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[2014] NSWCATGD 12
NCAT Guardianship
2014-06-19
McAuliffe J
Original judgment source is linked above.
BACKGROUND 1These Reasons for Decision are for the orders of the Tribunal made on 19 June 2014 concerning Mrs IEI.
What the Tribunal decided 2The Tribunal decided to review the operation and effect of the enduring power of attorney appointment made by Mrs IEI on 4 February 2009 and the appointment made by Mrs IEI on 26 May 2010. 3In relation to the application to review the enduring power of attorney appointment made by Mrs IEI on 4 February 2009 appointing Mrs HNL as her attorney, the Tribunal determined under section 36(2) of the Powers of Attorney Act 2003 (NSW) not to make any order under section 36 of the Powers of Attorney Act and dismissed the application. 4In relation to the application to review the enduring power of attorney appointment made by Mrs IEI on 26 May 2010 appointing Mr MHI as her attorney, the Tribunal revoked the power of attorney.
Background to application 5Mrs IEI is an 82-year-old woman who lives at an aged care facility on the North Shore of Sydney (facility A). 6Mrs IEI previously resided with her son Mr KAI in her own home in south-eastern Sydney. 7Mrs IEI has a diagnosis of severe Alzheimer's disease. On 8 February 2013 psychogeriatrician, Professor Z assessed her MMSE at 5/30. Reports to the Tribunal indicate Mrs IEI has high and complex care needs and requires full assistance with all activities of daily living. 8Mrs IEI has four children, Mr KAI, Mr MHI, Mr NBI and Mrs HNL. All of Mrs IEI's children live in the Sydney area. 9On 4 February 2009 Mrs IEI made an enduring power of attorney appointing Mrs HNL as her attorney ('the 2009 power of attorney'). 10On 29 July 2009 Mrs IEI made an appointment of enduring guardian, appointing Mrs HNL, Mr MHI, Mr NBI and Mr KAI as her guardians. 11On 26 May 2010 Mrs IEI made an enduring power of attorney appointing Mr MHI as her attorney ('the 2010 power of attorney'). This appointment resulted in Mrs HNL and Mr MHI becoming joint and several attorneys. 12Also on 26 May 2010 Mrs IEI made an appointment of enduring guardians appointing Mrs HNL and Mr MHI. 13Following an assessment by the Aged Care Assessment Team, on 25 June 2012, Mrs IEI was notified that she was eligible for Residential Care and Residential Respite Care at a high level. 14In April 2013 Mrs HNL placed Mrs IEI in respite care at facility A, not far from Mrs HNL's home. She made this placement following her concerns about her mother's care at home and without consulting or informing her brothers. Leading up to the placement there had been contact between the siblings and between Mr SCL and Mr KAI about the level of care Mrs IEI had been receiving. 15Mrs HNL expressed concern that the services she had put in place to support Mrs IEI at home, service provider B, service provider C, service provider D, service provider E, had all been cancelled by one or other of her brothers and that she was being denied access to her mother at home for twelve months prior to the placement with service provider A. Mrs HNL also expressed concern that the home environment was not safe for Mrs IEI and Mrs IEI was not being provided with a suitable level of care. 16At this point in time Mrs IEI's sons were of the view that Mrs IEI should be returned home and continue to be cared for by Mr KAI. Mrs HNL applied for a permanent placement for Mrs IEI, however this application was refused as Mr MHI was opposed to the placement and he wrote to in this regard. 17Mr MHI's letter of 14 June 2013 to service provider A read: "I believe my sister, [Mrs HNL] has applied for my mother, [Mrs IEI] to live permanently in your centre. I have provided you a copy of the Power of Attorney yesterday and as evidence by that document that I am also a donee. I am concerned and do not agree with my mother being placed in long term care at the moment, and I would like to inform you that there is conflict between my sister and myself. This is also to inform you that I am in the process of making an application to the Guardianship Tribunal and that you are not to enter on any agreement with my sister, [Mrs HNL] without my knowledge and consent." 18On 2 July 2013 an application to review the enduring guardianship appointment was received from Mrs HNL. 19On 16 July 2013 an application to review the 2010 power of attorney was received from Mr MHI. 20On 26 July 2013 the Tribunal (differently constituted) revoked the enduring guardianship appointment executed on 29 July 2009 and made a guardianship order appointing the Public Guardian for 6 months to make decisions about accommodation, access to services, health care and medical and dental treatment. In making the order the Tribunal wrote: "It was submitted that the only practical solution would be to appoint the Public Guardian in this case. This is because there is an urgent need for decisions to be made about accommodation. It was clear from the evidence that there is no one in [Mrs IEI's] family who would be prepared to consult widely with the other members of the family in such a decision making process. The only way in which each member of the family can have a role in the decision making function at this state would be for an independent decision maker to be appointed. Everyone who participated in the hearing agreed with that proposal." 21The Tribunal adjourned the application to review the 2010 power of attorney with directions for six months, including a direction that the attorneys participate in a mediation with a Nationally Accredited Mediator. 22Following on from the hearing on 26 July 2014 Mrs HNL and Mr MHI the parties attended a pre-mediation meeting on 19 September 2013, and mediation sessions on 1 November 2013 and 16 December 2013. No agreement was reached by the parties at the mediation. Mrs HNL reports that Mr MHI walked out of the mediation before it concluded. The qualifications and the payment of the mediator's fees then became disputed issues between the attorneys in these proceedings. 