PT
[2020] WASAT 147
•30 NOVEMBER 2020
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA)
CITATION: PT [2020] WASAT 147
MEMBER: MR D AITKEN, SENIOR MEMBER
HEARD: 9 NOVEMBER 2020
DELIVERED : 30 NOVEMBER 2020
FILE NO/S: GAA 4189 of 2019
GAA 4256 of 2019
PT
First Applicant
ED
Second Applicant
VM
Subject
GM
Donee of Enduring Power of Attorney
Catchwords:
Enduring power of attorney - Application for records and accounts kept by donee - Application for audit of records and accounts kept by donee - Applicant seeking to 'confirm or not' accuracy of statement of assets and liabilities of estate of deceased donor filed with Supreme Court for probate of the donor's will - Being suspicious not a proper reason for order to be made under s 109(1)(a) or s 109(1)(b) of Guardianship and Administration Act 1990 (WA) - Proceedings dismissed pursuant to s 47(1)(b) of State Administrative Tribunal Act 2004 (WA) as being used for improper purpose
Legislation:
Administration Act 1903 (WA)
Bankruptcy Act 1966 (Cth), s 179
Corporations Act 2001 (Cth), s 536
Family Provision Act 1972 (WA)
Guardianship and Administration Act 1990 (WA), s 109, s 109(1), s 109(1)(a), s 109(1)(b)
State Administrative Tribunal Act 2004 (WA), s 47, s 47(1)(a), s 47(1)(b)
Trustees Act 1962 (WA)
Result:
Proceedings dismissed
Category: B
Representation:
Counsel:
| First Applicant | : | Ms C Smiddy-Brown |
| Second Applicant | : | Ms C Smiddy-Brown |
| Subject | : | N/A |
| Donee of Enduring Power of Attorney | : | Mr P Arns |
Solicitors:
| First Applicant | : | Hammond Legal |
| Second Applicant | : | Hammond Legal |
| Subject | : | N/A |
| Donee of Enduring Power of Attorney | : | Arns & Associates |
Case(s) referred to in decision(s):
EW [2010] WASAT 91
GA and EA and GS [2013] WASAT 175
KS [2008] WASAT 29
Laurent and Commissioner of Police [2009] WASAT 254
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
VM made an enduring power of attorney dated 17 December 2009 (the EPA) appointing her son, GM as her immediate attorney, and another person as her substitute attorney.
The applicants in this proceeding under the Guardianship and Administration Act 1990 (WA) (GA Act), PT and ED are daughters of VM and sisters of GM.
The applicants seek the following orders:
•first, an order under s 109(1)(a) of the GA Act requiring GM to file a copy of all records and accounts kept by him of dealings and transactions made by him in connection with the EPA, which is matter number GAA 4189 of 2019; and
•secondly, an order under s 109(1)(b) of the GA Act requiring the records and accounts to be audited by an auditor appointed by the Tribunal and a copy of the auditor's report to be furnished to the Tribunal and the applicants, which is matter number GAA 4256 of 2019.
VM died on 13 January 2019 and there is currently a proceeding in the Supreme Court under the Family Provision Act 1972 (WA) (family provision proceeding) in which the applicants seek orders that the will of VM (VM's Will) be altered to provide greater provision for the applicants.
GM is a defendant to the family provision proceeding, both in his capacity as the executor of VM's Will and as a beneficiary under VM's Will.
Strike out application
GM has made an application for an order to strike out this proceeding (strike out application) under s 47 of the StateAdministrative Tribunal Act 2004 (WA) (SAT Act).
The strike out application was made in GM's minute of consent orders dated 15 September 2020, which was filed with the Tribunal and given to the applicants by GM on 16 September 2020, ahead of the directions hearing held on 17 September 2020.
GM set out the reasons for making the strike out application in a letter dated 15 September 2020 from his legal representative in this proceeding, Mr P Arns of Arns & Associates to the applicants' legal representative in this proceeding, Ms C Smiddy-Brown of Hammond Legal. The letter was filed with the Tribunal with the minute of consent orders.
