The Public Trustee of Queensland v Ban
[2012] QSC 255
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- Unreported Judgment
- The Public Trustee of Queensland v Ban[2012] QSC 255
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The Public Trustee of Queensland v Ban[2012] QSC 255
The Public Trustee of Queensland v Ban[2012] QSC 255
SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO/S: | |
Trial Division | |
PROCEEDING: | Hearing |
DELIVERED ON: | 7 September 2012 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 20 July 2012 |
JUDGE: | Boddice J |
ORDER: |
|
CATCHWORDS: | Guardianship and Administration Act 2000 (Qld) Local Government (Operations) Regulations 2010 (Qld) Power of Attorney Act 1998 (Qld) The Public Trustee of Queensland (as Litigation Guardian for ADF) v Ban & Anor [2011] QSC 380 Warman International Ltd v Dwyer (1995) 182 CLR 544 EQUITY – GENERAL PRINCIPLES – FIDUCIARY OBLIGATIONS – FIDUCIARY DUTY – ACCOUNT FOR BENEFITS GAINED – where the plaintiff makes application for an account of monies withdrawn or caused to be withdrawn by the first defendant from a joint account – where monies deposited in that joint account were held on trust – where there is no dispute that each of the transactions was undertaken by the first defendant, or at her direction – whether the transactions involved the first defendant obtaining a profit or benefit by reason of her fiduciary position or by reason of her having taken advantage of the opportunity or knowledge derived from that fiduciary position |
COUNSEL: | AP Collins for the plaintiff The first defendant appeared on her own behalf |
SOLICITORS: | Official Solicitor to the Public Trustee for the plaintiff The first defendant appeared on her own behalf |
[1] The Public Trustee of Queensland seeks an account of monies withdrawn or caused to be withdrawn by the first defendant from a joint account held in the name of the first defendant and ADF. The monies deposited in that joint account are held on trust for ADF[1].
The application
[2] The account concerns some 40 transactions between on or about 5 November 2009 and 12 May 2010. A summary of the disputed transactions is set out in the schedule to the affidavit of Jennifer Waldon filed 28 March 2012.
[3] There is no dispute that each of the transactions was undertaken by the first defendant, or at her direction. The issue to be determined is whether the transactions involved the first defendant obtaining a profit or benefit by reason of her fiduciary position, or by reason of her having taken advantage of the opportunity or knowledge derived from that fiduciary position.
Relevant principles
[4] A fiduciary is not entitled to make a profit out of, or by reason of, a fiduciary position without the knowledge and assent of the person to whom the fiduciary duty is owed[2]. If the fiduciary made a profit or benefit by reason of the fiduciary position or by reason of taking advantage of an opportunity or knowledge derived therefrom, the fiduciary must account for that profit or benefit. It is no defence that the fiduciary acted honestly and reasonably[3].
[5] Where it is established that the fiduciary obtained such a profit or benefit, a court must determine the true measure of that profit or benefit. That can be difficult in practice. Where appropriate, there must be an allowance for the skill expertise and other expenses of the fiduciary. An account should not be transformed into a vehicle for the unjust enrichment of a plaintiff.[4] The purpose of the remedy is not to impose a burden on the fiduciary beyond the benefit he or she has received. The remedy ought to ensure the beneficiary does not receive a windfall not reflecting any detriment suffered or benefit which the beneficiary ought to have received[5].
[6] It is for the fiduciary to establish it is inequitable to order an account of the entire profit or benefit. The guiding principle is that of equity. Regard must be had to the nature of the case and the particular facts.[6] In determining whether the fiduciary has discharged this onus, the central issue for consideration is whether any of the monies withdrawn were ultimately used for the benefit of the beneficiary.
Submissions
[7] The first defendant contends each transaction in issue was for the benefit of ADF, and that benefit must be given a broad definition, having regard to her relationship with ADF. That relationship was akin to father and daughter. It had involved, for many years, substantial generosity by ADF in assisting the first defendant with her own personal expenses. This financial assistance included payment of her mortgage and other personal liabilities. The first defendant contends it was ADF’s intention and wish to reside with the first defendant and her then husband at the first defendant’s premises.
