Chapter 8 - Administration/financial management
Contributed by Nick O'Neill with input from Carmelle Peisah, current to 30 April 2021.
8.1 Introduction
Central to the modern guardianship and administration of estates systems in Australia is the power given to tribunals in all the States and both Territories to make orders appointing others to manage the property and affairs of adults who lack the (decision-making) capacity to manage their financial affairs. These orders are known as administration orders in all the States, except New South Wales where they are called financial management orders, if they are made by either the Civil and Administrative Tribunal of New South Wales (NCAT) or that State’s Mental Health Review Tribunal. In the Australian Capital Territory they are called management orders.
As from 28 July 2016, in the Northern Territory the Northern Territory Civil and Administrative Tribunal (NTCAT) has had jurisdiction to appoint guardians to make decision in relation to some or all of the financial matters of the person the subject of NTCAT’s order.
As will be discussed in relation to each State and Territory in the appropriate places below, the Supreme Courts of each State and Territory either has both statutory jurisdiction and (almost certainly) inherent parens patriae jurisdiction to made similar orders or at least inherent parens patriae jurisdiction to do so. In New South Wales, such orders made by the Supreme Court are called protected estate management orders.
However, as is already clear from other chapters of this book, the guardianship and administration of estates systems in the different States and Territories of Australia are essentially the same, but have sufficient differences between them for it to be necessary to deal with each State and Territory’s system separately. Also, as many of the provisions that apply to the making of administration orders have already been discussed in Chapters 6 and 7 dealing with the appointment of guardians and their functions or powers, particularly Chapter 7, there will be appropriate cross references to those chapters in this chapter.
This chapter sets out which bodies have jurisdiction to make administration orders in each State and Territory. It also sets out how applications for those orders are made, by whom, who may be involved in the hearing process and what the criteria are for making such orders. The chapter deals with the processes for reviewing administration orders and the criteria that are relevant to the review process.
In New South Wales the Guardianship Division of the Civil and Administrative Tribunal of New South Wales (NCAT) makes the majority of administration orders, but unlike its counterparts elsewhere in Australia does not give administrators their powers to carry out their functions and responsibilities as administrators. Nor do administrators report to it. Since mid 2009 when the Office of Protective Commissioner was abolished, the NSW Trustee has been giving administrators directions as to how they are to administer the estates they have been appointed to manage, and administrators have been accounting to the NSW Trustee. In the other States and the two Territories the relevant tribunal gives the administrators their powers either directly, by setting them out in the appointment order, or by appointing administrators whose appointment vests them with powers that the tribunal appointing them may be able to add to or limit. In Victoria, Queensland and Tasmania the administrators report to the tribunal. In South Australia private administrators report to both the South Australian Civil and Administrative Tribunal (SACAT) and the Public Trustee while the Public Trustee reports to SACAT. In Western Australia and the Australian Capital Territory, private administrators report to the Public Trustee, but there is no provision for the Public Trustee to report to the tribunal that appointed them in either jurisdiction.
In this chapter the powers and functions that the NSW Trustee automatically has when appointed as administrator in New South Wales and the powers the Public Trustee may give to private administrators are set out in detail, together with the powers that VCAT may give to administrators it appoints in Victoria. The powers, functions and requirements imposed on family members and friends appointed as administrators in Queensland are set out in the general section of the chapter referred to in the next paragraph, as it is suggested that they apply to administrators appointed in the other States and Territories of Australia. The powers and functions of administrators are not dealt with in the same amount of detail.
There are a number of issues common to each of the eight guardianship and administration of estates systems in the country. Where possible, these issues are drawn out and discussed later in the chapter.
Note that, as at 30 June 2018, the “cut-off” date for this update, the
Guardianship and Administration Bill 2018 (Vic), a major overhaul of the current guardianship legislation in Victoria, had passed the lower house of the Victorian Parliament (the Legislative Assembly). Also it had been introduced into the upper house (the Legislative Council) on 1 May 2018. (That Bill provides for the Act to commence on 1 June 2019.)
Note also that, as at 30 June 2018, the NSW Law Reform Commission, which had been given a reference to review the
Guardianship Act 1987 (NSW), had issued a substantial booklet of draft proposals. Among those draft proposals was a proposal to repeal the
Guardianship Act 1987 (NSW) together with a number of proposals relating to how it would be replaced.
The chapter also discusses the role of health care professionals in the making and reviewing of administration orders.
8.2 Jurisdiction to appoint administrators
As noted in Chapter 5, one of the key aims of the modern guardianship and administration of estates systems in Australia has been to make the seeking and obtaining of administration orders much cheaper and more accessible than previously to those who need to get such orders. As a result, applications for administration orders in the States and Territories are made to tribunals.
In New South Wales the Supreme Court retains its statutory as well as its parens patriae jurisdictions. While it regularly uses those jurisdictions to make financial management and similar orders, in 2015 Lindsay J discussed the fact that the Court had those jurisdictions but that both the Guardianship Division of NCAT and the Mental Health Review Tribunal had been given statutory jurisdiction to make financial management orders. This issue is discussed in 8.3.1 below and also in Chapter 6 at 6.2 and 6.3.1. Earlier, in 2003, Morris J of the Supreme Court of Victoria had doubted that that Court’s parens patriae jurisdiction “should play any current role in the day to day administration of guardianship [and administration] matters” because of Victoria’s comprehensive laws in relation to those matters.
The question of which tribunals and courts are empowered to appoint administrators in each of the States and Territories is discussed in more detail below.
8.3 New South Wales
8.3.1 Who has jurisdiction to appoint financial managers?
In New South Wales the Supreme Court, NCAT and the Mental Health Review Tribunal may, and regularly do, make financial management orders.
In addition to its statutory jurisdiction under the
NSW Trustee and Guardian Act 2009 (NSW), the Supreme Court retains the inherent, parens patriae jurisdiction it has had since it came into existence in 1824.
In a 1987 case Powell J of the Supreme Court of New South Wales noted that the jurisdiction of the Court to make orders for the management of property of a person with unsound mind or incapable of managing their affairs may be found in a variety of sources. These included the inherent jurisdiction of the Court in relation to those of unsound mind and the jurisdiction given to the Court by the
Protected Estates Act 1983 (NSW) which has now been superseded by the
NSW Trustee and Guardian Act 2009 (NSW)
. NCAT’s jurisdiction in relation to financial management issues is found in the
Guardianship Act 1987 (NSW).
In June 2010, the Mental Health Review Tribunal took over, from the magistrates, the jurisdiction to make financial management (administration) orders in relation to those who are going through the process of being admitted to a mental health facility.
In 2015 Lindsay J of the NSW Supreme Court noted that nothing in the legislation giving jurisdiction to NCAT and the MHRT to make financial management orders deprived the Court of its inherent, protective jurisdiction. He then continued:
Nevertheless, in its exercise of that protective (parens patriae) jurisdiction, the Court is vigilant against allowing overly free access to the jurisdiction in circumstances in which parties might seek to circumvent, or set at nought, a process of appeal from a statutory court or tribunal established as a specialist jurisdiction designed to bear the burden of routine cases.
Conforming to a model found in several common law jurisdictions, the Court’s parens patriae jurisdiction is generally reserved for dealing with uncontemplated, or exceptional, situations where it appears necessary for the jurisdiction to be invoked for the protection of those who fall within its ambit.
In summary, NCAT, the Supreme Court and the MHRT have jurisdiction, arising from different sources, to make administration orders as follows:
- Guardianship Division of NCAT, under the Guardianship Act 1987 (NSW),
- Supreme Court, under the NSW Trustee and Guardian Act 2009 (NSW),
- Supreme Court, under the parens patriae element of its inherent jurisdiction,
- Mental Health Review Tribunal, in relation to those detained in mental health facilities, under the Mental Health Act 2007 (NSW), but with the financial management orders being made under the NSW Trustee and Guardian Act 2009 (NSW).
As NCAT makes far more financial management orders than the Supreme Court and the Mental Health Review Tribunal, its role will be discussed in more detail than those bodies. The jurisdiction of the Mental Health Review Tribunal both when conducting mental health inquiries and when making financial management orders later during a person’s admission to a mental health facility is dealt with as a separate matter at 8.3.8. It should be noted that NCAT may also deal with applications to make financial management orders in relation to persons who are patients under the
Mental Health Act 2007 (NSW).
Nevertheless it is worth noting what Lindsay J said about the Supreme Court’s jurisdiction in a 2017 case involving the removal and replacement of a protected estate manager, as it applies also to NCAT in the exercise of its jurisdiction in relation to financial management (administration) orders. He said:
The Court’s protective jurisdiction is not a “consent jurisdiction”. An order for the appointment, removal or replacement of a protected estate manager is not to be made merely because a party, or some other person, seeks it, consents to it or acquiesces in it. The Court is bound to exercise an independent judgement, protective of the person in need of protection.
No person or entity (public or private) has a legal entitlement to be, or to remain, a manager of a particular protected estate. The protective purpose of the jurisdiction, with its focus on the welfare and interests of the protected person, precludes this.
Care needs to be taken in all decision making affecting a protected person to focus on the facts of the particular case, preferably with due consultation with the protected person, his or her family and carers who may be well placed to inform the Court of the protected person’s particular circumstances.
8.3.2 Who may apply for a financial management order?
8.3.2.1 NCAT
Similar to applications for guardianship orders, applications for financial management orders may be made to NCAT by:
- the NSW Trustee,
- the person the application is about, or
- any person who, in the opinion of the Tribunal, has a genuine concern for the welfare of the person who the application is about.
As with applications for guardianship orders, most applications for financial management orders are made by family members or by health care professionals.
As pointed out in Chapter 6.3.3, NCAT does not use the requirement that it must be satisfied that the applicant has a genuine concern for the welfare of the person they are making an application about to strike out applications, unless the application is made by a “mere busybody” who has no prior involvement with the person and is causing trouble by making such an application, or by a person (who may be a relative) who is bringing the application to advance their own interests rather than those of the person who is the subject of the application.
In 2007, the then Guardianship Tribunal held that a genuine concern for welfare required that the applicant was:
- bringing to attention a fact situation in relation to the person the application was about which may call for intervention by the Tribunal to protect or promote the welfare or interests of that person,
- sincere in seeing the situation as one that may call for the intervention of the Tribunal in the interests of the person, and also that;
- the application was motivated by a desire to advance the welfare of the person.
8.3.2.2 Supreme Court
Applications to the Supreme Court for management orders are made according to the requirements of the Supreme Court Rules.
It is usual for the applicant, the plaintiff, to be a relative; however it is not essential that the applicant be a relative and another person, often described in legal cases and texts as a “stranger” may apply. This will be the case where there are no relatives to bring the application or where it is alleged that family members are mistreating the incapable person physically or misusing their estate.
In a 2016 case which dealt with the interface between the Supreme Court’s jurisdiction in relation to the settlement of claims made on behalf of, or against, a person under a legal incapacity as a result of motor vehicle accidents, and its protective jurisdiction, Lindsay J noted that:
The inherent, protective jurisdiction of the Court can generally be called in aid for solution of problems that cannot readily be dealt with within ordinary administrative arrangements attending protective legislation or as a means of aiding the due operation of a statutory scheme for the protection of a person incapable of managing his or her affairs.
The Court’s inherent jurisdiction is supplemented by legislation designed to engage the administrative infrastructure for which that Act provides, including authorisation of the NSW Trustee (supervised by the Court) to take protective action.
8.3.3 Who may take part in the hearing as a party?
8.3.3.1 NCAT
The automatic parties to the hearing of an application to NCAT for a financial management order are the applicant and the person the application is about. However, NCAT may join a person as a party to an application if it is of the opinion that the person should be a party, whether because of the person’s concern for the welfare of the person the hearing is about, or for any other reason.
Parties may attend the hearing of the application, give evidence and make submissions to NCAT. They may also appeal against a decision made in relation to an application. Such an “internal” appeal is made to an Appeal Panel of NCAT.
While parties to applications to NCAT are expected to present their own case and are not entitled to be represented by another person without leave from NCAT, they may seek leave to be represented by a lawyer or agent at the hearing of the application.
8.3.3.2 Supreme Court
The parties to applications to the Supreme Court for management orders are usually confined to the applicant as plaintiff and the person the hearing is about as defendant. The Supreme Court Rules apply.
8.3.4 What has to be proved before an order can be made?
Because of the detailed consideration of the question of capacity/incapacity to manage (financial) affairs undertaken by the current Protective List judge, Lindsay J, that are relevant not only to the Supreme Court in the exercise if its parens patriae and statutory jurisdictions, but also to the Guardianship Division of NCAT in the exercise of its jurisdiction to make financial management orders, it is appropriate to deal with the Supreme Court’s jurisdiction first.
8.3.4.1 Supreme Court exercising its inherent statutory and/or statutory (parens patriae) jurisdiction
The Supreme Court has a discretion to make an order that a person’s estate be subject to management if it is satisfied that the person is incapable of managing their affairs.
The formal process of the Court is:
- to make a declaration that the person is incapable of managing their financial affairs,
- to order that their estate be subject to management under the NSW Trustee and Guardian Act 2009 (NSW), and
- by order appoint either a suitable person or the NSW Trustee as manager of the estate of the incapable person.
Lindsay J sees the Supreme Court’s inherent jurisdiction being supplemented by legislation namely, the
NSW Trustee and Guardian Act 2009 (NSW). It is his view that the relevant chapter of that
Act has been designed to engage the administrative infrastructure that the
Act provides. This includes authorisation of the NSW Trustee (supervised by the Court) to take protective action. In other words, the Court’s inherent and statutory jurisdictions are effectively merged.
He has also noted that it has been long established that the protective jurisdiction is required to be administered, in the interests of the [person whose financial affairs have been made the subject of a financial management order], without strife in the simplest and least expensive way.
However, as Lindsay J pointed out in a case handed down on 1 May 2015, the Court’s inherent jurisdiction has never been limited by definition; and further, its limits (and scope) have not, and cannot, be defined. Nevertheless, that jurisdiction, although theoretically unlimited, must be exercised in accordance with its informing principles, governed by the purpose which is served by it. He continued by pointing out that, although the concept of “a person…incapable of managing his or her affairs” is foundational to the Court’s protective jurisdiction in all its manifestations, both inherent and statutory, the purposive character of the jurisdiction was liable to prevail over any attempt at an exhaustive elaboration.
He went on to note there had been different formulations of a “test” of what it is to be “a person (in)capable of managing his or her affairs”. But continued that such formulations were useful only so long as it was appreciated that they did not provide a substitute for direct engagement with the question whether the person the application to the court was about is, or is not, (in)capable of managing their affairs”. Further he noted that that engagement (or put another way, that decision-making process) had to be informed by the protective purpose of the jurisdiction, and the “welfare principle” derived from that purpose.
Lindsay J also pointed out that the “general law” (common law) does not prescribe a fixed standard of “capacity”. Consequently, the level of capacity required of a person for self-management (capacity to manage their financial affairs) had to be viewed in the context of particular facts relating to the particular person said to be in need of protection.
In his view, once this was accepted, there was scope for appreciation of different insights into the meaning of, and proper application of, whether or not the person the subject of the application was “(in)capable of managing their affairs”.
Lindsay J then set out four different formulations of the concept to illustrate this point. The first was Powell J’s formulation, in
PY v RJS.
The second was the formulation Hallen AsJ in
EB and Ors v Guardianship Tribunal and Ors.
The third test was an approach which commended itself to Lindsay J in the case he was deciding. He stated that in considering whether a person is or is not capable of managing his or her affairs:
- a focus for attention is whether the person is able to deal with (making and implementing decisions about) their own affairs (person and property, capital and income) in a reasonable, rational and orderly way, with due regard to their present and prospective wants and needs, and those of family and friends, without undue risk of neglect, abuse or exploitation; and
- in considering whether a person is “able” in this sense, attention may be given to
- past and present experience as a predictor of the future course of events;
- support systems available to the person; and
- the extent to which the person, placed as they are, can be relied upon to make sound judgments about their welfare and interests.
The fourth test, as Lindsay J pointed out, drew upon the legislation that governs the Guardianship Division of NCAT in determining whether or not to make a financial management order namely, the
Guardianship Act 1987 (NSW).
He then continued:
[I]t might be said that, in common experience, whether a person is or is not “capable of managing his or her own affairs” might be determined by reference to the following questions:
- whether the person is “disabled” within the meaning of sections 3(2) (a)-d). That is, whether the person is: intellectually, physically, psychologically or sensorily disabled, of advanced age, a mentally ill person or otherwise disabled; and
- whether, by virtue of such a disability, the person is (within the meaning of section 3(2}} “restricted in one or more major life activities to such an extent that he or she requires supervision or social habilitation”; and
- whether, despite any need they have for “supervision or social habilitation”;
(i) they are reasonably able to determine what is in their best interests, and to protect his or her own welfare and interests, in a normal, self-reliant way without the intervention of a protected estate manager,
(ii) they are in need of protection from abuse, exploitation or neglect.
Lindsay J pointed out that he considered that the utility of each of these formulations depended on whether, in the circumstances of a particular case, “it was revealing of reasoning justifying a finding that a person is or is not capable of managing [their] affairs, having regard to the protective purpose of the jurisdiction being exercised and the welfare principle”.
Note that we have referred to these four “tests” and have set out two of them in the context of the Supreme Court exercising its jurisdiction to make financial management orders. However, we deal with the way NCAT deals with its statutory jurisdiction to make financial management orders at 8.3.4.2, below.
Lindsay J also emphasised that in deciding each case, care had “to be taken not to allow generalised statements of the law or fact-sensitive illustrations to be substituted for the text of any legislation governing the particular decision to be made and, in its particular legislative context, the foundational concept of capacity for self-management”.
He concluded his consideration of this matter by pointing out that whatever is done or not done on an exercise of protective jurisdiction must be measured against whether it is in the interests, and for the benefit, of the person the application is about. This was because the core concern of the Court’s inherent jurisdiction was the welfare of the person the application was about which he stated found particular expression in s. 39(a) of the
NSW Trustee and Guardian Act 2009 (NSW).
In this case the person the application was about was a 21 year old man who had a mild autistic disorder and cone dystrophy; a rare eye disorder affecting his sight. The question of whether or not a financial management (administration) order should be made in relation to his estate arose because he was involved in litigation which resulted in judgment in his favour of $150,000 plus costs.
In applying his approach to the question of whether person the hearing was about, AKJ, was or was not incapable of managing his affairs depended upon an assessment of AKJ’s subjective circumstances, Lindsay J considered the support available to him from his family, the extent to which he, within a benign domestic environment, could be relied upon to make sound judgments about his welfare and interests. This led Lindsay J to what he considered was “the appropriate finding to make”, on the facts of the case namely that AKJ was, capable of managing his affairs. In making this finding, Lindsay J took into account the relatively modest size of AKJ’s estate, his prudential behaviour in dealing with money and his habit of regular consultation with his family about expenditure plans.
Significantly, Lindsay J went on to point out that if he had found the AKJ lacked “capacity for self-management”, he would have determined that, “notwithstanding his incapacity, an application of the welfare principle (measuring what is to be done, or not done, by reference to what is in the interests, and for the benefit, of [AKJ]) required that the application to be dismissed”. This was because AKJ’s support network was, “sufficient unto the day”.
Lindsay J noted that should AKJ’s circumstances change in the future, another application for a financial management order could be made.
While Lindsay J handed down this case on 1 May 2015, on 18 May 2015, he handed down the case
P v NSW Trustee and Guardian. In that case, he again took up the question of tests for capacity/incapacity to manage financial affairs. This involved a consideration of
PY v RJS and the categorisation of tests as “subjective” or “objective”, among other things. As the case was an appeal from a decision of NCAT to committing management of the estate of P to the NSW Trustee as her financial manager. And as it involved a consideration of the application of certain provisions of the
Guardianship Act 1987 (NSW) to the question of P’s capacity to manage her financial affairs, it is dealt with below in 8.3.4.2.
8.3.4.2 NCAT
Before NCAT may make a financial management order, it must conduct a hearing at which it considers the capability of the person the hearing is about to manage their own affairs and must be satisfied as to the following matters, namely that:
- the person is not capable of managing their own affairs,
- there is a need for another person to manage those affairs on the person’s behalf, and
- it is in the person’s best interests that the order be made.
There have been many cases about how to determine whether (or not) a person is not capable of managing their own (financial) affairs. In 2016 Lindsay J reviewed the decided cases and set out a broad-ranging approach to deciding that question. In the following paragraphs we seek to outline that approach. Nevertheless we draw readers’ attention to a summary of the legal principles and decided cases (authorities) relevant to the capacity/incapacity of a person to manage their (financial) affairs set out by a panel of the Guardianship Division of NCAT in a 2016 case.
We summarise that further, omitting references to the cases and the legislation, as follows:
- That NCAT should focus on the capability of the person, the subject of the application, to deal with their actual assets and to do what they are proposing to do with those assets. The focus of attention is on the person's particular circumstances.
- Both the Guardianship Division NCAT and the Supreme Court must have due regard to present and prospective wants and needs, and those of family and friends, without undue risk of neglect, abuse, or exploitation of the person. In considering whether the person is "able" in this sense, the Court or NCAT may give attention to:
- past and present experience as a predictor of the future course of events;
- support systems available to the person; and
- the extent to which the person, placed as they are, can be relied upon to make sound judgments about their welfare and interests.
- NCAT must exercise care in making a finding of incapability. The need for care arises from the very substantial consequences of a financial management (administration) order. That is the loss, in most cases completely, of the person's right to control their own financial affairs. Such a consequence will severely restrict their freedom of decision and freedom of action, which freedoms should be restricted as little as possible. A finding of incapability is usually a critical element in the making of an order. A financial management order cannot be made if there is no finding of incapability.
We also note that while NCAT’s powers (jurisdiction) to make financial management orders are found in the
Guardianship Act 1987 (NSW), the Supreme Court’s powers are found both in its inherent (common law) jurisdiction and in the
NSW Trustee and Guardian Act 2009 (NSW). However what we have set out in the last section above 8.3.4.1, about Lindsay J’s decisions is also relevant to the question of determining a person’s capacity to manage their financial affairs.
In order to understand the clarification of the law in New South Wales, it is necessary to go back to 1982. At that time Powell J was the Supreme Court Protective Division’s judge. In the case
PY v RJS, he explained why he was not going to make a financial management order in relation to a man with schizophrenia. His explanation came to be categorised as an objective test.
In two cases in 2015, Lindsay J set out his understanding of the meaning of the expression “[in]capable of managing his or her own affairs”.
By 2016 he was able to state that; “the so-called “objective test” has recently fallen from favour in [the] case-law”.
The
PY v RJS “test” was replaced by a much more nuanced approach taken by Lindsay J in the 2015 case
P v Public Trustee and Guardian, which was an appeal to the Supreme Court against a decision of NCAT to make a financial management order in relation to P.
In that case Lindsay J noted that whether a person is to be found “capable of managing his or her own affairs”, or not, ultimately requires a judgment-call grounded upon guidance available within the framework of the governing legislation and a close examination of the facts of the particular case.
And for those seeking a definition or set of criteria he stated:
An exhaustive definition of the concept, applicable to all cases at all times, is not otherwise to be expected…
While not seeking to create an exhaustive definition of the concept, Lindsay J pointed out that the terms of the legislation must be viewed holistically and also to bear in mind that that the concept of “capability” is directed to the reasonably foreseeable future as well as to the present time.
He also noted that:
In considering whether a person is or is not capable of managing his or her own affairs …. a focus for attention is whether the person is able to deal with (making and implementing decisions about) his or her own affairs (person and property, capital and income) in a reasonable, rational and orderly way, with due regard to his or her present and prospective wants and needs, and those of family and friends, without undue risk of neglect, abuse or exploitation.
Further he noted that the legislatively required criterion of need was holistically related to an incapacity for management of the person’s estate. He continued:
The focus of the legislation is not upon a person’s state of being, status or condition as such, or upon particular reasons for an incapacity for self-management, but upon functionality; in the present context, the functionality of a person’s management capacity.
Consistent with that approach to the relevant legislation, namely the
Guardianship Act 1987 (NSW), Lindsay J noted that:
The text of the legislation does not require that there be a finding of
mental illness or mental infirmity. No such requirement should, by a process of construction, be imposed on the text.
This statement is also consistent with what other judges of the New South Wales Supreme Court have been saying for some time. In a 2003 case, Barrett J stated:
The task of the court, upon an application such as this, is to make a judgment as to the capacity and ability of the person concerned to cope with the ordinary routine affairs of living, particularly so far as they concern the person’s property. This is a somewhat shorthand version of the tests laid down by the authorities to which I have already referred. The point to be emphasised is that the requisite judgment is to be made in the light of objective physical facts concerning the relevant person’s property, money and other assets and the way the person is able to look after them. If there is a lack of capacity, the reason for it does not matter. If the person is subjected to theft, vandalism and victimisation, the causes of those events is unimportant: the court is interested in whether the person is in a vulnerable position and cannot deal with such matters in a manner that is conducive to the person’s own welfare. (emphasis added).
In a 2012 case White J of the NSW Supreme Court, picked up on this statement and quoted it, leaving off the last sentence. White J then stated that he adopted Barrett J’s formulation on the way to rejecting the application to revoke the financial management (administration) order made by the Supreme Court in relation to the applicant in that matter.
On the question of the applicant’s incapacity to manage her affairs, White J inferred that it was as a result of her brain injuries.
Nevertheless in his 2015 decision in
P v NSW Trustee and Guardian, Lindsay J began to apply s. 3(2) of the
Guardianship Act 1989 (NSW) which sets out the criteria that have to be met before a person may be described as “a person with a disability”. He took the view that in assessing whether a person was, or was not, “capable of managing [their] her affairs” within the meaning of s. 25G(a) of the
Act regard had to be given to the legislative context in which that expression appeared.
In particular s. 3(2) had to be considered in order to determine whether the person was disabled.
This approach is inconsistent with Barrett J’s original statements which emphasised the functional aspects of financial incapacity (i.e. what the person can and cannot do) over the cause of that incapacity, while earlier in the judgment articulating the nexus between the two:
The question for the court goes to incapacity alone, regardless of its cause, although the fact that the question relates to a person’s capacity to manage the person’s affairs means that the ability to recognise and protect one’s own interests plays a central part in the enquiry, with the result that incapacity is most likely to be found in circumstances of mental illness or obvious inability to function, in relation to physical and financial matters, as a self-caring member of the community.
Put together, these developments in the Common Law in relation to the determination of incapacity for financial affairs, culminating in the recent judgments of Lindsay J, in many ways mirrors the medical approach, as will be discussed in Section 8.12.
As we have already noted, NCAT’s jurisdiction to make financial management orders is found in the
Guardianship Act 1987 (NSW). However that was not always the case. When the Guardianship Board, which is now the Guardianship Division of NCAT, began operations on 1 August 1989, its jurisdiction to make financial management orders was set out in s 17A of the now repealed
Protected Estates Act 1983 (NSW).
Section 17A(1) provided that if the then Board had made a guardianship order in relation to a person, it could then consider the person's capability to manage their affairs and, if satisfied that the person was not capable of managing those affairs, it had a discretion to order that the estate of that person be subject to management under the
Protected Estates Act 1983 (NSW).
Section 17A(2) provided that, if in any proceedings before the Board under Part 3 of the
Disability Services and Guardianship Act 1987 (NSW), the Board decided not to make a guardianship order in respect of the person those proceedings were about, it could nevertheless consider that person's capability to manage their affairs and, if satisfied that that person was not capable of managing those affairs, it had a discretion to order that the estate of the person be subject to management, again under
Protected Estates Act 1983 (NSW).
In 1993, the
Protected Estates Act (NSW)
1983 was further amended so that applications could be made directly to the then Guardianship Board, under its provisions, and not the provisions of the
Disability Services and Guardianship Act 1987 (NSW), for financial management orders to be made. However, the test for making an order remained the same. The Guardianship Board could consider that person's capability to manage their affairs and, if satisfied that that person was not capable of managing those affairs, it had a discretion to order that the estate of the person be subject to management, again under
Protected Estates Act 1983 (NSW).
Also in 1993, the
Disability Services and Guardianship Act 1987 (NSW) was renamed the
Guardianship Act 1987 (NSW).
In 1997, the Guardianship Board was renamed the Guardianship Tribunal.
However, more importantly in this context,
Part 3A, which gave the Tribunal its jurisdiction to make financial management orders, was added to the
Guardianship Act 1987 (NSW) and ss. 17A and 17B were omitted from the
Protected Estates Act 1983 (NSW).
While the statutory test was varied, two essential elements remained the same. The Guardianship Tribunal was required to consider the person’s capability to manage their own affairs before it could exercise its discretion to make, or not make, a financial management order in relation to that person’s estate. The change was that, before the Tribunal could exercise that discretion, it had to be satisfied not only that:
1. the person was not capable of managing those affairs;
but also that:
2. there was a need for another person to manage those affairs on the person’s behalf, and it was in the person’s best interests that the order be made.
Consequently, from the time a statutory tribunal, however named, has had jurisdiction to make financial management orders in New South Wales, the requirement that has had to be met was that the person the application was about was not capable of managing their (financial) affairs. It should also be noted that while NCAT must be satisfied as to the three criteria just set out, both the Supreme Court and the Mental Health Review Tribunal (MHRT) need to be satisfied as to the first of these three criteria when exercising their statutory jurisdiction under the
NSW Trustee and Guardian Act 2009 (NSW), just as the then Guardianship Tribunal had to from 1 August 1989 until 2 February 1998 when two extra criteria were added.
It should also be noted however that if the MHRT is satisfied that a person detained in a mental health facility is unable to manage their financial affairs, it must order that their estate be the subject of management under the
NSW Trustee and Guardian Act 2009 (NSW).
While there has always been significant similarity in the criteria that NCAT, the Supreme Court and the MHRT in the exercise of their statutory jurisdictions to make financial management orders, the criteria to be met before a financial management order can be made has always been different from the statutory criteria to be met before a guardianship order could be made by the tribunal, however named, with jurisdiction to make such an order.
A particular difference is that the tribunal has never had to make a finding that the person was a person who has a disability as described in
s. 3(2) of the
Guardianship Act 1987 (NSW) before it could make a financial management order in relation to the estate of that person.
The language of the
Act setting out the requirements that have to be met before NCAT may make a guardianship order in relation to a person 16 years or above is directed to considerations of the person’s capacity to manage their person and personal affairs.
The first requirement is that the person has to be “a person who has a disability”. That is a person who not only has a disability that is described in s. 3(2)(a) to (d), but also that by virtue of that disability (or disabilities) that person is restricted in one or more life activity to such an extent that they require supervision or social habilitation.
The second requirement is that because of a disability the person is totally or partially incapable of managing their person. A person who meets these two requirements is defined in s.3 of the Act as a “person in need of a guardian”.
The final stage of the process before NCAT may exercise its discretion to appoint a guardian for a person who is a “person in need of a guardian” is found in s.14(2) of the
Act. That sub-section requires NCAT to have regard to the person’s views, if they have any; as well as to the views of their spouse or their carer, where there are such persons. The sub-section also requires NCAT to have regard to the importance of preserving the person’s existing family relationships, the importance of preserving their particular cultural and linguistic environments and the practicability of services being provided to the person without the need for making a guardianship order.
For a person to be a person for whom a financial management order may be made, NCAT must be satisfied that that they are not capable of managing their affairs, that there is a need for another person to manage those affairs on the person’s behalf and that it is in the person’s best interests that the order be made.
As already noted, Barrett J stated and White J adopted his formulation that included the sentence: “If there is a lack of capacity, the reason for it does not matter.”.
Appropriately, NCAT has noted that usually, but not necessarily always, a person who is incapable of managing their affairs would be “disabled” within the meaning of s 3(2)(a)-(d) of the
Act.
Lindsay J is clear that NCAT’s discretion to make or not make a financial management order after considering the capability of the person the subject of the application to manage their affairs is not at large. NCAT’s discretion is confined by the subject matter, scope and purpose of the protective jurisdiction, including consideration of whether there was a need for a manager to be appointed and whether it was in the best interests of the person the hearing was about that a financial management order was made.
For the reasons set out above, there was no need to go further and require a consideration of whether the person the subject of the application was about was “a person who has a disability” under
s 3(2) of the
Guardianship Act 1987 (NSW). The general principles set out in that
Act, but, as a matter of strict statutory interpretation, applying only “with respect to persons who have disabilities” are understood in the practice of this jurisdiction to be considerations of the best interests of the person the subject of the application.
Also, as Lindsay J has noted s. 25P(2)(b) of the
Act allows NCAT, when reviewing a financial management order to revoke the order if it considers that to do so is in the best interests of the person even though the person does not have capacity to manage their affairs: and has given an example, albeit from the Supreme Court’s inherent jurisdiction.
However, in the past the then Guardianship Tribunal has revoked financial management orders on best interests grounds after finding that such orders have caused greater distress to the person whose estate was under management than the benefits of protection of the estate justified.
Although, "drawing specifically upon the liberal intent of the general principles set out in s. 4 of the
Act”, Lindsay J has suggested that there, “may be a case in which the Tribunal decides to take a risk in allowing a person in need of protection an opportunity to enjoy freedom of decision, freedom of action and the possibility of normal life living in community with an empathetic family".
But then he continued:
Ultimately, what is done or not done, must be measured against whether it is in the interests, and for the benefit, of the particular person in need of protection.
In other words, NCAT may take risks in the exercising of its discretion as to whether or not to make a financial management order and the concept of best interests has not yet been confined by limitations as to its extent.
8.3.4.3 MHRT
While the MHRT is established under the
Mental Health Act 2007 (NSW), its jurisdiction to make financial management orders, including the criteria that have to be met before such orders are made are set out in the
NSW Trustee and Guardian Act 2009 (NSW).
There are three sets of circumstances set out in the
NSW Trustee and Guardian Act 2009 (NSW) in which the MHRT has jurisdiction to make a financial management order in relation estate of a person.
The first is where the MHRT has conducted a mental health inquiry and orders that the person the subject of that inquiry be detained in a mental health facility. After conducting such an inquiry and making such a decision, the MHRT must:
- consider whether that person is capable of managing their own (financial) affairs, and
- if satisfied that the person is not capable of managing their own affairs, order that their estate be subject to management under the NSW Trustee and Guardian Act 2009 (NSW).
The second is where the MHRT, after reviewing a person’s case under Part 5 of the
Mental Health (Forensic Provisions) Act 1900 (NSW), orders that a person be detained in a mental health facility. After conducting such an inquiry and making such a decision, the MHRT must:
- consider whether that person is capable of managing their own (financial) affairs, and
- if satisfied that the person is not capable of managing their own affairs, order that their estate be subject to management under the NSW Trustee and Guardian Act 2009 (NSW).
The third situation is where the MHRT receives an application from a person who has, in the opinion of the MHRT, a sufficient interest in the matter to make an application for a financial management in relation to the estate of a patient.
If after considering the patient’s capability to manage their (financial) affairs and being satisfied that the patient was not capable of doing so, the MHRT must order that the estate of the patient to be subject to management under the
NSW Trustee and Guardian Act 2009 (NSW).
The
NSW Trustee and Guardian Act 2009 (NSW) continues by providing that order may be made under this provision even though there has been no change in the capability of the patient’s ability to manage their own affairs since that capability was last considered under Part 4.3 of the
Act.
It should be noted that once the MHRT is satisfied, in any of these situations, that the person is not capable of managing their own affairs, it has no discretion in relation to what order to make. It must make a financial management order in relation to the estate of the person the hearing was about. This contrasts with the discretion in relation to financial management orders held by the Supreme Court and NCAT, and set out above at 8.3.4.1 and 2. Furthermore, the MHRT has no discretion to appoint a private financial manager. It must commit the management of the person’s estate to the NSW Trustee.
As already noted, the criteria applied by the Supreme Court before making its declaration and appointment order are discussed later in this chapter at 8.11.5 to 8.11.8. The procedures of the Court to be followed in relation to an application under section 41of the
NSW Trustee and Guardian Act 2009 (NSW) are set out in the Supreme Court Rules and in the
Act.
8.3.5 Appointing a financial manager
8.3.5.1 NCAT and the Supreme Court
When either NCAT or the Court makes a financial management order, it must either:
- appoint a suitable person as (private) manager of the estate, or
- commit the management of that estate to the NSW Trustee.
In the Supreme Court, but not NCAT, unless it is proposed that the estate of the person the hearing is about is to be committed to the NSW Trustee for management or to be managed by the applicant, the proposed manager must consent, in the prescribed form, to being appointed the manager. Furthermore, unless the proposed manager is the NSW Trustee or a trustee company, affidavits must be given by at least two persons giving their opinion of the proposed person’s character, their fitness to act and details of their business experience. Also the proposed private manager must give their consent to being appointed manager.
In the leading New South Wales Court of Appeal case on the matters to be considered when deciding who to appoint as financial manager, Kirby P noted that the legislation provided first that a “suitable person” should be appointed as manager of the estate of a person the subject of a financial management order and only secondly that the management of that estate should be committed to the NSW Trustee.
He described this as a sensible hierarchy of choices pointing out that:
In many estates of modest size it will be appropriate where there is no risk of conflict of interest and duty, and where a relationship of love or affection is established, to reflect in the statutory appointment the form of management which for millennia, in primitive societies as in civilised communities, has been followed when a family member is found to be incapable of managing his or her affairs. It is normal then for the family to step in.
Despite this limiting view of who should be appointed manager, he insisted that the discretion to appoint and remove a financial manager was a broad one that should not be confined “by rigid rules” or even “guidelines” expressed in general terms. He then went on to provide a checklist of considerations to be borne in mind when exercising the discretion as to who to appoint as manager, with the “abiding rule” being the achievement of the best interests of the person the hearing is about.
A summary of the checklist is set out below.
He also noted that, in earlier times and before the advent of the modern guardianship and administration system, the courts conserved their intervention to cases where there was no family, or where no family member was willing to act, or where, for special reasons of incompetence, or conflict of interest, it was unsuitable to appoint a family member. He then pointed out that there was a danger in the administration of the legislation of overlooking not only that this was the natural order of things, but also that it was the way parliament had reflected the matter in the legislation by referring to the appointment of a suitable person ahead of committing the management of the estate to the NSW Trustee.
It should be noted however, that NCAT deals with a significant number of cases in which it is precisely because there is no family or no family willing to take on the role of financial manager that it commits the management of the estate to the NSW Trustee. In other cases, and often at the request of or with the support of family members, NCAT appoints the NSW Trustee in order to have a body outside the family managing the financial affairs of the incapable person. Sometimes the appointment is made for reasons of incompetence or conflict of interest or intra-family conflict which makes it not in the incapable person’s best interests to appoint a family member.
Nevertheless, in a 2006 case, the Appeal Panel of the then Administrative Appeals Tribunal stated that “if the Guardianship Tribunal did not look first to the possibility of appointing a suitable person to be the manager of the protected person’s estate or considered any potential conflict of interest to be an "absolute bar" to [a family member’s] appointment as a manager, then it will have made an error of law”.
While the Appeal Panel did not find an error of law on the facts of the case, its statement of the law reflects a rigidity of approach that is inconsistent with the broad discretion to be exercised in appointing financial managers and the abiding rule of achieving the best interests of the incapable person.
While care has to be taken to ensure that a financial manager will abide by the limits of the authorities and directions as to the management of the estates they are appointed to manage, and will account annually to the NSW Trustee on the management of those estates, NCAT occasionally appoints as financial managers persons who are not resident in New South Wales if they are otherwise suitable for appointment.
In a 2011 case, involving a complex estate and mistrust between some members of the family, the then NSW Guardianship Tribunal appointed neither a family member nor the NSW Trustee. Rather, they appointed an experienced practicing accountant who had experience in the role of financial manager, whose appointment was supported by some of the family members in conflict, and who the Tribunal considered was a well-qualified and independent accountant who could provide both a personal and a professional service to the person whose estate was placed under management.
