AG
[2007] WASAT 7
•12 JANUARY 2007
AG [2007] WASAT 7
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2007] WASAT 7 | |
| GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) | |||
| Case No: | GAA:421/2006 | 18 MAY 2006 AND 11 JULY 2006 | |
| Coram: | MS F CHILD (MEMBER) DR E LEIPOLDT (SENIOR SESSIONAL MEMBER) MS R CARROLL (SENIOR SESSIONAL MEMBER) | 11/01/07 | |
| 24 | Judgment Part: | 1 of 1 | |
| Result: | Administrator appointed Remuneration ordered | ||
| B | |||
| PDF Version |
| Parties: | AG PERPETUAL TRUSTEES |
Catchwords: | Guardianship and administration Appropriate appointee remuneration of the administrator Past remuneration Rate of future remuneration Expenses |
Legislation: | Guardianship and Administration Act 1990 (WA), s 3, s 4(2)(f), s 64, s 68, s 68(2)(a), s 68(2)(b), s 72, s 72(2), s 72(3), s 80, s 80(3), s 87, s 00, s 117, s 117(3), s 117(4), s 118 State Administrative (Conferral of Jurisdiction) Amendment and Repeal Act 2004 (WA), s 443 State Administrative Tribunal Act 2004 (WA), s 9, s 9(b), s 74(b), s 82 Trustee Companies Act 1987 (WA), s 18 |
Case References: | Jones & Anor v Moylan (1997) 18 WAR 492 Re E 12 SR (WA) 246 SC and SAS [2005] WASAT 255 Willett v Futcher [2005] HCA 47 Nil |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : HUMAN RIGHTS ACT : GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) CITATION : AG [2007] WASAT 7 MEMBER : MS F CHILD (MEMBER)
- DR E LEIPOLDT (SENIOR SESSIONAL MEMBER)
MS R CARROLL (SENIOR SESSIONAL MEMBER)
- Represented Person
PERPETUAL TRUSTEES
Administrator
Catchwords:
Guardianship and administration - Appropriate appointee - remuneration of the administrator - Past remuneration - Rate of future remuneration - Expenses
Legislation:
Guardianship and Administration Act 1990 (WA), s 3, s 4(2)(f), s 64, s 68, s 68(2)(a), s 68(2)(b), s 72, s 72(2), s 72(3), s 80, s 80(3), s 87, s 00, s 117, s 117(3), s 117(4), s 118
State Administrative (Conferral of Jurisdiction) Amendment and Repeal Act 2004 (WA), s 443
State Administrative Tribunal Act 2004 (WA), s 9, s 9(b), s 74(b), s 82
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Trustee Companies Act 1987 (WA), s 18
Result:
Administrator appointed
Remuneration ordered
Category: B
Representation:
Counsel:
Represented Person : N/A
Administrator : Mr M Fatharly
Solicitors:
Represented Person : N/A
Administrator : Kott Gunning
Case(s) referred to in decision(s):
Jones & Anor v Moylan (1997) 18 WAR 492
Re E 12 SR (WA) 246
SC and SAS [2005] WASAT 255
Willett v Futcher [2005] HCA 47
(Page 3)
Summary of Tribunal's decision
1 On review of an administration order, the State Administrative Tribunal confirmed the appointment of Perpetual Trustees Australia Limited, a trustee company, as administrator for a man diagnosed with Asperger's Syndrome. The company had first been appointed as administrator in 2003 by the Guardianship and Administration Board. The Board authorised remuneration of the administrator but did not specify a rate.
2 The Tribunal considered that the estate under administration was of sufficient size and complexity to warrant remuneration, and the Tribunal ordered that future remuneration of the administrator be at the usual rate charged by the company for this size estate.
3 As the order under review had not expressly provided for the rate of remuneration of the administrator, the Tribunal's order regularised the remuneration of the administrator under the Guardianship and Administration Act 1990 (WA) which requires express authority for remuneration.
4 The Tribunal also considered the past charges applied to the estate since 2003. The Tribunal found that the administrator had acted in good faith and in the mistaken belief it was entitled to be paid remuneration for administration of the estate that was expressly not authorised. Most importantly, as the work had been done and the represented person had benefited from the administration of the estate, it was appropriate that remuneration be authorised for this period to reflect the charges actually imposed.
5 The Tribunal ordered remuneration for the period March 2003 to July 2006 equal to an amount charged by the administrator for that period. Thereafter, the administrator was authorised to charge its published rate of fees for that size estate.
