RAG v HDG
[2022] QCATA 79
•23 June 2022
QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL
CITATION:
RAG v HDG & Ors [2022] QCATA 79
PARTIES: RAG (applicant/appellant)
v
HDG
PG
Public guardian
The public trustee of queensland(respondent)
APPLICATION NO:
APL122-20
ORIGINATING APPLICATION NOS:
GAA3476-19
GAA6945-19
GAA1609-20MATTER TYPE:
Appeals
DELIVERED ON:
23 June 2022
HEARING DATE:
16 July 2021
HEARD AT:
Brisbane
DECISION OF:
Senior Member Howard
ORDERS:
1. The appeal is allowed.
2. Leave to appeal is refused.
3. Order 9 of the Tribunal’s decision dated 25 March 2020 is set aside.
CATCHWORDS:
APPEAL – APPEAL AND NEW TRIAL – GUARDIANSHIP AND ADMINISTRATION – where tribunal determining an application for appointment of an administrator – where transaction transferring money to an attorney – where the Tribunal below directed the attorney to pay a sum of money to the adult – - whether the Tribunal had an application before it about the transaction – whether tribunal observed the rules of natural justice– whether tribunal gave adequate reasons for its decision payment of compensation
Guardianship and Administration Act 2009 (Qld) (‘GA Act’) s 11B, s 101, s 103(1)(b), s 103(1)(b) (c), s 119(d), 138AA(2), s 250, s 138, sch 2 s 1, sch 2 s 1, sch 4 (definition of ‘matter’).
Powers of Attorney Act 1998 (Qld) (‘POA Act’) s 34, s 65, s 73, s 87, 106, s 110, s 109A, s 118
Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 142 (‘QCAT Act’) s 28, s 142(3)(b), s 146.
Fehily v Atkinson [2016] EWHC 3069
Hanna v Raoul (2018) NSWCA 201
Kioa v West [1985] 159 CLR 550
MG & anor v The Public Guardian & anor [2021] QCATA 89
Mistero Pty Ltd v Cann [2017] QCATA 56
Partington & Anor v Urquhart (No 2) [2018] QCATA 120
Harrison v Meehan [2017] QCA 315
Pickering v McArthur [2005] QCA 294
Re BKD [2013] QCAT 422
Re Caldwell [1999] QSC 182
Re KAD [2012] QCAT 601
Re WFM [2006] QGAAT 54Shi v Migration Agents Registration Authority (2008) 235 CLR 286
Re WWR [2018] QCAT 463
APPEARANCES & REPRESENTATION:
Applicant/appellant:
Self-represented.
HDG:
No attendance.
PG:
Self-represented.
Public Guardian:
No attendance.
The Public Trustee of Queensland:
Nash Te Ua, regional manager, The Public Trustee of Queensland
REASONS FOR DECISION
RAG was appointed by his mother, HDG, as an attorney for financial matters pursuant to a general power of attorney made in NSW on 29 October 2009. He was appointed jointly with HDG’s husband. The power of attorney was expressed to be given with the intention that it would continue to be effective if HDG lost ‘mental capacity’ after its execution. Following the death of HDG’s husband in August 2015, RAG was the sole attorney. HDG also appointed RAG as enduring guardian for personal matters by a separate document on 20 November 2015.
On 29 March 2019, PG, another son of HDG, filed applications for appointment of a guardian and administrator for HDG under the Guardianship and Administration Act 2000 (Qld) (‘GA Act’). It appears the applications were largely motivated by PG’s allegations that HDG had at that time been relocated to Queensland by RAG in disregard of health professional advice; and allegations that HDG was unlikely to have had capacity to authorise a transaction on 11 September 2017 of a transfer of $450,000 from HDG’s account to RAG. The Tribunal’s decisions also record an application for an order about an enduring power of attorney. It appears the latter application was initiated by the Tribunal itself in making orders overtaking the enduring documents made by HDG.
An oral hearing of the applications took place on 17 June 2019. On that day, the Tribunal appointed the Public Guardian as guardian for HDG for several personal matters and the enduring appointment of RAG as guardian was overtaken. The appointment of the guardian was subsequently reviewed (at the same time as the application for appointment of an administrator was determined). I do not need to further discuss the applications relating to appointment and review of the appointment of the guardian in these reasons for decision, since the appeal proceeding concerns only a decision made about a financial matter as explained in the following paragraphs.
The application for appointment of an administrator was adjourned part-heard on 17 June 2019, and on several later occasions before orders were finally made on 25 March 2020, appointing the Public Trustee of Queensland (‘PTQ’) as administrator for HDG for all financial matters until further order of the Tribunal; together with a number of consequential orders; and an order overtaking the enduring power of attorney for financial matters appointing RAG. Further, on 25 March 2020 the Tribunal made the following order:
9. The Tribunal directs that RAG pay HDG the sum of $450,000.00. This amount is to be deposited in a bank account nominated by the appointed administrator within 30 days of this order.
RAG filed an application for leave to appeal or appeal the Tribunal’s decision of 25 March 2020. His later submissions clarify that while he contends that the Tribunal was mistaken in many findings made by the learned Member in the written reasons for its decision, he challenges only order 9.
For the reasons explained in the paragraphs that follow, the appeal must succeed. Although the Tribunal also made errors of fact and mixed law and fact for which leave to appeal would, in other circumstances, be granted, a critical error of law occurred here with the consequence that order 9, the subject of the appeal, must be set aside in its entirety and a rehearing is unnecessary.
Leave to appeal is refused, there being no prospect of substantive relief nor any substantial injustice to correct for which leave to appeal should be granted, having regard to the outcome of the appeal on questions of law alone. That said, the grounds of appeal concerning questions of fact and questions of mixed law and fact raise serious issues. Therefore, (and in any event in case I am wrong in disposing of the matter as I have),[1] I canvas those issues in observations, to avoid any misapprehension that they would, in other circumstances, be without merit.
[1]Partington & Anor v Urquhart (No 2) [2018] QCATA 120; Harrison v Meehan [2017] QCA 315.
The application for leave to appeal or appeal and the appeal
The grounds of appeal are not succinctly expressed by RAG, who is not a lawyer, and in the absence of legal advice. His application for leave to appeal or appeal attaches an explanation which disputes many aspects of the Tribunal’s reasons for decision.
He alleges that the Tribunal erred in finding that he entered into the transaction, when HDG herself undertook the transaction. RAG’s subsequent submissions focus upon the Tribunal’s alleged failure to apply, or misapplication of, the proper test for capacity and in particular, the presumption of capacity in respect of the transaction transferring $450,000 to RAG. He alleges an absence of any relevant evidence about HDG’s capacity for the transaction on 11 September 2017.
RAG further clarified at the appeal hearing that he was taken by surprise by the making of order 9, it having not been made clear to him at any time during the multiple days of oral hearing that this was a possible outcome of the applications before the Tribunal. Further, he did not understand the basis upon which order 9 was made, nor the power said to be relied upon by the Tribunal to make the order.
To the extent that RAG’s grounds of appeal require amendment consequent upon the clarification provided in and by his written and oral submissions, I would grant leave to amend.