Where a private person is appointed as manager, they may not begin to manage the estate until the NSW Trustee has authorised them to do so or, directions of the Supreme Court relevant to the management of the estate have been obtained. Nevertheless, a manager may take such action as may be necessary for the protection of the estate, including action specified by NCAT, pending the directions of the Court or authorisation by the NSW Trustee.
8.3.6 Joint /several/alternate financial managers
8.3.6.1 NCAT and Supreme Court
NCAT may, and sometimes does, appoint more than one financial manager. When NCAT does this, those appointed must act jointly and all agree with the decisions made during the management of the estate. However, as Powell J of the New South Wales Supreme Court pointed out in a 1982 case, it is the duty of the appointing authority to keep the administration of an estate simple and inexpensive, particularly if it is comparatively small and uncomplicated. Hence the appointment of multiple managers is to be avoided, especially if there is antipathy and mistrust between them.
Because it is appropriate for managers to have all the powers of a manager and for all managers to be able to exercise all their powers over all the estate, or at least as much of the estate that is under management, it is not sensible to appoint one manager with some powers over some of the estate and another with different powers. Nor is it sensible to appoint one manager for part of the estate and another manager for another part.
Neither the Supreme Court, nor NCAT nor the Mental Health Review Tribunal has statutory power to appoint alternate financial managers. Consequently, if the financial manager dies or becomes incapable, an application has to be made for another manager to be appointed.
8.3.7 Types of financial management orders
8.3.7.1 Plenary orders
In New South Wales all financial management orders made by the Supreme Court and most such orders made by NCAT are plenary orders covering all of a person’s estate.
8.3.7.2 Orders with part of the estate excluded
NCAT may exclude a specified part of a person’s estate from a financial management order. This is not the same as deciding what part of the person’s estate is placed under management. In New South Wales a financial management order applies to all of the person’s property and affairs unless NCAT specifically excludes part of the person’s estate from management and specifies, with precision, that part of the estate that is excluded from management.
As Lindsay J pointed out in a 2015 case, the provision in the
Guardianship Act 1987 (NSW) and the equivalent provision in the
NSW Trustee and Guardian Act 2009 (NSW) permit a specified part of an estate of a protected person (a person whose financial affairs are under management) to be excluded from a financial management order, the power to make a partial management order needs to be approached with caution, lest due management of a protected estate be prejudiced.
8.3.7.3 Interim orders
NCAT may make interim financial management orders for specified periods, not exceeding 6 months, pending its further consideration of the capability of the person about whom the order is made to manage their own affairs.
This power is limited intentionally. It is intended to be used where there is an urgent need to make the order in a person’s best interests, but where there has been insufficient time to obtain a satisfactory level of evidence, through medical examinations or other sources of information, to show that the person lacks capacity to manage their own financial affairs or where there is some doubt about the person’s capacity to manage those affairs and time is needed to obtain that evidence.
NCAT may not make an interim financial management order unless it has before it an evidential basis for believing that the person may be incapable of managing their own financial affairs and that they need an order urgently. These orders are not to be used as short term financial management orders if the evidence of the person’s incapacity is available. In that case, the proper course is to apply the tests for making a final order, and, if the order is made, to provide an early date for its review. It is not legitimate to make an interim financial management order where a short term order appears to be needed in the knowledge that such an order will be taken to have been revoked if the period for which it is made expires and no further interim order or no final order has been made.
While the wording of the legislative provision empowering NCAT to make interim financial management orders does not preclude the making of more than one such order either through clear words or necessary implication, a second interim order following immediately upon a first order should not be made unless there are legitimate difficulties in obtaining the evidence of the person’s incapacity and the evidence is likely to become available if the further order is made.
While the legislation appears to limit the circumstances in which such an order can be sought, interim financial management orders can be sought:
- during an application for either a guardianship or a financial management order,
- for a person who is already under guardianship, whether just placed under guardianship or having been under guardianship for some time,
- during the review of an appointment of an enduring guardian, or
- during the review of an appointment of an enduring power of attorney.
Where an interim order is made, the usual practice is to adjourn the application for a full financial management order or other relevant application so that the required evidence can be gathered, and to bring the matter back on for hearing before the time provided for in the interim order has expired. Interim financial management orders are taken to be revoked when the time for their expiry is reached.
8.3.7.4 Supreme Court
While the Supreme Court has no legislative power to make interim financial management orders, it has inherent jurisdiction to make interim orders to protect the estates of, as noted by Lord Eldon in
Ridgeway v Darwin, “all persons who were ‘unable to act with any proper and provident management’ who were ‘liable to be robbed by anyone’ whether they were, strictly speaking, insane or not because the mischief called for as much protection as actual insanity".
As Young J pointed out as he proceeded to appoint an interim receiver and manager on an urgent summons that he proceeded to hear without it being served on the person the hearing was about, the requirement was that the applicant:
[M]ust then show that there is a strongly arguable case that the defendant is a person who falls within the class specified by Lord Eldon in Ridgeway v Darwin, at least in the short term. The evidence need not go so far as to show that two medical practitioners or a medical practitioner and a psychologist consider that the defendant is incapable of managing his or her affairs, but the evidence must at least show a strongly arguable case that immediate protection is needed to preserve the defendant's property.
8.3.8 The jurisdiction of the Mental Health Review Tribunal to make financial management orders
8.3.8.1 Mental health inquiries conducted by the Mental Health Review Tribunal
When a person is taken to a mental hospital or other mental health facility, they must be examined as soon as possible, and in any event within 12 hours after they arrive at the hospital or other facility. The same requirements for examination apply if the person has gone to the mental hospital or other mental health facility as a voluntary patient and it is subsequently believed that they should be detained here for treatment on an involuntary basis. The examination must be carried out either by the medical superintendent or a medical officer at the hospital. Unless the examining doctor certifies that they are a mentally ill or a mentally disordered person, the person must not be detained after the examination.
As a result of amendments made to the
Mental Health Act 2007 (NSW) by the
Mental Health Amendment (Statutory Review) Act 2014 (NSW), if it is not reasonable practicable for an authorised medical officer of a mental health facility or other medical practitioner to personally examine a person or observe the person’s condition for the purpose of determining under s. 27 whether the person is a mentally ill person or a mentally disordered person, the person may be examined or observed for that purpose:
- by a medical practitioner at another place using an audio visual link, or
- in person by an accredited person authorised by the medical superintendent of the mental health facility to do so.
However, the examination or observation must be carried out by a medical practitioner who is a psychiatrist if that is a requirement of s. 27. A medical practitioner who is not a psychiatrist, or an accredited person, who examines or observes a person under this section must, if it is reasonably practicable to do so, seek the advice of a psychiatrist before making a determination as to whether the person is a mentally ill person or a mentally disordered person. The psychiatrist is not required to examine or observe the person.
If the person is certified to be either a mentally ill or mentally disordered person, they must be examined by a second doctor and that doctor must be a psychiatrist if the first examining doctor wasn’t. There are further provisions about medical examinations and if the medical opinion is that the person is either a mentally ill or mentally disordered person, then they must be brought before the MHRT for a mental health inquiry as soon as practicable.
It is the obligation of the medical officer who conducts the examination or causes other doctors to conduct the examination to bring the person before the MHRT for a mental health inquiry. The medical officer must give the person written notice of the inquiry and that notice must advise that, if the MHRT considers that the person should be detained, the Tribunal will also have to consider whether or not the person is able to manage their own affairs.
This notice must be given as soon as the medical officer is aware that the person is one for whom an inquiry is required to be held.
The mental health inquiry must be arranged by either the medical superintendent of mental hospital or other mental health facility or a doctor attached to that hospital or other facility and authorised by the medical superintendent. The parties to such an inquiry are:
- the applicant doctor,
- the person the inquiry is about, and
- their “ designated carer” and the “principal care provider”, if they can be served.
The doctor arranging the mental health inquiry must advise the person that all reasonably practicable steps will be taken to give notice of the inquiry to the person’s principal care provider” and the “designated carer” and then take those steps.
The “principal care provider” of a person is the individual who is primarily responsible for providing support or care to the person (other than wholly or substantially on a commercial basis).
A person may nominate up to two persons to be their designated carers.
If, after holding the mental health inquiry, the MHRT directs that the person must be detained in a mental hospital or other mental health facility as an involuntary patient, the Tribunal must deal with the question of the person’s capability to manage their own affairs under the
NSW Trustee and Guardian Act 2009 (NSW).
That matter is dealt with at
8.3.8.2 below.
8.3.8.2 Mental Health Review Tribunal
There are three sets of circumstances set out in the
NSW Trustee and Guardian Act 2009 (NSW) in which the MHRT has jurisdiction to make a financial management order in relation estate of a person. These are summarised in 8.3.4.3, above.
The first is where it is conducting a mental health inquiry, as discussed in
8.3.2.1 above.
If, after conducting the inquiry, the Tribunal orders that the person the subject of the inquiry is to be detained in a mental health facility, the Tribunal must consider whether or not the person is capable of managing their own (financial) affairs and if satisfied that the person is not capable of managing their own affairs, must order that their estate be subject to management under the
NSW Trustee and Guardian Act 2009 (NSW) and commit the management of the person’s estate to the NSW Trustee.
The parties to such a hearing are:
- the applicant doctor,
- the person the inquiry is about, and
- their designated carer” and the “principal care provider” if they can be served.
The second is where the Tribunal is reviewing a person’s case under
Part 5 of the
Mental Health (Forensic Provisions) Act 1990 (NSW).
Again if, after conducting the review, the Tribunal orders that the person the subject of the inquiry is to be detained in a mental health facility, the Tribunal must consider whether or not the person is capable of managing their own (financial) affairs and if satisfied that the person is not capable of managing their own affairs, must order that their estate be subject to management under the
NSW Trustee and Guardian Act 2009 (NSW) and commit the management of the person’s estate to the NSW Trustee.
The third situation is where a person who, in the opinion of the Tribunal has a sufficient interest in the matter, makes an application to the Tribunal for a financial management order to be made in relation to a patient in a mental health facility.
Whether or not it has previously considered the question, the Tribunal may consider a person’s capability to manage their own affairs. If the Tribunal is satisfied that the person not capable, it must order that the person’s estate be subject to management under the
NSW Trustee and Guardian Act 2009 (NSW) and commit the management of the person’s estate to the NSW Trustee.
Where such an application is made, the parties to the hearing would be:
- the applicant, and
- the person the hearing is about.
It is suggested that the language of
sections 44 and
45 of the
NSW Trustee and Guardian Act 2009 (NSW) makes it mandatory for the Tribunal to consider the capacity to manage the financial affairs of a person it has ordered to be detained in a mental health facility immediately after it has made the detention order in relation to them, and if the Tribunal is satisfied that the person is not capable of managing their (financial) affairs, it must make a financial management order in relation to them. There does not appear to be any discretion in the Tribunal not to make the order if it finds the patient not capable on the grounds that the patient has put other arrangements in place, like having appointed an attorney under an enduring power of attorney to handle their financial affairs when they, the patient with a mental illness, are unwell and need someone to manage their financial affairs for that time only.
In relation to a subsequent application in relation to a patient, the language of section 46 indicates that the Tribunal has a discretion as to whether or not it needs to consider the person’s capacity to manage their (financial) affairs. However, if the Tribunal does consider the application, and is satisfied that the person is not capable of managing their affairs, the section appears to require the Tribunal to make an order that the estate of the person be subject to management under the
NSW Trustee and Guardian Act 2009 (NSW) and commit the management of the person’s estate to the NSW Trustee even though there may have been no change in the person’s capability to manage their own affairs since that capability was last considered by the Tribunal or the Supreme Court.
There appears to be a conflict between the mandatory requirements of sections 44, 45 and 46 of the
NSW Trustee and Guardian Act 2009 (NSW) and
section 39 of that
Act which sets out applicable general principles. These principles apply to the MHRT and require it, when dealing with a patient’s capacity to manage their (financial) affairs, to:
- Give paramount consideration to the patient’s welfare and interests;
- Restrict the patient’s freedom of decision and freedom of action as little as possible;
- Encourage patients, as far as possible, to live a normal life in the community;
- Take the views of the patient into consideration;
- Recognise the importance of preserving family relationships and cultural and linguistic environments;
- Encourage the patient, as far as possible, to be self-reliant in matters relating to their personal, domestic and financial affairs; but also
- Protect the patient from abuse, exploitation or neglect.
These principles suggest that the Tribunal should exercise a discretion not to make a financial management order in some situations where the patient was incapable of managing their financial affairs. For example, where to make an order would so retard the patient’s recovery because of their agitation about the order that it would be contrary to the particular patient’s welfare and interests, as well as their views, to make the order. Another example of where it would be consistent with the principles not to make a financial management order is where the person has already appointed an attorney under an enduring power of attorney to handle their financial affairs when they are unwell and need someone to manage their financial affairs for the period of their unwellness only.
8.3.8.3 Interim financial management orders made by the MHRT
The MHRT, when exercising any of its financial management jurisdictions, may, if it appears to it either necessary or convenient to do so, make an interim financial management order appointing the NSW Trustee the manager of a person’s estate for a period of up to six months, pending further consideration of that person’s capability to manage their financial affairs.
An interim financial management order will expire six months after it is made if it is not reviewed within that time. If a review is begun within the six month period, the interim order will expire at the end of the review.
However, the Tribunal may, after further consideration of the patient’s capacity to manage their financial affairs, be satisfied that they do not have that capacity and make a financial management order or, not being so satisfied, revoke the interim financial management order and end the proceedings.
8.3.9 Powers and functions of NSW Trustee as financial manager
Most financial management orders made in New South Wales by the NCAT and the Supreme Court and all those made by the Mental Health Review Tribunal involve committing the management of the estate to the NSW Trustee (appointing the NSW Trustee as financial manager).
The NSW Trustee has, and may exercise, all the functions the person would have had and could have exercised when or if they had capacity.
In addition, the NSW Trustee may exercise all functions that are necessary for the management and care of the estate as well as any other functions given to her by the Supreme Court or NCAT.
The Tribunal’s power to give extra functions is, for reasons that are unclear, limited to situations in which the person whose affairs were being managed was also under guardianship.
The NSW Trustee may also execute and sign any document on behalf of the incapable person while managing their estate.
The
NSW Trustee and Guardian Act 2009 (NSW) sets out the specific purposes for which the NSW Trustee may spend money from an estate under management, namely:
- the payment of the debts and engagements of the person and the repayment of expenses chargeable to their estate,
- the person’s funeral expenses, but only after their death,
- the maintenance of the spouse of the person or any child, parent or other person dependent upon the person, or for whose maintenance the person provided when not a managed person or would be expected to provide,
- the payment of all proper costs incurred in or about the care, protection, recovery, sale, mortgage, leasing, disposal and management of the estate of the person,
- the preservation and improvement of the estate of the person,
- the taking up of rights to issues of new shares, or options for new shares, to which the person may become entitled by virtue of any shareholdings, and
- the maintenance (including future maintenance), clothing, medicine and care, past and present, of the person.
Without restricting any of her other functions, the NSW Trustee may exercise the following functions relating to the property of a person when managing that person’s estate:
- receive money, rent, income and profit of real and personal property,
- 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,
- enter into a share-farming agreement for a period not exceeding 3 years,
- surrender a lease and accept a new lease,
- accept a surrender of a lease and grant a new lease,
- execute a power of leasing vested in a person having a limited estate only in the property over which the power extends,
- buy, sell, realise and mortgage or charge (with or without a power of sale) real and personal property,
- pay interest secured by a mortgage or charge out of capital, if income is insufficient,
- 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,
- settle, adjust and compromise a demand made by or against the estate,
- exchange or join in a partition of property and give or receive money for equality of exchange or partition,
- carry on a business, so far as may appear desirable for the purpose of more advantageously disposing of, or winding up, the business or preserving the business of a managed person until the managed person is able to carry it on,
- agree to an alteration of the conditions of a partnership into which a managed person has entered, for the purpose of more advantageously disposing of an interest in the partnership or terminating liability,
- carry out a contract entered into before the appointment of the NSW Trustee or enter into an agreement terminating the liability,
- surrender, assign or otherwise dispose of, with or without consideration, onerous property,
- exercise a power, or give a consent required for the exercise of a power, where the power is vested in a managed person for the benefit of the person or the power of consent is in the nature of a beneficial interest in the person,
- sequestrate the estate under the bankruptcy laws,
- take proceedings to cause a company to be placed in liquidation and vote or act by proxy at meetings of creditors or shareholders, whether the company is in liquidation or not,
- bring and defend actions, suits and other proceedings,
- without limiting paragraph 19, take criminal proceedings touching or concerning property,
- pay rates, taxes, assessments, insurance premiums, debts, obligations, costs and expenses and other outgoings,
- without limiting paragraph 21, pay the reasonable costs of the erection of a memorial or a tombstone over the grave of a deceased person or, if a deceased person is cremated, the reasonable costs of a memorial or any arrangements for the preservation of the ashes of the deceased person,
- repair and insure against fire or accident any property, and
- bring land under the Real Property Act 1900 (NSW).
Since 1998 the Protective Commissioner, and subsequently the NSW Trustee and Guardian, has had the legislative authority to authorise a person whose affairs were under management to manage a specific portion of their estate.
Sometimes, to achieve this degree of autonomy, people need support in their financial decision making. In 2013, a small pilot of supported decision-making involving nine people whose estate had been committed to management by the NSW Trustee, was conducted in NSW.
By providing access of “managed persons” to the support they require in exercising their legal capacity, this approach is consistent with principles espoused under Article 12 of the United Nations Convention on the Rights of Persons with Disabilities (UNCORPD).
8.3.10 The supervisory role of the Supreme Court in the management of estates
Even though the evolutionary separation of the Supreme Court from the management of estates placed under management by itself, NCAT or the Mental Health Review Tribunal continues, the Court still retains a supervisory role which it may exercise from time to time.
In particular, the Court may give the NSW Trustee directions about how to exercise the functions of that office in relation to an estate the NSW Trustee is managing under a financial management order. While the NSW Trustee may apply for such directions from time to time in difficult matters, the person whose estate is under management or a relative, friend or debtor of that person may also apply to the Court. Also the Court may let any other person it considers has sufficient interest in the matter apply for such directions.
Nevertheless, private managers, whether appointed by the Supreme Court or NCAT, except in exceptional circumstances, receive their detailed authorities to act in orders from the NSW Trustee to whom they have to account annually.
8.3.11 The orders the NSW Trustee may give to private financial managers
The NSW Trustee gives orders to private financial managers as to the administration and management of the estates they have been made responsible for by either NCAT or the Supreme Court. Those orders cover the authorities and directions that the NSW Trustee gives to private financial managers, but may also cover enforcing the exercise of their functions.
The NSW Trustee may make both general and particular orders. They are orders that appear necessary:
- for the payment of the debts and engagements of, or otherwise for the benefit of, the person whose affairs a private financial manager is managing,
- for the maintenance and benefit of the family of that person, or
- otherwise as the Public Trustee thinks necessary or desirable for the care and management of the estate of the incapable person.
Commencing in 2014 and through a number of decisions, Lindsay J of the NSW Supreme Court changed the supervisory practice of the Supreme Court in relation to the NSW Trustee’s role in making orders for the management of the estates of those whose financial affairs were placed under management of private financial managers by the Guardianship Division of NCAT, the Supreme Court or the Mental Health Review Tribunal.
In doing so, Lindsay J noted that, “prime facie” the office of manager of an estate under the
NSW Trustee and Guardian Act 2009 (NSW) was a gratuitous one.
However, if such a manager were to be allowed remuneration out of an estate they were managing this could only be done under an order of the Court, or legislation, permitting it to be allowed. Lindsay J then went on to make orders providing a framework within which the NSW Trustee (or the Supreme Court) could, in an appropriate case, allow remuneration to a private manager. He also noted that such remuneration must be limited to an amount that is just and reasonable in the context of the particular estate and that the NSW Trustee must be satisfied that it was in the best interests of the managed person and for their benefit that remuneration be allowed.
The NSW Trustee may also make particular orders for particular purposes. She may make orders relating to the mortgaging or otherwise charging of the real property or the sale, charging or otherwise dealing with or disposing of, in the most expedient way, the real and personal property of a person whose affairs are managed by a private financial manager for the purpose of achieving one or more of the following outcomes:
- payment of the person’s debts or engagements,
- discharge of any encumbrance on property of the person,
- payment of any debt or expenditure incurred for the maintenance (including future maintenance), or otherwise for the benefit, of the person,
- payment of the costs of any proceeding under this Act or of any sale or other disposition made under this Act, and
- payment of such other sum or sums to such person or persons as the NSW Trustee thinks fit.
In addition the NSW Trustee may make orders authorising or directing the application of money that may comprise either the whole or a part of an estate under private management for any of the following purposes:
- the preservation and improvement of the person’s estate,
- the taking up of rights to issues of new shares, or options for new shares, to which the person may become entitled by virtue of any shareholdings, and
- the investment of money not required for the time being for any of the other purposes specified in 1 and 2 in such manner as the NSW Trustee thinks fit.
Further, the NSW Trustee may make orders authorising and directing private financial managers as follows:
- to exercise some or all of the functions as to property that the NSW Trustee may exercise and which are set out above,
- a manager to have all, or any specified, functions necessary and incidental to the management and care of an estate,
- to have and exercise such other functions as the NSW Trustee may direct.
The NSW Trustee may also give a manager such directions relating to the orders set out in 1, 2 and 3 as she thinks fit.
These 2009 provisions continue the practice developed in New South Wales that where NCAT or the Supreme Court appoints a private person as financial manager for an incapable person, but, unlike in some other States and Territories, it is the NSW Trustee, rather than the tribunal or Court making the appointment, that gives the financial manager their functions. Indeed, the
Guardianship Act 1987 (NSW) specifically states that the making of a financial management order by NCAT does not authorise the person appointed as manager to interfere in any way with the estate concerned until the NSW Trustee has given the manager an order setting out the functions that manager may exercise.
While this is the normal procedure, it is possible for the Supreme Court, on request, to give directions relevant to the management of the estate.
Also since 2009, the then Guardianship Tribunal and now NCAT has been able to include in its financial management orders appointing the NSW Trustee as financial manager, functions for the NSW Trustee to exercise as manager.
Orders made by the NSW Trustee in relation to private financial managers are subject to any relevant order NCAT may have made.
However, NCAT may make such orders only when the person the financial management order is about is also under guardianship.
Nevertheless, the person appointed as manager may take such action as may be necessary for the protection of the estate (including action specified by NCAT) pending the NSW Trustee’s orders (or directions of the Court).
Private financial managers provide the accounts of the estates they are managing to the NSW Trustee and answer to the NSW Trustee in relation to their management of an estate.
8.3.12 Effect of a financial management order
The effect of a financial management order made by NCAT, the Supreme Court of the MHRT is that the power of a person whose financial affairs are placed under management (a managed person) to deal with their estate is suspended in relation to so much of that estate as is placed under management of another person or committed to the management of the NSW Trustee.
In 2010 the Queensland Court of Appeal held that an administration order made under
s. 12 of the
Guardianship and Administration Act 2000 (Qld) had the same effect.
Only the financial manager (administrator) may deal with the persons financial affairs while the order is in place, even though the person whose affairs were under management may not have needed a financial manager (administrator) at the particular time they dealt with their financial affairs.
Nevertheless, the private financial manager or the NSW Trustee when appointed to manage the person’s estate may give a written authorisation to the person whose affairs are under management to deal with so much of their estate as the manager considers appropriate and specifies in the written authority.
This authorisation may be given at any time and, similarly, may be withdrawn, wholly or in part, at any time.
However, if the authorisation is to be given or taken away by a private financial manager, it cannot be given or withdrawn without the approval of the NSW Trustee.
As discussed in 8.3.9, this provision lends itself to opportunities for supported decision-making.
This provision also reflects the statutory interpretation decision of the majority in the New South Wales Court of Appeal case
David by her Tutor the Protective Commissioner v David that the effect of a decision by the then Guardianship Board to make a financial management order was to suspend, during the currency of the order, the right of the person the order was about to deal with their property as well as to give effect to the issues raised by the dissenting judge, Kirby P, about retention of rights and a least restrictive alternative approach.
The decision in the
David Case applies also to an order of this kind made by the Supreme Court if it were to exercise its residual parens patriae jurisdiction.
For a more detailed discussion of these matters see 8.11.13, below.
8.3.13 Reviews of financial management orders
NCAT, the Supreme Court and the MHRT may all revoke financial management orders that they have made and the NSW Trustee also has a role. These are dealt with below.
8.3.13.1 Requested and “own motion” reviews
Who may request a review?
NCAT may conduct two kinds of review. These are:
- a review of the whole order, and
- a review of the appointment of the manager.
In relation to the first, broad review of an order, this may be initiated in a number of ways:
- NCAT may order that a financial management order be reviewed within a specified time in which case, it must begin the review within the time specified in the order,
- in any financial management order that is either confirmed or varied as a result of a review, NCAT may order that that order be reviewed within a specified time in which case the requirements set out in 1 apply,
- by NCAT, at any time on its own motion, and
- on an application for revocation or variation of an order.
A review of the appointment of the manager may be initiated by:
- the NCAT on its own motion,
- a request from the NSW Trustee, or
- a request from any other person who, in the opinion of NCAT, has a genuine concern for the welfare of the person.
While the legislation does not empower the person the order was about to request this kind of review, NCAT would be likely to initiate the review of its own motion if such a person was seeking a review, unless it considered that the review would be futile, in that there would be no chance that it would result in it changing the manager or changing the order in any of the ways open to NCAT on such a review.
Supreme Court
The Supreme Court does not review the financial management orders it makes, but it may, on application by the person the order is about, revoke its order.
While the source of this power of the Supreme Court is the
NSW Trustee and Guardian Act 2009 (NSW), it is likely that the Supreme Court would consider that it had jurisdiction, based on the parens patriae elements of its inherent power, to review financial management orders it has made on the grounds of best interests.
It may also take the view that an application could be made for such a review not only by the person the subject of the order, but also any person the Court considered had sufficient interest in the matter to be treated as having standing to bring the application.
Similarly, the Court has the inherent power to replace a manager it has appointed if to do so was in the best interests of the person whose affairs were under management.
These matters are dealt with below at 8.3.13.2 and 8.3.13.3.
However, it should be noted that Porter and Robinson suggest that once made, management orders remain in place until the death of the person the order is about unless the Court orders that the person has become capable of managing their estate.
The Mental Health Review Tribunal (MHRT)
The MHRT may revoke an administration order it has made but only on the application of the person who is the subject of the order and who is a patient under the provisions of the Mental Health Act 2007 (NSW) or was but has ceased to be such a patient. The MHRT may revoke the order if the order be satisfied that the applicant is capable of managing their own affairs. The MHRT may also revoke the administration order if it is satisfied that it is in the best interests of the person to do so.
When the Guardianship Tribunal was initially established, in 1989, it could not make a financial management order in relation to a person’s estate unless it also had before it an application to make a guardianship order in relation to that person. A vestige of that time remains in the legislation, so that where a person has been the subject of a guardianship order and a financial management order committing the estate of the person to the NSW Trustee and the guardianship order is revoked or lapses, the NSW Trustee has a discretion to continue to manage the property and affairs of that person until either the financial management order is revoked, or the NSW Trustee is satisfied that the person is capable of managing their own affairs. In practice, when NCAT is reviewing the guardianship order in relation to a person whose estate is being managed by the NSW Trustee, the NSW Trustee asks NCAT, should it revoke the guardianship order, to express its views on whether the financial management order should continue or not. The NSW Trustee usually acts on that advice, after considering it.
Also, even if the NSW Trustee is not satisfied that the person is capable of managing their affairs, she must nevertheless do all things that are reasonably practicable to inform the person that they may apply to NCAT to revoke the financial management order in relation to them. The NSW Trustee is under the same obligation to a person who has ceased to be a patient in a mental health facility to advise them that they can make the same application to the MHRT if it made the financial management order in relation to them.
8.3.13.2 Parties to reviews of financial management orders
NCAT
The following are parties to reviews by NCAT of financial management orders or the appointment of a manager of an estate:
- the person who requested the review,
- the person the order is about,
- the spouse of that person, if the relationship between them is close and continuing,
- the person, if any, who has care of the person the order is about,
- the manager of the estate,
- the NSW Trustee, and any person whom NCAT has joined as a party to the review.
Supreme Court
Only the person the order is about may make an application to the Supreme Court under the
NSW Trustee and Guardian Act 2009 (NSW) for the order to be revoked.
Applications to change managers can be made by the person or others.
8.3.13.3 Powers of NCAT to review orders and the Court to deal with applications to revoke orders
NCAT has, in effect, the same powers whether it is dealing with what is, from the beginning a review of the whole financial management order or a review of the appointment of the manager. However, it may review only those orders that it has made.
8.3.13.3.1 Review of whole order
After a review of the whole order, NCAT has three options; it must vary, revoke or confirm the order. However, it may revoke the financial management order only if it:
- is satisfied that the person the order is about is capable of managing their affairs, or
- considers that it is in the best interests of the person the order is about that the order be revoked (even though NCAT is not satisfied that the person is capable of managing their affairs).
8.3.13.3.1.1 Revocation of financial management (administration) order because the person whose (financial) affairs are under management currently is capable of managing those affairs – s. 25P(2)(a) Guardianship Act 1087 (NSW)
In a 2003 case, Barrett J of the New South Wales Supreme Court pointed out that in relation to making of (management, financial management) orders concerning the financial affairs of persons who were found to be incapable of managing those affairs, the cause of the incapacity was irrelevant. There was no requirement to prove that the incapacity was caused by mental illness or mental infirmity.
He then continued:
The question for the court goes to incapacity alone, regardless of its cause, although the fact that the question relates to a person’s capacity to manage the person’s affairs means that the ability to recognise and protect one’s own interests plays a central part in the inquiry, with the result that incapacity is most likely to be found in circumstances of mental illness or obvious inability to function, in relation to physical and financial matters, as a self-caring member of the community.
He noted that the task of the Court [so by implication NCAT] was to make a judgment about the person’s capacity to manage their financial affairs, and continued:
[T]he requisite judgment is to be made in the light of objective physical facts concerning the relevant person’s property, money and other assets and the way the person is able to look after them. If there is a lack of capacity, the reason for it does not matter. If the person is subjected to theft, vandalism and victimisation, the causes of those events is unimportant: the court is interested in whether the person is in a vulnerable position and cannot deal with such matters in a manner that is conducive to the person’s own welfare. Likewise in relation to matters of physical environment such as (a tick infested tree adjacent to the person’s living quarters and a destabilised balcony – examples from the facts of the case): how those matters came about and whose responsibility it may be to rectify them are unimportant. The question again is whether the person can deal with those matters in a manner that is conducive to the person’s own welfare.
Barrett J then considered the medical evidence concluding that the person the subject of the application for a (financial) management order [R] was suffering from a clinical condition that affected adversely her ability to make rational decisions about where her own best interests lay.
Barrett J then noted what he called R’s lack of proportion as between the issues confronting her.
He also noted that it was inconsistent with reasonably competent handling of money that anyone would allow the way she handled aspects of her financial affairs to continue.
He the considered other matters, before going on to find that R was incapable of managing her financial affairs and appointed the then Protective Commissioner (now the NSW Trustee and Guardian) as the manager of her estate.
In 2017, R applied to the Supreme Court to revoke the management order. She is referred to as the plaintiff in the judgment. Slattery J heard the matter, and in a 2018 decision, dismissed the application.
He applied Barrett J’s approach for deciding whether or not a person had lost their capacity to manage their affairs to the question of whether or not a management order made in relation to a person’s estate should be revoked on the ground that the person was now capable of managing their financial affairs.
Slattery J noted that R’s “strange obsessions and inventions alone” did not warrant the dismissal of her application for revocation, but rather only if they affected “her capacity to manage her financial affairs in her own best interests”. However, because of her reported difficulties of having documents stolen from her home, he stated that he had real concerns about her ability to organise and find any bills or invoices that arrived by mail in order to pay her council rates, water rates and the insurance on her property with the result that she would fall behind in her payments if the NSW Trustee and Guardian no longer managed her estate.
Because of this view, concerns about her property which she intended to give away, her risk of exploitation, R’s inability to run her own litigation including current proceedings in the Land and Environment Court regarding her property, and the likelihood that she would continue to bring legal proceedings against others inappropriately and the risk of incurring massive legal costs, Slattery J dismissed R’s application.
In a 2015 case, Lindsay J of the New South Wales Supreme Court took the same approach to the question of deciding whether or not P had regained her capacity to manage her financial affairs.
He pointed out that:
- the real question is, is the person reasonably able to manage his or her own affairs in a reasonably competent fashion, without the intervention of a protected estate manager charged with a duty to protect his or her welfare and interests?,
- a focus for attention is whether the person is able to deal with (making and implementing decisions about) their own affairs (person and property, capital and income) in a reasonable, rational and orderly way, with due regard to their present and prospective wants and needs, and those of family and friends, without undue risk of neglect, abuse or exploitation.
- in considering whether the person is “able” in this sense, attention may be given to:
- past and present experience as a predictor of the future course of events;
- support systems available to the person; and
- the extent to which the person, placed as they are, can be relied upon to make sound judgements about their welfare and interests.
Lindsay J applied these matters in deciding P’s application for revocation of the management order before him. However he made a declaration that P was not capable of managing her (financial) affairs and confirmed the committal of the management of her estate to the NSW Trustee and Guardian.
8.3.13.3.1.2 Revocation of financial management (administration) order because, even though the Court or NCAT is not satisfied that the person whose (financial) affairs are under management currently is capable of managing those affairs, it considers that it is in the best interests of the person that the order be revoked – s. 25P(2)(b) Guardianship Act 1087 (NSW)
While some examples of the exercise of these powers are set out in the footnotes to the last paragraph, in a 2016 case NCAT adopted a view expressed by Lindsay J to the effect that it may be appropriate to dispense with an administration order where there is no practical utility in burdening a person or their estate with the administrative infrastructure necessarily involved in financial management.
In that case the financial manager applied to NCAT to revoke a financial management order. It was clear from the evidence that the person the subject of the order had intellectual disabilities that precluded him from ever being able to manage his financial affairs. However. NCAT revoked the financial management order on the grounds of best interests as the evidence showed that his financial affairs were being handled through informal processes that meant that the order was no longer required. In its reasons for decision for the order NCAT stated:
[NCAT] can and should follow the reasoning provided by the Court that it may be appropriate to revoke management orders in circumstances whereby there is no practical utility for the order despite the person being incapable of managing their affairs.
In addition, when reviewing its appointment of a manager, NCAT may also review the financial management order under which the manager was appointed, and may take any of the actions set out in the last paragraph.
8.3.13.3.2 Review of appointment of manager
NCAT has a discretion to review the appointment of [a financial] manager, that it has made, of its own motion.
However, if:
- the NSW Trustee, or
- the person whose financial affairs are under management, of
- any other person who, in the opinion of NCAT, has a genuine concern for the welfare of the person whose financial affairs are under management,
NCAT must conduct the review.
Unless NCAT has decided to exercise its discretion to conduct a review of the whole order, the review conducted by NCAT will be limited to reviewing its appointment of the manager. After conducting that kind of review, it may revoke or confirm that appointment. However, it may revoke the appointment under review only if:
- the manager themselves seeks the revocation, or
- NCAT is satisfied that it is in the best interests of the person the order is about that the appointment be revoked.
Those who seek to have the manager changed do not have to prove that the manager acted incompetently, improperly or unlawfully. They must show some reason why the manager should be replaced. This might be that the financial manager acted incompetently, improperly or unlawfully, but other considerations could lead to the decision to replace the initially appointed financial manager. While NCAT has a broad discretion as to whether or not to replace the manager; before doing so, it must be satisfied that it is in the best interests of the person whose estate is under management that the manager be replaced.
In a 2017 case, Lindsay J noted that in Holt v Protective Commissioner
(1993) 31 NSWLR 227, the Court of Appeal liberalised the jurisprudence relating to the selection, removal and replacement of protected estate managers. Since that time legislative and administrative developments have accommodated, and encouraged, a migration from public to private management of protected estates. Those developments have been accompanied by an appreciation of a need for greater flexibility than formerly may have been the case in effecting a change of managers, public or private.
Lindsay J also noted that competition between licensed trustee companies operating as financial managers (administrators) had increased but that care had to be taken to ensure that commercialisation of the provision of protected estate services did not subordinate, but rather served, the interests of those whose financial affairs had been placed under management. Further, that institutional managers, whether public or private, could no longer view their business as one essentially of funds management, rather than, as substantively, the business of a service provider.
Lindsay J was of the view that what Kirby P had seen as a “checklist of considerations” in the Holt Case had, through other cases morphed into “guidelines” thence to a set of “uncontroversial propositions”.
He set out those propositions in _Re TLH, a protected person.
Hallen J of the New South Wales Supreme Court set out those propositions again, and applied them in a 2018 case.
That case is an example of one of the situations in which an application to replace a manager might arise. It arose out of the tragedy that befell L who had suffered catastrophic injuries including severe head injuries, with irreversible brain damage, and became, essentially, a quadriplegic. He was awarded many millions of dollars in damages which were managed by a trustee company appointed by the Supreme Court as the manager of L’s substantial estate. In October 2007, the then Guardianship Tribunal [now NCAT] appointed the Public Guardian as L’s guardian with the functions of making decisions for him in relation to the services to which L should have access, and health issues. L went to live in Spain with his mother, LP, who had the day-to-day care of him, with the aid of carers. L needed around the clock care, seven days a week, and was wheelchair bound.
LP applied to the Supreme Court to replace the appointed manager with another company which, like the existing manager, was an experienced financial manager that routinely managed large estates for catastrophically injured clients, including those who lived overseas and/or who had complex family dynamics. Each company was able to manage the affairs of L from Australia, even when he resided in Spain.
However, L and all the other parties to the case were opposed to the change of managers proposed by LP.
Having applied the propositions, Hallen J stated:
It seems to me that the evidence, overall, requires the conclusion that, whilst there may have been tensions in the past between LP and [the appointed financial manager], at the date of the hearing and for some time before, there exists, and has existed, a prudential management regime that is being administered, generally, without strife, and in a way that is simple and expedient. I am not satisfied that there is any acceptable reason for replacing [the appointed financial manager] of L and appoint [another company] in its place, as the financial manager of L, and I do not propose to do so.
We set out an abbreviated list of those propositions as follows:
- the Court or NCAT must exercise independent judgment about the removal or replacement of a particular [financial] manager. It is not to be done merely because a party, or some other person, seeks it, and others consent or acquiesce to it;
- any decision made affecting the welfare or interests of [a person whose affairs are under management] must be made in a manner, and for a purpose, calculated to be in the best interests, and for the benefit, of that person; and no one else;
- all decision-making affecting a person whose affairs are under management must focus on the facts of the particular case, preferably, where possible, with due consultation with that person, their family and carers who may be well placed to inform the Court [or NCAT]of the person’s particular circumstances;
- decisions need to be made, in the interests of person whose affairs are under management, in the context of a prudential management regime that can be administered, without strife, in the simplest and least expensive way;
- the manager of a person’s estate is the holder of a fiduciary office, and has status and obligations accordingly;
- no one has a legal entitlement to be appointed or to remain manager of any estate placed under management by either the Court or NCAT;
- a decision about whether to replace a manager may need to be approached differently from the decision to appoint the initial manager because there has to be an acceptable reason for making the change, which has to be in the best interests of, and for the benefit of, the person whose affairs are under management. Also, depending on the facts of the particular case, this may, but will not necessarily, involve recognition that an applicant for change bears, at least, a forensic onus to establish a case for change;
- although disputes about the management of a protected estate may at times need to be determined in an adversarial setting, an exercise of protective jurisdiction is not inherently, or necessarily, adversarial in nature;
- the way the Court or NCAT meets the requirements of procedural fairness when carrying out the decision-making process in the exercise of this protective jurisdiction must also ensure that the protective purpose of the jurisdiction is duly served. However, once so satisfied, NCAT is “duty bound” to replace the manager.
In a 2017 decision in which NCAT decided to replace the NSW Trustee with a private manager, NCAT set out certain criteria that the tribunal normally ensures that the candidate(s) have met.
