RGP and MCTB
[2011] WASAT 52
•28 JANUARY 2011
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: HUMAN RIGHTS
ACT: GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA)
CITATION: RGP and MCTB [2011] WASAT 52
MEMBER: MR M ALLEN (SENIOR MEMBER)
HEARD: 13, 18, 24 AND 28 JANUARY 2011
DELIVERED : 28 JANUARY 2011
FILE NO/S: GAA 3673 of 2010
GAA 3682 of 2010
GAA 3692 of 2010
GAA 3693 of 2010
BETWEEN: RGP
Applicant
AND
MCTB
Represented Person
Catchwords:
Guardianship and administration - Application for administration order and orders intervening in an enduring power of attorney - Proposed represented person elderly woman - Medical evidence of developing dementia and incapable of understanding complex information regarding her assets held within family trusts and nature of transactions undertaken by her relating thereto - Finding that unable to make reasonable judgments regarding financial affairs - Appointment of daughters as limited administrators to investigate nature of recent transactions and to decide whether applications should be made to the Tribunal in relation to them and in relation to the enduring power of attorney, the donee of which is the son of the proposed represented person - Direction that the donee provide the administrators with documentation and information regarding the transactions
Legislation:
Guardianship and Administration Act 1990 (WA), s 3 s 4(2), s 64(1), s 64(1)(a), s 108, s 108(1), s 108(2), s 109, s 109(1), s 109(1)(a), s 109(1)(b)
Result:
Order made appointing joint limited administrators
Direction given to donee of enduring power of attorney
Category: B
Representation:
Counsel:
Applicant: Self-represented
Represented Person : Self-represented
Solicitors:
Applicant: N/A
Represented Person : N/A
Case(s) referred to in decision(s):
Nil
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
Three daughters of an elderly woman sought the appointment of an administrator of their mother's estate and orders requiring their brother, as the donee of their mother's enduring power of attorney, to produce documents and records relating to a series of transactions concerning their mother's affairs.
The Tribunal was satisfied from the medical and other evidence that the mother was unable to understand the complex nature of how she and her late husband owned substantial assets via two family trusts, nor did she understand a series of transactions by which she had resigned as a director of and transferred her shares in two trustee companies to her son. She was, therefore, unable to make reasonable judgments in relation to her financial affairs and a person in respect of whom an administration order could be made.
The Tribunal considered that there were reasons to suspect that the effect of the transactions was to extinguish a debt due to the mother by one of the trusts and to enable the son to be in a position to control the trustee companies and the two trusts and, hence, to be in a position to determine how the income and capital of the trusts could be distributed during his mother's lifetime and on her death. She was therefore in need of an administrator.
The Tribunal appointed the three daughters as limited administrators to investigate the nature of the transactions entered into and to determine whether any further applications needed to be made to the Tribunal in relation to those transactions or the enduring power of attorney. The son, in his capacity as donee of the enduring power of attorney, was directed to provide documents and other information relating to the transactions to the administrators.
The limited administration order is to be reviewed at the end of six months.
Background
MB (whom I will refer to in these reasons as Mrs B) was, at the time of the hearings in the proceedings, 90 years of age and has been a widow for approximately one year. She and her late husband moved into a nursing home in late 2009. Mrs B has four children, the applicant, RP (whom I will refer to in these reasons as Ms P), two other daughters (Ms G and Ms AB), and one son (Mr B).
In December 2010 Ms P applied to the Tribunal, supported by her two sisters, seeking guardianship and administration orders under the Guardianship and Administration Act 1990 (WA) (GA Act) and orders pursuant to s 109 of the GA Act in relation to an enduring power of attorney (EPA) by which Mrs B had appointed Mr B as her attorney. Hearings were held on 13 and 18 January 2011 at the Tribunal's premises and on 24 January 2011 at the nursing home where Mrs B resides. In view of the urgency of the matter, on 28 January 2011 I announced my decisions in the proceedings and indicated that I would publish reasons for the decision subsequently. These are those reasons.
