SMD
[2013] QCAT 350
| CITATION: | SMD [2013] QCAT 350 |
| PARTIES: | SMD |
| APPLICATION NUMBER: | GAA1721-13 |
| MATTER TYPE: | Guardianship and administration matters for adults |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Mr Jim Allen, Acting Senior Member |
| DELIVERED ON: | 10 July 2013 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. The Tribunal declares that s59 of the Guardianship and Administration Act 2000 allows a claim for compensation to be made against HB as a former administrator of SMD. |
| CATCHWORDS: | GUARDIANSHIP AND ADMINSITRATION – whether compensation claim can be made against former administrator Guardianship and Administration Act 2000 ss 6, 7, 12, 26, 27, 31, 32B, Part 4, 81 and 82. LPJ [2011] QCAT 177 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to section 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).
REASONS FOR DECISION
SMD has had an administrator appointed for her financial matters since 27 May 2010. Her first administrator, HB, was granted leave to withdraw as administrator by the Tribunal on 22 November 2012. On that date the Public Trustee of Queensland was appointed SMD’s administrator and the Adult Guardian was appointed as her guardian for decisions about accommodation and health care.
The present application has been made by SD, one of SMD’s sons, requesting that the Tribunal make a declaration in the following terms:-
That s59 of the Guardianship and Administration Act 2000, GAA Act, allows a claim for compensation to be made against HB as a former administrator of SMD.
The hearing at which HB was granted leave to withdraw as administrator had been as a result of an application by SD to review the appointment of HB. In his supporting material SD raised issues about the fees charged by HB as administrator and those paid to BDO, the firm of accountants he was associated with, and HB’s actions in regard to two flats SMD owned in the United Kingdom.
The application is in response to concerns raised at the hearing on 22 November 2012 about the effect of the Tribunal’s decision in BH [2012] QCA 179. The learned Member in that case decided that an application could not be made against a former administrator for compensation under s59 of the GAA Act.
The Tribunal made directions that SD file submissions and the active parties, including HB, were to file submissions in reply in regard to the application for a declaration. Submissions were received from SD and HB.
The GAA Act in s59 provides that
(1)a guardian or administrator for an adult (an appointee) may be ordered by the tribunal to compensate the Adult (or, if the adult has died, the adult’s estate) for a loss caused by the appointee’s failure to comply with this Act in the exercise of a power.
(2)Subsection (1) applies even if the appointee is convicted of an offence in relation to the appointee’s failure.
(3)If the adult of appointee has died, the application for compensation must be made to the Tribunal or a court within 6 months after the death,
(4)If the adult and appointee have died, the application for compensation must be made to the Tribunal or a court within 6 months after the first death.
(5)The Tribunal or a court may extend the application time.
The term administrator is defined in the GAA Act to mean “an administrator appointed under this Act”[1]. Administrators are appointed by the Tribunal under s 12 of the GAA Act. An appointment as an administrator for an adult ends automatically if one of the circumstances set out in s 26 of the GAA Act occur. This includes them becoming a paid carer for the adult; if the administrator and adult were married at the time of appointment and the marriage is dissolved; the same with civil partnerships; if the administrator dies or if the adult dies. As occurred here, an appointment ends with the Tribunal’s leave or the administrator withdraws[2].
[1] Schedule 4 Dictionary of the Guardianship and Administration Act 2000
[2] Guardianship and Administration Act 2000 s 27.
The Tribunal must review the appointment of an administrator, who is not the Public Trustee or a trustee company, at least every 5 years,[3] and the Tribunal may review an appointment on its own initiative, or on the application of various nominated parties[4].
[3] Ibid s 28.
[4] Ibid s 29.
An administrator’s appointment may be continued or revoked upon a review[5]. If the appointment is revoked or otherwise ends[6] then the Registrar of the Tribunal must advise the adult and any remaining appointee of the change revocation or ending of the appointment[7]. The Registrar of Titles must also be advised of the revocation or ending of an appointment[8].
[5] Ibid s 31.
[6] Ibid s 26, 57.
[7] Ibid s 32.
[8] Ibid s 27(b), 32A.