NCAT has to be satisfied that the person seeking appointment is willing to act and is suitable for appointment. However, while there are no express criteria for determining suitability for appointment in the relevant legislation, NCAT would normally ensures that the candidate has:
- reasonable familiarity with the subject person’s estate;
- a reasonable level of understanding of how to deal with and account for other people’s money. This can usually be demonstrated through their having held a relevant position in a corporation or business (including as an owner or employee), or in a not-for-profit organisation such as an industry association or a trade union, a community or sporting club or association. In some cases this can be satisfied by demonstrating substantial experience in relation to the subject person’s own affairs;
- no conflict of interest which would prevent their appointment on the basis that they might not be seen to be acting solely in the interests of the subject person; and
- nothing in their public record, in particular by way of any criminal or bankruptcy proceedings or orders, which might render them unsuitable for appointment.
If the outcome of the review is that the financial management order is revoked, then the appointment of the manager also comes to an end. However, if the outcome of the review is that the appointment of the manager is revoked, NCAT is required to appoint another person as manager of the estate under management to replace the manager whose appointment has been revoked.
The person whose appointment as the manager of an estate has been revoked must pay over or hand over the estate to the new manager.
In a 2002 case, the then Tribunal reviewed the appointment of two daughters of a woman with dementia, revoked their appointment and appointed the then Protective Commissioner (since replaced by the NSW Trustee) to manage their mother’s estate. They had failed to provide for their mother’s needs and had made gifts of $10,000 dollars each to themselves. Their view was that they were beneficiaries of their mother’s estate and she had no use for the money in her estate.
For a case in which the then Tribunal reviewed a financial management order on the basis of evidence that the person whose financial affairs were under management was capable of managing her affairs see, NCS
[2009] NSWGT 7. For a case in which NCAT revoked a financial management order on the basis that, consistent with the principles of the
Guardianship Act 1987 (NSW), it was in the best interests of person whose affairs were under management that the order be revoked see, UMT
[2016] NSWCATGD 7.
Supreme Court
When dealing with an application to revoke a financial management order, if the Court is satisfied that the person the order is about is capable of managing their affairs, it may:
- revoke any declaration made that the person is incapable of managing their affairs,
- revoke the order that the estate of the person be subject to management, and
- make such orders as appear to it necessary to give effect to the revocation of the order, including the release of the estate of the person from the control of the Court, the NSW Trustee or a manager and the discharge of any manager.
As already noted at 8.3.13.1 above, because the Supreme Court has the power to appoint a manager, it also has the power to remove and replace a manager.
Its discretion, and that of NCAT, to appoint and remove a financial manager is a broad one, but Kirby P has provided a checklist of considerations to be borne in mind when exercising the discretion as to who to appoint as manager or whether to revoke the appointment of a manager and appoint another person as manager. He also noted that the “abiding rule” was the achievement of the best interests of the person the hearing was about.
A summary of the checklist is set out below.
Note that there have been developments in this area of law and practise since Kirby P developed his “checklist of considerations”. The Supreme Court cases are dealt with under the heading above:
Revocation of financial management (administration) order because the person whose (financial) affairs are under management currently is capable of managing those affairs – s. 25P(2)(a) Guardianship Act 1087 (NSW)
8.3.14 Dealing with the estate after revocation of the financial management order
If NCAT revokes a financial management order (or varies it so as to exclude from the order a specified part of the estate previously subject to it), the person appointed as manager of the estate is to pay over or hand over the estate (or the relevant part of it):
- to the owner of the estate, or
- to a person designated by NCAT to receive the estate on behalf of the owner.
A person who pays over or hands over any part of an estate as a result of decisions made by NCAT does not incur any liability for doing so. Also, the paying over or handing over of any part of an estate not operate to change the ownership of the estate.
However, it would create a form of constructive trust with the person receiving the estate being the trustee and the owner of the estate being the beneficiary.
NCAT has to be very careful when designating who is to receive the estate. If the financial management order is revoked because the person the order was about has regained capacity to manage their own affairs, NCAT should designate them as the recipients of their own estate. NCAT would have to have very good reasons for designating a person other than the owner of the estate to receive the estate if its owner had capacity.
The question of who to designate to receive the estate becomes more difficult for NCAT if it revokes the financial management order on the ground that it is in the best interests of the person the order is about to do so even though NCAT is not satisfied that the person is capable of managing their affairs. It may be able to designate an attorney under an enduring power of attorney that may have been revived by the revocation of the order. Alternatively, it may be able to designate someone else who has demonstrated to it that they have a relationship with the owner of the estate and have a set of arrangements in place that will protect the estate of the still incapable person. An example would be a spouse or other long term life partner who had a long established joint bank account with the person.
8.4 Queensland
8.4.1 Who has jurisdiction to appoint administrators?
In Queensland the Queensland Civil and Administrative Tribunal (QCAT) is the appropriate tribunal to apply to for the appointment of an administrator of the state of an adult with impaired capacity for (financial) matters.
However, while the
Guardianship and Administration Act 2000 (Qld) is the source of QCAT’s jurisdiction to make administration orders, that
Act specifically states that its provisions do not affect the Supreme Court of Queensland’s inherent jurisdiction, including its parens patriae jurisdiction.
The
Act allows the Supreme Court, if it considers it appropriate, to transfer proceedings before it that are within the QCAT’s jurisdiction to QCAT and QCAT to transfer proceedings that are within the Court’s jurisdiction to the Court.
.
Note that the
Act also provides for either the Supreme Court or the District Court, when sanctioning settlements or damages awards in relation to adults with impaired capacity, to exercise QCAT’s powers under Chapter 3 of the
Act, including the power to appoint a guardian or an administrator.
The Supreme Court retains its specific jurisdiction under the
Public Trustee Act 1978 (Qld) to make protection orders appointing the Public Trustee to manage all or those parts of the estate of a person under the age of 18 years as the Court directs.
However, the exercise of this jurisdiction may be seen as now limited by the existence of QCAT, views expressed by judges about the exercise by the Supreme Court of its undoubted inherent jurisdiction in the light of the existence of QCAT, and the power of the Court to transfer proceedings brought before it to QCAT.
8.4.2 Who may apply for an administration order?
The application to QCAT for an administration order may be made by:
- the person the application is about, or
- another interested person, unless the Guardianship and Administration Act 2000 (Qld) or the Powers of Attorney Act 1998 (Qld) states otherwise.
Note that the question of who is an “interested person” is discussed in Ch. 6.7.2.
8.4.3 Who may take part in the hearing as a party?
These matters are the same as for an application for the appointment of a guardian and are dealt with in Chapter 6.
The application must also include the proposed administrator’s written agreement to being appointed.
Also, unless QCAT orders otherwise, a person who agrees to be appointed as administrator must give a management plan to QCAT, or its appropriately qualified nominee, for approval.
8.4.4 What has to be proved before an order can be made?
The same matters have to be proved for the appointment of an administrator as for the appointment of a guardian.
In particular, before QCAT may, by making an administration order, appoint an administrator for the person the hearing is about, it must be satisfied that:
- the person the application is about has impaired capacity for the (financial) matter,
- there is a need for a decision in relation to that matter or the person is likely to do something in relation to the matter that involves, or is likely to involve, unreasonable risk to their health, welfare or property, and
- without the appointment of an administrator;
- the person’s needs will not be adequately met,or
- the person’s interests will not be adequately protected.
A person has impaired capacity for a (financial) matter if they are incapable of:
- understanding the nature and effect of decisions about the matter,
- freely and voluntarily making decisions about the matter and
- communicating the decisions in some way.
A financial matter for an adult, is defined in the
Act as, a matter relating to the adult’s financial or property matters. It includes a matter relating to one or more of the following:
- paying maintenance and accommodation expenses for the adult and the adult’s dependants, including, for example, purchasing an interest in, or making another contribution to, an establishment that will maintain or accommodate the adult or a dependant of the adult,
- paying the adult’s debts, including any fees and expenses to which an administrator is entitled under a document made by the adult or under a law,
- receiving and recovering money payable to the adult,
- carrying on a trade or business of the adult,
- performing contracts entered into by the adult;
- discharging a mortgage over the adult’s property;
- paying rates, taxes, insurance premiums or other outgoings for the adult’s property;
- insuring the adult or the adult’s property;
- otherwise preserving or improving the adult’s estate;
- investing for the adult in authorised investments;
- continuing investments of the adult, including taking up rights to issues of new shares, or options for new shares, to which the adult becomes entitled by the adult’s existing shareholding;
- undertaking a real estate transaction for the adult;
- dealing with land for the adult under the Land Act 1994 (Qld) or Land Title Act 1994 (Qld);
- undertaking a transaction for the adult involving the use of the adult’s property as security (for example, for a loan or by way of a guarantee) for an obligation the performance of which is beneficial to the adult;
- a legal matter relating to the adult’s financial or property matters;
- withdrawing money from, or depositing money into, the adult’s account with a financial institution.
8.4.5 Appointing an administrator
The matters QCAT must be satisfied about before it may appoint a person as an administrator are essentially those it must be satisfied about before it may appoint a person a guardian. These are set out in Chapter 6.7.5. In addition, the proposed administrator must not be a bankrupt or be taking advantage of the laws of bankruptcy as a debtor under the
Bankruptcy Act 1966 (Cth) or a similar law of a foreign jurisdiction.
QCAT may appoint the Public Trustee or a trustee company under the
Trustee Companies Act 1968 (Qld) as the administrator of an impaired adult.
8.4.6 Joint, several, alternate and successive administrators
In relation to these matters, the same provisions apply as apply to guardians. These are set out in Chapter 6.7.6. In addition, the appointment of an administrator ends automatically if the administrator becomes bankrupt or insolvent.
8.4.7 Queensland administration orders
The
Guardianship and Administration Act 2000 (Qld) empowers administrators to exercise power in relation to all the financial matters of the adult with impaired capacity they have been appointed administrator for or in relation to those financial matters of that adult set out in the order appointing them. Administrators may do anything in relation to the financial matters that the incapable adult would have been able to do if they had had capacity.
. In this sense administration orders made by QCAT may be either plenary, covering all of the estate of the adult with impaired capacity, or limited in the sense of covering only those financial matters specifically referred to in the administration order. In this way part of the person’s estate may not be covered in the administration order leaving that part of the estate in their hands to be managed either by them or informally by others on their behalf.
8.4.7.1 Interim orders
If QCAT is satisfied that urgent action is required because of a serious risk to the financial affairs of an adult with impaired capacity, it may make an interim order appointing an administrator, for a maximum period of six months, without having to conduct a full hearing, provide notice of the hearing, or otherwise comply with the requirements of the
Guardianship and Administration Act 2000 (Qld)
The procedure for dealing with applications for interim orders is set out in a Presidential Direction.
8.4.8 Powers and functions of an administrator
As already noted in 8.4.7 above, Queensland administrators may do anything in relation to the financial matters they have been appointed to administer that the incapable adult would have been able to do if they had had capacity.
Some of the powers and functions of administrators are set out in the
Guardianship and Administration Act 2000 (Qld).
Those powers and functions and the common law powers and functions of administrators are dealt with later in this chapter at 8.11.14.
Administrators of estates valued at less than $50,000, excluding the principal place of residence or aged care facility bond of the person whose financial matters are being administered, account directly to QCAT. If the estate is valued at $50,000 or more, with the same exclusions, the administrator must submit the accounts of the estate they are administering to one of a panel of examiners approved by QCAT.
As to the question of whether or to what extent the decision-making powers in relation to their financial matters are suspended by QCAT making an administration order in relation to those matters, the Queensland Court of Appeal, put the issue beyond doubt in a 2010 case.
When an administration order, or its equivalent is made, the person or body appointed to manage the estate has the power to administer all of the estate (or financial matters) or that part of the estate made the subject of the order or all aspects of decision-making in relation to the estate that the appointee is given authority to manage.
Muir JA, with whom McMurdo P and Holmes JA agreed, pointed out that it was necessarily implicit in two sections of the
Guardianship and Administration Act 2000 (Qld) that an administrator for all financial matters assumed the powers in respect of financial matters of the person in relation to whose estate the order was made, to the exclusion of that person, except to the extent that QCAT orders to the contrary. The first of these sections is
s. 12. It requires QCAT, before it appoints an administrator for a financial matter of a person to be satisfied that:
- the person has impaired capacity for the financial matter;
- there is a need for a decision in relation to the matter; or
- the person is likely to do something in relation to the matter that involves, or is likely to involve, unreasonable risk to the person’s property; and
- without an appointment, the person’s needs will not be adequately met or their interests will not be adequately protected.
The second is
s. 33. It provides that unless QCAT orders otherwise, an administrator is authorised to do, in accordance with the terms of their appointment, anything in relation to a financial matter that the person could have done if they had capacity for the matter when the power is exercised.
In addition we note that
s.5(d) states that the
Act acknowledges the right of a person with impaired capacity to make decisions should be restricted, and interfered with, to the least possible extent. And that s.147 states that a declaration about whether a person had capacity to enter a contract is, in a subsequent proceeding in which the validity of the contract is in issue, evidence about the person’s capacity.
Muir JA went on to note that if the
Act did not operate to deprive the person of the powers assumed by the administrator, the protection that s.12 was plainly intended to provide to a person of impaired capacity would be negated in whole or in part. This was because there would be dual control over the person's financial matters - a result which the Legislature could not have intended. The financial wellbeing of the person with impaired decision-making capacity would be imperiled, for example, by the risk that the administrator and the adult could separately enter into transactions, such as separate contracts for the sale or purchase of the same property to different purchasers or from different vendors, which might expose to liability the person whose financial matters were the subject of the administration order. He then went on to give some examples including that: where the incapacitated person's mental capacity was variable it may prove difficult for the administrator and third parties to determine whether the incapacitated person lacked relevant capacity at the critical time.
He then went on to note that it was implicit in ss. 5 and 6 of the
Act that a adult with impaired capacity may, nevertheless, retain some decision making capability, with or without support for decision making. In addition to s. 5(d), s. 5 acknowledges that:
- an person’s right to make decisions is fundamental to their inherent dignity;
- the right to make decisions includes the right to make decisions with which others may not agree;
- the capacity of a person with impaired capacity to make decisions may differ according to
- the nature and extent of the impairment,
- the type of decision to be made, including the complexity of the decision and
- the support available from members of the adult’s existing support network;
- a person with impaired capacity has a right to adequate and appropriate support for decision-making.
Section 6 of the
Act seeks to strike an appropriate balance between:
- the right of a person with impaired capacity to the greatest possible degree of autonomy in decision-making; and
- their right to adequate and appropriate support for decision-making.
Muir JA noted that the words "that the adult could have done if the adult had capacity for the matter when the power is exercised" in s 33(2) of the
Act strongly implied that where an administrator was appointed in relation to a person’s financial matters, the person lacks capacity and, by inference, the power to make decisions about (all their) financial matters, (or those financial matters referred to in the orders appointing the administrator).
Muir JA also noted that the
Act contemplated that QCAT would identify in its orders:
- the extent of the interference with the impaired person's decision making capacity; and
- where appropriate, would address the question of decision making support.
This issue is discussed in further detail below in 8.11.13.
8.4.9 Reviews of administration orders
QCAT must conduct a review its appointment of an administrator at least every five years.
In addition to these periodic reviews, QCAT may also review its appointment of an administrator on its own initiative (own initiative reviews) or on the application of certain persons (requested reviews).
The provisions in relation to reviews of administration orders in Queensland, including the parties to such reviews and the powers of QCAT when conducting such reviews, are the same as those for the reviews of guardianship orders. These are set out in Chapter 6.7.11.
It should be recalled that, having conducted its review, QCAT must revoke the administration order unless it is satisfied it would have made an appointment if it had been dealing with a new application for an appointment of an administrator.
This was made clear in a 2015 case in which QCAT pointed out, in a review of an administration order case, that it had to be satisfied that the adult the subject of the hearing (still) had impaired capacity before it could further consider the review of the appointment of an administrator for that adult. This was because QCAT was required to determine capacity as at the date of hearing because the adult the subject of the hearing is presumed to have capacity.
In that case QCAT was satisfied that the presumption of capacity was rebutted by the evidence and that JTL still lacked capacity for financial matters.
In a 2017 case QCAT took the view, based on cases from New South Wales, that while the question of capacity/incapacity is to be determined as at the day of the hearing, it went on to quote Powell J; “one is not restricted to a consideration of matters as they stand on the day of the hearing. On the contrary, so it seems to me, one is both entitled, and required to consider what the position will be in the reasonably foreseeable future”.
In that case MEC’s financial affairs were being managed by the Public Trustee of Queensland under an administration order made by QCAT. MEC had had chronic paranoid schizophrenia for nearly twenty years; including 17 admissions over 16 years. This history had resulted in a number of urgent applications for administration orders. After considering the evidence available to it on the day of the hearing, including evidence from her medical records that MEC had regular relapses in her condition and that when she was unwell had impaired capacity in relation to financial matters, QCAT found that MEC had impaired capacity for complex financial decisions at the time of the hearing, and dismissed her application.
QCAT may replace administrators after conducting a review.
In January 2014, LLJ applied to QCAT, not for a review of the October 2013 appointment of Public Trustee of Queensland as his administrator for 12 months, but for a declaration of his capacity. LLJ believed that the appointment of the Public Trustee was an affront to his independence. He did not want Public Trustee in his life, and believed that he had capacity to make his own decisions. He blamed his current situation on the “intrusion” of his children. However, QCAT noted that there was clear evidence of vulnerability in the past and that LLJ made significant decisions that adversely affected his security and would have continued to do so without intervention. He continued to display no insight into the valid concerns his children held that led to financial administrators being appointed in the first place. The Tribunal was satisfied that the Public Trustee of Queensland should continue its role as the formally appointed administrator, providing for ongoing oversight of LLJ’s financial affairs, while allowing for the day to day management of LLJ’s finances to remain the purview of LLJ and his wife LT.
A 2017 case from Queensland is a salutary tale for persons appointed by QCAT (or the equivalent tribunal in any other State or the two Territories) to administer the financial affairs of adults who lack financial capacity.
In that case the administrator did not acquaint himself with the key aspect of the responsibility of administrators, namely that the “abiding rule” in the exercise of their powers under administration legislation is the achievement of best interests of those for whom administration orders have been made. Instead the administrator, not having read either carefully, or at all, the information pack given to him by QCAT about his responsibilities as an administrator, sought to apply “tax effective” advice to the management of the estate he had been appointed by QCAT to administer, and, misunderstanding other relevant matters, gave gifts of $10,000 from that estate to each of his 3 sons. While, on review, QCAT reappointed him as administrator of the estate, it declined to authorise the gifts to his sons and ordered him to refund $30,000 to the estate.
8.5 South Australia
8.5.1 Who has jurisdiction to appoint administrators?
In South Australia, both the Supreme Court and the District Court may make protection orders and the South Australian Civil and Administrative Tribunal (SACAT), which replaced the Guardianship Board as from 29 March 2015, may make administration orders. Because the District Court has most of the jurisdiction of the Supreme Court, both it and the Supreme Court may make protection orders under the
Aged and Infirm Persons’ Property Act 1940 (SA).
While the Supreme Court may retain its common law, parens patriae jurisdiction to appoint administrators for the estates of incapable people as would also the District Court it is not a significant issue because of statutory jurisdiction both courts have.
In addition, the
Aged and Infirm Persons’ Property Act 1940 (SA) appears to give SACAT precedence over the two courts in relation to the making of administration orders.
See also Chapter 6.3.1.
Consequently, for the reasons set out in Chapter 6.6.1, the wise course is to make applications for administration orders to SACAT rather than to the Supreme or District Court, unless the court has awarded damages to a person who has a physical or mental infirmity which renders them unable to manage their financial affairs. The role of the two courts in making protection orders will be returned to below at 8. 5. 8.
In summary, SACAT and the Supreme and District Courts have statutory jurisdictions, arising from different sources, to make administration orders:
- SACAT, under the Guardianship and Administration Act 1993 (SA),
- Supreme Court, under the Aged and Infirm Persons’ Property Act 1940 (SA),
- District Court, under the Aged and Infirm Persons’ Property Act 1940 (SA)
8.5.2 Who may apply for an administrator order?
Those who may make an application to the SACAT for a guardianship order or for the variation or revocation of such an order may also make applications for administration orders.
This matter is dealt with at 6.6.2.
8.5.3 Who may take part in the hearing as a party?
This matter is dealt with in Chapter 6.6.3. Those who may attend the hearing of an application for a guardianship order for a particular person may also attend the hearing of an application for an administration order for the same person. It is common for applications for both orders to be heard together.
8.5.4 What has to be proved before an order can be made?
Before SACAT may make an administration order it must be satisfied by the evidence before it that the person the subject of the application:
- has a mental incapacity, and
- should have an administration order made in relation to them.
The term “mental incapacity” and the considerations that the SACAT has to take into account before it can make an administration order are set out in Chapter 6.6.4 as they are the same as those that SACAT has to take into account before it may make a guardianship order.
8.5.5 Appointing an administrator
SACAT may appoint any of the following as an administrator:
- the Public Trustee,
- a trustee company under the Trustee Companies Act 1988 (SA), or
- any natural person who the Board considers suitable to act as administrator of the estate of the person the hearing is about.
SACAT cannot appoint anyone as an administrator unless they consent to the appointment. However the Public Trustee’s consent is not required before SACAT appoints him or her.
It is suggested that the Public Trustee cannot refuse to accept an appointment as administrator by SACAT.
When determining the suitability of a person for appointment as a private administrator, SACAT must have regard to:
- whether the potential appointee and the person with the mental incapacity would be incompatible,
- whether there is some existing family arrangement or relationship that should be preserved or should not be disturbed,
- whether the potential appointee would be competent to discharge the functions of an administrator and would do so in accordance with the principles set out in the Guardianship and Administration Act 1993 (SA),
- whether the potential appointee would be readily available for discharging those functions,
- whether any conflict of interest would arise from the appointment. (The fact that a proposed appointee is related to the person with the mental incapacity by blood or marriage is not, of itself, to be taken as giving rise to a conflict of interest), and
- such other matters as SACAT considers relevant.
8.5.6 Joint, several and alternate administrators
While the Public Trustee may only be appointed as a sole administrator, SACAT may appoint more than one private administrator to administer the estate of a mentally incapacitated person. If that is done, the administrators are joint administrators who must concur with one another in every act done and decision made in relation to the person the order is about.
While it is possible for SACAT to appoint administrators with separate functions and thus as “several” administrators, it would not be very practical to do so and would make it difficult for the administrators to consult among themselves and with the person the order is about and act in that person’s best interests.
8.5.7 Types of administration orders
8.5.7.1 Limited and full administration orders
SACAT may appoint an administrator for only a specified part of a mentally incapable person's estate - a limited administration order – unless it is satisfied that such an order would not be appropriate, in which case it can make a full administration order applying to the whole of the person's estate.
8.5.7.2 Self-revoking orders
SACAT has power to include limitations in any administration order it makes, including a limitation as to the duration of the order. Consequently, it may make administration orders that are to last only for a set period (of less than three years). Such orders would not have to be reviewed at the “circumstances reviews” discussed at 8.5.11.1 below.
.Self-revoking orders may be made for both limited and full administration orders.
8.5.7.3 Urgent orders
Prior to SACAT taking over the guardianship jurisdiction of the now defunct Guardianship Board, the Board could, if it was satisfied that urgent action was required, may make an urgent administration order for up to 21 days. While the relevant provision in the
Guardianship and Administration Act 1993 (SA) has been repealed, it is suggested that there is sufficient flexibility in SACAT’s procedures under the
South Australian Civil and Administrative Tribunal Act 2013 (SA) to allow for an urgent administration order to be made in circumstances in which SACAT was satisfied that such urgent action was required to protect the whole or part of the estate of an apparently mentally incapacitated person. It is further suggested that such an order could be made for such time as was necessary for SACAT to convene a hearing that complied with the requirements of procedural fairness relevant to the circumstances of the particular case and for the appropriate evidence relevant to the case to be collected.
There must be grounds for believing that the person lacks mental incapacity but that more evidence has to be gathered to demonstrate whether or not the person the hearing about has a mental incapacity. Such an urgent hearing would be a rare event.
8.5.8 Powers of the Supreme and District Courts to make protection orders
Both the Supreme Court and the District Court may make a protection order applying to all or part of the estate of a person who, they are satisfied, because of age, disease, illness, or physical or mental infirmity, is:
- unable, wholly or partially, to manage their affairs,
- being subjected to or liable to be subjected to, undue influence in relation to their estate or the disposition of it, or
- otherwise in a position which the court considers it necessary in the interest of that person or of those dependent upon them that their property should be protected.
These criteria are consistent with those that courts and tribunals elsewhere in Australia have to be satisfied about before they may make an administration order, but the two South Australian courts have a broad discretion to make administration orders where they are satisfied that a person is wholly or partially unable to manage their affairs because:
- the person takes alcohol to excess or uses any intoxicating, stimulating, narcotic, or sedative drug to excess, and
- this renders them, either continuously or occasionally, wholly or partially unable to manage their affairs.
The courts may do this notwithstanding anything to the contrary in any other
Act.
8.5.8.1 Who may apply for a protection order?
The following may apply for a protection order in either the Supreme or District Court:
- the person whose property is sought to be protected,
- the person they are married to or their domestic partner,
- any near relation by blood or marriage of the person,
- the Public Trustee, or
- any other person who, through evidence, satisfies the court that circumstances exist which make it proper that they should make the application.
When dealing with an action for damages for personal injury, both the Supreme or District Courts may, either on their own motion or on application, but before assessing the amount of the damages, make a protection order relating to all or part of the estate of the person the action for damages is about if it appears to the court that, as a result of that injury, the person suffers or is likely to suffer from some physical or mental infirmity which renders them:
- unable, wholly or partially, to manage their affairs, or
- actually or likely to be subject to undue influence concerning their estate or the disposition of it.
The courts may also make a protection order it they consider it is otherwise necessary in the interests of the person or their dependents that their property should be protected under the
Aged and Infirm Persons’ Property Act 1940 (SA).
This provision, inserted in the
Act in 1973, reflects more paternalistic philosophy than is reflected in the principles of the
Guardianship and Administration Act 1993 (SA).
8.5.8.2 Who may be appointed manager under a protection order?
The courts may, in a protection order, appoint any of the following as either sole or joint manager:
- the person’s spouse or domestic partner,
- the person’s near relation by blood or marriage,
- some other person, or
- any incorporated body (usually a trustee company).
The courts may appoint the Public Trustee but alone, not jointly.
The common law preference for appointing a family member appears to have been displaced by the terms of the
Aged and Infirm Persons’ Property Act 1940 (SA) so that in any case the courts have a complete discretion as to whether or not they appoint the Public Trustee or some other person or body.
The courts may rescind or vary any protection order.
The powers that managers have, unless the appointing court otherwise orders, are set out in the
Act.
If SACAT has made an administration order in relation to an estate or part of an estate, then neither the Supreme nor District Court may make a protection order in relation to that estate or part of that estate while SACAT’s order remains in place. Furthermore, if either of those courts has made a protection order in relation to an estate or part of an estate and subsequently SACAT makes an administration order covering that estate or part of that estate and files its order in that court, the protection order is deemed to have been rescinded as from the day that the administration order was made.
In these ways administration orders made by SACAT take precedence over protection orders made by the two courts.
8.5.10 Powers and functions of an administrator
The
Guardianship and Administration Act 1993 (SA) makes it clear that, although the administrator has the control and management of the estate and has the duties and obligations of, and is accountable as a trustee in relation to it, the estate does not vest in the administrator.
The estate remains the property of the mentally incapable person.
Administrators have significant powers and duties when appointed by SACAT; however SACAT can limit the extent of these powers in the orders it makes.
Nevertheless, SACAT may, in its orders, confer further powers on an administrator, beyond those set out in the legislation, if SACAT considers these necessary or desirable for the proper administration of the estate of the mentally incapable person. SACAT may include in the administration order such conditions or limitations as it thinks fit, including a limitation as to the duration of the order.
It is by appointing them that SACAT gives administrators their powers to act in South Australia. Most of the powers of administrators are found in the
Guardianship and Administration Act 1993 (SA).
Private administrators must provide statements of the accounts of the estates they are administering to both SACAT and the Public Trustee.
The Public Trustee must examine those statements of accounts and report on them to SACAT.
Where the Public Trustee is the administrator, they must provide, to SACAT, statements of the accounts of each estate they are administering as a result of an order by SACAT, at intervals decided by SACAT.
8.5.11 Effect of an administration order
The effect of an administration order made by SACAT, the Supreme Court or the District Court is that the power of a person whose estate (financial affairs) is under administration to deal with their estate is suspended in relation to so much of that estate as is placed under the administration of another person, the Public Trustee or a trustee company. In 2010 the Queensland Court of Appeal held that an administration order made under
s. 12 of the
Guardianship and Administration Act 2000 (Qld) had the same effect.
Only the administrator may deal with the persons financial affairs, covered by the order, while the order is in place.
For a more detailed discussion of this matter see 8.11.13, below.
8.5.12 Reviews of administration orders
There are now three types of reviews of administration orders in South Australia - internal reviews, periodic reviews and reviews requesting SACAT to vary or revoke an administration order.
8.5.12.1 Internal review of a decision to make an order
The
South Australian Civil and Administrative Tribunal Act 2013 (SA) created an internal review jurisdiction under which (an internal review panel of) SACAT may, on application, review a decision made (at a “first instance” hearing) by SACAT to make or refuse to make an administration order or to review the content of the administration order made, including who the administrator or administrators appointed were and the powers given to them. During the review, SACAT will examine the original decision on basis of the evidence or material before the original hearing but may allow further evidence or material to be presented to it. When conducting this kind of review, SACAT is required to reach the correct or preferable decision but in the process of doing so must have regard to, and give appropriate weight to, the decision under review. Having conducted the review, SACAT may:
- affirm the decision that is being reviewed; or
- vary the decision that is being reviewed; or
- set aside the decision being reviewed and
- substitute a new decision; or
- return the matter to the original decision-makers at SACAT for reconsideration of the application for guardianship in accordance with any directions or recommendations that the reviewers considered appropriate.
This kind of review is, in effect, a form of internal appeal. It is different in its purpose from the periodic and requested reviews discussed below.
There are limited further appeals from this kind of appeal. They are touched upon in the first paragraph of Chapter 6.6.1.
8.5.12.2 Periodic reviews
SACAT is required to review the “circumstances” of those whose financial affairs are under administration at least every three years to see whether the administration order in relation to them is still appropriate for those people. On completion of the review, SACAT must revoke the order unless it is satisfied that there are proper grounds for keeping the order in force.
If SACAT decides to keep the order in force, it may vary the terms of the order. SACAT has a wide discretion as to how it may conduct its reviews.
8.5.12.3 Parties to periodic reviews of administration orders
Neither the
Guardianship and Administration Act 1993 (SA) nor the
South Australian Civil and Administrative Tribunal Act 2013 (SA) sets out who are the parties to a review. It is the responsibility of SACAT to conduct periodic reviews.
The
South Australian Civil and Administrative Tribunal Act 2013 (SA) makes it clear that the person whose estate is under management is a party. This is because the review is an inquiry into “the circumstances” of the person whose estate is under management.
In any event, procedural fairness would require that at least the person whose estate is under management, the administrator of their estate and their guardian (if any) be notified of the review and be given the opportunity to take part in it.
8.5.12.4 SACAT’s powers on a periodic review
While SACAT is required to review the circumstances of the person rather than the administration order, the purpose of the review is to decide whether the administration order is still needed. If it is not still needed, it must be revoked so that the person is not under the stigma of having an administration order. If the order is still needed, its terms may be varied.
8.5.12.5 Reviews requesting SACAT to vary or revoke an administration order
SACAT is empowered, “on application” to vary or revoke an administration order if that is the proper course to take.
8.5.12.6 Who may request SACAT to vary or revoke an administration order?
Because SACAT is an amalgamation of a number of previously separate tribunals, the
South Australian Civil and Administrative Tribunal Act 2013 (SA) deals only in general terms with the question of who will be a party to particular proceedings before it.
However as already noted in Chapter 6.6.9.2 in relation to a person the subject of a guardianship order, the person whose estate is the subject of the administration order would be a party to any review of that order.
On rare occasions they will be the applicant. While administrators would be able to request reviews of the orders appointing them as administrators, so would any guardian of the person whose estate is the subject of the administration order. It is suggested that all the persons entitled under
s 33 of the
Guardianship and Administration Act 1993 (SA) to make an application for an administration order in relation to the person whose estate is now the subject of an administration order, would, prime facie, be able to request a review of any administration order made in relation to the estate of that person. However, there could be circumstances in which SACAT may refuse to conduct a requested review on the grounds that the applicant did not a proper interest in the welfare of the person the subject of the application. See also Chapter 6.6.2.
8.5.12.7 Who are parties to the hearing of a request to SACAT to vary or revoke an administration order?
Section 53 of the
South Australian Civil and Administrative Tribunal Act (2013) (SA) makes it clear that the applicant and the person the subject of the order sought to be reviewed would be parties to a requested review of that order. The administrator of the estate the subject of the order and any guardian of the person would be most likely to be joined by SACAT as a party to a requested review. So may any person appointed as a substitute decision-maker under an advance care directive made by the person whose estate is the subject of the application requested to be reviewed.
However, they and others may need to show SACAT why they should be joined as parties in the circumstances of the particular application.---++++ 8.5.12.8 SACAT’s powers when dealing with “vary or revoke” requested reviews
This form of requested review is created by
s. 30 of the
Guardianship and Administration Act 1993 (SA). When dealing with an application under that section, SACAT is limited to either dismissing the application or varying or revoking the administration order.
They are not reviews of “the circumstances” of the person the order is about as are the periodic reviews discussed in 8.5.11.2 and 3 above and Chapter 6.6.9.2.
8.6 Tasmania
8.6.1 Who has jurisdiction to appoint financial managers?
For the reasons set out in Chapter 6.5.1, the wise course is to make applications for orders appointing administrators to the Guardianship and Administration Board of Tasmania rather than to the Supreme Court.
8.6.2 Who may apply for a financial management order?
Any person may apply to Guardianship and Administration Board for an order appointing an administration for the estate of a person with a disability who is 18 years old or older.
As to other aspects of this matter, see Chapter 6.5.2.
8.6.3. Who may take part in the hearing as a party?
This matter is dealt with sufficiently in Chapter 6.5.3.
8.6.4 What has to be proved before an order can be made?
Before the Board may make an administration order, it must be satisfied by the evidence that:
- the person the hearing is about has a disability,
- because of that disability they are unable to make reasonable judgements about matters relating to all or any part of their estate, and
- they are in need of an administrator for their estate.
As to the other matters and considerations the Board has to put its mind to, these are set out in Chapter 6.5.4. and 6.4.4.
8.6.5 Appointing a financial manager
Where Board is satisfied that it is in the best interests of the person the hearing is about to appoint an administrator for their estate, it may appoint as administrator:
- the Public Trustee,
- the Public Guardian,
- a trustee company, or
- a private person.
While none of the Public Trustee, Public Guardian or trustee companies have to meet any specific criteria, private persons have to be suitable to act as the administrator and the Board has to be satisfied as to other matters in relation to them.
These are set out in Chapter 6.5.5. and 6.4.5.
8.6.6 Joint/several/alternate administrators
It is the practice of the Tasmanian Board to appoint only single administrators. Applying the normal rules of statutory interpretation, the Board may be able to appoint joint administrators, provided each of them meets the criteria for appointment as an administrator and they have the same functions as each other.
They would have to make the decisions about the estate jointly. The Board does not appoint joint administrators with different functions and does not to appoint alternate administrators. The
Guardianship and Administration Act 1995 (Tas) provides for such appointments in relation to guardians, but does not have similar provisions in relation to administrators.
Also, since there is no provision for dealing with the death of an administrator, the administration order would cease to operate if the administrator died.
8.6.7 Types of administration orders
8.6.7.1 Limited orders
The Board may make limited orders which list the type of financial decisions that the administrator is authorised by the Board to make.
8.6.7.2 Full orders
The effect of the
Guardianship and Administration Act 1995 (Tas) is that the Board may make a full order which allows an administrator to make all the financial decisions for the person with the disability only if such an order is the least restrictive of the person’s freedom of decision-making and action as is possible in the circumstances.
8.6.7.3 Emergency administration orders
The Board has the power to make an emergency order appointing the Public Trustee as the administrator of the estate of a person whose estate is not already under administration applying the same processes and criteria as for appointing a guardian where it is proper to do so for reasons of urgency.
These processes and criteria are set out Chapter 6.5.7.3.
8.6.8 Powers and duties of an administrator
In Tasmania administrators must at all times act in the best interests of the person whose estate they are administering. This involves them acting as far as possible:
- in such a way as to encourage and assist the person whose estate they are administering to become capable of administering their own estate; and
- in consultation with that person and in taking into account as far as possible their wishes.
Their powers and duties are set out in the
Guardianship and Administration Act 1995 (Tas).
These powers are similar to those given to administrators in New South Wales and Victoria. Administrators must provide statements of accounts of the estates they are administering to the Guardianship and Administration Board. The Board must examine those statements of accounts and have them audited if necessary.
Because the Tasmanian Board is responsible for the supervision of private administrators, it is the tribunal that acts most like the Supreme Courts of the States used to operate when they had exclusive jurisdiction to appoint managers for the estates of those who were unable to manage their financial affairs. The Supreme Courts did this sometimes in the exercise of statutory jurisdiction but also as part of their inherent parens patriae jurisdiction to make protective orders.
The fact that the Tasmanian Board not only makes the administration orders but also sets outs the powers and duties of each private financial manager and supervises their management of the estates they have been appointed to manage, provides a substantial basis for the argument that all aspects of jurisdiction was handed over to the Board including the concept that if the Board placed the estate of a person under management, that person’s ability to manage any part of their estate was suspended until the administration order in relation to their estate was revoked. A second substantial basis for forming this opinion is that under the
Guardianship and Administration Act 1995 (Tas), where a decision, action, consent or act is made, taken, given or done by an administrator under an order made by the Board or under any power or authority given by that
Act, that decision, action, consent or act has effect as if it had been made, taken, given or done by the person whose estate was under management and that that person had the legal capacity to do so.
The view held in Tasmania is that the making of an administration order by the Board has the effect of suspending the ability of the person whose estate is under management to manage any part of their estate until the administration order in relation to that person’s estate is revoked.
This view is consistent with the decisions made by the Courts of Appeal of New South Wales and Queensland. This matter is discussed in greater detail at 8.11.13 below.
8.6.9 Administrators may seek advice
An administrator may apply to the Board for advice or directions on any matter relating to:
- the scope of the administration order appointing them, or
- the exercise of any power by the administrator under that order.
If the Board receives such an application, it may require notice of the application to be given to any person that the Board directs. However, the Board may exercise its powers in relation to such an application without conducting a hearing. After considering the application, the Board may:
- approve or disapprove of any act proposed to be done by the administrator,
- give such advice as it considers appropriate, and
- vary the administration order or make any other order that it could have made on the original application relating to the administration of the estate that it considers necessary.
In addition, the Board of its own motion may direct, or offer advice to, an administrator in respect of any matter relevant to the administrator’s administration of the estate.
8.6.10 Reviews of administration orders
As with guardianship orders, the Board may make administration orders for a maximum of three years. After that they will expire unless they are continued after a review.
However, the Board is also empowered to hold a hearing to review an administration order at any time. It may do so:
- on its own initiative,
- on application by, or on behalf of, the person whose estate is under management, or
- on the application of any other person.
8.6.11 Parties to reviews of guardianship orders
In Tasmania the parties to reviews of administration orders are those persons that procedural fairness requires to be treated as parties. These are at least the following:
- the person the order is about,
- the administrator of their estate,
- the applicant for the review if they are neither the administrator nor the person whose estate is under administration.
Others, such as the spouse of the person whose estate is under administration, may be entitled to be parties, but that will depend on the circumstances of the case. However, it not necessary to be a party to be able to attend a review and to give evidence at it.
