Re THM
[2013] QCAT 370
•2 July 2013
| CITATION: | THM, Re [2013] QCAT 370 |
| PARTIES: | Re T H M |
| APPLICATION NUMBER: | GAA10605-12 |
| MATTER TYPE: | Guardianship and administration matters for adults |
| HEARING DATE: | 28 May 2013 |
| HEARD AT: | Bundaberg |
| DECISION OF: | David Lewis, Member |
| DELIVERED ON: | 2 July 2013 |
| DELIVERED AT: | Hervey Bay |
| ORDERS MADE: | 1. The application of the Adult Guardian for the appointment of an administrator is dismissed. |
| CATCHWORDS: | Application by Adult Guardian for appointment of administrator – enduring power of attorney – whether the attorney had breached the Powers of Attorney Act – whether the attorney had acted honestly and with due diligence – whether accurate records and accounts kept – need for an appointment. Powers of Attorney Act 1998 ss 66, 76, 85, Schedule 1; |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Adult Guardian, applicant, Represented by Ms Sally Christensen. |
| RESPONDENT: | K P (Attorney) in person. |
REASONS FOR DECISION
Mr M is a 94 year old man now resident in a nursing home in the Burnett area. In September 2009, when he was still residing at home, he executed an enduring power of attorney appointing a friend, Ms P, as attorney for both financial and personal/health matters. The power for financial matters was to begin “upon my loss of capacity as determined by a medical practitioner.”
Mr M suffered a collapse in December 2009, and his health began to deteriorate. It appears that Mrs P was caring for him at that time, and she continued to do so. In February 2010, his general practitioner, Dr R P, acting in consultation with Mrs P, wrote to the Department of Transport advising that she did not consider he was fit to drive.
By about the middle of 2011, Mrs P was assisting him with cooked meals, taking him shopping and so on. Other friends were also helping him, and he had the assistance of a cleaner and a gardener. However he continued to handle his money himself. Mrs P would drive him to his bank, but he attended to the banking and gave Mrs P money to pay his bills or buy his groceries.
On 1 September 2011, Mr M decided to get Mrs P to do more of the financial work for him. He asked her to attend to the banking and in effect she took over his financial affairs from then, although in consultation with him and at his direction. Later that month she consulted Dr R P, who then provided her with a letter, dated 26 September 2011, advising that Mr M “is no longer able to manage his financial affairs.”
On about 7 September 2011 the Office of the Adult Guardian (OAG) received information that alleged Mrs P had failed to protect Mr M’s assets adequately, in that he had substantial cash hidden in his house, and that she may have assisted him to withdraw substantial funds and dispersed those funds into her own account. The complaint also suggested she may have failed to provide him with adequate care.
Section 66 of the Powers of Attorney Act 1998 requires an attorney to exercise a power “honestly and with reasonable diligence”; section 85 imposes an obligation to keep and preserve accurate records and accounts of all transactions; section 86 requires the attorney to keep the principal’s money separate; and section 76 requires the attorney to apply the general principles from Schedule 1 of the Act when performing a function for an adult with impaired capacity.
The Adult Guardian has investigative powers and responsibilities under the Guardianship and Administration Act 2000 and the Office began an investigation which was not completed until October 2012. It concluded that the allegation about lack of care was not made out, and no further action was taken concerning that. However it concluded that in relation to the financial allegations, the attorney had breached section 66, and also section 85. In summary, the concerns were threefold: That she had kept substantial monies in cash, including monies that she had withdrawn from his account; that she had failed to provide a complete account of how the funds had been used; and that funds were unaccounted for. The allegation concerning dispersing monies into her own account (the s 86 matter) was not taken further.
As a result the Adult Guardian made an application to the Queensland Civil and Administrative Tribunal seeking the appointment of the Public Trustee Queensland as administrator for Mr M.
As part of its investigation, the OAG had detailed communications with the attorney, and with Dr R P. The medical evidence was that Dr R P was unable to say when Mr M had lost capacity for financial matters. She said she did not consider that to be the case when she wrote concerning his licence in February 2010. She provided a report to the OAG dated 8 September 2011 where she said in relation to financial matters: “Minimal capacity – realises that bills need to be paid and needs help to make sure that his responsibilities are met – has given carer permission to manage his money.” She concluded he had capacity for simple but not complex decisions. She also noted that he was influenced positively by Mrs P.
