GKT (Review of Enduring Powers)
[2012] TASGAB 27
•14 September 2012
GUARDIANSHIP AND ADMINISTRATION BOARD
LAUNCESTON
GKT on the application of Uniting Aged Care
Neutral citation: GKT (Review of Enduring Powers) [2012] TASGAB 27
REASONS FOR DECISION
Anita Smith (President)
Sue Hill (Member)
Rowena Holder (Member)
Date of hearing: 14 September 2012
Review of enduring power of attorney – validity of instrument –non-compliance with witnessing provisions – instrument revoked - appointment of an administrator – factors in suitability for appointment
Powers of Attorney Act 2000 – s 30, 33
Guardianship and Administration Act 1995 – s 51, 54, 72
BND (Review of Administration) [2012] TASGAB 3
HFO (Review of Administration) [2012] TASGAB 6
GKT is a 70 year old resident of an aged care facility. The operators of that facility have applied for a review of the enduring power of attorney that GKT (the donor) executed in favour of her sister, WNS (the attorney). Their reason for seeking a review is that the donor’s aged care fees are in arrears by approximately $10,000.00 and that there has been a pattern of the attorney disputing payments or being late with payments for most of the two years that the donor has lived in that facility. This pattern potentially means that the donor is significantly in breach of the terms of the Residential Aged Care Agreement, which may entitle the facility to terminate that agreement.
A review of an enduring power of attorney is conducted pursuant to section 33 of the Powers of Attorney Act 2000. Section 33(2) of the Powers of Attorney Act 2000 affords the Board the following powers after a review of an enduring power of attorney, the Board may:
“(2)(a) vary a term of, or a power conferred by, the enduring power of attorney; or
(b) appoint a substitute attorney; or
(c) appoint an administrator of the estate of the donor if he or she is over the age of 18 years; or
(d) declare that the donor did or did not have mental capacity to make a valid enduring power of attorney; or
(e) declare that the enduring power of attorney is invalid if the Board is satisfied that –
(i) the donor did not have the mental capacity to make it; or
(ii) it does not comply with the other requirements of this Act; or
(iii) it is invalid because the donor was induced to make it by dishonesty or undue influence or invalid for any other reason; or
(f) revoke the enduring power of attorney and, if the donor is over the age of 18 years and the Board thinks fit, appoint an administrator of his or her estate; or
(g) make such other order as to the exercise of the power, or the construction of its terms, as the Board thinks fit.
(3) An appointment of a person as administrator under subsection (2)(f) has the same effect as if it had been made under Part 7 of the Guardianship and Administration Act 1995.”
The relevant instruments:
In 2002 the donor executed a general power of attorney registered number XXXX appointing BNE and WNS as her attorneys. In 2003 the donor revoked that power to the extent that she removed BNE but confirmed the appointment of WNS. This revocation was registered as XXXX. This power is not an enduring power, so the Board has no jurisdiction with respect to this power. However, it would now be of no effect, due to the donor’s loss of capacity as reported by Doctors Cooke and Scott.
On 13 July 2004 the donor executed an enduring power of attorney (registered number XXXX) to WNS and NKD. The witnesses to this document were KGMD and Dr. Alison Bleaney. On 23 September 2004, the donor then revoked that power to the extent that she removed NKD as attorney but confirmed the appointment of WNS. The sole witness to this document was XBS and it was registered as XXXX.
The application:
The application was received by the Board on 9 February 2012. That application noted arrears in nursing home fees of $9,919.27 and stated:
“WNS has not met GKT’s financial obligations to Uniting Aged Care. WNS was contacted throughout 2011 regarding payment of fees for GKT. Uniting Aged Care has attempted to work with WNS with a repayment plan which has not been adhered to. Uniting Aged Care has waited whilst WNS had applied for financial hardship. Uniting Aged Care has been notified that WNS has not completed the information required for this application in a timely manner”
The application was not accompanied by a medical report regarding the donor’s capacity. The application was initially held in abeyance pending the receipt of a medical report.
The investigation:
On 17 May 2012, the attorney was provided with a copy of the application and asked to respond to a standard set of questions put to all attorneys where a review application has been made. The Registrar also requested more information from the applicants.
The Board received a brief response from the attorney which did not respond to the matters raised in full. The Board also received a letter from GM on 27 June 2012 asking the Board to “post-post” (sic) or cancel the hearing. Also on 27 June 2012, the Board received a detailed time line of events from the applicant.
The Registrar wrote to the attorney on 28 June 2012. In that letter the Registrar:
·Supplied copies of all accounts provided by the applicant and the time line of events,
·Granted the attorney a further 21 days to respond to the request for information or medical evidence to prove that she was incapable of complying with that request,
·Indicated in detail the possibility that the instruments were invalidly executed and invited a response to that issue,
·Sought clarification about medical evidence of the donor’s capacity, and
·Refused to cancel the hearing, noting postponement was not possible as no date had been set for hearing.
On 28 June 2012, the Registrar wrote to Dr. Cooke requesting a medical report regarding the donor. Dr. Cooke responded with a comprehensive report on 5 July 2012.
