Section 126 of the Administrative Decisions Tribunal Act 1997 applies to this decision.
Section 126 provides
(1A) This section applies only to the following:
(a) proceedings in the Community Services Division of the Tribunal,
(b) appeals to an Appeal Panel from a decision made by the Tribunal in the Community Services Division,
(b1) proceedings in relation to an external appeal made under section 67A of the Guardianship Act 1987 or section 21A of the Protected Estates Act 1983,
(b2) proceedings in relation to a reviewable decision made under the Guardianship Act 1987 or the Protected Estates Act 1983
(c) such other proceedings (or class or classes of proceedings) as may be prescribed by the regulations for the purposes of this section.
(1) A person must not, except with the consent of the Tribunal, publish or broadcast the name of any person:
(a) who appears as a witness before the Tribunal in any proceedings, or
(b) to whom any proceedings before the Tribunal relate, or
(c) who is mentioned or otherwise involved in any proceedings before the Tribunal,
whether before or after the proceedings are disposed of.
Maximum penalty: 10 penalty units or imprisonment for 12 months, or both.
(2) This section does not prohibit the publication or broadcasting of an official report of the proceedings that includes the name of any person the publication or broadcasting of which would otherwise be prohibited by this section.
(3) For the purposes of this section, a reference to the name of a person includes a reference to any information, picture or other material that identifies the person or is likely to lead to the identification of the person.
REASONS FOR DECISION
1 The appellant who, to protect his privacy, will be referred to in these reasons by the pseudonym, 'EQ', has applied to the Administrative Decisions Tribunal for review of the decision made by the Protective Commissioner not to reimburse him for alleged expenses incurred on behalf of his mother-in-law. The stated reasons for the Commissioner's decision were the lack of evidence to substantiate EQ's claim together with lack of funds to meet the claim.
2 EQ's mother-in-law has been diagnosed as suffering from a long-standing paranoid illness. She has been detained as an involuntary patient on numerous occasions over the past decade. In 2005, by order of the Guardianship Tribunal, her estate was committed to the management of the Protective Commissioner and remains under management to this day.
3 In these reasons, EQ's mother-in-law will be referred to by the pseudonym, 'IK'.
Background to subject decision
4 On 22 April 2006 EQ wrote to the Protective Commissioner seeking payment of an alleged debt in the range of between $60,000 and $70,000 from IK's estate. The alleged debt related to financial support provided to IK for over a decade. On EQ's account when he met his wife (IK's daughter) in the early nineties she had been supporting her mother, for an extended period and he took over that role when his wife left paid employment to care for their son. EQ claimed that IK had a gambling problem and was a poor manager of money.
5 The amount claimed includes payment for outgoings on a property owned by IK, purchase of various miscellaneous items and occasional cash advances. In addition, EQ claims the shortfall between the amount collected from the rental on IK's property and the probable rental income from his property in which IK resided rent free for five years. The sum claimed does not include any component for interest or EQ's time and labour.
6 EQ attached to the letter of claim some receipts and supporting documentation. He noted that due to a combination of circumstances 'a lot of the receipts had disappeared'.
7 Throughout the 1990's IK had been living alone on an isolated property in rural NSW. In 1999, EQ and his wife found her at home in a distressed and confused state and sought medical assistance. After a short admission as an involuntary patient, IK lived for a period with her daughter and EQ in their home in Melbourne. They decided on the basis of medical advice that IK was unable to return to live in her own home, given its remoteness and distance from services, and arranged for her to live in an apartment owned by her daughter in a NSW coastal town.
8 EQ claims that when IK left her home in 1999 it was filthy and in disrepair and he and his wife expended a great deal of time, money and effort in making it habitable so it could be rented out.
9 According to EQ, his wife had decided after a 'big fight' with IK in 2001, to ask her mother to leave the apartment so it could be sold and the proceeds could be used to allow the pair to 'get on with our lives'.
10 This did not eventuate as shortly after that argument EQ's wife died. EQ was her sole beneficiary and accordingly became the owner of the apartment where IK was residing. On EQ's account despite his wife's stated wish, he decided not to sell the apartment and allowed IK to remain. He claimed that as a consequence, he incurred a significant capital gains tax liability. He claimed that while he would have preferred to sever the tenancy he did not do so because he felt unable to confront his mother-in-law, whom he described as a 'very difficult woman'. He said that because of a combination of factors including grieving for his wife and taking on the sole responsibility for his disabled son, he did not feel 'up to having a brawl with IK'.
