PGT

[2024] NSWCATGD 8

NSW Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

PGT [2024] NSWCATGD 8

Hearing dates:

13 March 2024

Date of orders:

13 March 2024

Decision date:

13 March 2024

Jurisdiction:

Guardianship Division

Before:

K A McMahon, Senior Member (Legal)
M J Staples, Senior Member (Professional)
Emeritus Professor P J Foreman AM, General Member (Community)

Decision:

In relation to the enduring power of attorney made by PGT on 24 August 2018 which appointed DFT, BHT and NKT as attorney(s) the Tribunal determines, orders or declares:

not to carry out a review of the making and operation and effect of the enduring power of attorney.

Catchwords:

REVIEW OF AN ENDURING POWER OF ATTORNEY – application to review the making and operation and effect of an enduring power of attorney – principal is now deceased – allegations of financial exploitation by the attorneys – death of the principal terminates an enduring power of attorney – no practical utility in conducting a review of the making of an enduring power of attorney which has terminated – whether the Tribunal should make orders under s 36(4) of the Powers of Attorney Act 2003 – consideration of whether an order would better reflect the wishes of the principal prior to their death – Tribunal has no jurisdiction to order reimbursement to an estate – decision not to review the making or the operation and effect of the enduring power of attorney – no order made – application dismissed

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW), s 36

Guardianship Act 1987 (NSW)

Powers of Attorney Act 2003 (NSW), ss 19, 35, 36, 36(1), 36(3)-(4), 36(4)(e)

Cases Cited:

HKE [2021] NSWCATGD 43

KBX [2015] NSWCATGD 2
DPT [2015] NSWCATGD 3

KFE [2021] NSWCATGD 42

KNE [2022] NSWCATGD 22

KTC [2011] NSWGT 23

Susan Elizabeth Parker v Margaret Catherine Higgins & Ors [2012] NSWSC 1516

UQH [2014] NSWCATGD 37

Texts Cited:

None cited.

Category:

Principal judgment

Parties:

001: Review of an Enduring Power of Attorney

PGT (the person)
KGT (applicant)
DFT (attorney)
BHT (attorney, joined party)
NKT (joined party)
NSW Trustee and Guardian

Representation:

A Corbould, legal representative for DFT

R Dilley, legal representative for BHT and NKT

File Number(s):

NCAT 2022/00333070

Publication restriction:

Decisions of the Guardianship Division of the Civil and Administrative Tribunal have been anonymised to remove any information that may identify any person involved in the Tribunal’s proceedings: Civil and Administrative Tribunal Act 2013 (NSW), s 65.

REASONS FOR DECISION

Background

1. This application relates to PGT who died on 1 October 2023 at the age of 75 years. The applicant is his brother, KGT. PGT’s parents, and his brother, Mr Z, predeceased him. PGT had a lifelong intellectual disability and dementia in his later years.

2. PGT executed two enduring powers of attorneys. The first enduring power of attorney was executed on 31 May 2007, appointing Mr Z and his wife, DFT, jointly and appointing their sons, BHT and NKT as the alternative attorneys (the 2007 EPoA).

3. The second enduring power of attorney was executed by PGT on 24 August 2018. This was subsequent to Mr Z’s death in 2017.

4. The second enduring power of attorney appointed DFT, BHT and NKT jointly and severally as PGT’s attorneys (the 2018 EPoA).

5. KGT’s application for review of an enduring power of attorney was received by the Tribunal on 7 November 2022, thus, some time prior to PGT’s passing on 1 October 2023.

6. KGT initially sought orders under s 36 of the Powers of Attorney Act 2003 (NSW) (the PoA Act) in relation to the 2007 EPoA. He subsequently advised the Tribunal that he did not seek orders relating to the 2007 EPoA but orders relating to the 2018 EPoA and that a financial management order be made.

7. In view of PGT’s passing, KGT now confines his application to seeking orders under s 36(3) and s 36(4) of the PoA Act. KGT states that there are a number of concerning transactions relating to PGT’s estate. This includes the transfer of property owned by him in regional NSW (the regional NSW property) in 2015 to Mr Z and DFT and a loan to them in 2017 that had not been repaid. KGT states that PGT’s estate has otherwise been depleted by them and that they have financially exploited PGT.

8. DFT, BHT and NKT oppose the application. They state that there has been no wrongdoing on DFT’s part and in any event, the orders being proposed have no utility. They state that a dispute about the conduct of the attorneys and depletion of PGT’s estate is now a matter for the Supreme Court and not the Tribunal.

The hearing

9. At the end of these Reasons for Decision are lists of the parties to the application and the witnesses who attended the hearing. [Appendix removed for publication.]