8.6.12 Powers of the Board on review
After conducting the review hearing, the Board may vary or continue the administration order, subject to any conditions or requirements it considers necessary, or it may revoke the order. Also, the Board may make such further orders as it considers necessary in order to give effect to the administration order.
In a 2004 case the Board received an application for an early review of an administration order from the administrator. She wished to resign as administrator citing emotional conflict within the family. After considering the circumstances of the case, including the claim of another family member for appointment as administrator, the Board varied its original order by appointing the Public Trustee as administrator. The Board concluded its reasons for decision as follows:
The evidence received indicated to the Board that appointment of another family member would exacerbate existing conflicts. While appointment of the Public Trustee cannot solve those conflicts, it can ensure that decisions made about Mrs P’s estate are made independently from that conflict and for a single purpose of ensuring her best interests.
8.7 Victoria
8.7.1 Who has jurisdiction to appoint financial managers?
The opinion of Morris J, the first President of the Victorian Civil and Administrative Tribunal (VCAT), was that Victoria had comprehensive laws relating to guardianship and administration matters and has a wide jurisdiction to deal with them has been noted a number of times. While the Supreme Court of Victoria's parens patriae jurisdiction may continue to exist, that Court has preferred to leave the making of administration orders to VCAT. This approach was noted in a 2006 case.
With the coming into force of the
Guardianship and Administration Act 2019 (Vic) on 1 March 2020, and as already noted in 6.2 above, it has been clear that the Supreme Court of Victoria has jurisdiction to deal with applications for guardianship and administration orders. However, it also has the discretion to refuse to deal with such applications.
We suggest that the concept of “purposeful restraint” set out Lindsay J in 6.3.1 above is a relevant matter for the Supreme Court of Victoria to consider when deciding whether or not to deal with an application made to it directly. Lindsay J suggested that the NSW Supreme Court should adopt a practice convention of "purposeful restraint" in deploying its inherent jurisdiction. This would mean for Victoria that VCAT, as the statutory tribunal with jurisdiction to make (or refuse to make) guardianship and administration orders would, except in unusual circumstances, make those decisions at first instance and that the Supreme Court would deal with any appeals from those decisions through the regulatory framework established by the legislation.
Consequently, for the purposes of this chapter, only VCAT's jurisdiction to deal with applications in relation to administration matters, under the
Guardianship and Administration Act 2019 (Vic) will be considered.
8.7.2 Who may apply for an administration order?
Any person may apply to VCAT for an order appointing an administrator for a person with a disability who is 18 years old or older or, where the person with a disability for whom such an order is sought is less than 18 years of age, for an order that will take effect when that person reaches 18 years of age.
However, if the person for whom an administration order is sought does not reside in Victoria but their property is partly or wholly in Victoria, an application may be made for an administration order appointing an administrator for the person in relation to that part of the property that is in Victoria. .
8.7.3 Who may take part in the hearing as a party and/or have notice of the hearing and any order made?
The following are automatic parties to an application for an administration order:
- the applicant;
- the person in relation to whose estate the application for the administration order has been made;
- the proposed administrator;
- any current guardian for the person whose estate is the subject of the application for an administration order;
- any other person VCAT orders to be joined as a party to the proceeding
The following are entitled to notice of the application, the hearing and any order made as a result of the application:
- the automatic parties to the application referred to in the last paragraph:
- the spouse or domestic partner, if any, of the person the hearing is about;
- the primary carer of the, if any, of the person the hearing is about;
- any person referred to in the application as having a direct interest in the application; and
- any other person VCAT directs to be given notice.
Applicants for administration orders must include the following in their applications:
- the name and contact details of the person for whom the administration order is sought:
- the type(s) of order applied for, including details of the financial matter(s) in relation to which the order is sought, and if a guardianship order is also sought, the personal matter(s) in relation to which the guardianship order is sought;
- details of the reasons for making the application;
- the name and contact details of any person proposed as administrator (or where relevant, guardian)
Note that applications for guardianship and administration orders in relation to a particular person will be made to and, usually, dealt with by VCAT at the same time. Also applications for the appointment of a supportive guardian and/or a supportive administrator will often be made at the same time as the application for a guardian or an administrator. Applications for administrators and supportive administrators are dealt with at 8.7.14 below. Applications for a supportive guardian to be appointed rather than a guardian are dealt with in Chapter 6.4.11 below.
VCAT must commence hearing an application within 30 days after the application is received
Under the
Guardianship and Administration Act 2019 (Vic), the person the application for an administration order is about must attend the hearing unless VCAT is satisfied that that person does not want to attend the hearing or that their attendance is impracticable or unreasonable despite any arrangement that VCAT can make. However, VCAT may, if it think it is appropriate to do so, conduct all or part of the hearing by means of a conference conducted using telephones, video links or other systems of communication.
Also, if the parties to the application agree, VCAT may conduct all or part of a proceeding entirely on the basis of documents, without any physical appearance by the parties or their representatives or witnesses.
It should be appreciated that VCAT, in exercising, carrying out or performing functions under the
Act, must do so in a way which is the least restrictive of the ability of a person with a disability to decide and act as is possible in the circumstances.
The provisions of the
Guardianship and Administration Act 2019 (Vic) relating to who may apply for a supportive guardianship order and what information they must supply to VCAT in that application are set out in the paragraphs above in 8.7.3. In relation to applications for guardianship orders, they are set out in Chapter 6 at 6.4.3.2, and following. Supportive administration orders are dealt with at 8.7.14 below.
8.7.4 What has to be proved before an order can be made?
VCAT may make an administration order only if satisfied that:
- the person the hearing is about has a disability namely, a neurological impairment, intellectual impairment, mental disorder, brain injury, physical disability or dementia, because of which,
- the person does not have decision making capacity in relation to the financial matter (or matters) about which the order is sought; and
- the person is in need of an administrator; and
- the administration order will promote the person's personal and social wellbeing.
In an application for a reassessment of an administration order decided in June 2020 by the Vice President of VCAT, Judge Millane, took the view that, because of the evidence of IFZ’s vulnerability to undue influence and exploitation, the issue of influence may arise for consideration before VCAT proceeded to determine the need to appoint an administrator.
However, she was also of the view that undue influence had a more general relevance. In her opinion it was a relevant consideration when evaluating decision-making capacity and when determining the nexus, if any, between disability and any lack of decision-making capacity IFZ had in relation to her financial matters.
Judge Millane was comfortably satisfied that, for the purposes of the Act, that IFZ had a disability in the form of a mild cognitive impairment and that the nexus required by section 30(2)(a)(ii) of the
Act between the disability and decision-making incapacity in relation to financial matters for which the order for administration was sought, had been clearly established by the available evidence.
The
Guardianship and Administration Act 2019 (Vic) goes into some detail as to how the question of whether a person has decision-making capacity or not is to be resolved, setting out the considerations to be taken into account. The Act states as follows:
- a person is presumed to have decision-making capacity unless there is evidence to the contrary.
- a person has capacity to make a decision in relation to a matter (decision-making capacity) if the person is able:
- to understand the information relevant to the decision and the effect of the decision; and
- to retain that information to the extent necessary to make the decision; and
- to use or weigh that information as part of the process of making the decision; and
- to communicate the decision and the person's views and needs as to the decision in some way, including by speech, gesture or other means.
- a person is taken to understand the information relevant to a decision if the person understands an explanation of the information given to the person in a way that is appropriate to the person's circumstances, whether by using modified language, visual aids or any other means.a person is taken to understand the information relevant to a decision if the person understands an explanation of the information given to the person in a way that is appropriate to the person's circumstances, whether by using modified language, visual aids or any other means.
- In determining whether a person has decision making capacity, regard must be had to the following:
- a person may have decision-making capacity in relation to some matters and not others;
- if a person does not have decision-making capacity in relation to a matter, it may be temporary;
- it should not be assumed that a person does not have decision-making capacity in relation to a matter on the basis of the person's appearance;
- it should not be assumed that a person does not have decision-making capacity in relation to a matter merely because the person makes a decision that, in the opinion of others, is unwise;
- a person has decision-making capacity in relation to a matter if it is possible for the person to make the decision with practicable and appropriate support.
The requirement that all of these matters that are relevant in a particular case be considered means that relevant evidence must be presented to the Tribunal or Court deciding the application before it. In the cases in which it is alleged that undue influence adversely affected the decision-making capacity of the person the hearing is about must be presented as it was in the IZF Case.
However, the question of decision-making capacity is always issue-specific, fluctuating and context dependant.
Note also that Mullane J pointed out in the IFZ Case that:
In my view, the use of an existing tool such as the Financial Capacity Instrument to help assess and measure the functional aspects of financial capacity, is not inimical to the correct application of the statutory test for decision-making under by the Act. The responses by a person when assessed under each of the various domains identified in the Financial Capacity instrument may be relevant to the evaluation of decision-making capacity by reference to each of the indicia under section 5(1). In this application the financial judgment domain was a relevant domain in the assessment of decision-making capacity[ IZF (Guardianship) [2020] VCAT 582, [284].}}
The Act notes that, without limiting the ways in which the personal and social wellbeing of a person may be promoted, it is promoted by—
- recognising the inherent dignity of the person; and
- respecting the person's individuality; and
- having regard to the person's existing supportive relationships, religion, values and cultural and linguistic environment; and
- respecting the confidentiality of confidential information relating to the person; and
- recognising the importance to the person of any companion animal the person has and having regard to the benefits that may be obtained from the person having any companion animal.
VCAT must consider the following factors when deciding whether or not the person is in need of an administrator:
- the person’s will and preferences (so far as they can be ascertained);
- whether decisions in relation to the financial matter for which the order is sought:
- may more suitably be made by informal means; or
- may reasonably be made through negotiation, mediation or similar means;
- the wishes of any primary carer or relative of the person or another person with a direct interest in the application; andthe wishes of any primary carer or relative of the person or another person with a direct interest in the application; and
- the desirability of preserving existing relationships that are important to the person the hearing is about.
What was notable about
IFZ (Guardianship) [2020] VCAT 582, was that notwithstanding the general definition of capacity outlined in s 5(2) of the Act, expert evidence regarding a more specific application of financial capacity, including consideration of undue influence and abuse, was considered, as we outline in Section 8.12 of this chapter. Mullane J noted:
In my view, the use of an existing tool such as the Financial Capacity Instrument to help assess and measure the functional aspects of financial capacity, is not inimical to the correct application of the statutory test for decision-making under by the Act. The responses by a person when assessed under each of the various domains identified in the Financial Capacity instrument may be relevant to the evaluation of decision-making capacity by reference to each of the indicia under section 5(1). In this application the financial judgment domain was a relevant domain in the assessment of decision-making capacity .
Before VCAT may make an administration order, it must be satisfied that the person the application is about:
- is a person with a disability,
- that by reason of that disability is unable to make reasonable judgments concerning matters relating to all or any part of their estate,
- is in need of an administrator of their estate, and
- an administration order would be in their best interests.
In a 2006 case, Cavanough J pointed out that the first three of these matters are seen as separate and cumulative requirements and should not be conflated. He said that the question of whether the person was “in need of an administrator” did not arise unless and until VCAT was satisfied, first, that they were a “person with a disability” and that, second, because of that disability they were unable to make reasonable judgments about all or part of their estate. He also noted that, generally speaking, the question of “need” would be answered primarily by reference to the availability or otherwise of alternative arrangements outside administration (such as family support) to compensate for or deal with the person’s identified “inability”.
The
Guardianship and Administration Act 1986 (Vic) also requires VCAT, when determining whether or not a person is in need of an administrator of their estate, to consider whether the needs of the person the application is about could be met by other means that were less restrictive of their freedom of decision and action.
Also, any administration order that VCAT makes must be the least restrictive of freedom of decision and action of the person the order is about as is possible in the circumstances.
8.7.5 Appointing an administrator
It is only when the statutory criteria for making an administration order have been met and the other considerations set out above taken into account, and the need for an administrator remains, that VCAT can make an administration order and appoint an administrator.
It should be noted that one of the key changes brought about by the Victorian
Guardianship and Administration Act of 2019 was the replacement of the “best interests” test for making administration orders with an approach that emphases the giving effect to the will and preference of the person the hearing is about.
The 2019
Act authorises VCAT to appoint as an administrator any person who is of or over the age of 18 years and consents to act as administrator or body corporate (corporation) which consents to act as administrator, if VCAT is satisfied that the person or body corporate:
- will act in accordance with the duties set out in Division 7 of Part 3 of the Act; and
- is not in a position where the person's or body corporate’s interests conflict, or may conflict, with the interests of the person whose estate they will administer; and
- is a suitable person to act as the administrator in relation to the person whose estate they will administer; and
- has sufficient expertise to make decisions about any financial matter to be specified in the administration order.
Further, in determining whether a person is a suitable person to act as an administrator for the person the hearing is about, VCAT must take into account the following—
- the will and preferences of the person the hearing is about (so far as they can be ascertained);
- the desirability of preserving existing relationships that are important to the person the hearing is about;
- the desirability of appointing a person who is a relative of the person the hearing is about, or who has a personal relationship with the person the hearing is about, rather than appointing a person with no such relationship;
- whether the proposed administrator will be available to the person the hearing is about and able to meet and communicate with them;
- whether the proposed administrator will act cooperatively with any current guardian or administrator for the person the hearing is about;
- while VCAT must take into account whether the proposed administrator is or was a member of VCAT as constituted for a proceeding (relating to guardianship or administration). However VCAT may appoint such a person as administrator if it considers that in the circumstances it is appropriate for the person to act as an administrator.
- VCAT must not assume, without any evidence, that a relative of the person the hearing is about who is proposed as the administrator has interests that conflict, or may conflict, with those of the person the hearing is about merely because the proposed administrator is a relative; or similarly a relative is not suitable to be appointed as the administrator merely because that relative disagrees with another relative of the person the hearing is about concerning a matter pertaining to the person the hearing is about.
- If a statement of wishes for a future appointment was lodged under s.35 of the Act, VCAT must consider that statement.(See also Chapter 6.4.5.2, which is about VCAT’s discretion in relation to the appointment of guardians is limited by the wording of the Act, as it applies in relation to the appointment of administrators.)
It should be noted that any administrator that is appointed is expected to carry out the powers given them in the administration order appointing them in a way which is the least restrictive of the ability of the person whose estate they are managing to decide and act as is possible in the circumstances.
It should also be appreciated that VCAT, in exercising, carrying out or performing functions under the
Act, must do so in a way which is the least restrictive of the ability of a person with a disability to decide and act as is possible in the circumstances.
All of the matters set out In 8.7.4 and 8.7.5 above are there because the primary object of the
Act is to protect and promote the human rights and dignity of persons with a disability. The
Act does this by having regard to the United Nations Convention on the Rights of Persons with Disabilities and by recognising the need to support persons with a disability to make, participate in and implement decisions that affect their lives.
It also means that if an administration order (and/or a guardianship order) is made for such persons, the
Act:
- authorises VCAT to set safeguards and appropriate limitations on the powers of guardians and administrators when making such orders; and
- requires VCAT to review regularly such orders; and
- authorises VCAT to provide guidance for administrators (and/or guardians) when making decisions for those to whom those orders apply.
In many cases coming before VCAT an administrator with power to make decisions about the financial and related matters specified in the order will need to be appointed, but there will be cases in which a supportive administrator will be the more appropriate choice.
Supportive administrators are dealt with at 8.7.14 below.
8.7.6 Matters to be specified in an administration order
The 2019
Act states that an administration order must specify the following:
- the name of the person the order is about;
- the name of the administrator (or administrators);
- the financial matters in relation to which the administrator has powers;
- any other power referred to in sections 46 to 52 that VCAT specifically confers on the administrator;
- any restrictions on the administrator's exercise of a power granted in the order;
- whether the order is an urgent order.
Note that the powers VCAT may grant to an administrator are found in ss 46-52 of the
Act. Matters for which power cannot be given under an administration order are set out in at s 53 of the
Act.
Note in particular that the 2019
Act requires that any administration order that VCAT makes must be least restrictive of the freedom of decision and action of the person the order is about as is possible in the circumstances.
8.7.7 Joint/several/alternate administrators
Although VCAT has specific statutory power to appoint joint guardians, it is not given the same power to appoint joint administrators.
Nevertheless, under the normal rules of statutory interpretation, VCAT could appoint joint administrators. While doing so can create difficulties as joint administrators have to make all the administration decisions jointly and be in agreement about those decisions, VCAT and tribunals elsewhere in Australia do appoint joint administrators.
While the
Guardianship and Administration Act 2019 (Vic) does not deal with the matter in terms, VCAT does occasionally appoint "concurrent" administrators. For example, VCAT has appointed a firm of solicitors as administrator with power limited to "bringing, maintaining or concluding" a particular proceeding in the Magistrates' Court proceeding while, at the same time, maintaining the appointment of the State Trustees to administer all of the rest of the incapable person's estate.
VCAT has no statutory authority to appoint alternative administrators. If an administrator dies, resigns or becomes physically, mentally or legally incapable of administering the estate they were appointed to administer, then a party to the application may apply for a rehearing of the application so that a new administrator may be appointed.
8.7.8 Types of administration orders
Under the 1985
Act, usually when VCAT appointed an administrator, like in the other States and the Territories, it gave the administrator all the powers and duties of an administrator in relation to all of the estate of the person the order was about. However, the primary object of the current
Act, the
Guardianship and Administration Act 2019 (Vic), is to protect and promote the human rights and dignity of persons with a disability by having regard to the Convention on the Rights of Persons with Disabilities, recognising the need to support persons with a disability to make, participate in and implement decisions that affect their lives.
As a consequence, VCAT is less likely to make as many “plenary” administration orders than it used to and, will instead, seek to have the person with a disability more involved in the management of their financial affairs.
Nevertheless, from time-to-time VCAT will be faced with the dilemma that arose soon after the 2019
Act came into force. In a case involving a large and complex estate, VCAT explained why it made an administration order in the case as follows:
The order provides that the administrator can make decisions about all financial matters and exercise all the relevant powers in the Act (sections 46 and 52). This is so, because WSP’s financialaffairs are complex. WSP is a beneficiary under a testamentary trust and/or a family trust. These trusts are administered at the discretion of her siblings. The funds held on trust are considerable. As such it is not prudent to omit decision-making power about any sort of financial matter as it may make the order ineffective or require a reassessment to add the necessary powers.
8.7.8.1 Urgent Administration Orders
VCAT may make urgent administration orders if it is satisfied on reasonable grounds that there is an immediate risk of harm to the health, welfare or property of the person the application for the urgent administration is about, if the order is not made
The risk of harm may be caused by one or more factors, including:
- abuse, exploitation or neglect of the person the application is about;
- self-neglect by the proposed represented person
In order to facilitate an urgent hearing of the application, some or all of the procedural fairness requirements of notice of the hearing to all entitled to have it, full information about the matter and the attendance at the hearing of the person the application was about, set out in
ss 24,
26,
27 and
29 of the
Guardianship and Administration Act 2019 (Vic), can be waived by VCAT.
An urgent administration order remains in effect for 21 days and may be renewed, but only once, for a further 21 days.
After making an urgent administration order, VCAT must hold a hearing within 42 days after making the order, to determine whether to make an administration order in relation to the person who is subject to the urgent administration order.
8.7.8.2 Concurrent orders involving different aspects of an incapable person's estate
As already noted in 8.7.6 above, VCAT may appoint concurrent administrators responsible for different aspects of an incapable person's estate.
8.7.8.3 Orders with part of the estate excluded
While in most cases VCAT may continue to appoint the administrator to administer the whole of the estate, it may also make orders which apply to part of a person's estate and leave other parts of the person's estate under their control. It is not uncommon for VCAT to appoint an administrator just to conduct proceedings in the Family Court or to apply for a maintenance order under the
Administration and Probate Act 1958 (Vic) on behalf of an incapable person, to lodge a caveat to protect an incapable person's interest in certain land or to administer a pool of money that an incapable person may have inherited, been gifted or won while leaving them in control of the rest of their estate.
Two cases show the practise of VCAT after the coming into force of the
Guardianship and Administration Act 2019 (Vic). In the first case VCAT appointed the State Trustees Limited as administrator for WSP and gave it power to make decisions about all WSP’s financial matters. VCAT gave State Trustees Limited powers under
sections 46(1),
51 and
52 of the
Act. The order went on to state that administrators must comply with the
Guardianship and Administration Act 2019 (Vic)
, which outlines their powers and duties, and to require the administrator to complete and send a Financial Statement to VCAT for approval at the time the order was due for reassessment, or when VCAT requested it.
VCAT went on to note that this was so, because WSP’s financial affairs were complex. WSP was a beneficiary under a testamentary trust and/or a family trust. The trusts were administered at the discretion of WSP’s siblings. The funds held on trust are considerable. In these circumstances VCAT considered it not prudent to omit decision-making power about any sort of financial matter as it may make the administration order ineffective or require a reassessment to add the necessary powers.
8.7.9 The role of VCAT after making an administration order
Unlike in New South Wales where the NSW Trustee has the role of giving administrators their authorities and supervises their management of the estates they have been appointed to administer, in Victoria VCAT is responsible for awarding their powers and duties to administrators. VCAT also sets out the arrangements for the examination or auditing of the accounts of the estates under administration. It also gives directions and advice to administrators about the estates they are administering and reassessing administration orders periodically, on application or on its own initiative.
8.7.9.1 Giving advice etc
VCAT may on its own initiative direct, or give an advisory opinion to, an administrator concerning any matter.
In addition, any administrator may apply to VCAT for the advice about any matter relating to the scope of their administration order or the exercise of any power by them under the administration order.
When dealing with such an application VCAT may, approve or disapprove of any act proposed to be done by the administrator, give such advice as it considers appropriate and make any order that it considers necessary.
Where State Trustees Ltd wishes to commence proceedings acting in one capacity or on behalf of one person whose estate they are administering against State Trustees Ltd acting in another capacity or on behalf of another person whose estate they are administering, they must seek and obtain an order from VCAT approving such action.
Where this situation arises, State Trustees Ltd may deal with the matter by taking action to have another administrator appointed to administer the estate of one of the parties to the proceedings.
The person whose estate is the subject of the administration order and any person who has an interest as a creditor, beneficiary, next of kin, guardian, nearest relative, primary carer or otherwise in any estate being administered by an administrator appointed by VCAT or the Public Advocate may apply to VCAT about any matter arising out of the administration of the estate by the administrator. VCAT may make such order in relation to the application as the circumstances of the case may require.
While this right to apply about any matter arising out of the administration of the estate by the administrator is given to a range of people, it is likely that their right to apply would be limited to issues in which they have a clearly identifiable or legitimate interest.
In order to assist VCAT to deal with any question of advice or other order in relation to the administration of estate the subject of an administration order, VCAT may open and read the will of the person whose estate is under administration and the subject of proceedings before VCAT.
While VCAT's application form encourages applicants to find the will of the person the hearing is about and applicants sometimes bring the person's will to the hearing, VCAT will only look at the will when there is a need to. However, if the person whose estate is under administration makes a will between the time an administration order is made in relation to them and the reassessment of that order, VCAT is likely to look at that will.
8.7.9.2 Accounts
Usually at the time that it appoints the administrator of an estate, but sometimes at a later time, VCAT will appoint a person to examine or audit the accounts of the estate for a fee that VCAT approves and which is paid from the estate.
In almost all cases the State Trustees Ltd is appointed as the examiner. VCAT will receive a report from the examiner or auditor. If that report recommends the disallowance of any item in the accounts, VCAT must deal with that matter. However, it must not make an order disallowing an item if it is satisfied that the administrator acted in good faith and with reasonable care in the exercise of their powers as administrator. If any item is disallowed the administrator is liable for the amount of the item disallowed.
8.7.10 Powers and duties of administrators
8.7.10.1 Administrators
In Victoria, the powers and duties of administrators are outlined in Part 3 Divisions 6 and 7 of the Guardianship and Administration Act 2019 (Vic).
8.7.10.1.1 Powers of Administrators
When VCAT appoints a person a (decision-making) administrator of the person the application is about, it must also decide which of the following powers the administrator should have in order to carry out the functions of a (decision-making administrator) in relation to the estate of the person the hearing was about:
- a power to make gifts;
- a power of investment;
- a power to open the will of the person whose estate they are administering ;
- any other power that is specified in the order that is necessary or desirable for promoting the personal and social wellbeing of the person whose estate they are administering; and
- a power to sign and do anything that is necessary to give effect to any power or duty vested in the administrator; and
- a power to do all matters necessary or incidental to the performance of any power conferred on the administrator.
VCAT may specify in an administration order that an administrator has power to bring and defend an action or other legal proceeding in the name, and on behalf, of the person whose estate they are managing if the action or other legal proceeding is in relation to a financial matter specified in the order.
An administrator on whom such a power has been conferred is not required to be appointed a litigation guardian in accordance with rules of the relevant court or tribunal.
In an important change from the position under the common law, an administrator who undertakes such a legal proceeding is entitled to be reimbursed for the costs of the proceeding out of the estate they are administering. However, if the administrator was negligent or engaged in misconduct. a court or tribunal may order that the administrator is personally liable to pay for any costs of the legal proceeding.
Other powers which VCAT may specify in the administration order are:
- the power to collect, receive and recover income of the person whose estate they are administering, money due or which becomes due to that person and any compensation or damages for injury to the estate or person of that person;
- the power to invest any money in any security in which a trustee may by law invest;
- the power to demise land (usually means lease of land) at a rent and on conditions as the administrator thinks fit for any term not exceeding 5 years or, with the consent of VCAT, for any longer term;
- the power to exercise, to the extent and in the manner the administrator thinks fit, any power of leasing vested in the person whose estate they are administering;
- the powers to surrender any lease, accept any lease, accept the surrender of any lease or renew any lease;
- the power to bring land under the Transfer of Land Act 1958 (Vic);
- the power to sell, exchange, partition or convert into money any property;
- the power to mortgage or charge any property;
- the power to pay any debts and settle, adjust or compromise any demand made by or against the estate and discharge any encumbrance on the estate under administration;
- the power to carry on, to the extent the administrator thinks appropriate, any trade, profession or business which the person whose estate they are administering carried on;
- the power to agree to any alteration of a condition of any partnership into which the person has entered or to a dissolution and distribution of the assets of the partnership;
- the power to execute and sign deeds, instruments and other documents;
- the power to complete any contract for the performance of which the person whose estate they are administering was liable, or enter into any agreement terminating liability;
- the power to pay a sum for the maintenance of the person whose estate they are administering and their funeral expenses in the event of their death; the maintenance of their spouse or domestic partner or any child, parent or other person dependent on them; the education of their child and the ongoing care of any companion animal they had;
- the power to pay to the person whose estate they are administering for their personal use any amount of money standing to their credit but held by the administrator;
- the power to give to the person, whose estate they are administering, for their personal use any personal property which is under the control of the administrator and belongs to the person;
- any other relevant power in relation to a specified financial matter
Note however that an administration order does not, and cannot, confer on the person appointed as administrator the power:
- to make or revoke a will for the person whose estate they are administering; or
- to make or revoke an enduring power of attorney for the person whose estate the order is about; or
- to vote, on behalf of the person whose estate they are administering, in an election for the State or the Commonwealth or another State or a Territory of the Commonwealth or in a local election or a referendum; or
- to consent to the entering into, or dissolving of, a marriage of the person or a sexual relationship of the person whose estate they are administering; or
- to make or give effect to a decision about:
- the care and wellbeing of a child of the person; or
- the adoption of a child under the age of 18 years of the person; or
- to enter into, or agree to enter into, a surrogacy arrangement within the meaning of the Assisted Reproductive Treatment Act 2008 (Vic) on the behalf of the person whose estate they are administering; or
- to consent to the making or discharge of a substitute parentage order within the meaning of the Status of Children Act 1974 (Vic) on behalf of the person whose estate they are administering; or
- to continue the manage the estate of the person whose estate they were administering upon that person’s death; or
- to consent to an unlawful act.
8.7.10.1.2 Duties of Administrators
Administrators have the following duties:
- They must act in accordance with the general principles and decision-making principles.
The general principles are: - a person with a disability who requires support to make decisions should be provided with practicable and appropriate support to enable the person to make and participate in decisions affecting the person; to express the person’s will and preferences and to develop the person’s decision-making capacity
- the will and preferences of a person with a disability should direct, as far as practicable, decisions made for that person
- powers, functions and duties should be exercised, carried out and performed in a way which is the least restrictive of the ability of a person with a disability to decide and act as is possible in the circumstances
The decision-making principles are: - the administrator should give all practicable and appropriate effect to the will and preferences (if known) of the person whose estate they are administering;
- if the administrator is not able to determine the person's will and preferences, they should give effect as far as practicable in the circumstances to what they believe the person's will and preferences are likely to be, based on all the information available, including information obtained by consulting the person's relatives, close friends and carers;
- if the administrator is not able to determine the person’s likely will and preferences, they should act in a manner which promotes the person's personal and social wellbeing;
- if the person whose estate they are administering has a companion animal, the administrator should act in a manner that recognises the importance of the companion animal to the person and any benefits the person obtains from the companion animal;
- an administrator should override the will and preferences of the person whose estate they are administering only if it is necessary to do so to prevent serious harm to the person
- They must act as an advocate for the person whose estate they are administering; and
- They must encourage and assist the person whose estate they are administering to develop their decision-making capacity in relation to financial matters; and
- They must act in such a way so to protect the person whose estate they are administering from neglect, abuse or exploitation; and
- They must act honestly, diligently and in good faith; and
- They must exercise reasonable skill and care; and
- They must not use the position for profit unless authorised by law; and
- They must avoid acting if there is or may be a conflict of interest unless so authorised under the Act, by order of VCAT or otherwise by law; and
- They must not disclose confidential information gained as an administrator unless authorised to do so under the administration order or by law
8.7.11 Effect of a financial management order
The real and personal property the subject of the administration order remains the property of the person the order is about even if the nature of that property changes, for example, by land or shares being sold and converted into money.
Nevertheless, while an administration order applies to a person's estate, the person the order is about cannot deal with, transfer, alienate or charge their money or property or any part of it that is under the control of the administrator or become liable under any contract in relation to that part of the estate, unless:
- VCAT orders that the person may deal with their property or become liable under a contract, or
- the administrator gives their written consent to them so dealing or becoming so liable. In exercising this discretion, administrators do not have to obtain the consent of VCAT.
Every dealing, transfer, alienation or charge by the person who is the owner of the estate in relation of any part of the estate which is under the control of the administrator is void and of no effect. Also, any money or property the subject of any such dealing, transfer, alienation or charge is recoverable by the administrator in any court of competent jurisdiction.
However, any dealing, transfer, alienation or charge by any person the subject of an administration order (the owner of the estate) made for adequate consideration with or to or in favour of any other person who proves that they acted in good faith and did not know or could not reasonably have known that the person was the subject of an administration order remains valid.
This matter is discussed in greater detail at 8.11.13 below.
8.7.12 Requested rehearings
In Victoria, VCAT can rehear an application for an administration order if an application is made to it regardless of whether an administration order was made or the application was dismissed at the first hearing.
If this happens, the matter is reheard by a more senior member.
No rehearing can be applied for if VCAT makes a temporary order or if the President of VCAT hears the application alone or with others.
8.7.12.1 Who may apply?
The Public Advocate, an automatic party or a person entitled to notice of the application may apply to for a rehearing of the application.
A person entitled to notice of the application who did not become a party at the initial hearing may apply for a rehearing, but only if VCAT gives them leave to do so.
The application for a rehearing, or for leave to apply for a rehearing, must be made within 28 days after the day of the order.
8.7.12.2 Parties to rehearings of applications for administration orders
Anyone who was a party to the hearing of an application for an administration order is a party to a rehearing of the application, in addition to any other parties such as a person given leave to apply for a rehearing or a person joined as a party by VCAT. Anyone was entitled to notice of the initial application is entitled to notice of the application for a rehearing.
The person the hearing is about must attend the VCAT hearing unless VCAT is satisfied that they do not wish to attend the hearing, or that it is impracticable or unreasonable for them to do so, despite any arrangement that VCAT may make. Note however that, if it thinks it appropriate, VCAT may conduct all or part of a proceeding by means of a conference conducted using telephones, video links or any other system of telecommunication.
8.7.12.3 Powers of VCAT at the rehearing
VCAT must rehear the matter but in doing so has all the functions and powers it had at the first hearing. After rehearing the application, VCAT may:
- affirm the order made at the first hearing,
- vary that order,
- set aside that order and make another order instead.
8.7.13 Reassessments of administration orders
In Victoria administration orders, as with guardianship orders, are the subject of periodical reassessment. They can also be the subject of requested reassessments.
VCAT must conduct a reassessment of any administration order within 12 months after making the order, unless it orders otherwise, but must reassess the order at least once within each three year period after making the order. However, again VCAT has the discretion to order otherwise. In practice where VCAT makes a longer order, it is usually only for three months or less longer and for administrative convenience.
Nevertheless, VCAT may at any time conduct a reassessment of an administration order made by it either on its own initiative or on the application of any person.
8.7.13.1 Parties to reassessments
The following persons are parties to a reassessment:
- the applicant (but note there will not be an applicant if VCAT commences the reassessment itself);
- person the supportive administration order is about;
- any guardian, administrator, supportive guardian or supportive administrator of the person;
- any other person VCAT orders to be joined as a party to the reassessment
The following persons are entitled to notice of the reassessment:
- any party to the reassessment;
- the spouse or domestic partner of the person the order being reassessed is about:
- the primary carer of the person the order is about;
- any person referred to in the application as having a direct interest in the application; and
- any other person VCAT directs be given notice
Note that if VCAT intends to conduct a reassessment either as a periodic one or on its own initiative and does not propose to amend, vary or replace the order it may give notice to the automatic parties and the others referred to above that they can request a hearing of the reassessment. If no hearing is requested VCAT may conduct its reassessment "on the papers" without a hearing.
8.7.13.2 Orders after reassessments
After completing the reassessment VCAT may amend, vary, continue or replace the administration order subject to any conditions or requirements it considers necessary; or it may revoke the order.
8.7.14 Supportive Administrators
As has already been noted, the primary object of
Act is to protect and promote the human rights and dignity of persons with a disability by having regard to the United Nations Convention on
the Rights of Persons with Disabilities and, as part of that, recognising the need to support persons with a disability to make, participate in and implement decisions that affect their lives.
One of the ways of giving this support, provided for in the
Act, is by giving VCAT the power/jurisdiction to appoint supportive administrators for those with disabilities.
The
Act provides that a person may apply to VCAT for a supportive administration order that appoints a supportive administrator for a person with a disability who is of or over 18 years of age or is under 18 years of age, but the order takes effect when that person reaches 18 years of age. If the person in relation to whom a supportive administration order is sought does not reside in Victoria but their property is partly or wholly in Victoria, an application may be made for an order appointing a supportive administrator for the person in relation to that part of the property that is in Victoria.
However, VCAT may only make an order appointing a supportive administrator for a person if VCAT is satisfied about three different things, namely that:
- the person consents to VCAT making the order; and
- if the person is given practicable and appropriate support, they will have decision-making capacity in relation to the financial matter for which the supportive administration order may be made; and
- the supportive administration order will promote the person's personal and social wellbeing.
These three requirements are not easily met as some of the early cases in which VCAT considered them show. (At the time of writing the
Act had been in force less than a year.) The
NCX Case involved the reassessment of the guardianship and administration orders in relation to NCX.
After considering NCX’s expression of wishes, VCAT understood him not to be opposed to having a guardian and administrator and to agree that he needed a guardian and an administrator as decision-makers. NCX also expressed a preference for having a guardian and administrator rather than having a supportive guardian and supportive administrator.
However, VCAT pointed out that for it to appoint a supportive decision-maker for a person, the person must consent and also must have decision-making capacity when practicable and appropriate support was provided. NCX met neither of those criteria. He did not consent to having a supportive guardian or administrator. Although he first said at the hearing that he wanted that, he then changed his mind. Further, there was no evidence that he had decision-making capacity when support was provided. While NCX was able to express his wishes and preferences, VCAT could not be satisfied he understood all the concepts being discussed and could not form a view that he had the necessary level of decision-making capacity. Consequently, the less restrictive alternative of supportive decision-making was not available in this case.
In another 2020 case, VCAT took the view that the less restrictive alternatives of supportive guardianship and supportive administration orders were not available because the person the reassessment hearing was about lacked capacity in relation her financial affairs and lifestyle decision-making regarding accessing services.
In a case involving a thorough consideration of the evidence relevant to and the tests for decision-making capacity, the Vice President of VCAT, Judge Millane, stated:
For the sake of completeness it is appropriate to note that when evaluating the evidence called on decision-making capacity, I was satisfied that IFZ’s decision-making incapacity related to her financial estate as a whole and was not temporary. I made no assumptions about decision-making capacity based on IFZ’s appearance or the wisdom of her decisions. Finally, given the rigidity of IFZ’s thinking style and her apparent inability to use or weigh information relating to decisions about financial matters involving TUR (a family member), I was not satisfied that, even with practicable and appropriate support it would be possible for IFZ to make decisions in relation to her estate as a whole.
Judge Millane then went on to point out that a further hearing was required to deal with the additional matters required before an order for administration could be made. The possibility of a supportive administration order was off the agenda.
Another case shows the problem decision-making incapacity precluding the possibility of the use of supported guardianship and supported administration orders, as well as concern about the need to make an effectively plenary administration order out of concern that a less broad order could be ineffective. In this case evidence in letters, medical reports and assessments satisfied VCAT that TXA did have a disability, being a mixture of Alzheimer’s type and vascular dementia, and because of that disability VCAT was also satisfied that TXA did not have decision-making capacity in relation to decisions about where he lived, and decisions relating to his financial matters including the conduct of the property settlement dispute with his wife. As a consequence, both the guardianship and administration order in relation to TXA needed to be continued.
VCAT’s order stated that the administrator can make decisions about all financial matters and exercise all the relevant powers in the
Act (sections 46(1), 51, and 52) to continue to engage the services of a family law practitioner in relation to a range of related legal matters. That was because the property settlement with TXA’s wife was yet to resolve or conclude.
The circumstances of the case led VCAT to state: “In this case it is not prudent to omit decision-making power about any sort of financial matter as it may make the order ineffective or require a reassessment to add the necessary powers”.
8.7.14.1 Powers of Supportive Administrators
VCAT may confer any or all of the following powers on supportive administrators in the order appointing them:
- a power to access, collect or obtain information, or to assist the person the order is about to access, collect or obtain information. See s.91 of the Act for the details;
- a power to communicate any information about the person for whom the order has been made that is relevant to or necessary for the making of or giving effect to a supported decision; or
- to communicate or assist the person the order is about to communicate a supported decision they had made;
- a power to take any reasonable action or do anything that is reasonably necessary to give effect to certain decisions, other than a decision about a significant financial transaction
8.7.14.2. Duties of Supportive Administrators
A supportive administrator when performing duties under a supportive administration order must:
- act in accordance with the general principles of the Guardianship and Administration Act 2019 (Vic). These duties are:
- if the person with a disability they are supportive administrator for requires support to make decisions, they, as supportive administrator, should ensure that that person is provided with practicable and appropriate support to enable them to:
- make and participate in decisions affecting them;
- to express their will and preferences; and
- to develop their decision-making capacity
- to ensure that the will and preferences of a person with a disability, as far as practicable direct decisions made for that person; and
- to ensure that they exercise, carry out and perform the powers, functions and duties they have in a way which is the least restrictive of the ability of a person with a disability to decide and act as is possible in the circumstances
- act honestly, diligently and in good faith; andact honestly, diligently and in good faith; and
- exercise reasonable skill and care; and
- must not use the position for profit; and
- avoid acting when there is or may be a conflict of interest and, if acting when there is a conflict of interest, must ensure that the interests of the person who they are the supportive administrator for are the primary consideration; and
- must discuss anything relating to a supported decision with the person they are the supportive administrator for in a way that that person can understand and that will assist the person they are the supportive administrator for to make the decision; and
- not assist the person they are the supportive administrator for, in the role of supportive administrator, to conduct any illegal activity; and
- not coerce, intimidate or in any way unduly influence the person they are the supportive administrator for into a particular course of action
8.7.14.3 Supportive administrators may seek advice from VCAT
A supportive administrator may apply to VCAT for advice on any matter relating to the scope of the supportive administration order or the exercise of any power by the supportive administrator under the supportive administration order.