11 On 17 January 2002, IK appointed EQ under a power of attorney. She revoked it on 17 May 2005. On 28 April 2005, IK appointed her former husband as attorney.
12 On 8 November 2005, the Guardianship Tribunal made a financial management order, committing IK's estate to the management of the Protective Commissioner.
Decision made by the Protective Commissioner
13 By letter dated 7 November 2007, a delegate of the Protective Commissioner notified EQ that his claim for reimbursement had been refused. Two main reasons were given for that decision. First, the limited funds held by the Protective Commissioner on behalf of IK and; second, the absence of reliable evidence to substantiate EQ's claim.
14 The Protective Commissioner's delegate who made that decision concluded that IK's 'net financial position' was about $280,000, comprising assets of about $300,000 and 'known debts' of $20,000. The debts consisted of two loans secured by registered mortgages against IK's property.
15 The delegate also noted that IK received a fortnightly pension of $803.
16 EQ requested an internal review. In a decision dated 8 January 2007, the Commissioner's delegate, Mr John Neeley, affirmed the original decision. After carefully analysing the subject decision he concluded:
I have no doubt that [EQ] has provided assistance to [IK] at times in very difficult personal circumstances. However it is inappropriate for this office to agree to pay relatively large sums to him based on the limited evidence supplied. It is also impossible to confirm what may have been [IK's] view regarding arrangement over the 16 years in question.
17 Mr Neeley adopted most of the findings made by the original decision maker but took a more conservative view of IK's financial position. He thought that if compound interest was factored in, the 'potential payout figure' might be as high as $120,000, not $20,000 as originally believed.
Claim before Tribunal
18 Prior to the hearing, EQ provided the Tribunal a two-page document which broke down his claim into four major areas which he described in the following terms:
(i) Confirmed expenses paid by [EQ] for [IK's] bills - $12,248.81
(ii) Figure from when [IK] occupied our flat - $8,526
(iii) Lost rent from OPC when [IK] occupied our flat - $6,825
(iv) Unconfirmed payments 1991-2006 - $32,465.50 (minimum)
19 In the course of these proceedings EQ withdrew the claim for unconfirmed payments (Item iv) recognising the difficulty of establishing that claim in the absence of supporting evidence. He gave oral evidence in support of the balance of the claim and where available, took the Tribunal to supporting evidence.
Correct and preferable decision
20 In reviewing the subject decision the Tribunal 'stands in the shoes' of the Commissioner and is required to make the 'correct and preferable decision' having regard to any relevant factual material and any applicable written or unwritten law (Administrative Decisions Tribunal Act 1997, section 63). This includes any material that postdates that decision (YG & GG v Minister for Community Services [2002] NSWCA 247 at [25]). The review is to be conducted 'without any presumption as to the correctness of the decision': McDonald v Guardianship Administration Board [1993] 1 VR 521 at 530. When reviewing the subject decision the Tribunal may exercise all of the functions that are vested in the Commissioner.
21 In approaching this review it is necessary to address the following issues:
First, does the Commissioner have power to reimburse EQ for some or all of the amount claimed?
If so, can some or all of the claims be substantiated?
Finally, if so, should EQ be reimbursed?
i. Power to reimburse EQ
22 Section 24(1) of the Protected Estates Act 1983 (the Act) provides that the Protective Commissioner may exercise all functions necessary and incidental to the management and care of the estate of a 'protected person' when the management of that estate is committed to the Protective Commissioner.
23 Section 28 of the Act is headed 'Disposition of money in hands of Protective Commissioner', and provides that the Protective Commissioner may apply money comprising the whole or any part of the estate of a protected person towards one of more of the purposes listed in section 28(1). These include the payment of the debts and engagements of the protected person protected person: section 28(1)(a).
24 Whether the Commissioner has power to reimburse EQ turns on whether some claim constitutes a 'debt or engagement' (section 28(1)(a)). In deciding this issue I have taken EQ's evidence at its highest and accepted that over a period of just under two decades he advanced IK sums of money and paid for various expenses on her behalf.
