HDH (No6) (Review Enduring Powers)
[2007] TASGAB 17
•20 December 2007
GUARDIANSHIP AND ADMINISTRATION BOARD
HOBART
HDH Review of Enduring Power of Attorney
Neutral Citation: HDH (No6) (Review Enduring Powers) [2007] TASGAB 17
REASONS FOR DECISION
Melanie Bartlett (Chair)
Terry McGuire (Board Member)
Gerard Dibley (Board Member)
Hearing Dates: 6th and 7th September 2006
24th May 2007
Ms CC filed an Application in relation to an Enduring Power of Attorney (“Ms CC’s Application”), which was received, by the Guardianship and Administration Board (“the Board”) on 31st October 2005. In that Application Ms CC sought to have the Board review the Enduring Power of Attorney of Mr HDH made on the 20th January 2004. In that Enduring Power of Attorney (“the EPA”) Mr HDH appointed his son, Mr MH as his attorney, and directed that Tasmanian Perpetual Trustees Ltd be appointed as alternate attorney in the event of Mr MH failing to be able to act.
Mr Daniel Zeeman acts for Mr MH. Mr Tim Williams acts for Ms CC.
A Directions Hearing was convened on the 15th March 2006 to give directions in relation to the setting down of the matter for hearing. As a result it was determined that there were jurisdictional issues which required consideration prior to the hearing of the substantive issues and it was resolved to deal with those at a preliminary hearing. That preliminary hearing was held on 27th April 2006 and it was determined by the Board :
(a)That a previously constituted Board hearing an Application for Guardianship for Mr HDH in May 2005 had not already made a final decision in relation to the execution or operation of the EPA.
(b)That that Board could not be regarded as having, at the May 2005 hearing, determined to hold a hearing to review the EPA of its own motion pursuant to section 33(1)(a).
(c)That the Board would of its own motion hold a hearing under section 33(1)(a) of the Powers of Attorney Act 2000 to review the EPA of Mr HDH dated 20th January 2004 given that the there had been sufficient concerns raised in the decision of the Board following the May 2005 hearing, together with the matters raised by Ms CC in her Application for the Review of the Power of Attorney and in her correspondence to the Board prior to the hearing.
(d)The Board advised the parties that the matters to be considered at the hearing would include the circumstances relating to the execution of the EPA, the operation of the EPA by the Attorney, whether the needs of Mr HDH were being met by the Attorney, and whether there had been any inappropriate expenditure made by the Attorney in the operation of the EPA.
The substantive hearing as to the operation of the EPA by the Attorney, whether the needs of Mr HDH were being met by the Attorney, and whether there had been any inappropriate expenditure made by the Attorney in the operation of the EPA was held on 6th and 7th September 2005. Mr MH was not available for that hearing. He had previously left Australia and returned to his home overseas after becoming ill. At the time of the September 2005 hearing he was at another home overseas. Through his Counsel, Mr Zeeman, the Board was advised that Mr MH was content for that hearing to continue in his absence and that he be represented by his Counsel at the hearing.
It was submitted by Mr Zeeman, and accepted by the Board, that the issues relating to the details of Mr HDH’s estate and financial affairs were private and only relevant to Mr HDH and that Ms CC should not be privy to that information or in attendance at that part of the hearing. Ms CC was therefore in attendance for the part of the hearing which related to whether Mr HDH’s needs were being met by the Attorney, but she and her Counsel were not in attendance at the hearing into the operation of the EPA and whether there had been any inappropriate expenditure made by the Attorney. Ms CC also did not have access to any of the financial information provided by Tasmanian Perpetual Trustees Limited in relation to Mr HDH’s estate. As a consequence the part of this decision that relates to Mr HDH’s financial affairs and the operation of the EPA will not be made available to Ms CC.
Because the Board considered it was preferable to have Mr MH available for the balance of the hearing concerning the circumstances relating to the execution of the EPA the matter was adjourned pending advice from Mr Zeeman as to Mr MH’s availability, which was dependent on his health.
There being no advice from Mr Zeeman as to Mr MH’s availability, the Board set the matter down for hearing of the balance of the issues on 24th May 2007 with a short preliminary directions conference by phone on 18th May. Mr MH chose not to attend the hearing, although it is noted that the Board made the offer of organising a video or telephone link to Mr MH in Hong Kong. He was again represented by Mr Daniel Zeeman at the hearing.
