BA [2012] QCAT 228

CITATION: BA [2012] QCAT 228 PARTIES: BA APPLICATION NUMBER: GAA10332-11 / GAA10333-11 / GAA10334-11 / GAA10335-11 / GAA3302-12 / GAA3303-12 / GAA3309-12 / GAA4583-12 MATTER TYPE: Guardianship and administration matters for adults HEARING DATE: 21 May 2012 HEARD AT: Ipswich DECISION OF: Les Clarkson, Presiding Member Elizabeth Stone, Member DELIVERED ON: 5 June 2012 DELIVERED AT: Brisbane ORDERS MADE: 1. The application for a declaration about the capacity of BIC to enter into a loan transaction in February 2009 is dismissed. 2. The following Enduring Power of Attorney for BIC is declared invalid pursuant to s 113(2) of the Powers of Attorney Act 1998 and s 82(2) of the Guardianship and Administration Act 2000: (a) The Enduring Power of Attorney dated 4 November 2010 appointing BCJ as attorney for financial, personal and health matters. 3. Pursuant to s 82(1) of the Powers of Attorney Act 1998 and s 82(2) of the Guardianship and Administration Act 2000 the Tribunal gives leave to BCJ and BME to resign as attorneys for BIC for financial matters under the Enduring Power of Attorney dated 27 June 2007. 4. The following Enduring Power of Attorney for BIC is revoked pursuant to s 116(d) of the Powers of Attorney Act 1998 and s 82(2) of the Guardianship and Administration Act 2000: -- 1 of 12 -- 2 (a) The Enduring Power of Attorney dated 27 June 2007 appointing BCJ, BMB and BME as attorneys for financial, personal and health matters. 5. BCJ, BME and MMJ are appointed jointly and severally as guardians for BIC for the following personal matter: (a) Health care. 6. This appointment remains current until further order of the Tribunal. The appointment is reviewable and is to be reviewed in five (5) years. 7. The Public Trustee of Queensland is appointed as administrator for BIC for all financial matters. 8. The administrator is to provide a financial management plan to the Tribunal within four (4) months. 9. The Tribunal directs the administrator to provide accounts to the Tribunal when requested. 10. This appointment of The Public Trustee of Queensland remains current until further order of the Tribunal. CATCHWORDS: Attorneys – resignation – conflict transactions – presumption of undue influence – need for guardian and administrator – appropriateness for appointment Powers of Attorney Act 1998, ss 66, 73, 87 Guardianship and Administration Act 2000, ss 12, 15 APPEARANCES and REPRESENTATION (if any): BJ, BE, WR, ME, MJ – Applicants BM, WE, WA, BS, BP – family members PM – Office of the Adult Guardian RK – Public Trust Office REASONS FOR DECISION [1] BA (the adult) is an elderly woman who resides in an aged care facility in south-east Queensland. [2] She appointed three of her family members, BJ, BE, and BB, to act severally as her attorneys for financial and personal/health matters by way of an enduring document executed in 2007. -- 2 of 12 -- 3 [3] Family members allege that BB presently resides in an aged care facility, and has an illness which prevents her from carrying out any attorneyship duties. [4] A further enduring document made on 4 October 2010 appointed BJ solely as attorney for financial and personal/health matters. At that time, the adult had been diagnosed with dementia, which raises questions about the adult‟s capacity to execute the document. In addition, the document contains certain omissions and inconsistencies which raise questions about its validity. [5] Both enduring documents were expressed to take effect immediately upon execution. [6] In February 2009 and April 2011 the adult purportedly approved loans of $100,000 and $250,000 to a family trust, linked to the attorney, BJ. The second loan, with an interest component, has since been repaid to the adult. [7] BJ and BE have applied to the Tribunal seeking leave to resign as attorney for financial matters, and proposing the appointment of the Public Trustee as the adult‟s administrator. [8] Other family members, WR, ME, and MJ brought applications to the Tribunal seeking their appointment as the adult‟s guardian and administrator. [9] WR also brought an application to the Tribunal seeking a declaration about the adult‟s capacity to enter into the loan transaction in February 2009. The legislation [10] The Powers of Attorney Act 1998 (the Powers of Attorney Act) refers to various duties of an attorney, including: duty to act in a principal‟s best interests (s 66); duty to avoid conflict transactions (s 73). Section 87 also raises a presumption in the case of a transaction between a principal and an attorney (or a relative, business associate, or close friend of the attorney) that the principal was induced to enter into the transaction by the attorney‟s undue influence. [11] Section 82(1) of the Powers of Attorney Act provides that an attorney under an enduring document for a principal who has impaired