DBU [2015] QCAT 495

CITATION: DBU [2015] QCAT 495 PARTIES: DBU APPLICATION NUMBER: GAA6769-15 MATTER TYPE: Guardianship and administration matters for adults HEARING DATE: 22 September 2015 HEARD AT: Hervey Bay DECISION OF: Member Milburn DELIVERED ON: 13 December 2015 DELIVERED AT: Hervey Bay ORDERS MADE: 1. DBU does not have capacity for personal and financial matters. 2. The application for the appointment of an administrator by the Office of the Public Guardian is dismissed. CATCHWORDS: ADMINISTRATION – where the Office of the Public Guardian applies for the appointment of an administrator following an investigation of alleged financial abuse. POWER OF ATTORNEY – where it is alleged the principal's partner of long-standing, who is her attorney appointed by an enduring power of attorney, has acted contrary to law – where it is alleged the attorney has failed to act honestly and with reasonable diligence – where it is alleged the attorney has failed to keep his property separate from the principal's property – where the power of attorney document contains a specific provision authorising the attorney to enter into conflict transactions Guardianship and Administration Act 2000 (Qld) s 12, 22, Schedule 4 Powers of Attorney Act 1998 (Qld) ss 66, 73, 76, 86, 105, 118, Schedule 1 (the general principles) Ede v. Ede [2006] QSC 378 -- 1 of 7 -- 2 APPEARANCES: Adult’s partner/attorney: EG Lawyer for the attorney: Rebecca Pezzutti Adult’s daughter: EC Adult’s daughter: EU Adult’s stepdaughter: CG Adult’s son-in-law: RA Adult’s niece (in law): TI Public Guardian: Represented by Gina Do REASONS FOR DECISION Background [1] The adult, who is the subject of these proceedings, is 69, a woman who resides at home with her long-term partner. [2] The Office of the Public Guardian (OPG) applies to the Tribunal for the appointment of an administrator following investigations, then accusations, that the adult's partner, who is her attorney under an enduring document, has failed to act in accordance with his legislative obligations. [3] OPG does not specifically apply for an order about an enduring document. [4] When considering an application for the appointment of an administrator, the tribunal must initially consider the question of the adult's capacity to make decisions1. [5] The law presumes an adult to be capable of making his or her own personal and financial decisions. [6] In this case, the tribunal has the benefit of a Health Professional Report completed by the adult’s general practitioner, Dr Alisdair McGrouther, dated 4 March 2015. Dr McGrouther is of the opinion that the adult has a diagnosis of dementia, Alzheimer's disease, her cognitive impairment is progressive and her level of impairment is severe. Dr McGrouther is of the opinion that the adult is not able to manage complex or even simple decisions for personal/health matters and financial affairs on her own. [7] An aged care assessment undertaken in early January 2015 indicates that the adult lacks decision-making capacity. On the day of the assessment, the adult scored 8/30 in a mini mental state examination. 1 ‘Capacity’ is defined in Schedule 4 of the Guardianship and Administration Act 2000 (Qld), as meaning that the adult is capable of understanding the nature and effect of decisions, freely and voluntarily making decisions and communicating the decisions in some way. -- 2 of 7 -- 3 [8] Six members of the adult's family attended the hearing and all were of the view that the adult does lack capacity. [9] Based on the medical information provided to the tribunal and the evidence presented at the hearing, the tribunal determines that the presumption of capacity has been rebutted in this case. The tribunal determines that the adult does not have capacity to make decisions about personal and financial matters. [10] It does not automatically follow that the tribunal must appoint an administrator or guardian. The tribunal must find that there is a need for a substitute decision maker before making such an appointment2. [11] There is clearly a need for the adult to have a substitute decision maker; however, that does not necessarily mean that the substitute decision maker is an administrator or a guardian. It could be an attorney appointed by a power of attorney document. [12] In general, an appointment of an administrator or guardian is not necessary where the adult has lawfully signed a power of attorney document at a time when capable to do so. In this instance, the adult signed an enduring document on 25 June 2010 in favour of her long-term partner. There is no evidence before the tribunal to suggest that the adult did not have capacity to do so at that time. [13] In the context of the current attorney, I refer to the adult as the principal and her partner as the attorney. [14] When signing the enduring power of attorney, the principal included a special condition, being that, pursuant to section 73 of the Powers of Attorney 1998 (Qld), she authorised her attorney, while acting as her attorney, to engage in conflict transactions. [15] OPG says that it is necessary for the