AM
[2017] WASAT 65
•1 MAY 2017
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA)
CITATION: AM [2017] WASAT 65
MEMBER: MR J MANSVELD (SENIOR MEMBER)
HEARD: 20 FEBRUARY 2017
DELIVERED : 1 MAY 2017
FILE NO/S: GAA 5613 of 2015
BETWEEN: AM
Represented Person
Catchwords:
Guardianship and administration - Administration - Directions to administrator - Capacity - Mental disability - Reasonable judgments - Declaration that person in need of administrator of his estate - Once declaration made represented person considered incapable of entering into contracts subject to certain exceptions - Exceptions include any contract for necessaries
Legislation:
Guardianship and Administrator Act 1990 (WA), s 4, s 17(A), s 31(4), s 64(1)(a), s 64(1)(b), s 65, s 70, s 71(4), s 72(2), s 74, s 77, s 84, s 86, s 90(1), s 97 (1)(b)(i), s 97(1)(b)(iii)
Result:
Public Trustee appointed as plenary administrator
Summary of Tribunal's decision:
AM was a 51yearold man who sustained an accident at his work in 1994. He settled a workers' compensation claim for $2.56 million in 2010.
On 10 March 2015, the Tribunal appointed the Public Trustee as the plenary administrator of AM's estate with certain directions. The order was made in the Tribunal's jurisdiction under the Guardianship and Administration Act 1990 (WA).
During the term of the administration order, the administrator applied for a review seeking to have the directions revoked.
In the course of the review proceeding, AM's former legal representative sought a direction from the Tribunal that the administrator be required to pay outstanding fees for legal services amounting to $10,920.25.
The administrator had refused to pay the legal fees because AM was alleged to have been incapable of entering into a contract for legal services once the administration order had been made and further there was insufficient information provided by the former legal representative to warrant a decision that the legal fees incurred were a contract for necessaries.
The former legal representative argued that the contract for legal services entered into by AM prior to the administration order, should continue because there had been a continuity of legal representation. Further the legal services provided after the making of the administration order were necessary given the difficulties faced by AM in his communications with the administrator.
The Tribunal decided to reappoint the Public Trustee as the plenary administrator of the estate of AM. The Tribunal did not include any directions in the order, having determined that the need to give AM as much independence as possible in the context of a protective administration order could be satisfied by the need for the administrator to form an opinion of his best interests, taking into account the factors contained in s 70 of the Act.
The Tribunal decided not to make the direction sought by the former legal representative.
The Tribunal did not accept that once the administration order was made, the former legal representatives could rely upon a contract for legal services entered into prior to the order, except in limited circumstances.
Section 77 of the Act made it clear that once the Tribunal had declared that AM was in need of an administrator, he was not, subject to certain exceptions, considered capable of entering into contracts.
The Tribunal decided that it should proceed with caution before interfering in the daytoday management of AM's estate by the administrator, and would be more likely to consider a direction when sought by the administrator, which even then, may or may not be given.
As a claimed creditor of AM's estate, the former legal representative was able, in the normal course, to take action for recovery of the alleged debt in the same way as any other creditor.
Category: B
Representation:
Counsel:
Represented Person : N/A
Solicitors:
Represented Person : N/A
Case(s) referred to in decision(s):
AM [2015] WASAT 24
FS [2007] WASAT 202
McLaughlin v Freehill (1908) 5 CLR 858
Nash v Inman [1908] 2 KB
Public Guardian v Guardianship and Administration Board [2011] TASSC 31
Re The Full Board of the Guardianship and Administration Board 2003 WASCA 268
S v State Administrative Tribunal of Western Australia [No2] [2012] WASC 306
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
AM is a 51yearold man who sustained an accident at his work in 1994. He settled a workers' compensation claim for $2.56 million in 2010.
On 10 March 2015, the Tribunal appointed the Public Trustee as the plenary administrator (administrator) of AM's estate with certain directions (March 2015 order).
The March 2015 order, was made in the Tribunal's jurisdiction under the Guardianship and Administration Act 1990 (WA) (GA Act).