The questions of law which arise relate to whether RAG was afforded procedural fairness in the making of orders directing him to pay $450,000 to HDG and whether the Tribunal gave adequate reasons for its decision. The questions of fact and mixed law and fact relate to whether it was open on the evidence to conclude that RAG, rather than HDG, entered into the transaction by which the transfer of funds was effected; whether the transaction was a loan or a gift; whether, if HDG entered into the transaction effecting the transfer, the Tribunal correctly applied the test for capacity for the transaction, and in particular, whether the presumption of capacity was rebutted; and if RAG entered into the transaction whether the presumption of undue influence arose in the circumstances and whether the transaction was a conflict transaction.
An appeal against a decision of a non-judicial member may generally, as here, proceed on a question of law as of right.[2] An appeal on a question of fact or mixed law and fact may be made only if the party obtains leave to appeal.[3] Leave to appeal will usually be granted only where an appeal is necessary to correct a substantial injustice and there is a reasonable argument of error to be corrected.[4]
[2]Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 142 (‘QCAT Act’).
[3]QCAT Act s 142(3)(b).
[4]Pickering v McArthur [2005] QCA 294, at [3].
In deciding an appeal on a question of law only the Appeal Tribunal may confirm or amend the decision, set aside the decision and substitute its own decision or set aside the decision and return the matter to the Tribunal for reconsideration.[5] There is no element of rehearing. However, in deciding an appeal on a question of fact or a question of mixed law and fact, the Appeal Tribunal must proceed by way of rehearing.[6]
[5]QCAT Act, s 146.
[6][6] Ibid s 147.
In the unusual circumstances of this case, it is convenient to consider first the alleged errors of law. I say unusual because ordinarily if questions of law, as well as questions of fact and mixed fact and law are raised on appeal and leave to appeal should be granted, it would be appropriate having regard to s 146 and 147 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’), to dispose of all issues in the rehearing of the proceeding. That is, if leave is granted, the hearing must proceed by way of rehearing, in the course of which any errors of law can be dealt with. Here the errors of law are so fundamental that proceeding in that manner would be inappropriate for the reasons explained.
The Tribunal’s reasons for the decision
The Tribunal confirms applications for the appointment of a guardian and administrator were made by PG, and at paragraph [5] refers to PG seeking repayment of the $450,000 to HDG.[7] It explains that it determined the guardianship application on 17 June 2019, but adjourned the administration application with directions requiring the filing of further documentation.[8] It records ‘misinformation’ having been provided to the Tribunal on 17 June 2019 by Ms Miller, based on information provided to her (Ms Miller) by HDG and JD, HDG’s Sydney solicitor. [9]
[7]HDG [2020] QCAT 106 [2],[5] (‘HDG’).
[8]Ibid [8].
[9]Ibid [14]-[15].
The learned Member recites s 34 of the Powers of Attorney Act 1998 (Qld) (‘POA Act’). [10] Section 34 provides, in effect, that in respect of an enduring document made in another State complying with its (that is, the relevant State’s) requirements, then to the extent the powers given could be validly given by an Enduring Power of Attorney (‘EPA’) under the POA Act, the EPA must be treated as if it were an EPA made under and in compliance with the POA Act. The Tribunal refers to s 65(c) of the POA Act as extending the obligations of an attorney under the POA Act to a power of attorney made otherwise than under the Act, including requiring compliance with the General Principles and Health Care Principle; acting diligently and avoiding conflict transactions.[11] It refers also to the presumption of undue influence provided for in s 87 of the POA Act, where an attorney enters into a transaction with the principal.[12] The Tribunal states that the attorney’s compliance with these obligations needs to be considered as a ‘starting point’.[13] Further, it states that the extent to which the attorney is authorised to enter the transaction by the enduring document must be considered, and if the attorney was non-compliant, the Tribunal may consider appointing, relevantly, an administrator.[14]
[10]Ibid [25].
[11]Ibid [26].
[12]Ibid.
[13]Ibid [27].
[14]Ibid.
The Tribunal goes on to recite s 12 of the GA Act, setting out the issues for determination in an application for appointment of a guardian or an administrator, and s 15(1), in relation to prescribed matters for consideration in deciding whether a person is appropriate for appointment, including their likely compliance with the General Principles.[15]
[15]Ibid [28-29],
The Tribunal sets out what it considers to be the issues to be addressed by the Tribunal in deciding the applications before it in the following terms:
[30] Issues for the Tribunal are:
(a) Has the attorney acted in compliance with his obligations in relation to the specific impugned personal and financial decisions?
(b) Did the enduring document authorise the $450,000 transfer?
(c) Is the presumption of undue influence rebutted in relation to the transfer?
(d) If not, is the presumption of capacity rebutted in relation to personal health and/or financial affairs?
(e) Is there a need for decisions to be made which require a guardian or administrator to ensure HDG’s needs are met or interests adequately protected?
(f) If so, who is appropriate for appointment?
Although in discussing ‘personal decision-making’, the learned Member sets out the definition of capacity provided for in the GA Act. [16] The rebuttable presumption of capacity is not referred to.
[16]HDG [34].
The Tribunal states that RAG contends the $450,000 was a loan/gift which HDG offered him when she had capacity.[17] Further, the learned Member states that RAG has given ‘inconsistent explanations of the nature of this transaction variously described as a loan or a gift’ and was inconsistent in his explanations of the transaction to the Tribunal and the formal loan document was found not to exist.[18]
[17]Ibid [57]
[18]Ibid [58], [69].
The learned Member refers to RAG’s evidence on 17 June 2019 that HDG gave him a cheque for $450,000.[19] Further, that RAG said the amount was to purchase a house and that he referred to a pre-existing agreement with his father, HDG’s deceased husband, that a loan would be extended, but as a result of delays the ‘loan documents’ had not been drawn up until after his father’s death. The Tribunal records RAG as saying that in 2017, HDG wanted to proceed with the loan. He told the Tribunal that he did not have a copy of the documents and was unable to provide details of the terms of the ‘loan’.
[19]Ibid [63], [68].
Further, the Tribunal records that in RAG’s written submissions of 29 August 2019, he said he believed HDG made the transfer to help him with his home mortgage, as she had helped PG on many previous occasions.[20]
[20]Ibid [64].
The Tribunal sets out that Ms Miller told the Tribunal she has spoken with HDG’s Sydney solicitor who told her it was a loan agreed before HDG’s husband’s death and advanced sometime later.[21] The hearing was adjourned part-heard and Ms Miller was directed to file the loan documentation. It transpired that there was no loan document in existence.
[21]Ibid [66].
The Tribunal refers to a CUA bank statement which ‘indicated the transaction was effected by ‘internet transfer.’[22] The Tribunal finds that the transaction was a loan without any parameters in ‘light of the statements made by Ms Miller and RAG, and despite HDG’s evidence’.[23] The Tribunal states that it particularly relies upon evidence that suggests HDG became aware of the transaction ‘several months after it occurred’, stating that her (HDG’s) capacity for the transaction was less relevant where the transaction occurred without her knowledge. It observes that an authorised benefit of $450,000 was ‘not likely’ to be reasonable, noting the NSW power of attorney document provided for the attorney to receive, among other things, gifts of reasonable living expenses, saying that even though at that time HDG had ‘sizable means’ it reduced her liquid assets.[24] The learned Member notes also that the evidence showed (other) lump sum transactions in favour of PG, and said the transfer of $450,000 was not a reasonable personal expense in light of the lack of parameters around repayment of the loan and evidence of insecurity around private and commercial rental in light of the economic recession caused by COVID-19.[25]
[22]Ibid [68].
