FE (Administration) - [2010] TASGAB 8

GUARDIANSHIP AND ADMINISTRATION BOARD
HOBART

FE – Application for the appointment of an emergency administrator by EI

Neutral citation: FE (Administration) [2010] TASGAB 8

REASONS FOR DECISION

Anita Smith (President)

Date of order 11 May 2010

Administration – application for an emergency order – concerns raised by relatives that an elderly woman with a head injury was being preyed upon by a taxi driver who had removed furniture and received moneys from her – urgency created by listing of property for sale – concern about valuation of property and destination of the proceeds of sale

Guardianship and Administration Act 1995 s 65

On 7 May 2010 the Guardianship and Administration Board received an application by EI (‘the applicant’) for the appointment of an administrator for her great aunt, FE, (‘the proposed represented person’) pursuant to Part 7 of the Guardianship and Administration Act 1995 (‘the Act’). Details in the application supplied by the applicant and three other relatives of the proposed represented person alleged that the proposed represented person was being financially preyed upon by a taxi driver and, as a result, had lost significant assets and money. The application also noted that with the assistance of the same taxi driver, the proposed represented person had listed her home for sale, raising concerns about further potential losses.
The application was supported by a Health Care Professional Report (HCPR) by Dr STH (as required by regulation 10) who reported that the proposed represented person has an acquired brain injury resulting from a left frontal lobe inter-cerebral haemorrhage experienced on 19 February 2003. He stated that her condition is deteriorating and that she is susceptible to influence, noting that by reason of her disability she may not have the ability to perceive that a person’s behaviour which appears to be helpful may actually be motivated by a secondary reason other than her own wellbeing.
In a routine triaging of new applications on 11 May 2010, the writer reviewed the application and considered that, even observing the short adjudication time frames set for the Board in section 72 of the Act, it might be possible to settle a contract for the house and redistribute the proceeds before the Board would have an opportunity to hear the evidence. Noting the principles in the Act which requires, amongst other things, the Board to perform its functions, powers and duties in a manner that promotes the best interests of a person with a disability, the writer contacted the applicant to enquire whether the applicant had been aware of the emergency application facilities in Part 8 of the Act and whether she wished to use those facilities.
Later the same day, the applicant supplied further information to the Board together with a request for an emergency administration order pursuant to section 65(3) of the Act.
Relevant parts of section 65 provide:
“(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) …
(4A) The powers and functions of the Board under this section may be exercised and performed by one or 3 members of the Board as may be determined in each case by the President.
(5) An order under this section –
(a) remains in effect for such period as the Board determines but not exceeding 28 days; …
(6) …”
Background information provided by the applicant:
The following is a summary of the circumstances as outlined in the application. This information was supplied by the applicant, QI (the proposed represented person’s nephew) who has been close to her for almost 70 years, NQ (the proposed represented person’s great nephew), Dr BI GP (the proposed represented person’s great nephew) and Dr STH GP.
The proposed represented person is almost 90 years of age and a widow. Until relatively recently she lived for 30 years with her two sisters, MU (deceased) and UI. The proposed represented person had no children but played a matriarchal role in her extended family which earned her a great deal of loyalty from them. When UI resigned her driving licence several years ago, the three sisters became frequent users of a local taxi company, who employed a driver named L who often drove for them. MU died approximately 2 years ago and around the same time UI moved to nursing home care, leaving the proposed represented person living alone. At that point L became very useful to the proposed represented person in assisting with day to day routine needs, accepting money for certain tasks other than driving.
The relationship between L and the proposed represented person has developed into an interdependent platonic arrangement. However the named family members are concerned that the relationship does not resemble one of mere friendship when L is paid to spend time with her, and often well above the market rate for the services that he renders.
At some point recently, L has allegedly begun to act in a possessive manner towards the proposed represented person (including holding the single house key to her property), warding off assistance by family members who had historically rendered practical assistance and controlling information about her. Of particular concern was the occasion recently when L and a friend E removed art, furniture and fine china with an estimated value of $10,000.00 from her home and for which L paid her only several hundred dollars in an unrecorded transaction. Some other of her valuable possessions are apparently at L’s home in storage. L allegedly offered $5.00 for an antique wardrobe in the house which did not belong to the proposed represented person as she was merely a bailee on behalf of other members of the family. L is also alleged to have charged excessive fees for poor workmanship around the proposed represented person’s house, e.g. roof painting.
When the applicant and other family members learned, after the fact, that the represented person’s property at Hobart had been listed for sale they held two concerns. Firstly the real estate agent had reported to them that L had asked for $250,000.00 for the property when the agent priced it at $400,000.00. According to Dr BI’s letter, the real estate agent expressed concern that the proposed represented person did not really have an understanding of the value of her house. Secondly, they were concerned that L may have intentions for the sale proceeds that are not in the best interests of the represented person.
These concerns were heightened when both the real estate agent and the solicitor who had initially been co-operative with the family members closed ranks and refused to give any information apparently at the instruction of the proposed represented person.
Attempts by family members to question L’s involvement in the proposed represented person’s affairs have met with denial and resistance. Family members had informed that proposed represented person of the application and she was unhappy about the level of intervention between her and L. It is clear that the proposed represented person has developed a level of reliance upon L. Her family members are concerned that he is taking significant financial advantage of that reliance. They are also concerned that he is misusing his significant influence over her to rush into a very important decision to sell her major asset when it appears that he is also unsophisticated in financial matters and unconcerned about getting the best price for her assets.

