ADE
[2021] QCAT 431
•14 December 2021
QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL
CITATION:
ADE [2021] QCAT 431
PARTIES:
In an application about matters concerning ADE
APPLICATION NO/S:
GAA8551-21
MATTER TYPE:
Guardianship and administration matters for adults
ORDERS MADE ON:
8 December 2021
REASONS DELIVERED ON:
14 December 2021
HEARING DATE:
On the papers
HEARD AT:
Brisbane
DECISION OF:
Member Kanowski
ORDERS:
1. WFE as the appointed attorney for ADE is authorised, within 12 months following this order, to enter into the conflict transaction being the sale of the real property [address and description redacted] owned by WFE and ADE for a sale price of not less than $800,000.
2. WFE as the appointed attorney for ADE is authorised to enter into the conflict transaction being the purchase of another property jointly with ADE, using ADE’s funds for half of the purchase price.
CATCHWORDS:
HEALTH LAW – GUARDIANSHIP, MANAGEMENT AND ADMINISTRATION OF PROPERTY OF PERSONS WITH IMPAIRED CAPACITY – OTHER MATTERS – where attorney owns property jointly with principal – where attorney wishes to sell property to relation and purchase another property with proceeds – whether conflict transaction – whether transaction should be authorised
Powers of Attorney Act 1998 (Qld), s 66(1), s 73, s 118(2)
REPRESENTATION:
WFE:
Lember and Williams, solicitors.
No other parties made submissions
This matter was heard and determined on the papers pursuant to section 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld)
REASONS FOR DECISION
Introduction
‘ADE’ is 79 years of age. He has dementia. ‘WFE’ is his wife. They have been married for some 60 years. They have a jointly-owned home on acreage. They lived there together for many years until ADE moved into aged care in March 2021. WFE is wheelchair-bound, and ADE had been her carer.
WFE wishes to sell the home for $800,000 to ‘GSN’, their grandson, and use the proceeds to purchase a new home to be built in a retirement village. The acreage property is difficult for WFE to maintain. The new home will cost $800,000. WFE wishes to purchase it in joint names with ADE. However, only she will be able to live there. This is because ADE requires the nursing care provided at his aged care facility.
As ADE no longer has the capacity to make his own financial decisions,[1] or to sign contracts, WFE proposes to carry out the transactions involving ADE’s interests as his attorney under the enduring power of attorney that he made in 2008. WFE considers that the proposed transactions would be conflict transactions. Accordingly, she has applied to the tribunal for authorisation to proceed.
[1]The tribunal made a declaration to this effect on 28 October 2021.
An attorney for a financial matter may enter into a conflict transaction only if, relevantly, the tribunal has authorised the transaction.[2] The tribunal may authorise an attorney to enter into such a transaction if satisfied that the transaction would be in accordance with the general principles set out in the POA Act.[3]
[2]Powers of Attorney Act 1998 (Qld) (‘POA Act’), s 73(1). The provision refers to the court, meaning the Supreme Court, authorising the transaction. However, the tribunal has the same powers as the court, and references to the court are to be read as references to the tribunal where appropriate: s 109A of the POA Act.
[3]POA Act, s 118(2).
Are the proposed transactions conflict transactions?
‘Conflict transaction’ is defined in section 73 of the POA Act:
(6) A conflict transaction is a transaction in which there may be conflict, or which results in conflict, between—
(a) the duty of an attorney towards the principal; and
(b) either—
(i) the interests of the attorney, or a relation, business associate or close friend of the attorney; or
(ii) another duty of the attorney.
Examples—
1 A conflict transaction happens if an attorney for a financial matter buys the principal’s car.
2 A conflict transaction happens if an attorney for a financial matter lends the principal’s money to a close friend of the attorney.
3 A conflict transaction happens if an attorney for a financial matter rents the principal’s residential property to the attorney or a relative of the attorney.
4 A conflict transaction happens if an attorney for a financial matter uses the principal’s money to pay the personal expenses of the attorney, including, for example, the attorney’s personal travel expenses.
5 A conflict transaction happens if an attorney for a financial matter buys the principal’s house.
6 A conflict transaction does not happen if an attorney for a financial matter is acting under section 89 to maintain the principal’s dependants.
(7) However, a transaction is not a conflict transaction merely because—
(a) the attorney is related to the principal; or
(b) the attorney may be a beneficiary of the principal’s estate on the principal’s death; or
(c) by the transaction the attorney, in the attorney’s own right and on behalf of the principal—
(i) deals with an interest in property jointly held; or
(ii) acquires a joint interest in property; or
(iii) obtains a loan or gives a guarantee or indemnity in relation to a transaction mentioned in subparagraph (i) or (ii).
WFE considers that the proposed transactions are conflict transactions. I agree. Even though it can be seen from section 73(7) that the mere sale of jointly-held property or the mere acquisition of property jointly will not constitute a conflict transaction, there are additional factors here. The proposed sale is not to a stranger but to a relation. That transaction involves a conflict between WFE’s duty as attorney to maximise the price and the interest of GSN to minimise the price. The proposed purchase in the retirement village involves acquiring a home for WFE partly using ADE’s funds. Although the property will be held jointly, ADE will not be able to live in it. There may therefore be a conflict between WFE’s duty as attorney to use ADE’s assets for his benefit and her personal interest in acquiring suitable accommodation for herself.
Background and findings
I accept WFE’s evidence that the acreage home is no longer suitable for her, and that living in a retirement village will be suitable.