[23]HDG [70].
[24]Ibid [71]
[25]Ibid [71], [72].
The Tribunal states that s 87 of the POA Act applies, and the presumption of undue influence arose.[26]
[26]Ibid [73].
The Tribunal sets out a summary of the health professional reports (the details are considered later in these reasons for decision in discussing HDG’s capacity for the transaction), concluding that there was a significant deterioration in 2018 in HDG’s cognition.[27] However, the Tribunal finds that there was ‘substantial evidence of significant memory issues in 2017, and prior to this with medication being rejected for contraindications..’.[28] The Tribunal did not accept that HDG ‘was likely to have capacity to gift or loan $450,000 around that time in the context of an active lifestyle.’[29] Further, it states that Dr SB’s report referred to capacity for executing an EPA rather than entering into the transaction to transfer the $450,000, and that it was given less weight because Dr SB was not directly involved and did not have clear parameters within which to provide his opinion.[30]
[27]Ibid [74]-[81], [83].
[28]Ibid [87].
[29]Ibid [84].
[30]Ibid.
After recounting some of HDG’s evidence, the Tribunal states that it is open for the Tribunal to find that it was not clear whether HDG was aware of the transaction on 11 September 2017 and if she was aware, her memory impairments at the time affected her ability ‘to freely and voluntarily enter the transaction’.[31] The Tribunal said that on 17 June 2019, HDG’s recollection was that $400,000 was transferred rather than $450,000 and that she was unaware of her financial position.[32]
[31]Ibid [85]-[87], [89].
[32]Ibid [86].
The Tribunal finds that HDG was diagnosed in 2016 with dementia, and although it manifested in mild cognitive impairment in 2017, HDG had significant ongoing issues with her memory.[33] The Tribunal states that the evidence ‘indicated that [HDG] received financial advice about the transaction several months after it occurred, and her communications with PG demonstrate confusion around her finances and suggests that if she authorised the transaction prior to February 2018, she had no recollection of it.[34] Further, the Tribunal says that, although HDG wanted RAG to have the money, her ‘total reliance’ on him and his obligations as attorney, meant that HDG did not appreciate the impact of any ‘gift’ on her financial position and that she was unable to freely and voluntarily make the decision.[35] The learned Member found there was ‘insufficient evidence’ to rebut the presumption of undue influence imposed on an attorney by s 87 of the Queensland POA Act.[36]
[33]Ibid [90].
[34]HDG [90].
[35]Ibid [91].
[36]Ibid.
The learned Member then finds that RAG was not authorised to transfer the funds pursuant to the provisions of the power of attorney document.[37] It finds that the withdrawal of $450,000 largely depleted HDG’s savings, despite her other assets, together with failure to terminate her NSW accommodation arrangements. It finds that RAG’s benefit from having those funds in a mortgage offset account is a conflict of interest, and that HDG’s financial circumstances ‘have fundamentally altered since this transaction in 2017, and her reliance on rental income may be threatened in the current economic climate of a global pandemic’ and that the funds should be immediately repaid.’[38]
[37]Ibid [92].
[38]Ibid [94].
The Tribunal refers to the presumption of capacity as relevant in considering whether to appoint an administrator and finds in light of HDG’s dementia diagnosis, periods of delirium and progressive memory loss, that the presumption of capacity is rebutted for financial matters, ‘while she lacked the appreciation of her finances’.[39]
Was RAG afforded procedural fairness by the Tribunal in making an order requiring payment of $450,000 to the administrator by RAG?
[39]Ibid [97]-[98].
The applications brought by PG sought appointment (of a guardian and) an administrator for HDG. The Tribunal initiated an application about an enduring power of attorney, it appears to facilitate making orders overtaking the enduring document/s appointing RAG. The Tribunal had before it, relevantly to the appeal proceeding, an application requiring it to decide whether to appoint an administrator for HDG’s financial matters, and if it decided to make an appointment, who to appoint. If it appointed an administrator, a decision was necessary about the extent to which the enduring document should continue to operate, having regard to s 22 of the GA Act.
In considering the application for the appointment of an administrator, it was relevant for the Tribunal to consider, and make findings about those matters, as identified by the Tribunal, provided for in ss 12 and 15 of the GA Act. It was obliged in doing so to apply the General Principles.[40] Assuming for the moment that such an application would be appropriately made to the Tribunal about the transaction, here the Tribunal did not have before it an application pursuant to the POA Act, seeking compensation, or an accounting, (‘compensation application’) from RAG for a loss caused by his alleged failure to comply with his obligations as an attorney.[41] No such application was filed by any party to the proceeding.[42]
[40]Guardianship and Administration Act 2009 (Qld) (‘GA Act’)s 11B.
[41]Powers of Attorney Act 1998 (Qld) (‘POA Act’) s 106.
[42]For completeness, I observe also that there was not an application before the Tribunal for a declaration about whether HDG had capacity for the transaction.
I have read the transcript from the various days of oral hearing before the Tribunal. The transcript does not reveal any suggestion by the Tribunal to the parties that it had before it an application requiring that it determine whether the amount of $450,000 should be paid or repaid by RAG to HDG, or that such an order might be made, in determining the applications before it. Nor was there an application before it, in relation to the transaction.
In oral submissions in the appeal proceeding, PPG and PG referred me to written submissions filed by them on 23 March 2020 requesting an order be made to this effect, together with interest from 11 September 2017. This submission was made by them after the oral hearing proceeded on 3 separate days, namely, 17 June 2019, 2 September 2019 and 6 February 2020, and was made 2 days before the Tribunal further heard the application for appointment of an administrator on the papers. It appears it is this submission that is adverted to at paragraph [5] of the Tribunal’s reasons for decision in the following terms:
[5]In summary, the applicant’s concerns about RAG acting as appointed Enduring Power of Attorney raise concerns that $450,000 of HDG’s money was transferred into RAG’s account, on 11 September 2017 after HDG had been diagnosed with dementia in 2016. He argues that HDG was unlikely to have had the capacity to authorise this transaction and seeks that this amount is repaid to HDG.
It does not appear that RAG was provided with a copy of the submission filed on 23 March 2020. Further, and in any event, it was a late submission in respect of the application for appointment of an administrator, rather than a compensation application or a submission in support of any such compensation application before the Tribunal. Further, RAG was not made aware of it or given an opportunity to respond to it.
Every party must be afforded natural justice by the Tribunal.[43] Although what is required in affording natural justice in a given case depends upon the statutory regime and the circumstances,[44] one of the more certain requirements is the hearing rule. For natural justice to be observed, in general terms, a party must have notice of the application/s and the case against them as well as the opportunity to fully respond to it (including relevantly, by filing/giving evidence and making submissions in response to it).
[43]QCAT Act s 28.
[44]Kioa v West [1985] 159 CLR 550; Shi v Migration Agents Registration Authority (2008) 235 CLR 286.
