In the matter of Clara
[2019] ACAT 46
•15 May 2019
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
IN THE MATTER OF CLARA (Guardianship) [2019] ACAT 46
GT 114/2018
Catchwords: GUARDIANSHIP – competing applications for appointment of guardian and manager for a parent – meaning of ‘capacity’ – consideration of capacity to make an enduring power of attorney – consideration of medical evidence regarding capacity to make an enduring power of attorney – consideration of certificate given by a legal practitioner under section 22 of the Powers of Attorney Act 2006 – consideration of “presumption of sanity” – comparison between testamentary capacity and capacity to make an enduring power of attorney – absence of Tribunal power to declare void an enduring power of attorney – power to revoke an enduring power of attorney on the grounds that the principal lacked capacity to make it – misuse of principal’s money to pay for legal costs of the proceeding – appointment of the Public Trustee and Guardian as guardian and manager – lack of Tribunal jurisdiction to make orders regarding an enduring power of attorney made under the law of a different jurisdiction – absence of Tribunal power to order payment of costs –power given to the Public Trustee and Guardian to recover principal’s money not spent for her benefit
Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 8, 9, 16, 26, 48, 57, 62
Evidence Act 2011 s 138
Guardianship and Management of Property Act 1991 ss 7, 8, 16, 62, 65, 66, 72C
Powers of Attorney Act 2006 ss 9, 17, 18, 22
Powers of Attorney Act 2003 (NSW) ss 19, 36
Cases cited: A v Guardianship and Management of Property Tribunal [1999] ACTSC 77
Antov v Bokan [2018] NSWSC 1474
Banks v Goodfellow (1870) LR 5 QB 549
CIC v ACT Planning and Land Authority [2013] ACTSC 96
Craig v The State of South Australia [1995] HCA 58
Dalle-Molle by his next friend Public Trustee v Manos [2004] SASC 102
Gibbons v Wright [1954] HCA 17
Guthrie v Spence [2009] NSWCA 369
Hobhouse v Macarthur-Onslow [2016] NSWSC 1831
Hunter and New England Area Health Service v A (by his Tutor T) [2009] NSWSC 761
ICW [2017] NSWCATGD 43
In the Matter of Jane [2019] ACAT 18
In the Matter of LQL [2018] ACAT 53
J v Guardianship and Administration Board and Anor [2019] TASSC 15
LG v Melbourne Health [2019] VSC 183
Macleod v Australian Securities and Investments Commission [2002] HCA 37
Makita v Sprowles [2001] NSWCA 305
McLaughlin v Daily Telegraph Newspaper Co Limited (No 2) [1904] HCA 51
McNamara v Nagel [2017] NSWSC 91
Parker v Comptroller-General of Customs [2009] HCA 7
PJB v Melbourne Health [2011] VSC 327
Ranclaud v Cabban [1988] ANZ ConvR 134
R v Jenkins; Ex parte Morrison [1949] VLR 277
Re HAA [2007] QGAAT 6
Re Refugee Review Tribunal: Ex parte Aala [2000] HCA 57
Re X [2016] NSWSC 275
Roche v Roche [2017] SASC 8
Ryan v Dalton [2017] NSWSC 1007
Scott v Scott [2012] NSWSC 1541
Smith v Smith [2017] NSWSC 408
Szozda v Szozda [2010] NSWSC 804
XYZ v State Trustees Ltd [2006] VSC 444
XYZ (Guardianship) [2007] VCAT 1196
List of
Texts/Papers cited: Bryson J, How to draft an affidavit (1985) Aust Bar Review, 250
Cullen, O'Neill, Evans, Coen and Lawlor, A review of screening tests for cognitive impairment, Journal of Neural Neurosurgical Psychiatry 2007; 78
Lindsay J, A Struggle for Perfection in an Imperfect World: Dignity of the individual, incapacity for self-management, rights, duties and conflicts of interest; Society of Trust and Estate Practitioners Western Australia: "STEP (WA)”, Incapacity Conference, Perth, 26 October 2018
Lonie and Purser, Assessing testamentary capacity from the medical perspective (2017) 44 Aust Bar Rev 297
Odgers Uniform Evidence Law (13th edition)
O’Neill and Peisah, Capacity and the Law, Sydney University
Press (September 2011)
Noone, Addenbrooke's Cognitive Examination –III, Occupational Medicine 2015; 65
Perkins and Lonie, Responding to client vulnerability - the reality of an ageing society of increased longevity, (2018) Creative Commons 4
Ward J (NSW Supreme Court), Legal capacity then and now: the potential repercussions of neuroscientific studies, STEP Conference 29 May 2014
Tribunal: Presidential Member G McCarthy
Member G Wright
Date of Orders: 15 May 2019
Date of Reasons for Decision: 15 May 2019
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) GT 114/2018
IN THE MATTER OF CLARA
TRIBUNAL: Presidential Member G McCarthy
Member G Wright
DATE: 15 May 2019
ORDER
The Tribunal orders that:
1. The whole of the enduring power of attorney executed by [Clara] on 28 June 2018 under the Powers of Attorney Act 2006 is revoked.
2. The application for appointment of [John] as Clara’s guardian and manager is dismissed.
3. The application for appointment of [Susan] as Clara’s guardian and manager is dismissed.
Appointment of Guardian
4. The Public Trustee and Guardian is appointed guardian for [Clara] (the protected person) with the following powers:
(a) to decide where and with whom the protected person is to live;
(b) to give any consent required for a medical procedure or other treatment (other than a prescribed medical procedure);
(c) to make other personal decisions needed to ensure the protected person's health and welfare needs are met and to protect her from unreasonable risks to her health and welfare;
(d) to bring legal proceedings for or in the name of the protected person;
(e) to apply to the NSW Civil and Administrative Tribunal for an order that any power of attorney or enduring power of attorney signed by [Clara] under the Powers of Attorney Act 2003 (NSW) be revoked;
(f) to do things necessary to give effect to decisions about the matters set out above, including (but not limited to):
(i) giving or receiving information; or
(ii) giving consent to investigations and assessments; or
(iii) participating in negotiations; or
(iv) signing documents.
5. The Tribunal will review this appointment on its own initiative before 14 May 2022 or on application.
6. The guardian must notify the Tribunal of any changes to the address of, or of any other significant change in circumstances of, itself or of the protected person.
Appointment of Manager
7. The Public Trustee and Guardian is appointed as manager to manage all of the property including finances of [Clara] (the protected person) with the following powers:
(a) all the powers the protected person would have been entitled to exercise if she were legally competent to exercise powers in relation to her property including her finances herself.
(b) a power to recover from [John] -
(i) an amount equal to all money paid from the protected person’s account to Charles Filgate Giles and Associates and/or Mr Underwood of counsel for legal services; and
(ii) an amount equal to all money paid from the protected person’s account for goods or services that were not for her sole benefit.
8. The Tribunal will review this appointment on its own initiative before 14 May 2022, or on application.
9. The manager must notify the Tribunal of any changes to the address of, or of any other significant change in the circumstances of, itself or of the protected person.
…………Signed……………………..
Presidential Member G McCarthy
For and on behalf of the Tribunal
REASONS FOR DECISION
Summary
1. This was a case about a person’s a capacity to make decisions: to make an enduring power of attorney, to decide how to spend their money, to decide where to live and who to see.
2. Assessment of capacity can be extremely difficult. In Ranclaud v Cabban, cited with approval in Scott v Scott, the NSW Supreme Court, per Young J, said:
… [In the present case] experienced solicitors on both sides have witnessed Powers of Attorney and Revocations of Powers. One might ask how a person who was incapable could make a Power of Attorney in the presence of such professional gentleman. I think the answer is relatively clear. A person only seeing a little bit of the picture and seeing [the Principal] for a short time … may well form the view that it is safe to allow [the Principal] to proceed. It is only when one gets a complete overview of the evidence that one can see just how incapable [the Principal] really is.
3. This case well illustrates the point. On 2 October 2018, the Tribunal heard competing applications for appointment of a guardian and manager for the subject person who we will refer to in our reasons for decision as Clara.
4. The need for a guardian or manager appeared, at first, to be unnecessary because Clara had executed an enduring power of attorney in favour of her son who we will refer to in our reasons as John. That was certainly his submission. However, as the evidence unfolded at hearing and over the following months, it became clear to the Tribunal that Clara had no capacity to understand the nature and effect of two enduring powers of attorney that she signed on 28 June 2018, or capacity to manage her money, or capacity to communicate decisions about how and when to see members of her family.
5. Clara, we have concluded, is an elderly person managing dementia as best she can, but caught in a “tug-of-war” between her two children while having no understanding of the issues being fought around her. Clara’s decision-making capacity, in our view, extends only to her wish to see her friends and her family, and to live comfortably in a manner that enables her to attend her church. Our reasons follow.
Background
6. Clara was born in 1930. She is now 89 years of age. She has a son and daughter, who we will refer to in our reasons as John and Susan.
7. From 1989 until July 2017, Clara lived in her own home on the south coast of New South Wales. She lived there with her husband until he died in November 2009. Clara now owns the property, unencumbered, although it has been rented since July 2017. Susan valued the property at $500,000. John valued it at $420,000.
8. On 9 July 2017, arising from her need for practical support, Clara came to live with Susan and her family who live in a small town in NSW near the ACT border.
9. On 17 July 2018, John came to Susan’s house to collect Clara in order for her to stay with him and his wife, Jane, at his home in Canberra. Susan recalls her mother stating that she was going to spend two weeks with John and Jane, but in any event Clara now lives with them on an indefinite basis. John and Susan disagree about the circumstances in which Clara came to live with John and Jane, but that is not an issue we needed to review.
The legal documents
10. Clara has executed many legal documents apparently authorising others to make decisions on her behalf, and she signed more legal documents during this proceeding.
11. On 10 December 2009, Clara executed a document entitled “prescribed power of attorney” under the Powers of Attorney Act 2003 (NSW) (the POA Act (NSW)) appointing Susan as her attorney to do on Clara’s behalf anything that Clara “may lawfully authorise an attorney to do.” (the 2009 NSW EPOA).
12. Under paragraph 2 of the 2009 NSW EPOA, Clara stated that she gave the power of attorney “with the intention that it will continue to be effective if I lack capacity through loss of mental capacity after its execution.” Clara signed the document in the presence of a solicitor, Mr Hawdon, who practised near Clara’s home on the South Coast, and had acted for Clara and her husband since at least 1996.
13. On 2 March 2010, Clara executed a document entitled “form of appointment of enduring guardian” by which she appointed (or purported to appoint) two people to be her “enduring guardians if because of a disability I am partially or totally incapable of managing my person.” These people also lived on the South Coast and appear to be (or have been) her friends. The guardians were authorised “to decide what healthcare” Clara was to receive and “to consent to the carrying out of medical or dental treatment”. As one of Jehovah’s Witnesses, Clara directed her guardians to refuse consent for a transfusion of blood or blood products under any circumstances (the 2010 NSW EPOA). A registrar at the local courthouse witnessed the execution of the instrument, and certified that each person “appeared to understand the effect of the instrument”.
14. On 28 June 2018, Clara executed a document entitled “Enduring power of attorney” under the Powers of Attorney Act 2006 (ACT) (the POA Act (ACT)) by which she appointed John and John’s daughter, Jill, as her attorneys to do on her behalf “anything that [she] can lawfully do in relation to the matters specified below” being property matters, personal care matters, health care matters and medical research matters (the 2018 ACT EPOA). Schedule 1 to the document contained a statement that Clara revoked “all of my previous enduring Powers of Attorney”.
15. Mr Giles of the ACT law practice, Charles Filgate Giles and Associates (CFG) and Ms Smith, a solicitor in the employ of CFG, both witnessed the 2018 ACT EPOA and certified that Clara signed the 2018 ACT EPOA voluntarily in their presence. Mr Giles and Ms Smith both certified that at the time Clara signed the document she “appeared to me to understand the nature and effect of making it as set out in Schedule 3 to this document”. Schedule 3 set out the factors listed in section 17 of the POA Act (ACT) that a person must understand in order to understand “the nature and effect of making a power of attorney”.
16. On the same day, 28 June 2018, John and Jill signed an acceptance of their appointments as Clara’s attorneys.
17. Also on 28 June 2018, Clara signed another document entitled “Enduring Power of Attorney-NSW” by which she appointed John and Jill to be her attorneys under the POA Act (NSW) to do on her behalf anything that she “may lawfully authorise an attorney to do.” (the 2018 NSW EPOA). The document also stated that Clara gave the power of attorney “with the intention that it will continue to be effective if I lack the capacity through loss of mental capacity after its execution.”
