DEK [2017] QCAT 302

CITATION: DEK [2017] QCAT 302 PARTIES: DEK APPLICATION NUMBER: GAA9247-16; GAA1073-17; GAA4338-17; GAA7784-17 MATTER TYPE: Guardianship and administration matters for adults HEARING DATE: 10 August 2017 HEARD AT: Brisbane DECISION OF: Member Joachim DELIVERED ON: 12 September 2017 DELIVERED AT: Brisbane ORDERS MADE: ADMINISTRATION 1. The administration order made by the Tribunal on 27 August 2015 is changed by removing The Public Trustee as administrator and appointing FK and CK jointly as administrators for DEK. 2. The administrators are to provide a financial management plan to the Tribunal by 4:00pm on 17 November 2017, such plan to consider the contribution to be made by the administrator FK by way of payment of rent, utilities, rates, maintenance or services for the benefit of living in DEK’s house and how this was determined, including a rates account paid by the Public Trustee on 6 February 2017. 3. The grants a partial exemption to the administrators from the requirement to provide accounts but directs the administrators to provide to the Tribunal two (2) months prior to the anniversary of this appointment and annually thereafter: (a) copies of the adult's bank statements/passbooks/term deposits for the past year; -- 1 of 21 -- 2 (b) copy of the latest accommodation account of the adult; (c) copy of receipts for any individual items purchased in excess of $500.00; (d) for any shares, investments or superannuation, a copy of all dividend notices or statements received during the year; and (e) a signed and witnessed Declaration as to continuing appropriateness for appointment. 4. This appointment remains current until further order of the Tribunal. This appointment is reviewable and is to be reviewed in five (5) years. NOTICE OF INTEREST IN LAND 5. Before 10 November 2017 the administrators must: (a) Record the appointment as administrators on any property registered in the adults name with the Registrar of Titles by lodging the appropriate notice with a copy of the Tribunal’s appointment decision. (b) Provide confirmation to the Tribunal that this has been completed by providing: (i) A copy of the title search conducted identifying the adult’s property; and (ii) A copy of the Titles registry “Lodgement Summary Form” confirming the notice has been lodged for each property held by the adult. (c) If no property is held, a Record of a search of the Land Registry, from the Registrar of Titles confirming no property is held. 6. If the ownership of any property of the adult changes in any way or the adult acquires an interest in another property the administrators must, within fourteen (14) days of such changes: (a) Give a copy of this order to the Registrar of Titles; and -- 2 of 21 -- 3 (b) Give a notice to the Registrar about the changes or the adult’s interest in another property. DIRECTIONS 7. The former attorney RK is to advise the administrators and the Tribunal in writing of his plan to repay the sum of $266,290.00 plus 7% interest annually to DEK which he took from her bank account by 4:00pm on 3 November 2017. 8. The administrators are to consider what action, if any, they intend to take to recover funds taken by the former attorney RK from the bank account of DEK, including whether the quantum of funds should be considered a debt to the estate of DEK, payable on her death. 9. The administrators are to advise the Tribunal in writing about their decision by 4:00pm on 17 November 2017. 10. The Registrar is to take necessary steps to refer FK’s breach of s 66 of the Powers of Attorney Act 1998 to the Queensland Commissioner of Police. LIMITATION ORDERS 11. The Tribunal orders that pursuant to s 109 of the Guardianship and Administration Act 2000 the following document is confidential and must not be disclosed: (a) A two (2) page document dated 27 April 2017 signed by Kathryn Williams, Deputy Official Solicitor outlining legal issues relating to DEK’s legal matter. CATCHWORDS: GUARDIANS, COMMITTEES, ADMINISTRATORS, MANAGERS AND RECEIVERS – APPOINTMENT – where Adult appointed son as attorney under an Enduring Power of Attorney – where the Public Guardian investigated the actions of the attorney – where the Public Guardian identified unexplained withdrawals from the Adult’s bank account and brought an application for the appointment of an administrator – where the Public Trustee was initially appointed as administrator and where -- 3 of 21 -- 4 the Public Guardian was appointed as guardian – where Tribunal subsequently revoked the Enduring Power of Attorney – where on review appointment of the Public Guardian was revoked – where on Review two of the Adult’s sons were appointed administrators – where the former attorney son admitted to taking significant funds from the Adult’s bank account for his own purposes – where the Adult had significant memory impairment – where the former Attorney had no loan agreement, failed to keep records, failed to repay any of the funds, failed to ensure the Adult’s tax returns were prepared, took funds without the knowledge of the Adult – where the enduring document made no