KNF - [2017] QCAT 144

CITATION:	KNF [2017] QCAT 144
PARTIES:	KNF
APPLICATION NUMBER:	GAA13099-16
MATTER TYPE:	Guardianship and administration matters for adults
HEARING DATES:	15 December 2016 and 16 February 2017
HEARD AT:	Hervey Bay
DECISION OF:	Member Milburn
DELIVERED ON:	26 April 2017
DELIVERED AT:	Hervey Bay
ORDERS MADE:	1. The tribunal retrospectively authorises TMS and RMS (the former administrators) for KNF (the adult) to use the adult’s funds to obtain motor vehicles in their names. 2. The Public Trustee of Queensland is authorised to pay to TMS and RMS the sum of $5032.95 from the adult’s funds.
CATCHWORDS:	APPLICATION FOR AUTHORISATION OF A CONFLICT TRANSACTION – RESULTING TRUST – whether tribunal has power to authorise retrospectively conflict transactions –– whether the tribunal should authorise retrospectively conflict transactions by administrators not long after their appointment – whether the conflict transactions are properly categorised as a loan or the use of the adult’s funds to obtain property in the name of the administrators Guardianship and Administration Act 2000 (Qld ), s 37 Guardianship and Administration Tribunal v Perpetual Trustees Qld Ltd [2008] QSC 49
APPEARANCES and REPRESENTATIVES:
15 December 2016 and 16 February 2017 Mr KNF TMS and RMS 16 February 2017 Ms Carol Turner and Ms Alison Chappell, solicitors of Hervey Bay Neighbourhood Centre Inc. for TMS and RMS Mr Anthony Williamson and Mr Nelson Marks for the Public Trustee of Queensland

REASONS FOR DECISION

The matter for determination

On 19 June 2015, the tribunal appointed TMS and RMS (the former administrators) as administrators for KNF (the adult). At the same time, the tribunal revoked a power of attorney made by the adult on 19 May 2015, where he had appointed them as his attorneys. The tribunal revoked the power of attorney upon finding that the adult lacked the capacity to make it.
The tribunal directed the former administrators to provide certain financial documentation to the tribunal for review purposes at various intervals.
During the first financial review, the financial assessment team at the tribunal identified that the former administrators engaged in conflict transactions during the term of their appointment. This resulted in the tribunal initiating an application for a review of the appointment of the administrators.
That review hearing commenced on 15 December 2016. On that day, being the first day of hearing, the tribunal revoked the appointment of the former administrators. The tribunal then appointed the Public Trustee of Queensland as administrator. During the hearing, the tribunal initiated an ‘application for consent to conflict transactions’, to consider the legal position regarding the conflict transactions identified by the financial assessment team. The tribunal adjourned the hearing of the Authorisation of a Conflict Transaction, part heard, to 16 February 2017.
In short, the conflict transactions identified by the tribunal related to the acquisition of a motor vehicle by the former administrators and the use of the adult’s funds ($5000), described as a loan, by one of the administrators to purchase a motorbike for the administrator’s personal use.
Prior to the hearing of this…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: KNF [2017] QCAT 144
Case: [2017] QCAT 144
Decision Date: 26 April 2017

CaseChat Overview and Summary

The matter involved an application for authorisation of a conflict transaction by former administrators of an adult's estate. The applicant sought retrospective authorisation for transactions involving the use of the adult's funds to purchase motor vehicles in the administrators' names. The Guardianship and Administration Tribunal of Queensland was tasked with determining whether it had the power to authorise such transactions retrospectively and whether it should do so given the circumstances. The adult argued that the use of their funds for the purchase of the vehicles constituted a conflict of interest and that the tribunal should not authorise the transaction.

