HSH

CITATION:	HSH [2017] QCAT 341
PARTIES:	HSH
APPLICATION NUMBER:	GAA4816-17; GAA100816-17; GAA10050-17; GAA10051-17
MATTER TYPE:	Guardianship and administration matters for adults
HEARING DATE:	On the papers
HEARD AT:	Southport
DECISION OF:	Member McDonald
DELIVERED ON:	12 October 2017
DELIVERED AT:	Southport
ORDERS MADE:	1. The administration order made by the Tribunal on 19 January 1017 is changed by removing KG and RH as administrators and appointing The Public Trustee of Queensland as administrator for HSH, for all financial matters. 2. This appointment remains current until further order of the Tribunal. 3. The Tribunal dispenses with the requirement for the administrator to provide a financial management plan. 4. The Tribunal directs the administrator to provide accounts to the Tribunal when requested. 5. The Application for Directions is dismissed.
CATCHWORDS:	GUARDIANS, COMMITTEES, ADMINISTRATORS, RECEIVERS AND MANAGERS – APPOINTMENT – where allegations that jointly appointed administrators were not acting jointly – where dispute in relation to adult’s interest in her husband’s estate and proprietary rights in a motor vehicle – where co-administrator seeks removal of jointly appointed administrator – where allegations of conflict of interest in which co-administrator’s husband is executor, residual beneficiary and trustee of adult’s testamentary trust of adult’s husband’s estate – where conflict of interest denied by co-administrator – whether a change of administrator should be made Guardianship and Administration Act 2000 (Qld), s 12, s 31, s 35, s 39, s 118, Schedule 1, Schedule 4

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act), following an oral hearing on 14 August 2017.

REASONS FOR DECISION

HSH is a 96-year-old lady living with dementia in a nursing home. The medical evidence previously considered by the Tribunal indicates that in 2012 she was diagnosed with a mild to moderate dementia condition.[2]
[2]Letter from Dr Philip Morris Consultant psychiatrist to Dr Cuffe (General Practitioner) 18 October 2012.
HSH was married to GH, her second husband. GH was appointed as HSH’s administrator by the Tribunal on 1 March 2012. Sadly, GH died on

16 October 2016, necessitating the appointment of another administrator. At a hearing on 19 January 2017, the Tribunal appointed RH and KG as joint administrators for HSH. RH is HSH’s step son, (not related to GH). KG describes herself as: “step daughter in law (maybe once removed)” [3], although it is noted that there are references by third parties to her being HSH’s daughter.[4] KG clarified to the Tribunal that she has not held herself out to be HSH’s daughter, but some people have assumed this to be the case.
[3]Submissions of KG dated 22 September 2017.
[4]Letter to Natalie Mulcahy from Dr Jarrold, Robina Hospital Emergency Department, dated 7 June 2017.
KG is married to RG, the executor of GH’s will. RG is also the trustee of the testamentary trust in favour of HSH, and a residual beneficiary of this will, in the event of HSH’s death.
On 26 April 2017, RH brought an Application for Directions from the Tribunal. The Application for Directions suggested that his co-administrator, KG, had a conflict of interest as both co-administrator and the wife of the executor of GH’s will. He claimed that upon the death of GH, KG had failed to support his action to pursue HSH’s interest in the Holden Cruze which had been jointly owned by GH and HSH prior to his death. His application claimed that KG and her husband were benefitting from the use of this vehicle. RH’s submissions indicate that he had been in dispute with the executor of GH’s will in relation to the release of the vehicle and subsequently once the vehicle had been sold, a further dispute about the proceeds of the sale, which, at the point of application, he believed was a half share. He argued that KG had failed to take action in relation to recovering HSH’s interest in the vehicle, and had a conflict of interest in failing to act.
Accompanying his Application for Directions, RH provided copies of email correspondence of 18 May 2017 between he and RG (which were carbon copied to KG), which noted the vehicle had been jointly owned by GH and HSH and made reference to GH’s accounting financial reports to QCAT for the period of 18 December 2010 to 15 December 2013, examined by Vincent’s Chartered Accountants which noted joint purchase of the Holden Cruse valued at $15,421, and joint registration of the same.
