CRG - [2019] QCAT 168

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL

CITATION:

CRG [2019] QCAT 168

PARTIES:

In an application about a matter concerning CRG

APPLICATION NO/S: GAA2530-18

MATTER TYPE:

Guardianship and administration matters for adults

DELIVERED ON:

6 June 2019

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Member Gordon

ORDERS:
1. Pursuant to section 59 of the Guardianship and Administration Act 2000 the Public Trustee shall compensate CRG for its failure to comply with the Act in the exercise of a power by forthwith paying to CRG the sum of $18,199.96 plus interest to the date of this order of $19,205, a total of $37,404.96.

2. The claim brought against the Public Guardian is dismissed.

CATCHWORDS:
HEALTH LAW – GUARDIANSHIP, MANAGEMENT AND ADMINISTRATION OF PROPERTY OF PERSONS WITH IMPAIRED CAPACITY – ADMINISTRATION AND FINANCIAL MANAGEMENT – GENERALLY – application for compensation for failure to comply with the Guardianship and Administration Act 2000 (Qld) in the exercise of a power – nature and extent of the duties – whether duties were breached and if so, the correct amount of compensation

Guardianship and Administration Act 2000 (Qld), s 11,
s 33, s 34, s 35, s 51, s 54, s 59, s 138

Trusts Act 1973 (Qld), s 22, s 23, s 24

Duchess of Argyll v Beuselinck (1972) 2 Lloyd’s Rep 172

REPRESENTATION:

Adult:

Matthew Jones, counsel, appointed as a separate representative for CRG and appearing pro bono

Current administrator:

Self-represented

Public Guardian:

Tony La Spina, Senior Legal Officer

Public Trustee:

Represented by various officers

APPEARANCES: This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld)

REASONS FOR DECISION

This is an application by CRG for compensation for certain things done by CRG’s then administrator (the Public Trustee) and guardian (the Public Guardian) in 2006 and 2007.
The application comes to the tribunal under the Guardianship and Administration Act 2000 (Qld) (‘GAA’). By section 59 of that Act, the tribunal may order a guardian or administrator for an adult to compensate the adult for a loss caused by the appointee’s failure to comply with the GAA in the exercise of a power.
The manner of such an application is not specified in the GAA or in the QCAT Act. This application has been made by applying for directions under section 138 of the GAA about a matter already before the tribunal relating to CRG. Although an application seeking compensation from the Public Trustee on that basis was made back on 1 December 2009, it had remained outstanding and unresolved. On

28 February 2018 the tribunal recognised it as an application which needed to be dealt with and made an order accordingly. The delay and apparent difficulty in recognising this is was largely due it seems, to a number of other issues dealt with by the tribunal from time to time with respect to CRG.
Subsequent directions identified the precise issues to be determined by the tribunal. With respect to the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading CRG

Details

AGLC: CRG [2019] QCAT 168
Case: [2019] QCAT 168
Decision Date: 6 June 2019

CaseChat Overview and Summary

In the case of CRG, the dispute centred on whether the Public Trustee, in their role as an administrator under the Guardianship and Administration Act 2000 (Qld), had breached their duties in making a loan to CRG. The court was tasked with determining if the Public Trustee had failed to comply with the Act, and if so, what the appropriate compensation should be.

The legal issues revolved around whether the Public Trustee had breached their statutory duties in exercising their powers under the Act, particularly in relation to the prudent person investment rule, and if CRG was entitled to compensation for any such breaches. The court had to consider the principles of substituted judgment and the maintenance of existing supportive relationships as outlined in the Act, and whether these had been adhered to in the making of the loan.

The court found that the Public Trustee had indeed breached their duties by not complying with the prudent person investment rule as incorporated into the Guardianship and Administration Act by section 51. The Public Trustee had failed to exercise the care, diligence, and skill of a prudent person in managing the affairs of others when making the loan to CRG. Consequently, the court ordered that the Public Trustee compensate CRG for this failure, amounting to $18,199.96 plus interest of $19,205, totalling $37,404.96. The claim against the Public Guardian was dismissed as no breach on their part was found.

Orders

Orders of the court

1. Pursuant to section 59 of the Guardianship and Administration Act 2000 the Public Trustee shall compensate CRG for its failure to comply with the Act in the exercise of a power by forthwith paying to CRG the sum of $18,199.96 plus interest to the date of this order of $19,205, a total of $37,404.96.

