CA
[2010] QCAT 196
•10 May 2010
| CITATION: | CA [2010] QCAT 196 |
| PARTIES: | CA |
| APPLICATION NUMBER: | G20295 |
| MATTER TYPE: | Guardianship and administration matters |
| HEARING DATE: | 27 April 2010 |
| HEARD AT: | Brisbane |
| DECISION OF: | R Joachim – Presiding Member L Clarkson – Member E Benson Stott – Member |
| DECISION DELIVERED ON: | 27 April 2010 |
| REASONS DELIVERED ON: | 10 May 2010 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | 1. The application for directions regarding the possible severance of joint tenancies held between CA and CF is dismissed. DIRECTIONS 2. The Tribunal directs Steve Quadrio to produce within 7 days a copy of the last will and testament of CA to the Tribunal and to her attorneys appointed under the Enduring Power of Attorney dated 26 September 2003. 3. The Tribunal directs the attorneys to file in the Tribunal within 30 days a summary of receipts and expenditure in relation to CA for the last two (2) years, and to present to the Tribunal a plan of management for approval. . AUTHORISATION OF A CONFLICT TRANSACTION 4. That CF, CN and CM as the appointed attorneys for CA are hereby authorised to enter the conflict transaction being the continuation of the occupation, on a rent free basis, of the attorney, CN of any property in which CA has an interest. COSTS 5. Within 7 days of receipt of written reasons, CF may make submissions to the Tribunal for costs, such submissions to be also sent to the applicant CM. 6. The applicant is to provide a written response to the Tribunal and to CF within 7 days of receipt of CF’s submission. |
| CATCHWORDS : | Severing of joint tenancies, enduring power of attorney, conflict transaction, adult guardian investigation, eligible attorney, attorney’s access to principal’s will, testamentary intentions |
APPEARANCES and REPRESENTATION (if any):
| Ms CM, applicant, Mr CL and Ms PC represented by Mr J Devlin, Solicitor, and Mr Dan Morgan, Barrister |
| Mr CF, represented by Mr A Quadrio, Solicitor and Mr V Brennan, Barrister. The Adult Guardian represented by Mrs P. Behrbohm |
REASONS FOR DECISION
History of the application
On 4 March 2010 the Queensland Civil and Administrative Tribunal (the Tribunal) received an application from CM relating to her mother Mrs A.
CM applied to the Tribunal seeking advice, directions, and recommendations and the authorisation of a conflict transaction. She is an attorney under an Enduring Power of Attorney that her mother executed on 26 September 2003. In this document Mrs A appoints three (3) of her children as Attorneys, appointing her son, CF, who will be referred to as CF and her daughters CN and CM as Attorneys for personal/health matters and financial matters.
The way in which she specified that they make their decisions is as a majority, such that CF would be a decision maker at all times along with one (1) of the other two (2) Attorneys.
The applicant was seeking orders from the Tribunal to authorise the Attorneys to sever joint tenancies that Mrs A held with her son CF.
Mrs A owns three (3) properties. The first of these is property 1. She holds this property jointly with CF. Prior to her husband A’s death, he was also a joint owner.
The second property is property 2. This property has been owned since at least 5 September 1984 by initially A, Mrs A and CF as tenants in common. On A’s death his 1/3 share passed to Mrs A who now has a 2/3 share of this property with CF having a 1/3 share.
The third property is property 3. This property was purchased in 1973 jointly between CF and his parents. Since A’s passing the property is now jointly owned between Mrs A and CF. All three (3) properties between them have nineteen (19) flats or units.
One attorney, CN, had assisted her mother who lived in one of the units until 2009. CN continued to live in a unit rent free, an arrangement that had been in place for several years.
The Applicant is concerned that because of the way in which the properties are held it is not possible for Mrs A to will her share of the properties to other family members apart from property 2 which she owns as tenants in common.
10. The Adult Guardian became involved in this matter when she received a referral in respect of the actions of the Attorney CF. This referral alleged possible financial abuse and that the Attorney CF was not consulting with other Attorneys.
11. Prior to the hearing, the Tribunal granted leave for the applicant and for CF to be legally represented. The Tribunal had also been asked prior to the hearing to issue a notice to produce Mrs A’s last will. This application sought the will from CF who had allegedly refused to allow his solicitor Mr Quadrio to release the will. The Tribunal did not issue a notice to produce as this matter would be canvassed at the hearing.