The Validity of the Instrument:
The parts of Section 33 of the Powers of Attorney Act 2000 relevant to this matter provide as follows:
“(1) The Board may –
(a) of its own motion; or
(b) on application by an attorney; or
(c) on application by or on behalf of a donor; or
(d) on application by any other person who the Board believes has a proper interest in the matter –
hold a hearing in accordance with Division 1 of Part 10 of the Guardianship and Administration Act 1995 to review an enduring power of attorney.
(2) On the review, the Board may, by order –
(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.
(4) …
(5) …
(6) …
(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.”
Parts of Section 30 of the Powers of Attorney Act 2000 are also relevant and read as follows:
“(1) …
(2) A deed or instrument is not effective to create an enduring power of attorney unless –
(a) the donor understands the nature and effect of the deed or instrument; and
(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
(c) the deed or instrument has endorsed on it, or annexed to it, a statement of acceptance in accordance with form 3 or 4, or in a form to the same effect, executed by the person appointed to be the attorney.”A Power of Attorney is where one person appoints another person to act on their behalf. This concept has been recognized at common law for many years. In more recent times statutes have been enacted to regulate the making and operation of powers of attorney. At common law an attorney could only act to the extent of the donor of the power, so if the donor lost mental capacity then the authority of the attorney was terminated. This problem has been overcome by the introduction in many jurisdictions, including Tasmania, of “enduring” powers of attorney that allow an attorney to continue to act on behalf of a donor notwithstanding that the donor has lost capacity.
Mental capacity of the donor is also relevant at the time of execution of the power of attorney. The position as to the legal standard of mental capacity required in Australia varies from State to State depending on the relevant legislation. In Tasmania the test of mental capacity to give an Enduring Power of Attorney is set out in Section 30(2)(a) of the Powers of Attorney Act 2000 which states that a deed or instrument is not effective to create an EPA unless the donor understands the nature and effect of the deed or instrument. And the matters which the donor must understand in order to be taken to understand the nature and effect of the document are set out in subsection (3) of section 30. That subsection reads:
“(3) For the purposes of subsection 2(a) a donor is taken to understand the nature and effect of a deed or instrument only if he or she understands the following matters:
(a) that the donor may, in the enduring power of attorney, specify or limit the power to be given to an attorney and instruct an attorney about the exercise of the power;
(b) when the power begins;
(c) that, once the power for a matter begins, the attorney has power to make, and will have full control over, the matter subject to terms or information about exercising the power included in the enduring power of attorney;
(d) that the donor may revoke the enduring power of attorney at any time when he or she has the mental capacity to do so;
(e) that the power the donor has given continues even if the donor subsequently loses his or her mental capacity;
(f) that the donor is unable to oversee the use of the power if he or she subsequently loses mental capacity.(4) …”
Whilst there are relatively few reported cases on the element of mental capacity to execute a valid EPA because such documents are a relatively new creation of statute, assistance can be gained from the law in relation to mental capacity required for other documents which has been developed over the centuries.
At page 52 in the book “Mental Capacity – Powers of Attorney and Advance Health Directives”[1] the authors note:
“An essential requirement when assessing capacity is to ensure that the person making the enduring document is doing so freely and voluntarily and is not being unduly influenced to make an appointment. Those involved in the process also need to be aware of the potential for a person with doubtful capacity to have been “schooled”.
The same authors suggest, at page 41, that
“ In Australia, any consideration of mental capacity required for the making an enduring document should begin with the statement of Dixon CJ, Kitto and Taylor JJ in Gibbons v. Wright (1954) 91 CLR 423”. At page 438 of that joint judgment it states “[T]he mental capacity required by the law in respect of any instrument is relative to the particular transaction which is being effected by means of the instrument, and may be described as the capacity to understand the nature of that transaction when it is being explained.” In the case of Estate of Park [1954] P 112 at page 136 Hodson LJ said “…one cannot consider soundness of mind in the air, so to speak, but only in relation to the facts and the subject-matter of the particular case.”
