KS (2)
[2008] WASAT 167
•28 JULY 2008
KS (2) [2008] WASAT 167
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2008] WASAT 167 | |
| GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) | |||
| Case No: | GAA:1251/2007 | 2 NOVEMBER 2007 AND 11 APRIL 2008 | |
| Coram: | MS F CHILD (MEMBER) MR J MANSVELD (MEMBER) MS S GILLETT (SENIOR SESSIONAL MEMBER) | 4/07/08 | |
| 14 | Judgment Part: | 1 of 1 | |
| Result: | Donee ordered to file copies of records and accounts kept by him from the date of the settlement of the sale of the donor's property | ||
| B | |||
| PDF Version |
| Parties: | GS GC |
Catchwords: | Guardianship and Administration Application to intervene in an enduring power of attorney Donor deceased but capable at the time of his death Transaction benefiting the donee Role of the Tribunal to supervise enduring powers of attorney |
Legislation: | Guardianship and Administration Act 1990 (WA), s 107, s 109 Inheritance (Family and Dependants Provision) Act 1972 (WA) State Administrative Tribunal Act 2004 (WA), s 59(4) |
Case References: | KS [2008] WASAT 28 |
Summary | KS executed an enduring power of attorney in 2004 appointing his son-in-law, GC, as the donee. KS died in 2006. After KS's death, one of his sons applied to the Tribunal for orders that the attorney file records kept by him of transactions made under the enduring power of attorney.,Preliminary questions of law arose as to whether the Tribunal had jurisdiction to intervene where the donor of an enduring power of attorney was capable or after the death of the donor. These questions were referred to the President of the Tribunal who determined that the Tribunal had jurisdiction in both cases and referred the application back to the Tribunal, as originally constituted, to determine.,The Tribunal found that the evidence showed that the donee had acted on the enduring power of attorney and had benefited from a transaction made in connection with the enduring power of attorney through the transfer of substantial funds of KS to the donee after the sale of KS's property. In these circumstances, the Tribunal determined that it was appropriate for the donee to file records of transactions following the sale of the property. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : HUMAN RIGHTS ACT : GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) CITATION : KS (2) [2008] WASAT 167 MEMBER : MS F CHILD (MEMBER)
- MR J MANSVELD (MEMBER)
MS S GILLETT (SENIOR SESSIONAL MEMBER)
- GAA 1252 of 2007
- Applicant
AND
GC
Donee
Catchwords:
Guardianship and Administration - Application to intervene in an enduring power of attorney - Donor deceased but capable at the time of his death - Transaction benefiting the donee - Role of the Tribunal to supervise enduring powers of attorney
Legislation:
Guardianship and Administration Act 1990 (WA), s 107, s 109
Inheritance (Family and Dependants Provision) Act 1972 (WA)
State Administrative Tribunal Act 2004 (WA), s 59(4)
(Page 2)
Result:
Donee ordered to file copies of records and accounts kept by him from the date of the settlement of the sale of the donor's property
Category: B
Representation:
Counsel:
Applicant : Mr P Wyatt
Donee : Mr CP Stokes
Solicitors:
Applicant : Haynes Robinson
Donee : Chris Stokes & Associates
Case(s) referred to in decision(s):
KS [2008] WASAT 28
(Page 3)
Summary of Tribunal's decision
1 KS executed an enduring power of attorney in 2004 appointing his son-in-law, GC, as the donee. KS died in 2006. After KS's death, one of his sons applied to the Tribunal for orders that the attorney file records kept by him of transactions made under the enduring power of attorney.
2 Preliminary questions of law arose as to whether the Tribunal had jurisdiction to intervene where the donor of an enduring power of attorney was capable or after the death of the donor. These questions were referred to the President of the Tribunal who determined that the Tribunal had jurisdiction in both cases and referred the application back to the Tribunal, as originally constituted, to determine.
3 The Tribunal found that the evidence showed that the donee had acted on the enduring power of attorney and had benefited from a transaction made in connection with the enduring power of attorney through the transfer of substantial funds of KS to the donee after the sale of KS's property. In these circumstances, the Tribunal determined that it was appropriate for the donee to file records of transactions following the sale of the property.
Background
4 GS (applicant) seeks orders pursuant to s 109 of the Guardianship and Administration Act 1990 (WA) (GA Act) in respect of an enduring power of attorney (EPA) made by his father, KS, in 2004. KS died on 9 October 2006. Probate of his will dated 22 March 2006 was granted on 26 February 2007 to the appointed executors, employees of a firm of accountants who had acted for him during his lifetime.
