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- Unreported Judgment
Preston  QCAT 52
Guardianship and administration matters for adults
17 February 2016 and 30 March 2016
Senior Member Endicott
4 April 2016
GUARDIANSHIP – where an adult has impaired decision-making capacity for financial matters – where decision-making is supported at present by his existing support network – where that support network is likely to be unable to continue to give support in the near future – where a substitute decision-maker is required
REMUNERATION OF ADMINISTRATOR – where persons proposed for appointment as administrators seek to be remunerated in that role – where none of the persons proposed as administrators have been previously appointed for another adult as an administrator – whether the persons proposed carry on a business of and including administrations under the Guardianship and Administration Act 2000
Guardianship and Administration Act 2000 –ss14(1) and 48
JMK v RDC and PTO v WDP  NSWSC 1362
OTHER ACTIVE PARTIES:
Trevor Neil Spicer
Stephen Thomas Todd
Christopher Paul Kahler
The Public Trustee of Queensland by Clinton Miles
REASONS FOR DECISION
- John Preston lives with his mother, PM in a regional town in north Queensland. PM has been assisting her son with many aspects of his daily life, including money management for some years. PM is unwell and she wants to put into place some other arrangements for the support of her son as she is concerned that she cannot continue to provide adequate support to him into the future.
- PM applied to QCAT for the appointment of an administrator for her son. She proposed the appointment of three solicitors as his administrators, Mr Spicer, Mr Todd and Mr Kahler. They were willing to be appointed as administrators for Mr Preston.
- Prior to the hearing of the application, a case officer in the tribunal registry wrote to all three proposed appointees and informed them they would be required at the hearing to address the Tribunal on issues arising from sections 37 and 48 of the Guardianship and Administration Act 2000.
- QCAT can appoint an administrator, who is a decision-maker for an adult about financial matters, if satisfied that the person in question has impaired decision-making capacity for making decisions about those matters. Capacity for decision-making is defined in the Act in schedule 4 as meaning that the person is capable of-
- understanding the nature and effect of decisions about the matter; and
- freely and voluntarily making decisions about the matter; and
- communicating the decisions in some way.
- A report dated 17 September 2015 was filed in the Tribunal from Clive Darcy-Evans, who is a registered nurse and authorised mental health practitioner. Mr Darcy-Evans has known Mr Preston since January 2013 and he is the mental health case manager for Mr Preston. According to that report, Mr Preston has been diagnosed with schizophrenia of both the paranoid and disorganised type. Mr Preston has also been diagnosed with anxiety.
- Mr Darcy-Evans reported that he had discussed with Mr Preston in the past what support he needed if his mother were to be unable to assist him. It was reported that Mr Preston understood that he would need help to manage his affairs. Mr Darcy-Evans reported that Mr Preston seeks approval and advice from people he trusts when he has ideas such as buying a new car and that he relies on his mother to help with his decisions as he has a lot of ideas.
- The report revealed that Mr Preston needs to be reminded to attend clinic appointments on a monthly basis and that he needs prompting to take his medication regularly. The report stated that Mr Preston would not be able to cook, clean and shop without support. The report stated that Mr Preston has a basic understanding of financial matters but that he is unable to budget or to make complex financial decisions and he needs help to pay household bills and has a limited understanding of the consequences of not paying bills.
- Mr Darcy-Evans reported that Mr Preston has a delusional belief that he knows winning lotto numbers in advance and he tends to overspend on lotto. Mr Darcy-Evans described Mr Preston as gullible and that he would be vulnerable to financial exploitation. Mr Darcy-Evans expressed the opinion that Mr Preston could not make decisions freely and voluntarily. It was stated that Mr Preston was dependent on his mother as his major decision-maker.
- The report revealed that Mr Preston had been subject to an involuntary treatment order under the Mental Health Act 2000 in the past and that he had accepted the order when it was in place. Mr Darcy-Evans expressed the opinion that Mr Preston accepts treatment and attends the mental health clinic because his mother had told him that he needs to do so rather than understand that he has a mental illness.
- Mr Darcy-Evans expressed the opinion that Mr Preston could not understand the issues involved in granting an Enduring Power of Attorney. Mr Darcy-Evans concluded that in his opinion Mr Preston could not make complex financial decisions matters although he could make simple financial decisions due to his chronic and longstanding paranoid and disorganised schizophrenia.