[1] Edited by Collier, Coyne and Sullivan, Federation Press 2005
In terms of the chronology of events occurring regarding Mr HDH’s EPA, the evidence of Mr CE was first in time. He gave evidence that Mr HDH had been gradually deteriorating in his health during 2002 and 2003 and that his papers were not in the same good order that they used to be. He said there was also a decline in the condition of his house but that, in spite of this, Mr HDH thought he was “bullet proof”. His evidence was that Mr HDH was still able to do many things including going to town to pay bills, attending some University functions and entertaining friends in his own home. He said Mr HDH requested him to accompany him to an appointment he had made with Tasmanian Perpetual Trustees on 12th December 2003. This occurred with Mr CE driving Mr HDH there and also sitting in on the appointment that Mr HDH had with Ms Browing. Mr HDH wanted Mr CE to be present because he had determined that he wanted Mr CE to perform a subsidiary role which included being something of an intermediary between Mr HDH and Mr MH because Mr MH was living overseas and Mr CE was to be entrusted with the job of keeping Mr MH informed of matters.
Mr CE said that during the appointment Mr HDH described what he wanted to do in relation to amendments to his will and also said that he wanted a power of attorney which he saw as necessary, as a safeguard or safety net if he was in hospital or otherwise out of action. Mr CE was clear in his evidence that Mr HDH intended to appoint Mr MH as his attorney but that Mr HDH was less clear about what that might really meant in terms of the form it would take etc, because he did not understand the Tasmanian legislation. He also told Ms Browning that as he was expecting Mr MH to come to Tasmania early in the New Year he would get her to prepare a draft EPA and that he would clarify his wishes in relation to the changes to his will after he had discussed matters with his son. He said Mr HDH had some uncertainties as to the will but not as to the EPA, which he saw as necessary.
Mr CE was unable to recall any detail of what Ms Browning had told Mr HDH about the operation of the EPA. When asked if Mr HDH had had difficulties with hearing or comprehending what he was told by Ms Browning, Mr CE was definite in his response that Mr HDH had no difficulty with the comprehension, only with his hearing.
Ms Browning was a Trust Administrator employed by Tasmanian Perpetual Trustees with some 7 years experience in that role. Her evidence was that Mr HDH came to see her on 12th December 2003 and that she explained to him how an EPA would operate, but that Mr HDH did not give her instructions to actually prepare the document because he wanted Mr MH, who would be visiting Tasmania in the near future, to understand the appointment as an attorney and he was aware that there was a possibility of difficulties because Mr MH lived overseas. She said he wanted to know what the EPA would entail and he asked about the role of the attorney and the substitute attorney. He confirmed to her that his son would be his first preference, and she advised him of the way that would work with Tasmanian Perpetual Trustees taking up the role if things became too difficult for Mr MH to manage from overseas. Ms Browning said Mr HDH told her that the close friend attending the appointment with him, determined to be Mr CE, would contact her if something happened to him before Mr MH had got home. Ms Browning thought initially that that person was to be appointed the attorney, but Mr HDH was clear that that was not to be so. She said she provided Mr HDH with a brochure about EPA’s and her business card, and her understanding was that Mr HDH would return to see her with further instructions when Mr MH was back.
Ms Browning said that her next contact with Mr HDH was when Mr MH phoned her to say that he had found her business card amongst his father’s papers, that his father had had a fall and was in hospital, and that his father wanted to go ahead with the power of attorney. Ms Browning said that she advised Mr MH that it was Tasmanian Perpetual Trustees’ policy to require a medical certificate as to capacity before the power of attorney could be signed.
Ms Browning went to see Mr HDH at the Royal Hobart Hospital by herself because she wanted to confirm his instructions. Her evidence was that when she met him at the hospital he recognized her, recalled their previous meeting and introduced her to his son whom he identified as the person who was to be his attorney. She said she didn’t talk to Mr MH as such although he assisted when Mr HDH couldn’t hear her. Ms Browning acknowledged that there was discussion about the concerns Mr MH had about Mr HDH being by himself after Mr MH returned overseas and about Home Help and that Mr MH confirmed that Mr HDH had not at that stage had an Aged Care Assessment. Ms Browning said she had no doubts about Mr HDH’s capacity on that day.
On the following day, 20th January 2004, Ms Browning returned to the hospital with the EPA. Mr MH was there to hand over the letter from Dr Daniels regarding capacity. The letter only referred to the EPA and not to a will. Ms Browning stated in cross-examination that she would not have accepted that letter in relation to the signing of a will, although she had assumed the letter being obtained by Mr MH would have referred to both the will and EPA. She therefore told Mr MH that another letter would be required if a will was to be signed.
