FAP [2012] QCAT 419

CITATION: FAP [2012] QCAT 419 PARTIES: FAP APPLICATION NUMBER: GAA4289-12 MATTER TYPE: Guardianship and administration matters for adults HEARING DATE: 18 July 2012 and on the papers HEARD AT: Brisbane DECISION OF: Michelle Howard, Acting Senior Member DELIVERED ON: 20 August 2012 DELIVERED AT: Brisbane ORDERS MADE: 1. The administrator is authorised to pay the sum of $2,849 to F X Pty Ltd. CATCHWORDS: GUARDIANSHIP AND ADMINISTRATION – CONFLICT TRANSACTION – where administrator engaged adult’s grand-daughter and his daughter to project manage repair and renovation of adult’s home unit – where inside of unit destroyed – where significant time required to organise and supervise insurance inspections, quotes and repairs Guardianship and Administration Act 2000, ss 35, 37, 47,48 Guardianship and Administration Tribunal v Perpetual Trustees Qld Ltd [2008] QSC 49 APPEARANCES and REPRESENTATION (if any): This matter was part-heard on 28 July 2012 at a hearing attended by FL. Directions were made for the filing of further material by FL and the proceeding was adjourned part-heard. It was subsequently determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act). -- 1 of 5 -- 2 REASONS FOR DECISION [1] FL is appointed as guardian for all personal matters and administrator for all financial matters for his mother, FAP. [2] FAP has lived in residential aged care since 2010. However, until recently, FAP owned a home unit. [3] In May 2011, a neighbour of the unit made contact to advise that water was seen pouring out of the back door of the unit. FL, an engineer who works off-shore on a regular basis, was away at the time. He asked his daughter, FM, to assist him with the unit. [4] It transpired that a water pipe had burst in the unit. There was some 3 centimetres of water throughout. Black mould was subsequently discovered and ‘everything’ in the unit including the carpets, significant portions of the walls, doors, and kitchen fittings had to be replaced. Photographs confirm the extent of the damage and removal of significant components within the unit. [5] FL considers FM to be very reliable and capable. She runs her own business through a company, F X Pty Ltd, and works as a contractor. She is a textile designer and markets her designs through the company. She has a Masters in Graphic Design and through this, FL says, has a professional knowledge of project management and interior design. FL describes F X Pty Ltd as FM’s company, but he financed her start and is a 20% shareholder in the company. [6] When considering how the rebuild of the unit might be achieved, FL says he investigated project managers. FL says that because of his work commitments even when he is not away for work, he is frequently not available to take calls during business hours. He says that internet searches revealed that project managers charged in excess of $50 per hour plus expenses. FM was prepared to do the work for $35 per hour plus expenses, so he considered her a more cost-effective option. [7] FM liaised with the two insurance companies involved (FAP’s insurer and the body corporate’s insurer), prepared the insurance claims, negotiated with FL and the body corporate in order to lodge the claims. He says that this was a complex process which involved many exchanges over a three week period. Both insurance companies requested three quotes from each trade to be involved and each had preferred tradespersons. [8] It took some three months before the claims were approved, but on FL’s instructions, some tasks were done in the meantime. FL as the administrator had decided that, whether or not the insurance claims were approved, the unit required repair and that it would be sold after completion of the repairs. The insurance claims were approved, and although not to the full extent of the damage, covered the large majority of the costs which were almost $25,000. -- 2 of 5 -- 3 [9] The unit was subsequently sold quickly after it was placed on the market, for $285,000, which the administrator considers was a good price, and which he considers is considerably above the price it would have achieved in its original condition. He considers that his daughter’s project management ensured the unit was prepared to a high standard and assisted to achieve this result. [10] FL seeks an order from the Tribunal authorising a conflict transaction and payment from FAP’s funds to F X Pty Ltd for the project management work. [11] The account rendered is for $6,781.28 including GST. The account is charged out at $35 per hour, but is only billed in whole day (8 hours) or half day (4 hours) instalments. Twelve whole days are claimed and eight half days. [12] Travel or mileage charges are added on occasions when FM travelled from her address to the unit. Mileage charges are billed at $.50 per kilometre (which is said to be lower than the Australian Taxation Office rate of $.63 per kilometre) for 187.2 kilometres per trip or $93.60 per return trip. For all except two half days, mileage charges are included. Two half days claimed were spent attending at paint shops and carpet shops and other administrative follow-up. [13] Various dates are billed for between 19 May 2011 and 22 November 2011. This includes 6 full days for 19-24 May 2011 following advice of the problem, initial clean out and initial meetings with the insurers. FL returned to Australia during 21 May 2011 and joined FM at the unit on that day. [14] A document entitled ‘Time Line-FM’ sets out details of the tasks done on each day for which the account is rendered, although it is not apparent from the document how much time was spent engaged in activities at the adult’s unit on each occasion. Three hours is claimed for travelling on each day that FM travelled the 187.2 kms round trip. A notation is made on various occasions throughout the document ‘Took day off work. I am a contractor, so received no pay for this day’. [15] The Time Line also refers to another 3 days work and travel for which an amount is not billed in December 2011 and March 2012. [16] An administrator is required to exercise decision-making power for an adult honestly and with reasonable diligence to protect the adult’s interests.1 An administrator is prohibited from entering into a conflict transaction unless authorised to do so by the Tribunal. A conflict transaction is a transaction where the duty of the administrator conflicts with the interests of administrator or another person in a close personal or business relationship with the administrator.2 Having regard to an 1 Guardianship and Administration Act 2000, s 35. 