HM
[2016] WASAT 121
•6 OCTOBER 2016
HM [2016] WASAT 121
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2016] WASAT 121 | |
| GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) | |||
| Case No: | GAA:2469/2016 | 12 SEPTEMBER 2016 | |
| Coram: | MR J MANSVELD (SENIOR MEMBER) | 6/10/16 | |
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Attorney ordered to produce records and accounts Hearing otherwise adjourned to deal with a further matter | ||
| B | |||
| PDF Version |
| Parties: | HM |
Catchwords: | Enduring power of attorney Agency Enduring power of attorney to continue in force notwithstanding donor's subsequent legal incapacity Donor has full legal capacity Application by capable donor for attorney to produce records Obligation of attorney to preserve records and accounts Duty of attorney to account for monies received Were monies received by the attorney a gift by the donor Attorney ordered to produce records and accounts |
Legislation: | Guardianship and Administration Act 1990 (WA), s 109(1)(a), s 109(1)(c), s 107, s 107(1)(a), s 107(1)(b) State Administrative Tribunal Act 2004 (WA), s 54 |
Case References: | KS [2008] WASAT 29 |
Summary | HM, an 80yearold woman, made an enduring power of attorney in February 2015 appointing her daughter as her attorney. At the same time she made another enduring power of attorney appointing her granddaughter as her attorney.,In May 2016, HM revoked the enduring power of attorney appointing the daughter.,HM made an application to the Tribunal under the Guardianship and Administration Act 1990 (WA) for revocation of the enduring power of attorney appointing the granddaughter as attorney.,She subsequently was granted leave to withdraw the application given she had legal capacity and intended to revoke the enduring power of attorney in her own right. ,HM also made an application seeking an order requiring her daughter to produce the records and accounts concerning particular transactions allegedly made by the daughter as HM's attorney.,After the enduring power of attorney was made, HM had made two payments to the daughter, the first for $130,000 and the second, at a later time, for $242,334.38.,The daughter said that the $130,000 was a gift from HM and that when she disbursed the $242,334.38 she was acting under the instructions of HM.,The daughter contended that she did not act as HM's attorney under the enduring power of attorney when she disbursed the $242,334.28. She was of the view that the enduring power of attorney could only be used in the event that HM lost her legal capacity.,The Tribunal found that the daughter had acted as HM's agent when disbursing the $242,334.38 and that the agency came into existence when the enduring power of attorney was made by HM in February 2015 and accepted by the daughter.,It was not correct for the daughter to contend that the enduring power of attorney could only be used if HM no longer had legal capacity. On its face, the enduring power of attorney came into operation on 17 February 2015.,The daughter was ordered to produce the records evidencing the disbursement of the $242,334.38.,The character of the $130,000 paid by HM to the daughter was in dispute.,At the Tribunal hearing, the daughter submitted a Statutory Declaration purportedly made by HM evidencing an alleged gift of $130,000 from HM to the daughter. The initial response of HM was to question the Statutory Declaration.,There was insufficient evidence before the Tribunal to decide whether the $130,000 was a gift or whether it was paid to the daughter as attorney under instructions from HM to dispose of the funds in a particular way.,The Tribunal therefore adjourned that matter to enable further evidence to be adduced from both HM and the daughter. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL ACT : GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) CITATION : HM [2016] WASAT 121 MEMBER : MR J MANSVELD (SENIOR MEMBER) HEARD : 12 SEPTEMBER 2016 DELIVERED : 6 OCTOBER 2016 FILE NO/S : GAA 2469 of 2016
- GAA 2470 of 2016
- Represented Person
Catchwords:
Enduring power of attorney - Agency - Enduring power of attorney to continue in force notwithstanding donor's subsequent legal incapacity - Donor has full legal capacity - Application by capable donor for attorney to produce records - Obligation of attorney to preserve records and accounts - Duty of attorney to account for monies received - Were monies received by the attorney a gift by the donor - Attorney ordered to produce records and accounts
Legislation:
Guardianship and Administration Act 1990 (WA), s 109(1)(a), s 109(1)(c), s 107, s 107(1)(a), s 107(1)(b)
State Administrative Tribunal Act 2004 (WA), s 54
Result:
Attorney ordered to produce records and accounts
Hearing otherwise adjourned to deal with a further matter
Summary of Tribunal's decision:
HM, an 80yearold woman, made an enduring power of attorney in February 2015 appointing her daughter as her attorney. At the same time she made another enduring power of attorney appointing her granddaughter as her attorney.