On 23 July 2012, the attorney provided a long handwritten letter. It contained some but not all of the information requested by the Board. The letter did not respond to the issue of the validity of the instrument. The deficits in the response were brought to the attorney’s attention by letter dated 2 August 2012. She was invited to submit additional material prior to the hearing.
A notice of hearing was sent to all parties on 6 August 2012 for a hearing on 14 September 2012. Further correspondence from the attorney from that point related to her requests for adjournment of the hearing.
The requests for an adjournment:
The following persons attended the hearing on 14 September 2012:
TI – the donor’s daughter
BC – the donor’s sister
Vicki Pollock – Uniting Aged Care
Roy McDonald – Uniting Aged Care
Jessica Rowlands – The Public Trustee
The donor did not attend. Dr Cooke reported that “In relation to her attendance at any hearings this is not appropriate due to both her physical and mental status and the fluctuating nature of both”
The attorney did not attend. It was confirmed that she had received notice and copies of recent correspondence from the Board. TI and BC advocated on the attorney’s behalf for an adjournment.
Section 72 of the Guardianship and Administration Act 1995 requires that a hearing is commenced within 45 days of the receipt of the application. By the 14 September 2012, the Board was in breach of that requirement by 24 weeks. A request for adjournment by the applicants had been refused on 9 August 2012 for that reason.
The first request for an adjournment from the attorney occurred prior to a hearing date having been set. The attorney provided to the Board two medical certificates from Dr Julian Henly indicating some medical conditions from which the attorney suffers. Because these certificates did not specify what effect those conditions might have upon the attorney’s ability to comply with the Board’s requests, nor her ability to attend a hearing, the Board contacted Dr Henly. He indicated that he did not write the certificates based on his professional assessment of these conditions, he merely reported what his patient had said to him. He said that, in his view, none of the conditions should have the effect of delaying the proceedings.
At no stage did the attorney indicate a date at which she considered she could attend a hearing. Given her approach to the proceedings to date, the Board took the view that the attorney hoped to, at least, delay proceedings as long as possible and, at best, avoid them outright, which is not an option available under the legislation. The Board took into account the long delays in this matter, the statutory obligation to hear a matter within a short time and the extensions of time already granted to the attorney and determined that it was appropriate to proceed in her absence at least to the extent of considering the validity of the instrument. If the Board considered the instrument to be valid, then it would adjourn to include the attorney in any proceedings to examine her transactions as an attorney, if necessary.
Was the Instrument validly executed?
On 13 July 2004 and 23 September 2004, the legislative requirements for the creation of a power of attorney in the Powers of Attorney Act 2000 (the Act) included the following requirement:
“30. Creation and effect of enduring powers of attorney
(1) A power of attorney is an enduring power of attorney for the purposes of this Act if it is created –
(a) by deed containing words indicating an intention that the authority conferred is to be exercisable notwithstanding the donor's subsequent mental incapacity or in the event of the donor's subsequent mental incapacity; or
(b) by an instrument in accordance with form 3, conferring on the attorney particular powers specified in it; or
(c) by an instrument in accordance with form 4, conferring on the attorney powers to do all things that the donor may lawfully authorise an attorney to do.
(2) A deed or instrument is not effective to create an enduring power of attorney unless –
(a) …
(b) there are at least 2 attesting witnesses to the deed or instrument neither of whom is a party to it nor a relation of a party to it and each of whom has witnessed it in the presence of the donor and each other; and …”
In an email to the Board on 9 February 2010, related to different proceedings before the Board, the attorney confirmed that the donor, WNS and KGMD are sisters. Additionally, KGMD is NKD’s wife. This was also confirmed by KGMD on 11 February 2010. Therefore, the instrument was witnessed by a person who was a relation of all of the parties to the instrument. The effect of section 30(2)(b) is that the original instrument was not effective to create an enduring power.
If it was validly executed, it might have been argued that the partial revocation registered as XXXX remedied any defect in the original appointment. However, as that instrument had only one witness, it too would not meet the requirements of section 30(2)(b). Additionally, it might be argued that the partial revocation fails to meet the requirements of being an effective appointment for the purposes of subsection 30(1), as it is not in the correct form.
The above matters were explained to the attorney in the letter sent to her on 28 June 2012, but she did not respond to them at any point prior to the hearing. No witness argued to the contrary, except to point out that the power had been in operation for 11 years.
Pursuant to section 33(2)(e)(ii) of the Act, the Board declares that the enduring power of attorney is invalid. The Board is satisfied that the instrument does not comply with the requirements of the Act or did not comply with the requirements of the Act at the time that the instrument was executed.
What order should the Board make consequent upon the invalidity?
Having found that the power was invalid, the Board did not need to examine the transactions that WNS undertook as an attorney. Accordingly the Board did not adjourn the proceedings.
The power has been found to be invalid. By reason of the finding of invalidity, the Board revokes that power. Although section 33(2)(f) does not specify a test for the appointment of an administrator, section 33(3) states that an appointment of an administrator under subsection (2)(f) has the same effect as if it had been made under Part 7 of the Guardianship and Administration Act 1995 (the GAA). Accordingly, the Board applies the test in section 51 of the GAA with respect to the facts of this case.