As mentioned above, she gave Mrs P a letter on 26 September 2011 to the effect that he had lost capacity for financial matters. Given the wording of the power of attorney, the operative date for commencement of the power would seem to be 26 September 2011, or perhaps 8 September at the earliest. Prior to that, in a technical sense, Mrs P was acting as his agent rather than as attorney.
In her correspondence with the Adult Guardian, Mrs P explained that Mr M had a policy of not letting his bank account balance exceed $37,000, as he believed the government may take money from him if he had savings over that balance. It is not clear where this belief came from or when, but it seems to have operated from well before Mrs P assumed any responsibility for his finances. The Tribunal was supplied with bank statements from August 2009, and the balances are consistent with that habit right through until Mrs P re-banked money for him in November 2011.
She told the OAG that when she took over in September 2011 Mr M told her of his preference for limiting the bank balance and gave her $2,900 in cash to look after. He continued to request that she withdraw sufficient of his pension each fortnight to ensure that the balance was maintained.
It is clear from the OAG report that this was an issue Mrs P turned her mind to. Dr R P, in an advice to the OAG on 3 November 2011, said that she had discussed the issue with her. She suggested Mrs P return the money to his account, but she said he scrutinised his bank accounts, and would see that she had done so. R P then suggested Mrs P have the statements sent to herself. Mrs P was reluctant to act against the clear wishes of her principal and friend.
The Adult Guardian took the view that she should have over-ridden his wishes and rebanked the money, as this would maximise his benefit from interest earned. It was suggested that Mrs P should open a separate account, presumably to avoid the problem of the adult knowing that his wishes were being over-ridden.
This is the conventional and no doubt preferable view, though Mrs P’s actions are not without some support when one seeks to apply the general principles from Schedule 1. Section 7 of the schedule refers to the importance of preserving the adult’s right to make his own decisions, to seek his views, and to work out what the adult’s views would be, based on the adult’s previous actions. Mr M’s views, made at a time when he (on the evidence) had capacity, were that he wanted to limit his bank account balance to $37,000. The presumption of capacity includes accepting that an adult may make his own decisions even if most of us would consider those decisions unwise or based on a fallacy.
Section 7 (5) of Schedule 1 contains the proviso that in any event the attorney must exercise a power in a way consistent with the adult’s proper care and protection. This proviso supports the Adult Guardian’s view of the preferable approach, although one is uncomfortable with the implication that this may need to be done in a way that hides the result from the adult, and it is unsurprising that Mrs P had some reluctance to do this.
The money was rebanked in early November 2011, on the advice of the OAG. The Adult Guardian considers that the initial holding of a large sum in cash, and the withdrawal of further sums on the principal’s instructions were a breach of section 66 of the Act. I am not prepared to so find. The period from the commencement of operation of the power of attorney to the date of re-banking was less than 2 months. The amount ultimately rebanked was about $4,500. The interest would have been only a couple of dollars a week. Given the competing principles, the fact that she discussed the matter with the doctor, and acted in accordance with the Adult Guardian’s advice when received, I do not think the attorney’s actions can be said to constitute a failure to act honestly or diligently.
On the matter of funds unaccounted for, the OAG investigative report based its case on discrepancies over two periods. It said that on an analysis of the monies held in cash in September 2011, the additional amounts withdrawn, the sums spent and the sum rebanked, there was an amount of $7,969.44 unaccounted for in the period September to October 2011. Additionally it said that in the period November 2011 to September 2012 a further $1077 was unaccounted for, and an amount of $4,506.20 was rebanked. One assumes, though the report did not make it clear, that the amount rebanked was to be credited against the unaccounted for sums. It concluded that for the period September 2011 to September 2012, a total of $3,463.24 was unaccounted for. It did not explain how it had arrived at this figure, which is obviously not a figure capable of being derived from the other amounts mentioned, even if one assumes that they were themselves accurate.
Unfortunately the financial data supplied by the attorney was just as unhelpful, comprising as it did copies of many invoices and cash register dockets, some cheque butts and bank statements, and notes of expenditure, but nothing that resembled a statement or other account which might facilitate a ready understanding of the state of affairs.
As a result, when the matter first came on for hearing, it was adjourned and directions given requiring the Adult Guardian to file a financial statement setting out better particulars of its calculations, and providing for a response with similar detail from the attorney.