In particular, s 103 of the GA Act provides that each active party[45] in a proceeding must be given a reasonable opportunity to present the active party’s case. In particular, it provides for an active party to have access to documents during a hearing that are credible, relevant and significant to an issue in the proceeding;[46] and an opportunity to make submissions about the document or other information.[47]
[45]As an attorney, RAG was an active party: GA Act s 119(d).
[46]GA Act s 103(1)(b).
[47]GA Act s 103(1)(c).
RAG was not on notice of a compensation application (and nor was one made and before the Tribunal) either by PG or initiated by the Tribunal. It appears that RAG was not aware of the content of the submissions filed by PG and PPG on 23 March 2020 seeking orders for payment by him of $450,000 to HDG, which, given order 9, it is clear the Tribunal considered relevant and significant. That said, here even if he was given notice of the submission, it would not have put him on notice that a compensation application was made, as opposed to a misguided submission seeking orders that the Tribunal could not make in determining an application for appointment of an administrator.
In case it might be thought that the Tribunal initiated application for an order about an enduring document was a basis for the order to be made, that could only be so if in the clearest of terms, the Tribunal gave notice to RAG that was so, and gave him a proper opportunity to respond to that application. That did not occur.
In summary, natural justice was not afforded to RAG in respect of the making of order 9 ‘directing’ him to pay $450,000 to RAG. There was not an application before the Tribunal seeking an order to that effect. He knew only that the Tribunal was relevantly to decide an application for appointment of an administrator and that if an administrator was appointed, a decision would be made about whether the enduring document appointing him as an attorney would continue to operate.
In failing to afford natural justice to RAG in making order 9, the learned Member erred in law. The Tribunal did not have before it for determination an application in respect of which it could make an order to the effect of order 9 and did not put RAG on notice of its intention to consider making such an order. On this basis alone, the appeal must succeed and order 9 must be set aside. It is not appropriate that any other order be substituted, or the matter be remitted to the Tribunal to determine ‘the application’ according to law. There is no relevant application to be remitted for reconsideration as contemplated by s 146(c) of the QCAT Act. Relevantly, having regard to the applications before the Tribunal, it was to decide whether to make an order appointing an administrator and, if it did so, the extent to which RAG’s appointment as financial attorney should continue to operate having regard to s 22 GA Act. Having appointed an administrator and overtaken the appointment, the Tribunal’s functions for the proceeding were at an end.
The appeal should be allowed for the reasons explained.
Were the Tribunal’s reasons for decision adequate—what was the legal basis for the Tribunal’s order 9?
In case I am wrong in deciding the appeal on the basis I have, I make the following observations.
As discussed, the Tribunal has power in an appropriate case pursuant to the POA Act to make an order for compensation or an accounting against an attorney[48] upon a compensation application being made.[49] However, as discussed, here it did not have a compensation application before it.
[48]POA Act s 106.
[49]POA Act s 110.
With respect, it is not apparent from the Tribunal’s reasons for decision what power the Tribunal purported to exercise in making order 9. It says only as follows:[50]
[50]HDG [94]-[96].
Directions for repayment
[94] The withdrawal of $450,000 has substantially depleted HDG’s savings and while HDG has other income-producing assets, her liquid funds have been exhausted due largely to the failure to make decisions around the termination of the New South Wales living arrangements. RAG has taken the benefit of having those funds in a mortgage offset account upon his personal mortgage. This is a conflict of interest and duty which substantially disadvantages HDG in her current financial position. HDG’s financial circumstances have fundamentally altered since this transaction in 2017, and her reliance on rental income may be threatened in the current economic climate of a global pandemic. It is appropriate that the loan is immediately repaid in these circumstances. The Tribunal makes orders accordingly.
[95] RAG asserts that he is appropriate to continue to manage HDG’s financial interests. His financial management plan of 12 August 2019 states that he has managed the family property interests for 30 years and has broad commercial education and experience.
[96]Given the findings above, the Tribunal considers the Attorney is no longer appropriate as a substitute decision-maker for financial matters. There are multiple decisions which need to be made in relation to HDG’s financial matters.
I observe that the Tribunal mentions s 138 of the GA Act at paragraph [23], in the following terms:[51]
[23] The Tribunal is empowered to make directions by section 138 of the Guardianship and Administration Act: ‘Once an application about a matter has been made to the tribunal, the tribunal may… give… directions about the matter it considers appropriate’. In light of the difficulties finding a hearing date for the finalisation of the matter within an urgent timeframe, the Tribunal made orders for the matter to be finalised on the papers, and made directions for the Public Guardian to provide written representation on these issues to on HDG’s behalf, and all other parties to have an opportunity to provide submissions to the Tribunal and submissions in reply, so that the matter could finally be determined with urgency. Submissions were received from PG and PPG, the Public Guardian, RAG and the Public Trustee of Queensland.
[51]Ibid [23].
Section 138 of the GA Act is not said to apply here in giving the ‘direction’ for the payment in Order 9. On a fair reading, the Tribunal appears to discuss s 138 to explain the making of directions for the further on the papers (‘OTP’) hearing of the proceeding (following the various dates of oral hearing) and in making directions for the filing of submissions before the OTP hearing.
That said, as the Tribunal does not identify any other source of power for the making of order 9, although it is not clear that the Tribunal purports to make the direction for repayment pursuant to s 138 of the GA Act, because that it frames order 9 as a ‘direction’, I make the following observations.
To the extent that the Tribunal may have purported to make the ‘direction’ pursuant to s 138 of the GA Act, in my view, it did so in error. Section 138 empowers the Tribunal, once an application about ‘a matter’ has been made, to give advice, directions and recommendations about it, in the following terms:
138 Advice, directions and recommendations
(1)Once an application about a matter has been made to the tribunal, the tribunal may—
(a) give advice or directions about the matter it considers appropriate; or
(b) make recommendations it considers appropriate about action an active party should take.
(2) If the tribunal gives advice or a direction or makes a recommendation, it may also—
(a) continue with the application; or
(b) adjourn the application.
(3)The tribunal may also give leave for an active party to apply to the tribunal for directions about implementing the recommendation.
(4)A guardian, administrator or attorney who acts under the tribunal’s advice, directions or recommendations is taken to have complied with this Act or the Powers of Attorney Act 1998 unless the person knowingly gave the tribunal false or misleading information relevant to the tribunal’s advice, directions or recommendations.[52]
……………
[52]Definitions of ‘attorney’ and ‘power of attorney’ are provided for: GA Act s 138(5).
In my view, it is unlikely, as a matter of statutory construction, despite the apparent width of s 138, that an order effectively requiring a payment of compensation by an attorney falls within the scope of s 138. First, there are specific provisions for compensation provided for in the guardianship legislative scheme, namely in the GA Act s 59 in respect of the actions of administrators; and the POA Act s 106 in respect of the actions of attorneys. Second, s 138 provides that if an application is made ‘about a matter,’ advice, directions or recommendations may be made by the Tribunal ‘about the matter’.[53]
[53] GA Act s138, sch 2 s 1, sch 2 s 1, sch 4 (definition of ‘matter’).
Unless an application for appointment of an administrator is an application about financial matters generally, is to be construed as an application about ‘a matter,’ there was no application here about the relevant ‘matter’. In my view, an application about the matter is to be read as an application about the particular matter, that is, the transaction. The applications before the Tribunal were limited to those applications for guardianship and administration identified above. Order 9 was a purported direction to RAG to pay monies, not a direction about ‘a matter’ in a context of an application about ‘the matter.’
