| JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : HUMAN RIGHTS ACT : GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) CITATION : GA and EA and GS [2013] WASAT 175 MEMBER : JUDGE D R PARRY (DEPUTY PRESIDENT) MS J STANTON (SENIOR SESSIONAL MEMBER)
MS V O'TOOLE (SENIOR SESSIONAL MEMBER)
HEARD : 26 JUNE 2013 AND 12 SEPTEMBER 2013 DELIVERED : 12 SEPTEMBER 2013 PUBLISHED : 4 NOVEMBER 2013 FILE NO/S : GAA 1049 of 2013 BETWEEN : GA Applicant
AND
EA and GS
Donees under Enduring Power of Attorney
Catchwords: Guardianship and administration - Review by Full Tribunal under s 17A of the Guardianship and Administration Act 1990 (WA) Enduring power of attorney - Supervisory jurisdiction - Application for records and accounts kept by donees - Application for audit of records and accounts - s 109(1)(a) and (b) of the Guardianship and Administration Act 1990 (WA) - Allegations largely outside scope of proceedings - No reason requiring an inquiry into the operation of the enduring power of attorney - Costs - Unreasonable conduct
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Legislation: Guardianship and Administration Act 1990 (WA), s 17A, s 107(1)(a), s 107(1)(b), s 109(1)(a), s 109(1)(b)
Family Provision Act 1972 (WA)
State Administrative Tribunal Act 2004 (WA), s 87(1), s 87(2) Result: Application for review dismissed
Applicant and her brother and sister in law ordered to pay donees' costs and disbursements of $4,114
Summary of Tribunal's decision: The represented person passed away at age 92, leaving behind 14 children. The represented person had appointed two of her children as her enduring attorneys (donees). There was an ongoing dispute within the family regarding the transfer by the represented person of a fishing business and a property to one of the donees and certain of his siblings.
The applicant applied to the Tribunal under s 17A of the Guardianship and Administration Act 1990 (WA) for review by a Full Tribunal of a single member's decision in which the member dismissed the applicant's application for orders under s 109(1)(a) and (b) of the Guardianship and Administration Act1990 (WA) requiring the donees to file and serve records and accounts kept by them of dealings and transactions in relation to the power and requiring such records and transactions to be audited.
The applicant's submissions were largely out of the scope of the legislation. The applicant maintained these submissions even though the Tribunal conducted a directions hearing in which it explained its limited role under s 109(1)(a) and (b) and observed that much of the dispute between factions within the family could not be addressed in the proceeding.
The Tribunal found that there was nothing disclosed in the evidence requiring an inquiry into the operation of the enduring power of attorney and, in particular, no sufficient basis for an order for the filing and service or auditing of records and accounts kept by the donees.
The Tribunal found that the applicant and her brother and sister in law who assisted her maintained the proceeding for an ulterior purpose, outside of the scope of s 109(1)(a) and (b) of the Guardianship and Administration Act 1990 (WA), and maintained the proceeding unreasonably by continuing with allegations that were largely outside the scope of the proceeding.
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The Tribunal dismissed the application and ordered that the applicant, her brother and sister in law, pay the costs and disbursements of the solicitor who represented the donees.