After considering an application for advice, or on its own initiative, VCAT may:
- approve or disapprove of any act proposed to be done by the supportive administrator; and
- give such advice as it considers appropriate; and
- make any order it considers necessary.
Note that an action does not lie against a supportive administrator on account of an act or thing done or omitted by them under any order or on the advice of VCAT made or given by VCAT unless, in representing the facts to VCAT, the supportive administrator has been guilty of fraud, wilful concealment or misrepresentation.
If a supportive administrator is advised of the death of the person for whom they have been appointed supportive administrator, they must report the death in writing to VCAT as soon as practicable.
8.7.14.4 Rehearing and reassessment of supportive administration orders
The provisions in the
Guardianship and Administration Act 2019 (Vic) dealing with the rehearing of applications relating to the appointments of supportive administrators or the reassessment of supportive administrators orders are very similar to or identical with those provisions relating to guardianship orders. Rehearings and reassessments of guardianship orders are dealt with in Ch. 6.4.9 and 6.4.10 above.
8.8 Western Australia
8.8.1 Who has jurisdiction to appoint administrators?
As already noted in Chapter 6.8.1, the Supreme Court of Western Australia’s inherent jurisdiction, of which the parens patriae jurisdiction is part, is not affected by the
Guardianship and Administration Act 1990 (WA) which gives Western Australia’s State Administrative Tribunal (WASAT) its jurisdiction to make administration orders.
While the Court retains its jurisdiction, most applications for administration orders are made to WASAT. This appears to be supported by the Supreme Court which acknowledged the specialist jurisdiction of WASAT in a 2007 case.
8.8.2 Who may apply for an administration order?
Anyone may apply to WASAT for an administration order relating to real and personal property in Western Australia, including that part of the estate which is in Western Australia of a person who is neither resident nor domiciled in Western Australia.
.
8.8.3 Who may take part in the hearing as a party?
The executive officer of the Tribunal must give notice of the hearing at least 14 days in advance to the following so that they can attend if they wish:
- the applicant,
- the person the hearing is about,
- their nearest relative,
- the Public Advocate,
- any proposed administrator,
- the Public Trustee
- the guardian of the person if one has been appointed, and
- any other person who in the opinion of the executive officer has a proper interest in the proceedings.
8.8.4 What has to be proved before an order can be made?
Before WASAT may appoint an administrator for a person, it must be satisfied that the person is:
- unable, because of mental disability to make reasonable judgments about matters relating to all or any part of their estate, and
- in need of an administrator of their estate.
When dealing with an application to appoint an administrator, the primary concern of WASAT is the best interests of the person the application is about. It must also presume that the person the hearing is about is capable of looking after their own affairs and can make reasonable judgments about matters relating to their estate until the contrary is proved to the satisfaction of WASAT. In addition, WASAT must, as far as possible to do so, get the views and wishes of the person the hearing is about. However it can do so when the application is being dealt with, or by gathering those views and wishes from the person’s previous actions.
As has been pointed out in the decided cases, when dealing with an application to make an administration order, WASAT is required to consider whether the person the hearing is about has the ability to make 'reasonable judgments' about their estate. This is a subjective test because WASAT has to assess the person's ability in relation to their actual estate. However, WASAT must also consider whether the person has the ability to engage in the mental processes required in order to make reasonable judgments in relation to their estate. This is an objective test.
In the 2020 case of
PB, WASAT, quoting from the 2019 decision of
FY stated that:
[An] individual's ability to make reasonable judgments in respect of their estate requires that they have, amongst other things, the ability: to understand the need for, and sources of, income available to them; to understand the value of any income received relative to items of expenditure; to identify and calculate necessary expenditure for day to day living, together with expenditure for longer term financial objectives and discretionary items; to devise a budget so as to be able to live within their means; to identify and to assess the financial implications of particular items of expenditure or of financial decisions (for example whether to enter into contracts such as those for the purchase of a phone, household items, a car, or a house); to organise their affairs so as to be able to meet debts as they fall due; and to identify and implement problem solving strategies for resolving any unexpected financial issues.
This systematic approach to financial capacity is not unlike that ratified in _IFZ (Guardianship)
[2020] VCAT 528._ The test must be applied subjectively to the actual estate of the person the hearing is about. In many cases that estate will be very small and uncomplicated, but the principles still apply.
WASAT must not make an administration order if the needs of the person the application is about could be met by other means less restrictive of the person’s freedom of decision and action.
Also, any administration order it makes must be in terms that WASAT considers impose the least restrictions possible, in the circumstances of the case, on the person’s freedom of decision and action.
For two related examples of where appointments of enduring guardians and attorneys under enduring powers of attorney were revoked by WASAT and replaced by guardianship orders appointing the Public Guardian as a limited guardian and the Public Trustee as a plenary administrator see,
AF [2021] WASAT 58 and
JF [2021] WASAT 59.
8.8.5 Appointing an administrator
If WASAT decides to make an administration order, it must first declare that the person the hearing is about is in need of an administrator for their estate and then proceed to appoint an administrator or joint administrators.
Also, the order may be subject to such conditions and restrictions that WASAT thinks fit.
WASAT may appoint as private administrators only adults 18 years and above who have consented to being appointed administrator.
Before appointing them, the Tribunal must be of the opinion that they:
- will act in the best interests of the person whose estate they are appointed to administer, and
- are otherwise suitable to act as the administrator of the estate of that person.
When considering the suitability of a proposed private administrator for appointment, WASAT is required to take into account as far as possible:
- the compatibility of the proposed administrator with the person the hearing is about and with the any guardian of that person,
- the wishes of the person the hearing is about, and
- whether the proposed appointee will be able to perform the functions proposed to be vested in them as administrator.
The fact that a proposed administrator is the guardian of the person the hearing is about does not disqualify them from being appointed as the administrator of the estate of that person.
WASAT may also appoint as the administrator (or a joint administrator) of an estate, the Public Trustee or a trustee company which has consented to being so appointed.
As with private administrators, the Tribunal must be of the opinion before appointing them that they:
- will act in the best interests of the person whose estate they are appointed to administer, and
- are otherwise suitable to act as the administrator of the estate of that person.
Furthermore, when considering the suitability of a trustee company for appointment as administrator, WASAT is required to take into account as far as possible:
- the compatibility of the trustee company with the person the hearing is about and with the any guardian of that person,
- the wishes of the person the hearing is about, and
- whether the trustee company will be able to perform the functions proposed to be vested in it as administrator.
This requirement also applies to the Public Trustee.
However, there are further limits that apply to trustee companies but not to the Public Trustee.
A trustee company may not be appointed as an administrator unless WASAT is satisfied that either there is an individual who would otherwise be appointed as administrator and that individual has in writing requested the appointment of that trustee company or the person in the hearing is about has made a will appointing the trustee company as executor and the will remains unrevoked at the time of the appointment.
Also, as WASAT has noted:
There is a statutory preference for an unpaid individual to act as administrator over a corporate trustee, where such a person who is suitable for appointment exists in the life of the represented person. That statutory preference of an individual over a corporate trustee as administrator does not apply to the Public Trustee.
In Western Australia, the Public Advocate may be appointed as a joint administrator, but WASAT must not appoint the Public Advocate as sole administrator unless there is no other individual or corporate trustee who is suitable and willing to act as administrator of the estate of the person the particular hearing is about.
The former Guardianship and Administration Board of Western Australia saw the Public Advocate as administrator of last resort.
However, circumstances could arise in which it was inappropriate to appoint the Public Trustee, leading to the Public Advocate being appointed. However, the fact that it may be preferable to appoint the Public Advocate does not render the Public Trustee unsuitable for appointment, nor does the fact that the Public Trustee is required to charge fees fixed by Parliament. In addition the Public Trustee has provided a “standing consent” to being appointed.
8.8.6 Joint/concurrent/alternate administrators
As just noted, WASAT may appoint joint administrators.
As WASAT may appoint administrators for limited functions such as to conduct legal proceedings on behalf of the person whose estate they are administering, it is likely that it will need to appoint “concurrent” administrators from time to time where one administrator has one or more functions and an another administrator has one or more other functions.
WASAT has no statutory authority to appoint alternative administrators.
8.8.7 Types of administration orders
8.8.7.1 Orders giving plenary or limited functions
In Western Australia, WASAT has a discretion to give an administrator all the functions of an administrator (plenary functions) or to give them only the functions of an administrator set out in the order appointing them.
Consequently administrators can be appointed for limited purposes.
8.8.7.2 What WASAT may do in an emergency
Sometimes situations arise in which an application is made and it appears to WASAT that a person may be someone who needs an administration order, but it is not possible for the evidence to prove this to WASAT to be gathered and presented or for appropriate notice to be given or a procedurally fair hearing to be conducted; nevertheless it is necessary to make immediate provision for the protection of the person’s estate. In these circumstances WASAT, pending determination by it of the question whether the person is, in fact, a person in respect of whom an administration order should be made, may exercise such of the powers conferred on it by the
Guardianship and Administration Act 1990 (WA) as may be necessary for the protection of the person’s estate.
Such powers could include power to collect urgently money that would otherwise come into the hands of the person the hearing was about and may be quickly dissipated or lost by that person.
8.8.7.3 Orders authorising actions without administration orders
Where a person is, because of mental disability, unable to make reasonable judgments about matters relating to all or any part of their estate, but there is no need of a continuing appointment of an administrator of their estate, WASAT may, without making such an appointment, make an order authorising or requiring a person who could be appointed as administrator to perform any specified function.
These orders are intended for situations where only one or a few actions of a financial nature need to be taken in the interests of the incapable person, for example the sale of a property.
8 8.8 Obligations and functions of an administrator
Administrators are required to act according to their opinion of the best interests of the person whose estate they are administering.
They act in the best interests of that person if they act as far as possible:
- as an advocate for the person whose estate they are administering, in relation to the estate,
- in such a way as to encourage the person to live in the general community and participate as much as possible in the life of the community,
- in such a way as to encourage and assist the person to become capable of caring for themselves and of making reasonable judgments in respect of matters relating to their person,
- in such a way as to protect the person from financial abuse, exploitation or neglect,
- in consultation with the person, taking into account, as far as possible, the wishes of the person as expressed, in whatever manner, or as gathered from the person’s previous actions,
- in the manner that is least restrictive of the rights, while consistent with the proper protection, of the person,
- in such a way as to maintain any supportive relationships the person has, and
- in such a way as to maintain the person’s familiar cultural, linguistic and religious environment.
Nevertheless, none of these considerations is to be read as restricting the functions of an administrator may have at common law or under any written law (legislation).
A consequence of that provision is to preserve any functions of an administrator developed by the judge made law and not replaced by the provisions in the
Guardianship and Administration Act 1990 (WA) or other relevant legislation.
An administrator with plenary functions may perform any function in relation to the estate that the person whose estate they are administering could have performed if they were capable.
An administrator with limited functions may perform any function specified by WASAT in its administration order, including any common law function or any function found on Part A of Schedule 2 of the
Guardianship and Administration Act 1990 (WA) or in any in another
Act.
Administrators are empowered to execute documents and do such things on behalf of the person whose estate they are administering as are necessary for the performance of the functions vested in them by the administration order appointing them.
Any action an administrator takes, decision they make, consent they give or other thing that they do in the performance of the functions vested in them by the order appointing them has effect as if it had been taken, made, given or done by the person whose estate they are administering with full legal capacity.
In Western Australia the supervision of administrators is undertaken by the Public Trustee. Administrators are required, within four weeks of their appointment, to provide the Public Trustee with information about the estate, the person whose estate they are administering and themselves. They must also submit statements of accounts of the estates they are managing to the Public Trustee who examines them.
There is no provision for the Public Trustee to report to WASAT about the estates he is administering, except on a review of an administration order.
8.8.9 The role of WASAT after making an administration order
WASAT’s role in relation to administration orders is not confined just to making and reviewing them. When it gives a function to an administrator, it may give directions as to the time, manner or circumstances of the performance of the function by the administrator.
WASAT may deal with applications from administrators with limited functions to increase their functions without the need to conduct a review of the order.
This provision is rarely, if ever, used.
While administrators must submit their accounts to the Public Trustee in Western Australia and the Public Trustee has, through its examination of those accounts, a supervisory role over other administrators, WASAT may, on application, review decisions of the Public Trustee relation those accounts.
8.8.10 Effect of an administration order
The effect of an administration order made by WASAT or the Supreme Court is that the power of a person whose estate (financial affairs) is under administration to deal with their estate is suspended in relation to so much of that estate as is placed under the administration of another person, the Public Trustee or a trustee company. In 2010 the Queensland Court of Appeal held that an administration order made under
s. 12 of the
Guardianship and Administration Act 2000 (Qld) had the same effect.
Only the administrator may deal with the persons financial affairs, covered by the order, while the order is in place.
This matter is discussed in greater detail at 8.11.13 below.
8.8.11 Reviews of administration orders
When WASAT makes an administration order, it must specify a period, not exceeding five years, within which the order must be reviewed and WASAT must ensure that the order is reviewed accordingly.
However, WASAT must also review an administration order if the administrator or a joint administrator:
- dies,
- wishes to be discharged,
- has been guilty of such neglect or misconduct or of such default as, in the opinion of WASAT, renders them unfit to continue as guardian,
- appears to WASAT to be incapable of carrying out their duties, because of mental or physical incapacity,
- is bankrupt or a person whose property is subject to an order or arrangement under the laws relating to bankruptcy, or
- is a corporate trustee but has ceased to carry on business, has begun to be wound up, or is under official management or subject to receivership.
Any person may make an application for such a review.
They do not have to obtain leave from WASAT to do so.
In addition to these mandatory reviews, WASAT may, at any time, review an administration order on the application of:
- the Public Advocate,
- the person the order is about,
- the administrator of their estate,_
- their guardian, or
- a person to whom leave has been granted, with or without conditions, to conduct the review.
8.8.11.1 Parties to reviews of administration orders
As the executive officer of WASAT is required to give those listed below at least 14 days notice of the hearing of any of the three kinds of reviews of administration orders set out above, it is reasonable to assume that they are parties to any reviews to which they are given notice:
- the applicant where there is one,
- the person the order under review is about,
- the nearest relative of that person,
- the administrator,
- if there is one, the guardian of the person the hearing is about,
- the Public Advocate, and
- any other person who in the opinion of the executive officer has a sufficient interest in the review.
8.8.12 Powers of WASAT on review
After reviewing an administration order, WASAT may, as it considers necessary in the best interests of the person the order is about:
- confirm the order,
- amend the order so as to make any provision that may be included in an administration order,
- revoke the order,
- revoke the order and substitute another order for it, or
- without revoking the order, revoke the appointment of any administrator and appoint a new or additional administrator.
For a case showing the detailed processes of reviewing an administration order, see
NM [2020] WASAT 134.
8.9 Australian Capital Territory
8.9.1 Who has jurisdiction to appoint financial managers?
As noted in relationship to guardianship in Chapter 6.9.1, the Supreme Court of the Australian Capital Territory continues to have all original and appellate jurisdiction that is necessary to administer justice in the Territory, including its inherent, parens patriae jurisdiction.
However, it is not bound to exercise its powers if it has concurrent jurisdiction with another court or tribunal.
Although the Supreme Court may exercise its jurisdiction to appoint managers (the committee) of the property of an incapable person, this jurisdiction is more conveniently and cost effectively exercised by the ACT Civil and Administrative Tribunal (ACAT) which can appoint managers for the property of adults, namely persons 18 years of age or older.
ACAT may also appoint managers for persons less than 18 years of age, but such appointments do not take effect until the person turns 18.
In the light of these considerations, this chapter will deal only with the jurisdiction of ACAT.
8.9.2 Who may apply for a management order?
The
Guardianship and Management of Property Act 1991 (ACT) does not set out who may apply for a management order. The question of who may apply is discussed in Chapter 6.9.2.
In emergency situations, the Public Trustee and Guardian will usually apply. Only the Public Trustee and Guardian can be appointed as a person’s manager in emergency circumstances.
In addition to, but operating differently from emergency orders that are dealt with in 8.9.7.3 below, ACAT may make an injunction stopping a transaction in relation to a person’s real or personal property taking place, even before an application is made to it for a management order. These restraining orders are dealt with at 8.9.8, below.
8.9.3 Who may take part in the hearing as a party?
This matter is discussed in relation to applications for guardianship orders in Chapter 6.9.3. If the person the application is about has a guardian, they should be given notice of the hearing.
8.9.4 What has to be proved before an order can be made?
Before it may make a management order ACAT must be satisfied that:
- the person has impaired decision-making ability in relation to their financial matters or a matter affecting their property; and
- there is, or is likely to be, a need for a decision in relation to the matter; or
- the person is likely to do something in relation to the matter that involves, or is likely to involve, unreasonable risk to the person’s health, welfare or property; and
- if a manager is not appointed the person’s needs will not be met; or their interests will be significantly adversely affected.
Impaired decision-making ability and the person’s interests have the same meaning as set out in Chapter 6.9.3.
While a person’s impaired decision-making ability for management must arise from the same causes as for guardianship, the test for management requires an assessment of the person's level of understanding of their personal financial matters or matters affecting their personal property. The test is subjective in that sense and not a more objective “inability to make reasonable judgments” test that applies in Victoria, Tasmania and Western Australia.
There is a specific restriction on ACAT’s power to appoint a manager for property in the Australian Capital Territory of someone who lives outside the Territory. ACAT may appoint a manager in these circumstances only if it is satisfied that it is impracticable for a manager for the property to be appointed in the jurisdiction where the person with impaired decision-making ability lives or that an order appointing a manager for the property under the law of the other jurisdiction cannot be registered under
Guardianship and Management of Property Act 1991 (ACT).
8.9.5 Appointing a financial manager
Any of the following may be appointed by ACAT as a manager of a person’s property in the Australian Capital Territory:
- a private person 18 years or older,
- the Public Trustee and Guardian, or
- a trustee company.
However, the Public Trustee and Guardian or a trustee company must not be appointed as the manager if an individual who is otherwise suitable has consented to be appointed.
The private person may also be the person’s guardian or joint guardian.
Nevertheless, ACAT cannot consider a private person suitable for appointment as manager unless it is satisfied that that person will follow the decision-making principles, has provided certain information on oath and ACAT has taken into account a number of considerations.
These matters are discussed in Chapter 6.9.4.
The decision-making principles to be followed are:
- the wishes of the person whose property is under management, as far as they can be worked out, must be given effect to, unless making a decision in accordance with those wishes is likely to significantly adversely affect the person’s interests,
- if giving effect to those wishes is likely to significantly adversely affect the person’s interests—the manager must give effect to those wishes as far as possible without significantly adversely affecting the person’s interests,
- if those wishes cannot be given effect to at all—the interests of the person must be promoted,
- the protected person’s life (including the person’s lifestyle) must be interfered with to the smallest extent necessary,
- those whose property is under management must be encouraged to look after themselves as far as possible,
- those whose property is under management must be encouraged to live in the general community, and take part in community activities, as far as possible.
Note, as suggested in Chapter 6.9.11, these principles require a manager to exercise “substituted judgment” and make decisions for the person whose property is under management according to their wishes unless to do so would be likely to significantly adversely affect the interests of that person. If the person whose property is under management is able to express views, the manager must apply a form of substituted judgment. It is only if the person whose property is under management is unable to express views that the manager is free to act as a substitute decision-maker and act in the way that they think is in the best interests of that person.
Whether acting as a maker of substituted judgment decisions or as a substitute decision-maker, there is a further limitation on the manager. Before making a decision, the manager must consult with each carer of the person whose property is under their management.
However, the manager must not consult with a carer if the consultation would, in the opinion of the manager, adversely affect the interests of the person whose property is under their management.
In a 2018 case ACAT gave detailed consideration to the decision-making principles ACAT had to follow in appointing a manager (and guardian) and to the “checklist of considerations” developed first by Kirby J when he was President of the NSW Court of Appeal and, more recently, by Lindsay J of the Supreme Court of New South Wales.
8.9.6 Joint/several/replacement managers
Private persons may be appointed jointly as managers of the property of a person found by ACAT to have relevant impaired decision-making ability.
They will usually be required to act jointly only, but ACAT can specify that they may act severally in making decisions about the person’s property if necessary.
While there is no specific statutory provision for the appointment of replacement managers, ACAT has an implied power to do so. This is because it is required to conduct a review to consider the suitability of a person to be a manager as soon as practicable after the person becomes the replacement manager.
8.9.7 Types of management orders
8.9.7.1 Management orders in relation to all of the person’s property
ACAT may appoint a manager to manage all of the property of a person found to have relevant impaired decision-making ability. ACAT may also give that manager all the powers it is satisfied are necessary or desirable to allow the manager to make decisions in relation to the property of the person, in accordance with the decision-making principles.
Nevertheless, the
Guardianship and Management of Property Act 1991 (ACT) specifically requires that the powers given to a manager of a person’s property are to be no more restrictive of the incapable person’s freedom of decision and action than is necessary to achieve the purpose of the order.
In practice most management orders are plenary in effect to ensure that the manager can manage all aspects of the property of the person with impaired decision-making ability without having to return to ACAT to request extra powers when unexpected matters arise.
8.9.7.2 Orders with part of the estate excluded
As an alternative, ACAT may appoint a manager to manage only a stated part of the property of a person found to have relevant impaired decision-making ability. As with a manager of the whole of a person’s property, ACAT may also give that manager all the powers that are necessary or desirable to allow the manager to make decisions in relation to the property, but only those powers that are no more restrictive of the incapable person’s freedom of decision and action than is necessary to achieve the purpose of the order.
Although most management orders made by ACAT are plenary in nature and apply to all of the person’s financial matters and property, ACAT’s ability to make orders applying only to a stated part of the person’s property is consistent with the least restrictive alternative provisions of the
Act. In practice how it works is for ACAT to include all of a person’s property in a management order, except for a clearly stated part of it. This approach is sometimes used to allow a person with limited ability to manage their property and financial affairs to have control over their disability support pension or other social security income while an inheritance, a damages payment or other substantial sum and other related matters are managed on their behalf for their benefit and are protected against dissipation as a result of the importuning demands of others.
8.9.7.3 Emergency management orders
ACAT can make emergency management orders, lasting no longer than 10 days, appointing the Public Trustee and Guardian to be the manager of a person’s property, without holding a normal hearing. However, ACAT must be satisfied that there are special circumstances of urgency that make it proper to do so.
The question of the degree of proof required in relation to whether:
- the person the hearing has impaired decision-making ability in relation to their financial matters or a matter affecting their property,
- there is a need to make a decision about that matter, and if a manager is not appointed, the person’s needs will not be met or their interests will be significantly adversely affected,
has not been resolved in relation to emergency management orders. There is no indication in the legislation that it should be any less than proof on the civil standard of the balance of probabilities. In any event, as the application is usually made by the Public Trustee and Guardian, it is accompanied by one or more doctor’s reports about the person’s decision-making ability and information, albeit often hearsay, about the other matters that ACAT has to be satisfied about, the information before ACAT usually meets the standard of proof required.
Unlike in New South Wales, in the Australian Capital Territory there is no provision for an interim financial management order pending further consideration of the person’s capacity to manage their own affairs. Such a provision allows a financial management order to be made where the current and urgent need for the order is clear but, while there is an evidential basis for believing that the person is incapable, there is insufficient evidence to prove that matter on the balance of probabilities at the time the order needs to be made.
However, in the Australian Capital Territory there is power to seek a form of injunction to restrain dealings which has some of the same protective effect. This is discussed in the next section, 8.9.8.
8.9.8 Injunctions to restrain dealings
In addition to its power to make emergency management orders for periods no longer than 10 days, ACAT has the power, on the application of another person, to make an order restraining a person from entering into, completing or registering or otherwise giving effect to a transaction with someone else in relation to the property of that other person. However, before it may do so, ACAT must be satisfied that there are grounds for making an appointment of a manager for the property of that person. ACAT does not have to be satisfied by the evidence before it that an order can and should be made. However, it must have before it material that provides an evidential basis for it to form a view that there are grounds for the appointment of a manager.
Such an order can be made for a period of not more than three days. However if, within that period, an application for the appointment of a manager is made to ACAT, ACAT may continue the restraining order until the application is decided.
8.9.9 Effect of a management order
The accepted position when an administration order is made is that the power of the person whose property is under management to deal with their property is suspended while the order is in force.
This matter is discussed in greater detail at 8.11.13 below.
However, while acceptance of this position is implied by the
Guardianship and Management of Property Act 1991 (ACT), that
Act provides that if a person whose property is under management purports to enter into a transaction in relation to that property, the transaction is not necessarily void on the ground that the person was not legally competent to enter into the transaction. The person’s guardian or manager or some other person involved in the transaction may, within 90 days after the date of the transaction, apply to ACAT, the Supreme Court or the Magistrates Court. ACAT or either of those courts may by an order it considers just:
- confirm the transaction; or
- declare the transaction void; or
- adjust the rights of the parties to the transaction.
8.9.10 The role of ACAT after making a management order
ACAT’s role in relation to management orders is, as in most of the States, not confined just to making and reviewing them. It may, on application, give directions, an opinion or advice to a manager about the exercise of their functions or powers.
While managers must submit their accounts and other documents to the Public Trustee and Guardian in the Australian Capital Territory and the Public Trustee and Guardian must examine those accounts and documents, it is the role of ACAT to disallow any items in the accounts.
8.9.11 Powers and functions of a financial manager
When ACAT appoints a manager to manage all or a part of a person’s property, it gives that manager all the powers it is satisfied are necessary or desirable to allow the manager to make decisions in relation to the property of the person, in accordance with the decision-making principles.
Any act or omission of a manager acting under a management order or execution of a document (instrument) by them has effect as if it were an act, omission or document of the person whose property they are managing.
A manager may also read the will of the person whose property they are managing, unless ACAT orders otherwise.
This can help them in their decision-making in relation to the management of the person’s property.
The
Guardianship and Management of Property Act 1991 (ACT) imposes the following obligations on managers to:
- act, as far as possible, as the person would have acted in the circumstances if they did not have impaired decision-making ability,
- take into account the need to ensure that the person whose property is under their management does not become destitute,
- take into account the desirability of maintaining, as nearly as possible, the lifestyle of the person as if the person did not have impaired decision-making ability,
- exercise the power in the best interests of the person, ensure that in the exercise of the power their own interests do not conflict with those of the protected person, and
- ensure, unless ACAT orders otherwise, that their own property is kept separate from that of the person whose property is under their management.
If the property the manager has been appointed to manage includes real estate, the manager must lodge a copy of the management order with the Registrar-General.
If the person whose property is being managed receives interest or income from that property or money from the sale of it, or obtains other property, for example as a bequest in a will or as a gift, whatever is received will be managed by the manager unless ACAT orders otherwise.
A manager may only invest money that is part of the property they are managing in accordance with the requirements of the
Trustee Act 1925 (ACT), unless ACAT permits otherwise in an order.
Managers also have a discretion to pay out of the income or capital of a person’s property they are managing, reasonable amounts for the maintenance, advancement or education, or otherwise for the benefit, of the person and their dependants. In deciding whether to make a payment, the manager must take into account:
- the views and wishes of the person whose property they are managing,
- the amount and nature of the property to be paid out for these purposes,
- the amount and nature of the person’s remaining property, and
- the present and likely future needs of the person and any dependants they have.
ACAT’s “Information for Managers” sets out the powers of managers the principles they should operate by and other matters, in further detail.
On the anniversary of their appointment, managers must submit to the Public Trustee their accounts and other documents relating to their management of the estates they are managing.
The Public Trustee and Guardian must examine those accounts and other documents and may apply to ACAT for the disallowance of any item in the accounts.
8.9.12 Reviews of management orders
When ACAT appoints a manager, the appointment continues until:
- the death of the person whose property is under management,
- ACAT removes the manager because it is satisfied that the manager is no longer suitable or competent, or has neglected to perform the duties and functions of manager, or has contravened a particular provision of the Act, or
- the manager resigns in writing given to ACAT.
Nevertheless, ACAT must hold a review of (an inquiry into) each management order at least once every three years to see whether the order should be:
- varied,
- revoked on the ground that it is no longer needed, or
- whether the manager should be removed.
Such reviews may also be held as a result of an application or on ACAT’s own initiative.
Reviews must also be held if the manager dies or a replacement manger, provided for in the management order, becomes the manager.
8.9.13 Parties to reviews of management orders
These reviews, whether periodic, requested or commenced on ACAT’s own initiative, are conducted by way of hearing.
Chapter 6.9.3 sets out those entitled to receive notice of and attend such hearings.
8.9.14 Powers of ACAT on review
After conducting a hearing to review a management order, it may:
- vary the order,
- revoke it on the ground that it is no longer needed, or
- remove and replace the manager if they are no longer suitable to be a manager or no longer competent to exercise the functions or powers of a manager or have failed to exercise the functions or powers of a manager, or have contravened a provision of the Guardianship and Management of Property Act 1991 (ACT).
8.10 Northern Territory
8.10.1 Who has jurisdiction to appoint guardians for financial matters?
The
Guardianship of Adults Act 2016 (NT), which commenced on 28 July 2016, empowers the Northern Territory Civil and Administrative Tribunal (NTCAT) to make guardianship orders appointing guardians to make decisions about the financial matters of the person the subject of the order that NTCAT has given them authority in relation to.
Prior to the commencement of the
Guardianship of Adults Act (NT), both the Supreme Court and, in a more restricted way, the Local Court had power to make administration orders in the Northern Territory. Under the new
Act the Local Court’s role has been subsumed into NTCAT and any (financial) management order made by it which was current at the commencement of the new
Act became a guardianship order under the new
Act.
The Supreme Court’s statutory jurisdiction under the
Aged and infirm Persons Property Act (NT) was abolished by the repeal of that
Act.
Any protection order made by the Supreme Court that was current at the commencement of the
Guardianship of Adults Act (NT) became a guardianship order under that new
Act, the person whose estate was the subject of the protection order became a person the subject of an order under the new
Act and the manager became a guardian (for financial matters) under the new
Act.
We suggest that because it abolished the statutory jurisdiction of the Supreme Court to make protection orders and converted any current protection orders into guardianship orders for financial matters to operate under the provisions of the
Guardianship of Adults Act 2016 (NT), the Legislative Assembly of the Northern Territory intended that all applications for orders to be made for the management of the estate of a person unable to manage their financial affairs be made to NTCAT with appeals to the Supreme Court only on questions of law and only with the leave of the Court.
However, the Legislative Assembly did not seek to reduce or abolish the Court’s inherent parens patriae jurisdiction by clear words; and we do not see that the structure of the legislation creates a necessary implication that such a reduction or abolition of that jurisdiction was intended.
We also note that, in 2006, while the
Aged and Infirm Persons’ Property Act (NT) was in force, the Supreme Court was willing to rely on its parens patriae jurisdiction to order that an award to a woman with an intellectual disability, who needed her estate to be protected, be held in trust and to appoint someone outside the jurisdiction (the Public Trustee of Western Australia) to act as trustee.
We suggest that while almost all applications for guardianship orders whether in relation to financial matters or personal matters or both, should be dealt with by NTCAT, there will be the occasional matter that, because of its inextricable links to matters only within the Supreme Court’s jurisdiction to resolve or because rarity and complexity of the circumstances of the case are such that the Supreme Court should deal with them at first instance to avoid the administration of justice in the Northern Territory, being impeded or adversely affected if it could not do so. As we suggested in Chapter 6.10.1, the appropriate course is to adopt the position and views of Lindsay J of the New South Wales Supreme Court set out in Chapter 6.2 and 6.3.1.
8.10.2 Who may apply for a guardianship order for financial matters?
Because the same people may apply to NTCAT for the appointment of a guardian for financial matters or personal matters or both, there is no need to repeat what is set out about this matter in Chapter 6.10.2.
8.10.3 Who may take part in the hearing as a party?
There is no need to repeat what is set out about this matter in Chapter 6.10.3. Note that the hearings of applications for guardianship orders are not open to the public.
But also note who may be able to take part in the hearing, the provisions for joining parties and the comments we have made in relation to attendees based on our experience of sitting members of tribunals with guardianship jurisdiction. These are set out in Chapter 6.10.3.
8.10.4 What has to be proved before an order can be made?
NTCAT may make a guardianship order appointing a guardian for an adult to make decisions in relation to financial matters (or personal or matters or both), for the person the subject of the application, if it is satisfied that:
- the adult has impaired decision-making capacity; and
- the effect of the impairment is that, for some or all personal matters or financial matters, the adult is unable to exercise decision-making capacity; and
- the adult is in need of a guardian for some or all of those matters.
The elements of this issue are set out under three headings in Chapter 6.10.4. These are:
- test for decision-making capacity/incapacity in the Northern Territory
- person in need of a guardian – matters to be taken into account
- the guardianship principles.
The matters set out under these three headings are central to the appointment of guardians. They are set out in detail under Chapter 6.10.4.1, 2, and 3, in considerable detail.
8.10.5 Appointing guardians for financial matters
In this chapter, from now on at least, we are dealing with guardians appointed for financial matters; or if appointed for personal matters as well, in relation to their role as guardian for financial matters.
NTCAT may appoint as a guardian a person who is 18 years or above, who consents to act as guardian and who is eligible for appointment because they meet the requirements for appointment set out below. NTCAT may appoint the Public Trustee as but only if there is no individual eligible for appointment in terms of the requirements set out below.
However, the Public Trustee may be appointed guardian only for financial matters, and only if the Public Trustee agrees to the appointment.
It should be noted that under the
Adult Guardianship Act 1988 (NT), the legislation that immediately predated the
Guardianship of Adults Act 2016 (NT), the Local Court was empowered to appoint a person’s guardian to also manage their estate; if the Court was satisfied that the guardian was competent to do so. Such management orders are very common. Also, the Public Guardian was regularly appointed both guardian and manager in those circumstances. While NTCAT may appoint the Public Guardian for financial matters, and not necessarily for personal matters as well, time will tell whether the practice developed under the now repealed legislation will continue under the new legislative regime.
When deciding whether a person is suitable to act as guardian of the person under guardianship, NTCAT must take the following into account:
- whether they are likely to comply with the Act;
- their ability to properly exercise the authority of a guardian;
- the views and wishes of the person under guardianship;
- the desirability of preserving any existing support network for the person under guardianship;
- their compatibility of the individual with:
- the person under guardianship; and
- any other person also proposed to be appointed as a guardian for the person under guardianship; and
- cany other agent for the person under guardianship – namely another guardian appointed by NTCAT, a decision maker appointed by the person under guardianship in their advance personal plan (if any) or an attorney under any enduring power of attorney made by the person under guardianship;
- their availability and accessibility to the person under guardianship and to other interested persons for the person under guardianship;
- whether they have, or have had, a professional relationship with the person under guardianship, the nature of that relationship and whether it is appropriate for an individual with that relationship to be the guardian of the person under guardianship:
- the extent to which their interests are likely to conflict with the interests of the person under guardianship;
- their history and experience as a guardian or in a similar role in the Northern Territory or elsewhere;
- if it is proposed that they will have authority for financial matters – their individual's bankruptcy history (if any); (k) their criminal history (if any) in the Territory or elsewhere;
- any other matter NTCAT considers relevant.
Note also that both the Public Guardian and the Public Trustee may be appointed as a joint or several guardian with private guardians.
As already noted, the Public Trustee may be appointed as guardian in relation to financial matters only. Consequently, the Public Trustee could accept an appointment as either a several guardian, but so long as the other guardian does not have authority in relation to any financial matters that the Public Trustee is given authority in relation to, or as the only guardian for financial matters. Whether the Public Trustee would accept an appointment as a joint guardian for financial matters with a private guardian is an open question.
It is also important to appreciate that NTCAT when deciding, first whether or not to appoint a guardian, second who that guardian should be and third what financial (or financial and personal) matters they should have authority in relation to, must determine those questions in accordance with the guardianship principles set out in the
Act.
Those principles are set out in Chapter 6.10.5.
8.10.6 Joint and several financial guardians, the restrictions and requirements that may be imposed on them and directions that may be imposed on them
For a consideration of these matters see Chapter 6.10.6.
However note the comments made about the appointment of the Public Guardian and the Public Trustee in the last section.
8.10.7 Content of guardianship orders for financial matters
The
Guardianship of Adults Act 2016 (NT) requires NTCAT to specify in a guardianship order the financial matters for which the guardian has authority.
In other words there is no distinction between full (plenary) orders and limited orders made in the
Act. Instead NTCAT must set out in each order the financial matters for which the guardian has authority, as well as the restrictions, requirements the exercise of that authority is limited to and the directions (if any) that have been given in relation to the exercise of that authority.
In the Northern Territory, a financial matter for an adult person means a matter relating to their property or financial affairs. That definition is fleshed out with a list of examples of what are financial matters for the purposes of the
Guardianship of Adults Act 2016 (NT) and in particular the scope of the authority that NTCAT can give to a guardian for financial matters appointed by it.
The examples are:
- receipt and payment of money.
- banking.
- property (including real estate) ownership.
- investment and management of assets.
- carrying on a trade or business.
- insurance for the person or the adult's property.
- legal matters relating to a financial matter. However, this does not include exercising the person's rights as an accused person in relation to criminal investigations or criminal proceedings, including assessments and proceedings under Part 10 of the Mental Health and Related Services Act (NT).
The definition of the term “financial matter” and the examples given of it in the
Guardianship of Adults Act 2016 (NT) do not indicate that a guardianship order for financial matters would apply to the whole of a person’s financial estate unless the order made by NTCAT was drafted in a way that shows an intention to make the order to apply to the whole of the estate of the person the subject of the guardianship order. Consequently, the extent of the estate to be covered and the number of matters covered will depend on the terms of the order made by NTCAT. These matters have to be set out in clear terms in the order.
As set out in Chapter 6.10.7, there are a number of matters that NTCAT may not give a guardian authority to make decisions about. However these matters appear essentially to be personal matters and are so personal as to be matters that a substitute decision-maker should not be empowered to make decisions about.
This matter is also dealt with in detail in Chapter 7.4.
8.10.7.1 Interim orders
As set out in Chapter 6.10.7.1, if an application for a guardianship order (for financial matters) has been made to NTCAT, but has not yet determined the application, NTCAT may make an interim guardianship order for the person the subject of the application pending its determination of the application. There are strict limitations on making interim orders and these are set out in Chapter 6.10.7.1, along with how long the order may be made for and a number of other related matters.
8.10.7.2 Compliance orders
The
Guardianship of Adults Act 2016 (NT) creates a specialised form of order that NTCAT can make on application by either the guardian of, or an interested person for, the person the subject of a guardianship order.
The order that NTCAT may make is to authorise a guardian, or another specified person, to take specified measures to ensure the person under guardianship complies with the guardian's decisions in the exercise of their authority.
However, NTCAT may make such an order only if it is satisfied that, having regard to the best interests of the person under guardianship, authorising the specified measures to be taken under the order is the only appropriate way to protect that person from harm, abuse, exploitation or neglect.
Whether such orders are appropriate to be made in the context of financial matters is unclear.
Compliance orders are dealt with in more detail in Chapter 6.10.7.2.
8.10.7.3 Orders NTCAT may make either at the time it makes a guardianship order or subsequently
Because where there are joint guardians, they have to exercise their authority unanimously, it may be necessary for NTCAT to make orders as to how joint guardians resolve their differences should they be having difficulty reaching unanimous decision.
A person the subject of a guardianship order made by NTCAT may have had one or more agents before NTCAT made the guardianship order in relation to them. This is because when they had planning capacity (
as defined in the Advance Personal Planning Act (NT}}, they may have made an advance personal plan in which they appointed one or more decision makers. Such decision makers are agents of the person the subject of the guardianship order. This is the case whether or not they were given authority for matters for which the maker of the advance personal plan no longer has decision-making capacity. If they did have decision-making authority for matters that NTCAT is considering giving a guardian authority in relation to, that is a matter NTCAT must take into account when deciding whether the person the hearing is about is in need of a guardian.
