Re: WP - [2013] QCAT 277

CITATION:

Re: WP [2013] QCAT 277

PARTIES:

APPLICATION NUMBER:

GAA2673-13

MATTER TYPE:

Guardianship and administration matters for adults

HEARING DATE:

20 May 2013

HEARD AT:

Brisbane

DECISION OF:

Julia Casey, Member

DELIVERED ON:

20 May 2013

DELIVERED AT:

Brisbane

ORDERS MADE:

1. The appointment of The Public Trustee of Queensland as administrator for WP for all financial matters is continued.

2. The administrator is to provide a financial management plan to the Tribunal within six (6) months.

3. The Tribunal directs the administrator to provide accounts to the Tribunal when requested.

4. This appointment of The Public Trustee of Queensland remains current until further order of the Tribunal.

5. The administrator shall within three (3) months:

a) Identify, by way of a search of the records held by the Registrar of Titles or other means, any interest in real property registered in the name of WP.

b) Lodge with the Registrar of Titles a copy of this order and a notice notifying the Registrar of any interest in land held by the adult which is subject to this administration order.

c) Provide to the Tribunal:

(i) a copy of the search of records held by the Registrar of Titles referred to above and;

(ii) a copy of the lodgement summary with the dealing number showing lodgement of the order in respect of any interests in land held by the adult which is subject to this administration order.

6. If any change is made in an interest in land held by the adult which is the subject of this administration order or if there are any further dealings in land on behalf of the adult by the administrator, the administrator shall lodge with the Registrar of Titles within fourteen (14) days of the finalisation of such interest a copy of this order and a notice (in a form prescribed by the Registrar of Titles), concerning such changes or dealings.

7. The administrator pay, from the adult’s funds, any fee associated with the above notices.

8. Any purported Enduring Power of Attorney and the following Enduring Power of Attorney for WP are overtaken by the making of these appointments and, in accordance with s 22(2) of the Guardianship and Administration Act 2000 can no longer be acted upon to the extent that these appointments have been made:

(a) The Enduring Power of Attorney dated 22 July 2008 appointing WLD as attorney for financial, personal and health matters.

CATCHWORDS:

CAPACITY OF ADULT - Enduring Power of Attorney

Guardianship and Administration Act 2000 (Qld), s 7, s 12, s 15, s 31, Schedule 1

APPEARANCES and REPRESENTATION (if any):

The following parties attended the hearing via teleconference:

WDL wife of WP

Edmund Saw a solicitor from Hutchison Legal, granted leave to represent WDL

WD son of WP
Marian Hall representative of the Public Trustee of Queensland

Stephen Taylor, a solicitor from the Office of the Official Solicitor to Public Trustee, was granted leave to represent the Public Trustee of Queensland, and attended the hearing in person.

REASONS FOR DECISION

WP (the adult) is a 51 year old man who has schizophrenia and resides in Victoria with his wife, WDL, and adult son, WD.
On 22 July 2008 WP appointed WDL as his attorney for personal/health and financial matters.
In 2011, when WP was receiving treatment for his mental illness in a Brisbane hospital, his treating team submitted an application to the Tribunal seeking the appointment of a guardian and an administrator for the adult.
On 3 August 2011 the Tribunal dismissed the application for the appointment of a guardian and appointed the Public Trustee of Queensland as the adult’s administrator for all financial matters until further order of the Tribunal. The Enduring Power of Attorney dated 22 July 2008 was overtaken by the making of this appointment and could no longer be acted upon to the extent the appointment was made.
WP and WDL returned to Victoria in August 2011.
On 20 March 2013 the Tribunal received an application from WDL seeking her appointment as the adult’s administrator. In subsequent correspondence to the Tribunal WDL stated she was seeking to be jointly appointed with WD.
On 20 May 2013 the Tribunal conducted a requested review of the appointment of the administrator in Brisbane.

Does WP have capacity to make financial decisions?