Late in the proceedings, Ms P advised me that she wished to withdraw the application for a guardianship order and was supported in that request by her two sisters. In the light of the evidence that I had heard, I considered that this was an appropriate step to take and would not be contrary to Mrs B's best interests. Accordingly, on 28 January 2011 I granted Ms P leave to withdraw the application for a guardianship order and I need make no further reference to that part of the proceeding.
The other orders that I made on 28 January 2011 were as follows:
The Tribunal declares that it is satisfied that [Ms B] (the represented person) is:
(a)unable, by reason of a mental disability, to make reasonable judgments in relation to all of her estate; and
(b)is in need of an administrator of her estate.
The Tribunal orders that:
1.[Ms AB, Ms G and Ms P] are appointed joint limited administrators of the estate of the represented person with the following functions:
(a)To obtain, on behalf of the represented person, relevant information concerning the management of the represented person's estate since 1 June 2010, including all transactions entered into by the represented person, or on her behalf, since that date;
(b)To investigate the management of the represented person's estate since that date, including the nature of any such transactions and the circumstances in which they occurred;
(c)To determine whether, in relation to any such transactions an application should be made to the Tribunal under s 82 of the [GA Act] or under any other provision of that Act, and to make any such application in a timely manner; and
(d)To determine whether any application should be made to the Tribunal for the revocation of, or other orders in relation to, an enduring power of attorney made by the represented person on 22 March 2007 (the enduring power of attorney), and to make any such application in a timely manner.
2.[Mr B], in his capacity as donee of the enduring power of attorney, is to provide to the administrators such information, documents or other material relating to matters connected with the exercise by him of the enduring power of attorney as the administrators may request in the exercise of their functions.
3.The applications under s 109 are otherwise dismissed.
4.The Tribunal will commence a review of this order by 28 July 2011.
Statutory framework and issues to be determined
Section 64(1) of the GA Act provides that an administration order can be made in respect of a person if the Tribunal is satisfied that the person:
...
(a)is unable, by reason of a mental disability, to make reasonable judgments in respect of matters relating to all or any part of his estate; and
(b)is in need of an administrator of his estate, …
A 'mental disability' is defined in s 3 of the GA Act to include an intellectual disability, a psychiatric condition, an acquired brain injury and dementia.
Section 109(1) of the GA Act empowers the Tribunal to make orders, on the application of a person with a proper interest in relation to an EPA, as relevantly follows:
...
(a)requiring the donee of an [EPA] to file with the Tribunal and serve on the applicant a copy of all records and accounts kept by the donee of dealings and transactions made by him in connection with the power;
(b)requiring such records and accounts to be audited by an auditor appointed by the Tribunal and requiring a copy of the report of the auditor to be furnished to the Tribunal and the applicant for the order;
(c)revoking or varying the terms of an [EPA], appointing a substitute donee of the power or …
Section 4(2) of the GA Act sets out principles that must be observed by the Tribunal when dealing with proceedings under that Act. In summary, and in the context of the current proceedings, these principles are:
(a)the primary concern shall be the best interests of the person the subject of the proceedings;
(b)every person is presumed to be capable of making reasonable judgments in respect of matters relating to his estate until the contrary is proven to the satisfaction of the Tribunal;
(c)an administration order should not be made if the needs of the person could be met by other means less restrictive of the person's freedom of decision and action;
(d)an order appointing a limited administrator for a person shall be in terms that impose the least restrictions possible in the circumstances on the person's freedom of decision and action;
(e)in considering any matter, the Tribunal shall as far as possible seek to ascertain the views and wishes of the person concerned as expressed at the time or as gathered from the person's previous actions.
The issues for the Tribunal to determine in these proceedings are whether, having regard to the above statements of general principles, the requirements for the making of an administration order are made out in relation to Mrs B and, if they are, who should be appointed as administrator and with what functions and powers. In addition, the Tribunal must consider whether any orders should be made under s 109 of the GA Act.