In May 2016, HM revoked the enduring power of attorney appointing the daughter.
HM made an application to the Tribunal under the Guardianship and Administration Act 1990 (WA) for revocation of the enduring power of attorney appointing the granddaughter as attorney.
She subsequently was granted leave to withdraw the application given she had legal capacity and intended to revoke the enduring power of attorney in her own right.
HM also made an application seeking an order requiring her daughter to produce the records and accounts concerning particular transactions allegedly made by the daughter as HM's attorney.
After the enduring power of attorney was made, HM had made two payments to the daughter, the first for $130,000 and the second, at a later time, for $242,334.38.
The daughter said that the $130,000 was a gift from HM and that when she disbursed the $242,334.38 she was acting under the instructions of HM.
The daughter contended that she did not act as HM's attorney under the enduring power of attorney when she disbursed the $242,334.28. She was of the view that the enduring power of attorney could only be used in the event that HM lost her legal capacity.
The Tribunal found that the daughter had acted as HM's agent when disbursing the $242,334.38 and that the agency came into existence when the enduring power of attorney was made by HM in February 2015 and accepted by the daughter.
It was not correct for the daughter to contend that the enduring power of attorney could only be used if HM no longer had legal capacity. On its face, the enduring power of attorney came into operation on 17 February 2015.
The daughter was ordered to produce the records evidencing the disbursement of the $242,334.38.
The character of the $130,000 paid by HM to the daughter was in dispute.
At the Tribunal hearing, the daughter submitted a Statutory Declaration purportedly made by HM evidencing an alleged gift of $130,000 from HM to the daughter. The initial response of HM was to question the Statutory Declaration.
There was insufficient evidence before the Tribunal to decide whether the $130,000 was a gift or whether it was paid to the daughter as attorney under instructions from HM to dispose of the funds in a particular way.
The Tribunal therefore adjourned that matter to enable further evidence to be adduced from both HM and the daughter.
Category: B
Representation:
Counsel:
Represented Person : Ms F Ottolini
Solicitors:
Represented Person : Northern Suburbs Community
Case(s) referred to in decision(s):
KS [2008] WASAT 29
Introduction
1 HM is an 80yearold woman who lives in a retirement village. She has legal capacity to make her own decisions.
2 On 17 February 2015, HM executed two enduring powers of attorney appointing her daughter, DG, as her attorney and her granddaughter, BG, as attorney in separate instruments (EPAs). HM declared that both EPAs would continue in force, notwithstanding her subsequent legal incapacity.
3 Also, on 17 February 2015, HG appointed DG as her guardian and BG as substitute guardian under an enduring power of guardianship.
4 On 20 May 2016, HM revoked the EPA which had appointed DG as her attorney and the enduring power of guardianship.
5 In June 2016, HM made two applications to the Tribunal pursuant to the Guardianship and Administration Act 1990 (WA) (GA Act).
6 The first application was made under s 109(1)(a) of the GA Act seeking an order requiring DG, as attorney under the EPA, to file with the Tribunal and serve on HM a copy of the records and accounts kept by DG concerning particular transactions allegedly made by DG as attorney.
7 The second application was made under s 109(1)(c) of the GA Act seeking revocation of the EPA appointing BG as attorney.
8 HM sought further orders directing that mediation take place to try and have HM and DG resolve their differences and an order that DG be penalised pursuant to s 107 of the GA Act in the event that she had not acted with reasonable diligence to protect HM's interests.
9 The hearing took place on 12 September 2016 and was attended by HM, DG, BG and others. HM was represented by counsel.
10 In the course of the hearing, HM sought leave to withdraw the application made under s 109(1)(c) of the GA Act on the basis that she intended to revoke the EPA made on 17 February 2015 appointing BG as her attorney. Leave was granted to withdraw the application.
Mediation
11 Mediation was considered at the hearing. I decided that the applications should not be referred to mediation pursuant to s 54 of the State Administrative Tribunal Act 2004 and that the hearing should proceed.
The application under s 109(1)(a) of the GA Act
12 HM filed with the Tribunal a 'Statement of Facts' with supporting documents (statement). She also gave oral evidence at the hearing.