Ms Browning said she handed the EPA to Mr HDH to read and that there were some issues with finding the right reading glasses and with his hearing but he appeared to read the document and he asked her some questions about the meaning of certain words. She could not recall which words other than the words “donor” and “donee” which she explained to him. Ms Browning also said that she recalled Mr HDH asking questions about commission if Tasmanian Perpetual Trustees took over, which he had also asked during the interview on 12th December 2003. She estimated it was about 15 minutes from when she gave the document to Mr HDH and when he signed it.
Ms Browning said she then introduced Mr HDH to Ms Lamprey who had accompanied her from Tasmanian Perpetual Trustees. The EPA was then signed by Mr HDH and witnessed by Ms Browning and Ms Lamprey. Ms Browning said Mr HDH smiled after the document was signed and said that it was good to know that his mail was being collected. She said his biggest concern was his mail and he knew that because he was in hospital matters at home were not being dealt with. She said Mr HDH also instructed her that he wanted the EPA registered so that Mr MH could use it.
Under cross-examination by Mr Williams Ms Browning said she had no hesitation at the first and subsequent meetings that Mr HDH understood what he was doing. He had asked relevant questions about the document to satisfy her that he understood what he was signing and the role of his son. She confirmed that Mr HDH certainly had difficulties with his hearing but she overcame that by sitting close to him and shouting and that she would speak sentence by sentence, check that he understood what she had said and she would then proceed. She said that she could soon work out if he was hearing her properly from the questions he asked.
In relation to whether she was at any time alone with Mr HDH during that second visit to the hospital, Ms Browning confirmed that she was not alone with him. However, she said, that she would only have insisted on that if she had had any doubts about Mr HDH’s capacity or if she was concerned that there had been any undue influence.
Ms Browning said that the only reason capacity was an issue was because Mr HDH was in hospital and the policy of Tasmanian Perpetual Trustees was to require a medical certificate as to capacity in that situation. Ms Browning confirmed that approximately a week later Mr MH advised her that Mr HDH had been diagnosed with dementia, that he would be going to a nursing home and that he could not then sign an amended will. Ms Browning’s evidence was that she was shocked by that because she had had no query as to his capacity to sign the EPA. Ms Browning was asked if Mr MH had ever said to her not that Mr HDH had no capacity, but that he had not been assessed as to capacity yet. She denied that had been said to her.
Brief evidence was heard from the other witness to the EPA, Ms Lamprey who, at that time, had been a Trust Administrator with Tasmanian Perpetual Trustees for 3 years. She had not met Mr HDH prior to the date on which the EPA was signed. She said she stood back whilst Ms Browning explained the document to Mr HDH but she said she recalled Ms Browning explaining that Mr MH was to be the attorney, that Tasmanian Perpetual Trustees were to be the substitute attorney and she said in her view Mr HDH appeared to understand all those types of conditions. She couldn’t recall if there were “Yes/No” type answers or full answers and she denied that Ms Browning had to shout when speaking to Mr HDH. She said a Doctor’s certificate had been obtained and there was no discussion about capacity.
Dr Brett Daniels gave evidence that he had conducted a Mini Mental Examination on Mr HDH on 13th January 2004, 7 days before the EPA was signed. Mr HDH’s score on that Examination was said by Dr Daniels to be 19 out of 30, with scores of 24 or 25 and above being the usual range of scores expected for persons of this age. Dr Daniels was subsequently requested by Mr MH to provide a medical certificate as to his father’s capacity to appoint an attorney. The report was in the form of a letter dated 19th January 2004 addressed to Ms Browning at Tasmanian Perpetual Trustees. The letter contained only one sentence which read “It is my medical opinion that Mr HDH is of sufficient mental capacity to be able to appoint an attorney.”
At that time Dr Daniels was employed as a Rehabilitation Intern at the Royal Hobart Hospital. His evidence was that he did not carry out any particular tests to ascertain Mr HDHs’s mental capacity to sign an EPA. He did not ask Mr HDH any particular questions as to capacity or in relation to the appointment of an attorney. He said his assessment and opinion in the letter were on a clinical basis only.