I observe that s 138(1) and (3) contemplate that the Tribunal may make a recommendation about action an active party (relevantly, including an attorney)[54] in a proceeding should take.[55] Section 138(4) provides that an attorney, administrator or guardian who acts in accordance with the advice, directions or recommendations is taken to have complied with the Act or the POA Act. In context, as previous decisions indicate,[56]a direction might advise or direct that an attorney, faced with choices/options about the decision or action that may be made or taken about a matter for an adult, to act in accordance with a particular option or choice in discharging their function as the decision-maker. That is, the directions that might be made relate to advice and directions about how the administrator or attorney might proceed in making a decision about ‘a matter’.
[54]GA Act s 119(d).
[55]Ibid s138.
[56]Re WFM [2006] QGAAT 54 at [33]; Re BKD [2013] QCAT 422; Re KAD [2012] QCAT 601; WWR [2018] QCAT 463.
That is not the nature of the ‘direction’ made here by the Tribunal in Order 9. The Tribunal purported to make a ‘direction’ compelling RAG to pay a sum of money to HDG in circumstances when there was not any application before it about the matter – that is, the subject transaction.
Pursuant to s 138AA of the GA Act, the Tribunal may at ‘any hearing’ relating to an adult, give directions to a former attorney for ‘a matter.’ In case it should be thought this section empowers the Tribunal to make the ‘direction’ it made here, s 138AA(2) places limits upon the directions that may be made under that section to directions considered necessary because of the ending of the attorney’s appointment for the matter and in relation to a matter for which the attorney was appointed immediately before the appointment ended.[57] Order 9 is not in the nature of such a direction.
[57]GA Act s 138AA(2).
Further, for completeness, s 114 of the GA Act entitled, ‘Procedural directions’, empowers the Tribunal to make limited directions for persons to undergo examination by a health professional or to be brought before the tribunal. Section 62 of the QCAT Act is also a source of power for the Tribunal to make general procedural directions,[58] in proceedings in the Tribunal’s guardianship jurisdiction. However, order 9 the subject of this appeal proceeding affects substantive rights. It is not procedural in nature.
[58]Noting that GA Act s 101 does not provide for s 62 of the QCAT to not apply.
Putting aside for the moment that the Tribunal did not have a compensation application before it to decide, the Tribunal does not purport to make an order in the nature of compensation in making order 9. Rather the Tribunal ‘directs’ RAG to pay the sum of $450,000 to HDG.
The POA Act provides broadly in s 118 that the Tribunal may give declarations, orders, directions, recommendations and advice about a matter or another matter related to the POA Act upon application to it.[59] However, again here, the Tribunal did not have an application about the matter, namely, the subject transaction, asking it to do so. As discussed earlier, although the Tribunal initiated an application about an enduring power of attorney, it appears at the conclusion of the oral hearing on 17 June 2019, it was not raised with the parties in the hearing that it might result in an order or ‘direction’ such as Order 9, and appears to have been raised only to enable the Tribunal to make orders pursuant to s 22 of the GA Act about enduring documents made by HDG. There was, as discussed above, no indication to the parties that the Tribunal initiated application might have been intended to be an application in respect of which order 9 could or might be made.
[59]POA Act s 109A gives the tribunal the same jurisdiction and powers for enduring documents as the Supreme Court; POA s 118, s 110.
In any event, as a matter of statutory construction, I consider it unlikely that s 118 was intended to provide power to make a ‘direction’ in circumstances such as those here, having regard to the specific provision in s 106 for compensation and/or accounting from an attorney as discussed above. Further, in any event, the Tribunal’s reasons for its decision do not refer to, even in non-specific terms, or explain any of these provisions, that suggest the Tribunal purported to act under them in making the order.
In summary, if the Tribunal intended to make order 9 pursuant to s 106 or s 118 of the POA Act, it did not say so, and in any event did not have a relevant application before it to determine. Further, as a matter of statutory construction, s 118 seems unlikely to confer power to do so. If the Tribunal intended to make order 9 pursuant to s 138 of the GA Act, then in my view, it does not appear that s 138 provided the power for it to do so. Nor did any other direction-making powers available to the Tribunal in the GA Act or the QCAT Act provide it with the power to do so.
For the moment putting aside the absence of any relevant application about the transaction, on a fair reading of the Tribunal’s reasons, the power for making order 9 is not able to be ascertained. To that extent its reasons are inadequate. A failure to give adequate reasons for decision is an error of law if it amounts to a denial of procedural fairness.[60] In these circumstances, where it is not possible to ascertain the basis upon which the Tribunal made order 9, in my view, it amounts to a denial of procedural fairness. That said, as explained above, more fundamentally there was no application before it which entitled it to make such an order or ‘direction’.
[60]Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321.
Did the Tribunal err in finding that RAG entered into the transaction to transfer the $450,000, rather than HDG?
Did the Tribunal err in finding the transaction was a loan, rather than a gift?
If the adult entered into the transaction, did the Tribunal err in applying the test for capacity, and in particular, the presumption of capacity?
Although I do not need to decide whether leave to appeal should be granted in respect of the questions of fact and mixed law and fact raised by RAG in the appeal proceeding for the reasons earlier explained, in case I am wrong in disposing of the appeal as I have, I make the following observations.
For convenience, I deal with these questions together.
At the outset, I make the observation that, in my view, it was not essential for the Tribunal to make findings of fact about who entered into the transaction on 11 September 2017 and whether that transaction was a loan or a gift, in determining the application for the appointment of an administrator. If the Tribunal had concerns about the current arrangements for other reasons (such as failing to end the NSW living arrangements resulting in double costs for HDG), that decision could have been made based upon those more recent events. That said, the Tribunal was not precluded from making any findings of fact open on the evidence if it was necessary in determining the application before it.
Who entered into the transaction – RAG or HDG?
The Tribunal here proceeded from the outset as though the attorney had entered the transaction to transfer the funds in question. This is apparent from early in the Tribunal’s reasons for decision, where it said as follows:[61]
[27] The attorney’s compliance with these obligations needs to be considered as a starting point. The extent to which the attorney was authorised to enter the transaction by the enduring document must also be considered. If the Tribunal finds the attorney has not complied with the statutory obligations, the Tribunal may consider appointing a Guardian or administrator.
[61]HDG [27].
Further, in framing the issues to be considered by the Tribunal at [30], it is clear the learned Member proceeded from that point.[62] At no time, does the learned Member consider whether HDG might have entered the transaction herself. If HDG entered into the transaction, and had capacity for it at the time, she was, of course, entitled to make any decision concerning her own finances as she saw fit.
[62]Ibid [30].
It is useful here to summarise relevant evidence before the Tribunal about how and when the transaction occurred.
At the hearing, RAG said that he had not operated the power of attorney; did not have access to HDG’s accounts; and did not have the original power of attorney document to present to banks or other financial institutions until the Friday before the hearing.[63] It seems to be uncontroversial that until then the original power of attorney document was held by HDG’s Sydney solicitor, JD. RAG said that he had assisted his mother by helping her to put direct debits in place and the like, rather than operating under the power of attorney.[64]
[63]Transcript 17 June 2019, I- 43 lines 6-10; lines 39-42.