The letter states that the basis for the strike out application is that the application for orders under s 109 of the GA Act is for an ulterior purpose, namely to gather information for the purposes of the family provision proceeding and that the real issue which the applicants wish to agitate is the extent of the deceased estate of VM.
The Tribunal made orders at the directions hearing on 17 September 2020 which provided for GM and the applicants to file and serve any evidence relied upon and submissions in relation to the strike out application and then for a hearing of the strike out application.
Evidence and submissions
GM filed the following evidence:
•a copy of an affidavit of the second applicant, ED sworn 31 March 2020 in the family provision proceeding (ED's first affidavit);
•a copy of an affidavit of GM sworn 27 May 2020 in the family provision proceeding (GM's affidavit);
•a copy of an affidavit of the second applicant, ED sworn 11 June 2020 in the family provision proceeding (ED's second affidavit); and
•a copy of the transcript of the decision of Master Sanderson on 18 August 2020 to dismiss the application by the second applicant, ED for discovery against GM in the family provision proceeding.
The applicants filed a copy of an affidavit of the first applicant, PT sworn 15 October 2020 in this proceeding (PT's affidavit).
GM filed submissions in support of the strike out application and the applicants filed submissions in opposition to the strike out application.
Counsel for GM, and counsel for the applicants, also made oral submissions at the hearing of the strike out application on 9 November 2020.
GM's submissions
GM's submissions in support of the strike out application may be summarised as follows:
•GM contends that, on a true analysis, the applicants are seeking an explanation from the executor of the deceased estate of VM, not the donee of the EPA, based on the belief held by the applicants that the statement of assets and liabilities (VM statement of assets and liabilities) filed as part of the application in the Supreme Court for probate of VM's Will did not accord with the applicants' understanding of VM's property interests at the date of her death.
•GM says the applicants do not make any direct allegation of misconduct against him and there is no evidence of misconduct by him.
•GM says there has not been any misconduct by him. GM further says the applicants had very limited contact with their mother, VM, in the 17 years prior to her death and it is understandable that they do not have a good understanding of decisions made by VM in relation to her affairs and property interests after 10 February 2002 when VM's husband (and father of the applicants and GM), LM died.
•GM says that in 2008 VM obtained estate planning advice in relation to her financial affairs and property interests from her accountant and a solicitor. GM further says that as the result of that advice VM transferred a number of properties which she owned to trusts with corporate trustees.
•GM says that the properties which VM did not transfer to trusts are accounted for in the VM statement of assets and liabilities.
•GM contends that, in the absence of some cogent and plausible allegation of misconduct by him, which is supported by some objective evidence, no proper basis for an inquiry under s 109 of the GA Act has been established.
•GM refers to the reasons given by Master Sanderson in the family provision proceeding for dismissing the application by the second applicant, ED for discovery against GM in the family provision proceeding in which Master Sanderson states:
The question between the parties here seems to be the extent of the estate of (VM) … While the extent of the estate is relevant, establishing just what the estate is – that is, what has to be brought into the estate – is a dispute which involves the executors in their capacity as executors. It must be pursued under the Trustees Act, under the Administration Act or under the inherent jurisdiction of the court.
•GM contends that a relevant consideration for the Tribunal in determining an application under s 109(1)(a) and (b) of the GA Act is whether the applicants may have other remedies to pursue, for example, a breach of trust. GM says that Master Sanderson has given a clear indication to the applicants what the appropriate remedy is and the path to pursue that remedy, which is under the provisions of the Trustees Act 1962 (WA) (Trustees Act), or under the provisions of the Administration Act 1903 (WA) (Administration Act) or under the inherent jurisdiction of the Supreme Court. GM says it is not a remedy to be pursued in the jurisdiction of the Tribunal.
•GM contends that the reasoning of the Tribunal in its decision in GA and EA and GS [2013] WASAT 175 (GA and EA and GS) to dismiss an application made under s 109(1)(a) and (b) of the GA Act are relevant and applicable in the present case.