5 The applicant asserts that the schedule submitted with the application for the grant of probate was incomplete; that assets were omitted, and did not reflect the true value of the estate prior to his father's death. The orders sought in the application before the Tribunal are for the filing of records and accounts kept by the attorney, GC (donee), of transactions made in connection with the EPA and for the audit of those records and accounts once filed.
6 The application in the Tribunal is brought against a background of an application to the Supreme Court pursuant to the Inheritance (Family and Dependants Provision) Act 1972 (WA) (Inheritance Act). The applicant states in that application that proper provision was not made for him in the
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- will executed by his father on 22 March 2006. A mediation convened before a Registrar of the Court has reportedly been adjourned for the application before the Tribunal to be determined.
7 The Tribunal convened a hearing on 2 November 2007 at which there was argument about the Tribunal's jurisdiction to intervene in the EPA because the donor of the EPA, KS, had died. The Tribunal adjourned the hearing and referred two questions of law to the President of the Tribunal for determination pursuant to s 59(4) of the State Administrative Tribunal Act 2004 (WA):
• whether the Tribunal has jurisdiction to make orders intervening in an EPA where the donor has died; and
• whether the Tribunal has jurisdiction to make orders intervening in an EPA where the donor has retained legal capacity.
8 The President determined that the Tribunal did have jurisdiction in both cases and remitted the applications to the Tribunal, as originally constituted, for determination.
9 The Tribunal was reconvened on 11 April 2008 to hear from the parties regarding the applications. After oral evidence, final written submissions were invited within 21 days and the decision was then reserved.
Evidence and material before the Tribunal
10 The written material before the Tribunal includes:
• A copy of a document executed as an EPA on 6 July 2004 by KS appointing GC as donee. The EPA is executed in the form to come into effect immediately and to be in force notwithstanding subsequent legal incapacity. One of the witnesses is an employee of the firm of accountants and later an executor of the deceased estate of KS.
• A statutory declaration made by the donee on 21 December 2005 confirming that the EPA had not been revoked or varied by the donor.
• Copies of wills of KS dated 17 June 1996, 23 July 2004 and 22 March 2006.
(Page 5)
- • Copies of documents submitted for probate of the will dated 22 March 2006, including an affidavit dated February 2007 of Dr NF, KS's treating doctor at the time of his death, which states that KS was capable and last seen by the doctor on 3 October 2006.
• A copy of the grant of probate of the will dated 22 March 2006.
• The schedule of assets and liabilities as submitted for probate shows:
• approximately $23,000 in a bank account, approximately $7000 in another account and $66 in a credit card account;
• three safe custody packets which were not inspected at the time of the grant;
• money owed to the deceased estate, which is understood to be an amount due under a contract of sale of the retirement villa unit in an amount of $334,000;
• total assets in the estate amount to $365,694.73; and
• liabilities of $18,799, made up of approximately $10,000 in funeral expenses but also including accommodation fees owing to the aged care accommodation provider in the amount of $4,713, and $192 for the preparation of a will.
• A copy of a contract for the sale of land dated 2 March 2006 signed by GC 'being power of attorney'.
• A copy of a transfer of land dated 25 March 2006 signed by GC 'as attorney for KS'.
• An insurance authority signed by GC as 'attorney' on behalf of KS in August 2006.
• Submissions from the parties including material submitted for the earlier hearing on jurisdiction.
(Page 6)
11 It is uncontested that KS executed an EPA in 2004 by which he appointed his soninlaw, GC, as donee.
12 It is also agreed that in October or November 2005, KS was admitted to hospital and was treated there for a period. It was during this time that the applicant says KS asked him to contact his accountant to send KS's lawyers to visit him in hospital. This is disputed by the donee and KS's brother and other son, who say that KS reported to them at the time, that it was the applicant who had initiated contact with the solicitor, either, according to the brother of KS, RS, for the purpose of drawing up a transfer to have KS's property transferred to the applicant, or, according to KS's other son, PS, changing KS's will or to transfer the house to the applicant. The brother reports that KS was 'livid' about this, and the other son states that KS was 'incensed'.
13 The applicant maintains that he had a good relationship with his father, and denies there was ever a 'falling out' between them. He does state that there was a 'disagreement' between his father and the applicant's wife, following his father's discharge from hospital, which was 'over the sale of the house'. The applicant agrees that the argument was over the allegation by his father that the applicant was trying to sell his house. According to the applicant, his wife had denied this to KS, who had then called the applicant 'a liar'. The applicant agrees that his father had not advised him where he was living after he had sold his home and moved to a villa unit in a retirement village in January 2006. He agrees that his father had not discussed with him his plans about the sale of his property or the purchase of a villa unit. He also agrees that he was not invited (nor were his wife or son) to his father's 85th birthday celebrations.
