SEI
[2014] NSWCATGD 23
•14 April 2014
NSW Civil and Administrative Tribunal
New South Wales
Medium Neutral Citation: SEI [2014] NSWCATGD 23 Hearing dates: 14 April 2014 Decision date: 14 April 2014 Jurisdiction: Guardianship Division Before: Anderson J, Senior Member (Legal)
Stone S, Senior Member (Professional)
Djoneski V, General Member (Community)Decision: Decision not to carry out a review of an enduring power of attorney and dismiss the application.
Consent to withdrawal of application to review enduring guardianship appointment.
Catchwords: ENDURING POWER OF ATTORNEY - review of making and review of operation and effect - capacity to make - undue influence - no independent advice - attorney's requirement to act - attorney's requirement to keep accounts - allegations of mismanagement - insufficient grounds to warrant review.
ENDURING GUARDIANSHIP - application to review enduring guardianship appointment - communication between family members - no immediate decisions to be made - conciliation between parties - consent to withdrawal of application.
PROCEDURAL FAIRNESS - opportunity to be heard - lack of notice to party - adjournment considered - several previous adjournments - hearing proceeded.Legislation Cited: Guardianship Act 1987(NSW)
Powers of Attorney Act 2003 (NSW)
Civil and Administrative Tribunal Act 2013 (NSW)Cases Cited: Catherine Elizabeth Parker v Margaret Catherine Higgins & Ors [2012] NSWSC 1516 Category: Principal judgment Parties: Mrs SEI (subject person)
Ms WRB (applicant, attorney and enduring guardian)
Ms TGI (attorney and enduring guardian)
Mrs DIW (alternate enduring guardian)File Number(s): 54823 Publication restriction: Decisions of the Guardianship Division of the Civil and Administrative Tribunal have been anonymised to remove any information that may identify any person involved in the Tribunal's proceedings (s 65, Civil and Administrative Tribunal Act 2013 (NSW)).
reasons for decision
What the Tribunal decided
The Tribunal determined, under section 36(1) of the Powers of Attorney Act 2003 (NSW) not to carry out a review of the enduring power of attorney made by Mrs SEI on 4 November 2009, and dismissed the application.
The Tribunal consented to the request made by the applicant to withdraw her application for review of the appointment of enduring guardian made by Mrs SEI on 17 June 2011.
Background
Mrs SEI is an 86-year-old woman who presently resides in high-level residential care at aged care facility A in East Sydney. Before aged care facility A, she resided at Aged care facility B. As well, Mrs SEI has spent periods of time in hospital.
Prior to her move to residential care in September 2013, Mrs SEI lived alone in an apartment at East Sydney, and for a period of time she was receiving support services from a community support services provider.
Mrs SEI has two daughters, Ms WRB (the applicant) and Ms TGI. Mrs SEI was married to Mr CAI, (who died in February 2014). They separated in 1994 and divorced several years later. Mrs SEI has not remarried.
Mrs SEI has dementia, which was diagnosed in 2012 by Dr Z, Geriatrician. Mrs SEI has other health concerns including hypertension, osteoporosis, chronic venous disease, mitral regurgitation and recurrent venous ulcers.
According to Dr Y, Mrs SEI's current general practitioner, Mrs SEI's dementia is advanced, severe, and affects her ability to make informed decisions in relation to her accommodation, health and medical care, and financial affairs.
Enduring Guardianship and Enduring Power of Attorney appointments
On 4 November 2009 Mrs SEI appointed her daughter Ms TGI as her attorney pursuant to an enduring power of attorney. Clause 5, 6 and 7 of the instrument authorise the attorney with additional powers to give gifts, confer benefits on the attorney and confer benefits on third parties. Clause 8 provides for conditions or limitations. None of those clauses have been crossed out. Clauses 7 and 8 provide space for insertion of relevant details, however, no such details are provided.
Ms MHB, solicitor, completed a certificate pursuant to section 19 of the Powers of Attorney Act 2003, certify inter alia that she had explained the effect of the power of attorney to Mrs SEI before it was signed, that Mrs SEI appeared to understand the effect of this power of attorney, that she (Ms MHB) is a prescribed witness, and that she witnessed the signature of this power of attorney by Mrs SEI.
On the same date, Ms TGI accepted her appointment as attorney.
On 17 June 2011, Mrs SEI appointed Ms TGI as her enduring guardian, authorising her to exercise the functions of accommodation, health care, medical and dental treatment and personal services. Mrs SEI also purports to appoint Ms DIW (daughter of Ms TGI) as an alternative enduring guardian.