The March 2015 order was set for review in 18 months.
The Tribunal's decision and reasons were published as AM [2015] WASAT 24 (AM).
Reference will be made to AM in the course of these reasons.
Under the March 2015 order, the administrator was directed as follows (March 2015 directions):
•an annual budget of AM's non-capital expenditure was to be developed in consultation with him;
•once established the budgeted amount was to be paid to AM in a lump sum for him to manage; and
•the administrator was to monitor AM's expenditure to ensure that essential expenditure such as utilities and property expenses were paid.
In December 2015, the administrator applied for a review of the March 2015 order under s 86 of the GA Act, seeking removal of the March 2015 directions concerning the provision of an annual budget amount to AM (s 86 review).
In the course of the s 86 review, AM's former legal representative (X Legal), sought a direction from the Tribunal that the administrator pay outstanding legal fees from AM's estate. The administrator had refused to pay those fees (legal fees matter).
The administrator and X Legal were directed to file written submissions.
A question arose as to whether X Legal was in a position to continue to represent AM in the s 86 review, given the legal fees matter. X Legal subsequently withdrew its legal representation of AM in March 2016.
The administrator advised it was willing to continue to pay fees for legal representation of AM in the s 86 review notwithstanding the dispute contained in the legal fees matter.
On 28 April 2016, the day before the scheduled hearing of the s 86 review, AM filed a medical certificate with the Tribunal and advised that he was unable to appear in person or by telephone. He stated he was seeking further medical assistance.
On 17 May 2016, AM was directed to advise the Tribunal by 31 May 2016 of his available dates for the hearing of the s 86 review, and of any medical or allied health assessments in which he intended to rely, regarding his capacity to make decisions about his financial affairs.
AM attended a directions hearing on 13 June 2016. He was given further time to obtain legal representation regarding the s 86 review and to obtain specialist assessment of his capacity.
At the hearing on 13 June 2016, I decided to suspend the operations of the March 2015 directions pending the final outcome of the s 86 review.
AM did not provide any of the information as directed.
A further directions hearing was held on 19 October 2016 to consider whether a litigation guardian should be appointed for AM.
AM did not attend the directions hearing.
I decided ultimately to refer the s 86 review to the Public Advocate pursuant to s 97(1)(b)(iii) of the GA Act. The referral required the Public Advocate to consider and report on the following:
•whether AM remained in need of an administrator;
•whether the March 2015 order was operating in AM's best interests and whether any amendment should be made to the order;
•to ascertain the views and wishes of AM regarding the issues raised in the s 86 review; and
•all other matters the Public Advocate considered relevant.
Under s 97(1)(b)(i) of the GA Act, it was the role of the Public Advocate at hearings before the Tribunal to seek to advance AM's best interests.
Nothing further was heard from AM.
The s 86 review was set for a final hearing on 20 February 2017. The hearing was attended by a legal officer of the administrator, a Senior Investigator with the Public Advocate (Senior Investigator) and AM's father, RM. Attempts by the Tribunal to make contact with AM on the day of the hearing were unsuccessful. AM had not made any submission for a further adjournment.
AM's conduct was unfortunately consistent with what occurred in the protracted proceedings in the making of the March 2015 order and despite the fact he was then legally represented (AM at [6] [19]).
I therefore decided to proceed with the hearing.
Decision
I decided to revoke the March 2015 order and substitute another order for it.
I appointed the Public Trustee as plenary administrator of AM's estate. I decided not to include any directions to the administrator.
My reasons follow.
I will also deal with the legal fees matter in these reasons.
The s 86 review
Capacity and need
Upon review of an administration order, the Tribunal can confirm the order, amend the order, revoke the order and substitute another order for it, revoke the appointment of any administrator or appoint a new or additional administrator: s 90(1) of the GA Act.
An administration order can be made if the Tribunal finds that by reason of a mental disability, the person is unable to make reasonable judgments in respect of matters relating to all or any part of his estate, and is in need of an administrator: s 64(1)(a) and (b) of the GA Act.