23The Public Guardian made a decision, on or around October 2013, that Mrs IEI should remain living at facility A. Mrs IEI's sons had advocated for either Mrs IEI returning to her own home or being placed in an aged care facility in south-eastern Sydney, the area in which she had lived all her life, and which was closer to Mr NBI and Mr KAI. On request from Mr MHI the Public Guardian provided reasons for decision to have Mrs IEI stay at facility A, and those reasons are dated 6 November 2013. The Public Guardian noted that in reaching the decision she considered whether moving Mrs IEI to another aged care facility may better preserve family relationships to a degree that would outweigh the risks associated with dislocation. In rejecting the proposal to move Mrs IEI to a facility closer to her home the Public Guardian decided that it was not clear that Mrs IEI would derive any benefit from moving to a facility in the area which she lived her life and which was closer to two of her sons, though the Public Guardian formed the view that there was a considerable likelihood Mrs IEI would suffer from dislocation issues such as worsening confusion and delirium if she were to be moved. The Public Guardian was also not persuaded by Mr MHI's argument that Mrs IEI should be moved to a dementia specific unit as she concluded that Mrs IEI was receiving appropriate care at service provider A. 24Mr NBI, on 11 December 2013, requested the Public Guardian review the decision. The Public Guardian declined to conduct a review on the basis that the application for review was made outside of the 28 day timeframe. 25On 16 January 2014 the Tribunal decided to conduct a review of the appointment of enduring guardian made by Mrs IEI in May 2010 and then adjourned all matters for approximately one month. 26On 10 February 2014 a request to review a guardianship order was submitted to the Tribunal by Mr NBI. 27At a hearing on 20 February 2014 the Tribunal renewed and varied the guardianship order, appointing Mrs HNL as guardian for a period of 12 months with the function of accommodation. In its Reasons for Decision the Tribunal wrote: "[Mr MHI] took the view that although he knew his sister would continue their mother's placement at facility A, her appointment as guardian was his preference over the Public Guardian as, in his view, it is right and proper and in his mother's best interests that a family member be the decision-maker and not a stranger. [Mr NBI] also supported [Mrs HNL]'s appointment as he said although they didn't all agree on what was in their mother's best interests he was convinced that they all were acting in what they believed was her best interest. He said [Mrs HNL] should be given "a go." [Mr KAI] echoed his brothers' views and also supported the appointment of [Mrs HNL] as guardian." 28At that hearing the Tribunal also dismissed the application to review the appointment of enduring guardian and adjourned the application for the review of the 2010 power of attorney for approximately 2 months with directions in relation to the service of documents. 29On 20 February 2014 the Tribunal accepted an oral application to review the 2009 power of attorney from Mr MHI and then adjourned the application for approximately 2 months. 30On 23 April 2014 all of the matters before the Tribunal were adjourned part heard. 31On 6 June 2014 Mr MHI filed an application to withdraw his applications for review of the powers of attorney. Mrs HNL opposed the application to withdraw. The basis of his application to withdraw was that he wished to preserve the status quo, which would see both he and Mrs HNL remain jointly and severally powers of attorney. Mr MHI proposed that this arrangement would enable him to execute his stated plan, which was, put simply, to allow Mrs HNL to manage their mother's finances whilst allowing him oversight of her management.
THE HEARING 32At the end of these Reasons for Decision are lists of the parties to the application and witnesses who attended the hearing [Appendix removed for publication].
The Decision to Review 33Section 36(1) of the Powers of Attorney Act 2003 (NSW) ('the Act') provides that the Tribunal may decide to review the operation and effect of a reviewable power of attorney on the application of an interested person. 34Section 35(1) of the Act provides that an attorney is an interested person. Clearly Mr MHI is an attorney in relation to the 2010 power of attorney and is therefore an interested person. The Act does not appear to limit the interested person to being an attorney appointed in relation to the instrument to which the review application is aimed and therefore the Tribunal finds that Mr MHI is also an interested person in relation to the 2009 power of attorney and is entitled to bring the application to review this instrument. 35If the Tribunal is not correct in this view the Tribunal considers that Mr MHI would be a person who has a proper interest in the proceedings and a genuine interest in the welfare of Mrs IEI and would therefore be entitled to bring an application in relation to the 2009 power of attorney pursuant to s 35(1)(d) of the Act. 36If the Tribunal decides to carry out a review then s 36(4) sets out the orders the Tribunal may make in relation to the operation and effect of a power of attorney if it is 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. The Tribunal may make 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. 37Mr MHI has come to the view that he and Mrs HNL acting jointly as attorneys is unworkable. Hundreds of pages of documents have been forwarded to the Tribunal and the parties are in dispute in relation to a number of matters. 38In these circumstances the Tribunal is of the view that it should review the operation of both the 2009 Power of Attorney and the 2010 Power of Attorney and given the Tribunal decided to review both powers of attorney it refused Mr MHI's application to withdraw the applications.
THE DOCUMENTS 39The Tribunal was provided with more than a hundred documents. A not insignificant number of these documents were correspondence between the parties the Tribunal was copied into. Although the Tribunal read each of the documents it considered that some of that material was repetitive, unreliable and dealt with day to day issues in detail and were not directly relevant to the issues before the Tribunal.