Category: B
Representation: Counsel:
Applicant : N/A
Donees under Enduring Power of Attorney : Mr AD Wilson
Solicitors:
Applicant : N/A
Donees under Enduring Power of Attorney : Frichot & Frichot
Case(s) referred to in decision(s):
DB and MJB [2013] WASAT 73
EW [2010] WASAT 91
KS [2008] WASAT 29
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REASONS FOR DECISION OF THE TRIBUNAL:
Introduction 1 The represented person, who passed away at the age of 92 on 13 April 2013, had 14 children. The represented person left behind what was aptly described by the member whose decision we are reviewing as 'a deeply divided family' having 'over the years favoured some children over others' (T:2.1, 11.03.13). 2 On 10 December 2002, the represented person made an enduring power of attorney (EPA) appointing two of her children as the donees. We will refer to those children as the first and the second donees in these reasons. 3 In 2002 and 2003, the represented person transferred a fishing boat business to certain of her children. She transferred a half interest to the first donee and quarter interests to two of her other sons. In 2009, the represented person transferred her residential property in South Fremantle to herself and the first donee as joint tenants, the consideration for which was stated in the application for transfer as 'natural love and affection'. Under a Deed dated 8 July 2009, the first donee was to hold the South Fremantle property on trust for himself, the second donee and another sibling in the event that the represented person predeceases him. 4 On 18 December 2012, while the represented person was still alive, one of her daughters, the applicant, applied to the Tribunal for orders under s 109(1)(a) and (b) of the Guardianship and Administration Act 1990 (WA) (GA Act). These sections state as follows: A person who has, in the opinion of the State Administrative Tribunal, a proper interest in the matter may apply to the Tribunal for an order - (a) requiring the donee of an enduring power of attorney to file with the Tribunal and serve on the applicant a copy of all records and accounts kept by the donee of dealings and transactions made by him in connection with the power; (b) requiring such records and transactions to be audited by an auditor appointed by the Tribunal and requiring a copy of the report of the auditor to be furnished to the Tribunal and to the applicant for the order. 5 On 11 March 2013, the application under s 109(1)(a) and (b) of the GA Act was heard and dismissed by a single member, Mr J Mansveld. The member dismissed the application because he considered that it was (Page 5)
not necessary to require production of records and accounts given the represented person's long standing wish that information about her financial affairs not be widely disseminated, including within the family. Further, the documents relating to the principal transactions by the represented person, since her husband's death, were described during the proceedings and were, in any case, entered into by her directly after receiving legal advice from an Italian speaking lawyer, rather than by the donees on her behalf. 6 On 19 March 2013, the applicant sought review by the Tribunal of that decision under s 17A of the GA Act. Although the represented person passed away subsequently, the Tribunal has jurisdiction and power to determine, on review, whether to make orders under s 109(1)(a) and (b). 7 The applicant was subsequently represented for a short time by a solicitor, who then withdrew.
Directions hearing and programming orders 8 Deputy President, Judge Parry conducted a directions hearing on 10 June 2013 in the matter. By that stage, the applicant was represented, or at least assisted in the conduct of the case, by her brother and sister in law. At the directions hearing on 10 June 2013, the Tribunal explained to the applicant, her brother and sister in law, the limited role of the Tribunal under s 109(1)(a) and (b) of the GA Act and observed that much of the ongoing and bitter dispute between factions within the family could not be addressed in the proceeding. 9 The Tribunal was aware of the ongoing and bitter dispute within the family from the transcript of the hearing before the single member, at which a great deal of that history was recounted by various participants. The Tribunal explained, at the directions hearing, that the only issues before the Tribunal in this matter are whether the Tribunal should order the production of records and accounts kept by the donees of dealings and transactions made by them in connection with the EPA and whether the Tribunal should require such records and accounts to be audited. 10 When, at the directions hearing, the applicant told the Tribunal that she wished to proceed with the application, notwithstanding the Tribunal's clear indication of the limited scope of these proceedings, the Tribunal directed her to file with the Tribunal any evidence on which she proposed to rely, not already filed, and her submissions 'as to why the donees of the enduring power of attorney should be ordered to file and serve all records (Page 6)
and accounts kept by them of their dealings and transactions made by them in connection with the power of attorney and why such records and accounts should be audited'.