[8] The first defendant also contends it is relevant that ADF had been found to be a “related person” pursuant to the Local Government (Operations) Regulations 2010 (Qld). That finding, it was submitted, evidences the closeness of the relationship between the first defendant and ADF. The first defendant submits the existence of such a close relationship is a relevant factor in considering the exercise of her powers as ADF’s attorney, particularly having regard to the provisions of the Guardianship and Administration Act 2000 (Qld) and the Power of Attorney Act 1998 (Qld).
Discussion
[9] The cardinal principle of equity requires that each transaction not be considered in isolation. It must be considered having regard to all of the circumstances of the case. Those circumstances include the close personal relationship between ADF and the first defendant, ADF’s obvious affection for the first defendant, and his desire to assist her financially in the past. However, the circumstances must also include any change in ADF’s personal circumstances. Those personal circumstances include his severely deteriorating medical condition, which resulted in ADF requiring care and assistance in an aged care facility.
[10] This change in ADF’s circumstances resulted in significant demands on ADF’s financial resources to ensure his own proper care into the future. These demands include significant, ongoing needs. These needs are likely to increase as ADF ages, and his health deteriorates further. There is a compelling need to preserve ADF’s available funds to ensure his financial needs can be properly met for the rest of his life.
[11] Having regard to those factors, and the relevant principles, I turn to consider the individual transactions.
Item 1
[12] This item relates to the transfer of $700,000 on 5 November 2009. The first defendant’s initial explanation for that transaction was that it was for her “own use”. The first defendant subsequently detailed its use.
[13] The first defendant states $100,000 was transferred to her husband. She says ADF intended to give her husband money from the sale of his Park Ridge property so that debts could be met.
[14] A further $50,000 was paid to a builder for initial work on an extension to the defendant’s home to permanently accommodate ADF. The first defendant states ADF was very much looking forward to moving in with her upon its completion.
[15] A further $40,000 (approximately) was spent on the first defendant’s wedding. The defendant states ADF treated her as his daughter, gave her away at the wedding, and intended that he pay for her wedding.[7]
[16] A further $96,000 (approximately) was used to purchase a half-share in a unit at Mount Warren Park. The defendant gave evidence that this unit was purchased as a means by which she could increase ADF’s available funds as his medical condition deteriorated further. She accepted that this purchase, whilst made in her name, was intended to increase ADF’s funds.[8]
[17] A further $40,000 (approximately) was utilised by the first defendant on her unsuccessful election campaign. The first defendant stated ADF had funded previous campaigns and intended to provide substantial financial support for her campaign for the 2010 Federal Election.
[18] A further $49,000 (approximately) was used by the first defendant for her own personal expenses, such as mortgage repayments, household expenses, repair and maintenance, and day-to-day living expenses. The defendant says ADF regularly assisted her in the past to meet these day-to-day expenses, and it was his intention to do so into the future.[9]
[19] A further $75,000 (approximately) was used to build a new fence on the first defendant’s residential property. This fence was constructed by the first defendant’s brother. The materials cost approximately $42,000. The defendant says ADF had, prior to his deterioration, undertaken steps to obtain quotes for the construction of this fence. It was his intention he pay for its construction.
[20] The remaining sum (approximately $250,000) was retained by the defendant. It either remains in her former solicitor’s trust account, or has been returned to the Public Trustee.
[21] Whilst the defendant contends all of the monies expended by her as part of this item involved expenditure on items ADF had previously met, the issue for consideration is whether this expenditure was for ADF’s benefit. The determination of this issue involves a consideration of all of the circumstances, including the significant change in ADF’s circumstances.
[22] Whilst ADF, in the past, may have readily expended money in payment of the defendant’s personal expenses, his own circumstances significantly changed as his health deteriorated, and he required access to considerable funds to meet his own medical and other needs. This change in circumstance necessitated a reconsideration of ADF’s ability to meet those expenses in the future. Otherwise, he would be acting to his detriment.
