CAJ
[2014] QCAT 571
•30 October 2014
| CITATION: | CAJ [2014] QCAT 571 |
| PARTIES: | CAJ |
| APPLICATION NUMBER: | GAA5003-14 |
| MATTER TYPE: | Guardianship and administration matters for adults |
| HEARING DATE: | 22 May 2014, 22 September 2014 |
| HEARD AT: | Brisbane |
| DECISION OF: | Member Joachim |
| DELIVERED ON: | 30 October 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | Decision made 22 September 2014: 1. The appointment of The Public Trustee of Queensland as administrator for CAJ for all financial matters is continued. 2. The administrator is to provide a financial management plan to the Tribunal within four (4) months. 3. The Tribunal directs the administrator to provide accounts to the Tribunal when requested. 4. This appointment of The Public Trustee of Queensland remains current until further order of the Tribunal. Enduring Power of Attorney: 5. The following Enduring Power of Attorney for CAJ is overtaken by the making of this appointment and, in accordance with s 22(2) of the Guardianship and Administration Act 2000 can no longer be acted upon to the extent that this appointment has been made: a. The Enduring Power of Attorney dated 28 December 2006 appointing AG as attorney for financial, personal and health matters. Directions 6. The Public Trustee of Queensland is directed to report to the Tribunal by 4.00pm on 20 March 2015 whether it is in the interests of CAJ to take steps to effect a transfer of 80 shares in Company A from the attorney back to the CAJ. |
| CATCHWORDS: | ENDURING POWERS OF ATTORNEY – ADMINISTRATION – where allegations made attorney breached Powers of Attorney Act 1998 – where Public Guardian conducted investigation into actions of attorney – where Public Guardian suspended attorney – where shares in principal’s company transferred to attorney – whether attorney acted improperly – whether shares should be transferred back to principal Guardianship and Administration Act 2000 (Qld), s 31 |
APPEARANCES:
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).
REASONS FOR DECISION
CAJ is 89 years old. He accumulated his wealth in a motor boat company. He has lived in a nursing on the Gold Coast since September 2012 having previously resided with his son on property at Toorbul owned by Company A in which CAJ has an interest.
The Adult Guardian seeks the appointment of the Public Trustee as administrator for CAJ despite him appointing his daughter AG as enduring power of attorney in 2006.
Following an investigation by the Public Guardian the Public Guardian suspended AG as attorney as their investigations found it appeared she had breached the Powers of Attorney Act 1998 (Qld) by:
· Not acting with reasonable diligence in protecting CAJ’s interests.
· Not avoiding a conflict transaction.
· Not keeping adequate records.
· Not keeping funds separate.
The hearing of the application was conducted on 22 May 2014. I made findings that CAJ had vascular dementia and was unable to understand information nor appreciate the consequences of decisions. He had poor short-term memory and demonstrates confusion. I was satisfied he did not have capacity to make decisions for himself.
I heard conflicting evidence from the attorney AG and her brother CS about their father’s affairs. There is considerable animosity between them.
CAJ’s assets consisted of $484,000 in a Westpac account, a nursing home bond of $44,000 and some other small holdings with the Public Trustee and the Commonwealth Bank. He owns 21 shares out of 102 shares in Company A. This company owns land at Toorbul where the son still lives. This is said to be worth hundreds of thousands of dollars.
The Public Trustee have valued his asset in Company A at $164,705.88. I am unsure as to how they have calculated this.
Prior to 8 August 2012 CAJ held 101 of the 102 shares in Company A. On 8 August 2012, 80 were transferred to the attorney AG.
The Company A property earns no income and there are a range of outgoings paid for in the main by CAJ. AG pays some outgoings. CS pays none.
AG has admitted to buying $400,000 of shares in her name using her father’s funds.
The financial interests of CAJ need management and protection. At the hearing, I could not be satisfied as to the rebuttals made by the attorney against the concerns of the Adult Guardian and the attorney’s son CS.
As a result I made a short term order on 22 May 2014 appointing the Public Trustee for a period of four months and gave directions as follows:
6.CS is directed to particularise in writing to the Tribunal financial information he is seeking from the attorney, by:
4:00pm on 30 May 2014.
