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- Unreported Judgment
CGB QCAT 93
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CGB  QCAT 93
In applications about matters concerning CGB
Guardianship and administration matters for adults
27 March 2019
On the papers
HUMAN RIGHTS – JURISDICTION AND PROCEDURE – QUEENSLAND – where applications in relation to the payment of legal costs were made – whether the legal costs were incurred to the benefit of the adult – where the principles as to costs in guardianship matters were discussed – whether directions should be given to the administrator to pay the legal costs of a party
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORIES – COSTS – GENERAL MATTERS – POWER TO AWARD GENERALLY – OTHER MATTERS – where applications in relation to the payment of legal costs were made – whether the legal costs were incurred to the benefit of the adult – where the principles as to costs in guardianship matters were discussed – whether directions should be given to the administrator to pay the legal costs of a party
HEALTH LAW – GUARDIANSHIP, MANAGEMENT AND ADMINISTRATION OF PROPERTY OF PERSONS WITH IMPAIRED CAPACITY – ADMINISTRATION AND FINANCIAL MANAGEMENT – where applications in relation to the payment of legal costs were made – whether the legal costs were incurred to the benefit of the adult – where the principles as to costs in guardianship matters were discussed – whether directions should be given to the administrator to pay the legal costs of a party
Guardianship and Administration Act (Qld) 2000, s 33(2), s 34, s 36, s 51, s 54, s 81(1)(d), s 127, s 127(2)
The Public Trustee
The Official Solicitor
K&L Gates, Solicitors
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
- CGB resides in care at the Gold Coast. He has very substantial assets. There have been numerous applications made to the Tribunal, and numerous orders made, in relation to him.
- An order in relation to the appointment of administrators for CGB was made by the Tribunal on 7 April 2016.
- I made an order on 22 June 2018 in Application GAA5477-17 (Review of the Appointment of an Administrator) giving leave to SBK, who was one of the administrators, to withdraw as administrator. I changed the previous order of the Tribunal, and appointed the Public Trustee of Queensland as sole administrator for CGB for all financial matters.
- I gave extensive directions on 22 June 2018, including directions as to the obtaining and provision of documents, and authorising the release of funds to the solicitor for SBK in respect of legal fees.
- Numerous parties, and legal representatives, attended the hearing on 22 June 2018. These included legal representatives for OM (the son of CGB) and for CAJ (the daughter of CGB).
- I gave a direction on 22 June 2018 as to any application for costs as follows:
- 16.Any party may file an application as to the costs of these proceedings, including costs of compliance with any directions, which will be then subject to further directions.
- Applications were received for a non-publication order, and a confidentiality order. I made such orders on 31 July 2018 as follows:
- 1.The Tribunal orders that Publication of any information placed on the Tribunal files in relation to CGB’s financial and business affairs is prohibited pursuant to s 108 of the Guardianship and Administration Act 2000.
- 2.The Tribunal orders that information placed on the Tribunal files in relation to CGB’s financial and business affairs is confidential and must not be disclosed to any person other than the Public Trustee of Queensland, the Public Guardian, and the adult’s primary contacts namely, SBK, CGB’s daughter and son and their legal professional representatives, or as otherwise required by law, pursuant to s 109 of the Guardianship and Administration Act 2000.
- CAJ filed an application, GAA11650-18, in relation to costs on 27 September 2018 for a direction as follows:
That the Public Trustee pays the applicant’s reasonable legal costs associated with the applicant’s involvement in proceedings numbered (Client Number) from the assets of the adult, CGB.
- An affidavit by the solicitor for CAJ was also filed on 27 September 2018. The affidavit noted that CAJ sought to have her costs of and incidental to the review proceedings paid.
- I gave directions on 8 November 2018, in relation to the application by CAJ, as to the filing of submissions by CAJ, and by any interested parties.
- The Public Trustee of Queensland, as administrator for CGB, filed an application, GAA258-19, on 14 December 2018, for directions as to the payment of moneys by The Public Trustee as follows:
- 1.The Public Trustee pay the amount of money directed by QCAT to Minter Ellison from CGB’s funds for the legal fees incurred by CAJ (an active party in this matter) with that firm.
- 2.The Public Trustee pay the amount of money directed by QCAT to K & L Gates from CGB’s funds for the legal fees incurred by OM (an active party in this matter) with that firm.
- 3.The Public Trustee is directed that in the future, accounts from Minter Ellison and K & L Gates, who represent active parties in this proceeding, should be referred to QCAT for subsequent directions and that the Public Trustee is not authorised to pay those accounts otherwise.