6 The review of the order in this case raised some of the same issues of principle as raised in two other matters before the Tribunal. All three cases were heard together and decisions reserved in each. Written decisions have been delivered in those cases.
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Reasons of the Tribunal
7 These reasons are published pursuant to s 74(b) of the State Administrative Tribunal Act 2004 (WA) (SAT Act) where the State Administrative Tribunal (Tribunal) has reserved a decision, and relate to decisions of the Tribunal in respect of the estate of AG (represented person).
Applications before the Tribunal
8 Applications are brought under the Guardianship and Administration Act 1990 (WA) (GA Act) for leave to apply for review and an application for review of an administration order. The applicant is the Executive Officer of the Tribunal.
9 Section 87 provides that:
"(1) Any person may request the State Administrative Tribunal for leave to apply for the review of a guardianship order or an administration order.
…
(5) The State Administrative Tribunal may -
…
(b) if it is satisfied that because of a change of circumstances or for any other reason a review should be held, grant, either unconditionally or subject to any condition, leave to the person to apply for the review."
11 The reason given for the application for leave to apply for the review is the ambiguity regarding the fees charged by the administrator. The ambiguity lies in the fact that remuneration is being charged but the rate of remuneration was not expressly authorised in orders made by the former Board. It is submitted by the applicant that it is not in the best
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- interests of the represented person that there be ambiguity as to the authorised remuneration.
12 The jurisdiction and functions of the Board were absorbed by the Tribunal from January 2005. The Public Trustee now has in his possession "accounts" files that were previously held by the Board.
13 For the review hearing, the Public Trustee provided a report regarding the estate of the represented person, and one of his officers attended the hearings. Representatives of the administrator, including the Trust Manager and the State Manager, attended the hearing with counsel and provided submissions. The submissions of the Public Trustee and of counsel greatly assisted the Tribunal in considering the issues before it.
14 Leave was granted and the review proceeded. During the hearing it was evident that further information was required. The hearing was adjourned to 11 July 2006 for further information to be provided by the administrator to the Tribunal, in particular to itemise the fees charged during the period of the order, to differentiate the nature of the various charges which might be characterised either as remuneration or reimbursement of expenses, and for submissions as to the appropriate rate of remuneration to be ordered for services rendered by the administrator in the future.
15 The order for adjournment included the following:
"The administrator is to file with the Tribunal by close of business on 30 June 2006 a submission which addresses the following:
(a) The current composition and value of the estate of the represented person as at June 2006;
(b) The full range of the charges currently applied to the represented person's estate, other charges previously but not currently applied, and the nature of the services provided for those charges;
(c) What is charged as expenses of the administration of the estate and during what time periods have those expenses been charged;
(d) Proposals for the rate of remuneration to be fixed by the Tribunal; and
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- (e) Any other matter the administrator considers relevant to these proceedings."
The review
16 The powers of the Tribunal on review of an administration order are set out in s 90 of the GA Act:
"(1) Upon a review of a guardianship order or administration order, the State Administrative Tribunal may, as it considers necessary in the best interests of the represented person, confirm the order or by order -
(a) amend the order so as to make any provision that may be included in a guardianship order or administration order, as the case may be;
(b) revoke the order, or revoke the order and substitute another order for it; or
(c) without limiting paragraphs (a) and (b) -
(i) revoke the appointment of any guardian or administrator;
(ii) appoint a new or additional guardian or administrator;
(iii) appoint an alternate guardian.
Capacity
17 On the review of an order, the Tribunal must consider whether the represented person remains a person for whom an order can be made, that is, to whom s 64 of the GA Act applies.
18 Section 64 provides:
"(1) Subject to section 4, where the State Administrative Tribunal is satisfied that a person in respect of whom an application for an administration order is made under section 40 -
- (a) is unable, by reason of a mental disability, to make reasonable judgments in respect of matters relating to all or any part of his estate; and
(b) is in need of an administrator of his estate, ..."
19 At the time of the appointment of the administrator, the reports before the Board noted that the represented person had a diagnosis of Asperger's Syndrome. Reports of psychological assessments indicate the effect of this diagnosis on the capacity of the represented person to manage aspects of his life. The reports note the difficulty the represented person has in communicating with and engaging with others. A recent report, dated 10 May 2006, from the represented person's general practitioner confirms a diagnosis was made in 2001 and notes that the represented person suffers "acute anxiety" and an "impairment of rational ideas".
