DXD (Review of Administration)

[2016] TASGAB 9

GUARDIANSHIP AND ADMINISTRATION BOARD
HOBART

DXD (Review of Administration) [2016] TASGAB 9

REASONS FOR DECISION

Wendy Hudson (Chair)

Date of hearing: 26 August 2016

Administration – Review of the appointment of a private administrator – obligation of administrator to provide accurate and timely annual reports – non-compliance with the Board’s advice and orders - failure to act in accordance with the role and responsibilities of an administrator

Guardianship and Administration Act 1995 s.54

1. On 26 August 2016 the Guardianship and Administration Board (the Board) reviewed guardianship and administration orders for DXD. DXD’ daughter, ZD, has requested a Statement of Reasons in relation to the review of administration.

2. DXD has been the subject of an administration order since September 2007 when the Board appointed ZD as her administrator. Upon review in September 2010 and August 2013, the Board determined that the administration order should continue. The current order was to remain in effect until 28 August 2016.

3. ZD together with Elizabeth Dalgleish, Investigator from the Board, attended the hearing to review the administration order.

4. The Board had before it the following documentation:

   ·     Correspondence between the Board and ZD in relation to the provision of the annual reports,

   ·     Correspondence between the Board and ZD in relation to the distribution of gifts,

   ·     an Order dated 26 July 2012 authorising the distribution of gifts from DXD’ estate to a maximum of $300 from September 2012 to September 2013 provided that there were sufficient funds in the estate,

   ·     Annual reports and statements of accounts from ZD supported by a statutory declaration dated 18 February 2016 and 30 September 2014.  ZD lodged the most recent annual report and statement of accounts after the hearing, on 8 September 2016, and

   ·     Correspondence between the Board, ZD and Nursing Home in relation to the payment of outstanding fees owed by DXD from 2013 to 2016, totaling $51, 341.93 as at 1 July 2016.

5. A review of an administration order provides an opportunity for the Board to assess whether the continuation of the order is consistent with the principles of section 6 of the Guardianship and Administration Act (the Act), to determine whether the requirements of section 51 remain, and whether the person appointed as administrator continues to satisfy the Board of the elements contained in section 54.

6. The Board was satisfied that DXD continues to be a person under disability, and because of that disability is incapable of managing her finances and continues to require an administrator.  The Board however questioned whether ZD should continue as DXD administrator.

7. Prior to the review hearing the Board was contacted by Nursing Home who indicated that they wished to lodge an application with the Board, advising that they had tried to contact ZD in relation to the outstanding accommodation fees but their calls were never returned. ZD was contacted by the Board and advised to contact Nursing Home and to confirm with the Board that the issue had been resolved. On 30 June 2016 ZD advised the Board that the issue had been resolved. However on 1 July 2016 Nursing Home advised the Board and ZD that they wished to proceed with an application. On 1 July 2016 ZD emailed Nursing Home, ‘…Would you accept 50% immediate payment of the arrears and $1200 per fortnight and not submit an application to the Guardianship Board please?...’. It appears from the email correspondence that Nursing Home did not respond to ZD and consequently on 4 July 2016 ZD emailed ‘…Please be advised that I have paid $20, 000 towards my Mother’s debt on Friday and I would appreciate it if you would contact me to discuss a suitable arrangement for the remaining debt. I am confident that we can sort this matter out without involving the Guardianship Board.’ On 4 July 2016 Nursing Home acknowledged the payment but stated ‘…Unfortunately due to the large sum still outstanding we are still going to proceed with an application with the Guardianship Board.’ ZD responded ‘…Please advise me of the balance of the account and I will pay this in full today on my Mothers behalf.’ ZD paid two further lump sums of $20,000 and $10, 000 on the 4 and 5 July 2016 respectively.

8. Surprisingly given the above, ZD did not furnish the Board with the annual report and statement of accounts prior to the review hearing nor did she bring any financial documentation with her on the day of the hearing. At the review hearing ZD said ‘I’m normally on time with this sort of thing, haven’t been this time, so I do apologise’. Historically however the Board’s file clearly indicates that this has not been the case during the entirety of ZD’ appointment as administrator:

Board’s letter requesting documents	Due date	Date received (late by)
11 August 2008	30 September 2008	29 October 2008 (1 mth)
7 August 2009	6 October 2009	10 November 2009 (1 mth)
20 July 2010	6 August 2010	20 August 2010 (2 weeks)
1 August 2011	30 September 2011	30 November 2011 (2 mths)
10 August 2012	30 October 2012	11 December 2012 (1½ mth)
8 July 2013	2 August 2013	2 September 2013 (1 mth)
7 July 2014	30 August 2014	31 August 2014
15 July 2015	28 September 2015	18 February 2016 (4½ mths)
17 May 2016	10 August 2016	8 September 2016 (1 mth)

1. The Board’s file also highlights a pattern of unauthorised gifts being made by ZD at various times during the administration contrary to the advice of the Board. In the annual report received on 20 November 2011 ZD individually listed gifts totaling $1,707 and noted a lump sum gift to her of $500. The Board’s compliance officer, Mr Lee Perry, wrote to ZD on 7 April 2012 referring to the handbook which had been provided to her in 2007, provided an updated version of the handbook (marking the section that dealt with gifts and loans), and advised that if she wished to make gifts/loans from the estate, she needed to apply to the Board.