The Tribunal may give directions to former administrators that it considers necessary because of the ending of the appointments[9]. The directions may be given when the Tribunal gives leave to an administrator to withdraw under s 27, when the Tribunal revokes the order appointing an administrator or removes the administrator under s31, or at any hearing of a proceeding relating to the adult for whom they were appointed[10]. The directions may only relate to a matter for which the former administrator was appointed immediately before the appointment ends. [11]
[9] Ibid s 32B(2).
[10] Ibid s 32B(3).
[11] Ibid s 32B(4).
Where an administrator’s power has changed, either by suspension or removal, the administrator who, without knowing of the change, purports to exercise power for the matter does not incur any liability, either to the adult or anyone else, because of the change[12]. A transaction between the administrator, whose power is changed and a person who does not know of the change is in favour of the person, as valid as if the power had not been changed[13].
[12] Ibid s 56.
[13] Ibid s 56(3).
Section 56 of the GAA Act is in the same part of the Act as s 59, Part 3 -Other provisions applying to guardians and administrators. The language of s 56 makes it clear that it extends to actions taken by former administrators and yet the term former administrator is not used in the section. In s 56(1) the transition from administrator to former administrator is made clear. First the Tribunal gives power to an administrator and then the power is changed, and includes either being suspended or removal. At the point of change the administrator would become a former administrator if the change was by removal. In a similar way, if an administrator was granted leave to withdraw and they entered a transaction with a person who did not know of the change, the transaction would be valid as against the third party[14]. SD submitted that “section 56 therefore expressly comprehends a circumstance where the administrator when no longer an administrator has sought to do something as administrator.” He noted that the section does not expressly protect former administrators. Similar submissions are made in relation to s 58 which gives the court discretion to excuse an administrator who has acted honestly and reasonably to be excused for a failure to comply with the Act.
[14] Ibid s 56(3).
The Tribunal’s functions for the GAA Act include making declarations, orders or recommendations, or giving directions or advice in relation to administrators[15] and exclusive jurisdiction for the appointment of administrators, subject to s 245 of the GAA Act, in regard to appointments as a result of settlements or damages awards, and the other jurisdictions given under the Act[16]. The GAA Act is an enabling act for the purposes of s 6 of the QCAT Act and these functions confer original jurisdiction[17] on the Tribunal.
[15] Ibid s 81(d)(i).
[16] Ibid s 82.
[17] Queensland Civil and Administrative Tribunal Act 2009 of the s 9(1).
In BH the Public Trustee submitted that s 81(d) of the GAA Act gives the Tribunal power to make declarations and orders in relation to administrators and noted the definition of administrator. It was then submitted that s 32B of the GAA Act empowers the Tribunal to make directions of a limited nature in relation to former administrators and that s 32B would not be required if s 81(1)(d) conferred power to make directions against a former administrator.
The decision in LPJ [2011] QCAT 177 in regard to attorneys was cited as authority for this proposition. Senior Member Endicott in LPJ used a similar analysis to that of the Public Trustee when considering whether the Tribunal had jurisdiction in respect of a claim for compensation against a former attorney under a revoked enduring power of attorney where the principal had died. Senior Member Endicott considered “that if the Tribunal’s powers conferred by s 81 of the GAA Act had already included the power to make orders about revoked enduring documents or former attorneys a provision such as that found in s 138AA would not be necessary. The fact that a specific power was inserted into the Guardianship and Administration Act 2000 to enable the Tribunal to deal with former attorneys confirms that generally the Tribunal’s powers to make orders about enduring documents and attorneys come to an end when the enduring document has come to an end.”
The decision of Senior Member Endicott ultimately though was based on a consideration of s106 of the POA Act. She stated that “An action by an executor of a deceased estate claiming recovery of moneys from a former attorney whether by way of compensation or otherwise is an estate claim about which the Tribunal has no jurisdiction, Such a claim can only be brought in the civil courts. The power to recover compensation by the estate has been expressly conferred on the courts by s106 of the Powers of Attorney Act 1998 but that section does not have the effect of conferring jurisdiction to bring an estate claim in the Tribunal. The functions of the Tribunal in section 81 of the GAA Act do not include making orders in estate claims.”