The Adult Guardian subsequently produced a one page supplementary report setting out a new calculation of the alleged missing funds. In the September – October period the figures were: total funds withdrawn $5,152.94, less expenses incurred $1,739.65, equals missing funds $3,413.29. In addition, the OAG claimed that the attorney had held funds in cash of $4,556.15 in that period; she had rebanked $4,506.20 on 8 November, leading to a further amount of $49.95 missing.
The sum of the two missing amounts, that is $3,413.29 plus $49.95, is $3,463.24. This agrees with the conclusion from the earlier investigative report, though via a different set of calculations.
The figure of $5,152.94 is derived from the bank statements, although as Ms Christensen explained at the hearing, it includes a withdrawal on 18 August. The expenses incurred are presumably the Adult Guardian’s calculation from Mrs P’s receipts and other notes supplied. The cash held ($4,556.15) was the figure advised by Mrs P by letter of 2 November 2011. The amount rebanked is agreed as correct.
The “missing” amount of $49.95 is most probably explained by the fact that the advice as to the cash held was given on 2 November, but the cash was not rebanked until 8 November. Given that much of the expenditure was in cash, it would be surprising if the figure remained constant for a week. That issue should detain us no further.
The other alleged discrepancy suffers from a more fundamental error. It assumes that the September – October surplus of $3,413.29 is an entirely different set of funds from the cash held at the end of that period, and in effect concludes that the two amounts should be added. However it is Mrs P’s contention that this surplus forms part of the $4,556.15 cash on hand at the beginning of November. This is more likely to be correct, for otherwise one would have to explain where both amounts came from, which the OAG has not done.
Mrs P’s account explains this. She says that the adult gave her $2,900 in cash at the beginning of September when he asked her to start doing his banking. To this should be added $4,185.49 withdrawn from the account in September – October. (The withdrawal on 18 August should be ignored as it precedes the cash handover, and is therefore part of those funds.) After deducting the expenses of $1,763.45 and the rebanked $4,506.20, there remains only $815.84 unexplained. However Mrs P says that at about this time Mr M was taken in by a fraudster who charged him $900 to paint his roofing screws. Thus she says the whole amount is accounted for, as nearly as practicable.
The evidence about the roofing fraud is limited, and one cannot be certain that that expense was incurred in the relevant period. Nonetheless this is just one of a number of uncertainties about this sort of analysis. The period under discussion was one of transition, from a time when the adult was handling his own affairs, through a period where Mrs P was assisting him informally, through to her starting to act under her formal appointment. The financial arrangements were fluid, monies were still being spent by Mr M personally, and the attorney was coming to a task where she was perhaps unsure of how she should proceed. Add to that her admitted inexperience with book-keeping, and it would not be surprising if months or years later it proves impossible to account for every last dollar.
What one can conclude with a good deal of confidence is that, with respect to the office bearers of the Adult Guardian, their analysis of this part of the matter is flawed. If there were unaccounted for funds of more than three thousand dollars, that would indeed be most serious. However any discrepancy, if it is there at all, would be of only a minor sum, and more likely to be explained by errors in book-keeping or recording (not necessarily by the attorney) than by any dishonesty. Certainly there is nothing like enough cogent evidence for the tribunal to draw an adverse inference against the attorney on this part of the case.
The OAG supplementary report then proceeds to explain its calculation of the further unaccounted for monies in the period from November 2011 to September 2012. It states that $14,695 was withdrawn from the bank account in that period, with only $13,618 spent on the adult’s expenses, and hence a shortfall of $1,077. The withdrawal amount is claimed to be from the bank statements. The expenses are based on a calculation by Mrs P in an undated statement where she estimated the expenditure at $619 per fortnight.
Again, regrettably, there are problems with these figures. My own calculation of the amounts withdrawn from the bank account in that period, taken from the bank statements’ summaries of debits for each statement period, was $16,633.37. The Adult Guardian’s representative was unable to explain the discrepancy, and so am I. However on closer examination of the material before the Tribunal, it is noted that several of the bank statements produced are missing the second page. If the OAG added the actual debit entries, this would miss any debits on the second page and obviously produce the wrong figure. The missing pages appear to have escaped the notice of all parties in their preparation and at the hearing.
So far as the expenses are concerned, the fortnightly figures are quite clearly an estimate, and some discrepancy over a period of 11 months would be expected.