Mr MHI 40On 6 June 2014 Mr MHI filed an application to withdraw his application. 41In his reasons for the request to withdraw Mr MHI wrote: "There is now no request from me to require decisions to be Joint as was requested on the application. This request would deem the Power of Attorney role(s) potentially unworkable." I have no history in my role as Power of Attorney in making unilateral decisions nor is there any history of me blocking decisions made by [Mrs HNL] other than asking her to inform me of such, to allow time for effective consideration and evaluation." This primarily to ensure major decisions made on behalf of Mrs IEI: Are not dependent on the health, wellbeing, financial or mental state of one family member being the sole Power of Attorney especially when there is now a history of dementia in the family; Have a 2nd well considered opinion prior to final decision making; Are audited and scrutinised to reduce the potential for future mismanagement when and if the personal and financial situation for the one Power of attorney varies over time; It appears from [Mrs HNL]'s signing of a 2nd Power of Attorney in 2010 (with the same solicitor her 2009 Power of Attorney) that she felt, and apparently the solicitor, it also was in the best interests of [Mrs IEI] that there be 2 Powers of Attorneys." 42In his oral evidence Mr MHI told the Tribunal:
Mrs HNL 68Mrs HNL told the Tribunal that she has been looking after her mother's affairs since 2009 and her record of doing so has been "impeccable." She relied on the report tendered to the Tribunal of law firm A dated 27 March 2014 confirming this and she produced the records she has kept to the Tribunal. 69The Tribunal was provided with many emails from Mrs HNL to her brothers in which she denied allegations made against her. The Tribunal did not consider it either necessary to appropriate to include all of this material in these Reasons for Decision. 70Mrs HNL rejects Mr MHI's assertion that he has not blocked any of her decisions and instead has only asked her to keep him informed. Mrs HNL describes this assertion as "false and misleading" and claims Mr MHI "blocked" as follows: (a)By obstructing and walking out of the mediation; (b)By preventing Mrs IEI's permanence at facility A by instructing facility A not to sign a permanent residency contract, despite the Public Guardian having decided that Mrs IEI was to remain permanently at facility A. Mrs HNL claimed that he gave this instruction to service provider A on 17 October 2013, in full knowledge that her respite allocation had expired on 15 October 2013; (c)By preventing her recovering costs from Mr KAI whilst he chose to reside in Mrs IEI's house after Mrs IEI was placed into residential care; (d)Refusing to sign a statutory declaration declaring there was no person residing in Mrs IEI's house in order to minimise her rate charges; (e)Mr MHI instructed his preferred selling agent not to send her directly a copy of the agent's submission. 71Mrs HNL said that her mother had appointed Mr MHI as her attorney at her suggestion in case something happened to her, that is, Mrs HNL. 72At the time of the appointment in 2010 they were able to work together. Since then however the family relationships have completely broken down. She said that there have been disturbing accusations raised against her honesty and integrity and against her family and even her elderly parents-in-law have been included. She feels she has been abused and bullied and that the 'arrangement' proposed by Mr MHI is completely unworkable. There has been a lot of anger and abuse levelled at her. Mr MHI has attacked her character and credibility and has even sought to denigrate by calling her fat. Mrs HNL showed the Tribunal an abusive text Mr MHI had sent on 7 May 2014 in which he alleged, among other things that she was attempting to manipulate the Tribunal. 73Mrs HNL is firmly of the view that if the current attorney arrangements continue then Mr MHI would continue abusing her and she will have to put up with that abuse. 74She said if she is permitted to retain her role as attorney she will agree to communicate with her brothers regarding their mother's welfare and finances but that communication will be limited to keeping them informed. She said she will not be responding or replying to any of their emails/correspondence. 75Mrs HNL did not support the Tribunal treating the applications as an application for a financial management order. In her view the appointment of a financial management order is not in Mrs IEI's best interests as this would cost her mother a considerable sum of money, (in the vicinity of $20,000 p.a.) when she has been managing her mother's finances well, despite the challenges, she has kept meticulous records and done nothing wrong. Mrs HNL said it was sad that her brothers did not trust her but that was no reason to revoke the 2009 power of attorney or appoint a financial manager.
Mr KAI 76Mr KAI's view as to who should be managing Mrs IEI's money was "definitely not Mrs HNL." In answer to a question from the Tribunal he said he did not have to look at the documents and "read that garbage." He described battling in two jobs to look after his mother when "Mrs HNL was in charge of mum" and that "Mrs HNL kidnapped mum." 77Mr KAI echoed his brothers' views that there has been a lack of communication from Mrs HNL and he believes that this has been the major source of the problems for the family.
Mr NBI 78Mr NBI told the Tribunal that when his mother had capacity she decided that she wanted Mr MHI and Mrs HNL to be her attorneys. In 2010 the relationship between his brother and sister was "OK." He accepts that having the two as attorneys now may be difficult but it was their mother's wish and that wish should be respected. He said there is no second best alternative. 79Mr NBI said he would never agree to Mrs HNL being in charge and that his siblings should "just do it, no matter how hard it is." Mr NBI was unhappy about and had his suspicions raised by not being told about the reverse mortgage. He is concerned that he is not given answers to his questions and said "when I don't have answers, I get worried."
Mrs IEI 80Mrs IEI was not able to attend the Tribunal hearing or provide her views due to her disability. 81There is no dispute or evidence to the contrary that in May 2010 Mr MHI wanted both Mr MHI and Mrs HNL to look after her finances. 82Mr MHI told the Tribunal that when the 2010 power of attorney was executed he and Mrs HNL had a good relationship. Indeed he said that he and his sister were the closest out of all the siblings for a long period of time. Mrs IEI could not have known that the relationship would deteriorate to the extent it has, and the Tribunal takes the view that what she intended was for her children to work together. The current fractured and disagreeable relationship between her children would not have been envisaged by Mrs IEI and given the evidence the Tribunal heard about her love for each of her children.