capacity for a matter may only resign as attorney for the matter with the leave of the court or the Tribunal. [12] Schedule 4 of the Guardianship and Administration Act 2000 (the Act) contains the definition of capacity. Section 12 outlines the matters about which the Tribunal ought to be satisfied before it may appoint a guardian or administrator for an adult. Section 15 outlines the appropriateness considerations to which the Tribunal must have regard in deciding whether a person is appropriate for appointment as a guardian or administrator. -- 3 of 12 -- 4 The issues for the Tribunal [13] The relevant legislation raised the following issues for the Tribunal: (a) Did the adult have decision-making capacity at the time of the hearing? (b) Did the adult have capacity to make the 2009 loan? (c) Is the 2010 enduring document invalid for want of form or because the adult did not have capacity to execute the document? (d) If so, should the attorneys, BJ and BE, be given leave to resign as attorneys for financial matters under the 2007 enduring document? (e) Is there a need for decisions about personal and/or financial matters to the extent that, without an appointment, the adult‟s needs will not be adequately met or her interests will not be adequately protected? (f) If so, who is appropriate for appointment as guardian and/or administrator for the adult? Evidence pertaining to the adult’s capacity [14] Letter and Report of Dr C (23 November 2011 and 8 March 2012) state that he has not seen the adult since March 2009. Her medical conditions at that time included cognitive impairment since around 2005. He notes that in December 2005, the adult was a vague historian, and needed assistance from a family member. He further notes that on 18 December 2007, the adult was even vaguer due to significant cognitive problems, and again the family member provided most of the background details. However; Dr C did not offer an opinion about the adult‟s decision-making capacity. Dr C refers to a Mini Mental State Examination (MMSE) score of 18/30 on 2 March 2009. [15] Report of Dr R (16 January 2012) states that he was the adult‟s General Practitioner from 3 March 2006 to 16 December 2009, and he has not seen her since that time. Her medical conditions include dementia, which at that time was mild and fluctuating. Dr R opines that the adult was capable of understanding information relevant for decision-making “as long as well rested and no illness”. In Dr R‟s opinion, the adult was at that time (December 2009) capable of understanding and making complex decisions about personal and financial matters. Dr R refers to a MMSE score of 28/30 on 1 November 2007. [16] Boonah Medical Centre Care Plan (generated 20 April 2010) – One of the listed problems is Home Management – Dementia, with the adult noted to have significant dementia. [17] ACAT assessment (16 September 2010) refers to a Primary diagnosis of Unspecified Dementia. The assessment refers the adult experiencing regular problems with short term memory and disorientation to time, and episodes of confusion. The assessment noted a gradual deterioration of cognition and function. [18] Dr W, Health Summary Sheet (17 October 2010) notes the current active problems include unspecified dementia. -- 4 of 12 -- 5 [19] Psychogeriatric Assessment Scales (17 October 2010) resulted in a score of 8, which is indicative of mild impairment. [20] Boonah Hospital Progress Notes contain references by various health professionals about the adult‟s confusion, following her admission in August 2010. There is also reference to various MMSE scores, namely: 24/30 on 26 August 2010 and 1 September 2010, and 18/30 on 12 September 2010. [21] The Progress Notes also refer to a Cognistat test conducted by an Occupational Therapist on 2 September 2010 indicating the adult experienced severe difficulties with reasoning, construction, and memory items, and moderate difficulties with language, orientation, and attention. [22] Dr W, the adult‟s treating doctor at the hospital, made an entry in the Progress Notes on 6 September 2010 to the effect that, given the cognistat result, the adult has moderate dementia and is not competent to make decisions about financial, health care, and accommodation matters. [23] The witness to the enduring document made by the adult on 4 November 2010 was DJ, Justice of the Peace. In response to inquiry by the Adult Guardian in January 2012, DJ stated that he interviewed the adult in the presence of BJ. He had a conversation with the adult about matters in general, and her answers were lucid and cognisant. He stated that, for instance, the adult understood that the appointment related to personal and financial matters, and she was happy to hand that responsibility to BJ. He stated that the adult appeared to understand the ramifications of signing an