BHV [2018] QCAT 126

CITATION: BHV [2018] QCAT 126 PARTIES: BHV APPLICATION NUMBER: GAA4631-17, GAA4632-17, GAA4637-17, GAA4638-17 MATTER TYPE: Guardianship and administration matters for adults HEARING DATE: 17 July 2017 HEARD AT: Brisbane DECISION OF: Member Allen DELIVERED ON: 4 May 2018 DELIVERED AT: Brisbane ORDERS MADE: DECLARATION ABOUT CAPACITY 1. BHV does not have capacity for all personal and financial matters. GUARDIANSHIP 2. The application for the appointment of a guardian by BFD and ENC Ellis for BHV is dismissed. ADMINISTRATION 3. The application for the appointment of an administrator by BFD and ENC for BHV is dismissed. CONFLICT TRANSACTION 4. BFD and ENC as the appointed attorneys for BHV are hereby authorised to enter the transaction being: (a) The sale of the grazing property situated at XXX more particularly described as Lot on Crown Plan Title Reference to be registered in the name of an entity associated with BFD for a consideration of $1,275,000.00. -- 1 of 8 -- 2 5. The authorisation to enter the abovementioned transaction will expire on 31 December 2017. 6. The Tribunal is satisfied that there are no conflict transactions disclosed in regard to the convening of a general meeting to appoint directors of XX Pty Ltd. CATCHWORDS: GUARDIANS, COMMITTEES, ADMINISTRATORS, RECEIVERS AND MANAGERS – where adult has appointed attorneys under an enduring power of attorney – where adult has Alzheimer’s type dementia – where application for declaration about adult’s capacity for personal and financial matters – where application for guardianship and administration GUARDIANS, COMMITTEES, ADMINISTRATORS, RECEIVERS AND MANAGERS – where application for approval of conflict transactions – where adult is a director of corporate trustee and beneficiary of trust – whether adult’s attorneys able to ensure her interests protected – whether transactions constitute conflict transactions and should be authorised Guardianship and Administration Act 2000 (Qld), s 12, s 146 Powers of Attorney Act 1998 (Qld), s 73, s 118 APPEARANCES: BHV; BPR, son and her power of attorney; ROH, daughter; BFD, son; ENC, daughter; BR, daughter-in-law REPRESENTATIVES: DT, solicitor for BPR; PD, counsel for BPR REASONS FOR DECISION [1] BHV is 86 years old and has resided for many years on her grazing properties in rural Queensland. I note that some of the relevant land was owned by BHV and other parts of it were owned by the corporate trustee of a discretionary trust in which she held an interest. Until very recently she has not required any assistance to ensure her daily needs are met. Her family though have become aware that she required support at home and thy made arrangements for various family members to stay with her on rotation. -- 2 of 8 -- 3 [2] They became concerned as to her safety at home and arranged for her to be assessed by her doctor. It was determined that it would be better for her to reside in a facility in town and this was suggested to BHV who was resistant to the idea. [3] BHV appointed two of her children, BFD and ENC as her attorneys under an enduring power of attorney executed on 14 July 2016, as such they would have been able to make any necessary decisions having regard to the views and wishes of BHV if it was determined that she did not have capacity for decisions in regard to those matters. [4] While BHV had sufficient income and liquid assets to ensure that her financial needs were met while she was residing on her grazing property, there was concern that she may not have sufficient resources if she was to reside at a facility in town. Consideration was given by her family to the disposal of BHV’s grazing properties. BFD had breeding and grazing interests which he conducted on properties adjacent to BHV’s. BFD was interested in purchasing BHV’s grazing interests by way of consortium that he was setting up. As he was an attorney of BHV this would be considered a conflict transaction and there was no authorisation in the enduring power of attorney for attorneys to enter conflict transactions, and so this would require the approval of the Tribunal. [5] To facilitate the issues in regard to personal decisions and the possible conflict transaction, applications were made to the Tribunal for a declaration about capacity and for the approval of a conflict transaction. In an abundance of caution, an application was also made for the appointment of a guardian and/or administrator. [6] In any application before the Tribunal the threshold question is whether or not the adult has capacity for the matter as defined in the Acts.1 There is a presumption that an adult has capacity for a matter,2 and it is for that presumption to be rebutted. [7] A health professional report by BHV’s geriatrician was filed. The opinions expressed in the report are that: a) BHV has a relevant diagnosis of Alzheimer’s dementia made in March 2016 for which she is receiving Aricept; b) That she lacks the insight into her health issues including her cognitive decline and that her medications need to be monitored; c) That she had great difficulty in understanding and appreciating the risks associated with her living alone; 1 Powers of Attorney Act 1998 (Qld) (‘POA Act’) Schedule 3 Dictionary; Guardianship and Administration Act 2000 (Qld) (‘GAA Act’) Schedule 4 Dictionary. 