Ms TGI accepted her appointment as enduring guardian. However, Ms DIW has not accepted her appointment as alternative enduring guardian.
On 6 December 2012, another enduring power of attorney and enduring power of guardianship was purportedly made by Mrs SEI and prepared by Mr OJN, solicitor. Pursuant to the enduring power of attorney, Mrs SEI purported to appoint Ms WRB and Ms TGI jointly to be her attorneys. The instrument authorised her attorneys to give reasonable gifts. It further stipulated that the power of attorney operated when as each of her attorneys accepts the appointment. Mr OJN witnessed Mrs SEI's signature and completed a certificate under section 19 of the Powers of Attorney Act.
With respect to the enduring power of guardianship, Mrs SEI purported to appoint her daughters as joint enduring guardians.
On 6 December 2012, Ms WRB accepted her appointment as an attorney and an enduring guardian. Ms TGI has accepted neither her appointment as an attorney nor her appointment as an enduring guardian pursuant to the instruments dated 6 December 2012. Ms TGI is of the opinion that at that date, her mother did not have the capacity necessary to make those powers.
Application to Review Power of Attorney
On 5 November 2013, the Tribunal received an application from Ms WRB for a review of the enduring power of attorney made by Mrs SEI on 4 November 2009.
Ms WRB sought a review of both the making and the operation and effect of the enduring power of attorney, and submitted as follows:
- That the power of attorney is unrestricted, and permits the attorney to confer benefits for living and medical expenses.
- That the power of attorney appeared inconsistent with Mrs SEI's wishes and actions.
- That the power of attorney had immediate effect.
- That it was prepared by a solicitor who is a personal friend of Ms TGI.
- That the level of explanation provided to Mrs SEI was inadequate.
- That the matter was not discussed with the Applicant at the time of the instrument's execution and the Applicant only knew about its existence in September 2012.
- That Mrs SEI relied on Ms TGI to tell her what to do.
- That attempts have been made to discuss the power of attorney with Ms TGI however this has not been able to occur because Ms TGI has cancelled those attempts.
- That Mrs SEI expressed that she wanted the power of attorney to be fair and equal, and a subsequent power of attorney instrument was drafted purporting to appoint Ms WRB and Ms TGI jointly but which Ms TGI has not signed.
- That Ms TGI has not operated in her role as attorney with openness and transparency.
- That Ms TGI arranged for Mrs SEI's property to be sold without prior consultation with Ms WRB.
- That Ms TGI has delayed mediation to discuss Mrs SEI's personal and financial affairs.
The Applicant seeks orders as follows:
(1) That the enduring power of attorney is invalid for any other reason (for example, non-compliance with requirements of the Powers of Attorney Act or that the principal was induced to make the enduring power of attorney by dishonesty or undue influence);
(2) Appoint a substitute attorney for an attorney who has been removed or where the office has become vacant;
(3) Order an attorney to furnish accounts and other information to a person nominated by the Tribunal or to the Tribunal;
(4) Lodge with the tribunal a copy of all records an accounts kept by the attorney of dealings made by the attorney under the power;
(5) That those records or accounts be audited and the report of the auditor be furnished to the Tribunal;
(6) That the attorney submit a plan of financial management to the Tribunal for approval;
(7) Revoke all or part of the enduring power of attorney.
(8) That Ms TGI is to provide any inventory of the personal property removed from Mrs SEI's apartment.
Ms WRB indicated that she did not wish to apply for a financial management order in respect of Mrs SEI.
Application to review appointment of enduring guardian
On 14 February 2014, the Tribunal received an application from Ms WRB to review the appointment of enduring guardian made by Mrs SEI on 17 June 2011. In her application, Ms WRB states that there is a need to review the enduring guardianship appointment because Ms TGI has not acted consistently with the principles set out in section 4 of the Guardianship Act ("section 4 principles"), and that a second person should be appointed to make health and lifestyle decisions for Mrs SEI because Ms TGI is not always available due to overseas travel.
Ms WRB sought an order that the Tribunal revoke the appointment and make a guardianship order, on the basis that it would be in Mrs SEI's best interests to have a guardian that maintains family relationships, acts in accordance with the section 4 principles, and is available to make medical and lifestyle decisions for Mrs SEI.
INTERLOCUTORY MATTERS
An interlocutory hearing was held on 11 February 2014, the outcome of which the Tribunal refused leave to Mr XKC to represent Ms TGI.