tribunal to overtake3, at least to some extent, the power of attorney and appoint an administrator because the attorney has misused the powers conferred upon him pursuant to the enduring document. OPG says the attorney has entered into conflict 2 Section 12 of the Guardianship and Administration Act 2000 (Qld) provides that before the tribunal can appoint a guardian to make personal decisions or an administrator to make financial decisions for an adult with impaired decision-making capacity, the tribunal must be satisfied that there are circumstances that establish a need for a guardian or an administrator. Need is established if the tribunal determines that the adult is likely to do something in relation to the matter that involves, or is likely to involve, unreasonable risk to the adult’s health, welfare or property and without an appointment the adult’s needs will not adequately be met or the adult’s interests will not be adequately protected. 3 I use the term ‘overtake’ in the context of the power conferred upon the tribunal by section 22 of the Guardianship and Administration Act 2000 (Qld) where, by virtue of subsection 2, the attorney may exercise power only to the extent authorised by the tribunal. That is, the tribunal can effectively nullify the effect of part of the power of attorney document. In the context of this case, that could relate to the power to make financial decisions, by the appointment of an administrator. -- 3 of 7 -- 4 transactions and breached the obligations imposed upon him by section 66 of the Powers of Attorney Act 1998 (Qld) by failing to act honestly and with reasonable diligence. In addition, OPG suggests that the adult breached section 86 of the Act by failing to keep his property separate from the principal’s property. Specifically, OPG alleges that the attorney obtained a reverse mortgage over the adult's home for the attorney’s benefit. Further, OPG alleges that the attorney utilised the adult's pension funds for his own benefit. Reverse mortgage [16] The OPG conducted an investigation about an allegation that the attorney obtained a reverse mortgage ‘over the principal’s home’ for his own benefit. Respectfully, the investigation is to some degree ill-conceived, because the principal does not exclusively own the home. The couple purchased the home in 1998 as joint tenants and it has been their joint principal place of residence since that time. [17] The attorney explained to OPG that he and the principal obtained the reverse mortgage over the property in late 2014 for their lifestyle purposes. They had planned to use some of the funds to travel overseas before the principal’s health deteriorated. Ultimately, they were unable to travel due to her ill health. The mortgage provider approved a loan to the extent of $64,000. At the date of the hearing, the attorney had drawn just under $26,000. About $20,000 of this amount remained unspent and the attorney has banked this amount into an account solely in his own name. [18] I accept the submission on behalf of OPG that the authorisation of conflict transactions contained in the enduring document, in general terms, does not negate the legal obligation of the attorney to act honestly and with reasonable diligence or the requirement to keep property separate. [19] The attorney says that he has not breached his legal obligations. He says that his actions are consistent with the obligation to act with reasonable diligence, pursuant to section 66 of the Powers of Attorney Act 1998 and the requirement to keep his property separate, as described by section 86 of this Act. [20] An attorney for a financial matter may enter into a conflict transaction only if the principal authorises the transaction, conflict transactions of that type or conflict transactions generally4. [21] However, a transaction is not a conflict transaction merely because by the transaction the attorney in the attorney's own right and on behalf of the principal deals with an interest in property jointly held; or acquires a joint interest in property; or obtains a loan or gives a guarantee or indemnity in relation to such a transaction5. 4 Powers of Attorney Act 1998 (Qld), s 73(1). 5 Ibid, s 73(3). -- 4 of 7 -- 5 [22] A joint interest includes an interest as a joint tenant or tenant in common6. [23] It is the tribunal's view that the attorney may have possession of these funds for his use as he sees fit. As a joint tenant, he is entitled to use the property. He shares the entitlement with the principal. [24] The tribunal finds that the transaction is not a conflict transaction. [25] If his conduct did amount to a conflict transaction, I am satisfied that the tribunal should excuse the attorney’s actions. In my view, his actions are excused by reference to the conflict clause contained in the enduring document. [26] Therefore, in the alternative, the tribunal excuses the attorney by reference to the conflict clause. [27] An attorney for a financial matter must keep the attorney's property separate from the principal's property7. The obligation imposed upon an attorney in this regard