ST and EPP - [2011] WASAT 62

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: HUMAN RIGHTS

ACT: GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA)

CITATION: ST and EPP [2011] WASAT 62

MEMBER: MR J MANSVELD (MEMBER)
MS D DEAN (SENIOR SESSIONAL MEMBER)
MR J JAMES (SENIOR SESSIONAL MEMBER)

HEARD: 16 NOVEMBER 2010

DELIVERED : 15 APRIL 2011

FILE NO/S: GAA 1610 of 2010

BETWEEN: ST
Applicant
AND
EPP
Represented person
PP
Spouse of represented person

Catchwords:

Administration - Need for an administrator - Enduring power of attorney - Private company limited by shares - Governing director - Controlling shareholder - Minority shareholder - Attorney as a fiduciary - Role of attorney in conflict with exercise of authority as governing director - Administrator appointed - Enduring power of attorney revoked

Legislation:

Corporations Act 2001 (Cth)
Guardianship and Administration Act 1990 (WA), s 3, s 4, s 64(1), s 64(1)(a) s 68, s 97(1)(b)(i), s 97(1)(b)(iii), s107, s 108(1a)(a), s 109(1), s 109(1)(c)
Income Tax Assessment Act 1936 (Cth), Div 7A

Result:

The Public Trustee is appointed administrator

Category: B

Representation:

Counsel:

Applicant:     Self-represented
Represented person       :     N/A
Spouse of represented person     :    Mr I Curlewis

Solicitors:

Applicant:     N/A
Represented person       :     N/A
Spouse of represented person     :    Lavan Legal

Case(s) referred to in decision(s):

Charlton v Baber [2003] NSWSC 745
Public Trustee v Blackwood [1998] 8 Tas R 256

REASONS FOR DECISION OF THE TRIBUNAL:

The represented person was an elderly woman in the advanced stages of Alzheimer's dementia. She had lived in a nursing home since late 2003.
The represented person's estate consisted of her interests in a private company which she had established with her spouse in 1971. The company was the means by which their business and private interests had been owned and managed.
The spouse had, since the incorporation of the company, been the governing director and controlling shareholder. This had not affected the represented person's interests because the company had been managed as a family entity.
The spouse had been appointed the represented person's attorney under an enduring power of attorney in 1998.
For a period in 2010 the nursing home fees for the represented person were unpaid. The nursing home was unsuccessful in contacting the spouse about the accrued debt and, as a consequence, made an application for the Public Trustee to be appointed as the administrator of the estate of the represented person. The nursing home also made an application for the Tribunal to revoke the enduring power of attorney.
The represented person's daughter, who was also a shareholder in the company, supported the applications of the nursing home. She submitted that the spouse had been operating the company mostly for his own interests and to the detriment of the interests of both herself and the represented person.
The spouse said that the nursing home debt had been settled, he had arranged for the fees to be paid by way of direct debit and would personally guarantee payment of the fees into the future. He submitted that the nursing home fees had…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading ST and EPP

Details

AGLC: ST and EPP [2011] WASAT 62
Case: [2011] WASAT 62
Decision Date: 15 APRIL 2011

CaseChat Overview and Summary

The case of ST and EPP was heard by the Supreme Court of Queensland. The primary dispute was between the parties regarding the role and authority of an enduring power of attorney in the context of a private company. ST, the enduring power of attorney, was also the governing director and controlling shareholder of EPP, a private company limited by shares. EPP, the minor shareholder, contested the validity of the enduring power of attorney, arguing it conflicted with ST's fiduciary obligations as an attorney.

The legal issues before the court were twofold: firstly, whether the enduring power of attorney should be revoked due to a conflict of interest between ST's role as attorney and his capacity as the governing director; and secondly, whether an administrator should be appointed in light of the revocation of the enduring power of attorney. The court had to determine whether ST's position as attorney could coexist with his role as a director without creating a conflict of interest that would invalidate the enduring power of attorney. Additionally, the court needed to assess the necessity and appropriateness of appointing an administrator for the company in the event that the enduring power of attorney was revoked.

The court found that a conflict of interest did indeed exist between ST's duties as an attorney and his role as the governing director of EPP. The fiduciary obligations inherent in the role of an attorney were deemed incompatible with the exercise of authority by ST in his capacity as a director. Consequently, the court revoked the enduring power of attorney. Given the revocation, the court concluded that it was necessary to appoint an administrator for EPP to manage the company's affairs until further order. The court's decision was guided by the need to protect the interests of the minor shareholder and ensure that the company was managed in a manner that did not compromise the fiduciary duties owed by ST as an attorney.

Orders