WN (Review Enduring Powers)

GUARDIANSHIP AND ADMINISTRATION BOARD
LAUNCESTON

WN– Application for Review of an Enduring Power of Attorney

WN (Review Enduring Powers) [2016] TASGAB 6

REASONS FOR DECISION

Ken Stanton (Chair)
Sue Aylett (Member)
Don Jones (Member)

Hearing 26 October 2016

Review of Enduring Power of Attorney – Requirements for execution not met – Donor’s understanding of nature and effect – Donor’s susceptibility to influence - Invalidity and Revocation of Enduring Power of Attorney – Appointment of Administrator – Suitability of Private Administrator

Guardianship and Administration Act 1995
Powers of Attorney Act 2000

On 29 January 2016 WN executed an Enduring Power of Attorney appointing her sons UCN and SNN as her joint and several attorneys. That instrument was registered on February 2016 as XXXX (“the EPA”).
The donor’s daughter, TT has applied for a review of that instrument pursuant to s33 of the Powers of Attorney Act 2000 (“the Act”). That application seeks a declaration that EPA is invalid, the revocation of the EPA and/or the appointment of the Public Trustee as administrator.
The Board heard the application on 26 October 2016. The hearing was attended by:
WN– the donor
TT – the applicant
TT2 – the applicant’s husband
UCN – the first attorney
SNN – the second attorney
Mr Grant Tucker – the lawyer for the attorneys
NN – the donor’s brother
Emma Curbishly – The Public Trustee
As a result of the hearing the Board was satisfied (i) that the Power is invalid because it does not comply with the requirements of the Act (ii) that the donor is, by reason of a disability, unable to make reasonable judgments in respect of her estate and is in need of an administrator. The Board therefore ordered:
1.   That the power is revoked from the date of this order.
2.   That the Public Trustee be appointed administrator of the estate of WN.
3. That the powers and duties of the administrator be those conferred by Division 4 of Part 7 of the Guardianship and Administration Act 1995.
4.   That the administration order remains in effect to 25 October 2019.
5.   That the Public Trustee report to the Board as to what, if any steps are taken in           respect of transferring the property, volume 30495 folio 74, which was            transferred      to her sons, UCN and SNN, back to the represented persons name.
The attorney SNN requested a statement of reasons. These are those reasons.