provision for loans or conflict transactions – whether s 66 of the Powers of Attorney Act 1998 (Qld) has been breached Guardianship and Administration Act 2000 (Qld), s 15, s 16, s 17, s 18, s 31, s 109 Powers of Attorney Act 1998 (Qld), s 66 DEK (Unreported, QCAT, Member McDonald, 2 September 2015) APPEARANCES: FK, CK, RK, the Public Trustee of Queensland represented by the Deputy Official Solicitor, the Public Guardian represented by Andrea Stephens on 27 April 2017. The Public Guardian did not attend the hearing on 10 August 2017. REASONS FOR DECISION Background [1] DEK lives in residential aged care in south-east Queensland. She is 94 years old. DEK has three sons, RK, FK and CK. FK lives in her house. [2] On 26 March 2011, DEK appointed RK as her attorney under an Enduring Power of Attorney to make decisions for her about personal, health and financial decisions with the power for financial matters to commence immediately. DEK did not put any clauses in the document allowing for any conflict transactions, any loans or other transactions that allowed RK to use her funds for his benefit. [3] Following allegations about the actions of the attorney alleging financial abuse of DEK, the Public Guardian conducted an investigation and applied to the Tribunal for the appointment of the Public Trustee of Queensland as -- 4 of 21 -- 5 administrator for DEK. The Public Guardian had identified unexplained withdrawals from DEK’s bank accounts totalling over $430,000.00. [4] Prior to the hearing of the application on 27 August 2015, the Tribunal appointed the Public Trustee of Queensland under an interim order. Following the hearing, the Tribunal appointed the Public Trustee of Queensland as administrator for DEK for all financial matters until further order, with a review in two years. The first hearing [5] In her extensive written reasons for decision, the learned Member heard the following evidence:1 [10] The Public Guardian identified a number of concerning transactions. They had been unable to make contact with [RK] to gain clarification of the nature of these transactions. [11] The Public Guardian surveyed [DEK] Suncorp bank account transactions and noted with concern that in the period between May 2013 and April 2015 in which $430,000 had been deposited into [DEK]’s Suncorp Account, and $437,000 had been withdrawn. [RK] was the only other signatory to this account. Several unaccounted for deposits were identified. During that period, $23,585 in share dividends were paid into her account. Cash withdrawals of $24,628 had been made during the period. Multiple purchase on [DEK]’s Visa Account were made. An accounted for bank cheque in the sum of $ 38,840 was drawn but not identified. A bank cheque to East Coast Commercials car dealership for $38, 475 on 12 September 2013. Further, despite the account being $7,000 in credit at the commencement of the period, and having over $430,000 credited, in April 2015 her account was overdrawn. [12] The Public Guardian identified seven branch deposits from unaccounted sources were also made in the period. … [15] He stated that his mother recognised that he was in financial need and offered him financial assistance by way of a loan in 2013. He said that the agreement was made that he loaned funds from [DEK] at this time. He stated that the terms of this loan were that he offered to repay the loan at 7% interest when the house (his investment property) sold. He said that his mother had been typically very generous with gifting all of her life, in particular to charitable institutions. He stated that [DEK] never had a strong understanding of financial affairs, being reliant on her husband during his lifetime. The adult’s other sons, [CK] and [FK] confirmed this to be the case, and confirmed that she would not be able to manage a share portfolio. [16] [RK] stated to the Tribunal that he had made loans from his mother’s account from 2013 onward for the renovation of his investment property. He said the withdrawals were made from his mother’s 1 DEK (Unreported, QCAT, Member McDonald, 2 September 2015). -- 5 of 21 -- 6 Suncorp Account into a Suncorp account in his name, which he stated that he commenced in order to be “transparent”. … [18] [RK] stated that he was unable to identify the full value of amounts loaned without access to his records which he did not have with him at the time, and had made no repayments but intended to do so. [19] He clarified that a number of lump sum deposits identified in the Public Guardian’s investigation report as being from an unaccounted source were in fact deposits as a result of sell down of her shares. Deposits of $78,425, $192,343.72, and $84, 445 he said represented credits to [DEK]’s account as a result of sale of Westpac and Wesfarmers shares. Asked the reasons for the sale of the shares he replied “because I needed the money.” He identified a deposited sum of $6,718.36 as being a gift to his mother from him. When questioned why this amount was so specific he was unable to provide further clarification beyond the statement that it was a gift and not towards repayment