Capacity to make reasonable judgments about her estate
The first question to be addressed is whether or not Mrs B is capable of making reasonable judgments in respect of matters relating to all or part of her estate. Before addressing that question, however, it is necessary to understand what her estate consists of.
Prior to taking up residence in the nursing home, Mrs B and her late husband sold their former matrimonial home for a substantial amount of money. Approximately $800,000 was paid to the nursing home by way of a bond for the two of them and half of that amount (in respect of Mrs B's husband) is presently refundable to his estate but has not yet been repaid. The balance of the proceeds of the sale, plus other amounts (after making cash gifts to their children), is presently held in a joint account in the name of Mrs B and her late husband and in term deposits.
The major income of Mrs B and her late husband came from their major asset, which consists of 12 medical suites that were purchased some years ago. Mr B gave evidence that in 2011 Mrs B would receive a distribution of $60,000 from a trust which, together with interest earned on various accounts, would give her a total income of about $87,000 and total expenses of about $74,000.
The medical suites are held within two discretionary trusts, although the relationship between the trusts and precisely how the assets are held did not appear from any of the evidence that was given in the proceedings. I will refer to the two trusts as the H Property Trust and the B Family Trust, the corporate trustees of which appear to be, respectively, H Nominees Pty Ltd (H Nominees) and G Nominees Pty Ltd (G Nominees). It appears, although there was some uncertainty, that Mrs B was the owner of one share in both trustee companies and a director of both of them. As she was the sole beneficiary of her late husband's estate, she appears to have become entitled to a second share in each of the trustee companies. It also appears that on the death of her husband, Mrs B became the guardian and appointor in relation to both trusts, although the Tribunal was not provided with any of the constituent documents of the trust or the terms thereof and it remained at all times unclear what the guardian and appointor of each trust could lawfully do.
The management of Mrs B's financial affairs is currently undertaken by her son, Mr B, pursuant to the terms of an EPA that was made by Mrs B in March 2007. By that document, Mrs B appointed her late husband as her sole attorney with her son, Mr B, to be her sole substitute attorney once Mrs B's husband was unable or unwilling to act. It appears that Mr B has exercised the powers under that EPA since the death of his father.
I was told by Mrs B's three daughters, and I accept, that the reasons they made the applications to the Tribunal were primarily because of their concerns about transactions that had been undertaken since their father's death - either directly by Mrs B under the guidance of Mr B or by Mr B in the execution of his powers under the EPA - and because they had been unable to obtain any reasonable information about the nature of the transactions and their consequences for Mrs B's financial position and future financial security. They were particularly concerned about transactions undertaken at the end of November 2010, which I now describe.
In circumstances that are by no means clear, but which were obviously arranged by Mr B, on 30 November 2010 a meeting was held between Mrs B, Mr B and two representatives of the legal firm retained by Mr B. Mr B was unable or unwilling to provide specific information to the Tribunal about the precise nature of the transactions that were completed at that meeting, other than in relation to one aspect of Mrs B's will, which will be referred to below. The best evidence available to the Tribunal as to what happened at the 30 November meeting is a letter dated 2 December 2010 from the legal firm to Ms A, who is an accountant who looked after the financial affairs of Mrs B and her husband and who was one of two executors of their wills (jointly with Mr B).
The letter enclosed copies of a range of documents and instructions to Ms A to make changes to various corporate records. It appears from that letter that both H Nominees and G Nominees adopted new constitutions and the B Family Trust amended its trust deed in several ways, one of which was to provide that upon Mrs B's death Mr B became the guardian and appointor of that trust. Another change in relation to the B Family Trust was that the trustee company was no longer excluded from being a general beneficiary under the trust. It appears that for both H Nominees and G Nominees there was a transfer to Mrs B of her husband's share in the two companies and then a subsequent transfer of Mrs B's shares to Mr B. In addition, Mrs B resigned as a director of both companies and it appears, although it is not certain, that Mr B became a director of both companies.
