UCC (Costs)
[2010] TASGAB 2
•3 March 2010
GUARDIANSHIP AND ADMINISTRATION BOARD
HOBART
UCC – Application for costs
Neutral Citation: UCC (Costs) [2010] TASGAB2
REASONS FOR DECISION
Anita Smith (President)
Colin McKenzie (Deputy President)
Gerard Dibley (Member)
Review of Enduring Power of Attorney – consideration in an award of costs – complex application - costs of the proceedings ought to be borne by the estate in these circumstances
Powers of Attorney Act 2000 s 32(1)(a)
Guardianship and Administration Act 1995 s 80
Latoudis v Casey (1990) 170 CLR 534 and Hardman v Ward [2004] TASSC 74, Oshlack v Richmond River Council (1998) 193 CLR 72, Duke Eastern Gas Pipeline Pty Ltd (2001) ATPR 41-827
On 1 December 2009, the Board received an application from LBC (the applicant) to review her father’s enduring power of attorney registered number PA 14229 in which he appointed his partner, NC, and his son, SC, as his attorneys with enduring powers.
That application was heard and dismissed on 19 February 2010 on the grounds that:
“The Board was not satisfied that the concerns raised in the application had been sufficiently supported by cogent evidence as to warrant the making of any order or direction”.
Mr Chambers, solicitor for the attorney, NC, made an application for costs pursuant to section 80 of the Guardianship and Administration Act 1995 against the applicant. Such application was reserved.
Section 80 of the Guardianship and Administration Act 1995 provides:
“Where the Board is of opinion in a particular case that there are circumstances which justify it in doing so, the Board may make such orders as to costs and expenses as the Board thinks just.”
As in previous costs applications before this Board, the Board accepts that the starting position for interpretation of section 80 is that ‘costs follow the event[1]’ and that costs should be compensatory not punitive. We also note that, given the language of the statute, there are no absolute rules that govern how the Board exercises this discretion[2].
[1] Latoudis v Casey (1990) 170 CLR 534 and Hardman v Ward [2004] TASSC 74
[2] Oshlack v Richmond River Council (1998) 193 CLR 72
The Board considers that a number of factors are relevant to the exercise of a discretion to award costs in this case. Some of these factors relate to the Board’s own processes.
The Board’s process in hearing the application:
The Board received the application on 1 December 2009 and acknowledged its receipt to the applicant on the 8th December 2009. On the 9th December 2009, the Acting Registrar sent copies of the application and Health Care Professional Report to the attorneys with a request for extensive information about the operation of the powers, under threat of a summons for non-compliance, requesting that information be provided on or before 30 January 2010. The request included the words:
“You are strongly advised to seek independent legal advice to assist in the preparation of your response.”
Attorney, SC, replied with a brief but informative response on 17 January 2010. He did not seek legal representation.
Notice of hearing was sent to all interested parties and the donor of the power on 29 January 2010. That notice states in part:
“Can I have a lawyer represent me at the hearing?
If you are the person named in the application or the applicant, you may be represented at the hearing without the permission of the Board. Non-legal advocates may also represent a person with a disability.
If you are an ‘interested party’, you can be represented by a lawyer if the Board gives permission for that representation. Because hearings are relatively informal, it is not often necessary to be legally represented. Costs awards are rare in the proceedings of the Board.”
On 2 February 2010, Mr Chambers telephoned the Board’s Investigation and Liaison Officer to indicate that he was acting for attorney, NC, and anticipated a response to the Acting Registrar’s letter as soon as possible. On 5 February 2010, that response was delivered to the Board. In the covering letter, Mr Chambers wrote:
“We can indicate that at the hearing we will be seeking an order that the applicant pay our client’s costs pursuant to Section 80 of the Act.”
NC’s response to the Acting Registrar’s request was comprehensive and included a 4 page statement together with over 60 pages of attachments. The response, together with Mr Chamber’s covering letter was sent to the applicant on 5 February 2010. Some other witnesses provided letters to the Board also. (Had the applicant withdrawn her application at this stage, she may still have borne the risk of a costs application and the majority of costs were probably incurred in preparing the response, rather than attendance at the hearing.)
The Board considers these pre-hearing processes relevant to the extent that the Board encouraged the attorneys to seek legal advice and also made the parties aware of the possibility of an award of costs. It also, however, stated to all parties that an award of costs is rare. The action of the attorney in seeking legal representation was reasonable and consistent with her duties as an attorney to the donor and to the Board. Mr Chambers indicated at the hearing that he estimated his costs would be in the vicinity of $3000.00 and that also appeared to be reasonable given the comprehensive response to the Board.