Applicant's submissions and evidence 11 Despite what was said at the directions hearing on 10 June 2013, and inconsistently with the order to which we have referred, the applicant's submissions, and submissions made by her brother and sister in law, largely relate to the long standing and bitter dispute within the family which had its origins, or at least included, a dispute about the transfer of the fishing boat business and the transfer of the residential property in South Fremantle. As was explained at the directions hearing, those are matters outside the scope of this proceeding. 12 The only points that were raised by the applicant and her brother and sister in law in their various submissions, both written and oral, that could potentially be relevant to whether records and accounts should be required from the donees and should be the subject of audit, relate to a concern expressed by the applicant that the first donee used his mother's money to pay his own lawyer, at a certain point in time, and that in 2009 the represented person's bank account contained approximately $1.1 million, whereas, at the time of her death, it contained approximately $500,000. 13 However, no evidence was provided in relation to the first allegation in the written submissions, nor at the hearing, other than the generalised assertion that the first donee had used his mother's money to pay a lawyer. No detail was provided in the written submissions as to the allegation that there was $1.1 million in the account in 2009 and that that had been substantially reduced to approximately $500,000. 14 The applicant gave evidence to us today that in 2009 she attended the bank with her mother when the second donee was unable to do so and that she was told by the bank manager that there was a large sum of money in the account and that it should be invested by her mother. The applicant told the Tribunal that she saw the statement or passbook and that it indicated that there was $1.1 million in the account. 15 At the hearing today, the first donee produced the passbook for the bank account which was the only bank account held by the represented person from the period 2007 to date. The bank book shows that there has never been any amount in the vicinity of $1.1 million in the account. The account has been generally at approximately $500,000 $600,000 with (Page 7)
relatively small transactions. The most significant addition occurred earlier this year in circumstances we will describe later in these reasons. 16 Thus, the applicant's concerns which prompted this application before the Tribunal and its maintenance relate substantially to the transfer of property undertaken by their mother directly, not to the conduct of the donees. 17 We note that there were also concerns raised by other children earlier in the proceeding about aspects of the conduct of the donees, although those concerns related not to their conduct as donees under the EPA, but their conduct to do with financial affairs within the family. In any case, those concerns were, in effect, withdrawn before the hearing today. 18 We also note finally, before turning to the statutory framework and the consideration of the application, that there is evidence that the represented person was a very private person who placed a great deal of trust and confidence in the donees and another daughter (the other daughter). The represented person was interviewed by an officer of the Public Advocate early this year. In the interview, the represented person said to the interviewer that, to quote the report by the Public Advocate to the Tribunal: The other children should not get involved in her affairs. 19 When she was asked which children assisted her with her finances, she replied: [The donees and the other daughter]. 20 Referring to the donees and the other daughter, the officer stated in the report that the represented person: ... spoke forcefully of her wishes, and was consistent throughout the interview of her wish for [the donees and the other daughter] to be the only children involved in her financial management. 21 The report stated: [The represented person] reiterated she had lots of children and didn't want them getting involved. 22 The applicant, in a submission to the Tribunal, said that her mother gave inconsistent answers to the officer of the Public Advocate. However, as these quotations reveal, the represented person was clear and consistent at least in relation to the trust and confidence that she placed in (Page 8)
the donees and the other daughter, and in her wish for her financial affairs to be managed and known only by those children. 23 That of course is not, by any means, determinative of the issues before the Tribunal; but is reflective of the trust and confidence placed by the represented person in the donees.