The Statutory Framework

10. The Tribunal's review of an enduring power of attorney is governed by s 36 of the PoA Act. Section 36(1) of the PoA Act provides that a Tribunal, may on the application of an interested person, decide to review the making, revocation or the operation and effect of a reviewable power of attorney or not to carry out such a review.

11. Section 36(3) of the PoA Act provides that a Tribunal may make either or both of the following orders with respect to the making of a power of attorney:

1. An order declaring that the principal did or did not have mental capacity to make a valid power of attorney;

2. An order declaring that the power of attorney is invalid (either in whole or in part) if the Tribunal is satisfied:

1. The principal did not have the capacity necessary to make it; or

2. The power of attorney did not comply with the other requirements of this Act applicable to it; or

3. The power of attorney is invalid for any other reason, for example, the principal was induced to make it by dishonesty or undue influence.

12. Further to s 36(4) of the PoA Act, a Tribunal may, if satisfied that it would be in the best interests of the principal to do so or that it would better reflect the wishes of the principal, make any one or more of the following orders relating to the operation and effect of a power of attorney:

1. An order varying a term of, or a power conferred by, the power of attorney;

2. An order removing a person from office as attorney;

3. An order appointing a substitute attorney to replace an attorney who has been removed from office or who otherwise vacates the office;

4. An order reinstating a power of attorney that has lapsed by reason of any vacancy in the office of power of attorney and appointing a substitute attorney to replace the attorney who vacated office;

5. An order directing or requiring any one or more of the following:

1. that an attorney furnish accounts and other information to the Tribunal or a person nominated by the Tribunal;

2. that an attorney lodge with the Tribunal a copy of all records and accounts kept by the attorney of dealings and transactions made by the attorney under the power;

3. that those records and accounts be audited by an auditor appointed by the Tribunal and that a copy of the report of the auditor be furnished to the Tribunal;

4. that the attorney submit a plan of financial management for approval;

6. An order revoking all or part of the power of attorney,

7. Such other orders as the Tribunal thinks fit.

13. It is well established law that the death of the principal terminates an enduring power of attorney.

14. The Tribunal has previously considered whether it should review an enduring power of attorney once the principal has died (see UQH [2014] NSWCATGD 37, KBX [2015] NSWCATGD 2, DPT [2015] NSWCATGD 3, KFE [2021] NSWCATGD 42, HKE [2021] NSWCATGD 43, KNE [2022] NSWCATGD 22).

15. The Tribunal has been satisfied that it has jurisdiction to review the operation and effect of an enduring power of attorney where the principal is deceased and to make orders under s 36(4)(e) of the PoA Act if to do so would reflect the wishes of the principal prior to his or her death. The Tribunal has determined that once the principal has died best interests cannot be ascribed to the principal and the Tribunal cannot make any orders based on best interests.

16. In the matter of DPT [2015] NSWCATGD 3, the Tribunal formed the view that a number of the transactions warranted scrutiny including that the attorneys had taken benefits from the estate. The Tribunal went on to decide if it should make an order following its findings in this regard. The Tribunal decided to make no order. Noting that it is the duty of the executor(s) of the estate to take steps to recover moneys owed to the estate, the Tribunal said:

“[34] If there is disagreement or justifiable contentions that the executors are not able to make unconflicted investigations and decisions about the estate, action can be taken by the beneficiaries, and indeed by the executors, in the Supreme Court seeking the determination of these matters. The Supreme Court has jurisdiction to make a wide range of orders in relation to the administration of estates, whereas this Tribunal's jurisdiction is limited to the powers conferred under the POA Act.

[35] Having regard to these matters, the Tribunal determined not to make any orders under s 36(4)(a) of the POA Act. First, the appropriate mechanism is for disputes in respect of the estate to be resolved by the executors, failing which by the Supreme Court, given its broader powers to resolve disputes, particularly disputes in relation to the administration of estates. Secondly, it is not clear that an accounting under s 36(4) (a) would have resolved the critical issues in dispute.”

17. The Tribunal adopted this reasoning in HKE [2021] NSWCATGD 43, finding that there would be no utility in making the orders sought under s 36(4) of the PoA Act. Further the Tribunal had regard to s 36 of the Civil and Administrative Tribunal Act 2013 (NSW) that provides that the guiding principle to be applied to practice and procedure is to facilitate the just, quick and cheap resolution of the real issues in the proceedings and that it was not in accordance with the principal to embark on a review that would in all likelihood not result in an order by the Tribunal.

Does KGT have standing to make the application?