The application to review the enduring power of attorney was listed for hearing on 14 February 2014. On the day of the hearing Ms WRB made an application to review an enduring guardian appointment. In addition, the parties were informed of a serious health event affecting their father, and the matters were adjourned. A further interlocutory hearing was held on 11 March 2014, and both applications were adjourned for hearing on 14 April 2014.
THE HEARING
Withdrawal of Application to review appointment of enduring guardian
The instrument dated 17 June 2011 appointing the enduring guardian was not provided to the Tribunal or Ms WRB until the morning of the hearing on 14 April 2014. When called for by the Tribunal, Ms TGI produced the instrument and a copy was provided to Ms WRB.
Following receipt of the instrument, it was apparent to the Tribunal that the nominated alternative guardian, Ms DIW, notwithstanding her non-acceptance of the appointment, was another potential party to the proceedings.
Mr HLW, husband of Ms TGI and father of Ms DIW, suggested that the Tribunal could attempt to contact Ms DIW by telephone. However, the Tribunal noted that Ms DIW not been previously served with the documents relevant to the application. Additionally, there was only limited time available to conduct the hearing of the application for review of appointment of enduring guardian, and foreshadowed that the hearing of that application would need to be adjourned to a future date.
The Tribunal canvassed information from the parties to assess whether there were any urgent or immediate guardianship decisions required for Mrs SEI. It was ascertained that there were unlikely to be any immediate accommodation decisions now that Mrs SEI was a permanent resident of aged care facility A and there were no plans to change her residence. It was also ascertained that Ms WRB, although limited somewhat in her own availability, was not being prevented from visiting her mother and was not being refused information from the facility staff about her mother's health care and wellbeing.
The Tribunal and the parties explored the method of communication by which Ms TGI could inform Ms WRB about health events affecting their mother. The Applicant was offered an opportunity to consider how she would like to proceed with her application. Ms WRB indicated she would also use the short adjournment to consider her position and to speak to her sister.
The Tribunal may, where appropriate, use or require parties to use resolution processes, for example alternative dispute resolution, to assist the parties to resolve or narrow the issues between them in the proceedings (section 37, Civil and Administrative Tribunal Act 2013 (NSW)).
Following the short adjournment, Ms WRB indicated that she had spoken to her sister and to Mr HLW, and that she now wished to withdraw her application for review of the appointment of enduring guardian.
In light of the agreement reached by the parties, and on the available evidence about Mrs SEI's current circumstances, the Tribunal took the view that there was no proper basis for interfering with the current decision-making arrangements in relation to Mrs SEI's medical and lifestyle needs. Accordingly, the Tribunal consented to the withdrawal of the application to review the appointment of the enduring guardian.
OVERVIEW OF THE EVIDENCE
Mrs SEI's wishes
The Tribunal was aware that due to Mrs SEI's advanced dementia her personal attendance at the hearing would not be appropriate. The Tribunal, with the assistance of nursing staff at aged care facility A, made contact with Mrs SEI by telephone. The Tribunal attempted to ascertain Mrs SEI's present wishes with respect to the management of her affairs and in particular, who she wished to have this responsibility. However, it was apparent to the Tribunal that Mrs SEI was not able to provide this information.
Mrs SEI's loans and payments
Despite their separation and subsequent divorce, Mrs SEI was in regular contact with Mr CAI and he continued to be involved in and oversee at least part of Mrs SEI's financial affairs. In 2001, Mrs SEI loaned to Mr CAI sums of $20,000 and $100,000 respectively. A deed was drawn up and witnessed by Mr NMP, solicitor, providing for repayment of the two loans. However, it appears that no monies were in fact paid to Mrs SEI in respect of those loans.
Between September 2002 and April 2003, Mrs SEI made 4 interest-free loans to Ms WRB [totalling] $121.381.48. The details of the loans are contained in a (unsigned) letter purportedly written by Mrs SEI dated 5 August 2003. The letter provides for the repayment of the loans within 60 days of Mrs SEI's death, or "as [an] alternative to your repaying the loans, the total amount of these outstanding loans and any future loans which I may make to you) will be deducted from your share of my estate which you are otherwise entitled to under my will, and will be added to the share that your sister [Ms TGI] is entitled to under my will." Mrs SEI further writes: "My will provides for my estate to be divided equally between you and your sister [Ms TGI]. However I have not loaned [Ms TGI] any money as I have done with you." The letter purports to provide a copy to "[Ms TGI]. My Executor."