In addition to the above, a transaction is recorded involving the H Property Trust that involved the 'capitalisation' of a loan account amount of $900,134. This is a loan that was apparently made by Mrs B's late husband to the trust some years ago to fund the purchase of the medical suites. It appears to have stood in the books of account of the H Property Trust as a debt due from the trust to Mrs B's late husband and, accordingly, formed part of the estate of Mrs B's husband and was, therefore, inherited by Mrs B as the sole beneficiary of that estate. Mr B was asked at the hearings on a number of occasions to explain what he understood the effect of that transaction was. He appeared unable or unwilling to do so, other than to concede that the effect appeared to be to remove the loan as a liability of the trust. He was not willing to concede that the other side of the transaction was that the loan ceased to be an asset of his late father's estate and hence not an asset to be inherited by his mother.
I turn then to the question of Mrs B's capacity to make reasonable decisions about her financial affairs. The following written medical reports concerning Mrs B's capacity were provided to the Tribunal.
Dr EC
Dr EC, who is a general practitioner, provided a report dated 22 December 2010. She has known Mrs B for approximately one and a half years and described herself as Mrs B's regular medical attendant. Dr EC said that she had first recognised an impairment of Mrs B's cognitive abilities in October 2009 describing the impairments as being shortterm memory loss and several episodes of an acute confusion. A CT scan had shown moderately severe small vessel ischemia, which certainly could contribute to, if not cause, cognitive impairment.
Dr EC expressed the opinion that Mrs B could not make reasonable decisions about personal healthcare, her living situation or her financial affairs, nor was she capable of executing a valid EPA at the time of the report. Dr EC thought that Mrs B could make no contribution to the hearing of the applications.
Dr JC
Dr JC is a consultant geriatrician and provided a report dated 9 January 2011. She has known Mrs B since October 2009 when Mrs B was admitted to hospital with increasing confusion, visual hallucinations and weight loss. The diagnosis at that time was prolonged delirium complicated by a fall resulting in a fracture that required a total hip replacement. Her hallucinations settled and her cognition slowly improved. Dr JC was of the opinion at that time that Mrs B had an emerging dementia which made her vulnerable to developing delirium when unwell. She could not exclude Alzheimer's disease or dementia with Lewy bodies. Her cognitive impairment and the fact that she required a lot of help with activities of daily living at discharge from hospital supported the notion of an underlying disorder.
Dr JC saw Mrs B again on 5 January 2011. At that time, Mrs B confused Dr JC with Dr EC. Although her orientation had improved generally, her recall, shortterm memory and concentration had decreased. Dr JC had a long discussion with Mrs B about her finances and recorded that her understanding of issues and remembering of facts was very variable - and it was difficult to know at times whether Mrs B remembered an incident or simply believed that something should have happened. She was able to recall that the main asset of she and her late husband were the medical suites and was able to recall that they were owned by a company which she was able to name. She was quite clear that she was a shareholder and a director of the company and that she had not and would not sign away that right. She was adamant that she had never been asked to do this and that her son, Mr B, would never ask her to do it. She recalled a meeting at Mr B's house before Christmas when other people were present and she remembered signing some papers at that meeting. She was unsure what they were but thought that it may have had something to do with making a new will, which she needed because her husband had died. Beyond the basic understanding that she and her late husband had a company which owned some property and that she had some income, Dr JC thought that Mrs B could not explain any of the details of her financial affairs and was very vague about what assets either she or the company owned.