of the loan. … [21] [RK] admitted that funds were transferred from [DEK]’s account to his solicitor Michael Dwyer’s trust account. He was unable to confirm to the Tribunal what this was for, but thought this may be for legal costs relating to this his mother or possibly to this proceeding but said he was unable to be certain. The Public Guardians’ report notes that $3,500 was transferred to this account. Mr Dwyer clarified that he has never acted for [DEK], although as acted for [RK] in a number of matters. [22] [RK] stated to the Tribunal that [DEK]’s tax returns had not been submitted for the past three years. [23] [RK] stated that [DEK] had wanted to gift ... with a Nissan Patrol motor vehicle and this was purchased for a sum in excess of $30,000 with his facilitation, although he considered that [FK] had alternative vehicles which could be driven. The Tribunal notes that a bank cheque of $33,475 to East Coast Commercials represents this purchase on 12 September 2013. [6] The learned Member made the following findings: [27] The Tribunal has formed the view that the attorney has breached his obligations under the POA Act in many ways. [28] Section 87 gives rise to a presumption of undue influence where there is a transaction between an attorney and the principal. The evidence before the Tribunal suggests that the loan agreement, if there was one, occurred in 2013 which was around the time that [DEK] was diagnosed with and treated for Alzheimer’s Disease. [RK] was unable to provide the Tribunal with sufficient evidence that would rebut the presumption of undue influence in relation to the loan agreement between he and his mother. [29] The agreement to make a loan and the loaning and draw down of her funds was a conflict transaction which was not authorised by the attorney specifically in the enduring document. It is apparent that no -- 6 of 21 -- 7 loan has been authorised expressly in the Enduring Power of Attorney executed by [DEK] on 26 March 2011. An attorney has a duty to avoid conflict transactions under s 73 of the POA Act, where their interests and their duty conflict. Cleary, in using [DEK]’s funds for the renovation of his investment property, he put his own financial interests before his duty to protect [DEK]’s financial position. [30] Under s 88 of the POA Act, an attorney has an obligation to keep their property separate from the principals. The evidence suggests that [RK] has made direct transfers from his mothers account to his own bank account. [31] The attorney has authorised a gift of a vehicle to [FK] where [DEK]’s financial position was in a very poor state due to his multiple loans. Under s 88 of the POA Act the gift must be reasonable having regard to the circumstances. The Tribunal notes that the gift was endorsed by [DEK], and was for the purpose of facilitating her transport by her carer. However the Tribunal notes that the adult had a bank balance of $1209 until three days prior to the purchase, and that the vehicle had therefore been purchased from the proceeds of the sale of her shares, and subsequent reduction of her income stream. Such a gift is therefore unreasonable and inappropriate to the adult’s circumstances. There is no basis for approval of such a gift. The Attorney’s facilitation of this gift is in breach of the Act. [32] The attorney also has failed to attend to his obligations to submit annual tax returns for [DEK], in breach of his obligation to act with diligence. [33] The attorney has sold down [DEK]’s shares for his own interest, without regard for implications for her financial position. She has been financially disadvantaged by the reduction in her income stream in circumstances where her shares were her major source of income. He has disregarded possible capital gains tax which may adversely affect her. These decisions were opportunistic and do not show financial prudence, nor any regard for [DEK]’s current or future needs. [34] In taking the aforementioned actions, the attorney has failed to act in accordance with the General Principles of the POA Act, and in particular with Principle 10, which requires that the attorney to act in a manner that is appropriate to the adult’s characteristics and needs. He has loaned [DEK]’s funds to himself, and gifted significant amounts to his brother where she was not in a financial position to make gifts or substantial loans. [RK] has not considered her present or future needs for her income stream, and has depleted her bank balance to nil at one point, despite her income of over $430,000 in the two year period he was acting as [DEK]’s attorney. The loans to himself were excessive and have significantly disadvantaged [DEK]. [35] The Tribunal finds that having regard to the multiple breaches of the POA Act in the exercise of financial power, [RK] is no longer appropriate to act as Enduring Power of Attorney for financial matters. … [37] The Tribunal is satisfied based on the evidence of Dr Chai and Pitzen, and the adults own statement of dependence and failing memory that the adult is unable to make decisions freely and voluntarily. She therefore