QHT (Review Enduring Powers)
[2014] TASGAB 1
•25 February 2014
Guardianship and Administration Board
QHT, on the application of BT
GAB No. XXXX of 2013
QHT (Review Enduring Powers) [2014] TASGAB 1
REASONS FOR DECISION
Ken Stanton (Board member)
Procedure – request for a stay in a review of an enduring power of attorney – jurisdiction of the Board to review an enduring power of attorney – whether prejudice, advantage or disadvantage will result to any party from conducting the review - whether proceedings have been brought for an improper purpose
Judicial Review Act 2000 s.29
Powers of Attorney Act 2000 s.33
By letter of 20 December 2013 Rae & Partners, the legal practitioners for the Attorney, requested the Board to exercise its discretion not to hold a hearing to review the EPA.
The Board has decided it should hold such a hearing to review the EPA. It is therefore directed that the matter be listed for hearing on a date to be fixed by the Registrar.
In that event Rae & Partners requested a statement of reasons pursuant to section 29 of the Judicial Review Act 2000. The Applicant suggested reasons ought not be provided because they would delay the resolution of the Application. It may be that the Board is only required by s29 of the Judicial Review Act 2000 to provide reasons requested after it has made a decision and that the request for reasons is premature. However to withhold provision of reasons to await such a request, which could be easily made, would only result in further delay. The reasons for the Board’s decision to hold a hearing of the Application are therefore provided now.
Submissions made by the Parties
By letter of 14 January 2014 the Applicant responded to Rae & Partners submissions. That letter was provided to Rae & Partners with an invitation to address any new matters raised in the Applicant’s submissions which could not have been reasonably anticipated when they made their submissions of 20 December 2013.
Rae & Partners made further submissions on 7 February 2014. A copy of those submissions was provided to the Applicant. She was not invited to respond to them. However she provided further submissions to the Board on 18 February 2014. A copy of those further submissions was provided to Rae & Partners with an indication that the Board considered ample opportunity to make submissions had been provided to the parties and the Board would proceed to make its decision.
Background Circumstances
While the submissions of the parties indicate there is much in dispute between them, the Board is satisfied of the following matters for the purposes of determining whether it should hold a hearing.
The Donor was married to ST (“ST”). The Applicant is ST’s daughter. The Attorney is the Donor’s daughter.
By a will dated 28 March 2012 ST appointed the Donor, the Applicant (referred to in that will as BT) and FNQ (ST’s other daughter) as his executors. That will left a life interest to the Donor and the residuary to the Applicant and FNQ.
The Donor has a current will under which the Attorney is a substantial beneficiary of the Donor’s estate.
10.On 11 January 2013, ST died. Prior to that he had been living in the Manor aged care facility as was the Donor. The Donor needs to pay an accommodation bond in the order of $300,000 to stay there.
11.On 17 July 2013 the Donor as Plaintiff, by the Attorney, commenced proceedings in the Supreme Court of Tasmania No XXXX of 2013 against the Applicant (referred to as BT) and FNQ as Defendants (“the Supreme Court proceedings”). Those proceedings seek relief based on the existence of constructive trusts in respect of assets forming part of ST’s estate including property at Launceston in Tasmania, various bank accounts and shares in a company of which ST was the majority shareholder. It also seeks an account of dealings with ST’s bank accounts.
12.By paragraph 1.4 of a defence dated 30 August 2013 filed on their behalf by Butler McIntyre and Butler on 2 September 2013 the defendants dispute the validity of the EPA on the basis that the Donor had been formally diagnosed with dementia in or about May 2012.
13.Those proceedings have progressed to the stage of discovery of documents.
The Power to Review an Enduring Power of Attorney
14.The Board’s power to review the EPA is contained in s33 of the Powers of Attorney Act 2000 (“the POA Act”). On such a review, the Board can make the orders set out in s33(2) including, so far as relevant to this matter:
a.appointing a substitute attorney;
b.appointing an administrator of the Donor’s estate
c.declaring that the Donor did not have the mental capacity to make a valid enduring power of attorney and declaring the EPA invalid;
d.revoking the EPA and appointing an administrator of the Donor’s estate; and
e.making any other order it thinks fit as to the exercise of the EPA.
15.The Board also has the power pursuant to s33(7) of the POA Act to impose appropriate terms and conditions on any order it makes.
The Discretion to Hold a Hearing to Review an Enduring Power of Attorney
16.The Attorney asks the Board to exercise a discretion not to hold the hearing of the review.