He submitted that he has sought from the executor copies of insurance and registration papers, and requested the support of KG in this endeavour, but these requests had been ignored.
With the passage of time, once RH obtained the will, he became aware that HSH held rights to the full value of the vehicle under the terms of GH ’s will.[5] He argues that KG had not supported his attempts to confirm or gain access to her entitlement to the same.
[5]Submissions of RH, 14 August 2017, annexing Grant of Probate of Will of GH given under the seal of the Supreme Court of Queensland on 20 July 2017.
His supporting submissions stated that he has found it extremely difficult to work with KG and that he considered he had been obstructed in bill paying and access to accounts and not informed of KG’s absences overseas. He considered KG was not acting jointly under the appointment.
RH approached the Tribunal to resolve the impasse by removing KG from the administration appointment.
The matter went to oral hearing on 14 August 2017. At that hearing, SA, HSH’s niece, advised the Tribunal that she had in the days prior to the hearing filed an Application for Review of the Appointment of an Administrator proposing herself and RH be appointed. This application had not been received in time for the procedural requirements of s 118 of the Guardianship and Administration Act 2000 (Qld) (the Act) to have been met for this review application to have been listed for the oral hearing on that date. Section 118 requires that a notice of hearing in any application needs to be sent to the adult and active parties at least 7 days prior to the hearing of a matter, and if the adult has not received this the hearing will be void. The Tribunal adjourned the Application for Directions to be listed for further hearing with the review application and made direction for any other applications to be filed, and any supporting submissions to be sent to the other active parties. Due to scheduling constraints, the matter was listed for a hearing on the papers for 3 October 2017. Applications for the appointment of an administrator were proposed by RH, seeking the joint appointment of he and SA as administrators; from SA proposing the same; and from KG proposing her sole appointment, and suggesting that in the event her application was unsuccessful, the Public Trustee’s appointment as Administrator for HSH. RH also suggested in an email of 16 August 2017 to the Tribunal Registry that his wife LH also be appointed as co-administrator, however no formal application seeking this and no statutory declaration or any submission from LH as to her appropriateness for appointment were received.
KG provided submissions to the Tribunal in response to the Application for Directions which indicated that she saw no conflict of interest in her appointment, stating that she had no authority to make direction to the executor of GH ’s estate.[6] She stated that she did not accept that HSH had legal ownership of the vehicle.[7] She said that her husband, the executor, had offered to pay 50% of the proceeds of the sale of the vehicle to HSH, but this could not occur until the matter of whether GH’s will would be contested was finalised[8]. Further, that this offer was “subject to the will not being contested”.[9]
[6]Submissions of KG dated 25 May 2017, p 1.
[7]Ibid, p 1 and 2.
[8]Ibid, p 2.
[9]Ibid, p 3.
She indicated that she had used the vehicle prior to its sale to visit HSH in the nursing home and hospital, and take her on outings. She considered that she had looked after HSH’s investments diligently, pointing out that the value of HSH’s assets had increased under her active management.[10] KG stated in submissions of 22 September 2017 that the joint administration operated “very smoothly” but for face-to-face meetings with RH and the issues around the car, which she sought not to be involved in because she wanted to avoid any potential conflict of interest. She explained that she had accordingly referred RH on to deal with RG on these issues if he did not agree to accept the offer of 50%.[11]
[10]Ibid, p 4.
[11]Submissions of KG 22 dated September 2017.
She cites that she has no pecuniary interest in the matters affecting her administration of HSH’s affairs. She is critical of RH’s clerical skills and emphasises errors in his application which she suggest may undermine his ability to be administrator.[12]
[12]Ibid.