18. Section 36 of the PoA Act provides that an application to review an enduring power of attorney must be made by an “interested person”, which is defined in s 35 of the PoA Act as:

1. An attorney (including an attorney whose appointment has been purportedly revoked);

2. The principal;

3. Any person who is:

1. a guardian of the principal (whether under the Guardianship Act 1987 (NSW) or any other Act or law); or

2. an enduring guardian of the principal under the Guardianship Act;

4. any other person who, in the opinion of the review Tribunal, has a proper interest in the proceedings or a genuine concern for the welfare of the principal.

19. In UQH, the Tribunal observed that where the principal has died, the welfare of the principal is not a relevant consideration. We accept that reasoning and adopt the same approach.

20. As KGT does not meet the criteria at (a)-(c), the only basis on which he can be considered to be an “interested person” is if we are satisfied that he has a “proper interest in the proceedings”.

21. The meaning of this expression was considered by the Tribunal in the decision of KTC [2011] NSWGT 23. In that case (in which the principal was still alive) the Tribunal saw the word “proper as meaning that the interest of the applicant must be appropriate to the powers of the Tribunal on a review, in other words there must be a nexus between the interest and the powers on the review”.

22. In UQH, the Tribunal adopted the reasoning and conclusion of KTC that:

• A proper interest goes beyond the genuine concern test

• The proper interest test should be interpreted cautiously taking into account the intrusion on the affairs and privacy of the principal

• What comprises a proper interest must be decided on a case-by-case basis.

23. In UQH, the Tribunal found that the applicant's motives were to gather information for other proceedings, which was not a proper interest. In KFE, the Tribunal accepted that the applicant was an “interested person” as the Tribunal accepted that he was “operating at least in part, because of a genuine belief that he has a legitimate interest in ensuring that his late mother’s affairs were properly managed”. In reaching this conclusion the Tribunal was influenced by the factual circumstances arising whereby the applicant in bringing the application had relied on information in a government publication which was not correct, and that without this factor, a different conclusion could well be made.

24. Mr Dilley and Mr Corbould submit that KGT’s motives for pursuing the application relate to his own financial interests in pursuing a claim against the estate. However, they did not challenge his standing to make the application.

25. In the circumstances of this matter, we were satisfied that KGT had standing to make the application. We accept that he is “operating at least in part, because of a genuine belief that he has a legitimate interest” in ensuring that PGT’s affairs were properly managed, and noting the background of the application and its commencement around 12 months before his death. We may well have reached a different conclusion if the application had been commenced after PGT’s death.

Evidence and Issues

26. We were provided with a number of affidavits, statements, reports and other material detailing events over the course of PGT’s lifetime, and in relation to his relationships with his family and the management of his finances and affairs.

27. Whilst it is not in issue that PGT relied heavily on Ms Y and later other family members to assist him in managing his affairs, there are differing views expressed as to the extent that PGT had capacity to understand his affairs and to make decisions, which were his own decisions.

28. The following matters appear not to be contentious between the parties.

1. PGT had an intellectual disability resulting from birth trauma and was never able to independently manage his affairs. He attended a special school for children with disability. Whilst PGT generally worked, this was in basic manual jobs only. PGT relied heavily on the assistance provided by his mother with his finances and otherwise. Medical reports provided confirm his diagnosis of intellectual disability.

2. PGT and his brothers grew up in a regional NSW area south of Sydney, where the family were based for many years. PGT continued to live in that area until around 2006, when he moved with his mother to a suburb in a regional NSW north of Sydney. Mr Z and his family were by that time residing at another suburb, also in regional NSW north of Sydney. KGT continued to reside in regional NSW south of Sydney.

3. PGT’s father operated a paint business from a property in regional NSW south of Sydney known within the family as “the factory”. Following the business going into liquidation in the 1970s, Ms Y and PGT purchased the property as joint tenants. They rented the property out, deriving substantial rental income over the years.

4. Further, Ms Y purchased shares on PGT’s behalf. There were investment properties they jointly purchased, which were later sold. The unit in regional NSW north of Sydney was owned by them as joint tenants.

5. On 31 May 2007, PGT executed an enduring power of attorney appointing Mr Z and DFT jointly and appointing their sons, BHT and NKT as the alternative attorneys (the 2007 EPoA).

6. In around 2011 and following a deterioration in her health, Ms Y moved to an aged care facility. She passed away in 2013. Later in 2013, PGT moved from the unit in regional NSW north of Sydney to more supported accommodation in regional NSW north of Sydney. In 2020, PGT moved to an aged care facility at another suburb in regional NSW north of Sydney.

7. PGT was the sole beneficiary named in Ms Y’s will. In 2014, KGT made a claim against the estate which was settled at mediation in 2015. Following their mother’s death, KGT and Mr Z became estranged.

8. Following Ms Y’s passing, PGT became increasingly reliant on the assistance of Mr Z and DFT regarding the management of his affairs.