Enduring Power of Attorney; he had known the adult for many years and she “presented fine on the day”. [24] Report of DH, Director of Nursing, (22 November 2011) states that the adult has dementia, which is stable and moderate in severity. She is unable to make decisions freely and voluntarily. In summary, DH opines that the adult is able to understand and make simple decisions only about health care and lifestyle matters, but not about financial matters. Summary of Evidence about the adult’s capacity [25] No party challenged the opinion of DH to the effect that the adult was presently unable to make complex decisions about personal and financial matters without assistance or guidance. [26] There is no substantial evidence before the Tribunal to rebut the presumption of capacity in favour of the adult in relation to the execution of the 2007 enduring document. [27] In relation to the 2009 loan, the opinions of the two medical practitioners, Dr R and Dr C appear to be at odds. [28] While Dr C provides no specific opinion, he describes the adult‟s inability to provide relevant historical details, which he attributed to significant cognitive problems. The inference must be that, Dr C would tend to the view that the adult‟s capacity was impaired at the relevant time. Dr C is a specialist. However, his report notes that he has seen the adult on only a few occasions between 2005 and 2009. -- 5 of 12 -- 6 [29] Dr R‟s report supports the adult‟s decision-making capacity, but expresses a qualification to the effect that the adult needs to be well-rested with no illness. Dr R was the adult‟s general practitioner who presumably saw her on a more regular basis than Dr C. [30] While there is apparent inconsistency in the reports of Doctors C and R about the adult‟s capacity in 2009, from 2010 onwards there is no inconsistency in the evidence of health professionals. That is to say, from 2010 to date, the evidence of the health professionals involved with the adult consistently indicates that she lacked decision-making capacity, and by inference, the capacity to execute an enduring document. Findings about decision-making capacity [31] On the question of the adult‟s capacity at the time of the hearing, the medical evidence is consistent and unchallenged. It establishes to the Tribunal‟s satisfaction that the adult‟s capacity is impaired to the extent that she is unable to make complex decisions about personal matters or simple decisions about financial matters. [32] The Tribunal concluded that the presumption of capacity to which all Queensland adults are entitled is rebutted in the adult‟s case in relation to decisions at this time for personal and financial matters. [33] As indicated, there is apparent inconsistency in the opinions of the medical practitioners about the adult‟s capacity in 2009. A finding about the adult‟s capacity to enter into the loan transaction in February 2009 is rendered more difficult by the fact that one medical practitioner does not offer an opinion, while the other does not state the basis for his opinion. It may well be that the best evidence about the matter is not yet before the Tribunal, and should the issue be considered relevant by a decision-maker for the adult, a hearing about the matter which might include an interrogation of the relevant medical practitioners will likely result in a more productive outcome. In any event, at this point the Tribunal is disinclined to speculate about the matter. Findings about capacity for enduring documents [34] There is no evidence tending to rebut the presumption that the adult had capacity to execute the 2007 enduring document, and the Tribunal concluded that she had the capacity to do so. [35] The 2010 enduring document is a different matter. As stated, there is consistent evidence from various health professionals in 2010 which indicate that the adult did not possess the requisite capacity at the time of execution of the enduring document, namely, 4 November 2010. [36] Section 41(2)(a) to (f) of the Powers of Attorney Act outlines the matters which the principal must understand in order to understand the nature and effect of an enduring document. These matters are contained in Section 8 of the document, headed „Statement of Understanding‟, and they are the matters to which the witness certifies the principal appeared to understand. -- 6 of 12 -- 7 [37] Superimposed on s 41(2) is the more general definition of capacity in Schedule 4 of the Act. One of the elements in that definition is the ability of an adult to make decisions freely and voluntarily. [38] When the Tribunal is required to rule on a person‟s capacity to execute an enduring document, it is often the case that contemporary medical evidence on the point is lacking. In that event, the evidence of the witness is critical, as that person is best placed at the precise