Ms WRB does not dispute that such loans were made to her by her mother, but does not believe that her mother in fact was the author of the letter referred to above. In particular, she queries the reference to Ms TGI as executor. Indeed, in a letter to the Tribunal, Mr ENC, Mrs SEI's younger brother, indicates that up until 2009 he was executor of Mrs SEI's will. In any event, this issue was not material to the question of the loans made by Mrs SEI, and was not further explored.
In 2013, Ms WRB owed monies to the Australian Taxation Office and sought financial assistance from her mother. On 16 July 2013, Ms WRB informed Ms TGI by email that their mother had agreed to pay her (Ms WRB) $50,000 and that a codicil would be attached to Mrs SEI's [Will] to protect Ms TGI's interests. On 17 July 2013, a withdrawal of $50,000 was made from a bank account held by Mrs SEI. Apparently, Ms WRB accompanied her mother to the bank on this occasion.
Ms TGI took steps to inform the bank about concerns that she had about her mother's mental capacity to enter into such a transaction, and was advised that confirmation from a medical practitioner about Mrs SEI's capacity was required before transactions by Mrs SEI could be stopped.
Ms TGI says that when speaking to her mother later in the day of 17 July 2013, her mother had no recollection of going to the bank and withdrawing $50,000.
The making of the power of attorney by Mrs SEI in 2009
According to Ms WRB, her mother has always been a bit of a character, and quite a 'naughty' person, who exhibited eccentric and strange behaviours. Ms WRB said that after her mother's marriage ended in 1994, her mother developed psychological problems and depression.
When questioned about Mrs SEI's state of mind at the time she made the loans to her in 2002 and 2003, Ms WRB conceded that her mother "knew what she was doing."
Ms WRB said that in 2009 she spoke with her mother on the telephone every two to three days, but due to her own circumstances (she had recently commenced law studies around that time) she would see her mother in person only on birthdays and major events.
Ms WRB said that in her opinion her mother and Ms TGI had a co-dependent relationship, and that Ms TGI was in effect, taking over from their father. Ms WRB said she did not think that her mother had the ability to make her own decisions independently and to seek her own legal advice. Ms WRB had concerns about the making of the power of attorney because the solicitor who prepared Mrs SEI's power of attorney was a personal friend of Ms TGI's and that Ms TGI was present during the appointments with the solicitor. In this regard, Ms WRB made reference to the NSW Law Society guidelines for solicitors on preparing a power of attorney, and in particular, the recommendation that a solicitor should seek instructions directly from the principal and advise the principal in the absence of the proposed attorney.
Ms WRB was not aware that her mother had appointed her sister as her attorney until about the end of August or early September 2012 when Ms TGI was about to travel overseas. Ms WRB does not agree that the power of attorney accords with her mother's wishes, in that the sole appointment of Ms TGI does not reflect the fair and equal treatment of her daughters that Mrs SEI considered important, and further, that the benefits provided for in clauses 6 and 7 of the power of attorney are not benefits that her mother would have intended to confer.
Ms TGI said that she has always close to her mother and sees or speaks to her almost every day. In 2009 her mother was active and mobile. She drove her car and went to church, made her own decisions and her health was good despite an ulcer on her ankle and high blood pressure. She lived independently in her home, a first floor apartment with 15 steps to climb, and did not have any formal supports or services to assist her.
In May 2009 that Mrs SEI was first reviewed by Dr Z, following a referral by Mrs SEI's then general practitioner, Dr X. Dr Z saw Mrs SEI on 5 occasions between 2009 and 2013.
In his report of 26 May 2009, Dr Z writes of two main areas of concern in relation to Mrs SEI's health care; - proposed knee surgery and hypertension. As part of his assessment, Dr Z assessed Mrs SEI's mood and cognition, and reported that Mrs SEI was "an engaging, intelligent woman who had no obvious cognitive impairment on brief cognitive testing."
On 10 December 2009, Dr Z reviewed Mrs SEI again; in relation to an ulcer on her ankle. There is no reference in Dr Z's report to Mrs SEI's cognition.
Dr Z did not review Mrs SEI again until 16 August 2011. On that occasion, he referred to reports by both Ms TGI and Mrs SEI herself that her (Mrs SEI's) memory was declining. Mrs SEI scored 25/30 on a cognitive examination, which Dr Z reported: "whilst this is borderline normal, it is likely that [Mrs SEI] has mild cognitive impairment due to cerebrovascular disease, given her significant cardiac risk factors." In a subsequent review in October 2012, Dr Z diagnosed Mrs SEI with possible mixed Alzheimer's and vascular dementia.