14 KS's other son, PS, states that their father had said that he did not want the applicant to attend his birthday party. Following contact from the applicant with KS at his villa unit, KS is reported to have asked that his telephone number be changed because he did not want further contact with the applicant. PS asserts that he went against his father's wishes to advise his brother of the deterioration in their father's health on 27 September 2006, and that prior to this, there had been little contact.
15 The applicant also asserts that KS had, at his death, shares valued at approximately $400,000, a safe deposit box containing some $10,000 - $15,000 in cash, his late wife's will, ruby rings, and war medals. The applicant advises that he has not seen the contents of the box but believes these items were held by his father, based on discussions between
(Page 7)
- them. He could not give a time of these discussions but agrees that it may have been many years before.
16 The applicant makes a number of allegations about the conduct of the donee. It is suggested by the applicant that the donee was experiencing financial difficulty (in about 2004) but then appeared (to the applicant or to his son) to have access to financial resources.
17 In respect of the evidence about shares, the brother of KS states that both he and his brother had inherited a small parcel of shares from their mother but these had been disposed of by compulsory acquisition many years before.
18 KS executed a will in March 2006 appointing executors who were employees of a firm of accountants with whom he had had a long-term relationship. The applicant asserts that the signature on the will is not that of KS, and makes other allegations about the will, including that a period of six months elapsed between the preparation of the will and its execution. He asserts there was some interference by his brother, PS, in the execution of the will.
19 The applicant says that the only way the executors can be sure that the statement of assets and liabilities of KS submitted for probate is complete is if the donee files accounts and they are audited. He states that he raised what he says are discrepancies in the assets disclosed with the executors, but says that the executors do not support this application before the Tribunal. Notice was given to the executors of the hearing before the Tribunal; however, there was no appearance by them at the substantive hearing.
20 Other than his application under the Inheritance Act, the applicant does not have any other applications before the Court for the challenge of the will of KS or to the grant of probate.
21 The initial response from the donee to the application is that he never acted on the EPA.
22 The donee states that he undertook numerous duties on behalf of KS but that KS managed his own affairs.
23 He states that he collected the safety deposit box prior to the death of KS at his request, and there had been $85 in bank notes, a ruby ring and no war medals belonging to KS. It is understood that a medal belonged to
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- KS's father, and the donee states that both this and the ruby ring were given by KS to his daughter, the donee's spouse.
24 As noted above, the EPA executed in July 2004 by KS was styled in a manner to come into effect immediately. The donee readily accepts that he signed the acceptance, having read it, and as far as he recalls, he might have had the effect explained to him by the solicitor who prepared the document for KS.
25 The donee states that he believed the EPA would only be in force during a period of incapacity of the donor. He states that during his lifetime, KS did not lose capacity, and as such, that he acted only at the direction of KS. He believes that he did not act pursuant to the EPA. The donee agrees that the bank which held accounts in the name of KS received a copy of the EPA sometime in 2005.
26 The donee states that he undertook many tasks, including the execution of documents, on behalf of KS but that he acted only as the 'agent' of KS. In his view, as he acted as an agent, he need not have kept detailed records of the transactions. However, later, he agreed that he does have records.
27 The evidence of the donee is that, on the sale and settlement of the property, the total proceeds of sale were transferred by him into a joint account in his name and that of his spouse, the daughter of KS. The explanation given for this is that KS intended to make a gift of the funds to his daughter on the condition that he 'be looked after' by her. The Tribunal heard that, on settlement, a bank cheque in the amount of $490,243 was deposited by the donee into the joint account. A few days later, the donee repaid $288,000 to the brother of KS who had previously loaned this amount to KS to enable him to secure aged care accommodation. After this, the donee states that he met most of the ongoing expenditure for KS from the balance of the funds. KS is said to have insisted that the gift be made, over the objections of his daughter, who accepted the gift only at the urging of KS's brother, RS, that it was the wish of her father. When asked, the donee said that he presumed that Centrelink had been notified of the sale of KS's property, and of the gift, but had not done so himself.
28 PS states that he spoke to his father many times about his financial affairs to check if he was happy with the arrangements being made, and his father had told him that he was. He said that his father had complete faith in the donee. Although PS was not involved in the discussions about
(Page 9)
- the arrangements, he was certain that KS understood that the donee and his daughter would look after KS for the rest of his life.