25 A debt? The term 'debt' is not defined in the Act. The Macquarie Dictionary offers this definition: '1. that which is owed; that which one person is bound to pay to or perform for another; 2. a liability or obligation to pay or render something…' The Oxford English dictionary offers a similar definition: 'that which is owed or due; anything (as money, goods, or service) which one person is under obligation to pay or render to another'.
26 EQ concedes that he did not have an express agreement with his mother-in-law that she would repay the money advanced. His evidence, at its highest, is that from time to time she said, 'I'll pay you back when I can'.
27 In my view the claim made against EQ does not constitute a legally enforceable obligation and therefore could not be said to constitute a debt.
28 An engagement? The meaning of the word 'engagement' in the context of section 28(1)(a) was considered by the Court of Appeal in The Protective Commissioner v "D" & Ors [2004] NSWCA 216. The Court of Appeal decided that the Protective Commissioner had power under the Act to make payment for past gratuitous care from the estate of a protected person.
29 In the leading judgement, McColl JA concluded that the term engagement 'is not limited to legally enforceable obligations'. Her Honour referred (at par. [161]) to the consideration of the term by Drummond J in The Wik Peoples v State of Queensland (1996) 63 FCR 450 in the context of section 2 of the NSW Constitution Act 1855 (Imp) and said:
His Honour found (at 464 - 465) that in the first half of the nineteenth century the term "engagement" was "in common use" like the term "promise" to "describe government undertakings with respect to grants of interest in Crown land that did not amount to arrangements legally binding on the Crown." Drummond J's historical researches revealed the term "engagements" to refer to something in the nature of a commitment, but not necessarily a legal obligation. It might be presumed that the meaning of the term did not undergo a limitation between 1855 and 1878. That that is so is borne out by the dictionary meaning given to "engagement" which includes both "a formal promise, agreement, undertaking, covenant" and a "moral or legal obligation": The Shorter Oxford English Dictionary (3rd Ed). It seems sensible to assume, therefore, that when the word "engagements" was used in section 151(a) of the 1878 Act [Lunacy Act 1878], where, it will be recalled, it was used in contradistinction to the word "debts" ("debts or engagements") it was intended to refer to something which may not amount to a legally enforceable obligation.
30 Her Honour went on to say (at pars [163] and [164]):
When "engagements" was carved out of section 81 of the 1958 Act and inserted into section 28(1)(a) the drafter connected it to the word "debts" with the conjunction "and". That word should be given its ordinary meaning: Victims Compensation Fund Corporation v Brown [2003] HCA 54; (2003) 201 ALR 260 at [13] per Heydon JA (with whom McHugh ACJ, Gummow, Kirby and Hayne JJ agreed). In the present context, the use of "and" to join the two terms indicates a legislative intention to list purposes towards which the Protective Commissioner could apply money comprising part of the protected person's estate. There was no point to using the word "engagements" if it had the same meaning as "debts". The word was added to the word "debts" because it carried a different meaning. It is not superfluous. It must be given a meaning: Project Blue Sky Inc v Australian Broadcasting Authority , above, at [71].
In my opinion, therefore, the expression "debts and engagements" is not a hendiadys [that is, the two words linked by 'and' meaning the same thing]. "Engagements" is not a synonym for "debts": cf Victims Compensation Corporation Fund v Brown [2003] HCA 54; (2003) 201 ALR 260 at [34]. Its use in section 28(1)(a) indicates the legislature's intention that the moneys in the protected person's estate could be applied by the Protective Commissioner not only to discharge legally enforceable obligations, but also to meet a commitment which was a moral obligation only.
31 Applying that reasoning, the question to be asked is: does EQ's claim give rise to a moral obligation on IK's part? If EQ's account is accepted, namely that over an extended period he provided financial support to IK, derived no apparent financial benefit and had been promised that he would be repaid, EQ's claims could constitute an engagement for the purpose of section 28(1)(a).
ii. Can some or all of the claims be substantiated?
32 As acknowledged by the Protective Commissioner's delegates, EQ provided his mother-in-law with much needed care and support, including financial support, since the early 1990s and continued to do so after the death of his wife.
33 This however does not relieve EQ from discharging the evidentiary onus. In respect of each item claimed it is necessary to ask whether it is supported by cogent, reliable and independent evidence. This is especially so given the passage of time since many of the items were purchased, IK's inability to comment on any part of the claim, together with the fact that self evidently EQ is not an independent witness.
