SBER

[2015] QCAT 154

CITATION: SBER [2015] QCAT 154

PARTIES:	SBER
APPLICATION NUMBER:	GAA662-15

MATTER TYPE: Guardianship and administration matters for adults

HEARING DATE: 15 April 2015

HEARD AT: Toowoomba

DECISION OF: Member Bayne

DELIVERED ON:

DELIVERED AT:

ORDERS MADE:

4 May 2015

Brisbane

ADMINISTRATION

1.    The administration order made by the Tribunal on 22 May 2014 is changed by removing AJ and SS as administrators for SBER for all financial matters. 

2.    The Public Trustee of Queensland is appointed as administrator for SBER for all financial matters.

3.    The administrator is to provide a financial management plan to the Tribunal within four (4) months.

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

5.    This appointment remains current until further order of the Tribunal. 

NOTICE OF INTEREST IN LAND

6.     That before 15 July 2015 the administrator must:

(a)   Search the records of the Registrar of Titles to identify any property registered in the adult’s name.

(b)   Give the registrar of titles a copy of this order and a notice to the registrar advising that any interest in property held by the adult is subject to this order.

(c)   Give to the Tribunal:

(i)    a copy of the “Lodgement Summary Form” from the Titles registry confirming the notice has been lodged for each property held by the adult; and

(ii)   a copy of the current title searches.

7.     If the ownership of any property of the adult changes in any way or the adult acquires an interest in another property the administrator must, within 14 days of such changes:

(a)   give a copy of this order to the Registrar of Titles and

(b)   give a notice to the Registrar about the changes or the adult’s interest in another property.

CATCHWORDS:

GUARDIANSHIP – adult has cognitive
impairment –one administrator has acted incompetently – one administrator does not wish to act – The Public Trustee of Queensland is more appropriate.

Guardianship and Administration Act 2000
(Qld)
Trusts Act 1973 (Qld)

APPEARANCES:

SB                  the adult
AJ                 sister and administrator
SS                 brother and administrator (by telephone)
LB                  representing The Public Trustee of Queensland

REASONS FOR DECISION

1. SBER (known as SB) is aged 56 years and lives in his own home in Queensland.

2. On 6 March 2012, the Tribunal appointed SB’s siblings, AJ and SS, as his joint and several administrators. This appointment was made until further order, to be reviewed in five years.

3. On 22 May 2014 however, the Tribunal initiated a review of the appointment of the administrators due to an unauthorised conflict transaction[1]. The appointment of both administrators was continued, with the appointment to be reviewed in two years.

   [1]A loan of $15,000 to JA, since repaid.

4. A further Tribunal-initiated review was held on 15 April 2015 due to the administrators’ refusal to implement the investment strategy recommended by a licenced financial planner.

Does SB have capacity for decisions about financial matters?

1. In undertaking a review, the Tribunal is guided by s 31 of the Guardianship and Administration Act 2000 (Qld). In brief, the Tribunal is to undertake a review as though the matter was coming to the Tribunal for the first time.

2. I therefore first considered SB’s current capacity to make decisions about financial matters.

3. SB has been diagnosed with paranoid schizophrenia, and receives a Disability Support Pension. A health professional’s report received on 20 December 2011 from a doctor of a regional hospital outlined SB’s difficulties in financial decision making[2].

   [2]Albeit written when SB was in hospital with an exacerbation of his mental illness.

4. In the absence of a more recent health report, I relied on the current views of SB and his family.  

5. AJ is convinced that SB is unable to manage his finances, a position that she has not changed substantially since 2012; she has also had significant concerns as to his financial vulnerability[3].

   [3]In a letter written in February 2012, AJ informs: In the past two years… he has   disposed of a $90,000 bank account, … a share portfolio of almost $100,000 and a coin collection worth over $50,000.

6. Concerned at present as to SB’s reliability in paying bills, AJ pays for expenses including household insurance, health insurance, lawn mowing, rates and water charges; SB is responsible  for the costs of house cleaning, meals on wheels, phone, electricity, bus fares, entertainment and personal care.   AJ visits SB twice a week, does his laundry and ironing and takes him shopping when required.

7. From his own evidence, SB clearly depends on AJ for significant support in financial decision-making.  AJ and SS agreed.