9. Following Ms Y’s passing, PGT became the sole owner of the regional NSW property. On 29 June 2015, PGT transferred half of his ownership of the regional NSW property to Mr Z and DFT without financial consideration.

10. Whilst it is not in dispute that PGT developed dementia in his later years, there are conflicting views about when this began and its severity. KGT dates the onset of his dementia from around 2009, whereas DFT dates his dementia from some years later.

11. Dr X, Geriatrician, reviewed PGT as detailed in his report dated 8 June 2018, noting his descent into dementia since 2014 and expressed the view that he met the criteria for having “mild dementia”. KGT’s view is that PGT’s dementia was more severe however than is suggested in Dr X’s assessment.

12. By 2015, Mr Z had been diagnosed with cancer and was receiving treatment. Mr Z and DFT decided to sell their property in regional NSW north of Sydney and purchase a unit at another suburb in the same regional NSW area. On or about 4 June 2017 and during the process of acquiring the unit at that other suburb, and whilst acting as PGT’s attorney, Mr Z sold a portion of PGT’s shares and borrowed $237,448 from him. Mr Z did not repay the loan prior to his death in 2015.

13. On 24 August 2018 PGT executed an enduring power of attorney appointing DFT, BHT, and NKT jointly and severally as his attorneys (the 2018 EPoA).

14. DFT acted solely as PGT’s attorney from at least 24 August 2018 to the time of his death on 1 October 2023.

15. KGT did not have any contact with PGT between late 2013 to mid-2022. In mid- 2022, and after learning of Mr Z’s death, KGT took steps to locate and contact PGT at his aged care facility. KGT made his application to the Tribunal upon learning at around this time, of the transfer of PGT’s one half ownership of the regional NSW property which occurred in 2015.

16. Consistent with a report provided by Dr W, dated 26 February 2023, by the time of this application was made, PGT’s cognition was extremely poor. When assessed by Dr W, PGT was unable to state where he was or to recognise family members from photographs. Dr W states that he was unable to express views about who he would want to have visit him or to otherwise manage his affairs. PGT did not participate in the Tribunal's process in 2023 prior to his death.

29. In relation to issues in dispute between the parties:

The regional NSW Property

30. DFT states that the transfer of the regional NSW property was a gift which PGT wanted to make to Mr Z and herself. She states that neither of them acted as PGT’s attorney in relation to the transfer.

31. A file note from the solicitor, Mr V, who acted in relation to the transfer indicates it was a gift. This records that “[PGT] signed the transfer and understands it and is happy with the transaction.” The file note does not indicate PGT’s reasoning behind wanting to make the gift, nor does DFT really explain why in her statements to the Tribunal.

32. KGT states that PGT was not inclined to making gifts. He states that Mr Z and DFT abused their position of trust and took advantage of PGT in getting him to transfer one half of his ownership of the regional NSW property without financial consideration. He states that the explanation given by DFT regarding the transfer is scant. He is critical of Mr V and his role in relation to the transfer. He states that DFT and Mr Z were in breach of their fiduciary duty as they were PGT’s attorneys under the 2007 EPoA.

33. KGT states that the transfer deprived PGT of ownership of a valuable asset and the substantial rental income it generated. He states that a conservative estimate of its worth is $1.5 million and that it generates approximately $90,000 per annum in rent and that this loss should be remedied.

EPoA

34. KGT states that:

1. PGT did not have capacity to make the 2007 EPoA, but would have signed this document under Ms Y’s direction.

1. PGT did not have capacity to execute the 2018 EPoA.

2. Whilst PGT was assessed by a geriatrician, Dr X prior to the execution of the document, the geriatrician's approach was misguided in so far as he states in his report dated 21 May 2018 that whilst PGT “met the criteria for mild dementia” if spoken to “slowly and gently without legal complicated terminology or excessive external stimuli” his “legal guardians could probably have him understand the concepts of Power of Attorney and Guardian and that he would then be able to give instructions back to his legal representatives, “with the final decision resting with the legal representatives”.

3. Dr X’s report does not establish PGT’s capacity however demonstrates a misguided approach as it was not up to DFT to explain capacity and provide instructions on it.

4. There is lack of documentation to establish that the solicitor who prepared and witnessed the document, Mr V fulfilled his obligations such as explaining and attesting to PGT’s understanding and by reference to the relevant Law Society Guidelines relating to capacity.

5. As the 2007 EPoA was void following Mr Z’s death and PGT lacked capacity, DFT should have approached the NSW Civil and Administrative Tribunal (NCAT) for a financial management order.

35. DFT disputes that PGT did not have capacity to execute the 2007 EPoA or 2018 EPoA. She and her sons state that the EPoA properly reflects PGT’s wishes as to who he wanted to have in these roles. She states that the documents from Dr X and Mr V are supportive of PGT having capacity. She states that there is a lack of any objective evidence to support KGT’s contention that PGT lacked capacity to make the 2018 EPoA.