It must be noted that section 106 of the Powers of Attorney Act 1998 refers to “a court” which is defined in the section to mean any court and there is no specific mention of the Tribunal. Justice Wilson, the Tribunal President was asked to determine the question of whether an attorney, appointed under an Enduring Power of Attorney, may be ordered by the Tribunal to pay compensation to the principal in Public Trustee of Queensland v BN and Ors [2011] QCAT 666. Wilson J discusses the decision in LPJ and notes the submission of the Public Trustee in BN “that there is an error in LPJ namely: that, it misapprehends the purpose of s138AA of the GAA.”
Wilson J states “Ultimately, I am persuaded that there are sufficient indications in the legislation for it to be concluded that its intention and purpose was not to invest QCAT with all the powers of the courts and, in particular, not to grant to the Tribunal the power to entertain and adjudicate upon claims for compensation of the kind referred to in PAA, s 106(1).” He goes on to say, "It is unnecessary, with respect, to found this conclusion in a way which reflects upon the decision in LPJ. On the analysis set out above, the Tribunal’s lack of jurisdiction in compensation matters arising under EPAs does not necessarily stem, however, from the fact of revocation either by death, or the act of revocation”.
Wilson J contrasts the position in regard to attorneys with that of administrators and states that, “in the case of guardians or administrators the GAA does, however, grant both the court and the Tribunal jurisdiction power to award compensation for losses caused by the appointee’s failure to comply with the Act in the exercise of a power: s 59 - even if the adult has died.”
The learned Member in BH had noted that “the effect of s 32B (and s 138AA) is to confer power on the Tribunal to give directions to former appointees in certain limited circumstances” and then that “Further, apart from the power to give directions, the Tribunal’s power to make orders under s 81(1)(d), must, in the absence of a provision similar to s 32B, give rise to the conclusion that the Tribunal is not empowered to do so in relation to a former administrator.”
He goes on to say “that it is logical to conclude that, except where expressly provided otherwise, the reference to an administrator in the Act is to be taken a reference to an existing appointed administrator” and then states that “Section 59(1) expressly provides otherwise. It deals specifically with compensation orders against a guardian or administrator. It also provides for orders to be made if the adult has died. In effect, this provision empowers the Tribunal to make a compensation order in relation to a former administrator. That is because, under s26(1)(d) the administrator’s appointment has been automatically revoked by the death of the adult, However, apart from this limited scenario, s59(1) does not refer to other types of former appointees.”
The learned member concludes by stating “The terms of s59 (1) are quite specific in their application. While in the particular circumstances outlined therein, the Tribunals power will extend to a former administrator, that is not so in this case. That is because the applicant (an adult who had regained capacity) is not deceased.”
Another way of approaching s32B is that it limits the power of the Tribunal to make directions it could otherwise make under s81(d) of the GAA Act to former administrators in terms of when they can be made[18] and the subject matter of those directions[19]. So it is not that there is no power under s81(1)(d) of the GAA Act to make directions to former administrators, but that in the case of former administrators, that power must be exercised in accordance with s32B of the GAA Act.
[18] Guardianship and Administration Act 2000, ss 32B(3).
[19] Ibid s 32B(4).
While s59(1) clearly deals with the circumstance where the adult has died, there are provisions in s59(3) and (4) which deal with the death of the administrator as well. They have the effect of ensuring that any claim made against the estate of a deceased administrator must be made within 6 months of the death. This is the same period of time during which a claim for further and better provision can be made against a deceased person’s estate[20]. This ensures that there is a limit on the time period during which claims can be made against the deceased administrator’s estate.
[20] Succession Act 1981 ss 41, 44(3).
This is significant because ss59(3) and (4) are not further powers to make compensation claims, instead they place limits on the time during which a claim can be made under ss59(1). The appointment of an administrator ends upon their death[21] and so the compensation provisions in ss59(1) apply in another case where there is a former administrator.
[21] Guardianship and Administration Act 2000 s 26(e).
The word former administrator is not found in s59 of the GAA Act and yet it is clear that the section applies to former administrators whether as a result of the death of the adult or the administrator.