Mr MHI's submissions 83Mr MHI submitted that he cannot feel comfortable with anything that Mrs HNL says is factual. This includes what she has told the Tribunal about her husband's work, the reverse mortgage and the mediation. He concludes that Mrs HNL has misled the Tribunal with semantics and secrecy. He asked the rhetorical question, why, if Mrs HNL was making decisions in Mrs IEI's best interests was she doing so in secrecy? 84He said the Tribunal can have no faith in Mrs HNL's integrity. The solution he offered was to remain an attorney and monitor Mrs HNL's actions as attorney. Mr MHI submitted that "If I have no right to find out that will be a problem." 85He submitted that although he does not trust Mrs HNL he will let her make all the decisions.
Mrs HNL's Management of Mrs IEI's finances 86Mrs HNL provided to the Tribunal a report titled "Independent Assurance Report in relation to expenditure authorised by Mrs HNL on behalf of Mrs IEI" prepared by law firm A and dated 25 March 2014. 87The report purports to cover "expenditure authorised by Mrs HNL on behalf of her mother Mrs IEI during a period from 24 July 2009 to 28 February 2014" and concludes that "the expenditure authorised by [Mrs HNL] on behalf of [Mrs IEI]...appears to be reasonable and has been expended solely for the benefit of [Mrs IEI]." The report was signed by Solicitor Y, Director of law firm A. 88Mr MHI questioned the independence of the report on the basis that Mr SCL, Mrs HNL's husband, is an employee of law firm A. Mrs HNL and Mr SCL denied Mr SCL was an employee and vouched for the independence of the report. 89Despite the provision of the report of 25 March 2014 Mr MHI and Mr NBI were concerned about the lack of transparency and honesty in Mrs HNL's management of Mrs IEI's finances. Mr MHI and Mr NBI complained that they were unable to assess whether Mrs HNL had been managing their mother's finances appropriately and honestly unless they were supplied with source documents. 90The Tribunal made directions that Mrs HNL produce one year's bank statements, the letter from financial planner, and the reverse mortgage agreement and associated documents, the agreement with service provider A and professionals' invoices for a year. 91Mrs HNL told the Tribunal she had all the receipts for the expenditure. The parties agreed that it would be sufficient for Mrs HNL to produce the receipts for a representative period of three months and the Tribunal invited Mr MHI to nominate a three month period, which he did, May 2013 to August 2013. 92Mrs HNL complied with the Tribunal's directions. 93The Supreme Court had occasion to examine the issue of accounts kept by attorneys recently in the matter of Susan Elizabeth Parker v Margaret Catherine Higgins & Ors [2012] NSWSC 1516. 94In this case George and Gwenda Higgins two daughters, Susan and Margaret, were their joint and several attorneys. Susan lived in the UK and Margaret lived in Australia. Margaret exercised the day to day management of their parents' financial affairs. 95Susan wanted access to documents and accounting information held by Margaret. Margaret made an offer to provide some of the material but Susan was dissatisfied with this and hence the Supreme Court application was made by Susan to review the powers of attorney made by her parents. 96Gwenda required a tutor in the proceedings and George was appointed as her tutor. 97Susan was seeking access to an extensive range of documents, which Margaret resisted, including trustee standard accounts. 98The Supreme Court decided that the attorney's obligation is only to keep accurate primary records. 99Slattery J wrote: "19 Thirdly, neither the Powers of Attorney Act nor the general law applicable to powers of attorney ordinarily requires one of two attorneys to produce journals, ledgers, bank reconciliations and the other main elements of trustee's accounts, of the type that Susan requests here. (a) Whether trustee standard accounts are required? 54. ...There is little doubt that the documents that have been produced do not meet the trustee standard for accounts. But, in my view, they do meet the lesser standard, which the law provides for attorneys. I conclude in this section that: (1) the powers that Susan and Margaret are exercising are not those of trustees; and (2) the law in this jurisdiction does not require attorneys such as Susan and Margaret to produce accounts to the standard that would apply to trustees. 55. I accept Margaret's argument that these two attorneys are not trustees. The position of an attorney is one that carries with it fiduciary duties. But not every fiduciary is a trustee.... 60. But the standard of account keeping under a power of attorney for attorneys appointed in New South Wales is not the trustee standard. It is less demanding. The relevant law in this State is summarised in G D Dal Pont's, Powers of Attorney, LexisNexis Butterworths, Australia, 2010:- "[8.55] Although courts speak of agents, and attorneys, being obliged to account to their principals, the general law remains relatively vague on detail. At a basic level accountability presupposes the maintenance of records of transactions, with sufficient particulars in readily accessible form, that afford the principal, or a third party in the principal's stead, the ability to ascertain with clarity the dealings in which the attorney has engaged. General law obligations are reflected by statute in most jurisdictions, which speaks in terms of an obligation to keep accurate records and accounts of all dealings and transactions made under the power.... 64. The attorney's obligation is really one to keep accurate primary accounting records, for which the principal can call, if necessary, for the principal's examination. If the principal then wishes to produce secondary accounts, or full financial accounts, that is a matter for the principal. 65. In my view this is the applicable standard by which Susan and Margaret's account and record keeping as attorneys must be judged." 100On 19 June 2014, after the parties had had the documents filed by Mrs HNL, there was no allegation that she had not been keeping appropriate primary records. The Tribunal finds that Mrs HNL has been managing her mother's finances since 2009 and has kept adequate primary records of income and expenditure on her mother's behalf. 