2. The claim brought against the Public Guardian is dismissed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

Of particular relevance to this application however, and relied on by the Public Trustee, are the general principles in paragraphs 7(4) and 8, which read:-7 Maximum participation, minimal limitations and substituted judgment(4) Also, the principle of substituted judgment must be used so that if, from the adult’s previous actions, it is reasonably practicable to work out what the adult’s views and wishes would be, a person or other entity in performing a function or exercising a power under this Act must take into account what the person or other entity considers would be the adult’s views and wishes.8 Maintenance of existing supportive relationshipsThe importance of maintaining an adult’s existing supportive relationships must be taken into account. I would add this principle which also seems to be relevant:-10 Appropriate to circumstancesPower for a matter should be exercised by a guardian or administrator for an adult in a way that is appropriate to the adult’s characteristics and needs. As for (c) (the prudent person investment rule), this is incorporated into the GAA by the effect of section 51 of the GAA, which provides that an administrator may only invest in ‘authorised investments’. An authorised investment is defined in the dictionary as ‘(a) an investment which, if the investment were of trust funds by a trustee, would be an investment by the trustee exercising a power of investment under the Trusts Act 1973, part 3; or (b) an investment approved by the tribunal’.[2] [2]Dictionary in Schedule 4 of the GAA. Part 3 of the Trusts Act 1973 (Qld), and in particular sections 22 to 24, set out the duties of a trustee when considering in what way to exercise a power of investment. Section 51 of the GAA therefore has the effect of incorporating these duties into the requirements of the GAA, so that the tribunal could compensate the adult if the duties were not complied with. In this matter, the Public Trustee accepts that the loan to CRG was an ‘investment’ within Part 3 of the Trusts Act 1973 (Qld), and accordingly that the duties in that Act, as incorporated by section 51 of the GAA, applied to the Public Trustee in making the loan.[3][3]Submissions of the Public Trustee given on 25 February 2019, paragraph 1. The statutory provisions of the Trusts Act 1973 (Qld) which apply are:-22 Duties of trustee in relation to power of investment(1) A trustee must, in exercising a power of investment—(a) if the trustee’s profession, business or employment is, or includes, acting as a trustee or investing money for other persons—exercise the care, diligence and skill a prudent person engaged in that profession, business or employment would exercise in managing the affairs of other persons; or(b) if the trustee’s profession, business or employment is not, or does not include, acting as a trustee or investing money for other persons—exercise the care, diligence and skill a prudent person of business would exercise in managing the affairs of other persons.(2) A trustee must, in exercising a power of investment, comply with a provision of the instrument creating the trust that is binding on the trustee and requires the obtaining of a consent or approval or compliance with a direction for trust investments.(3) A trustee must, at least once in each year, review the performance, individually and as a whole, of trust investments.23 Law and equity preserved(1) A rule or principle of law or equity imposing a duty on a trustee exercising a power of investment continues to apply except so far as it is inconsistent with this or another Act or the instrument creating the trust.(2) Without limiting the rules or principles mentioned in subsection (1), they include a rule or principle imposing—(a) a duty to exercise the powers of a trustee in the best interests of all present and future beneficiaries of the trust; and(b) a duty to invest trust funds in investments that are not speculative or hazardous; and(c) a duty to act impartially towards beneficiaries and between different classes of beneficiaries; and(d) a duty to obtain advice.(3) A rule or principle of law or equity relating to a provision in an instrument creating a trust that purports to exempt, limit the liability of, or indemnify a trustee in relation to a breach of trust, continues to apply.(4) If a trustee is under a duty to obtain advice, the reasonable cost of obtaining the advice is payable out of trust funds.24 Matters to which trustee must have regard in exercising power of investment(1) Without limiting the matters a trustee may take into account when exercising a power of investment, a trustee must, so far as they are appropriate to the circumstances of the trust, have regard to the following matters—(a) the purposes of the trust and the needs and circumstances of the beneficiaries;(b) the desirability of diversifying trust investments;(c) the nature of and risk associated with existing trust investments and other trust property;(d) the need to maintain the real value of the capital or income of the trust;(e) the risk of capital or income loss or depreciation;(f) the potential for capital appreciation;(g) the likely income return and the timing of income return;(h) the length of the term of the proposed investment;(i) the probable duration of the trust;(j) the liquidity and marketability of the proposed investment during, and at the end of, the term of the proposed investment;(k) the total value of the trust estate;(l) the effect of the proposed investment for the tax liability of the trust;(m) the likelihood of inflation affecting the value of the proposed investment or other trust property;(n) the cost (including commissions, fees, charges and duties payable) of making the proposed investment;(o) the results of a review of existing trust investments.(2) A trustee—(a) may obtain, and if obtained must consider, independent and impartial advice reasonably required for the investment of trust funds or the management of the investment from a person whom the trustee reasonably believes to be competent to give the advice; and(b) may pay out of trust funds the reasonable costs of obtaining the advice.

Ratio Decidendi

Legal Principle Established

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