Dr JC concluded that Mrs B either was not told, did not understand at the time, or can not now remember, what the content of the papers that she signed in late 2010 was. Dr JC thought that Mrs B was very vulnerable to suggestion because of her poor memory and decreased cognitive abilities, especially her ability to reason and integrate new information. In Dr JC's opinion, Mrs B did not have the capacity to understand the financial consequences and implications of giving up her share or directorship of her family company and trust even if it were explained to her. Dr JC doubted that Mrs B understood the extent of her estate and would not be able to understand the implications of moving property into a trust and hence that it was not part of her personal estate.
Dr M
Dr M, who is a consultant physician, provided a report dated 5 January 2011, having reviewed Mrs B on that day at the request of a general practitioner other than Dr EC. This had been arranged by Mr B. Mrs B displayed no evidence of psychotic phenomena, was generally oriented and was able to describe her immediate family. She provided information regarding her current assets. Dr M considered that, despite Mrs B's ongoing memory impairment, she displayed testamentary capacity. Dr M stated that Mrs B's ability to understand more complex documents is limited and that it was likely that for many years she had been uncertain about the exact structures of the family businesses, which were probably the domain of her late husband. He thought that Mrs B's competence needs to be considered issue by issue and that it is likely that complex matters would be beyond her abilities.
Ms JK
A report was also provided to the Tribunal by Ms JK, who is the manager of the nursing home at which Mrs B resides. The report stated that all four of Mrs B's children visit regularly but Mrs B does not remember visits and sometimes gets upset that she hasn't seen her family, when she actually has. The report noted that there was some lack of communication between some family members. Ms JK reported that increasing confusion by Mrs B had been noted and that she got reality confused at times, and became upset and delusional. Ms JK offered the opinion that Mrs B was not capable of making decisions or judgments for herself due to the level of her dementia, about which she lacked insight.
Evidence at the hearing
At the hearing on 24 January 2011, Dr M and Dr JC gave evidence concurrently at the Tribunal's direction, having previously seen each other's reports and having conferred about the matters upon which they agreed and any matters upon which they disagreed. Their concurrent evidence was that they agreed that Mrs B would not be capable of making decisions about anything that was complex. She was capable of giving directions of a general nature, but she was not capable of understanding transactions or executing documents that were of any degree of complexity.
Dr JC identified that there was a slight difference between herself and Dr M in relation to whether or not Mrs B had testamentary capacity. Dr JC believed that she did not, whereas Dr M thought that she may have. Dr M clarified this aspect of his evidence by noting that Mrs B was able to give him information regarding assets and how they might be divided amongst her children. His opinion was premised on a major assumption that the information that Mrs B provided regarding the assets was correct and it was clear from his discussion with her that she believed that she had ownership of the major assets and could bequeath them by will. Dr M confirmed that Mrs B was not able to understand or retain any information of complexity regarding the ownership of assets. Dr JC and Dr M agreed that the fact that Mrs B did not remember the transactions or documents that she had executed in late 2010 indicated that she was vulnerable because, if she signed significant documents and could not remember the details or implications of them later, then that was an indication that she was not capable of understanding transactions of that complexity.
Mr B said in evidence that he considered his mother to be generally capable of making decisions about her financial affairs and that he kept her fully informed about any transactions or matters affecting her. He said Mrs B had attended a meeting with the legal advisors on 15 November 2010 when the nature of the transactions was explained to her and she understood well what was involved. She had subsequently confirmed that she wished to proceed with these transactions and the meeting on 30 November 2010 had proceeded accordingly, with Mrs B signing all the various documents personally.
It was the evidence of Mrs B's three daughters that they considered Mrs B, at around the time of that meeting, to be quite incapable of in any way understanding the nature of the transactions or to give instructions for them. They tendered an instruction sent by Dr EC to the nursing home dated 16 November 2010 about Mrs B's care, which noted that Mrs B was becoming confused and delusional.
Mrs B gave evidence to the Tribunal at the hearing on 24 January 2011. She recalled attending the meeting on 30 November 2010, but could say only that she thought it had something to do with the preparation of a will. She thought that a new will was required because her husband had died and her will needed in some way to be updated. She could not say how the new will differed from her previous will. She made no reference to the fact that the nominated executors of the new will differed from those in the previous will.