Uncontested medical evidence from Doctors Scott and Cooke indicated that GKT has an acquired brain injury and that she is not capable of managing her estate. Some lay witnesses referred to GKT having “good days” where she shows a better level of awareness than others, but no witness provided reliable evidence that she is capable of managing her estate. The Board accepted the medical reports as evidence that GKT lacks capacity to manage her estate.
GKT has been in need of the services of an enduring attorney to date, so the consequence of the revocation of that power is that she is now in need of an administrator for the purposes of section 51. An administrator is required to assess the arrears of fees alleged by the aged care facility, make arrangement to pay agreed arrears and establish a future payment plan to ensure that fees do not fall into arrears again. An administrator may also complete an incomplete application for hardship with respect to the ongoing aged care fees charged to GKT. In addition GKT has real estate currently on the market, so an administrator is required to assess the sale price and valuation of that property, to enter into any agreements for sale of that property and to invest any proceeds of sale.
With respect to the identity of the administrator, the Board observed the requirements of section 54 of the GAA. The Board assumed that, had she attended the hearing, WNS would seek appointment as an administrator. TI also nominated herself for consideration as administrator. The applicants sought the appointment of the Public Trustee as administrator.
The Board is not satisfied that WNS is a suitable person for appointment as administrator. The Board noted GKT’s wishes for WNS to have financial control, but the Board did not consider this to be in GKT’s best interests. WNS has demonstrated, in these proceedings, that she has difficulty in meeting the accountability requirements of the Board and the Board is not satisfied that she would adequately comply with the reporting and accountability requirements required in section 63 of the GAA. From her own written evidence, WNS indicated relevant conflicts of interest, such as the assertion that GKT is indebted to WNS for significant sums of money and periods when WNS has been a tenant in GKT’s property. Added to that, the apparent inability to resolve the longstanding dispute over debts for aged care fees and the apparent inability to complete a hardship application since 2010 indicated to the Board that WNS is significantly lacking in the kinds of skills required of an administrator.
TI impressed the Board as having skills acquired from a career in financial services which would be referable to appointment as an administrator. Additionally, GKT has clearly indicated her wishes that if WNS could not be her attorney, then TI should. The Board considered that, absent the level of conflict surrounding this application, she would have been a suitable administrator in terms of her level of skill.
However, at this point, TI’s loyalty to WNS was of concern to the Board. TI was somewhat unclear on the nature of the outstanding nursing home fees and incorrectly considered that a substantial proportion of it to be outstanding interest based upon what WNS has asserted to her. TI volunteered that WNS had consulted her highly on all matters in the estate. The Board considered that WNS and TI have been in ‘lock-step’ with regard to the affairs in the estate to date, and the appointment of TI at this point may simply continue the dispute over aged care fees. This dispute has resulted in allegations that GKT is significantly in breach of the terms of her residential aged care agreement and her accommodation could be placed in jeopardy if that dispute is not resolved. Once that dispute has been resolved, any arrears paid and monthly payments are established, it may be appropriate for TI to nominate again for appointment as administrator in accordance with her mother’s wishes.
The Public Trustee has a statutory advantage over private individuals seeking appointment as administrator. This is discussed in the following decisions of the Board: BND (Review of Administration) [2012] TASGAB 3 and HFO (Review of Administration) [2012] TASGAB 6. The Board adopts that reasoning in this case. Accordingly the Board appoints the Public Trustee as administrator for three years.
Conclusion:
After hearing an application in relation to an Enduring Power of Attorney (XXXX) registered on the 15 July 2004 (hereinafter ‘the power’) made by GKT (hereinafter ‘the donor’) appointing WNS (hereinafter ‘the first attorney’) and NKD (hereinafter ‘the second attorney’) as her attorneys
The Board was satisfied that the power did not comply, at the time of execution and registration, with the requirements of the Powers of Attorney Act 2000 (hereinafter ‘the Act’) in that one the attesting witnesses to the instrument was a relation of parties to it, namely KGMD is the sister of both the donor and the first attorney and the wife of the second attorney.
The Board was also satisfied that a partial revocation of an enduring power of attorney (XXXX) removing NKD but confirming WNS did not comply, at the time of execution and registration, with the requirements of the Act for appointment of an attorney (and therefore did not correct the original error in appointment) namely that there was only one witness to the instrument.
THE BOARD DECLARES, pursuant to s33(2)(e)(ii) of the Act, that the power is invalid and, pursuant to section 33(2)(f) of the Act, revokes the power and appoints an administrator as follows:
THE BOARD ORDERS
That The Public Trustee be appointed administrator of GKT.
That the powers and duties of the administrator be those conferred by Division 4 of Part 7 of the Guardianship and Administration Act 1995.
That the administration order remains in effect to 13 September 2015.
For certainty, to the extent that the revocation XXXX may be construed as an appointment of an attorney, that instrument is also declared invalid pursuant to section s33(2)(e)(ii) of the Act.
Anita Smith
PRESIDENT
Reasons delivered: 24 September 2012
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