7.The Tribunal will issue directions to the attorney, AG, following the receipt of CS’s request, not before:
4:00pm on 4 June 2014.
I subsequently made some further directions on 30 May 2014 as follows:
1.The attorney AG is to provide written submissions to the Tribunal, the Public Trustee of Queensland, the Adult Guardian and CS outlining the following:-
a.Why the presumption of undue influence should be rebutted in respect of her acquiring 80 shares from CAJ in Company A in August 2012.
b.i. What consideration, if any, the attorney gave to the impacts of her taking over $400,000.00 of CAJ’s funds to buy shares in her name and her acquiring 80 shares from CAJ in Company A.
ii.What the impact of these two transactions will be on the adult’s previous and future pension payments.
c.Why during 2012 and 2013 CAJ met all of the costs of Company A at the times he owned only 20% of the company.
d.The costs incurred by CAJ in paying Company A’s accounts since the time he owned 20% of the company, and whether anyone else has paid Company A’s accounts and in what sum.
e.What the attorney declared to Centrelink in 2012 as CAJ’s assets for his assets assessment.
f.When the attorney became aware that CAJ was assessed as eligible for high level residential care as per the Aged Care Assessment undertaken on 9 August 2012.
g.What loans the attorney says were made to CS and others by either the adult or Company A from 2004 to 2011, in terms of the dates and amounts of the loans, together with any supporting documentation.
h.How the attorney proposes to fund Company A’s liabilities into the future?
i.Why the Tribunal should reinstate the Enduring Power of Attorney for financial matters?
j.If the Tribunal reinstated the Enduring Power of Attorney for financial matters, what records and auditing should apply to the attorney?
by 4:00pm on 30 July 2014.
2.The parties may provide written comments on the attorney’s submissions to the Tribunal
by 4:00pm on 27 August 2014.
3.The Tribunal will decide the review of the Public Trustee’s appointment on the basis of written submissions
not before 15 September 2014.
The review was conducted on the papers on 22 September 2014. When the Tribunal conducts a review of an appointment of an administrator, it does so under s 31 of the Guardianship and Administration Act 2000 (Qld). This requires that at the end of its review the Tribunal must revoke an appointment unless satisfied it would make appointment if a new application were to be made.
In this matter I needed to consider whether AG submissions are sufficiently comprehensive and explanatory such that I would be convinced that there is no need for an appointment and that the enduring power of attorney which she hold for financial matters can be put back in place.
CAJ continues to have a decision-making impairment and is unable to make decisions about his financial matters.
It is relevant to note at this time that the funds used by AG to buy shares in her name have been returned to an account in CAJ’s name.
It should also be noted that the management of Company A does not necessarily form part of the assets of CAJ to be administered by an administrator. This is a company which has directors.
The Public Trustee’s briefing report dated 10 September 2014 notes that it is questionable whether the Public Trustee has authority to involve himself in the company.
The outcome of this review will be guided by not only the earlier report of the Public Guardian into the actions of AG but also by the submissions provided by the parties as directed in the earlier orders.
The Submissions of AG
AG provided submissions to the Tribunal in response to the directions made. She advised that the reason for her father’s decision to make her a shareholder in the company of which she had been the director of for several years, is that during private discussions, her father had expressed his concern over how things would be divided upon his death.
In response to the fact that AG and her brother did not get on she submitted her father noted that there would be difficulty dividing his assets on his death due to the fact that CS would probably want to hold onto the farm.
She submitted that her father had realised that CS had received substantial funds over the years from both personal and company loans and that the father felt by providing her with a majority share of the company it would be a fair way to handle things.
In addition, she submitted that she had worked for over a year unpaid every weekend to put her father’s personal accounts and Company A’s accounts in order.
She submitted that her father had signed all documents associated with the transfers with the same degree of willingness and understanding up until his heart attack in late August. She stated that the decision to buy shares was a mutual one, following much discussion as to the possible investment options available to him as her father was unable to get a pension and was too old to work. They agreed that upon the maturing of a term deposit and the sale of commercial property at Caboolture that it would be best to buy shares which paid dividends.