Statutory framework 24 As explained in the decisions of the Tribunal in KS [2008] WASAT 29 and EW [2010] WASAT 91 (EW), the Tribunal exercises a supervisory jurisdiction under s 109(1)(a) and (b) of the GA Act. Those sections are to be understood in the context of s 107(1)(a) and (b) of the GA Act which state that: The donee of an enduring power of attorney (a) shall exercise his powers as attorney with reasonable diligence to protect the interests of the donor and, if he fails to do so, he is liable to the donor for any loss occasioned by the failure; [and] (b) shall keep and preserve accurate records and accounts of any dealings and transactions made under the power; 25 As the Tribunal said in the decision in EW at [94]: An enduring power of attorney is an essentially private agreement between the donor and donee, and the transactions undertaken pursuant to that agreement should not be scrutinised unless there is reason to do so. 26 In EW, having found some assistance in cases concerning supervision of trustees and liquidators, which were referred to at [96][100] of the decision, the Tribunal said at [101] that the issues for determination in an application for orders under s 109(1)(a) and (b) are whether there is: ... something which requires an inquiry,… and whether there is: … a sufficient basis for making an order for an audit of the records and accounts kept by the [donee] of dealings and transactions made by [him or] her as attorney … (Page 9)
What is the correct and preferable decision in this review? 27 In our view, no reason requiring or justifying an inquiry or scrutiny into the operation of the EPA has been established by the applicant or her brother and sister in law assisting her. The principal dispute in the family which, as we have said, is ongoing and bitter, relates to decisions made by the represented person herself. There is a dispute as to whether the represented person exercised free will in relation to making those transactions. However, all of that is beyond the scope of this proceeding. There is also an ongoing dispute about whether terms of the agreement under which the fishing boat business was transferred have been complied with by the first donee and others. Again, that is beyond the scope of this proceeding. 28 It appears that the practical significance of the EPA was very limited as the major transactions were undertaken by the donor in person and she received payments from, and the benefit of payments of expenses by, various family members. The EPA itself, the evidence shows, was only ever used for the limited purposes of attending the bank by the second donee to withdraw, at the represented person's request, pension and interest moneys and occasionally by the first donee in dealing with certain authorities such as Medicare. 29 There is no evidence of any other use of the EPA and there is no evidence of there being any records or accounts kept by the donees of their dealings and transactions made in connection with the EPA. 30 There are only two matters of potential significance in relation to whether an order should be made under s 109(1)(a) and (b). The first, as noted earlier, related to the allegations of misuse of funds by the first donee and in particular payment of his lawyer, of which there is no evidence. 31 The other matter of potential concern raised by the applicant related to what she said was a substantial diminution in the bank account balance from $1.1 million to about $500,000. However, that simply did not occur. 32 In consequence, it can not be found that there is something which requires an inquiry in this case nor can it be found there is a sufficient basis for making an order for an audit of the records and accounts. 33 The single member came to the same view. He noted, however, at that stage that the evidence given before the Tribunal indicated that there was a large sum of money in cash kept by the represented person. The (Page 10)
amount was estimated in the evidence before the single member at approximately $226,000. The first donee subsequently advised the Tribunal, as well as the represented person and others, that an amount slightly less than $226,000 was banked subsequently, in April 2013, into the represented person's bank account. The bank account passbook, shown to the Tribunal at this hearing, confirmed that to be the case. 34 As the member pointed out, arguably, it was not consistent with s 107(1)(a) of the GA Act, which requires an attorney to exercise reasonable diligence to protect the interests of the donor, for a large sum of money to be kept in an unsecure location on behalf of the donor. The evidence given to us today indicates the bulk of the cash money was kept in the represented person's wardrobe in the South Fremantle property, and a smaller amount, although still substantial at approximately $26,000, was kept in a green bag by the represented person in her nursing home. There was discussion at the hearing before the single member as to whether the maintenance of this money in cash was consistent with the represented person's wishes, and there was general agreement that, in fact, that was her desire. 35 Nevertheless, as the member observed, an attorney must act in an objective way to protect the interests of the donor. That was recognised, then, by the donees' depositing the money into the bank account. A question was raised today before us about the manner in which that occurred. However, the evidence of the donees satisfies us that it occurred in a proper and appropriate manner, although not witnessed by a third party. It occurred in the presence of their mother who, the first donee told us, had a very good understanding of the amount that was held in cash. 36 Although there is some discrepancy as to the exact amount, we find that the amount in total was approximately $226,000, and that that did not include a lesser amount of approximately $6,000 that the represented person kept and took back to the nursing home. Most of that amount was found after her death and banked by the first donee into the bank account. 37 We do not consider that the evidence in relation to the maintenance of cash, its counting and deposit indicates that there is a requirement for an inquiry, in the circumstances of this case, as to the operation of the EPA, and in particular, that the donees should be required to provide a copy of all records and accounts kept by them of their dealings and transactions in connection with the EPA. (Page 11)
