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Public Trustee of Queensland investigated for high fees and financial mismanagement

“The nine most terrifying words in the English language are: I’m from the Government, and I’m here to help.”

President Ronald Reagan, AUGUST 12, 1986

The facts

The Public Trustee of Queensland is a public body charged with managing the finances of some of the most vulnerable members of the community, including those lacking capacity and prisoners.

The Queensland Government has belatedly launched investigations into the Public Trustee of Queensland for its high fees and financial mismanagement.

Some of the horror stories that have been revealed by a Four Corners report in Queensland and Western Australia include the following:

→  Brisbane man Chris Pearson, who has a memory disorder, is estimated to be about $1 million worse off following four and a half years under the office of Queensland’s Public Trustee. The 72-year-old was charged about $250,000 in nursing home fees even though he told authorities he did not want to be there. He has since returned home after a legal battle.
→  A 66-year-old man with a brain injury, Peter Ristic, was charged more than $59,000 in fees by the same Queensland office over four years. Included in those charges was $14,000 in “realty fees” to manage four empty blocks of bushland on the NSW Central Coast valued at just $20,000 in total.
→  In 2019 Perth woman Siham Benz was accused by WA’s Public Trustee of stealing from her dementia-stricken mother. She was acquitted but found out last week that the Trustee’s office deducted $10,000 in legal fees from her mother’s estate to gather evidence and help police build a case against her.

The Public Trustee’s fees are notoriously high. That is why there is significant personal injury case law into whether the Public Trustee of Queensland’s fees incurred as a result of injury are claimable against a Defendant. It’s also why you would be strongly advised not to appoint The Public Trustee as executor of your will if you care about how much the beneficiaries under your will are likely to receive in the end.

Last year, Queensland’s Public Advocate, Mary Burgess, released her report, finding serious issues about the level and complexity of fees, its lack of transparency and “ the Public Trustee earning revenue from clients’ funds”.

Also last year, there was a Supreme Court of Queensland case where Peter Damien Carne, the former Public Trustee of Queensland was mentioned in a report prepared by the Crime and Corruption Commission about alleged corrupt conduct by him .

We are unable to confirm whether the Public Trustee is distracted about Lunar New Year, Transgender Day of Remembrance, paleo pear and banana bread, Mardi Gras and the like, as the Australian Financial Complaints Authority and Department of Finance appear to be.

Relevant Legislation

The Public Trustee Act 1978 (Qld) establishes the Public Trustee of Queensland.

Section 17 of the Public Trustee Act provides that:

“7 Public trustee may fix fees and charges
(1) The public trustee may, by gazette notice, fix fees and charges for services the public trustee performs or provides.
(2) The fees and charges have effect from the day the notice is gazetted or a later day stated in the notice.
(3) The fees and charges must be reasonable having regard to the circumstances in which the service is provided.
(4) In particular, and without limiting subsection (3) , the amount of a fee or charge must be decided having regard to the following—
(a) the type and complexity of the service performed;
(b) the degree of care, responsibility, skill or special knowledge required to perform the service.
(5) Also, the gazette notice may provide that a fee or charge for a service is to be worked out according to—
(a) a stated hourly, daily or other rate; or
(b) the number or type of documents perused.
(6) A gazette notice under this section is subordinate legislation and exempt subordinate legislation.”

Section 17A of the Public Trustee Act provides that:

“17A Priority etc. of fees and charges
(1) The public trustee may retain or pay out of an estate the public trustee is administering, in priority to any other claims—
(a) expenses (including liabilities) a trustee may retain or pay out of trust property, or that the public trustee considers are necessary or expedient for the management of the estate; and
(b) fees payable for a service the public trustee provides.
(2) The public trustee is to decide whether the fees and expenses payable under this section are to be paid from capital or income.
(3) The public trustee has a general lien on all property comprised in an estate the public trustee is administering for the payment of—
(a) fees and expenses payable, including fees and expenses payable under this section for the administration of the estate; and
(b) costs, fees and allowances and charges earned by the official solicitor or another lawyer who is a public service officer for the public trustee in connection with a proceeding relating to the estate.”

Section 51 of the Public Trustee Act provides that:

“51 Public trustee may hold property to which mentally incapable beneficiary is entitled
Where it appears to the public trustee on reasonable grounds that a person who is beneficially entitled to property that is held by the public trustee, including an interest in an estate under administration, is not mentally capable of giving a good discharge for the property and the value of such property as estimated by the public trustee does not exceed $75,000, the public trustee may, subject to any order of the court, retain the property on trust for that person, with power to apply it for his or her maintenance, education and advancement.”