does not have capacity to make financial decisions and has -- 7 of 21 -- 8 complex financial matters to attend to in recovering her financial position and managing and protecting her assets. There are decisions to be made with respect to recovery action, taxation, and management of the balance of her share portfolio… The second hearing [7] On 2 June 2016, the Tribunal appointed the Public Guardian as guardian limited to make decisions about accommodation and health care until further order, with a review in five years. The member revoked the Enduring Power of Attorney at that time. Further applications [8] Applications have been received seeking a review of both appointments. CK seeks to replace the Public Trustee of Queensland with himself and FK as administrators, and to replace the Public Guardian as guardian with himself and FK as guardians. The Tribunal Hearing on 27 April 2017 [9] These applications commenced being heard on 27 April 2017. At that time, the Tribunal revoked the appointment of the Public Guardian as guardian for DEK. Whilst finding that DEK lacked capacity for decision-making for personal matters, the Tribunal was not satisfied there was a need for an appointment. I also found that DEK lacked capacity for her financial matters as a result of progressive dementia and very poor short term memory. [10] When the Tribunal reviews an appointment it does so under s 31 of the Guardianship and Administration Act 2000 (Qld) (GAA Act). This provides that at the end of the review, the Tribunal must revoke its appointment unless satisfied it would make an appointment if a new application was made. [11] DEK had moved to an alternative residential aged care facility on 28 February 2017 as the previous facility had closed. CK and FK stated that their mother had settled in reasonably well, was stable and that the three brothers would be able to agree on health care matters. [12] In these circumstances, I found that DEK’s needs for decisions about personal matters would be adequately met and her interests adequately protected without the need for a guardian. Whilst the Public Guardian had recommended an appointment was required for accommodation decisions, this was in the context of her previous accommodation closing and no decision having been made for her to move to Magnolia Homestead. [13] The sons could make health care decisions under the Statutory Health Attorney regime under the Powers of Attorney Act 1998 (Qld) (POA Act), without the need for a guardianship appointment. [14] As a result, I revoked the appointment of the Public Guardian as guardian. -- 8 of 21 -- 9 [15] RK did not attend this hearing. He later claimed he did not receive notice. Because of his non-attendance, and the handing up of certain documents detailed below, I adjourned the application by his brothers for a review of the Public Trustee of Queensland’s appointment because I wanted to hear from RK about his actions as attorney for financial matters as this information would guide me in any decision about the need for and appropriateness of potential administrator/s. [16] At the hearing, the Public Trustee of Queensland provided a report to the Tribunal regarding their attempts to recover funds from RK, their further review of bank accounts and their continuing appropriateness for appointment. Attached to the submissions was a schedule of transactions outlining 300 unexplained withdrawals from, and one unexplained deposit, to DEK’s Suncorp bank account. [17] FK and CK also handed up a submission at the hearing outlining their perceived shortcomings of the Public Trustee of Queensland. [18] Both the Public Trustee of Queensland and DEK’s three sons required time to consider and respond to these documents in the interests of natural justice. [19] The Public Trustee of Queensland submitted a further document over which it requested a confidentiality order. I adjourned the review with directions as below: DIRECTIONS 3. Within twenty-one (21) days the Public Trustee of Queensland is directed to respond in writing to the Tribunal and to the applicants with respect to the applicants statement handed to the Tribunal on 27 April 2017 in so far as it relates to the Public Trustee of Queensland’s administration. 4. By 4.00pm, 26 May 2017 the financial attorney, [RK], is directed, pursuant to section 138AA of the Guardianship and Administration Act 2000, and section 213 of the Queensland Civil and Administrative Tribunal Act 2009, to provide an explanation of each of the 301 unexplained withdrawals and deposits contained in the Public Trustee of Queensland schedule of transactions for [DEK]. 5. Should [RK] fail to provide sufficient details of these transactions, a notice to attend and produce is to be issued to [RK] requiring him to attend a hearing at a specified time, date and location. 