38 For these reasons, the application for review should be dismissed.
Costs application 39 The donees were represented in the proceedings by Mr AD Wilson, a lawyer. Mr Wilson sought an order at the conclusion of his submissions for the payment by the applicant and her brother and sister in law of his clients' legal costs of the proceeding. He did so essentially on the basis that the proceeding was brought for an 'ulterior purpose', namely, 'an information gathering exercise' for anticipated Family Provision Act 1972 (WA) or probate proceedings. 40 The application for costs was opposed by the applicant and her brother and sister in law on the basis that they requested that no party be represented by a lawyer and that they are laypeople conducting these proceedings. 41 The starting proposition in relation to costs in this Tribunal, in all proceedings, is that each party pays its own costs and that no party is responsible for legal or other costs incurred by another party. That is clear from the terms of s 87(1) of the State Administrative Tribunal Act 2004 (WA) (SAT Act). 42 However, s 87(2) of the SAT Act confers a discretion upon the Tribunal to make an order for the payment by a party of the costs of another party. In this case, although the applicant initiated the proceedings, her brother and sister in law are each parties to the proceedings. 43 The Tribunal has an established practice in relation to the exercise of its discretion as to costs under s 87(2) of the SAT Act in proceedings under the GA Act under which, normally, each party pays its own costs of the proceedings. Generally, a costs order will only be made where a party has acted unreasonably and has, by that party's unreasonable conduct, caused another party to incur costs. 44 In this case, it was reasonable for the donees to be represented by a lawyer. The allegations made by the applicant and her brother and sister in law were serious, although, as we have found, were largely outside the scope of the legislation. Although the applicant and her brother and sister in law requested that no party be represented by lawyers, they were informed by the Tribunal, prior to the directions hearing on 10 June 2013, that a party has a right to be represented by a lawyer in the proceedings, and the Tribunal could not, in the normal course, interfere with that right. (Page 12)
45 It is also true that the applicant and her brother and sister in law are laypeople. However, in this case, the Tribunal went to extraordinary lengths to explain to them the very limited role that it can play under s 109(1)(a) and (b) of the GA Act. 46 In the circumstances of this case, we consider that the conduct of the applicant and her brother and sister in law in maintaining these proceedings after the directions hearing on 10 June 2013, or more particularly after a reasonable period thereafter, in which they should reasonably have considered their positions and withdrawn, is unreasonable conduct, which would warrant a costs order for the payment of the professional costs incurred by the donees. 47 We have come to this view for two reasons. The first is that the proceeding was maintained, certainly after the directions hearing, for what has been substantially an ulterior purpose, that is outside the scope of the purpose of s 109(1)(a) and (b). It has been maintained for an information gathering exercise for other proceedings. That was clear from the scope of the issues that the applicant and her brother and sister in law sought to raise and also clear from their statements that they have wider intentions in terms of bringing proceedings. 48 People should have the right to bring proceedings in the Tribunal, acting properly and reasonably, and exercise those rights without fear that any costs order might be made against them. However, they have an obligation to act reasonably and not to invoke the Tribunal's processes for an ulterior purpose. 49 The second reason is that, in maintaining the proceedings after the directions hearing on 10 June 2013, the applicant and her brother and sister in law have acted unreasonably, by continuing with allegations that were largely outside the scope of the proceedings and caused the donees to incur expense in terms of legal representation. 50 In the circumstances, we consider that the unreasonable conduct of the applicant and her brother and sister in law warrants a costs order for the reasonable professional costs incurred by the donees on and after 25 June 2013 which is two weeks after the directions hearing. That will include the costs incurred at the hearing which took place on 26 June 2013 and the costs of preparation for and attendance at the hearing today. (Page 13)