Section 80 of the Public Trustee Act provides that:

“80 Management by public trustee of property of incapacitated person
(1) When the public trustee becomes manager of the estate or part of the estate of an incapacitated person—
(a) the estate under management shall not thereby become vested in the public trustee; and
(b) the public trustee shall be entitled to the possession and management of the same in accordance with the provisions of this division; and
(c) the public trustee shall be deemed to be a trustee; and
(d) the public trustee shall have in respect of matters of a property, monetary, business or like nature or any rights of a property nature (including proceedings or other action to protect property or enforce rights of a property nature, or rights in aid thereof or ancillary thereto) full power and authority, subject to any order of the court to the contrary, to do, in the public trustee’s corporate name or in the name of the incapacitated person, anything which the incapacitated person could do if the incapacitated person were not under a legal disability; and
(e) without limiting the generality of the foregoing, but subject to the other provisions of this part, the public trustee may apply any property of the incapacitated person or otherwise exercise any of the public trustee’s powers under this division for any of the following purposes—
(i) the maintenance or benefit of the incapacitated person;
(ii) the maintenance or benefit of other persons (whether relatives of the incapacitated person or not) for whom a reasonable person, not under a legal disability but otherwise in the position of the incapacitated person, might be expected to provide;
(iii) any purpose which a reasonable person, not under a legal disability but otherwise in the position of the incapacitated person, might be expected to seek to achieve;
and for the reimbursement, with or without interest, of any person for any expenditure incurred for any of such purposes.
(2) Without limiting the generality of subsection (1) the powers of the public trustee shall extend to the following—
(a) taking proceedings to recover any legacy or distributive balance in the estate of a deceased person to which the incapacitated person is entitled;
(b) requiring any person holding or controlling property in respect of which the incapacitated person is beneficially interested as cestui que trust, beneficiary or next of kin to render to the public trustee all such information as the incapacitated person could have required if the incapacitated person were not under a legal disability, and taking all such proceedings to enforce such rights as the incapacitated person could have taken;
(c) demanding, receiving and recovering property held on trust for the incapacitated person and requiring any person holding or entitled to deal with property, in respect of which the incapacitated person is beneficially interested, to deal with such property, to the same extent as the incapacitated person could have required if the incapacitated person were not under a legal disability;
(d) demanding, receiving and recovering all documents, including wills and other testamentary instruments, belonging to the incapacitated person or of which the incapacitated person is, or if not under a disability would be, entitled to possession or custody;
(e) exercising any options or other powers or rights of the incapacitated person arising under any policy of insurance, scheme of superannuation or other arrangement or in respect of any benefit;
(f) making any application under the Succession Act 1981 , part 4 or any other Act, which the incapacitated person would be entitled to make if the incapacitated person were not under a legal disability, or instituting any proceedings under the Maintenance Act 1965 or any other Act or law;
(g) borrowing a sum of money or increasing the amount of any overdraft, loan or advance or securing the payment of an amount by mortgage or charge and entering into such covenants, provisions and agreements relating thereto as the public trustee considers reasonable.
(4) The court may authorise or require the public trustee to perform, carry out or do any duty, act or thing which the court considers desirable in relation to the estate, rights or powers of the incapacitated person.”

Section 91 of the Public Trustee Act provides that:

“91 Public trustee to manage property of certain prisoners
Except as otherwise provided in this part the public trustee shall, without further or other order or authority, be the manager of the estate of every prisoner to whom this part applies.”

Conclusion

The  above legislative provisions give the Public Trustee extraordinary powers over individuals who have the misfortune of being their customers, and appear to give the Public Trustee carte blanche to charge whatever fees they like. Gag laws that prohibit publications about such matters without Court Order only increase the lack of accountability of the Public Trustee.

The problems with the Public Trustee have been long-standing. Queensland Attorney-General Shannon Fentiman’s only very recent concerns about the Public Trustee are disingenuous, or reveal her lack of competence as a state Minister. These reviews are long overdue.

Serious consideration ought to be given to having another body handle some of the Public Trustee’s functions, or have a panel of private/community providers such as insurance companies or superannuation funds who can manage people’s finances at lower cost.

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1 thought on “Public Trustee of Queensland investigated for high fees and financial mismanagement”

  1. My wife and I have had encounters with this service because my mother (deceased) was convinced that they were “above board”. She gave me a reasonable sum of money for our youngest daughter to be given to her 7 years later and she insisted that it was to be in the care of the Qld Trustee. At that tine interest paid was quite reasonable from the banks but the Qld Public Trustee took everything. Hence my wife and I became horribly suspicious of them when my wife received an inheritance from her uncle of a substantial amount while he left his drug affected son a much lesser amount. Into this marched the PT with their lawyers and you can imagine the rest. I have never associated with a more sinister group of people.

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