- 4.The That these orders remain confidential between the active parties and not be disclosed outside of these QCAT proceedings unless required for use in a subsequent legal action brought in a Court of competent jurisdiction.
- I gave various directions as to the filing of submissions in applications GAA11650-18 and GAA 258-19.
- I gave directions on 12 February 2019 that applications GAA11650-18 and GAA 258-19 were to be determined together, on the papers, on the basis of the written submissions.
- This is the decision in relation to applications GAA11650-18 and GAA 258-19.
- The Guardianship and Administration Act (Qld) 2000 is referred to in these reasons as ‘the Act’.
Submissions of the Public Trustee
- An affidavit of Mr Miles, the Director of Disability Services at the Public Trustee of Queensland, was filed on 14 December 2018.
- Mr Miles noted that the adult’s two children were each represented by lawyers in these proceedings.
- Mr Miles stated that Public Trustee had paid, or would be likely to pay, the sums of $31,745 and $25,344 to K&L Gates, and MinterEllison, the solicitors for the adult’s son and daughter respectively, in relation to costs incurred between 26 February 2018 and 17 April 2018, on the basis that those sums were authorised by orders of the Tribunal.
- Mr Miles stated that the Public Trustee had not paid, and was seeking QCAT direction as to payment of ‘unpaid fees' to K&L Gates of $58,904.30, and to MinterEllison of $67,745.16.
- Mr Miles referred to an accompanying Affidavit of Mr Coco, Managing Lawyer in the Office of the Official Solicitor Public Trustee of Queensland, which forecast that the adult would have no financial surplus for the year ending 30 June 2009, and a forecast surplus of $148,940 for the financial year ending 31 June 2020. He noted that the letter exhibited to Mr Coco’s affidavit made it clear that the payment of CGB’s children’s lawyer’s fees would need to be funded from the adult’s capital and not from his future income.
- Mr Miles stated that the payment of the unpaid fees could be accommodated without jeopardising the adult’s future financial security, however future payments of fees of the same quantum may have a more significant impact.
- Mr Miles stated that the Public Trustee would not resist a direction that it pay the unpaid fees in full, but for the reasons outlined in its letter of 13 December 2018 to the solicitors for the adult son and daughter, consider that it requires a QCAT direction to do so; and that it was open to QCAT to direct the Public Trustee to pay none, all or part of the adult’s children’s lawyers unpaid fees.
- The letter of 13 December 2018 referred to Section 54 of the Guardianship and Administration Act 2000 (Qld) which refers to gifts, and provides that an administrator may give away the adult’s property as a gift only in specified situations, but that the Tribunal may order otherwise.
- The Public Trustee filed further submissions on 1 February 2019. It noted that paragraph 4 of the application filed by it on 14 December 2018, as to confidentiality, would not be pursued, and that a new application would be filed in that respect.
- The Public Trustee noted that it was almost certain that the adult is intestate, and that his son and daughter could each expect to be entitled to receive a part of the adult’s estate upon his death. It submitted that this raised consideration of several factors:
The Public Trustee submits that:
- (a)Administrators under the capital GAA do not have the power to pay active parties legal fees of their own volition. In particular, the administrator must act with honesty and reasonable diligence (s 34), exercise its powers as required by the terms of any order of the Tribunal (s 36), invest only in authorised investments (s 51), and not gift and adults property without first complying with s 54.
- (b)It appears to be submitted by the active parties that the Public Trustee has a discretion to pay legal fees because of the orders dated 26 February 2018 and 17 April 2018, however the Public Trustee has explained its interpretation of the plain meaning of those orders in CJM-4. Section 36 GAA states that the Public Trustee must exercise its powers only in accordance with the terms of the orders made. The orders of 22 June 2018 make it plain that active parties must file an application in relation to the costs if they wish them to be paid from (the adults) funds. Such an order makes it clear that the Public Trustee is not authorised to determine whether to pay active parties legal costs.
- (c)QCAT could have directed or authorised the Public Trustee to pay all of (the sons and daughters) legal fees in this matter in the past or in the future, but has not done so to date. The absence of plain words to this effect is contrary to the active parties submission that the Public Trustee is already authorised to make such a payment.
- (d)The If it is the case that the Public Trustee already has the power to determine to pay the active parties legal fees, then the Public Trustee has made clear that it will not do so with that QCAT’s direction. Therefore if the active parties were successful in their submission the Public Trustee has the power to determine to pay the active parties legal fees, then without the direction requested by the Public Trustee from QCAT, additional legal fees would not be paid to K & L Gates and Minter Ellison.
