MTJ
[2014] QCAT 195
| CITATION: | MTJ [2014] QCAT 195 |
| PARTIES: | MTJ |
| APPLICATION NUMBER: | GAA077-14; GAA1569-14 |
| MATTER TYPE: | Guardianship and administration matters for adults |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Senior Member Endicott |
| DELIVERED ON: | 6 March 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. ABC and DEF as the appointed administrators for MTJ are hereby authorised to enter the conflict transaction being: the sale of one half interest in the house owned by MTJ to DEF for $225,000. 2. This authorisation is conditional on the house being owned as tenants-in-common in equal shares by MTJ and DEF after sale of one half share to DEF. 3. This authorisation is conditional on MTJ’s one half share in the house being free from any mortgage taken out by DEF to secure the borrowing by her of part or all of the purchase price of $225,000. 4. This authorisation is conditional on the sale of one half share being completed and payment in full of $225,000 being made to MTJ by 30 April 2014. 5. If the sale and payment of $225,000 are not completed by that date, the authorisation for the sale of one half interest in the house to DEF will lapse. 6. The Enduring Power of Attorney dated 23 February 2000 granted by MTJ is declared invalid. |
| CATCHWORDS: | GUARDIANSHIP – where administrators want to deal with real property of adult with impaired capacity – where proposed transaction constitutes a conflict of interest between the adult and his administrators CONFLICT TRANSACTION – where administrators can only enter into conflict transaction if authorised by the tribunal – where sale of interest in house to one of the administrators would provide funds for care of adult CONDITIONS OF AUTHORISATION – where sale of partial interest in house authorised subject to conditions – where holding must be as tenants-in-common – where holding of adult must not be subject to mortgage – where time limit on authorisation ENDURING POWER OF ATTORNEY – where enduring document did not contain witness certification – where non compliance with statutory requirements – where finding that enduring document was invalid Guardianship and Administration Act 2000 ss 11, 37,152 and 7(4) of part1 of schedule 1 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).
REASONS FOR DECISION
MTJ was found to have impaired decision making capacity by this tribunal on 12 November 2012. His daughters, ABC and DEF, were appointed jointly and severally to be his administrators for all financial matters.
MTJ had lived at home until his increasing care needs required his placement into residential aged care. The accumulated savings and financial resources of MTJ are being used up by his care and accommodation fees and the administrators recognised a need to consider selling the house to access funds for MTJ’s ongoing care and accommodation fees.
DEF has resided in the family home all her life. There is a desire by the family to keep the family home within the ownership of the family. The administrators reached a decision to sell a half share in the house to DEF as that strategy would achieve the result of funds being available to cover the anticipated future care and accommodation costs for MTJ and of the house remaining in the ownership of the family.
The administrators have provided to QCAT evidence from two independent valuations that the house is valued at $450,000. DEF has sought a loan in order to purchase one half share in the house for $225,000. The administrators have informed QCAT that their father’s available funds will be used up by the end of March 2014 and that the proceeds of sale from this proposed transaction are needed urgently to cover the full cost of his care and accommodation needs.
The proposed sale of one half share in the house owned by MTJ to one of his administrators constitutes a conflict of interest under section 37 of the Guardianship and Administration Act 2000. An administrator can only enter into a conflict transaction if this tribunal authorises the transaction. The Guardianship Act provides the tribunal with unfettered discretion to consider authorisation of conflict transactions.[1] However the tribunal must apply the general principles when performing a function under the Guardianship Act.[2]
[1] Guardianship and Administration Act 2000 s 152.
[2] Ibid s 11.
Under the general principles a person performing a task as a substitute decision maker must take into account the adult’s views and wishes if it is reasonably practicable to work out what those views and wishes would be.[3] In this case the administrators have given evidence that MTJ had made his daughters the beneficiaries of his estate and that he has no other immediate family other than his two daughters.
[3] Ibid paragraph 7(4) of part1 of schedule 1.
I am satisfied that MTJ’s views and wishes about the disposition of his assets on death can be reasonably worked out and that he wants his daughters to have the benefit of his estate when he passes away. However there is no evidence he had expressed any wish that one or other of his daughters was to have a right of ownership in his house prior to his death. There is evidence that DEF has lived in the house all of her life. During most of that period of time MTJ had decision making capacity and a reasonable inference can be drawn that he had wanted DEF to live in the family home if she chose to do so. However that is as far as an inference can be drawn.
I am unable to work out from the evidence the views and wishes of MTJ about the proposed transaction whereby one of his daughters seeks to purchase one half share in his house. I am however satisfied that the evidence has established that the currently available cash resources of MTJ are dwindling and that he will not be able to afford his current level of care and accommodation costs for much longer unless some equity is released from his house.
