KBX [2015] NSWCATGD 2

Statutory framework and issues for determination

1. Section 36(1) of the Powers of Attorney Act 2003 (NSW) (the POA Act) provides as follows: A review Tribunal may, on the application of an interested person, decide to review the making, revocation or the operation and effect of a reviewable power of attorney or not to carry out such a review.
2. In reviewing the making of a power of attorney, the Tribunal may make the orders set out in s 36(3) of the POA Act, including orders that the power of attorney is invalid. In reviewing the operation and effect of a power of attorney, the Tribunal may make orders as provided under s 36(4) as follows: A review Tribunal may, if satisfied that it would be in the best interests of the principal to do so or that it would better reflect the wishes of the principal, make any one or more of the following orders relating to the operation and effect of a power of attorney: (a) an order varying a term of, or a power conferred by, the power of attorney, (b) an order removing a person from office as an attorney, (c) an order appointing a substitute attorney to replace an attorney who has been removed from office by a review Tribunal or who otherwise vacates the office, (d) an order reinstating a power of attorney that has lapsed by reason of any vacancy in the office of an attorney and appointing a substitute attorney to replace the attorney who vacated office, (e) an order directing or requiring any one or more of the following: (i) that an attorney furnish accounts and other information to the Tribunal or to a person nominated by the Tribunal, (ii) that an attorney lodge with the Tribunal a copy of all records and accounts kept by the attorney of dealings and transactions made by the attorney under the power, (iii) that those records and accounts be audited by an auditor appointed by the Tribunal and that a copy of the report of the auditor be furnished to the Tribunal, (iv) that the attorney submit a plan of financial management to the Tribunal for approval, (f) an order revoking all or part of the power of attorney, (g) such other orders as the review Tribunal thinks fit.
3. At the directions hearings, the applicant advised the Tribunal he did not seek a review of the making of the powers of attorney but wished to proceed with his applications for a review of the operation and effect of the powers of attorney made by his parents. In particular, the applicant stated that he sought orders under s 36(4)(e)of the POA Act.
4. As noted by the Tribunal in UQH [2014] NSWCATGD 37 at [17], it is well-established law that the death of the principal of a power of attorney terminates the power. There was no dispute that the powers of attorney made by Mr SGX and Mrs KBX ceased to have operative effect from 26 October 2012, in the case of Mr SGX, and 28 August 2013, in the case of Mrs KBX.
5. The issues for determination were: first, whether the Tribunal had power to review the powers of attorney of Mr SGX and Mrs KBX given both had passed away at the time of the application and the hearing; secondly, if there was power to review the instruments, whether the Tribunal should conduct such a review and, thirdly, if the Tribunal were to conduct reviews what orders should be made.
6. Because Mr SGX's power of attorney was a Queensland instrument, a further issue arose [in respect of the application concerning Mr SGX] as to whether the Tribunal had jurisdiction to review an instrument created under legislation in another State.

Interlocutory applications

1. As already noted, a barrister, Mr UCC, sought leave to represent Mrs LDI in the proceedings.
2. Relevantly, s 45 of the Civil and Administrative Tribunal Act 2013 (NSW) (the CAT Act) provides: (1) A party to proceedings in the Tribunal: (a) has the carriage of the party's own case and is not entitled to be represented by any person, and (b) may be represented by another person only if the Tribunal grants leave for the person to represent the party. … (3) The Tribunal may at its discretion: (a) grant or refuse leave under subsection (1) (b), and (b) revoke any leave that it has granted.
3. The Guardianship Division has issued a procedural direction (Procedural Direction No 2: Representation), setting out guidelines for when the Division will grant leave for legal representation. The procedural direction provides that the Division will take into account the following matters when exercising its discretion to grant leave:

• Whether representation will promote the principles in section 4 of the Guardianship Act 1987, in particular the paramount concern being the interests of the subject person;
• The guiding principle set out in section 36(1) of the Act to facilitate the just, quick and cheap resolution of the real issues in the proceedings;
• Any disability or other factor that impedes the party's capacity to fully participate in the hearing;
• The nature and seriousness of the interests of the party that are affected by the proceedings;
• Whether the party's interests and point of view conflict with those of other parties;
• Whether the proceedings involve complex legal or factual issues;
• Fairness between the parties. It may be unfair if one party is represented but another is not, particularly if the subject person is unrepresented or the parties are in conflict;
• Whether representation may assist a party to focus on the relevant issues and may promote a conciliatory approach in the proceedings.