13 There appear to be some inconsistencies between aspects of HM's statement and oral evidence. Counsel for HM said during the hearing that when the events the subject of the evidence occurred, HM was under significant stress, having not long lost her husband.
14 For the sake of clarity, the evidence of HM is set out separately according to her statement and oral evidence.
Statement
15 Relevantly, the case put by HM in her statement is as follows.
16 She and her husband lived in a property owned by them (family property).
17 The husband died in September 2014.
18 Shortly after the husband's death DG moved in with HM at the family property.
19 HM says she had discussions with DG about selling the family property and moving closer to DG and BG. HM states that DG promised to assist her to purchase a two bedroom unit (first unit) but only if she initially lived in a retirement village and, if subsequently, she found it not to be to her liking.
20 On that basis, HM says that she sold the family property for $400,000 and purchased a longterm lease of a one bedroom unit in a retirement village (retirement village unit).
21 HM states that $130,000 from the proceeds of the sale of the family home was paid to DG as her initial contribution towards the purchase of the first unit. She says she recalls that DG undertook to purchase the first unit on her behalf, covering the balance of the purchase price until HM could afford to repay her.
22 The settlement statement for the sale of the family property, dated 14 July 2015, shows that the net proceeds of sale were distributed as $130,000 to DG; $239,000 for the retirement village unit and $15,524.99 to HM.
23 HM says that she subsequently found the retirement village unit far too small for her needs and decided to leave. A draft settlement statement dated 24 November 2015 shows that the balance payable to HM from the surrender of the lease of the retirement village unit was $242,334.48.
24 Upon settlement of the retirement village unit, HM states that she authorised the $242,334.48 to be paid directly to DG's bank account as her final contribution towards the purchase of the first unit. She says that DG orally accepted the funds on that basis.
25 HM states that unbeknownst to her the first unit had been purchased in DG's name only. HM says she asked DG if she could move in with her but this request was refused.
26 HM states that DG refused to provide her with any details of the purchase of the first unit.
27 HM says that she was then confronted with the urgent need to find rental accommodation which she did in another retirement village (rental unit). The rent costs $60 per day and HM says it is not suitable for her. HM states that as a consequence she has needed to apply for rental assistance and to be placed on the waitlist for public housing.
28 HM states that the funds she paid to DG, which in total amounted to $372,334.48, affected her pension such that it has been reduced by about $200 per fortnight. She has included with her statement a copy of a letter to her from a representative of the Returned Services League dated 18 February 2016 which refers to the 'extra $130,000 you loaned your daughter' which is said to be subject to deeming provisions because 'as far as [Department of Veterans' Affairs] is concerned you still have the money as part of your assets.'
29 HM states that subsequent to moving into the rental unit she had further discussions with DG about more permanent accommodation. HM says that DG promised to pay her $1,500 per month to assist with the rent and those payments would be deducted from the debt DG now owed HM. DG is said to have also promised that HM could move into the first unit after February 2016 or, alternatively, DG would purchase another two bedroom unit for her.
30 Payments of $1,500 were made by DG to HM on 29 December 2015, 1 February 2016, 29 February 2016, 21 March 2016 and a payment of $1,000 was made on 5 May 2016.
31 HM states that, in February 2016, she inspected a unit which she found to be suitable for her needs (second unit). She says that she then visited DG with a view to discussing whether DG would be prepared to purchase the second unit for her, as previously promised, and also to discuss the reduction in her pension.
32 HM says that DG refused to discuss these matters and that communication has since become very difficult.
Oral evidence
33 In her oral evidence, HM states that after the death of her husband and pending the sale of the family property, she made an offer on a property close to BG. However, because the family property was taking some time to sell, she did not go through with that purchase.
34 HM says she had received advice that she should contemplate moving closer to her family and she had initially been persuaded by DG, who had been living in the south west of the State, that they could purchase a property together and live in the property.
35 Later in her evidence HM says that when she sold the family property she made $130,000 available to DG to purchase the first unit and to pay debts that DG had accrued. She says that she did not expect her name to be on the title of the first unit. The $130,000 was to be used by DG as an entry into the property market. She expected that DG would borrow the balance of the purchase price of the first unit and would be able to do so because she was in employment.
