R
[2021] WASAT 4
•14 JANUARY 2021
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA)
CITATION: R [2021] WASAT 4
MEMBER: MR J MANSVELD, MEMBER
HEARD: 16 OCTOBER 2020
DELIVERED : 14 JANUARY 2021
FILE NO/S: GAA 3168 of 2020
GAA 3575 of 2020
R
Deceased
Catchwords:
Enduring power of attorney - Donor's capacity - General supervisory role of Tribunal - Attorney to act with reasonable diligence - Attorney to keep and preserve records - Attorney not to renounce power during periods of donor's incapacity - Something which requires an enquiry - Utility of proposed orders - Applications dismissed
Legislation:
Guardianship and Administration Act 1990 (WA), s 107, s 107(1)(c), s 109(1)(a), s 109(1)(b)
Result:
Applications dismissed
Category: B
Representation:
Counsel:
| Deceased | : | N/A |
Solicitors:
| Deceased | : | N/A |
Case(s) referred to in decision(s):
EW [2010] WASAT 91
KS [2008] WASAT 29
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
R is deceased. She died on 31 December 2016.
During her lifetime R made an enduring power of attorney (EPA). On 4 September 2007 she appointed a son, G as her sole attorney. The authority of the attorney was not subject to any conditions or restrictions. The EPA was able to be used upon execution.
G had also been appointed the executor and trustee of R's will made on 4 September 2007 (will). Probate was granted to G on 16 March 2017.
The beneficiaries in the will were G, a daughter L and two other sons, B and M. M's share of the estate was to be held by G as trustee.
At the time of her death R's estate was reported to be valued at $798,300. R's property was valued at $800,000, a motor vehicle $6,000 and furniture $500. The estate had debts of $9,700.
In August 2020, B made applications under s 109(1)(a) and s 109(1)(b) (applications) of the Guardianship and Administration Act 1990 (WA) (GA Act).
The applications were made in respect of the EPA and the alleged conduct of the attorney.
The applications were heard by way of a directions hearing on 9 September 2020 and a final hearing on 16 October 2020.
The decision was reserved.
The relevant legislation
Section 109(1)(a) and s 109(1)(b) of the GA Act provide:
(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[.]
Section 107 of the GA Act provides:
(1)The donee of an enduring power of attorney -
(a)shall exercise his powers as attorney with reasonable diligence to protect the interests of the donor and, if he fails to do so, he is liable to the donor for any loss occasioned by the failure;
(b)shall keep and preserve accurate records and accounts of all dealings and transactions made under the power;
(c)subject to section 109(2), may not renounce a power during any period of legal incapacity of the donor; and
(d)shall, if the donee becomes bankrupt, report that bankruptcy to the State Administrative Tribunal.
Penalty applicable to paragraph (b): $2 000.
(2)In relation to an enduring power of attorney recognised by the State Administrative Tribunal under section 104A(2), subsection (1)(a) and (b) only apply to the donor’s estate within Western Australia and subsection (1)(c) does not apply.
The applications
B filed an affidavit in support of his applications with a number of attachments are referred to in these reasons.
The further material filed by the applicant are copies of R's bank statements for the period 8 November 1999 to 31 May 2017 (bank statements) and copies of credit card statements for the period 16 November 2011 to 27 April 2017 at which time the balance of the credit card debt was paid (credit card statements).
B states that around 2007 and 2008 he observed a deterioration in R's mental state. R was having difficulty identifying family members, was at times paranoid and was often erratic and unpredictable.
In about May 2008 B decided to move interstate. Prior to B leaving he had dinner with R, however she did not recognise him or remember who he was.
B states that because of R's deterioration and a tendency to get angry with his wife for no apparent reason, he did not maintain contact with R.
B continues to live outside of Western Australia.
B infers from his reading of the bank statements that R moved into residential aged care (nursing home) in 2010 having until then lived in her own home (the nursing home period).
B states he has concerns about the debit transactions on the bank statements and credit card statements and questions how much of the expenditure was used for R's benefit.
B says that R was a very frugal person and was modest in her gift giving.
B states that he has made enquires with G since R's death concerning the transactions G undertook as attorney. However B has not been satisfied with the responses.
B has identified a number of areas of contention in the financial decision-making of G, as attorney under the EPA and which he submits warrants an order by the Tribunal that records should be provided by G.
B submits that he is seeking records from G for the nursing home period.
The credit card statements
B refers to a credit card statement for the period 17 December 2014 to 9 January 2015 as being representative of the expenditure that occurred in the nursing home period.
