RGB[2023] QCAT 501

REASONS FOR DECISION

Introduction

1. [1]
   These applications relate to a 74-year-old woman who, for privacy reasons, will be referred to only as RGB. The applications are made by one of her sons, concerning decision-making arrangements for RGB if she lacks capacity. The main impetus for the applications was that RGB lost a substantial amount of money in recent years in a romance scam. The losses totalled around $170,000, representing the bulk of RGB’s assets.
2. [2]
   The Public Trustee was appointed interim administrator for RGB for three months from 14 August 2023. The Public Trustee advises that RGB’s funds as of 7 November 2023 totalled approximately $7,500. She also owns a car. She owes $2,000 on a credit card and $669 to the State Penalties Enforcement Registry. She receives a pension. 
3. [3]
   RGB had appointed the son as her attorney for financial and personal/health matters in an enduring power of attorney made on 15 November 2006.
4. [4]
   In 2021 RGB was widowed. In 2022 she was living in a granny flat at the son’s home. The son says he became aware she was transferring significant sums and concluded that she was being scammed. He could not convince her of this, however. He took steps to monitor her bank account. His intervention was resented by RGB. The relationship between them became increasingly tense and disharmonious. Eventually he insisted that she leave the granny flat. She moved out on 14 October 2023 into a granny flat she found through Facebook. Sadly, RGB and the son have become estranged.
5. [5]
   Meanwhile, on 27 August 2022, RGB had signed a revocation of the enduring power of attorney. However, the revocation document misidentified the enduring document as one appointing both the son and his wife. Later, on 20 July 2023, RGB signed another revocation, this time correctly identifying the enduring document.
6. [6]
   The son has applied to the tribunal seeking:

   1. the appointment of an administrator for RGB;
   2. the appointment of a guardian for RGB.
   3. a declaration about RGB’s capacity;
   4. an order about the enduring documents to the effect that the enduring power of attorney has not been validly revoked (on the basis that RGB lacked capacity to revoke and, further, the first revocation document misidentified the enduring document); and
   5. leave to resign as attorney because of the breakdown of the relationship.
7. [7]
   The relevant legislation is the Guardianship and Administration Act 2000 (Qld) (‘Guardianship and Administration Act’) and the Powers of Attorney Act 1998 (Qld) (‘Powers of Attorney Act’).
8. [8]
   An oral hearing was held on 9 November 2023. RGB attended by telephone along with her solicitor. The son attended in person along with his solicitor. There was not enough time for the parties to make oral submissions, so the tribunal directed that written submissions be provided. The son’s solicitor and RGB’s solicitor provided submissions dated 16 and 23 November 2023 respectively.

The scam and RGB’s evidence about her finances 

9. [9]
   Some of the details of the scam are taken from the report of Dr Pia Iacovella, a geriatrician who assessed RGB on 19 April 2023 and prepared a report dated 2 May 2023. Other details are taken from the son’s affidavits.
10. [10]
    The scam mainly involved a man called Dan Frederick. RGB told Dr Iacovella that he was the friend of a friend, and that she met Mr Frederick once in person for 20 minutes. He later told RGB he was undertaking a construction project in Türkiye. He gave a series of reasons for needing money, such as having been defrauded by a business partner and having had a suitcase stolen from a taxi. So, she transferred sums to him.
11. [11]
    RGB’s son says that she described Mr Frederick as her fiancé.  She also said that she believed her grandchildren would be harmed if she did not transfer funds. RGB was also enlisted as a ‘money mule’, according to the son. This involved her receiving mail and being asked to carry out steps which resulted in someone else being scammed.
12. [12]
    RGB's son says that after a time RGB agreed to stop transferring money to Mr Frederick. However, she did not stop, he believes, but merely started using different descriptions in transfers in an effort to disguise them.
13. [13]
    At the hearing, RGB said that Dan Frederick had not scammed her; rather someone using his name had. She became suspicious only when almost all of the money was gone. RGB indicated she regrets having been scammed. She made a big mistake. She just wanted love, which she had not received in her marriage. She has learnt a lesson. She added that she has not sent money to a scammer in the last two years.
14. [14]
    The son’s solicitor drew attention to certain transactions in RGB’s bank accounts, which he suggested were part of the scam payments and are more recent than two years ago. One for example was an Osko payment of $13,000 out of the account on 7 June 2022 with the description ‘Hospital REFERENCE DAN’.

