Furina v Cooke - [2017] SASC 45

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
FURINA v COOKE
[2017] SASC 45
Judgment of The Honourable Justice Kelly
31 March 2017
MAGISTRATES - JURISDICTION - GENERAL MATTERS - GENERALLY
MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT - POWERS OF COURT - OTHER MATTERS
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - INTERFERENCE WITH JUDGE'S FINDINGS OF FACT - FUNCTIONS OF APPELLATE COURT - IN GENERAL
Appeal against the judgment of a Magistrate on 13 October 2016. The appellant held an enduring power of attorney for her late mother. The Magistrate found she unlawfully withdrew funds from her late mother’s accounts between 29 September 2005 and 8 April 2011 and consequently owed a debt to the estate. The Magistrate was satisfied that the respondent had standing as executor to recover the debt and entered judgment in the sum of $54,142.28 for the respondent plus interest. The finding was made on unchallenged evidence of the respondent before the court. The appellant elected not to give evidence.
The appellant appeals on a number of grounds. First, the appellant complains that the Magistrate erred in finding that the Powers of Attorney and Agency Act 1984 (SA) does not vest exclusive jurisdiction in the Supreme Court to hear matters such as this. Second, the appellant complains that the Magistrate erred in finding that the appellant owed a debt to the estate and that she unlawfully withdrew the money.
Held (dismissing the appeal):
1. The Powers of Attorney and Agency Act 1984 (SA) contains no prohibition against a person seeking to claim a debt as a consequence of funds misappropriated by any means, in this case by the vehicle of a power of attorney.
2. The Magistrates Court, in its civil jurisdiction, had the power to hear and determine the claim pursuant to s 8(1) of the Magistrates Court Act 1991 (SA).
3. There was sufficient evidence before the Court to support the Magistrate’s findings that the appellant was indebted to the estate by virtue of the unlawful misappropriation of money withdrawn by the appellant as donee of the power of attorney from her mother’s account.
4. The appeal is dismissed.
Powers of Attorney and Agency Act 1984 (SA) s 11, s 11A; Magistrates Court Act 1991 (SA) s 8, referred to.

FURINA v COOKE
[2017] SASC 45
Magistrates Appeal: Civil
KELLY J.
Introduction

This is an appeal against the judgment of Magistrate Foley in the Magistrates Court of South Australia on 13 October 2016. The Magistrate found that the appellant, Sheryl Furina, had unlawfully withdrawn funds from her late mother’s accounts and consequently owed a debt to the estate. He found the claim made by the respondent, Robert Cooke, the brother of the appellant and executor of the estate of their late mother, had been proved.
Background
The appellant was, by enduring power of attorney, appointed as the attorney of Gloria June Cooke (the deceased) from 15 April 2002 until her passing on 15 September 2011.
Between 29 September 2005 and 8 April 2011 the appellant withdrew a total amount of $82,370.00 from the bank account of the deceased. The respondent commenced proceedings in the Magistrates Court to recover the misappropriated funds. During the trial the respondent conceded that deductions needed to be made from the total claim for legitimate expenses such as chemist and telephone bills paid for by the appellant on behalf of the deceased. It was also conceded that the appellant was entitled to a one-quarter share in the estate. The Magistrate was satisfied that the respondent had standing as executor to recover the debt outstanding to the deceased’s estate and, after making all of the relevant calculations, entered judgment in the sum of $54,142.28 for the respondent plus interest fixed at $8,000.00, the final total being the amount of $62,142.28. The finding was made on unchallenged evidence of the respondent before the court. The appellant elected not to give evidence.
