MG v The Public Guardian[2021] QCATA 89

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

1. [1]
   MG and MH seek leave to appeal or appeal a decision of the Tribunal made on 18 April 2019 that TCAR did not have capacity to enter into a property transaction on 4 November 2015.^[1] The decision was issued  to the parties on 2 May 2019.
2. [2]
   The learned Member’s orders of 18 April 2019 are as follows:

1. TCAR did not have capacity to enter into the property transaction on 4 November 2015.
2. MG is to report to the Tribunal within 28 days, outlining the steps that the Attorney proposes to take to address the finding in sub paragraph 1.
3. A Directions Hearing will be scheduled at a time after the 28 days provided for in sub paragraph 2.
4. The Tribunal dismisses the application by HD for the appointment of an administrator.

3. [3]
   On 24 November 2019, an order was made staying the operation of orders 2 and 3 pending finalisation of the appeal proceeding. Order 4 was not the subject of the appeal proceeding.
4. [4]
   The learned Member’s reasons for his decision are at TCAR [2019] QCAT 414.
5. [5]
   For the reasons that follow, the appeal succeeds.

The grounds of appeal

6. [6]
   The grounds of appeal are expressed as follows:

1. The tribunal erred in law and fact by failing to give any weight, or due weight to the presumption of capacity;
2. The tribunal erred in law and fact in determining that the making of a will required a lower level of capacity than a property transaction;
3. The tribunal erred in making findings of fact based on irrelevant considerations and without taking into account relevant considerations;
4. The tribunal Member was biased or there existed a reasonable apprehension of bias.

7. [7]
   The grounds raise questions of law and questions of fact or of mixed law and fact. Leave to appeal is required on questions of fact, or of mixed law and fact,^[2] while an appeal on a question of law is as of right.^[3]
8. [8]
   In deciding an appeal on a question of law only the Appeal Tribunal may confirm or amend the decision, set aside the decision and substitute its own decision or set aside the decision and return the matter to the Tribunal for reconsideration.^[4] Subject to leave being granted, an appeal against a decision on a question of fact only or on a question of mixed law and fact must be decided by way of rehearing with or without the hearing of additional evidence.^[5]
9. [9]
   This appeal raises both questions of law and questions of fact and of mixed law and fact. Accordingly, it is appropriate to address first the questions of fact or of mixed law and fact. If leave to appeal is granted, then the appeal must be decided by way of a rehearing^[6] and all the matters the subject of the grounds of appeal be dealt with in the rehearing.^[7] If leave is not granted, then the appeal proceeds on the questions of law under s 146 of the QCAT Act, in which case there is no element of rehearing.

Should leave to appeal be granted with respect to the grounds which raise questions of fact or questions of mixed law and fact?

10. [10]
    The question of whether leave to appeal should be granted is determined according to established principles: is there a reasonably arguable case of error in the primary decision;^[8] is there a reasonable prospect the applicant will obtain substantive relief;^[9] is leave necessary to correct a substantial injustice to the applicant caused by some error;^[10] and is there a question of general importance upon which further argument and a decision of the appellate court or tribunal would be to the public advantage?^[11]
11. [11]
    For the reasons below, we accept that grounds one and two raise questions of mixed law and fact. There is a reasonably arguable case that the Member, although referring to the presumption of capacity, did not properly apply it. Further, there is a reasonably arguable case that the Member misdirected himself as to the appropriate test to be applied in determining TCAR’s capacity for the property transaction, by applying an eight point cognitive test,^[12] and in visiting upon the adult the alleged inadequacy of the advice received in respect of the transaction.^[13] Further, there is a reasonably arguable case of error that the Member misdirected himself in relation to the test of capacity by requiring TCAR demonstrate ‘actual understanding’ as opposed to a ‘capacity to understand’ relevant information.^[14] We also consider there is a reasonably arguable case of error in the approach adopted by the Member evident by his statement that a will requires a ‘lower level of capacity’ than a ‘property transaction’.
12. [12]
    We find in respect of grounds 1 to 2 that there is a reasonable prospect MG and MH will obtain substantive relief. It is also a matter where the relief would correct a substantial injustice caused to them by the errors. The grounds also raise questions of general importance about the tests and approach of the tribunal to issues of capacity.
13. [13]
    Accordingly, we grant leave to appeal.

Background and history of the proceedings

14. [14]
    These proceedings concern the capacity of TCAR to enter into a property transaction on 4 November 2015. TCAR passed away on 5 February 2020.
15. [15]
    MG, MH and TCAR and her husband TN had lived on adjoining rural properties (Lots 4 and 5 on M Road) in Cairns for over 30 years. In 2005 MG and MH sold their lot, Lot 4 and in December 2005 purchased Lot 5 from TCAR and TN. A condition of that purchase was that a 4008m2 block of land would be subdivided off for TCAR and TN to build a new lowset house. This subdivided lot, Lot 51 is 116 M Road and it is the transfer of TCAR’s interest in that property to TCAR, MG and MH as joint tenants^[15] that is at the heart of these proceedings.
16. [16]
    TCAR made an enduring power of attorney on 20 April 2014 appointing her daughter MG as her sole attorney for financial and personal/health matters. The power for financial matters commenced immediately. On 22 June 2015, TCAR’s husband, TN, passed away and the interest in the property owned by them jointly vested solely in TCAR. TCAR moved around that time, to live next door with MG and MH, while TCAR’s house was rented out. Nobody disputes that MG performed the role of attorney properly and it is uncontroversial that MG looked after her mother very well at least from when TCAR lived with MG and MH.
17. [17]
    In August 2015, TCAR consulted a lawyer, Ms Reeve, to finalise TN’s estate-related matters.
18. [18]
    On 1 September 2015, TCAR saw Ms Reeve to give instructions about making a new will. She presented Ms Reeve with a hand-written note that day, setting out what she said she wanted; namely, that MG and MH have the house property, and HD and TG share the rest of her estate. Ms Reeve says she satisfied herself that TCAR understood and had capacity to give instructions. TCAR told Ms Reeve that she wanted to transfer the house to MG and MH in her lifetime. Ms Reeve advised her against doing so. At this time, Ms Reeve also advised her that her gift of the house to MG and MH was open to challenge by way of family provision application. Her lawyer advised her that she could consider transferring an interest in the house to MG and MH so that it did not form part of her estate.
19. [19]
    On 3 September 2015, TCAR saw Ms Reeve again and executed a will leaving the house to MG and MH, and her residuary estate to her other children, HD and TG. Again, Ms Reeve was satisfied that TCAR had capacity to execute the will.
20. [20]
    On 4 November 2015, TCAR instructed Ms Reeve to transfer the property to MG and MH. After taking further advice from Ms Reeve, TCAR transferred the property to MG, MH and herself as joint tenants. As joint tenants each holds an equal interest in the whole. 
21. [21]
    Further, on 4 November 2015, TCAR gave instructions for a new will, leaving all of her estate to HD and TG. Also, on 4 November 2015, TCAR provided two handwritten and signed letters to Ms Reeve. The first dated 14 September 2015 to ‘G and D’ confirming her wish that MG and MH receive the house in accordance with her will and that she wants them to respect her wishes as set out in her will. The second dated 2 November 2015 to ‘G’ explaining her unhappiness about his actions in causing trouble with MG and MH. She asked Ms Reeve to place the letters with her will.
22. [22]
    Ms Reeve considered that TCAR had the capacity for the property transaction and to give instructions for the new will.
23. [23]
    On 12 January 2016, TCAR saw Ms Reeve again, confirmed her instructions and executed her new will in the terms indicated.  
24. [24]
    On 31 August 2016, the Public Guardian brought an application for a declaration of TCAR’s capacity to enter into the property transaction.
25. [25]
    On 25 November 2016, DH filed an application seeking to be appointed jointly with TG as administrator for TCAR.