Applicants' submissions
The applicants' submissions in opposition to the strike out application may be summarised as follows:
•The applicants contend that the central issue of the application in this proceeding is that they assert that the VM statement of assets and liabilities 'does not reflect what they believe should be the assets of VM at the time of her death'.
•The applicants say that the reason for this belief has been gleaned through public records and 'their general knowledge'.
•In ED's first affidavit she states that between 28 October 2016 and 10 October 2018 there were gross proceeds of $6,777,000 from the sale of 15 blocks of land owned by VM. Attached to ED's first affidavit is a copy of the VM statement of assets and liabilities, which shows the funds in VM's bank accounts at the time of her death being $1,251,438.
•The applicants refer to statements by the Tribunal in its decision in Laurent and Commissioner of Police [2009] WASAT 254 (Laurent), at [19][21] regarding the approach which should be taken by the Tribunal when an application is made under s 47 of the SAT Act for a proceeding to be dismissed or struck out.
•The applicants refer to statements by the Tribunal in its decision in EW [2010] WASAT 91 (EW) regarding the meaning of 'proper interest' in s 109(1) of the GA Act and say that they have a proper interest in this matter.
•The applicants refer to statements by the Tribunal in its decision in GA and EA and GS and in its decision in EW and say that 'there is a strong basis to warrant an inquiry and invoke the general supervisory jurisdiction of the Tribunal' under s 109(1) of the GA Act in respect of the conduct of GM under the EPA.
•The applicants refer to VM having approximately $1.25 million in funds at the date of her death despite the sale of the 15 blocks of land by VM prior to her death having grossed approximately $6.7 million. The applicants refer to PT's affidavit which sets out details of searches obtained by her from Landgate of 15 Transfers of Land signed by GM as attorney for VM. The applicants also refer to statements in GM's affidavit regarding loans, debts and expenses of VM which were paid by GM as attorney for VM and conclude that VM must have accrued a debt of over $4.5 million for the subdivision and sale costs of the blocks of land, which they say seems 'highly implausible'. In their written submissions, the applicants say that they believe there must be a misappropriation of funds by GM, but during the hearing of the strike out application counsel for the applicants withdrew this allegation.
•The applicants say that the utility of GM producing records in connection with the use of the EPA are that the records will either 'confirm or not' the accuracy of the VM statement of assets, thereby confirming the size of the estate of VM for the family provision proceeding and that the records may also resolve ongoing issues over the assets of the estate of VM.
The exercise of the Tribunal's power under s 109 of the GA Act
Section 109 of the GA Act provides as follows:
On application State Administrative Tribunal may intervene
(1)A person who has, in the opinion of the State Administrative Tribunal, a proper interest in the matter may apply to the Tribunal for an order
(a)requiring the donee of an enduring power of attorney to file with the Tribunal 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 Tribunal and requiring a copy of the report of the auditor to be furnished to the Tribunal and the applicant for the order; or
(c)revoking or varying the terms of an enduring power of attorney, appointing a substitute donee of the power or confirming that a person appointed to be the substitute donee of the power has become the donee.
(2)The donee of an enduring power of attorney may apply to the State Administrative Tribunal
(a)for an order referred to in subsection (1)(c); or
(b)for directions as to matters connected with the exercise of the power or the construction of its terms.
(3)The State Administrative Tribunal may, upon an application under this section or upon receiving a report of a donee's bankruptcy under section 107(1)(d)
(a)make an order referred to in subsection (1) or (2); or
(b)make such other order as to the exercise of the power or the construction of its terms as the Tribunal thinks fit.
(4)An order under this section may be made subject to such terms and conditions as the State Administrative Tribunal thinks fit.
(5)In relation to an enduring power of attorney recognised by the State Administrative Tribunal under section 104A, an order under this section is limited to the donor's estate within Western Australia.
