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[2014] NSWCATGD 37
NCAT Guardianship
2014-10-02
Koussa J, Stout CJ
Original judgment source is linked above.
reasons for decision 1These Reasons for Decision are for the orders of the Tribunal made on 2 October 2014 concerning Mr UQH.
What the Tribunal decided 2The Tribunal dismissed the application for review of an enduring power of attorney.
Application details 3Mr UQH was born in September of 1921 and passed away on 11 July 2014. He is survived by his wife, Mrs OVH and six children, Miss HTH and Ms DSX (the attorneys), Mrs NRH, (the applicant), Mr PDH, Mr TEH and Mr UGH (who lives in the USA). 4Prior to his death Mr UQH had been living with his wife at an aged care facility in Southern Sydney. Mrs OVH remains living at the aged care facility. 5On 22 July 2014 Mrs NRH lodged an application for a review of the enduring power of attorney made by Mr UQH on 14 February 2014 by which Mr UQH appointed Ms DSX and Miss HTH as his attorneys. 6The applicant sought orders relating to the operation and effect of the enduring power of attorney. The applicant sought an order that the attorneys:
THE HEARING 12At the end of these Reasons for Decision are lists of the parties to the application and witnesses who attended the hearing. [Details removed for publication]
THE STATUTORY FRAMEWORK 13In NSW the Tribunal can make orders relating to the operation and effect of a reviewable power of attorney pursuant to Part 5, Division 4 of the Powers of Attorney Act 2003 (NSW) ('the Act'). Part 5, Division 4 contains sections 33 to 38 inclusive. 14A power of attorney is a reviewable power of attorney if the Tribunal has jurisdiction to deal with the application (see section 33(1)). 15The Act provides that an 'interested person' may bring an application pursuant to section 36 and that an interested person includes any person who "in the opinion of the review tribunal, has a proper interest in the proceedings or a genuine concern for the welfare of the principal" (see section 35(1)(d) of the Act). 36. (1) Tribunal may review making or operation and effect of power. 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) As a consequence of reviewing the making, revocation or operation and effect of a reviewable power of attorney, a review tribunal may decide whether or not to make an order under this section. (3) Orders relating to making of power of attorney A review tribunal may make either or both of the following orders with respect to the making of a power of attorney: (a) an order declaring that the principal did or did not have mental capacity to make a valid power of attorney, (b) an order declaring that the power of attorney is invalid (either in whole or in part) if the tribunal is satisfied: (i) the principal did not have the capacity necessary to make it, or (ii) the power of attorney did not comply with the other requirements of this Act applicable to it, or (iii) the power of attorney is invalid for any other reason, for example, the principal was induced to make it by dishonesty or undue influence. (3A) Orders relating to revocation of power of attorney A review tribunal may make either or both of the following orders with respect to the revocation of a power of attorney: (a) an order declaring that the principal did or did not have mental capacity to revoke a power of attorney, (b) an order declaring that the power of attorney remains valid (either in whole or in part) if the tribunal is satisfied: (i) the principal did not have the capacity necessary to revoke it, or (ii) the revocation is invalid for any other reason, for example, the principal was induced to make the revocation by dishonesty or undue influence. (4) Orders relating to operation and effect of power 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.