[64]Transcript 17 June 2019, I-17, lines 42-44; I-18, lines 2-4; I-41 line 25 – I-43, line 18; I-45, lines 5-9; lines 39- 42; I-46 35 to I 47 line 30; I-11 lines 11-13.
PPG told the Tribunal that in mid-2018, HDG raised concerns with PG about a significant amount of money missing from her bank account.[65] PG said that in September 2017, $450,000 was removed from HDG’s bank account which was a significant portion of the funds she had to live on.[66]
[65]Transcript 17 June 2019 I-9 line 7-9.
[66]Transcript 17 June 2019 I-10, lines 26-28.
Ms Miller, a lawyer said to be representing HDG, had been in contact with JD, who spoke of a documented loan for $450,000 arranged by HDG’s husband before he died. He had told her it was documented, but subsequently it transpired that there was no loan documentation.[67] That said, the Tribunal had before it a copy of his Will, which provided that in the event of HDG not surviving him then any mortgage he held from RAG was to be forgiven upon his death.[68]
[67]H044, email M Miller dated 26 June 2019, explaining that JD had been mistaken.
[68]H044, Will of WAG dated 11 February 2010, clause 7.
RAG told the Tribunal that before HDG’s husband passed away, the transfer of $450,000 had been discussed, and HDG and his father had discussed it with JD. He said documentation had been drawn up but as his father became ill, it ‘didn’t happen,’ but in then 2017, when HDG came to stay with him for several months, and saw her accountants, she brought it up again.[69] He says the accountants raised no issues with it or her capacity to make the decision. Further, he says HDG returned to Sydney and had a further discussion with JD, then wrote him a cheque which she sent to him for the amount.
[69]Transcript 17 June 2019 I-17, line 31- -45
The Tribunal questioned RAG about an apparent inconsistency, referring to a CUA statement noting a ‘debit transfer’ of $450,000 to RAG’s account on 11 September 2017,[70] rather than a cheque. He responded that as he did not have access to the account and he had not effected an electronic transfer, speculating that perhaps HDG had gone into a branch to effect the transaction.
[70]F1, Attachment. Transcript 17 June 2019 I-41.
On 17 June 2019, the Tribunal made an adult evidence order and subsequently spoke with HDG alone. Relevantly, in response the Tribunal’s question whether she ever loaned or gave money to RAG,[71] HDG told the Tribunal that she gave RAG over $400,000.[72] She explained that she and her late husband helped their children out, and she said, ‘I just give it to them’[73] and she ‘knew I’d never get paid. …they didn’t pay it back, those loans’.[74]
[71]Transcript 17 June 2019 I-29, line 44- 45.
[72]Transcript 17 June 2019 I- 30, line 7 to 13.
[73]Ibid, line 16-17.
[74]Ibid, line 18-20.
She made it clear that she wanted her children to share in her estate and had given money to other family members, – most of it to BL, after her husband died.[75] She was unable to say how much money she had in the bank, but said it was not a great deal, and knew that she owned several real estate parcels and received rent money for them.[76] She said RAG now did the ‘money work’ as her late husband had previously done.[77]
[75]Transcript 17 June 2019 I-31, line 34 to I-32, line 10.
[76]Transcript 17 June 2019 I-28 and 29.
[77]Transcript 17 June 2019 I-28 lines 25-45.
HDG’s evidence was that she gave RAG over $400,000. The Tribunal in error reports at [86] that HDG recalled giving $400,000 to RAG. RAG said HDG gave him the $450,000 after consulting with accountants and her Sydney lawyer, JD.
The statement from CUA which showed the transaction was effected by electronic transfer. RAG said he received the funds by cheque from HDG. This caused the Tribunal some concern. However, it must be said that whether it was received by cheque or electronic transfer was of little consequence if HDG entered the transaction rather than RAG. RAG’s evidence that he did not operate the EPA or have access to HDG’s accounts even at the time of the hearing. RAG’s evidence which was not the subject of any serious contest, was that until after the proceedings commenced, he had not had the original power of attorney to present to a bank. On the basis of this evidence, there does not appear to be a basis upon which to conclude that RAG had transferred the funds himself, which was presumably the concern of the Tribunal - although it did not expose its concern in its reasons for decision. Further, on my reading of the Tribunal’s reasons for decision, the Tribunal did not in any event make a finding that RAG transferred the funds himself.
PG and PPG gave no direct evidence about the how the transaction occurred and who entered it, and could not do so. On their own account, they were unaware of it until 2018. They made submissions about the transaction, but they had no actual knowledge of it, the circumstances in which it occurred, (or HDG’s capacity to enter the transaction) on 11 September 2017. Indeed, on the available evidence PG received a further gift from HDG of some $40,000 subsequently, in respect of which he apparently saw no issues at all.
Based on the available evidence, in my view, it was not open for the Tribunal to conclude, absent the drawing of inferences about how the transaction occurred, which were not drawn, that RAG entered into the transaction. I make the observation that the ‘submissions’ made by PG and PPG, referred to by the Tribunal at paragraph [70] of its reasons for decision, were not capable of providing such a basis.
The Tribunal finds at [69] that RAG was ‘inconsistent in his explanation of this transaction to the Tribunal’. It finds he spoke about a loan being subject to discussion with his father, prior to his death, a supposedly documented loan agreement, which turned out not to exist. With respect, RAG gave evidence of discussions with his father and that HDG and his father had discussed it with JD. He understood that documentation had been drawn up, but that his father became ill and it did not happen. Ms Miller said that she had a conversation with JD who spoke of a documented loan. RAG gave evidence that HDG, during a visit to Queensland, advised him in 2017 that she wished to provide the funds to him. She had discussions with her accountants and JD. Then, having returned to Sydney, unless it is not accepted that RAG could not operate the account (and such a finding was not made by the Tribunal), the evidence suggests HDG transferred the money.
As above, HDG told the Tribunal she gave RAG over $400,000. From her evidence, and the evidence of others, she said she and her late husband had a history of financially helping family members. Her evidence is to the effect that after her husband died, she simply gave it to them, not expecting any repayment. The Tribunal acknowledges that she told it she gave the money to RAG.[78] HDG’s account of discussions with her husband suggests he may have been more inclined to provide loans, rather than gifts. This is consistent with RAG’s evidence about understanding ‘documentation’ being drawn up prior to his father’s death, the forgiveness of any mortgage from RAG in his late father’s Will, and Ms Miller’s evidence based on her discussions with JD. However, once he was deceased, HDG’s evidence tends to suggest that HDG gave money to family members, rather than made loans to them.
[78]HDG [86].
While, as the Tribunal found, HDG had impaired capacity for financial matters by the time of the hearing(s), her evidence at hearing is consistent with her actions based on the other available uncontroversial evidence of substantial gifts to both PG and BL.
Was the transaction a loan or a gift?
Although in part relying upon the perceived inconsistency in RAG’s evidence,[79] the learned Member appears to have found the transaction was a loan, rather than a gift, largely based on the ‘strong submission’ of PG.[80]
[79]Ibid [69].
[80]Ibid [70].
Whether or not it was a loan or gift was a finding of fact to be made based on the available evidence. PG had no direct knowledge of the events surrounding the transaction and the ‘strong submission’ could not assist the Tribunal in making the relevant finding of fact. Further, it did so despite the evidence of HDG and RAG to the contrary and in the absence of any evidence that it was a loan.
