CITATION:	HJG [2015] QCAT 395	

PARTIES:	HJG	
		
APPLICATION NUMBER:	GAA5759-15	

MATTER TYPE:	Guardianship and administration matters for adults	

HEARING DATE:	2 October 2015	

HEARD AT:	Brisbane	

DECISION OF:	Senior Member Endicott	

DELIVERED ON:	2 October 2015	

DELIVERED AT:	Brisbane	

ORDERS MADE:	1.	The appointment of HB as administrator for HJG is revoked.
2.	The reasons for decision are to be sent to the Legal Services Commissioner	

CATCHWORDS:	ADMINISTRATION APPOINTMENT  - where Tribunal had made a declaration that an adult had impaired capacity for instructing his lawyers in a damages claim- where an administrator had been appointed to provide instructions and to manage any damages recovered in the claim

REVIEW OF APPOINTMENT – where the damages claim settled on instructions given directly by the adult – where damages paid out to the adult by his lawyers – where lawyers had formed unilateral view that adult had capacity 

Guardianship and Administration Act 2000 (Qld) ss12 and 31(2)

Bergmann v DAW  [2010] QCA 143	

APPEARANCES and REPRESENTATION (if any):

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).

REASONS FOR DECISION

[1]	HJG sustained injuries on 11 October 2007.  During a claim for damages, his lawyers filed with the Tribunal an application by HB, his brother, to be appointed as administrator for certain financial and legal matters.  According to an assessment carried out by neuropsychologist, Debbie Anderson, HJG had consistently complained of extremely severe ongoing issues with pain and cognitive dysfunction. As a result, he had been unable to return to work or to maintain an effective role within his household.
[2]	A psychiatrist, Dr Joesph Mathew, reported that HJG had moderate memory loss, becomes disorientated at times, displays impulsive spending requiring his wife to manage the family finances and was unable to engage in paid employment.  
[3]	In April 2012, HJG had told Dr Mathew that he forgets what had happened a week ago, he would lose track of time, he would forget to take his medication, he was quite reckless with his spending and he agreed that it was a good thing that his wife handled the finances as it took pressure off him.   He also told Dr Mathew that if he recovered a lump sum of damages then his wife would need to manage it to pay off bills and to put a deposit on a house. 
[4]	Dr Mathew reported that he had also spoken to Mrs HJG.  She had told Dr Mathew that she managed all the family finances and that if her husband received a large sum of money, then it would be squandered.
[5]	Dr Mathew expressed an opinion that HJG had suffered an acquired brain injury.  Dr Mathew was of the opinion that HJG had suffered some depressed mood but his cognitive symptoms were markedly out of proportion to the thinking disturbances that would be associated with his level of depression.  Dr Mathew expressed the opinion that HJG did not have the capacity to instruct his lawyers to settle his claim for damages and that he would require a decision-maker for financial matters.
[6]	In a separate health professional’s report filed in the Tribunal, Dr Mathew reported that HJG had stated that he believed he was incapable of making financial decisions as a result of his cognitive difficulties.  Dr Mathew reported that HJG is impulsive with money and is unable to budget or to manage bills or to allocate money between competing needs.  Dr Mathew stated that HJG would require assistance from his wife regarding advising his lawyers about an upcoming settlement.
[7]	Dr Mathew concluded in that health professional’s report that HJG could not make any simple or complex financial decisions due to his acquired brain injury and cognitive difficulties.  
[8]	In the application filed in the Tribunal for the appointment of an administrator, it was disclosed that HJG relied on a pension for income and that he had assets of about $1,071.03, mainly made up by two cars.  He also had liabilities of about $53,855. 
[9]	At a hearing on 8 August 2012, the tribunal made specific findings that HJG did not have capacity for instructing his lawyers in his claim for damages and in instructing his lawyers as to the finalisation of that claim.   The Tribunal appointed HB as administrator for managing two specific financial and legal matters, namely instructing lawyers in the claim for damages including any settlements or finalisation of that claim and managing any damages recovered as compensation for HJG’s injuries.
[10]	The appointment was made until further order of the Tribunal but was due to be reviewed in three years.  It was further ordered that the appointment of the administrator would be reviewed to insert directions for the filing of annual accounts at the time the Tribunal considered the financial management plan ordered to be filed by the administrator within 28 days of the finalisation of the damages claim. 
[11]	The Tribunal was notified by the solicitors for HJG by email sent on 20 January 2015 that the damages claim had settled on 10 October 2014.  The solicitors also informed the Tribunal that given HJG’s continuing incapacity they must apply to the court to have the settlement sanctioned.  The solicitors stated that they anticipated that the court would not permit HB to administer the damages recovered and that the court would expect The Public Trustee of Queensland to administer the funds.   
[12]	The solicitors asked the Tribunal registry to inform then as to the best way to go about having the order made by the Tribunal altered.  They indicated that this needed to be done before they filed the application for sanction in the court.   According to the Tribunal’s records, a registry officer gave oral advice on these requests to the solicitors for HJG.
[13]	On 18 June 2015 a registry officer spoke to the administrator, HB, to enquire what had occurred about the damages payment.  HB informed the registry officer that he thought HJG had been paid the funds directly because the administrator had not been contacted about the damages by the solicitors for HJG.
[14]	The registry officer then contacted the solicitors who had acted for HJG.  The solicitors agreed to send to the Tribunal a copy of the settlement agreement and other documents.  The Tribunal subsequently received a copy of the agreement dated 16 April 2015 which HJG had signed on his own behalf. The agreement was not subject to any requirement of a sanction and did not provide for the settlement funds to be paid to HJG’s administrator.  An order from the Supreme Court dated 11 March 2015 merely deemed the matter to be resolved.  