18. The 2018 NSW EPOA also states additional powers as follows:
I authorise my attorney to give reasonable gifts as provided by section 11(2) of the Powers of Attorney Act 2003.
I authorise my attorney to confer benefits on the attorney to meet their reasonable living and medical expenses as provided by section 12(2) of the Powers of Attorney Act 2003.
19. Mr Giles signed a certificate under section 19 of the POA Act (NSW) stating that he explained the effect of the power of attorney to Clara before she signed it; that she appeared to understand the effect of the power of attorney; that he is a prescribed witness; that he is not an attorney under this power of attorney; and that he witnessed Clara’s signature.
20. On the same day, 28 June 2018, John and Jill signed an acceptance of their appointments as attorneys under the POA Act (NSW).
21. On 4 July 2018, Clara signed a document entitled “revocation of power of attorney” stating “I hereby revoke the power of attorney dated 10/12/2009 and 22/08/2017 appointing [John] and [Jill]” (the 2018 NSW Revocation). Mr Giles witnessed the document.
22. The 2018 NSW Revocation has an error on its face in that the power of attorney executed on 10 December 2009 appointed Susan, not John and Jill, as Clara’s attorney, as mentioned in paragraph 11 above. The reference in the revocation document to yet another power of attorney dated 22 August 2017 was not explained and no such document was produced.
John’s application for his appointment as guardian and manager
23. By application filed with the Tribunal on 30 July 2018, John applied to be appointed as Clara’s guardian and manager. He did so, notwithstanding that a month before Clara had executed the 2018 NSW EPOA and the 2018 ACT EPOA appointing John and Jill as her attorneys. In his application, John noted that Clara had signed the 2018 ACT EPOA, and stated that he did not apply for it to be revoked. He attached a copy of the 2018 ACT EPOA. The application was later described as a “defensive application”.
24. In his application, John stated that he had made the application for him to be appointed as a “limited” guardian and as a “limited” manager for Clara. The application does not state what the limits on either appointment should be. John stated only that he made his application “to challenge [the] jurisdiction of a guardianship application made [in] NSW” and “to ensure that the wishes of my mother to live with me and my wife in the ACT are respected.” How an application to this Tribunal could assist with a jurisdictional challenge to an application brought in NSW was not explained.
25. In support of his application, John provided:
(a) reports dated 8 August, 26 September and 9 November 2018 from a consultant geriatrician, referred to in these reasons as Dr A;
(b) a report dated 9 August 2018 from a general practitioner, referred to in these reasons as Dr B;
(c) an undated statement from himself.
(d) a statement dated 26 September 2018 from John’s daughter, Jill;
(e) a letter dated 19 September 2018 from Ms Jones, a friend of Clara for over 30 years who lived near her when they both lived on the South Coast;
(f) a letter dated 20 September 2018 from Ms Brown, Clara’s friend and neighbour for 21 years when Clara lived on the South Coast; and
(g) a letter dated 7 August 2018 from Ms Davies, an advocate with the ACT Disability, Aged and Carer Advocacy Service Inc (ADACAS).
26. John, through his counsel, Mr Underwood, asked for the following declarations and orders:
(a) a declaration, pursuant to section 65 of the Guardianship and Management of Property Act 1991 (the GMP Act), that Clara had decision-making capacity when she executed the 2018 ACT EPOA and the 2018 NSW EPOA;
(b) an order that Susan’s application to be appointed as Clara’s guardian and manager be dismissed; and
(c) any other orders that the Tribunal considers appropriate.
Susan’s application for her appointment as guardian and manager
27. By application filed with the Tribunal on 23 August 2018, Susan applied to be appointed as guardian and manager for Clara, and for the two enduring powers of attorney executed on 28 June 2018 appointing John and Jill as Clara’s attorneys to be declared invalid or, in the alternative, revoked on the grounds that Clara did not have capacity to make them.
28. Susan’s solicitor, Mr Morton, from the law firm Farrar Gesini Dunn (FGD), asked the Tribunal to make the following declarations, findings, orders and/or directions:
(a) a declaration that Clara has impaired decision-making capacity pursuant to section 65 of the GMP Act;
(b) a finding that Clara’s impaired decision-making capacity has been present since 13 July 2017;
(c) a declaration under section 62(2)(e) of the GMP Act that the 2018 ACT EPOA and the 2018 NSW EPOA are void ab initio and have no effect;
(d) in the alternative, an order that the 2018 ACT EPOA and the 2018 NSW EPOA be revoked;
(e) an order appointing Susan as Clara’s guardian and manager;
(f) in the alternative, an order appointing the Public Trustee and Guardian (the PTG) as Clara’s guardian and manager “for any areas for which there was no effective appointment as an attorney or guardian”;
(g) a direction that John not apply any of Clara’s estate to any legal costs arising out of the proceedings, and that if he has done so he reimburse Clara’s estate; and
(h) in the alternative, a direction that Clara’s manager or attorney pay John and Susan’s legal costs from Clara’s estate under section 16 or section 62(2)(a), respectively, of the GMP Act.
29. Of great concern to Susan and her children (meaning Clara’s grandchildren) is that they wish to spend time with Clara and have been unable to do so subsequent to her moving to live with John and Jane. They requested the Tribunal to assist by suggesting or making an arrangement to enable them to visit Clara.
30. In support of her application, Susan provided:
(a) reports dated 4 April and 1 August 2018 from Clara’s treating general practitioner, referred to in our reasons as Dr C;
(b) a report dated 23 May 2018 from a staff specialist in geriatric medicine at Canberra Hospital, referred to in our reasons as Dr D;
(c) a report dated 1 November 2017 from a geriatrician and general physician at Canberra Hospital, referred to in our reasons as Dr E;
(d) several statements from herself;
(e) an undated statement from the agent that manages Clara’s property on the South Coast; and
(f) a statutory declaration from Mr Hawdon, who was Clara’s former solicitor.
31. In the interests of reducing cost and hearing time, Mr Underwood and Mr Morton agreed not object to the tender of any of the evidence and to waive their respective rights to cross examine any of the authors of the documents.
32. The reasons for decision below consider the written and oral evidence and submissions, and include our conclusions, concerning the issues raised by these proceedings in the following order:
(a) whether the 2018 NSW EPOA and the 2018 ACT EPOA were validly made, including whether Clara had capacity to make them at the date of their execution (paragraphs [55] to [164]);
(b) how Clara’s finances were managed, particularly between July and November 2018 (paragraphs [165] to [226]);
(c) who should be allowed to visit Clara and what the visiting arrangements should be (paragraphs [227] to [242]);
(d) the costs incurred in relation this proceeding and who should bear them (paragraph [243] to [253]); and
(e) whether a guardian and manager should be appointed for Clara and, if so, who should be appointed and some possible implications of the appointment (paragraphs [254] to [269]).
33. The resolution of the first issue involves consideration of medical evidence, the evidence of observations by family members and Clara’s oral evidence to the Tribunal, as well as the relevant law about how to assess a person’s capacity to make an enduring power of attorney. We turn initially to the evidence.
The medical evidence
34. Referring first to the medical evidence led by Mr Underwood, the relevant parts of Dr A’s first report dated 8 August 2018 state:
[Clara] is an 88 year old woman with history of cognitive impairment …
[Clara] has been diagnosed of dementia both Alzheimer’s type and vascular by a gerontologist in the past. She had few episodes of delirium over the past year due to infections. She was not delirious when I was assessing her cognition today. I have conducted an Addenbrooke’s Cognitive Examination (ACE-R) on her today, where she scored total of 71/100 with Attention and Orientation domain 13/18, Memory domain 12/26, Fluency domain 9/14, Language domain 24/26 and Visuospatial domain 13/16. In my opinion, she has mild dementia when taking into consideration of her age, level of education (primary school) and occupation) housewife and factory worker).
On assessing her capacity, I found that [Clara] was able to express her wishes in strong determination consistently. After living with her daughter in the past year, she found out that she was very unhappy. … … Her daughter did not want to bring her to a church or place of worship, which is a very important part of her life.[Clara] has decided to move in to live with her son. She does not want to go into a residential aged care facility. She reported that her son has the same faith, beliefs and values as hers. .. [Clara] as expressed to me that she wants her son to look after all her health matter, lifestyle matter including living arrangement, and financial matter.
In my opinion, [Clara] with her current level of dementia is still capable of making her own decision in regards to appointing a Guardian and Financial Manager. [Clara] strongly believes that by appointing his (sic) son [John] as her Guardian and Financial Manager, not only will her physical needs be met but her emotional and spiritual needs will be met as well.
35. In his second report dated 26 September 2018, Dr A stated that he had done a “follow-up assessment”. Regarding decision-making capacity, the relevant parts state:
[Clara] is suffering from unnecessary financial stress from the cost incurred from trying to protect her free will to appoint her son John to be her legal guardian.
[Clara] has mild dementia with quite well preserved functional status she still have very good insight. … [Clara’s] cognition seems to be stable from when I saw her about two months ago.
I have reassessed her capacity to appoint a guardian for herself. I found that she has been very consistent with her decision wanting to appoint her son [John] to be her Guardian. [Clara] has expressed to me that she wants her son to look after or her health matters, lifestyle matters clean living arrangement, and financial matters. She feels very safe with her son and happy living with him. She knows that his son has a best interests at heart unlike her daughter.
In conclusion, [Clara] is still very capable of making her own decision in regards to appointing a Guardian and Financial Manager. Again, [Clara] strongly believe that by appointing his (sic) son [John] as her Guardian and Financial Manager, not only will her physical needs be met but her emotional and spiritual needs will be met as well.
36. In his third report dated 9 November 2018, Dr A stated that he had again assessed Clara in regards to her cognition and her decision-making capacity. He reported that Clara “is still very happy living with her son [John]” and that “the only thing that is distressing her at moment is her ongoing Guardianship proceedings”. Regarding capacity, the relevant parts of the report state:
I am pleased to find that [Clara] is still very happy living with her son [John] and her daughter in law. She feels that her physical, emotional and spiritual needs have been met since she moved into (sic) with her son. The only thing that is distressing her at the moment is her ongoing Guardianship proceedings. These have caused her a great deal of emotional and financial stress. She really wishes that these Guardianship proceedings will be over soon, so that she can fully get on with her life.
On assessment of her cognition today, she scored total of 72/100 on her Addenbrooke’s Cognitive Examination, where she scored 14/18 for attention and orientation, 9/26 for memory, 10/14 for fluency, 26/26 on language and 13/16 visuospatial domains. She scored total of 71/100 on 8 August 2018. On my assessment today, [Clara’s] cognition has been stable so far.
[Clara] understands that she has appointed her son [John] and granddaughter [Jill] as her attorneys and has revoked her daughter [Susan] as her attorney. She is very happy with her decisions and has not regretted her decisions at all. [Clara] again has been very consistent in giving her reasons for making such decisions. Please refer to my medical reports dated on 8 August 2018 and 26 September 2018 for further details.
From my assessment today, I strongly believe that [Clara] understands that her attorneys could assume complete authority over her affairs including her property from the time of the appointment of the attorneys, even when she became mentally incapable. Given that [Clara] has been very consistent in her decision-making capacity, I believe that [Clara] would have had the mental capacity to execute an Enduring Power of Attorney instrument on 28 June 2018 appointing her son [John] and granddaughter [Jill] as her attorneys and to execute the revocation instrument of her daughter [Susan] as her attorney on 4 July 2018.
37. Dr B provided a report dated 9 August 2018 directed to CFG. His report states:
I am writing in response to your letter to me dated 3 August 2018.
I will answer your questions in turn:
I saw [Clara] on 12 June 2018, with her son [John]. She is a widow not happy to be living with her daughter over the last several months after leaving her own home … She feels controlled and constrained by her daughter. She expressed a desire to live with her son [John] instead. I believe her daughter has POA documentation in place. As it was clinically apparent she may have some degree of cognitive impairment, I arranged a further assessment with my nurse for 29 June 2018.
On 29 June 2018 [Clara] underwent MMSE and GPCOG examinations, both standard dementia screens used in general practice. Her MMSE score of 21/30 and her GPCOG score of 2/9 both indicate moderate cognitive impairment, consistent with her clinical diagnosis of dementia.
