KB[2023] QCAT 112

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

1. [1]
   In satisfaction of s 114A of the Guardianship and Administration Act 2000 (Qld) (the GAA Act), the adult and other active parties are referred to herein in a de-identified format.

Background

2. [2]
   On 24 July 2019, PG and SG were appointed jointly and severally as administrators for KB for all financial matters. They are KB’s sisters.
3. [3]
   On 28 July 2022, in a periodic review of that appointment, I changed that appointment removing both PG and SG as administrators and appointing the Public Trustee of Queensland (the PTQ) in their place. This step was taken because of substantial unexplained discrepancies in the accounts provided by the administrators to this Tribunal. As it was noted in the Financial Assessment Report for the period 6 March 2021 to 4 May 2022:^[1]

Perusal of the bank statements identified withdrawal activity at various pubs and clubs during the reporting period. Based on the withdrawal activity, it appears that the adult frequented these types of venues approximately 2 to 3 times were (sic) per week, spending approximately $60 to $150 per visit. However, from October 2021 through to December 2021 the level of withdrawal activity, at these venues, increased significantly with daily withdrawals increasing to $300 and sometimes over $700 per visit. It is noted that during this period the adult was an inpatient at the Cairns Based (sic) Hospital. Given this fact, it is questionable that the transactions were being made by the adult himself. …

The adult’s total savings were depleted over the reporting period, with this largely attributed to the multiple withdrawals at various pubs and clubs.

4. [4]
   At the same time:

   1. (a)
      I directed the PTQ to investigate the expenditure from KB’s accounts during the period of his hospitalisation to determine whether there had been conduct by PG and/or SG that could be a failure by either or both of them to comply with the GAA Act in the exercise of their powers as administrators, and to report back to this Tribunal; and

2. (b)
   I put both SG and PG on notice that this Tribunal will consider making a compensation order against either or both of them personally should the PTQ’s investigation show that either or both of them have failed to so comply, but before doing so the Tribunal would provide each of them the opportunity to provide submissions to this Tribunal as to why, as relevant, they should not be required to compensate KB.

5. [5]
   The PTQ undertook that investigation and made the following findings which it reported to this Tribunal by way of a letter dated 26 October 2022 to which was attached the relevant supporting documentation:^[2]

From our investigations, transactions to the personal benefit of the former administrators have occurred in the below amounts:

I. [PG] - $3,189.84 - No response has yet been received from [PG] in respect of our investigations.

II. [SG] - $16,580.29 - A response has been received with supporting records for various transactions, however it would appear that this amount remains unaccounted for/was used for the personal benefit of [SG].

6. [6]
   Having received that report, on 4 November 2022 I gave orders that the PTQ was to provide a copy of its report to PG and SG, and thereafter PG and SG were to provide any written submissions they each wished to make to this Tribunal in terms of the information contained therein as to why they each respectively should not be required to compensate KB and thus why this Tribunal should not make a compensation order against them.
7. [7]
   By e-mail sent to the Tribunal Registry late in the evening on 20 November 2022, each of PG and SG gave their written submissions. The hearing then proceeded before me on 7 December 2022. PG, SG, and KB all appeared at that hearing in person. The PTQ’s representative appeared by phone.

The Relevant Law

8. [8]
   Under s 59 of the GAA Act, this Tribunal may order an administrator for an adult to pay an amount to the adult or the adult’s estate:

   1. (a)
      to compensate for a loss caused by the administrator’s failure to comply with the GAA Act in the exercise of a power; or
   2. (b)
      to account for any profits the administrator has accrued as a result of the administrator’s failure to comply with the GAA Act in the exercise of a power.^[3]
9. [9]
   The tribunal has no other jurisdiction to award compensation. There is no room, for example, to consider whether there has been a breach of any other duty which might be imposed at common law, or in equity, or by statute.^[4]
10. [10]
    Whether the Tribunal orders compensation or an account of profits will depend on the circumstances of the case, and in particular whether the adult has suffered a loss or the appointee has made a profit. However, the Tribunal may not order the administrator to make a payment under both limbs in relation to the same exercise of power.^[5]
11. [11]
    This power to order compensation or accounts applies even if the appointee is convicted of an offence in relation to the administrator’s failure,^[6] or  where the appointment has ended.^[7] However, this power is not enlivened unless the failure to comply with the GAA Act is complete – for example, the failure of an administrator to obtain the Tribunal’s authorisation to a conflict transaction is not complete until the possibility of retrospective authorisation has been exhausted.^[8]  Therefore, the Tribunal must determine if:

    1. (a)
       the administrator has failed to comply with the GAA Act in the exercise of a power and in the course of their role; ^[9] 
    2. (b)
       the adult has suffered a loss or the administrator has made a profit,^[10] and that the loss must also be particularised and identified as the Tribunal can only award compensation in respect of what has been identified as having been lost, ^[11]  and where there is no loss there is no grounds for compensation; ^[12] and
    3. (c)
       the loss or profit was caused by the administrator’s failure.^[13] 
12. [12]
    Generally, the matters should be determined on the balance of probabilities, and this Tribunal should be wary of finding fault merely on the basis that after events show that mistakes were made.^[14]
13. [13]
    An  administrator however is afforded relief from personal liability under s 58 of the GAA Act, but only in circumstances where the administrator has acted honestly and reasonably and ought fairly to be excused for the contravention.^[15] In such circumstances this Tribunal may relieve the administrator of all or part of the administrator’s personal liability for the contravention.^[16]

The Submissions

14. [14]
    The submissions from PG and SG were short. They did not address the provisions of the GAA Act to which I have just referred, but rather each of them explained their respective personal and financial circumstances. It is not necessary for me to note here the majority of that which was contained therein. It is sufficient to note the following key submissions they each made.
15. [15]
    For PG:

I am unable to ascertain copy receipts for unaccounted amount of $3,189.84 but I genuinely believe the payment withdrawals were for [KB]’s accommodation at BUPA Age (sic) Care and his personal use.

I am unable to pay compensation due to high cost (sic) living as this will affect my livelihood and cause me severe financial hardships (sic).

[KB] is my brother that I have looked after and cared for. As a guardian and financial administrator I made sure that he was living a comfortable life.

16. [16]
    For SG:

I agree with Public Trustee that the amount unaccounted for $16080.29 (sic) was for ‘personal use’ no (sic) $16,580.29 as the last two transactions in August 2022 was incorrectly noted. [KB]’s NAB bank card was delivered to him the day after the previous hearing on 29 July 2022.

During COVID 19 period, it has affected my mental well-being. I was feeling stress (sic). My over anxiety, sleep disorder and depression that (sic) led to gambling problems as form of relief.

I have an existing financial debt consolidation loan.

Paying back compensation will cause me severe financial hardship on top (sic) my existing financial commitment.

I have never neglected [KB] as a guardian and financial administrator I made sure that he was living a comfortable life.

17. [17]
    During the hearing on 7 December 2022 I gave each of PG and SG the opportunity to expand on these submissions if they wanted to, and specifically raising with each of them, and giving them an opportunity should they want it, to apply for approval of a conflict transaction in terms of any of the unexplained transactions. Save only for some short additional oral submissions from SG which I mention in the next paragraph, they each declined to assume those opportunities and were content to proceed on the basis of their written submissions.
18. [18]
    The short further submission from SG was to inform me that in the past she had used allot of her own resources to bring KB from Darwin to Cairns, and that she had reduced her work time to look after him. However, such was a bare submission devoid of any detail as to what the resources were or the extent to which her work time had been reduced or when these events were said to have occurred.
19. [19]
    I also heard briefly from KB. When I asked him as to what his views were on the extent to which his sisters should compensate him for the amounts identified by the PTQ he did not answer the question in any meaningful way. His response was simply that he wanted to get his money back because he planned to travel to Darwin to collect his car and bring it back to Cairns, and that he wanted it paid before Christmas, but later sad that he was happy to get back whatever he could from PG, suggesting 50% would be OK, but wanted SG to pay back everything.
20. [20]
    Finally, I also heard briefly from Ms Harris from the PTQ. She did not have anything to add beyond the PTQ’s report, nor could she add anything further to address the $500 difference raised by SG in her written submissions.