It is apparent from Dr Daniel’s evidence and the hospital records that at this time the staff at the hospital were principally concerned with ascertaining whether Mr HDH would be able to return to live in his own home. The assessments and observations were only as to that aspect and were not in any way intended to assess his capacity to sign documents such as a will or an EPA.
Dr Daniels was not provided with any information from Tasmanian Perpetual Trustees as to the requisite standard of capacity required to execute a power of attorney. He was not advised that Mr HDH needed to understand the nature and effect of the EPA and that in order to do that Mr HDH needed to be able to take in what was being explained to him and ideally demonstrate this understanding by communicating the information back to the Doctor. Dr Daniel’s was also not advised of the matters set out in section 30(3) which were to be understood by Mr HDH so that he could be taken to understand the nature and effect of the document he was to sign.
Evidence was heard next from Mr John Fourez, a Consultant Psychologist, who was requested by the Royal Hobart Hospital (Dr V Shrikanth) to undertake a cognitive appraisal, which he did on 16th February 2004. Mr Fourez wrote a letter by way of report to Dr Shrikanth dated 20th February. This letter was available to the Board.
Mr Fourez’s evidence was that he took a history from Mr HDH and he conducted a number of tests on Mr HDH including memory tests, tests as to his capacity for abstract reasoning, and perception of issues. The emphasis of this testing was on the aspect of Mr HDH’s memory as Mr Fourez indicated that that was the area of concern advised to him by Dr Shrikanth.
Mr Fourez outlined to the Board the distinction between immediate memory span which can be tested by forward and backward digit spans, and cognitive capacity which is the ability to go beyond the immediate situation and see things that are not obvious. When information is provided it is taken into a person’s immediate memory store (which is temporary memory), and it is also transferred and consolidated into the longer term memory from where it may need to be later retrieved.
Mr Fourez said that Mr HDH had little understanding as to why he was in hospital, and he could recall major events, but he was confused as to the chronology or timing of those events. His evidence was that Mr HDH understood what was being said to him and that his memory for content was satisfactory but he did not have chronology of events correct.
In cross-examination by Mr Williams, Mr Fourez said that the referral to him was for assessment of memory loss, particularly with reference to Mr HDH’s discharge from hospital and whether he could return to live in his home. When asked if Mr HDH would have had sufficient insight to appreciate the risks if he went to live in his own home, Mr Fourez response was that if Mr HDH was not able to make rational decisions about his disability, he probably could not have had the level of insight to make that decision. He said that recall is essential to insight and Mr HDH had reduced recall.
Mr Fourez was shown the provisions of section 30 (2)(a) of the Powers of Attorney Act 2000 by Mr Williams. His view as to whether Mr HDH would have understood these matters was that if the matters in that subsection were not explained to Mr HDH he doubted that Mr HDH would have satisfied the tests in that subsection in terms of his capacity. He thought that Mr HDH would need someone to explain matters to him so he could decline or accept. But if no one put the options to him he could not have worked out the options himself at that time. However, his opinion was that he would have had sufficient capacity to understand on 20th January 2004 what was being explained to him. He needed explanations to make sure he understood and retained the information. He said it would have been wise to refresh his memory when he had to make a decision.
Mr Fourez was shown the results of the Mini Mental Test administered to Mr HDH on 13th January 2004. He concluded that the level of impairment outlined in the Test was largely consistent with what he himself had found. When asked if the Mini Mental Test would be able to be used to determine whether a person had capacity to sign an EPA, Mr Fourez said the information in the Test was “meagre” for that purpose.
Evidence was also given by Mr Fourez that it is usual for the physical and cognitive functions of a person who has suffered a stroke to improve for up to 2 years after suffering the stroke, and that it is normal for there to be the most improvement during the first 6 months or so. However, with a pre-existing condition which may have been progressive in nature, such as Alzheimer’s disease, a person will deteriorate with time, not improve.
The Board is therefore left in the position of having a medical assessment at the time of the signing of the EPA from Dr Brett Daniels that was inadequate and not undertaken for the purpose of ascertaining Mr HDH’s mental capacity to sign the EPA because it was not prepared after consideration of the relevant requirements of the Powers of Attorney Act but was prepared for a different purpose, namely to assist in determining whether Mr HDH could return to live in his home.