1. The applicant opposed the application for leave on the basis that he was not legally represented and Mrs LDI was well able to represent herself.
2. Having regard to the guidance provided in the procedural direction, the Tribunal refused Mr UCC's application for leave. There was no evidence that representation would promote the principles in s 4 of the Guardianship Act 1987 (NSW), that Mrs LDI had a disability that would impede her capacity to participate in the hearing and make submissions or that the proceedings involved complex legal or factual issues. The Tribunal also had regard to the fact that it had considered and previously rejected the applicant's application for legal representation and it would be unfair for Mrs LDI to be legally represented in circumstances where the applicant was not. Moreover, the Tribunal was satisfied that it could resolve the issues in dispute without recourse to legal representation. The application, while novel, was not complex.

Evidence and submissions

1. The applicant and Mrs LDI were jointly appointed as executors of Mrs KBX's estate. It is common ground that the applicant and Mrs LDI have been unable to administer the estate because of conflict between them. The applicant has requested copies of bank statements and wants to examine his parents' accounts. Mrs LDI says she does not have copies of the statements. She also says she has not refused the applicant access to information, although she agrees she gave instructions to the estate lawyers not to distribute information to her brother pending these proceedings.
2. The applicant tendered copies of correspondence with the estate lawyers and from his lawyers. This correspondence included a letter dated 5 February 2014 from the estate lawyers responding to an email from Mr Williams' lawyers. Relevantly, the letter noted as follows: I confirm that we have been advised that there are no accounts held in the name of [Mrs KBX] and therefore we do not have any information in that regard.
3. The applicant submitted that it was appropriate for the Tribunal to review the operation of his parents' enduring powers of attorney because he was entitled to know what had happened to money in their accounts. He was seeking this further information as executor of his mother's estate because it was relevant to understand what assets form part of Mrs KBX's estate and whether there had been wrongful dissipation or misuse of assets by his sister. The applicant further submitted that he wanted to obtain this information through these proceedings as even though he could have pursued this through the courts, it would be more economical for him to pursue this action in the Guardianship Division. Mrs LDI had transferred over $100,000 from their parents' accounts on 26 March 2012 into an account in her name and she had failed to account for these moneys after her parents' death.
4. Mrs LDI submitted that the Tribunal should not review the enduring powers of attorney or make orders as this would not be in the best interests of her parents. They were deceased and, as such, their best interests could not be considered. If the applicant wanted to pursue an action, particularly about the administration of the estate of Mrs KBX, he should pursue this through the court. Alternatively, Mr LFX could obtain the information directly from the banks and should seek to engage with the lawyers acting for the estate to break any impasse between them. In any event, the power of attorney in respect of Mr LFX had not been invoked and had been invoked in respect of Mrs KBX on Mr SGX's instructions. Mr SGX and Mrs KBX had an investment account of $105,000, which was transferred into her name at Mr SGX's request for safe keeping.