20 Based on all the professional reports before the Tribunal we find that the represented person remains a person for whom an administrator may be appointed.
Need for an order
21 The administrator reports the total value of the represented person's estate is approximately $1.59 million, including the property in which he lives, an investment property in another State and other investments.
22 The represented person is incapable of managing his estate and of making judgments about his financial affairs, and we therefore find that he is in need of an administrator of his estate.
Appointment of the administrator
23 As to who may be appointed administrator, s 68 of the GA Act provides as follows:
"(1) An administrator (including a joint administrator) shall be -
(a) an individual of or over the age of 18 years; or
(b) a corporate trustee,
who has consented to act and who, in the opinion of the State Administrative Tribunal -
- (c) will act in the best interests of the person in respect of whom the application is made; and
(d) is otherwise suitable to act as the administrator of the estate of that person.
- (2) The State Administrative Tribunal shall not appoint as administrator a corporate trustee that is a trustee company under the Trustee Companies Act 1987 unless it is satisfied that -
(a) there is an individual who would otherwise be appointed as administrator and that individual has in writing requested the appointment of that trustee company; or
(b) the person in respect of whom the application is made has made a will appointing the trustee company as executor and the will remains unrevoked at the time of the appointment."
25 In the course of the hearing of the review of the order on 18 May 2006, the represented person expressed the preference for the appointment of the Public Trustee rather than the current administrator.
26 In considering any matter relating to a represented person, the Tribunal is bound to ascertain the wishes of that person (s 4(2)(f)).
27 The Public Advocate was directed to investigate whether the wish expressed by the represented person in the review hearing, regarding the replacement of the current administrator, was a continuing one, to investigate the views of his grandmother and mother regarding the proposal and to report on any matter relevant to the determination of the appointment of an administrator in the best interests of the represented person.
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28 At the resumed hearing the representative of the Public Advocate (Public Advocate) reported that although she had met with the represented person, he had indicated to her that he did not have sufficient information to choose between trustees. She reported that she had terminated the interview with him at his request as he was becoming distressed. She had been unable to obtain the views of the mother of the represented person but reported that the grandmother supported the reappointment of the administrator. Her reason for this was that although she was concerned about an increase in fees charged by the administrator, the represented person had an established relationship with the staff of the administrator and it was important that the administrator remained in place because of that continuity.
29 The Public Advocate referred to a letter from the Public Trustee dated 4 July 2006 which provided an estimate of fees which the Public Trustee would be entitled to charge on an equivalent estate.
30 On the information available to the Public Trustee of the value of the estate, the total fees estimated amount to $6473.24 per year with the addition of $2464 payment for a portfolio review undertaken by an external agent. This is compared with what is estimated to be charges of approximately $6000 per quarter by the administrator.
31 The Public Advocate submitted that it was difficult to make a comparison between the fees charged for the services provided by the administrator and that which might be provided by the Public Trustee as the information was incomplete. She suggested that any comparison would require a full examination of fees and services and the different approaches to the management of the investment portfolio by each. She stated that the Public Advocate would find it difficult to make a recommendation. However, she stated she was aware of the longstanding client relationship of some 22 years between the represented person and the administrator. In addition, the service provider working directly with the represented person had developed a good working relationship with the administrator.
32 Counsel submitted that while a comparison could be made between fees charged by the administrator and those of the Public Trustee, it would be hard to make a comparison into the future because of the possibly changing needs of the represented person.
33 He submitted that a comparison between fees charged by the administrator and the Public Trustee had been made in a Queensland case
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- which was later subject to appeal to the High Court. The case cited is Willett v Futcher [2005] HCA 47. Their Honours refer to a comparison accepted by trial Judge of an estimate of fees to be charged by the administrator which were less than that which the Public Trustee was entitled to charge over the lifetime of the trust fund. The case involved the settlement of a personal injuries claim "for $3,850,000 ... plus costs plus trustee Administration and Management Charges". The expected fees to be charged by Perpetuals was $876 506 and the fees which the Public Trustee would charge was $969 336.
34 That case considers what is the appropriate amount which should be allowed for management by an administrator of the damages awarded to a person rendered incapable of managing her own affairs by the defendants' negligence. The Court noted that the case was not an application authorising or fixing the rate of remuneration of the administrator.