101At the hearing on 19 June 2014, after having had time to consider all the documents filed, Mr MHI's told the Tribunal that, prior to July 2013, Mrs HNL cannot be said to have mismanaged or misused Mrs IEI's funds as the only money she had to manage at that stage was Mrs IEI's pension payment. It is submitted by Mr MHI that that situation changed in July 2013 when $250,000 was made available to Mrs HNL as a result of her obtaining a reverse mortgage on Mrs IEI's property in that sum. He says Mrs HNL in her role as power of attorney mismanaged or misused Mrs IEI's finances since July 2013 as follows: "a) Corporate Insolvency Lawyer (Mediator) fees $4,400 b) Accountant fees - tick off receipts to bank statement/worksheet $2,750 c) Mrs HNL Lawyer fees (January 16 hearing) - bill presented after questioning $4,416.50 d) Mrs HNL estimated lawyer fees (Feb/Jun 3 hearings) -$8,800 bills not presented e) Service provider A Bond interest/fee - $3,850 x 6 months (December 2013 on)$21,510 f) Estimated interest on reverse mortgage loan (December 2013 on) $1500 g) May 2014 RP Data 1% drop in NSW house sale prices since April $13,000 "Total financial mismanagement/misused funds since the July 2013 Reverse Mortgage created surplus/available funds $56,376.50" 102It is the Tribunal's view that Mrs HNL has a valid argument that the money spent on mediator and legal fees which would not have been incurred but for Mrs HNL's role as power of attorney and the allegations that have been made against her in that role, is properly charged to Mrs IEI, particularly given that there have been no adverse findings made by the Tribunal relating to her record keeping (and mismanagement as will be seen later in these reasons). 103There was no evidence presented to the Tribunal that the sums expended for the professional fees were excessive or unreasonable. In these circumstances the expenditure on mediation or legal fees cannot be characterised as mismanagement or misuse or a breach of Mrs HNL's fiduciary duties to her mother. 104Similarly there was no evidence that what Mr MHI's described as the accountant's fees was an unreasonable amount to be charged for the work he undertook. The Tribunal accepts that the reason the report was obtained was Mrs HNL's attempt to satisfy her brothers that she has been carrying out her duties as attorney properly. It is disingenuous of Mr MHI to argue that the money was wasted when he has argued strenuously for transparency. The Tribunal is not satisfied that the money expended on what Mr MHI describes as the "accountant's report" constitutes mismanagement or misuse or a breach of the attorney's fiduciary duties. 105In his oral evidence Mr MHI referred to there being $7000 missing from the accounts. It was the Tribunal's understanding that his allegation was not that there had been $7000 misappropriated only that the figure had been left out of the spreadsheet, due to an error on the part of the accountant. The Tribunal understands Mr MHI argument to be that the accountant who prepared the documents did was incompetent or careless in doing so and therefore not worthy of the fee paid by Mrs HNL for the work. The Tribunal considers this error to be minor and is an irrelevant consideration in judging Mrs HNL's management. 106Mr MHI seeks to include in his assessment of loss the interest payments which have had to be made to service provider A because the bond payment has not been made. He estimated these losses to amount to $3,850 per month. The Tribunal agrees that this loss to Mrs IEI has been considerable and avoidable. Mr MHI considers that Mrs HNL is responsible for these losses. The Tribunal does not accept this. 107Mr MHI told the Tribunal that:
The Caveat and the Reverse Mortgage 114Mr MHI said, on 18 June 2013, he placed a caveat on his mother's property to stop Mrs HNL from selling the house. Mrs HNL then had the caveat removed and without telling Mr MHI, obtained a reverse mortgage in the sum of $250,000 over the property, signing the mortgage documents on 26 July 2014. Mrs HNL stated the money was needed to fund Mrs IEI's placement pending the sale of the house and to undertake the necessary repairs and maintenance on the home to ready it for sale. Mr MHI said he discovered the reverse mortgage when doing a search on the title of the property. Mr MHI complained that this was the same day as the Tribunal hearing. He said the Tribunal asked Mrs HNL whether there were any urgent financial matters and she replied there were not. Mr MHI says her answer was disingenuous and misleading. 115Mrs HNL said that she thought about the reverse mortgage when she was applying for guardianship as she did not know what the Tribunal's decision would be. If Mrs IEI was going into residential care then that would need to be paid for and if she was going home, home modifications would need to be funded. She said if the house had to be sold she knew that would take some time. 116Mrs HNL said she signed the mortgage on 26 July 2014 as that was the day she had off work. She said the reason she did not raise it in the Tribunal hearing that day was because that day the main topic was guardianship. She said the Tribunal asked if there were any urgent decisions to be made and the reverse mortgage was not urgent. 117Mrs HNL said she did not discuss it with Mr MHI as the opportunity had not arisen. She said it was raised with the Mediator however Mr MHI walked out of the mediation before that discussion had taken place. 118Mrs HNL told the Tribunal that she did not tell her brothers because they would have "accused me of being a thief." She said that if she had disclosed it before she had completed the transaction it was "obvious what would have happened." 119The Tribunal has formed the view that entering into the reverse mortgage, without informing her brothers has been a significant contributing factor to the suspicion and animosity towards Mrs HNL apparent in both the emails sent to Mrs HNL and copied to the Tribunal and in oral evidence at the Tribunal. The transaction involves a good deal of money and is Mrs IEI's major asset. The Tribunal acknowledges that transactions regarding the family home often are more than just financial decisions for families, there is often a significant emotional component. It was suggested to the Tribunal that if Mrs HNL had discussed with her brothers her proposal to enter into a reverse mortgage then the Tribunal proceedings would have followed a different course. This may be so. 120However, it is not the role of the Tribunal in this case to decide on the wisdom of Mrs HNL's decision not to inform her brothers and it may even be that, having heard the views and feelings from her brothers and one of their wives that, with hindsight, Mrs HNL may have made a different decision. 121The Tribunal accepts that the optimum operation of the power of attorney would involve Mr MHI and Mrs HNL working co-operatively, perhaps consulting their brothers and keeping them informed, whilst managing the affairs in Mrs IEI's best interest. This situation however is not achievable and therefore the Tribunal has to decide what the best option is for Mrs IEI, after weighing in the balance all the relevant factors. It must take into account in the balancing exercise that Mrs HNL has informed the parties and the Tribunal that if she is the sole power of attorney she will not be seeking her brother's views nor will she enter into any correspondence with them, she will simply keep them informed. It must also take into account that she has been effectively managing her mother's affairs since 2009 and any appointment of a financial manager will cost her mother money and will be less flexible and reactive.