8. I find that SB’s cognitive functioning is affected to the extent that he is dependent on others for all significant and/or complex financial matters.  The presumption of capacity contained in the Act is rebutted in SB’s case for decisions relating to financial matters.

Is there a need for the appointment of an administrator?

1. SB has substantial financial assets. As well as his principle place of residence, he has superannuation and various cash investments.

2. There was general agreement among the parties attending the hearing that there is a need for the appointment of an administrator.

3. The duties of an Administrator are provided in the Act[4]. The General Principles that must be followed to ensure the effective and responsible administration of the adult's finances include the requirement to:

   (a)  Determine the full nature and extent of the adult's financial interests; 

   (b)  Ensure all entitlements to income or benefits such as pensions are obtained; 

   (c)  Develop a budget covering expected income and expenditure that ensures financial security and maximises the adult's independence and quality of life; 

   (d)  Maintain clear and accurate records, including receipts, of all actions taken on the adult's behalf; 

   (e)  Initiate or follow-up any matters that affect the adult including taxation, social security, legal claims and insurance; 

   (f)    Ensure that the adult and their relatives and carers participate in the decision-making process; 

   (g)  Recognise and take into account the adult's cultural and religious values; and

   (h) Act in accordance with Part 3 of the Trusts Act 1973 (commonly known as the Prudent Person Rule) when making or maintaining investments on behalf of the adult. This includes an obligation to review the performance of investments on an annual basis at minimum, to consider the risk of capital or income loss or depreciation, the likely income return and the timing of income return. 

Are the current administrators competent or is someone else more appropriate for appointment as administrator?

[4]On 6 March 2012 JA signed a QCAT checklist ‘Your duties as an administrator’ which summarises the role and responsibilities of administrators.

1. AJ has been acting severally as SB’s administrator.

2. SS stated that he has not acted in the role since his initial appointment in 2012. From his evidence, it is clear that he has left almost all of the decisions and action to AJ and has not participated in the duties he had as joint and several administrator. AJ agreed.

3. SS explained that he lives near Rockhampton and due to other commitments is not able to be actively involved with SB.  SS informed that he does not wish any ongoing responsibility for the management of his brother’s financial matters.

4. The administrators’ investment strategy has been to retain all of SB’s considerable assets in various bank accounts, including fixed term deposits.

5. On 22 May 2014, however, the Tribunal directed that an updated financial management plan including a copy of a statement of advice obtained from a licensed financial planner be forwarded to the Tribunal. These were provided[5] and, following an examination by the Tribunal, letters were sent on 22 September 2014 and 17 November 2014 seeking clarification from the administrators as to whether they intended to implement the investment strategy recommended in the SOA, and the reasons why not, if they did not.

   [5]The Statement of Advice (36 pages) dated 31 July 2014 was prepared by a licensed financial planner.  

6. In response to the first letter, AJ wrote on 26 September 2014:

   ‘I have been through this statement with SB explaining what has been suggested. He has stated he does not wish to have his finances changed from the arrangements we have in place at the present … I do not wish to go against SB’s wishes so his investments will stay as they are’.

7. In response to the second, AJ wrote on 19 November 2014:

   ‘I stated in my previous letter to you that SB did not wish to continue with the advice of the Financial Plan and wished his finances to remain as they are. I do not consider there is a necessity to provide any further information to you regarding this matter’.

8. Initially it seemed that, despite her declaration that SB is not competent to manage his own financial matters and that she has been concerned as to his financial vulnerability, AJ chose to continue a management and investment strategy in compliance with SB’s wishes. 

9. Clarification of this position was however forthcoming in the hearing.

10. AJ stated that she had read the SOA. She said that she had rejected its recommendations primarily because of the fees and charges (page 19)[6]  and because she did not consider that investments in shares (page 15) were desirable. AJ also believed[7] that SB’s DSP entitlements would be reduced if the recommendations of the SOA were implemented.

    [6]AJ sent a copy of page 19 to SS. SS did not request any other pages or, but agreed with AJ that the fees were too high.

    [7]And had seemingly also convinced SB.

11. Despite a plethora of tables, several charts/graphs, paragraphs of explanation and the repeated use of the word ‘superannuation’ in the SOA, AJ failed to recognise that the strategy recommended in the document involved a superannuation platform. The advantages listed (page 12) include an increase in SB’s DSP entitlement because of a significant contribution to superannuation.  When the questioning persevered in the hearing, AJ stated that she ‘must have missed it’.