B points to payments made to Coles in the rural town where G lived, Masters, Woolworths, Spotlight, Bunnings and Caltex and submits these could not be payments that applied to the needs of R when she was living in the nursing home.
B refers to credit card statements for the periods 15 August 2015 to 11 September 2015, 12 December 2015 to 17 January 2016 and 16 March 2016 to 17 April 2016 as further representative of expenditure made for G's benefit and not of R.
Payments were made to Bettina Management which B states is a child talent agency, and to Chicken Treat in the rural town where G lived and a payment to Perth Camera House for $1,009.00. There are also payments to various liquor stores.
B notes that expenditure continued for a time after R's death.
The bank statements
B states that payments made to the same and similar organisations shown on the credit card statements appear on the bank statements.
The gifts made
B states that in communication with G and his legal representative, the following gifts have been acknowledged to have been made from R's funds:
•Payments made in early 2015 in support of G's daughter including setting up a baby room, bedding, baby shower gifts, car seat, pram and baby capsule.
•Three payments of $1,000 each made on 15 June 2011 and characterised as 'nanny support' for two mentioned persons.
B submits that at the times these payments were made R is unlikely to have had capacity in which case G would have needed to use his authority as attorney under the EPA.
Payments G made to himself
On 19 September 2014 G paid himself $5,000 from R's funds. His explanation to B in their communications was that the payment represented 'reperation' (sic) for work carried out on R's property during 2009.
B states that R was a proud woman and when he left Western Australia in 2008 he considered her property to be in good condition.
B regards as suspicious the payment made six years after the work on R's property was allegedly undertaken and submits that the payment represented a conflict transaction by G, as attorney for R.
R's motor vehicles
B states that R stopped driving in about 2008.
Information given by G to B shows that on 27 February 2012, 28 February 2012 and 1 March 2012 the hostel managed by G in a rural town was reimbursed a total of $10,935 for using hostel funds to purchase R's Toyota Corolla (Corolla) and for the vehicle's registration and insurance.
B questions whether the purchase of the vehicle was in R's best interests as she was not driving and she had another vehicle at the time, a Mitsubishi Lancer (Lancer).
B says he understands that when R stopped driving, M would sometimes drive R to appointments.
B states that the Lancer was primarily used by G for his benefit in the rural town until it was involved in an accident in 2014. The Corolla was primarily used by L until the accident in 2014 when G took it to the rural town.
B states that G sold the Corolla in October 2019 to his de-facto partner for $3,000.
B states that the expenses for the running of both vehicles were paid from R's funds and questions how that could have been in R's best interests.
The gold nuggets
B states that he recalls R telling him in 1998 that she had purchased several gold nuggets (nuggets) from G for about $13,000. He sighted a receipt for the purchase.
B says that R told him she wanted to keep the nuggets in the family after G had advised he was going to sell them.
On 22 September 2014 G paid himself $5,000 and on 29 December 2014, a further $2,000. The $5,000 is represented by G as the final payments for the nuggets but is described by G as 'House Lo' as is the $2,000 payment.
B questions what the description 'House Lo' means and considers R not to have had the capacity at the time to consent to the later payment(s).
B notes that G did not declare any nuggets in the statement of assets and liabilities prepared for probate.
The average expenditure of R's funds
B submits that the average expenditure of R's funds has increased significantly since G was appointed attorney. Using the bank statements for the periods 2000-2002 and 2004-2006, B calculates average yearly expenditure at $26,598.80. For the years 2008 to 2016, the average yearly expenditure is calculated as $43,188.14, an increase of over 60 per cent.
B submits that any increase in expenditure as a consequence of nursing home fees from 2010 should have been offset by the decrease in the expenditure that was needed whilst R was still living at home.
Payments made in respect to the needs of M
B submits that any of M's expenses reported by G as having been made out of R's funds (see below) should be considered in the context of the information provided by the Public Trustee as the administrator of M's estate as to what payments were being made from M's income.
That information which was sought by B and which was filed with the Tribunal by the Public Trustee on 12 October 2020 states as follows:
The Public Trustee's appointment as administrator of M's estate was revoked on 13 July 2006 and reappointment occurred on 19 November 2009. Information could not be provided for that period.
The Public Trustee records indicate that M was living in a private rental until about January 2005 at which time he moved in with R. M moved out of the property on 9 May 2018.
M was initially paying $130 per fortnight for board and lodging which increased to $250 per fortnight in about February 2010. M paid rent of $300 per fortnight from about December 2012.
