The call for an inquiry into the NSW Trustee and Guardian has been heard with the Tweed MP throwing his support behind an investigation into the government agency. Legal Practice Director, Jeff Garrett, recently spoke about the failure of both QLD and NSW public trustees to 4CRB Radio to urge those tempted by a ‘free’ Will to consider the legal implications.
Attwood Marshall Lawyers is a long-standing firm providing legal services to the Gold Coast and Northern New South Wales communities since 1946. We have dealt with the New South Wales Trustee and Guardian (‘the NSWTG’) and their in-house legal section for many years and over time experienced a litany of incidents constituting a long term pattern of neglect, maladministration and mismanagement of the affairs of those most vulnerable in our society. The Queensland Public Trust Office is no better, delivering legal services which fall well below community expectations after luring in clientelle with ‘free’ Wills.
Ahead of the 2019 NSW Elections on March 23, we took the opportunity to lobby sitting MPs and candidates to commit to an inquiry into the NSWTG – the move triggered by the shocking conditions in which Kingscliff disabled pensioner Steven Colley died. The NSWTG were acting as trustee of Mr Colley’s late father’s estate, responsible for managing his trust funds, when they ignored requests to salvage his home from mounting disrepair over many years. Mr Colley passed away aged 57 in squalid conditions.
Despite a previous NSW Ombudsman decision which found maladministration by the NSWTG, the Government agency wanted $25,000 in fees and commission before transferring the title of Mr Colley’s home after he had died. It was not until the threat of legal proceedings by Attwood Marshall Lawyers that the NSWTG wrote to Mr Colley’s family in February to apologise, waive its commission and fees and agree to transfer the title of Mr Colley’s Kingscliff home.
Steven’s sad story is the human face of a systematic failure of the NSWTG which needs to be investigated. Our call to hold a subsequent inquiry has been supported by local politicians in the media last week (see link to NBN News below) and we look forward to working with the elected member to make this happen.
About the NSW Trustee & Guardian
The NSWTG is a government body often appointed by a Court or tribunal such as the New South Wales Civil and Administrative Tribunal (NCAT) to provide direct financial management services for people who have impaired decision making capabilities or minors. The NSWTG can be appointed to provide direct financial management services (day to day financial management) or the NSWTG can be appointed trustee, whereby the NSWTG is bound by the provisions of the Trustee Act 1925 (NSW) and the NSW Trustee & Guardian Act 2009 (NSW). Family members or close personal friends can be appointed as financial managers; however, when there is no one available, or where there is the slightest conflict between family members, it is our experience that the tribunal or Court will often appoint the NSWTG.
The NSWTG market and promote a ‘free’ Will service, and in this way become the executor of thousands of deceased estates every year. In the 2017-2018 Financial Year, NSWTG processed $3.3b worth of transactions, held $5.9b in client assets and a made revenue of $92.87m (14.5% over budget). 11,661 people had NSWTG as their financial managers.
Why a NSW Parliamentary Inquiry is needed
While private trustee companies fall under the authority of the Australian Securities and Investments Commission, public trustee companies do not. The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services has no scope to investigate public trustee companies, despite their role in financial management. The Royal Commission into Aged Care Quality and Safety will not examine either guardianship or financial management. The Terms of Reference for a Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability have not been announced.
Areas where the NSWTG needs to be investigated
A NSW Parliamentary inquiry should identify and address several areas to ensure that in its provision of services, the NSWTG meets with community standards and expectations. We have identified the following as areas of concern:
A) Maladministration on the part of the NSWTG in managing client funds, including:
i. Financial mismanagement and incompetence including poor investment decisions or failure to adequately invest client funds resulting in substantial financial losses;
ii. Poor communication, tardiness and unresponsiveness in dealing with and responding to client requests;
iii. Tardiness/inaction on the part of the NSWTG in dealing with third parties on behalf of clients in the administration of trusts or management of client finances, often resulting in financial losses to the client;
iv. Over-restrictive expenditure parameters and denial of access to client funds (“penny-pinching”) when there is clearly capacity within the client’s financial resources for reasonable expenditure.
B) Demeaning and intimidating practices within NSWTG and an entrenched culture of bullying and victimisation of clients, the elderly and vulnerable in our society, including:
i. Restricting spending of client funds for essential items (such as house repairs or furniture or bed linen) and over-controlling client funds. Often the extent of these practices constitutes financial abuse, stripping clients of autonomy, self-determination and dignity.
ii. Failure to provide full disclosure of statements of account to clients under management.
iii. Limiting the ability of family members to have a voice for those under management of the NSWTG by restricting the amount of communication and issues allowed to be raised with the NSWTG at any given time.