In doing so, in my view, the Tribunal erred.
If the adult entered into the transaction, did the Tribunal err in applying the test for capacity, and in particular, the presumption of capacity?
Despite the Tribunal’s findings discussed above about the ‘starting point’ for its consideration, the Tribunal did consider HDG’s capacity for the transaction to some extent. It said that the relevant date for determining whether HDG had capacity was ‘less relevant’ as the transaction ‘appeared’ to have happened without HDG’s knowledge and her authorisation sought at a later date.[81]
[81]Ibid.
The evidence about HDG’s capacity for the transaction
There was not a health professional report before the Tribunal that assessed HDG’s capacity on 11 September 2017 for the transaction, or at all.
A brief report from Dr I, who said she had known HDG for 4 years, dated 11 February 2019, stated that HDG had been diagnosed with Alzheimer’s and cerebrovascular dementia in 2014, and that she was easily manipulated in relation to financial matters, with ‘no understanding due to poor memory, and was incapable of making a contribution at a hearing’.[82] She further said that dementia could suddenly worsen as delirium could develop with bladder or chest infection. In a report dated 14 December 2018, Dr I states that HDG’s memory is rapidly deteriorating. In yet another report in the produced documents, dated 15 November 2018, Dr I provided a letter to whom it may concern, stating that HDG had no significant cognitive impairment, and has the capacity to understand and sign documents. On 14 December 2018, she wrote to Dr EH referring HDG and states that RAG seems to be emptying her accounts and controlling her finances, stating HDG has no memory of it and that Dr I doubts she has capacity anyway. I observe that Dr I’s records contain a variety of similarly inconsistent reports or referrals.
[82]MED 1.
Dr EH, a specialist in geriatric medicine reported after a consultation with HDG (accompanied by her niece KA) on 18 March 2017 to Dr I that in 2016, HDG was diagnosed with mixed Alzheimer’s dementia. At that time, she scored 20/30 on a MoCA and 28/30 on an MMSE. No treatment was commenced because of other health issues, namely ‘bladder issues’. That said, it was noted that she underwent a surgical repair which had resulted in significant improvement in the urinary issues. She noted that HDG reported that her memory ‘is a significant issue’ and is ‘worse when she is nervous.’
Dr EH again reported to Dr I on 5 November 2017 following a further consultation. She states that there have been no further ‘urine infections’ and no concerns with delirium during this period, in context, it seems, since her last report, and her cognition has been at a similar level. On that day she scored 21/30 on a MoCA, similar to her previous score. She was noted to have a ‘wonderful’ quality of life, being active, independent and enjoying herself and her bladder was much improved since her surgery the previous year. She says HDG’s niece KA reported no concerns to Dr EH.
A further report of Dr EH dated 17 July 2018, noted that in April 2018, HDG had a hospital admission and periods of delirium. Her short-term memory then necessitated ‘an increased role for family in providing supervision and medical management’. HDG acknowledged poor short-term memory and CE a family member with her confirmed it. Dr EH considered HDG lacked insight into her cognition. On a MoCA, she scored 20/30. A further report dated 28 November 2018, refers to delirium in July with pneumonia during a hospital admission. ‘Daughter-in-law’ CE reported ongoing cognitive decline ‘over the past months’ and ‘multiple UTIs’. HDG scored 18/30 on a MoCA. She concluded that HDG’s dementia was progressing and now at moderate severity.
Dr SB, consultant geriatrician, also provided reports which were before the Tribunal. On 19 September 2019, he reported to HDG’s Qld GP. He noted a MoCA of 11/30 and an MMSE of 18/30. He considered the discrepancy between the results reflected the ‘vascular nature’ of the cognitive decline. He commented that a MoCA of 20/30 in 2017 did not necessarily equate to ‘not having capacity’. In a report from Dr SB to RAG dated 1 October 2019, after reviewing other health reports including from Dr EH, he comments that it does not appear a capacity assessment was carried out in 2017, but notes that HDG was cognitively and physically stable with a MoCA of 22/30, and functioning well. In error, he states that Dr EH did not consider the need for memory enhancing medication at that time. He suggests that the notes suggest significant deterioration occurred later than in 2017. He appeared to consider that the history indicated HDG had capacity to execute an EPA in 2017.
What was the evidence and what findings did the Tribunal make about HDG’s capacity?
The Tribunal’s conclusions about HDG’s capacity were briefly summarised in earlier paragraphs. I set out below, a summary of the evidence about HDG’s capacity
As above, at paragraph [74] of its reasons for decision, the Tribunal observed that in a report of 11 February 2019, Dr I said that HDG was ‘easily manipulated in financial matters’; that her dementia ‘could worsen quickly’; and that she had ‘no understanding of financial matters because of her poor memory’.[83] Further, in a report of 14 December 2018, Dr I considered that her memory was rapidly deteriorating. It did not refer to Dr I’s report of 15 November 2018, stating that HDG had no significant cognitive impairment and capacity to sign and understand documents.
[83]HDG [74].
The Tribunal observed that Dr EH reported on 18 March 2017, as set out earlier, that HDG had been concerned about her memory and at 5 November 2017, HDG had been well with no urinary infections and scored similarly on MoCA testing to 6 months prior.[84] In my view, this tends to suggest that, unlike in other years, HDG had no periods of delirium precipitated by infections in the intervening period. However, the Tribunal does not acknowledge that this was so. Rather it focusses upon an obvious error in a report by Dr SB, about prescription of Aricept being delayed because of the previous infections.[85]
[84]Ibid [77-78].
[85]Ibid [80]-[82].
The learned Member then found that:[86]
[83] The Tribunal considers the evidence indicates that a significant deterioration in her cognition is evidenced in 2018. However, there is substantial evidence of significant memory issues throughout 2017 and prior to this, with medication being rejected for contraindications rather than not being needed.
[84]The Tribunal does not accept that the absence of medication in these circumstances suggests that she was likely to have capacity to gift or loan $450,000 around that time in the context of an active lifestyle. This opinion does not contemplate the significance of her documented memory impairment affecting her ability to make decisions freely and voluntarily. The Tribunal also notes that the capacity Dr SB provided his view about is her capacity to execute an Enduring Power of Attorney, rather than her capacity to enter the transaction relating to the transfer of $450,000. Therefore, the Tribunal places less weight on Dr SB’s opinion given that he was not directly involved and was not provided with clear parameters to provide his opinion.
[86]Ibid [83]-[84].
The Tribunal says that it must be satisfied the presumption of capacity is rebutted for financial matters and s 12 satisfied before it appoints an administrator.[87] Then, it finds that the presumption is rebutted for financial matters, and that HDG no longer has capacity and could not make financial decisions while she ‘lacked appreciation of her finances’.[88] The point in time at which the presumption is said to have been rebutted (that is, from when she lacked appreciation of her finances) is not clear, in the context that the Tribunal refers to ‘evidence’ outlining ‘a dementia diagnosis since 2016, with periods of delirium and a progressive memory loss’.
[87]Ibid [97].
[88]HDG [98].
Did the Tribunal apply the correct test and the presumption of capacity?