It may well have been Tasmanian Perpetual Trustees’ policy to require the provision of a medical certificate as to capacity for any person who is a patient in a hospital before they sign a document such as a will or a power of attorney, and such a policy is understandable. However, it is a policy that is rendered of very little use if no guidelines or insufficient guidelines are provided to the medical practitioner who is to provide the assessment, in the light of the quite specific requirements of section 30 of the Powers of Attorney Act 2000 in particular.
The Board is therefore required to make its decision on the basis of the medical reports as supplied, together with other peripheral evidence to ascertain the issue of Mr HDH’s capacity at the time he signed the EPA.
It is the view of the Board that under the Tasmanian Powers of Attorney Act 2000 one can begin with the assumption that an adult person has the required level of capacity unless and until it is shown that that capacity was lacking at the requisite time. Mild and moderate dementia with short-term memory loss does not of itself override the presumption of capacity. However, it should raise alarm bells about the need to enquire into the issue of capacity by those involved in preparing an EPA and having it executed. It is not the function of a witness to make a professional judgment of the capacity of the donor. If that is in issue, other evidence should be obtained from appropriate experts. The relevant time that the donor must be shown to have the necessary mental capacity is at the date of signing the EPA.
In general terms, if there is a presumption of capacity and there is not sufficient evidence to show the alternative i.e. no capacity, then the document must be found to be valid. Alternatively, if there is found to be a lack of capacity then the document will be void. At common law if this capacity is not present, the EPA will be void. Gibbons v Wright (1954) 91 CLR 423 at 444-445.
The decision as to whether the Donor had capacity will be made on the balance of probabilities not to the standard of beyond reasonable doubt. The evidence must be examined carefully and a view taken on the whole of the evidence. The decision must be whether, on the whole of the evidence, and despite any doubts, the donor had the mental capacity to sign the EPA.
The Board accepts that all the evidence heard, from Ms Lamprey, Dr Daniels, Mr Fourez, Mr CE and Ms CC, was given honestly and to the best of their abilities. In relation to the evidence of Ms Browning the Board formed the view that Ms Browning tailored her evidence to put her own role in these events in the best light. She was overly adamant in her conclusions and came across as being very defensive.
The issue for the Board is whether the evidence available goes far enough and provides sufficient information to determine the issue of capacity. The evidence of Dr Daniels was objective and independent. He had had an opportunity to see Mr HDH over a period of some 12 days by the time he wrote his letter to Tasmanian Trustees Ltd about Mr HDH’s capacity. However, he had not been briefed by Tasmanian Trustees Ltd either directly, or through Mr MH, about the factors relevant to capacity set out in Section 30(2) and (3). He based his decision only on the Mini Mental Test and his observations of Mr HDH. Both he and Mr Fourez agreed that the Mini Mental Test was not an adequate tool to assess whether a person adequately understood all the matters set out in those subsections.
Mr Fourez had had only one meeting with Mr HDH, some 27 days after the signing of the EPA. However, he did conduct a fuller assessment of Mr HDH and had access to Mr HDH’s medical records, including the Mini Mental Test. But again, his assessment was not directed to the factors set out in subsection 2 of section 30. His assessment was predominantly to assess Mr HDH’s ability to return to live in his own home. In carrying out that assessment, however, Mr Fourez was able to acquire information that was of assistance to the Board in relation to Mr HDH’s capacity at that later date.
Both Mr CE and Ms CC had had the opportunity to observe Mr HDH over a number of years. Although they are not medically qualified to provide an opinion of Mr HDH’s capacity, their observations can provide the Board with a sense of the broader picture regarding Mr HDH.
It was submitted by Mr Zeeman that subsection (3) of section 30 of the Powers of Attorney Act 2000 sets out the general nature of the understanding that the donor must have in order for his or her act in reacting the power to be effective. He further submitted that the Board should place reliance on Ms Browning’s evidence that Mr HDH gave clear instructions on 10th December 2003, that she explained the matters in subsection (3) of section 30 at that time, that Mr HDH recognized her when she first visited him at the RHH in relation to the EPA and remembered the December meeting, and that it was Mr HDH who told Ms Browning at that meeting at the hospital that Mr MH was to be his attorney. In addition, he submitted that Ms Browning’s evidence that Mr HDH read the EPA that she took on the second visit to the hospital, clarified some terms in it, and appeared to understand it should be accepted by the Board as confirming Mr HDH’s capacity to execute the EPA.