35 The Tribunal accepts that there may be circumstances in which the fee structures applied to an estate may result in higher fees being charged by the Public Trustee than by the administrator. However, in the cases where the administrator has been appointed heard together with this one and indeed in this case, the fees estimated by the Public Trustee for administration of the estate of the represented person have been lower than those of the administrator, sometimes substantially so.
36 Counsel submitted that it should not necessarily follow that the Public Trustee be appointed as administrator (for a person under disability) and referred the Tribunal to the case of Jones & Anor v Moylan(1997) 18 WAR 492 where it was held that the governing consideration in the appointment of a trustee to manage funds of a disabled person is what is best done for that person and that there is no more than a predisposition towards the appointment of the Public Trustee.
37 A consideration in that case was the good rapport which the family of the disabled person had with officers of the administrator and their wish that the judgment sum be invested with that trustee (per Wallwork J at 501).
38 We accept the Public Advocate's submission that it is not possible to make a real comparison between the services provided to the represented person by the administrator with those that might be provided by the Public Trustee because of the existing relationship he has with the administrator and because of the differences between the two organisations in the structure of the services provided including the
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- management of investments. Nevertheless, from the material before us, the Public Trustee can and does perform similar functions for persons under administration at a lower cost. Although we accept the Public Advocate's submission that it would be in the best interests of the represented person if he could receive the same services at a lower cost, whether those services would be the same if the Public Trustee was appointed in place of the administrator remains unclear.
39 What is clear is that there is a long established relationship with this administrator and no one takes issue with the proposition by the administrator that the estate has been well managed.
40 Given the nature of the represented person's disability, the very longstanding relationship between the represented person and the administrator and the strongly expressed views of his grandmother, who has been his primary carer for most of his life, we conclude that it is in the best interests of the represented person that the administrator be reappointed.
Remuneration of the administrator
41 Section 117 of the GA Act provides for the circumstances in which an administrator may be remunerated.
"(1) The State Administrative Tribunal may fix remuneration or a rate of remuneration and order that the same be paid to an administrator out of the estate of the represented person if the Tribunal considers that, because of the size or complexity of the estate or both, remuneration should be paid to the administrator.
(2) A guardian, and except as provided in subsection (1) an administrator, shall not receive remuneration for services rendered to the represented person.
(3) Nothing in this section
(a) prevents the Public Trustee from receiving remuneration under the Public Trustee Act 1941; or
(b) limits the operation of section 16 of this Act or section 39, 87 or 88 of the State Administrative Tribunal Act 2004.
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- (4) Subject to subsection (3)(a), a corporate trustee shall only be entitled to commission in respect of the capital of the estate of a represented person to the extent that the State Administrative Tribunal expressly allows."
42 The administrator submits that it should be remunerated for the administration of the estate of the represented person.
43 The Tribunal is satisfied, on the basis of the size and complexity of the estate of the represented person, that remuneration should be paid to the administrator.
Previous orders
44 The order dated 27 March 2003 appointed the administrator with plenary authority and exempted the administrator from filing accounts with the Board on condition that the administrator submit a statement of account and investment portfolio at least annually in the format produced by its accounting package.
45 Following the passage of the State Administrative (Conferral of Jurisdiction) Amendment and Repeal Act 2004 (WA), the functions of the former Board to order or to exempt the examination of accounts submitted by administrators passed to the Public Trustee by amendment of s 80 of the GA Act (see s 443 of the State Administrative (Conferral of Jurisdiction) Amendment and Repeal Act 2004 (WA)). The Tribunal therefore can no longer exempt an administrator from filing accounts.
46 A review of the transcript of the hearing of 27 March 2003 reveals a discussion of the remuneration of the administrator if appointed. A representative of the administrator notes that additional fees would be charged as the administrator was now proposed to take on the role of "bill paying" for the represented person; a task which had previously been undertaken by his grandmother. The fees were in addition to an existing (portfolio management) fee. The representative of the administrator confirms that a fee of $5 is charged per payment for this service. A reference is also made to the existing charges to the portfolio and that the administrator time charges "currently" at an hourly rate of $245 per hour for tasks undertaken for the represented person not associated with the management of the portfolio. No formal orders were sought for remuneration but it appears clear that the existing standard fees of the administrator were proposed to be applied to the estate.
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47 The order was amended by an order dated 4 December 2003 to include a term, which had been omitted from the original order, authorising the administrator to charge fees in relation to the estate of the represented person "as the Board may approve from time to time in writing". The file of the former Board, now in the possession of the Tribunal, does not contain any correspondence to the administrator at that time setting an amount or rate of remuneration. The order itself makes no express provision in respect of commission on capital to be charged by the administrator as required by s 117(4) of the GA Act.