Discussion on the Submissions and the Relevant Law

21. [21]
    I start by making a very brief observation on the submissions I heard from KB. He appeared before me in a wheelchair with a support carer present assisting him. As I observed him he appeared to be of ailing health and not fully cognitive. He seemed to not fully understand the circumstances that were the subject of the hearing, nor did he appear to me to be able to give any meaningful submission in a manner that showed me he understood the nature and effect of that which he was saying. I did not give his submissions any weight.
22. [22]
    I thus turn to the submissions from PG and SG.
23. [23]
    A primary function of both PG and SG as administrators under the GAA Act was to exercise their powers for KB honestly and with reasonable diligence to protect the KB’s interests.^[17] Moreover, they were required to consult with one another on a regular basis to ensure that KB’s interests were not prejudiced by a breakdown in communication between them.^[18] They were also required to have applied the General Principles as they are laid down in the GAA Act.^[19] As is relevant in this proceeding, General Principle 9 dictates that  in performing a function or exercising a power under the Act in relation to KB they must have done so in a way that promotes and safeguards his rights, interests, and opportunities.
24. [24]
    Yet, in my opinion, neither of them did so. A total of $19,770.13 was spent by them combined in circumstances where it cannot be accounted for as expenditure directly for and on behalf of KB. Moreover, as noted by this Tribunal’s Financial Assessment Team in its report on the accounts reviewed, KB’s savings had been depleted by this expenditure.
25. [25]
    Whilst PG asserted that the expenditure identified via the PTQ’s investigation as being by her was, as she believes it to be, for KB’s benefit, she was not able to explain in any meaningful way what that expenditure was for other than to make the bare assertion that she thought it was for BUPA payments and his personal use. Nor was she able to explain why she could not provide receipts for same. To the extent it was for BUPA payments, it seems to me that receipts could readily be received from BUPA to which a reconciliation against the payments identified by the PTQ could be done.
26. [26]
    It is an express requirement of the GAA Act that PG, as an administrator, was required to keep records that are reasonable in the circumstances.^[20] Whilst it may readily be accepted that on occasion an administrator might overlook obtaining, or end up losing, a receipt for some expenditure, the administrator should still be able to be readily identify within the accounts which the administrator should keep of their conduct as an administrator the purpose of any spending of the adult’s money. PG has simply failed to do this.
27. [27]
    What however is more concerning is that, as SG readily admits, she spent over $16,000 of KB’s money for her own personal use in satisfying her gambling habits. Associated with this, and equally concerning, is the absence of any conduct by PG being identified, or at the very least any explanation by her for the absence of such conduct, in taking steps to communicate with SG about this unauthorised expenditure and to put a stop to it.
28. [28]
    In all respects, these aspects of PG’s and SG’s conduct as KB’s administrators was entirely unacceptable. It was directly at odds with the obligations and duties cast upon them as administrators under the GAA Act. In my opinion this conduct demonstrates squarely a failure by both PG and SG to have applied General Principle 9 as well as being a direct contravention of s 35 of the GAA Act. Their combined conduct has resulted in a loss to KB.
29. [29]
    As to the quantum of that loss, I turn first to the PTQ’s findings about SG. On my reading of the material before this Tribunal, there is insufficient information for me to form a concluded view on the $500 that SG disputes as being expended by her. As I read the PTQ’s report this is for two transactions, one which occurred on 3 August 2022 as a $300 withdrawal at an NAB ATM in Earlville, the remainder being $200 withdrawal on 17 August 2022, although simply recorded as a withdrawal without any other explanation. Given the absence of clarity and her assertion that at the time of these withdrawals she did not hold the relevant bank card, in my opinion she should be given the benefit of doubt in that regard and the relative amount be limited to that which she has expended to which admits to, namely $16,080.29.