6. The Public Trustee of Queensland is directed to make enquiries of Mr Tiley of Tiley and Co and on Dr E Merson regarding [DEK]’s capacity at material times and provide evidence to the Tribunal about his enquiries, fourteen (14) days prior to the hearing to hear the adjourned matter. -- 9 of 21 -- 10 Events before the resumption of the adjourned hearing [20] I was not satisfied with the explanation of RK regarding the unexplained withdrawals and deposit for the following reasons: a) He blames others for not accurately quantifying his borrowings from his mother; b) Apart from indicating $256,930.00 transferred from his mother’s account to his, and a payment of $33,475.00 for a motor vehicle for FK, he was unable to explain the other transactions, other than his mother probably undertook them; c) It was apparent that he had failed to keep records of his mother’s transactions, despite his acting as her attorney from December 2013. [21] I made the following order on 30 May 2017: 1. The presiding member directs that [RK] attend the hearing on 10 August 2017. NOTE: 2. Pursuant to s115 of the Powers of Attorney Act 1998 the Tribunal will consider at the hearing whether or not the attorney has breached s66 of the Powers of Attorney Act 1998. [22] RK received this order and a notice to attend dated 30 May 2017 in respect of the 10 August 2017 hearing. [23] The notice of hearing issued on 18 July 2017 to all parties, including RK, specifically drew attention to the provisions of s 66 of the POA Act – acting honestly and with reasonable diligence, as well as the penalty for breaching this section. [24] The notice also advised that the application for a confidentiality order would be heard, and the Tribunal initiated application for an order about an enduring document would also be heard. The resumed hearing on 10 August 2017 [25] RK attended this hearing along with his brothers, CK and FK. The Public Trustee of Queensland was also in attendance. [26] The Public Trustee of Queensland’s request for a confidentiality order over a document submitted at the hearing on 27 April 2017 was considered first. The application was made under s 109 of the GAA Act which provides at subsection (1): (1) If the tribunal is satisfied it is necessary to avoid serious harm or injustice to a person, the tribunal may, but only to the extent necessary, by order (a confidentiality order)— -- 10 of 21 -- 11 (a) withhold from an active party or other person a document, or part of a document, before the tribunal; or (b) withhold from an active party or other person other information before the tribunal. [27] This document related to a legal matter of DEK and outlined the legal issues involved in potential action against RK to recover funds from transactions he was alleged to have made whilst attorney. [28] No parties had any objections to the making of the order and I made the order to avoid injustice to DEK should legal action be commenced against RK in his role as attorney for his mother. [29] When considering the review of the appointment of the Public Trustee of Queensland as administrator for DEK, I must take into account not only the provisions of s 31 referred to earlier, but also the removal provisions on review. Section 31 provides that I can only remove an existing appointee if the current appointee is no longer competent or another person is more appropriate. The applicant brothers submitted they were more appropriate. [30] The appropriateness provisions are contained in s 15 to s 18 of the GAA Act. In this case, the Tribunal must have particular regard to s 15. [31] The applicant brothers provided written submissions to the tribunal about why they should be appointed and their concerns about the actions of the Public Trustee of Queensland. The Public Trustee of Queensland provided responses to the brother’s concerns. [32] In brief, the brothers are concerned about the following: a) The Public Trustee of Queensland’s inability to regain any of their mother’s funds from their brother RK in over two years; b) The Public Trustee of Queensland not declaring the missing funds as a debt which will never be repaid; c) The Public Trustee of Queensland’s push to have their mother’s house sold; d) The selling of their mother’s assets for working capital with the sale of the car only realizing a percentage of its true value; e) Allowing funds to accumulate in a Suncorp account from which unauthorised withdrawals were made without proper monitoring by the Public Trustee of Queensland; f) No funds being spent on property maintenance; g) Poor communication between the Public Trustee of Queensland and the applicant brothers; -- 11 of 21 -- 12 h) Lack of staff stability leading to the involvement of multiple trust officers; i) The Public Trustee of Queensland’s tardiness in responding to the police in circumstances where RK was accessing and damaging the property; j) The Public Trustee of Queensland not prioritising their mother’s spending; and k) Unpaid pharmacy bills. [33] In response the Public Trustee of Queensland has commented as follows: a) The Public Trustee of Queensland is an independent decision-maker who tries to work with families; b) The Public Trustee of Queensland will always face staff turnover; c) The Public Trustee of Queensland has acted in accordance with the general principles; d) The Public Trustee of Queensland