The central legal issue was whether the tribunal had the authority to retrospectively authorise a conflict transaction under the Guardianship and Administration Act 2000. The court considered whether the transactions in question should be categorised as a loan or as the use of the adult’s funds to obtain property. The tribunal also needed to decide if the administrators' actions were in good faith and aligned with the adult's best interests. The court found that the tribunal did have the power to authorise such transactions retrospectively, as established in the case of Guardianship and Administration Tribunal v Perpetual Trustees Qld Ltd. Furthermore, the tribunal accepted that the transactions were conflict transactions but were undertaken in good faith by the administrators, who had a positive relationship with the adult and had cared for them for an extended period.

In its decision, the tribunal found that the administrators had used the adult's funds to acquire motor vehicles, which constituted a conflict transaction. However, the tribunal did not classify the transaction as a loan but rather as the use of the adult’s funds to obtain property in the administrators' names. The tribunal authorised the transaction retrospectively, acknowledging that the administrators acted in good faith and with the intention of benefiting the adult. The tribunal concluded that the loss incurred from the sale of the vehicles should be shared in proportion to the initial contributions. Consequently, the tribunal authorised the payment of $5032.95 from the adult’s account to the former administrators.

The tribunal ordered that the Public Trustee of Queensland should pay $5032.95 to the former administrators from the adult's funds. This payment reflected the proportion of the loss to be borne by the former administrators based on their initial contributions to the purchase of the vehicles. The tribunal also retrospectively authorised the former administrators' use of the adult’s funds to obtain the motor vehicles in their names.

Orders

Orders of the court

1. The tribunal retrospectively authorises TMS and RMS (the former administrators) for KNF (the adult) to use the adult’s funds to obtain motor vehicles in their names.

2. The Public Trustee of Queensland is authorised to pay to TMS and RMS the sum of $5032.95 from the adult’s funds.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

If the tribunal determines that the former administrators had borrowed $23,000 from the adult, then they would assume all the shortfall suffered consequent upon the sale of the motor vehicles. If the tribunal determines that the former administrators used the adult’s funds to assist in purchasing the vehicles in the administrators’ names, then the adult would share in the shortfall.Factual conclusions I am satisfied that the former administrators used the adult’s funds to obtain an asset in the administrators’ names and that the administrators contributed towards the cost of that asset from their own resources (through their trade-in). While that construction of the arrangement is financially disadvantageous to the adult, I cannot appropriately categorise the financial arrangements between the former administrators and the adult as a ‘loan’ arrangement. I come to this conclusion because I accept the evidence of the former administrators that they acquired vehicle #1, in part, because of their desire to transport the adult. I accept their evidence that they exchanged vehicle #1 for vehicle #2 specifically to accommodate and transport the adult’s walking aid in the vehicle. I do not conclude that the former administrators acquired vehicle #1 for their own purposes solely. The fact that prior to the acquisition, they did not test whether the vehicle was suitable for his purposes, is in my view nothing more than a mistake on their part. I simply accept that administrators do make mistakes from time to time. Legal position and findings In Guardianship and Administration Tribunal v Perpetual Trustees Qld Ltd [2008] QSC 49, Mullins J determined that the tribunal has power to authorise retrospectively conflict transactions and that power is found in s 37 of the Guardianship and Administration Act 2000. The solicitors representing the former administrators conceded that the acquisition of the motor vehicles constituted a conflict transaction. I accept that position. They argued that the former administrators engaged in the conflict transactions in good faith and were mindful of the best interests of the adult. I accept that evidence, in part because the adult clearly has a positive relationship with the former administrators, the former administrators have cared for the adult for an extended period and the former administrators did not fully appreciate their obligations as administrators. I accept the submission of the solicitors acting for the former administrators to the effect that the loss suffered on the resale of the vehicles should be shared by the parties in proportion to their initial contributions. Applying resulting trust principles, given that vehicle #2 was sold for $19,500, the adult’s interest of 74.19% is $14,467.05. The former administrators interest of 25.81% is $5032.95. As the administrators paid $19,500 into the adult’s account, the current administrator of the adult’s account is authorised to pay to the former administrators the sum of $5032.95

Ratio Decidendi

Legal Principle Established

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