When interpreting the provision this Tribunal has had regard to the words of Wilson J in BN where he stated, “the process of statutory construction is to be undertaken in a way which, if possible, reaches an interpretation that will best achieve the purpose of the Act; and, an analysis and understanding which is consistent with the language and which achieves that is to be preferred to any other.”
The purpose of the GAA Act is to strike an appropriate balance between the right of an adult with impaired capacity to the greatest possible degree of autonomy and the adult’s right to adequate and appropriate support for decision-making[22]. This purpose is achieved by, amongst other things, providing a comprehensive scheme to facilitate the exercise of power for financial matters and personal matters for an adult who needs, or may need, another person to exercise power for the adult; states principles to be observed by anyone performing a function or exercising a power under the scheme; and confers jurisdiction on the Tribunal to administer particular aspects of the scheme.[23]
[22] Ibid s 6.
[23] Ibid s 7.
The functions and power of administrators are set out in Chapter 4 of the Act and include: to apply the general principles,[24] to act honestly and with reasonable diligence,[25] to avoid conflict transactions,[26] to keep records,[27] to keep property separate,[28] to invest and continue investments[29] and to make gifts[30]. It is the failure of an administrator to comply with provisions such as these which may result in a compensation claim being made under s59 of the GAA Act. That claim can be made to either the Tribunal or a court but the powers of the Tribunal or court are the same. Therefore if a claim for compensation does not lay under the GAA Act against a former administrator, the claim likewise cannot be made in a court.
[24] Ibid s 34.
[25] Ibid s 35.
[26] Ibid s 37.
[27] Ibid s 49.
[28] Ibid s 50.
[29] Ibid s 51.
[30] Ibid s 54.
An adult has a right to adequate and appropriate support for decision-making and if that support is not appropriate then the adult, or their estate, must have the right to compensation for any loss suffered as a result of the failure of the administrator.
It is counterintuitive to say that a claim can only be brought against a current administrator as that may require someone who is known to be acting inappropriately to continue in the role so that a claim can be made. It may only be possible to quantify the claim once a new administrator has been appointed and has been able to establish the actual loss suffered by the adult.
Submissions made on behalf of HB by Mr Dickson of counsel also supported the proposition that s59 should include a former appointee. That there were no words in section 59 that limit the power of the Court or the Tribunal to make compensation orders against a current appointee. When a person is appointed by the Tribunal as an administrator that appointee becomes subject to the duties and responsibilities prescribed by the Act for all administrators. There are no provisions in the Act (including s 59) that give a discharge to an appointee for possible breaches of their statutory duties and responsibilities, if they cease to be the adult’s appointee. Like the appointment of a trustee, once a person is appointed as an administrator they are liable for any breaches of their duties as administrator until and unless there is a legal basis for them to be discharged from that liability.
The Tribunal puts some weight on the submissions on behalf of HB because he is the one who would be subject to any compensation claim and if an argument could be raised against the proposition then it would surely be in his interests to do so.
The decision in BH was appealed in BH [2012] QCATA 204, the learned Member who wrote the reasons in the appeal made it clear that the grounds of appeal did not address the question of jurisdiction or power of QCAT to entertain the application. While it was noted that the Appeal Tribunal had examined the reasons for the learned Member’s decisions, the Tribunal could find no error or law in the reasons of the learned Member, this Tribunal considers that obiter dicta. The decision on the appeal was that the applicants had not succeeded on their grounds of appeal and the application was dismissed.
Having regard to the above analysis, with the assistance of the party’s submissions, this Tribunal is satisfied that an application for compensation can be made against a person who has ceased to be an administrator for whatever reason. There is no logical reason why if the compensation provisions apply in cases where the administrator or adult has died, that they would not also apply generally where an appointee has ceased to be an administrator for whatever reason.
The Tribunal has not been asked to make any finding that HB is liable to pay compensation to SMD only that s59 of the Guardianship and Administration Act 2000, allows a claim for compensation to be made against HB as a former administrator of SMD and the Tribunal so orders in accordance with s81(1)(d) of the GAA Act.
4
0