The Tribunal is required to determine capacity as at the date of hearing in accordance with s 12 of the Guardianship and Administration Act 2000 (Qld), (the GAA Act), as the Tribunal must be satisfied that the adult has impaired capacity before it can further consider an application for the review of the appointment of an administrator for the adult.
WP is presumed to have capacity in accordance with s 7 of the GAA Act and general principle 1 of Schedule 1 under the GAA Act. The Tribunal considered the medical evidence and submissions from the parties to determine if the presumption of capacity has been rebutted for the adult.
The Tribunal’s medical evidence includes a report dated 3 March 2011 by Dr Fionnula Dunne, a consultant psychiatrist, who stated that WP has treatment-resistant schizophrenia and was receiving involuntary treatment under the Mental Health Act 2000 (Qld) at the time the report was written. In Dr Dunne’s opinion the adult lacked the capacity to manage simple and complex financial matters.
A report dated 4 March 2013 by Dr John Robertson, a psychiatrist in Victoria, provides that WP is now voluntarily engaging in treatment for schizophrenia and that he achieved a score of 22/30 on the Mini Mental State Examination revealing deficits in short term memory and higher organizational skills. Dr Robertson provided the opinion that the adult is able to manage day-to-day finances and is unable to understand the criteria necessary to execute or revoke an Enduring Power of Attorney.
In her letter to the Tribunal dated 13 May 2013 Kellie O’Connor, the adult’s case manager, submitted that the adult receives care and assistance from WDL on a daily basis to ensure he receives medication and attends medical appointments for his mental illness.
In their oral submissions WDL and WD did not challenge the medical evidence.
The evidence establishes that WP has schizophrenia and deficits in short term memory and higher organizational skills.
The Tribunal makes findings that WP is unable to make decisions in relation to his complex finances due to his mental illness and cognitive deficits.
The Tribunal formally rebuts the presumption of capacity for financial matters for WP.

Is there a need for the appointment of an administrator?

When reviewing an appointment the Tribunal must take into account the provisions of s 31(2) of the GAA Act and must revoke its order making the appointment unless it is satisfied it would make an appointment if a new application for an appointment were to be made, with reference to s 12 of the GAA Act.
The Tribunal considered the evidence in relation to the adult’s financial circumstances.
WP’s cash and superannuation assets total approximately $3,440. His fortnightly income approximates $700 and consists of the disability support pension and rent assistance.
He holds an interest in vacant land at Gympie together with WDL and a family friend, KM, (now deceased). The interests are held by the parties as tenants in common and the property is valued at between $220,000 and $250,000. The property is mortgaged with the National Australia Bank with the current liability totaling $162,828.
The adult’s administrator and WDL have signed an agreement for the appointment of an agent to sell the property. KM died intestate. At present, no person has authority to sign an agreement for the appointment of an agent to sell the Gympie property, or agree to the distribution of the proceeds of the sale in relation to parties’ contributions, on behalf of KM.
In the event of the mortgagee effecting the sale of the property the adult will incur further expenses.
The Tribunal determines that as WP has assets, liabilities, income and expenditure that require management there is a need for decisions in relation to financial matters and that without the appointment of an administrator his needs will not be adequately met and his interests will not be adequately protected.
The Tribunal is satisfied the requirements of s 12 of the GAA Act have been met in relation to the establishment of the need for the appointment of an administrator WP.

Is the current administrator competent or is someone else more appropriate for appointment?