2. ZD made an application to the Board on 13 June 2012, seeking authorisation to make gifts to 5 people (family members and one friend) totaling less than $5,000 for the ongoing period of the Order. On 28 June 2012 Mr Perry questioned the quantum of the gifts in light of the fact that after expenses DXD’ estate for the last annual report provided a balance of $878 ‘…which did not leave much leeway for any unforeseen expenditure that she may have and to provide a saving reserve…’. On 26 July 2012 the Board heard ZD’ gift application and noting the size of the estate, only authorised the distribution of gifts to a maximum of $300 from September 2012 to 2013 for family members ‘subject to the Administrator’s discretion and are only applicable providing that there are sufficient funds in the estate’.

3. The annual statements covering the period of the Gift Order from September 2012 to September 2013 recorded ‘gifts’ totaling $1900 rather than a maximum of $300. In contrast to the previous annual report, ZD did not provide any details regarding the amount or to whom each gift was made. The annual reports lodged by ZD since that time have continued to include an amount for ‘Gifts or Loans’ without authorisation from the Board:

   a)in 2014 ZD identified $372 as Gifts/Loans in the Statement of accounts, however in the individual list of items the word ‘gift’ is noted next to a number of other items which increases the total to $620,

   b)in 2015 ZD identified $664 as Gifts/Loans, no individual list of items was provided by ZD. Mr Perry emailed ZD on 18 February 2016 referring to the gifts, noting ‘…the current administration order does not contain any provision for making gifts and no further such payment should be made by you…’. No acknowledgement/response was received from ZD,

   c)in 2016 ZD identified $364 as Gifts/Loans in the Statement of accounts. On this occasion, ZD also included the same amount of $364 for gifts as a debt owed to the estate.

4. Although at the review hearing, in response to questioning regarding her ability to make gifts without an order of the Board, ZD stated ‘I know I have to ask for an Order’, ZD’ actions throughout the period of the administration have been consistently contrary to that understanding. In 2012 ZD had also been referred by Mr Perry to the administrator’s handbook which states, in part:

   ‘Misuse of the represented person’s funds is a very serious matter and will most likely result in your removal as administrator and potentially referral to Police.  An administrator must not use any funds from the estate for the benefit of any person except the represented person.

   The represented person’s funds may only be used for the represented person’s benefit and for no other individual.  The only exception to this rule is where there has been a prior order of the Board approving a loan, gift or settlement from the estate or where there is a maintenance arrangement for a dependent of the represented person.’

5. ZD was aware that the consideration of a Gift Order was dependent upon their being sufficient surplus funds in the estate. ZD was also aware that when her mother moved into Nursing Home (1 May 2013), the fees were approximately $2, 475 per month and her mother’s income was $2, 755 per month, she was not paying the full amount of fees having entered into a payment agreement, and that the balance outstanding amount was an ever increasing debt to the estate. It is also interesting to note that in July 2014, ZD sought further guidance from Mr Perry about gifts, specifically what advice she would need to obtain to be able to ‘…gift myself some money from the proceeds of the sale..’ of her mother’s house.

6. At the review hearing ZD was also asked about the bank account which she was using for the management of DXD’s estate and a number of inconsistencies identified in the bank statements. The Board noted that in 2007 at the original hearing DXD had one bank account in her name - Commonwealth Bank account (CBA), number 067002 28041586 however as part of the annual report lodged by ZD for 2015, two bank statements were provided:

   a)a pensioner security account CBA 067002 10455326 in DXD’ name which recorded 8 transactions; an opening balance of $1.62 and a closing balance of $6.99. The 8 transactions did not include receipt of DXD’ pension nor any payments to the nursing home. They included payments to the Campania general store, the Campania bar/bistro, and the Richmond Arms Hotel; they did not appear to be payments for the benefit of DXD; and

   b)a complete access account XXXX XXXX in the names of SHG and ZD. There was substantial transaction history recorded for this account.