Consideration

1. The issue of whether this Tribunal had power to review an enduring power of attorney after the principal had passed away was considered in UQH. In that case, one of the children of Mr UQH made an application to review an enduring power of attorney made by Mr UQH prior to his death. Mr UQH passed away before the application was filed. There were disputes between the applicant and Mr UQH's attorneys, two of his other children, about the administration of his finances and the administration of his estate. The Tribunal held that this Tribunal would have jurisdiction to review an enduring power of attorney under the POA Act even if the principal had passed away prior to the hearing. The Tribunal also found that, given the nature of the relief under s 36(4) of the POA Act, the Tribunal could only make orders that would have practical utility. The Tribunal recognised its general supervision role in relation to enduring powers of attorney but noted it could only make orders under s 36(4) if it was satisfied about the threshold matters required to enliven the discretion.
2. Under s 34(6), the Tribunal may make orders in respect of an enduring power of attorney if it is satisfied it would be in the best interests of the principal to make the orders or that it would better reflect the principal's wishes. When the principal has died, the principal's best interests can no longer be an operative consideration. As noted by the Tribunal in UQH at [43] Once the principal has died best interests cannot be ascribed to the principal and the Tribunal cannot make any orders based on best interests.
3. The same cannot be said of the other threshold required to enliven the discretion under section 36(4), namely, whether the orders would better reflect the wishes of the principal. In UQH, the Tribunal found that the Tribunal must be able to take into account the principal's wishes at the time of the execution of the power of attorney and indeed any time after until the death of the principal. The Tribunal therefore opined that, in relevant circumstances, it may make an order under s 36(4) if it could be satisfied that the order would better reflect the principal's wishes prior to their death.
4. We agree with these propositions.
5. A principal who was granted a power of attorney to another would wish authority under that power to be exercised appropriately. If the attorney abused the power or improperly took benefits for themselves or others to the detriment of the principal, or ultimately to the beneficiaries of the estate of the principal, it may be appropriate for the Tribunal to review a power of attorney and make orders under, for instance, s 36(4)(e) of the POA Act. Arguably, it would better reflect the wishes of the principal for the assets, and ultimately their estate, not to be dissipated or transferred to the benefit of the attorney or another. A principal who executes a Will and Testament setting out their wishes as to how their estate is to be distributed would have an interest in ensuring their wishes could be given effect and not circumvented by the dissipation of their assets before their death, other than for their benefit.
6. Accordingly, we are of the view that the Tribunal is empowered to review the enduring power of attorney of Mrs KBX even though she had passed away prior to the hearing and prior to the application being filed. However, the critical issue is whether the Tribunal should review the power of attorney and, if in conducting the review, it should make any orders under s 36(4) of the POA Act.
7. In this case we determined not to review the power of attorney executed by Mrs KBX.
8. Section 36(1) of the POA Act gives the Tribunal a discretion to review an enduring power of attorney. The discretion is unfettered although, as already noted, the orders that can be made by the Tribunal are circumscribed by s 36(4).
9. In this case, the applicant seeks orders that Mrs LDI provide audited accounts to the Tribunal about the management of his parents' finances before their death. He argues that he cannot get access to financial information about these matters. These issues are ultimately relevant to the administration of his parents' estates. Any dealings in his father's estate before his death may affect Mrs KBX's entitlement to distribution from the estate and any dealings in Mrs KBX's estate may affect the administration of her estate to her children, which includes the applicant and Mrs LDI.
10. However, the applicant has alternative means available to scrutinise these matters and discharge his obligations as executor of Mrs KBX's estate. Furthermore, the jurisdiction of this Tribunal is limited and there is little practical utility in the Tribunal conducting a review, at considerable cost, where the most effective course is for the applicant to exercise his existing rights and take action as joint executor of his mother's estate.
11. First, the applicant was appointed as attorney for Mr SGX. He was entitled to obtain access to his bank accounts and any dealings in respect of those accounts prior to his father's death. Arguably he may be still be so entitled to assess whether there was any mismanagement of his father's accounts by Mrs LDI as his attorney.
12. Secondly, and most significantly, as joint executor of the estate of Mrs KBX, the applicant is entitled to access to Mrs KBX's bank accounts and obtain information relevant to the administration of her estate. If, as the applicant alleges, Mrs LDI withdrew money from her parents' joint investment account prior to her father's death and deposited those funds into an account in her name, the issue that arises is whether this transfer was under instruction from Mr SGX as a gift to Mrs LDI or whether this was to be held in trust by Mrs LDI for Mr SGX and Mrs KBX. If it was the latter, these funds would have comprised part of Mr SGX's estate on his death and Mrs KBX would have been entitled to a distribution of the proceeds. Mrs KBX was her husband's executor but it is unclear whether she administered his estate or whether she had capacity to do so. On Mrs KBX's death, the applicant and Mrs LDI were duty bound to administer her estate. The question of whether the proceeds from this investment account formed part of Mrs KBX's estate is clearly a material issue for the executors to resolve. However, they have not done so and remain in dispute. It is apparent there is self-interest between the parties in the administration of the estate, yet there are other beneficiaries who have an interest in the estate.
13. There is some evidence, through communications between Mrs LDI and a Tribunal officer as recorded in the Tribunal hearing report made available to the parties and the Tribunal, that Mrs LDI distributed these proceeds after her parents' death between her siblings, excluding the applicant, because it was alleged the applicant owed money to Mr SGX and Mrs KBX. Whether this was the case and whether this was appropriate in the circumstances and was in proper discharge of obligations as an executor of Mr SGX and Mrs KBX's estates is an issue that goes well beyond the jurisdiction of the Tribunal.
14. Where there is dispute between executors about the administration of an estate of this nature, the appropriate action is for the executors to resolve these disputes by application to the Supreme Court. While this Tribunal may make orders under s 34(4)(e) for an accounting, it is not empowered to make the broad range of orders available to the Supreme Court in respect of the disputed administration of estates.
15. In summary, as an executor of Mrs KBX's estate the applicant has authority to obtain information relevant to the administration of his mother's estate from Mrs LDI, the estate lawyers and any relevant financial institutions. If this information cannot be obtained or if there is ongoing dispute about the administration of the estate, the appropriate action is for one or more of the executors to make application to the Supreme Court.
16. This being the case, it is not appropriate for this Tribunal to conduct a review of the operation and effect of the enduring powers of attorney of Mr SGX or Mrs KBX or indeed to make any order pursuant to s 36(4).
17. Accordingly, the application for review of the power of attorney of Mrs KBX executed on 4 June 2007 was dismissed.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 28 April 2015