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- Unreported Judgment
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
HAZ  QCAT 322
In applications about matters concerning HAZ
Guardianship and administration matters for adults
28 August 2019
24 June 2019
The Tribunal makes the following orders:
HEALTH LAW – GUARDIANSHIP, MANAGEMENT AND ADMINISTRATION OF PROPERTY OF PERSONS WITH IMPAIRED CAPACITY- Duties of an Administrator - determination of compensation owed by an Administrator failing to act appropriately and prudently.
S35-37; 49-50 of the Guardianship and Administration Act 2001
Cowan v Scargill (1985) Ch 270; and SMD QCAT
APPEARANCES & REPRESENTATION:
SH Official Solicitor’s Office of the Public Trust Queensland
HJ Regional Manager of the Public Trust Queensland
BC service provider.
REASONS FOR DECISION
Presumption of capacity
- HAZ sustained an acquired brain injury in a motor vehicle accident.
- The adult’s capacity to manage his Financial Affairs has been rebutted in a number of hearings going back to 1 May 2012 and 30 April 2014.
- The adult’s condition is relatively stable.
- The Tribunal finds that HAZ suffered a severe head injury and this has impacted on his cognitive abilities.
- The presumption that he had ability to manage his Financial Affairs is rebutted.
- On 1 May 2012, the Tribunal appointed PM as HAZ’s guardian for all personal matters and administrator for all financial matters. On 30 April 2014, PM’s appointment as HAZ’s guardian and administrator was continued.
- A review of PM’s appointment was initiated because of concerns about PM’s handling of HAZ’s financial affairs.
- On 21 June 2016, the Tribunal revoked PM’s appointment as guardian and administrator. The Tribunal appointed the Public Guardian and CD for certain personal matters and the Public Trustee of Queensland as HAZ’s administrator for all financial matters.
- On 31 July 2017, the Public Trustee of Queensland as HAZ’s administrator wrote to PM requesting that she provide information regarding transactions made on HAZ’s accounts while she was his administrator. The Public Trust of Queensland report that no response was received from PM to this correspondence. The Public Trustee of Queensland sent follow-up letters to PM on 10 and 30 October 2017. The Public Trustee of Queensland report that PM did not respond to these letters.
- On 2 July 2018, correspondence was sent to PM by the Official Solicitor. This correspondence provided three schedules of transactions listing transactions made on the accounts of HAZ totalling $90,709.75. PM was asked to provide an explanation in relation to each transaction listed in the schedules. The Public Trustee of Queensland state that PM did not respond to the letter dated 2 July 2018.
- On 30 July 2018, the Public Trustee of Queensland filed an Application for Miscellaneous Matters seeking directions from the Tribunal that PM provide the Public Trustee of Queensland with information regarding the transactions on the accounts as listed in the schedules.
- On 6 November 2018, the Tribunal directed that:
- (a)PM be joined as an active party to the proceedings;
- (b)pursuant to section 44 of the Guardianship and Administration Act 2000, PM as HAZ’s former administrator provide answers to the matters raised in the letter dated 2 July 2018 in the schedule sent by the Official Solicitor to PM. PM’s answers were to be filed in the Registry and a copy served on the Public Trustee of Queensland by 4 PM, 7 December 2018;
- (c)PM fully cooperate with the Public Trustee of Queensland and do all things necessary to provide the Public Trustee with all the information and material the Public Trustee of Queensland required;
- (d)PM was on notice that if she did not comply with these requirements then she would be in breach of an order of the Tribunal; and
- (e)the Tribunal warned PM that it had power pursuant to section 97 of the Queensland Civil and Administrative Tribunal Act 2009 to compel it to attend and produce documents if she did not comply.
- The Tribunal also directed that a compensation matter be initiated.
- On 10 December 2018, the Tribunal gave PM an extension of time to comply with the order of 6 November 2018 until 4 PM, 11 February 2019 and relisted the matter for 20 March 2019.
- The Public Trustee of Queensland advised that on 19 March 2019, PM provided a response to the Official Solicitor.
- The Public Trust of Queensland are of the view that PM has not provided receipts or other records to support her account of the transactions on the accounts. The Public Trustee of Queensland has examined HAZ’s budget and financial records when reviewing PM’s account of the transactions. The Public Trustee of Queensland based on these enquiries has formed the view that the transactions for which a response has been provided by PM may have been made for HAZ’s benefit. On that basis the Public Trustee of Queensland accepts that $25,885.08 accounted for by PM should not be included as part of the compensation orders sought on HAZ’s behalf.