Ms TGI says that in about August 2009 she had discussions with her mother about making a power of attorney. Ms TGI says that her (Ms TGI's) occupation as a finance journalist meant that she had an awareness of such an instrument, and also had conversations with friends and family about her mother's advancing age and the need to put her affairs in order. In addition, Ms TGI had concerns about the level of involvement her father maintained over her mother's finances, including an indication that he may be seeking to be released from repaying the loans Mrs SEI had made to him.
Ms TGI said that she initially approached the solicitor used by the family, Mr NMP, to assist her mother with these matters. However, Mr NMP indicated he was unable to because of his engagement by Mr CAI. It was then that Ms TGI approached Ms MHB.
Ms MHB stated that has known Mrs SEI for about 13 years. She met Mrs SEI through her acquaintance with Ms TGI, whom she had met while their daughters attended the same schools. Ms MHB has been practicing as a solicitor since 1986, during which time she has prepared many powers of attorneys, wills and guardianship documents. Ms MHB prepared a number of documents for Mrs SEI, including the power of attorney, enduring guardianship and will.
Ms MHB charged fees for her services in preparing Mrs SEI's power of attorney in 2009, and met with her on 3 occasions; 3 October, 12 October and on 4 November 2009 when the power of attorney was executed. Ms TGI was present during each of those occasions. Ms MHB said she asked Mrs SEI whether she wanted to meet with her on her own. Ms TGI offered to leave "to go shopping," however Mrs SEI indicated that she wished for Ms TGI to be present.
Ms MHB stated that she formed the view that Mrs SEI was attending voluntarily and that she had the mental capacity to give independent instructions. Ms MHB said that Mrs SEI impressed her as being astute, intelligent, and clear about what she wanted. Ms MHB was of the opinion that Mrs SEI was of sound mental health and had capacity to enter into the power of attorney, and was aware of the implications of doing so.
During the course of their first appointment, Ms MHB said that she gave comprehensive advice to Mrs SEI on powers of attorney generally, including literature for Mrs SEI to take with her. Ms MHB recommended that Mrs SEI appoint two attorneys, and in particular, both Ms TGI and Ms WRB. Mrs SEI indicated that she would think about it.
Ms MHB said that Mrs SEI was concerned about being fair in relation to her daughters, and this is reflected in her will, which names both Ms TGI and Ms WRB as executors. However, Ms MHB stated that Mrs SEI specifically did not wish for Ms WRB to be a co-attorney, and Mrs SEI mentioned that she had loaned monies to Ms WRB in respect of which she did not believe she would be repaid.
Ms MHB stated that Mrs SEI said that she trusted Ms TGI absolutely, and wanted Ms TGI to be able to assist with the day-to-day affairs, for example, going to the bank, and that she (Mrs SEI) could foresee a time when would not be able to do it.
During the second appointment, Ms MHB said that Mrs SEI gave instructions to proceed with drafting the power of attorney with Ms TGI as sole attorney. Ms MHB stated that she took Mrs SEI through each clause of the power of attorney, while explaining each clause and taking instructions. In relation to clause 6 (the conferring of benefits on the attorney), Ms MHB's evidence is that Ms TGI said to her mother not to include that clause as it "will cause problems," however, Mrs SEI expressed she wanted it to remain on the basis that whilst Ms TGI might be well off now, however, "you don't know what's around the corner."
Ms MHB's evidence is that she formed the impression that Mrs SEI was motivated to make the power of attorney primarily in relation to her former husband's involvement in her financial affairs. It appeared to Ms MHB that while she was loyal to her former husband, Mrs SEI was also concerned about the level of his control in this area of her life. Ms MHB's impression is that Mrs SEI's decision to appoint her daughter Ms TGI was not borne out of bullying or duress, but out of trust.
Mr ENC (Mrs SEI's younger brother who lives in Victoria) in his letter to the Tribunal indicates that he holidayed with Mrs SEI every year from 1994 to 2008. He was named as executor of Mrs SEI's will up until 2009 when he and Mrs SEI agreed because of his age and location that he be replaced in that role. Around that time, Mrs SEI informed him that she was giving Ms TGI power of attorney. Mr ENC said that Mrs SEI's decision made sense to him at the time as he was aware that Mrs SEI and Ms TGI saw a lot of each other and, and that during discussions he had with Mrs SEI, Mrs SEI had indicated that her contact with Ms WRB often involved discussions about money.