KG’s submissions outlined that her administration activity was separate from her husband’s role as Executor of GH ’s estate, and has tried hard not to “blur the lines”. She stated that she had redirected RH’s questions about HSH’s interest in GH’s estate to the executor. She believed that she had answered all questions about her role as co-administrator honestly and reasonably. She said she considered that HSH’s interests “were best served by co-operating with the executor instead of risking a court case over legal ownership of the said vehicle when the offer of 50% of the net proceeds of the sale of the said vehicle has already been volunteered by the executor subject to GH ’s will not being contested.”[13]
[13]Submissions of KG dated 25 May 2017.
KG summarises her position to the Application for Directions noting “this whole issue of the vehicles has nothing to do with me, other than my decision to accept the executors offer of 50% of the proceeds of the sale of the vehicle.”
KG’s comments through these submissions suggest she has not contemplated the positive obligation on the Administrator to protect the adult’s assets by acting diligently in accordance with s 35 of the Act. As noted at paragraph 5 above, KG was in receipt of an email from RH noting that GH had disclosed to QCAT the joint ownership of the Holden Cruze, registration and value of the jointly purchased vehicle on his accounts to the Tribunal in 2014, in annual accounts which were examined by Vincent’s Chartered accountants. This information very clearly suggests joint ownership should have been actively and jointly followed up by the co-administrators. Notably, searches of the Motor Vehicle Registry confirm this joint registration.[14] KG rejected the concept of HSH’s interest and failed to protect her interests in the vehicle.
[14]Affidavit of RH, sworn 21 September 2017 at SH1.
Notwithstanding the position that KG took in relation to HSH’s ownership of the vehicle during GH ’s lifetime, KG has failed to protect HSH’s interests in the vehicle under the will.
RH suggests that information about HSH’s interest in the will was obscured from him.[15] He claims to have made several requests for information from the executor[16] and sought KG’s consent in this endeavour. He was not provided with a copy of the will by the executor despite these requests, and instead approached the Supreme Court for a copy of the Grant of Probate. In his written submissions of the 26 July 2017 RH stated that he had “been advised by the executor of GH’s’ will (RG) that GH left HSH absolutely nothing whatsoever and previously declaring in writing on more than one occasion that he would leave HSH his waterfront house and estate.”[17]
[15]Submission of RH dated 14 August 2017
[16]Ibid.
[17]Submissions of RH dated 26 July 2017, p 2.
RH informed the Tribunal that “RG constantly told SA and myself that GH had left HSH nothing in his will.[18]
[18]Submissions of RH dated 14 August 2017.
When RH received a copy of the Grant of Probate of the Will of GH in August 2017 through the Court, he became aware that HSH was a beneficiary of GH’s will being donated all GH’s personal property, which includes motor vehicles, and the residue of the estate funds are to be held on trust to applied as HSH needs where “my Trustee is of the opinion that HSH’s personal assets and income are insufficient to meet HSH’s reasonable needs…” The Will further goes on to nominate a number of beneficiaries in the event of HSH’s death, including RG. Personal property was clearly identified at Clause 8 (2) (ii) to include any motor vehicles.[19] This arrangement gave the executor discretion to distribute funds during HSH’s lifetime based upon her need, and also stands to gain a pecuniary benefit if funds are not so distributed. KG is married to the person with this sole discretion.
[19]Probate of Will of GH given under the seal of the Supreme Court of Queensland on 20 July 2017.
At the hearing of 14 August 2017, RG stated that KG had not seen a copy of the will. While this is RG and KG’s position, the Tribunal is not satisfied that this response accords with KG’s obligations to act diligently, particularly in circumstances where she has been appointed jointly to voice those reasonable needs to the executor, where HSH no longer has the capacity to do this for herself.