48 The order was reviewed in July 2004, together with two other orders where the administrator had been appointed administrator for the purposes of regularising the issue of remuneration.
49 At the hearing on 16 July 2004 the representative of the administrator stated:
"In relation to our represented person business, we have never applied any fee increase to any of our represented person accounts. In other words we continue to administer the affairs of the represented persons under the fee scales that were in force at the time of our appointment".
50 And later:
"... we are not seeking to move to a new fee scale. We're just seeking confirmation of our fee scales that were in force at the time of our appointment."
51 He initially confirmed to the member that only the portfolio management fee was being charged to the estate and that the transaction fee was not charged. Later in the hearing he clarified that that there had been some hourly charging for the preparation of taxation returns for the represented person.
52 The member reserved the decision but the transcript notes that he would continue to authorise the existing charges applied to the estate.
53 The order made on review dated 16 July 2004 authorises the administrator to charge fees in relation to the estate of the represented person as the Board may approve from time to time in writing.
54 By letter dated 19 July 2004 from the Acting Executive Officer of the Board to the administrator, remuneration was set as a percentage of
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- capital of the estate consistent with the submission made by the administrator. The letter refers to the administrator's published remuneration schedule at the time of appointment. However, no reference is made in the letter to other charges which formed part of the administrator's published remuneration schedule, such as the additional service charge and the transaction fee. The applicant for review submits that while the Executive Officer of the former Board may have had authority to authorise the fees payable to an administrator, the Executive Officer of the Tribunal does not have that authority. We agree with his submission that remuneration can only be fixed by an order of the Tribunal and not in the manner expressed in the order of July 2004 or in the letter of 19 July 2004. Having considered the nature of the estate as it existed at that time, the range of investments and the inclusion of real property and its present value, this Tribunal considers that the size and complexity of the represented person's estate has always justified remuneration of the administrator. The issue that arises in these circumstances is what is the proper rate of remuneration to be ordered.
The rate of future remuneration
55 The administrator is a trustee company whose activities, including the charging of fees, is regulated by the Trustee Companies Act 1987 (WA) (TC Act). The TC Actcreates a regime for the remuneration of corporate trustees. As will be seen below, the TC Actdoes not provide authority or fix a rate for fees applicable to represented estates under the GA Act. The administrator seeks orders that fix the rate of remuneration at its published fees, as varied by notice from time to time. The effect will be that the rate of fees can be amended in accordance with the requirements in the TC Act.
56 The charges that the administrator proposes fall into the following categories:
(a) a "Portfolio Management Fee",
(b) an "Additional Service Fee" including charges for the preparation and lodgement of taxation returns, and
(c) a "Transaction Fee", and
(d) a fee on each transaction.
57 The rate of charges published by the administrator as at 24 January 2005 include the following:
(a) Portfolio Management Fee
- 1.925% per annum on the gross value of assets up to $500 000
$1.375% per annum on the gross value of assets over $500 000 up to $1 000 000
0.825% per annum on the gross value of assets up over $1 000 000 up to $300 000 000
0.530% per annum on the gross value of assets over $300 000 000
This fee is calculated as a percentage on capital of the estate. It is, in effect, the commission on capital referred to in s 117(4) of the GA Act.
- (b) Additional Service Fee now charged at $300 per hour including the preparation of tax returns.
(c) Transaction Fee $5 per transaction.
58 A number of arguments were advanced during the hearing in support of the proposal to fix the rate of remuneration at the administrator's published fee. Reference was made to the TC Act, which provides the regime for the remuneration of corporate trustees. The requirement under the TC Act that fees be published provides transparency and certainty to the question of remuneration in respect of all estates under administration or management. Furthermore, counsel submitted that the administrator is a public company which provides its services to clients on a commercial basis and is not operating for charitable purposes.
59 Counsel submitted further that by fixing the remuneration to the published schedule, the order will not need to be reviewed by the Tribunal if the rate changes. This will save resources both of the administrator (with costs that might in the future be passed on to the represented person) and the Tribunal, by avoiding further review hearings. In this respect, the orders proposed by the administrator can be seen to be consistent with the objectives of the Tribunal as set out in s 9 of the SAT Act. Specifically, s 9(b) provides that the Tribunal's main objectives include "to act as speedily and with as little formality and technicality as is practicable, and minimise the costs to parties …"
60 In contrast, there are arguments against the proposal. The current practice of the administrator, of fixing the applicable fee at the rates applicable at the time of appointment, provides certainty about the costs
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- of administration for the represented person, and for persons who might fall into the category of persons to whom s 68(2)(a) applies.