2 Guardianship and Administration Act 2000, s 37. -- 3 of 5 -- 4 administrator’s duties, a conflict transaction may only be authorised by the Tribunal if it is to protect the interests of the adult. Conflict transactions may be authorised retrospectively.3 [17] Tasks done by an administrator who is not a professional administrator are not remunerated, although an administrator is entitled to reimbursement of expenses.4 [18] Because FL engaged his daughter through her company, in which he also has an interest, the arrangement constitutes a conflict transaction. [19] I accept that the administrator needed to make decisions about arrangements for the damage to the unit to be dealt with and rectified, to protect and preserve FAP’s equity in her home unit. Consistent with the non-remuneration of persons who are not professional administrators, the general expectation is that an administrator who is a member of the adult’s support network would attend to tasks associated with those decisions personally or with the unpaid assistance of other family members, out of their love and concern for the adult. [20] That said, FL was personally absent at the time the crisis arose and immediate steps were necessary. The damage to the unit was significant. Given the extent of the damage, numerous attendances were going to be necessary to have the damaged components of the unit removed and then rebuilt or installed. Given FL’s busy professional life, I accept that it was not practical for him to attend personally to the many tasks involved. [21] I am satisfied that it a reasonably diligent administrator would in the circumstances engage a person to attend to the variety of tasks involved and that doing so protected the adult’s interests, namely her equity in her unit. I accept that engaging a person to do these things costs money. [22] FL is a 20% shareholder of the company which will benefit if the transaction is authorised. Therefore, he could potentially benefit personally and financially by the payment to the company, although he could not directly ensure this occurred given his minority shareholding. In these circumstances, I do not consider that this prevents the authorisation of the transaction if I am satisfied that it should otherwise be authorised. [23] A number of issues arise on the evidence. Does an internet search constitute adequate enquiry to identify the rate at which a project manager or other suitable person might be engaged? Could an ‘all-up’ cost have perhaps been negotiated through personal contact with an experienced project manager? Given that FM has no qualifications in building, or indeed, project management as such, was she an appropriate choice? Did the agreement reached with FM by the administrator protect the adult’s interests? 3 Guardianship and Administration Tribunal v Perpetual Trustees Qld Ltd [2008] QSC 49. 4 Guardianship and Administration Act 2000, ss 47 and 48. -- 4 of 5 -- 5 [24] Despite the issues arising, I am satisfied that FM did attend at the adult’s unit on the numerous occasions claimed. She cleaned out the unit; dealt with the insurers; arranged for quotes; arranged access by tradespersons; and although not as a building professional, provided some level of oversight of the work done. [25] Whether or not $50 per hour is the charge out rate for a project manager has not been established to my reasonable satisfaction. I do not have any detail of the searches done, let alone the qualifications of the persons concerned. In any event, FM has no qualifications in project management, although she may have some knowledge of it through her study of graphic design. Therefore, the evidence about this issue is not helpful. However, I do not consider the agreed hourly charge out rate of $35 is excessive. [26] That said, a reasonably diligent administrator would not, in making arrangements for a person to do the necessary work, have agreed to pay travel costs for three hours on each occasion that the person was to attend the unit. If arrangements had been made independent of family relationships, a local person would most likely have been employed and no agreement made or necessary to pay travelling time or fuel or mileage costs. I consider that such an arrangement would have protected the adult’s interests, by preserving FAP’s financial position while ensuring the necessary work was done. [27] Therefore, I am prepared to authorise the conflict transaction to allow payment to FM’s company at the rate of $35 per hour for the time claimed excluding travelling time and mileage costs. That is, I am prepared to authorise payment for 5 hours on each day she claims a whole day and for one hour on each of the 6 days she claims for 4 hours including travelling. The two half days spent should be paid in full. I am not prepared to authorise payment of any mileage costs charged. [28] The total hours for which FM is to be paid are therefore as follows: a) 12 x 5 hours at $35 per hour = $2,100; b) 6 x 1 hour at $35 per hour = $ 210; c) 2 x 4 hours at $35 per hour = $ 280. [29] The total is $2,590, GST of $259 should also be paid on this amount. [30] The total payment authorised to be paid by the administrator to F X Pty Ltd for the work undertaken by FM is therefore $2,849. I make orders accordingly. -- 5 of 5 --