Lessons from a Recent NCAT Decision
In a recent decision, the NSW Civil and Administrative Tribunal (NCAT) made a financial management order for a man in his seventies, Thomas, after a solicitor brought an application arising from ongoing unpaid strata levies.
The case, Thomas (a pseudonym) [2025] NSWCATGD 22, is significant because it clarifies when a creditor or their solicitor has "standing" to bring a financial management application—and demonstrates that financial incapacity can exist even without a formal mental health diagnosis.
The Background
Thomas is a man in his seventies who lives alone in a unit at South Sydney. He has lived there for many years, but the property is actually owned by the estate of his late mother, Sarah, who died in 2009. Thomas is her only child and is both the executor and sole beneficiary of her estate.
The problem? Thomas had not applied for probate of his mother's estate or transferred the property into his own name—16 years after her death.
Meanwhile, strata levies on the property had gone unpaid. A previous bankruptcy application had been made against his mother's estate to recover earlier strata debts. Once that debt was cleared, Thomas continued not to pay the levies, accumulating a further debt of approximately $8,400.
The Application
The applicant was Gerald, a solicitor acting for the owners corporation of the strata plan. Gerald applied for a financial management order for Thomas, seeking to have Thomas's estate committed to the NSW Trustee and Guardian.
The key issue at the hearing was: Did Gerald have standing to bring the application?
Under the Guardianship Act 1987 (NSW), a person can bring an application if they are:
The person themselves,
The NSW Trustee and Guardian, or
Any other person who, in the Tribunal's opinion, has a genuine concern for the welfare of the person.
The Standing Test
The Tribunal applied the well-established test from the ACJ [2007] case, which asks:
Is the applicant bringing to the Tribunal's attention a situation where the person's interests may call for intervention?
Is the applicant sincere in seeing the situation as one that may call for intervention?
Is the application motivated by a desire to advance the welfare of the person?
Importantly, the applicant may also have their own interests or their client's interests in mind—the test focuses on concern rather than motivation.
The Evidence
Gerald provided extensive evidence showing:
A pattern of non-engagement: Thomas had not responded to correspondence from Gerald since 2020. He did not attend the hearing, despite being properly notified.
Repeated bankruptcy proceedings: Previous bankruptcy applications had been necessary to recover strata debts.
No progress on probate: 16 years after his mother's death, Thomas had not applied for probate or transferred the property.
Ongoing financial losses: Interest was accumulating at 10% per annum on unpaid strata fees, and recovery costs were adding to the debt.
Limited contact details: Thomas's phone numbers had been disconnected; he had no internet access.
A consultant, Mr Y, had visited Thomas in December 2023. Thomas told Mr Y that he had "some serious medical issues," was "embarrassed about the situation," and wanted to resolve the issues. Although he said he wanted to sell his Southern Sydney unit and apply for probate, he had "not been able to progress" these issues.
Mr Y noted that Thomas "suffered no apparent mental problem" but was "unable to progress issues requiring management."
The Tribunal's Decision
Standing
The Tribunal found that Gerald did have standing to bring the application. Key factors included:
Gerald's evidence was reliable and carefully presented
He had made extensive efforts to resolve the situation before coming to the Tribunal
The situation was genuinely detrimental to Thomas—his estate was being diminished through unpaid fees, interest, and recovery costs
Thomas's dysfunctionality raised reasonable concerns about his ability to manage other aspects of his affairs
The Tribunal noted that while Gerald's client had an interest in recovering unpaid strata fees, this did not negate the genuine concern for Thomas's welfare.
Financial Incapacity
The Tribunal then considered whether Thomas was "incapable of managing his affairs."
The test, established in cases such as P v NSW Trustee and Guardian [2015], asks whether a person is "reasonably able to manage his or her own affairs in a reasonably competent fashion" and can make "sound judgments about his or her welfare and interests."
The Tribunal found that Thomas was not capable of managing his affairs because:
He had not paid strata levies despite having the resources to do so
Interest and costs were accumulating at significant rates
He had not progressed probate on his mother's estate for 16 years
He had a pattern of non-engagement and avoidance
He had no telephone or internet access
Despite promising to take steps, he had been unable to follow through
Need for an Order
The Tribunal was satisfied that a financial management order was necessary and in Thomas's best interests. Without intervention, the pattern of non-payment and accumulating debt would likely continue. The order would allow a financial manager to:
Apply for letters of administration for his mother's estate
Transfer the property into Thomas's name
Ensure regular payment of strata levies
Address other aspects of his financial affairs
Appointment
No private person was identified as a potential financial manager, so the Tribunal committed the management of Thomas's estate to the NSW Trustee and Guardian.
What This Case Means for Our Clients1. Creditors and Their Solicitors Can Bring Financial Management Applications
This case confirms that a solicitor acting for a creditor can have standing to bring a financial management application, provided the test for "genuine concern" is satisfied. The fact that the applicant also has a commercial interest does not disqualify them.
However, the applicant must be able to demonstrate:
A sincere concern for the person's welfare (not just debt recovery)
That they have taken reasonable steps to resolve the situation before coming to the Tribunal
2. Financial Incapacity Can Exist Without a Mental Health Diagnosis
Significantly, there was no formal diagnosis of mental illness or cognitive impairment in this case. The Tribunal's finding was based on functional incapacity—Thomas's demonstrated inability to manage his affairs in a reasonable, rational, and orderly way.
This is consistent with the legal test, which focuses on what a person can actually do, not on why they cannot do it.
3. The Tribunal Looks at the "Totality" of the Evidence
The Tribunal considered not just the unpaid strata fees, but the broader picture: 16 years of inaction on probate, a pattern of non-engagement, disconnected phone lines, and the accumulation of interest and costs. This "totality" approach is critical—a single debt may not be enough, but a pattern of dysfunction can be.
4. A Financial Management Order Can Be a "Least Costly" Solution
Gerald argued that bankruptcy applications were a "wasteful remedy" and that a financial management order would be more efficient and less expensive in the long run. The Tribunal accepted this, noting that repeated bankruptcy proceedings would further deplete Thomas's estate.
5. The Person's Absence Does Not Prevent the Tribunal from Proceeding
Thomas did not attend the hearing and had not engaged with the process. The Tribunal proceeded in his absence because he had been properly notified and had a reasonable opportunity to respond. This is a reminder that a person cannot simply avoid a financial management application by ignoring it.
Practical Takeaways
If you are considering a financial management application, this case highlights:
The importance of evidence: You need to provide clear, reliable evidence of the person's functional incapacity and the need for intervention.
The "genuine concern" test: Even if you have a commercial interest, you may still have standing if you can demonstrate genuine concern for the person's welfare.
The value of a holistic approach: The Tribunal will consider the person's overall circumstances, not just the specific issue that triggered the application.
Conclusion
Thomas [2025] NSWCATGD 22 is a useful reminder that financial management orders are available not just for people with diagnosed mental health conditions, but for anyone who is functionally unable to manage their affairs in a competent fashion.
The case also confirms that creditors and their solicitors can bring such applications, provided they can demonstrate genuine concern for the person's welfare—not just a desire to recover a debt.
If you are concerned about a family member, client, or other person who seems unable to manage their financial affairs, this case provides a roadmap for how the Tribunal approaches these difficult decisions.
Disclaimer: This summary provides general information only and does not constitute legal advice. Every case is different, and you should seek independent legal advice about your particular situation.