61 If the fee to be charged is fixed at the time of appointment, the administrator will need to seek a review if it intends to change that rate. Although this may create some administrative burden (and added costs), there is no procedural barrier to this review, as an administrator may apply for review of the order at any time. It can be argued that in this jurisdiction, regular oversight by review of orders provides an appropriate level of protection for a person incapable of making reasonable judgments about his or her estate. Then again, the role of the Public Trustee in examining accounts does provide an opportunity for review of administration orders by the Tribunal, on the application of the Public Trustee for leave, if there are unexplained irregularities in the administration of the estate, including remuneration of the administrator.
62 The previous attitude in this jurisdiction to remuneration is revealed in an early decision of the Board. In Re E 12 SR (WA) 246, the Full Board considered the rate of remuneration of the administrator. At the hearing, the Board considered the types of remuneration which might be applied, and received information of the approach taken in other jurisdictions. Having reviewed material from Victoria, the Board agreed with the Victorian Board's requirement "that financial reports be seen by a relative or close friend in order that there is observance of what the administrator is doing". The Board also agreed, in that case, that the fee structure be "patent and predictable". The Board, in that case, accepted the submission of the administrator that income-based and hourly charges were inappropriate. Hourly charging was seen as "fundamentally problematical in terms of its open-ended nature, potentially leading to "an unknown quantum of costs".
63 According to the reasons at the time the order was made in Re E, the capital commission charged by the administrator was said to cover all the functions which now attract the additional service charge, which is charged at an hourly charge.
64 The argument was advanced in the hearing that the rates of remuneration under s 117 should be fixed in the same way as fees may be charged under the TC Act. The regime in s 18 of the TC Act however, by its terms, provides for remuneration of the administrator for the provision of its services, other than for appointments made pursuant to the GA Act. In respect to the appointment of an administrator under the GA Act, the provisions of s 117 apply. The terms of s 117 are specific in their
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- application and are prescriptive, and therefore the provisions of the TC Act do not have direct application. (The provisions of the TC Act relating to fees and charges do, however, reflect Parliament's more general intention as to the proper way for trustee companies to charge fees for services rendered.)
65 It appears from s 117 of the GA Act that Parliament's intention was somewhat different for matters under the GA Act. That provision requires express authorisation in each case where there is to be management of the estate of an incapable person and remuneration for that service.
66 Reading s 117 with s 68 of the GA Act, we conclude that there is a statutory preference for an unpaid individual to act as administrator over a corporate trustee, where such a person who is suitable for appointment exists in the life of the represented person. That statutory preference of an individual over a corporate trustee as administrator does not apply to the Public Trustee. Although the definition of "corporate trustee" in s 3 of the GA Act includes the Public Trustee, the Public Trustee is not a trustee company listed in the Schedule of the TC Act, and so the requirements of s 68(2)(a) or s 68(2)(b) of the GA Act do not apply to an appointment of the Public Trustee.
67 As noted above, the administrator is reappointed in this case, but considering the intersection of the various provisions it may be that there is more than a "predisposition" in the GA Act in favour of the appointment of the Public Trustee when the decision is taken to appoint a corporate trustee.
68 Having said that, we conclude that once the decision is made by the Tribunal that it is appropriate to appoint a private trustee company, the appointment must take into account the nature of the administrator and the services it provides, and contemplate the remuneration of that administrator, on the usual commercial terms applicable to that organisation. Consequently, great care needs to be taken to consider the financial implications to the estate in making such an appointment.
69 We have determined that it is in the best interests of the represented person the administrator's appointment be confirmed and that the size and value of the estate justifies remuneration. Taking into account the arguments for and against authorising the published rate as amended from time to time in accordance with the TC Act, we conclude that it is, on balance, appropriate to fix the rate for future remuneration in those terms.
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- We are persuaded that this provides the necessary certainty and transparency in relation to the fees to be charged to the estate.
Past remuneration
70 The administrator seeks a further order authorising the retention of payments made to itself from the estate of the represented person which were not expressly authorised by orders of the Board.
