BS [2012] QCATA 217

CITATION: BS [2012] QCATA 217 PARTIES: BS APPLICATION NUMBER: APL368-11 MATTER TYPE: Appeals HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Richard Oliver, Senior Member Susan Gardiner, Member DELIVERED ON: 26 October 2012 DELIVERED AT: Brisbane ORDERS MADE: 1. Leave to appeal is granted and the order of the Tribunal dated 14 September 2011 is set aside. 2. The application for compensation filed 10 September 2010 is dismissed. CATCHWORDS: APPEAL – GUARDIANSHIP – Where an order for compensation made against the administrator over alleged loss of chattels – where de facto property agreement made including a global distribution of chattels – where a specialist family lawyer appointed to represent adult – where the administrator not held liable for chattels alleged to have not been received by adult after property settlement signed Guardianship and Administration Act 2000, s 35 Property Law Act 1974, ss 265(1), 270 APPEARANCES and REPRESENTATION (if any): This matter was heard and determined on the papers pursuant to s 32 of Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act). -- 1 of 5 -- 2 REASONS FOR DECISION [1] BS has an acquired brain injury as a result of being involved in a motor vehicle accident in 2005. The Public Trustee was appointed as administrator for financial affairs in 2006 and has continued in that role. [2] Over the intervening years BS‟s family and another interested party have made various complaints about The Public Trustee‟s performance of its role as administrator. On 10 September 2010 an application for compensation was filed claiming that The Public Trustee‟s “actions and inactions” has resulted in significant financial loss and hardship for BS. [3] That application was heard by the Tribunal on various dates with the principal decision being made on 28 March 2011. During the course of the hearing which took place on the 28 March 2011 a number of specific complaints were made however, the Tribunal found that only one complaint was made out in that The Public Trustee did not act with due diligence to protect BS‟s interests in the division of chattels under a separation agreement between BS and his former partner.1 After receiving some further submissions on compensation, the Tribunal ordered that The Public Trustee compensate BS with a payment of $3,248.00 by way of compensation. [4] On 14 October 2011, The Public Trustee filed an application for leave to appeal or appeal. The Public Trustee says that the Tribunal misdirected itself as to the correct legal principles, denied it procedural fairness, acted without probative evidence, and also made inconsistent findings of fact. [5] Directions were made for the conduct of the appeal and consistent with those directions The Public Trustee has filed submissions in support of the appeal but no submissions had been filed by BS. [6] To put the appeal in context, the claim for compensation related to the alleged loss of certain chattels BS says he was entitled to as a result of an agreement with his former de facto partner under a property settlement pursuant to section 265(1) and section 270 of the Property Law Act 1974. BS and his partner lived in a de facto relationship but the relationship broke down in 2009. The Public Trustee appointed specialist family lawyers, SP & Associates to act for BS to protect his interests in the division of property between himself and his partner. [7] On 11 November 2009 a written “separation agreement” which divided the property in which the parties had a joint interest was signed. There is a certificate of independent advice attached to the separation agreement which confirms that a solicitor certifies that she provided advice to The Public Trustee as “administrators for the financial affairs of BS” independent of any other party and before the time at which The Public Trustee signed the deed of agreement as to the effect and consequences of the document. 1 Guardianship and Administration Act 2000, s 35. -- 2 of 5 -- 3 [8] The first schedule to the agreement sets out a schedule of BS‟s assets and liabilities and the second schedule sets out his partner‟s assets and liabilities. It is clear from the document that BS has significantly more property than his partner. BS‟s property included the following chattels: a Yamaha jet ski, 2001 box trailer, 1999 box boat trailer, and a 1999 Mitsubishi Triton. [9] In the usual way, the agreement included a clause: “That apart from property and financial resources dealt with above, each party retain without claim from the other the ownership in any other personal property or financial resources under their custody, control or in their possession.” What is the effect of the separation agreement [10] The hearing proceeded on the basis that the parties were in a de facto relationship and during the period of the relationship both made contributions to the acquisition of the jointly owned goods and chattels. Because of the de facto relationship, prior ownership of property becomes less relevant the longer the relationship endures, however it does become relevant to the contribution made by one party to the total property pool for the purposes of division of that property either by agreement or by the Court. [11] The purpose of the separation agreement was to finalise both parties‟ claims to the joint property pool. Fortunately for BS, he had The Public Trustee appoint a very experienced solicitor and accredited specialist in family law. The solicitor from this office had the conduct of BS‟s property settlement. All agree that the separation agreement reflects a very good outcome for BS. Even though his partner was not represented by a solicitor in the negotiations, BS‟s solicitor was careful to ensure that the property settlement reflected her contribution to the pool of assets. [12] The agreement provided that BS‟s partner would be paid a total of $25,000, on terms, and that “each party retain without claim from the other ownership in any other personal property or financial resource under their custody control or possession” as at the date of the agreement.2 [13] Retention of property under clause 3.4 of the agreement is not contingent on ownership before the relationship commenced or who acquired the property during the relationship. Once it is accepted that a de facto relationship exists then apart from any specific agreement as to ownership of