[Clara] has impaired cognitive function. She will need daily supervision of all activities of daily living. She will need help and assistance from her family for all financial and legal decisions. Having a POA in place is most appropriate.
With regard to her desire to live with her son, I feel she is cognitively able to make this decision of her own volition, in this decision ought be respected.
It would be appropriate for [Clara] to be referred to a geriatrician for further assessment of her dementia illness.
38. Turning to the evidence led by Mr Morton, Dr C is Clara’s treating doctor. In his report dated 4 April 2018 directed to the “Guardianship Tribunal”, Dr C wrote:
This is to confirm that [Clara] has dementia both Alzheimer’s type and vascular. She is under the care of the gerontologist Dr [E].
[Clara] has also had an admission in March this year with delirium due to LRTI. Her daughter [Susan] has POA. [Clara] is continuing to have falls despite her pacemaker. She needs help with her ADLs so can’t live independently and is currently living with her daughter [Susan] and her granddaughter [Sonia].
39. Dr C, in his second report dated 1 August 2018 directed to FGD, wrote:
In response to your letter dated 1/8/18 I write the following:
[Clara] indeed has a significant disability being Alzheimer’s type dementia with associated vascular dementia. This stems from at least 1/11/17 when she was assessed by the gerontologist, Dr [E], with a Mini Mental State Exam result of 20/30 which is moderately severe cognitive impairment. Also see letter from ACT Rehabilitation etc dated 17/5/18 also confirming her dementia.
[Clara] is totally incapable of making decisions on her own behalf and indeed her daughter has EPOA (since 2009) to be able to do this. Thus a guardian needs to be appointed to make decisions on her behalf.
[Clara] has been seen by my GP colleague Dr [P] at this practice since 23/1/12 and I have been seeing her since 13/7/17.
The cognitive impairment was obvious when she first consulted me on 13/7/17 and of course has persisted since then.
[Clara] has been incapable of understanding the full meaning of the effects of an Enduring Power of Attorney since at least 13/7/17.
[Clara’s] cognitive impairment from April 2018 is such that she could not have retained information sufficiently to enable her to make a decision regarding whether to execute an EPOA.
[Clara] would be regarded as having an impaired decision-making capacity such that she is therefore unable to make decisions for herself.
40. Dr D is a staff specialist in geriatric medicine at Canberra Hospital. On 17 May 2018, in response to a referral from Dr C, Dr D diagnosed, among other things, “mild cognitive impairment”. Dr D notes that Clara “left school at the age of 14 and has been a housewife throughout her life.” Regarding capacity, Dr D wrote:
Her MMSE score today was 21/30, and she scored 24-hour to 30 while she was in the hospital. However her daughter thought there were no significant changes. [Clara] had poor memory with conversations, and she could not recall names of all her grandchildren. [Clara] did not go out on her own and usually walked around inside her own property. … She had never used a computer or mobile phone …
In summary, [Clara] is an elderly lady with dementia, recently discharged from the Canberra Hospital, seemed like her delirium had resolved. She had an ongoing short-term memory loss with other cognitive domains involvement secondary to dementia.
41. Dr E is a geriatrician and general physician at Canberra Hospital. She saw Clara on 1 November 2017, in response to a referral from Dr C. Regarding capacity, Dr E wrote:
[Clara] was transferred from Bateman’s Bay Hospital to Canberra Hospital in July this year … [Clara] had a severe delirium during her hospital stay. She had visual hallucinations including seeing her deceased husband in bed. These have now resolved. She can occasionally continue to mix up [Sonia] for her niece.
[Clara] has complete insight into her cognitive decline…. She describes her general health as being okay but that it is her memory that is deteriorating
[Clara] has a son [John] and daughter [Susan]. [Susan] has four children and the two younger grandchildren are living with [Susan] and [Clara]. She was originally born in Northern Ireland grew up in Yorkshire. She worked in microbiology as a laboratory assistant at the John Curtin School of medical research. She had worked with Professor Frank Fenner in virology research. She is a lifelong non-smoker and does not drink regular alcohol. [Clara] has lived in the South Coast for more than 25 years ago and has only recently moved back to live [near Canberra].
The Mini-Mental State examination score was 20/30 which was the same score as when she had it done … with a diagnosis of Alzheimer’s type dementia. There is likely to be a vascular component given her history of atrial fibrillation. … I will review her again to determine whether there has been some improvement in her cognitive function.
The lay evidence
42. John provided a statement in which he describes in strong terms his perception of Clara’s unhappiness upon coming to live with Susan in July 2017, and that Clara is much happier now that she lives with him.
43. The Tribunal received copies of several handwritten letters from John’s wife, Jane, one of which was a handwritten letter dated 24 April 2017 from Jane to Clara. Some relevant parts of that letter state:
Dear [Clara],
I want to thank you for all your help when you were here … [John] really care about you and was very happy to help you. As a Christian I don’t know why people lie or hurt each other. Jesus only taught the truth from the Bibles. Why did you said you didn’t talk to [Susan] because of her wrongdoing to Jehovah. When [Clive] died in Nov 2009. Less than two week after [Susan] and [Clara] change the Will taking [John] your son off the will without telling him (How sad. Don’t you like him any more. Your grandchildren, [Jane] and [Clive].. Are you going to hurt them as well. [Clara] and [Susan] … Have his name back on the Will it is only and not take [Jane] and [John]name off at all it is a Christian duty as ; [Clive] John many be fair to [Susan] and never got much from you and didn’t ask for it) [John] was a true son to you)
From your Daughter in Law
[Jane] 24-4-2017 (sic)
44. John’s daughter, Jill, provided a statement dated 26 September 2018 stating that she has worked in aged care for 24 years and that based on her extensive experience she believes that Clara does not require 24-hour care, that there is “no risk in her living with my father”, and that she is quite independent but “would benefit from minimal assistance from agencies such as support for showering, helping in meal preparation and social outings.” Jill does not say anything about her appointment as Clara’s attorney three months earlier.
45. Clara’s friend, Ms Jones, describes a long-standing friendship that she and her husband held with Clara and her husband when they all lived on the South Coast. She states that Clara was not happy when she came to live with Susan because she felt isolated and was a long way from her friends. Ms Jones states that Clara is much happier living with John, especially as she is now she is able to go to a meeting “each Sunday to study the Bible”.
46. Clara’s neighbour on the South Coast, Ms Brown, provided a letter dated 20 September 2018 stating that she has known Clara for 22 years and that Clara was her neighbour for 21 years. The letter describes a close and positive relationship. Ms Brown describes phone calls with Clara after she moved to live with Susan in which Clara stated that she did not like living with Susan, and that when she spoke with Clara on 16 September 2018 she was “her old happy self” and was so pleased to be now living with John.
47. Ms Davies from ADACAS states that she met with Clara and John on several occasions to offer support regarding her move to live with John. Ms Davies states that she accompanied Clara to her appointment with Dr B “so she could obtain an assessment to prove she could make her own decisions … and choose where she would like to live.” Ms Davies states that Clara told her that if she could not live with John she would rather live in a nursing home than live outside Canberra with Susan.
48. Susan provided a statutory declaration describing her own connection with the Jehovah’s Witnesses, her positive ongoing relationship with Clara when Clara lived on the South Coast, Clara’s complaints to her (Susan said) about lack of respect and mistreatment from John, and her support for Clara after she came to live with Susan in July 2017. Susan describes how she paid the income derived from the rental of Clara’s house on the South Coast into an account in Clara’s sole name.
49. Susan also provided a lengthy statement describing her many years working in the “aged care industry” and many events that caused her to believe that her mother was suffering from mild dementia. Susan also describes the care she provided to Clara, in comparison to the lack of care (she said) provided by John. Susan also describes her distress at being unable to visit or speak with Clara following her move to live with John.
50. Clara’s former solicitor, Mr Smith, provided a statutory declaration in which he stated that he had been Clara’s and her husband’s solicitor since 1996. Mr Smith states that on 26 May 2018 he received a phone call from John asking for a copy of Clara’s Will and other information which Mr Smith declined to give for reasons of client confidentiality. Mr Smith states:
On 29 May 2018 I returned a call, again from someone who I understood was [to be] [John]. When [John] answered he indicated that [Clara] was with him and he appeared to hand the phone to someone who claimed to be [Clara]. From the voice I was of the view that it was indeed [Clara] [and I] could hear [John] speaking and prompting [Clara] to ask particular questions.
I became concerned about my ability to act on the instructions that were being provided to me and that the phone call. I recall I had the distinct impression that [Clara’s] capacity was diminishing.
51. Mr Smith then details how he asked Clara to see him in person or for her to see an ACT solicitor and give them instructions. He then details receiving a phone call the following day, 30 May 2018, from Mr Giles stating that he acted for Clara. Mr Smith details that on 26 June 2018 he received, under cover of an email from CFG, a handwritten letter from Clara. The letter states, verbatim, omitting addresses:
[Clara] now off [John’s address] (Formerly off [Susan’s address]
Heer by instruct act as my solicitor obtain all my documentes from Bolton Hordon & McMahon
52. For reasons not explained, Clara wrote her letter on CFG letterhead. Where the letter is handwritten, errors such as “now off”, “Formerly off” and “Heer by” would appear to have arisen from someone (presumably someone at CFG) dictating what Clara should write, but she not understanding or being able to spell the words she was asked to write.
53. Mr Smith states that he was concerned about the apparent authority, in particular because of mis-spellings of his name. Clara’s letter also refers to “Bolton Hordon and McMahon” where the correct name of Mr Smith’s firm was “Button Hawdon and McMahon”. Again, the errors appear to reflect Clara writing what someone was dictating to her but Clara incorrectly writing the words. Arising from the errors in the authority, Mr Smith prepared a typed authority for Clara to sign. On 27 June 2018 he forwarded that authority to CFG. On 29 June 2018, he received the typed authority from CFG, signed by Clara, under cover of an email from CFG stating “could you please ensure that all [Clara’s] documents are dispatched to our office as a matter of priority.” Mr Smith did so.
Clara’s evidence
54. Clara attended the hearing on 2 October 2018 when the Tribunal was constituted by a Presidential Member McCarthy and Senior Member Matheson. The following exchange occurred between the Tribunal and Clara:
PRESIDENTIAL MEMBER: [Clara], how do you feel about talking to me with all these people here.
[CLARA]: Well, they’re family.
PRESIDENTIAL MEMBER: Yes.
[CLARA]: Whether they agree together or not’s another point. But you just fire away and we’ll answer the best we can.
PRESIDENTIAL MEMBER: Alright.
[CLARA]: Or I will answer the best I can, I should say.
PRESIDENTIAL MEMBER: Alright. But do you want to talk to Ms Matheson and I by yourself, just the three of us or would you be happy to let everybody hear your answers?
[CLARA]: No. It’s family. So if they can’t take what I’ve got to say, then that’s it. I’ve got my own opinions.
PRESIDENTIAL MEMBER: Yes. So
[CLARA]: Excuse me a minute. I am 84.
PRESIDENTIAL MEMBER: Okay.
[CLARA]: But - I’m 85, somebody said.
PRESIDENTIAL MEMBER: That’s alright.
[CLARA]: But the point is this. The mind is still active and the feet are just as good.
PRESIDENTIAL MEMBER: Excellent.
[CLARA]: So alright. You go.
PRESIDENTIAL MEMBER: Well, can you tell me what you think this is all about today?
[CLARA]: Well, in my own opinion I think it’s certain members of my family are playing tug of war. If you get my point.
PRESIDENTIAL MEMBER: Yes, I do. And
[CLARA]: I’m at the present currently living with my son. I did live with my daughter.
PRESIDENTIAL MEMBER: Yes.
[CLARA]: So now I’m living with my son. And
PRESIDENTIAL MEMBER: And how do you feel about that?
[CLARA]: I’m very happy because we’ve both got the same religious faith and I get to the church and - I’m one of Jehovah’s Witnesses. And [John] is the same. [Susan] doesn’t go to church, or she wasn’t going to church. She might have changed her mind, I don't know. I haven’t been in contact with [Susan] for a while. But the point is this, I’m very, very happy where I am in my home with [John] and [Jane] and I get what I need, everything, and I also get to my church meetings and I couldn’t be happier if I tried.
PRESIDENTIAL MEMBER: And do you remember going to see Ms Smith and the other - Fil Giles?