Operation and effect of enduring power of attorney
In July 2013 Ms TGI provided her mother's bank with confirmation (from her mother's GP) that her mother was not able to manage her affairs, in the context of concerns Ms TGI had about the payment of $50,000 to Ms WRB.
Ms TGI's evidence is that she did not in fact commence exercising her powers until August 2013 when she started paying her mother's bills for her. Ms TGI stated that she, in effect, took over from her father, who had been diagnosed with Alzheimer's disease and Parkinson's disease. Ms TGI's management of her mother's financial affairs have included payment of her mother's bills, including nursing home fees, and arranging for the sale of her mother's East Sydney apartment.
Ms TGI said that the decision to sell her mother's property was made in the context of advice from Dr Z, who, in around July 2013 expressed his opinion that Mrs SEI required residential care. Ms TGI stated that her mother was accepting of this at that time, and the possibility that her home may need to be sold as a result. According to Ms TGI, Mrs SEI requested that she (Ms TGI) take care of things for her.
Later that same month, Ms TGI made inquiries with a financial institution in relation to the financial implications of her mother's move into residential care.
In mid-September 2013, Mrs SEI moved into aged care facility B.
On 8 October 2013 Ms TGI formally engaged the services of the financial institution to provide advice, which they did in written form on 10 November 2013. A recommendation was that Mrs SEI's home be sold to fund her move into residential care. Ms TGI arranged for the sale of her mother's apartment, through an agent, which she says achieved a sale price which was 10 to 20% higher than expected, and in excess of the sale price of apartments above and below her mother's. She said the timing was important; - it was a strong property market when she arranged for the property to be listed for sale. She says she took two weeks off work to make arrangements for the property's sale, which included certain works and repairs to be carried out, and for advertising and the services of a stylist. She accessed her mother's funds for those purposes.
Ms TGI did not consult her sister Ms WRB about the sale of their mother's property. Nor did she ask Ms WRB to assist with preparing the property for sale. She informed her sister for the first time the night before the first inspection of the property was due to occur. Ms TGI made a list of the property's contents, which are currently held in storage. She is also aware that her mother holds some jewellery in a safe deposit box. She has provided Ms WRB with a list of contents.
In addition to the sale of the property, Ms TGI manages her mother's other assets, which include funds of approximately $600,000 (which Ms TGI transferred from a term deposit to a high-interest on-line savings account), some savings in another bank account of approximately $50,000, and shares with a value of approximately $240,000.
Ms TGI said that she has maintained and continues to maintain records and accounts in relation to her management of her mother's financial affairs, with the exception of certain payments her mother made to her, effectively reimbursing her for monies she had expended from her own funds to pay for her mother's services from a community support services provider. Ms TGI says that she has not sought any payment or reimbursement for the carrying out of her functions as attorney.
Ms WRB said she was not informed of the decision to sell her mother's property and that Ms TGI made the decision before the financial advice was sought. Ms WRB also said that Ms TGI did not ask for Ms WRB's input or assistance in relation to the styling of the property in spite of Ms WRB's expertise as an architect. Ms WRB also said that the list Ms TGI gave to her of her mother's contents is very vague. Ms WRB says that Ms TGI has not been open and transparent in her management of their mother's affairs.
Ms WRB sought orders as detailed in the paragraphs above. She suggests that clauses 6 and 7 of the power of attorney be struck out, and suggests that there be two or more attorneys appointed. She suggested the Tribunal consider, in addition to herself, a lawyer or accountant, her daughter Ms BFE, or a friend of the family.
Ms TGI says that she is prepared to continue in her role as attorney. She says that she has done a very good job in difficult circumstances. She does not think that she could work with her sister and the current proceedings have made relations even more strained. Ms TGI said that she would be happy to work with a second person and, if required, to provide accounts. However, she would be concerned about the cost to her mother's estate if an audit were to be required.
Findings
In all of its proceedings, the Tribunal is required to act in accordance with the principles set out in section 4 of the Guardianship Act 1987, which in respect of Mrs SEI requires that:
- Her welfare and interests are to be given paramount consideration;
- Her freedom of decision and freedom of action should be restricted as little as possible;
- She should be encouraged as far as possible to live a normal life in the community;
- Her views should be taken into account as much as possible;
- The importance of preserving her family relationships and her cultural and linguistic environment should be recognized;
- She should be encouraged to be as self-reliant as possible in respect of her personal, domestic and financial affairs;
- She should be protected from neglect, abuse and exploitation.