THE ISSUES TO BE DETERMINED 16The applicant in these proceedings is seeking orders pursuant to section 36(4) of the Act that:
Standing 19Section 35 of the Act sets out the list of persons who are authorised to bring an application to the Tribunal under the Act. These persons include an attorney, the principal, a guardian or enduring guardian and any other person who, in the opinion of the Tribunal has a proper interest in the proceedings or a genuine concern for the welfare of the principal. 20Mrs NRH is neither attorney nor guardian. 21As Mr UQH is deceased, welfare is not a relevant consideration. Therefore in order for Mrs NRH to bring this application the Tribunal must be satisfied that she has a "proper interest in the proceedings." 22In KTC [2011] NSWGT 23, a differently constituted Tribunal considered the meaning of proper interest in the context of section 35 of the Act. " 59 The Powers of Attorney Act was passed by Parliament subsequent to the Guardianship Act. The Tribunal saw the expression, "person who, in the opinion of the review Tribunal, has a genuine concern for the welfare of the principal" as having the same meaning as in the Guardianship Act. 60. However, the Tribunal needed to carefully consider what is meant by a "person who ....has a proper interest in the proceedings". This expression must be intended to extend the standing provision beyond people encompassed by the genuine concern test.... 62. The expression "proper interest" needs to be interpreted in the context of the Powers of Attorney Act NSW. 63. In Alphapharm Pty Limited v Smithkline Beecham (Australia) Pty Limited & others [1994] FCA 996, the Full Federal Court considered the meaning of a person whose "interests are affected by the decision" - the test for standing to seek administrative review in the Administrative Appeals Tribunal. Gummow J said at 22: a. Like the expression "a person aggrieved", the phrase "a person whose interests are affected by the decision" and cognate terms, appear in a variety of statutes as the identification of the persons who are given standing to seek administrative or judicial review. The day is long gone when there was any general presumption that in such statutes the "interests" concerned must be proprietary or even legal or equitable in nature, or that the affectation be of a nature as understood in private law. However, it is important not to draw from what was said in any particular decision by way of identification of that which did or did not amount to a sufficient affectation of an interest any general proposition which may be translated to the instant dispute. In each case, the content of the terms "affect" and "interest" are to be seen in the light of the scope and purpose of the particular statute in issue. 64. In Allan v Transurban City Link Ltd [2001] HCA 58, the High Court quoted Brennan J from another Federal Court case: "Across the pool of sundry interest, the ripples of affection may widely extend" (Re McHatton and Collector of Customs (NSW) (1967) 1 ALD 67). However, the High Court said that this did not mean that any ripple of affection would be sufficient to support an interest. The starting point was the construction of the particular act, "with regard to its, subject, scope and purpose". 65. In the Powers of Attorney Act, obviously, "proper interest" requires two things. First, the applicant needs to have an interest and second, the interest needs to be proper. 66. The Macquarie Concise Dictionary fourth edition has a number of definitions of "proper", relevantly including: a. adapted or appropriate to the purpose or circumstances; fit; suitable: the proper time to plant b. conforming to established standards of behaviour or manners; correct or decorous. 67. The Tribunal saw the word "proper" as meaning that the interest of the applicant must be appropriate to the powers of the Tribunal on a review, in other words there must be a nexus between the interest and the powers on the review. 68. In interpreting the word "interest", the Tribunal first noted that the Powers of Attorney Act includes a strong protective element in relation to principals with impaired capacity like Mrs KTC but also a broader range of regulation of powers of attorney. 69. Division 4 of the Act is about reviews of certain powers of attorney by the Guardianship Tribunal and Supreme Court. The division applies to enduring powers of attorney and other powers of attorney given by a principal who has become incommunicate (section 33). 70. The powers that the Tribunal has on a review are predominantly relevant to situations where the principal no longer has capacity to make, revoke or vary a power of attorney or hold the attorney to account. The Tribunal may declare that the principal did or did not have the mental capacity to make a valid power of attorney and that a power of attorney is invalid due to lack of capacity or other reasons. The 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 a range of orders in relation to the operation and effect of a power of attorney. This includes orders varying the power, changing the attorney or requiring the attorney to furnish accounts and that the accounts to be audited. The Tribunal may decide to make no order on the review and instead treat the application as an application for a financial management order under the Guardianship Act (Sections 35 and 36). 