The Operation of the Powers of Attorney 122Mr MHI asserts that he has not made any decisions pursuant to his power of attorney. He submits he has simply been monitoring what decisions and actions Mrs HNL has made and offered her support and assistance by providing her with information. Mr MHI told the Tribunal that this is the role he wishes to continue to play in the future and further that the Tribunal is able to judge his future actions by his past actions. 123The Tribunal does not accept that Mr MHI has not been making decisions pursuant to the power of attorney. 124Mr MHI placed a caveat on his mother's property which he would have done as power of attorney. He also stepped in to prevent the service provider A contract being signed. 125In his letter to Mr KAI dated 9 May 2014 which he copied to the Tribunal and Mrs HNL he began the letter with the following words "I am writing to you in my role as mum's power of attorney" and in that letter he asked Mr KAI "can you go back to looking after mums house..." 126In an email to Mrs HNL dated 31May 2014 Mr MHI wrote: "The non-maintained state of the house is due to your mismanagement and as such I have had to step in and rectify the situation, as I have done and am doing..." 127The Tribunal finds that some of Mr MHI's correspondence to Mrs HNL and his evidence and submissions have been insulting and offensive. 128The Tribunal finds that the relationship between Mr MHI and Mrs HNL has broken down to such an extent that there will not be able to be effective communication between them and decisions will as have been up to now either not be made (decision to appoint a real estate agent), the decision of one attorney will be reversed or halted by the other (the signing of the service provider A agreement) or the attorneys will make different decisions which conflict (e.g. Mrs HNL deciding professionals will carry out maintenance on Mrs IEI's property in preparation of selling and Mr MHI deciding that family should do maintenance). The Tribunal concluded that the current inability of the attorneys being able to work together will continue into the future. 129In Susan Elizabeth Parker v Margaret Catherine Higgins & Ors there were a number of similarities to this case, including sub-optimal co-operation between siblings and mutual antagonism. In that case the Supreme Court recognised that this was a case where the Court might intervene to review the power of attorney. One of the important points of difference between Mrs IEI's circumstances and the Supreme Court case was that in the Supreme Court case one of the principals retained capacity and he asked the court not to make an order, preferring to deal with the issue in his own way. 130Slattery J:- 102. Evidence of lack of co-operation between attorneys may yet be relevant to an application for Powers of Attorney Act, s 36(4) relief, for removal of one of the attorneys. But the mere fact that Margaret may not have agreed with Susan about all aspects of the administration of these powers of attorney does not mean that Margaret is automatically in breach of her duties as an attorney. 103. Moreover the level of disagreement demonstrated in the course of correspondence prior to the hearing does not warrant the Court undertaking a Powers of Attorney Act, s 36(1) review, when George and Gwenda do not wish to act on that disagreement. The history is clear, although the detail of the correspondence need not be recounted. Margaret began to operate her parents' bank accounts from December 2010, when they moved into the aged care facility. Susan did not operate the bank accounts. Margaret also took control of George and Gwenda's personal files about the same time. From about October 2011 Susan began to ask Margaret for information and documents relating to her parent's affairs. Lengthy and at times acrimonious correspondence followed between them. Many of Susan's requests seem not unreasonable. But Margaret took the view in this correspondence that she only had obligations to her parents and not to her co-attorney. In this correspondence Susan was referred to Margaret's solicitor Mr Jones. Margaret also declined to permit Susan to inspect documents unless Susan took a more active role in the day-to-day affairs of George and Gwenda. She imposed other conditions upon access to documents. Arrangements were made for the inspection of documents between Susan's and Margaret's solicitors in early September 2012. But these arrangements broke down. These proceedings were commenced shortly afterwards. 104. This short history of lengthy correspondence shows a suboptimal level of co-operation between these two sisters. Each sister contributed to the lack of cohesion in her own way. Their mutual antagonism has led to the costs of engaging lawyers and accountants. But to a large extent the air has now been cleared by the Court's compulsory processes being used to provide documents for inspection that had previously been withheld. 105. To the extent a conflict arises between the two attorneys about the discharge of their function under the George and Gwenda's powers of attorney that is a matter that the principals can resolve, if they wish, despite their age and infirmity. If the attorneys cannot agree upon how they will exercise their powers jointly, and they act severally leading to chaos, then George has the power to resolve that situation by changing his attorneys... 