In addition to these payments the Public Trustee paid M a regular allowance. From about December 2012 M was also being paid $100 per week for groceries at IGA.
G's evidence and submissions
As ordered by the Tribunal, G filed a responsive statement (statement) to B's affidavit and supporting documents.
In his statement, G states and submits as follows:
1)He had assisted R with her personal and financial affairs since the mid-1980s. This was done without help from R's other children and their partners.
2)M lived with R for almost his entire life and certainly in the years preceding R's admission to the nursing home.
3)R had a transient ischaemic attack in 2004 and her medical practitioners were concerned there could be issues in the future.
4)In about 2007 R began to have more frequent episodes. By that time it was becoming obvious that R might need formal help with her financial affairs. The EPA was made after R was given medical clearance to do so.
5)G did not notice the paranoia that B said was an emerging feature of R's mental state in about 2007.
6)In mid- 2009 L advised that M's carers were refusing to enter the property because it was cluttered by the things that R and M had purchased. The situation worsened as R began to make repeated purchases of the same items.
7)G moved in with R and M to undertake a decluttering and stayed for about five months from about late June 2009 to December 2009.
8)R entered nursing home care around July 2010.
9)G disagrees with B as to R's supposed frugality. R was said to be generous with gifts to family. She had given G $8,000 in the 1980's as contributions for his business ventures and over many years had been generous in gifts to children and grandchildren. R had said to G that he was to look after the family should anything happen to her.
10)R is said to have always supported M financially and emotionally. She regularly gave him money for food, fuel and cigarettes.
11)In respect to R's alleged spending habits and the concern of B that the credit card statements and bank statements reveal expenditure not for the benefit of R, G states at page 10 of the statement:
I feel all and every Transaction I made towards caring for [R], Her house, vehicle, Insurances and ongoing care in general for [M] and support for [R's] family was critically important to [R] and in her best interests. Just as [R] would have done so by herself should she have been able to do so and as [R] had asked me to do.
At all times I acted in the best interests of [R] to continue doing what [R] had asked me to do on many occasions during her life, especially after [R] had become incapacitated. I have no doubt that [R] would have gifted and helped any member of her family if they were in financial distress and [R] would have expected me to do so on her behalf in this very situation.
It is my opinion that [B]'s 'knowledge' of [R's] nature and spending habits appears to be anecdotal evidence and possibly reflects his relatively brief time spent with, or in caring for, [R].
12)When in 2009 G moved to Perth to be with R and M, he lost casual work and long-term part-time work as a consequence. When funds became available he reimbursed himself $5,000 an amount G says R would have approved given his understanding of her wishes. The payment was characterised as 'House Lo' because G transferred the funds to his housing loan account.
13)When the Corolla was purchased in February 2012 the Lancer was effectively a “write off” because of engine failure. G tried to sell the vehicle without success and eventually purchased it himself for $2,000 which was banked to R's bank account. The Corolla was needed to effectively look after R's personal and financial affairs. G used it to travel to and from Perth on a monthly basis to attend to works on R's property and other matters. The Corolla was sold to G's partner in October 2019 at its insurance value.
14)As for the nuggets, in 1998 G needed additional funds and R agreed to purchase two large nuggets for $13,000. R initially paid G $8,000 as that was the amount G needed at the time. G later arranged for the balance of $5,000 to be paid to himself.
15)G did not include the nuggets in the assets and liabilities statement for probate purposes as '60% of the gold was missing' (page 15 of statement). G could not account for the missing gold.
16)G maintains that the average expenditure calculated by B for the period from 2008 to 2016 should have had deducted the regular monthly fees for the nursing home of approximately $2,200 per month from July 2010. These fees G calculated to be $171,000.
17)The expenditure for that period included a loan to L (requested by her) of $20,000 which was repaid.
18)Deducting the nursing home fees and the loan to L from the expenditure calculated by B would according to G have meant the average annual expenditure for the period from 2008 to 2016 to be $24,711.26 which is less than for the periods 2000-2002 and 2004-2006 as submitted by B when R had her property to maintain as well as the costs for her and M's personal needs.
19)In a letter from G's legal representative to that of B dated 3 April 2020, reference is made to significant flooding and water damage to R's property over four days in December 2018 subsequent to a burst washing machine water pipe during which most of the property contents were destroyed.
20)In his oral evidence G states that he was aware of his obligations as attorney for R. He says that a lot of records were destroyed when R's property flooded.
21)G says that he has provided B with all the information that he has.
22)G opposes the application.