- There was evidence filed in the Tribunal that Mr Preston had recurrent funding from Disability Services to pay for accommodation and community support and for community access support and respite support. He has regular support workers who are funded to provide this range of support both at home and in the community to Mr Preston.
- An information sheet was filed in the Tribunal that had been prepared with the assistance of Mr Preston to help new support workers learn about him. Among other things, the information sheet stated that Mr Preston was good at saving money, that he thinks that having money is important, that he is a generous person and that he has to be reminded not to lend money to anyone, that his support workers have to understand his anxieties, that it is helpful if his support workers can bring him back to reality if he talks about things that are unusual or unreal (psychic lotto, that he has won $20 million in lotto, UFOs and ghosts), that he may have to be reminded to change his clothes if his shirt becomes dirty, and that he has arrangements in place to help him to manage his money.
- At the hearing on 17 February 2016, Mr Preston gave evidence that he was not too bad managing his money, that he makes a list of what he spends and that he saves money really well. He told the Tribunal that he can see numbers that win with Lotto but that he does not gamble very much. He told the Tribunal that he has heard voices in his head associated with lotto.
- His mother gave evidence at the hearing on 17 February 2016. She stated that people take advantage of her son. She agreed with the comments made in the report of Mr Darcy-Evans and with his opinions about the limited capacity of Mr Preston to make decisions. Evidence was given that she had set up a Special Disability Trust and a testamentary discretionary trust in her will to hold the ownership of the family home and to hold other substantial cash assets that will be available for the financial support of Mr Preston when she passes away.
- Kerrie Morgan is the Support and Operations manager for the Endeavour Foundation who has been providing support to PM due to her decreasing ability because of her illness to give the level of support she formerly had to her son. Ms Morgan has been able to observe that Mr Preston relies on his mother to budget, to save money and to pay all his bills. Ms Morgan stated that Mr Preston had struggled with day to day matters when his mother had been in hospital and that he also relies on his paid support workers.
- I accept the evidence from Mr Darcy-Evans, PM and Ms Morgan that Mr Preston has a chronic mental illness diagnosed as paranoid and disorganised schizophrenia. I find that Mr Preston has delusional ideation and exhibits patterns of disorganised thinking and behaviour arising from his mental illness. He needs prompting to take medication and to attend mental health clinics and his understanding of his illness is limited. He needs support with many activities of daily living in his home and in the community. He can save money with support from other people but he is unable to independently budget or pay bills. He is vulnerable to exploitation and he has been taken advantage of financially in the past.
- I find that Mr Preston is unable to find for himself, and is unable to understand, information that is relevant to making decisions about how to spend his pension to cover his financial needs, how to manage any savings that have been accrued over the years, and how to plan for his financial future in ways that would not jeopardise his high level of dependence on support workers funded by Disability Services. I find that he could not analyse information about those matters so that realistic options for decision-making could be formulated. He has the capacity to understand simple purchases with funds that have been provided to him but not to plan and execute more complex decisions that rely on learned experiences, analysis and evaluation of new and complex information and an ability to appreciate how the future is impacted by current choices.
- I find that due to his disorganised thinking patterns, he could not evaluate options for decision-making about his financial affairs and that his delusional ideation would severely interfere with his ability to reach reliable and consistent choices about options. I find that due to his demonstrated inability to understand consequences of financial decisions, he would not be able to appreciate consequences of making choices about his more complex financial affairs after his mother is no longer able to provide patient and constant support for such choices.
- I am satisfied by the evidence that Mr Preston is unable to understand the nature and effect or consequences of decisions about his financial affairs. By applying the definition of capacity in the Act, I conclude that Mr Preston has impaired decision-making capacity for financial matters.
- This finding does not by itself result in the appointment being made of a substitute decision-maker for Mr Preston. Under section 12 of the Act, the Tribunal must be satisfied that decisions must be made or that Mr Preston is likely to do something that would involve unreasonable risk to him. At the present time, there are many financial decisions that need to be made but those decisions are being made by Mr Preston with the ongoing and constant support of his mother. He is not at risk while that support is in place.
