[Mr NDT] has suffered from dementia (Alzheimer's type) for at least 5 years...Due to his dementia he is incapable of caring for himself and managing his own affairs.' 9The participants in the hearing all agreed that Mr NDT is unable to manage his own affairs and the Tribunal was satisfied that this is the case. Is there a need for another person to manage Mr NDT's affairs and is it in his best interests for a financial management order to be made? Evidence 10The Tribunal noted that the primary issue before the Tribunal is whether or not there is a need for a financial management order given that Mr NDT executed an enduring power of attorney in 2004. The power of attorney, which is stated to be enduring, is worded as follows: '3. This power of attorney operates: *as to the appointment of [MRS GKT] as she accepts the appointment. *as to the appointment of [MRS POL] as from [MRS GKT] dying or declining to act as my attorney or upon two medical practitioners certifying in writing that she is suffering lack of capacity through loss of mental capacity and upon the attorney accepting the appointment.' 11In material submitted in support of her application, Mrs WES states that: '[Mr NDT]'s financial affairs are being managed by his wife (my step-mother) [Mrs GKT] (aged 82 years) as his Power of Attorney. In her personal interactions [Mrs GKT] presents as having mental health problems, she is dishevelled, disoriented and easily confused. I hold serious reservations regarding her cognitive capacity and her ability to manage my father's financial matters. ... It is likely that [Mrs GKT] could be convinced by others to deal with my father's assets in a way that would not benefit my father. On Monday 18/8/14 [Mrs GKT] told me that people had been giving her papers to sign and that she didn't know and could not remember what she had signed. [Mrs GKT] is being guided by members of her own family in regard to my father's financial affairs. I am concerned that she may not be acting in my father's best interests.' 12Mrs GKT participated in the hearing by telephone and asserted that she is 'quite capable' of managing her husband's affairs. She told the Tribunal that the property at Regional NSW in which she previously resided with Mr NDT was recently sold however she was unable to recall the sale price or the terms of the settlement. Mrs GKT gave evidence that she and Mr NDT have approximately $116,000 in a joint investment account and that they have approximately $50,000 in an everyday operating account. Mrs GKT stated that she and her husband each receive a pension from Centrelink, but she was unable to recall how much they receive. 13The Tribunal drew Mrs GKT's attention to a letter dated 17 September 2014 from Ms Y, Partner of law firm A in Regional NSW, to Mr X of law firm B in the North Shore of Sydney. Ms Y writes: 'Further to our telephone conversation on 16 September 2014, we confirm our client is aware and agreeable to your client making application and taking over the financial management for [Mr NDT]'. 14Mrs GKT acknowledged that Ms Y is a lawyer whom she has consulted. However she could not recall having consulted with Ms Y in relation to the financial management application and denied having ever provided the instructions reflected in the above extract from the letter of 17 September 2014. 15The Tribunal contacted Ms Y by telephone during the hearing. She confirmed that she had met in person with Mrs GKT and had also subsequently spoken to her by telephone to confirm the instructions she was given. Ms Y told the Tribunal that she is aware that since then Mrs GKT appears to have 'had a change of heart'. 16Ms W, the admissions officer at the nursing home also participated in the hearing by telephone. She commented that Mrs GKT has had many issues to deal with over recent weeks and that her inability to be able to recall details about her pension or the sale price of the property needs to be considered in that context. 17The Tribunal also contacted Ms KJM by telephone during the hearing. Ms KJM is the wife of one of Mrs GKT's sons and the participants in the hearing all agreed that she has been involved in the recent management of Mr NDT and Mrs GKT's financial affairs, including the sale of their property in Regional NSW. The detailed written submission of Ms KJM to the Tribunal evidences her involvement. 18It was asserted by Mrs WES in her written submissions, and at the hearing, that Ms KJM works for the real estate agent company in Sydney and that she referred the potential sale of the property to the real estate agent company's office in Regional NSW, for which she will receive a referral fee of twenty percent of the commission payable to the agent. Ms KJM confirmed that she had made a referral to the real estate agent company's office in Regional NSW and stated that the total amount she will receive is approximately $500 which she intends to refund back to Mr NDT and Mrs GKT. 19Ms KJM gave evidence that Mrs GKT has purchased a one bedroom ground floor apartment in a retirement village adjacent to the nursing home in which Mr NDT is residing at a cost of $160,000. In her written submission, Ms KJM states that Mrs GKT will also be liable for an ongoing charge of 'around 80% of her pension'. Ms KJM told the Tribunal that Mr NDT has been accepted as a permanent resident and that he is currently paying an interim daily rate of $47.15 per day or 85% of his pension, pending an assets assessment following the sale of the marital property and purchase of the unit for Mrs GKT. She stated that no bond is payable. 