10.47 In Chapter 5, the ALRC recommends the vesting of tribunals with expanded compensatory powers for the abuse or misuse of a power, or the failure to exercise a duty, by substitute decision makers including guardians and financial administrators. This aims to deter people from acting outside of their power, while also providing a more accessible avenue for redress when that occurs. State Trustees Victoria, however, observed:
One of the more distressing features of State Trustees’ investigations into allegations of financial abuse is that often, by the time the issue has been identified, an application made to VCAT, and an administrator appointed, the offender has squandered what was misappropriated and there are no assets to recover.
10.48 As a protection against this, some states and territories permit the public trustee to require that security be lodged with state trustees. NSW introduced a surety bond scheme in March 2015. In the Discussion Paper, the ALRC asked whether ‘the [mandatory] surety bond scheme of the NSW T&G should be adopted nationally, to address situations where compensation orders cannot restore the person to their original state because misused funds have been totally depleted’.
10.49 Since the release of the Discussion Paper, the NSW Government has announced an independent review of this scheme due to the generally negative reception of it by the public. Additionally, while the ALRC only received a few submissions on this issue, the majority of those were opposed to a mandatory scheme. The Law Society of South Australia submitted, for example, that surety bonds were a failure in the context of intestate estates because insurance companies would not provide them. The Law Council of Australia also raised questions about the commercial availability of surety bonds. The Office of the Public Advocate (Vic) noted:
data presented by State Trustees (Vic) and the NSW Trustee and Guardian suggests around 9 to 20 per cent of identified financial abuse is perpetrated by a financial administrator. It is important to note that the data presented involves just 30 or so cases across both states … this is far less than one per cent of the thousands of administration orders that are in force in a given year … OPA questions whether the potential benefits of surety bonds would be worth the significant costs imposed on thousands of people each year.
10.50 Further, stakeholders submitted that a mandatory requirement would capture all private financial administrators, regardless of how well the administrator is performing, and noted the deterrent effect on people willing to take on this role.
10.51 In light of the ongoing review of the mandatory surety bond scheme and the concerns raised by stakeholders, the ALRC does not recommend that a mandatory surety bond scheme be adopted at this time. The Public Trustee (Qld) suggested the adoption of a statutory insurance scheme, as part of the establishment of a national register, may be an alternative approach. Consideration of this approach could occur as part of a broader consideration by state and territory governments of the ALRC’s recommendations on the establishment of a national register.
State Trustees Victoria, Submission 138.
See, eg, NSW Trustee and Guardian Act 2009 (NSW) ss 64, 68; Guardianship and Administration Act 2000 (Qld) s 19.
Australian Law Reform Commission, Elder Abuse, Discussion Paper No 83 (2016) question 6–2, [6.44].
NSW Trustee and Guardian, Surety Bond Scheme <www.tag.nsw.gov.au/surety-bond-scheme.html>.
Law Society of South Australia, Submission 381; Law Council of Australia, Submission 351; Aged Care Steps, Submission 340; Carroll & O’Dea, Submission 335; Institute of Legal Executives (Vic), Submission 320; Public Trustee of Queensland, Submission 249; W Bonython and B Arnold, Submission 241; Advocare, Submission 213. Only State Trustees (Victoria) were in favour: State Trustees (Vic), Submission 367.
Law Society of South Australia, Submission 381.
Law Council of Australia, Submission 351.
Aged Care Steps, Submission 340; Carroll & O’Dea, Submission 335; Institute of Legal Executives (Vic), Submission 320; W Bonython and B Arnold, Submission 241. Recent media articles provide an illustrative example. ‘Sofie Korac, a financial planner in Gordon, has managed her relative’s estate for 24 years, regularly providing documents to TAG to ensure every cent is accounted for … [she told reporters that she was required to provide a surety bond despite her record because she] could get dementia or develop a gambling addiction’: Esther Han, ‘NSW Trustee and Guardian Hits Hurdle in Its Bid to Force Private Managers to Buy Surety Bonds’ Sydney Morning Herald, 21 April 2017.
Public Trustee of Queensland, Submission 249.