7. ZD indicated that the access account was in her name and the name of her ex-partner because when she tried to set up an account for her mother’s pension, the bank wanted her mother to be there in person, she’d tried to explain to the bank that she needed to keep her money and her mother’s money separate but ‘…the only way to deal with it was to set up an account that I don’t use, so even though it’s not actually my money, it’s just under my name because my mother couldn’t be there as a signatory, for the account…’. This statement however is clearly not correct given the fact that a new pensioner security account has been opened in her mother’s name during the period of ZD’ appointment as administrator. ZD however has not arranged for DXD’ funds to be deposited into that account.

8. When asked whether all of the credit and debit amounts recorded in the access account were for DXD’ benefit, ZD said ‘Yes, that’s right.’ ZD was then referred to a number of items including payments to the Richmond Arms Hotel, Woolworths, Campania Self-Serve, video hire, South East Tyre Centre, McDonalds, cash out withdrawals, and Telstra Recharge. ZD stated that she would buy takeaways for her mother and take them to the nursing home (noting that this has now changed due to her dietary requirements), and she would get movies out for her mother to watch at the nursing home on her DVD player.

9. The access account transaction history includes income from:

   ·Roseprint Pty Ltd (ZD stated that this was LJ Hooker rental income from her mother’s house)

   ·DXD’ pension

   ·Unexplained transfers from other accounts xxxx of $31.15, $100, $100, $2; xxxx of $40; xxxx of $1; xxxx of $1.

10. The debit history recorded in the access account includes direct debit payments for expenses relating to DXD’ home, pharmacy and Nursing Home, as well as a pattern of payments which do not appear to be for the benefit of DXD:

    ·Unexplained cash withdrawals or cash out payments,

    ·Supermarket purchases from Campania Supermarket, Woolworths, Coles, Richmond IGA

    ·Non CBA ATM withdrawal fees

    ·Overdrawing approval fee

    ·Telstra recharge

    ·Petrol expenses

    ·Takeaway food  and other dining expenses

    ·Unexplained transfers to other accounts

    ·School expenses

    ·Chemist expenses (over and above the direct debit pharmacy payments)

    ·Home loan payment

    ·Videos, State cinema and Village cinema

    ·Credit card fees.

11. The Board has now also had an opportunity to consider the annual report for 2016 together with the bank statements. The pattern of expenditure outlined above continues, plus there have been some substantial unexplained money transfers including:

    ·7 July 2016  transfer from the account  to xx4520 - $7,700

    ·24 June 2016 transfer into the account ‘Admin loan proceeds’ - $81,037.66

    ·24 June 2016 transfer from the account to another unidentified account - $73,000.

    The documentation lodged by ZD also included a letter from the CBA dated 24 June 2016 in relation to an Economiser Home Loan in the sum of $206,195. The letter stated ‘As arranged, repayments of $990 will be debited to your account 067101 10348901’. ZD has written the following on the letter – ‘Details of payment of $50,400 from ZD to Nursing home fees’ and noted next to the bank account number the words ‘incorrect account’. ZD also provided other NetBank Transaction printouts for:

    ·30 June 2016 from account number XXXX to Nursing Home - $400

    ·1 July 2016 from account number XXXX to Nursing Home - $20,000

    ·4 July 2016 from account number XXXX to Nursing Home - $20,000

    ·5 July 2016 from account number XXXX to Nursing Home - $10,000

    ·29 August 2016 from account number XXXX to XXXX - $600.

12. Although ZD provided an explanation for some of the 2015 expenses, the Board does not accept her explanations. The pattern of expenditure is the same from week to week, year to year, and is consistent with a person’s day to day spending. It is not consistent with the careful management of funds in circumstances where DXD’ income is only just above her expenses.

13. The legislation places upon the Board an ongoing responsibility to assure DXD’ best interests. The facility for monitoring DXD’ best interests is through the receipt and scrutiny of annual reports. If the Board does not have confidence that the annual reports represent an accurate picture of expenditure, the Board cannot be assured that DXD’ best interests have been met.

14. The Board concludes that ZD does not understand the role and responsibilities of an administrator. In particular, she does not understand the need to keep her mother’s money separate from her own, not to use her mother’s money for the benefit of others, the reporting requirements of an administrator and the requirement for precise records of expenditure. As part of that, she also does not understand the authority of the Board or the need to comply with the Boards’ advice and-orders.

15. In the circumstances, the Board considers -that the only appropriate action is to appoint the Public Trustee as administrator. After hearing a review of an administration order made on 29 August 2013 in respect of DXD (the represented person), the Board was satisfied that the represented person:

    ·is a person with a disability, and

    ·is unable by reason of the disability to make reasonable judgements in respect of her estate, and

    ·is in need of an administrator.

    The Board orders:

    1.   That The Public Trustee be appointed as the represented person’s administrator in place of ZD.

    2. That the powers and duties of the administrator be those conferred by Division 4 of Part 7 of the Guardianship and Administration Act 1995.

    3.   That the order remains in effect until 25 August 2019.

Wendy Hudson

Chair