106. George has made clear in final submissions on behalf of himself, and as tutor for his wife that both principals wish to take their own course about managing the problem of potential disagreement between their co-attorneys Susan and Margaret. This expression of view deserves very considerable weight in the exercise of discretion the Court is being invited to undertake here. 111. ...George and Gwenda do not want the court to intervene to conduct a Powers of Attorney Act, s 36 review or to make orders under the section. The Court in my view should be very cautious about taking any step to intervene in George and Gwenda's financial affairs over their opposition by initiating a Powers of Attorney Act, s 36 review of their powers of attorney 112. Primarily because of this powerful consideration, in my view the Court should neither in its discretion conduct a review of these two powers of attorney under Powers of Attorney Act, s 36(1), nor in its discretion make any orders under Powers of Attorney Act, s 36(2). The supplementary factors already considered in these reasons, and identified here seriatim, support the same conclusion that neither the s 36(1) nor s 36(2) discretion should be exercised as Susan requests: (1) brief perusal of the documents Margaret has produced does not point to any maladministration under the powers of attorney on her part; (2) George and Gwenda are not incapable of sorting out these delicate family matters themselves and wish to have the opportunity to do so; (3) there is much Susan can yet do without Court intervention to gain direct access to banking and similar information about George and Gwenda's affairs; and, (4) no party wishes to pay for an accounting investigation of George and Gwenda's financial affairs, or the preparation of trustee standard accounts. 131The Tribunal finds, in this case, that the result of the antagonism between the attorneys is having them remain appointed as joint and several attorneys is contrary to Mrs IEI's interest and the Tribunal must intervene to protect Mrs IEI.
Mr MHI's proposal 132The Tribunal has concluded there has been no dishonesty or mismanagement of Mrs IEI's funds by Mrs HNL. The Tribunal has formed the view that Mrs HNL has undertaken her role honestly with her mother's best interests at heart and not because she has been monitored or had the possibility of monitoring by Mr MHI, or later the Tribunal. There is no cogent material or argument put to the Tribunal to suggest that Mrs HNL will suddenly start to mismanage those funds. On the basis of these findings there is no ongoing need for a co-attorney or for the NSW Trustee and Guardian to protect or promote the best interests of Mrs IEI, or to monitor or 'check-up' on Mrs HNL. 133The evidence Mr MHI gave in support of his proposal to retain his role as power of attorney along with Mrs HNL the Tribunal found at some points to be conflicting and confusing. On the one hand he asked the Tribunal to accept that Mrs HNL was dishonest, deceitful, and manipulative and mismanaging Mrs IEI's finances. He asked the Tribunal to accept that the depth of her deception was so great that the NSW Trustee and Guardian would not be able to identify it. On the other hand he expressed the view that Mrs HNL needed support in her difficult role and he was the one to give her that support. He expressed regret at the manner in which he had expressed his views about Mrs HNL and said that that would change. Mr MHI ultimately described the reason for wanting to retain his role as attorney was to be able to check up on Mrs HNL's actions as attorney. 134The Tribunal failed to elicit a coherent and complete answer from Mr MHI to its question as to what action he would take if, in his view, Mrs HNL's actions were contrary to Mrs IEI's best interests. 135The Tribunal concludes that even if it were to accept that Mr MHI's motive for wanting to retain his role is to support Mrs HNL in her role, his actions to date have been the antithesis of support. Even if the Tribunal was to accept that Mr MHI does want to change his way of communicating with his sister, his presentation to the Tribunal leads the Tribunal to conclude that his insight into the effect of his words and actions is limited and he will not be able to limit his involvement to the extent necessary to allow Mrs HNL to make the necessary decisions. Mr MHI's correspondence has been insulting and offensive to Mrs HNL. The Tribunal accepts that she feels abused and bullied by Mr MHI's contact. 136The Tribunal finds that not only is Mr MHI's involvement stressful for Mrs HNL the result has been that a relatively straightforward decision, in appointing a real estate agent, has not been able to be achieved at a cost to Mrs IEI. 137The Tribunal finds that Mr MHI's role as attorney will not serve to support Mrs HNL, but will have the opposite effect and will likely result in further loss to Mrs IEI. 138The Tribunal accepts that Mrs IEI's wish was to have both her children look after her finances however the Tribunal has formed the view that this arrangement is now contrary to her interest. The Tribunal understands that if it does not continue Mr MHI as attorney then he and his brothers will not be consulted about any decisions relating to Mrs IEI's finances. The Tribunal accepts Mrs HNL's undertaking that she will keep her brother's informed, but will not consult or correspond. 139The Tribunal was not satisfied that it should treat this application as an application for a financial management order in order to be able to appoint a financial manager, (the NSW Trustee and Guardian) particularly, as the Tribunal concluded there was no evidence that Mrs HNL was not complying with her fiduciary duties as attorney, her acting as attorney accorded more closely with Mrs IEI's wishes when she had capacity and that a financial management order would incur unnecessary and considerable financial cost to Mrs IEI. 140The Tribunal understands that Mr MHI and his brothers are unhappy and suspicious and feel that their responsibility towards their much loved mother and their ability to provide care and support for her has been diminished by Mrs HNL's unilateral and to them undisclosed actions, including moving Mrs IEI to service provider A and taking out a reverse mortgage. Although the situation is less than ideal, the ideal, which would be for both Mrs HNL and Mr MHI to be able to work together in Mrs IEI's interest, is not achievable.