The nature of the donor-attorney relationship:
On 27 April 2006, UCC appointed NC and SC as his attorneys. UCC has a significant estate, but entrusted that estate to volunteers who did not necessarily have professional financial management skills or knowledge. He made that decision with undisputed capacity. In accepting appointment, the attorneys accepted onerous trustee duties[3] for which they were unlikely to be remunerated. It is a consequence of acting as a trustee for a vulnerable person that an attorney may be called to account as has occurred in this case. In seeking professional assistance to respond to a call to account, an attorney is acting within his or her duties.
[3] Powers of Attorney Act 2000 section 32(1)(a)
The Board considers that the attorney ought not to bear the costs of the proceedings personally because those costs arise as a consequence of a duty that she accepted on the donor’s behalf. Mr Chambers contends that the costs ought to be borne by the applicant because the application was shown to be without substance.
The substance of the application and hearing:
The applicant and witnesses who supported her application were chiefly concerned at a decision by attorney, NC, to move the donor from his property at Hobart. Their concern at this decision was that it was contrary to long stated wishes of the donor and that it was done with a lack of consultation with other family members.
NC, in her statement to the Board, contended that she had purchased the Hobart property with her own funds. Some of the donor’s funds had been used to pay for improvements to that property. The applicant believed that some of the donor’s funds had been used in the purchase, but had only hearsay evidence to support that view.
The applicant and witnesses supporting the application contended that the attorney was spending unwisely and that an annual expenditure of $72,000.00 was excessive for two persons and out of character for the donor.
Ultimately the application failed because it had more of a character of a ‘fishing expedition’ than an application supported by cogent evidence. The transaction of primary concern, the purchase of the home at Hobart, was a transaction that appeared on the evidence to have been undertaken without invocation of the powers as attorney. Other transactions appeared to fall into the category of normal household and personal expenditure or reasonable alterations to a new home. An expectation that the attorney should consult with family members on major decisions was not supported in law. At best, the application was misguided. The Board reserves the right to expand upon these brief observations should a full statement of reasons for the dismissal be sought.
While it held reservations about the applicant’s unrealistic expectations regarding NC, the Board was satisfied that the applicant’s concern for her father was genuine and her motivations for bringing the application came from that concern. From the perspective of a costs application, the applicant’s case was weak, but it also appeared that she had expectations that issues which would have been more suited to a guardianship application would be dealt with in the context of an application to review an enduring power of attorney. This is a highly specialised area of the law and even experienced legal practitioners often mistake the nature of applications in this jurisdiction, so a lay-person should not be expected to understand such distinctions.
The Board did not consider it appropriate to award costs against the applicant for the following reasons:
(a) Because the application centres upon the best interests of the donor, who was an absent party for the proceedings, it is not strictly inter partes litigation. If the applicant had been successful in her application, she would not actually have ‘won’ anything to advance her own private interests. As has been noted in previous costs decisions by this Board, this jurisdiction is not easily amenable to categories of “winners” and “losers”.
(b) Applications to review enduring powers of attorney are highly specialised and complex and, although the applicant failed to select the appropriate vehicle for her concerns, the applicant ought not to be held to a standard of legal understanding above that of general legal practitioners. Had the applicant had a thorough understanding of the area of law, she may have opted to withdraw the application after receiving NC’s statement, but as noted above, it is likely that the majority of costs had been incurred by this stage.
(c) In the Board’s opinion, the applicant acted in good faith and out of concern for her father’s best interests.
(d) The Board’s role in reviewing enduring powers of attorney comes from the protective jurisdiction of the State. That role is increasingly being used to protect against financial abuse of elderly persons. If applicants were hesitant in making an application because of the fear of a potential award of costs in proceedings, public policy and public confidence in this system may be undermined. The Board notes the decision in Duke Eastern Gas Pipeline Pty Ltd (2001) ATPR 41-827 and the importance of not discouraging participation in the legal process.
The Board is satisfied that the costs of the proceedings ought to be borne by the estate. In making this decision, the Board has not ignored the fact that the attorney does not draw independent income because she is assessed for welfare purposes to be the donor’s partner and his estate is large enough to preclude her eligibility for anything other than a small carer’s allowance. Therefore, an award of costs against the estate may impact directly against her personal source of income.
The Board notes that numerous aspects of the donor’s estate are held separately and distinctly from the day-to-day cash management accounts in which NC shares. The Board approves the attorney’s use of the donor’s separate assets to meet the legal costs, and if necessary, the liquidation of such assets for the purpose of meeting those costs.
Dated this 3rd day of March 2010
| Anita Smith PRESIDENT | Colin McKenzie DEPUTY PRESIDENT | Gerard Dibley MEMBER |
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