The presumption of capacity is provided for in General Principle 1 contained in s 11B(3) of the GA Act, in the following terms:
1 Presumption of capacity
An adult is presumed to have capacity for a matter.
The Tribunal did not specifically refer to that provision, although it set out the definition of capacity in considering the application for the appointment of a guardian.[89]
[89]Ibid [34].
The Tribunal found the presumption of capacity rebutted for HDG for all financial decisions at the time of hearing, in determining the application for appointment of an administrator. If the Tribunal made a finding that the presumption of HDG’s capacity was rebutted for the transaction on 11 September 2017, on a fair reading of the Tribunal’s reasons for decision, it is not sufficiently clear that it did so.
If it did so, in my view, that finding was not open on the evidence before it.
Capacity is matter and time specific. Therefore, if findings were to be made about HDG’s capacity for the transaction, it was appropriate to determine HDG’s capacity for the transaction at the relevant time, that is, when it was entered into on 11 September 2017. That HDG may appear to have forgotten about the transfer at some stage in 2018, it seems temporarily, during a period of time when she went through a period of significant physical ill-health is not to the point. Nor is it to the point that there was evidence of memory issues throughout 2017 and in 2016. Of itself that does not indicate HDG’s capacity for the transaction at the relevant time. The question was whether HDG had capacity at the time of the transaction. Further, in the absence of cogent evidence to the contrary, she was entitled to the presumption of capacity.
It is not apparent what test the Tribunal applied in reaching its conclusions at paragraph [98]. Further, if the Tribunal found that the presumption for capacity was rebutted for HDG for the transaction, in my view the learned Member failed to apply the presumption of capacity, in reaching its conclusion.
The onus of rebutting the presumption of capacity for a particular decision lies with those asserting that an adult lacks capacity for the transaction.[90] There is no place for benign paternalism. An adult may make any decision for themself if they are capable. The views of others considering it improvident are not relevant.[91]
[90]Re Caldwell [1999] QSC 182.
[91]Hanna v Raoul (2018) NSWCA 201 at [54].
The first limb of the definition of the definition of capacity requires the requisite understanding, as explained in Fehily v Atkinson[92] as follows:
…in order to understand a proposed transaction, a person needs the mental capacity to recognise the issues that need to be considered, to obtain, receive, understand and retain relevant information … and to weigh the information (including that derived from the relevant advice) in reaching a balanced decision.[93]
[92][2016] EWHC 3069.
[93]HDG [15-16].
The second limb requires that the adult concerned be able to freely and voluntarily make the decision, that is, free from undue influence, (noting that even adults who have capacity for all matters will be influenced by professional advice and seek support and counsel of friends and family members) and free from, where relevant delusional beliefs.
Assuming for the moment that the Tribunal did, or was required to, make a finding about HDG’s capacity on 11 September 2017 for the transaction in determining the applications before it, there was no evidence that HDG did not have capacity for it on 11 September 2017. An earlier diagnosis of dementia or some evidence of earlier memory impairment is not of itself an indication of a person’s capacity for a particular transaction at a particular date. The Tribunal had reports that explained how HDG presented on particular days, but not on 11 September 2017. The medical evidence suggests that during the period from March to November 2017, despite a diagnosis of dementia in 2016, HDG was relatively stable, and suffered no urinary tract infections or related periods of delirium. Further, it suggests that at that point, she was in the early, and relatively mild stages of dementia. Putting aside the intermittent periods of delirium in 2016, it might have been expected that her level of cognitive functioning in 2016 and 2017 was relatively higher than in more recent years. In my view, the evidence that was before the Tribunal tends to support a finding that the presumption of capacity was not rebutted.
Further, although it ought to go without saying that with a diagnosis of progressive condition such as dementia, that HDG’s later episode of confusion or apparent temporary lack of memory about the transaction in 2018, it seems, during a period of physical ill-health, is of no consequence in determining her capacity for it on 11 September 2017, and could not rebut the presumption of capacity and was not relevant to HDG’s capacity for the transaction on 11 September 2017, as the Tribunal seems to have considered, in error, it did.
Further, the learned Member did not consider the requisite capacity for the transaction. If HDG had capacity for the transfer, the transaction was an inter vivos gift to RAG. The Appeal Tribunal discussed capacity for an inter vivos gift in MG & anor v The Public Guardian & anor[94] and I adopt what was said at [94-96] as to the requisite understanding required at the time of the gift.[95]
[94][2021] QCATA 89.
[95]Ibid [94]-[96]
Finally, the Tribunal expressed concerns about other external events occurring significantly after the transaction, which at least in part, appear to have motivated the making of order 9, namely that HDG’s ‘financial circumstances have fundamentally altered since the transaction in 2017, and her reliance on rental income may be threatened in the current economic climate of a global pandemic. It is appropriate that the loan is immediately repaid in the circumstances’.[96] Those later events are, of course, most unfortunate, but necessarily irrelevant to the question of HDG’s capacity for the transaction, if she entered the transaction, at the time it was entered into.
[96]HDG [94].
In conclusion, if the Tribunal found the presumption of capacity rebutted for HDG for the transaction and properly considered the question of HDG’s capacity for the transaction, it is not clear from its reasons for decision that it did. In any event, if it did make the findings, in my view, it misapplied the presumption and the test for capacity by taking into account events that occurred after the transaction which were irrelevant to the question of whether HDG had capacity for the transaction on 11 September 2017.
If RAG entered into the transaction, did the presumption of undue influence arise and did it constitute a conflict transaction
If RAG was found by the Tribunal to have entered into the transaction (and if that finding was open), other issues would arise for consideration.
The Tribunal below considered that at all relevant times, s 34 and s 65(c) of the POA Act applied to the transaction and the EPA. Accordingly, it considered that the transaction was a conflict transaction and that the presumption of undue influence arose in HDG’s favour as they would to an enduring power of attorney under the POA Act.[97]
[97]POA Act s 73, s 87.
However, the application of those provisions may not be straight-forward in the circumstances. For example, without deciding whether it is necessary to do so, it is not apparent when the enduring power of attorney commenced to take effect, noting the general power of attorney had been in effect for many years. How it transitions into an enduring document, and the consequences and responsibilities of an attorney under each type of document might be relevant to the transaction. Further, it might be relevant to consider whether the document complies with the requirements of NSW law, in order to find that ss 34 and 65 might apply.[98]
[98]POA Act s 34, s 65.
The Tribunal could have, in appointing an administrator, left it for the administrator to decide whether to make a compensation application, (and any necessary related applications), that the administrator considered appropriate after some further investigation into the transaction.
An administrator in deciding how to proceed, (as indeed in a proper case brought before it the Tribunal) would consider whether the proper forum is Queensland in circumstances when it appears the transaction occurred in New South Wales, at a time when the adult was living in NSW, and where there was a NSW power of attorney that was governed by NSW law. It may be that the more convenient forum for any such application/s might be NSW.
There may well be other relevant issues that I have not discussed in making these observations. Suffice it to say, there are a variety of issues that would appear to arise, should a compensation application and any related application/s be made to the Tribunal.
Conclusions and orders
For the reasons explained, the appeal must succeed.
I make orders allowing the appeal and setting aside order 9. Leave to appeal is refused.
The delay and inconvenience to all parties in finalising this proceeding is regretted.
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