The Tribunal was guided by these principles in its deliberations in this matter.
The Tribunal was satisfied that Ms WRB had standing as an interested person to make the application for review as she has a genuine concern for her mother's welfare. (Powers of Attorney Act, section 35(1)(d)).
On an application for a review of a power of attorney, the Tribunal has a discretion as to whether or not it should conduct a review under section 36 of the Act.
In Susan Elizabeth Parker v Margaret Catherine Higgins & Ors [2012] NSWSC 1516, Slattery J stated:
"On an application for s 36 review such as this the Court must first exercise a discretion under Powers of Attorney Act, s 36(1) to decide whether or not to conduct a s 36 review. In my view the Court does not have to conduct a full review of all documents associated with the operation of the subject power of attorney to do this. Something short of a full review must be able to justify the exercise of the s 36(1) discretion as to whether or not the Court should conduct a full s 36 review. In the circumstances of this case the Court can glean sufficient information to exercise the s 36(1) discretion by undertaking a general survey of what...(a party)...has produced". (at 80)
In relation to the current application before it, the Tribunal was satisfied that it was not necessary to conduct a full review into the making or the operation and effect of the power of attorney made by Mrs SEI on 4 November 2009.
Making of power of attorney
Pursuant to section 19 of the Powers of Attorney Act 2003, an enduring power of attorney is created if:
(a) the instrument is expressed to be given with the intention that it will continue to be effective even if the principal lacks capacity through loss of mental capacity after execution of the instrument, and
(b) execution of the instrument by the principal is witnessed by a person who is a prescribed witness, and
(c) there is endorsed on, or annexed to, the instrument a certificate by that person stating that:
(i) the person explained the effect of the instrument to the principal before it was signed, and
(ii) the principal appeared to understand the effect of the power of attorney, and
(iii) the person is a prescribed witness, and
(iv) the person is not an attorney under the power of attorney, and
(v) the person witnessed the signing of the power of attorney by the principal.
The evidence available to the Tribunal prima facie indicates that the power of attorney complied with the requirements of the Powers of Attorney Act. It was properly signed, witnessed and dated. The certificate under section 19 of the Powers of Attorney Act was completed by a solicitor.
It was not ideal that Ms MHB, a personal friend of Ms TGI's, conducted her three appointments with Mrs SEI in the presence of Ms TGI. Indeed, as Ms WRB points out, such action is contrary to the recommendation in the relevant Law Society guidelines. However, those circumstances do not in themselves invalidate the instrument nor indicate that Mrs SEI was induced to make the power of attorney by undue influence by Ms TGI. In particular, Ms MHB at the time of providing advice to Mrs SEI was a legal professional in practise for approximately 23 years with experience in estate planning. Moreover, Ms MHB had spent in excess of 3.5 hours with Mrs SEI over three appointments and was satisfied that Mrs SEI was not unduly influenced by Ms TGI, and had the necessary capacity to comprehend the power of attorney and understand its effect and implications. The Tribunal had no cause not to accept Ms MHB's evidence in this regard.
The prima facie evidence establishes that Mrs SEI was an intelligent woman. There was no medical evidence suggesting that she had any cognitive impairment in 2009. Mrs SEI had a close relationship with her daughter Ms TGI, with whom she had frequent contact. Ms TGI was skilled and knowledgeable in financial matters, and whilst it may have been important for Mrs SEI to be fair and equal in her treatment of her daughters in a number of respects, it is also reasonable to conclude that Mrs SEI in 2009 did not wish to appoint Ms WRB as an attorney to be responsible for management of her financial affairs; - particularly in light of the loans Mrs SEI had previously made to Ms WRB and the potential conflict that may have arisen if Ms WRB were to assume a responsibility of managing her financial affairs. Moreover, there is a lack of evidence of undue influence being exerted by her daughter Ms TGI in relation to making of the power of attorney.
On balance, the Tribunal was satisfied that it had before it sufficient information, both in documentary and oral form, to undertake a general survey of the matters at hand so as to invoke the discretion as to whether a full review of the making of the power of attorney should be conducted. The Tribunal finds that consideration of that information does not point to deficits in relation to the making of the power of attorney such as to warrant further review. In the circumstances, the Tribunal finds that a full review into Mrs SEI's capacity, Ms MHB's actions, or the actions of Ms TGI in 2009 would not be in Mrs SEI's best interests.