[23] Having carefully considered the first defendant’s explanation for this item, I am not satisfied any of these transactions were for ADF’s benefit, apart from the payment of the expenses associated with the first defendant’s wedding. Each of these transactions resulted in a benefit to the first defendant, to the detriment of ADF.
[24] The significant deterioration in ADF’s health meant the first defendant’s primary obligation was to ensure the retention of all available funds so that ADF could be properly cared for in the future. The fact ADF may have met these expenses on the defendant’s behalf in the past does not render the use of his funds by the defendant to pay them in the future for his benefit.
[25] This conclusion includes the sums of $50,000, spent on the intended extension to the defendant’s home, and $75,000 spent on a new fence for the residence. Whilst it may have been ADF’s wish to live with the defendant and to fund these works, ADF’s medical condition had deteriorated prior to any contract for the building work being entered into by the first defendant. This deterioration was so substantial that ADF required admission into an aged care facility. This admission required the payment of a substantial accommodation bond. There is no evidence to suggest ADF would be better cared for in any accommodation built by the first defendant as part of the extension to the first defendant’s residential property.
[26] The first defendant gave evidence that the payment of the accommodation bond was a temporary measure until the extension had been completed by her, and ADF was then to move into her premises.[10] I do not accept that evidence. Such a contention does not accord with ADF’s need for ongoing medical and nursing care. Further, there is no documentation to support such a contention. Importantly, there is no documentation to support a contention that such a move would have been for ADF’s benefit. His significantly deteriorating mental health would suggest the contrary. He is obviously in need of the care of qualified health professionals.
[27] The payment of the defendant’s wedding expenses falls into a different category. I accept ADF was very fond of the defendant, and treated her as his daughter. I accept he would have obtained considerable joy from giving the defendant away, and from being able to pay for her wedding. In considering whether a payment is for ADF’s benefit, “benefit” should be given a wide interpretation. Undertaking activities which result in great joy for ADF constitutes a benefit to him. The first defendant has satisfied me, on the balance of probabilities, that the payment was for ADF’s benefit.
Item 2
[28] This item related to a sum of $8,000. The Public Trustee of Queensland accepts this payment was in discharge of an obligation owed by ADF to the first defendant.
Items 3, 11 and 16
[29] These items relate to cash withdrawals to pay Robert Laza, the first defendant’s mother, and a carer at the aged care facility.
[30] Robert Laza visited ADF regularly. The payments were to reimburse his expenses. His visits provided company for ADF and, on occasions, an outing. They were obviously for ADF’s benefit. The first defendant has satisfied me, on the balance of probabilities, that the payments to Robert Laza were for ADF’s benefit.
[31] The cash payment to the first defendant’s mother was for a sum of $300. The first defendant says it was by way of reimbursement of fruit purchased on ADF’s behalf.[11] The first defendant could not give further details. Her mother was not called to give evidence in support of the purchase by her of the fruit.
[32] Whilst the evidence provided by the first defendant in respect of this payment was cursory, the payment must be considered in the context of the entire relationship between ADF and the first defendant. I accept that relationship entailed the first defendant purchasing items on behalf of ADF from time to time. There is no evidence to suggest the first defendant was regularly making cash payments to her mother. In those circumstances, I see no reason to reject the first defendant’s explanation for this payment. The first defendant has satisfied me, on the balance of probabilities, the cash payment to her mother was for ADF’s benefit.
[33] The remaining cash sum relates to a payment of $100 to a carer at ADF’s aged care facility. The first defendant gave evidence that these payments were for incidentals purchased by the carer on behalf of ADF. Whilst such an arrangement is surprising, the payments do not represent regular withdrawals. Further, it is entirely understandable ADF would have required incidentals to be purchased on his behalf from time to time. In those circumstances the first defendant has satisfied me, on the balance of probabilities, that the cash payments to the carer were for ADF’s benefit.