However, where NTCAT appoints one or more persons as guardians for the person the hearing is about, whether or not they are given authority that a decision maker had prior to the making of the guardianship order, they become agents of the person the person the hearing is about and NTCAT needs to consider whether to use its power to make orders to facilitate a reasonable and workable division of decision-making authority between those agents.
The matters set out in the last paragraph are indicators of one of the legislative policies underlying the
Guardianship of Adults Act 2016 (NT) and the
Advance Personal Planning Act (NT) namely that that the views expressed and actions taken by the person now the subject of the guardianship order when they had (relevant) decision-making capacity continue to be given effect to unless obviously inappropriate.
As suggested by the heading of this section, NTCAT may make the orders discussed in it either when it makes the guardianship order or at any time that it is in operation.
8.10.8 Duties and responsibilities of guardians for financial matters
While the duties and responsibilities of guardians are dealt with in in detail for all the States and the Australian Capital Territory, because the Northern Territory is the only jurisdiction in which a tribunal may appoint a guardian and give them authority in relation to the financial matters of the person under their guardianship, we deal separately with the duties and responsibilities, however described, of such guardians.
As already noted in 8.10.5 above, it was quite common for the Local Court to appoint guardians for personal matters as managers of the estate of the person under guardianship, under the now repealed
Adult Guardianship Act (NT). Consequently, it is not a new idea in the Northern Territory for a person to appointed guardian with authority in relation to both personal and financial matters of the person under their guardianship. However, there a number of matters specifically provided for in the
Guardianship of Adults Act 2016 (NT) that need to be set out in this chapter as they are likely to apply in relation to guardians for financial matters than in relation to guardians for personal matters only.
The first of these is NTCAT’s powers to make orders as to the exercise of the guardian’s authority.
How broad these powers are may be determined, over time, by decisions of NTCAT and the Supreme Court; but they extend to at least the matters set out below.
8.10.8.1 Asset management plans
NTCAT may require a guardian to prepare an asset management plan, including certain associated matters. The form of the asset management plan, which may be in a form approved either by NTCAT or a specified person and the matters to be dealt with by the plan. NTCAT may require the plan to be approved by itself or a specified person and to whom the plan must or may be given.
Note that NTCAT may not necessarily require a private guardian to prepare an. In some situations it will be clear what is required to be done and that the appointed guardian is already doing it informally anyway. In other situations the person’s estate will be very small and so linked in to the estates of others, that it may not be sensible to require such a plan. However in some other cases it will be appropriate for a range of reasons, including issues involving the person’s family circumstances, that it is appropriate that a management plan be prepared.
In order for a guardian to carry out the responsibilities of their office, the
Guardianship of Adults Act 2016 (NT) provides that a guardian has the same right to documents and information that the person under their guardianship has. However, as this entitlement relates to the exercise by the guardian of their guardian’s authority, it relates only to matters relevant to that authority. A person with custody or control of a relevant document or relevant information must give that document or information to the guardian if the guardian requests it. While the person providing the information may claim they have a reasonable excuse for not complying with the request, they must comply if NTCAT orders them to give the document or information to the guardian. A person obeying such order is not civilly or criminally liable, or in breach of any professional code of conduct, for doing so.
Similarly, if a person is required by law to give information or a thing to the person the subject of the guardianship order, they must give it to the person’s guardian and not the person. By doing so are complying with the law and have no civil, criminal or professional liability.
8.10.8.3 Record keeping and reporting obligations of guardians
Guardians also have record keeping and reporting obligations. They must keep records that are reasonable in the circumstances to keep in relation to their exercise of their authority under the order. They must also comply with the regulations about the keeping of records, preparing annual reports, the auditing and verification of records and reports and related matters.
8.10.8.4 Guardians must manage property as if it were trust property
When dealing with the real property (land and similar assets) and personal property of the person under their guardianship, a guardian with authority for financial matters must deal with the property of the person whose estate is under their guardianship as if it were trust property held by them on trust for that person. Also when dealing with such property, a guardian is subject to the duties, obligations and limitations that apply under a law of the Northern Territory to a trustee dealing with trust property if permitted to do so by a provision of the
Guardianship of Adults Act 2016 (NT) or authorised by NTCAT to do so either in the guardianship order or in a separate order made by it, in an order relating to gifts or the maintenance of other persons under the provisions of the
Act.
However, these obligations do not prevent the continuation of joint ownership of property by the person the subject of the order and the guardian if the joint ownership commenced before the guardian was appointed or after the appointment, but while the person the subject of the order had decision-making capacity for the matter.
8.10.8.5 A guardian’s authority in relation to the giving of gifts
While the
Guardianship of Adults Act 2016 (NT) states clearly that a guardian who has authority for financial matters may make gifts from the property of the person under their guardianship, that gift-giving authority is limited to a gift of the kind that the person made when they had decision-making capacity or might reasonably have been expected to make – say to mark a special occasion such as a wedding, the birth of a child, a significant birthday or a significant religious or cultural event. Also that value of the gift that is given by the guardian, on behalf of the person under their guardianship, must be reasonable in the circumstances.
While this authority is automatically held by a guardian for financial affairs by virtue of their appointment as such, NTCAT may, in the guardianship order itself or by a subsequent order, on the one hand, restrict the guardian's authority to make gifts, or on the other hand, authorise the guardian to make a gift that would not otherwise be permitted.
Again, while the gift giving authority is automatic, a guardian is not automatically authorised to give a gift from the property of the person under their guardianship to themselves unless NTCAT has, either in the guardianship order or by a subsequent order, specifically authorised the guardian to do so.
8.10.8.6 A guardian’s authority in relation to the maintenance of dependants of the person under their guardianship
The
Act takes a similar approach in relation to the maintenance of dependants of the person whose financial matters the guardian is managing. A guardian with authority for financial matters has authority, by virtue of their appointment, to provide for the needs of a dependant of the person whose financial matters they are managing from that person’s property. However, that automatic authority is limited to provision of maintenance of the kind that the person made when they had decision-making capacity or might reasonably have been expected to make at that time; and the value of the maintenance was reasonable in the circumstances.
Again, while this authority is automatically held by a guardian for financial affairs by virtue of their appointment as such, NTCAT may, in the guardianship order itself or by a subsequent order, on the one hand, restrict the guardian's authority to provide for dependants, or on the other hand, authorise the guardian to provide for the needs of a dependant that would not otherwise be permitted.
However, the
Act is silent on the issue of whether, if the guardian is a dependant of the person they are the guardian of, they can provide themselves with maintenance, to a value that is reasonable from the property of the person under their guardianship. Nor does the
Act empower NTCAT to authorise a guardian to do so.
In these circumstances, we suggest that, because a guardian who is a dependant of a person under their guardianship is not precluded from providing maintenance to themselves that is of the kind that the person provided when they had decision-making capacity or that which they might reasonably have been expected to provide and the value of the maintenance was reasonable in the circumstances, that they have that authority automatically under the guardianship order, whether they be the only dependant or there are other dependants.
We suggest this for two reasons. First the statutory interpretation reason: the
Act is silent on the issue, but provides in the immediately preceding section that, while similar power is held automatically unless there is a legislative intervention to make it otherwise. Second, the more important real world reason namely that it is likely that there will be circumstances in which a person meets the criteria for needing a guardianship order for financial matters and the only person, or the most appropriate person to appoint is the only or one of the dependants of the person in need of the guardianship order. Such guardians would be likely to include the spouse, partner, or other close relative of the person needing the guardianship order.
8.10.8.7 When exercising guardian’s authority in a way that the guardian reasonably believes is in the best interests of the person under their guardianship, the guardian gives a benefit of another kind to another person
A guardian their decision maker’s authority in a way that may be beneficial to another person if:
- the benefit to the other person is of a kind that the person under guardianship provided when they had decision-making capacity for the matter; or
- might reasonably be expected to provide (even in their current circumstances); and
- the benefit being provided to the other person is reasonable in the circumstances and will not significantly adversely affect the best interests of the person under guardianship.
The
Act gives some examples of what was intended:
- It may be appropriate for a guardian to make provision out of the money of the person under guardianship for educational expenses for their children, even though that action is not directly for the benefit of the person under guardianship and will mean that the money is not available to pay for their own expenses.
- It may be appropriate for NTCAT to consent to the person under guardianship donating bone marrow to treat their child who has leukemia, even though doing so may involve some risk to the adult.
8.10.8.8 A guardian must give effect any advance care statement in an advance care plan made by the person under their guardianship
The final duty or responsibility of a guardian of a person who has made an advance care statement in an advance care plan is to give effect to any advance care statement even if doing so is not in the best interests of the person under guardianship, unless:
- the under guardianship with the decision-making capacity to do so, states that they do not want that statement to be given effect; or
- a circumstance has come into existence that makes exercising substituted judgment to give effect to the statement impracticable, unlawful or imposes a burden on another person that is so onerous that it is justifiable to override the wishes of the person under guardianship expressed in that statement. The Guardianship of Adults Act (NT) goes on to provide other grounds for not giving effect to the statement These are, first, that that there is no reasonable possibility that the person under guardianship would have intended that the statement would apply in the circumstances. Second, that exercising substituted judgment would be so unreasonable in the circumstances that have arisen that it is justifiable to override the wishes of the person under guardianship.
If, in reliance on this section, a guardian does not exercise substituted judgment, they must keep a written record of having done so and the grounds on which they formed the applicable reasonable belief.
These provisions again emphasize the policy in the legislative scheme of giving effect wherever possible to the views of the person who has now lost decision-making capacity.
8.10.9 Reimbursement and remuneration of guardians
The
Guardianship of Adults Act (NT) provides for the possibility of guardians for financial matters or personal matters or both being reimbursed or remunerated from the financial resources of the person under their guardianship. However NTCAT must agree to the reimbursement or the payment of the remuneration.
To go into more detail, a (non-professional) guardian is entitled to reimbursement from the person under their guardianship for reasonable expenses incurred in exercising authority as guardian.
However, a professional guardian is entitled to reasonable remuneration from the person under their guardianship.
The professional guardians are the Public Trustee, the Public Guardian and any individual who carries on the business of, or including, providing services as a guardian.
While non-professional guardians have an entitlement to reimbursement and professional guardians an entitlement to remuneration, NTCAT must approve both the reimbursement of expenses and the remuneration in the guardianship order itself or in a subsequent order.
In addition, a person who is a guardian, and is exercising authority as such, who provides services other than just guardianship services, such as acting as the carer of the person under their guardianship, NTCAT may approve either reimbursement of the expenses incurred in providing those other services or remuneration for providing those other services. However, NTCAT may not give that approval unless it is satisfied that it is reasonable in the circumstances for the guardian to also provide those other services and the amount to be paid is reasonable.
8.10.10 Effect of a guardianship order for financial matters
While the
Guardianship of Adults Act (NT) reflects the policy that requires guardians for financial matters appointed by NTCAT to exercise their decision maker’s authority in a way that is least restrictive of the freedom of decision of those they have been appointed guardians for as is practicable and to provide those they are guardians for with as much support as is practicable to make their own decisions, there will be applications brought before NTCAT that require it to appoint guardians to make all of the decisions about the property and financial affairs of the person they are appointed as guardians for. Sometimes it will be most of the decisions about the property and financial affairs of such persons and at other times the guardianship order may cover only a few financial matters.
However, the question of what is the ability of the person to make decisions about the financial matters covered by the guardianship order in relation to them arises? The accepted position is that when such an order is made, the power of the person whose financial matters are the subject of the orders to deal with those matters is suspended while the order is in force.
This matter is discussed in greater detail at 8.11.13 below.
However as noted in 8.10.1 above, prior to the commencement of the
Guardianship of Adults Act (NT), both the Supreme Court and, in a more restricted way, the Local Court had power to make administration orders in the Northern Territory. Under the new
Act the Local Court’s role was subsumed into NTCAT and any (financial) management order made by it, which was current at the commencement of the new
Act, became a guardianship order for financial matters under the new
Act.
The Supreme Court’s statutory jurisdiction under the
Aged and infirm Persons Property Act (NT) was abolished by the repeal of that
Act and any protection order made by it which was current at the commencement of the new
Act became a guardianship order for financial matters under the new
Act, the person whose estate was the subject of the protection order became a person the subject of an order under the new
Act and the manager became a guardian (for financial matters) under the new
Act.
8.10.11 Reassessments of guardianship orders for financial matters
Under the
Guardianship of Adults Act (NT) a guardianship order made by NTCAT comes into force when it is made.
Such orders remain in force until the first of the following events occurs:
- (where the order is to expire on a specified date) – that date is reached;
- the order is revoked by NTCAT;
- the person the order is about dies.
All guardianship orders must specify a reassessment date, unless they are orders that will expire less than a year after they were made: in which case there will be no need to specify a reassessment date.
NTCAT must conduct a reassessment of a guardianship order on, or as soon as practicable after, the reassessment date specified in that order. However, the person the subject of the order or an interested person for that person may apply to NTCAT for a reassessment of a guardianship order at any time during its currency.
When reassessing a guardianship order NTCAT must consider three matters namely whether:
- the order should remain in force,
- those appointed under the order should be changed and
- any changes should be made to any other terms of the order.
On completing the reassessment, NTCAT must do one of the following:
- confirm the order;
- vary the order;
- revoke the order and make another in its place;
- revoke the order.
When reassessing a guardianship order NTCAT must apply the guardianship principles set out in the
Guardianship of Adults Act (NT). This requires NTCAT to make reassessment orders that it “reasonably believes is in the [person’s] best interests”.
We suggest that even where the person whose financial affairs are under management as a result of a guardianship order made by NTCAT or its predecessor tribunals has impaired decision-making capacity for all financial matters, NTCAT should consider revoking the order where there is no need for the order in the best interests of the person because informal arrangements for the management of the person’s financial affairs are in place and are working effectively.
Reassessments of guardianship orders are dealt with in more detail in Chapter 6.10.9.
8.11 General matters
8.11.1 Purpose of administration orders
It is well established in the common law and has been restated a number of times in Australia in the late 20
th century that administration orders are to be made only where it is desirable to do so for the benefit of the person with the decision-making disability and not for the benefit of others.
Even then there is a discretion as to whether or not to make the order.
Administration orders are also to be made to protect those incapable of managing their property and affairs from exploitation.
The High Court has noted there will be cases in which a person who has lost capacity because of the injuries they have received through proven or admitted negligence will receive an award of damages to compensate them for losses past, present and future caused by that negligence. Where such a person will never be able to manage their financial affairs they will need an administrator. That administrator will have to invest the damages and act with reasonable diligence. Consequently, they will incur expenses in performing those tasks. Because the incurring of those expenses is a direct result of the negligence, the damages to be awarded to place the person, so far as possible, in the position they would have been in if the tort had not been committed will include an amount assessed as providing for the remuneration and expenditures properly charged or incurred by the administrator of the fund during the intended life of the fund.
The nature of the office of administrator has not yet been described in a way that has been accepted by the judges in Australia. In a 2016 case Lindsay J of the Supreme Court of New South Wales noted that Powell J likened the office to that of a bailiff as did H S Theobald, the author of the classic work
The Law Relating to Lunacy, published in 1924.
He also noted that White J described the relationship between a person whose financial affairs were placed under management and the administrator of their estate as that of principal and agent rather than as trustee and beneficiary.
Lindsay J continued that, having reviewed the authorities
, he concluded, that:
[I]t may be best to regard the office of a protected estate manager as unique, attracting the obligations of a fiduciary, taking colour from the terms of his, her or its appointment as manager, governed by the Court’s protective jurisdiction and informed by the nature, purpose and historical origins of that jurisdiction.
Lindsay J also noted that, in the Supreme Court at least, many of the applications for administration orders involved estates that would comprise financial investments consequent upon an award of compensation, in personal injury litigation, made in favour of the person whose estate was to be placed under management. In such a case, he said, the manager may be said, loosely, to receive, hold, and invest the person’s money as a trustee.
However, as White J pointed out, the scheme of the
NSW Trustee and Guardian Act 2009 (NSW) is that the person whose affairs are under management retains title to their property, but that property is managed on their behalf by the person appointed as manager.
This applies also to administration orders made in NSW by NCAT and the MHRT.
8.11.2 Who may apply for an order
The legislation in all States and the Northern Territory sets out who may apply for an administration order and who may apply for its review or revocation. Sometimes there will be no family members or friends either at all or any prepared to make the application for an administration order. Sometimes family members or “new found friends” of incapable people will be exploiting them financially and this may only come to light through accident or the observation of others not related to the incapable person. Consequently, it is necessary in the best interests of incapable people for there to be a range of people who can apply for administration orders on their behalf.
Where a person in this position has a solicitor, the New South Wales Guardianship Tribunal, the predecessor to NCAT, has been willing to accept an application from the solicitor as a person who has a genuine concern for the person the application is about. This practice has been beneficial to some who need administration orders, but it should be used with caution, and avoided altogether if it is known that the incapable person opposes such an application or there is possibility that they will recover their capacity to such an extent that they may be able to appreciate that their affairs are under management and that that was something they did not want.
In a 1993 case, Powell J observed that it was undesirable that a solicitor should put themselves in an adversary position with their clients if their conditions could be cured or controlled and they might wish to oppose the order.
However, he went on to acknowledge that there may be occasions when there was no one other than the incapable person’s own solicitor who was either willing or able to commence proceedings for the appointment of an administrator. Nevertheless, he went on to suggest that the preferable course in these circumstances was for the solicitor to invoke the good offices of a friend of the client, or even of one of the trustee companies and have them bring the application.
While it is necessary in the best interests of incapable people for there to be a range of people who can apply for administration orders on their behalf, it is also important that those who cannot show a genuine interest in the welfare of the person they are seeking an administration order for because they are mere ‘busybodies’ or are motivated by considerations contrary to the best interests of the person can be precluded from proceeding with their application. The NSW Guardianship Tribunal, now the Guardianship Division of NCAT, developed some criteria for dealing with this matter.
8.11.3 Who should have notice of the hearing of the application?
The legislation in most States and the two Territories sets out who should be given notice of the hearing of the application and be able to attend. However, in 1846 Lord Eldon noted:
Those to whom the Crown has confided the exercise of this jurisdiction have thought, and in my judgment they have rightly thought, that it is greatly to the advantage of lunatics, generally speaking, that all the next of kin and the heir at law should be present when the proposals for committees of the estate and of the person are discussed. In their absence many cases would be decided in total ignorance of, or only with a partial and imperfect acquaintance with, those circumstances a thorough knowledge of which is necessary to enable the Lord Chancellor to determine whether the plans he is required to sanction, will be beneficial, or detrimental, to the unfortunate persons on whose account they are framed.
8.11.4 Tests for making administration orders
In all States and Territories of Australia there are statutory criteria that must be satisfied before the various courts and tribunals which have jurisdiction to make administration orders may make such orders. They all require the proof of “incapacity”- a term which is given different names in the different
Acts.
8.11.5 The incapacity criterion
In New South Wales NCAT may make a financial management (administration) order about the estate (financial affairs) of a person only after considering the capability of a person to manage their affairs and being satisfied that:
- the person was unable to manage their financial affairs (estate);
- there was a need for another person to manage those affairs, on their behalf ; and
- it was in the person’s best interests that the order was made.
In Victoria VCAT may only make an administration order if it is satisfied the person the application is about:
- has a disability because of which they do not have decision-making capacity in relation to the financial matter about which the order is sought;
- is in need of an administrator; and further
- that the administration order will promote their personal and social wellbeing;
In Tasmania the Guardianship and Administration Board and in Western Australia the State Administrative Tribunal, has to be satisfied that the person the application is about:
- is a person with a disability; and
- by reason of that disability is unable to make reasonable judgments about matters relating to all or part of their estate; and
- is in need for an administrator of their estate.
In Queensland QCAT has to be satisfied that:
- the “adult” has impaired capacity for the (financial) matter; and
- there is; i a need for a decision in relation to the matter or ii the adult is likely to do something in relation to the matter that involves, or is likely to involve, unreasonable risk to their … property; and iii without the appointment; - their needs will not adequately be me, or - their interests will not be adequately protected.
In the Australian Capital Territory, while the wording is slightly different, the test is essentially the same as in Queensland.
In South Australia SACAT may make an administration order if it is satisfied that:
- that the person the subject of the application has a mental incapacity; and
- an administration order should be made in respect of the person.
As from 2016 in the Northern Territory NTCAT may make a guardianship order for financial matters if it is satisfied that:
- the adult has impaired decision-making capacity; and
- the effect of the impairment is that, for some or all financial matters, the adult is unable to exercise decision-making capacity; and
- the adult is in need of a guardian for some or all of those matters.
These tests, despite the different wording used, are very similar. There has to be a need for an order. In all the States and Territories there has to be a manifestation of inability to manage financial affairs whether it be straight out inability to manage affairs or inability to make reasonable judgments or unreasonable risk or unable to exercise decision-making capacity. In South Australia, that inability to manage is implied. In Victoria, Tasmania and Western Australia disability has to be shown, but it is decision-making disability that is central to the decision of a tribunal to make an administration (financial management) order.
In 1982 when Powell J was the Supreme Court Protective Division’s judge, in the case
PY v RJS, he explained why he was not going to make a financial management order in relation to a man with schizophrenia. His explanation came to be categorised as an objective test.
In two cases in 2015, Lindsay J set out his understanding of the meaning of the expression “[in]capable of managing his or her own affairs”.
By 2016 he was able to state that; “the so-called “objective test” has recently fallen from favour in [the] case-law”.
The
PY v RJS “test” was replaced by a much more nuanced approach taken by Lindsay J in the 2015 case
P v Public Trustee and Guardian, which was an appeal to the Supreme Court against a decision of NCAT to make a financial management order in relation to P.
In that case Lindsay J noted that whether a person is to be found “capable of managing his or her own affairs”, or not, ultimately requires a judgment-call grounded upon guidance available within the framework of the governing legislation and a close examination of the facts of the particular case.
And for those seeking a definition or set of criteria he stated:
An exhaustive definition of the concept, applicable to all cases at all times, is not otherwise to be expected...
While not seeking to create an exhaustive definition of the concept, Lindsay J pointed out that the terms of the legislation must be viewed holistically and also to bear in mind that that the concept of “capability” is directed to the reasonably foreseeable future as well as to the present time.
He also noted that:
In considering whether a person is or is not capable of managing his or her own affairs …. a focus for attention is whether the person is able to deal with (making and implementing decisions about) his or her own affairs (person and property, capital and income) in a reasonable, rational and orderly way, with due regard to his or her present and prospective wants and needs, and those of family and friends, without undue risk of neglect, abuse or exploitation.
This notion that the ability to recognise and protect one’s own interests, and to function as a self-caring member of the community played a central part in the enquiry into financial capacity was also articulated in 2003 by Barrett J.
We have set out in further detail in 8.3.4.2, above the current approach in New South Wales to determining and applying the criteria for deciding whether or not a person has capacity to manage their financial affairs when NCAT is exercising its statutory jurisdiction to appoint financial managers (administrators).
As there could be seen to be a slightly different approach when the Supreme Court is exercising its inherent jurisdiction to the same end, we have set out the Supreme Court’s jurisdiction in 8.3.4.1, above.
While the considerations listed by Powell J in
PY v RJS are not those that are specifically set out in the provisions of the
Guardianship Act 1987 (NSW) that NCAT has to follow, they can be relevant to the question of whether a person should have a financial management order made in relation to their estate. Some of the considerations are indicators of need for a financial manager, while others are factors militating against the need for an order.
Like the man in
PY v RJS, others have difficult lives, living in ways that most of us could not tolerate; but that does not mean that they have lost capacity to manage their financial affairs. Ms W was essentially homeless and relied on others to provide her with accommodation overnight. By the end of most days she was intoxicated. Sometimes she had her money stolen. Sometimes she was assaulted. Others, who had through their actions long proven that they had a genuine concern for her welfare, applied to the then New South Wales Guardianship Tribunal for an administration order in relation to her. She refused to come to the hearing. The only evidence about her capacity was a Mini-Mental State Examination in which she scored 28 out of 30. Other evidence showed that she actively chose to spend most of her income on alcohol and that she was able to obtain accommodation. As the Tribunal was not satisfied that she had lost her capacity, it did not make a financial management order in relation to her.
In another case in which the then Tribunal was not satisfied that a person had lost their capacity to manage their financial affairs, a husband was unable to deal with the divorce proceedings brought by his wife to end their marriage. He was able to continue to run his business. While he was not dealing with one important aspect of his financial affairs, the evidence did not show that he had lost his capacity to manage his financial affairs and the Tribunal dismissed the application for an administration order in relation to him.
It should be noted however that in Queensland at least where the incapacity may relate to a particular financial matter, it may be possible to make an administration order only in relation to that particular financial matter if impaired capacity for that matter is proved.
In dealing with the test for making an administration order in the Supreme Court of New South Wales, Porter and Robinson noted in 1987 that:
It is very significant that the section does not limit the nature of the disability and therefore an order could be made in the case of someone who has become incapable of communicating because of quadriplegia through trauma, but whose cognitive or reasoning abilities could remain quite unimpaired.
During the time Powell J’s approach in
PY v RJS was still seen as the law in New South Wales, it was repeatedly applied both in terms of determining whether a financial management order should be made or whether, on review, the order should remain in place or be revoked. The cases listed in the footnote to this sentence, we suggest, would have resulted in the same outcome if Lindsay J’s approach set out above had been applied.
While the apparent difference of view between the Supreme Courts of New South Wales and Victoria about the proper test for (in)capacity to manage one’s own (financial) affairs may have evaporated in the light of Lindsay J’s more nuanced views set out above, we consider it appropriate to leave in our text references to cases showing the Victorian approach in which capacity is seen as more related to the personal circumstances of the person the application is about.
As Cavanough J of the Supreme Court of Victoria noted in a 2006 case, under the “subjective” test it was necessary to measure the person’s ability against their actual property and affairs however extensive, complex or demanding they may be, rather than against an “objective” standard such as “the ordinary routine affairs of man” (Powell J’s phrase).
Cavanough J noted that the Victorian provision applicable to a broader range of persons than the equivalent New South Wales provision; however he took the view that the proper tribunal to deal with applications in Victoria was VCAT, and sent the matter back to it to decide.
Cavanough J shared the concerns of other Supreme Court and Court of Appeal judges in Victoria about the reach of the Victorian provision. He referred specifically to 1982 report upon which the Victorian Parliament relied in framing the
Guardianship and Administration Act 1986 (Vic) quoting part of the report that a determination that a person was incapable of managing their financial affairs should not operate to mean that:
[A] bad investor or unsuccessful entrepreneur should not lose control of his estate, nor should the person who simply lacks an interest in money matters be the subject of an estate administration order. It is the person whose capacity is lacking or is severely impaired who may be in need of this type of protection. (Cavanough J’s emphasis)
He also referred to the 1992 Victorian Court of Appeal case which noted that the authority that may be conferred on an administrator under the Victorian
Act effectively commits to the administrator total control over the property of the person the order was about, but that control and its extent may be limited by virtue of the extent of the powers and duties given to the administrator in the order made by VCAT.
The Court of Appeal went on to comment that while there would be cases in which the jurisdiction of [now VCAT] may be justifiably invoked, administration orders “are calculated to achieve, at the instance of any person at all, a far-reaching deprivation of the freedom of action not only of represented persons but of near relatives of such persons."
The Court also noted that the
Guardianship and Administration Act 1986 (Vic) prescribed very important safeguards against the making of inappropriate administration orders. These included the requirement that VCAT’s jurisdiction be exercised so that its orders were the least restrictive of the freedom of decision and action of the person the order was about as was possible in the circumstances, that the best interests of that person were promoted and their wishes were given effect to wherever possible.
In a 1988 case, predating the coming into force of what is now the
Guardianship Act 1987 (NSW), Powell J said:
I find myself unable to accept that the intention of the Parliament, as expressed in the Protected Estates Act 1983 (NSW), was that a person who does not suffer from mental illness, mental infirmity, mental retardation or some other like condition, but who, although otherwise capable of leading a normal life and managing his affairs, is, for some reason, as, for example, a limited education, incapable of managing or administering a large or complex estate which may fortuitously come his way, should be liable to be deprived by the Court of all power to manage his life and affairs.
We suggest that this non-interventionist approach applies to applications under the
Guardianship Act 1987 (NSW) and that such a person would not be made the subject of a financial management order unless there was evidence demonstrating that, on the balance of probabilities, the person was not capable of managing those affairs, needed someone else to manage those affairs and that it was in their best interests that the order was made.
In a 2005 case decided when the statutory jurisdiction of the New South Wales Supreme Court was still provided for by the
Protected Estates Act 1983 (NSW) and the
PY v RJS test was still being applied, in a case in which an application for a financial management order was refused, Campbell J expressed a view that, we suggest, remains relevant. He said:
Being able to identify and deal appropriately with someone who is trying to get the benefit of some of one’s assets for themselves through unfair dealing is relevant to whether someone has capacity to manage his or her affairs in two different ways. One is that it is part of the skills needed to carry out the ordinary routine affairs of mankind. However, the fact that people of undoubtedly full capacity can be the victims of confidence tricksters or subject to undue influence or subject to the type of conduct which leads equity to set aside a transaction on the grounds of unconscionable conduct shows that complete success in exercising that skill is not necessary to have legal capacity. It is only when a person’s skill of that type falls well below the ordinary level, so that it could not be said the person had reasonable competence in exercising that skill, that the question arises of whether he or she is incapable of managing his or her affairs arises.
For some time however, the differences in approach between Victoria and New South Wales have been more apparent than real. This was partly because of the cautions expressed by the judges of the Supreme Court of Victoria and the “glosses” on the
PY v RJS test made by judges of the Supreme Court of New South Wales set out below. The difference between the two tests in terms of the evidence considered by the court or tribunal determining particular cases, and the decisions they reach on the facts of those cases, may not be very great.
In an unreported 1997 case, Hodgson J commenting on the test in
PY v RJS agreed with Powell J that the first element of the test, namely that because of the lack of competence of the person the hearing is about there is a real risk that they may be disadvantaged in the conduct of their financial affairs, has to be judged without reference to the difficulty or complexity of the person’s affairs, but significantly he continued as follows:
I do not think [Powell J’s] view, however, means that the complexity and difficulty of the person’s affairs cannot be taken into account in assessing the risk which has to be considered under the second element; and, of course, there is no reason why that aspect, that is the complexity and difficulty of the person’s affairs, should not be taken into account in any element of discretion that the Court may have.
In a 2000 case in which Young J was not satisfied that a man, who had had serious head injuries for which he had received substantial damages, had recovered his capacity to manage his own affairs, he said:
[T]he ordinary affairs of mankind do not just mean being able to go to the bank and draw out housekeeping money. Most people’s affairs are more complicated than that, and the ordinary affairs of mankind involve at least planning for the future, working out how one will feed oneself and one’s family, and how one is going to generate income and look after capital. Accordingly, whilst one does not have to be a person who is capable of managing complex financial affairs, one has to go beyond just managing household bills.
Because in Western Australia, the legislation provides that if a person is unable, because of mental disability, to make reasonable judgments about matters relating to all or any part of their estate, the conditions precedent to making an administration order of having a mental disability and of being unable to make reasonable judgments have been conflated.
It is settled there that when dealing with an application to make an administration order, WASAT is required to consider whether the person the hearing is about has the ability to make 'reasonable judgments' about their estate in terms of the person's ability in relation to their actual estate - a subjective test. However, WASAT must also consider whether the person has the ability to engage in the mental processes required in order to make reasonable judgments in relation to their estate.
In Queensland, QCAT must be satisfied that the adult person the hearing is about has impaired capacity for a financial matter, among other things, before it may make an administration order.
The
Guardianship and Administration Act 2000 (Qld) contains a long list of financial matters.
While most administration orders made in Queensland cover all aspects of the property and financial affairs of the person the order is about, the test for capacity is subjective in nature.
Whether or not a person the subject of an application meets the criteria for making an administration order is not restricted to a consideration of the matters as they stand on the day of the hearing. The court or tribunal hearing the matter is “both entitled and required to consider what the position will be in the reasonably foreseeable future".
While we have already dealt with the 2003 case in which Barrett J of the New South Wales Supreme Court, stated that, if there is a lack of capacity, the reason for it does not matter, it is worthwhile returning to it because of its importance in the transition from PY v RJS to the current approach deciding the issue of incapacity. In that case, after quoting Powell J’s test in
RY v RJS, went on, in the next paragraph, to state:
Under the present legislation, the cause of the incapacity is irrelevant. There is no requirement that it be the product of mental illness or mental infirmity … The question for the court goes to incapacity alone, regardless of its cause, although the fact that the question relates to a person’s capacity to manage the person’s affairs means that the ability to recognise and protect one’s own interests plays a central part in the inquiry, with the result that incapacity is most likely to be found in circumstances of mental illness or obvious inability to function, in relation to physical and financial matters, as a self-caring member of the community.
Further on in his judgment Barrett J said:
The task of the court, upon an application such as this, is to make a judgment as to the capacity and ability of the person concerned to cope with the ordinary routine affairs of living, particularly so far as they concern the person’s property. This is a somewhat shorthand version of the tests laid down by the authorities to which I have already referred. The point to be emphasised is that the requisite judgment is to be made in the light of objective physical facts concerning the relevant person’s property, money and other assets and the way the person is able to look after them. If there is a lack of capacity, the reason for it does not matter. If the person is subjected to theft, vandalism and victimisation, the causes of those events is unimportant: the court is interested in whether the person is in a vulnerable position and cannot deal with such matters in a manner that is conducive to the person’s own welfare.
As already noted, in a 2012 case White J of the same Court, picked up on this quotation, leaving off the last sentence. He then stated that he adopted Barrett J’s formulation on his way to rejecting the application to revoke the financial management (administration) order made by the Supreme Court in relation to the applicant in that matter.
It is also worth coming back to a 2005 case already mentioned, in which, Campbell J pointed out that; the test in
PY v RJS was not a substitute for the statutory test. He also noted that because the words “at the least” appearing in the test, it did not purport to be exhaustive.
In a 2013 case Lindsay J of the NSW Supreme Court stated that the term "incapable of managing his or her affairs" took its colour from the particular
Act in which it appeared.
He continued by noting that whether it was viewed through the lens of the legislation or the antecedent general law, the question whether a person was incapable of managing their own affairs focused attention on the personal circumstances of that person, thus supporting the “subjective” test approach supported by other NSW Supreme Court judges.
In a 2015 case the Guardianship Division of NCAT considered judgments of Barrett, White and Lindsay JJ and stated that as a result of those authorities, NCAT would look at the functionality of management capacity of the person the hearing was about rather than their mental capacity or the particular reasons for their incapacity for self-management. It would look at the actual assets of the person, how they are proposing to manage their ordinary affairs of living, whether they could look after their assets and what they are proposing to do with them.
As a statement standing alone, this appears to be an overstatement of what the three Supreme Court judgments relied upon actually decided. In each of those cases there was substantial evidence, accepted by the deciding judge in preference to evidence to the contrary where it existed, that the person had psychiatric or psychological conditions or acquired brain injuries that adversely affected their decision-making capacity. It is also important to note that in NCAT’s jurisdiction to make financial management (administration) orders is found in the
Guardianship Act 1987 (NSW).
In the first case there was contested evidence that the person the hearing was about, by reason of her “unsound mind” could not give informed instructions to her lawyers or deliver evidence that was “not distorted by delusional beliefs”. Having reviewed all the evidence, Barrett J stated that, on the whole, the medical evidence led him to conclude that the person the hearing was about was suffering from a clinical condition that adversely affected her ability to make rational decisions about where her own best interests lay.
In the second case the person seeking a declaration that she was capable of managing her (financial) affairs had suffered a brain stem injury with what the judge approving the settlement of her claim in the District Court described as a; “brain stem injury with severe intellectual impairment which had brought about a loss of all capacity for all forms of work and need for permanent care”. White J noted that the person the hearing was about denied that she owed any debts despite being confronted with clear evidence to the contrary and that she had an unshakeable belief that she had assets far greater than those she actually possessed.
In the third case, the person the hearing was about had, as Lindsay J pointed out, been severely injured in a motor vehicle accident. He had suffered brain damage; “which has left him, beyond reasonable doubt, disadvantaged in personal management of his affairs” and had been awarded damages of approximately $1million.
In that case there was no contrary evidence, no dispute nor any scope for independent doubt that the person the hearing was about was incapable of managing his affairs.
Even in the case before the Guardianship Division of NCAT, there was evidence that the person the hearing was about, who was seeking to have the financial management order in relation to him revoked, confirming that he had a diagnosis of a schizoaffective disorder, that he was non-compliant with his medication and that he had little insight into his need to medication. There was also evidence that his decision-making capacity was very impaired by his delusions and that he became particularly delusional after he had consumed alcohol. There was other evidence relevant to his incapacity to manage his affairs, and, at this hearing, no evidence to support the order he sought.
However in a judgment handed down in November 2015 Lindsay J noted, after reviewing the recent case law in NSW, in light of the State’s current legislative regime; “there has been a return to the approach for which
Gibbons v Wright is the prime authority”.
This return to the “
Gibbons v Wright approach” led Lindsay J to state in a case earlier in 2015:
The general law does not prescribe a fixed standard of “capacity” required for the transaction of business. The level of capacity required of a person is relative to the particular business to be transacted by him or her, and the purpose of the law served by an inquiry into the person’s capacity.
Finally it is worth noting what Lindsay J said in
H v H about what he described about the “concept of incapacity for self-management namely” that it bears the ordinary meaning of language used to describe it, informed by the purpose and principles of the protective jurisdiction and that the “affairs” against which an individual’s capacity for self- management is to be measured are those of the particular individual, rather than a hypothetical construct. He went on to point out the four important, practical implications arose namely:
- any “test” of incapacity for self-management must be accommodated to standards prevailing in the community of the particular person said to be in need of protection, as well as their particular need;
- the utility of any formulation of a “test” of incapacity for the purpose of an exercise of protective jurisdiction depends on whether (and, if so, to what extent) it is, in the particular case, revealing of reasoning justifying a finding that a person is or is not (as the case may be) capable of managing their affairs, having regard to the protective purpose of the jurisdiction being exercised and established principles including, especially, the welfare principle;
- in conformity with the general law (Gibbons v Wright), the level of capacity required of a person for a due exercise of protective jurisdiction is relative to the particular business to be transacted by that person, and the purpose of the law (in the present context, the protective jurisdiction) served by an enquiry into the person’s capacity;
- although a decision about whether a particular person is, or is not, capable of managing their affairs may be powerfully informed by an expression of a medical opinion, based upon articulated observations of fact and accompanied by an exposition of technical medical terms, a determination about capacity for self-management made upon an exercise of protective jurisdiction is not, in essence, the province of medical expertise but of independent judgement by the Court applying established criteria to particular facts.
Experience of the protective jurisdiction makes a judge wary of medical opinions,
unaccompanied by an articulation of primary facts based on empirical observation, but forensically convenient to the application of the moment. It is for that reason, for example, that medical opinions expressed in support of an application for revocation of management orders are routinely measured against earlier opinions expressed in support of the initial application for a (financial management) order.
Lindsay J continued by noting that while the Court, and so by implication NCAT, may take comfort from an
opinion, but it must look primarily to
facts, especially in close-run cases in which opinions may fairly differ. He concluded by pointing out that, if in doubt, there was no substitute for a direct, personal engagement with the person whose capacity for self-management was under consideration, and those closely associated with them in daily living.