time of execution to form an opinion as to the principal‟s understanding of the document. [39] In this case, there are a number of reports leading up to the execution of the 2010 enduring document. The consistent opinions about the adult‟s impaired capacity would normally incline the Tribunal to the view that the presumption of capacity to execute the instrument has been rebutted. However, there is also the evidence of the witness who appears to be confident the adult had the requisite capacity at the time of execution. Does the evidence of the witness outweigh the opinions of the health professionals who admittedly did not see the adult at the time of execution of the document? [40] The Tribunal concluded that it does not. [41] That is because the Tribunal finds that the witnessing process was flawed. There are guidelines issued by the Office of the Adult Guardian and the Queensland Law Society which outline recommended procedures for a witness to an enduring document. They include: a) Endeavouring to interview the principal alone. This procedure is designed to develop rapport and to establish the context within which the principal has decided to execute the instrument. It also gives the witness the opportunity to ascertain if the principal is subject to influence. b) Making a record of questions and responses. c) Requesting the principal to read the document. d) Avoiding closed questions on the basis that responses requiring a “yes/no” may be inadequate to ascertain a person‟s understanding of the document or the process. [42] The evidence indicates that at least some of these recommendations were not adopted by the witness. [43] BJ stated that he was present only at the commencement of the interview. That may well be, but it does not accord with the statement of the witness. Further, the witness does not indicate what questions he asked, and what responses he received, which satisfied him as to the adult‟s capacity. The witness does not indicate whether he queried the adult at all about any of the matters outlined in Section 8 of the document. Unfortunately the Tribunal was not able to interrogate the witness at the hearing, and so it must be assumed that the information the witness provided to the Adult Guardian represents the sum total of the evidence he could provide. [44] In that event, the evidence of the witness is essentially that he had a conversation with the adult about general matters; he perceived that she -- 7 of 12 -- 8 appeared to understand the ramifications of the enduring document and that she understood the appointment referred to personal and financial matters and was happy for BJ to be appointed; and he observed that the adult presented fine on the day. Without knowing the questions asked of the adult, the manner in which they were asked, and the adult‟s responses, the Tribunal found the statement of the witness to be unproductive and unpersuasive in its consideration of the adult‟s capacity at the relevant time. [45] While it may be that the witness was confident the adult had the requisite capacity to execute the enduring document, his responses to the Adult Guardian‟s inquiries do not incline the Tribunal to hold that his opinion is justifiable on any reasonable or objective basis. Conclusion [46] The evidence of the witness is therefore of insufficient weight to prevail over the consistent evidence of health professionals, and so prevent a rebuttal of the presumption of capacity to execute the enduring power of attorney. [47] The Tribunal concludes therefore that the enduring document made on 4 October 2010 is invalid because the Tribunal is satisfied the adult did not have the capacity to make it. [48] The Adult Guardian points out that the Witness‟s Certificate in the 2010 enduring document is deficient. That is because the witness has not certified that he was not a paid carer or health provider for the principal, and he does not certify that the principal signed the document in his presence. The Adult Guardian further points out that the Attorney‟s Acceptance is dated 28 October 2010, a week prior to the execution of the enduring document. The Adult Guardian submits that these deficiencies raise doubts about the validity of the 2010 enduring document. [49] For completeness, the Tribunal concluded that these deficiencies were not necessarily fatal to the document. For example, one of the critical issues is whether or not the witness was a paid carer – as opposed to whether he failed to certify to that fact. In any event, the Tribunal elected not reach a final conclusion in this regard, or provide detailed reasons therefor, given its finding that the enduring document was invalid for lack of capacity. Should the attorneys BJ and BE be given leave to resign as attorneys for financial matters under the 2007 enduring document? [50] The finding of invalidity