12. The evidence supports a position that the administrator did not reject the specific superannuation strategy because, for example, that strategy might have been more costly than other such schemes. The recommendations were rejected because they were not as SB wished, and on AJ’s basic inability to understand the financial recommendations and her incorrect assumptions about some of them.

13. It is not only that administrator has apparently failed to comprehend most of the document, she has also failed to recognise the possibility of ramifications of her inability to do so. AJ has not taken any steps to clarify the contents of the SOA, has not sought alternative advice or further sought to inform herself.

14. Although SB should be afforded maximum participation, minimal limitations and substituted judgment[8], it is clear that he would have been dependent on the administrator, who did not understand the SOA, to explain the document to him.

    [8]Guardianship and Administration Act 2000 (Qld) Schedule 1 Principles; s 7 in particular.

15. The administrator has also failed to comply with directions in the Tribunal’s Orders:

    a)    SB’s assets have not been fully disclosed in various financial documents submitted. His existing superannuation is missing from the 2014 and 2015 returns and indeed was not identified as an asset until mentioned in the SOA;

    b)    Several of the returns are missing from the 2015 documents provided.  These include a few pages of bank account statements, a copy of the latest CentreLink statement and information about SB’s current share portfolio[9]; and

    c)    Receipts for over $500 for the operating account managed by SB have also not been provided.

    [9]Identified as an asset previously; I was informed in the hearing on 15 April 2015 that these had been sold some time ago.

16. In addition, it would appear that the administrator has not adequately monitored the use of funds available to SB. AJ[10] indicates that the DSP and interest from the term deposits are regularly deposited into SB’s operating account, and SB is responsible for paying expenses of approximately $350 per fortnight. Copies of this bank account statements indicate however an average withdrawal rate in 2014 well in excess of this; $3,595 was for example recorded for September 2014.

    [10]See paragraph 6 above.

17. Given AJ’s professed belief in SB’s financial vulnerability, it is also of concern that significant funds are available to him at all times[11], possibly at his discretion to spend. The safeguards put in place, if any, by the administrator are unclear.

    [11]Over $22,000 as at December 2014.

Discussion

1. As above, the legislation outlines the responsibilities of appointed administrators. It is the duty of administrators to exercise their power for an adult with impaired capacity with reasonable diligence to protect the adult’s interests[12]. Furthermore, administrators are required to perform their duties in accordance with the Tribunal’s orders and directions[13].

   [12]Guardianship and Administration Act 2000 (Qld) s 35.

   [13]Ibid s 36.

2. Administrators must also exercise the care, diligence and skill a prudent person of business would exercise in managing the affairs of other persons[14]. This is set out in section 24(1) of the Trusts Act 1973 (Qld) and requires administrators to have regard to many factors when making investments including the desirability of diversification.

   [14]Trusts Act 1973 (Qld) s 22(1)(b).

3. I do not challenge AJ’s care of her brother. On 15 April 2014, she wrote: ‘I have religiously looked after SB for many years at great cost to myself’ and on 7 May 2014: ‘I look after SB on my own, I take care of all of his financial responsibilities, his personal cares and spend a lot of my time ensuring he is looked after correctly’.

4. It is also apparent that AJ believes that she has managed SB’s finances well.

5. I am convinced however that AJ demonstrates only a superficial understanding of the role and responsibilities of an administrator under the legislation. AJ has failed to provide adequate explanations for many of her decisions and has not abided by orders and directions of the Tribunal.

6. Under s31 of the Act, the Tribunal can only change an appointment if only if the tribunal considers—

   (a) the appointee is no longer competent; or

   (b) another person is more appropriate for appointment.

7. Based upon the evidence presented, I find that AJ  is not  competent to fulfil the roles required of her in that:

   a)    a relevant interest of the adult has not been, or is not being, adequately protected; and

   b)    the appointee has neglected the appointee’s duties[15].

   [15]Guardianship and Administration Act 2000 (Qld) s 31(5).

8. I consider the options for a more appropriate appointment.

9. As no other party has expressed interest in the role of administrator, I find that an independent decision-maker is necessary.

10. I therefore change the appointment made by the Tribunal on 22 May 2014 and appoint the Public Trustee of Queensland as administrator for SB until further order of the Tribunal. The reporting requirements are set out in the order.