She further submitted that the shares in Company A were purchased and paid for by herself. She did not provide any evidence of when this happened, how much she paid and where it is was paid to. She advised that the transfer of $400,000 of CAJ’s funds to buy shares in her name and her acquiring 80 shares from CAJ in Company A would not have an impact on CAJ’s pension as he was only receiving a partial DVA hearing pension of approximately $70.00 per week.
AG was asked to provide advice as to why during 2012 and 2013 CAJ met all of the costs of Company A at a time when he owned only 20 per cent of the company. In response, AG advised that her father did not meet all the costs and that most of these were paid from her own company, in particular for telephone, electricity, and insurance.
She also noted that her brother lives free of charge at her father’s request and as a result, has relinquished any form of rent for the property. She submitted that she bears the major portion of the costs.
AG advised in response to the question regarding when she became aware that CAJ was eligible for aged care as per the aged care assessment undertaken on 8 August. She stated she received a letter from ACAT informing her of her father’s assessment for high care. She did not indicate when she first became aware of this, as she had been directed to do.
In response to the question, what loans she says were made to CS and others by either CAJ or Company A from 2004 to 2011, she provided numerous cheque butts, which she says were in her father’s handwriting. These indicated the various loans that were made to CS and are represented in the financial statements put together by the accountant. She stated she never wrote a cheque out for Company A.
She submitted a number of these stubs indicated a number of loans were made to CS and some gifts were made to him along with loans to other persons. On my analysis, there were various other cheque stubs where CS was paid money but the stubs did not attribute these funds as being gifts or loans.
In response to the question how the attorney proposed to fund Company A liabilities into the future, she submitted that her brother will need to vacate the property so it can be prepared for sale. She submitted that as there is no income coming in and no rent being paid the commercial decision is that it must be sold given that there are a number of fixed expenses and possible maintenance items.
In response to the question as to whether the Tribunal should reinstate the enduring power of attorney for financial matters AG submitted that this should happen because her father appointed her in 2006 to assist him in all matters.
She stated that should the Tribunal decide to allow her to continue as her father’s enduring power of attorney she would resume this position only on the condition that she was not constantly harassed by her brother and others. She stated if she is not reinstated, she would expect to continue as her father’s enduring power of attorney for personal matters.
She further submitted she would be prepared to provide six monthly sets of accounts to the Public Trustee.
The Submissions of CS
CS was also asked to provide submissions. He considered that the transfer by his sister of 80 shares to herself was an abuse of her responsibility as her father’s attorney and considered the action improper and something done solely to further her own interest rather than something that met her responsibility to her father as his attorney.
He advised that he and his father bought the Toorbul property currently owned by Company A in 1991 with an intention of farming and ultimately subdividing the land for resale. He submitted that he contributed $50,000 to acquisition of the land and was director of Company A from November 1989 and that the shareholdings of the company were 50 per cent to his father and the other 50 per cent were held in trust for him by his father.
He advised that his father took care of the company and that whilst he did not recall the arrangements described above it fits with his understanding on the basis of which they jointly made the investment.
He advised the Tribunal that in 1996 he registered himself as an owner/builder and constructed buildings on Company A’s property in which he and his father lived. His father lived in the main house until his illness in 2012.
When CS built a small dwelling close to the main house the cost of the material were approximately $58,000 and it remains only 85 per cent complete because of an injury that he suffered in constructing the building.
He submits that in building the two houses on the Toorbul property and building fences, cattle yards and shed he made a very substantial contribution to its value. He was not paid for his physical work and the organisation of the second dwelling.
He advised that in 2006 he was removed as director of Company A at, he says, the insistence of his sister. He advised he was not aware of the share transfers in 2012 until QCAT provided details earlier this year.
He submitted that as far as he was aware there was no payment made by AG to their father or Company A in consideration of the share transfers in her favour. He rejects the assertion made by the attorney that she made an agreement with her father that the transfer of shares to her would better reflect his testamentary intentions upon his passing.
He submitted that he knows his father recognises his long-standing rights in regard to the Toorbul property. He considered his father in signing the company related documents in 2012 was either misled or confused due to his illness.
He noted that under the heading Company A in her submissions, the attorney asserted that she needed to be a shareholder in order for ASIC to recognise her power of attorney. He further submits that she asserted to QCAT that a letter to her father which she said is an indication of her good relationship with her father, appears to CS to be a very deceptive persuasion designed to get their father to sign a transfer of company shares to herself.