[15]	The solicitors for HJG aslo sent to the Tribunal a copy of a report from Dr John Chalk, psychiatrist dated 31 March 2015.  That report expressed an opinion that HJG had capacity to give instructions with respect to the claim and that he had capacity to manage his settlement funds.  In a letter dated 23 June 2015, the solicitors for HJG stated that they had previously advised HJG and HB of their obligations with respect to QCAT.  The letter stated that HB had requested that the firm no longer contact him and the firm understood that the brothers have not been communicating with each other.  
[16]	On 14 September 2015, HB told a registry officer that he had had a falling out with HJG around the time that the settlement monies were paid out because HJG would not agree to the recovered funds being paid to the administrator.  HB told the registry officer that HJG’s solicitors would not recognise HB’s authority as administrator in finalising the settlement.  According to HB, his brother received about $80,000 after legal fees were paid and that HJG has already exhausted the funds.  
[17]	HB informed the tribunal that he did not want to continue as an administrator for his brother.  HB considered that his brother could manage his own day to day finances but that he would need assistance to investigate any legal matters arising from the failure of his former lawyers to ensure compliance with QCAT’s order.  
[18]	In view of the finalisation of the damages claim and the absence of current evidence that HJG had any complex financial decisions to make, a review of the appointment of the administrator was conducted on the papers based on the documents previously provided to the Tribunal. 
[19]	Under section 31(2) of the Guardianship and Administration Act 2000, the Tribunal must revoke an appointment of a substitute decision-maker on review unless it is satisfied it would make an appointment if a new application for an appointment were to be made.   There is no evidence that HJG currently needs an administrator to provide him with decision-making support about his financial affairs. According to the evidence before the Tribunal, HJG is in receipt of a pension, lives in a house owned by his father and shares household expenses with his two adult children.  It is not established whether HJG has spent all of the recovered damages as alleged by HB.  If so, there is no evidence that HJG has any entitlement to be compensated for any loss arising from the actions of his lawyers.  There appear to be no current complex decisions to be made.  
[20]	As the Tribunal would not make an appointment of an administrator based on the evidence currently provided to the Tribunal, the only option is to revoke the appointment of HB as administrator for the limited matters set out in the order made on 8 August 2012.  
[21]	However, the Tribunal is troubled by the actions of the lawyers acting for HJG.  They were aware that a declaration had been on 8 August 2012 that HJG did not have capacity to instruct his lawyers in the damages claim and specifically to instruct his lawyers in the settlement of that claim.  They were aware that an administrator had been appointed to provide instructions to the lawyers in the damages claim and then to manage any damages recovered in that claim. 
[22]	They were aware on 16 April 2015 that the appointment of the administrator had not been revoked yet the administrator was not asked to provide instructions as to the settlement of the claim nor to sign the settlement agreement nor to sign the discharge form.  The solicitors paid out the damages direct to HJG despite being aware that an administrator had the sole authority to manage those funds on behalf of HJG.  
[23]	While the declaration about capacity was in force and while there was an administrator appointed to make specific decisions for HJG, it was not open to the solicitors to unilaterally decide that HJG had capacity to provide them with instructions or that he had capacity to manage the damages funds.  The proper course would have been to apply to QCAT for an order revoking the appointment and for a declaration that HJG had capacity to make his own decisions.  The solicitors were aware of the ability of QCAT to vary or revoke the appointment prior to the settlement of the damages claim as they had made enquiries with the Tribunal about this issue in January 2015. 
[24]	While an administrator is in place, an adult does not have the ability to lawfully make decisions which come within the scope of decisions covered by the administrator’s appointment. This position even applies where the adult has capacity but an earlier appointment had not yet been revoked. The Court of Appeal in Bergmann v DAW  clarified this issue in 2010.  McMurdo P said: The better view, in my opinion, is that an order under s 12 suspends the right of the adult subject to the order to deal with financial matters under the Act, even where the adult has capacity in fact, as long as the order is in force.     
[25]	Muir JA in the same case also said: If the Act did not operate to deprive the adult of the powers assumed by the administrator, the protection that s 12 is plainly intended to provide to a person of impaired capacity would be negated in whole or in part. There would be dual control over the adult's "financial matters": surely a result which the Legislature could not have intended.    
[26]	HJG simply did not have any power to provide instructions to his lawyers to settle his claim.  He could not give a valid discharge to the defendant.  The damages should not have been paid directly to him by his lawyers as they knew there was an administrator appointed for the very task of managing those funds due to a finding by the Tribunal about the adult’s incapacity to make decisions about complex financial matters.  The actions of the lawyers are inexplicable, displayed no respect for the Tribunal’s authority and appear to fall below the standard of conduct expected of competent lawyers.  
[27]	The Tribunal will refer a full version of these reasons to the Legal Services Commissioner to consider the actions of HJG’s lawyers in relation to the settlement of the damages claim and the payment of the recovered funds to HJG.