The Hearing
12. The hearing took place in Brisbane on 27 April 2010. In attendance as active parties were the applicant, CM, daughter of Mrs A and Attorney, CL, son, PC, daughter and Pamela Behrbohm, Senior Investigation Officer at the Adult Guardian’s office, and CF for part of the hearing by telephone. Leave was granted to Mr Steve Quadrio, Solicitor and Mr Vince Brennan, Barrister, to represent CF and CN. Leave was also granted to Mr John Devlin, Solicitor and Mr Dan Morgan, Barrister, to represent CM, PC and CL.
13. Present as interested parties were Chuck Bunor, a Liaison Officer from the Office of the Adult Guardian, CP, son in law, CC, grandson and CD, grandson.
14. The Tribunal had access to considerable documentation on its file which included the application, the will of CA dated 22 August 2000, Enduring Power of Attorney of Mrs A dated 26 September 2003, an aged care assessment team report of February 2009, an affidavit from the applicant, an affidavit from CF, extensive material including a report of their findings from the Adult Guardian which had a range of attachments, acquired during their investigation into the actions of their attorney, a domestic violence order taken out by Mrs A against the applicant, property searches and property transfer documents.
Issues to be decided by the Tribunal
15. The issues before the Tribunal are as follows:-
§ Does Mrs A lack capacity for decision making?
§ Should the Tribunal grant the applicant access to the Adult’s will?
§ Should the Tribunal give directions and recommendations to the Attorneys in relation to the severing of joint tenancies?
§ Should the Tribunal approve CN living in one of her mother’s units rent free as a conflict transaction?
§Should the Tribunal change or replace any aspect of the Enduring Power of Attorney
Does Mrs A lack capacity for decision making?
16. For the Tribunal to have jurisdiction, it has to be satisfied that Mrs A lacks capacity for decision making such that she is unable to instruct her attorneys.
17. Capacity is defined in schedule 4 of the Guardianship and Administration Act 2000.
18. An aged care assessment team report of February 2009 assessed Mrs A as eligible for dementia specific high level care. This report notes regular short term memory problems, regular confusion and disorientation to time and occasional disorientation to place.
19. All Parties present agreed that Mrs A was unable to make decisions for herself.
20. The Tribunal was satisfied that Mrs A was unable to understand the nature and effect of decisions about her financial matters and concluded she did not have capacity for those matters.
Should the Tribunal direct that Mrs A’s will be provided to the applicant and Attorney and is it relevant?
21. Mr Morgan argued, on behalf of the applicant, that it was important to access Mrs A’s will in order to understand her intentions to distribute her property on her passing to various members of the family.
22. Mr Brennan, for CF, advised the Tribunal that Mr Quadrio holds Mrs A’s will in his capacity as her lawyer. He advised the Tribunal that the will has not been produced to CF and argued that the production of the will in the circumstances of this hearing was not relevant. He noted however the Tribunal can order a third party to produce a document. He further advised the Tribunal that CF had not authorised Mr Quadrio to release the will. He argued that a will is not a financial matter but a special personal matter and as such an Attorney does not have a right to have a copy of the principal’s will and in any event the possession of knowledge of a will could result in the Attorney taking action which could frustrate the principal’s intentions.
23. Mr Morgan argued that the definition of financial matters in schedule 2 of the Powers of Attorney Act 1998 included a legal matter relating to the principal’s financial or property matters and as a result this would include a will. The Adult Guardian submitted that general principle seven (7) contained in schedule one (1) was relevant, in that the adult was now unable to make her views and wishes known, and that the only avenue available to an Attorney to act on or take into account the principal’s views and wishes in dealing with her property, would be to access and view her will.
24. The Tribunal decided that the will should be made available to the Attorneys and gave oral reasons why this decision had been made, referring to section 81 of the Powers of Attorney Act 1998. This gives an Attorney the right to all the information the principal would have been entitled to if the principal had capacity and that is necessary to make, for the principal, decisions about anything the Attorney is authorised to do. Section 63 of the Queensland Civil and Administrative Act provides that a third party in control of information can be ordered by the Tribunal to provide that information or document to the Tribunal or a party in the proceedings.
25. The Tribunal also accepted the argument advanced by the Adult Guardian in relation to the Attorney’s being required to apply the general principles and that Mrs A’s will provided some insight into her views and wishes. In all the circumstances the Tribunal makes an order ordering Mr Quadrio to provide a copy of Mrs A’s will to her Attorneys and to the Tribunal.
