Civil and Administrative Tribunal New South Wales

• Medium Neutral Citation: BEY v NSW Trustee and Guardian [2014] NSWCATAD 87
• Hearing dates: 29 April 2014
• Decision date: 03 July 2014
• Jurisdiction: Administrative and Equal Opportunity Division
• Before: L Goodchild, Senior member

Decision

The decision under review is affirmed

• Catchwords: NSW Trustee and Guardian - decision to sell home - best interest - financial management order
• Legislation Cited: Guardianship Act 1987; NSW Trustee and Guardian Act 2009
• Cases Cited: Protective Commissioner v. D & Ors (2004) NSWCA 216
• Category: Principal judgment
• Parties: BEY (Applicant); NSW Trustee and Guardian (Respondent)
• Representation: BEY (Applicant in person); Ms Stormont NSW Trustee and Guardian (Respondent)
• File Number(s): 1410056
• Publication restriction: S64 Civil and Administrative Tribunal Act 2013

reasons for decision

INTRODUCTION

1 These proceedings were commenced by the applicant, BEY, filing an Application for Review of a decision made by the NSW Trustee and Guardian (NSWTG), that a residential property in Sydney owed by BEY's mother should be sold. BEY's mother, Mrs JF, is 88 years old. She has dementia and is living in a nursing home in Western Australia. She has two sons including BEY. Her other son, SF, resides in Western Australia. The property was the family home for many years and the home where Mrs JF resided before she moved to Western Australia in July 2012 and became a resident in nursing home accommodation.

2 The decision was made to sell the JF's home by the respondent, NSW NSWTG pursuant to its appointment as financial manager of Mrs JF's financial affairs.

3 JF's two sons, sadly, have a hostile relationship. The applicant contends that it is in the best interests of his mother for the property to be leased. The son in Western Australia contends that it is his mother's wish is for the property to be sold and he supports that course.

BACKGROUND TO THE DECISION THE SUBJECT OF REVIEW

4 This is a review of a decision made under Part 3A of the Guardianship Act 1987.

5 On 14 March 2013, the Guardianship Tribunal made a decision committing the management of the estate of Mrs JF to NSW Trustee & Guardian (NSWTG).

6 On 23 July 2013, the property branch of NSWTG recommended leasing the index property.

7 Mr John Neely, Assistant Director Client Services, on 1 October 2013 decided to lease the protected persons property via a formal lease agreement.

8 SF made a request for an Internal Review on 18 December 2013. In summary, SF cites the following grounds in his review request:

9 The cost of repairs/maintenance to achieve maximum rental is between $5,000.00 and $50,000 depending on the scope of work carried out.

10 The cost to prepare the property for sale is minimal.

11 Land Tax, insurance and agents fees lessen the return from rental and the protected person anticipates it may take up to 10 years to recoup these costs.

12 That the protected person wishes to sell the property.

13 In accordance with s.53 of the Administrative Decisions Tribunal Act 1997 (NSW), Elaine Tamblyn, Assistant Director Client Services was directed to internally review the decision.

14 Ms Tamblyn decided to set aside Mr Neely's decision and made a substitute decision that the protected persons index property be placed on the market for sale.

15 This is the decision that is under review on application of BEY.

HISTORY

16 Mrs JF is an 88-year-old woman who lives at a Nursing Home in Western Australia. She has a projected life expectancy of five years. It is not anticipated that she will return to NSW.

17 Her husband died in mid-2012. Her two sons have a hostile relationship. SF lives close to her in Western Australia. The applicant lives in NSW.

18 In mid-2012, Mrs JF was diagnosed with Dementia. Dr Law, a specialist at Lady Davidson Hospital, said on 4 July 2012 "she is not capable of making sound decisions based on her needs." Dr Chan, also a specialist at Lady Davidson Hospital, on 9 July 2012 recommended that she be placed in a facility for high-level care dementia.

19 At the Guardianship Tribunal hearing on 14 March 2013, the Presiding Member recorded in the reasons for decision report, located in 'Exhibit 1', that the protected person indicated "that she had a greater degree of confidence and trust in her son SF than in her son BEY" She said she would trust her son SF to manage her affairs.

20 The tribunal found "The protected person appeared to have a reasonable level of understanding of the explanation and of the proceedings. She participated in the hearing and was able to give the Tribunal a reasonably clear account of her views".