71. The Tribunal felt that the proper interest test had to be interpreted cautiously taking account of the intrusion on the affairs and privacy of the principal that an application under the Powers of Attorney Act entails. 72. And so, what "proper interest" might arise that goes beyond the genuine concern test? 73. A situation could well arise where a third party is dealing with an attorney and then has reason to be concerned that the power of attorney is invalid or that the attorney is acting beyond power. Similarly, a third-party might have an ongoing commercial relationship with a principal and then become concerned about the principal's capacity and whether the third-party should instead be dealing with the attorney. The Tribunal sees these kinds of situations as giving rise to a proper interest to seek a review of a power of attorney. This view is reinforced by section 34(2)(a) of the Act which specifies that, if the Guardianship Tribunal is considering referring a review application to the Supreme Court, one relevant factor is "whether the application relates to the effect of the enduring power of attorney on third parties". 74. Beyond this, the Tribunal did not feel it should seek here to definitively set out what comprises a proper interest. It is better for the Tribunal to determine what is a proper interest on a case by case basis." 23This Tribunal respectfully adopts the reasoning and conclusion of KTC that:
Jurisdiction 28If the Tribunal is mistaken in relation to the issue of standing it would then have to determine the question whether orders can be made in relation to a power of attorney once the principal has died. This issue has arisen in two other jurisdictions in Australia, in Western Australia and Victoria. 29In NSW, enduring powers of attorney are recognised and regulated by the provisions of the Powers of Attorney Act 2003. 30The relevant statutes regulating enduring powers of attorney in the various Australian jurisdictions have much in common however it is necessary to consider closely the terms of each statute to understand how it operates in the particular jurisdiction in question. It is instructive to examine each of the other jurisdiction's decisions in some detail. 31In the Western Australian case of KS [2008] WASAT 29, the applicant was the son of the donor of an enduring power of attorney who applied to the State Administrative Tribunal (WA) for an order for accounts of transactions allegedly undertaken by the donee under the power. The donor was deceased and it had not been established that the donor had lost capacity at any time during his lifetime. The applicant had already initiated proceedings in the Supreme Court of Western Australia challenging the administration of his father's will. He asserted that the schedule of assets submitted for probate did not properly reflect the value of the estate prior to his father's death. 32The applicant in the State Administrative Tribunal sought orders pursuant to s 109 of the Guardianship and Administration Act 1990 (WA) ('the GA Act') for the filing and audit of accounts for transactions allegedly undertaken by the done under the enduring power of attorney during the lifetime of his father. 33Two questions of law were referred to the President of the Tribunal for determination:- Question 1: Does the Tribunal have jurisdiction to make orders under s 109 of the GA Act for intervention where the donor has died? and Question 2: Does the Tribunal have jurisdiction to make orders under s 109 of the GA Act for intervention when the donor is capable. 34Section 109 of the GA Act provides: (1)A person who has, in the opinion of the State Administrative Tribunal, a proper interest in the matter may apply to the Tribunal for an order - (a)requiring the donee of an enduring power of attorney to file with the Tribunal and serve on the applicant a copy of all records and accounts kept by the donee of dealings and transactions made by him in connection with the power; (b)requiring such records and accounts to be audited by an auditor appointed by the Tribunal and requiring a copy of the report of the auditor to be furnished to the Tribunal and the applicant for the order; or (c)revoking or varying the terms of an enduring power of attorney, appointing a substitute donee of the power or confirming that a person appointed to be the substitute donee of the power has become the donee. (2)The donee of an enduring power of attorney may apply to the State Administrative Tribunal - (a)for an order referred to in subsection (1)(c); or (b)for directions as to matters connected with the exercise of the power or the construction of its terms. 35The President, Justice Barker, determined that the Tribunal has jurisdiction to make orders intervening in an enduring power of attorney pursuant to s 109 where the donor has died and where the donor has retained capacity. In relation to cases involving the death of the donor His Honour decided: "25 While the donor of an enduring power of attorney is alive, and the enduring power of attorney is operational, the donee must meet the obligations specified in s 107 of the GA Act. Those obligations include that set out in s 107(1)(b) of the GA Act, to keep and preserve accurate records and accounts of all dealings and transactions made under the power. 