[CLARA]: No. I’m not good with faces. Mainly. No.
PRESIDENTIAL MEMBER: Okay. Can you remember filling in a document about who was to make decisions for you?
[CLARA]: Again I can’t remember that.
PRESIDENTIAL MEMBER: You can’t remember that.
[CLARA]: I’m being honest because I can’t
PRESIDENTIAL MEMBER: That’s alright.
[CLARA]: My memory’s not 100 per cent. It comes and goes.
PRESIDENTIAL MEMBER: Okay.
[CLARA]: I think it might be too much gin sometimes. I don’t drink.
PRESIDENTIAL MEMBER: Sure. And if you wanted somebody to make - not so much to look after you and things, but to make decisions for you if you weren’t able to make decisions for yourself, who would you like to do that?
[CLARA]: [John] and [Jane], because I’m with them now and I’m very happy where I am.
PRESIDENTIAL MEMBER: Alright.
[CLARA]: And they’ve got the same church to go to same as I do. Anything I need I can get it. So what else you want to know I don't know.
UNIDENTIFIED SPEAKER: [Clara], I
[CLARA]: And my health is quite good. I am 87 or 88. I just said I was a bit younger.
PRESIDENTIAL MEMBER: Alright. I forget my age too sometimes.
[CLARA]: Well, I was born in 1930, so there you are. January 1930.
PRESIDENTIAL MEMBER: That’s the problem with that, isn’t it. It changes every year.
SENIOR MEMBER: [Clara], you’ve got a lot of your family here today.
[CLARA]: Yes, I noticed that.
SENIOR MEMBER: And that seems to say to us that all your family care about you.
[CLARA]: Yes, I understand that.
MEMBER: Wherever you’re living - my question is now wherever you’re living would you like to have contact with all your family? All members of your family?
[CLARA]: Well, I’ve - I’ve had contact with all my family. I had years with [Susan] and I’ve only just come in with [John] in the last few months. And I’m happy whichever one I am with. But the only thing is [Susan] doesn’t go to the same church as I go to.
SENIOR MEMBER: So your spiritual church is very important to you. That’s what counts?
[CLARA]: Yes, yes. And I am one of Jehovah’s Witnesses, and [John] is one of Jehovah’s Witnesses. But we both have got the same attitude, we’ll put it that way. And I’m happy where I am.
SENIOR MEMBER: Well, that’s good to hear.
[CLARA]: So I just think, well, while I’m on a good thing stick with it. If things change, well then I’ll change, and that’s the size of it.
SENIOR MEMBER: Given that you choose to stay with [John] as your instructor is telling us now
[CLARA]: At the moment, yes.
SENIOR MEMBER: and going forward from here, would you still like to have visits from your other family members?
[CLARA]: Visits don’t worry me.
SENIOR MEMBER: You still
[CLARA]: Whoever wants to or comes to [John’s] place, I don’t think [John] would turn them away. And - and that’s the size of it. And if I have to go in a nursing home, I’ll go in a nursing home. But I don’t want to go where I - I can’t get to witness. As I said, I’m one of Jehovah’s Witnesses and my faith is very important. So that’s the way I - I’m fitting it in.
Validity of the 2018 documents
55. Mr Morton asked the Tribunal to make a declaration that the 2018 NSW EPOA and the 2018 ACT EPOA are void ab initio and have no effect, consequent upon the Tribunal finding (as he submitted it should) that Clara did not have capacity to make them. He asked the Tribunal to make that declaration under section 62(2)(c) or 62(2)(e) of the GMP Act or, in the alternative, section 9 or section 57 of the ACT Civil and Administrative Tribunal Act 2008 (the ACAT Act).
56. Mr Underwood submitted that the Tribunal should not make such a declaration because it should be satisfied on the evidence that Clara had decision-making capacity to make the two 2018 EPOAs at the time she signed them.
57. In the case of any proposed order, the starting point is whether the Tribunal has jurisdiction to make it. The Tribunal is a subordinate body. It can exercise only the powers conferred on it by statute. When exercising its guardianship jurisdiction, the Tribunal is performing an executive function.
58. In Re Refugee Review Tribunal: Ex parte Aala, the High Court, per Hayne J, commented on the importance of a statutory decision-maker identifying the limits of its functions and powers when conducting its process and when determining what orders it may make. After acknowledging that there can be difficulties in drawing a “bright line” between jurisdictional error and error in the exercise of jurisdiction, His Honour said that those difficulties should not obscure the difference between “each species of error”. His Honour said:
There is a jurisdictional error if the decision maker makes a decision outside the limits of the functions and powers conferred on him or her, or does something which he or she lacks power to do. By contrast, incorrectly deciding something which the decision maker is authorised to decide is an error within jurisdiction. (This is sometimes described as authority to go wrong, that is, to decide matters within jurisdiction incorrectly.) The former kind of error concerns departures from limits upon the exercise of power. The latter does not.
59. Jurisdiction is not to be lightly assumed. Close attention must be given to what the Tribunal is empowered to do, and any conditions that must be met, in order for there to be a valid exercise of power.
60. Leeming JA, of the NSW Court of Appeal, in his text Authority to Decide - The Law of Jurisdiction in Australia commented:
What makes identifying jurisdictional error hard is that in addition to the contestability of [the] distinction [between] jurisdictional error and error in the exercise of jurisdiction, there is ordinarily a threshold question of construction of the statute, and the principles also vary depending upon the nature of the donee of the power.
61. Section 62 of the GMP Act states the Tribunal’s powers in relation to an enduring power of attorney as follows:
62 ACAT directions etc for enduring powers of attorney
(1) This section applies in relation to an enduring power of attorney if the principal has impaired decision-making capacity.
(2) On application, or on its own initiative on hearing a matter under this Act, the ACAT may, by order—
(a) give a direction, not inconsistent with the Powers of Attorney Act 2006 or the power of attorney, that the attorney do or not do a stated act; or
(b) direct the attorney to produce stated books, accounts or other records of transactions carried out by the attorney for the principal; or
(c) revoke the enduring power of attorney, or part of it; or
(d) suspend the enduring power of attorney, or part of it; or
(e) make a declaration about the interpretation or effect of the enduring power of attorney.
(3) An application under subsection (2) may be made by an interested person or, with leave of the ACAT, someone else.
(4) If the ACAT revokes an enduring power of attorney, the ACAT may appoint a guardian or manager for the person who was the principal for the power.
(5) If the ACAT suspends an enduring power of attorney, the ACAT may appoint a guardian or manager for the person who was the principal for the power for the period of the suspension.
62. We accept, as a matter of law, that a power of attorney executed by a person who lacks the mental capacity to understand what he or she is doing in executing the instrument is void, but we were not persuaded that anything in section 62 of the GMP Act permits the Tribunal to make a declaration to that effect. Section 62 does not state such a power, and (in our view) the powers given to the Tribunal under the section presuppose the existence and validity of an enduring power of attorney. For example, referring to section 62(2)(c) upon which Mr Morton relied, the word “revoke” means to take back, withdraw, annul, cancel or reverse that which exists. Mr Morton, however, sought a declaration that the two 2018 EPOA’s are void, meaning they should be taken never to have existed.
63. Section 62(2)(e), upon which Mr Morton relied, empowers the Tribunal to make a declaration about “the interpretation or effect” of an enduring power of attorney, but such a power presumes that a valid document exists.
64. Mr Morton relied also on section 9 of the ACAT Act, which enables a person to apply to the Tribunal “if an authorising law provides that the application may be made” and section 57 of the ACAT Act, which provides that “an authorising law may set out the powers of the [T]ribunal, and the decisions it may make on an application made under the authorising law.” These sections, in our view, do not advance the matter of jurisdiction. Neither section, by itself, gives jurisdiction. Each section depends upon identifying an authorising law and the powers given to the Tribunal under it.
65. There was no suggestion that the Tribunal has any power under the POA Act (ACT) to declare that an enduring power of attorney is invalid, nor could we identify such a power.
66. The legislative scheme under the GMP Act can be contrasted with that under the POA Act (NSW). Section 36(3) of that Act gives the NSW Civil and Administrative Tribunal (NCAT) the following declaratory powers:
(3) A review tribunal may make either or both of the following orders with respect to the making of a power of attorney:
(a) an order declaring that the principal did or did not have mental capacity to make a valid power of attorney,
(b) an order declaring that the power of attorney is invalid (either in whole or in part) if the tribunal is satisfied:
(i) the principal did not have the capacity necessary to make it, or
(ii) the power of attorney did not comply with the other requirements of this Act applicable to it, or
(iii) the power of attorney is invalid for any other reason, for example, the principal was induced to make it by dishonesty or undue influence. (emphasis added)
67. By reference to section 36(3) of the POA Act (NSW), in ICW (a decision on which Mr Morton relied), NCAT ordered that an enduring power of attorney was invalid. However a power to make an order of that kind does not exist in the ACT.
68. We acknowledge that the ACT Supreme Court, like the NSW Supreme Court, has an inherent jurisdiction, as part of its protective jurisdiction, to make a declaration of the kind Mr Morton seeks but the Tribunal does not hold an inherent jurisdiction of any kind.
69. For these reasons, we have concluded that the Tribunal does not have power to declare that either of the 2018 EPOAs is invalid.
Capacity
70. The absence of power to declare either of the 2018 EPOAs to be invalid does not preclude the Tribunal from considering the factual question of whether Clara had decision-making capacity to make them at the time she signed the documents. That question of fact could be relevant to a whole range of issues. For example, as the Supreme Court of NSW, per Barrett J, observed in Szozda v Szozda, the authority of an attorney may become an issue in a proceeding which may in turn raise the question of the principal’s capacity to give the power of attorney.
71. Clara’s capacity to execute the 2018 EPOAs is a key consideration in this proceeding because the substance of John’s case is that the Tribunal should respect and uphold Clara’s stated wish to entrust to John the powers given to him under the two 2018 EPOAs. The proposition begs the question whether she had decision-making capacity to entrust John with those powers at the time she signed the documents.
72. If so, Mr Underwood seeks a declaration to that effect under section 65(1) of GMP Act which states:
65 Declaration about decision-making capacity
(1) The ACAT may, on application, declare that a person who is the principal for an enduring power of attorney has decision-making capacity or impaired decision-making capacity.
(2) The declaration may be general or relate only to a property matter, personal care matter, health care matter or medical research matter.
73. If not, Mr Morton seeks in the alternative an order that the Tribunal revoke the 2018 ACT EPOA (at least) under section 62(2)(c) of the GMP Act.
74. We first make some observations about the meaning of ‘capacity’.
75. We begin by noting that it is incorrect to think in terms of a person having, or not having, capacity generally. It is a concept that must be applied by reference to a particular decision or action.
76. In Gibbons v Wright the High Court said:
[T]he mental capacity required by 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 the transaction when it is explained.
One cannot consider soundness of mind in the air, so to speak, but only in relation to the facts on the subject-matter of the particular case.
77. The need to assess capacity by reference to the action, decision or document in question, not as a ‘stand alone’ concept, has been consistently recognised. In Antov v Bokan the NSW Supreme Court, per Ward CJ in Eq, stated:
It is well-known that whether there is capacity must be measured by reference the kind of document or transaction which is in question.
78. In 2009, in Guthrie v Spence, the NSW Court of Appeal said:
Under the general law there is no single test for capacity to perform legally valid acts – rather, capacity is decided, in relation to each particular piece of business transacted, by reference to whether the person has sufficient mental ability “to be capable of understanding the general nature of what he is doing by his participation”, and concerning any legal 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 explained”: Gibbons v Wright [1954] HCA 17; (1954) 91 CLR 423 at 437–8
79. In A v Guardianship and Management of Property Tribunal, Miles CJ of the ACT Supreme Court said:
The essential nature of the concept of legal incompetence is that it is not absolute but relative. It is summed up in the single sentence at the commencement of Christian Witting's paper in 1996, 3 Journal of Law and Medicine, 377:
“Employment of the term ‘incompetent’ naturally elicits the inquiry, ‘incompetent in relation to what?’”
80. In 2009, in Hunter and New England Area Health Service v A (by his Tutor T) (Hunter), the NSW Supreme Court, per McDougall J made a similar observation relevant to this case:
In this context, it is necessary to bear in mind that there is no sharp dichotomy between capacity on the one hand and want of capacity on the other. There is a scale, running from capacity at one end through reduced capacity to lack of capacity at the other. In assessing whether a person has capacity to make a decision, the sufficiency of the capacity must take into account the importance of the decision … The capacity required to make a contract to buy a cup of coffee may be present where the capacity to give away one's fortune is not.