Legislation
29 Section 107 of the GA Act sets out the obligations of a donee of an EPA:
Obligations of donee
(1) The donee of an enduring power of attorney -
(a) shall exercise his powers as attorney with reasonable diligence to protect the interests of the donor and, if he fails to do so, he is liable to the donor for any loss occasioned by the failure;
(b) shall keep and preserve accurate records and accounts of all dealings and transactions made under the power;
(c) subject to section 109(2), may not renounce a power during any period of legal incapacity of the donor; and
(d) shall, if the donee becomes bankrupt, report that bankruptcy to the State Administrative Tribunal.
Penalty applicable to paragraph (b): $2 000.
(1) A person who has, in the opinion of the Board, a proper interest in the matter may apply to the Board for an order
(a) requiring the donee of an enduring power of attorney to file with the Board and serve on the applicant a copy of all records and accounts kept by the donee of dealings and transactions made by him in connection with the power;
(b) requiring such records and accounts to be audited by an auditor appointed by the Board and requiring a copy of the report of the auditor to be furnished to the Board and the applicant for the order; …
32 In a case where the donor has died:
(Page 10)
- … even though the donor of an enduring power of attorney may have passed away, there may, in appropriate circumstances, be a proper reason established to justify the making of an order requiring the donee of an enduring power of attorney to account for his or her actions under the enduring power of attorney during the earlier lifetime of the donor, under s 109(1)(a) or s 109(1)(b) of the GA Act. [KS op cit 28 at [34]].
33 He went on to say that '[A]ny such order made could only require the relevant accounting or audit and would not have any other remedial effect'.
The issue to be determined
34 The question for the Tribunal is whether this is an appropriate case for the Tribunal to exercise its discretion under s 109(1)(a) of the GA Act to require the donee to file with the Tribunal and serve on the applicant a copy of records and accounts kept by him of dealings and transactions made by him in connection with the EPA, and further order, under s 109(1)(b) of the GA Act, that those accounts be audited.
Findings and reasons for decision
35 In respect of the relationship between the applicant and his father, we do not accept the applicant's assertion of a good relationship between them; by his own evidence, the opposite is true - his father had called him a liar, he was not told of his change of address when his father moved, and was not invited to his father's 85th birthday party.
36 Where there is conflict in the evidence between the applicant and other members of the family, we prefer the evidence of the donee, the brother, RS, and the other son, PS. Their evidence is all consistent, and RS and PS in particular impressed the Tribunal as reliable witnesses.
37 The allegations made in the application about shares and the contents of the safety deposit box, the alleged delay in execution of the will and the general conduct of the donee are mere assertions and are not supported by the evidence we have heard.
38 We find, on the evidence taken as a whole, that the applicant was estranged from his father and had not been taken into the confidence of KS about his financial dealings.
39 We accept the evidence of KS's brother, RS, that KS's shares had been disposed of at the time of his death and possibly before the execution of the EPA. The applicant did not know this. It is also clear from all of
(Page 11)
- the evidence that the applicant was not told about the sale of KS's property. KS made plain, by his refusal to advise the applicant about his move or of his new address, that he did not want him involved in this process. In respect of the sale of his property, we are satisfied that KS relied on the assistance of the donee, his daughter and his brother. We conclude from all of this that the applicant was not someone with whom KS had shared information, and the applicant himself conceded this in the hearing.
40 The evidence of all family members, other than the applicant, is that KS wanted to make a gift during his lifetime to his daughter of the balance of the proceeds of the sale of his house. It may be that this was in the knowledge, and perhaps with the intent, that any assets disposed of by him in this way would not be available for distribution on his death.
41 In relation to the operation of the EPA, by virtue of the form of its execution, the EPA was in force from its execution despite the evidence of the donee of his belief that it would only be in force from KS's incapacity.
42 Although we accept this was the belief of the donee, this is not consistent with documentary evidence before the Tribunal which shows that the donee executed documents as 'power of attorney' or 'attorney'. These documents are a contract for the sale of land dated 2 March 2006, a transfer of land on 26 March 2006 and an authority for an insurance company in August 2006.
43 As the EPA was in force, and as the donee had acted under it, he was subject to the obligations in the GA Act, which include the requirement that he maintain records of transactions.