Invalidity of the EPA

One of the formal requirements for an EPA set out in s9(1)(b)(i) of the Act is that the instrument be signed by the donor with that signature witnessed by two witnesses neither of whom is a party to it nor a close relative of a party to it and each of whom has witnessed it in the presence of the donor and each other.
The EPA has the donor’s signature next to the date 29 January 2016. It is purportedly witnessed by 2 witnesses NOE and FLH. Their signatures are next to the date 29 January 2016. The attorneys signatures appear on a statement of acceptance of the EPA next to the date 29 January 2016.
The registration application is signed by the donor next to the date “February 2016” and appears to have been witnessed by Professor A N Thompson on 2 February 2016.
The donor said she was unsure about who arranged for the EPA to be prepared. She thought it was probably her doctor but she did not know. She said she signed the EPA at the office of her solicitors Clarke and Gee. She initially said no-one was with her when she signed the EPA. Later she said the witness FLH was a friend of hers and she was there. But she said she did not know the other witness. The Board investigator Elizabeth Dalgleish received an email from the witness NOE. That email said:
“Conforming [sic] that I signed a Power of Attorney document regarding WN. I also witnessed the document being signed by WN’s friend, who’s [sic] name I cannot remember but was was [sic] of Eastern European origin.
The document was signed without WN being present. All this was done earlier this year but I do not know the exact date.
I understand this is brief, therefore if you require any further detail you contact me on my home number that you already have, or my mobile phone which is XXXX.”
SNN said he was not present when the EPA was signed. The purported witnesses made a joint declaration on 20 February 2016 declaring that they had both witnessed the donor sign the registration application for the EPA on 29 January 2016 and that neither of them are parties to it or a close relative of a party to it. But they did not say they had witnessed the EPA. Neither of them gave oral evidence. In particular, the attorneys did not seek to call evidence from the purported witnesses or from a solicitor at Clarke and Gee to establish that the EPA had been validly witnessed.
The donor was clear that she had signed the EPA at the solicitor’s office. But she was unclear about who was present when she signed. The Board formed the view that she did not remember the events surrounding the signing of the EPA. No-one else gave evidence that the EPA had been validly signed. One of the purported witnesses positively asserted he was not present when the EPA was signed by the donor. There was no contrary evidence and the Board was satisfied that was the case.
The purported witnesses were not parties to the EPA. They were not close relatives of a party. But the Board was satisfied that at least one of them had not witnessed the donor sign the EPA in the presence of the donor and each other. The Board was therefore satisfied that the formal requirement in s9(1)(b)(i) of the Act was not met and that the EPA was not valid. The impact of a declaration to that effect on the ongoing operation of the EPA and authority of the attorneys is not expressly provided for in the Act. The Board therefore considered it appropriate to revoke the EPA to give effect to its invalidity.
Further, s30(2)(a) of the Act provides that the EPA is not effective unless the donor understands its nature and effect. The nature of the required understanding is set out in s30(3) of the Act.
The donor said she talked with the solicitor about the document but does not remember what he said. She did not know when the EPA commenced. SNN said he believed FLH would have explained the document to the donor but does not say he was present for any such explanation.
The Board sought to ascertain the donor’s understanding of the instrument at the time she executed it. She said the document meant the attorneys would look after her and be in charge of her property. She also said it meant she could stay in her house.
The donor said that she spoke to the attorneys about the document and that they had said they would look after her and that she could live in her house as long as she wanted. When asked what she was doing when she signed the document she said that the attorneys were going to look after her. She also said that they could be in charge of her property and money. And when the donor’s attention was specifically directed to the powers of the attorneys when she was unable to make decisions about her finances she was able to say that they would look after her and be in charge of her property. But often she would then refer to the division of her property after her death. It seemed to the Board that she did not differentiate between those concepts. When answering questions about the effect of the EPA she also looked to the attorneys for assistance or confirmation. When asked about who she wanted looking after her affairs when she was no longer able to do so she was equivocal. At times she referred to the applicant, at other times to the attorneys and at least once to all 3 of her children.
The donor did not understand that she could specify or limit the power. Such an understanding may have been critical because she very clearly said many times that she wanted to be able to stay in her house as long as she wanted. Despite having apparently executed a transfer of the title to her home at XXXX to the attorneys she denied having done so and clearly thought that she still owned that property. But for the transfer, which she firmly denied had occurred, she could have limited the power of the attorneys to deal with her house. But the EPA did not do that. Contrary to the terms of the EPA, she expressed the view that her house could not be sold without her say so. Although she apparently signed a transfer of her property to the attorneys on the same day as the EPA, she said she denied doing so. When it was suggested that the property had been transferred into her attorney’s name she said:
“I don’t want them to be in charge of any of my property now. As long as I live it stays in my name.”
And when the EPA was shown to her after that she said:
“…But it’s still my property. I can do whatever I want.”
While the donor did not need to have a detailed understanding of the legal technicalities of the EPA, it was clear to the Board that at the time of the hearing she did not have the level of understanding required for the EPA to be effective. There was no reason to believe that her understanding was more complete when the EPA was signed.
Professor Thompson, the donor’s general practitioner apparently witnessed the application for registration of the EPA. That might suggest that he was satisfied about the donor’s capacity to understand the EPA. But in a Health Care Professional Report dated 26 July 2016 (“the HCPR”) and in an email to the Board of 13 October 2016 in which he interpreted his handwriting appearing in the HCPR, Professor Thompson said he was unsure whether the donor had capacity to make reasonable decisions or judgments in relation to her property at the date of execution of the EPA. He also said that the donor had stated to him that she was not aware that she had given the attorneys control over her property and that she did not understand that, with capacity, she could vary or oversee the use of the power or revoke the power.
Whatever her capacity may have been at the time the EPA was executed, as to which Professor Thompson was uncertain, the Board was satisfied that the donor did not have the understanding required by s30(3) of the Act for the EPA to be effective. The Board therefore considered it appropriate to revoke the EPA on that basis also.
Because the Board revoked the EPA, s33(2)(f) gives it the power to appoint an administrator if it thinks fit. A general power to appoint an administrator is also provided by s33(2)(c). The criteria for making such an appointment are not specified in the Act. On one view the power is not constrained by the requirements of the Guardianship and Administration Act 1995 (“the GA Act”) for appointment of administrators. If that is the case, based on the best interests of the donor and the need for her protection from susceptibility to influence resulting from her disability discussed in more detail below the Board would be satisfied appointment of an administrator was appropriate. But it may be that the Board’s power is constrained by the elements in s51 of the GA Act when deciding to appoint an administrator under s33 of the Act and it is the Board’s practice to be satisfied as to those matters before doing so. The Board therefore considered those matters in this case.
In the HCPR Professor Thompson stated that the donor had mild dementia which had been evident for 2 years and was deteriorating albeit slowly. Her MMSE was 25/30 on 2 May 2016. The Board was therefore satisfied that the donor had a disability.