referred RK’s non-payment to the official solicitor in April 2016 (I note the first decision of QCAT appointing the Public Trustee of Queensland after a full hearing was made on 2 September 2015); e) The Public Trustee of Queensland continued to make further inquiries to assist it in possible future action against RK; f) The Public Trustee of Queensland is entitled to recover reasonable legal costs; g) The Public Trustee of Queensland remains competent and appropriate, is impartial and experienced; h) The information provided by the Public Trustee of Queensland to the Department of Veteran’s Affairs (DVA) in relation to the assets and income assessment for DEK’s nursing home costs was based on an action plan that RK would repay the funds he owed his mother. DVA were notified about the allegations of misuse of $300,000.00 and treated it as a loan in assessing her Refundable Accommodation Deposit (RAD) or Daily Accommodation Payment (DAP); i) The applicant brothers did not want the property sold; j) The Public Trustee of Queensland was unable to obtain insurance details for the vehicle and at one time could not locate it after RK had been requested to return it; k) The Public Trustee of Queensland had withdrawn funds from the Suncorp account after dividends had been paid into it, however, DEK -- 12 of 21 -- 13 signed withdrawal slips after a further build up of funds, despite the Public Trustee of Queensland requesting on 9 June 2015 that no further withdrawals be permitted without its authority. l) The Public Trustee of Queensland considered it was appropriate for a small bank account to be available for DEK; m) The Public Trustee of Queensland conducted building inspections highlighting certain maintenance was required. Various communications took place between the Public Trustee of Queensland, FK and CK, resulting in some works and quotes. Because of some family conflict the Public Trustee of Queensland asked that no further alterations occur. Subsequently it was agreed FK, as the occupant would attend to repairs and maintenance; n) The sale of the property was considered in the context of needing funds for the RAD. As limited funds were available for upgrades, the Public Trustee of Queensland would have put it in a saleable condition and obtained a valuation. FK would have been allowed time to move; and o) The Public Trustee of Queensland engaged a locksmith after discussion with CK regarding RK removing items. [34] The Tribunal is satisfied that the Public Trustee of Queensland remains a competent administrator whilst facing considerable difficulties, essentially arising from RK’s reluctance to co-operate with the Public Trustee of Queensland and his brothers. [35] Despite the oral submissions of the Official Solicitor that the appropriateness considerations are not addressed in the applicant’s submissions, I respectfully disagree. I accept what the brothers have argued in their submission on this point as summarised below. [36] In their written submissions, the applicant brothers have argued they are more appropriate because: a) They would not make any forced sale of any remaining assets; b) They will not charge any costs for management; c) Whilst they will seek legal advice regarding the recovery of their mother’s funds, they are concerned the Public Trustee of Queensland will continue to spend money on the legal action; d) There will not be multiple trust officers if they are appointed; e) They understand their mother’s views and wishes; and f) They would offer a more personalised approach to financial management. -- 13 of 21 -- 14 [37] As required in s 15 of the GAA Act, I have also considered the matters contained in that section and find the brothers are appropriate for appointment. [38] I accept their arguments above in paragraph [36](b), (d), (e) and (f) as to why they are more appropriate. [39] I will appoint the applicant brothers CK and FK as administrators for all financial matters until further order with a review in five years. Because FK remains living in his mother’s property, I will require an updated financial management plan taking into account what contribution FK intends to make for the benefit of remaining in the home. [40] For the reasons outlined below they will also be required to consider what action, if any, they should take to recover funds taken by RK from their mother’s bank account. Order about an Enduring Power of Attorney – Has RK acted honestly and with reasonable diligence whilst attorney for his mother? [41] The Public Trustee of Queensland identified 300 unexplained withdrawals from and one unexplained deposit to DEK’s Suncorp Account 017321225, a 55 Plus account. [42] The withdrawals covered the period 20 May 2013 to 14 May 2015 with the deposit being made on 27 May 2015. [43] At the hearing, RK advised he commenced acting under the Enduring Power of Attorney from December 2013. [44] It is relevant to note the various health professional reports leading up to this time. [45] On 1 June 2013, Dr Pitzer GP records a diagnoiss of Alzheimer’s disease, unable to make complex decisions about her