81. In their work, Capacity and the Law, O’Neill and Peisah said:
There is general consensus that capacity is not a unitary concept but rather refers to specific decisions, tasks or domains. Capacity is therefore task or domain-specific, that is, peculiar to the particular type of decision made. Thus, the capacity task is different for entering into a contract; executing a power of attorney, will or deed; appointing an enduring guardian or an attorney under a power of attorney; or consenting to treatment, divorce or marriage.
…
Thus, capacity cannot be extrapolated from one capacity task to another. For example, a person’s capacity to write a will cannot be inferred from their capacity to consent to medical treatment. The concept of global capacity, whereby a person is deemed capable or incapable of making all decisions, has been rejected. Consequently, it is inappropriate to state that a person “lacks capacity”, without further reference to the type of capacity.
82. The question, therefore, in this case is whether Clara had capacity to make the two 2018 EPOAs at the time she signed them?
83. The starting point is section 9 of the POA Act (ACT), which states:
9 What are decision-making capacity and impaired decision-making capacity?
(1) For this Act, a person has decision-making capacity if the person can make decisions in relation to the person’s affairs and understands the nature and effect of the decisions.
(2) For this Act, a person has impaired decision-making capacity if the person cannot make decisions in relation to the person’s affairs or does not understand the nature or effect of the decisions the person makes in relation to the person’s affairs.
84. For the purpose of deciding whether a person “understands the nature and effect” of a decision, section 17 of the POA Act (ACT) states:
17 Understanding nature and effect of making powers of attorney
Understanding the nature and effect of making a power of attorney includes understanding each of the following:
(a) that the principal may, in the power of attorney, state or limit the power to be given to an attorney;
(b) that the principal may, in the power of attorney, instruct the attorney about the exercise of the power;
(c) when the power under the power of attorney can be exercised;
(d) that, if the power under a power of attorney can be exercised for a matter, the attorney has the power to make decisions in relation to, and will have full control over, the matter subject to terms or information about exercising the power that are included in the power of attorney;
(e) that the principal may revoke the power of attorney at any time the principal is capable of making the power of attorney;
(f) for enduring powers of attorney only—
(i) that the power given by the principal continues even if the principal becomes a person with impaired decision making capacity; and
(ii) that, at any time the principal is not capable of revoking the power of attorney, the principal cannot effectively oversee the use of the power.
85. It follows that in order for a person to have decision-making capacity to make an enduring power of attorney, the person must satisfy each (or all) of the factors listed in section 17(a) – (f), in addition to any other factors that might be relevant in a particular case.
86. In Szozda v Szozda Barrett J commented on the capacity required in order to conclude that a person executing an enduring power of attorney “understands the nature and effect” of making it:
33 The approach outlined by Hoffmann J in Re K [1988] Ch 310 and approved by the English Court of Appeal in Re W [2001] Ch 609 is, in my opinion, appropriate. Those cases were decided in a particular statutory context but the principle regarding the relevant capacity to understand was not, in my view, affected by that and is of general application. Hoffmann J said (at 313):
“Finally I should say something about what is meant by understanding the nature and effect of the power. What degree of understanding is involved? Plainly one cannot expect that the donor should have been able to pass an examination on the provisions of the 1985 Act. At the other extreme, I do not think that it would be sufficient if he realised only that it gave cousin William power to look after his property. Counsel as amicus curiae helpfully summarised the matters which the donor should have understood in order that he can be said to have understood the nature and effect of the power: first, if such be the terms of the power, that the attorney will be able to assume complete authority over the donor's affairs; second, if such be the terms of the power, that the attorney will in general be able to do anything with the donor's property which he himself could have done; third, that the authority will continue if the donor should be or become mentally incapable; fourth, that if he should be or become mentally incapable, the power will be irrevocable without confirmation by the court.”
34 The central concept is thus one of complete and lasting delegation to a particular person, albeit with the ability to put an end to the delegation while capacity to do so remains. That concept of empowering another person to act generally in relation to one’s affairs raises two basic questions. First, is it to my benefit and in my interests to allow another person to have control over the whole of my affairs so that they can act in those affairs in any way in which I could myself act – but with no duty to seek my permission in advance or to tell me after the event, so that they can, if they so decide, do things in my affairs that I would myself wish to do (such as pay my bills and make sure that cheques arriving in the post are put safely into the bank) and also things that I would not choose to do and would not wish to see done – sell my treasured stamp collection; stop the monthly allowance I pay to my grandson; exercise my power as appointor under the family trust and thereby change the children and grandchildren who are to be income beneficiaries; instruct my financial adviser to sell all my blue chip shares and to buy instead collateralised debt obligations in New York; have my dog put down; sell my house; buy a place for me in a nursing home? Second, is it to my benefit and in my interests that all these things – indeed, everything that I can myself lawfully do – can be done by the particular person who is to be my attorney? Is that person someone who is trustworthy and sufficiently responsible and wise to deal prudently with my affairs and to judge when to seek assistance and advice? The decision is one in which considerations of surrender of personal independence and considerations of trust and confidence play an overwhelmingly predominant role: am I satisfied that I want someone else to be in a position to dictate what happens at all levels of my affairs and in relation to each and every item of my property and that the particular person concerned will act justly and wisely in making decisions?
87. In Antov v Bokan, Ward CJ in Eq described this description as “instructive”. In Scott v Scott, Lindsay J of the NSW Supreme Court said he was “inclined towards acceptance” of Barrett J’s analysis.
88. In Scott v Scott Lindsay J expanded on capacity to make an enduring power of attorney as follows:
199. There is no rule of general application relating to all powers of attorney without regard to particular facts. Attention must be focussed on all the circumstances of the case, including the identities of the donor and donee of a disputed power of attorney; their relationship; the terms of the instrument; the nature of the business that might be conducted pursuant to the power; the extent to which the donor might be affected in his or her person or property by an exercise of the power; the circumstances in which the instrument came to be prepared for execution, including any particular purpose for which it may ostensibly have been prepared; and the circumstances in which it was executed.
200. An exploration of all the circumstances of the case will, not uncommonly, call for consideration of events leading up to, and beyond, the time of execution of the disputed power of attorney, as well as on the focal point of the time of execution itself. A longitudinal assessment of mental capacity, along a time line extending either side of the focal point, may be necessary, or at least permissible, in order to examine the subject's mental capacity in context. Medicos and lawyers, alike, tend to embrace that approach. It is difficult to do otherwise. Context has a temporal as well as spacial and relational dimensions.
201. Given equity's tender regard for protection of the weak and considerations of conscience, an examination of the question whether a donor had mental capacity to grant a power of attorney will, not uncommonly, also invite a critical inquiry as to whether any element of undue influence may be discernable.
…
205.It is not, literally, a matter of imposing, or recognising, a different "standard" of mental capacity in the evaluation of the validity of different transactions. What is required, rather, is an appreciation that the concept of "mental capacity " must be assessed relative to the nature, terms, purpose and context of the particular transaction. Nothing more, or less, is required than a focus on whether the subject of inquiry had the capacity to do, or to refrain from doing, the particular thing under review.
206. Insights into appropriate lines of inquiry, or relevant considerations, in a particular case can be obtained from consideration of similar cases in which the validity of similar transactions has been reviewed. However, care needs to be taken not to elevate helpful passages in potentially analogous cases into rules of general application, whether characterised as an applicable "standard" or rules of law or merely practice. At the end of the day, a qualitative judgment needs to be made in each case on the facts of the particular case. Process and form are not unimportant. In some cases, they may point the way to a substantive outcome of a dispute. However, they are not ends in themselves. The focus of the Court must be on the substance of the inquiry whether the particular subject had, in fact, the requisite capacity - understanding - to effect a particular transaction.
89. We consider we should follow the observations of Barrett J in Szozda v Szozda at paragraph 34 of his decision.
90. Following the reasoning in Szozda v Szozda, on 28 June 2018 Clara might well have had the capacity to decide that she wanted to live with John, rather than Susan. But did she have the capacity to understand that, by signing the 2018 ACT EPOA and the 2018 NSW EPOA, she was (for example) giving John and Jill power to do whatever they wanted with her money and with her house on the South Coast and in particular to deal with her money and her house without any liability to account to her for their use of her money and without any legal obligation to use her money solely for her benefit? Did she understand that John and Jill could decide where she should live including against her wishes? Did she understand that Jill could make any of those decisions independently of John?
91. In Antov v Bokan, Ward CJ in Eq said:
Relevantly, in the present case, the question is whether it has been established that Ljubica did not have the capacity to understand that by this document she was delegating to Vase the ability to do what he wanted with the proceeds of sale (if it be sold) of the Granville property and, in particular, to deal with them as if that money was his own and without any liability to account to her for the money or to use it in any way for her benefit.
92. At hearing, we sought submissions as to whether the capacity to make an enduring power of attorney is the same or different to the (testamentary) capacity required to make a will. We did so because several recent cases have considered whether a testator with dementia had capacity to make a will at the time the will was made. To what extent, therefore, would the principles in those cases be relevant to whether a person had capacity to make an enduring power of attorney?
93. Mr Underwood submitted at hearing on 2 October 2018 that the capacity to make a will is “far higher” than the power to make a power of attorney because of the consequences. However, in later written submissions he submitted that an analogy between capacity to make a will and capacity to make a power of attorney is inappropriate because no particular transaction is in contemplation when giving a power. Mr Underwood referred to Szozda v Szozda, at paragraph 32 quoted below, in support.
94. Mr Morton submitted at hearing that a “much lower test” applies when assessing capacity to make a will, and that a power of attorney is a “much more serious document” because it:
..empowers someone to make decisions about all aspects of a person’s well-being, healthcare, financial decisions, and they can be used to great effect and for great malice as well while this person is alive, such that the person’s memory of someone who later dies can be completely ruined.
95. However, in his later submissions, Mr Morton submitted that the tests are not the same and that much depends “on the circumstances”. He submitted that in this case a higher standard of proof should be applied, given Clara’s age and stage in life.
96. On the extent to which testamentary capacity is comparable with capacity to make an enduring power of attorney, in Szozda v Szozda, Barrett J said:
31 In considering the question of capacity to create a general and enduring power of attorney, resort is sometimes had to an analogy with testamentary capacity. The validity of the analogy is questionable. A testator must have the capacity to appreciate what his or her property is, to recognise the persons who have a moral claim to the estate and to exercise a balanced judgment as to those claims. The making of a will involves decisions about particular dispositions and the wisdom of them from the point of view of the exercise of the testator’s bounty, just as the giving of a power of attorney specifically to facilitate a particular transaction involves a decision as to the wisdom of the transaction from the point of view of the donor’s interests. In the latter case, an understanding of the transaction to be facilitated is indispensable to an understanding of the power of attorney: Crago v McIntyre [1976] 1 NSWLR 729 at 749-750.
32 It seems to me that different considerations attend a decision to grant a general power of attorney without reference to any foreshadowed transaction and as a means of catering for the possibility that the donor might be unavailable or unable to act at some undefined future time when action is needed. The donor is prescribing no dispositions. He or she has no need to appreciate the extent and nature of moral claims and the extent and nature of the property available to meet them. Because no particular transaction is in contemplation, there is no specific dealing to be assessed as an indispensable concomitant of the giving of the power of attorney. The only matter that can sensibly become the subject of assessment is the creation of the power of attorney itself, for use as and when the need may arise in the future. It is the nature of that act (by which I mean to include its ramifications and consequences) that the donor must sufficiently understand.
…
35 The decision to create a general and enduring power of attorney differs from that involved in the making of a will but must be regarded as of a similar degree of complexity or even greater complexity. I quote, in that connection, a passage from the decision of the Queensland Guardianship and Administrative Tribunal in Re HAA [2007] QGAAT 6 at 34:
“Expert medical opinion provided to (and which appears to have been accepted by) the Court in Adult Guardian (In Re Enduring Power of Attorney of Vera Hagger) v Vera Hagger, Declan James Barry and Albert Craig Ray SC Qld No 1083 of 2001 (Unreported), was that an Enduring Power of Attorney was both more unfamiliar and more complex (for most members of the community) than a will. Accordingly, a higher cognitive ability and therefore standard of capacity would be required for an Enduring Power of Attorney. (emphasis added)
97. We are inclined to agree with the observations of the Queensland Guardianship and Administrative Tribunal in Re HAA.
Application of the capacity test
98. The starting point is section 18 of the POA Act (ACT) which states, in effect, a presumption of capacity. Section 18 states:
18 Presumption that principal understands nature and effect of making power of attorney
In the absence of evidence to the contrary, a principal who makes a power of attorney is taken, for this Act, to understand the nature and effect of making the power of attorney.