It was evident from Mrs B's evidence that she had no material recollection of having entered into the range of transactions concerning the companies and trusts described above. She said she didn't think she had signed documents other than a will. Mrs B said that she didn't know whether she owned shares in the company H Nominees or whether it was only her husband that had owned shares. She thought that he would have been a director and she thought that she was a director. She said that she would be surprised to learn that she had transferred any shares that she may have inherited from her husband to her son. She appeared to have no recollection of any such transfer or any resignation by her of her position as a director of any company.
It was also clear from the evidence of Dr EC, Dr JC and Dr M that Mrs B suffers from a degree of dementia and hence has a mental disability as that term is defined in s 3 of the GA Act. She is to be presumed capable of making reasonable judgments about her financial affairs unless I am satisfied to the contrary. I am satisfied from the evidence of Dr JC and Dr M, and from my own observations of Mrs B and the evidence that she gave at the hearing, that her memory impairment is significant and that she does not now, if she ever did, understand precisely what assets she has or has inherited from her late husband or how those assets have been held in the past by companies and trusts. It is fair to say that those financial arrangements are quite complex and Mr B, who is the donee of the EPA, was unable to provide the Tribunal with a clear description of the relationship between the two trusts and how trust income worked its way through those trusts in order to be distributed to beneficiaries. It is clear from Dr JC's evidence that Mrs B, in early January 2011, believed that she had been and remained a shareholder and director of at least one of the companies when that was not in fact the case following the 30 November 2010 transactions. I am satisfied that at the time of the hearings of these proceedings Mrs B did not recall what transactions had been entered into by her or on her behalf and she was incapable of understanding and recalling information about any transaction of any degree of complexity. The transactions at the end of November 2010 were clearly complex in their nature and I am satisfied she did not have the capacity to understand them at the time or subsequently - even if (about which I make no finding) she was provided with information about the transactions at the time.
It follows from the above that, in my opinion, Mrs B was and remains incapable of understanding the detail of her assets and how they have been dealt with in the recent past. The presumption relating to Mrs B's capacity to make judgments about her financial affairs has been rebutted and I am satisfied that Mrs B is a person for whom an administration order could be made because the requirements of s 64(1)(a) of the GA Act have been satisfied.
Need for an administrator
A person can be said to need an administrator if the person's financial affairs are of such a nature that there are actions to be taken or decisions to be made about those affairs that the person is not able to undertake personally - and which will not otherwise be possible unless another person is given the authority to undertake them on the first person's behalf or unless there is some other informal way in which the necessary actions and decisions can be taken.
In Mrs B's case, her day to day affairs are managed by Mr B exercising the EPA, and Ms P and her two sisters are not presently seeking to interfere with that arrangement. Rather, the three daughters seek information about the true and full extent of the transactions that have been undertaken by Mrs B or on her behalf since the death of their father. They are concerned, from what they know about the transactions that occurred on 30 November 2010, that the transactions may have been to Mrs B disadvantage and, perhaps, in the longer term to their disadvantage.
Having considered carefully all the material and information available to me I am satisfied that it would be in Mrs B's best interests if a person or persons were appointed to perform a limited role as her administrator - primarily to investigate precisely what has happened in relation to her financial affairs in recent times. I have arrived at this conclusion by reason of the following matters:
a)The 'capitalisation' of the loan due to Mrs B's late husband by the H Property Trust appears to remove that as an asset of his estate and hence an asset that Mrs B would inherit, which in turn would be inherited by all four of Mrs B's children on her death. Instead, the net assets of the trusts would be increased by the amount of the loan, which would be distributable at the discretion of the trustee(s) of the trusts.