The elements of section 65(2):

In my view these are urgent circumstances. Concerned family members with long standing relationships with the proposed represented person have concerns that (i) a taxi driver has inveigled his way into the affections of an elderly and vulnerable person who does not understand the value of her property, (ii) that she has already been taken advantage of to his significant financial gain and (iii) is about to embark on a transaction involving her largest asset relying upon his guidance. There are two risks, one that she will sell undervalue, the other that the proceeds may not be used in the proposed represented person’s best interests. Given that a hearing of the application may take up to 45 days and the property had already been listed at the date of the application, there is a risk that the harm that the family members are trying to avoid could occur before the hearing is convened.
Dr STH’s report confirms that the proposed represented person has a disability and that the disability renders her incapable of making reasonable judgments. In particular in response to the pro forma questions in the HCPR Dr STH responded as follows:
Q -      “To what extent is the person capable of making reasonable decisions in relation to his or her real or personal property?”
A -       “FE would need guidance in making decisions.”
Q -      “Does the person’s disability affect his or her ability to: … (b) Make major financial decisions, e.g. whether to sell a major asset, how to invest significant sums of money, negotiating a disputed debt (if relevant):”
A -       “FE would need guidance in the need to make a decision, in the making of a decision and in the process of going through the decision.”
Q -      “What, in your view, might be the consequences of appointing or not appointing a guardian or administrator for the person?”
A -       “I consider there is significant concern that FE’s financial resources could be diverted to someone else due to her susceptibility to influence if an administrator is not appointed.”
Given all of the above, I consider that there may be grounds for making an administration order appointing The Public Trustee as administrator of the proposed represented person’s estate.
CODA
This statement of reasons has been requested on 21 May 2010 by Mr Egan of Murdoch Clarke who acts for the purported purchaser of the represented person’s property at Hobart. He has asked the Board to confirm that “… notwithstanding the emergency order, FE has to the world (or at least those persons who have not notice of the order) retained her mental capacity to act on her own behalf” and “… that there is no provision in the Guardianship and Administration Act which removes legal capacity from FE as a consequence of the emergency administration order”.
With regard to the first of these questions it is not a matter that is within the jurisdiction of the Board, but presumably within the jurisdiction of the Supreme Court, whether a party to a contract has ‘such soundness of mind as to be capable of understanding the general nature of what he is doing by his participation.’[1] and ‘the capacity to understand [the] transaction when it is explained.’[2] The decision in Gibbons v Wright, quoted here, set the foundation for the modern understanding that legal capacity for decision making is ‘domain specific’, and one is no longer declared incompetent for all purposes by the making of an administration order. However, in terms of the specific and relevant domain, the Board’s order did reflect a prima facie concern that the represented person did not understand the value of her property and was being poorly advised by an unsophisticated person who may have ulterior motives for encouraging the transaction. This also answers, to the extent that is appropriate for this Board, Mr Egan’s second question.
[1] Gibbons v Wright (1954) 91 CLR 423 (Dixon CJ, Kitto and Taylor JJ) at page 437
[2] Ibid at 438
Further, the Board has received notice since the making of the order that Tasmanian Perpetual Trustees hold an unregistered enduring power of attorney for the represented person. This is not a situation where section 65(4)(c) applies because the power, being unregistered, was not ‘in force’ at the time of making the order for the purposes of Part 4 of the Powers of Attorney Act 2000. This raises an interesting question of interpretation, regarding section 53 of the Guardianship and Administration Act 1995, as to whether the power or the order will prevail during the currency of the order. As this question has not been raised with the Board, it is not appropriate to determine that question in these reasons.
Conclusion:

The Board being satisfied that there are reasons for urgency and grounds for making an administration order in respect of FE of Hobart (hereinafter called the ‘represented person’)

THE BOARD ORDERS
1. That The Public Trustee be appointed administrator of the represented person.

That this order remains in effect for 28 days from this date.
FURTHER THE BOARD DIRECTS That on or before the expiry of 25 days duration of this order The Public Trustee shall report to the Board in relation to any decisions or transactions made on behalf of the represented person pursuant to this order.

DATED this 11^th day of May 2010

............................

Anita Smith

PRESIDENT

Statement of reasons delivered 25 May 2010.