10.3 Laws and legal frameworks for guardianship and financial administration are the responsibility of states and territories. Each state and territory has a tribunal or board that appoints a guardian or financial administrator for a person with diminished decision-making ability.
10.4 Guardianship and financial administration orders are orders of a court or tribunal conferring powers of guardianship or financial administration over a person with diminished decision-making ability. A guardian can be granted the power to make health and lifestyle decisions, and a financial administrator can make decisions about financial affairs (for example, operating bank accounts, selling or buying property, and paying bills).
10.5 Both guardianship and financial administration orders must be used as a last resort and be the least restrictive of a person with diminished decision-making ability. This means that guardianship orders are usually limited to decision making in certain areas of a person’s life, and usually only apply for a limited time. Financial administration orders are generally made for a limited time, and in practice, tend to cover the entirety of a person’s estate.
10.6 A member of the person’s family or someone who knows the person will be given preference for appointment as guardian or financial administrator subject to suitability and willingness to act (private guardians or private financial administrators). Financial administrators can also be professional accountants, trustee companies, or equivalent (professional financial administrators). Each state and territory also has a statutory body that constitutes the guardian or financial administrator of last resort—appointed where the tribunal considers that a person requires a guardian or financial administrator but there is no suitable person who is willing or able to fulfil the appointment (public guardian or public trustee).
10.7 Private and professional financial administrators are generally required to submit a financial management plan, keep records of financial transactions, and lodge accounts annually with tribunals or state trustees.
10.8 Guardians and financial administrators are generally obliged to act in the ‘best interests’ of the person, with reference to statutory guiding principles to observe the interests, freedom, participation and family life of the person, and to protect the person from abuse. In addition to any common law obligations, statutory provisions can also prevent financial administrators from conducting conflict of interest transactions, or combining or using the estate for their own benefit.
10.9 Guardianship and financial administration orders are generally subject to periodic review. An appointment may be revoked by the tribunal where it is alleged the appointee is not meeting their obligations under the relevant Act.
Guardianship and financial administration and elder abuse
10.10 Guardianship and financial administration orders are increasingly being made for older people. For example, in NSW, 61% of applications in the 2015–16 financial year were for people aged 65 years and above. The NSW Civil and Administrative Tribunal (NCAT) stated in its 2015–16 Annual Report, that ‘the workload of the Guardianship Division is directly impacted by the ageing of the population’.
10.11 Elder abuse is often committed by people with no authority to make a decision on behalf of an older person, or by substitute decision makers appointed by the older person themselves, such as those appointed under enduring powers of attorney. However, stakeholders noted that there is some evidence of elder abuse committed by private guardians and private financial administrators. For example, the NSW Trustee and Guardian (NSW T&G) advised that only six of the 521 matters it litigated in 2015–16 on behalf of represented persons involved financial abuse by a private financial administrator. While the numbers were low, stakeholders provided some examples of abuse by private guardians and private financial administrators. The NSW T&G advised that over the period 2010–16, there had been
a few cases where close family members are appointed financial manager and misappropriate the funds of those whom they manage. There have been cases involving misappropriation of a client’s funds by a mother, another involving a client’s father and others have involved misappropriation by siblings.
10.12 Stakeholders identified that the key issue with private guardians and private financial administrators is a lack of knowledge and understanding of their roles and responsibilities. Abuse of older persons by private guardians or private financial administrators may therefore be inadvertent. For example, private financial administrators may be unaware of the requirement to keep the assets of the person separate from their own. Informal arrangements in place prior to the commencement of the order may persist, which may involve conduct in breach of the appointment. Justice Connect provided the following example:
Bill, 70, had a stroke and was admitted to hospital for three months. Following admission, his sister was appointed as his administrator. She was initially reluctant to be appointed because she had her own health issues and could not deal with too much paperwork. However, Bill’s finances were relatively straightforward: his only income was the age pension and he lived in public housing.
Every pension day he would withdraw enough cash to pay his bills and buy food and whatever was leftover he kept as cash. He had been very successful in managing his money this way, having saved $15,000 over the last 10 years, by virtue of a direct debit into a savings account. His sister managed Bill’s finances in the same manner: she paid for expenses in cash and whatever was left over she gave directly to Bill. Even though Bill’s sister paid all his expenses while he was in hospital, she did not keep all the receipts … [m]any months later, Bill’s sister was asked to provide a statement to VCAT of how she managed his money. She was having some problems with her own health, and didn’t have time to get all the paperwork together, so Bill and his worker tried to provide evidence that she had managed Bill’s finances while he was in hospital. This evidence was insufficient.
10.13 Bill’s sister was found to have managed Bill’s affairs appropriately. However, greater vigilance was required in her role as a financial administrator (for example, with respect to keeping receipts). Helping her to understand her responsibilities better may have assisted her in this regard.
10.14 Abuse can also happen where a representative is indifferent or reckless as to their legal responsibilities. There may also be a small cohort of people who deliberately set out to exploit or abuse their powers under guardianship or financial administration.
These bodies are referred to as tribunals in this chapter. These tribunals share their jurisdiction to appoint a guardian or financial administrator with courts. For the purposes of this Inquiry, the ALRC focuses on the jurisdiction of state and territory tribunals.
For a discussion of the different guardianship bodies, see: John Chesterman, ‘The Future of Adult Guardianship in Federal Australia’ (2013) 66(1) Australian Social Work 26, 27–28.
Financial administration orders are also referred to as ‘financial management’ orders. In this Report, this class of orders are referred to as financial administration orders. Those appointed under such orders are referred to as financial administrators.