30. [30]
    Turning then to the identified expenditure by SG, whilst the expression by SG that her belief is that the expenditure was for her brother’s benefit appeared to me as being genuine, in my opinion the mere expression of that as a belief held is not enough. More was required to be able to tip the scales in terms of the balance of probabilities in her favour. As I read the PTQ’s report to this Tribunal, the PTQ gave PG the opportunity to explain the identified transactions, but for whatever reason she chose not to respond.^[21] She once again had the opportunity to provide something more to this Tribunal by way of both her written submissions and again during the hearing. Yet once again she did not provide anything more. Thus, in the absence of that something more, notwithstanding her stated belief, I draw the inference that the relevant and requisite information simply does not exist and thus on the balance of probabilities the expenditure was by PG for her personal use. Accordingly, the relevant amount to be dealt with in terms of PG is $3,189.84.
31. [31]
    It is the combination of these two amounts which is the loss KB has suffered.
32. [32]
    There can be no doubt that both PG and SG made mistakes in their conduct as administrators and so brought about this loss. However the circumstances that have brought about the loss suffered are, in my opinion, not the type of mistake for which the Tribunal should exercise caution when considering the question of a fault and compensation as I noted it in paragraph [13] herein.
33. [33]
    These are no mere oversights. These mistakes are a failure of both PG and SG to have recognised the extremely high burden placed upon each of them, when appointed as administrators, to ensure that their brother’s financial affairs were properly and effectively managed such that his interests were safeguarded. To permit their brother’s savings to be depleted because of expenditure by one of them which cannot properly be accounted for, and because one of them had a gambling habit that was being satisfied by use of their brother’s funds, is in my opinion entirely inexcusable. Neither PG nor SG have acted honestly and reasonably such that the relief from personal liability that administrators are afforded under the GAA Act should provide them with a means of being excused for the contravention. Accordingly, there will be an order for compensation.
34. [34]
    The remaining issue then is who should compensate what. As I noted it earlier, PG and SG were appointed jointly and severally as administrators. Thus, one might suggest that the compensation order be made against them both such that they are jointly and severally liable. But no such recommendation was made in the PTQ’s report nor was it an issue canvassed during the hearing such that each of PG and SG had the opportunity to make submissions on it. Notwithstanding that which I have said in paragraph [21] herein in terms of the need for them to have consulted with each other, whilst it should readily be expected that on a proper review of the accounting information in which each should have engaged they would have gained the requisite knowledge of the unauthorised expenditure, in my opinion there is an absence of sufficient evidence before this Tribunal to be able to make a determination that each was aware of the other’s expenditure that is in issue. Thus, for these reasons to make such an order now would be to deny both PG and SG procedural fairness.
35. [35]
    In the circumstances that the PTQ’s report makes clear the relevant expenditure can be separately identified as being incurred by PG and SG, it seems to me that they should each be held liable for only their respective portion of the expenditure. For this reason, the proper compensation orders are that they are to be held separately liable for the respective amounts.
36. [36]
    Finally, there is an issue of interest and whether the compensation order should include an amount for same. Once again this was not raised in the PTQ’s report nor was it an issue raised during the hearing on which PG and SG were afforded an opportunity to make submissions about. Once again if I were to incorporate an interest amount into the quantum of the compensation order it would be to have denied PG and SG procedural fairness. Accordingly no order for interest was made.
37. [37]
    For all of these reasons the orders will be that PG is to compensate KB $3,189.54 and SG is to compensate KB $16,080.29.