of the 2010 enduring document enlivens the previous enduring document, appointing three attorneys for personal and financial matters. [51] As previously stated, the adult made loans to a family trust in which at least one of the attorneys, namely, BJ, and other family members were beneficiaries. [52] The evidence indicates that the attorney, BJ, acted as attorney in relation to the 2011 loan. In the result, his actions offended various provisions of the Powers of Attorney Act. They include likely breaches of s 73 (unauthorised conflict transaction); s 87 (presumed undue influence); s 66 -- 8 of 12 -- 9 (failing to act with reasonable diligence to protect the principal‟s interests). However, the issues surrounding the circumstances of the 2011 loan appear to be largely settled, given that the loan and an interest component have been repaid. It remains for a financial decision-maker for the adult to ascertain if the interest component of the loan is satisfactory in the circumstances. [53] BJ states that the adult acted in her own right in the 2009 loan arrangements and he was not involved in the transaction as her attorney. Nevertheless, the transaction was between the principal and either the attorney, or a relation of the attorney. In these circumstances, s 87 of the Powers of Attorney Act provides that the transaction gives rise to a presumption in the principal‟s favour that the principal was induced to enter into the transaction by the attorney‟s undue influence. [54] It is pertinent to note at this point that there is no evidence before the Tribunal which would indicate that the adult was subjected to undue influence by BJ or anyone else, but that is not the point. It is for the attorney(s) or others to overturn the statutory presumption which arises simply because of the relationship between the respective parties in this transaction. It is thus a matter which should require further investigation by a relevant decision-maker for the adult. [55] The Tribunal members indicated to the parties at the hearing that there was no evidence before it to suggest that any party had acted fraudulently or dishonestly. Nevertheless, given that the loan transactions appear to breach various provisions of the relevant legislation, and that further inquiry and potential recovery action may be contemplated, it is also the Tribunal‟s view that, if the attorneys were not seeking leave to resign, the Tribunal would have considered revoking their appointment, at least for financial matters. [56] For these reasons, the Tribunal concluded it was appropriate to give leave to the attorneys, BJ and BE, to resign as attorneys for BIC for financial matters. Is there a need for decisions about personal matters to be made for the adult to the extent that without an appointment her needs will not be adequately met or her interests will not be adequately protected? [57] The parties gave evidence to the effect that the adult is well settled at the facility, and there are no plans to relocate her. Further, all the essential services the adult might foreseeably require are provided at the facility. The parties‟ evidence was to the effect that the only area of decision- making which will likely be required for the adult in the future was in the area of health care. [58] Decisions about health care for the adult may be made by members of her family as statutory health attorneys. However, given the large number of family members, and some communication difficulties which have arisen in the past, certain family members were proposed as guardians for decisions about health care only. [59] The family members proposed were BJ, BE, and MJ. No party objected to the appointment of any of these parties. -- 9 of 12 -- 10 [60] The effect of such an appointment would be to overtake the 2007 enduring document, and in this regard, it is pertinent here to consider that document. [61] As indicated, one of the attorneys is said to be no longer capable of carrying out her attorneyship duties. In this event, the enduring document is revoked to the extent it gives power to the attorney (s 56 Powers of Attorney Act). [62] Further, the document is no longer operable for financial matters because the remaining two attorneys have been given leave to resign. [63] The intent of the parties is to render the 2007 document inoperative by the guardianship appointment. However, this will not occur if the appointment is limited to certain personal matters. Given the evidence that the only decisions likely to be made for the adult in the future are decisions about health care, an appointment for this matter will effectively render the 2007 enduring document inoperative. [64] In the circumstances the Tribunal found that a revocation of the 2007 enduring document would likely benefit all parties. It would provide the family with some certainty