b)It is not known whether Mrs B's new will alters that inheritance arrangement, as none of her children, apart from Mr B, has seen the new will. As noted above, Mrs B's only recollection about the new will was that she thought it was needed because her husband had died. Mr B gave evidence that he had received advice that Mrs B's will (and that of her late husband) had in some way been deficient because it attempted to deal with trust assets that did not form part of their personal estate. He was shown a copy of Mrs B's late husband's will, which he acknowledged was the same as Mrs B's earlier will, but he could not identify what was the deficiency. It was later in the hearing on 24 January 2010 and when Mrs B was no longer present, that Mr B disclosed that the new will had appointed a new executor. The previous will had appointed Mr B and Ms A, who had managed their parents' affairs for many years, as joint executors. Mr B first said that the new executor was himself, but subsequently said that the new will appointed himself and a Mr S jointly. He said that Mr S had been recommended to him by one of his in-laws and he (Mr B) had met Mr S only once. Mrs B has never met Mr S. Because this new information was received when Mrs B was not available to give further evidence to the Tribunal, it was not possible to ask her whether she recalled anything about the change of executor.
c)Ms A, when she became aware of the transactions of 30 November 2010 as a result of being asked to attend to documentation of them, informed Mr B that she was no longer willing to act as accountant and tax agent for the property trusts, etc. I was referred to an email sent by Ms A to Mr B on 17 December 2011 in which Ms A cited as her reasons for this position that the changes to the trustee companies appear to be an attempt to undermine the intention to preserve the distribution of the trust assets to all four children and to provide for Mrs B - and were 'against the grain' of Mrs B's late husband's intentions. In this regard, during the hearing Mr B produced (at the request of Ms P's husband) a document dated 26 May 2008 signed by Mrs B and her late husband, and which was addressed to Mr B and Ms A. That document was carefully worded so as to avoid being characterised as a testamentary instrument or an amendment of their wills, and contained an expression of the wishes of Mrs B and her husband regarding the future management of the two trusts after the death of them both. It records that Mr B and Ms A would be in a position to control the two trusts and records the wish that the trusts not necessarily be wound up but that the income and capital of the trusts should be distributed to the beneficiaries who take the residue under the will of the survivor or them in the same proportions as those beneficiaries take. It was not in dispute that under the wills of Mrs B and her late husband at that time the residual beneficiaries were the four children in specified shares.
d)Despite their best efforts to obtain information, Mr B had declined to provide meaningful information to his sisters about the 30 November 2010 transactions. Solicitors retained by the daughters and those retained by Mr B had corresponded but, although offers were made about how Mrs B's affairs might be managed in future, there was no disclosure of anything material concerning the 30 November 2010 transactions.
The effect of the above is that I am concerned that Mr B has effectively placed himself in a position where he owns the shares in the two trustee companies and as the sole director of them he is in a position to control those companies and decisions that are to be made by them regarding the distribution of the income or capital of the two trusts, both before and after Mrs B's death. Mr B attempted to explain that this was not a cause for any concern because his mother, as the continuing guardian and appointer of the trusts during her lifetime, could in some way that was unexplained, control his actions or remove his ability to exercise any powers. He maintained that control of the trusts and the trustee companies remained with Mrs B.
Even if that is true in a strictly legal sense, about which I make no finding, in the absence of information about the terms of the trust deeds and other documents, it seems to me that it does not in any way reflect the reality of the position at the present time. I have concluded above, in the light of medical and other evidence, that Mrs B is in no position to understand any of the complexities of the current arrangements regarding her estate and in fact has a false understanding of the true position, nor is she in a position to make decisions of any complex nature regarding her affairs. I am satisfied that in a real sense Mr B is in a position to determine what income Mrs B receives during her lifetime and what happens to the trust assets on her death.