While all that is true, there is a clear and important place for assessments of capacity to be made both during the life of a person who may have incapacity in relation to some or all personal or financial decision-making, or, after their death. It is recognised internationally in the scientific community that health professionals with the requisite expertise in performing such assessments can assist the court by providing opinions that are based on their own observations of the person, or the observations of others where it is not possible for the assessor to see the person. Moreover, medical opinion is based on conclusions drawn from cumulative evidence based on the person’s past medical, psychiatric, social and relationship history, and behaviour, supplemented by test results, often performed by others, and never solely based on single cross-sectional facts. For the tribunals and the Supreme Courts whose responsibility it is to decide the question of capacity, when exercising guardianship/ protective jurisdiction, these assessments and opinions are of considerable assistance. This is, of course, provided that the assessor is advised of, and applies, the correct legal criteria against which to make their assessment. Assessment of capacity is dealt with in detail at 8.12.3 below.
In relation to this issue, it should be noted that the judgment, referred to above, handed down by Lindsay J in November 2015 was appealed to the NSW Court of Appeal as
IA v TA. In allowing the appeal, the Court of Appeal stated that:
When considering any available psychiatric evidence, the considered opinions of the long term treating psychiatrist of the person whose capacity for self-management is under consideration should usually assume considerable importance.
In its judgment, the Court pointed out that this did not to diminish the importance of lay evidence in the task of the Supreme Court [or NCAT] in determining whether or not a person had incapacity to manage their financial affairs. They also stated that they agreed that; “… there is no substitute for a direct, personal engagement with the person whose capacity for self-management is under consideration, and those closely associated with him or her in daily living”.
Nevertheless, they to point out that preferring the conclusion of another psychiatrist over the conclusion of the treating psychiatrist of the person the hearing was about, without hearing the treating psychiatrist and testing his views against the views of the other psychiatrist was an error. That and the failure to adjourn to allow the treating psychiatrist to be called meant that there had been a failure of procedural fairness leading to the appeal being upheld and the matter being sent back to the Supreme Court for rehearing.
8.11.6 Deciding the incapacity issue
In most cases, the incapacity of the person the hearing is about will be beyond question and not in contention. Nevertheless, the court or tribunal will need to have before it some medical or other appropriate evidence to satisfy it that the person has sufficient incapacity for it to be able to proceed to consider the other criteria it must be satisfied about before deciding whether or not to make an order.
The evidence of those lay to medicine, particularly about what the person can and cannot do in terms of attending to their financial affairs and avoiding the blandishments of others and other risks, can be very important on this matter. This was hinted at by Cavanough J in
XYZ v State Trustees Ltd when he also noted that VCAT had gone beyond the legitimate use of expert evidence and had inappropriately delegated to the expert the responsibility that lay with it to decide the capacity issue.
Billings DP took up the matter of capacity assessment in the
XYZ Case when it came back to VCAT for rehearing and, in doing so, noted the claim that neuropsychological examinations have moderately good success in predicting money management ability and performance on an important component of instrumental activity of daily living in the form of automated machine usage, but may fall down on other quality of life type issues.
In the 2020 case of IFZ
, the Vice President of VCAT, Judge Millane, considered how the provisions of the
Guardianship and Administration Act 2019 (Vic) operated to resolve whether or not an administration order could be made in relation the estate of a person with decision-making disabilities.
While the application before VCAT was for the reassessment of and revocation of the administration order on IFZ’s estate made before the coming into force of the
Guardianship and Administration Act 2019 (Vic), it involved an assessment as to whether or not IFZ had a disability because of which she did not have decision-making capacity in relation to a financial matter (or financial matters) as defined in the 2019
Act.
At the time of the decision, 2020, IFZ was a 90-year-old widow. She had been born in Greece and educated there up to grade two in primary school. Her parents died when she was seven. She moved to Australia in the 1950s as part of an arranged marriage that lasted until her husband’s death in May 2012. Her husband had also emigrated from Greece. They had two children, a son who was born in 1958 and a daughter, who was born in 1966.The son was married and it was his wife who made the application for reassessment and revocation of the administration order in relation to IFZ. IFZ’s daughter is also married.
IFZ spoke limited English and she could not read or write in English. She stated that she could read Greek until the onset of cataracts in mid-2016.
In 1973, IFZ and her husband commenced what became a successful cake shop business, which they operated as a partnership until her husband’s death. In 1991 their son joined the partnership and took over the running of the business following his father’s death. Their daughter commenced working in the business from about the age of 16.
From 1999 the business was conducted through a Family Trust, the Trustee of which was a company. Both IFZ and her husband were directors and shareholders of the Trustee company.
Based on accounts given by IFZ and family members, the family functioned on patriarchal lines. IFZ’s late husband made the decisions and ran the business, and IFZ deferred to and relied on him in the management of their joint financial affairs.
Nevertheless, she took a keen interest in the business and had been very much involved in its day-to-day running. She operated the till, waitressed, managed staff and baked. She retired from working in the business about 15 years prior to the hearing.
As already noted, the application before VCAT was brought by IFZ’s daughter-in-law, and was for the reassessment of and revocation of the administration order over IFZ’
s estate. The case for revocation was essentially that IFZ did not have a disability that affected her decision-making capacity in respect to any financial matter.
IFZ’s daughter’s position was that the application lacked merit and that the administration order should remain in place. The hearing was to determine that question.
Five expert witnesses prepared reports and gave evidence at the hearing to determine whether IFZ had a disability. A set of questions, agreed between the parties, to be considered were:
- Does IFZ have a disability, as defined in section 3? 1 If yes, what is it?
- Why do you consider she does or does not have a disability?
- In your opinion, does she not have decision-making capacity in relation to financial matters relevant to her situation because of any disability?
IFZ’s financial situation was summarised as including interests in residential and commercial properties, held by her personally, as a director of a company and through the family trust, in Australia. Some properties are subject to diverse forms of mortgages. She also has a personal interest in a property in Greece.
Various neuropsychological, psychometric testing and clinical evaluations were conducted to determine IFZ’s capacity. A consultant neuropsychologist and a clinical psychologist gave evidence that IFZ did not have a relevant disability. A psychiatrist of old age, a clinical neuropsychologist and a consultant clinical psychologist gave evidence that IFZ did have a relevant disability.
Millane J gave detailed consideration to the evidence of all five health professionals; and after doing so found that she was comfortably satisfied that for the purposes of the
Act, IFZ had a disability in the form of a mild cognitive impairment.
Millane J went on to point out that; “whilst IFZ’s disability is characterised as a ‘mild’ cognitive impairment, section 5 of the
Act requires evaluation by reference to the impact of IFZ’s disability on decision-making capacity, not the description of the disability”.
She continued by stating that she was comfortably satisfied that the nexus required by the
Act between the disability and decision-making incapacity in relation to financial matters in relation to which the order for administration (had been sought and obtained), had been clearly established by the available evidence. The opinion of the clinical neuropsychologist in particular and also the consultant clinical psychologist’s opinion were important in this regard.
Millane J was also satisfied that, in keeping with the protective object of
Act, in IFZ’s case vulnerability to undue influence was a relevant circumstance in the evaluation of decision-making capacity and in determining the causal nexus between disability and decision-making incapacity.
She was also comfortably satisfied by the evidence that IFZ’s vulnerability to exploitation was exacerbated by the concreteness of her thinking, her propensity to have categorical perceptions of her children and persons such as (the current administrator), as well as her difficulties in recollection, and in being able to undertake a process of comprehensive and rational reasoning about options open to her. Millane J also concluded that, whilst a multiplicity of factors likely contributed to IFZ’s vulnerability and decision-making incapacity, the attributes of IFZ’s disability acted to heighten her vulnerability to undue influence and exploitation.
In order to prepare the way for the order to follow, Judge Millane noted that she was satisfied that IFZ’s decision-making incapacity related to her financial estate as a whole and was not temporary. She stated that she made no assumptions about decision-making capacity based on IFZ’s appearance or the wisdom of her decisions. However she also noted that, given the rigidity of IFZ’s thinking style and her apparent inability to use or weigh information relating to decisions about financial matters involving her son, [Millane J] was not satisfied that, even with practicable and appropriate support it would be possible for IFZ to make decisions in relation to her estate as a whole.
This last finding meant that Millane J was satisfied that VCAT would not be able to appoint a supportive administrator for IFZ as she could not meet all the criteria for having a supportive guardian appointed for her.
Millane J then adjourned the application so that a hearing date could be arranged for the purpose of hearing and determining the additional matters required by the
Act before an order appointing a decision-making administrator could be made.
While this case demonstrates that proof of the causal nexus between the disability and decision-making incapacity in relation to financial matters is an essential prerequisite for an administration order to be made, it also demonstrates that vulnerability to undue influence can be a relevant circumstance in the evaluation of financial decision-making capacity and in determining the causal nexus between disability and decision-making incapacity.
As a 2006 decision from the Tasmanian Guardianship and Administration Board shows, getting into serious financial difficulties because of drinking and gambling addictions will not necessarily prove incapacity and inability to make reasonable financial judgments. In that case the medical evidence indicated that any incapacity that the person the hearing was about had was likely to be due to alcohol use rather than being due to dementia or brain injury. If the person were to stop drinking altogether, then it would be likely that there would be very little residual incapacity and that the person would “be able to attend to all normal functions at all times”.
On the disability issue the Board stated:
The Board was not satisfied that when [the person the hearing was about] is sober, he is a person with a disability; that is the Board did not receive any conclusive evidence that [the person] has experienced any absence, loss or abnormality of mental, psychological, physiological or anatomical structure or function. Even if we were satisfied that there may be an underlying depression or early stage brain damage, we could not be satisfied that by reason of that disability he is incapable of making reasonable financial judgments.
In a 2020 case, NCAT committed the management of most of TZF’s estate to the NSW Trustee and Guardian prior to a mediation in relation to physical and emotional abuse he had suffered and involving the State of New South Wales.
At the time of the application,
TZF was 21 years of age. He was a young Aboriginal man who had had limited opportunities for education. He had been diagnosed with persistent depressive disorder, obsessive compulsive disorder, polysubstance abuse disorder and mild intellectual impairment. The evidence was that he engaged in impulsive behaviour, had significant issues with regards to addiction and poor affective regulation. He had learning difficulties, problems understanding complex, written and verbal material.
It was anticipated that he would receive a substantial sum as a result of the mediation or other legal processes that he would not be able to navigate himself. Given that he was likely to receive a substantial sum as a result of processes that were about to commence, he would also at risk for exploitation and would not be capable of managing his funds independently. The belief by others in his life that he would not be able to manage these matters himself led to this application.
Having considered these and the other matters required under the relevant legislation, NCAT was satisfied that TZF was incapable of managing his affairs, and as noted above, committed the management of most of TZF’s estate to the NSW Trustee and Guardian. NCAT decided to exclude Centrelink benefits and employment income from the financial management order, and to review that order in two year’s time.
8.11.7 The need criterion
In New South Wales, Victoria, Tasmania and Western Australia, the Northern Territory, and although using different language, Queensland, South Australia and the Australian Capital Territory, the tribunal or court making the order has to be satisfied that the person the hearing is about is in need of another person to manage their financial affairs before it may make an administration order in relation to that person.
As already noted, Cavanough J of the Victorian Supreme Court has stated that, generally speaking, the question of “need” is answered primarily by reference to the availability or otherwise of alternative arrangements outside administration (such as family support) to compensate for or deal with the person’s identified “inability”.
The
Guardianship and Administration Act 2019 (Vic) confirms this approach as it requires VCAT to consider the following, among other things, before making an administration order:
- the will and preferences of the person the hearing is about (so far as they can be ascertained); and
- whether decisions in relation to the financial matter (or matters) for which the order is sought may more suitably be made by informal means; or may reasonably be made through negotiation, mediation or similar means.
On the question of the need for an administrator criterion and the least restrictive alternative criterion, Underwood J of the Tasmanian Supreme Court noted in a 1998 case that once it was established that the person the hearing was about was under a disability and because of that was unable to make reasonable judgments about matters relating to all or part of their estate, it would almost invariably follow that there was a need for an administration order. However, because Parliament had directed the Tasmanian Guardianship and Administration Board to consider, not only the need for an administrator to manage and protect the estate, but also all the other needs of the person the hearing was about, if after having done this, the Board reached the view that all the person’s needs could be satisfied by means less restrictive of their freedom of action and decision than would be the case if an administration order was made, then an administration order should not be made. Underwood J commented that his construction reflected the philosophy apparent in the
Guardianship and Administration Act 1995 (Tas) namely that control over and restriction on a person under a disability is to be kept to a minimum.
Underwood J’s approach was followed in Western Australia in 2001 in a case decided by a panel the then Guardianship and Administration Board of Western Australia which included its president and deputy president.
However, the Western Australian Board expanded on Underwood J’s views. They noted that while the need for an administrator (or guardian) would usually follow from the existence of disability, they stressed that the mere fact that a person has a disability that makes them unable to make reasonable decisions does not automatically mean that they are “in need of an administrator” (or guardian). The person may have no assets that require administration or their assets may be in a joint account which their spouse can access and use for the person’s benefit. Their pension may be sent by Centrelink to a nominee to use for the person’s benefit. The person may have appointed an attorney under an enduring power of attorney while they were still capable or a formal trust or court order may be in existence, avoiding the need to appoint an administrator.
The Western Australian Board also noted that the phrase "needs of the person" in the
Guardianship and Administration Act 1990 (WA) was the same as that term in the Tasmanian
Act as interpreted by Underwood J, but took the matter further.
That Board noted that the term “needs of the person” was of wide import and encompassed all the wants and necessaries of the person. The Board also noted that there was a two-step process. The tribunal deciding the matter had first to determine whether there was a need for an administrator (or guardian) and then move on to the issue of whether, notwithstanding the absence of any formal legal authority to deal with the affairs of the person, the needs of that person could, nevertheless, be met under informal arrangements which were less restrictive of the person's freedom of decision and action.
The Board continued:
The first step is the question whether the basic requirements for making an order have been satisfied, that is, whether an order could be made on the facts of the particular case. The second … is the question whether there is any alternative to making an order, that is, whether an order should be made.
It is suggested that the same approach applies as a result of the legislative provisions and common law applicable in the other States and Territories of Australia.
It was the established practice of the then New South Wales Guardianship Tribunal that if there were currently satisfactory informal arrangements in place for the management of an incapable person’s estate and these were continuing to operate and would be able to continue to operate into the foreseeable future, then there would be no need to make an administration order. Young J supported that approach in a case in which he noted that when a tribunal or a court is exercising its discretion as to whether or not to make an administration order, it should bear in mind that ordinarily members of the community consider that (the appointment of a family member as administrator) or the appointment of an outside manager is a measure of last resort.
The recent reform of powers of attorney legislation in some Australian States, particularly in relation to enduring powers of attorney, had as one of its goals the encouragement of people to make enduring powers of attorney in anticipation of a time when they might lose their decision-making capacity either temporarily or permanently. By appointing an attorney under an enduring power of attorney, the appointor (sometimes called the principal or the donor) has the dignity of appointing the person they want to manage their financial affairs when they are incapable of or no longer wish to manage those affairs.
While this will work well in most cases, there will be occasional difficulties. Enduring powers of attorney are discussed in Chapter 10.
However, as Cohen J of the Supreme Court of New South Wales pointed out in a 1998 case, that where a now incapable person’s solicitor is also their attorney, it is difficult not to have a conflict of interest. One difficulty is that the solicitor would have no one who could give them instructions about their charges and no one would be able to authorise the payment of the fees which they might charge. Cohen J considered the “checklist of considerations” summarised below at 8. 11. 13, particularly the advantage of appointing the now NSW Trustee in these circumstances. He declared the appointor incapable of managing her affairs, ordered that her estate be subject to management under the since repealed
Protected Estates Act 1983 (NSW) and ordered that the then Protective Commissioner (now NSW Trustee) be appointed manager of her estate.
In relation to the appointment of professionals as attorneys under enduring powers of attorney he stated, in particular, that:
In any event I think a professional person who becomes an attorney is put in a very difficult or even impossible situation.
In Queensland and the Australian Capital Territory the need criterion is expressed as the needs of the incapable person not being met without the appointment of an administrator.
Nevertheless, the same considerations that lead a tribunal or court to be satisfied as to the need for an administration order in the other States and the Northern Territory seem to be relevant in Queensland at least. There, in a 2003 case, the tribunal that is now QCAT was satisfied that there was a need to appoint an administrator for the person the hearing was about because without an appointment his needs would not have been adequately met and his interests not adequately protected. The medical evidence showed that he was unable to manage his own finances. There were concerns “that other people could take advantage of [the person] if they got hold of his details” and there was a substantial debt owing on his car that had to be addressed.
8.11.8 The best interests criterion
There is a "best interests" or "interests" criterion to be met before an administration order is made in all the Australian jurisdictions except Victoria and South Australia and the Supreme Court and Mental Health Review Tribunal in New South Wales.
In Western Australia the best interests criterion is found in the principles of the
Guardianship and Administration Act 1990 (WA).
However, WASAT and the Supreme Courts of at least Western Australia, New South Wales and Tasmania have sought to give content to the concept of best interests in the context administration (financial management) orders. They have noted that in this context the concept of best interests is individualistic in its scope. The paramount concern is the overall interests and separate and independent welfare of the individual who the subject of the application for an administration order. WASAT has pointed out that it is not its concern how the estate of the person for whom an administration order is made is distributed upon their death; It is their financial needs during their lifetime to which WASAT must direct its attention.
In Victoria, the amended
Guardianship and Administration Act 2019 (Vic) no longer examines the best interests of the person under administration, but instead takes into account the “will and preferences” of the represented person. This has been highlighted as a general principle under the
Act whereby, “a person with a disability who requires support to make decisions should be provided with practicable and appropriate support to enable the person…to express the person’s will and preferences”
and that “the will and preferences of a person with a disability should direct, as far as practicable, decisions made for that person”
Similarly, this has been further reiterated under the decision-making principles of the
Act in Section 9, whereby a decision-making administrator making a decision for the person for whom they have been appointed administrator (or a supportive administrator carrying out his or her functions) must have regard to the following principles:
- they should give all practicable and appropriate effect to the will and preferences, if known, of the person for whom they have been appointed administrator;
- if they are not able to determine what the will and preferences of the person for whom they have been appointed administrator are, they should give effect as far as practicable in the circumstances to what they believe what that will and those preferences are likely to be, based on all the information available, including information obtained by consulting the person's relatives, close friends and carers;
- if they are not able to determine the person’s likely will and preferences, they should act in a manner which promotes the personal and social wellbeing of the person for whom they have been appointed administrator;
- if the person for whom they have been appointed administrator has a companion animal, they should act in a manner that recognises the importance of the companion animal to that person and any benefits that person obtains from the companion animal; and
- they should override the will and preferences of the person for whom they have been appointed administrator only if it is necessary to do so to prevent serious harm to that person.
In a 1986 case involving a young man blinded and significantly brain damaged in a motor vehicle accident the question was whether to appoint as financial managers of his estate his parents and carers or to commit his estate to the management of the then Protective Commissioner. Citing English and New South Wales cases as authority, Powell J said:
It is … a commonplace that questions arising for determination in the Protective Division of the Court are determined solely by reference to the interests of the particular defendant, the Court's overriding duty being to ensure that that defendant's estate is so managed as to serve that defendant's best interests.
Young J has taken the view that the consideration of “best interests” in relation to administration orders must include taking into account the welfare, health and well-being, in a wide sense, of the person the hearing is about. Also, what is in their interests means what is for their personal benefit and not for the benefit of their family or friends or estate.
8.11.9 Onus of proof
In the courts the onus of proof lies on the person applying for the order to be made, or for it to be revoked.
However, if a tribunal conducting its proceedings in a less formal manner, taking a more inquisitorial approach and informing itself of the matters to be decided in the manner it thinks fit that is consistent with the requirements of procedural fairness, it will be up to the tribunal to be satisfied that the statutory criteria have been met rather than the applicant having to prove that they have been.
8.11.10 Standard of proof
The standard of proof required in both courts and tribunals is on the balance of probabilities tempered by the effects of the nature of the application, the subject-matter of the particular case, the gravity of the matters alleged and the strength of the evidence.
However, when dealing with applications to revoke administration orders, the Supreme Court of New South Wales has taken a careful approach to people awarded substantial damages for brain injuries who subsequently seek to be freed from administration in order to spend the money awarded. As Young J pointed out in a 1999 case, the court is always wary when someone awarded damages for permanent brain damage in a motor vehicle accident case a few years later wishes to take up the position that, having got those damages they should now be free to spend them.
In a 2000 case Young J noted that a person who wished to show that seven years after the damages were assessed for head injuries, things have changed to such an extent that despite their injuries, they were then able to manage their own affairs bears a very heavy onus.
In a 2005 case, Campbell J of the Supreme Court of New South Wales pointed out that in deciding whether an applicant for revocation of an administration order had discharged their onus of establishing that they were capable of managing their own affairs, it was legitimate to take into account the seriousness of their making a mistake which wasted capital. A very important factor was the extremely long pension preclusion period, often many decades and in that case nearly 22 years. Campbell J conceded that any member of the community managing their own affairs is at some risk of making a financial mistake, but noted that for most members of the community the seriousness of making such a mistake is alleviated by the fact that, even if the mistake is a very serious one which results in their bankruptcy, they still have, in many cases, the capacity to earn a living up to retirement age, and usually, if they are unable to earn their living or are past retirement age, they have a right to support of a rudimentary kind from social security.
8.11.11 Who to appoint as administrator – a “checklist” of considerations
In the leading New South Wales Court of Appeal case on the appointment and removal and replacement of administrators, Kirby P noted that it was inappropriate for the discretion to appoint or remove administrators to be confined by rigid rules or even “guidelines” expressed in general terms.
Nevertheless, he did suggest, but without limiting the possibility of other applicable considerations, a checklist of considerations that might be kept in mind.
Since Kirby P created his checklist of considerations in 1993, despite his warning that it was inappropriate for the discretion to appoint or remove administrators to be confined by rigid rules or even “guidelines” expressed in general terms, other New South Wales judges have, through other cases, morphed the “checklist” into “guidelines” and thence to a set of “uncontroversial propositions”. These are propositions are discussed, and an abbreviated version of them is set out in 8.3.13.3.2 above in material about the criteria to be used in determining applications for the removal and replacement of Supreme Court appointed managers or NCAT appointed financial managers.
It is suggested that these are relevant to all Australian jurisdictions, but must be read so as not to change or reduce the effect of any statutory criteria dealing with the appointment of administrators. The checklist deals with considerations relevant to the appointment of both private persons and public bodies as administrators. It is summarised below as follows:
- The appointment of an administrator invites the exercise of a discretion that derives from legislation and must be exercised keeping in mind the purposes of the legislation. The exercise of the discretion should not be narrowed to apply only to certain circumstances because other discretions were so limited because of other legislation,
- An application for the removal of a person validly appointed as a manager will not invoke the same discretion as the initial appointment of a manager. It will normally be necessary for the party seeking a change in the status quo to show some reason why the court or tribunal dealing with the matter should do so,
- The abiding rule in the exercise of powers under guardianship and administration legislation is the achievement of best interests of those for whom guardianship or administration orders have been made,
- Where it is shown that a person appointed as manager is incompetent or has acted in a relevant way improperly or unlawfully, the court or tribunal may terminate the appointment and appoint another manager,
- Ordinarily, a person who would face a conflict of interest and duty would not be appointed a manager of a person's estate. However, in some family situations, inter-related property interests may present such conflicts. Sometimes they will be more apparent than real. They do not necessarily present an absolute bar to appointment as a manager for otherwise this would exclude from consideration a range of family members who were in every other way appropriate,
- When weighing up the competing advantages of appointing a family member or the statutory body authorised to act as an administrator, for example the State Trustees Ltd in Victoria, the (now NSW Trustee) in New South Wales, the Public Trustee in Queensland, South Australia, Tasmania, Western Australia and the Australian Capital Territory, or the Public Guardian or Public Trustee in the Northern Territory, to manage the estate of a person incapable of managing their own financial affairs, the court or tribunal may take the following into account as relevant:
- the appointment of the public official has the following advantages:
- the manifest independence of the statutory office;
- the advantages of a dispassionate and neutral approach where there is a potential for family conflict and sharply divided views concerning the best interests of the person;
- the expertise of the staff of the statutory body, their experience in managing estates, the know how accumulated by them over time and their impeccable reputation; and
- the security provided to the estate against loss or damage
- the appointment of a family member has the following advantages:
- the size and complexity of the estate: in a smaller estate it may often be appropriate to appoint a family member who will be entirely familiar with the assets and liabilities and readily able to manage them with greater economy and possibly free of cost to the person. (Public officials are entitled to and ordinarily do recover their fees.),
- the capacity of the incapable person, to interact with their, so far that as possible, they may remain in charge of, or at least be able to influence, the broad directions of the management of the estate,
- the ingredient of love and affection and unquestioning devotion to the person which an appropriate family member can add to the task of management. Whilst the office of manager is, by its definition, concerned with proprietary and financial matters and involves the prudent control of the property and like interests of the protected person, in the nature of things the manager of the estate of an incapable person is more likely than a general trustee or receiver to become involved in decisions which affect that person's quality of life. A lifetime knowledge of the person and a devotion to his or her interest may contribute to that quality. It may more readily be secured by the appointment as manager of a family member with the requisite knowledge and motivation;
- any special features of the case which may require particular attention, and
- any special qualities of the applicants to act as managers will be relevant.
- Different considerations may affect the management of an estate comprised of few liquid assets when contrasted to one which enjoys substantial and regular income. The court or tribunal appointing a manager from the family of the incapable person, should satisfy itself that the income and (where necessary) the capital assets of that person's estate are devoted to the incapable person's interests. Especially where the bulk of the estate is made up of a verdict calculated by reference to the protected person's expectation of life and as compensation for injuries, disabilities, pain and suffering and loss of the enjoyment of life it is appropriate that the capital and income should be expended, as intended, to advance the quality of life of the incapable person rather than to increase in due course the assets of their family.
Kirby J noted that he may have overlooked considerations which would be relevant to particular cases and then repeated that it was undesirable that, by rules or guidelines, the broad discretion of appointment and revocation should be controlled.
Particularly when dealing with an initial application for an administration order but also relevant when reviewing an order, dissension in the family, provided that the conflict goes beyond “typical family differences”, can be a reason a public official may be appointed administrator over a relative in the best interests of the person the hearing is about. So can the lack of business ability on the part of the relative proposed as administrator. The best interests of the person the hearing is about remains the abiding rule and it is not necessary for the tribunal or court dealing with the matter to expressly find that the relative proposed as administrator was deficient in their ability to act as administrator before moving to appoint a public official or a non-relative.
In what could be seen as a high-water mark example of the discretion to replace a manager, in 2000 Hodgson J of the New South Wales Supreme Court found that the relationship between the mother and primary carer of a man the management of whose estate had been committed to the (now NSW Trustee) had broken down and could not be restored. This had adverse consequences for the man and his estate because his mother could not deal directly with the then Protective Office. She engaged solicitors to do this, incurring very substantial costs that were paid out of her son’s estate. Although Hodgson J found no material breach of duty by the then Protective Commissioner, he considered that the history of the particular estate did not suggest that there was any significant advantage to the man in retaining the then Protective Commissioner as manager, rather than appointing a reputable trustee company. Consequently he replaced the then Protective Commissioner as manager with a trustee company even though there was likely to be a small financial disadvantage to the estate and the possibility that the relationship between the mother and the trustee company could break down in the future. Hodgson J considered that on balance, the advantage in removing a manager outweighed any disadvantage involved in the appointment of the new manager.
In a 2002 case Windeyer J of the New South Wales Supreme Court followed Hodgson J’s approach, and replaced the then Protective Commissioner as manager with a trustee company.
He pointed out that it was not his intention to decide that an order for a change of managers was justified by annoyance or minor complaint or even a justified complaint. He noted that such matters were often able to be dealt with by the Court giving directions under the now
NSW Trustee and Guardian Act 2009 (NSW).
Windeyer J also noted that for general management of the estate of a sometimes difficult person, the long experience of the (now NSW Trustee) is valuable.
There were three matters that led him to change managers. The first was the lack of continuity of managers in the Office of the then Protective Commissioner which causes distress when relationships are built up and then severed without consideration of the effect on the person whose affairs are under management and their family or others who are providing services or support to them. The second was that the trustee company’s financial plan was likely to be more beneficial to the person whose affairs were under management than the then Protective Commissioner’s financial plan. The third matter was the uncertainty of the fees to be charged by the then Protective Commissioner.
This last matter has been resolved since Windeyer J’s decision. There is a cap on the fees that the NSW Trustee may charge, but he charges fees for specific services.
It is clear that the “checklist of considerations” is still very much in vogue as it is regularly discussed and referred to, and occasionally extended, in the case law.
The leading example is a 2013 case,
M v M. In that case, which involved the unopposed transference of the management of a young man’s estate from the NSW Trustee to the young man’s sister, Lindsay J of the Supreme Court of New South Wales noted changes of policy both in the legislation and in the roles of the executive and judicial arms of government in relation to the management of protected estates in New South Wales.
He then referred to a specific element of the policy change namely that in New South Wales the (new) social, economic and regulatory environment in which the estates of protected persons were managed would result in a migration from public to private management of protected estates and greater flexibility than before in changing management from public to private and vice versa.
He then went on to set out 20 propositions which he adopted as non-exhaustive “guidelines” [a “framework approach” or “checklist of considerations”] that, “might be borne in mind” when the Supreme Court [or NCAT] was considering substituting one [private or public] manager for another.
In a 2018 case ACAT noted Kirby P’s comment in the
Holt Case that the role of an administrator is not solely to carry out financial responsibilities, but also to ensure, that the person whose financial affairs are under management has a quality of life which is as beneficial to the person as the resources available to the manager permit.
Also in that case, ACAT gave detailed consideration to the decision-making principles it had to follow in appointing a manager (and guardian) and to the “checklist of considerations” developed first by Kirby J when he was President of the NSW Court of Appeal and, more recently, by Lindsay J of the Supreme Court of New South Wales, as already set out above
In another 2018 case, NCAT noted that before appointing a private person as financial manager (administrator) it had to be satisfied that the person seeking appointment was willing to act and was suitable for appointment. It also noted that, while there were no express criteria for determining suitability in the relevant legislation, NCAT normally ensure that the candidate for appointment had: 1. reasonable familiarity with the subject person’s estate; 2. a reasonable level of understanding of how to deal with and account for other people’s money. This can usually be demonstrated through their having held a relevant position in a corporation or business (including as an owner or employee), or in a not-for-profit organisation such as an industry association or a trade union, a community or sporting club or association. In some cases this can be satisfied by demonstrating substantial experience in relation to the subject person’s own affairs; 3. no conflict of interest which would prevent their appointment on the basis that they might not be seen to be acting solely in the interests of the subject person; and 4. nothing in their public record, in particular by way of any criminal or bankruptcy proceedings or orders, which might render them unsuitable for appointment.
In 2018 the “guidelines” were also discussed by an Appeal Panel of NCAT.
8.11.12 Appointing private managers
In a 2000 case, Young J of the New South Wales Supreme Court pointed out that:
[I]f a responsible member of the incapable person's family, with the consent of other members of the family and particularly when joined with a person with financial expertise, seeks to be the manager, such an order will, at least at present, usually be made almost as of course.
Nevertheless, before a court or tribunal may appoint them as an administrator, it has to be satisfied that they are a “suitable person”. In the same case the Young J said:
In the case of a relative, the Court must look to see that there are minimal conflicts of interest, or, if conflicts of interest cannot be avoided, that they are properly dealt with. In the case of a private manager who purports to have financial expertise, the Court needs to be satisfied not only of that person's good fame and character and of his or her ability generally to manage funds, but also that that person has a good conception as to what is required of a fund manager.
In another case he also decided in 2000, Young J was more specific about what a court or tribunal considering appointing a private manager had to be satisfied about, particularly if the estate involved a large amount of money. He said that the court or tribunal had to be satisfied that:
- any “so called” financial expert has, in fact, expertise to allow him or her to assist the incapable person in the circumstances of the particular case; and
- any relative has either no conflicts of interest or, alternatively, the conflicts of interest are able to be handled by appropriate guidelines from the (now NSW Trustee).
Young J also noted that there would always be some conflict arising in the management of the estates of incapable people. Some of these may be benign conflicts as shown in the English case
Re W. Other potential conflicts can arise from deciding whether small donations should be made to charities or whether gifts should be made to relatives for Christmas and things of that nature. Young J noted that most of those can be dealt with sensibly by directions of the (Supreme Court or now NSW Trustee) or by management plans developed by the (now NSW Trustee) where the Guardianship Tribunal makes the financial management order.
In a 2011 case Hallen AsJ (as he then was) of the NSW Supreme Court stated:
It would be unwise to attempt any definition of the matters that may legitimately be enquired into to determine whether the applicant is suitable. Each case must depend on its own circumstances. Needless to say, however, the Court must consider, at least, the proposed manager’s character, honesty and ability to manage, diligently, the managed person’s property in the managed person’s best interests.
Young J also noted that while it was “most acceptable” that a parent who is the financial manager of a person who cannot manage their own affairs lives in the same house as their adult child rent free, care needs to be taken that the manager is not receiving a substantial benefit at the expense of the incapable person.
Some potential conflicts of interest or conflicts within families do not prevent the appointment of a family member as administrator while others make the appointment of an independent public official as administrator essential. It depends on the facts in each case.
For the assistance of financial managers generally, Young J also noted the Supreme Court “does not countenance” people obtaining damages on the basis that certain improvements to their house are absolutely necessary and then not substantially carrying out those improvements with the verdict money they receive.
When a State or Territory tribunal dealing with an application for an administration (financial management) order, it will consider the views, wishes and preferences of the person whose financial affairs, either in whole or in part, are the subject of the hearing. However those views, wishes and preferences will not always be given effect to. For an example also see,
NM [2020] WASAT 134.
8.11.13 Effect of administration orders
The established position in all of the Australian States and Territories, as a matter of statutory interpretation, is that when an administration order, or its equivalent
, is made, the person or body appointed to manage the estate has the power to administer all of the estate (or all financial matters) or that part of the estate made the subject of the order or all aspects of decision-making in relation to the estate that the appointee is given authority to manage.
During the time that when an administration order or its equivalent was made and all of the person’s estate (or financial affairs) were placed under management, the established position was, as stated by the NSW Court of Appeal in the
David Case, in 1993, that the effect of an administration order made by a court or tribunal was that the power of a person whose financial affairs are placed under administration (a protected person) to deal with their estate was suspended, for the duration of the order.
However, as a result of the developments in the understanding if decision-making capacity, and in particular the fact that it can be decision-specific, together with the impact of the Convention on the Rights of Persons with Disabilities, changes have been made to legislation, and new legislation enacted providing for tribunals with jurisdiction to make administration orders or their equivalents that relate to some, but not all of a person’s estate or financial affairs.
As a consequence, the position now is that where less than the whole of a person's estate or financial affairs is made the subject of an administration order, the person's right to manage their own financial affairs is suspended only in relation to that part of the estate, or those financial matters, that are set out in the orders made by the tribunal. The person remains able to deal with and make decisions about that part of the estate or those financial matters not covered by the orders. This is set out in the Queensland Court of Appeal's 2010 decision Bergmann v Daw which is discussed in detail below in 8.11.13.1.
The estate of the person does not vest in the administrator. It remains the property of the person whose property or financial affairs the administration order, or its equivalent, is about. This is the position established in the common law, but it is specifically referred to in the legislation of some of the States and the two Territories.
8.11.13.1 The statutory interpretation basis for the effect of administration orders and their equivalents
Sheller JA, with whom Priestly JA agreed, gave the leading judgment of the majority in the
David Case. He was of the opinion that an inevitable consequence of the then Guardianship Board, now NCAT, committing the management of Mrs David’s estate to the then Protective Commissioner, now NSW Trustee, and vesting in that person the power, authority and duty to manage Mrs David’s estate, was that the right of the person whose estate it was, Mrs Davis, to manage her property and financial affairs, was suspended. Sheller JA also stated that to construe the legislation as enabling the person whose estate was under management to deal with the property the management of which had been committed to the Protective Commissioner was to deny the plain meaning of the legislation. He continued that Parliament could not have intended something which was contrary to the language used, namely to give the Protective Commissioner the power duty and authority to manage the estate while, at the same time, leaving the person whose estate was under management with a right to defy that authority.
To support of his opinion, Sheller JA referred to the 1982 decision of Beach J of the Supreme Court of Victoria.
Although the facts in that case were different from those in the
David Case, they were similar to them and arose in a similar context. Beach J, like Shellar JA after him, considered that the approach of the English Court of Appeal was appropriate to follow.
To paraphrase Beach J’s adoption of the English approach, the way it is put is that the right of a person of unsound mind to manage their affairs is suspended by the [administration] order and that the sole management of the estate is committed to the [administrator]. If this were not so, an unsatisfactory result would follow, namely, that the affairs of the person of unsound mind, although put under the control of the [administrator], would in fact be controlled by two persons--namely, the person of unsound mind and the [administrator].
That was a state of things which Beach J considered that the courts ought not to recognise if that could be avoided. It was his opinion that the reasoning of
In re Walker applied and that that decision ought to be treated as extending to persons in the position of the plaintiff. Consequently, his opinion was that any document signed by a person whose affairs were being administered by another whereby that person sought to deal with his property was void and of no effect.
Beach J’s opinion was adopted and applied with approval by the Victorian Court of Appeal in 2005 and by Nicholson J of the Federal Court of Australia in 2007.
It should be noted that the statutory interpretation approach established in England was applied by Beach J to the Victorian legislation and by the New South Wales Court of Appeal to legislation applying to a similar situation in the
David Case and then by the Victorian Court of Appeal in the
McVey Case. The fact that both the fact situations and the wording of the legislation was different in each case did not deter the judges from applying the same interpretation as to the effect of the legislation namely, that the right of the person whose estate was under the management of another person or organisation was suspended during the currency of the relevant order. Nicholson J took the view that he should follow the reasoning in the
McVey Case as there was no apparent legal reason for not doing so. In particular, he agreed that any differences in the wording of the legislation under consideration in the case before him and that considered in the
McVey Case did not provide a foundation for making the reasoning in that case inapplicable to the case before him.
In a 2010 case in the Queensland Court of Appeal, the issue was put beyond doubt.
When an administration order, or its equivalent namely a financial management order, a management order, a protection order or a guardianship order for financial matters, is made, the person or body appointed to manage the estate has the power to administer all of the estate (or financial matters) or that part of the estate made the subject of the order or all aspects of decision-making in relation to the estate that the appointee is given authority to manage.
Muir JA, with whom McMurdo P and Holmes JA agreed, pointed out that it was necessarily implicit in two sections of the
Guardianship and Administration Act 2000 (Qld) that an administrator for all financial matters assumed the powers in respect of financial matters of the person in relation to whose estate the order was made, to the exclusion of that person, except to the extent that QCAT orders to the contrary. The first of these sections is
s. 12. It requires QCAT, before it appoints an administrator for a financial matter of a person, to be satisfied that:
- the person has impaired capacity for the financial matter;
- there is a need for a decision in relation to the matter; or
- the person is likely to do something in relation to the matter that involves, or is likely to involve, unreasonable risk to the person’s property; and
- without an appointment, the person’s needs will not be adequately met or their interests will not be adequately protected.
The second is
s. 33. It provides that unless QCAT orders otherwise, an administrator is authorised to do, in accordance with the terms of their appointment, anything in relation to a financial matter that the person could have done if they had capacity for the matter when the power was exercised.
In addition we note that
s. 5(d) states that the
Act acknowledges the right of a person with impaired capacity to make decisions should be restricted, and interfered with, to the least possible extent. And that s.147 states that a declaration about whether a person had capacity to enter a contract is, in a subsequent proceeding in which the validity of the contract is in issue, evidence about the person’s capacity.
Muir JA went on to note that if the
Act did not operate to deprive the person of the powers assumed by the administrator, the protection that s. 12 was plainly intended to provide to a person of impaired capacity would be negated in whole or in part. This was because there would be dual control over the person's financial matters - a result which the Legislature could not have intended. The financial wellbeing of the person with impaired decision-making capacity would be imperilled, for example, by the risk that the administrator and the adult could separately enter into transactions, such as separate contracts for the sale or purchase of the same property to different purchasers or from different vendors, which might expose the person the subject of the order to liability. He then went on to give some examples including that: where the incapacitated person's mental capacity was variable it may prove difficult for the administrator and third parties to determine whether the incapacitated person lacked relevant capacity at the critical time.
