Avoid conflict transaction
37 Avoid conflict transaction
An administrator for an adult may enter into a conflict transaction only if the tribunal has authorised the transaction, conflict transactions of that type or conflict transactions generally.
Note—See section 152 for the authorisation of conflict transactions by the tribunal.
A conflict transaction is a transaction in which there may be conflict, or which results in conflict, between—
the duty of an administrator towards the adult; and
either—
the interests of the administrator or a person in a close personal or business relationship with the administrator; or
another duty of the administrator.
Examples—
1 A conflict transaction happens if an adult’s administrator buys the adult’s car.
2 A conflict transaction happens if an adult’s administrator lends the adult’s money to a close friend of the administrator.
3 A conflict transaction happens if an adult’s administrator rents the adult’s residential property to the administrator or a relative of the administrator.
4 A conflict transaction happens if an adult’s administrator uses the adult’s money to pay the personal expenses of the administrator, including, for example, the administrator’s personal travel expenses.
5 A conflict transaction happens if an adult’s administrator buys the adult’s house.
6 A conflict transaction does not happen if an adult’s administrator is acting under section 55 to maintain the adult’s dependants.
However, a transaction is not a conflict transaction merely because—
the administrator is related to the adult; or
the administrator may be a beneficiary of the adult’s estate on the adult’s death; or
by the transaction the administrator in the administrator’s own right and on behalf of the adult—
deals with an interest in property jointly held; or
acquires a joint interest in property; or
obtains a loan or gives a guarantee or indemnity in relation to a transaction mentioned in subparagraph (i) or (ii).
Also, to remove any doubt, it is declared that the making of a gift or donation under section 54 is not a conflict transaction.
A conflict transaction between an administrator and a person who does not know, or have reason to believe, the transaction is a conflict transaction is, in favour of the person, as valid as if the transaction were not a conflict transaction.
In this section—joint interest includes an interest as a joint tenant or tenant in common.
This Act’s bill:Explanatory memorandum
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