17.By the use of the word “may”, the terms of s33 of the POA Act indicate that the Board has a discretion as to whether or not to hold a hearing to review the EPA. The Applicant does not suggest to the contrary. The Board is satisfied it has a discretion as to whether or not to hold a hearing to review the EPA.
The Application for Review
18.The application for review relies principally on 2 grounds:
a.that the donor did not have the capacity to validly make the EPA; and
b.that the Attorney is abusing her powers or not acting in the interests of the Donor by:
i.pursuing the Supreme Court proceedings; and
ii.dissipating the Donor’s funds of $250,000.
19.While the Attorney contests those grounds she does not suggest that the application for review is defective, unarguable or that the Board does not otherwise have the power to conduct the review.
Discussion
20.In conducting a review of an EPA, the Board is exercising a protective jurisdiction. It is given the power to conduct a review of the EPA to ensure that the interests of the Donor are protected or advanced in circumstances where the Donor may not be able to do that herself. The power to hold such a hearing was granted to be exercised. Prima facie it is appropriate for the Board to exercise its jurisdiction. Upon the making of a valid application the Board would normally hold a hearing to review the Power of Attorney as a matter of course.
21.Rae & Partners for the Attorney submit that the Board should not follow the ordinary course because of the Supreme Court proceedings.
22.The mere existence of the Supreme Court Proceedings is not sufficient to justify the Board refusing to exercise its jurisdiction to review the EPA. The fact that the review of the EPA by the Board and the Supreme Court proceedings both involve consideration of the question of the Donor’s capacity is not, of itself, sufficient to justify that refusal. Neither is the fact, if it be the case, that the claim in those proceedings is a strong one, or that it is necessary to make the claim to provide financial resources for the Donor’s accommodation needs. Those matters may be relevant to how the Board exercises its powers under s33 of the POA Act, but they do not justify refusing to conduct a hearing to review the EPA.
23.However a relevant consideration in deciding whether to hold the hearing is whether doing so will be likely to cause any prejudice. While the position of all parties is relevant, the Board would give particular weight to any prejudice which might be suffered by the Donor if the hearing was conducted.
24.The review of the EPA will require the Board to consider whether the Donor had the mental capacity to validly make the EPA. If after conducting the hearing the Board determines that the Donor had the capacity to make the EPA and the Attorney has not abused her powers or acted contrary to the best interests of the Donor as alleged, it might dismiss the application. In that event the question of the Donor’s capacity would still need to be determined by the Supreme Court. There is no suggestion any prejudice would flow from that. The types of prejudice suggested by the submissions for the Attorney could only arise if the Board made an order affecting the validity or continuation of the EPA. Whether such an order should be made requires a hearing to be conducted.
25.If the Board determines that the Donor did not have the requisite mental it could declare the EPA invalid. The Recorder is required to register that declaratory order. It is possible that the Board’s declaration of invalidity might mean that the Supreme Court proceedings were not properly commenced. But that does not mean, assuming it was in her interests to do so, that the Donor’s claim could not be pursued.
26.If the Board was satisfied it was appropriate, it could revoke the EPA. The revocation would not necessarily have retrospective effect. So it is not clear revoking the EPA would have any effect on the regularity of the commencement of the Supreme Court proceedings.
27.The Board might appoint a substitute Attorney or an administrator if it considered either of those courses appropriate. Again it is not clear that would have any effect on the regularity of the commencement of the Supreme Court proceedings.
28.But assuming any order made by the Board at the conclusion of the review had the effect that the Supreme Court proceedings were not properly commenced, it is unlikely the Donor’s claim would be stifled. The Supreme Court proceedings are commenced in the name of the Donor. If the Donor could not make a decision about continuing the proceedings the Board could appoint an administrator or substitute Attorney for that purpose. Such a decision maker would be able to decide what the best interests of the Donor required in respect of the Supreme Court proceedings, no doubt taking account of the advice received by the Donor and the Attorney to date. In any event, if it conducts a hearing to review the EPA, the Board will be able to take account of the effect on the Supreme Court proceedings, if any, of any order it might make. It can be reasonably anticipated that the parties would provide full submissions as to that at the hearing of the review.
29.If the Board made an order which impacted the Supreme Court proceedings, it could impose appropriate terms and conditions to ameliorate any prejudice which might be suffered as a result. That might, but would not necessarily, include appropriate directions to the Attorney or any other substitute decision maker as to their conduct of the Supreme Court proceedings where it was in the interests of the Donor to give those directions. None of that suggests any prejudice to anyone, let alone the Donor.