34 A cautious approach must be taken where a claim is made against the estate of a protected person who lacks capacity, especially where there is an absence of reliable supporting documentation. O'Connor J in GJ and Ors v Protective Commissioner [2005] NSWADT 66, endorsed the principle that payment from the estate of a protected person for past gratuitous services should only be ordered on proper evidence citing, with approval, Jones v Moylan [2000], WASCA 361 at [119]; Grevett v McIntyre [2002] QSC 106 at [6] and Huet v Irvine [2003] QSC 387 at [10]. That principle, in my view, applies equally to a claim for reimbursement for expenses incurred on behalf of a protected person.
35 It is necessary to examine each of EQ's claims in turn.
Claim 1: 'Figure from when [IK] occupied our flat - $8,526'
36 To understand this claim it is necessary to sketch in the details about the rental arrangements for IK's and EQ's respective properties throughout the period of this claim.
37 IK lived rent-free in her daughter's seaside apartment (the apartment), from about 2000 until late 2005. (The exact date IK moved to the property is in dispute but nothing turns on this.) The apartment passed to EQ on his wife's death. Throughout this period, IK's property was rented on the private rental market and managed by a local real estate agent. Weekly rental of about $200 was paid.
38 While not entirely clear it would seem that until her death in late 2001, the rent from IK's property was paid into an account operated by EQ's wife. In January 2002, EQ opened a trust account in IK's name. From 31 January 2002 to 30 November 2005, regular deposits, totalling $28,842, were paid into that account representing the net rental income after the deduction of agent's commission and other outgoings.
39 The respondent tendered in these proceedings a list of cheques drawn by EQ on the trust account prepared from available bank records and cheque butts (Annexure A, filed 5 June 2008). The total amount drawn was $23,732.65. It is not in issue that IK did not operate the account and most cheques were drawn to pay for EQ's personal expenses.
40 EQ claims that had his apartment been rented on the private rental market it would have attracted a marginally higher rental than IK's property, as, while smaller, it was located in a popular seaside town. No independent evidence has been provided to support that claim.
41 This claim is broken down into two periods - before and after the death of EQ's wife.
42 First period EQ claims the difference between the probable rental income of the apartment and the actual rental from IK's property, for the period, January 2000 to December 2001. He calculates that figure to be $1,040, based on a differential of $10 per week (104 weeks x $10). He makes no claim for any expenses incurred by his wife in relation to IK's property.
43 Second period This claim relates to the period, 21 December 2001 to 7 March 2006, and is less straightforward. As I understand it, EQ claims, (i) the difference between his estimate of the probable rental income of the seaside apartment and the actual income received from IK's property; and (ii) the expenses he paid on IK's behalf for that property; (iii) less the amount he withdrew from the trust account to pay for his expenses. The amount claimed is $6,836.
44 Total claim The total amount claimed for the two periods is $8,526 ($1,040 + $6,836).
45 Finding and conclusions In my view this claim cannot be substantiated for these reasons.
46 First, there is no evidence to support EQ's claim that the seaside apartment had greater income earning potential than IK's property. While plausible that contention is unsupported.
47 Second, there is a paucity of reliable evidence about the expenses EQ claims for the second period. The evidence reveals that record keeping was not one of EQ's strengths. The only records produced to substantiate these expenses were the handwritten entries on cheque butts. No records cross-referencing the cheques drawn to the corresponding receipt or invoice were kept. Absent the narrative provided by EQ it is not possible to identify what expenses the trust account funds were used for.
48 Third, it may be that EQ inadvertently breached his fiduciary duty to IK that came about as a consequence of his appointment as her Attorney. A power of attorney was granted to EQ in January 2002. That gave EQ the authority to act as agent for IK and generally manage her affairs.
49 The principles of common law and equity in relation to powers of attorney continue to apply except where the Powers of Attorney Act 2003 provides otherwise: section 7(2). The relationship of agency is generally viewed as having a fiduciary nature: Keith Henry & Co Pty Ltd v Stuart Walker & Co Pty Ltd (1958) 100 CLR 342 at 350; 32 ALJ 200 per Dixon CJ, McTiernan and Fullagar JJ. Where, as in this case, money is received by an agent on a principal's behalf, particular obligations apply. All moneys received on behalf of the principal must be paid over or accounted for to the principal upon request: Harsant v Blaine Macdonald & Co (1887) 56 LJQB 511. It is the duty of the agent to keep accounts of all transactions and to be prepared at all times to produce them to the principal.