WFE has provided recent evidence from a registered valuer that the acreage home is worth $800,000. She has also supplied a recent market appraisal by a local real estate agent, expressing the view that the ‘the property should achieve between $825,000 - $875,000’.[4] WFE submits that even if the actual value is over $800,000, a private sale to GSN would see savings of around $25,000 on real estate commission and advertising costs. In any event, I prefer the evidence of the valuer to that of the real estate agent, having regard to the greater independence and expertise of valuers. Accordingly, I find that the proposed sale price of $800,000 reflects market value.
[4]Attachment C to WFE’s statutory declaration dated 12 November 2021.
WFE says that the home which she wants to have built in the retirement village is a manufactured home. That implies it will be relocatable, but WFE’s evidence does not indicate whether there would be contractual restrictions on relocation. Nor does her evidence indicate whether exit fees will apply should WFE sell or die, but I think it should be assumed that they would. Accordingly, I consider it likely that investing ADE’s half share of the sale proceeds in a house situated in a retirement village is likely to see a lesser return in the long run than, for example, investment in other real property.
WFE says, and I accept, that she has obtained advice from an aged care financial advisor about the effects on ADE’s aged care costs if he was to hold his share of the sale proceeds in cash (which presumably also encompasses shares or similar investments). WFE says the advice is to the effect that it is advantageous for ADE for the funds to be used in the manner she proposes.
WFE also says that the proposed transactions will not affect ADE’s veteran’s pension.
WFE’s evidence indicates that ADE has few assets other than his share of the acreage home and its contents. As at May 2021, he had a car and approximately $33,000 in the bank. According to WFE, ADE receives considerable pension income, well in excess of his outgoings. She says she and other family members consider that ADE is receiving good care in the aged care facility. It is implicit in WFE’s evidence that she anticipates that ADE’s income will meet his reasonable expenses for the rest of his life, and that he will not need to access capital. I see no reason to doubt the reasonableness of this forecast.
WFE has discussed in her evidence ADE’s views, wishes and preferences, although inevitably in this case this would incorporate assumed views, wishes and preferences informed by ADE’s past conduct and beliefs. I accept WFE’s evidence about ADE’s views, wishes and preferences. These include that ADE always wanted to keep the acreage property in the family; that ADE would want GSN to own the property and finish restoring some vehicles kept there; and that ADE would want WFE to have suitable accommodation in which she feels comfortable. WFE says, and I accept, that she would not be able to afford the retirement village property using only her own funds.
ADE and WFE have two children. Both have provided affidavits indicating that they have no objection to the sale of the acreage property to GSN at market value. They did not comment on the proposed purchase: it seems that plan crystallised after they prepared their affidavits.
Should the proposed transactions be authorised?
The general principles are set out in Chapter 1A of the POA Act. Most of them are not presently pivotal, in that they do not point to any particular course of action being preferable here. A principle that is directly engaged is that an attorney must engage in a structured decision-making process.[5] Where the principal’s views, wishes and preferences can be determined, these must be taken into account.[6] Where they cannot be determined, the attorney must use the principle of substituted decision-making: taking into account what would be the views, wishes and preferences of the adult based on what the principal had expressed or demonstrated when they had capacity.[7]
[5]POA Act, s 6C, general principle 10.
[6]Ibid, general principle 10(3).
[7]POA Act, s 6C, general principle 10(4).
WFE argues that another principle is engaged: that the importance of maintaining the principal’s existing supportive relationships must be taken into account.[8] She says that her long-lasting supportive relationship is crucial for ADE, and that this support will be enhanced if she proceeds with the proposed relocation. I am not persuaded, however, that this principle is pivotal here. I accept that the proposed relocation will benefit WFE and, indirectly, ADE. However, it is likely in my view that WFE would find a way to continue providing emotional support to ADE regardless of where she is living.
[8]POA Act, s 6C, general principle 4(1).
The proposed sale
I am satisfied that the proposed sale is in accordance with the general principles, particularly in that it accords with ADE’s views, wishes and preferences. The sale would be at market value, consistent with WFE’s obligation to exercise the financial power ‘with reasonable diligence to protect the principal’s interests’.[9] It is appropriate, therefore, to exercise the tribunal’s discretion to authorise the transaction.
[9]POA Act, s 66(1).
The authorisation should be subject to a term that the sale take place within 12 months, because of the potential for a rise in the value of the property over time. Similarly, I consider it appropriate to express the authorisation in terms that the sale price must be at least $800,000. This will give WFE the opportunity to sell at a higher price if appropriate, for example if there is a delay of some months, without having to make a further application to the tribunal.
The proposed purchase
Again, I consider that the proposed purchase in the retirement village is in accordance with the general principles, particularly in that it accords with ADE’s views, wishes and preferences. Whether the proposed purchase should be approved, on discretionary grounds, however, is less straightforward than with the sale. It is less likely to maximise ADE’s long-term capital, because of the likely impact of exit fees, compared with the option of investment in other real property. On balance, however, taking into account ADE’s likely strong wish that WFE lives in the environment where she feels most comfortable, and her confidence that his income will be sufficient to meet his needs for the rest of his lifetime, the tribunal’s discretion should be exercised in favour of authorising the proposed transaction.
WFE has proposed an order in terms specific as to location and price, but I consider it preferable to express the order in broader terms to allow some flexibility.
Conclusion
For these reasons, the proposed transactions should be authorised.
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