- The Public Trust of Queensland having considered PM’s response accepted some of her submissions and reduced the total unaccounted to the sum of $64,824.67.
- On 29 April 2019 the Tribunal gave PM lengthy guidance on the type of evidence that would be necessary in order to satisfy requirements of the Public Trustee of Queensland. The Tribunal also told PM that she could make submissions at the hearing on what weight the Tribunal place on the evidence before it and any other relevant factors. The Tribunal gave PM until 3 June 2019 to file and provide the Public Trustee of Queensland any further material related to the expenditure of funds of HAZ during her time as administrator.
- On 7 June 2019 PM emailed the Public Trustee of Queensland a response which consisted of single line entries for example: “washing powder”; “soaking agents”; “clothes” and “shoes”.
- The submission from PM did not provide any:
- (a)Explanation; nor
- (b)any supporting material; or
- (c)any other basis to support the entries.
- On 24 June 2019 PM did not attend. The hearing support officer was unable to contact PM on the day. This meant no further material evidence was supplied in support of her submission of 7 June 2019. PM was aware of the hearing date as it was communicated on 29 April 2019 and contained in the orders/directions of that date. The submissions of 7 June 2019 were provided as a result of the directions of 29 April 2019.
The Law in relation to Administrator’s duties
- PM as HAZ’s administrator was required to:
- (a)act honestly and with reasonable diligence (section 35 of the Act);
- (b)act as required by the terms of any order of the Tribunal (section 36 of the Act);
- (c)avoid conflict transactions unless authorised by the Tribunal (section 37 of the Act);
- (d)keep records (section 49 of the Act) and by the directions given in the Tribunal’s Decision dated 1 May 2012 and 30 April 2014); and
- (e)keep property separate (section 50 of the Act).
- On 8 April 2014, before her appointment as HAZ’s administrator was continued, PM swore in a statutory declaration that amongst other requirements records have been kept for all financial transactions and she is able if required to produce records for inspection.
- Section 35 of the Act requires an administrator who may exercise power from adult to exercise that power honestly and with reasonable diligence to protect the adult’s interests.
- The overriding requirement is to act reasonably in the overall best financial interests of the beneficiary of the power. The authority for this position is Cowan v Scargill (1985) Ch 270.
- Section 59 of the Act allows a claim for compensation to be made against a former administrator. The authority for this is SMD  QCAT 360.
- The Tribunal in order to make a compensation order must be reasonably satisfied that:
- (a)there has been a loss;
- (b)the loss was caused by PM;
- (c)there has been a failure by PM to comply with the Act; and
- (d)the failure to comply occurred in the exercise of PM’s power as administrator for HAZ.
- The Public Trust of Queensland submitted that on the basis of the information provided by PM, HAZ has suffered a loss of $64,824.67 representing those transactions on the accounts for which PM is not or cannot account for.
- The Public Trustee of Queensland put together statements raising queries in relation to expenditure of $90,709.76. The Public Trustee of Queensland put this evidence to PM on 2 July 2019 and again on 10 and 30 October 2019. PM did not respond to these letters. On 6 November 2018 the Tribunal directed PM to provide information regarding the transactions on the accounts that had been provided.
- When PM finally provided a response to the material provided by the Public Trustee of Queensland, the Public Trustee of Queensland formed the view that the sum of $25,885.08 be deducted from the monies said to be owing to HAZ. This left on the calculations of the Public Trustee of Queensland a balance of $64,824.67 unaccounted.
- The evidence of PM was that she had not kept accounts or to the extent that she had kept records that she was unable to locate those records.
- The evidence of the Regional Manager of the Public Trustee of Queensland was that she did not accept the notations provided by PM. Her evidence was that they were unlikely to have been incurred by the adult or that there was no evidentiary basis to accept these claims as evidence of expenditure on behalf of the adult.
- The Tribunal asked HJ to put her evidence and reasoning in an affidavit and ensure that this was served on PM and filed in the registry.