Accordingly, the Tribunal exercises its discretion in deciding not to conduct a full review into the making of the power of attorney dated 4 November 2009.
Operation and effect of power of attorney
An attorney is in a fiduciary relationship with the person whose affairs they manage. An attorney must act in the best interests of the principal and must not obtain a personal benefit other than specifically provided for in the executed enduring power of attorney (Powers of Attorney Act, s 12(1)).
The Tribunal was satisfied that it had sufficient information before it to enable it to decide whether a full review into the operation and effect of the power of attorney was appropriate. At a prima facie level, the Tribunal finds that there was a lack of evidence to indicate that Ms TGI, in her role as attorney, has been acting contrary to the best interests of her mother, or in breach of her fiduciary obligations. At a prima facie level, there is no evidence of financial mismanagement or maladministration by Ms TGI.
Rather, it appears to the Tribunal on the information before it that Ms TGI has acted reasonably and appropriately. In particular, Ms TGI appears to respect her mother's wishes in relation to the level of involvement her mother was comfortable for Mr CAI to have in her financial affairs; - and only became active in her role as attorney in about July 2013. Furthermore, Ms TGI's decision to sell her mother's property appears to have been made in the context of her mother's move into residential care, the receipt of professional financial advice, an awareness of the property market at the relevant time, and of ensuring that her mother's accommodation and care needs could be met into the future.
In addition, at first instance there is no evidence that Ms TGI has claimed any monies in carrying out her role as attorney, or sought to benefit herself financially.
The Tribunal's perusal of a small number of transactions on bank account statements suggests no evidence of financial wrong-doing on Ms TGI's part. The Tribunal was informed about the existence of Mrs SEI's other assets, including monies held in an investment account and shareholdings. To further inquire into such transactions and accounts would be, in the Tribunal's view, neither appropriate nor necessary in light of a lack of evidence of any maladministration on Ms TGI's part.
It appeared to the Tribunal that a predominant concern of Ms WRB's was that Ms TGI had not informed her of major financial decisions concerning their mother, and has not been open and transparent. However, those concerns are not especially relevant to the Tribunal's determinations. An attorney is not required to keep third parties informed of his or her decisions or provide information (for example, accounts and other information) to such persons on his or her management of the principal's estate.
Moreover, there is no statutory requirement that the attorney keep records and accounts. However, a general law obligation exists, considered by Slattery J in Susan Elizabeth Parker v Margaret Catherine Higgins & Ors as follows:
"The attorney's obligation is really one to keep accurate primary accounting records, for which the principal can call, if necessary, for the principal's examination. If the principal then wishes to produce secondary accounts, or full financial accounts, that is a matter for the principal" (at 64)
In the case at hand, the Tribunal has no reason not to accept Ms TGI's evidence that she is in fact maintaining records and accounts on the administration of her mother's estate. In any event, on the information before it the Tribunal found that there it was not cause to conduct a full review into the operation and effect of the power of attorney dated 4 November 2009. To commence further scrutiny for example, of various financial records and accounts is not appropriate or in the best interests of Mrs SEI in circumstances where there is a paucity of evidence with respect to: (1) any incapacity of Mrs SEI in 2009, (2) any undue influence on Mrs SEI in 2009, and (3) any financial mismanagement by the attorney.
The Tribunal was not asked to review the enduring power of attorney and enduring guardianship purportedly made by Mrs SEI on 6 December 2012. It appears to be accepted by the parties that those powers are not effective on the basis that they purport to create joint appointments only; - and Ms TGI has not accepted either of those appointments. There is also concern that Mrs SEI lacked capacity at the time of those instruments were prepared. In any event, the Tribunal makes no findings in relation to those documents, and notes that the applications before it were in relation to the earlier instruments only.
Finally, it was apparent to the Tribunal that both Ms WRB and Ms TGI love and care deeply for their mother. It is hoped that the agreement both daughters reached during the Tribunal hearing about communication concerning their mother's health and wellbeing will continue, and be sustained into the future in the interests of Mrs SEI.
FORMAL FINDINGS
The Tribunal made the following formal findings.
(1) The Tribunal was not satisfied there was a need to review the enduring power of attorney made by Mrs SEI on 4 November 2009. Accordingly, the application was dismissed.
(2) The Tribunal consented to the withdrawal of the application to review the appointment of enduring guardian.
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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
Decision last updated: 22 October 2014
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