Every person is presumed to be capable of making reasonable judgments in respect of matters relating to his estate unless the contrary is proved to the satisfaction of the Tribunal: s 4(3)(d) of the GA Act.
An administration order shall not be made if the needs of the person can be met by other means less restrictive of the person's freedom of decision and action: s 4(4) of the GA Act.
The primary concern shall be the best interests of the person concerned, and in considering any matter the Tribunal shall seek to ascertain the person's views and wishes: s 4(2) and (7) of the GA Act.
AM had been diagnosed with complex regional pain disorder (CRPD or AM's condition) (AM at [42]). The CRPD had a profound impact on AM's cognition and functioning (AM at [111] [119]).
The only further medical or psychological evidence available for the s 86 review was that of AM's GP, Dr H.
Dr H in a report dated 23 January 2017, stated that he referred AM for psychiatric opinion but that AM did not attend the appointment. Although unsure as to whether AM had the cognitive capacity to make reasonable decisions concerning simple and complex financial matters or legal matters, Dr H stated:
[I] believe there is an underlying mental condition which affects cognition.
The Senior Investigator submitted that based on the information currently available, AM's condition, remained at the very least unchanged from when the administration order was made in March 2015 (Report of the Senior Investigator at page 4).
The administrator's trust manager submitted in a report dated 17 February 2016 that AM could not manage his finances and required help, and in a report dated 14 October 2016 that AM had exhibited some financial independence but continued to require oversight of his finances.
In the report of 17 February 2016, the administrator's trust officer set out in detail the communications with AM and X Legal regarding the difficulties in establishing an annual budget further to the March 2015 directions.
The trust manager stated in the report that AM was paying his accounts, but that there were concerns about his ad hoc purchases. X Legal advised on 15 December 2015 that in the previous six months, AM had spent $17,000 on fridges (two), freezers (two), surround sound systems (three), televisions (three), wireless keyboards, dishwasher, microwave oven, portable hard drives, laptops, twin tuners (two), printers (two), anti-vibration feet, BBQ, reaching aids, vacuum cleaner and wheelchair charger.
In the report of 14 October 2016, the trust manager stated that the administration of AM's estate was working easier since the withdrawal of X Legal. AM's annual budget had been increased to $48,000 (from $31,500) and he was being paid $12,000 quarterly in advance.
In a submission by the administrator's legal officer dated 16 January 2017, the administrator confirmed its proposal that it be reappointed the plenary administrator of AM's estate and that the March 2015 directions be removed.
The legal officer stated that because AM had required significant and repeated advances of funds since the March 2015 order was made, he continued to need assistance to manage his estate. The legal officer submitted that the nature of the purchases made by AM included multiple television sets, sound systems and computer printers, which reflected an inability to restrict his spending sensibly.
I accept that AM continues to be opposed to the making of any administration order.
Absence any evidence that disputes or is contrary to the substantial evidence available when the administration order was made, I continue to find that AM is unable, by reason of a mental disability, to make reasonable judgments about his estate.
I further find that AM is in need of an administrator and that there are no less restrictive alternatives to the making of an order that have been presented to the Tribunal.
The estate to which the order applies is AM's actual estate (FS [2007] WASAT 202 at [103] [106]), which in February 2016, was valued at approximately $2.4 million. It is the only source of funds available to AM to meet his needs over the course of his life, in a situation where because of his disability, he is unemployable and is precluded from receiving an income support payment from Centrelink for a substantial period of time.
AM's estate needs to be managed in such a way as to ensure that it can support him for his lifetime. The evidence available to the Tribunal when the March 2015 order was made, was that AM was manifestly unable to do so on his own (see for example AM at [75]), and there is little before the Tribunal which suggests this has changed.
It is hoped that with the guidance of the administrator and under the protection of an administration order, that AM will be able to continue to be given a measure of independence in dealing with some of his daytoday finances.
It is the best interests of AM that the Public Trustee be reappointed as the plenary administrator of his estate.
