TJ v The Public Trustee of Queensland

The appellant, as administrator for his stepson’s financial affairs, challenged a decision of the Queensland Civil and Administrative Tribunal, relevantly constituted by a judicial member, which dismissed his application for an order that the Public Trustee compensate his stepson for loss he alleged was caused by the Public Trustee’s failure to comply with the Guardianship and Administration Act 2000 (“GAA”) in making certain decisions on his stepson’s behalf. An important legal issue arose on appeal – what is the appropriate test of causation to apply when determining an application for compensation under s 59(1) GAA. In dismissing the appeal, the Court explained that to establish an entitlement to compensation under s 59 it must be shown that the loss to the person would not have occurred but for the breach.

Bowskill CJ, Mullins P and Bond JA

30 July 2024

The appellant’s position was that the Public Trustee had mismanaged his stepson’s financial affairs in the exercise of its power as administrator since 2004. He made an initial application to QCAT, under s 59 Guardianship and Administration Act 2000 (“GAA”) for an order that the Public Trustee compensate his stepson for the loss he alleged was caused by its failure to comply with the Act in making those decisions. [2]. That application was unsuccessful both at first instance and on appeal to QCAT’s appeal tribunal. However, the Court of Appeal found in the appellant’s favour, determining that the Public Trustee had breached its obligations as administrator. [3]. It remitted the application for compensation to QCAT for rehearing. [7]. The Tribunal dismissed the application for compensation on the basis it was not satisfied the Public Trustee’s failures (as found by the Court of Appeal) caused loss to the stepson. [8]. The appellant sought to appeal against that decision. [10].

The primary legal issue on appeal was – what is the applicable test for causation under s 59 GAA? [12].

The Court clarified:

(1)The compensation provided for under s 59 of the GAA is intended to redress loss which results from the breach of an appointee’s duty (that is, any noncompliance with the Act). The inclusion of the words “caused by” indicates that the statute requires that a causal connection exists between the breach and the loss for which compensation is claimed. Given the nature of an appointee’s duty, it is “appropriate to adopt the equitable principle that to establish an entitlement to compensation for breach of trust it must be shown that the loss to the person would not have been sustained but for the breach”. [18].

(2)Substitutive compensation is a remedy which is directed at reinstating to a trust an asset (or the value of an asset) what was dissipated without authority. By comparison, reparative compensation involves a claim for reparation for loss suffered by breach of duty. The statutory language of s 59 GAA contemplates a claim of that nature – namely, compensation for a loss which results from the appointee’s non-compliance with the Act in the exercise of a power (albeit a claim can also arise in other circumstances for example unauthorised dissipation of an asset). “Describing the claim as ‘substitutive’ or ‘reparative’ cannot avoid the statutory requirement for a causal connection to be shown”. [21].

(3)The factors which need to exist in order to establish a claim for compensation under s 59 GAA are that: (a) the appointee failed to comply with the Act in the exercise of their power; (b) the adult has suffered a loss; and, (c) that loss was caused by the appointee’s failure to comply with the Act – in the sense that “the loss would not have occurred but for the breach” (see Target Holdings Ltd v Redferns [1996] AC 421, 434). [22].

(4)That s 11B of the GAA is intended to have application to entities other than the Tribunal or a court. [60].

The Court was not satisfied that any error (of fact or law) had been made by the Tribunal on the rehearing. [64].

Disposition

The appeal was dismissed.

A Jarro