Mr Williams on the other hand submitted that for the EPA to be valid the Board has to be satisfied that Mr HDH understood the nature and effect of an enduring power of attorney and that he understood each and every matter specified in subsection (3) of the Act. His submission was that this subsection is mandatory and the EPA is valid “only if” each of the matters in that subsection are understood. Further he submitted that Mr HDH, in understanding these concepts had to have the ability to understand the facts applicable to his own situation and he submitted that Mr HDH had to be able to retain and apply all relevant factual information so as to be able to appreciate the consequences of each of the subsection (3) factors when applied to his own situation. His view was that Mr HDH had been shown not to have that capacity.
Giving due consideration to all the evidence before the Board, the Board concludes that, starting from the presumption of capacity, there is insufficient evidence to establish that Mr HDH did not have capacity to execute to the EPA. The medical report as to capacity cannot be taken at face-value, and having heard evidence from Dr Daniels as to his knowledge of Mr HDH’s medical condition/situation and the purpose for which he conducted the Mini Mental Examination, it is clear that he did not provide that report with any knowledge of the matters which Mr HDH needed to understand to comply with subsection (3) of Section 30 of the Act.
The report and evidence of Mr Fourez was of assistance to the Board, but again does not provide sufficient clear evidence of Mr HDH’s capacity on 20th January 2004; it provides definite information on his capacity at a later date, and, albeit professional speculation/conjecture, on his capacity as at 20th January.
There is anecdotal evidence, as opposed to medical opinion, from Ms CC and Mr CE about Mr HDH’s declining health, but that is not of assistance to the Board in determining whether, on the relevant date, Mr HDH had the legal capacity to execute the EPA.
Having determined that there is insufficient evidence to establish that Mr HDH did not have capacity to execute the EPA on 20th January 2004, the Board must next consider whether the EPA was created in accordance with the requirements of section 30 of the Act.
Subsection (2)(a) of section 30 reads as follows:
“(2)A deed or instrument is not effective to create an enduring power of attorney unless –
the donor understands the nature and effect of the deed or instrument; and
…”and subsection 3 begins with the words:
“(3) For the purposes of subsection 2(a) a donor is taken to understand the nature and effect of a deed or instrument only if he or she understands the following matters:
(a)…”
The requirements in subsections (2) and (3) are therefore mandatory, and the Board is of the view that they are more than merely general in nature.
Enduring Powers of Attorney have a certification included at their conclusion where the two attesting witnesses sign to witness the document in the presence of the donor and of the other witness. This certification requires the witnesses to certify that the donor and the attorney appeared to understand the effect of the power of attorney and the form of acceptance. This certification is, in the Board’s opinion, of a more general nature requiring the witness to certify that the donor “appears” to understand and does not require the witnesses to ensure that the donor has complied with the more stringent requirements of subsections (2) and (3) of section 30.
In relation to whether Mr HDH could be regarded as having complied with the requirements of subsections (2) and (3) of section 30, the evidence of Ms Browning is relevant. She gave evidence that at their first meeting in December 2003 she gave Mr HDH general information with regard to Powers of Attorney, and gave him a pamphlet to take home, together with her business card. The Board did not have access to the pamphlet to see what information was contained therein.
Ms Browning said that she advised Mr HDH of the role of the attorney and of the substitute attorney because Mr MH, who was to the Attorney, resided overseas and therefore Tasmanian Perpetual Trustees Ltd may have a role. She said Mr HDH asked questions about commission that would be paid if Tasmanian Perpetual Trustees Ltd acted as substitute attorney.
Ms Browning was recalled on the morning of the second day of the hearing and was asked if she recalled the precise information she gave Mr HDH at their first meeting in December 2003 by reference to paragraphs (a) to (e) of subsection (2) of section 30 of the Act. In relation to paragraph (a) she said that she did not recall if she told Mr HDH about the contents of that paragraph. As to paragraph (b) she said she had advised Mr HDH of the registration process and that the EPA would come into effect once it was registered. She also confirmed that she had advised Mr HDH of the matters in paragraphs (c), (d), and (e).
On the occasions of her first and second meetings with Mr HDH when he was in hospital, she said she did not go over the exact same things with Mr HDH because she had no reason to doubt his capacity. He had recognised her from their first meeting in the previous December, knew she was the “lady with the power of attorney” and recalled details of their previous conversation.
