MNU No.2[2024] QCAT 392

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

Introduction

1. [1]
   This is a costs application in proceedings relating to an elderly man referred to as ‘MNU’. The substantive proceedings are described in published reasons: MNU.^[1] The applicant for costs is MNU’s daughter. She seeks an order that the applicants in the substantive proceedings, her brothers SNC and SNF, pay costs. The daughter says she has incurred legal costs in the region of $56,000. Her solicitor submits that the default position for the tribunal is to fix costs, and ‘should the Tribunal be minded to fix costs, an appropriate figure would be $35,000.00’.^[2]
2. [2]
   The costs order is sought under section 127(2) of the Guardianship and Administration Act 2000 (Qld) (‘Guardianship and Administration Act’). Section 127 provides:

127 Costs

1. Each party in a proceeding is to bear the party’s own costs of the proceeding.

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.

…

3. [3]
   On 29 May 2024 that tribunal made directions for the filing of evidence and submissions, and directed that unless an active party requested an oral hearing by 5 August 2024, the application for costs would be decided on the papers. No party has requested an oral hearing. The only material received in response to the directions was an affidavit by the daughter dated 26 June 2024 and submissions filed by Hawthorn Cuppaidge and Badgery Lawyers on behalf of the daughter on 27 June 2024.

Background

4. [4]
   The substantive proceedings originally involved applications by SNC and SNF for the appointment of an administrator and the appointment of a guardian for MNU. If such appointments had been made, they would have overtaken the powers of MNU’s attorneys – the daughter and his other son, SNG – under an enduring power of attorney made by MNU on 29 March 2023.
5. [5]
   In the course of the proceedings, the tribunal also initiated an application for an order about an enduring power of attorney. Further, SNC and SNF withdrew their application for the appointment of a guardian. The matter proceeded to hearing over three days across October 2023, January 2024 and March 2024. The outcome was that SNC and SNF’s application for the appointment of an administrator, and the tribunal-initiated application for an order about an enduring power of attorney, were dismissed on the basis that the presumption of capacity was not rebutted.
6. [6]
   There were originally similar applications by SNC and SNF relating to MNU’s wife (the mother of the four children) heard together with the applications involving MNU. However, those applications lapsed when the wife died before the second day of hearing.
7. [7]
   Throughout, SNC and SNF were legally represented. The daughter appeared unrepresented on the first day of hearing, but was legally represented by Hawthorn Cuppaidge and Badgery Lawyers subsequently. SNG represented himself throughout the proceeding.
8. [8]
   Submissions by Hawthorn Cuppaidge and Badgery Lawyers on behalf of the daughter include, in summary:

   1. the application by SNC and SNF for the appointment of an administrator was vexatious;
   2. it was brought ‘because the applicants did not like the fact that their father was not following their wishes rather than any real concern for his welfare’;^[3]
   3. the application for the appointment of an administrator could succeed only if, amongst other things, MNU was shown to have impaired capacity;
   4. the medical evidence was equivocal to say the least;
   5. a geriatrician considered that MNU had impaired capacity but the tribunal did not accept her opinion for a number of reasons;
   6. there was a report by a general practitioner, who found no evidence of cognitive impairment, but the tribunal found the report to be irrelevant;
   7. the 2023 enduring power of attorney was witnessed by a solicitor, Mr Orlando, who spoke MNU’s original language, Italian;
   8. Mr Orlando provided to the tribunal a comprehensive report addressing why he was satisfied that MNU had capacity to make the enduring power of attorney;
   9. despite that, SNC and SNF persistently challenged the validity of the enduring power of attorney;
   10. the grounds on which SNC and SNF sought the appointment of an administrator were largely based on their dislike of MNU’s actions;
   11. these actions included alleged changes by MNU to his will, though it was not said how the will was changed;
   12. SNC asserted that the daughter and SNG had pressured MNU to change his will  but there was no substantial evidence of this; and
   13. if MNU’s actions were rational, dislike of them is not a basis for appointing an administrator.
9. [9]
   The submissions by Hawthorn Cuppaidge and Badgery Lawyers also point out aspects of the evidence or submissions of SNC and SNF which were weak, vague or unreasonable, for example:

   1. questioning routine bank transactions;
   2. criticising the amount MNU was spending on gambling even though it was not excessive in comparison with his means;
   3. contending that conveyancing fees on the sale of a block of six units, where a body corporate had to be set up, could have been done for only $500 or $600;
   4. criticising the daughter for not providing certain bank records to the tribunal when none of the four children, who were all attorneys for their mother and therefore entitled to obtain documents, had been able to get the documents;
   5. criticising the engagement of an Italian-speaking lawyer to provide services for MNU;
   6. SNC professing concern for MNU despite having ceased contact with him; and
   7. SNC making unsupported allegations that SNF was instrumental in burning down an industrial property.
10. [10]
    The above is not an exhaustive list of the instances cited. Hawthorn Cuppaidge and Badgery Lawyers submit that while each instance taken in isolation could be seen as simply unhelpful or annoying, taken together they are vexatious.
11. [11]
    In her application form, the daughter had also narrated other complaints about the character, conduct or mental health of SNC and SNF. These ranged from their agitation at a family meeting about aged care to manifestations of SNC’s mental health problems.

Discussion

12. [12]
    It would be evident from the above summary that the proceedings arose in a context of significant ongoing distrust by SNC and SNF of their two other siblings. There was discord between the two camps of siblings over many issues, as laid out in numerous text messages and similar material filed by SNC and SNF.
13. [13]
    Enduring powers of attorney made by MNU in 2020 and 2021 had each appointed all four children as attorneys, but these were replaced by the 2023 enduring power of attorney appointing only the daughter and SNG. Meanwhile, MNU’s wife’s enduring power of attorney, appointing all four children, continued to operate. The wife had dementia. MNU had Parkinson's disease. Properties owned by MNU and his wife were being sold as they faced the need to move into smaller accommodation or residential aged care. As it turned out, they made a short move into a retirement village before moving into an aged care facility. Financial advice had been obtained which presented a number of options including one to reduce the wife’s assets substantially so that she might qualify for a pension if MNU predeceased her.
14. [14]
    SNC and SNF contended that their siblings had been manipulating MNU and had turned him against them. They also believed, correctly as it turned out, that an amount of approximately $400,000 had been shifted from joint ownership of MNU and his wife to MNU’s sole ownership. In fact, the total amount turned out to be more than $600,000, across two transactions.
15. [15]
    When SNC and SNF filed their applications in the tribunal, in July 2023, they said that MNU had resisted any assessment of his decision-making capacity. They sought an order that MNU undergo a medical examination. The tribunal directed MNU to undergo a capacity assessment by a doctor, with no attorney present. He was examined by a geriatrician who prepared a report dated 6 September 2023. The daughter accompanied MNU to the appointment, contrary to the tribunal’s direction. It is apparent from the geriatrician’s report that the daughter provided information to the geriatrician to the effect that MNU’s cognition had not declined. Despite that, the geriatrician, considering all of the information before her, came to the opinion that MNU lacked financial capacity. However, as explained in MNU,^[4] I was not persuaded to accept the geriatrician’s ultimate opinion.
16. [16]
    A direction from the tribunal to the geriatrician was required to obtain her report, after she advised the tribunal’s registry that she had been declined permission to release the report.
17. [17]
    There was a short letter by a general practitioner, dated 18 October 2023, describing a good result achieved by MNU in a cognitive screening test. However, as explained in MNU,^[5] I did not consider it to be of assistance.
18. [18]
    Shortly before the first day of the hearing, the tribunal sought and obtained a statement from Mr Orlando, the solicitor who had witnessed the 2023 enduring power of attorney. It explained why Mr Orlando was satisfied that MNU had capacity to make the enduring power of attorney.
19. [19]
    It can be seen, then, that significant additional but disparate evidence became available shortly before the first day of hearing. Even though Mr Orlando’s statement was comprehensive and ultimately accepted by the tribunal, it is important to remember that the application for an order about an enduring power of attorney was not brought by SNC and SNF. It was initiated by the tribunal. It was open to SNC and SNF to argue, as they did, that even if the enduring power of attorney is valid, it should be overtaken by the appointment of an administrator in circumstances where, if certain evidence were accepted, MNU had lost decision-making capacity by the time of the tribunal’s hearing, and his attorneys could not be relied upon to protect his interests.