Discussion of the issues
The Tribunal has a general supervisory jurisdiction in respect to enduring powers of attorney and this role can extend to situations where the donor has died (KS [2008] WASAT 29 at [20] to [37] (KS).
The available remedy under s 109(1)(a) and s 109(1)(b) of the GA Act is limited to the 'relevant accounting [production of records and accounts] or audit' (KS at [35]).
In addition to his or her common law duties, an attorney has a statutory obligation to exercise his or her powers with reasonable diligence to protect the interests of the donor and to keep and preserve records and accounts of all dealings and transactions made under the power: s 107(1)(a) and (b) of the GA Act.
G was not permitted to renounce his power under the EPA during any period of R's incapacity (s 107(1)(c) of the GA Act).
The position of the Tribunal in respect to applications made under s 109(1)(a) and s 109(1)(b) of the GA Act was considered in EW [2010] WASAT 91 (EW).
I adopt the reasoning in EW.
There was no submission made to challenge B's right to make the applications as a person with a proper interest in the matter. I accept that to be the case (EW at [28]).
G agrees that R was experiencing some difficulties with her cognition and mental state around the time of the execution of the EPA in September 2007 and that the EPA was made to deal with that situation.
There is no evidence before the Tribunal to rebut the presumption that despite some difficulties R was capable of making the EPA.
It is the position of B that the reasonable starting point for consideration of the applications and when R can be said to have lost capacity, is when she was admitted to the nursing home in about July 2010.
Nothing in G's evidence appears to oppose the position of B and for the purposes of the applications I will accept that as the starting point.
I find persuasive B's contention that G used some of R's funds for his own use and for the use of others during the nursing home period.
Even allowing for ongoing expenditure on maintaining R's property and her personal needs (and perhaps additional assistance to M), the expenditure identified by B in the credit card statements and bank statements cannot on its face be reasonably taken to have been wholly used for R's needs from when she permanently resided in the nursing home.
There are reasonable grounds regarding the gifts made from R's funds and the payments G made to himself for lost income as transactions in which G had a conflict of interest.
I do not accept G's evidence that during the nursing home period he was simply acting as R would have wished him to do to assist R's family. When R lost her capacity G assumed full control over R's estate under the EPA which was not subject to any condition or restriction (EW at [89]).
G had a fiduciary obligation to protect the interests of R and although her wishes could not be wholly irrelevant to the exercise of the power under the EPA, it was the duty of G to act with reasonable diligence (KS at [56] and s 107 of the GA Act).
I am satisfied that there is a strong likelihood that G did not do so.
It is B's submission that the evidence is sufficient to support an order under s 109(1)(a) and it follows, under s 109(1)(b), because there is something which requires an inquiry as identified in EW at [101].
Whilst I am otherwise favourably disposed to B's submission I am not inclined to make the orders sought in this particular case.
I do so for the following reasons:
First, there is something to be said for the need for orders under s 109(1)(a) and s 109(1)(b) of the GA Act to have utility, to be able to sufficiently add something to what is already available, enough to warrant the orders being made;
Secondly,in addition whilst an attorney must keep and preserve records, there may be instances where the requirement to produce those records is so onerous as to effectively negate the utility of orders made;
Thirdly, B is seeking records from 2010 to the end of 2016. He already has the bank statements and credit card statements for that period. Those statements show clearly the amount of the payments and to whom the payments were made. That information for many of the transactions would seem to be sufficient to identify in broad terms the type of purchases made. It is highly unlikely that G would have retained the transaction slips for what may be classified as day-to-day purchases for the period in question;
Fourthly, G has acknowledged and detailed the gifts made from R's funds and also the payments made to himself, the motor vehicle transactions and payments in respect to the nuggets. It is difficult to envisage what else he could provide that would add materially to those admissions;
Fifthly, whether in undertaking these transactions G breached his fiduciary duty to R, I have commented upon but ultimately it is not a matter on which I need to make final findings of fact in order to dispose of the applications;
Sixthly, G's evidence is that records were lost in late 2018 when R's property was flooded. G did not provide any documentary evidence to support this, however the matter was not pursued by B;
Seventhly, the correspondence between the legal representatives of B and G which is before the Tribunal demonstrates that G was not averse to providing information and giving his explanation for the financial transactions undertaken. He continued to do so in these proceedings; and
Eightly, I am inclined to accept G's submission that there is nothing now that he can materially provide that will add to the information already in the knowledge and possession of B.
For all of these reasons I will dismiss the applications.
Orders
The Tribunal orders:
1.The applications are dismissed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MR J MANSVELD, (MEMBER)
14 JANUARY 2021