Items 5, 6, 8, 13, 31 and 34
[34] These items relate to cash advances for relatively small amounts. The first defendant gave evidence that each of these items was in payment either of meals shared with ADF and a friend, or reimbursement for items purchased by the first defendant on ADF’s behalf.
[35] It was submitted by the Public Trustee that where meals were shared, it was appropriate that ADF only pay for his meal. I do not accept that contention. As a person ages, one of the remaining joys in life is to share a meal with friends. That joy includes the privilege of paying for that meal. Such social occasions are for that person’s benefit. Similarly, purchasing items which are required by ADF, including linen, are for ADF’s benefit.
[36] The first defendant has satisfied me, on the balance of probabilities, that these items were expended for ADF’s benefit.
Item 9
[37] This item relates to an EFTPOS transaction at Nardoo Lavender Shop. The first defendant gave evidence that this transaction involved the purchase of Christmas presents for Robert Laza and his wife. The first defendant said ADF took great joy from being able to purchase this gift. I accept the first defendant’s evidence in this regard. The first defendant has satisfied me, on the balance of probabilities, that this transaction was for ADF’s benefit.
Item 18 and 21
[38] Each of these items relate to cash withdrawals for donations to “Father Danny”. Item 18 also includes a cash withdrawal of $40 for the purchase of goods from Coles and a newsagency.
[39] The first defendant states Father Danny visited ADF. I accept her evidence in that regard. Against that background, the donation of monies to him is likely to be a transaction of a nature ADF might reasonably be expected to have made, and is for an amount which is reasonable in all the circumstances[12]. It is also a transaction that is likely to bring ADF joy. Likewise, the purchase of goods for ADF is for his benefit.
[40] The first defendant has satisfied me, on the balance of probabilities, that each of these items was a transaction for ADF’s benefit.
Items 4, 7, 10, 14, 22, 23, 24, 25, 26, 28, 29, 30, 33, 35, 37 and 40
[41] Each of these items relates to a purchase from the florist “Bunch It Up”. The defendant gave evidence that flowers and/or fruit were purchased weekly and delivered to ADF. The defendant spoke of ADF’s delight at the receipt of these flowers.
[42] The Public Trustee cannot dispute that flowers and/or fruit were delivered to ADF. However, the invoices in support of these weekly purchases were numbered sequentially, despite reportedly being in relation to the months of November and December 2009 and January and February 2010. The Public Trustee contends this raises a doubt as to their authenticity. The defendant explained this oddity on the basis that when an issue arose, she sought receipts from the florist in support of past purchases, and that documentation for all months may have been obtained at the same time.
[43] Whilst the invoices raise concerns, there is no suggestion the florist “Bunch It Up” does not exist, or that the invoices were not prepared by a representative of that florist. Further, whilst there is no specific evidence of delivery of flowers to ADF on a weekly basis, I accept the defendant’s evidence that each of these items relates to the delivery of flowers and/or fruit to ADF. I am satisfied ADF took delight in their receipt, having regard to his circumstances. The provision of items which bring him joy is plainly for ADF’s benefit.
[44] The defendant has established, on the balance of probabilities, that each of these items related to an expense for the benefit of ADF.
Items 12, 15, 17, 19 and 20
[45] These items total $28,426. Each relate to payments made to the first defendant’s brother for work undertaken by him in cleaning ADF’s properties at Park Ridge and Greenbank so that they may be sold. Each payment is supported by an invoice provided by the first defendant’s brother. Those invoices reveal the payments were made for work allegedly undertaken over several days. An enormous number of hours are claimed, representing an average of 12 hours per day.
[46] The first defendant contends each property required substantial work to be undertaken by way of cleaning, as ADF was a “hoarder”.[13] This work included removing motor vehicle parts and other heavy items. The first defendant did not call her brother in support of these claims. The first defendant also did not call her mother, who is said to have been involved with others in undertaking his work.
[47] There is no doubt that work undertaken on ADF’s behalf to prepare the properties for sale would be for ADF’s benefit. There is also no doubt that ADF ought to pay a reasonable fee for such work. However, the hours claimed are extraordinary. Even allowing for ADF being a hoarder, the total claimed appears excessive even if it had been undertaken by professional cleaners.