20. [20]
    SNC’s and SNF’s distrust in their sister would only have been amplified by certain evidence she gave on the first day of the hearing. She told the tribunal that a sum of approximately $428,000 from the sale of a property owned by MNU and his wife, although paid initially into an account in MNU’s sole name, was moved within a matter of days to a joint term deposit. She was asked to point to the bank records showing this. She purported to do so by pointing to a statement for a joint term deposit. However, that statement was for an earlier term deposit. 
21. [21]
    Documents obtained by SNC and SNF after the first day of hearing showed that the funds had actually remained in MNU’s account. The daughter in subsequent evidence said that she and MNU had thought it preferable for him to keep control of the funds so that he could ensure his wife’s expenses were paid as there was discord between the two camps of the wife’s attorneys. This evidence was not only unconvincing but disquieting in that it detracted from the daughter’s assertion that she was simply confused when addressing the topic on the first day of hearing.
22. [22]
    Having regard to those concerns, I do not regard the long-running distrust by SNC and SNF of their sister, and by extension her ally SNG, as baseless. MNU was elderly and had Parkinson's disease. Suspicion that he was being manipulated by the daughter and SNG, to their potential financial advantage at the expense of SNC and SNF, is hardly surprising. The geriatrician’s report would have confirmed the belief of SNC and SNF that MNU had lost decision-making capacity. MNU at the hearing appeared to have cognitive difficulties.^[6]
23. [23]
    This is not to find that the daughter and SNF were manipulating MNU, or that they were aiming to seek financial advantage for themselves. Actual motives in such situations are hard to discern. Whether MNU has actually changed his will to favour certain children is unknown. What is known that some $428,000 was shifted from a joint asset of MNU and his wife to an account in MNU’s sole name without informing SNC and SNF who, along with their two siblings, were attorneys for the wife. The daughter certainly knew about it and should have discussed it with SNC and SNF as co-attorneys. She did not. They only became aware of the shift indirectly.
24. [24]
    On the first day of the hearing, the daughter sought to minimise the shift, portraying it as a temporary measure. Her later explanation for the shift, that it ensured that the wife’s expenses would be met, is not convincing. It is unthinkable that SNC and SNF would have blocked the meeting of their mother’s expenses. The real motive for the shift remains unclear: whether, for example, it was in pursuit of the strategy suggested by the financial adviser, or for testamentary reasons.    
25. [25]
    On the third day of hearing, when shown documents by the lawyer for SNC and SNF, the daughter acknowledged that she had also been present at the bank when $200,000 was moved from a term deposit jointly held by MNU and his wife to an account in MNU’s sole name. She did not suggest she informed, let alone consulted, SNC and SNF who were co-attorneys for her mother.
26. [26]
    Such hostility and distrust had developed between the two camps of siblings by mid-2023 that any attempt at calm resolution by dialogue would probably have been futile. SNC and SNF suspected, correctly as it turned out, that their sister had concealed from them a significant shift of funds.
27. [27]
    Although the application of SNC and SNF for the appointment of an administrator was not ultimately successful, they had an arguable case. It is true that they added some vague or unproven allegations. This includes the arson allegation, but that did generate any significant response (at least not from the daughter). Nor did it occupy significant hearing time. 
28. [28]
    The daughter’s complaints in her application form point, in my view, to the unfortunate deterioration in family relationships rather than vexatious intent by SNC and SNF in bringing the proceedings.
29. [29]
    It is also relevant to note that the tribunal had sufficient concern about the daughter’s trustworthiness to appoint an interim administrator for MNU at one point. The tribunal had also appointed an interim administrator for the wife.
30. [30]
    I am not persuaded that SNC and SNF brought their application for the appointment of an administrator vexatiously, or that they persisted unreasonably in the application after seeing Mr Orlando’s statement. They had an arguable case including an expert opinion that MNU lacked capacity and serious grounds for questioning the trustworthiness of their sister.
31. [31]
    There are not exceptional circumstances warranting an order for costs against SNC and SNF.

Conclusion

32. [32]
    The application for costs is refused.