The question is whether the house should be sold for this purpose or whether some alterative arrangement would be more appropriate. On the facts presented to the tribunal, an alternative to sale is the transfer for value of a half share in the house to a family member. This latter proposal is supported by both the decision makers appointed for MTJ. As the focus must be on a strategy whereby MTJ obtains funds to cover his care and accommodation costs in residential aged care, the tribunal considers that a partial sale of the house would adequately achieve that strategy.
However it is likely that the sale of a half share in the house will render the house less attractive on the open market should it later become necessary to realise MTJ’s remaining equity in that property. The options for accessing the remaining equity during MTJ’s lifetime would be reduced and may practically be limited to his then joint owner buying out his remaining share. Such a transaction would in future require further approval of this tribunal as long as MTJ’s administrators are members of his family. It should be possible to safeguard MTJ’s interests by ensuring that any future sale price is for full proven value of his share.
I am satisfied that the proposed sale of a half share of the house to DEF should proceed as it is a means of raising funds for MTJ’s immediate use. Any adverse consequences of this proposal on the market value of his remaining share could be addressed by future conditions placed on further dealings by the administrators with that share.
I accept the evidence provided to the tribunal about the current value of the house. I am satisfied that the current market value of the house is $450,000. I authorise the administrators to enter into a transaction to transfer one half interest in that house to DEF on the payment of $225,000. However the house must be owned as tenants-in-common in equal shares by MTJ and DEF after the sale of the half share is completed.
It is a condition of this authorisation that MTJ’s half interest must not be subject to any mortgage taken out by DEF to secure any moneys that she borrows in order to purchase an interest in the house. It is not in the interests of MTJ for his remaining interest in the house to be adversely affected by mortgage.
The authorisation for the sale to DEF of one half interest in MTJ’s house is subject to the sale being completed by 30 April 2014. If the funds cannot be paid by that date, then the current proposal may prove to have been impractical and some other strategy would then need to be considered by the administrators to cover the future costs of MTJ’s care and accommodation.
During the course of providing information to QCAT about the conflict transaction, the administrators found the Enduring Power of Attorney that MTJ had granted to his daughters in February 2000. A query was made whether decision making for MTJ should now be made by the attorneys under that enduring document rather than by the administrators appointed by QCAT. It is acknowledged that the attorneys are the same persons as the administrators.
The existence of an Enduring Power of Attorney was known at the time of the appointment of the administrators on 12 November 2012. However the enduring document was not able to be located at that date. The order made on 12 November 2012 expressly overtook the Enduring Power of Attorney as far as the enduring document granted power for financial decision making. Under section 70 of the Powers of Attorney Act 1998, once an administrator has been appointed for an adult, an attorney for that adult can only exercise power to make financial decisions to the extent authorised by QCAT. The tribunal’s order does not authorise use of power by the attorneys to make any financial decisions.
However there is a more fundamental difficulty with the Enduring Power of Attorney. Now that the document has been located, a copy has been provided to the tribunal. It is now apparent that the enduring document omits one of the requirements set out in section 44(4) of the Powers of Attorney Act. The witness to the document did not sign a certificate stating that MTJ as principal appeared to the witness to have the capacity necessary to make the enduring document.
The witness, Mr Origlasso, signed on page 8 of the document as a witness to MTJ’s signature but he did not sign on page 9 the certification required by the Act. In fact the enduring document sets out the name of quite a different person in the witness’s certification, a Mr Bridge, but neither Mr Bridge nor Mr Origlasso signed the certification.
The enduring document does not comply with the formal requirements of the Act. Mr Origlasso provided a statutory declaration dated 22 February 2014 in which he confirms that he was the witness to the Enduring Power of Attorney for MTJ but he did not provide evidence as to how he satisfied himself that MTJ appeared to have capacity to make the enduring document at the time of the creation of the document.
As it is some 14 years since the document was made, it would be unlikely that any cogent evidence could be relied on as an accurate account of the circumstances of the making of that enduring document. I am not able to find that substantial compliance has been made with the requirements of the Act. Non compliance with the provisions in section 44(4) of the Act invalidates the enduring document.
The declaration that the Enduring Power of Attorney dated 23 February 2000 is invalid means that there are no formal decision making arrangements in place for personal matters for MTJ. His daughters can make personal decisions informally. They can make health care decisions as statutory health attorneys. However if they require formal authority to make any personal decisions, they can apply for appointment as guardians if the decision making needs of MTJ cannot be met in any other way.