21 It is recorded in the Guardianship Tribunal's Reasons for Decision, that when asked by Tribunal Members what she wanted done with her home Mrs JF was clear in stating that she wanted it sold, because "no one goes there." She has since affirmed this sentiment in subsequent contact with NSWTG and has consistently stated that she wishes to sell the property.

22 Mrs JF receives a Superannuation payment from CompSuper. She also receives income from various investments in shares. There is no concern regarding her income being sufficient to meet her needs. Her current income is in excess of her current expenditure.

23 The property has remained vacant since the Mrs JF moved to Western Australia. A sales and leasing report on 15 July 2013 states that minor repairs would be required to bring the house to a rentable standard. The rental projection of $750.00 per week was based on the condition of the property with the minor repairs carried out. Cost of repairs is reported to be in the vicinity of $10,000.

24 The NSWTG property branch advice on 23 July 2013 recommend leasing of the property. Financial Planning modelling showed that the anticipated rental return is approx. $13,000.00 per annum more than income derived from investing sale proceeds (based on an anticipated rental of $750.00 per week compared with interest rate of 3% on net sale proceeds of $936,000.00). FPU advice on 29 September 2013 supports leasing the property as the best financial outcome for the Mrs JF.

25 In the circumstances of this case, there is not significant financial difference between rental and sale. Specialist advice is in favour of leasing the property with the rate of rental return being put at 4.06% per annum and the anticipated interest rate of 3% per annum. Both are conservative projections and the difference is approximately $10,000.00 per annum, and is based on the property being fully occupied at market rental. Generally speaking rental projections take into consideration only 80% of rental income (allowing 20% for vacancy and costs) this would see a rental return of $31,200 per annum which is only $3,100.00 more than the conservative return on cash of $2,800.00.

26 The Applicant is in favour of renting the property and has prepared significant documentation in support of his proposal. He is himself an Architect and qualified to conduct building inspections. He provided considerable financial modelling to support his position for retaining the property for lease. He provided a Building Inspection Report undertaken by himself which notes the property in good condition, confirming his view that minimal work would be require to prepare the property for lease.

27 He identifies a further reason to retain his mother's home as to provide a financial diversity in her financial portfolio. He contends that his father wished the property to remain in his mother's portfolio until it 'needs' to be sold.

28 SF initially stated he had no preference for sale or lease however following a trip to NSW to retrieve some items from the home and after viewing the property he has now informed NSWTG he would like the property sold.

29 Elaine Tamblyn the Internal Reviewer made a substitute decision to that made by Mr John Neely Assistant Director Client Services, on 1 October 2013. Mrs Tamblyn determined that the protected persons index property should be placed on the market for sale.

30 Ms Tamblyn in deciding to sell the index property placed weight on the protected persons consistent opinions and the fact that there was no compelling evidence that she would be significantly financially disadvantaged by a sale of the property.

THE PROTECTED PERSON'S FINANCIAL POSITION

Mrs JF's Total Income consisting of:

Centrelink Pension;

Bank a/c withdrawals;

Sale of shares proceeds;

tax refunds;

dividend income

This is estimated to total $201,427.

The protected persons budgeted expenses for FY 2013-14 were $73656.

Financial Assets total $1,263,256 and include:

$182,906 in Trust Account

A Commonwealth Super Pension of $622.21 pf ($16,180 pa); and

DVA benefits of $304.25 per quarter ($1,220 pa)

Return on Funds Calculation: Rental p.a. / Sales value= 4.06%.

The protected persons Land Tax for 2013 was $4222.35 and her net cash flow is estimated to be $127,770.

CONSIDERATION

31 The NSWTG is required to take into consideration s39 of the NSW Trustee and Guardian Act 2009 which is as follows:

32 It is the duty of everyone exercising functions under this Chapter with respect to protected persons or patients to observe the following principles:

(a) the welfare and interests of such persons should be given paramount consideration,

(b) the freedom of decision and freedom of action of such persons should be restricted as little as possible,

(c) such persons should be encouraged, as far as possible, to live a normal life in the community,

(d) the views of such persons in relation to the exercise of those functions should be taken into consideration,

(e) the importance of preserving the family relationships and the cultural and linguistic environments of such persons should be recognised,

(f) such persons should be encouraged, as far as possible, to be self-reliant in matters relating to their personal, domestic and financial affairs,

(g) such persons should be protected from neglect, abuse and exploitation.

33 Chapter 4 of the NSW Trustee and Guardian Act 2009 is concerned with 'management functions relating to persons incapable of managing their affairs.' By s.56(a) the Trustee may exercise all the functions necessary and incidental to management and care of the estate of the managed person.