30.It might be that there will be some additional cost or inconvenience to the parties resulting from the need to conduct proceedings to determine the validity of the EPA before both the Board and the Supreme Court. However, there is no reason to think those additional costs will be sufficiently large or any inconvenience will be of such a scale to justify a refusal to exercise the Board’s jurisdiction to review the EPA, particularly when that review is undertaken to consider the Donor’s capacity and best interests. Indeed, if the Board’s decision did impact on the determination of the Donor’s capacity in the Supreme Court proceedings, it is possible that the informal procedures able to be adopted by the Board would be more cost effective and convenient than the determination of that issue in accordance with the more formal Supreme Court procedures.
31.The Attorney suggests that the Donor would be disadvantaged if the Board appointed an administrator other than the Attorney because any other decision maker would not have the familiarity with the relevant facts and circumstances affecting the Supreme Court proceedings that the Attorney has. But there is no reason to think that the Attorney could not provide the benefit of her knowledge and support to assist the prosecution of the Supreme Court proceedings whether or not she had the formal decision making power. Indeed the potential benefit to her as a substantial beneficiary under the Donor’s will, let alone her expressed concern for her mother’s best interests, suggests she would continue to co-operate with the prosecution of the Supreme Court proceedings if that was in the best interests of the Donor, whoever the Donor’s substitute decision maker might be.
32.For those reasons the Board is not satisfied there is any sufficient prejudice to warrant refusing to hold a hearing in this case.
33.Another relevant consideration is whether the Application for the review of the EPA was brought for an improper purpose. If that was the case, it might be appropriate for the Board not to conduct the review sought.
34.The Applicant and the Attorney each suggest that the conduct of the other is motivated by financial self-interest and is not for the benefit of the Donor. Each maintains their motivation is selfless. It seems reasonably clear that the outcome of the Supreme Court proceedings will ultimately impact what each of them receives pursuant to the wills of the Donor and ST. That does not mean either of them is motivated by self-interest. In any event, such matters are peripheral to the real issues the Board is required to consider, in particular the capacity and best interests of the Donor.
35.The Attorney suggests the Application is brought for a collateral purpose, i.e. to give the Applicant some tactical advantage in the Supreme Court proceedings.
36.The Board is not satisfied holding a hearing to review the EPA would necessarily provide the Applicant with a tactical advantage in the Supreme Court proceedings. It appears any tactical advantage would be essentially procedural. It would not lead to the defeat of any legitimate claim made by or on behalf of the Donor.
37.Any such advantage would depend on the outcome of the review. It is possible the outcome of that review would be to maintain the status quo in respect of decisions to be made for the Donor if she lacks capacity. If that was not the case any prejudice to the Donor created by any tactical advantage to the defendants in the Supreme Court proceedings could well be ameliorated, if it was appropriate to do so, by the imposition of appropriate terms or conditions on any order pursuant to s33(7).
38.Even if there is some tactical advantage to be gained for the Applicant, the fact that the Application for review of the EPA might have that effect does not make it inappropriate to conduct the hearing of the review unless the advantage sought is beyond what the law provides and is the predominant purpose of the Application for review. So long as the Application is objectively within the scope contemplated by s33 of the POA Act the subjective motivation for it is of little, if any, importance. In this case, without forming or expressing any views as to the merits of the grounds raised in the Application, the scope of the review sought does not appear to be beyond that contemplated by the legislation.
39.The Applicant suggests the Attorney has a conflict of interest because she eventually stands to benefit from the success of the Supreme Court proceedings. The Attorney denies any such conflict. The existence of a conflict between the interests of the Attorney and those of the Donor would be a relevant consideration in a review of the EPA and a good reason to conduct the hearing. In this case, that might involve considering whether or not it is in the Donor’s best interests for the Attorney to be making decisions about the use of the Donor’s current resources in pursuing the Supreme Court proceedings when she might, as a substantial beneficiary under the Donor’s will, benefit from the claim made in those proceedings. Without forming or expressing any view as to the appropriate resolution of that question, it is appropriate to conduct a hearing to consider it.
Conclusion
40.The Board is not satisfied that it is appropriate to decline to hold a hearing to review the EPA. It is appropriate to hold such a hearing. The matter should be listed for hearing and accordingly the Board directs the matter be listed on a date to be fixed by the Registrar.
Ken Stanton
BOARD MEMBER
25/2/14
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