Loan

36. DFT states that she was not aware that Mr Z sold a portion of PGT’s shares and took a loan of $237,448 to purchase their unit at the other suburb in regional NSW north of Sydney. She states that she only became aware of these events following the commencement of this application and going through documents.

37. She agrees that Mr Z acted inappropriately and in breach of his obligations as an attorney. In material filed with the Tribunal in 2023, DFT stated she did not propose that she continue to act as PGT’s attorney in the circumstances. She initially proposed that an independent financial manager be appointed and then later proposed her sons.

38. DFT states that she has now taken steps to repay the loan and with interest calculated by reference to applicable interest rates.

39. KGT states that the loan is part of a continuing course of conduct on the part of Mr Z and DFT whereby they abused their position of trust and financially exploited PGT for their own benefit. He does not accept that DFT was not in breach of her obligations as an attorney and states that adequate steps have not been taken to remedy the loss to PGT, including the loss of capital growth on the shares.

Estate

40. KGT states that PGT was a wealthy man at the time of his mother’s death. His estate however has otherwise been depleted. His estate is now worth substantially less than as at 2015 and that there is insufficient explanation of how this has occurred. His superannuation pension has been depleted and there are other unexplained transactions on his accounts. He queries transactions relating to payment of the residential deposit to the aged care facility. He states that the loss is substantial and in excess of $1 million. He states that the information provided comprises the “tip of the iceberg” only.

41. DFT disputes KGT’s contentions and states that she has acted conscientiously to manage PGT’s finances and for his benefit. The documents provided by her include a report from Mr U, Financial Advisor, and details of accountants retained and her management of PGT’s finances and including in relation to the regional NSW property. The evidence provided includes some financial records of PGT’s estate. She takes issue with the valuation and the assessments made by KGT.

PGT’s wishes

42. There are conflicting views between KGT, on the one hand, and DFT and her sons, NKT and BHT, on the other, regarding the nature of KGT’s relationship with PGT and about what his wishes would be.

43. KGT and DFT each detail a lot of family history including details of various loans and property transactions over the years and details of the dispute that occurred following Ms Y’s death.

44. KGT states that:

1. He was closely involved in PGT’s life up until the time of Ms Y’s passing and provided crucial support to PGT following her death up until late 2013. Prior to becoming a solicitor, KGT worked in education, and specialised in the area of disability. He had a special understanding of PGT and an ability to relate well to him.

2. He was involved in managing the regional NSW property prior to Ms Y’s passing and for a time afterwards. However, in a statement dated 11 May 2023, KGT states that he had “never been directly responsible for overseeing [PGT]’s finances”.

3. He did not have any contact with PGT between late 2013 to 2022, because Mr Z told him in 2013 not to contact PGT. On learning of Mr Z’s death, he sought to renew his relationship with PGT.

4. PGT had a “sense of justice and injustice” and would be “horrified” if he had known the “full story” of what has happened to his estate.

5. PGT would now want him “to stand in his shoes” to ensure that there is proper accountability and redress for the wrongdoing that has occurred in relation to his estate. He states that making orders under s 36 of the PoA Act as sought by him in his application would reflect PGT’s wishes.

45. PGT’s partner, Ms R, has provided statements to the Tribunal supportive of KGT’s role and his relationship with PGT and other observations as to PGT’s capacity and his wishes.

46. DFT takes issue with KGT’s evidence regarding his relationship with PGT. She states that:

1. PGT made statements indicating that he did not want KGT involved with managing his finances both before and after his mother’s passing.

2. PGT’s wishes are properly reflected in the EPoAs. These documents reflect PGT’s close relationships and who he trusted.

3. It is not correct to state that the estrangement that occurred following KGT’s claim against Ms Y’s estate was just between Mr Z and KGT. PGT was upset that KGT made the claim and was also estranged from KGT. She states that PGT expressed a poor view of KGT.

4. She and her sons had a close and continuing relationship with PGT. This is evidenced in the statements made by her and her sons detailing their continuous involvement with PGT. In contrast, Mr KGT had no contact with PGT from late 2013 to 2022.

5. Documents provided by the aged care facility attest to her close involvement.

6. Reports from treating doctors further indicate her close involvement. In addition to the abovementioned reports, we have a report from Dr T, dated 1 February 2022, referring to her involvement.

47. BHT and NKT state that they have had a close and continuing relationship with PGT as detailed in their statements. They and DFT state that the orders sought by PGT in his application would not accord with PGT’s wishes. They state that KGT in not in a position to indicate PGT’s wishes.