71 The written submission of the administrator submitted for the review hearing refers to the TC Act and states that in the usual course, matters committed to its management would attract the fees applicable under s 18 of that Act, and that it mistakenly operated on the assumption that it was entitled to charge the published fee.
72 The written submission of the administrator does not address the provisions of s 117, but it was conceded by counsel during the hearing that s 117 of the GA Act is the relevant provision for the determination of the remuneration of an administrator appointed under the GA Act, not s 18 of the TC Act. It was submitted by counsel that the TC Act provides a context in which to consider the fees charged by an administrator generally acting under that Act, but that it does not determine the remuneration of an administrator appointed pursuant to the provisions of the GA Act.
73 Information regarding the fees charged by the administrator to the estate of the represented person since appointment as plenary administrator on 27 March 2003 to 30 June 2006 were provided to the Tribunal as follows:
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- financially and is in the same position he would be in had the "appropriate order" been made.
75 The administrator has maintained that the fees charged to the estate were those existing at the time of appointment (with an increase in the additional service fee hourly rate from May 2005). In the course of the review hearings before the Board and the Tribunal, there was some conflicting information about the transaction fee; whether it had been applied to the estate, had been "turned off" (transcript 18 May 2006) deliberately or had been mistakenly not applied, or had only been applied for part of the period of the administration. Whatever the position from the point of view of the administrator, the transaction fee and the additional service fee have not been authorised.
76 The administrator seeks an order extending the terms of the order to allow for the additional fees to be charged in the future and to retain those fees charged but not expressly authorised.
77 The following questions arise in respect of this application:
78 Firstly, does the Tribunal have the power to order remuneration for services provided that were not expressly authorised at the time of the payments?
79 Secondly, if s 117 does provide for authorisation of remuneration for past services, should the Tribunal make such an order, and if so, what amount by way of remuneration should be ordered to be paid out of the represented person's estate?
80 In respect of the first question whether the Tribunal has the power to make the order sought, s 117(3) of the GA Act provides that a corporate trustee is not entitled to remuneration unless the Tribunal expressly allows. It does not follow from this that an administrator who has not been entitled to remuneration (as there was no express provision for it) could not, at a later time, become entitled to remuneration once an order to that effect is made. The section gives the Tribunal (and formerly the Board) the discretion to order remuneration be paid to an appointed administrator.
81 Counsel submits that there is nothing in the language of the section or in the GA Act that requires that such an order be made at the time of the appointment. Indeed, it may be the case that an administrator who seeks to be paid for services may be asked to submit a proposal for remuneration following his or her appointment and that the Tribunal will
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- later make orders fixing the remuneration. Counsel referred to a case in his submissions regarding whether remuneration should be ordered where just this situation arose: see SC and SAS[2005] WASAT 255. In that case, an individual proposed himself as administrator and was appointed by the Tribunal. He sought remuneration and was asked to submit a proposal outlining his proposed fees. On review of the order, the appointment of the administrator was confirmed and remuneration was ordered as an annual figure.
82 Pursuant to s 82 of the SAT Act, a decision comes into effect immediately after it is given or at such latertime as is specified (emphasis added.) This implies that orders of the Tribunal should not operate retrospectively. This is consistent with the general principle against retrospective operation of legislation.
83 An order setting remuneration for a period of an administration order, which includes a period in the past, would authorise receipt of past payments and have a retrospective effect but would not be an order that is retrospective in operation.
84 Even if s 117 of the GA Act does not operate so as to allow for payment for services rendered in the past, s 72 of the Act gives wide-ranging powers to the Tribunal to make orders necessary for the proper administration of an estate. Section 72 provides:
"(1) The State Administrative Tribunal may give any direction, make any order or do any other thing provided for in Part B of Schedule 2.
(2) Without limiting this section or section 71, the State Administrative Tribunal may make any other order (whether or not of the same nature as those so provided for) that it thinks necessary or expedient for the proper administration of the estate of the represented person.
(3) Notwithstanding this section or section 71, an administrator shall not without the authority of the State Administrative Tribunal under section 71(5) -
(a) make a payment or disposition of a charitable, benevolent or ex gratia nature; or
- (b) make a payment in respect of a debt or demand that the represented person is not obliged by law to pay."
85 Section 72(2) confers a very wide power to make any order necessary or expedient for the proper administration of the estate of a represented person.