Submissions of the adult’s son
- 15.Given: the complexity of (the adults) commercial interests; (the son and daughter) concern that those commercial interests be administered competently by QCAT appointed administrator; the issues surrounding the previous administration of his business affairs; the fact that (the adult) is of advanced years in failing health; and the fact that (his daughter or son) or both will likely be entitled to apply to be the personal representative of (the adults as brackets deceased estate, QCAT and the Public Trustee have each continued to see the practical utility of involving (his own daughter) in this matter in the future. A corollary of that involvement is that both (his daughter and son) are accruing legal costs now. This financial impost might be relieved by QCAT providing appropriate directions about the payment of costs if the Member were minded to do so.
- The Public Trustee referred to section 54 of the Act as to gifts, and submitted that there was no evidence to suggest that payment of the son’s and daughter’s legal fees is something that the adult would have paid if he would have had capacity, and thus the payment may be made only in accordance with QCAT directions.
- The Public Trustee noted that it did not categorise the payment of the son’s and the daughter’s legal fees as an ‘expense’ of the adult, and that the adult is not compellable (without an order from QCAT) to pay those fees. It noted that when the adult is not compellable to pay for something, then payment can only be categorised as voluntary, and a payment made voluntarily is a gift.
- The Public Trustee noted the submissions made on behalf of the son and daughter and made the following comments:
- The Public Trustee noted that it sought directions:
- (a)about the payment of the outstanding amount of legal fees requested by the adult’s son in the sum of $59,054.30; and by the adult’s daughter in the sum of $67,745.16 for her solicitor’s fees, and $6,046.88 for her counsel’s fees, and
- (b)that future legal costs of each of the active parties should be referred to QCAT for subsequent directions and that the Public Trustee is not authorised to pay those accounts otherwise.
- Submissions on behalf of the adult’s son, OM, were filed by his solicitors on 17 January 2019.
- OM’s solicitors submitted that the legal costs incurred by OM and the adult’s daughter CAJ were in the interests of the adult:
- 20.Significant work has been undertaken by (the son and daughter) to seek to assist the Public Trustee to discharge its duties to (the adult) as his administrator (including as co-administrator prior to 22 June 2018) in the interests of (the adult) and for the purposes of ensuring the proper administration of his estate and the preservation of his assets. That work has included, relevantly, investigating and assessing SBK’s conduct as co-administrator, consulting with the Public Trustee in respect of that conduct, and assisting the Public Trustee and collating information and material necessary to take steps to seek to preserve the assets and current/future financial position of (the adult).
- 21.In the course of undertaking that work (for the benefit of the adult), (the son and daughter) have incurred certain costs, including in retaining professional advisers.
- 22.Having regard to the nature of that work, and that (the son and daughter) are out of pocket significant amounts, they seek that those costs be paid out of the assets of (the adult).
- The son’s solicitors note that the Public Trustee does not oppose the payment of the costs, but consider that it requires further direction from the Tribunal in order to do so, and that the quantum of the costs are not in issue.
- The son’s solicitors submit that the existing orders are sufficient to authorise and direct the Public Trustee to pay the costs out of the adult’s assets.
- The son’s solicitors submit that there are ‘exceptional circumstances’ which attract the application of section 127(2) of the Act, and submit as follows:
- There are limited authorities in respect of costs in the Tribunal’s Guardianship and Administration jurisdiction, and those that exist do not canvass circumstances in which the costs were incurred solely for the purpose of the preservation of impaired adult’s financial position against the gross and long-term mismanagement of his affairs by one of the Administrators. In the present case, those circumstances resulted in significant work by active parties including (his son and daughter), extensive investigations into those affairs, numerous applications, and protracted discussions with (SBK) and other active parties to seek to secure resolution most favourable to (the adult). Our client respectfully submits that clearly falls within the ambit of ‘exceptional circumstances’ as contemplated by the provision (section 127).
- The son’s solicitors submit further, and in the alternative, that the work has been undertaken for the benefit of the adult:
- The results of the work undertaken, for which the payment of costs is now sought, allowed the Public Trustee and the Tribunal to make a significantly more informed assessment of the state of affairs that had existed, and that required investigation to, inter alia, preserve the assets of (the adult) and make the appropriate Orders in respect of the administration of (the adult’s) affairs, including on both the initial Review and on the Application for leave to withdraw as administrator filed by (SBK). It follows that work was necessary to protect (the adult) and advance his interests, including his financial interests and security.
- The Act provides in section 127 that each party in a proceeding is to bear its own costs of the proceeding.