That would not necessarily be a cause for concern if there was no reason to suspect that Mr B would exercise those powers in a manner that was consistent with the views and wishes expressed by Mrs B and her late husband in the past. In fact, Mr B has apparently made substantial, although in large part unexplained, changes to the management structures around the two trusts and to the identity of the executors of his mother's will. The result is that the accountant, in whom Mrs B's late husband as the main manager of the family's financial affairs, placed reliance, and Mrs B's daughters, have been placed in a position where they fear for Mrs B's future financial security and that Mr B is placing himself in a position where the wishes of his parents can be displaced. Mr B had the opportunity in these proceedings to provide a full explanation of the transactions, how they might impact on the future management and distribution of family assets, and how he intended to exercise the powers that he now appears to have taken to himself. He did not take advantage of that opportunity.
Who should be appointed as limited administrator?
I conclude that a limited administrator should be appointed to investigate the transactions that have occurred and to determine what action, if any, should be taken in relation to them. That raises the question of who should be appointed. It is obvious that Mr B, although the donee of Mrs B's EPA, could not be asked to perform that role because he would be investigating his own actions. The Public Trustee could be appointed and would bring an impartial and professional approach to the questions to be addressed. On the other hand, the appointment of the Public Trustee would involve substantial costs to Mrs B's estate.
I consider that Mrs B's three daughters should be appointed to make the enquiries and decisions that I believe need to be made. Although it may be said that they have a vested interest in decisions made about Mrs B's estate - because they and Mr B will inherit whatever Mrs B's estate consists of at the time of her death and have an interest in how the trust assets are managed and distributed - I consider that they are motivated by their mother's best interests rather than their own. They are obviously intelligent women and they have access to legal advice about the matters they would be required to examine.
I have not overlooked that my conclusion to involve Mrs B's daughters in this way is not consistent with Mrs B's wishes. It is apparent that she believes that Mr B is the person who should be managing her affairs, that she trusts him, and that she sees no reason why her daughters should want or receive any information about her affairs.
Having ascertained those wishes, I should of course act in accordance with them unless I consider it would not be in Mrs B's best interests to do so. Reluctantly, I have concluded that this is one of those relatively rare occasions when it is necessary to depart from a represented person's wishes. I have reached this conclusion having regard to the nature of the enquiries that the limited administrators must undertake; my belief that Mrs B's daughters have a legitimate interest in knowing how their mother's affairs are being managed; my conclusions regarding Mrs B's inability to understand the nature of the transactions that have been undertaken; and my conclusion that Mr B has undertaken transactions that raise suspicions that he is not acting in his mother's best interests and which, at least, appear to be inconsistent with the wishes of Mrs B and her late husband. Whether in the end that will turn out to be the case remains to be seen when considerably more information is available about the transactions.
The enduring power of attorney
Having concluded that an administration order should be made, I am required by s 108 of the GA Act to consider whether I should revoke or vary the EPA made in March 2007. Section 108(1) provides that I may revoke or vary an EPA when an administration order is made, and s 108(2) provides that if an administration order is made and the continuation of the EPA would be inconsistent with the functions of the administrator then I must revoke or vary the EPA to remove the inconsistency.
In the present case, I do not consider that the terms of the administration order are inconsistent with the continued operation of the EPA. The purpose of the administration order is to enable the persons appointed as administrator to obtain information and make decisions about whether applications should be made to the Tribunal in relation to the EPA or otherwise. For the present, I see no reason why Mr B should not be able to manage the day to day affairs of Mrs B under the EPA.
The applications made under s 109(1)(a) and s 109(1)(b) of the GA Act sought only the production of financial books and records that would explain the transactions of concern. In the circumstances, I consider that there is no need to make any order other than a direction to the donee of the EPA, Mr B, that he must provide to the administrators documents and information regarding the exercise by him of the powers under the EPA.
Review
The administration order made must be reviewed by a date fixed by me, being not more than five years from the date of the order. Because of the limited nature of the orders made, I consider that the administrators should be able to obtain information and decide whether any action needs to be taken within six months - and so the orders should be reviewed at that time.
I certify that this and the preceding [53] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR M ALLEN, SENIOR MEMBER
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