What would Mrs A do or have done about severing the joint tenancies if she had capacity today or had been advised about the effect of joint tenancies on her testamentary intentions?
26. The Tribunal is unable to answer this question with certainty with the current evidence before it.
27. It is obvious to the Tribunal that Mrs A intended to leave all of her property to her children in particular ways.
28. Her will dated 12/4/07, shows that she wished property 1 that she owned jointly with CF to be left to him alone.
29. The will also shows that she wished the entire property 3, that she also owned jointly with CF to be left to 4 of her children in equal shares. Of course, she is unable to do this because it will automatically go to CF as joint owner if he survives her.
30. As to property 2 which she owns as tenants in common with CF, 2/3, 1/3, she seeks to leave 100% of the property to her children and grandchildren, by way of leaving each of them a designated unit, despite the property not being strata titled, and despite only owning two thirds of it.
31. She clearly did not understand how these properties were held and what her rights were to bequeath them.
32. Two properties were purchased decades ago either in joint names with her husband and CF or as tenants in common with her, her husband and CF in equal shares.
33. It is difficult to understand why she would think she now owned the properties outright.
34. Of particular concern to the Tribunal is that the same law firm, albeit in different creations, acted as solicitor for Mrs A and her husband A for several decades.
35. The firm drew up wills for Mrs A and her husband, A’s last will being executed on 22/08/2000 with Mrs A’s being executed on 12/04/07.
36. The firm drew up Mrs A’s Enduring Power of Attorney dated 26 September 2003.
37. The firm organised the property transfers when properties were acquired. The firm administered the estate of A after he died in 2003.
38. It is legitimate to ask how could a law firm with such detailed records and an apparent intimate knowledge of Mr & Mrs A’s affairs draw up a will for Mrs A in 2007 which failed to recognise how she held properties, and the effect thereof on her testamentary intentions. The likely result on the face of it, is that Mrs A’s testamentary intentions will be inoperative.
39. Had this circumstance been drawn to her attention at the time, she may have decided to sever the joint tenancies so that she could leave more property to her children other than CF.
40. It is also possible that Mrs A may not have elected to sever the joint tenancies.
Should the Tribunal authorize severance of the joint tenancies?
41. The applicant asks the Tribunal to give directions to the attorneys to sever the joint tenancies of the properties Mrs A owns with CF.
42. The request is made so that Mrs A’s property interests in the 3 properties can be willed by her in accordance with her testamentary intentions to provide benefits under her will to her children.
43. The Tribunal’s powers to do this are contained in section 118 of the Powers of Attorney Act 1998 which is reproduced below:
(1) On an application about a matter, the court may give directions or advice or make a recommendation, order or declaration about the matter or another matter related to this Act, including about—
(a) the interpretation of the terms of, or another issue involving, a power of attorney, enduring power of attorney or advance health directive; or
(b) the exercise of an attorney’s power or another issue involving an attorney’s power.
(2) Without limiting subsection (1), if the court considers it in the best interests of the principal, the court may, by order and subject to the terms the court considers appropriate, authorise an attorney, either generally or in a specific case, to undertake a transaction that the attorney is not otherwise authorised to undertake or may not otherwise be authorised to undertake.
44. Section 109 (A) of the Act confers on the Tribunal concurrent jurisdiction with the Supreme Court in relation to enduring documents.
45. This application was opposed by CF son and principal attorney.
Mr Brennan, of Counsel, in his written submissions, correctly identifies that the Tribunal does not have power to sever the joint tenancies.
46. The most the Tribunal can do is authorise the attorneys to do so, if the Tribunal considers it in the best interests of Mrs A.
47. The applicant argues that the severance is what the adult would have wanted as evidenced by her wishes expressed in her will. As discussed earlier, her wishes so expressed, cannot operate because of how her ownership in the properties is held.
48. Mr Brennan argues that:
§ There is no evident need to sever the joint tenancies and it is not consistent with Mrs A’s proper care and protection.
§ The severing would not produce a benefit to Mrs A, but would to the beneficiaries
§ The severing would produce a detriment to the adult because in the event CF predeceases her she currently enjoys the rights associated with survivorship.
§ The order would unravel a 37 year history of the way in which interests in property 1 and property 3 have been held in that Mrs A, her husband and CF intended that two of the three properties be held as joint tenants and the third as tenants in common.
49. The arguments advanced by the applicant related to Mrs A’s will and particularly how she had wanted certain properties left. Severance of the joint tenancies would more closely align with her intentions.