- These circumstances are distinguishable from the rule as to costs in section 127, as the adult’s son and daughter are not seeking that they be paid their legal costs of the proceeding as a consequence of the outcome of the proceeding, as is considered in civil litigation; but are seeking that the administrator pay their legal costs of participating in the proceedings, from the adult’s assets, on the basis that they are costs that have been incurred in the interests of the adult, and should properly be paid by him.
- The Act provides that the functions of the Tribunal include the making of declarations, orders or recommendations, or giving directions or advice, in relation to administrators.
- The Tribunal therefore may give a direction to the Public Trustee in its role as administrator for CGB to pay the legal costs of his son and daughter, if they are seen as costs incurred by the administrator in his interests, and should properly be paid by him.
- I have made three previous directions as to costs. They are summarised in the son’s submissions as follows:
- The Tribunal has made the following orders in respect of costs in this proceeding:
- (a)on 26 February 2018 – that “the costs of complying with these directions are to be drawn from the funds of (the adult) in the first instance but such costs are subject to further order of the Tribunal";
- (b)on 17 April 2018 – that “in the event that any party wishes to submit that the provisional direction as to costs referred to in the directions of 26 February 2018 should not apply to the costs of these proceedings that party is to file and serve on all other parties within 28 days of this Order his or her proposed order as to such costs and thereupon the resolution of such costs will be considered at the adjourned hearing"; and
- (c)on 22 June 2018 – “any party may file an application as to the costs of these proceedings, including costs of compliance with any directions, which will be then subject to further directions"
- I do not consider that those directions do clearly authorise and direct the Public Trustee to pay the legal costs of the son and daughter in the proceedings to date, as submitted by the son’s solicitors.
- Those directions were intended to facilitate the speedy resolution of the situation as to the Administrators, and to ensure that financial information was quickly secured and transferred to the Public Trustee.
- There was a commercial imperative that those actions be taken as quickly as possible in the adult’s interests, as the cost of paying SBK’s fees to prepare and hand over the documents was likely to be much less than the cost of the harm that would have been caused to the adult’s business interests by protracted proceedings over the payment of fees, and production of documents, whilst the businesses continued to lose money. The documents were able to be rapidly be provided in a relatively short time, whereas that aspect of the matter may otherwise have continued for a lengthy period, with continuing losses to the business.
- I considered that it was more expedient to authorise the payment of costs at that time, and the directions were formulated with SBK in mind, rather than having a general application to other parties.
- I accept the submissions of the Public Trustee that more specific directions are required to clearly authorise it to pay the legal costs of the son and the daughter in the proceedings. Further directions are therefore required.
- The provisions of section 127 (2), as to costs, are as follows:
- (2)However, the Tribunal may order an applicant to pay an active party’s costs and the costs of the Tribunal in exceptional circumstances, including, for example, if the Tribunal considers the application is frivolous or vexatious.
- I do not consider that the costs provisions in section 127(2) of the Act are applicable. That subsection refers to payment of costs by an applicant. In this matter, costs are not being sought against an applicant, so this is not a situation that would attract the attention of section 127(2).
- The Tribunal has a function under section 81(1)(d) of the Act to make declarations, orders or recommendations, or give directions or advice, in relation to Administrators and related matters.
- Section 36 of the Act provides that an Administrator must exercise power for an adult as required by the terms of any order of the Tribunal.
- I accept that the legal work that was done by the solicitors for the adult’s son and daughter was in the interests of the adult.
- The Public Trustee has been able to have the benefit of the assistance of the solicitors for the adult son and daughter, as submitted. Further, in this matter, the presence, and oversight, of two additional sets of lawyers would have focused SDK to consider his position as administrator, and to consider whether to continue, or to withdraw as he did. That outcome was in the interests of the adult, in light of the strong evidence suggestive of mismanagement.
- I do note that, if the estate transpires as suggested by the Public Trustee, that the adult’s son and daughter would effectively be reimbursed the legal costs that they had already paid, from their share of the estate. The practical effect of an order that the legal costs be paid from the adult’s estate now, is that his subsequent estate is reduced. The net effect to them would be the same as if the legal costs were now paid to them by their father.
- The effect of a payment on the estate of the adult would not normally be a valid consideration, as the only consideration is the interests of the adult, not of any beneficiaries.
- In this matter however, it is apparent that the assets are of such a magnitude that the adult’s needs will be well accommodated for during his lifetime, and that diminution of his estate by these costs would not adversely affect the payment of any of his needs or expenses during his lifetime.