C) The unfairness of exorbitant fee structures and lack of fee transparency/understanding within the NSWTG, including:
i. When a Will is prepared by the NSWTG, the NSWTG will suggest that NSWTG be appointed executor for “independent and impartial service”. Sometimes these Wills are offered “free of charge”. However, when the person dies and their estate is administered the NSWTG charges an “executor’s fee” which is calculated on a percentage basis, based on the value of the estate. In addition, the NSWTG charges an estate management fee, an account keeping fee and an investment fee.
ii. For clients under direct Financial Management with the NSWTG, an establishment fee is charged based on the initial value of assets, with an ongoing management fee, investment fee and account keeping fee.
iii. For clients under Private Management with the NSWTG, an establishment fee is charged based on the initial value of assets, with an ongoing administration fee, investment fee and account checking fee.
iv. For clients with Trusts under administration by the NSWTG, a “one-off Trustee fee” is charged based on the value of assets, with an ongoing trust management fee, investment fee and account keeping fee.
v. None of the above include “additional costs” which are not covered by the standard fee structure including financial planning fees and legal services (which are usually charged on an hourly basis or a scale fee, calculated on the value of the client’s assets).
vi. It is our experience the fees charged by the NSWTG in all aspects of practice, from administering estates, financial management and administration of trusts are often grossly disproportionate to the work involved.
D) Inherent conflict of interest
The NSWTG is a state government body and there is an inherent conflict of interest in the nature of the decisions made on behalf of clients when the NSWTG is entitled to collect associated fees and outlays and the NSW government is able to collect associated costs (such as stamp duty collected by the state government on the sale of client assets).
E) We have found the complaint handling process and accountability is entirely inadequate
Often complaints are brought before the New South Wales Ombudsman who has limited powers when it comes to dealing with complaints relating to the NSWTG and further, complaints are often not dealt with in a timely manner. Complaints in relation to the conduct of the NSWTG are rarely reported to the media as legislation in New South Wales does not allow the publication of any person under financial management to the extent that publication of any information or other material that is likely to lead to the identification of the person is prohibited and carries a penalty of imprisonment. Family members disgruntled with their experience with the NSWTG have limited options for recourse.
F) Incompetence of legal services within the NSWTG, including:
i. Numerous instances of incompetence on the part of the NSWTG legal services branch. In a recent matter in which we were involved the NSWTG requested a subpoena to be issued to investigate the closure of a bank account that was closed by the NSWTG some months earlier. The NSWTG ought to have known the account was closed. This whole process was a waste of time and costs and demonstrates the fundamental incompetence within the legal services of the NSWTG.
ii. Frustrating delays on the part of the NSWTG legal services. There are a number of instances where the NSWTG legal services branch has failed to act diligently by unnecessarily delaying legal proceedings. In some instances, it has taken the NSTWG legal services branch months or even years in one instance to respond to correspondence.
iii. Refusing to be cooperative and sensible in court matters by failing to agree on simple consent orders that would avoid court appearances and unnecessary costs;
iv. Failing to act as a model litigant in court proceedings resulting in delays, unnecessary court steps and increased legal costs.
Non publication/suppression provisions for NSWTG matters
Current NSW legislation provides automatic non-publication/suppression provisions for NSWTG matters. This places strict limits on the media’s ability to report on NSWTG matters, meaning the agency is not open to public scrutiny or held publically accountable for its actions. The relevant section for those under Guardianship or Financial Management in NSW is the Civil and Administrative Tribunal Act 2013 (NSW), which states:
65 Publication of names or identification of persons involved in certain proceedings
(1) This section applies only to the following proceedings:
(a) proceedings in the Guardianship Division (or internal appeals against decisions made in such proceedings),
(b) proceedings for a decision for the purposes of the community welfare legislation within the meaning of the Community Services (Complaints, Reviews and Monitoring) Act 1993 (including an internal appeal against such a decision),
(c) such other proceedings (or classes of proceedings) as may be prescribed by the regulations for the purposes of this section.
(2) A person must not, except with the consent of the Tribunal, publish or broadcast the name of any person:
(a) who appears as a witness before the Tribunal in any proceedings, or
(b) to whom any proceedings in the Tribunal relate, or
(c) who is mentioned or otherwise involved in any proceedings in the Tribunal, whether before or after the proceedings are disposed of.
Maximum penalty:
(a) in the case of a corporation–100 penalty units, or
(b) in any other case-50 penalty units or imprisonment for 12 months, or both.
(3) This section does not prohibit the publication or broadcasting of an official report of the proceedings that includes the name of any person the publication or broadcasting of which would otherwise be prohibited by this section.
(4) For the purposes of this section, a reference to the name of a person includes a reference to any information, picture or other material that identifies the person or is likely to lead to the identification of the person.
Conclusion
The experiences our clients have endured at the hands of the NSWTG demonstrate systematic neglect of those most vulnerable in our society. NSWTG advertises its values as “Integrity, Trust, Service, Accountability, and Respect”. The experience of our clients is one of distrust, delay, disservice and loss. By their maladministration, unfairness and incompetence, they show disregard for human dignity. Their actions should be scrutinised with a look to new policies and legislation which better protect young children, wards of the state, the disabled and war vets. We look forward to an inquiry into misconduct and maladministration by the NSWTG so this multibillion dollar Government agency delivers its services fairly, legally, and to community standards.
If you need to make contact with our firm in relation to a Queensland Public Trust or NSW Trustee and Guardian matter, please contact aheather@attwoodmarshall.com.au or on Direct line: 07 5506 8245.