He then went on to note that it was implicit in ss. 5 and 6 of the
Act that a person with impaired capacity may, nevertheless, retain some decision-making capability, with or without support for decision making. In addition to s. 5(d), s. 5 acknowledges that:
- an person’s right to make decisions is fundamental to their inherent dignity;
- the right to make decisions includes the right to make decisions with which others may not agree;
- the capacity of a person with impaired capacity to make decisions may differ according to,
- the nature and extent of the impairment,
- the type of decision to be made, including the complexity of the decision and
- the support available from members of the adult’s existing support network;
- a person with impaired capacity has a right to adequate and appropriate support for decision-making.
Section 6 of the
Act seeks to strike an appropriate balance between:
- the right of a person with impaired capacity to the greatest possible degree of autonomy in decision-making; and
- their right to adequate and appropriate support for decision-making.
Muir JA noted that the words "that the adult could have done if the adult had capacity for the matter when the power is exercised" in s 33(2) of the
Act strongly implied that where an administrator was appointed in relation to a person’s financial matters, the person lacks capacity and, by inference, the power to make decisions about (all their) financial matters, (or those financial matters referred to in the orders appointing the administrator).
Muir JA also noted that the
Act contemplated that QCAT would identify in its orders:
- the extent of the interference with the impaired person's decision making capacity; and
- where appropriate, would address the question of decision making support.
8.11.14 Functions and powers of administrators
8.11.14.1 Does the administrator have all functions and powers that the person whose estate they are administering would have if they were capable?
In Queensland, unless the terms of their appointments limit them, administrators are authorised to do anything in relation to the estate they have been appointed to administer that the person whose estate it is could have done if they had capacity.
In New South Wales, the NSW Trustee may do all these things if appointed financial manager (administrator), subject to any limiting directions given to her by the Supreme Court in relation to a particular estate.
However, a private financial manager, as already noted at 8.3.11 above, has only those functions and powers given then in an order by the NSW Trustee.
The Supreme Court may also make such orders.
In the Australian Capital Territory, ACAT may give a person’s manager all the powers the person with impaired decision-making capacity would have in relation to their property if they were competent.
It is suggested that subject to any specific limitations in the legislation of the other States or the Northern Territory, administrators either automatically have, or may be given, by the relevant, tribunal, court or other authority any functions or powers the person whose financial affairs are under management would have in relation to their property either real or personal. These functions and powers are set out in relation to some of the States and Territories in 8.3 above, but the next section sets out the functions, powers and requirements of administrators that apply in Queensland. It is suggested that they are at least guidelines to administrators in the other States and the two Territories as to their functions and powers and as to how they should operate as administrators.
8.11.14.2 The functions and powers and requirements/obligations of administrators
For the assistance of family members and friends who are appointed as administrators in Queensland,
Guardianship and Administration Act 2000 (Qld) sets out a series of powers, functions and requirements of administrators.
As noted in the last section, it is suggested that these apply equally to administrators, financial managers and managers appointed in the other States and Territories of Australia. These are set out below.
Administrators must apply the general principles of the legislation under which they are appointed.
Administrators must exercise their powers and functions honestly and with reasonable diligence in order to protect the interests of the person whose estate they have been appointed to administer.
They must also exercise their powers as required by the terms of the order appointing them.
Administrators should avoid entering into transactions which would result in a conflict between the duty they owe as an administrator towards the person whose estate they have been appointed to administer and:
- their own interests, or
- the interests of those with whom they have a close personal or business relationship, or
- another duty they have as the person’s administrator.
An example of this is the administrator buying the car of the person whose estate they have been appointed to administer. Administrators should enter into such transactions only if authorised to do so by the tribunal or other body (in New South Wales the NSW Trustee) supervising their administration.
Where two or more persons are appointed as administrators of the estate of an incapable person, they should consult with one another regularly to ensure that the interests of the person whose estate they have been appointed to administer are not prejudiced by a breakdown in communication between them.
Because of this possibility, where there is conflict in a family relating to a person for whom an administration order is being made, careful consideration should be given before appointing as joint administrators those family members who are in conflict with one another or who may become so as they are representatives of differing factions within a family. This is particularly so in those States and Territories in which the joint managers “must concur in every act, matter or thing done in relation to the estate by a manager”.
In Queensland administrators have a right to all the information the person whose estate they have been appointed to administer would have been entitled to if they had capacity and which is necessary for the administrator to have in order to make an informed exercise of the particular powers they have as administrators. Also, if an administrator requests such information, a person who has custody or control of that information must give it to the administrator, unless the person has a reasonable excuse for not doing so.
Furthermore, if the person who has custody or control of the information does not give it to the administrator, the administrator may apply to QCAT for an order that the person give the information to the administrator. If QCAT makes such an order the person must give the information to the administrator unless they have a reasonable excuse for not doing so. A person has a reasonable excuse if giving the information might tend to incriminate them. This provision specifically overrides any restriction, in legislation or the common law, about the disclosure or confidentiality of information; and any claim of confidentiality or privilege, including a claim based on legal professional privilege.
The privacy legislation of the Commonwealth and some of the other States and Territories, is sometimes relied upon to deny administrators (and guardians) information they need to make the decisions they are authorised to make under the terms of their appointments. This is not the purpose of such legislation, but its drafting is usually complicated and its administration so conducted that authorised substitute decision-makers are sometimes denied necessary information with outcomes that contradict the intended effect of the modern guardianship and administration legislation.
The Queensland legislation also provides that where it is necessary or convenient for the exercise of power given to an administrator, they may execute an instrument with their own signature or, if sealing is required or seal; and do any other thing in their own name, provided that they execute the instrument in such a way that shows that they executed it as administrator.
Consistent with this approach, if an administrator is empowered to do a thing, they have the power to execute a deed to do the thing.
Private administrators are entitled to reimbursement from the estate of the person whose estate they have been appointed to administer for any reasonable expenses they incur while acting as administrator, while those who carry on businesses as administrators, trustee companies and Public Trustees are entitled to remuneration for the provision of their services.
Administrators must keep records that are reasonable in the circumstances and be able to produce them to their supervising authorities when asked to do so.
There are different rules in each State and Territory about the kinds of records administrators must keep and when they have to present them. However, administrators need to be able to show how they have been managing the estate they have been made responsible for. Even if the estate is that of a close relative or of a family member who has never been able to manage their own affairs, the estate remains the property of that person. It does not become the property of the administrator. They have no legal or equitable interest in the property, only the obligation to manage it in the best interests of the person the administration order is about. This is why administrators must keep the estate property separate from their own property, unless the administrator owns the property jointly with the person the administration order is about.
Administrators may invest money from the estate they are administering but only in investments that a trustee investing under trustee legislation may invest in. However, they may continue the existing investments of the person whose estate they are managing and taking up rights to issues of new shares, or options for new shares, arising from existing shareholding.
In some States and Territories they may obtain approval to invest outside the ambit of the trustee legislation.
Administrators may give gifts from the estates they are managing but usually only if the gift or donation of the nature the person whose estate is being managed made when they had capacity or was a gift or donation of the nature the person might reasonably be expected to make and the gift’s value is not more than what is reasonable having regard to all the circumstances, particularly the person’s financial circumstances.
Administrators may provide from the estates they are managing for the needs of the dependants of those whose estates they are managing. However, what is provided must not be more than what is reasonable having regard to all the circumstances, particularly the financial circumstances of those whose estates they are managing.
It is well settled that where a person does not have the capacity to marry, no court or tribunal or substitute decision-maker such as an administrator or guardian can consent to marriage on behalf of an adult who lacks the capacity to marry.
However, the question has arisen as to whether an administrator may commence proceedings on behalf of the person whose estate they are managing to dissolve a marriage or have it declared void or seek a property settlement or a legal separation.
This matter is discussed in Chapter 2.5 and 2.6.
The role of the administrator comes to an end at the death of the person whose estate they are managing and their affairs are then administered by their executor or by anyone else authorised by the relevant Supreme Court to manage their estate.
However in some States, the administrator has some leeway to continue to act after death.
8.11.14.3 Administrators for legal proceedings
In Western Australia, WASAT may make plenary administration orders or orders limited to specific functions. In 2001 the then Guardianship and Administration Board of Western Australia noted:
If the only issue is the conduct of litigation which is either underway or contemplated, the usual order of the Board is to appoint a limited administrator with the authority to conduct legal proceedings on behalf of the represented person (the person the hearing is about).
For those States and the Australian Capital Territory where it is possible to appoint an administrator for the purpose of conducting or defending litigation on behalf of an incapable person, the recent consideration of capacity to litigate by English judges may be useful. The settled view in England is that the question of capacity to litigate is not something to be determined in the abstract. The focus has to be on the particular piece of litigation in relation to which the question of capacity arises. The question is always whether the person has capacity to litigate in relation to the particular proceedings in which they are involved.
The issue is addressed by asking three questions:
- does the litigant have the mental ability to recognise the problem,
- can the litigant obtain and receive, understand and retain relevant information, including advice, and
- can the litigant weigh the information (including that derived from advice) in the balance in reaching a decision.
In a 2002 case Chadwick LJ rejected the submission that a person who was incapable of taking investment decisions in relation to a large sum received as compensation would be held, for that reason, to be incapable of pursuing a claim for that compensation. He accepted that capacity to pursue a claim required capacity to take a decision to compromise that claim and that that capacity to compromise required an understanding of what the effects of a compromise would be. To be capable of litigating the person would have to understand that the compensation monies would have to be dealt with so as to provide for the future. But the person would not have to have an understanding of how that would be done.
In New South Wales, if the estate of an incapable person has already been committed to the management of the NSW Trustee, she may bring or defend legal actions in any court or tribunal in New South Wales on behalf of the person whose estate the order is about.
If a private person has been appointed as the manager of an incapable person’s estate, the NSW Trustee may authorise the manager to bring or defend legal actions in any court or tribunal in New South Wales on behalf of the person whose estate the order is about.
Now that NCAT has an unencumbered discretion to exclude specified parts of an estate from the administration order, it may be able to make an order limited to the administrator bringing or defending legal actions in courts or other tribunals.
Nevertheless, the practice of applying to the court or tribunal in which the litigation is to be commenced or is already under way to appoint another person to commence or defend legal action brought by or against the incapable person as the incapable person’s tutor, next friend or litigation guardian may be continued.
8.11.14.4 Payments for past care given gratuitously
In a 2004 case in the New South Wales Court of Appeal, McColl JA noted that the decisions made by judges applying the common law were founded on the proposition that the courts exercised their protective jurisdiction to manage an incapable person’s estate for the benefit of that person, but took “a large and liberal” view of what that benefit was and that it included not only what may benefit the incapable person directly, but what that person “as a right-minded and honourable” would desire to do. Consequently, payments for past gratuitous care could be made, where appropriate, in the exercise of the court’s inherent jurisdiction but also in the exercise of its statutory jurisdiction.
8.11.15 Reviews of administration orders
The courts and tribunal empowered to make administration orders in the various States and Territories also have the power to review such orders and, and where they are provided, apply the statutory criteria that are set out for dealing with those matters. They will also apply the common law that has not been replaced by or rendered inappropriate by the legislation they operate under.
While some administration orders are revoked on review, in most cases the person the order is about remains incapable of managing their property and affairs and in need of an administrator for the rest of their lives. Usually an administration order, once made, remains the least restrictive way of achieving the best interests of the person the order is about. As already noted, the judges approach applications by those awarded substantial damages for brain injuries assessed to be permanent to have the administration orders in relation to them revoked with a degree of skepticism, particularly if the evidence indicates a tendency in the person to spend beyond the ability of their award to sustain or that the person has had a range of money-making plans and a disinclination to take financial advice.
The risk of being unable to obtain income support through the Australian social security system because of lengthy pension preclusion periods, is a particular problem for those who have received substantial awards of damages based on the likelihood that, because of their injuries, they would not be able to obtain or maintain employment. However, treating it as a legitimate matter to take into account in deciding whether an applicant for revocation of an administration order had discharged their onus of establishing that they were capable of managing their own affairs, raises the question of paternalism that concerned Cavanough J of the Supreme Court of Victoria and Miles CJ of the Supreme Court of the Australian Capital Territory.
As Cavanough J pointed out in the
XYZ Case, there are three separate and cumulative requirements for making an administration order, the first being satisfaction by the tribunal that the person the hearing is about is a person with a disability.
If this matter is not proved to the satisfaction of the tribunal deciding the matter, then the tribunal proceeds no further and dismisses the application. The question then becomes, if there is an application to review, rehear or reassess the order with a view to revoking it and the evidence satisfies the tribunal that the person is not currently a person with a disability, does this mean that the tribunal must revoke the order without considering any other matters including the risks to the person the order applies to of revoking the order?
It is suggested that the answer depends on the way the legislation of the particular State or Territory is framed. In Victoria, if Cavanough J’s opinion is applied to applications seeking revocation of an order, the answer would have to be yes. Tasmania’s legislation is very similar to that of Victoria on this matter, so the answer would be yes there.
In New South Wales the Supreme Court must, on application of the person the subject of the order be satisfied that they are capable of managing their own affairs, before it revokes the management order in relation to the person’s estate. While that requirement involves a consideration not only of the person’s disability but also the effect of that disability on their capacity to manage their own affairs, there has been a long-term view in New South Wales that if the person can show that they have now have the capacity to manage their own financial affairs, the Court (or the tribunal) dealing with the application must revoke the order.
As Young J pointed out in a 1999 case involving a woman whose financial affairs were committed to the then Protective Commissioner in 1990 as a result of injuries she received in a motor vehicle accident, whose preclusion period was over and who wanted to invest in a noodle business:
There is no room in the legislation for benign paternalism. A person is allowed to make whatever decision she likes about her property, good or bad, with happy or disastrous effect, so long as she is capable.
The Mental Health Review Tribunal (MHRT) may revoke an administration order it has made but only on the application of the person who is the subject of the order and who is a patient under the provisions of the
Mental Health Act 2007 (NSW) or was but has ceased to be such a patient. The MHRT may revoke the order if the order be satisfied that the applicant is capable of managing their own affairs. The MHRT may also revoke the administration order if it is satisfied that it is in the best interests of the person to do so.
NCAT may make the same orders as the MHRT, but may do so on the application of a range of applicants.
Note what are called administration orders elsewhere are called financial management orders in New South Wales.
Note the substantial discussion of these matters in 8.3.13.3 above.
In South Australia periodic reviews are reviews of the “circumstances” of the person who is the subject of the administration order. At the completion of this review, SACAT’s obligation is to revoke the order unless it is satisfied that there are proper grounds for the order remaining in force.
However separate applications can be made for variation or revocation of an administration order; but there are no criteria that have to be satisfied before a variation or revocation order may be made set out in the legislation.
This is probably because any number of circumstances could arise to make it appropriate to apply to SACAT to vary or revoke an administration order.
In the Australian Capital Territory applications may be made to ACAT for it to review an administration order to consider whether the order should be varied or should be revoked on the ground that the need for it no longer exists or to review the order with a view to replacing the appointed manager.
In the Northern Territory NTCAT has an obligation to reassess guardianship orders whether they apply only to financial matters or to the whole range of matters a guardianship order may be made in relation to. It may also deal with applications to vary or revoke a guardianship order. But it may not revoke a guardianship order unless it has conducted a reassessment in relation to that order. When conducting such a reassessment, NTCAT must consider whether it is appropriate for the guardianship order to remain in force.
In Western Australia, WASAT may revoke an administration order if it considers that to do so is necessary in the best interests of the person the order is about.
This necessarily involves a consideration of the consequences of revoking an order. However, if the person still meets the first criterion for the making of an order namely that they still have a mental disability by reason of which they are unable to make reasonable judgments about matters relating to all or part of their estate, then it would be unlikely that WASAT would revoke the order. On the other hand, if the evidence showed that either they no longer had a mental disability or that disability did not prelude them from making reasonable judgments, then the foundation requirement for making an order would have disappeared and the statutory presumption that the person was capable of managing their affairs would be in effect.
In Queensland, when reviewing an administration order as a result of a periodic, own motion or requested review, QCAT is required to revoke the order at the end of the review unless it is satisfied that it would have made the order on a new application. Consequently, at the end of the review it must be satisfied that the person still has “impaired capacity” for one or more financial matters meaning that the person is not capable of understanding the nature and effect of decisions about a financial matter, some financial matters or all financial matters or is not capable of freely and voluntarily making decisions about one or more financial matters before it may renew the order.
8.12 The assessment of financial capacity: the role of the expert
8.12.1 Understanding the concept
Financial capacity comprises a broad range of conceptual, pragmatic and judgmental abilities that distinguish it from more simple and less cognitively demanding types of decision-making which are primarily verbally mediated. Its complexity renders it an “advanced” or “higher order” activity of daily living (ADL) compared with basic or household ADLs such as shopping, housework or bathing. Notwithstanding the inherent complexity of the construct, some estates are more complex to manage than others; and, some people are more involved in the management of their own affairs than others. Thus, financial abilities vary across individuals depending on their socioeconomic status, occupational attainment and financial experience.
,
,
Further, even within the financial capacity construct, there may be partial or limited competency such that a person may be able to do some things like write cheques or handle small amounts of money, but not handle more complex investment and financial decisions.
IFZ is an example of a case in which a number of health professionals with a range of expertise in relation to the question of decision-making capacity gave evidence. The case is set out in more detail in 8.11.6 above.
At the time of the decision, 2020, IFZ was a 90-year-old widow. She had been born in Greece and educated there up to grade two in primary school. Her parents died when she was seven. She moved to Australia in the 1950s as part of an arranged marriage that lasted until her husband’s death in May 2012. Her husband had also emigrated from Greece.
In 1973 IFZ and her husband established a successful cake shop business. The family functioned on patriarchal lines. IFZ’s husband made the decisions and ran the business, and she deferred to and relied on him in the management of their joint financial affairs.
At the hearing, IFZ demonstrated inconsistent financial knowledge. She could demonstrate some knowledge and understanding of aspects of her estate. She could recall signing a power of attorney and understand the purpose and effect of such a document. However, when questioned about it two years later, she did not remember having made a power of attorney. The judge hearing the case formed the view that, because of her limited formal education and background, IFZ did not have any knowledge with respect to trusts, mortgage or other financial concepts pertaining to the family’s financial affairs. The judge found that there was a causal nexus between her mild cognitive impairment and decision-making capacity such that due to her disability, in combination with her illiteracy, lack of facility with business dealings, symptoms of anxiety and depression and rigid thinking, she was more vulnerable to undue influence and exploitative conduct on the part of the individuals whom she trusted uncritically and was heavily reliant on.
8.12.2 The legal tests
When asked to perform an assessment of a person’s capacity with regards to administration or financial management, the expert must direct themselves to the question of what needs to be proved in their relevant jurisdiction for an order to be made. The basic elements of the tests for incapacity in financial management are disability, incapacity, need and best interests, although these are required in variable combinations in the different jurisdictions across Australia. A suggested approach to the assessment of each of these elements will be outlined.
8.12.2.1 Disability
Some form of disability must be present for a financial manager to be appointed in the Victorian, South Australian, Western Australian, Tasmanian, Australian Capital Territory and Northern Territory jurisdictions. While tribunals in New South Wales and Queensland do not require demonstration of disability, provision of this information will usually assist with understanding the basis of incapacity issues.
Although the crucial evidence usually relies on an explanation of how the disability impacts on the person’s ability to manage their affairs (i.e. the person’s capacity), an assessment of the nature and severity of the disability is extremely useful in placing the capacity issues in context.
A 2006 decision from the Tasmanian Guardianship and Administration Board illustrated the importance of establishing the type of disability underlying incapacity. The decision showed that getting into serious financial difficulties because of drinking and gambling addictions will not necessarily prove incapacity and inability to make reasonable financial judgments. In that case the medical evidence indicated that any incapacity that the person the hearing was about had was likely to be due to alcohol use rather than being due to dementia or brain injury. If the person were to stop drinking altogether, there it would be likely that there would be very little residual incapacity and that the person would “be able to attend to all normal functions at all times”.
On the disability issue the Board stated:
The Board was not satisfied that when (the person the hearing was about) is sober, he is a person with a disability; that is the Board did not receive any conclusive evidence that (the person) has experienced any absence, loss or abnormality of mental, psychological, physiological or anatomical structure or function. Even if we were satisfied that there may be an underlying depression or early stage brain damage, we could not be satisfied that by reason of that disability he is incapable of making reasonable financial judgments.
What sort of disabilities cause absence, loss or abnormality of mental, psychological, physiological or anatomical structure or function? The range varies enormously and may include dementia, head injury, developmental disability and chronic mental illnesses such as schizophrenia. Financial abilities have been shown to be impaired in the early stages of dementia, if not Mild Cognitive Impairment (a prodromal phase before the onset of dementia, characterised by subjective and objective memory loss, normal performance on general cognitive tests and generally preserved activities of daily living).
;
Mild cognitive impairment in the case of IFZ
was a disability which caused IFZ to be more vulnerable to TUR’s undue influence and exploitative conduct for his own financial gains. There were multiple other factors which contributed to IFZ’s vulnerability such as her rigid thinking, lack of agility of mind, illiteracy, lack of facility with business dealings, symptoms of anxiety and depression, however, her mild cognitive impairment in combination with all of these other factors, heightened her vulnerability to undue influence and exploitation. Even if she was given practicable and appropriate support like in the case of a supportive administration order, her rigid thinking style and inability to use or weigh information to adapt to changing circumstances, would make it extremely difficult for her to be able to make financial decisions for her own estate.
8.12.2.2 Incapacity
As stated previously, common to all jurisdictions in the making of financial management orders is the requirement that the person is incapable of making their own decisions or “reasonable judgments” in regards to financial matters. How can these functions be assessed? Billings DP took up the matter of capacity assessment in the
XYZ Case when it came back to VCAT for rehearing and, in doing so, noted several important issues addressed here including:
- the limitations of the Mini Mental State Examination (MMSE) in assessing capacity; and
- the relationship between neuropsychological test data and real life functioning.
8.12.3 The assessment of capacity
Assessment of financial capacity should include the gathering of contextual and corroborative data, as well as clinical interview including the formal objective assessment of mental state, cognition and financial task performance.
8.12.3.1 The trigger or the 'why' of assessment
Before formal assessment takes place, as part of gathering contextual data, it is important to understand why the assessment is occurring. As we discussed in Chapter 1, there is a common law presumption of capacity in relation to anyone 18 years or more, and this applies to all types of capacity. Both from a common law and human rights perspective, it is essential that there be valid “trigger” to rebut the presumption of capacity. People are often affronted by the questioning of their capacity, and assessment is, by its inherent nature, intrusive. It is thus important to document why and how the assessment came about, as well as the consent, or at least assent, of the person to the process.
8.12.3.2 History taking and corroborative information
No assessment of financial capacity is valid without corroborative information regarding the nature, extent and management of the person’s financial affairs. Self-report of financial capacity is insufficient on its own because the person themselves may be unaware of their impairment. Even caregivers have been known to either underestimate or overestimate the financial abilities of people with Alzheimer’s disease.
Clearly, the assessor can’t judge a person’s understanding of and competence to manage their financial affairs unless the assessor knows what the person’s assets and income are, whether their bills have been paid, if they have been prey to influence, fraud or deception, or if current informal substitute or supportive arrangements are in place and working. Reliability and validity of statements made by the person must be verified, ideally by an objective source such as the person’s lawyer or accountant. As with all areas of capacity assessment, the assessment of financial capacity is best undertaken with a collaborative effort between the person, the health care professional and the legal and/or financial services professional. Clinicians should be particularly wary of launching into an assessment of financial capacity in a clinic without prior notice and access to adjunctive corroborative information.
8.12.3.3 Mental status
Obtaining the person’s psychiatric history and making or obtaining an assessment of their mental status to exclude symptoms of mental illness relevant to financial decision-making such as abnormalities of mood (e.g. depressed or manic states) and thought content (e.g. grandiose delusions or grandiosity or delusions of poverty) is essential to the assessment of financial capacity.
8.12.3.4 General cognitive screens
As emphasised by Sullivan, the MMSE, which is a general screening tool, was not developed to assess capacity.
Its use in capacity assessments is a subject of debate due to its cost effectiveness and substantial literature base on the one hand, against its insensitivity, reliance on education and language skills and its failure to test executive functions on the other hand.
;
;
In regards to the latter, the MMSE does not adequately assess abilities crucial to capacity determinations such as the foresight, planning and task execution skills necessary to take care of one’s property or to one’s manage funds.
Notwithstanding these limitations, the MMSE can be a useful means of documenting general cognitive abilities and of estimating the severity of cognitive decline. However, it must supplemented by tests of executive or frontal lobe function (e.g. judgment, planning and reasoning). Sullivan has argued persuasively for the need for a two stage capacity assessment involving an assessment of general cognitive ability followed by a specific measure of capacity. There are several reasons for this. They include the relationship between general cognitive abilities such as memory and decision-making ability; the better documentation, knowledge base and standardisation of general ability tests compared with specific measures of capacity; and finally, that a good general ability assessment may provide insights into why a person failed a specific ability test.
8.12.3.5 Neuropsychological testing
Neuropsychological testing is clearly far more comprehensive than “bedside screening” tests such as the MMSE, in that it usually incorporates a detailed assessment of attention, memory, language, visuospatial abilities and most importantly, executive function. However, like the MMSE, neuropsychological testing was not developed to assess questions of legal capacity.
A commonly cited shortcoming of even detailed neuropsychological testing is its lack of ecological validity (i.e. the difficulty extrapolating from testing to real life). In the
XYZ Case Billings DP showed insight into this very issue, acknowledging statements by Crowe that neuropsychological examinations have moderately good success in predicting money management ability and performance on an important component of instrumental activity of daily living in the form of automated machine usage, but may fall down on other quality of life type issues.
Crowe commented further that the most appropriate way to assess how someone functions in the real world is to move in with them for a month and watch how they cope in their daily lives, while acknowledging the impracticality of such a statement. Importantly, it is not just how the person copes in their daily lives, but specifically how they cope with financial tasks. Extrapolating from cooking to managing income may be as flawed as extrapolating from a score on a memory test to managing income. Certainly, performance in testing or daily functioning can give information about thinking and decision making but caution is advised in drawing too many inferences and definitive conclusions from such information.
In the
IFZ Case, the judge preferred the evidence of a neuropsychologist who took the approach of combining psychometric testing (i.e. formal neuropsychological testing) with structured clinical examination. In considering a range of opinions from three neuropsychologists in this case, this method was considered an ‘an appropriate approach to testing”
[214] [222] [261] [297] [341]
What are the neuropsychological correlates of financial abilities? One proposed model of financial capacity contains three elements:
- Declarative knowledge – the ability to describe facts, concepts and events related to financial activities (e.g. knowledge about currency, personal financial data, interest rates, loans);
- Procedural knowledge – the ability to carry out motor-based, overlearned practical skills and routines (e.g. making change, writing cheques); and
- Judgment – the ability to make financial decisions consistent with self-interest both in everyday and novel or ambiguous situations.
It is judgment which is probably most complex and therefore vulnerable to the effects of neurodegenerative disorder. For example, in subjects with mild cognitive impairment (MCI), financial ability correlated with attention and executive function (i.e. planning, task initiation and persistence, judgment), and it is likely that the basis of functional change in MCI may not be amnestic (i.e. based on memory), but rather, emergent declines in the abilities to selectively attend, self-monitor and temporally integrate information (“working memory”), and abstract reasoning.
This further emphasises the need to test executive functions and, even more specifically, conceptual understanding of finances rather than over-learned, pragmatic cash transaction skills, which rely on procedural memory (memory for well-learned routines) which are often relatively well preserved until later in the course of neurodegenerative disease.
Even social vulnerability – an important aspect of financial capacity - cannot be predicted by neuropsychological test performance. Pinsker found that scores on standardised neuropsychological tests- including that of executive function - were not always related to informant based perceptions of vulnerability as measured by the Social Vulnerability Scale. In explaining this discrepancy, it was stated:
Neuropsychological tests engage various higher-level cognitive processes, but most involve artificial, well-structured tasks and not the novel, unstructured, and ambiguous problems that typically confront people in real-world situations.
8.12.3.6 Instruments
Over the last 30 years a plethora of instruments or methodologies to assess financial capacity either indirectly by inference, or directly, have been developed. Sousa et al (for a review of these instruments and references
) have categorised them as follows:
- Neuropsychological assessment – As discussed above, this needs to cover several cognitive domains, but especially memory, attention, executive function, working memory, verbal abstraction, arithmetic skills;
- Functional assessment scales – These scales assess a range of activities of daily living, mostly based on self-report, of which financial skills are but one activity. They include the Instrumental Activities of Daily Living Scale (IADL), the Katz Index of Basic Activities of Daily Living, the Barthel Index; the Functional Independence Measure (FIM); the Functional Activities Questionnaire (FAQ); the Bristol Activities of Daily Living Scale; and specifically for dementia, the Disability Assessment for Dementia (DAD); the Instrumental Activities of Daily Living scale for Elderly People (IADL-E); for cognitive impairment, the Alzheimer’s Disease Cooperative Study Scale for ADL in Mild Cognitive Impairment (the ADCS-MCI – ADL) and for mental illness, the World Health Organization Disability Assessment Schedule-II (WHODAS-II);
- Performance–based functional assessments are scales which are based on direct observation or performance of a range of activities of daily living, rather than on self-report. They include the Test of Everyday Functional Abilities (TEFA); The Direct Assessment of Functional Status (DAFS); Everyday Problems test for Cognitively Challenged Elderly (EPCCE), Kohlman Evaluation of Living Skills (KELS), the Structured Assessment of Independent Living Skills (SAILS); The Measure of Awareness of Financial Skills (MAFS);
- Forensic Assessment instruments - These are functional assessment instruments that provide a direct answer to legal and clinical questions about various types of capacity. They include the Financial Capacity Instrument (FCI) Financial Competence Assessment Inventory (FCAI) Independent Living Scale (ILS); Financial Assessment and Capacity Test (FACT) Assessment Capacity for Everyday Decision-making tool (ACED); The Hopemont Capacity Assessment Interview (HCAI) and the Decision-making Instrument for Guardianship (DIG).
Clearly, this list shows that there is no one standard instrument that should be used, or that any test should be used in isolation without clinical examination, cognitive assessment and corroborative history taking.
The appeal of purpose-built tests of financial capacity is that they measure the specific competency task we wish to assess, in this case the ability to manage financial affairs. One such test, categorised above as a Forensic Assessment instrument is the Financial Capacity Instrument (FCI, a standardised psychometric instrument based on a conceptual model of the financial capacity construct which assesses 14 tasks of financial ability comprising six clinically relevant domains of financial activity, including:
- Domain 1: Basic Monetary skills i Naming coins/currency ii Coin/currency relationships iii Counting coins/currency
- Domain 2: Financial Conceptual knowledge i Define financial concepts ii Apply financial concepts
- Domain 3: Cash transactions i 1-item grocery purchase ii 3-item grocery purchase iii Change /vending machine iv Tipping
- Domain 4: Chequebook management i Understand chequebook ii Use chequebook/register
- Domain 5: Bank statement management i Understand bank statement ii Use bank statement
- Domain 6: Financial judgment i Detect mail fraud risk ii Detect telephone fraud risk
- Domain 7: Bill payment i Understand bills ii Prioritize bills iii Prepare bills for mailing
- Domain 8: Knowledge of personal assets/estate arrangements
- Domain 9: Investment decision making;
The instrument yields scores for each domain as well as a total score. Although administering such an instrument in its entirety may be beyond the scope of a standard capacity assessment, many of the tasks can be useful to guide the clinician in devising questions which might specifically test financial capacity (see below). A brief semi-structured clinical interview-based on eight of the domains has been developed.
Perhaps the most important domain for the clinician to attend to is Domain 6, Financial Judgment including fraud risk (also measured by a specific tool the Social Vulnerability Scale).
The incorporation of this concept in the assessment of financial capacity is a significant advance in highlighting to clinicians their responsibilities in screening for and identifying financial abuse, consistent with Article 16 of the United Nations Convention on the Rights of Person with Disabilities (CRPD),
as well as with various government initiatives to address elder abuse.
Additional obligations under Article 12, which mandate that people with disability are free of undue influence, mean that clinicians should identify risk factors for undue influence, as relevant here as it is in will-making.
For example, in a 2014 case before QCAT, an assessment of financial capacity including the identification of risk factors for undue influence, culminated in the appointment of the Public Trustee of Queensland to protect the assets of the vulnerable person. The risk factors included cognitive deficit with impairment in reasoning and lack of insight, personality change, willingness to hand over money, physical frailty and physical and psychological dependency on a carer, vulnerability to sexual bargaining, a major age discrepancy between himself and his carers/intimates and family conflict.
As a standardised instrument, the FCI has provided research opportunities to collect objective comparative data for different populations. For example, it has been shown that patients with mild Alzheimer’s disease (AD) performed significantly below controls on all domains except Basic Monetary skills, while patients with moderate AD performed below norms on all tasks.
Mild Cognitive Impairment (MCI) participants demonstrated impairments in Financial Conceptual knowledge, Cash Transactions, Bank Statement Management and Bill Payment, although these impairments were mild and may only apply to a subset of patients with MCI.
Research using another instrument, a functional assessment scale, the abovementioned Disability Assessment for Dementia (DAD) has shown that even within the global concept of financial capacity, certain domains may be lost before others.
For example, organizing finance to pay bills and interest in financial affairs was shown to be lost before the ability to adequately handle money.
Notwithstanding these findings it is still important to examine each person as an individual and not extrapolate from these general observations. However, it does give credence to the possibility of establishing financial incapacity in specific areas, using supported decision-making to buttress deficit areas, and where substitute decision making is required, if possible only use it in areas where there are deficits, especially in earlier stages of dementia, and depending on the preferences of the person.
To this end, another of the Forensic Assessment Instruments, the FCAI (Kershaw and Webber, 2008)
was developed to assess strengths and weaknesses across six domains of financial capacity including everyday financial abilities, financial judgement, estate management, cognitive functioning related to financial tasks, debt management and support resources. Again quite comprehensive and comprising 38 items, the tool has very specific and detailed anchors for rating many of these domains including, but not limited to, ability to read a typical household bill such as an electrical bill, understanding of how credit cards work, consequences of poor decision-making such as legal action, default notices, disconnections of services, and understanding of assets. In this way, strengths and weakness can be ascertained in order to guide supported decision-making.
As already noted, a Vice President of VCAT, Mullane J, approved of the use of an assessment tool to help in the assessment of this approach to the assessment of financial capacity in
IFZ (Guardianship) [2020] VCAT 528, as follows:
In my view, the use of an existing tool such as the Financial Capacity Instrument to help assess and measure the functional aspects of financial capacity, is not inimical to the correct application of the statutory test for decision-making under by the Act. The responses by a person when assessed under each of the various domains identified in the Financial Capacity instrument may be relevant to the evaluation of decision-making capacity by reference to each of the indicia under section 5(1). In this application the financial judgment domain was a relevant domain in the assessment of decision-making capacity [Ibid., 284] .
Mullane J described this process as:
[A] helpful road map for negotiating the issue of assessment of decision-making capacity as it relates to financial matters under the Act, subject to the rider that the information obtained from questions directed to a person’s financial matters must always be evaluated with due regard to the requirements of the test and the guiding principles for determining whether the evidence suffices to rebut the presumption of capacity. I also gave particular weight to Professor Peisah’s evidence relating to assessment of financial capacity particularly under the domain for financial judgment, given the issue around IFZ’s vulnerability to undue influence and exploitation and the nexus between this and decision-making incapacity. [Ibid., 336]
8.12.3.7 Needs and best Interests
As previously stated, tribunals or courts in New South Wales, Victoria, Tasmania and Western Australia, have to be satisfied that the person the hearing is about is in need of another person to manage their financial affairs before it may make an administration order in relation to that person.
Further, New South Wales, Tasmania, and Queensland have a "best interests" or "interests" criterion to be met before an administration order may be made.
Sometimes health professionals will be able to provide evidence as to need or best interests, depending on how well they know the patient and their social milieu and functioning. It is sometimes useful to consider such issues in terms of the risk or consequences of not making an order. For example, is the person not meeting their everyday needs? Can they recognise and protect their own interests, and to function as a self-caring member of the community? Is the person being exploited financially or subject to undue influence? The person does not have to manage financial tasks in the best possible way, but they must be able to manage them or have alternative arrangements for others to either support them in doing so, or to manage their financial affairs in their stead. Thus, it is important to clarify whether any alternative informal arrangements with regards to management of affairs are in place and are working.
Since 1 March 2020, this best interest principle has been modified in Victoria so that VCAT and any appointed decision maker must take into account the “will and preferences” of the represented person.
This ensures that people with disabilities are supported in their decision-making to uphold the primary object of the Act which is to “promote the human rights and dignity of persons with a disability”.
This has been highlighted in the case of IFZ whereby the matters required by section 30(2)(b) and (c) of the 2019 Victorian
Act have to be determined before an administration order can be made for IFZ.
8.12.4. Report Writing
A suggested outline for medicolegal report relating to financial management is outlined in BOX 8.12.14:
Box 8.12.4 Suggested outline for report writing for assessment of ability to manage financial affairs - Expertise: An outline of the health care professional’s background or expertise that they are bringing to the assessment
- What is the trigger for the report? Who initiated the assessment and why?
- Is there a diagnosis or disability? If so, provide basis for that diagnosis (i.e. psychiatric history, results of mental status examination and cognitive assessment, and/or results of neuropsychological testing). Why, as a result of that diagnosis might the person be incapable (e.g. frontal lobe deficits in decision making/planning/judgement, other deficits in memory or calculation, overspending, delusions of poverty or grandiosity)?
- Severity: An estimate of the severity of the disability/intellectual disorder.
- Specific testing of financial capacity: Does the person know their assets and income? Can they read a bank statement? Can they identify currency and its relative value? Do they pay their bills? May use the Financial Capacity Instrument (see, 8.12.3.6) as a guide to ensure all domains are covered such as Basic Monetary skills, Financial Conceptual knowledge, Cash transactions, Chequebook management, Bank statement management, Financial judgment, Bill payment, Knowledge of personal assets/estate arrangements, Investment Decision making [NB Need some corroborative information regarding assets, income, bill payment to check veracity of responses.]
- Need and/or best interests: Is there a need or is it in the best interests of the person – depending on the jurisdiction (e.g. Can they afford food? Do they pay crucial bills such as rent, electricity, water rates or a crucial accommodation bond)? Can they recognise and protect their own interests, and to function as a self-caring member of the community? Are there risk factors for undue influence i.e. is the person at risk of exploitation or dissipation of the estate by others? Is there evidence of financial abuse? If they are unfamiliar with their financial affairs or have never managed their own affairs, have they put in place appropriate alternative or informal arrangements which are currently working (e.g. a family member looking after their affairs, an attorney under an enduring power of attorney or an accountant)?
|
Notes
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
NSW Trustee and Guardian Act2009 (NSW) s 88.
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
Gardner; re BWV [2003] VSC 173, [99], 7 VR 487.
:
XYZv State Trustees Ltd [2006] VSC 444, [73].
:
:
:
Guardianship and Administration Act 2019 (Vic) s 23(1).
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
WSP(Guardianship) [2020] VCAT 502 [37]. For another example in which in powers in relation to all the estate were given to the administrator because it was; “not prudent to omit decision-making power about any sort of financial matter as it may make the order ineffective or require a reassessment to add the necessary powers”, see TXA (Guardianship) [2020] VCAT1357, generally and [86] in particular.
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
Act .
:
Act .
:
Act .
:
Guardianship and Administration Act 2019 (Vic) s 46.
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
IFZ (Guardianship) [2020] VCAT 528 [355]-[356].
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
PB [2020] WASAT 121, [45] quoting FY [2019] WASAT 118, [53].
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
: