DXX – Emergency suspension of an enduring power of attorney and appointment of an emergency administrator - [2015] TASGAB 7

GUARDIANSHIP AND ADMINISTRATION BOARD
HOBART

DXX – Emergency suspension of an enduring power of attorney and appointment of an emergency administrator

REASONS FOR DECISION

Anita Smith (President)

Date of decision: 15 May 2015

Review of enduring power of attorney – nature of a protective jurisdiction - urgent circumstances – apparent conflict of interest in a transfer of donor’s property to the attorney at less than government valuation – no evidence of donor receiving an independent valuation or independent legal advice

Powers of Attorney Act 2000 s. 32AC, 33
Guardianship and Administration Act 1995 s. 65

NPG (Review Enduring Power) [2011] TASGAB 9

On 30 April 2015 the Board received an application from Advocacy Tasmania Inc. in relation to DXX (the donor) who executed an enduring power of attorney appointing DWN as his attorney. Advocacy Tasmania Inc. (ATI) is an independent, non-government organisation that provides a free, independent and confidential advocacy service to older people and people with disabilities. ATI made the application at the donor’s request noting that the donor had concerns about the attorney’s management of his money and concerns that the attorney had sold the donor’s house to herself.
Section 32AC (which commenced on 1 February 2014 and applies to transactions that occur under the power since) states:
“32AC. Transactions that may involve conflict of duty
(1) An attorney under an enduring power of attorney may only enter into a transaction that results, or may result, in a conflict of interest, if –
(a) the enduring power of attorney specifies that the transaction may, even though it will or may result in a conflict of interest, be entered into by the attorney; or
(b) the transaction is a member of a class of transactions that the enduring power of attorney specifies may, even though the transactions will or may result in a conflict of interest, be entered into by the attorney; or
(c) the power of attorney specifies that, even though such a transaction will or may result in a conflict of interest, any transaction may be entered into by the attorney.
(2) For the purposes of subsection (1), a conflict of interest is a conflict between –
(a) the duties of an attorney in respect of the donor; and
(b) either –
(i) the interests of the attorney, or a relative, business associate or close friend of the attorney; or
(ii) another duty of the attorney.
(3) Despite subsection (2), a transaction does not result, or is not to be taken to be a transaction that may result, in a conflict of interest only because, by the transaction, the attorney in the attorney's own right and on behalf of the donor –
(a) deals with an interest, in property, held by the attorney and the donor as tenants in common or joint tenants; or
(b) acquires an interest, in property, jointly with the donor as tenants in common or joint tenants; or
(c) obtains a loan or gives a guarantee or indemnity in relation to –
(i) the acquisition of an interest, in property, held by the attorney and the donor as tenants in common or joint tenants; or
(ii) a dealing with an interest, in property, jointly with the donor as tenants in common or joint tenants.”
The Board’s staff conducted a search of the property on the date it received the application. The result of that search showed the property still registered to the donor and indicated no other dealings that would suggest it would be transferred imminently. It also showed a valuation on 2 November 2012 of $200,000. One of the applicant’s concerns was that the same solicitor was acting for both donor and attorney – this has since been evidenced to the Board by a letter dated 22 April 2015 from the solicitor to ATI which states:
“We act for Mr. DXX. We also act for his niece Mrs. DWN

The Board’s investigator contacted the attorney on 6 May 2015. The attorney stated to the investigator that she has paid $150,000 to purchase the donor’s house. She said she had spent $80,000 renovating the kitchen in the property (in a later conversation she mentioned a different value of the renovations she has made). The investigator emailed the solicitor the following day enquiring for whom they acted, asking for information about the progress of the transfer of the property, and asking whether the transaction might attract the operation of section 32AC of the Powers of Attorney Act 2000. She requested a response by Friday 8 May 2015.