2 GAA Act, s 7(a). -- 3 of 8 -- 4 d) That her memory deficits as well as difficulties with executive mean that she will have extreme difficulty with handling bank accounts, and paying bills, as well as understanding legal and financial decisions; e) BHV has great family support, though due to her advanced cognitive decline BPR was not sure she is able to appreciate the love and support she receives from family. f) While her expressive language is intact, due to her Alzheimer’s dementia, reception of complex information is impaired; g) Having regard to whether BHV can understand and her own decisions, BHV does not have capacity to make any decisions. [8] There were also filed a series of review letters from the geriatrician to BHV’s general practitioner which set out his assessment of her and noted the concerns around her continuing to reside on her grazing property. [9] The geriatrician was requested by the BHV’s childrens legal representative to provide a report in regard to BHV’s capacity in regard to specific matters. He stated in his report of 22 March 2017 that over the last 12 months she has shown progressive cognitive deficits, especially with short-term memory and information gathering and retention. She has also demonstrated significant deficits in self-care where her family have taken turns to be with her due to safety issues. The diagnosis of dementia of Alzheimer’s type was made in May 2016 and she has been on Aricept 10mg which is a memory-specific medication. Despite treatment, she has shown progressive cognitive deficits with lack of insight. With regard to her making informed decisions, BHV lacks the capacity to grasp process and retain the information. Based on these grounds it is quite clear that she lacks capacity to make an informed decision with regard to her health, welfare and financial matters. [10] A health professional report by BHV’s general practitioner was filed. That report notes that BHV scored the following on the Mini-Mental State Examination: a) 20/30 on 29/6/17; b) 16/30 on 18/10/16; and c) 24/30 on 14/01/16. [11] The general practitioner’s report notes the diagnosis of Alzheimer’s dementia and that BHV has significant short-term problems which limit her ability to make complex decisions, such as for major surgery. She is not able to weigh up the pros and cons of complex decisions. It notes that: a) She has decided to move into retirement village with some reluctance; b) She can make daily decisions regarding which function to attend, but not long term decisions regarding holidays or travel; and -- 4 of 8 -- 5 c) She gets very confused with figures and maths, excluding only basic interactions, like paying for coffee, and she could not look after a bank account or budget. [12] BHV had capacity on 14 July 2016 to make an enduring power of attorney, though the general practitioner said she quickly forgets. The general practitioner’s opinion was that BHV would be able to make simple decisions. [13] The general practitioner was also asked to provide a report in regard to BHV’s capacity for specific matters. He stated in his report dated 24 February 2017 that: a) She had been diagnosed with dementia of the Alzheimer’s type; b) She is currently taking anti-cholinesterase medication (Aricept) in an attempt to slow the progression of the disease; c) There had been a decline in her cognitive capacity over the last 6 months with increasing short-term memory problems. She has no problems with orientation or understanding but has major problems with retention of information. It is this difficulty with retention that makes it impossible for her weigh up the pros and cons of information. [14] Affidavits were filed by BHV’s children which set out information in regards to her circumstances. In particular, BFD stated that, in the latter part of 2016, her health and capacity had degenerated significantly such that all family members were concerned that she could not live on the property alone and gave examples where she was not able to pay bills or manage at home without family staying with her. [15] At the hearing, all parties and their representatives confirmed that BHV’s decision-making was being adversely affected as a result of Alzheimer’s dementia. [16] The Tribunal has been asked to make a declaration about BHV’s capacity,3 and to make decisions about routine financial matters, dealing with substantial capital assets and living in a remote and isolated area. Capacity is defined as: a) Understanding the nature and effect of decisions about the matter; b) Freely and voluntarily making decisions about the matter; and c) Communicating the decisions in some way. 3 GAA Act, s 146. -- 5 of 8 -- 6 [17] I am satisfied that due to the effects Alzheimer’s dementia BHV is not able to retain information to enable to make decisions and that her capacity to make personal and financial decisions is impaired. [18] An adult may have impaired capacity, in particular, as a result of an organic syndrome that deprives them of the ability to retain information. Though, they may have some information processing skills and executive function skills and be able to have a valuable input into decisions which are being made which affect them. This requires that they be given the information necessary so that they can express their views and wishes in regard to decisions. This is enshrined in Schedule 1 General Principle 7 of the POA Act. [19] The Tribunal considers appointments for guardians and administrators under s 12 of the GAA Act. Firstly, there must be a finding of impaired capacity in regard to the matter and then a consideration of what decisions are required to be made in relation to the matter and finally whether