44 The donee's evidence is that, following the sale and settlement of the property of KS, he transferred, at the direction of KS, the proceeds of sale into an account he held jointly with his spouse. We find that this transaction was made in connection with the EPA of KS, since the funds transferred had been realised though the sale of KS's property effected by the donee and were released to him by a settlement agent who had notice of his role as donee.
45 On the evidence of the applicant, KS had not taken him into his confidence about the sale of his property or his other financial dealings. An issue for the Tribunal is whether he is entitled now, since KS has died, to the sort of information he was not given in KS's lifetime.
(Page 12)
46 The independent executors chose not to take up concerns expressed by the applicant to them before the grant of probate about the will or the assets in the deceased estate. The purpose of the applicant in bringing this proceeding is closely aligned to his application for a greater share of the deceased estate through his application pursuant to the Inheritance Act. Whether the applicant can make out that claim or not, or whether the matter is negotiated between the parties, is not a matter for the Tribunal, but it does put this application into context.
47 An application under the Inheritance Act alone would not, in our view, provide a sufficient reason for orders to be made under s 109 of the GA Act. The role of the Tribunal is not to determine what is in, or to be distributed from, the deceased estate of a donor of an EPA, but rather, in the appropriate case, the supervision of the operation of an EPA during the lifetime of the donor.
48 The only evidence the Tribunal has before it is that KS was capable at the time of his death. In cases where the donor is or was capable, the Tribunal is likely to be reluctant to intervene, because the powers of the Tribunal on intervention are or were within the power of a capable donor. Despite this, and although we prefer the evidence of the donee (and other family members) to the applicant in respect of the reported intentions and actions of KS, this is an appropriate case for intervention by the Tribunal to require the donee to file accounts of dealings and transactions made in connection with the EPA, in particular the transfer of funds from the sale of the property of KS to an account in the name of the donee and his spouse.
49 The reason for the intervention by the Tribunal is the transaction itself. The transfer of $490,000 (less the money repaid to the brother, RS) represented a substantial financial benefit to the donee. This transaction occurred at a time when KS was elderly, said to be in poor health and, in this sense, a vulnerable person.
50 An issue also arises about the nature of the gift, since it could be said that the gift was made on condition that KS be maintained for his lifetime, and so it might be said that the funds were held by the donee and his spouse in trust' for KS.
51 We accept the evidence that KS had a relationship of trust and mutual affection with his daughter and the donee, and that he was reliant on them. It is the case that, following the transfer of the bulk of his funds to his daughter and the donee, KS was also financially dependent on them.
(Page 13)
- The Tribunal was not told that KS had obtained independent advice about the transaction. That the donee was unsure whether pension authorities had been informed about the transaction is troubling, since, although it is consistent with the submissions that KS managed his own affairs, it appears this aspect was not considered, even though it might be assumed that such a transaction would have some consequences for the income or other entitlements of KS in the future.
52 It is appropriate in this case that the Tribunal intervene to make an order for the filing of records kept by the donee in its supervisory role. In this case, the transaction - being the transfer of funds to an account held in his name with his spouse - undertaken by the donee in connection with the EPA, was one from which he derived a significant financial benefit.
53 The evidence shows that the donee did not fully understand the obligations arising from his acceptance of the role as donee. Although we think that these obligations are now understood and that there was no intention on the part of the donee to act inappropriately in respect of KS, this is a further reason why the transactions following the sale should be scrutinised.
54 The order to file the accounts is not onerous on the donee since he was always obliged to keep records. The filing of the records and the provision of copies to the applicant simply puts the applicant in the position of knowing what occurred in relation to those transactions.
55 In our judgment, the need to provide records only arises in respect of the period following the sale and settlement of the property of KS, and the transfer of the funds to KS's daughter and the donee and the subsequent expenditure of those funds. Because the funds have been deposited into an account in the names of the donee and his spouse, those accounts will need to be disclosed.
56 We will adjourn the application for orders under s 109(1)(b) of the GA Act to enable us to hear further from the parties as to whether there should be an audit of the records filed and how the costs of any audit will be met.
Orders
1. In respect of the application pursuant to s 109(1)(a) the donee of an enduring power of attorney dated 6 July 2004 by which KS appointed GC as his attorney, file with the Tribunal and serve on the applicant, by 30 July 2008
- a copy of all records and accounts kept by him as donee of dealings and transactions made by him in connection with the power from 1 March 2006 to the date of death of the donor. The records provided are to be in date order, indexed, paginated and with supporting documents.
- 2. The application pursuant to s 109(1)(b) is adjourned to 10am on 14 August 2008.
I certify that this and the preceding [56] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MS F CHILD, MEMBER