Navigating Section 109 of the Guardianship and Administration Act: Orders for Records, Accounts and Audits

Introduction to the Facts

In OR [2024] WASAT 2, heard before Ms R Bunney at the State Administrative Tribunal of Western Australia, a dispute arose under the Guardianship and Administration Act 1990 (WA) (GA Act), particularly focusing on the interpretation and application of section 109. The case involved OR, the donor, and VR, the donee, engaged in a series of financial transactions under an enduring power of attorney (EPA). OR, while retaining the capacity to make decisions, alleged that VR conducted significant financial transactions without his consent or knowledge, which were deemed against his interests.

Legal Framework under the GA Act

The GA Act, particularly section 109, governs the conduct and obligations of donees of enduring powers of attorney. This case hinges on the interpretation of section 109(1), which stipulates conditions under which a person may seek orders from the Tribunal regarding the actions of a donee. Key issues include whether the transactions were made ‘in connection with the power’ and whether OR, as the donor, had a ‘proper interest’ in the matter.

Examination of Specific Transactions

The Tribunal scrutinized four significant transactions conducted by VR. These included the transfer of funds, changes in the control of a family trust, and alterations to the beneficiary status within the trust. The critical analysis focused on whether these actions were in the best interests of OR and complied with the fiduciary duties expected under the GA Act.

Tribunal’s Findings

  1. Proper Interest and Transactions In Connection with the Power: The Tribunal found OR had a proper interest under s 109(1), as he was the donor affected by transactions he was unaware of (BFO & ORS and KPW [2014] WASAT 68). The First and Second Transactions were directly connected to the EPA, as VR utilized it to affect these transactions. The Third and Fourth Transactions, although more complex, were also linked to the power granted under the EPA.

  2. Duty of a Donee: The Tribunal highlighted the fiduciary nature of the donor-donee relationship, underscoring the duty to act in the donor’s best interests and avoid conflicts of interest (Dal Pont, Powers of Attorney; Butterworths, Australian Legal Dictionary). The donee’s actions must adhere to the 'conflict rule' and the 'profit rule', ensuring no personal gain at the expense of the donor (DW and JM [2006] WASAT 366).

  3. VR's Compliance with Duties: The Tribunal concluded that VR’s actions did not align with the duty of protecting the donor’s interests. The transactions conducted were found to be against OR’s interests, thus failing to comply with section 107(1)(a) of the GA Act. This finding was pivotal in considering the application of section 109(1).

Tribunal’s Discretion under Section 109(1)

Despite the above findings, the Tribunal chose not to exercise its discretion under s 109(1)(a) and (b) to require VR to file and audit accounts of her transactions. This decision was based on the fact that OR had eventually received all necessary information through the Family Court proceedings, thus rendering the specific remedy sought under the GA Act redundant (EW [2010] WASAT 91; PT [2020] WASAT 147). The Tribunal’s decision underscores the importance of the Tribunal’s role in supervising the conduct of donees, while also recognizing the limitations of its jurisdiction when parallel legal proceedings provide sufficient remedies.

Applicable law

Section 109 of the Guardianship and Administration Act 1990 (GA Act) allows a person with "proper interest" to apply to the State Administrative Tribunal (Tribunal) for orders regarding an enduring power of attorney (EPA). This includes requiring the attorney (donee) to provide records and accounts of dealings made under the EPA and requiring an audit of those records [s109(1)(a)-(b)].

The Tribunal has supervisory jurisdiction over EPAs to ensure attorneys fulfil their legal obligations, even if the donor has capacity [para 5]. Attorneys owe fiduciary obligations to donors as the relationship is agential and fiduciary in nature [para 9, 14].

Key duties are to:

  • Exercise powers under the EPA with reasonable diligence to protect the donor's interests [s107(1)(a), para 15]. Failing this exposes the attorney to liability for loss [s107(1)(a)].

  • Avoid conflicts of interest and act in the donor's best interests, not the attorney's own interests [para 14, 17, 91]. This includes not profiting from transactions without the donor's fully informed consent [para 11, 17].

  • Keep accurate records and accounts of dealings under the EPA [s107(1)(b)].

Breach of these duties constitutes grounds for Tribunal scrutiny and intervention [para 13, 71-75]. However, mere suspicion of breach is insufficient [para 7, 8].

The Tribunal has power to order attorneys to file all records and accounts regarding EPA dealings [s109(1)(a), para 18] and can appoint an auditor [s109(1)(b)]. However, these orders only compel production of existing records rather than creation of new records [para 19]. Any further remedies for breaches must be pursued in other jurisdictions [para 19].

In determining whether to order production of records or an audit, the Tribunal will consider if:

  • The applicant has "proper interest" in the matter [para 20-21]. This usually requires a genuine concern regarding an attorney's compliance with duties [para 14, 20].

  • The dealings were "in connection with" the EPA [para 22-25]. Even indirect connections can enliven Tribunal scrutiny where earlier connected dealings enabled the later dealings [para 23-25].

  • There are grounds for suspecting breach of duties under the EPA [para 7-8, 13, 71-75]. Suspicion alone is insufficient [para 8].

If such factors are present, the Tribunal has discretion whether or not to make orders under s109(1)(a)-(b) based on the circumstances [para 87-90].

Other remedies may also be available in other jurisdictions [para 19, 89].

Key cases cited as authority:

  • EW [2010] WASAT 91 at [94], [101]: mere suspicion of breach insufficient for Tribunal intervention

  • KS [2008] WASAT 29 at [26], [47]-[59]: Tribunal has supervisory role regarding EPAs even if donor has capacity

  • PT [2020] WASAT 147 at [33]: mere suspicion insufficient

  • SMM [2020] WASAT 85: Tribunal will scrutinise dealings suggesting breach of attorney duties

  • DW and JM [2006] WASAT 366 at [5], [40]: attorney's key duty to avoid conflicts of interest

  • BFO & ORS and KPW [2014] WASAT 68 at [28]: applicant must have proper interest

Key legislation:

  • GA Act s107(1)(a)-(b): attorney duties

  • GA Act s109(1)(a)-(b): Tribunal powers re: records, accounts and audits