Mrs P provided a statement setting out her expenditure for the period. She also produced some notes. While the figures are comprehensive, the layout is confusing. Monies were withdrawn from the bank and many expenses paid in cash. Others were paid by cheque. The cash withdrawals were also effected by drawing cheques. It was not always clear which payments were from the cash pool, which by cheque. At the hearing, the Adult Guardian’s representative produced two more calculations of the apparent expenditure. If I understood her correctly, one was based on a new analysis of the bank statement entries and one derived from the attorney’s own statements of the expenses. Neither agreed with the figure in the supplementary report. Subsequent to the hearing, my analysis of the attorney’s statements produced yet a fourth different figure.
It does not follow that the attorney’s records were necessarily wrong, but they were confusing. Given time, it may have been possible to arrive at the correct figures by going through the entries with the attorney and having her explain them. But this would have been a long exercise. It was not one that the Adult Guardian undertook, and it is obviously not the function of the Tribunal to do so. The result however is that one cannot be confident that there is any missing money at all.
The Adult Guardian raised three new concerns at the hearing. One was the missing receipt for the payment to the roof scammer. As I understood the evidence, that payment was made by the adult personally, perhaps before the attorney was acting under the EPA. I would not attribute any blame to the attorney concerning that. A second was that there had been some water damage suffered to the adult’s house, and it was then discovered that his insurance policy did not cover this adequately. Ideally an attorney would check such matters as insurance, but it is the sort of check which an attorney might not think to do until an annual premium became payable. I think it would be unreasonable to hold an unpaid volunteer to too high a standard of performance in such matters, and as it was raised only at the hearing, she was not given an opportunity to prepare a considered response.
The third matter was a concern that the amounts being withdrawn fortnightly were more than reasonably required, and more than the earlier estimate. While at first blush there might appear to be some merit in this complaint, it is the sort of issue that should not be guessed at. Given the long opportunity for the Adult Guardian to prepare a detailed case on the expenditure issue, and given the limitations in the case presented, it would not be reasonable to draw any adverse conclusions on a simple overview of the bank statements. I also note that in the 13 months of the attorney’s stewardship for which records were produced, the adult’s bank balance increased by about $14,000. Even allowing for the re-banking of monies which he had held in cash, this does not seem consistent with any systematic exploitation of him by his attorney.
It remains to comment on the investigation’s finding that the attorney had breached section 85 of the Act, that is the duty to keep accurate records and accounts. As will be apparent, Mrs P’s style of accounting was confusing, and she admitted that she knew nothing of book-keeping. However she does appear to have kept all the relevant receipts for her expenditure, right down to cash register dockets for just a few dollars, as well as notes where she had given the adult cash for his own expenditure.[1] I do not think the section should be interpreted to mean that an attorney is obliged to keep the sort of financial statements that would be expected of a paid professional. The data was there, and while it may have been a lengthy exercise, a full accounting would have been achievable.
1The medical evidence said that he had capacity for simple decisions and he continued to spend some money himself.
On the material before the Tribunal, I conclude that while it would have been preferable for the attorney to have kept the records in a more comprehensible form, and while there may have been aspects which could have been handled differently, these are only minor quibbles and there is no sufficient evidence on which I could or should conclude that she has breached the relevant provisions of the Act.
Mr M ceased to be able to live in his home, and moved into a nursing home in September 2012. Since then his financial affairs have become simpler, as much of his care, and in effect expenditure, is handled by the nursing home. Mrs P arranged for a real estate agent to let his home and that produces him an income stream. As well it means that most of the administrative burden of the house is being attended to professionally. As a consequence of these developments, the attorney is relieved of the day to day work she had previously done, and her responsibilities are limited to paying the occasional account like rates, and perhaps some general oversight where necessary.
Section 12 of the Guardianship and Administration Act 2000 provides that the tribunal may appoint an administrator if it is satisfied that the adult has impaired capacity (which he does) and that there is a need for a decision and that without an appointment the adult’s needs will not be adequately met or his interests will not be adequately protected. In this matter, I am satisfied that, especially given Mr M’s current living arrangements, his needs can be adequately met and his interests protected pursuant to the existing appointment of Mrs P under the enduring power of attorney. Therefore there is no need established for the appointment of an administrator.
I might add in closing, that the adult has obviously entrusted his affairs to the attorney at a time when he was able to make that sort of decision. It is likely that he would prefer to leave the remaining matters in her hands rather than have them handed over to strangers at this late stage of his life.
The application for appointment of an administrator will be dismissed.
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