finances, that she is strongly influenced by her son RK, that she was unable to make decisions freely and voluntarily. [46] On 1 June 2013, Dr Chai, Geriatrician, noted a report from son FK about DEK having mild memory problems, and Dr Chai recorded mild cognitive impairment and Alzheimer’s disease. [47] On 17 December 2013, discharge report from Allamanda Hospital notes disorientation, poor short term memory, mild cognitive impairment. [48] RK acknowledged the following at the hearing: a) About $320,000.00 to $330,000.00 of DEK’s shares were sold; b) He borrowed around $256,930.00 from his mother to be repaid at 7% interest per annum. These funds were taken from his mother’s account by way of branch transfers and phone transfers commencing -- 14 of 21 -- 15 12 September 2013 and continuing until 14 May 2015 (the amount taken was actually $266,290.00); c) A further amount of $33,475.00 of his mother’s funds was used to purchase a vehicle for FK by way of a bank cheque withdrawal on 12 September 2013; d) A $6,000.00 deposit was made on 27 May 2015 by RK as a gift to his mother, not any repayment of his borrowings; e) He borrowed the funds for property renovation, solicitor’s fees and personal expenditures; f) He has never repaid any borrowings or interest; g) His mother would not remember the amount he borrowed; h) There are no records of the transactions apart from the bank statements as RK did not keep records; i) He assisted his mother’s accountant with finalising her 2012 tax return but did not arrange for any subsequent years tax returns to be completed and filed; and j) Whilst initially saying his mother was involved in all withdrawals, he subsequently advised that she was not present in relation to transactions for living expenses from 18 December 2014 (there were phone transfers which totalled $13,290.00 and are included in the total borrowings of $266,290.00, as is a branch transfer of $3,500.00 from his mother’s account to his solicitor’s trust account). [49] From his admissions, I have calculated the alleged borrowings from the Public Trustee of Queensland schedule of unexplained transactions. The details of the amounts admitted to as borrowings are listed at Schedule 1 of these reasons. [50] The Pubic Trustee submitted that the borrowing of monies by RK breached the POA Act. [51] CK stated he did not object to his mother loaning money to RK, but he had no idea of the amount being borrowed and how it would leave his mother financially. [52] FK submitted that there was no likelihood of the money being paid back and that RK treated their mother’s money as his income. [53] RK made the following submissions: a) He admits borrowing money from his mother; b) He has been honest and open in all the transactions and has not lied; -- 15 of 21 -- 16 c) He has shown due diligence in that his brothers were aware he borrowed money from their mother and had not left her destitute; d) He was working on how to pay it back and was seeking employment; and e) He fully supported his brothers being appointed as administrators. [54] I agree with the findings of Member McDonald that RK as attorney has breached his obligations under the POA Act in many ways. I also refer to her remarks noted in paragraphs [5] and [6] of these reasons. [55] This has particular relevance to evidence given by FK, with which RK disagrees, that their mother told FK she was not going to lend RK any more money even before the shares were sold. [56] I make the following findings of fact in relation to s 66 of the POA Act: a) RK commenced acting as attorney in December 2013 under an Enduring Power of Attorney executed on 26 March 2011 by DEK appointing RK as attorney for personal, health and financial matters; b) The Enduring Power of Attorney for financial matters was to begin immediately and made no provisions for gifting, loans or conflict transactions; c) RK took funds from his mother’s account when she lacked capacity for decision-making for financial matters as a result of short term memory loss and cognitive impairment due to dementia; d) RK, whilst attorney, utilised at least $266,290.00 of DEK’s funds for his own purposes; e) RK has not repaid any of these funds despite promising to do so at 7% interest per annum; f) RK did not enter into any loan agreement; g) There was a conflict between RK’s interests as attorney and the principal, DEK’s interests in respect of the transactions initiated by RK to take funds from his mother’s account; h) Despite being aware of difficulties with the finalisation of DEK’s 2012 taxation return requiring his intervention, RK failed to take any action to ensure her tax returns in 2013, 2014 and 2015 were completed and filed; and i) RK failed to keep adequate records of the funds he had taken and the accrued interest, evidenced by his inability to advise the Tribunal at the original hearing of the amount he owed his mother. -- 16 of 21 -- 17 [57] As a result of the above, I consider that RK is in breach of s 66 of the POA Act: 66 Act honestly and with reasonable diligence (1) An attorney must exercise power honestly and with reasonable