SUMMARY OF FINDINGS 141The Tribunal summarises the findings as follows: (1)Mrs HNL and Mr MHI cannot both retain their roles as attorneys as to continue in this way would be contrary to Mrs IEI's best interest; (2)The proposals by Mr MHI to restrict his role to one of monitor only is not necessary or appropriate in Mrs IEI's best interest; (3)Mrs HNL has appropriately managed Mrs IEI's finances since 2009 and will continue to be able to do so in the future; (4)Having reviewed the enduring power of attorney made by Mrs IEI on 4 February 2009, the Tribunal was not satisfied there was a need to make orders in relation to the enduring power of attorney; (5)Having reviewed the enduring power of attorney made by Mrs IEI on 26 May 2010, the Tribunal was satisfied that it was in the best interest of Mrs IEI to revoke the power of attorney.
A Positive Duty on an Enduring Attorney to Act? 142The facts and circumstances of this case raised an interesting question for the Tribunal, though one ultimately it was not required to answer. 143Mr MHI proposed using his enduring power of attorney only to monitor the acts of his co-attorney. He was not proposing to act on that power of attorney even it seems if, in his view, his co-attorney was not acting in the principal's interest. This raised the issue as to whether an enduring attorney has a positive duty to act once the principal has lost capacity. 144It is generally accepted that an attorney has a duty to carry out the principal's instructions (Dynaski v Grant [2004] NSWSC 1187 at [19]). 145Where an agent, such as an attorney, has discretion as to what course to take, the agent must be guided by the honest exercise of his or her own judgment and the interests of the principal (Jones v Cananvan [1972] 2 NSWLR 235 at [246] and [247]). 146In G E Dal Pont's 3rd Edition of 'Law of Agency suggests that there is no positive duty owed by fiduciaries. At paragraph 10.8 he writes: "The proscriptive not prescriptive, nature of fiduciary duties dictates that Australian law 'does not...impose positive legal duties on the fiduciary to act in the interests of the person to whom the duty is owed." 147In support of this contention Dal Pont cites Breen v Williams (1996) 186 CLR 71 at [113]; per Gaudron and McHugh JJ and Attorney General v Blake [1998] Ch 439 at [455] per Lord Woolf MR ('It tells the fiduciary what he must not do. It does not tell him what he ought to do.') 148In Breen v Williams the High Court expressly rejected the Canadian courts' tendency to view the fiduciary relationship as imposing obligations extending beyond exacting loyalty, so creating an independent source of positive obligations supporting a new civil wrong: see at [95] per Dawson and Toohey JJ, at [113] per Gaudron and McHugh JJ. 149These authorities are all referable to fiduciary relationships where the principal retains capacity. 150GE Dal Pont 'Powers of Attorney' Lexis Nexis 2011 at page 195 recognises that a positive duty to act once the principal no longer has capacity is arguable. "So far as enduring powers are concerned, it has been cogently argued that the general law ought to recognise a positive duty to act, beyond merely authority to act, once the principle is no longer capable of superintending the power. The proposition has been proffered that a person who knows that he or she has been named as the attorney under an enduring power 'should not be permitted to do nothing for an unreasonable period of time and escape liability.' (CL Dessin, 'Acting as Agent under a Financial Durable Power of Attorney: An Unscripted Role' (1996) 75 Nebraska L Rev 574 at 607). 151O'Neill and Peisah in 'Chapter 10 - Enduring Powers of Attorney' of Capacity and the Law [2011] SydUPLawbk 12 also argue in favour of the existence of a positive duty to act for an enduring attorney when the principal has lost capacity. The authors state at 10.6: "Enduring attorneys must exercise the powers given according to the terms of the power-of-attorney and honestly and with reasonable diligence to protect the interests of the maker. The Queensland provision creates a criminal offence as well is right in the maker to seek compensation for losses caused by the enduring attorneys failure to exercise their powers honestly and with due diligence. [Powers of Attorneys Act 1998 (QLD) s 66] In South Australia and Western Australia the legislation requires an enduring attorney to exercise their powers with reasonable diligence to protect the interests of the maker and makes them liable to the make up for any loss caused by their failure to do so. [Powers of Attorney and Agency Act 1984 (SA) s 7 and Guardianship and Administration Act 1990 (WA) ss 107(1) (a)] In Tasmania and enduring attorney is taken to be a trustee of the property and affairs of the maker according to the terms of the power-of-attorney and must exercise their powers to protect the interests of the maker. [Powers of Attorney Act 2000 (TAS) 32A (1)] While enduring attorneys have no statutory duty to act honestly or with reasonable diligence in New South Wales, Victoria, the Australian Capital Territory and the Northern Territory, it is suggested that these are some of the essential obligations that apply to enduring attorneys and that enduring attorneys could be found liable in the courts for any provable loss caused by the failure to exercise their powers honestly and with due diligence." 152It could be suggested that the requirement of an enduring attorney to accept the appointment in writing in order to enliven the power (when a general power of attorney has no such requirement) supports the argument that, even though a general power of attorney does not impose a positive duty to act, an enduring power of attorney does, at least when the principal loses capacity.
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: 20 August 2014
Susan Elizabeth Parker
Margaret Catherine Higgins