The Tribunal’s first decision dated 23 March 2017

26. [26]
    The matter was heard on 30 November 2016 and 8 February 2017 with written reasons provided by the learned Member on 23 March 2017. The Member made the following orders:

1. MG is to instruct her solicitor to take all steps necessary to transfer the property situated [at Cairns] back into TCAR’s sole name.
2. MG is to advise the Tribunal when the appointment with the lawyer has been made as soon as possible and advise the Tribunal of the name of the solicitor and the timeframe to comply with the above direction.
3. MG is to provide a copy of the title search showing the property having been returned to the sole name of TCAR.
4. The Tribunal declares that TCAR did not have capacity to make complex financial decisions as at 4 November 2015.
5. The Tribunal dismisses the application by HD for the appointment of an administrator.

27. [27]
    The learned Member found that TCAR did not have capacity to enter into the property transaction of 4 November 2015.^[16] In summary, the Member held there was insufficient information to indicate TCAR understood the consequences of the transaction or that she had sought appropriate information about the transaction. The Member considered that to show capacity TCAR ‘would have needed to demonstrate that she had sought information about the impact of her decisions and was aware of the consequences including the impact on her future financial circumstances’.^[17] The Member found the property transaction was a ‘complex financial affair’ and that this requires a higher level of capacity than testamentary capacity.^[18]

First appeal of 3 August 2018

28. [28]
    The Appeal Tribunal, differently constituted, allowed the appeal, set aside the decision of 23 March 2017 and returned the matter to the Tribunal below constituted by the same Member for reconsideration with directions that the matter be listed for a Directions Hearing and that the Tribunal below consider whether it requires further evidence.^[19]
29. [29]
    The Appeal Tribunal held that the Member had made errors of law in failing to apply the presumption of capacity generally and in relation to the alleged failure to raise with TCAR the issue of the future financial consequences of her decision to transfer an interest in her property. The Appeal Tribunal also held that the first order by its terms could not be carried out and that the Member erred in concluding the attorney had entered into a conflict transaction, given the transaction was entered into by TCAR, and erred in concluding TCAR had made a gift given TCAR retained a joint interest in the property.

The Tribunal’s decision of 18 April 2019

30. [30]
    The orders made on remitter have been set out above.
31. [31]
    We turn now to consider the grounds of appeal in relation to the decision of 18 April 2019.

Ground One: The tribunal erred in law and fact by failing to give any weight, or due weight to the presumption of capacity

32. [32]
    The Member begins his discussion of capacity by reciting that there is a presumption that the adult had capacity to enter into the transaction.^[20] Merely stating that the presumption exists does not mean it has been properly applied or applied at all. Further, if the Member misdirects himself as to the relevant test for capacity then the ‘presumption’ it exists must necessarily be affected by error. In our view the Member erred: first, in not affording the benefit of the presumption to TCAR by, in effect, placing the onus on her to demonstrate she had capacity at the relevant time; and secondly, by misdirecting himself as to the appropriate test for capacity.
33. [33]
    That the learned Member failed to apply the presumption as to capacity is evident in the following passage:

[87] The Tribunal was of the view that for TCAR to have shown capacity, she would have needed to demonstrate that she had sought information about the impact of her decision and was aware of the consequences including the impact on her future financial circumstances.

…

[88] The Tribunal was of the view that TCAR would needed to have demonstrated that she was thinking in terms of the consequences. There is no evidence before the tribunal to demonstrate that TCAR had turned mind (sic) to her future financial needs. (emphasis added)

34. [34]
    The Member also appears to demonstrate a failure to apply the presumption in relation to his consideration of the medical evidence where he states:

Dr Strivens did say that the adult had capacity to do a will but that requires a lower level of capacity. This is not evidence that the adult had capacity for the property transaction.^[21]

35. [35]
    The Member also repeated the observations he had made in the first decision (which was relied upon by the Appeal Tribunal as evidencing a failure to properly apply the presumption) which relied on the stated failure of TCAR’s solicitor to raise financial implications of the property transaction. The Member and the then Appeal Tribunal observe that the failure of the solicitor ‘was unfortunate’ because it denied the Tribunal the opportunity to consider whether the adult was aware of and had weighed the potential issues arising from the transaction. However, whether or not the solicitor did so, did not reflect upon TCAR’s capacity to make the decision.
36. [36]
    In our view, the comments of the Member reflect an incorrect application of the presumption of capacity. The fact that there is not evidence specifically addressing capacity for the property transaction does not mean the presumption of capacity has been rebutted. The presumption as to capacity was discussed in Re Caldwell,^[22] in the context of capacity to make an enduring power of attorney, where Mackenzie J held:

Like any presumption it can be rebutted by satisfactory evidence. As the narrative above indicates it is not a case where there is a mere assertion of lack of capacity. There is evidence, relatively contemporaneous with the execution of the Power of Attorney, to raise the issue of capacity in a serious way. The onus lies on the applicants to prove positively that Mr McClelland did not understand the nature and affect of enduring Power of Attorney at the time it was executed. In view of the evidence positively supporting a conclusion that he had capacity, especially that of Dr Keys and the solicitor, the onerous nature of the task of the applicants should not be underestimated.^[23]

37. [37]
    MG and MH submit, and we accept, that there is no evidence to support the finding that TCAR did not have capacity to understand the financial effects of the transaction, assuming for the moment that that was required. The alleged potential financial ramifications were not raised at the first hearing, while on the second hearing, which proceeded ‘on the papers’, the Member failed to refer to, and appears not to have considered, MG and MH’s submissions and the further evidence relevant to those issues. In particular, evidence was presented that TCAR took action to seek financial advice from Centrelink in October 2015 and also, as discussed later, about that time, contacted Veterans Affairs. Although there is no evidence as to the nature of the advice sought or taken from Centrelink, it is evidence that tends to suggest that after receiving advice from her lawyer in September 2015, and before effecting the transfer in November 2015, she sought some financial advice. This evidence tends to support, in the context of the relevant events, a finding that the presumption was not rebutted.
38. [38]
    It follows, from the above, that the Member did not properly apply the presumption of capacity in favour of TCAR and further, erred in finding that an absence of evidence from her as to her consideration of the financial implications meant the presumption of capacity had been rebutted.
39. [39]
    Further, we also find that the Member applied the wrong test for capacity or at least took into account irrelevant considerations in applying the test by referring to ‘eight cognitive functions’ he said were ‘supposed to be necessary in order to think rationally’.^[24] This eight limbed test is not incorporated by the statutory definition of ‘capacity’ or applied in relevant authorities. It appears that the Member based his finding of a lack of capacity on the extent to which TCAR displayed such cognitive functions:

The Tribunal is of the view looking at these cognitive functions that TCAR did not have capacity to undertake a property transaction that the presumption that she had capacity had been rebutted.^[25]

40. [40]
    We note that the Member had no medical evidence which specifically addressed the extent to which TCAR was able to exercise the listed cognitive functions, even had they been relevant, as at 4 November 2015 when the transfer was effected. In any event, as we have said, whether she did was not the appropriate test.
41. [41]
    Capacity is defined in the GA Act as follows:

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

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

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

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

Note—

Under section 146 (3) in deciding whether an individual is capable of communicating decisions in some way the tribunal must investigate the use of all reasonable ways of facilitating communication, which may include symbol boards or signing.^[26]

42. [42]
    The Member also appears to have conflated the quality of the solicitor’s advice regarding the transaction with the capacity of TCAR to understand the transaction. The test of capacity requires that the adult was ‘capable’ of understanding the nature and effect of a particular matter, not that they did.^[27] If it were otherwise, a person’s capacity would rest on the quality of the advice he or she received, which is plainly incorrect.
43. [43]
    In Fehily v Atkinson,^[28] it was held:

…the question is whether the person had the ability to understand the transaction, not whether they actually understood it: Re Beaney at 773A-B, Haworth at [74]. In Manches v Trimborn (1946) 174 LT 344, Hallett J said: “the question in a case of this kind is not whether the consent was accompanied by reason or deliberation, but whether the person was capable of exercising the reason and deliberation necessary for a true consent.” In Re Smith (Deceased); Kicks v Leigh [2014] EWHC 3926 (Ch), [2015] 4 AllER 329 at [27], Stephen Morris QC, sitting as a deputy High Court judge said: “Thus the overall test is one of ability to understand, rather than actual understanding. If the maker of the gift does not in fact understand the transaction, in circumstances, where its general purport has not been fully explained, that does not establish lack of capacity. The test is whether he or she would have understood it, if the consequences had been fully explained”. Having said that, if the person did understand the transaction, then obviously they had capacity to understand it, so that evidence of their actual understanding may be highly relevant.^[29]

44. [44]
    By contrast, the Member said:

…it is necessary to distinguish between the mere capacity to understand information, and actual understanding. Merely having the capacity to understand is not sufficient consideration for actual understanding. An individual may have the intellectual capabilities to understand information, but nonetheless may misunderstand information…^[30].

45. [45]
    The Member did not apply the presumption of capacity and, in effect, reversed the onus of proof by requiring TCAR to demonstrate she had capacity for the property transaction. Further, the Member did not apply the statutory test for capacity, as set out in schedule 4 of the GA Act, and erred in finding that evidence of ‘actual understanding’ of the financial implications of the transaction was required.
46. [46]
    The Member has, in our view, fundamentally confused the issue of whether TCAR had capacity, and whether she in fact understood the transaction. While to prove understanding of the transaction would be evidence of her capacity, a lack of evidence about her understanding is not determinative of incapacity, nor whether the presumption of capacity was rebutted.
47. [47]
    Accordingly, we find that the learned Member erred in the application of the presumption of capacity and, more broadly, in his consideration of the test for capacity. Ground one of the appeal must succeed.

Ground 2: The tribunal erred in law and fact in determining that the making of a will required a lower level of capacity than a property transaction

48. [48]
    The Member states:

Dr Strivens did say that the adult had capacity to do a will but that requires a lower level of capacity. (emphasis added)^[31]

….