diligence to protect the principal’s interests. Maximum penalty—200 penalty units. (2) In addition to any other liability the attorney may incur, the court may order the attorney to compensate the principal for a loss caused by the attorney’s failure to comply with subsection (1). [58] RK has not acted diligently to protect his mother’s interests in that he has not kept records, had no written loan agreement, he has not filed her tax returns, he has not repaid any monies taken, he took funds from her accounts at a time when she could not remember whether she had previously loaned him money and he took at least $13,290.00 from her accounts on his own admission, without her knowledge from 18 December 2014 to 14 May 2015. He had a duty to keep records from December 2013 onwards when he commenced acting as her attorney. He didn’t. [59] I consider RK should be prosecuted under s 66 of the POA Act. [60] The Registrar is to take necessary steps to refer RK’s breach of s 66 of the POA Act to the Queensland Commissioner of Police. -- 17 of 21 -- Schedule 1 Transactions admitted by attorney as having been taken from DEK’s bank account Date Details Amount 12 September 2013 Branch transfer [branch] to [RK’s account] 10,000.00 12 September 2013 Branch Transfer [branch] to [RK’s account] 5,000.00 21 October 2013 Branch Transfer [branch] to [RK’s account] 5,000.00 31 October 2013 Branch Transfer [branch] to [RK’s account] 10,000.00 4 December 2013 Branch Transfer [branch] to [RK’s account] 25,000.00 31 January 2014 Branch Transfer [branch] to [RK’s account] 20,000.00 17 February 2014 Branch Transfer [branch] to [RK’s account] 15,000.00 10 March 2014 Branch Transfer [branch] to [RK’s account] 20,000.000 28 March 2014 Branch Transfer [branch] to [RK’s account] 15,000.00 15 April 2014 Branch Transfer [branch] to [RK’s account] 15,000.00 14 May 2014 Branch Transfer [branch] to [RK’s account] 10,000.00 24 May 2014 Branch Transfer [branch] to [RK’s account] 10,000.00 30 May 2014 Branch Transfer [branch] to [RK’s account] 5,000.00 6 June 2014 Branch Transfer [branch] to [RK’s account] 2,500.00 -- 18 of 21 -- 19 Date Details Amount 9 July 2014 Branch Transfer [branch] to [RK’s account] 3,000.00 11 July 2014 Branch Transfer [branch] to [RK’s account] 10,000.00 23 July 2014 Branch Transfer [branch] to [RK’s account] 5,000.00 1 August 2014 Branch Transfer [branch] to [RK’s account] 5,000.00 6 August 2014 Branch Transfer [branch] to [RK’s account] 5,000.00 14 August 2014 Branch Transfer [branch] to [RK’s account] 5,000.00 18 August 2014 Branch Transfer [branch] to [RK’s account] 6,000.00 26 August 2014 Branch Transfer [branch] to [RK’s account] 6,000.00 1 September 2014 Branch Transfer [branch] to [RK’s account] 5,000.00 9 September 2014 Branch Transfer [branch] to [RK’s account] 10,000.00 15 September 2014 Branch Transfer [branch] to [RK’s account] 6,000.00 19 September 2014 Branch Transfer [branch] to [RK’s account] 5,000.00 23 September 2014 Branch Transfer [branch] to [RK’s account] 4,000.00 24 September 2014 Branch Transfer [branch] to [RK’s account] 5,000.00 7 October 2014 Branch Transfer [branch] to [RK’s account] 1,000.00 3 November 2014 Branch Transfer [branch] to [RK’s account] 1,000.00 -- 19 of 21 -- 20 18 December 2014 Phone transfer debit to [RK’s account] reference n.97391711 1,000.00 20 December 2014 Phone transfer debit to [RK’s account] reference n.82368522 1,000.00 9 January 2015 Phone transfer debit to [RK’s account] reference n.70670461 1,000.00 11 January 2015 Phone transfer debit to [RK’s account] reference n.51525822 300.00 13 January 2015 Phone transfer debit to [RK’s account] reference n.99029830 1,000.00 16 January 2015 Phone transfer debit to [RK’s account] reference n.86822562 1,000.00 4 February 2015 Phone transfer debit to [RK’s account] reference n.6764932 400.00 12 February 2015 Phone transfer debit to [RK’s account] reference n.46681502 800.00 16 February 2015 Phone transfer debit to [RK’s account] reference n.37264900 40.00 19 February 2015 Phone transfer debit to [RK’s account] reference n.81618592 200.00 19 February 2015 Phone transfer debit to [RK’s account] reference n.73725891 550.00 27 February 2015 Phone transfer debit to [RK’s account] reference n.60542312 2,000.00 27 February 2015 Branch transfer Mt Tamborine to 45104165 3,500.00 -- 20 of 21 -- 21 Date Details Amount 10 March 2015 Phone transfer debit to [RK’s account] reference n.63786011 1,000.00 19 March 2015 Phone transfer debit to [RK’s account] reference n.74928630 600.00 14 April 2015 Phone transfer debit to [RK’s account] reference n.11240692 500.00 20 April 2015 Phone transfer debit to [RK’s account] reference n.70723591 300.00 23 April 2015 Phone transfer debit to [RK’s account] reference n.11331702 150.00 27 April 2015 Phone transfer debit to [RK’s account] reference n.39116232 100.00 30 April 2015 Phone transfer debit to [RK’s account] reference n.62423621 800.00 14 May 2015 Phone transfer debit to [RK’s account] reference n.24121531 350.00 14 May 2015 Phone transfer debit to [RK’s account] reference n.78106750 200.00 Total: $266,290.00 -- 21 of 21 --