CS requested QCAT make orders that the position be reinstated prior to the 2012 transfers: that is that one-half of the Company A shares were held in trust by his father for his benefit.
In relation to the sum of over $400,000 used to purchase shares, he submits the money is plainly his father and not the attorneys and it was inappropriate for the attorney to act in the way she did.
He advised that he has no issue with the reimbursement of reasonable sums paid by the attorney in respect of the assets, she did not own.
He submits that neither his father nor Company A ever loaned him any money apart from the loans made since the bare licence granted to him following the agreement of 25 October 2012, the sum of these loans being $5,400.
He submitted that since 2000 he had been employed on the property, spent the majority of the time on the property and in return for his work his father periodically paid him sums of money for his own use and this reflected the work he did on the property. He does not accept that in respect of the cheque butts submitted by the attorney that any of the amounts that were given to him were loans. He questions the writing on the cheque butts.
He further stated that his father never said to him that any of the payments were loans. He said this makes sense because his father knew his financial position that he had no ability to repay loans and was dependent on any income from Company A.
CS also submits that one cheque of 23 February 2014 for the sum of $50,000 is noted on the cheque butt as a loan but he states that this was a payment to partly reimburse him for the cost of material for the second dwelling.
He advises he had a close relationship with his father, which went back to the period after he finished secondary school, and he started working at a motor boat company firstly as an apprentice and subsequently as a branch manager.
He considers that his sister has used dishonest means to take ownership of assets that belong to his father and himself. He concluded that his sister has used deceitful means to circumvent their father’s will and wishes and has misappropriated all of the valuable assets that were held by their father before her appointment as attorney. He seeks a specific order over-turning each and every transaction made by her as an attorney wherever the transaction has adversely affected the interests of their father or himself.
He further wants QCAT to make orders that restore the shareholding in Company A that his father held as trustee for him and declare his interest as a sole beneficiary of that trust.
The Submissions of the Public Guardian
The Public Guardian’s response to the attorney’s submissions was that a range of documentation submitted by the attorney with her statement to QCAT responding to the QCAT directions had not been provided to the Public Guardian’s office throughout the course of the investigation. These included such things as cheque butts, various notifications regarding Australia Post redirections, various accounts for electricity and Telstra invoices.
The Public Guardian noted the ongoing conflict between the attorney AG and CS. The Public Guardian submitted that as it appears the adult’s financial circumstances still require further investigation, the Office of the Public Guardian supports consideration for the attorney to be required to report to the Tribunal in relation to the adult’s financial matters and also seek consideration of a direction for the accountant from the Public Trustee to further examine the adults financial circumstances to protect the adults ongoing rights and interests.
The Tribunal’s View
The Tribunal notes that the Aged Care Assessment Team completed an assessment on 8 August 2012 and by letter, dated 14 August 2012 approved CAJ for permanent residential aged care at a high level from 10 August 2012.
This assessment noted that CAJ had regular problems with short-term and long-term memory with regular confusion and occasional disorientation to time. He required assistance with urinary and faecal incontinence. It also indicated that he is quite repetitive in his conversation.
The report indicates that CAJ lacks insight into his care needs and shows poor judgment. He gets agitated when things are not done how and when he wants them.
It is pertinent to note that according to ACAT, AG made the request to ACAT to have the assessment done on 2 August 2012. Whilst there is no evidence about this, it is likely that following the assessment, AG was advised of the results by the assessor on that day i.e. 8 August 2012. I have come to this view because AG was an informant for the assessment and noted as the main carer.
According to the Adult Guardian’s investigation report, minutes of a shareholders meeting held by CAJ and AG on 8 August 2012 evidence a special resolution changing the company share structure whereby 80 of CAJ’s shares are placed in the attorney’s name.
It is very concerning that a few days after arranging an ACAT assessment for her father AG participates in a meeting with him to arrange for 80 per cent of his shares to be transferred to her and this meeting occurs on the very day of the ACAT assessment. I am satisfied on the balance of probabilities that this was not coincidental. I consider it was arranged because AG was concerned about her father’s incapacity to make decisions.