48. Evidence was provided by the parties in relation to events in 2022 and 2023, before and subsequent to the filing of the application, arising from KGT’s attempts to renew a relationship with PGT and steps taken by KGT, DFT and the aged care facility staff in relation to this and events shortly before PGT’s death.

49. KGT states that DFT blocked his access to PGT for her own purposes, an allegation which she denies. We do not consider it necessary to draw any conclusions from their competing accounts on this issue and in so far as it reflects either way upon PGT’s wishes or upon his relationships with the parties.

Will and Estate

50. KGT has made statements indicating an interest in PGT’s will. For example, in his statement to the Tribunal dated 28 March 2023, he addresses concerns that he has about PGT’s will and his Binding Death Nomination, noting comments made by Ms Y that he would be a beneficiary of PGT’s will. Amongst the documents that KGT has sought, are a copy of PGT’s will and the Binding Death Nomination for his superannuation.

51. In his statement dated 11 December 2023, Mr KGT notes that he had made a request to Mr Corbould for PGT’s will. KGT states that:

“I know that I have always been a beneficiary in any of [PGT]’s wills that were made in my mother’s lifetime. If [PGT]’s will has been changed so I am not a beneficiary this means that I shall have to bring a Family Provisions claim in the Supreme Court of NSW as well as a challenge to such a will’s validity.”

52. Prior to this hearing, correspondence was exchanged between KGT and Mr Corbould in relation to KGT’s request to be provided with a copy of PGT’s will. KGT stated that it was relevant as he believes that DFT is the executor of the will and that goes to the issue of available remedies.

53. As indicated in correspondence with Mr Corbould, dated 9 November 2023, KGT has asked that DFT provide an undertaking not to apply for probate until after the resolution of the NCAT proceedings.

54. DFT advised at the hearing that PGT made a will dated 2 December 2014 appointing Mr Z and herself as executors and naming them as beneficiaries and in the event that they are predeceased, naming BHT and NKT as beneficiaries of the estate.

Orders Sought

55. The orders sought by KGT are set out in his submission dated 6 January 2024. KGT seeks orders:

“(1) Pursuant to s36(3)(a) and s36(b)(i) and s36(3) (iii) of the PoA Act that the 2018 EPoA is of no force or effect.

(2) Pursuant to s36(4)(e)(i) that DFT furnish accounts of [PGT] and all other information including the accounts kept by [Mr Z], the Binding Death Benefit Nomination to PGT’s superannuation provider and the Refundable Accommodation Deposits paid to [the service provider] on behalf of PGT to Mr KGT within 30 days.

(3)   In the alternative to (2), pursuant to s36(4)(e)(iii) and s26(4)(e)(iii) that:

(a)   [DFT] lodge with the Tribunal a copy of all records and accounts kept by her and [Mr Z] as attorneys for [PGT] of dealings and transactions made by the attorneys under the power within 30 days and

(b)   That those records and accounts be audited by an auditor appointed by the Tribunal and a copy of the report of the auditor be furnished to the Tribunal.

(4)   An other order the Tribunal deems fit.”

56. In support of the proposed order at (2) above, PGT states that he is able to do a preliminary audit of the accounts kept by Mr Z and DFT as he has undertaken similar exercises in analysing complex financial records of Family Law matters and complex debt recovery matters.

57. In relation to the proposed order at (3) above, KGT outlined in his oral submissions, that he envisaged that following an audit, there would follow a negotiation process between the parties whereby an agreement could be reached regarding reimbursement. KGT’s view is that the practicalities regarding the cost of the audit could be worked out with a sensible approach taken by the parties.

58. KGT states that the proposed orders are necessary in order to get a true picture of the depletion of the estate and in order to properly value the estate and so that there can be a process whereby the estate can be properly reimbursed. He states that DFT has a conflict of interest and that the orders are necessary “as she is hardly going to investigate herself”. He disputes that his claim is brought to advance a claim in the Supreme Court, and it is his preference that the matter is “sorted out by NCAT”.

59. KGT states that the orders should be made to protect PGT’s interest as a person with a disability to be protected from abuse and exploitation. He pointed to the protective nature of the Tribunal's jurisdiction. He said that the orders sought would have utility value, as it would mean that there was a process of accountability and “the true position would be known”. In PGT’s view, this is of protective value to persons with a disability.

60. Mr Dilley and Mr Corbould submit that there is no utility in the proposed orders. They state that KGT has made it clear that he has a financial interest in PGT’s estate and that a dispute about the estate, and including in relation to the attorney's conduct and whether there should be reimbursement to the estate is a matter for the Supreme Court, not NCAT. Mr Dilley submits that even if the Tribunal were to make the orders sought by KGT, this would not remedy any deficiency in the attorneys' management of the estate.