identified chattels, all of the property goes into the pool. This is reflected in the agreement by reference to the schedules which identifies each party‟s personal liabilities and assets. [14] The evidence establishes that the property found by the Tribunal to “belong” to BS at the time of the agreement was more likely than not to be in the custody, control or possession of the other party because she was 2 Separation agreement clause 3.4. -- 3 of 5 -- 4 still occupying the home where they both lived when the deed was signed. It may well be that the reason she did not press for a greater cash settlement was because she was going to retain those chattels that were in the property with her. It is not for the Tribunal or us to second guess the rationale for agreeing to the terms of the settlement, unless the agreement itself is under challenge. [15] BS‟s claim for compensation was based on his ownership of the chattels not on the fact that they were in his custody, control or possession at the time the agreement was signed. His claim for ownership is irrelevant to his entitlement to the property once the agreement was signed. [16] There is nothing unusual about a provision for settlement of the minor chattels in this in globo fashion in property settlements both under the Family Law Act 1975 and the Property Law Act 1974. [17] All of the evidence relied upon to establish that BS had an entitlement was gathered well before the separation agreement was signed, as depicted by the photographs taken in July, some of which included the items set out in the schedule to the agreement. None of this evidence goes to prove that it was in BS‟s custody, control or possession on 11 November 2009. The schedules of property annexed to the agreement were simply there for the purposes of establishing both parties‟ contribution to the pool so that there could be an adjustment to reflect that contribution. Further, no challenge has been made to the separation agreement per se so it remains the operative document for the purposes of division of property between these two parties. Did The Public Trustee act with reasonable diligence [18] Section 35 of the Guardianship and Administration Act 2000 imposes an obligation on an administrator, here The Public Trustee, to act honestly and with reasonable diligence to protect the adult‟s interest. Failure to do so can result in a claim for compensation by the adult if loss is caused through some fault of the administrator. [19] In dealing with BS‟s property settlement the Trustee took all reasonable steps and acted with due diligence in appointing an experienced specialist solicitor to act in BS‟s interests in coming to agreement about the distribution of the jointly owned property. No criticism has been made of the settlement separation agreement, nor can any. [20] The clause about the chattels is, as we have said, a standard provision in many property settlements to avoid protracted disputes about minor chattels of little value. This case itself demonstrates that proposition because some of these chattels have been valued as little as $5. The only chattel of any significant value is an RX 250 motorbike. There was no probative evidence provided to the Tribunal that BS was indeed the owner of this chattel. The extra time and expense in dividing the “pots and pans” can be significantly outweighed by the cost incurred in undertaking such a process. It becomes counterproductive. -- 4 of 5 -- 5 [21] Although the Tribunal expressed concerns about the agreement because it was silent on the issue of non significant property3 this is not sufficient to go behind the agreement to then make a determination as to what property or chattels belonged to BS and what belonged to his de facto partner after the agreement was signed. The fundamental error in the approach taken by the Tribunal in this matter was attempting to go behind the settlement separation agreement to then identify property that “belonged to BS”. [22] Criticism is also made in that The Public Trustee should have protected BS‟s interest by securing those chattels that he says were his before the separation agreement was signed. This again exhibits a misunderstanding of the nature of the property proceedings. Although BS may have a claim to specific chattels brought into the relationship by him it does not automatically give him a right to those chattels greater than that of his partner because the nature of the de facto relationship means that the property becomes the property of the relationship. Certainly BS can argue that he should receive certain chattels as part of the distribution of the property, perhaps because he brought that property into the relationship, but he cannot do so simply by claiming ownership. [23] The question is whether The Public Trustee was diligent in not collecting or securing BS‟s personal property prior to the separation agreement. There may be some circumstances where an administrator should be responsible for such a step to protect the interests of the adult. This would be a matter of the facts of each situation. Here there were short periods of resumed cohabitation after the separation in 2008, making identification of ownership of particular chattels prior to the signing of the separation agreement even more difficult. [24] The responsibility of The Public Trustee in the circumstances of this matter as a diligent administrator, was to engage competent solicitors to look after BS‟s interest, to ensure that BS‟s views were made known to the solicitor either directly, through close family or through an advocate on his behalf and arrive at an appropriate settlement in the circumstances. This they did with the assistance in this matter, of an advocate on BS‟s behalf. If any criticism can be made, not that we can see any should be, it would be against the solicitors for not securing specific items for BS during the negotiation of the property settlement if that was made known to the solicitor. [25] We have come to the view that the Tribunal, in the way it approached the settlement separation agreement, fell into error by going behind that agreement to conclude that The Public Trustee did not protect BS's interests in respect of minor chattels in the settlement agreement. [26] We therefore propose to give leave to appeal and set aside the order and order that BS„s application be dismissed. 3 Reasons paragraph 133. -- 5 of 5 --