Guardianship and financial administration orders can also be made by the Supreme Court. For the purposes of this inquiry, the ALRC focuses on tribunal orders.
Guardianship and Management of Property Act 1991 (ACT) ss 4(2)(d)–(e); Guardianship Act 1987 (NSW) ss 4(b), (f), 14(2)(d), 15(4); Guardianship of Adults Act 2016 (NT) ss 4(a), 11(d); Guardianship and Administration Act 2000 (Qld) s 1(1), sch 1 cl 7(2), (3)(a); Guardianship and Administration Act 1993 (SA) ss 5(c)–(d); Guardianship and Administration Act 1995 (Tas) ss 20(2), (5), 51(2), (4); Guardianship and Administration Act 1986 (Vic) ss 22(2)(a), (5), 46(2)(a), (4); Guardianship and Administration Act 1990 (WA) ss 4(4), (6).
Requirements for the review of guardianship and administration orders are discussed below.
Guardianship and Management of Property Act 1991 (ACT) s 26(1); NSW Trustee and Guardian Act 2009 (NSW) s 66; Guardianship of Adults Act 2016 (NT) s 32; Guardianship of Adults Regulations 2016 (NT) cll 4–5; Guardianship and Administration Act 2000 (Qld) s 49; Guardianship and Administration Act 1993 (SA) s 44; Guardianship and Administration Act 1995 (Tas) s 63; Guardianship and Administration Act 1986 (Vic) s 58; Guardianship and Administration Act 1990 (WA) s 80. In NSW, the requirements to submit a financial management plan, keep records and lodge accounts are set out in directions given to a financial administrator by the NSW Trustee and Guardian under the NSW Trustee and Guardian Act 2009.
In its Equality, Capacity and Disability in Commonwealth Laws Report, the ALRC recommended that guardianship and financial administration laws facilitate a shift toward supported decision-making, including the appointment of supporters rather than substitute decision makers, and most relevantly here, by requiring guardians and financial administrators to make decisions in accordance with a person’s will, preferences and rights, rather than in their ‘best interests’: Australian Law Reform Commission, Equality, Capacity and Disability in Commonwealth Laws, Report No 124 (2014) rec 10–1, [10.10].
Guardianship and Management of Property Act 1991 (ACT) s 4; Guardianship Act 1987 (NSW) ss 4, 21A(2); NSW Trustee and Guardian Act 2009 (NSW) s 39; Guardianship of Adults Act 2016 (NT) s 4; Guardianship and Administration Act 2000 (Qld) sch 1; Guardianship and Administration Act 1995 (Tas) s 6; Guardianship and Administration Act 1986 (Vic) ss 28, 49; Guardianship and Administration Act 1990 (WA) ss 51, 70.
Guardianship and Administration Act 2000 (Qld) ss 37, 49, 50.
In most jurisdictions, there is a requirement to review an order within a maximum set timeframe. This varies between three and five years, depending on the jurisdiction: Guardianship and Management of Property Act 1991 (ACT) s 19; Guardianship and Administration Act 2000 (Qld) s 28; Guardianship and Administration Act 1993 (SA) s 57; Guardianship and Administration Act 1995 (Tas) s 52; Guardianship and Administration Act 1986 (Vic) s 61; Guardianship and Administration Act 1990 (WA) s 84. NSW and the Northern Territory do not make specific provision for automatic review. However, in both jurisdictions, the legislation makes provision for a periodic review. In NSW, the tribunal may specify in the financial administration order or in a subsequent order that the financial administration order must be reviewed within a specified time: Guardianship Act 1987 (NSW) s 25N. By contrast, in the Northern Territory, the order must include a ‘reassessment date’: Guardianship of Adults Act 2016 (NT) s 19.
Chesterman, above n 2, 28–29, 34.
NSW Civil and Administrative Tribunal, NCAT Annual Report 2015–2016 (2016) 41.
See, eg, Seniors Rights Service, Submission 169; ADA Australia, Submission 150; ACT Disability, Aged and Carer Advocacy Service, Submission 139; NSW Trustee and Guardian, Submission 120; Public Trustee of Queensland, Submission 98; Office of the Public Advocate (Vic), Submission 95; TASC National, Submission 91. State Trustees Victoria on the other hand submitted that there was ‘plenty of evidence that VCAT appointed administrators are guilty of financial abuses of represented persons. State Trustees has no reason to assume that VCAT appointed guardians are not also equally guilty of offending’. It referred to a case review conducted in February 2016. Of the 128 cases of financial abuse reviewed, 49% of abusers had no legal authority to act for the victim; 27% held a power of attorney; and 20% had acted under a financial administration order: State Trustees Victoria, Submission 138.
NSW Trustee and Guardian, Submission 120.
See, eg, Seniors Rights Service, Submission 169; Australian Association of Social Workers, Submission 153; ADA Australia, Submission 150; Legal Aid NSW, Submission 140; State Trustees Victoria, Submission 138; NSW Trustee and Guardian, Submission 120; Law Council of Australia, Submission 61.
NSW Trustee and Guardian, Submission 120.
See, eg, UnitingCare Australia, Submission 162; Resthaven, Submission 114.
Justice Connect Seniors Law, Submission 362. While this case study was provided to the ALRC as evidence of how onerous oversight mechanisms attached to financial administration can be, the ALRC considers it is a useful example of how a person’s pre-existing patterns of behaviour might continue despite the changed nature of their role.
See examples given by: Seniors Rights Victoria, Submission 171; NSW Trustee and Guardian, Submission 120; Law Council of Australia, Submission 61.