The concept of capacity is decision specific. Thus, if the adult possessed testamentary capacity, that is not evidence of capacity for the transaction just because the two are interrelated. The assessment of capacity is quite different between testamentary capacity and capacity to enter into the property transaction. The Tribunal accepts the evidence of Dr Scriven’s (sic) that this was a more complex matter….^[32]

49. [49]
    MG and MH submit that the property transaction was merely the transaction that was necessary to facilitate TCAR’s undisputed intention in terms of the distribution of her estate upon her death, which was to leave her interest in the property to them and the remainder of her estate to be shared equally between her two other children; namely, HD and TG.
50. [50]
    They submit that the property transaction was entered into for estate planning purposes, to ensure that they received the home through survivorship upon TCAR’s death, and that the evidence established TCAR had testamentary capacity. Further, they submit that it was improper for the Member to have taken judicial notice of the fact that her ability to enter a nursing home may have been compromised by the transaction. In any event, they contend that to the extent that it was an issue for consideration, the Tribunal had a report from a financial expert, Coral Coast Financial Services, which states that TCAR would have been readily able to afford to move into an aged care facility regardless of the property transaction.^[33]
51. [51]
    The Member reasoned that a property transaction was different to the making of a will, that the property transaction was a ‘complex financial affair’^[34] which required a higher level of capacity than testamentary capacity. He reached this conclusion, he says, on the basis of the following factors:

1. Dr Strivens’ evidence that the transfer of property was a complex financial matter;
2. The transaction purported (sic) transfer a substantial part of TCAR’s assets – a major decision in any adult’s life;
3. There is no evidence that TCAR turned her mind to her future needs or demonstrated an understanding of the impact this transaction would have on her future needs;
4. The transaction raised complex legal issues regarding the gifting of property by the principal to the attorney and potential conflict transactions.^[35]

52. [52]
    There is, in our view, no general rule that a ‘higher level of capacity’ is required for one type of matter than another. As Applegarth J held in Hamill v Wright:^[36] ….

…it is not a matter of imposing, or recognising, a different standard of mental capacity in the evaluation of different transactions. The concept of “mental capacity” must be assessed relative to the nature, terms, purpose and context of the particular transaction.^[37]

53. [53]
    Firstly, with respect to the learned Member, we consider it desirable to make a number of observations in relation to the four factors he relied upon in concluding that a ‘higher level of capacity’ than testamentary capacity was required.
54. [54]
    First, the complexity of the transaction or transfer was a question for the Tribunal, not Dr Strivens. Had Dr Strivens examined TCAR on 4 November 2015, he may have been able to give evidence as to his opinion about TCAR’s understanding and other factors relevant to capacity for the transaction, but he did not. Secondly, as capacity is decision-specific, merely describing it as a ‘complex’ decision does not address whether TCAR had capacity for the particular transaction; that is, to effect the transfer of the property from her sole name to herself, MG and MH as joint tenants. Thirdly, as we have said, while we accept that evidence that TCAR had positively turned her mind to the effect of the transaction  may have evidenced her capacity for the decision, the absence of evidence about whether she considered those effects does not rebut the presumption of capacity; nor establish that TCAR did not have the ability to make the decision. Fourthly, as the transaction was effected by the adult (not the attorney), it was not a conflict transaction (which an attorney must generally avoid) and therefore did not raise the ‘complex legal issues’^[38] as referred to by the learned Member.
55. [55]
    The authorities demonstrate that cases concerning testamentary capacity are useful when assessing the capacity of a person to execute an inter vivos transaction.^[39] In each case, the question is whether the person has capacity for the particular transaction being considered. Testaments and inter vivos transactions may vary in complexity and it is difficult to apply any single standard of capacity to every transaction. Ultimately, the correct approach is, in our view, reflected in the observations of Holland J in Crago v McIntyre^[40] (a case concerning testamentary capacity) which was applied in the context of a voluntary inter vivos transaction in Collins v May^[41] as follows:

[59] This was clearly a voluntary transaction and, in my view, the principles applicable to cases of testamentary capacity are largely applicable. Resort can be had to the testamentary capacity cases to ascertain the extent or degree of the understanding necessary in a particular case.

…

[61] This test was explained in Crago where Holland J said at 740 - 741:

“In establishing that test the courts have endeavoured to reconcile acceptance of the right of a testator to dispose of his property as he pleases with a desire to protect the interests of those whom society has accepted as having a moral claim on a testator's bounty. For this reason it is not enough for the testator to know and understand how he is leaving his property when he executes his will. He must also possess sufficient capacity to appreciate what his property is and recognise the persons who have a moral claim upon him and, more importantly for present purposes, a capacity to exercise a balanced judgment as to such claims. In my opinion, there is much to be said for applying the same standard to a voluntary settlement by a settlor of his own property. The positions of a settlor and a testator are not, of course, identical. In the case of a testator the law has no concern to look after the donor's own interests because he is dead, but equity has always shown some concern for the interests of a person who makes a voluntary settlement of his own property inter vivos. Maybe this is because the trusts created by such a settlement are enforceable only in equity, and this has given the equity courts, as courts of good conscience, an opportunity to apply to such settlements general concepts of fairness and protection of the weak, particularly when they are for some reason disabled from exercising a proper judgment of their own interests. No question of depriving another party of the benefits of a fair and proper bargain for which he has given consideration arises on a voluntary settlement, but such a settlement may put a settlor in a position in which he has failed to do justice, not only to himself, but also to those who may become dependent upon him, or to whom he might owe or acquire a moral duty to provide. For these reasons I think that there should be applied to the case of a voluntary settlement the same test of mental capacity as is applied to the creation of a testamentary trust.”

[62] Reference should also be made to Re Beaney [1978] 2 All ER 595 in which it was held that the subject matter and value of the voluntary disposition might be relevant to the particular transaction. If the effect of the transaction was to dispose of the donor's only asset of value the degree of understanding is as high as that required for a will and the donor must understand the claims of all potential donees and the extent of the property to be disposed of.

56. [56]
    The learned Member observed, correctly in our view, that capacity is ‘decision specific’ and that ‘evidence of testamentary capacity is not evidence of capacity for the transaction’.^[42]  Unfortunately, as we have said, he then confined his attention to Dr Strivens’ view that the property transaction was ‘a more complex’ matter,^[43] rather than considering whether there was evidence that rebutted the presumption that TCAR was capable of understanding the nature and effect of the transaction and capable of freely and voluntarily making the decision effecting the transfer.   
57. [57]
    In our view, the learned Member erred in approaching the issue by simply categorising the transaction as a complex financial matter and in concluding TCAR did not have capacity for complex financial transactions. In our view, this approach failed to consider the essential issues in considering TCAR’s capacity, as defined in the GA Act, for the particular matter and whether the presumption of capacity for the transaction was rebutted.
58. [58]
    We return now to the ground of appeal. It is well established that testamentary capacity requires that a testator have capacity to appreciate what his or her property is; those who may have a claim against it; and those whom the testator should consider in making a will.^[44] Here, although the transaction was entered into for estate planning purposes, it occurred during TCAR’s lifetime, when she had ongoing financial needs for the remainder of her life, to be considered in deciding whether to effect the transfer to herself, MG and MH as joint tenants. We accept that there are additional considerations in understanding the nature and effect of the property transaction, as opposed to making a will.
59. [59]
    Accordingly, although we conclude that the learned Member erred in his overall approach, he was not in error in concluding that entry into the property transaction required a higher level of capacity than that required for TCAR to make her will.