Dr Iacovella’s report 

15. [15]
    As mentioned earlier, geriatrician Dr Iacovella has provided a report dated 2 May 2023. In relation to the scam, Dr Iacovella comments that RGB ‘could not identify that this could be a fraudulent case’^[1] or that her financial security had been undermined. Dr Iacovella considers that RGB is able to carry out day-to-day calculations and bill payment, but cannot demonstrate financial management, such as how she would fund dental work that she requires which is expected to cost $3,000.
16. [16]
    Dr Iacovella notes that RGB had been diagnosed with anxiety and depression. Dr Iacovella also discusses cognitive screening tests: one that she administered to RGB and an earlier different test referred to in medical records. Dr Iacovella considers that RGB is cognitively impaired due to a degenerative disorder not yet clinically identified. Frontotemporal dementia is suspected. Dr Iacovella says ‘this may contribute to impulsivity, emotional lability and mood swings, and impaired executive thinking and complex problem-solving compounding her financial vulnerability’.^[2]
17. [17]
    Dr Iacovella recommends that if the enduring power of attorney remains in force, the attorney should commence making financial decisions for RGB. 

Other information and submissions

18. [18]
    RGB says she is happy where she is living. The granny flat is in a rural location and the people who own the house check on her and invite her to share some meals. The rent is $300 per week which she considers very reasonable.
19. [19]
    RGB’s solicitor says that RGB has engaged with Caxton Legal Centre’s seniors’ legal and support service, an older women’s housing support service, and Suncare, receiving counselling, information and referrals. RGB has gained insight, the solicitor submits, and developed a budget which will enable her to save. The tribunal must bear in mind, the solicitor urges, that capacity is time-specific and matter-specific. The solicitor submits that RGB is able to make her own decisions; the enduring power of attorney has been validly revoked; and neither an administrator nor a guardian should be appointed. The solicitor submits that appointing a substitute decision-maker would limit RGB’s human rights, and that can be done only if the limit is reasonable and justifiable.^[3]
20. [20]
    The son’s solicitor relies on Dr Iacovella’s opinion. He submits that RGB has never met Dan Frederick. The solicitor notes evidence from the son that RGB often resorted to asking him for money or to buy goods for her. He points to text messages RGB sent containing such requests, though I note that RGB also complained in one of the texts that the son had all her money. The son says a rental ledger shows the RGB was constantly in arrears of rent.
21. [21]
    The son’s solicitor points to evidence from the son about RGB having become increasingly withdrawn, socially isolated and argumentative in recent years. While Dr Iacovella’s report addresses only capacity for financial decision-making, there is sufficient evidence overall, the solicitor submits, to raise significant concerns about personal decision-making as well. The son is concerned that RGB could overdose on medication, noting that she made threats to commit suicide when she was living at his home.
22. [22]
    The son’s solicitor submits that the Public Trustee should be appointed as administrator and the Public Guardian should be appointed as guardian.
23. [23]
    The solicitors have made differing written submissions arising from the situation when RGB was living at her son’s home. The son’s solicitor submits that RGB’s conduct was irrational, erratic, and aggressive. RGB’s solicitor submits that the son was controlling and verbally abusive.
24. [24]
    This was not a topic explored in oral evidence at the hearing. I do not consider that I am in a position to make confident findings about it. Further, I do not consider that findings on the topic are required in order to make an adequately informed decision on the applications. In a similar category is the son’s perception, denied by RGB in her oral evidence, that she is dependent upon, if not addicted to, strong pain medication.
25. [25]
    The tribunal received written comments prior to the hearing from RGB’s sister and another son. They portray the scam as a mistake on RGB’s part, rather than as evidence of incapacity. However, I do not place weight on these views because it is not apparent that either is in a position to reliably assess the situation.

Definitions and presumption of capacity

26. [26]
    ‘Capacity’ is defined in the Guardianship and Administration Act and the Powers of Attorney Act.
27. [27]
    The Acts use the concepts of financial matters and personal matters. In Schedule 4 to the Guardianship and Administration Act and in Schedule 3 to the Powers of Attorney Act, capacity for a matter is defined:

3. capacity, for a person for a matter, means the person is capable of—

3. (a)
   understanding the nature and effect of decisions about the matter; and

3. (b)
   freely and voluntarily making decisions about the matter; and

3. (c)
   communicating the decisions in some way.

28. [28]
    Section 5(c) of the Guardianship and Administration Act acknowledges:

3. the capacity of an adult to make decisions may differ according to—

3. (i)
   the type of decision to be made, including, for example, the complexity of the decision to be made; and

3. (ii)
   the support available from members of the adult’s existing support network.

29. [29]
    A different definition of capacity in the Powers of Attorney Act applies for capacity to make an enduring power of attorney. Section 41(1) says:

3. (1)
   A principal has capacity to make an enduring power of attorney only if the principal—

3. (a)
   is capable of making the enduring power of attorney freely and voluntarily; and

3. (b)
   understands the nature and effect of the enduring power of attorney.

30. [30]
    Section 41(2) goes on to list particular matters that a principal must understand.
31. [31]
    A principal may revoke an enduring power of attorney only if they have capacity to make an enduring power of attorney.^[4]
32. [32]
    Capacity is presumed.^[5] The presumption may be rebutted.