without an appointment the adult’s needs will not be adequately met or their interests adequately protected. [20] Here there has been a finding of impaired capacity and there are clearly decisions of both a personal and financial nature required. BHV’s attorneys are willing to continue in their roles and are supported by their siblings and BHV is happy for them to be her decision-makers. There is no evidence before me that the attorneys have not undertaken their roles competently and they are supported by BHV and their siblings to continue in the role as attorneys. [21] The Tribunal may only appoint a guardian or administrator where it is satisfied that, without appointment, the adult’s needs will not be adequately met or the adult’s interests will not be adequately protected. Having regard to the fact that there are attorneys appointed by BHV who are willing and able to meet her needs and protect her interests I am not satisfied that there is need for appointment of a guardian and administrator and the applications in that regard are dismissed. [22] With BHV is no longer residing on her grazing property and incurring additional expenses for either living in a retirement unit or aged care facility, consideration was given to how this would be financed. At the time, BHV’s major source of income was from the rental of the grazing property to an entity controlled by her son, BFD. BFD wished to enter an arrangement where an entity in which he and his wife would have an interest, would be created and BHV’s property would be sold to that entity. [23] An attorney may enter into a transaction where there is conflict between their duty towards the principal and the interests of the attorney, or a relation, business associate or close friend of the attorney, that is, a conflict transaction, only if it is authorised by the principal, in this case BHV, in accordance with s 73 of the POA Act. -- 6 of 8 -- 7 [24] In this case, BHV does not have the capacity to authorise the transaction and the enduring power of attorney of 14 July 2016 does not authorise conflict transactions. [25] The Tribunal in accordance with s 118 (2) of the POA Act may, if it considers it in the best interests of the principal, authorise an attorney to undertake a transaction that the attorney is not otherwise authorised to undertake. [26] The Tribunal has been requested to authorise the following transactions: a) A transfer of the grazing property for $1,275,000 or more; and b) Pursuant to the Corporations Act 2001 (Cth) s 201F(2)(b), cause a shareholders meeting to be convened and resolutions passed appointing the family to be 4 office bearers of XX Pty Ltd in lieu of BHV for the purpose of: i) Exercising powers as the officers of XX Pty Ltd; and ii) Causing XX Pty Ltd as the trustee of the BHV Settlement Trust to effect a transfer of the BHV Settlement Trust lands for $635,000.00 or more. [27] It was submitted that all of BHV’s children consider that it is in her best interests to sell the grazing property so that she can fund whatever is required to afford her a reasonable standard of living. [28] Financial records in regard to BHV’s assets, income and a budget to the Affidavit of BHV show that BHV’s assets outside of the grazing property include: a) Publicly listed shares valued at $80,270; b) Bank accounts valued at $191,318; and c) That that her annual income is $26,110 including her interest in a partnership with the estate of her late husband. [29] Her expenses are $73,625, which means that she will have annual deficit. I note that these expenses include some in relation to the rural property. [30] The valuation of the grazing property owned by BHV prepared by Herron Todd White as at 22 December 2016 was $1,275,000.00. [31] I note that all of the children of BHV consider that the proposed transaction is in BHV’s best interests. I note that, BHV will no longer be residing on the property and her financial position will be in deficit unless there is another source of funds such as the investment of the proceeds of sale of the property. [32] I am therefore satisfied that it is in BHV’s best interest that the attorneys for BHV be authorised to enter transaction proposed in regard to the sale of -- 7 of 8 -- 8 the land owned by BHV to an entity in which BFD has an interest. To ensure that BHV obtains the current value of the grazing property, this authorisation will expire on 31 December 2017. [33] In regard to the transactions contemplated for XX Pty Ltd as trustee for the BHV Settlement Trust, only the calling of the general meeting for the appointment of directors relates to an asset of BHV. That is, the calling of the general meeting is the exercise of the powers inherent in her shareholding of XX Pty Ltd. That in itself does not appear to be a conflict transaction and does not require Tribunal approval. The other matter relates to the exercise of powers of the directors and dealings by XX Pty Ltd as trustee of the BHV Settlement trust. Those transactions are not transactions in relation to any financial matters of the principal as defined in Schedule 2 Part 1 of the POA Act and therefore do not require authorisation by the Tribunal. [34] That is not to say that in carrying out those transactions the parties in their roles as directors for the trustee of the BHV Settlement Trust do not have duties to BHV as a beneficiary of that trust and her interests as a beneficiary of that trust, must be considered in any transactions by the trustee of the Trust. -- 8 of 8 --