26 The Parliament has given the Tribunal a general supervisory jurisdiction in respect of enduring powers of attorney. As noted earlier, under s 108(1) of the GA Act, the Tribunal can revoke or vary the enduring power of attorney if it decides to grant an administration order in respect of a person's estate. 27 Under s 109(1)(a) and s 109(1)(b) of the GA Act, amongst other things, the Tribunal, on the application of a person who has a proper interest in the matter, can order the donee of the enduring power of attorney to file with the Tribunal and serve on the applicant a copy of all records and accounts kept by the donee of dealings and transactions made by him in connection with the power; and require such records and accounts to be audited. 28 The first question that arises for determination in the current proceedings in the Tribunal is whether, once a donor has died, the Tribunal can make an order of the kind contemplated by s 109(1)(a) and s 109(1)(b) of the GA Act. 29 There is nothing in Pt 9 of the GA Act, or elsewhere, that expressly says that the Tribunal loses the power to make an order under s 109(1)(a) or s 109(1)(b) of the GA Act if the donor of the enduring power of attorney has died. 30 Indeed, in my view, it would be surprising if there were such an express power because the Tribunal would then lose the responsibility of properly supervising the earlier conduct of a donee under a power of attorney that occurred during the lifetime of the donor. 31 I can see no reason why, in an appropriate case, the Tribunal should not be able to make an order of the kind contemplated by s 109(1)(a) or s 109(1)(b) of the GA Act, on an application made by a person, with a proper interest in a matter, following the death of a donor. 32 In that regard, I do not consider that the reference in s 109(1)(a) to the power of the Tribunal to make an order in respect of "the donee of an enduring power of attorney" is confined to the donee of an enduring power of attorney which is still operative at the date of the making of the order. It seems to me that, having regard to the context in which these words appear in s 109(1)(a) and having regard to the general intent of the Parliament that may be drawn from Pt 9 of the GA Act concerning the Tribunal's supervisory role, in respect of the conduct of donees under enduring powers of attorney, the reference includes a person who, at any material time during the lifetime of a donor, completed any transactions under an enduring power of attorney. In other words, I do not consider that the relevant words in s 109(1)(a) should be read as if the words "which is still operative" appeared after the words "the donee of an enduring power of attorney". 33 I consider this to be so even though it is clear that the power of the Tribunal to make other orders contemplated by s 109 would be redundant following the death of a donor. For example, there would be no legal efficacy in any order purporting to revoke or vary the terms of an enduring power of attorney or to appoint a substitute donee of the power, under s 109(1)(c), where the donor is deceased. Similarly, if the donee has passed away the Tribunal would lack the power to make directions as to matters connected to the exercise of the power on the application of a donee under s 109(2). 34 However, in my view, even though the donor of an enduring power of attorney may have passed away, there may, in appropriate circumstances, be a proper reason established to justify the making of an order requiring the donee of an enduring power of attorney to account for his or her actions under the enduring power of attorney during the earlier lifetime of the donor, under s 109(1)(a) or s 109(1)(b) of the GA Act. 35 Any such order made could only require the relevant accounting or audit and would not have any other remedial effect. 36 In these circumstances, I see no good reason why the operation of s 109(1)(a) and s 109(1)(b) should be limited to an application made during the lifetime of the donor of an enduring power of attorney. 37 In my opinion, it is open to the Tribunal, in appropriate circumstances, to make an order under s 109(1)(a) or s 109(1)(b) of the GA Act, notwithstanding that at the time of consideration of the application by the Tribunal, the donor of the enduring power of attorney in question is deceased.' 36The Victorian Civil and Administrative Tribunal ('VCAT') also considered the issue of jurisdiction to make an order in relation to an enduring power of attorney when the donor was deceased in the case of DJB (Guardianship) [ 2010] VCAT 280. 37In DJB a beneficiary named in the will of the donor of the enduring power of attorney, who was deceased, applied to VCAT for orders requiring the attorney to provide accounts relating to transactions made during the donor's lifetime. The beneficiary was of modest means and wanted to see the accounts to be satisfied that the attorney was not in breach of her fiduciary duty and questions of cost and convenience led to the making of the applications in VCAT (presumably rather than in probate proceedings in the Supreme Court). 