Once need for an appointment is established the Tribunal must have regard to the appropriateness considerations set out in s 15 of the GAA Act in deciding who to appoint as the adult’s administrator.
In accordance with s 31(4) of the GAA Act, the Tribunal may make an order removing an appointee and replacing that person only if the Tribunal considers that the appointee is no longer competent or another person is more appropriate for appointment.
The parties provided oral and written submissions inclusive of background to the purchase of the property and their actions during the period under review.
The property was purchased in November 2007 for $300,000 for the purpose of subdivision. WDL signed the contract for the purchase of the property on behalf of WP pursuant to a previous Enduring Power of Attorney dated 31 May 2007.
WP and WDL contributed funds of $152,892. The balance of the purchase price was funded by a loan from the National Australia Bank, pursuant to a Facility Agreement dated 2 January 2008, and secured by a mortgage over the property with WDL and WP each paying a quarter share of repayments and KM paying a half share.
While WDL submits WP signed the Facility Agreement on his own behalf, the Public Trustee of Queensland submit the document was signed on behalf of the adult by WDL pursuant to the Enduring Power of Attorney dated 31 May 2007.
KM did not contribute any funds to the purchase of the property. In her evidence to the Tribunal WDL said KM was experienced in subdivision issues and was to be responsible for clearing the land and liaising with the council. The Public Trustee of Queensland advised that a proposed Joint Venture Agreement, drafted by Hutchison Legal, was never signed by the owners of the property, and that the duties and responsibilities of the property owners, in the context of disparity between the parties’ contributions, was never formalized.
Submissions from Marian Hall, representative of the administrator, include that the Public Trustee of Queensland has done everything in its power to protect WP’s financial interests, while balancing his assets and responsibilities with his financial needs. She provided the administrator initially forwarded $550 per fortnight to WDL for the adult’s living expenses and loan repayments. WDL deposited the loan repayments for herself and WP into a joint account that she held with KM. The arrangements were that KM was to also deposit his loan repayments into this account and that the total fortnightly loan repayments, from the three parties, were to be direct debited to the bank from the joint account.
Marian Hall stated that in June 2012 the National Australia Bank advised the administrator that loan repayments were in arrears. The administrator then made enquiries to the bank and was advised that KM had been granted a hardship claim for three months from January 2012. The administrator contacted WDL who stated she knew about the hardship claim and thought that it applied for a six month period. While WDL had not advised the adult’s administrator about the hardship provisions she had continued to receive fortnightly payments from the administrator for the adult’s living expenses and loan repayments.
Marian Hall submitted that the administrator attempted to facilitate the sale of the property in June 2012, and suspended loan repayments on behalf of the adult in August 2012. Living expenses paid to the adult were restricted at this time in order to pay creditors of the adult.
Stephen Taylor provided that on 11 September 2012 the National Australia Bank issued a Default Notice to the parties with a requirement for $3,459 to be paid by 12 October 2012. On 28 September 2012 the Public Trustee sent an email to WDL outlining options to pay the amount owing by the due date or to sell the property. The following day WDL sent an email to the Public Trustee advising that she and KM would not be selling the property and would advise the Public Trustee of their intended course of action which was to be determined in a meeting with a financial adviser on 4 October 2012.
On 4 October the Public Trustee sent a further email to WDL outlining options to sell the property, refinance the loan or pay the default amount of $3,459. The Public Trustee advised WDL that the best outcome would be to sell the property and avoid additional legal fees and a reduction in the value of the asset should the mortgagee sell the property. On the same day WDL replied by email that financial advisers had been engaged and that the subdivision would be going ahead as planned.
The administrator recommenced loan repayments on the adult’s behalf in December 2012, paying the bank directly from the adult’s account. On 20 December 2012 the administrator recommenced providing the adult with fortnightly living expenses of $220. Ms Hall said the adult’s bank account was in debit for most of 2012 in order to meet the adult’s financial responsibilities (e.g. loan repayments, rates, living expenses).
In April 2013 the Public Trustee was advised that KM had passed away in February 2013 and that WDL would be agreeable to selling the property. The Public Trustee, in a different capacity, is now considering whether to act as the personal representative of KM’s estate and are currently investigating his financial circumstances.
The representatives of the administrator submitted that WDL would not be more appropriate for appointment as WP’s administrator as she has had difficulties in managing her own financial affairs. They said a prudent person would have proceeded with the sale of the property in mid 2012, as the administrator had endeavoured to do, to effect a positive outcome, and that despite notices of default WDL refused to sell the property, while making occasional and insufficient loan repayments.
In contrast, Edmund Saw submitted that WDL is an appropriate person to be appointed as the adult’s administrator as she has managed his finances since the couple’s engagement 25 years ago. He submitted that WDL has cared for the adult over a long period of time and continues to do so, and that she is accessible and available to the adult.
Edmund Saw submitted that, in contrast to the actions of the administrator, WDL consistently paid all loan repayments on behalf of the adult whilst acting as the his attorney. He provided that WP has incurred additional costs due to decisions of the administrator in relation to fees and charges, and that the representatives of the Public Trustee of Queensland have been “dragging their feet” in relation to placing the property on the market, after his client “took the initiative” to progress the sale of the property due to her awareness of the costs involved if the property were to be sold by the mortgagee.