[48] Allowing for the fact that substantial cleaning would have been required to have been undertaken in any event, and would have resulted in payments by ADF, I am satisfied a proportion of the sum claimed by way of these items represents payments made for ADF’s benefit. However, even being generous in respect of the work that needed to be undertaken, I am satisfied any cleaning would not have cost in excess of $20,000.
[49] The defendant has established, on the balance of probabilities, that $20,000 of the sum of $28,426 represented by these items was for work undertaken for ADF’s benefit.
Items 27 and 32
[50] These two items total $11,275. They were for payment of legal services undertaken by Campbells Legal Services on the first defendant’s behalf. The first defendant engaged Campbells Legal Services to act on her behalf in respect of queries raised by the Adult Guardian in relation to her conduct as ADF’s attorney. These queries ultimately led to the Public Trustee of Queensland being appointed, and the first defendant resigning as ADF’s attorney.
[51] The defendant contends these services were necessary in order to properly respond to the Adult Guardian’s query. She contends they were for ADF’s benefit as ADF wished her to be his attorney. She relies on the fact that ADF granted her an enduring power of attorney.
[52] The legal services were specifically to address concerns raised in relation to the first defendant’s conduct as ADF’s attorney. Those queries resulted in the appointment of the Public Trustee of Queensland. There is no basis to find that payment of these legal services was for ADF’s benefit. It was a cost properly to be met by the first defendant. It is a direct conflict of her duty as attorney for those legal services to be paid by ADF. The payment of these legal services was not for ADF’s benefit.
Item 36
[53] This transaction relates to a purchase at Just Crazy Bargains for $221.00. The first defendant believes it relates to the purchase of greeting cards which she then sent daily to ADF. I accept her evidence that this brightened ADF’s day. The first defendant has satisfied me, on the balance of probabilities, that this transaction was for ADF’s benefit.
Item 38
[54] This transaction concerns an amount of $31.14 drawn by cheque. The first defendant is unable to recall what was purchased and no longer has access to the cheque butts. In those circumstances, the first defendant cannot satisfy me that the transaction was for ADF’s benefit.
Item 39
[55] This item relates to a transfer of $170,000 by the first defendant. This transaction occurred after the first defendant’s entitlement to act as ADF’s attorney had been the subject of a suspension.
[56] The first defendant’s affidavit material does not seek to justify the transfer of this money. Instead, it notes that some $152,000 of that sum was transferred back to the Public Trustee, with the balance being used to pay Campbells Legal Services.
[57] There is no basis for a finding that this item was for ADF’s benefit.
Conclusion
[58] The defendant has satisfied me, on the balance of probabilities, that the transactions, the subject of items 2, 3, 5, 6, 8, 9, 11, 13, 16, 18, 21, 31, 34 and 36 were for ADF’s benefit. The defendant has further satisfied me that $20,000 of the sums the subject of items 12, 15, 17, 19 and 20 were for ADF’s benefit. The balance of those items was not for ADF’s benefit.
[59] I am satisfied that except for $40,000 of item 1, the remaining items, the subject of the application, were not for ADF’s benefit.
[60] I shall hear the parties as to the form of orders, and as to costs.
Footnotes
[1] The Public Trustee of Queensland (as Litigation Guardian for ADF) v Ban & Anor [2011] QSC 380.
[2] Warman International Ltd v Dwyer (1995) 182 CLR 544 at 563.
[3] Warman at 557 – 558.
[4] Warman at 561.
[5] Warman at 561.
[6] Warman at 559.
[7] T1-83/43.
[8] T1-88/46.
[9] T1-88/8.
[10] T1-23/13.
[11] T1-67/11.
[12] See, generally, Power of Attorney Act 1998 (Qld), s 88; Guardianship and Administration Act 2000 (Qld), s 54.
[13] Affidavit of H Ban filed 22 June 2012, paragraph 10.