Grounds of appeal
The appellant appeals on five specific grounds. First, the appellant complains that the Magistrate erred in law when considering the test as to the exclusive jurisdiction of the Supreme Court in respect of matters relating to the accountability of an attorney acting under enduring power of attorney and the Powers of Attorney and Agency Act 1984 (SA) (the Act). Second, the appellant complains that the Magistrate erred in law and fact when considering that the cause of action in debt as pleaded by the respondent was the appropriate cause of action in circumstances where the respondent was seeking for the appellant to be made accountable for her conduct as the donee of the power of attorney and for an audit to be undertaken as a consequence of any alleged misappropriation of funds. Third, the appellant complains that the Magistrate erred in law and fact in finding that the respondent had proven on the balance that the appellant owed a debt to the estate. Fourth, the appellant complains that the Magistrate erred in law in finding that the appellant unlawfully withdrew money from the account of the deceased whilst acting under a valid enduring power of attorney. Finally, the appellant complains that the Magistrate erred in law and fact in not granting the application of the appellant to require the respondent to amend their pleadings to the cause of action supported by the evidence of the respondent, namely for the conduct of an audit and accountability of the appellant in respect of any misappropriation of funds whilst acting under a power of attorney for the deceased.
Discussion
Although the appellant appeals on five grounds, the appellant’s primary contention on appeal is that the Supreme Court has exclusive jurisdiction to hear matters such as this to the exclusion of the Magistrates Court. Essentially, the appellant says that the Magistrate had no power to hear and determine the action brought by the executor to recover the debt owed by the appellant.
The relevant statutory provisions are found within the Act, which states the following in ss 11 and 11A:
11—Powers of Supreme Court in respect of enduring powers
(1)Any person who has, in the opinion of the Supreme Court, a proper interest in the matter may, at any time, apply to the Supreme Court for an order—
(a)     requiring the donee (or former donee) of an enduring power of attorney to file in the Supreme Court and serve on the applicant a copy of all records and accounts kept by the donee of dealings and transactions made by him in pursuance of the power; or
(b)     requiring such records and accounts to be audited by an auditor appointed by the Supreme Court and requiring a copy of the report of the auditor to be furnished to the Supreme Court and the applicant for the order; or
(c)     revoking or varying the terms of an enduring power of attorney or appointing a substitute donee of such a power.
(2)The donee of an enduring power of attorney may apply to the Supreme Court—
(a)     for an order referred to in subsection (1)(c); or
(b)     for advice and direction as to matters connected with the exercise of the power or the construction of its terms.
(3)The Supreme Court has, upon an application under this section, jurisdiction—
(a)     to make an order referred to in subsection (1); or
(b)     to make such other order (declaratory or otherwise) as to the exercise of the power, or the construction of its terms, as the Court thinks fit.
(4)An order under this section may be made subject to such terms and conditions as the Supreme Court thinks fit.
11A—Applications by beneficiaries of the will of a deceased donor
(1)Where—
(a)     the donor, or former donor, of an enduring power of attorney dies leaving a will; and
(b)     the donor or former donor had, while the enduring power of attorney was in force, suffered a period of legal incapacity; and
(c)     it appears at the death of the donor or former donor that, in consequence of any exercise of power by the donee of the enduring power of attorney during that period of incapacity, the share of any beneficiary under the will has been affected,
the Supreme Court may, on application by any person who has, in the opinion of the Supreme Court, a proper interest in the matter, make such orders as it thinks just to ensure that no beneficiary gains a disproportionate advantage, or suffers a disproportionate disadvantage, of a kind not contemplated by the will, in consequence of the exercise of the donee’s powers during the period of legal incapacity of the donor or former donor.
(2)An order made by the Supreme Court under subsection (1) operates and will take effect as if it had been made by a codicil to the will of the donor or former donor executed immediately before his or her death.
(3)The Supreme Court must, on making an order under subsection (1), direct that a certified copy of the order be attached to the grant of probate of the will, or grant of letters of administration with will annexed, and may, for that purpose, require the production of the relevant grant.
(4)An application under this section must be made within six months from the date of the grant in this State of probate of the will or letters of administration unless the Supreme Court, after hearing such of the persons affected as the Supreme Court thinks necessary, extends the time for making the application.
(5)An extension of time granted under subsection (4) may be granted—
(a)     on such conditions as the Supreme Court thinks fit; and
(b)     whether or not the time for making an application under this section has expired.
(6)An application for extension of time must be made before the final distribution of the estate.
(7)A distribution of any part of the estate made before an application for extension of time will not be disturbed by reason of the application or any order made on the application.
(8)This section does not apply in respect of the will of a deceased person who died before the commencement of this section.