It is not in issue in this proceeding that an application can be made under s 109 of the GA Act after the donor of an enduring power of attorney has died: see the decision of the Tribunal in KS [2008] WASAT 29 (KS).
However, as was noted by the Tribunal in KS, at [33][35], the power of the Tribunal to make orders under s 109 of the GA Act after the death of a donor is limited and can only require the donee to account for his or her actions under the enduring power of attorney during the lifetime of the donor under s 109(1)(a) or s 109(1)(b) of the GA Act and cannot have any other remedial effect. The Tribunal also stated in KS, at [34], that there must be a proper reason established to justify the making of such an order.
It is not in issue in this proceeding that the applicants have a proper interest in the matter. Following the reasoning of the Tribunal in EW at [27] and [28] the Tribunal is satisfied that the applicants have a proper interest in the matter for the purposes of s 109(1) of the GA Act.
In GA and EA and GS, at [24][26], the Tribunal stated the following regarding the issues for determination by the Tribunal in an application for orders under s 109(1)(a) and (b) of the GA Act:
24As explained in the decisions of the Tribunal in KS [2008] WASAT 29 and EW [2010] WASAT 91 (EW), the Tribunal exercises a supervisory jurisdiction under s 109(1)(a) and (b) of the GA Act. Those sections are to be understood in the context of s 107(1)(a) and (b) of the GA Act which state that:
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; [and]
(b)shall keep and preserve accurate records and accounts of any dealings and transactions made under the power;
25As the Tribunal said in the decision in EW at [94]:
An enduring power of attorney is an essentially private agreement between the donor and donee, and the transactions undertaken pursuant to that agreement should not be scrutinised unless there is reason to do so.
26In EW, having found some assistance in cases concerning supervision of trustees and liquidators, which were referred to at [96][100] of the decision, the Tribunal said at [101] that the issues for determination in an application for orders under s 109(1)(a) and (b) are whether there is:
... something which requires an inquiry,…
and whether there is:
… a sufficient basis for making an order for an audit of the records and accounts kept by the [donee] of dealings and transactions made by [him or] her as attorney …
In their submissions in relation to the strike out application both parties have referred to the issue of whether there is a proper or sufficient basis for an inquiry under s 109 of the GA Act in respect of the conduct of GM under the EPA.
In EW, at [95][101], the Tribunal drew on the language used in cases concerning the supervision of trustees under s 179 of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) and the supervision of liquidators under former s 536 of the Corporations Act 2001 (Cth) (Corporations Act), in formulating that one of the questions which the Tribunal had to consider was whether there was 'something that requires an inquiry' to determine whether an order should be made under s 109(1)(b) of the GA Act.
Section 179 of the Bankruptcy Act gives a court the power to inquire into the conduct of a trustee and to make such order as the court thinks proper. Former s 536 of the Corporations Act gave a court the power to inquire into the conduct of a liquidator and to make such order as the court thinks fit.
However, s 109 of the GA Act does not give the Tribunal the power to inquire into the conduct of the donee of an enduring power of attorney, nor to make such order as the Tribunal thinks proper or fit. The Tribunal's powers under s 109 of the GA Act are more confined and, as has been noted above, in a situation where the donor has died, the Tribunal can do no more than make an order under s 109(1)(a) and (b) of the GA Act.
In EW, at [111], the Tribunal found that, in that matter, there was 'something which requires inquiry', rather than 'something which requires an inquiry' (which was the term used in [101] of EW). In light of the above observations, the term used in [111] is a more accurate statement of one of the issues which are to be considered by the Tribunal in an application for an order under s 109(1)(a) or (b) of the GA Act.
The exercise of the Tribunal's power under s 47 of the SAT Act
Section 47 of the SAT Act provides as follows:
Frivolous etc. proceedings, dismissal of etc.
(1)This section applies if the Tribunal believes that a proceeding
(a)is frivolous, vexatious, misconceived or lacking in substance; or
(b)is being used for an improper purpose; or
(c)is otherwise an abuse of process.