Should the Tribunal conduct the review?

61. In Susan Elizabeth Parker v Margaret Catherine Higgins & Ors [2012] NSWSC 1516, Slattery J stated at [80]:

“On an application for s 36 review such as this the Court must first exercise a discretion under Powers of Attorney Act, s 36(1) to decide whether or not to conduct a s 36 review. In my view the Court does not have to conduct a full review of all documents associated with the operation of the subject power of attorney to do this. Something short of a full review must be able to justify the exercise of the s 36(1) discretion as to whether or not the Court should conduct a full s 36 review. In the circumstances of this case the Court can glean sufficient information to exercise the s 36(1) discretion by undertaking a general survey of what... (a party)...has produced.”

Decision not to review the making of the 2018 EPoA

62. KGT states that PGT did not have capacity to execute the 2018 EPoA. His concerns surrounding the “misguided approach” that he considers that Dr X and Mr V took are detailed earlier in these reasons. More broadly KGT and Ms R give evidence of PGT’s lack of capacity by reason of his intellectual disability, his deteriorating cognition due to dementia, and the influence and control that they state was being exercised by Mr Z and DFT.

63. The thrust of KGT’s submission is that the overall picture is one in which there is insufficient evidence to establish that PGT had capacity to execute the 2018 EPoA and what then flows are the orders sought under s 36(3) of the PoA Act.

64. Against this, Mr Dilley states that KGT has not provided any independent or documentary evidence in support of his contention of incapacity, and that we should prefer the evidence of the attorneys. Mr Dilley submits that the onus to satisfy the Tribunal that the powers of s 36(3) of the PoA Act should be enlivened rests upon KGT and that he failed to meet the necessary threshold.

65. It is established law that the death of a principal terminates an enduring power of attorney.

66. In HKE [2021] NSWCATGD 43, the Tribunal decided not to review the making of enduring power of attorneys in the circumstances that the principal had died. The Tribunal stated:

“If we were to embark on review of making a power of attorney, we would be empowered to make orders about their validity, including that they were invalid. However they are now terminated since the death of the late HKE. In our view there is no utility in making an order about the invalidity of the terminated appointments. Accordingly we decided not to review the making of the enduring powers of attorney.”

67. In our view the Tribunal’s comments in HKE are applicable to this matter. We can see no practical utility in conducting review of the making of the 2018 EPoA.

68. Further in any event, on the basis of our review of the material, we saw merit in Mr Dilley’s submission and had difficulty seeing that the matters raised by KGT were sufficient to discharge the onus on him to persuade us to make the orders sought.

69. In this regard we note that he did not have contact with PGT for a period of around five years before the 2018 EPoA was made, which necessarily impacts upon his ability to comment on PGT’s capacity. His contention that PGT’s dementia was quite progressed by the time that he lost contact with him in 2013 is not supported by the independent and expert evidence of Dr X who assesses his dementia as being mild in 2018.

70. PGT’s criticisms of Dr X and Mr V are insufficient in themselves to establish a lack of capacity in view of the totality of the evidence and including Dr X’s assessment of his dementia as being mild and the certificate under s 19 of the PoA Act completed by Mr V. Whilst PGT had an intellectual disability, the issue of capacity is task specific.

Decision not to review the operation and effect of the 2018 EPoA

71. We decided not to review the operation and effect of the 2018 EPoA because:

1. A focus of KGT’s application relates to his concerns regarding the transfer of the regional NSW property in 2015 and detriment arising to PGT, including the lost opportunity for income and capital growth. The documentary evidence from Mr V and the transfer form is consistent with DFT’s contention that neither she nor Mr Z acted as attorneys on the transfer. The EPoA that had been executed by that time was the 2007 EPoA.

2. Even if we were to accept, that whilst PGT signed the transfer, they were acting as attorneys for PGT by this time and/or that they unduly influenced him, the transaction was unrelated to the operation of the 2018 EPoA. This is necessarily so as the transaction predates the execution of the 2018 EPoA. A further review will not alter this fact.

3. Another focus of KGT’s application relates to the sale of shares and the loan in 2017. This transaction also predates the 2018 EPoA and is properly characterised as a transaction unrelated to the 2018 EPoA.

4. Our conclusions regarding the 2015 and 2017 transactions are consistent with the Tribunal's approach in the decision in DPT where the Tribunal found that a number of the disputed transactions were unrelated to the operation of the enduring power of attorney that was in issue.

5. We are mindful of KGT’s submission that the 2015 and 2017 transactions are part of a continuing course of conduct on the part of the attorneys and DFT’s role as attorney under both EPoAs. Further, it is not in issue that Mr Z was in breach of his duties as an attorney in selling the shares and taking the loan in 2015. Even if we accept his contentions that we should approach the matter on the basis of a course of conduct, we could not see sufficient basis to proceed to a further review or that there would be utility in the proposed orders.