about decision-making authority. That is because the only authority for personal matters would be found in a Tribunal appointment. It would also tend to ease family tensions, and so benefit the adult. Appointed guardians would then be in a position to start afresh with the power reposed in them. Conclusion [65] In the circumstances the Tribunal concluded that there was a likely need for decisions to be made for the adult in the area of health care only. [66] Given the past tensions and communication difficulties, it was also likely that the adult‟s support network could not meaningfully assist the adult in this regard without a formal guardianship appointment, and accordingly the Tribunal was satisfied it should appoint a guardian for the adult. Who is appropriate for appointment as a guardian? [67] The options for the Tribunal included the three proposed family members, or the Adult Guardian who is always available to accept appointments of this nature. [68] Under s 14(2) of the Act, the Tribunal may appoint the Adult Guardian as guardian for a matter only if it is satisfied that no other appropriate person is available for appointment for that matter. [69] The Adult Guardian did not bring an application for the appointment of a guardian, and did not seek such appointment at the hearing. Further, the Adult Guardian‟s representative raised no objection to the proposed guardianship appointees. [70] The Tribunal was satisfied that all family members in attendance were committed to support the adult and were motivated to act in her best interests. There was no evidence before the Tribunal to suggest that any of the proposed appointees were not appropriate for appointment as decision-makers for the adult for health care matters. -- 10 of 12 -- 11 Conclusion [71] The Tribunal concluded that the proposed three family members were appropriate for appointment, and should therefore be so appointed. Is there a need for decisions about financial matters to be made for the adult to the extent that without an appointment her needs will not be adequately met or her interests will not be adequately protected? [72] The evidence establishes that the adult has reasonably substantial assets which will require decisions on an ongoing basis about management and investment, as well as day-to-day financial decisions, such as budgeting, bill paying and the like. Further, the loan transactions should be examined to determine if any further action is appropriate. The adult is clearly not in a position to attend to these matters herself, and equally clearly, her support network or other persons would be unable to meaningfully assist her in this regard without a formal administration appointment. Conclusion [73] The Tribunal was satisfied that, without the appointment of an administrator, the adult‟s needs will not be adequately met or her interests will not be adequately protected. Who is appropriate for appointment as administrator? [74] The options before the Tribunal included the appointees proposed in the applications, namely WR, ME, and MJ on the one hand, and the Public Trustee on the other. [75] Section 15 of the Act outlines appropriateness considerations to which the Tribunal must have regard in deciding whether a person is appropriate for appointment as administrator for an adult. Section 15(1)(c) refers to the extent to which the adult‟s and the person‟s interests are likely to conflict. [76] Despite evidence at the hearing indicating some tensions and lack of communication in the past, there was also evidence to the effect that the family is a solid and tightly-knit unit. Even if that were not the case, the appointment of family members as financial decision-makers for the adult raises a concern as to their perceived impartiality, particularly in relation to investigations about the loan transactions. That is because the family members proposed as administrators are related to the former attorneys, and will no doubt be related to the beneficiaries of the family trust which was the recipient of the loans. [77] No party at the hearing objected to the appointment of the Public Trustee. Conclusion [78] The perception of impartiality and transparency in the decision-making process is critical when dealing with vulnerable adults. In the Tribunal‟s view, it can be achieved in this case only by the appointment of a decision-maker who is perceived to be independent of external influences and able to make decisions dispassionately and with the adult‟s best interests in mind. -- 11 of 12 -- 12 [79] Without in any way impugning the integrity of the family members who sought appointment, the Tribunal concluded that the circumstances of this case demand an appointee who is perceived to be independent and impartial. [80] The Public Trustee is such an appointee. Orders [81] Orders made accordingly. -- 12 of 12 --