99. Section 17 of the POA Act (ACT) set out above and Szozda v Szozda (following Re K) direct the Tribunal to the issues it must consider when determining whether Clara understood “the nature and effect” of making the two 2018 EPOA’s. The question is what conclusion, on the evidence, should be drawn?
100. Mr Underwood submitted that the Tribunal “would need considerable evidence” to displace the presumption, and that the Tribunal should prefer the evidence of Dr A and Mr Giles that Clara understood the nature and effect of making the 2018 ACT EPOA at the time she signed the document.
101. Mr Underwood submitted that the Tribunal should give “paramount weight” to the reports from Dr A as the “only specialist medical practitioner who had assessed [Clara’s] capacity at the temporally relevant time”. This submission was not factually correct: Dr D and Dr E are both specialists in geriatric medicine and assessed Clara on 1 November 2017 (Dr E) and on 17 May 2018 (Dr D). Those dates are more “temporally relevant” than Dr A’s assessments after the event.
102. In his further written submissions dated 19 March 2019, Mr Underwood noted that Dr B, in his examination on 12 June 2018, noted that Clara only “may” have some degree of cognitive impairment and that Clara’s “dementia screens” indicating “moderate cognitive impairment” were conducted on 29 June 2018 after Clara’s execution of the two 2018 EPOAs. We struggle with the implicit proposition that Clara had capacity to make an enduring power of attorney on 28 June 2018, but had “moderate cognitive impairment” the next day. We also note Dr B’s statement in his report that the screens were “consistent with her clinical diagnosis of dementia”.
103. Mr Underwood also relied upon Dr B’s opinion that Clara remained “cognitively able” to make a decision regarding living with her son, John, and that her wish to do so should be respected. In this regard, Mr Underwood relied also on the independent opinion of Ms Davies from ADACAS to that effect.
104. Mr Morton submitted, with reliance on the report from Dr E, that Clara has had impaired decision-making ability in the form of dementia since at least 1 November 2017. He relied on Dr C’s statement that Clara’s cognitive impairment was “obvious” from when Dr C first saw Clara on 13 July 2017. He submitted that greater weight should be given to the opinion of Dr C, as Clara’s treating doctor, who has been seeing Clara since 13 July 2017. Mr Morton also relied on Dr D’s report dated 17 May 2018 stating that Clara has poor memory of conversation and has been unable to identify her family members. He notes that Dr D’s report predates Clara making the two 2018 EPOAs. So too does Dr E’s report dated 1 November 2017.
105. In his written submissions dated 31 October 2018, Mr Morton stated, and we accept, that he wrote to Mr Giles requesting information about the questions Mr Giles asked Clara for the purpose of forming his opinion that Clara had capacity to make the two 2018 EPOAs. Mr Morton says, and we accept, that he did not receive a reply. Mr Morton submitted (at the time) that the failure of Mr Giles and/or Ms Smith to provide evidence regarding the basis for their certifications that Clara had capacity to make the two 2018 EPOAs should invite a “negative inference” regarding her capacity. Mr Morton submitted that “limited weight” should be given to the certificates from Mr Giles and Ms Smith given under section 22 of the POA Act (ACT), and that the certificates should be taken only as prima facie evidence of capacity, especially where a certificate “does nothing more than say that the person appeared to understand the document.”
106. Mr Morton also submitted that there are numerous technical faults in the 2018 documents which, he said, meant the documents are invalid. It was not necessary for us to determine this issue.
107. In response to Mr Morton’s submissions, Mr Giles provided the Tribunal with a statement dated 13 November 2018 on CFG letterhead concerning Clara’s execution of the two 2018 EPOAs. The relevant parts of the letter stated:
1. On 26 June 2018, I had an interview with [Clara] … who was currently living with her daughter [Susan] .. [Clara] had become very unhappy with her current living situation, and complained that her daughter was treating her like a child and was seeking to isolate her from her friends, thereby controlling her. Specifically, [Clara] felt that [Susan] … would not assist [Clara] to travel to her church for worship. [Clara] further stated her wishes were now to live with her son, [John], and to revoke her existing Enduring Power of Attorney which named [Susan] as her sole attorney. At this time, I became aware of a conflict between the beliefs of [Clara] and [Susan] ... [Clara] instructed that she wanted to appoint [John] and her granddaughter [Jill] as her new attorneys. [Clara] further instructed that she was concerned that [Susan] was taking money from a bank account without her authority. During this initial client interview, [Clara] was very alert and active in providing her instructions to me, that external influences. [Clara’s] instructions were very clear that she did not want [Susan] to have any control over her lifestyle.
2. On 28 June 2018, [Clara] returned to my offices to execute two EPOA instruments, one in ACT and one in NSW. During this second interview, I systematically went through each of the items listed in Schedule 3 to the Enduring Power of Attorney (ACT) to ensure that [Clara] understood the nature and effect of making a new EPOA. I also tested [Clara’s] ability to understand the explanation of the EPOA that I provided to her by:
18. My wishes regarding family visitations are for a regime to be implemented after the Tribunal has made its decision in these guardianship proceedings, when the stress of my participation and waiting for an outcome has passed will stop at this time, I would like to see my family according to visitation arrangements that have been agreed to by [John], as I live under his roof.
181. By email dated 21 January 2019, CFG stated that it objected to the Tribunal receiving into evidence FGD’s letter dated 29 November 2018 and the attached bank statements “on the grounds that [Clara] has not consented to them being provided to a third party as stated at paragraph 14 of [her] statutory declaration dated 11 December 2018.” CFG objected to the tender, notwithstanding there having been no objection on 4 December 2018 when the Tribunal received the bank statements into evidence.
182. The Tribunal requested submissions as to whether the documents produced under the section 72C notices should be released or withheld and why the bank statements tendered on 4 December 2018 should (instead) not form part of the evidence. The Tribunal was concerned that Clara and John should not be disadvantaged by Ms Smith not objecting to their tender at the time.
183. Regarding the bank statements, CFG submitted that the statements “were obtained improperly” and therefore should be excluded under section 138 of the Evidence Act 2011 which provides:
138 Exclusion of improperly or illegally obtained evidence
(1) Evidence that was obtained—
(a) improperly or in contravention of an Australian law; or
(b) in consequence of an impropriety or of a contravention of an Australian law;
must not be admitted unless the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained in the way in which the evidence was obtained.
(2) Without limiting subsection (1), evidence of an admission that was made during or in consequence of questioning, and evidence obtained in consequence of the admission, is taken to have been obtained improperly if the person conducting the questioning—
(a) did, or omitted to do, an act in the course of the questioning even though the person knew or ought reasonably to have known that the act or omission was likely to impair substantially the ability of the person being questioned to respond rationally to the questioning; or
(b) made a false statement in the course of the questioning even though the person knew or ought reasonably to have known that the statement was false and that making the false statement was likely to cause the person who was being questioned to make an admission.
(3) Without limiting the matters that the court may take into account under subsection (1), it must take into account—
(a) the probative value of the evidence; and
(b) the importance of the evidence in the proceeding; and
(c) the nature of the relevant offence, cause of action or defence and the nature of the subject matter of the proceeding; and
(d) the gravity of the impropriety or contravention; and
(e) whether the impropriety or contravention was deliberate or reckless; and
(f) whether the impropriety or contravention was contrary to or inconsistent with a right of a person recognised by the International Covenant on Civil and Political Rights; and
(g) whether any other proceeding (whether or not in a court) has been or is likely to be taken in relation to the impropriety or contravention; and
(h) the difficulty (if any) of obtaining the evidence without impropriety or contravention of an Australian law.
184. CFG submitted that on 19 July 2018 they provided FGD with a registered revocation of the 2009 NSW POA that appointed Susan as Clara’s attorney, and that Susan’s subsequent access to Clara’s bank account was improper because she knew she did not have Clara’s consent to access the bank account and had no express authority to do so. CFG relied upon the High Court’s decision in Parker v Comptroller-General of Customs to submit that the methods used by Susan to obtain the bank statements were improper because they were not obtained in accordance with fact, reason or rule.
185. Regarding the documents produced pursuant to the section 72C notices, CFG submitted that the information was for the Tribunal “only”, and that a literal approach to statutory interpretation - presumably of section 72C - “indicates that no obligation arises to provide this material to an entity other than that Tribunal.”
186. Regarding the bank statements, FGD submitted that the statements were not obtain improperly or illegally. They submitted that access to Clara’s Internet banking was given to Susan independently of the 2009 NSW POA, and has not been revoked. FGD also noted that the validity of the revocation document was contested. FGD also submitted that the bank statements are “probative” because they are consistent with FGD’s submission that John acts in his own interests and not those of Clara.
187. Regarding the documents produced pursuant to the section 72C notices, FGD submitted that the documents are “relevant to a hearing”, adopting that phrase from section 72C, and are therefore evidence that the Tribunal may take into account. FGD submitted that it would be contrary to principles of procedural fairness for Susan not to have access to all the evidence.
188. Section 138 of the Evidence Act 2011 is not binding on the Tribunal. Pursuant to sections 8 and 26 of the ACAT Act, respectively, the Tribunal “need not comply with the rules of evidence” and may “inform itself in any way it considers appropriate in the circumstances.” However, whilst the Tribunal need not comply with the rules of evidence, we accept that they provide strong guidance as to whether it is “appropriate” to receive information, oral or in writing, as evidence in a matter.
189. Also, section 138(1) of the Evidence Act does not mandate that evidence obtained “improperly or in contravention of an Australian law” must not be admitted. The provision requires a court to engage in a balancing exercise, weighing up the considerations for and against exclusion or admission of the evidence. Section 138(3) lists factors that a court must take into account, when deciding how to exercise its discretion regarding exclusion or admission of the evidence.
190. In this case, two issues therefore arose. First, whether the bank statements were obtained “improperly”. Second, if the statements were obtained improperly, whether it was nevertheless appropriate for the Tribunal to receive the statements as part of the evidence.
191. In Parker, the High Court noted that the party seeking to exclude the evidence has the burden of showing that the conditions for its exclusion are satisfied, namely that it was obtained improperly or in contravention of an Australian law. If that burden is discharged, the burden then falls upon the party seeking the admission of the evidence to persuade the court that it should be admitted. There is thus a two stage process.
192. CFG submitted that the statements were received “improperly” because, in July 2018, Clara revoked the power of attorney in favour of her daughter that she executed in 2009. The Tribunal was not persuaded. The revocation might, arguably, have made it improper for Susan to deal with Clara’s money, but Susan did not do so. She merely obtained information about how others had used the account. Also, the Tribunal inferred from Susan’s ability to access Clara’s bank account that the bank held an authority given by Clara authorising Susan to do so or Clara had given Susan all the information that Susan needed (for example the account number and password) to access the account online. If that authority was to be withdrawn, or Clara no longer wished Susan to be able to access her account, it was incumbent on Clara, or John in his capacity as her new attorney, to take whatever steps were necessary to remove that access and/or right of access. The Tribunal inferred that neither person had done so because Susan was able to we have applied to cancel we have apply access, download and print the bank statements.
193. Accordingly, the Tribunal rejected CFG’s submission that Susan was aware that Clara did not consent to Susan accessing the bank account and had no express authority to do so.
194. The Tribunal also concluded that even if it was wrong about the first issue, and Susan obtained the bank statements improperly, the statements should still be accepted into evidence. The desirability of admitting them into evidence outweighed the undesirability of admitting them having regard to the way in which the evidence was obtained. The bank statements had a high probative value, noting their indisputable content. They were also important evidence concerning Clara’s capacity in relation to her financial affairs, which bore upon the validity of the 2018 documents. The Tribunal also concluded that the bank statements might also be relevant to the question whether John had exercised his power as Clara’s attorney in a manner that was not in Clara’s interests.
195. For these reasons, having regard to the principles underpinning section 138 of the Evidence Act 2011, the Tribunal was satisfied that it was appropriate for the Tribunal to receive the bank statements into evidence.