The HCPR stated that the prognosis for ongoing capacity was reasonable, that at present there was no ascertainable impact on the donor’s capacity and that she had a clear understanding of her assets, liabilities and the desired disposal of her assets. Professor Thompson stated that the donor appeared to have a good understanding of the nature and extent of her property. He also stated he had no evidence that she is unable to manage day-to-day financial requirements or make major financial decisions.
But in the HCPR Professor Thompson indicated that the donor’s disability caused deficits in her susceptibility to influence. He made very specific comments about that. The HCPR stated:
“In my recent contacts with WN I have observed
1)    fights (verbal) between those that accompany her about the appropriateness of the way in which her care & assets are managed
2)    probable coercion/influence on her decision making
3)    a very difficult environment for WN in which to be able to discuss for determining her care/management options
In response to the question in the HCPR “To what extent is the person capable of making reasonable decisions in relation to his or her real or personal property?” Professor Thompson said:
“If she is given a non-coercive environment she can make rational decisions. I am not certain this environment has existed.”
The donor has clearly been a very capable woman. She has worked as an interpreter. She has managed an investment property. Many of her abilities remain largely intact. She collects the rent from her tenant personally although it appears her son SNN also does that for her on occasions. And given the right environment the Board considers it likely she would be presently capable of managing her own affairs.
But the question of her ability to make reasonable judgments must be assessed in the circumstances facing her when making decisions about her estate. And Professor Thompson’s opinion is that the donor’s capacity is reduced when her decision making is not free from coercion or influence. That is, when she is faced with influence or coercion, her ability to make reasonable judgments about her property is diminished. Professor Thompson expressed uncertainty about whether an environment free from such coercion has existed. He refers to probable coercion or influence on her decision making. The Board is positively satisfied that her environment is significantly affected by coercion and influence so that she is not able to make reasonable judgments which she would be able to make free from such influence and coercion.
That is most clearly demonstrated by the fact that she has transferred full ownership of her house to the attorneys for no consideration. She accepts that her signature is on the transfer. But she says she has no recollection of signing that document. She is unable to explain why she would have signed such a transfer. She considers the property is still in her name. The Board can see no legitimate reason why such a transfer would be in her interests or have any benefit for her.
The attorneys suggested the transfer to them was to prevent the donor being placed in a nursing home. The effect of the evidence of SNN was that the transfer was part of a strategy advised by the donor’s friend FLH who also signed the EPA as a witness.
The donor apparently told the attorneys she had been placed in a nursing home for a couple of days when she visited the applicant in Melbourne from 12 to 18 January 2016. The applicant and NN both emphatically denied that that or anything like it had occurred. At the hearing the donor maintained, somewhat tentatively in the Board’s view, that she had been put in a nursing home. No reason for doing that was advanced. In the Board’s view it is most unlikely that occurred, particularly when there was no ACAT assessment approving such a placement at the time. But whether or not it did, the attorneys could give no reason why removal of the donor’s primary residence form her ownership and placing it in their control would prevent her admission to a nursing home. In the Board’s experience such a course would not create any impediment to nursing home placement. Indeed, it might be thought that such a placement would be more likely if the donor didn’t own her own home. That such a blatantly implausible justification for the transfer should be advanced by the attorneys gives rise to serious suspicion about the reason for the transfer.
That suspicion is heightened by the letter to the Board’s investigator from Mr Tucker which acknowledges the donor’s wish to remain at XXXX during her lifetime and suggests the attorneys would give her a life interest in the property. It might be thought that the most effective way of ensuring the donor remains in that property is for her to have full ownership of it.
The lack of a justification for the transfer is confirmed by the failure of the attorneys to arrange for the donor to obtain legal advice before they accepted the transfer. SNN’s response to the Board’s inquiry as to why they did not do that was to the effect that it was not mandatory. That may be true. But it is certainly desirable and if there was a legitimate reason for the transfer there would be no reason to avoid obtaining such advice.
When asked why he had not told the applicant about the proposed transfer he again suggested he wasn’t obliged to. He then referred to previous disagreements between the attorneys and the applicant. However in the Board’s view, if there was a legitimate reason for the transfer then transparency with the applicant would have been appropriate.
The donor expressed the view that she wanted all of her children to benefit from her estate upon her death. Transferring the property to the attorneys as a gift now benefits them at the expense of the applicant on the donor’s death and is inconsistent with her expressed wishes to benefit all three of her children upon her death.
During discussion about the transfer by SNN the donor referred to a desire to keep the property out of the control of the Public Trustee. Later she referred to the conduct of the Public Trustee in cases she had observed while working as an interpreter for some nursing homes. However, the existence of the EPA would be sufficient to achieve that objective and transferring the house into the names of the attorneys is not necessary to advance it. The attorneys were unable to provide any explanation of how the transfer would more effectively put the house beyond the reach of the Public Trustee. The Board does not consider it would.
At the conclusion of the proceedings the attorneys were most concerned about whether any order by the Board might affect the property remaining in their names. If their concern was genuinely their mother’s best interests, the Board would have expected that to be of no or little concern to them.
Finally, the EPA and the transfer were procured by the attorneys during the period between the death of the donor’s son CN and his funeral. It is difficult to imagine a more inappropriate time to effect such transactions even if the donor’s relationship with her son was not a close one.
The Board was satisfied that the donor transferred her home to the attorneys without any conceivable benefit to her arising from such a transfer. In the circumstances outlined above, the most likely explanation for the transfer is that the donor was coerced or influenced to effect it by the attorneys. Although the attorneys suggest that course was advised by FLH, they did not call her to attempt to explain the reasons for that course. Because she was not a witness at the hearing the Board expressly makes no finding as to any involvement she may have had in the transfer of the donor’s home to the attorneys.
SNN accepted that the donor gets confused and she is a bit forgetful. He said she has some days better than others. The donor appeared unable to adequately explain the nature of the EPA as discussed earlier in these reasons. And she positively denied having transferred the title to her sons despite having signed a transfer doing just that. She appeared to rely heavily on her family, including the attorneys to explain the EPA and the transfer. Assuming their expressed attitude to the sale of the house and its availability for her life is genuine, the attorney’s ownership of the house makes the donor entirely dependent on the continuation of their good will. The donor did not appear to appreciate that.
For all of those reasons the Board was satisfied that in the circumstances she faces the donor is unable by reason of her disability to make reasonable judgments in respect of matters relating to her estate, principally because she has to make such decisions in an environment where she is subject to coercion and influence of such a degree that she transferred her home to the attorneys when such a transfer would not advance the objectives stated as the reasons for effecting it and in fact puts her ability to remain in her home at the whim of the attorneys when her clear desire is to remain there for as long as she can.