Findings and conclusions

33. [33]
    I am unable to make a firm finding on whether RGB has met Dan Frederick (if he exists). It is possible she has met someone of that name and mentioned him on social media, giving scammers a name to exploit.
34. [34]
    I do not accept RGB’s evidence that she has not transferred money to a scammer in the last two years. The transfer on 7 June 2022 was clearly one such transfer. It is unclear whether this signifies a lack of precision in RGB’s evidence, a lack of insight, or an effort to minimise the problem.
35. [35]
    The fact that RGB was scammed does not itself mean she lacks capacity. A person with capacity can make an unwise decision or an error of judgment, or even a series of such decisions. Having said that, persistence in a scam despite warnings may be indicative of an inability to understand the nature and effect of a decision. In RGB’s case, she persisted with what she now concedes were scam transactions, well after her son recognised them as exploitative and tried to dissuade her.
36. [36]
    Dr Iacovella commented on RGB’s inability, as of April 2023, to see that she may be a victim of fraud. It can be inferred that this was attributed to cognitive impairment, though quite possibly depression also played a role. On the basis of Dr Iacovella’s report, I find that RGB was unable to understand the nature and effect of the decisions to continue to transfer money from the point when it should have been apparent that a scam was occurring. She clung to the belief that she was giving money to someone who loved her and with whom she would share a happy future. The true nature and effect of the decisions was that she was giving money to a scammer or scammers. In respect of those transactions, the presumption of capacity is rebutted.
37. [37]
    RGB’s present finances are straightforward. She must ensure that her bills are paid and that she accumulates some savings for unexpected costs that might arise and for discretionary spending. She must also ensure she avoids again falling victim to scammers, whether the same ones or new ones. Although she is no longer in a position to part with large sums, she could give away money she needs for her own living costs.
38. [38]
    RGB says she now realises that she was the victim of a scam. Whether she truly believes that is unclear. Nonetheless, I accept that she has gained awareness of scamming and so she is less likely to be susceptible in the future. It was not suggested in Dr Iacovella’s report that RGB has no ability to learn. 
39. [39]
    In relation to budgeting, I take into account that RGB's son says she had difficulties meeting her expenses, but I place relatively little weight on that concern because those difficulties arose in the context of an increasingly fraught relationship and where RGB’s attorney may have been constraining RGB’s access to funds because of the scamming. Dr Iacovella observed difficulties in RGB’s ability to make financial plans. However, I accept the evidence that RGB has developed a budget and that there are support services she knows she can turn to for assistance.
40. [40]
    I find that RGB has the capacity to manage her current finances, if necessary with some support. The presumption of capacity for making the financial decisions RGB presently needs to make is not rebutted.
41. [41]
    Nor is the presumption of capacity for personal decision-making rebutted. Dr Iacovella’s report does not address the topic. There may be cause for concern about RGB’s wellbeing because of her cognitive impairment and depression, and the loss of the close relationship she previously had with her son. However, there is no firm evidence to rebut the presumption.
42. [42]
    There is no health professional evidence directly assessing RGB’s capacity to make, and therefore to revoke, an enduring power of attorney. The first attempted revocation was defective because it misdescribed the enduring document. However, the second one did not have that flaw. The revocation was witnessed by a justice of the peace who certified that RGB appeared to understand the matters that a person must understand to make an enduring power of attorney.
43. [43]
    Although I have found that RGB lacked decision-making capacity in respect of certain decisions, it does not necessarily follow that she lacked capacity to make an enduring power of attorney. In Lambourne & Ors v Marrable & Ors,^[6] it was observed that a person may lack capacity to conduct complicated financial affairs yet still have capacity to make an enduring power of attorney.
44. [44]
    In the absence of clear evidence rebutting the presumption that RGB had capacity to make an enduring power of attorney, I am satisfied she had capacity to revoke it.

What orders should be made?

45. [45]
    The tribunal’s power to make a declaration about capacity is discretionary.^[7] Although I have found that RGB lacked capacity for some decisions, it is not apparent that any purpose would be served by making a declaration about capacity. Accordingly, the application for a declaration about capacity will be dismissed.
46. [46]
    The tribunal may make a declaration about something related to the Powers of Attorney Act.^[8] In my view, this would extend to making a declaration about whether an enduring power of attorney has been revoked. I consider that RGB’s enduring power of attorney has been revoked, by the revocation document dated 20 July 2023. It is desirable to make a declaration accordingly so that the parties know whether the enduring power of attorney still operates.
47. [47]
    That removes any need to give leave to RGB's son to resign as attorney. That application for leave will be dismissed.
48. [48]
    The applications for the appointment of an administrator and a guardian will be dismissed. Such appointments can be made only for a person with impaired capacity.^[9] I have found that RGB has capacity for the matters she must presently decide.