It is difficult to accept that the executor of the will did not inform his wife that the vehicle had been gifted to HSH in her husband’s estate when they acted to sell the vehicle. The invoices dated 12 January 2017 and 7 April 2017 from Von Bibra for repairs in preparation for sale annexed to KG’s submissions[20] are made out to KG and RG. Decisions were clearly being made about the vehicle jointly by RG and KG. RG as executor had clear information that the vehicle was gifted to HSH under GH’s will, and both were privy to information that the vehicle had been jointly purchased and registered by Mr and HSH. It is therefore apparent that even if KG was ignorant of HSH’s entitlements to her husband’s estate, she took no steps to satisfy herself of HSH’s interests, by supporting RH’s requests to ascertain HSH’s interest under the will, and in doing so failed in her duty under s 35 of the Act to act diligently to protect HSH’s interest. KG contends that she referred RH’s inquiries on to the executor to avoid blurring the lines and becoming involved in any potential conflict of interest. The Tribunal considers this conflict of interest existed in fact and could not have been avoided, but for termination of KG’s appointment.
[20]Submissions of KG dated 25 May 2017.
The Tribunal is particularly concerned by KG’s statement, referred to at paragraph 13 of these reasons, that the offer to settle for half of the proceeds of the vehicle’s sale was conditional on GH’s estate not being contested. This suggests that KG’s priority in GH ’s estate was not ensuring HSH received her entitlements at law.
It further concerns the Tribunal that given that KG’s husband, RG, is a trustee of a testamentary trust and beneficiary of the will in the event of HSH’s death, and has discretion around whether estate funds are distributed to HSH, a very clear conflict of interest arises from KG’s appointment as administrator. KG’s household has potential pecuniary gain from the failure of distribution of funds and personal property from the estate of GH. KG is not in a position to act without a conflict of interest on behalf of HSH. She should be removed from the appointment.
It is also apparent that conflict exits between RH and KG although this is expressly denied by KG who claims RH is in conflict with her not she with him.[21] Irrespective of this, conflict exists and the joint administrators have not been able to comply with s 39 of the Act requiring jointly appointed administrators to exercise power unanimously on the issue of the vehicle or protecting HSH’s legal interests in her husband’s estate.
[21]Submissions of KG 22 dated September 2017.
In the circumstances, an alternative Administrator should be appointed. Applications before the Tribunal propose the joint appointment of RH and SA. RH has in the Tribunal’s view acted appropriately to protect HSH’s interest throughout these protracted proceedings. However, the Tribunal accepts the administrator will need to deal with the executor with respect to HSH’s interests under the will and to date these dealings have demonstrated intractable conflict. Resolution of very simple issues have not been able to progress (such as the vehicle and the provision of information) and RH’s evidence suggests he has received misleading information and obstructions to requests for information. That also concerns the Tribunal. It is unlikely these patterns of difficulties dealing with the executor of GH’s will would change with the removal of only KG from the administration appointment.
RH asserts that he and SA are likely to provide a conflict-free administration, and there are not complex issues to deal with. KG is critical of the accuracy of the financial material that RH has placed before the Tribunal in his application, suggesting it significantly understates HSH’s accurate position. This does concern the Tribunal, but it is noted that there has been some communication breakdown about this. KG asserts that RH has been provided with bank statements and should have an accurate description of the assets. He has not filed a financial management plan, which would have assisted the Tribunal to consider his proposals for managing HSH’s affairs. She is further critical of RH’s clerical skills in her submissions to the Tribunal.[22] The Tribunal has placed little weight upon this concern.
[22]Submissions of KG dated 22 September 2017.
SA’s application is in substance seeking the same as that lodged by RH. I note KG’s submissions that SA did not receive a copy of her application. Procedural fairness considerations apply where the applicant has failed to comply with a direction of the Tribunal. However, SA’s application was filed prior to the direction of 14 August 2017 and all parties had a right to inspect all documents on the file.
The Tribunal has concerns about the appropriateness of appointment of the proposed appointees given a lengthy history of litigious matters evident in the material put before the Tribunal. Further, the record of the proceeding for the hearing of the 19 October 2017 refers to the dispute between RG / KG and RH / SA, referring to a particular lack of trust between SA and KG and RG. RG’s communications to the Tribunal indicate that there is problematic communication between them. The Tribunal is not satisfied that the impasse on this issue would not be a recurring aspect of the administration if RH and SA undertook the role. The Administrator is HSH’s voice with respect to her legal rights to her husband’s estates and will need to be able to communicate her needs and interests to the executor of her husband’s estate and other relevant stakeholders. The cloud of longstanding conflict between RG and RH / SA is a significant barrier to effective administration in the proposed arrangements. The Tribunal accepts KG’s submission that the Public Trustee is the more appropriate administrator. It will bring independence beyond the entrenched hostilities of these parties who all state that they are acting in HSH’s best interest.