The Board does not doubt that Mr HDH had sufficient capacity in December 2003 at the time of his first meeting with Ms Browning to understand what he was told about powers of attorney. The issue for the Board is that there is no clear evidence that Mr HDH was told about the matters in paragraph (a) of Section 30(3). Ms Browning does not recall if she did so, and Mr CE does not recall any of the detail of the information provided by Ms Browning to Mr HDH.
The Board must therefore conclude that the EPA executed on the 20th January 2004 is not a valid document pursuant to section 33(2)(e)(ii), because the Board cannot be satisfied that Mr HDH understood the nature and effect of the document. There is no evidence/insufficient evidence that the information in paragraph (a) of section 30(3) was provided to Mr HDH before he signed the EPA. That subsection contains a mandatory level of knowledge in the donor.
Conclusion:
As a consequence of these findings, and to ensure ongoing stability and certainty in the management of Mr HDH’s significant estate the Board orders that Tasmanian Perpetual Trustees Ltd be appointed as Administrator for the estate of Mr HDH for a period of three years. That company has had the account on behalf of the Attorney, Mr MH since Mr HDH became unwell in January 2004, and Mr HDH has been a client of the company prior to making the Power of Attorney. The Board notes that it has made findings (detailed below) in relation to the operation of the Power of Attorney by Mr MH and whether there has been any inappropriate expenditure by the Attorney in the operation of the Power. In summary the conclusion of the Board is that Mr MH has exercised his powers in the best interests of Mr HDH and there has been no inappropriate expenditure in so doing. The Board therefore notes that its decision to appoint Tasmanian Perpetual Trustees Ltd as the Administrator is made taking into account practical issues including the fact that Mr MH resides outside Australia, that he has been suffering from ill health which has prevented his traveling to Australia for some time, and that the decision is in no way a criticism of Mr MH or his operation of the EPA.
Issues Raised Regarding the Operation of the Power of Attorney:
The other issues for determination by the board are:
(i) Whether the needs of Mr HDH are being met by his Attorney?
(ii) Whether there has been any inappropriate expenditure by the Attorney in the operation of the EPA?
The Law:
Section 32 of the Powers of Attorney Act 2000 states that the Attorney:
(a) “Is taken to be a trustee of the property and affairs of the donor according to the tenor of the power.
and
(b) Must exercise his or her powers as Attorney to protect the interests of the donor - and, if he or she fails to do so, is liable to compensate the donor for any loss occasioned by the failure.”
The Evidence:
The Board heard evidence in respect of the first issue (paragraph 65(i) above) from the following:
…
…
Ms CC whose evidence was as follows:
· That she perceived lack of attention to Mr HDH in areas such as haircuts and podiatry but did not attribute her concern to financial depravation.
· A number of her concerns have not been raised with the Aged Care Facility.
· She has been reimbursed for some purchases made unilaterally by her for Mr HDH.
Summary – Whether the Needs of Mr HDH are Being Met by the Attorney?:
· There is on the evidence a proper relationship of agency between the Attorney and TPT together with an open communicative relationship between the Aged Care Facility, the Attorney and TPT.
· The evidence strongly suggests that Mr HDH’s needs are limited by his condition and that he is a “high care” resident of the nursing home with those needs properly and adequately provided for.
· That Ms CC concerns, whilst clearly subjectively honest, do not specifically relate to financial deprivation.
· The Board is therefore of the view that Mr HDH’s needs are adequately, appropriately and professionally met and monitored.
In respect the second issue (paragraph 65(ii) above) for determination being whether there has been any inappropriate expenditure by the Attorney in the operation of Enduring Power of Attorney …
…
Submissions for Counsel of the Attorney can be summarised as follows:…………
Summary – Whether there has been any Inappropriate Expenditure by the Attorney in the Operation of the EPA?
The evidence suggests:
§ Prudent conduct of the estate by the Attorney.
§ An increase in the net value of the estate.
§ Prudent and business-like reorganisation of the donor’s financial matters and investments generally.
§ Historically a close family and beneficial relationship between the donor and the Attorney (and the Attorney’s family).
§ Expenditure consistent with the historical lifestyle of the donor.
§ Expenditure generally in the donor’s best interests.
§ The Board is therefore of the view that there has not been any inappropriate expenditure by the Attorney in the operation of the Enduring Power of Attorney.
Dated the 20th day of December 2007
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