In his submissions Edmund Saw stated the administrator has provided insufficient funds to the adult for living expenses, (including food, tobacco, and petrol), and that the trust officers have been difficult to contact.
In her evidence to the Tribunal WDL provided additional information in relation to her actions as the adult’s attorney when purchasing the Gympie property, and since the appointment of the Public Trustee of Queensland. She stated that when she purchased the property on behalf of WP she did not consider implications in relation to the adult’s Centrelink pension and tax liabilities. She said she did not enquire about costs and fees associated with subdivision, as this was to be managed by KM as per the informal agreement.
WDL told the Tribunal she knew the subdivision was not going ahead when she learned KM was unwell on or about May 2012, and that while she was aware of the hardship provisions that were granted to KM by the National Australia Bank she did not inform the Public Trustee of Queensland.
In her submissions WDL stated that she was advised of KM’s passing on the date of his death by family members and that she did not advise the Public Trustee of Queensland.
In contrast to her oral evidence WDL’s Financial Management Plan to the Tribunal dated 4 March 2013 states her intention at that time was to sell the Gympie property “after subdivision”.
WD advised the Public Trustee of Queensland was releasing insufficient funds to pay for the adult’s living expenses. He advised the Tribunal WP and WDL have been residing with him since they returned to Victoria as they cannot afford their own accommodation. He stated that the adult’s living costs were being subsidized by his wage and WDL’s pension and that the current situation is not sustainable.
The Tribunal considered the evidence and observed that whilst acting as the adult’s financial attorney WDL did not protect the adult’s financial interests when she entered into a contract to purchase the Gympie property using the majority of the adult’s cash assets while KM provided no capital investment. The estate of KM may have a claim to a share of one third of the value of the property and a substantial share of the adult’s capital investment – despite KM’s disproportionate contribution to the purchase of the property.
During the period when WDL was acting as the adult’s financial attorney a Facility Agreement was entered into with the National Australia Bank, that was secured by the mortgage over the Gympie property, subjecting the adult to a loan repayment schedule using funds from his disability support pension.
As WDL did not formalize the proposed Joint Venture Agreement on the adult’s behalf she did not protect the adult’s financial interests in the proposed subdivision.
As the adult’s attorney WDL did not consider the likely effect of her financial decisions on the adult’s taxation liabilities and income.
In the period since the appointment of the Public Trustee, WDL did not advise the administrator of hardship provisions granted by the National Australia Bank to KM while she continued to receive funds from the administrator for the adult’s loan repayments and living expenses.
She did not advise the administrator of the death of KM and the associated implications to adult’s financial circumstances.
WDL has provided contradictory evidence to the Tribunal by verbally stating she was aware in May 2012 the subdivision project would not proceed and providing written evidence in the March 2013 Financial Management Plan stating the project was to continue. The Tribunal observes that WDL omitted the fact that KM had passed away in the Financial Management Plan.
In her evidence to the Tribunal WDL did not demonstrate an appreciation of the adverse financial consequences to the adult as a result of the loan repayments being in default in 2012 and the possibility of the mortgagee exercising power of sale.
Neither WDL nor WD provided evidence to the Tribunal that they understood that the adult has had minimal cash assets for everyday living expenses due to meeting his financial obligations in relation to the Gympie property. They did not appreciate that the administrator is unable to facilitate the immediate sale of the property and that the delay is due to KM dying intestate. They did not demonstrate that they identified a disparity between the adult’s contribution to the purchase of the property and that of KM, or that they would negotiate a distribution of the proceeds of the sale to reflect the disparity between the parties’ contributions.
On balance, the Tribunal is of the view that the adult’s financial circumstances have been adversely impacted upon by the actions of WDL both as his attorney and, since the appointment of the administrator, as a part owner of the Gympie property.

The Tribunal determines that in the period under review the Public Trustee of Queensland has been diligent in his efforts to manage the adverse consequences to the adult as a result of the decisions of his former attorney, and the administrator’s efforts to protect the adult’s financial interests have been compromised by the continuing actions of WDL as a tenant in common of the Gympie property.
The Tribunal determines that the Public Trustee of Queensland, an experienced and independent administrator, has acted in accordance with the terms of the order of 3 August 2011 and has fulfilled the obligations under the Act.
The Tribunal is satisfied that, pursuant to s 31 of the GAA Act, the Public Trustee of Queensland is competent and that no other person is more appropriate for appointment as administrator for the adult.
The Tribunal therefore continues the appointment of the Public Trustee of Queensland as administrator for WP to make decisions about all financial matters until further order of the Tribunal.
The Enduring Power of Attorney dated 22 July 2008 and any purported Enduring Powers of Attorney are overtaken by this appointment, and can no longer be acted upon to the extent the appointment was made.
In order to address decisions in relation to the adult’s real property, the administrator is directed to submit a financial management to the Tribunal within six months.