The Tribunal has considered s 31 of the Act in relation to the review of the administration appointment:
31 Appointment review process
(1)     The tribunal may conduct a review of an appointment of a guardian or administrator (an “appointee”) for an adult in the way it considers appropriate.
(2)     At the end of the review, the tribunal must revoke its order making the appointment unless it is satisfied it would make an appointment if a new application for an appointment were to be made.
(3)     If the tribunal is satisfied there are appropriate grounds for an appointment to continue, it may either—
(a) continue its order making the appointment; or  
(b) change its order making the appointment, including, for example, by—
(i) changing the terms of the appointment; or  
(ii) removing an appointee; or  
(iii) making a new appointment.  
(4)     However, the tribunal may make an order removing an appointee only if the tribunal considers—
(a) the appointee is no longer competent; or  
(b) another person is more appropriate for appointment…

Before it makes an appointment, the Tribunal must be satisfied that the provisions of section 12 of the Act are met. Specifically, the Tribunal must be satisfied that HSH has impaired capacity for financial matters and there is a continuing need for decisions to be made. Consideration of the elements of these provisions indicates that HSH continues to experience the progressive symptoms of dementia diagnosed in 2012, which affects her ability to make decisions freely and voluntarily and to understand the nature and consequences of decisions around her financial affairs.
Capacity[23]is outlined at Schedule 4 of the Act.[24] There has been no improvement in HSH’s decision -making capacity, and the presumption of capacity continues to be rebutted,
[23]The Act, Schedule 1, General principle 1.
[24]““capacity”, for a person for a matter, means the person is capable of—
(a) understanding the nature and effect of decisions about the matter; and  
(b) freely and voluntarily making decisions about the matter; and  
(c) communicating the decisions in some way.”  
HSH’s affairs are complex including decisions around the ongoing management and investment of her estate, her income and expenses and the legal matters around her interests in her husband’s estate. There continues to be a need for financial decisions to be made and, without an appointment, her interests will not be protected. The Tribunal has considered that the Public Trustee is independent of the conflict that has plagued the parties and will be in a better position than the alternative appointees to constructively deal with the executor of GH’s will. The Public Trustee is in the opinion of the Tribunal the more appropriate appointee.
The outcome of the Applications for Review of the Appointment of an Administrator has dealt with the issues generating the Application for Directions, and it now falls to the Administrator to pursue HSH’s interests in the vehicle which may yet to be distributed to her. It is noted that KG states that the proceeds of the sale of the vehicle are in the executor’s solicitor’s trust account. They have been purportedly, although incorrectly, dealt with as assets of GH’s estate. The Tribunal does not have jurisdiction to make directions in relation to the funds of the estate. Whether the HSH’s original rights in the motor vehicle were through a joint tenancy or under her husband’s will, there is incontrovertible evidence which indicates that HSH has full entitlement proceeds of the vehicle’s sale. The Tribunal only has power to direct an Administrator/Guardian to act. It does not intend to interfere with the Administration of the Public Trustee who is required to act in accordance with their obligations under section 35 the Act. The Tribunal therefore dismisses the Application for Directions.
The Tribunal further notes that an Application for a Guardianship was not correctly brought in this matter. It appeared that a partial completion of the application may have been initiated by RH, but the incomplete application fails to make the requisite statutory declaration as to his appropriateness for appointment, and consequently did not become listed for hearing on the date for which the notice of hearing of the administration appointments were notified. If the intention to apply for guardianship exists, a fresh application for the Appointment of a Guardian should be filed.

[2017] QCAT 341

12 October 2017