196. The Tribunal readily accepted CFG’s submission that the obligation to produce documents in accordance with the notice issued under section 72C of the GMP Act did not bring with it a corresponding obligation to provide the documents to any other person or entity. An objection to production must be dealt with on its merits. An objection may be taken on many grounds, for example relevance, privilege or that the prejudice to the party that produced the documents outweighs the probative value of the documents.
197. However, if an objection is successfully made, the Tribunal would ordinarily disregard the documents altogether. For reasons of procedural fairness, only in extraordinary or unusual circumstances would the Tribunal accept documents into evidence but not produce them to the other parties or persons involved with the litigation.
198. In response to the first paragraph of the notice, Mr Giles produced all correspondence to Dr A and Dr B.
199. In response to the second paragraph of the notice, CFG provided two tax invoices under its own letterhead dated 3 October and 19 November 2018, and four tax invoices for fees payable by CFG to Mr Underwood dated 3 and 31 October 2018 and 14 and 19 November 2018. In his written submissions dated 19 March 2019, Mr Underwood confirmed that “the Tribunal has been provided with all information requested pursuant to the section 72 Notices”.
200. The Tribunal concluded that the tax invoices produced by Mr Giles under the section 72C notice were relevant you, consistent with the bank statements, for the reasons that follow.
201. The Tribunal could not envisage any basis upon which it could take the documents into evidence and yet deny Susan the opportunity to receive copies of them and to make submissions about them. We so directed.
202. The only proviso to that conclusion was that the documents, having been produced under compulsion by means of the section 72C notices, attracted qualified privilege regarding their use.
203. On 17 July 2018, Clara came to live with John in one of the southernmost suburbs of Canberra. From 18 July 2018, John and Clara had access to Clara’s bank accounts. We accept that from that day Susan ceased using the account. On 20 July 2018, following closure of her savings account, Clara’s day-to-day account held a credit balance of $30,122.63.
204. The bank statement records that on 20 July 2018 someone withdrew $500 in cash from the Fyshwick branch of Clara’s bank. The bank statement records more cash withdrawals from the Fyshwick branch on 12 October ($100) 30 October ($500) and 13 November ($200).
205. In his statement dated 11 December 2018, John said that he drove Clara to the bank’s Fyshwick branch where she:
signed the withdrawal forms herself as she wanted some general spending money for incidentals.
206. Why Clara needed $1,300 in cash over a period of four months to pay for “incidentals” was not explained, nor why she always went to Fyshwick to withdraw cash in circumstances where her bank has an ATM in Greenway, Tuggeranong, ACT, which is a short distance from where Clara is now living.
207. There was also no evidence about why Clara needed $1,300 in cash to pay for incidentals in the four-month period from 20 July to 13 November 2018, but there were no cash withdrawals prior to 18 July 2018.
208. The bank statement records that on 16 August 2018 someone withdrew $7,000 from Clara’s account, again from the Fyshwick branch of the bank. Ms Smith stated that this money was to pay CFG’s legal fees, but that is not consistent with the tax invoices that were later produced. The purpose of the withdrawal remains unexplained.
209. The bank statements record that on 31 August 2018 someone withdrew $12,775.00 from the Fyshwick branch of the bank. Ms Smith was not able to comment on the purpose of this withdrawal. There is no basis to surmise that it represents payment of legal fees because other later payments correspond with all the tax invoices for legal fees that were produced. The purpose of the withdrawal remains unexplained.
210. The bank statements record that on 9 October 2018 someone withdrew $12,673.50, and on 27 November 2018 someone withdrew $10,503.57. Again, the withdrawals were from the Fyshwick branch of the bank.
211. It appears clear that the withdrawal on 9 October 2018 was to pay CFG’s tax invoice dated 3 October 2018 for professional fees of $5,786 and disbursements of $6,887.50 to a total of $12,673.50. The withdrawal on 27 November 2018 was presumably to pay CFG’s tax invoice dated 19 November 2018 for professional fees of $6,528.50 and disbursements of $3,975.07 to a total of $10,503.57.
212. Mr Underwood’s tax invoices are dated 3 October 2018 ($6,805), 31 October 2018 ($2,310), 14 November 2018 ($2,475) and 19 November 2018 ($3,135). The means by which these tax invoices were paid (assuming they are now paid) is unclear. The first invoice, perhaps, forms part of the disbursements claimed in CFG’s first tax invoice. The fourth, perhaps, forms part of the disbursements claimed in CFG’s second tax invoice, but the means by which the second and third tax invoices were paid is not explained.
213. We considered whether the withdrawals of $7,000 on 16 August 2018 and $12,775.00 on 31 August 2018 might have been payments of legal fees in relation to the earlier guardianship proceedings in NCAT, but that possibility was eliminated because of the breadth of the section 72C notice. We accept Mr Underwood’s submission (or statement) that all tax invoices were produced.
214. Clara’s bank statement also records monthly deposits on 31 July 2018 ($1,453.75), 31 August 2018 ($1,162.75), 2 October 2018 ($1,453.75) and 31 October 2018 ($1,453.75) from the agent managing her home on the South Coast. We presume this represents Clara’s rental income less expenses. These amounts total $5,524.
215. Clara’s bank statement also records payments of two pensions of approximately $590 and $175 paid each fortnight. In the period 20 July 2018 to 28 November 2018, these pensions totalled approximately $7,636.
216. Clara’s bank statement also records a deposit of $2,500, again at the Fyshwick branch of the bank, on 27 November 2018.
217. The deposits into Clara’s account between 20 July and 28 November 2018 totalled approximately $15,660, but the withdrawals of approximately $46,500 during that period left Clara with a balance in her account as at 28 November 2018 of only $276.69.
218. In response, CFG provided a statutory declaration signed by Clara stating, in substance, that payment of CFG’s legal fees was her “own decision”. The content of the statutory declaration is set out in paragraph 180 above. The Tribunal has several concerns about this document.
219. First, much of it is written in highly legalistic language. Having regard to her dementia, we have real doubts that Clara understood it. An affidavit should be written in language that reflects the evidence that the deponent would and could give orally, and evidence that the deponent can understand. Former Justice Bryson of the NSW Supreme Court noted in his article, How to draft an affidavit, the cynical proverb “Truth will out, even in an affidavit”. In our view, even simple gentle questioning of Clara about her statutory declaration would quickly show that she has no understanding of phrases such as “documents that are in the custody of my daughter”, “I … make all my own financial transactions of my own free will”, “I have not provided my consent for my personal bank statements to be provided to a third party” , “I have retained [CFG]” and “my wishes regarding family visitations are for a regime to be implemented”.
220. Second, the “evidence” that Clara chose to pay all of CFG’s legal fees and at least some of Mr Underwood’s fees which (with other significant unexplained expenditure) has caused almost all her money to be spent, confirms our view that Clara has no capacity to make decisions regarding her finances. We do not accept that Clara would rationally spend what appears to be approximately $28,000 in legal fees in response to a dispute between her son and daughter about who can make decisions on her behalf, especially where Clara’s only apparent concern was that she be able to live with John in order to attend church and where is no evidence that John paid anything. We expect that such evidence would have been given had that occurred.
221. The observation of McDougall J in Hunter that the capacity “required … to buy a cup of coffee may be present where the capacity to give away one’s fortune is not” is apposite.
222. When reaching this conclusion, we were mindful of the settled proposition that a person with capacity has a right to make poor decisions. In T the State Administrative Tribunal in Western Australia said:
There is a common maxim in the jurisdiction that people have a right to make bad or unwise decisions. Competent people make them all the time. It will be for the Tribunal in each instance to ensure that any order under subsection (iii) is appropriate and that the subsection is not simply being used in an attempt to override what are capably made albeit bad or unwise decisions with which others engaged with or close to the proposed represented person simply disagree.
223. That principle was recently confirmed by the Supreme Court of Tasmania, per Wood J, in J v Guardianship and Administration Board and Anor where a person the subject of a guardianship application wished to continue living alone on his boat contrary to medical and other advice. The Court accepted that poor decision-making can be taken into account when deciding whether a person has capacity to make reasonable judgements, but said:
[U]ltimately the issue is ability and capacity to make reasonable judgements, rather than the judgements themselves.
224. Wood J acknowledged that cases turn on their facts. In that matter, there was competing evidence about capacity and cognitive impairment. The subject person had insight into his physical disabilities and was considering options to address them for the purpose of being able to continue living on his boat. However, determinative of the case, was Wood J’s concern about the “bootstraps” approach used to ascertain capacity. His Honour said:
The medical reports of the treating team also reveal this heavy reliance on the appellant's fixed poor decision to continue living on his boat. It can be seen that there was a degree of working back from “poor decisions” to opine poor reasoning. That is not to criticise the legitimacy of taking into account poor decisions, but rather to note the need for caution because, as I have said, poor decisions are not to be equated with poor decision-making ability.
225. In our view, this case is distinguishable on the facts from J. The prevailing evidence about Clara’s dementia was enough to satisfy us that Clara did not have capacity to make the two 2018 EPOAs or the revocation instrument at the time she made them. We regard her spending of nearly all her money on CFG’s legal fees and other very substantial and unexplained items, or her acquiescing in that expenditure, as confirmation of her incapacity rather than determinative of it.
226. Clara’s statutory declaration made on 11 December 2018, in form and content, is further evidence confirming that Clara did not have capacity to make the 2018 EPOAs.
Visitation
227. Susan and her children informed the Tribunal that they have been unable to visit or speak with Clara since she commenced living with John and Jane in July 2018. This has caused them great distress.
228. This claim was made despite Clara informing the Tribunal on 2 October 2018, on enquiry about family visits, that “visits don’t worry me”.
229. Later, on enquiry about visits, the following exchange occurred with Clara regarding visits from her daughter and granddaughters:
[CLARA]: It’s okay. I would just like to say I would rather if the family wanted to come to pick up the phone and say, “We’re on our way”, because I go [for] walks a lot. And I am - I’m a fanatic walker and I wouldn’t like to be out walking and the family to decide they want to come, because although I walk I’m not a runner. So it - just from a courtesy point of view if they wanted to come round, I think they should give me the chance to - because I’m in my late 80’s. So the thing is I’m not as - I’m not as agile as I used to be. So I just think that if - if the family in general know that they’re making a plan to come up but don’t drop on me, because I can’t cope with that then.
230. Mr Morton asked the Tribunal to establish or provide guidance on how and when they may visit Clara or accompany her on outings.
231. We were satisfied that Clara has no objection to seeing Susan or her children, and requested only some notice of their visit. It was an entirely unremarkable and appropriate response. At the hearing on 2 October 2018, John said he had no objection to such arrangements, and yet the Tribunal receive subsequent advice that Susan’s efforts to visit her mother continued to be frustrated.
232. On 11 December 2018, Mr Giles provided a statutory declaration stating that Clara “has found the Tribunal proceedings very stressful, and wishes to suspend family visitations until the proceedings have been determined.” CFG provided a statutory declaration signed by Clara dated 11 December 2018 quoted above which, at paragraph 18 of the declaration gives evidence to the same effect.
233. On 19 March 2019 Mr Underwood provided the Tribunal with “a structured visitation regime” which, he said, “will be appropriate once these guardianship proceedings have been determined”. The “visitation regime” was provided in the form of a letter from CFG to Clara and John, which stated:
Please confirm your instructions regarding a regime for family visitations are as follows:
1. A regime for visitation by [Susan], [Sonia] and [Sally] may be implemented after the Tribunal has made its decision in these guardianship proceedings.
2. The regime will require a support person to accompany [Clara] during visitation times.
3. Visitation times will be once a fortnight on a Monday at 11:30am, for a maximum of 1.5 hours duration, unless for health or other reasons beyond [Clara’s] control visitation cannot be managed. In these circumstances, the earliest possible notice of cancellation of the visit will be given.
4. Visitations will only occur at one of three coffee shops in Tuggeranong Homeworld square.
5. Family who wish to visit [Clara] during the designated visitation time are to call [Clara] at least one (1) day in advance to confirm the visitation.
234. CFG’s letter is signed by John and Clara. Their signatures are witnessed by Mr Giles.
235. With respect, it is difficult to imagine a more incongruous document.
236. It is written in language that, in our view, Clara could never have understood, and which would therefore have defeated her capacity to give ‘instructions’ in those terms.
237. It is inconsistent with the views she expressed to the Tribunal about wishing to see her family whenever they might wish to see her.