6. PGT is seeking a process of redress whereby there is reimbursement to the estate. This is demonstrated in his evidence that following his audit or that of an independent auditor, he envisages that there would then follow a process whereby the parties would negotiate reimbursement. It is unrealistic to suggest that KGT does not have a financial interest in the estate in view of his comments expressing an interest in PGT’s will and estate and his claim to be a beneficiary. He has sought an undertaking from DFT that she does not file an application for probate pending the resolution of the NCAT proceedings. KGT threatened to file a caveat if she did not provide the undertaking. KGT expressed his preference at the hearing that “the matter is sorted out at NCAT”. However, the Tribunal does not have any power to order reimbursement to an estate, and his proposal depends upon the contingency of the parties' agreement.

7. Consistent with previous decisions of the Tribunal, and including DPT and HKE, we accept that the appropriate mechanism for resolving a dispute about the depletion of an estate and remedies for this, and including whether an executor is able to make unconflicted investigations and decisions is within the jurisdiction of the Supreme Court, as opposed to the Tribunal. We accept Mr Dilley and Mr Corbould's submission that the proposed orders will not have utility. We cannot see that a full review would lead us to a different conclusion.

8. In this regard we note KGT’s contentions that the depletion of the estate raise matters of lost capital growth and lost income arising from the transfer of the regional NSW property and the shares and the loan. Resolution of these matters would require assumptions, for example, as to market value and assessment of loss likely requiring adjudication. This is beyond the scope of the orders that are available under s 36(4) of the PoA Act. This would follow also in respect of other aspects of other contentions made of loss to the estate, for example, depletion of superannuation and other transactions occurring since 2018.

1. Consistent with the approach in HKE, in our view, it is not in accordance with the principle set out in s 36 of the Civil and Administrative Tribunal Act that we embark on a full review in this matter which, in all likelihood would not result in an order by this Tribunal as there would be no utility.

2. This is particularly given the volume and scope of the material filed by the parties, spanning decades of PGT’s life and his affairs, both personal and financial and the scope of the contentions made by KGT, and the contentions made DFT and their replies. The scope of the documents and audit sought by KGT is considerable, as he seeks accounts of the attorneys dating from 2007.

3. Further, our review of the material does not support KGT’s contention that the orders sought would better reflect the wishes of PGT. KGT’s contention that PGT would now want him “to stand in his shoes” to seek accountability and redress is against the weight of the evidence. KGT himself states that he had “never been directly responsible for overseeing [PGT]’s finances”. Even accepting his evidence of a close relationship with PGT prior to 2013, it is not in issue that he had no contact with him for a lengthy period between late 2013 to mid-2022. This necessarily impacts upon KGT’s ability to comment upon what PGT’s wishes would be.

4. Against this is the detailed evidence from DFT, BHT, and Mr Z demonstrating a close and continuing relationship with PGT. The independent evidence from the aged care facility staff, Mr U, financial adviser, and PGT’s treating doctors, such as Dr T, whose reports are in evidence, are consistent with DFT’s evidence on this issue. Further, DFT’s evidence that KGT’s claim upon his mother’s estate adversely impacted on his relationship with PGT is reasonable, given that PGT was the sole beneficiary of it.

5. KGT contends, however, that PGT did not know the “full story” of what has happened to his estate and would be “horrified” if he did know. It is not in issue that Mr Z breached his obligations as an attorney in 2015 and it is not suggested that PGT was aware of this. Further, it is not in issue that DFT has sought to redress this by repaying the loan with interest. KGT and DFT disagree as to whether her repayment constitutes adequate redress for the breach. A principal who executes a power of attorney has an interest in ensuring that the attorney complies with their duties as an attorney and that their estate is not depleted to the detriment to the beneficiaries of their estate. Again, however, we cannot see that a full review or the orders sought would resolve the dispute about whether the estate has been adequately reimbursed for the depletion.

6. Further, it is far from clear that PGT would want KGT to agitate this through this application to the Tribunal or would seek that the Tribunal make the orders sought, given the nature of KGT’s relationship with him and particularly their relationship since 2013.

7. KGT states that we should make orders under s 36(4) of the PoA Act taking into account the protective nature of the Tribunal's jurisdiction and in order to protect the rights of persons with a disability. In our view, his submission on this issue is properly characterised as one based on the Tribunal acting in accordance with the best interests of the deceased principal whereas we can only make orders that better reflect the wishes of the principal. This is consistent with the approach taken in HKE.

72. Taking these matters into consideration, we decided not to review either the making or the operation and effect of the 2018 EPoA.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 02 August 2024