36 HM states that she regarded the $130,000 as a loan to DG whilst DG was rearranging her financial affairs and that together with the $242,334.48 paid later to DG, it would be a sufficient sum to enable DG to purchase another unit for her (HM).
37 HM says that in this way DG would have the first unit and she would have what would effectively be the second unit or equivalent.
38 HM characterises this as 'wealth creation' for the family and she expected the second unit to be purchased in about February 2016.
39 HM states that she now no longer wants DG to purchase the second unit but expects DG to repay all the funds paid to her totalling $372,334.48.
40 HM states that she received some financial advice from the Department of Veterans' Affairs. She says she was advised not to forward any funds to DG because it would reduce her pension by virtue of legislative deeming provisions. HM would be deemed to be earning interest on the funds made available to DG and HM would be required to disclose the transactions to which she says she did. HM says that she now regrets not taking the financial advice.
The evidence of DG
41 DG states then when HM was considering selling the family property after the death of her husband, she (DG) counselled HM to wait for two years before making a decision. HM did not take her advice and began looking for properties close to BG.
42 DG says that HM ultimately settled on the retirement village unit and moved there in about July 2015.
43 DG states that HM told her that she wanted her to move close to where HM was living and that she had surplus funds from the sale of the family property. DG states that HM gifted the $130,000 to her to help her purchase the first unit.
44 At the hearing DG submitted a copy of a Statutory Declaration purportedly made by HM evidencing the gift (Statutory Declaration).
45 The Statutory Declaration is dated 23 June 2015 and states:
That I give to my daughter [DG], the sum of $130,000. This gift is unconditional, non[-]repayable and non[-]refundable.
46 (HM states that she is not aware of the Statutory Declaration and that she did not make it. She says it is dated prior to the settlement statement for the family property (see above) and she did not know, on 23 June 2015, what would be the net proceeds of sale).
47 DG says that she moved into the first unit at a time HM was living in the retirement village unit. She believed everyone was happy with where they were living.
48 DG states that HM did not like living in the retirement village unit and that HM made enquiries about alternative accommodation, finally deciding on the rental unit.
49 DG states that HM told her she obtained financial advice about what to do with the net proceeds of the sale of the retirement village unit ($242,334.48) and that it should be used for 'wealth creation' for the family. DG says that HM left it to her and BG to decide how to invest those funds.
50 DG states that she used the funds in three ways. The first was for her living expenses because she was able to salary sacrifice her salary to her superannuation fund. The second way was in making loans, although she was unable to detail the loans and to whom they were made. The third way was to 'drip feed' HM $10,000 in two year periods to supplement HM's income. DG says that to date she has paid $7,500 to HM.
51 DG states that the $242,334.48 has been fully expended.
52 DG submits that she has acted on HM's instructions and has not used the EPA in the transactions to expend the $242,334.48.
53 DG contends that an EPA can only be used when HM no longer has legal capacity.
54 DG submits that it is the 'German way' to leave an estate to one person in the family (HM states that she had not intended to dispose of her estate in her lifetime but only upon her death).
Other evidence
55 Evidence was given concerning a watch that belonged to HM's late spouse, questioning who was holding the watch and who was allegedly entitled to it. The evidence was not taken to its conclusion because it was not relevant to the decision to be made under s 109(1)(a) of the GA Act.
Discussion
56 The fact that HM has legal capacity does not prevent her as a person with a proper interest in the matter, making an application under s 109(1)(a) of the GA Act. The Tribunal has jurisdiction to consider such an application (KS [2008] WASAT 29 at [57] and [58]).
57 The jurisdiction of the Tribunal under s 109(1)(a) of the GA Act is, however, a narrow one. It is limited to requiring an attorney under an enduring power of attorney to file with the Tribunal and serve on an applicant, a copy of all records and accounts kept by the attorney of dealings and transactions made by them in connection with the power.
58 One of the obligations of an attorney under an enduring power of attorney is to keep and preserve records and accounts of all dealings and transactions made under the power: s 107(1)(b) of the GA Act.
59 HM is seeking an order from the Tribunal that DG produce the records and documents evidencing the receipt and expending of the payments made to her, being the $130,000 and the $242,334.48.
60 DG contends that the $130,000 was a gift and that the $242,334.48 was expended upon the instruction of HM to create wealth for the family ('wealth creation').
61 The questions for determination are whether in disbursing the funds provided to her by HM, DG acted under the EPA and, if so, should she be required to produce the relevant records.