238. It is inconsistent with her earlier evidence that she had years with Susan, and is now with John and “I’m happy whichever one I am with” with the proviso that Susan “doesn’t go to the same church as I go to.”
239. It is inconsistent with Clara’s statement to the Tribunal on 2 October 2018:
PRESIDENTIAL MEMBER: Is there anything you want to tell us? Is there anything that you would like to tell us about all this?
[CLARA]: Well, I’ll say this. It’s a shock to come and find everybody around the place. I didn’t expect it.
PRESIDENTIAL MEMBER: Sure.
[CLARA]: But I’m pleased that it’s all happening and it will all come to the head one way or the other. (emphasis added)
240. Regarding the “visitation regime”, the letter more resembles terms and conditions for release of a person from prison on home visits, or access under a family violence order, than arrangements for a grandmother to see her daughter and grandchildren.
241. The letter also adds to our conclusion that Clara finds herself in an entirely foreign environment, in the middle of a ‘tug-of-war’ (to use her words) between her son and daughter. It confirms our conclusion that she signed the 2018 EPOAs without any understanding of their content and without capacity to understand their nature and effect. The letter also adds to our conclusion that the Public Trustee and Guardian (the PTG) should be appointed as Clara’s guardian in order for a right so basic as being able to see her family can be upheld.
242. We are not persuaded that the Tribunal should make directions or even suggestions about arrangements for Clara to spend time with Susan or other members of her family. The better approach is for the PTG, in its capacity as her guardian, to discuss that with Clara in a setting where she is comfortable to do so.
Costs
243. Mr Morton initially sought a direction that John not use Clara’s funds to pay any legal costs arising out of this proceeding or, if he has already done so, a direction that he repay Clara. Alternatively, he seeks a direction that Clara’s funds be used to pay John and Susan’s legal costs of the proceeding.
244. In his later submissions dated 13 March 2019, upon CFG acknowledging that Clara has paid CFG’s fees and (it would seem) at least some of Mr Underwood’s fees, Mr Morton sought a direction that John reimburse Clara for all funds that she has paid to CFG. Mr Morton submitted that directions of this kind can be made under section 16 or section 62(2)(a) of the GMP Act.
245. Section 16 of the GMP Act state:
16 Directions by ACAT
(1) The ACAT may, on application, give a direction to a guardian or manager about the exercise of his or her functions or powers.
(2) A guardian or manager must not, without reasonable excuse, contravene a direction.
Maximum penalty: 50 penalty units, imprisonment for 6 months or both.
246. Section 62(2)(a) of the GMP Act states:
62 ACAT directions etc for enduring powers of attorney
(1) This section applies in relation to an enduring power of attorney if the principal has impaired decision-making capacity.
(2) On application, or on its own initiative on hearing a matter under this Act, the ACAT may, by order—
(a) give a direction, not inconsistent with the Powers of Attorney Act 2006 or the power of attorney, that the attorney do or not do a stated act;
247. Mr Underwood submitted that the Tribunal’s only power to make a costs order is found in section 48(2) of the ACAT Act, and that the Tribunal cannot vary the “default position”, meaning that each party must bear its own costs.
248. Section 48(1) and (2) of the ACAT Act states:
48 Costs of proceedings
(1) The parties to an application must bear their own costs unless this Act or another territory law otherwise provides or the tribunal otherwise orders.
(2) However—
(a) if the tribunal decides an application in favour of the applicant, the tribunal may order the other party to pay the applicant––
(i) the filing fee for the application; and
(ii) any other fee incurred by the applicant that the tribunal considers necessary for the application;
249. Mr Underwood’s submission is not strictly correct. In some cases, the Tribunal may order a party to pay costs, but we are not persuaded that the Tribunal has power to make a costs order in this case.
250. We first put aside section 16 of the GMP Act. It concerns a direction to a guardian or manager and, in our view, about future conduct. We acknowledge that Mr Morton’s reference to section 16 is premised on the Tribunal appointing John as Clara’s manager, in the sense of making the direction subsequent to his appointment, but as we have decided to dismiss John’s application for his appointment, the question of a direction under section 16 of the GMP Act falls away.
251. Section 62(2)(a) also falls away. It concerns a direction to an attorney to do or not do a stated act. Where the Tribunal has concluded that it should revoke the 2018 ACT EPOA, John will no longer be Clara’s attorney upon the Tribunal doing so. With that order made, the Tribunal will no longer have power to direct John to do anything under section 62.
252. We accept however that John should be held responsible for payment of all of CFG’s and Mr Underwood’s fees. We reject the proposition that any of these services were reasonably incurred for Clara’s benefit. Her only interest was to come to live with John, rather than with Susan, so that she could be closer to her friends and attend her church. That wish could and should have been resolved without engaging lawyers and, in particular, without spending Clara’s money to pay them.
253. In our view, the real drivers to engage legal representation were John and Susan. Clara was, and it seems remains, the subject of their dispute but not a participant in it.
Orders
254. Having found that Clara did not have capacity to make the 2018 ACT EPOA, we accept Mr Morton’s submission that it should be revoked and will order accordingly.
255. We will also dismiss John’s application to be appointed as Clara’s guardian and manager. His acquiescence, at least, in Clara’s spending of her money to the point where her funds were almost entirely exhausted such that she now lives under his roof completely dependent upon him for food, shelter, welfare and access to her church satisfies us that he is not suitable for appointment as her guardian or manager.
256. We pause here to address Mr Morton’s submission that CFG had a conflict of interest, by acting for Clara and John. We were not persuaded that that was necessarily the case. Elderly people regularly appoint a child or their children as their attorneys under an enduring power of attorney, which necessarily creates the potential for a conflict of interest between the interests of the parent and the interests of the child. It is a question of how the power and the potential conflict is managed. The Tribunal dealt with this subject in In the Matter of LQL, with reference to a decision of the NSW Supreme Court, per Lindsay J, in Smith v Smith.
257. Lindsay J, in his paper given on 26 October 2018 entitled A Struggle for Perfection in an Imperfect World: Dignity of the individual, incapacity for self-management, rights, duties and conflicts of interest, dealt with the fiduciary obligations upon a guardian, manager or attorney, and the “problems” that can arise especially as the person becomes “increasingly vulnerable as he or she drifts into incapacity”. His Honour said:
Secondly, there is the problem of recognising the existence of conflicting interests within the family. Not uncommonly, even professional advisers erroneously assume that note conflicts of interest arise, or need to be guarded against, in a family setting.
Thirdly, even if the existence of conflicting interests within the family is recognised, there is the problem of constructing a regime of management which ensures that: (a) conflicts of interest are eliminated, or at least minimised; and (b) due performance of duties owed to the incapable person remains paramount: IR v AR [2015] NSWSC 1187 at [29] – [35].
Because the offices of financial manager and guardian are fiduciary in character, the holder of such an office is duty-bound (in positive terms) to serve only the protective purpose for which he, she or it was appointed to the office, and (expressed proscriptively) not to allow collateral purposes or personal interests to intrude upon the performance of that primary duty.
In considering whether to appoint to such a fiduciary office a member of the family, a carer or an associate of the person in need of protection, a court or tribunal exercising protective jurisdiction must be satisfied that the prospective appointee, above any consideration of self-interest, can be relied upon to perform the duties of the office. If that element of reliability is absent so too is suitability for appointment.
258. Following the principles stated by Lindsay J, John’s acquiescence at least in Clara’s spending of her money in the manner described persuades us that this ‘element of reliability’ to protect Clara’s interests above any consideration of self-interest is absent.
259. We will also dismiss Susan’s application to be appointed as Clara’s guardian and manager, although for different reasons. Clara’s stated wish no longer to live with Susan, and to live with John, creates insurmountable problems with her holding an appointment as Clara’s guardian or manager.
260. The conflict between Susan and John also persuades us that neither is suitable for appointment.
261. We are, however, satisfied that a guardian and manager needs to be appointed. Referring to the three criteria in each of sections 7 and 8 of the GMP Act, we are satisfied that Clara has impaired decision-making ability regarding her health, welfare, finances and property. We are satisfied that decisions need to be made about where she should live (having regard to the expenditure of her money and the arrangements proposed for her seeing her family), about ongoing treatment for her dementia and other ailments, and about her property and finances. Having regard to the evidence about expenditure of Clara’s money over the past four months and the proposed arrangements for her to see members of her family, we are also satisfied that if a guardian and manager are not appointed, Clara’s needs will not be met and her interests will be significantly adversely affected.
262. Accordingly, and where no one has applied for appointment as Clara’s guardian or manager who we regard as suitable for appointment, we will appoint the PTG as her guardian and manager with the powers that we think are necessary to protect her interests. This will include a power to recover from John and/or Jill the amount Clara has paid to CFG and/or Mr Underwood and the amount of all other withdrawals from her account (especially the significant and unexplained withdrawals referred to above) unless it can be shown to the PTG that those payments were for her sole benefit.
263. We are also concerned about Clara’s statement in her statutory declaration that she does not wish to return to the Tribunal, despite telling the Tribunal on 2 October 2018 that she was “pleased that it’s all happening”. The statement placed the Tribunal in a difficult position, not knowing what her views and wishes now are about her lifestyle and her money but also not wishing to place stress upon her by making these enquiries. We hope that the appointment of the PTG as her guardian and manager will enable her views and wishes (including her views about where she wishes to live) to be obtained.
264. In reaching the conclusion that the PTG should be appointed as Clara’s guardian and manager, we should add comment about the several enduring powers of attorney that Clara has made from time to time under the POA Act (NSW).
265. Mr Morton submitted that we should revoke the 2018 NSW EPOA. We are not persuaded that this Tribunal has power to make any order about any of the enduring powers of attorney made under the POA Act (NSW). Section 62 of the GMP Act “applies in relation to an enduring power of attorney”. The section has no application to an enduring power of attorney made in another jurisdiction because an “enduring power of attorney” is defined as a power made under section 8 of the POA Act (ACT).
266. We can only give our opinion that the 2018 NSW EPOA is invalid. We hold that opinion for two reasons.
267. First, it is not valid because Clara did not have capacity to make it.
268. Second, we do not accept that Clara, John and Jill, all domiciled in the ACT at the time they signed the document, were legally able to execute the document in the ACT under the laws of NSW. As a general rule, the law to be applied is the law of the place where a document is made. The fact that Clara owns her house on the South Coast is irrelevant. A valid enduring power of attorney made under the POA Act (ACT) would have given John and Jill power over Clara’s house regardless of its location in NSW.
269. We can only express our view that Susan, John, Jill and the appointees under the 2010 NSW EPOA should resign their appointments as Clara’s attorneys to permit the PTG to carry out its functions as Clara’s guardian and manager. We will give the PTG power to apply to NCAT for the 2009, 2010 and 2018 NSW EPOA’s to be revoked in the event that the appointees do not resign within a nominated period.
Closing remarks
270. At the end of our deliberations, we were left wondering why these applications were brought and so fiercely contested. The ostensible position was a dispute about where Clara should live, but that dispute was out of all proportion to the effort and cost that John and Susan brought to the case. Huge effort went into the question of whether Clara had capacity to make the two 2018 EPOA’s. However, there was no suggestion that John or Jill have done or decided anything pursuant to their powers. John’s position was always that Clara decided everything for herself, and had (and still has) the capacity to do so. So why the litigation?
271. The answer, we think, lies in Jane’s correspondence to Clara (set out at paragraph 43 above) protesting the terms of Clara’s Will, in John’s request to Mr Hawdon for a copy of the Will and the haste with which the 2018 EPOAs were executed. We would be very concerned if the dispute about capacity was not so much about capacity to make an enduring power of attorney but about her capacity to make a new Will and the inheritance of her house on the South Coast.
………………………………..
Presidential Member G McCarthy
For and on behalf of the Tribunal
HEARING DETAILS
FILE NUMBER:
GT 114/2018
PARTIES, APPLICANT:
John
PARTIES, RESPONDENT:
Susan
COUNSEL APPEARING, APPLICANT
Mr G Underwood
COUNSEL APPEARING, RESPONDENT
Mr T Morton
SOLICITORS FOR APPLICANT
Charles Filgate Giles & Associates
SOLICITORS FOR RESPONDENT
Farrar Gesini Dunn
TRIBUNAL MEMBERS:
Presidential Member McCarthy
Member G Wright
DATES OF HEARING:
4 December 2018
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