does not apply to property owned jointly by the principal and attorney, or property acquired jointly by the principal and attorney in place of property owned jointly by the principal and attorney8. [28] The tribunal finds that money the attorney received by the reverse mortgage is jointly owned. Therefore, the general obligation to keep her property separate from the principal’s property does not apply in this case. [29] In my opinion, the attorney’s action in banking the sum of $20,000 into his account is lawful. [30] In any event, on that point alone, I do not regard the attorney’s actions as sufficient to warrant the appointment of an administrator. Utilising the principal’s funds [31] The adult receives a pension. By arrangement, Centrelink pays the pension into the adult’s own bank account. The attorney operates the bank account. [32] From the adult's bank account, the attorney makes arrangements for payment of nursing home fees and other expenses for the adult. However, to some degree, he also uses the account for his own purposes. Of particular concern to the Office of the Public Guardian, quite rightly, were a series of seven transactions between January 2015 and April 2015 that relate to the purchase of alcohol and the expenditure of money for betting purposes. The amounts in question ranged between $72 and $200. The attorney, and not the principal, obtained the benefit. 6 Ibid, s 73(4). 7 Ibid, s 86(1). 8 Ibid, s 86(2). -- 5 of 7 -- 6 [33] By drawing money from the principal’s account for the purpose of betting and purchasing alcohol, the attorney has engaged in a conflict transaction. [34] The Office of the Public Guardian says the attorney has breached section 66 of the Powers of Attorney Act 1998 (Qld) by failing to act honestly and with reasonable diligence and section 86 of the Act by failing to keep the attorney's property separate from the principal’s properly. OPG says the principal’s actions negatively impact upon the adult, because her own cash savings in this account are being utilised in a way that is not to her benefit. [35] I find that the principal has engaged in a conflict transaction and has failed to keep the adult’s properly separate to his own property. [36] In my view, the instances in this case are of minor concern and the tribunal can excuse his actions by reference to the specific authorisation given by the principal in her own power of attorney document. I do not condone the attorney's actions in this regard but rather choose to accept that they are actions reasonably contemplated by the principal at the time she appointed the attorney. I accept that when she was well, the principal and the attorney did draw upon the principal's accounts routinely. The principal continued this practice. In part, the nature and extent of the infractions in this regard are relevant. Had his actions been more than of relatively minor consequence I may have come to a different view. [37] Accordingly, I am of the view that by virtue of the special condition contained in the enduring document the principal did authorise this particular conflict transaction9. [38] I am of the view that the attorney has acted honestly and reasonably and the tribunal ought to excuse the breach10. [39] I accept that, in general terms, an attorney must fulfil his fiduciary duty, however I am satisfied that the tribunal may excuse his breach in the circumstances11. Conclusion and orders [40] In my view, there is no need to appoint an administrator. I am satisfied that the power of attorney signed by the principal remains effective. The attorney may continue to act as substitute decision-maker pursuant to that document. [41] The tribunal does have power to revoke the enduring power of attorney or to declare that it is overtaken to the extent that an appointment of an administrator or guardian is made. [42] Given my findings in the matter, I do not believe it is appropriate to either revoke the enduring document or declare that it is overtaken by an 9 Ibid, s73. 10 Ibid, s105. 11 Cf. Ede v. Ede [2006] QSC 378. -- 6 of 7 -- 7 appointment. I do not believe it is necessary to give advice or directions to the attorney12. I believe that the attorney is able to comply with the general principles13. [43] Further, given that the principal had the foresight to authorise her partner to engage in conflict transactions specifically, I do not need to determine whether it is necessary to authorise any such conflict transactions. [44] I am satisfied that by signing the enduring power of attorney the principal has put protective provisions in place to cater for her current circumstance. [45] In my view, without appointment of an administrator by the tribunal, the adult's needs will still be adequately met and interests adequately protected. [46] The formal orders that I make are: a) DBU does not have capacity for personal and financial matters. b) The application for the appointment of an administrator by the Office of the Public Guardian is dismissed. 12 Powers of Attorney Act 1998 (Qld), s118. 13 Ibid, Schedule 1 (the general principles). -- 7 of 7 --