62 It is not necessary for the Tribunal to find on all the differences in the evidence of HM and DG, or for that matter in the obvious inconsistencies in the evidence of HM in her statement and oral evidence.
63 In her own evidence, DG says that she acted under the instructions of HM when disposing of the $242,334.48. According to DG, HM gave her (and perhaps BG) a wide discretion to interpret the notion of 'wealth creation'.
64 Unlike the $130,000, DG has not characterised the $242,334.48 as a gift from HM.
65 The fact that HM and DG appear to have had differing views of what 'wealth creation' entailed is not relevant to my decision.
66 Whatever 'wealth creation' ultimately meant, it is not in dispute that the $242,334.48 was received by DG and expended by her. In doing so, DG clearly acted as HM's agent when disbursing those funds. On the evidence before me, that agency could only have come into existence when the EPA was executed on 17 February 2015.
67 It is not correct for DG to contend that the EPA could only be used if HM no longer had legal capacity. On its face, the EPA, at clause 4, came into operation on 17 February 2015 when HM executed the instrument and DG accepted it.
68 I find therefore that DG acted as HM's attorney under the EPA when she received and disbursed the $ 242,334.48.
69 One of the duties of an agent is to account for the money received on behalf of the principal (S Fisher, Agency Law (Butterworths, 2000) at 116).
70 DG has not accounted to HM for the disposal of the $242,334.48.
71 In the circumstances of this case it is clear to me that DG should do so in the way the GA Act allows.
72 I order that DG file with the Tribunal and serve on HM a copy of the records and accounts kept by her as attorney under the EPA in respect of the disbursement of the $242,335.48 she received from HM.
73 DG will be given until 31 October 2016 to produce the records.
74 The character of the $130,000 paid by HM to DG is in dispute.
75 It is unfortunate that DG chose to furnish the Statutory Declaration purportedly made by HM only at the Tribunal hearing when she would have been aware in the correspondence she received from HM's solicitor that HM had a different view of the payment than she had.
76 As a consequence, HM was not given the opportunity to properly respond to the Statutory Declaration.
77 The initial response of HM was to question the Statutory Declaration.
78 There is insufficient evidence before me to enable me to decide whether the $130,000 was a gift or whether it was paid to DG, as attorney under instructions from HM, to dispose of the funds in a particular way.
79 I will therefore adjourn that matter to enable further evidence to be adduced from both HM and DG.
80 To assist the Tribunal, I will require HM and DG to file with the Tribunal and give to each other a statement setting out their view of the character of the payment of $130,000 and the evidence supporting their respective positions.
81 As for the order sought under s 107 of the GA Act (see Introduction), that section sets out the statutory obligations of an attorney. Relevantly, an attorney must exercise their powers with reasonable diligence to protect the interests of the donor and, if they fail to do so, are liable to the donor for any loss occasioned by the failure: s 107(1)(a) of the GA Act.
82 An attorney is liable to a penalty if they do not preserve accurate records and accounts of all dealings and transactions under the power: s 107(1)(b) of the GA Act.
83 The order sought by HM is not within the jurisdiction of the Tribunal.
Orders
Application under s 109(1)(a)
In relation to the enduring power of attorney dated 17 February 2015 made by [HM] ('the donor') appointing [DG] ('the donee') as her attorney the Tribunal declares and orders that:
1. By no later than 31 October 2016, [DG] is to file with Tribunal and serve on [HM] a copy of the records and accounts kept by [DG] of the dealings and transactions made by her in respect to the disbursement of the $242,334.48 received from [HM].
2. The matter is otherwise adjourned.
3. By no later than 31 October 2016, [HM] and [DG] are to file with Tribunal and give to each other a statement setting out their view of the character of the $130,000 paid by [HM] to [DG] in 2015 and the evidence supporting their respective positions.
4. The application under s 109(1)(a) of the Guardianship and Administration Act 1990 in respect to the payment of $130,000 is set for a final hearing on 28 November 2016 at 2pm.
Application under s 109(1)(c)
1. Pursuant to s 46(1) of the State Administrative Tribunal Act 2004, the applicant has leave to withdraw this proceeding, and the proceeding is hereby withdrawn.
I certify that this and the preceding [83] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR J MANSVELD, SENIOR MEMBER