The investigator learned that the donor’s nursing home fees are $25,000 in arrears.
Mr. F for the solicitor expressed some concern to the investigator that a Facts Sheet sent by the Board stated that there would be a Health Care Professional Report with an application. It is apparent that the sheet Mr. F had received was a discontinued version of the Facts Sheet which does not represent the current requirements of the regulations. The Board does not consider that it makes any material difference to the issues at hand that in one minor respect a discontinued Facts Sheet with a minor error was sent to his client. Mr. F also denied that section 32AC applied to the transaction. Mr. F was offered a further week to respond to the Board’s questions. Mr. F was on notice that the Board was considering an emergency suspension of the power and the appointment of the Public Trustee until the matter can be heard.
The investigator visited the donor on 11 May 2015 and found him to be very confused on a range of matters. He expressed some concerns about the attorney living in his home and renovating the property. He expressed support for a review of the enduring power of attorney and the appointment of the Public Trustee.
In attending the aged care facility where the donor resides, the investigator learned that the attorney is attorney for a number of persons at that facility. A search of the register noted that she is attorney for a number of persons.
The investigator emailed Mr. F again on 14 May reporting on the contents of her visit with the donor. She renewed her request for information from him about the transaction for sale of the donor’s property to the attorney.
The investigator spoke again with the attorney on 14 May 2015. The attorney stated that:
·Mr. F acts for donor and attorney, vendor and purchaser
·The transfer document had been signed and prepared
·The purchase price is $150,000 as agreed between the two parties 3-4 years ago
·There was no independent valuation of the property
By letter dated 15 May 2015 Mr. F expressed a view expressed in previous emails and telephone conversations that it was for the Board to explain why section 32AC applied to the transaction and it had failed to do so. He also stated his instructions from the donor to the opposite effect of what the donor has indicated to the applicant and to the investigator. He opposed the suspension of the enduring power of attorney and the appointment of the Public Trustee.
The Board’s concern is that since 30 April 2015 it has been on notice that an elderly person who appears to have dementia has had concerns that his property is being sold to his attorney. He clearly expresses different opinions when speaking with different persons and his genuine wishes are difficult to ascertain, which gives the impression that he has a disability and he is incapable of making consistent and reasonable decisions about his estate.
From the reports obtained by the investigator:
·His property appears to be the subject of an agreement for sale for consideration that is 25% less than a Government valuation made 3 years ago and appears to confer on the purchaser (the attorney) a financial benefit.
·There has been no independent valuation of the property prior to the agreement being made (if such an agreement exists).
·The donor does not appear to have had the opportunity for independent legal advice, given that the solicitor acts for purchaser and vendor/attorney and donor.
·Responses from the solicitor have to date obfuscated the issues, denied any conflict and evaded direct answers in relation to the purported sale of the property.
The Guardianship and Administration Board is a protective jurisdiction. In the absence of any useful responses from the solicitor in question, the Board is increasingly concerned that a transfer could be registered, the donor could lose his interest in the property and be disadvantaged unless urgent action is taken. By the same transaction the attorney could receive an advantage (i.e. ownership of a property below its value). Fifteen days had elapsed since the Board had been on notice of a possible conflict-of-interests transaction and despite persistent attempts by the investigator no reasonable explanation for the purported transfer, or no explanation where the donor’s interests appeared to have been observed, had been obtained and no indication of when the purported transfer was to be effected. Those circumstances combined to make an urgent situation where it was necessary for the Board to take steps to protect the donor’s interests.
Section 33 of the Powers of Attorney Act 2000 provides:
(4) When the Board considers it proper to do so by reason of urgency, the Board may suspend the attorney under an enduring power of attorney and, on doing so, the attorney ceases, for the period of the suspension, to be authorised to take any action under the power of attorney and the Board may –
(a) appoint the Public Trustee or any other person as a substitute attorney to act in the place of the suspended attorney for the period for which the suspension remains in force; and
(b) make such other orders, and give such other directions, as to the exercise of the power as it thinks fit.
...
(5) In the exercise of its powers under subsection (4) or subsection (4A) –
(a) the Board is not required to give notice to any person or, subject to subsection (4A)(e), to hold a hearing before making an order but the Board must make such inquiries or investigations as may be appropriate; and
(b) the Board may act on a request made, or information received, by telephone or any other means that the Board considers appropriate in the circumstances.
(6) An order under subsection (4) –
(a) remains in effect for such period as the Board determines but not exceeding 28 days; and
(b) may be renewed but only once for a further period not exceeding 28 days.
...
(7) An order under this section may be made subject to such terms and conditions as the Board thinks fit.
(8) On making an order under this section, the Board must forward a copy of the order to the Recorder who must register it.”
Section 65 of the Guardianship and Administration Act 1995 provides:
“(2) Where the Board considers it proper to do so, by reason of urgency, the Board may, in respect of a person who is not a represented person but in respect of whom the Board considers that there may be grounds for making a guardianship order or an administration order make an order appointing –
(a) the Public Guardian as his or her guardian; or
(b) The Public Trustee as administrator of his or her estate –
and in either case the Board may make any order or give any direction considered appropriate in the circumstances.
(3) The Board may make an order under this section of its own motion or on request by any person whom the Board considers to have a proper interest in the matter.
(4) In the exercise of its powers under this section –
(a) the Board is not required to give notice to any person or to hold a hearing before making an order but the Board must make such inquiries or investigations as the Board may think appropriate; and
(b) the Board may act on a request made, or information received, by telephone or any other means that the Board considers appropriate in the circumstances; and
(c) the Board may make an administration order in respect of the estate of a person who is the donor of an enduring power of attorney in force under Part 4 of the Powers of Attorney Act 2000, if he or she is of or over the age of 18 years.
...
(5) An order under this section –
(a) remains in effect for such period as the Board determines but not exceeding 28 days; and
(b) may be renewed but only once for a further period not exceeding 28 days.
(6) ...
As set out above, the Board considers that the issue was urgent and attempts to investigate the nature and effect of the proposed transfer had not assured the Board that the donor’s interests were being protected or that the transfer was occurring in circumstances that are consistent with the proper duties of an attorney. As noted by the Board’s Deputy President in NPG (Review Enduring Power) [2011] TASGAB 9:
“Section 33(4) [POAA] appears to create an internal inconsistency in that it gives the Board certain powers with regard to the exercise of a power which it has suspended. This could be resolved by inferring various interpretations of the process intended by parliament. However it is desirable to avoid uncertainty.”
Therefore the Board considers it appropriate to suspend the operation of the enduring power of attorney pursuant to section 33(4) of the Powers of Attorney Act 2000 and appoint the Public Trustee as administrator pursuant to section 65(2) and 65(4)(a) of the Guardianship and Administration Act 1995.

Anita Smith
PRESIDENT