The powers of the Supreme Court pursuant to s 11 and s 11A are not disputed in this matter. However, I observe that from the outset there appears to be nothing in the wording of the Act to suggest exclusive jurisdiction resides in the Supreme Court.
The Magistrates Court had jurisdiction to hear and determine the claim pursuant to s 8(1) of the Magistrates Court Act 1991 (SA), which states:
8—Civil jurisdiction
(1)The Court has jurisdiction—
(a)     to hear and determine an action (at law or in equity) for a sum of money where the amount claimed does not exceed $100 000;
(b)     to hear and determine an action (at law or in equity) to obtain or recover title to, or possession of, real or personal property where the value of the property does not exceed $100 000;
(c)     to hear and determine an interpleader action where the value of the property to which the action relates does not exceed $100 000;
(d)     to grant any form of relief necessary to resolve a minor civil action.
The appellant’s contention on appeal is that the respondent’s evidence evinced a clear intention on the part of the respondent as executor to seek an audit of the exercise of the powers by the donee, namely the appellant, during the relevant period. The power to make such an order, by virtue of s 11 and/or s 11A of the Act, is vested in the Supreme Court. The appellant contends that the Magistrate therefore had no power to hear and determine the matter. It was conceded, at least implicitly on appeal, that s 11A of the Act had no part to play given that the mental capacity of the donor was not in issue at any stage during the proceedings. Nevertheless it was contended that the action ought to have been brought pursuant to s 11(1) of the Act and not in the Magistrates Court.
The appellant’s counsel submitted during argument on appeal that this issue is a matter of some import to the legal profession of South Australia who, in Mr Zollo’s submission, await the decision of this Court on that issue. Nevertheless both parties declined an invitation to refer the matter to the Full Court.
In any event, in my view the submission is misconceived.
As the evidence before the Magistrate demonstrated, and as I understood the appellant’s argument on appeal, the appellant has never denied that she owed a debt to the estate as a consequence of the monies withdrawn and misappropriated by her as donee of the power or attorney.
In those circumstances the Magistrates Court, in its civil jurisdiction, had the power to hear and determine the claim pursuant to s 8(1) of the Magistrates Court Act 1991 (SA).
It is true that the respondent might have had to resort to applying for an order or orders pursuant to s 11 of the Act. In appropriate circumstances that section provides the vehicle by which a person with a proper interest in the matter may make a subsequent claim against the donee of a power of attorney.
However, the Act in my view contains no prohibition against a person seeking to claim a debt as a consequence of funds misappropriated by any means, in this case by the vehicle of a power of attorney.
The difficulty for the appellant on this appeal is that the evidence of the respondent in the court below as to the circumstances in which the appellant misappropriated monies of the deceased was not challenged. The Magistrate accepted the respondent as a credible and honest witness. His evidence was capable of satisfying the court that the appellant had withdrawn funds of her mother’s and spent them on various gaming and poker machines. In that regard the Magistrate accepted the evidence of the respondent that the appellant, in a conversation with him at a Port Lincoln hotel, had admitted as much.
In the face of the unchallenged evidence of the respondent it was not surprising that the Magistrate found that the appellant had admitted the debt to the estate. In my view the appellant’s decision not to give evidence at the trial is fatal to the contention on appeal that because she held a power of attorney, the withdrawal of the monies during the period in which she was the donee of the power, was not unlawful. The fact is that the appellant, by her conduct, effectively admitted that she had no authority to spend the money in the way she did.
That fact in effect disposes of the remaining grounds of appeal. In the face of the appellant’s conduct as described by the respondent, and unchallenged by the appellant, it was open to the Magistrate to conclude that the debt was admitted. No contrary submission was made on appeal.
In these circumstances, while a case may well arise which raises for consideration the extent of the Supreme Court’s jurisdiction under s 11 of the Act, the facts of this matter raise no such issue.
Finally, I would add that it is regrettable that the appellant, having chosen not to give evidence in the court below contesting any of the facts asserted by her brother, has chosen to incur further costs on pursuing an appeal which was foredoomed to failure.
The appeal is dismissed.