Ground 3: The tribunal erred in making findings of fact based on irrelevant considerations and without taking into account relevant considerations.

60. [60]
    In respect of this ground it was argued that the learned Member took into account considerations that were not the subject of evidence, including that the property transaction would adversely affect TCAR’s Centrelink payments and her pension and also could affect her ability to enter into an aged care facility because she would not be able to pay the accommodation bond.
61. [61]
    As discussed earlier, these matters were the subject of evidence filed by MG and MH and, it appears, this evidence was not taken into account by the Tribunal. Further, it was an error for the Member to take into account TCAR’s lawyers failure to discuss all of the potential consequences of the decision with TCAR in determining that, because these effects had not been explained to TCAR, she therefore lacked capacity to enter into the transaction. In effect, the Member conflated the quality of the advice TCAR had been given with her capacity to understand the necessary matters. This error then infected the Tribunal’s decision about the weight attributed to the lawyer’s evidence. The Tribunal stated that it decided not to place ‘much weight’ on it ‘because of concerns about the way in which she sought instructions.’^[45] Ms Reeve’s was the only independent evidence before the Tribunal which was directly relevant to TCAR’s understanding of the nature and effect of the transfer at the time TCAR entered the transaction.
62. [62]
    For reasons we have discussed above, we find that the learned Member erred in taking these matters into account (and the consequent erroneous treatment of the lawyer’s evidence) and, conversely, in not taking into account relevant evidence filed by MG and MH which indicated matters that had been considered by TCAR, and that the implications of the transaction were in fact ‘neutral’.

Ground 4: The tribunal Member was biased or there existed a reasonable apprehension of bias.

63. [63]
    MG and MH submit that the Member ignored their submissions made on the rehearing, was dismissive of them in the Directions Hearing and indicated by his comments that he had, in effect, prejudged the issue.
64. [64]
    We do not accept that a Member who does not mention a party’s submissions or who fails to consider them is necessarily guilty of bias or of apprehended bias. That said, this, in combination with the conduct by the Member at the Directions Hearing, may have led a fair-minded observer to conclude that the Member had not brought an impartial mind to the issue.^[46]
65. [65]
    MG and MH submit that the Member on 8 February 2017, by a number of comments, indicated he had pre-judged the issue.^[47]
66. [66]
    In our view, the comments that could reasonably lead to that view were as follows:

1. The Member saying his decision was overturned in the first Appeal Tribunal decision because ‘I didn’t put the words “the presumption has been rebutted” in my decision’. This was a mis-characterisation and minimisation of the Appeal Tribunal’s decision. It also could indicate that the decision on rehearing was not going to be different because that was the only error and the impression he gave was that it was, in his view, a technicality.
2. His expressed displeasure at being appealed.
3. Statements which indicated the decision was a forgone conclusion, including asking questions as to how to go about the transfer back of the property to TCAR’s estate were he to make that order; that MG and MH were welcome to appeal his next decision (but not HD and TG); and that anyone who goes into an aged care facility has to pay a bond if they have assets.

67. [67]
    In our view, these statements were apt to give rise to a reasonable apprehension on the part of a fair-minded observer that the Member had pre-judged the issue and was not going to approach the rehearing with an impartial mind. This was a breach of procedural fairness and an error of law.
68. [68]
    We do not agree with MG and MH’s submission, relying on Maher v Adult Guardian,^[48] that the lack of an oral hearing in circumstances where the views of the parties as their preferred mode of hearing were not sought gave rise to an apprehension of bias. The procedure for a proceeding is at the discretion of the Tribunal, subject to the QCAT Act, the enabling Act and the rules.^[49] The Tribunal is required to act fairly and according to the substantial merits of the case.^[50] In conducting a proceeding it must observe the rules of natural justice but must act with as little formality and technicality and with as much speed as the requirement of the QCAT Act, an enabling Act or the rules and a proper consideration of the matters before the Tribunal permit.^[51] Section 32(2) of the QCAT Act provides that the Tribunal may, if appropriate, conduct all or a part of a proceeding entirely on the basis of documents.
69. [69]
    Further, we do not accept MG and MH’s submission that the matter should have gone back to be reconsidered by a different Member on the basis that the Member was required to decide the same questions of fact, thereby giving rise to an apprehension of bias that he would not bring a fair and impartial mind to the hearing. A right-minded person, in our view, would not conclude from the mere fact that a matter is remitted, that the Member can not bring a fair and impartial mind to the matter.
70. [70]
    The parties were permitted to file any further submissions and evidence prior to the rehearing which the Member said he would take into account in making his decision.^[52] In circumstances where there had already been an oral hearing over two days, it was not, in our view, unfair to the parties to have the rehearing conducted on the papers.
71. [71]
    However, in conclusion, we accept that the Tribunal erred in breaching its obligation to afford all parties with procedural fairness. As we must rehear the proceeding pursuant to s 147 of the QCAT Act, it is not necessary for us to remit the matter for reconsideration to the Tribunal.

The rehearing

72. [72]
    Certain of the Tribunal’s findings are unchallenged. These include those set out in the Tribunal’s reasons at [56]: TCAR had capacity for the EPA made on 10 April 2014, and the wills made by her on 3 September 2015 and 12 January 2016 (although the Tribunal in error refers to 3 December 2015 and 12 June 2016 respectively as the execution dates of the wills). Further, the learned Member found that she retained ‘social capacity’ to decide where and with whom she lived and that she wished to live with MG and MH. We see no reason to interfere with those findings, despite the unorthodox, and somewhat puzzling, reference to ‘social capacity’ rather than capacity to decide the personal matters of where and with whom she lived.
73. [73]
    As we have discussed, the GA Act provides that an adult is presumed to have capacity for a matter. The definition of capacity, relevant to all matters, including for entering the property transaction, is the test set out in Schedule 4 to the GA Act. The definition provides the relevant test for capacity. It provides, in effect, that capacity for a matter means: the adult is capable of understanding the nature and effect of the transaction; freely and voluntarily making it; and communicating it. At the outset, we observe that there is no issue that TCAR was able to communicate her decision.
74. [74]
    The test for capacity does not require that the adult understood everything that should have been explained to him or her about the transaction. Nor is it the case that, in order to have capacity, an adult must have received and understood advice on the broader implications of the transaction.^[53] In Fehily v Atkinson,^[54] it was held that:

…in order to understand a proposed transaction, a person needs the mental capacity to recognise the issues that need to be considered, to obtain, receive, understand and retain relevant information, including advice, and to weigh the information (including that derived from advice) in the balance in reaching a decision.^[55]

75. [75]
    In Hamill v Wright,^[56] Applegarth J held:

…it is not a matter of imposing, or recognising, a different standard of mental capacity in the evaluation of different transactions. The concept of “mental capacity” must be assessed relative to the nature, terms, purpose and context of the particular transaction.^[57]

76. [76]
    Bearing in mind those general principles, and the applying the principle explained by Mackenzie J in Re Caldwell, if the presumption that TCAR had capacity to enter the property transaction is to be rebutted, those raising capacity in a serious way must positively prove that she did not have capacity.
77. [77]
    The evidence from health professionals is relied upon to assert that TCAR had impaired capacity for the transaction. Dr Sainsbury, TCAR’s GP, stated on 11 August 2015 that she did not, in his opinion, have capacity for complex financial or personal decisions, recording that TCAR had progressive and severe Alzheimer’s dementia. However, on 15 August 2015 Dr Strivens, geriatrician, completed a comprehensive geriatric and cognitive evaluation and concluded TCAR had a good awareness of her assets, had testamentary capacity and that she should make a will.
78. [78]
    In a letter dated 18 August 2015 from Dr Strivens to Dr Sainsbury, Dr Strivens reports that TCAR has ‘mild cognitive defects consistent with an early neurodegenerative process, although these defects are relatively stable and do not impact on her testamentary capacity’. The letter continues ‘At this stage, (TCAR) retains testamentary capacity and is able to, and should be encouraged to, complete an up-to-date will following the passing of her husband’.
79. [79]
    It is worthy of note that his evidence is to the effect that TCAR’s cognitive functioning improved after commencing on Aricept after he prescribed it between August 2015 and February 2016.^[58] On 6 February 2016, when Dr Strivens revisited TCAR, cognitive testing indicated her cognition had improved from an MMSE of 23/30 six‑months earlier to 25/30, that she continued to present with mild cognitive deficits consistent with an early neurodegenerative process which were relatively stable and that she retained testamentary capacity.
80. [80]
    On 1 July 2016, Dr Sainsbury stated in a report to the Public Guardian that TCAR did not have capacity for complex financial matters but did have capacity for complex and simple health, accommodation and other personal matters and for simple financial matters. He also states that TCAR would have had testamentary capacity on 4 November 2015.
81. [81]
    Dr Sainsbury’s evidence changed between August 2015 and July 2016, in that he considered in 2016 TCAR had capacity for complex personal decisions, although in his opinion, she did not, in August 2015. In any event, his earlier report is at odds with Dr Strivens’ evidence. As a specialist geriatrician, we find that Dr Strivens was more likely than not better placed to make an assessment of TCAR’s capacity. Accordingly, we give less weight to Dr Sainsbury’s evidence than Dr Strivens’. In August 2015, Dr Strivens diagnosed TCAR as being in the early stages of neurodegenerative process with mild cognitive defects. Further, he states that TCAR had a good awareness of her assets and testamentary capacity. He started her on Aricept, after which her capacity improved, through until at least February 2016.
82. [82]
    Neither Dr Strivens (nor Dr Sainsbury) examined or assessed TCAR on 4 November 2015 when the transaction was entered into. Neither was asked at any time to assess her capacity for the transaction. At the hearing in March 2017, Dr Strivens’ evidence is to the effect that he considered the transaction was a complex one.^[59] He said that he had not, at any time, assessed her capacity for complex transactions.
83. [83]
    The evidence of TCAR’s lawyer, Ms Reeve, explained the series of events and transactions leading up to, and surrounding, the creation of the joint tenancy. Ms Reeve spoke with TCAR on 10 occasions between 4 August 2015 and 4 November 2015. We are satisfied that she acted prudently in seeking a health professional report for TCAR prior to taking instructions for TCAR’s will, given TCAR’s diagnosis of mild dementia. Ms Reeve took instructions in relation to TCAR’s wills and the transfer without any other person present in the room. Ms Reeve tested TCAR’s capacity through asking open and probing questions. On each occasion, she satisfied herself that TCAR understood the implications of her decisions and had the requisite capacity to give instructions. For example, she confirmed that TCAR realised that the arrangements she proposed meant that MG and MH would receive most of her assets.
84. [84]
    She advised TCAR of her options on each occasion; for example, rather than transferring her entire interest in the property, advising TCAR to consider a joint tenancy and thereby retain an interest in the property. Even though she does not appear to have discussed the potential consequences and risks for TCAR of a transfer during her lifetime, other than to suggest that MG and MH could decide they didn’t want her to live with them anymore and she would need a place to go in that event, that does not speak to TCAR’s capacity.
85. [85]
    Whether or not Ms Reeve gave advice to TCAR about all of the matters that may have been ideally desirable, as so concerned the learned Member, is irrelevant. There is no challenge to Ms Reeve’s veracity, nor is there (other) evidence which is inconsistent with it. Nor is it inherently implausible.  She is an independent, objective professional witness who as a lawyer has a duty to the Court (and thereby, the Tribunal) who had, and has, no personal interest in the events or the outcome.
86. [86]
    We observe that, although the transfer document reflects a joint tenancy between TCAR, MG and MH, it is possible that Ms Reeve may have been unclear about the precise manner in which the joint tenancy operated, in effect describing the transfer in related correspondence and her affidavit at one point as a transfer by TCAR of a 50% interest as a gift to the transferees. However, whether or not this is so does not reflect upon TCAR’s capacity for the transaction which achieved her desired outcome; namely, ensuring the property passed by survivorship to MG and MH.
87. [87]
    Ms Reeve’s evidence, which we accept and give significant weight, is the best independent evidence available as to TCAR’s capacity to enter into the transaction on 4 November 2015.
88. [88]
    As set out earlier, in context, making provision for the house to go to MG and MH was TCAR’s consistently expressed intention in her instructions to Ms Reeve and her testamentary decisions. She made a will on 3 September 2015, leaving the house to MG and MH, and the rest and residue of her estate to her other children. When she gave these instructions, Ms Reeve says that TCAR also expressed a desire to give the house to MG and MH outright during her lifetime (explaining the decision in terms of her close and supportive relationship with them, and her desire that the house not be sold), but Ms Reeve advised against it (suggesting that if she wished to do it, she should remain a joint owner). TCAR at that time left the bequest in her will. Ms Reeve says that she gave TCAR advice about the potential for a family provision application.
89. [89]
    Then on 4 November 2015, TCAR saw Ms Reeve again and instructed that she wished to effect the transfer to MG and MH. She gave Ms Reeve two letters to place in her will packet.  One was a letter dated 14 September 2015 addressed to ‘G and D’ in effect asking them to respect her wish that MG and MH have the house. The second was the letter addressed to ‘G’. Ms Reeve records in a contemporaneous file note which states that TCAR had told her ‘quite strongly’ that she wanted her property to go to MG and MH, not HD and TG, and that she did not want them to have a chance of changing her will; that she understood HD and TG would probably be upset but she was giving them her money in her bank and that, ‘no matter what’, she wanted MG and MH to have the house; that she understood the property was worth around $500,000 but did not want them to pay anything for it; and that she understood there was a big difference between what MG and MH, and HD and TG on the other hand, would receive upon her death but that ‘that was what she wanted and she was happy with that’.
90. [90]
    Again, Ms Reeve gave advice to TCAR to retain a joint interest in the property, so that it would pass by survivorship to MG and MH upon her death, and put it beyond the reach of a family provision application. Although TCAR had initially on that day instructed her solicitor to transfer her entire interest in her home to MG and MH, TCAR took Ms Reeve’s advice and acted upon it. TCAR retained an interest in the property, by creating a joint tenancy between herself, MG and MH. She contemporaneously gave instructions for a new will and confirmed those instructions to Ms Reeve some ten weeks later before executing it in January 2016. Consistently with the property transaction, TCAR’s will effectively gave her whole estate to her other two children, HD and TG, in equal shares.
91. [91]
    On 18 February 2016, Ms Reeve confirmed by written statement that TCAR understood what she was doing, in particular that a joint tenancy meant she would no longer own the property by herself, that she would now own it with MG and MH and that her other two children would not be able to challenge the will as the property had been removed from the estate and that the property would go to MG and MH upon her death.
92. [92]
    Although TCAR sought to give effect to her testamentary intentions by creating the joint tenancy, it was not a testamentary disposition. It was a property transaction effected during her lifetime.
93. [93]
    The New South Wales Supreme Court in Perochinsky v Kirschner^[60] held:

There was no dispute that the test for testamentary capacity was applicable by analogy to determine his capacity to make gifts of his interests in the shares and the accommodation bond (Crago v McIntyre [1976] 1 NSWLR 729 at 740-741; Beverley v Watson (Owen J, Supreme Court of Western Australia, 14 September 1994, unreported, BC9401884 at [15]); Collins v May [2000] WASC 29 at [59]; Stone v Registrar of Titles [2021] WASC 21 at [151]).

94. [94]
    In considering whether, in that case, Mr Perochinsky had capacity the Court held:

For Mr Perochinsky to have had the capacity to make the gifts he would have to have been capable of understanding the nature and effect of the transaction, that is, that he was giving away his, or his and his wife's, shares and accommodation bond. Secondly, he would have to have had the capacity to understand generally the extent of his property, or at least the extent of the property that was the subject of the transaction. Thirdly, he would have to have had the capacity to assess the persons who would have a moral claim on him who would be affected by the decision and the capacity to weigh the claims of such persons so as to make a balanced judgment as to whether or not it was proper to make the gift.^[61]

95. [95]
    Further, the Court observed:

For Mr Perochinsky to have had the capacity to make significant gifts he needed to have the capacity to weigh the claims of those who would be affected by the gifts. The people who would be affected would be his wife and himself and the residuary beneficiaries of his and his wife's estate. Mr and Mrs Perochinsky had made their wills in September 1997. There is no evidence that prior to Mr Perochinsky 's death either of them had any specific plan to change their wills. No solicitor was ever consulted for that purpose. They did not speak to Mr or Mrs Kirschner about changing their wills. The residuary beneficiaries under the will of the survivor of Mr and Mrs  Perochinsky  were Mrs Kirschner and Galina Chadskaia. Although neither Associate Professor Rosenfeld nor Dr Kosoff commented on it in their reports, the question of Mr  Perochinsky 's capacity to make the gifts must be assessed by asking whether he had the capacity to bring to mind the claims of his wife, his own needs, the claims of Mr and Mrs Kirschner to immediate access to property, and also the claims of Galina Chadskaia to the residue of their estate.

It does not appear that Mr Perochinsky gave any attention to such claims. Of course the question is not whether he did weigh the claims of those who would be affected by the making of the substantial gifts, but whether he was capable of doing so. ^[62]