- The Act acknowledges that the capacity of an adult with impaired capacity to make decisions may differ according to the support available from the adult’s existing support network. I find that there will be a need for someone to make decisions for Mr Preston as a substitute decision-maker when the support network is no longer available. That position will occur when the illness that is affecting PM renders her unable to provide support any longer.
- The evidence given to the Tribunal is that, apart from PM, there is no family member available to give any support to Mr Preston. No close friend is available to fill a support role. Paid support workers may provide practical and physical support to Mr Preston but they are not persons who naturally constitute a support network about financial decision-making as they generally are not permitted, for prudential and accountability reasons, to become involved with financial management for their clients.
- I find that unless an administrator is appointed to make financial decisions for Mr Preston, his needs will not be adequately met nor would his interests be adequately protected. However, an appointment is not required until such time as his existing support network is no longer available. The order that I will make will defer the commencement of the operation of the appointment until there is medical certification that PM is no longer able to support her son with decision-making for financial matters.
- The remaining issue is who should be appointed to be the administrator for Mr Preston. Originally, the Tribunal was asked to appoint three solicitors chosen by PM for the role. Not unnaturally, the proposed appointees, as practising lawyers, would perform the duties of administrator in the course of their respective legal practices and would do so during the hours that they would be expected to do billable work. They gave evidence that they would seek an order from the Tribunal to enable them to be remunerated from the funds of Mr Preston for their work.
- The Tribunal sought submissions as to how these proposed appointees would satisfy the requirements of section 48 of the Act. They were not prepared by the time of the hearing on 17 February 2016 to set out the basis on which they were entitled to an order for remuneration. After a short adjournment during the hearing when the proposed appointees were able to discuss with PM the requirements for remuneration in section 48, the Tribunal was asked to adjourn the hearing for sufficient time to permit PM to consider alternatives for appointment. Directions were made for submissions to be filed about remuneration prior to the resumption of the hearing.
- Before the resumption of the hearing on 30 March 2016, the Tribunal was notified that PM was no longer seeking the appointment of the solicitors as the administrators but is proposing the appointment of Janet Harney who is an accountant and an employee of an accounting firm called Breeze Professionals. Ms Harney had signed a declaration setting out her willingness to be appointed as the administrator for Mr Preston.
- According to the evidence filed in the Tribunal, Ms Harney stated that she had 13 years of financial administration experience and is a client services manager for Breeze professionals. However, at the resumed hearing on 30 March 2016, Ms Harney confirmed that she had never before acted as an administrator under the Act and neither had the firm for which she worked. Ms Harney stated that she had the full backing of Breeze Professionals and she will have the resources and expertise of the full Breeze Professionals practice at her disposal as she undertakes her responsibilities as an administrator.
- In a filed statement, Ms Harney set out that the accounting firm had clients who are charitable trusts and the firm had worked within the statutory reporting requirements that these trusts fall under. The managing director of the firm is a trustee of a charitable trust and Ms Harney would be able to call on the expertise of that person when needed. Ms Harney confirmed that she would be seeking to be remunerated if appointed as the administrator for Mr Preston.
- Ms Harney gave evidence that she would charge an establishment fee of $220, a fee of $220 to prepare the annual reporting documents for the Tribunal and ongoing annual fees of $2,850 based on a charge rate of $110 per hour. At the hearing, Ms Harney confirmed that she would be performing these tasks during her working day as an employee of Breeze Professionals and that the firm would be in effect charging the fees for this service. Ms Harney conformed that she would not accept appointment if she were not to be allowed to be remunerated in the role of administrator.
- The Public Trustee of Queensland made written submissions, supplemented by oral submissions, on the issue of when an administrator appointed under the Act can be remunerated. The submissions have assisted the Tribunal in considering the issues in this application and how to apply the law to those issues. The issue of remuneration of administrators who are not trustee companies has been considered only infrequently by QCAT and its predecessor tribunal and there are limited published decisions on the issue.
- The role of administrator is a statutory creation and was not present at common law. However, an administrator is in a fiduciary relationship with the adult for whom decisions are being made. Fiduciaries are not normally entitled to remuneration at common law but generally are regarded as acting on a gratuitous basis unless a special arrangement is made by a court or allowed by legislation.