38The question the Tribunal had to determine was whether it had jurisdiction to make orders in relation to an enduring power of attorney after the donor had died. 39The Tribunal considered the material parts of sub-sections 125ZB of the Instruments Act 1958 (Victoria) set out below to be relevant to the issue: "(1) in the case of an enduring power of attorney, the Tribunal may make an order that - (a) The attorney lodges with the Tribunal, accounts or other documents relating to the exercise of the power for a specified period...... (2) the Tribunal may make the order of its own initiative or on the application for the donor or the Public Advocate or another interested person....." (Emphasis added) 40The Tribunal concluded that it did have jurisdiction to make orders after the donor had died giving the following reasons in reaching this conclusion: 46. "Similar to what Barker J said about the Western Australian legislation, the Victorian legislation gives the Tribunal general supervisory jurisdiction in respect of the conduct of attorneys under EPAs. The Victorian statute differs in a number of ways from the Western Australian one, but I do not see anything in the Victorian Act that would prevent the Tribunal making the orders sought in this case. 47. I regard KS as persuasive but I also consider that an independent examination of the Victorian legislation, having regard also to the relevant Second Reading speech, would lead to essentially the same outcome. 48. There appears not to have been any serious challenge to the evidence about the donor's capacity and his wish to keep his affairs private. I note however that he was an elderly man with impaired vision and hearing who was residing with and in the care of, and so dependent on, his attorney. It cannot be presumed that he was aware of how his affairs were being managed in every particular. The attorney was involved in at least one major transaction on the donor's behalf having signed the Transfer of Land for one of his properties. At that time there was expenditure from one source or other that evidently resulted in an increase in the value of her assets. This of course is not to conclude that there has been any wrongdoing on her part. These circumstances are sufficient, however, to justify making the order sought. D and M's personal interests can be said to coincide with society's interests in ensuring that a vulnerable person not be subjected to financial abuse or exploitation. The aim of the legislation is protective and that protection will be enhanced when attorneys who are required to keep and preserve accounts know that the donor's death will not prevent them being required to produce accounts for transactions that occurred during the donor's lifetime. In this way, the protection of the estate of one donor, now deceased, may contribute to the protection of other donors. 49. My conclusions about how the Act should be interpreted are reinforced by statements made by the Minister in relevant Second Reading speech: "[T]he bill confers on VCAT the power to make declarations, orders, directions, recommendations or advice in relation to enduring powers of attorney. For example, VCAT will now be enabled to make a declaration that an enduring power of attorney is invalid on the grounds that the donor did not meet the criteria of the test for legal capacity, as specified in the legislation, at the time the document was created. It is intended that these powers conferred on VCAT will operate concurrently with the powers of the Supreme Court ... It is ... essential that legal mechanisms that are purposely designed to protect the vulnerable and the disadvantaged from abuse and exploitation are as effective as possible." (Hansard, Legislative Assembly, 28 August 2003, p 217)." 41The NSW legislative scheme has a number of similarities to both the Western Australian and Victorian legislative schemes. The similarities relevantly include:
Should the Tribunal conduct a review of the operation and effect of the power of attorney? 57The Tribunal accepts that if the applicant had standing to bring the application then the Tribunal would have had jurisdiction to hear an application for review of the operation of the power of attorney. 58If, in these proceedings, the Tribunal had made a different decision regarding the applicant's standing, the issue would then be whether the Tribunal should exercise its discretion, contained in section 36(1) to review the operation and effect of the power of attorney. 59In this matter the accounts that were sought to be examined by the applicant belonging to Mr UQH and to which she may not already have had access, are accounts where access could have been granted to the applicant in the proceedings regarding Mrs OVH, as the accounts in question were held jointly between Mr and Mrs OVH and Mrs OVH's attorney is Miss HTH. 60In other words because all the evidence that was sought by the applicant was able to be produced in the proceedings regarding Mrs OVH there was no need to, and the Tribunal should not, conduct a review of the operation and effect of the power of attorney made by Mr UQH. 61Additionally, a financial management order was made by the Tribunal, appointing the NSW Trustee and Guardian as financial manager, for Mrs OVH with the consent of her attorney and the applicant therefore had no need to rely on findings of the Tribunal on which to argue that her sisters were not suitable for appointment.
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: 12 December 2014
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