Assessment of costs 51 [The Tribunal heard submissions from the parties in relation to the assessment of costs]. 52 We have heard argument in relation to the assessment of costs in accordance with the costs order that we have foreshadowed. The amount of costs sought by Mr Wilson on behalf of his clients for the preparation for and attendance at the hearing on 26 June 2013 of five hours at $374 per hour is reasonable for that work. Five hours is a reasonable and not an excessive period for the preparation of submissions which were detailed submissions and the preparation and attendance at that hearing. 53 Similarly, the claim of six hours for the work necessary to prepare for and attend the hearing today is reasonable; it includes two and a half hours of refreshing preparation and reviewing further submissions that were received since the last hearing and the attendance of three and a half hours today. 54 Mr Wilson also sought $900 for his client's lost wages. The first donee has incurred a loss of wages in time off work in the amount of $900 for which he seeks compensation. When the discretion is enlivened, the discretion includes the power to make an order for the payment of compensation, expense, loss, inconvenience resulting from the proceedings and therefore $900 in lost wages is sought in respect of that heading. The order, however, that we have foreshadowed is an order for professional costs. 55 Had a lawyer not been engaged and, although we have found that the maintenance to the proceedings was unreasonable, we would not have made a costs order in favour of the donees. Although it would be open to the Tribunal in the exercise of discretion to make an award of costs in relation to lost wages that is only exceptionally done and, in our view, should not be done in the exercise of discretion in relation to this matter. It is the fact that there was legal representation that was reasonably obtained and the costs of that were necessitated by the unreasonable conduct of the applicant that warrants a costs order. 56 The Tribunal's practice in relation to the assessment of costs is wellknown and was recently described in relation to proceedings under the GA Act in DB and MJB [2013] WASAT 73 at [45] and following. The Tribunal seeks to ensure that costs are minimised, even in a case where a costs order is made. It considers what is a reasonable amount of time for the work that is necessitated and then applies as a guide as to the (Page 14)
maximum amount that might be awarded the rates in the Legal Practitioners (State Administrative Tribunal) Determination 2012 (Determination). The Determination, strictly speaking, only applies in relation to solicitor and client costs. However, it is used as a guide in a costs order assessment as between parties. The time of five hours in relation to the first hearing and six hours in relation to this hearing are reasonable for the work that was involved and the amount that is sought per hour is $374 which is the maximum amount for a senior practitioner available under the Determination. 57 The applicant and her brother and sister in law maintained essentially the same points in relation to the assessment of costs as they expressed in opposition to the costs order. We have addressed those matters earlier. 58 In the circumstances, we will make a costs order of $4,114, which equates to 11 hours at $374 per hour. 59 Finally, we note that, in relation to the assessment of costs, the applicant's brother submitted that the costs order should be made payable out of the estate of his late mother, rather than to be paid by him, his wife and his sister. However, there is no basis in the circumstances of this case for an order for the payment of costs out of the estate of the represented person. 60 Section 16(4) of the GA Act does provide an opportunity for an order to be made for a party's costs to be paid out of the estate of the represented person or the person whom the proceeding concerns where the person bringing the proceeding acts in the best interests of the represented person or the person concerning whom the proceedings are brought. However, that involves the exercise of discretion in relation to costs incurred by the person seeking the costs order. That section is not available. The Tribunal does not have power, therefore, to make an order for the payment of costs out of the estate. Even if the Tribunal had power, which it does not, to make such an order it would decline to do so, because this application has not been brought on behalf of or in the best interests of the donor.
Orders 61 The Tribunal makes the following orders: 1. The application for review is dismissed. (Page 15)
2. The decision made by the Tribunal on 11 March 2013 to dismiss the application for orders under s 109(1)(a) and (b) of the Guardianship and Administration Act 1990 (WA) concerning the enduring power of attorney made on 9 December 2002 by which the represented person appointed [the donees] to act as attorneys is affirmed. 3. Pursuant to s 87(2), the State Administrative Tribunal Act 2004 (WA), the applicant, [and her brother and sister in law] are jointly and severally to pay the costs and disbursements of [the donees] of this proceeding assessed in the amount of $4,114 within 28 days. |