- Section 48 of the Act is the legislative source for an administrator being remunerated. Subsection 1 sets out the circumstances that can result in an remuneration order: If an administrator for an adult carries on a business of or including administrations under this Act, the administrator is entitled to remuneration from the adult if the tribunal so orders. The wording and use of the present tense in subsection 1 is somewhat challenging. It would be a logical conclusion that a person who seeks to be appointed for the first time as an administrator under the Act is not entitled to an order for remuneration at the time of appointment, but possibly at a later stage. That is, until it is established that the person is carrying on a business of administrations, the entitlement to remuneration would not arise. That interpretation imposes a practical barrier to professional persons seeking appointment for the first, and perhaps only time, as an administrator.
- This practical barrier is reinforced by the limited categories of persons or entities available for consideration for appointment as administrators under the Act. Section 14(1) of the Act limits administrators to natural persons or The Public Trustee or trustee companies under the Trustee Companies Act 1968. A professional partnership or firm and incorporated professional entities fall outside those categories. An employee of such a partnership, firm or corporation could be appointed as an administrator but would have difficulty establishing that, as an individual, that employee carries on a business of administrations under the Act when the work is performed during working hours and the work performed is actually the business of the employer. The individual is already remunerated as an employee for the work performed by wages paid by the employer. In reality, a remuneration order sought in that circumstance is remuneration for the employer entity which is not eligible to be appointed as an administrator and therefore not eligible for remuneration under the Act.
- In the case of Mr Preston, the proposed administrator must be an individual and cannot be an accounting firm. Breeze Professionals as an entity cannot be appointed as administrator even if the members of that firm had individually at other times been appointed as administrators under the Act. The evidence from Ms Harney is that she has not previously been appointed as an administrator for any other adult under the Act.
- The evidence is clear: Ms Harney does not currently carry on a business of or including administrations under the Act as she has never been appointed as an administrator. If she were to be appointed for Mr Preston, it would be her first administration under the Act. She is an employee of Breeze Professionals and the work she would do as the administrator for Mr Preston would be conducted as part of her duties as an employee of Breeze Professionals. She is remunerated by wages by her employer for the work she performs during her working hours. Consequently, as an employee she would not be carrying on business for herself as a professional administrator. The remuneration sought by Ms Harney is actually fees to be rendered by her employer, Breeze Professionals in the course of its accounting practice.
- I find that Ms Harney does not now, and will not if appointed as administrator for Mr Preston, carry on a business of or including administrations under the Act. I find that the benefits of section 48(1) of the Act cannot be applied to her. If she were to be appointed as the administrator for Mr Preston, the tribunal could not make an order that she be remunerated for her work. Ms Harney has informed the Tribunal that she will not accept appointment if she could not be remunerated from the funds of Mr Preston for the work done in that role. As a remuneration order will not be made, I find that Ms Harney is no longer willing to be appointed as administrator.
- PM had informed the Tribunal that if Ms Harney was not appointed as administrator, then she accepted that The Public Trustee of Queensland was an appropriate option for appointment as her son’s administrator. While The Public Trustee does not have an office in the town where Mr Preston resides, there are experienced trust officers who regularly and efficiently manage the funds of adults in northern Queensland from offices in either Cairns or Townsville. I find that the appointment of The Public Trustee as administrator for Mr Preston is an appropriate appointment.
- Many of the decisions regarding Mr Preston’s financial position will in any event be made by the trustees of the trusts set up in the will of PM. Most of the financial resources that will be used to provide for his future financial security will be contained in those trusts. The role of the administrator will be limited in effect to management of assets of about $10,000 owned by Mr Preston plus pension income received by Mr Preston.
- Unlike a private administrator, The Public Trustee has a statutory basis to charge remuneration under section 48(3) of the Act and the Public Trustee Act 1978. According to the submissions from The Public Trustee, the annual fees would be considerably less than the fees of either the originally proposed appointees or Ms Harney.
- I appoint The Public Trustee as the administrator for Mr Preston until further order of the Tribunal.
- Published Case Name:
- Shortened Case Name:
 QCAT 52
Senior Member Endicott
04 Apr 2016