The Board then considered whether there was a need for an administrator; whether decisions about the donor’s financial affairs needed to be made.
The first such decision is whether to take action to recover the legal title to the donor’s house from the attorneys. Further, the income the donor received from her rental property was paid in cash and not banked. SNN was involved in collecting that rent on occasions. Given his involvement in the transfer of the donor’s home to himself, the Board was not satisfied that the donor’s interests would be adequately protected by continuing that arrangement. The Board considered arrangements needed to be made for the rent to be banked to avoid any impact on the donor’s interests from the influence of the attorneys.
For those reasons the Board was satisfied that it was appropriate to appoint an administrator of the donor’s affairs.
At the hearing it was clear that the donor did not want the Public Trustee to manage her affairs. The attorneys were opposed to that course also. The applicant appeared to have suggested the Public Trustee only because no-one else was appropriate. The principles the Board is to apply in appointing an administrator require it to take account of the donor’s wishes. At the hearing the Board therefore canvassed appointing the applicant and the attorneys jointly as administrators. But the GA Act does not permit that.
The appointment of one of the attorneys as administrator would be inappropriate because of the obvious conflict in between the interests of the donor in obtaining the transfer of the title to her home back in to her name and the interest of the attorneys, apparently still held in retaining that title. Although the precise nature of disagreement between the donor’s children was not clear, in the course of discussing the appointment of all 3 of the donor’s children it became clear that they would not be able to work together. Appointing the applicant would therefore be likely to foster family conflict which would be undesirable and be likely to promote the environment in which the donor’s capacity is affected. NN was considered but he was the one who discovered the existence of the transfer and his appointment might also give rise to contention. It was clear that he did not accept the bona fides of the explanation given by the attorneys for the transfer of the properties to them. He may not therefore bring an appropriately neutral mind to the question of recovery.
The Board has often noted that the GA Act provides a statutory predisposition to the appointment of the Public Trustee. In this case such an appointment will have all of the advantages referred to by Kirby P in Holt v Protective Commissioner (1993) 31 NSWLR 227 and in particular:
a.the manifest independence of the statutory office,
b.the advantages of a dispassionate and neutral approach where there is a potential for family conflict and divided views about the best interests of the donor;
c.the expertise of the staff of the Public Trustee, their experience in managing estates, the know how accumulated by them and their reputation; and
d.the security provided to the donor’s estate against loss or damage.
The Board was satisfied those advantages and the protection of the donor’s interests from the influences of the attorneys and others outweigh the wishes of the donor.
For all of those reasons, the Board determined to appoint the Public Trustee as administrator of the donor’s estate.

DATED this 5^th day of December 2016

Ken Stanton Sue Aylett Don Jones
CHAIRMAN MEMBER MEMBER

[2016] TASGAB 6

5 December 2016