20The Tribunal noted the summary of fee arrangements from the nursing home which states that 'Residents can choose to pay for their accommodation by a refundable deposit, a daily payment, or a combination of both.' 21There was significant written evidence before the Tribunal, which together with the verbal interactions during the hearing, indicated that a significant level of mistrust has developed between the biological children of Mr NDT and those of Mrs GKT. The participants in the hearing all agreed that this is the case. In particular, Mr NDT's children feel that decisions have been made about their father's affairs by Mrs GKT's children and their spouses without their being consulted, as a result of which they are concerned about whether his interests are being protected. 22The Tribunal noted the email dated 8 September 2014 from Ms Y to Mr V stating that Ms KJM had been requested to obtain a doctor's certificate from Mrs GKT's doctor 'as to her [Mrs GKT's] capacity to manage her own and [Mr NDT]'s finances'. The only professional evidence before the Tribunal in relation to this issue is the very brief letter written by Dr Z, general practitioner, on 22 August 2014 which states that: 'In my opinion she [Mrs GKT] is capable of signing the appropriate paperwork for the sale of her house'. This does not provide the Tribunal with any reassurance as to Mrs GKT's capacity to make complex financial decisions about her husband's affairs as his attorney. 23While the Tribunal is mindful of the stress that Mrs GKT has been under over past months as noted by Ms W, and the potential impact this may have had on her ability to recall specific details of her and her husband's financial affairs, the Tribunal was concerned that Mrs GKT was unable to recall the amount of their pensions given that this is their primary source of income, nor the sale price of the property which was sold very recently. The Tribunal was also concerned about Mrs GKT being unable to recall having consulted her solicitor and her denial of having provided the instructions documented by Ms Y. 24There was evidence before the Tribunal that Mrs GKT has been receiving a significant level of input into the decisions being made on behalf of Mr NDT from at least some of her biological children and their spouses. During the hearing it appeared that Mrs GKT was at times being 'coached' in her responses by Ms DHM, who was present with her. While there was no evidence before the Tribunal that Mr NDT's affairs have been mismanaged to date, the Tribunal was not confident that Mrs GKT is able to make informed decisions about important issues such as the optimal financial arrangement in relation to Mr NDT's accommodation. Consideration 25Given that Mr NDT has an enduring power of attorney, there is only a need for the making of a financial management order to be contemplated if the enduring power of attorney is not operating effectively. The Tribunal has not been asked to review the operation and effect of the enduring power of attorney made by Mr NDT and it is therefore not appropriate for the Tribunal to make a formal finding about Mrs GKT's capacity. Clearly, however, the effectiveness of the enduring power of attorney is critical in the Tribunal's determination as to whether or not a financial management order should be made for Mr NDT. 26An attorney appointed pursuant to an enduring power of attorney is in an important position of trust and must always make decisions and act in the principal's best interest. While it is appropriate for an attorney to seek the advice and opinions of others, it is not appropriate for the attorney to effectively delegate their decision making to others, as appears to be the case in this matter. Mrs GKT appears to have deferred to her children and their spouses with respect to decisions that need to be made such as the arrangements relating to the sale of the marital home and the provision of appropriate accommodation for her and her husband. Mrs GKT's children and their spouses have, in effect, become Mr NDT's 'de facto' attorneys by way of a sub-delegation of authority from Mrs GKT. 27After considering the evidence the Tribunal was satisfied that there is a need to appoint someone to manage Mr NDT's affairs and it is in his best interests that an order be made. There was significant evidence before the Tribunal that Mrs GKT is no longer capable of making decisions about complex financial matters on behalf of her husband. In his enduring power of attorney, Mr NDT sought to provide for the possibility that his wife may cease to have the capacity to act as his attorney and to provide for an alternative attorney in such circumstances. Given Mrs GKT's assertion at the hearing that she is still capable of acting as her husband's