In the light of the above, I cannot accept AG’s statement reported in the Adult Guardian’s investigation report that ‘as the attorney was of the belief the adult had capacity at the time of the shareholder meeting on 8 August 2012, no medical advice was sought in relation to the matter’. AG had already organised an ACAT assessment because of her father’s functioning. In my view she knew there were cognitive problems. She, in fact, reported them to the ACAT assessor.
I have considered the submissions in great detail. I accept that Company A did make loans to CS. It is clear that the cheque butts make clear differentiations between payments to CS, which are not loans, gifts to CS which are not loans, some other payments to CS which are not loans. It remains clear that there are entries on the stubs that specify loans.
I am of the view that when CAJ wrote these cheques he gave consideration to how the cheque butts should be characterised and it is very clear to me that the purpose of a number of the payments were loans.
I accept that the property owned by Company A which is not in receipt of any income but does have outgoings needs to be sold. Company A is unable to pay its bills, as it has no income. To date it appears that the bills have been paid by a combination of CAJ’s personal funds and AG’s personal or her company funds. CAJ is unable to afford to make payments for Company A and whereas AG may choose to do so, she does not have to.
I am satisfied that there is considerable conflict between CS and AG such that any negotiations in relation to the sale of the Company A property would be impossible. It will be necessary for another party outside of the siblings to be involved in the sale arrangements.
That is one reason why I will be appointing the Public Trustee as CAJ’s administrator. I would like the Public Trustee to strongly consider their replacing CAJ on the Board by a representative of the Public Trustee. Should CAJ already have been removed from the Board I would urge the Public Trustee to discuss with AG that a representative from the Public Trustee join her as a director.
Two matters concern me greatly in relation to the actions of AG as attorney. The first of these is the transfer of over $400,000 of CAJ’s funds into shares in her name. I note that the funds have been returned to a bank account in CAJ’s name. There is no evidence before me as to what happened regarding capital gains, or capital losses. The dividends were apparently paid to the Company A bank account. It is inappropriate for an attorney to transfer money of a principal into the attorney’s name in whatever form.
The second concern is the transfer of the 80 shares from CAJ in Company A into the attorney’s name. This was done at a time when CAJ’s capacity was significantly compromised. It is clear on the evidence that CAJ had been deteriorating cognitively for some time. It is also clear that he had given a number of loans to CS over the years. AG submits that as a result of this CAJ wanted to give her some shares in the company to ‘even up the ledger’ as it were.
There is however, nothing in the material to substantiate the latter.
I have decided to continue the appoint of the Public Trustee for all of the financial matters for CAJ on the basis that the attorney has acted inappropriately as described above and that the Public Trustee needs to consider whether a representative is appointed as director of Company A for the reasons I have described above.
I have decided to direct the Public Trustee to report to the Tribunal as to whether it is in CAJ’s interest to take steps to effect a transfer of these shares back to CAJ.
I accept that AG has provided support for her father both emotionally and in managing Company A’s finances and his personal accounts prior to his incapacity. AG states that the shares in the company i.e. Company A were purchased and paid for by herself. She has provided no evidence of this or how much she paid for the shares, and when this occurred. This will be a matter for further determination by the Public Trustee.
I accept that AG has paid some of the Company A expenses. I accept that the cheques written by Company A were written by CAJ. I accept that the property owned by Company A needs to be sold. I accept that CS and CAJ bought property at Toorbul together with the intention of farming and ultimately subdividing the land for resale and that CS built a house and other structures on the property.
I accept that he has done work on the property and may not have always been paid for this work. I do not accept CS’s conclusion that his sister has used deceitful means to circumvent their father’s will and wishes and has misappropriated all the valuable assets that were held by their father before her appointment as attorney.
The orders that CS seeks for me to overturn each and every transaction made by AG in her capacity as CAJ’s attorney is not within the power of this Tribunal. Nor is it within my power to restore the shareholding in Company A that he says his father held as a trustee for him and nor is it within my power to declare his interest as a sole beneficiary of the trust.
The appointment of the Public Trustee does not mean AG cannot exercise powers to make decisions for her father for non financial matters. She remains the attorney for personal and health matters.
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