86 The question of ex gratia payments is dealt with separately in s 72(3) and prohibits "gifting" without authority of the Tribunal. The examination of accounts by the Public Trustee is relevant to this issue. Section 80(3) of the GA Act provides:
"The Public Trustee shall examine any accounts lodged under subsection (1) or delivered under subsection (2) and may -
(a) allow them;
(b) disallow any amount paid;
(c) determine that any amount or asset has been omitted, or that any loss has occurred."
88 We conclude, on the basis of s 117 of the GA Act and the other sections referred to, that nothing in the Act precludes the Tribunal from ordering that the administrator receive payment for remuneration for past services, where those services can be quantified and where there is a good reason for doing so.
89 Having decided that remuneration should be ordered for the period of the order, the next issue is what amount by way of remuneration should be ordered to be paid out of the represented person's estate for the period? In this case, the administrator disclosed the type of fees to be charged fees at the original hearing of the application. No formal order in those terms was sought or made by the Board.
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90 We consider that, in all the circumstances, the amount of remuneration which should be fixed for the period 27 March 2003 to 30 June 2006 is the amount charged in that period.
91 From 30 June 2006 the administrator is authorised to charge its published rate of remuneration as notified as 1 January 2005 and as changed from time to time.
Recovery of expenses by the administrator
92 Provision is also made in the GA Act for the reimbursement by an administrator of expenses reasonably incurred. Section 118 provides:
"An administrator may re-imburse himself for or pay out of the estate of the represented person all expenses reasonably incurred in or about the performance of his functions."
93 At the first hearing, there was some uncertainty as to whether the transaction fee should be regarded as a recoupment of out of pocket expenses, and as such, an expense, or should more properly be seen as an element of the remuneration of the administrator. At the second hearing, this aspect was clarified, and the submission of counsel on behalf of the administrator was that the transaction fee did constitute an aspect of the remuneration.
94 Whether a charge imposed by an administrator is, in effect, remuneration of the administrator is a matter for the Tribunal and subject to the terms of s 117. After the decision in this matter was reserved, counsel for the administrator made known, by letter dated 8 August 2006, to the Tribunal that, contrary to his submissions in the hearing, the administrator treats the fixed rate transaction fee as an expense recovery fee. That is, it is an amount paid to the administrator by way of expenses and disbursements on transactions. A further submission filed on 15 September 2006 refers to the transaction fee in the following terms:
"Perpetual Trustees maintain that the purpose of the $5 transaction fee is to recoup out of pocket expenses rather than a form of remuneration. Given the nature of the expenses referred to in our letter of 8 August 2006, such as postage, couriers, photocopying, bank charges, telecommunications charges and settlement fees, it would be impractical and administratively far more difficult to precisely cost out every out of pocket expense in relation to each transaction. Those expenses, which are not necessarily expenses incurred to third
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- parties, but operational costs in undertaking transactions, are offset by the $5 transaction fee and by the retaining of interests as specified in our letter."
95 Having considered the submissions of the administrator and a further submission filed on 30 August 2006 by the Public Trustee, we consider that the $5 transaction fee is a form of remuneration. Although we accept that a component of the fee is for the recovery of expenses of the administration, the administrator has noted the difficulty in precisely identifying out of pocket expenses in each transaction, and that the $5 transaction fee includes a component of "operational costs in undertaking transactions". In the submission of the Public Trustee, it is noted that "the transaction fee is often raised where Perpetual incur no external expenses, such as crediting the receipt of interest or dividends".
96 We note that whether an "expense", properly construed, is reasonably incurred by an administrator, is a matter for consideration when the accounts are examined by the Public Trustee. This fee is proposed in the suite of charges imposed on all clients of the administrator, and in the interests of certainty and consistency, we consider that that charge should be included in the remuneration authorised.
Orders
97 On review of the administration order dated 16 July 2004, the order is revoked and an administration order in the following terms is substituted for it:
1. Perpetual Trustees WA Limited of Level 29 Exchange Plaza, 2 The Esplanade, Perth, Western Australia is appointed plenary administrator of the estate of the represented person with all the powers and duties conferred by the Guardianship and Administration Act 1990 (WA).
2. Remuneration of the administrator is authorised:
(i) for the period 27 March 2003 to 30 June 2006 in the amount charged by the administrator in that period.
(ii) from 30 June 2006 at its published rate of remuneration as notified at 1 January 2005 and as changed from time to time.
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- 3. This order is to be reviewed by 12 January 2012.
I certify that this and the preceding [97] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MS F CHILD, MEMBER
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