attorney, and her resistance to relinquishing that role, the enduring power of attorney executed by Mr NDT is not able to be operated upon effectively at this time in the manner he envisaged. The evidence before the Tribunal was that financial decisions have been made which impact Mr NDT without his biological children being involved and that as a result a lack of trust has developed. The Tribunal concluded that it is in his best interests for a financial management order to be made. 28The making of a financial management order suspends the operation of the enduring power of attorney for the duration of the financial management order. The Tribunal notes that if Mrs GKT decides that she would in the future decline to continue to act as her husband's attorney (if the enduring power of attorney was not suspended), an application could be made to the Tribunal requesting a review of the financial management order with a view to its revocation on the basis that the enduring power of attorney could become operative again, with Mrs POL assuming the role of attorney as was intended by Mr NDT. If the Tribunal then decided to revoke the financial management order, this would terminate the involvement of the NSW Trustee and Guardian and the ongoing payment of supervisory fees to that agency. Who should be appointed financial manager? 29In appointing a financial manager, as in making all other orders under the Guardianship Act 1987 (NSW) ('the Guardianship Act'), the Tribunal must act with the interests of the person concerned as the paramount consideration and in accordance with the other principles set out in section 4. 30Section 25M of the Guardianship Act provides that, if the Tribunal makes a financial management order, it may appoint a suitable person to manage the person's estate or may commit the management of the estate to the NSW Trustee and Guardian. 31The Tribunal noted that Mr NDT's wishes when he executed the power of attorney in 2004 were that Mrs GKT be appointed as his attorney and, that if she is unable to act as his attorney as a result of her death or incapacity, that his daughter, Mrs POL should assume responsibility. In light of this, the Tribunal canvassed with the participants in the hearing the possible options, including the joint appointment of Mrs GKT, or one of her children, as joint financial manager with Mrs POL. 32Mrs GKT submitted that she wishes to remain in control of her husband's finances. When asked her view about the appointment of one of her children jointly with Mrs POL, Mrs GKT stated that she would like to nominate her eldest son, Mr TPM. Mr TPM did not participate in the proceedings until the hearing was almost over and the Tribunal did not consider it appropriate to consider him for appointment as joint financial manager for Mr NDT. 33The Tribunal ultimately determined that, given the doubt about Mrs GKT's current capacity to be her husband's attorney, it was not appropriate to consider her for appointment as his financial manager. The Tribunal does not consider it appropriate for Mrs GKT's children to be instrumental in the management of Mr NDT's affairs, which will need to be separated as a result of Mr and Mrs GKT's changed living situations. Mr NDT did not contemplate his step-children or their spouses being involved in the management of his affairs and their making decisions on his behalf as his '[de facto]' attorneys has the potential to lead to conflict as had been demonstrated at the time of the hearing. Mr NDT specifically provided in his enduring power of attorney, that his daughter, Mrs POL, should become his attorney in the event that his wife declined to so act, or was medically determined to no longer have the mental capacity to act as his attorney. 34Mrs POL attended the hearing and indicated that she was willing to be considered for appointment as financial manager for Mr NDT. She gave evidence that she is a qualified accountant and CPA, and impressed the Tribunal with her conciliatory approach and ability to focus on the relevant issues during the hearing. Mrs POL stated that she and her sisters are not unhappy with the decisions that have been made to date and indicated that if she is appointed as financial manager she will seek to ensure that Mr and Mrs GKT are able to remain as close together as possible. Section 4 of the Guardianship Act provides that the views of the person who is the subject of an application to the Tribunal should be taken into consideration. Mrs POL's appointment as her father's financial manager gives effect as closely as possible to his wishes as stated in the enduring power of attorney he made. 35The Tribunal was satisfied that Mrs POL is a suitable person to be appointed as financial manager for Mr NDT subject to the authorities and directions ordered by the NSW Trustee and Guardian, and appointed her as financial manager for Mr NDT. As previously noted, the making of a financial management order suspends the enduring power of attorney executed by Mr NDT for the duration of the order. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar 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. Decision last updated: 06 November 2014