(2)If this section applies, the Tribunal may order that the proceeding be dismissed or struck out and make any appropriate orders.
(3)The Tribunal's powers to act under subsection (2) are exercisable only by a legally qualified member.
(4)The Tribunal may act under subsection (2) on the application of a party or on its own initiative.
Consideration
In paras 913 of GM's affidavit, GM refers to the development of land which had previously formed part of a market garden owned by LM, ownership of which passed to VM under the will of LM upon his death (the market garden land).
GM says that he assisted VM to obtain development approval for the market garden land, which took many years. GM says that the cost of the subdivision, which included obtaining necessary approvals and all earthworks was funded by loans to VM from Bankwest and from trusts associated with VM, which were repaid from the proceeds realised from the sale of the blocks of land created by that subdivision. GM says that VM's taxation obligations, accountant's fees and VM's health and aged care fees were also paid from those proceeds and that at the date of VM's death six blocks of land which she still owned formed part of her estate assets.
The only evidence which the applicants have provided in this proceeding to support their application for orders under s 109(1)(a) and (b) of the GA Act is PT's affidavit, which provides details of the sale prices of 15 lots in the subdivision taken from the Transfers of Land of those lots registered by Landgate. The applicants refer to the total of those sales prices being approximately $6.7 million. They acknowledge that there was a loan of approximately $1.1 million owed by VM to Bankwest, which was repaid from the proceeds of those sales. They then refer to the funds of approximately $1.25 million in VM's bank accounts at the time of her death and say that it is 'highly implausible' that the difference between the gross sale proceeds, less the repayment of the Bankwest loan and the funds in VM's bank accounts at the time of her death was the costs of the subdivision and the sale costs of the 15 lots. However, the applicants have not provided any evidence to support that assertion.
The Tribunal stated in KS, at [34], that there must be a proper reason established by the applicant to justify the making of an order under s 109(1)(a) or (b) of the GA Act.
The Tribunal stated in EW at [94] that it is not sufficient for an order to be made under s 109(1) of the GA Act simply that an application be made by a person with a proper interest and that, because an enduring power of attorney is an essentially private agreement between the donor and the donee, the transactions undertaken pursuant to that agreement should not be scrutinised unless there is a proper reason to do so.
Conclusion
The reason for the applicants seeking orders under s 109(1) of the GA Act is because they think the VM statement of assets and liabilities 'does not reflect what they believe should be the assets of VM at the time of her death' and they wish to 'confirm or not' the accuracy of the VM statement of assets and liabilities. That is no more than a suspicion. The Tribunal does not consider that to be a proper reason for an order to be made under s 109(1)(a) or s 109(1)(b) of the GA Act.
The Tribunal has, therefore, concluded that the applications made by the applicants in this proceeding for orders under s 109(1)(a) and s 109(1)(b) of the GA Act have been made for an improper purpose and should be dismissed pursuant to s 47(1)(b) of the SAT Act.
In their submissions the applicants referred to the decision of the Tribunal in Laurent and, in concluding, the Tribunal will deal with that part of the applicants' submissions. In Laurent the Tribunal dealt with a situation in which it was contended by the respondent that the proceeding was frivolous, vexatious, misconceived or lacking in substance and the respondent applied to have the proceeding dismissed under s 47(1)(a) of the SAT Act. The part of the reasons for decision in Laurent to which the applicants have referred in their submissions deal with that situation and not the situation here where the Tribunal has decided that the proceeding is being used for an improper purpose.
Orders
For the reasons given, the Tribunal will therefore make the following orders:
GAA 4189 of 2019
1.The proceeding is dismissed pursuant to s 47(1)(b) of the State Administrative Tribunal Act 2004 (WA) as it is being used for an improper purpose.
GAA 4256 of 2019
1.The proceeding is dismissed pursuant to s 47(1)(b) of the State Administrative Tribunal Act 2004 (WA) as it is being used for an improper purpose.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MR D AITKEN, SENIOR MEMBER
30 NOVEMBER 2020
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