- In the affidavit of HJ the relevant paragraph is paragraph 12 which provides:
- (a)HAZ was involved in a single vehicle rollover motor vehicle accident in which he suffered a head injury and subsequently also suffers from depression. HAZ as a result of this motor vehicle accident has difficulties in communication and verbalising his opinions or needs. HAZ can only speak a few words with prompting;
- (b)PM has not provided a copy to the Public Trustee of Queensland the budget she prepared at the time she was HAZ’s administrator;
- (c)the charges PM credits as being made to Telstra on HAZ’s behalf are sporadic. Further PM has not shown the payments to Telstra were being paid on HAZ’s behalf pursuant to any budget. Also there is no evidence the Telstra services engaged by PM met HAZ’s communication needs;
- (d)PM has provided no evidence as to how HAZ made withdrawals from his bank accounts or how those withdrawals were in HAZ’s interests and all within his budget;
- (e)the Public Trustee is not aware that HAZ had any health insurance or in particular HCF health insurance upon the appointment of the Public Trustee and no evidence has been provided by PM that she maintained a health insurance policy for HAZ the period she was HAZ’s financial administrator;
- (f)PM has indicated that payments to SPER were for the payment of HAZ’s fines. SPER have indicated HAZ’s last SPER debt with them was in 2011;
- (g)PM has accounted for a birth certificate for HAZ. PM has not provided the birth certificate to the Public Trustee. Further costs were incurred as the Public Trustee ordered a birth certificate for HAZ;
- (h)PM has identified some of the transactions being for clothing and shoes for HAZ. By comparison to HAZ’s current budget for clothing and shoes, PM’s account appears excessive unless further evidence can be supplied;
- (i)PM identifies an ongoing payment made to Polar Industries of which she says was or air-conditioning. There is no evidence to show this was solely for HAZ’s benefit; and
- (j)PM provides explanations indicating transactions for chemist accounts, rent and house insurance. There is no evidence to show this was for HAZ’s sole benefit.
- The Public Trustee formed a view that the explanations for the transactions which PM provided on 7 June 2019 are insufficient and without further evidence to support the transactions there is $64,824.67 of HAZ’s funds unaccounted for.
The Tribunal’s view of the evidence
- The Tribunal prefers the evidence of the Public Trustee over the evidence of PM.
- The Tribunal notes that there is a requirement on an administrator to keep records. Where an administrator has not kept records or is unable to locate these records this should not shield the Administrator from liability where the adult’s funds have not been managed appropriately. The protection for an administrator against claims of inappropriate management are the records that have been kept. Where an administrator has not kept records and cannot account for the expenditure a bald claim that the expenses are for the benefit of the adult is insufficient. There is a positive duty on administrator to be able to account. This is part of the prudential requirements of the role.
- The Public Trust of Queensland have spent considerable time and energy to put a submission together for PM to respond to. The Tribunal spent considerable time talking to PM about the evidentiary requirements of supporting her assertions regarding the expenditure of the adult’s funds. The Tribunal told PM on 24 June 2019 that would be in her best interests to put in a further submission and to be able to talk to the Tribunal at the hearing.
- The Tribunal makes the following findings of fact:
- (a)HAZ has suffered a significant loss as a result PM’s breach of duty as administrator.
- (b)PM has been unable to provide an adequate explanation and supporting evidence or $64,824.67 of the transactions that were incurred on HAZ’s accounts whilst PM was his administrator.
- (c)PM failed to keep adequate records of HAZ’s financial affairs.
- (d)PM use some of HAZ’s funds in a way that was not in his best financial interests.
- (e)The loss that HAZ has incurred is as a result of the inappropriate exercise by PM as HAZ’s administrator.
- The Tribunal accepts the submission of the Public Trustee of Queensland that the explanations for the transactions which PM provided on 7 June 2019 are insufficient and without further evidence to support transactions. The Tribunal accepts the submission of the Public Trustee of Queensland that the balance unaccounted for is the sum of $64,824.67.
- The Tribunal is of the view that the evidentiary requirements of making a compensation order referred to above have been met. The Tribunal orders that PM pay the sum of $64,824.67 to HAZ by way of compensation within 28 days.
- The Tribunal directs that this order may be registered in an appropriate court in the State of Queensland as a sum of money due and owing by PM to HAZ.
- Published Case Name:
In applications about matters concerning HAZ
- Shortened Case Name:
 QCAT 322
28 Aug 2019