50. The evidence currently before the Tribunal is insufficient for the Tribunal to give any directions in relation to severing the joint tenancies.
51. The Tribunal is unable to conclude this is what Mrs A would do today, and is not prepared to speculate on this point.
52. The Tribunal was not satisfied, at this time, that severance would be in Mrs A’s best interests, and no evidence was produced to this effect. The application for directions is dismissed.
Conflict Transaction – CN
53. CN is one of Mrs A’s daughters. She currently resides in a unit at property 1. Previously she lived in a unit at property 2.
54. She swapped resides with her son in recent times with CF’s agreement.
55. CN lived in property 2 for several years, providing care for her mother who lived in another unit in the building. She lived rent free with the blessing of her mother and CF.
56. She continues to provide support to her mother by taking food and other items to her mother at Berlasco Court.
57. An issue arose as to whether CN was an eligible attorney under section 29 of the Powers of Attorney Act 1998 by virtue of her receiving free rent as a carer.
58. The Tribunal determined that currently CN is not a paid carer because even if free rent was regarded as remuneration, she no longer provides care as defined by the definition in Schedule 3 of the Powers of Attorney Act. The Tribunal also notes that section 63 (3) and (4) of the Act does not apply to her circumstances because CN was not a statutory health attorney but an attorney under an Enduring Power of Attorney.
59. No family members had any objection to CN living rent free in property owned by Mrs A apart from one matter.
60. Concern was expressed that Mrs A had wanted CN to live at property 2. This unit had been renovated for CN’s benefit using her funds. If rented it would attract around $300 per week. The unit where she moved to is of lesser quality and would rent for approximately $200 per week.
61. Section 73 of the Powers of Attorney Act 1998 deals with conflict transactions. The Enduring Power of Attorney did not authorise conflict transaction which is defined as
“a transaction in which there may be a conflict, or which results in a 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.”
62. Clearly, if an attorney lives rent free in a principal’s property and is not a dependant, this constitutes a conflict transaction because of the benefit to the attorney at the expense of the principal’s income.
63. Section 118 of the Power of Attorney Act 1998 permits the Tribunal, by virtue of its concurrent jurisdiction with the Queensland Supreme Court over enduring documents (section 109A) to authorise a conflict transaction.
64. The Tribunal concluded that in all the circumstances it should make an order authorising CN to live in Mrs A’s property rent free.
Adult Guardian’s investigation into the actions of the attorney, CF
65. The Adult Guardian received a referral on 29 October 2009 raising concerns about possible financial abuse by CF as attorney and his lack of consultation with another attorney.
66. Amongst other things, the investigation report of Pamela Behrbohm from the Adult Guardian’s office noted the following:
§ CF advised that rental income from all property is distributed in favour of his mother with costs shared.
§ CF and CM, one of the other attorneys have been in constant conflict for years involving the financial dealings of their mother’s finances and assets.
§ No records, receipts, expenditure or invoices were provided for the rental properties after June 2008
§ Consultation does not occur with CM and CF does not disclose financial information to CM when she requests it.
§ A possible breach of section 73 of the Powers of Attorney Act 1998 may have occurred as a result of the other attorney CN living rent free in a property partly owned by the adult
§ CF and CN may have committed breaches of section 85 of the Act in relation to record keeping for the Mrs A’s income and expenditure.
§ Breaches may also have occurred in relation to sections 79 and 81 of the Act because of a lack of consultation and non disclosure of information.
67. Ms Behrbohm indicated to the Tribunal that she had requested further information from CF but this had not yet been received. She advised that this would need to be considered by the Adult Guardian before reaching any final conclusions. She indicated that the Adult Guardian may bring an application to the Tribunal to consider the appointment of the Public Trustee to administer Mrs A’s financial affairs.
68. Parties present did not object to such a cause of action. However, Mr Brennan reserved his client’s right to respond to the views and findings of the Adult Guardian.
69. The Tribunal was concerned after questioning CF that his record keeping may not be acceptable and made orders in relation to this.
70. The Tribunal also noted that, if there was an appointed administrator in the future, this person/entity might be able to further pursue information to assist in decision making about the joint tenancies and their possible severance.
Costs
71. Mr Brennan foreshadowed that on receipt of the Tribunal’s reasons for decision, he may pursue a costs order.
72. Parties agreed that this would be done by way of written submissions and be considered by the Tribunal without an oral hearing. Orders were made accordingly.
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