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SLRM[2018] QCAT 140

SLRM[2018] QCAT 140

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

SLRM [2018] QCAT 140

PARTIES:

SLRM

APPLICATION NO/S:

GAA2411-18

MATTER TYPE:

Guardianship and administration matters for adults

DELIVERED ON:

18 May 2018

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Member Allen

ORDERS:

The application for approval of a conflict transaction by SLEB is dismissed.

CATCHWORDS:

GUARDIANS, COMMITTEES, ADMINISTRATORS, MANAGERS AND RECEIVERS – where application for approval of conflict transactions – where adult is a beneficiary of a self-managed superannuation fund – where superannuation fund owns units in a unit trust which holds real property –  where proposal to sell real property to son of adult – where adult’s spouse is his attorney, director of superannuation fund trustee company and trustee of unit trust – whether transactions constitute conflict transactions and should be authorised

Powers of Attorney Act 1998 (Qld), s 73, s 118

Smith v Glegg [2004] QSC 443

APPEARANCES:

 

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld).

REASONS FOR DECISION

  1. [1]
    SLRM is a self-funded retiree who has now transitioned into aged care. His wife SLEB is his attorney and she has made application to the Tribunal for approval of a conflict transaction.
  2. [2]
    To understand the transaction it is necessary to understand the structure under which certain assets which SLRM has an indirect interest in are owned:
    1. (a)
      SLRM and SLEB are members of the SL Super Fund of which SL Super Fund Pty Ltd is the trustee;
    2. (b)
      SLRM and SLEB are shareholders in SL Super Fund Pty Ltd;
    3. (c)
      SLEB is the director of SL Super Fund Pty Ltd;
    4. (d)
      SL Super Fund Pty Ltd as trustee for the SL Super Fund Pty Ltd owns 100 units in the SL Unit Trust; and
    5. (e)
      SLEB as trustee of the SL Unit Trust owns real property.
  3. [3]
    The transaction in question involves the sale by SLEB as trustee of the SL Unit Trust of the real property to SLEB and SLRM’s son, SLMW. The material provided indicates that the sale price is in excess of the current valuation of the property and so there is no issue about SLMW taking a benefit at the expense of SLRM.
  4. [4]
    The purpose of the sale is ultimately to provide funds to SLRM for the final payment of a refundable accommodation deposit for his aged care facility.
  5. [5]
    The proceeds of the sale are to be distributed from the SL Unit Trust to the SL Super Fund Pty Ltd as trustee for the SL Super Fund and then a lump sum payment will be made to SLRM to pay the refundable accommodation deposit.
  6. [6]
    SLEB as attorney for SLRM will presumably make the request to the super fund trustee for the payment of the lump sum and will then, when the monies are paid into SLRM’s bank account, pay those funds to the aged care facility.
  7. [7]
    It is clear that SLEB will be acting in many capacities in respect of this series of transactions as attorney for SLRM, as director of SL Super Fund Pty Ltd and as trustee for the SL Unit Trust. As such there is a potential for there to be some conflict between duties of SLEB.
  8. [8]
    The question though is, whether the transaction in question, the sale by SLEB as trustee for the SL Unit Trust to SLMW of the real property, is one which would require authorisation as a conflict transaction.
  9. [9]
    The enduring power of attorney made by SLRM on 15 April 2015 appoints SLEB and then alternatives as his attorney for financial matters and personal/health matters. This enduring power of attorney does not contain any terms in respect of the powers given. Enduring powers of attorney may contain a clause authorising the attorney to enter conflict transactions.
  10. [10]
    It is clear from s 32 of the Powers of Attorney Act 1998 (Qld) (‘POA Act’) that an attorney may be authorised to do anything in relation to 1 or more financial matters. Financial matter is defined in Schedule 2 part 1 of the POA Act as, for a principal, a matter relating to the principal’s financial or property matters with a list of examples relating to the direct financial interests of the principal.
  11. [11]
    A conflict transaction is one where there may be a conflict, or which results in conflict, between:
    1. (a)
      the duty of an attorney towards the principal, in this case SLRM;

and

  1. (b)
    the interests of the attorney, or a relation, business or close friend of the attorney;

or

  1. (c)
    another duty of the attorney.[1]
  1. [12]
    An attorney for a financial matter may enter into a conflict transaction only if the principal authorises the transaction, conflict transactions of that type or conflict transactions generally.[2]
  2. [13]
    In this case SLRM has not authorised SLEB as his attorney to enter conflict transactions generally in the enduring power of attorney which appointed her and the evidence before the Tribunal is that SLRM no longer has capacity to authorities SLEB to enter any particular conflict transaction.
  3. [14]
    The Tribunal may authorise an attorney to enter a transaction they would not otherwise be authorised to enter if it considers it is in the best interests of the principal, SLRM.[3]
  4. [15]
    While SLEB is SLRM’s attorney, the transaction that she is proposing to enter is by her in her capacity as trustee of the Unit Trust, and not as attorney for SLRM. This is because the real property in question is not owned by SLRM it is owned by SLEB as trustee for the Unit Trust. A transaction in regard to the land is therefore not in regard to a financial matter of SLRM as he has only an indirect interest in the real property.
  5. [16]
    It has been made clear in cases such as Smith v Glegg that where the attorney has not exercised power under the enduring power of attorney then the POA Act applies only in terms of such things as the presumption of undue influence in s 87 of that Act,[4] which applies where the transaction is between a principal and an attorney or associated party. I note that in that case McMurdo J held that the attorney was subject to a fiduciary duty to avoid any dealing or transaction by which her own interests could conflict with her duty to the plaintiff, Principal.[5]
  6. [17]
    The Public Trustee of Queensland was asked to make submissions in regard to the application. They very helpfully provided further detail in regard to the structure of the super fund and Unit Trust. The conclusion of the Public Trustee was that they did not consider the Tribunal has authority regarding the roles and responsibilities of the Directors and Trustees of the super fund and Unit Trust and that the Tribunal may consider a decision that there is no conflict between the roles of the attorney in this matter.
  7. [18]
    It appears that this application has been made out of an abundance of caution on the part of SLEB to ensure that she will not be acting contrary to the requirements of the POA Act.
  8. [19]
    I concur with the Public Trustee, having regard to my discussion of the various provisions of the POA Act, that the Tribunal is not required to authorise the transaction for the sale by SLEB as trustee of the Unit Trust to SLMW of real property because she is not entering them as attorney for SLRM.
  9. [20]
    While the transaction is not required to be authorised by the Tribunal as it does not involve a transaction in regard to a financial matter for SLRM that is not to say that SLEB does not owe fiduciary duties to SLRM in regard to the transaction as was made clear in Smith v Glegg. This is because SLRM has an indirect interest in the asset which is being dealt with. Those duties though are not ones which require an authorisation of the transaction by the Tribunal.
  10. [21]
    The application for a conflict transaction is dismissed.

Footnotes

[1] POA Act, s 73(2).

[2] Ibid s 73(1).

[3] Ibid s 118(2).

[4] [2004] QSC 443.

[5] Ibid [61].

Close

Editorial Notes

  • Published Case Name:

    SLRM

  • Shortened Case Name:

    SLRM

  • MNC:

    [2018] QCAT 140

  • Court:

    QCAT

  • Judge(s):

    Member Allen

  • Date:

    18 May 2018

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Smith v Glegg[2005] 1 Qd R 561; [2004] QSC 443
3 citations
Jump To
Cite 1 - [2004] QSC 443
Cite 2 - [2004] QSC 443
Cite 3 - [2004] QSC 443

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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