- Therefore, whilst payment of the legal costs may well come to be drawn from the capital of his estate, as forecast by the Public Trustee, his estate would not be diminished to an extent that adversely affects the adult.
- Section 33(2) of the act provides as to the power of administrator as follows:
- (2)Unless the Tribunal orders otherwise, an administrator is authorised to do, in accordance with the terms of the administrators appointment, anything in relation to a financial matter that the adult could have done if the adult had capacity for the matter when the power is exercised.
- The Public Trustee submitted that there was no evidence to suggest that payment of the son’s and the daughter’s legal fees is something that the adult would have paid if he would have had capacity, as I previously noted.
- It may be not be an easy matter to determine what the adult would have paid if he or she had capacity. That may particularly apply when the adult is known to be a person who was ‘difficult’. There is anecdotal suggestion that such a description would apply to the adult in this matter.
- I am not convinced that the adult would not have paid the legal fees of the son and daughter in the circumstances. The adult had estranged relationships with both his son and daughter. The adult was a business person, however, and would not wanted to have seen his businesses being mismanaged, or see himself taken advantage of, and may well have elected to have his son and daughter vigorously pursue the proceedings.
- Whilst there is no evidence that the adult would definitely have agreed to pay the legal fees, I do think there is a reasonable argument that he would have. That is not determinative, but it is another factor that I do take into consideration to some extent.
- There is no question raised as to the quantum of the legal costs claimed by the Solicitors for the adult son and daughter, and I accept, and will proceed, on the basis that they are fair and reasonable.
- I consider it appropriate that the Public Trustee be given a direction to pay the legal costs of the adult’s son and daughter referred to in the application of the Public Trustee, having regard to the following matters:
- (a)the unique nature of these proceedings;
- (b)the serious nature of the suggested mismanagement of the substantial businesses;
- (c)the significant quantum of the adult’s assets;
- (d)the satisfactory provision that remains for all of the adult’s needs after payment of the legal fees under discussion;
- (e)the benefit to the adult that the involvement of the solicitors acting for the adult’s son and daughter has brought in assistance of the Public Trustee, and in the proceedings;
- (f)the realistic possibility that the adult would have agreed to pay the legal costs of the adult’s son and daughter referred to in the application of the Public Trustee.
- To avoid any uncertainty, I make it clear that the direction is to include the payment of the legal costs that the Public Trustee has already made, as well as the unpaid costs.
- The adult’s son and daughter will have incurred additional legal fees in the conduct of these applications, and I consider it follows that those fees should also be paid by the Public Trustee as administrator.
- I do not consider it is appropriate to make directions as to the payment of all legal costs in the future, however. A direction of that nature would give an ‘open cheque’ as to future legal costs. The situation as to the Administration is now significantly different as to that which was in place when the Review was initiated. The Public Trustee is now the sole administrator, and can take any necessary steps in the interests of the adult. There is therefore a reduced need for close involvement by the solicitors for the adult’s son and daughter.
- If the Public Trustee is not satisfied that it is authorised to pay future expenses or claims in the normal course of its administration, then the appropriate course is for it to make a further application for directions to the Tribunal as required.
- I direct that:
- The legal fees that have been paid by the Public Trustee of Queensland in the sums of $31,745 and $25,344 to K&L Gates, and to MinterEllison, the solicitors for OM and CJ respectively, in relation to costs incurred between 26 February 2018 and 17 April 2018, are confirmed as authorised by the Tribunal.
- The Public Trustee of Queensland is directed to pay the further outstanding amount of legal fees requested by OM in the sum of $59,054.30; and by CAJ in the sum of $67,745.16 for her solicitor’s fees, plus $6,046.88 for her counsel’s fees.
- The Public Trustee of Queensland is directed to pay any additional reasonable legal fees of OM and CAJ incurred in relation to the conduct of applications GAA11650-18 and GAA258-19.
 Affidavit of Clinton James Miles, filed 14 December 2018, .
 Ibid,  and attachment CJM-3.
 Ibid,  and .
 Ibid, .
 Ibid,  and .
 Submissions on behalf of the Public Trustee of Queensland, filed 1 February 2019, .
 Ibid,  as to paragraphs 48 and 61.
 Ibid,  as to paragraph 67(b).
 Ibid, .
 Ibid, .
 Submissions on behalf of the adult’s son, filed 17 January 2019, , , .
 Submissions on behalf of the adult’s son, filed 17 January 2019, .
 Guardianship and Administration Act 2000 (Qld), s 81(1)(d)(i).
- Published Case Name:
- Shortened Case Name:
 QCAT 93
27 Mar 2019