96. [96]
    Although we accept that the approach applied by the New South Wales Supreme Court is the correct approach, with the greatest respect to the Court, it did not equate the capacity for the inter vivos gift with testamentary capacity. It considered those matters required for a party to have testamentary capacity but, as discussed, went further in stating that, in the circumstances, the person must have capacity to weigh the claims of those affected by the gifts, including his own needs and those of his wife during their lifetimes (when a testamentary disposition is made the latter is unnecessary). Hence, understanding of the nature and effect of the transaction involved understanding some additional matters not relevant for making a will, but relevant to understanding the implications of the gift on the person’s ability to meet their financial obligations and ability to meet their own needs for their lifetime.
97. [97]
    Here, the property transaction was perhaps somewhat similar in nature to an inter vivos gift, as opposed to a testamentary disposition. That said, by way of distinction, as a joint tenant, TCAR retained an interest in the whole of the property during her lifetime. As we have said, viewed in context, the transaction gave effect to TCAR’s consistently expressed intention that the MG and MH should receive her house upon her death and her other two children should share equally in the remainder of her estate. There is no evidence to support a finding that TCAR was not capable of weighing the claims of her other two children. Indeed, the fact she made a will leaving initially the remainder of her estate to them and, after the transfer, the whole of her estate to them, tends to suggest that she was so capable. Further, the legal advice TCAR received and acted in accordance with suggests that she had an independent reason, quite apart from her expressed intentions that MG and MH have the house, for creating the joint tenancy, rather than leaving the property to MG and MH in her will; that is, to put it beyond the reach of a family provision application.
98. [98]
    In this regard, we observe that after the proceeding was commenced, as the Tribunal recorded, TCAR told the separate representative that she ‘still wanted her house to go to MG and MH.’^[63] Indeed, the separate representative gave evidence that from when she first met TCAR towards the end of January 2017 to the hearing in February 2017 her ‘strong instructions’ have always been that she still wished her home to go to MG and MH.^[64]
99. [99]
    Further, in context, the creation of the joint tenancy occurred against the background of TCAR having lived nearby to MG and MH for over 30 years, next door to them for some ten years, and in circumstances that she had moved in with them and had been cared for by them since her husband died.
100. [100]
     Whether the property transaction was fair in the eyes of others is not to the point. It is certainly not evidence that TCAR lacked capacity to enter into the transaction. The transaction is not unexpected or apparently illogical having regard to the preceding or subsequent events. It is not relevant that others may have considered the transaction improvident^[65] or that others may think TCAR should have divided her estate equally among her three children or that the transaction led to unhappiness or was in some way unfair. As Young J held in considering the issue of capacity in Re C (TH) and the Protected Estates Act:^[66]

There is no room in the legislation for benign paternalism. A person is allowed to make whatever decision she likes about her property, good or bad, with happy or disastrous effect, so long as she is capable.^[67]

101. [101]
     Also, there is evidence that TCAR actively sought financial advice from Centrelink and contacted Veterans’ Affairs shortly prior to giving instructions for the transfer. Although the precise nature of the advice sought and taken, and other enquiries made, is unknown, again, it is evidence that tends to suggest that TCAR was considering her financial position and financial arrangements at that time. Having regard to the evidence overall, there is no basis upon which it can reasonably be inferred that she did not consider or have the capacity to understand the nature and effect of the potential financial implications of her decision to transfer the property to herself and MG and MH as joints tenants. 
102. [102]
     Although it was not contemporaneously obtained by TCAR, we also accept the evidence from a financial advisor presented by MG and MH to the effect that the transaction was ‘neutral’ in terms of its impact on TCAR’s Centrelink payments, pension and ability to enter a nursing home.
103. [103]
     The only other ‘evidence’ amounted to, in effect, a criticism of the lack of information provided to TCAR about the financial implications of her decision to enter into the transaction and make the transfer. There are two problems with this: one, whether TCAR has capacity to understand something does not depend upon whether her solicitor told her everything that she should; further, it was not TCAR’s onus to discharge. It was for those contending that TCAR did not have capacity for the transaction to adduce evidence to show that TCAR lacked the capacity to enter into the transaction, not for TCAR to demonstrate that she had capacity for ‘complex financial transactions’. There is no such evidence. The evidence there was, at its highest, was the evidence from Dr Strivens to the effect that he did not make an assessment of TCAR’s capacity for the property transaction^[68] or ‘complex transactions’ and that he had some concerns about her memory and ‘integration of information.’^[69] That said, he acknowledged that capacity is decision-specific and to be determined at the time of the transaction. In effect, he says no more than that TCAR had testamentary capacity and capacity for an EPA, but may not have had capacity for complex financial decisions, and he cannot say whether she had capacity for the property transaction when it was entered into.^[70] This evidence did not address whether TCAR had capacity to enter into the property transaction on 4 November 2015.
104. [104]
     The next question is whether TCAR had the capacity to freely and voluntarily make the decision. The evidence suggests that she did. Dr Strivens’ evidence was to the effect that he had not seen anything to suggest she was influenced by any person (and not making decisions freely and voluntarily),^[71] despite commenting that a person with TCAR’s level of cognitive functioning was vulnerable generally to influence.^[72]  Ms Reeve took steps to satisfy herself that TCAR had capacity for the decisions she made;^[73] saw her alone;^[74] and indeed, it is reasonable to infer that it was her legal advice to TCAR which motivated TCAR to enter into the property transaction, to ensure that her intentions for MG and MH have the house property were not defeated.
105. [105]
     For the reasons discussed, we find that the presumption that TCAR had capacity for the property transaction on 4 November 2015 is not rebutted.

Disposition of the application for a declaration of capacity

106. [106]
     The Public Guardian’s application sought a declaration as to TCAR’s capacity to enter into the property transaction.
107. [107]
     The GA Act provides that the tribunal may in its discretion make a declaration about the capacity of an adult for a matter: s 146(1). We have found that the presumption that TCAR had capacity for the property transaction has not been rebutted. It is appropriate to make a declaration in those terms about TCAR’s capacity for the transaction.
108. [108]
     In our view, it may be appropriate to make a declaration that an adult has capacity or alternatively, has impaired capacity for the particular transaction or matter, when a positive finding of capacity is made, or, if a finding is made that a person has impaired capacity for the transaction to which the application relates. This might more readily be the case where the relevant transaction is yet to be entered into. We observe that the drafting of s 146 (and the corollary provision in s 147) of the GA Act might be construed in the present tense as intended to operate together, such that if the tribunal makes a declaration about capacity for a particular transaction, the transaction is then entered into and the transaction is later challenged in proceedings, then the tribunal’s declaration about capacity is evidence in the proceeding.
109. [109]
     However, here, we have determined the application as to whether TCAR had capacity for a particular transaction at some well-past point in time. The presumption is not rebutted. However, in our view, we could not go so far as to declare that the adult had capacity, at least in the absence of making a positive finding to that effect. Although in our view it is likely that TCAR had capacity for the transaction, such a conclusion is not positively established on the available evidence.

Conclusions and orders

110. [110]
     In conclusion, we find the Member erred in declaring that TCAR did not have capacity for the property transaction of 4 November 2015.
111. [111]
     Accordingly, we make the following orders:

     1. Leave to appeal is granted.
     2. The appeal is allowed.
     3. The Tribunal’s orders dated 18 April 2019 and numbered 1-3 are set aside.
     4. It is declared that the presumption that TCAR had capacity for the property transaction on 4 November 2015 is not rebutted.