50 It should be noted that EQ acted without reward and it does not appear that he professed to have any special skills. He apparently took on the role of managing IK's affairs by default. Notwithstanding that, he had a duty, among other things, to keep proper accounts. Where an agent fails to keep proper accounts every presumption consistent with the facts will weigh in favour of the principal.
51 EQ was ignorant of the duties imposed on him as a consequence of his appointment as IK's attorney. While I am satisfied he did not seek to profit out of that relationship, as a consequence of not keeping proper records and accounts and using IK's money as if it were his own, in my view he forfeits any moral claim to any claim for expenses drawn from the trust account.
52 Finally, by his own admission, EQ continued to draw on the trust account after his power of attorney had been revoked.
53 For the reasons given I cannot be satisfied that the claim for expenses and rental shortfall has been made out.
Claim 2: Confirmed expenses - $12,248
54 EQ claims reimbursement for the following ten items:
(i) Rates on IK's property - EQ claims $3,001.26 for the payment of rates on IK's property. EQ concedes that there is a degree of overlap between this item and Claim 1 above.
(ii) 'IK took rent money $1,330' - The basis of this claim is unclear.
(iii) 'Money spent on [IK's] house total $3571.05' - EQ testified that he spent 'at least' this amount on preparing IK's property so it could be rented out. He did not particularise this claim or provide receipts for all items claimed.
(iv) Oil heater - EQ claimed that he purchased a gas heater for his mother-in-law and installed it in her property when she was living there. He claimed that when she moved he removed it and had it installed in the apartment for her benefit. In cross-examination he agreed it was a fixture.
(v) Money orders $440 - EQ claimed he sent his mother-in-law money orders when she ran out of cash on a regular basis.
(vi) Cost tried to sell unit -$412 - This claim related to expenses incurred in preparing the apartment for sale in 2001.
(vii) Steam clean carpet and new mat - This claim also related to expenses incurred following EQ's wife's decision to sell the apartment.
(viii) Car accident bumper - $140 - This related to the cost of replacing a bumper bar on IK's car.
(ix) Bega Valley $19.50 - this claim relates to water rates for IK's property.
(x) 'Bills paid for repairing [IK's] house from agent $3013' - This relates to expenses incurred by EQ during the time IK's house was rented out up until the time her estate came under the management of the Protective Commissioner.
55 The evidence provided in support of these items claimed is, in my view, inadequate.
56 The claim for car repairs is but one example. The sole supporting evidence is a receipt issued to EQ. There is nothing on the face of that document to indicate that it related to a car owned by IK. Nor is there any evidence to support the claim that the car had been damaged by EQ's mother-in-law.
57 The evidence surrounding the claim for expenses said to have been incurred in the course of preparing the apartment for sale, provides a further example. Leaving aside the lack of reliable documentary evidence, this claim rests on the assumption that IK has an obligation to repay EQ for the cost of preparing the apartment for sale. Even if EQ's account of the circumstances that caused him not proceed with the sale, it does follow that IK is responsible for that decision or the costs thrown away.
58 Having carefully considered all of the evidence in respect of each item claimed, I am not satisfied that EQ has discharged the evidentiary onus.
Claim 3: Lost rent after estate committed to management
59 This claim relates to rental income allegedly foregone after IK's estate was committed to the management of the Protective Commissioner. The amount claimed is $6,825. It is noted that there is an overlap between this claim and Claim 1 but as the latter has been refused it is convenient to proceed to determine this claim for the period 'pleaded'.
60 It is necessary to sketch in the factual background to this claim.
2 November 2005 Final withdrawal by EQ from IK's account
8 November 2005 IK's estate committed to management
9 March 2006 Protective Commissioner (PC) commences paying rent to EQ
13 June 2006 IK moves to an aged care facility
27 June 2006 Last rental payment by PC to EQ
6 July 2006 PC arranges IK's clothes and personal effects to be collected from the apartment
1 August 2006 EQ requests PC to return key to apartment so it can be prepared for sale
18 October 2006 EQ's solicitor writes to PC demanding that IK's possessions be removed from the apartment
24 October 2006 EQ repossesses apartment