34 There is in force an order from the Guardianship Tribunal committing the management of the protected person's estate to the Trustee. In managing that estate the Trustee may exercise any of the powers vested in it by s.16. Relevantly, these include -

(b) grant leases of property for a term not exceeding 10 years and give to a lessee an option of renewal if the aggregate duration of the lease and any such renewal does not exceed 10 years,

...

(d) surrender a lease and accept a new lease,

(e) accept a surrender of a lease and grant a new lease,

(f) execute a power of leasing vested in a person having a limited estate only in the property over which the power extends,

(g) buy, sell, realise and mortgage (with or without a power of sale) real and personal property,

(i) postpone the sale, calling in and conversion of any property that the NSW Trustee has a duty to sell, other than property that is of a wasting, speculative or reversionary nature,

35 In determining an application for review, s.63 of the Administrative Decisions Tribunal Act provides that the Tribunal is to decide what is the correct and preferable decision having regard to the material before it. In this application, that includes the Application for Review and the various Sections of the written submissions of the Applicant. It also includes the documents provided by the NSW Trustee and Guardian. It also includes the oral evidence given both by the applicant and SF at the hearing of the application.

36 In considering the decision under review, it is important to recognise the position of a manager of the estate of a protected person when making decisions in the course of the management of the estate. In Protective Commissioner v. D & Ors (2004) NSWCA 216 McColl JA (Mason P and Giles JA agreeing) said at 173 that:

"The manager stands in the shoes of a person who is unable to manage his/her affairs by virtue of circumstance 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 the person's continued maintenance. In this respect the 1983 Act and its predecessors reflected the 'parental and protective' jurisdiction historically exercised by the Crown both in exercise of his prerogative and pursuant to the Prerogative Statutes."

37 The applicant contends that his mother is being controlled, manipulated and influenced by his brother. It is for that reason that he considers that little weight can be given to his mother's wishes. The applicant recalls a conversation with his mother over lunch one day where he spoke with her about her future and asked her what her thoughts were regarding her home. The applicant recalls his mother making it very clear to him that she trusted his and his brother's good judgment and she wanted to leave the entire financial decision making up to SF and the applicant. The applicant contends that his mother has never been interested in financial matters and when her husband was alive - left everything to him.

38 Sadly, the two people she trusted with respect to decision-making regarding her financial matters cannot agree and the dispute between them has become very bitter.

39 I do not propose to make any determination with respect to purported manipulation or influence of Mrs JF by SF. I do not believe it is necessary for the purpose of these proceedings.

40 As I stated above, I have had regard to the applicant's submissions and the material provided by the respondent. In the circumstances, I have decided to affirm the decision of the NSW Trustee and Guardian to sell Mrs JF's home. I have regard to the observations made by the Tribunal contained in its reasons from the March 2013 hearing.

41 I have had regard to the submissions by the applicant that his mother has the right to earn the best income possible in a diversified investment portfolio.

42 Mrs JF will not be returning to the property. It is but one asset in a portfolio containing shares and superannuation. There is no concern that Mrs JF would be at any significant financial disadvantage by the sale of the home. The return per annum over lease compared to sale is not, given the size and nature of her financial estate and given the nature of her needs, a significant difference.

43 There is no concern that Mrs JF's combined income would not be sufficient to meet her needs.

44 There is no desire by members of the family to hold onto the family home or to purchase the home upon the death of Mrs JF. The property is vacant, has been for two years. It will in all likelihood be sold upon the death of Mrs JF.

45 I accept that Mrs JF wants to sell the property. I accept that she expressed that view to the Tribunal in March 2013. I accept that she has expressed that view to SF. I do not accept that simply because she has not in the past taken any 'interest' in her financial affairs and that her husband has, when alive, made all of the decisions regarding financial a matters, that any less weight should be placed on the view that she wants to sell the home because nobody goes there. It is a sensible comment.

46 Mrs JF has expressed disappointment and distress because of the ongoing dispute between her sons. I would expect that this mother would want equanimity between her sons. Hopefully a sale takes away one less avenue for dispute.

47 I consider that affirming the decision for the sale of the property would give paramount consideration to the welfare and interests of Mrs JF, restrict as little as possible the freedom of decision and freedom of action of Mrs JF, would take into account the views of Mrs JF, and may go some way to preserving the family relationship of Mrs FK and her sons.

ORDER

48 That the decision under review is affirmed.

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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

Decision last updated: 03 July 2014