The order is to be reviewed in five years: s 84 of the GA Act.
The March 2015 directions
The Tribunal's rationale for the making of the March 2015 directions is set out in AM at [124] [128].
In seeking the s 86 review the administrator states that the March 2015 directions have been unworkable.
The administrator has filed with the Tribunal copies of the correspondence between AM, his then legal representative (X Legal), the administrator's legal officer and trust manager (budget correspondence).
I am satisfied that the budget correspondence demonstrates the difficulty of giving practical effect to the March 2015 directions.
I accept that the same outcome that was intended by the March 2015 directions, is able to be achieved in the context of a plenary order and the application of s 70 of the GA Act, in particular, that the administrator is required as far as possible, to encourage AM to become capable of caring for himself, to protect AM from financial neglect, abuse or exploitation, to consult with AM and take into account as far as possible his wishes, and to act in a manner that is least restrictive of his rights while consistent with his proper protection: s 70(c), (d), (e) and (f) of the GA Act.
For these reasons, I am satisfied that I do not need to add directions to the order reappointing the Public Trustee as the administrator of AM's estate.
The legal fees matter
The budget correspondence
There is a dispute between the administrator and X Legal regarding the payment of fees charged by X Legal to AM.
The dispute became apparent early during the budget correspondence.
On 18 March 2015, the administrator wrote to AM setting out a proposed annual budget of $31,500 and asking for a response by 31 March 2015 (proposed budget).
On 10 April 2015, X Legal wrote to the administrator on behalf of AM alleging that proper consultation had not taken place with AM, that he disputed the proposed budget and that:
[W]e are in the process of taking comprehensive instructions and we expect to be in a position to provide our clients more detailed instructions as to his view of a more appropriate proposed budget in due course[.]
On 11 May 2015, the administrator wrote to X Legal noting having received a fees invoice of $3,187.25 and querying what needed to be done to justify the account. The administrator asked for a copy of the advice given to AM.
On 3 June 2015, X Legal wrote to the administrator advising that AM suffered from a condition that impacted on his ability to take in the oral advice given to him. A solicitor from X Legal had met with AM for nearly two hours, at which various matters were discussed including the proposed budget. X Legal further stated:
[We] note your request to provide a copy of the letter of advice provided to our client and we do not consider that it is our obligation to do so. A Guardian was not appointed for our client and you have been appointed in an administrative capacity only. We will continue to provide advice to our client as and when it may be required and, respectfully, that is a matter for our client and not your office[.]
On 3 June 2015, the administrator wrote to X Legal advising that its letter of 18 March 2015 provided a methodology for the proposed budget, including allowing for a response from AM. The administrator further advised that the fees invoice was unable to be authorised for payment until an adequate explanation was given for the use of nearly eight hours of professional time to meet with AM, reporting to him and then informing the administrator that more time would be required to respond to the proposed budget.
On 23 June 2015, the administrator again wrote to X Legal noting that a response was yet to be received from the letter of 3 June 2015. X Legal had submitted a further invoice which the administrator stated appeared to relate to the refusal of X Legal to deal with the queries of the administrator.
On the matter of the fees invoices, the administrator stated:
[U]nless we are able to ascertain the nature of the advice which you are providing to [AM], we cannot be satisfied that the advice being provided is a 'contract for necessaries' as envisaged by Section 77(3)(a) of the Guardianship and Administration Act 1990.
In those circumstances [we] will not make payment of your outstanding account nor any other accounts which you render to [AM]'s estate until such time as we are satisfied that the advice been provided is 'necessary'.
On 28 July 2015, X Legal wrote to the administrator and noted that it had represented AM throughout the Tribunal proceeding that resulted in the making of the March 2015 order. X Legal said that the Public Advocate had acknowledged the importance of X Legal continuing to work with AM.
X Legal alleged that the administrator's trust manager had attempted to undermine its continued relationship with AM.
Responding to the query from the administrator in its letter of 3 June 2015 about the use of eight hours of professional time, X Legal said that AM had been seen at length to discuss the Tribunal's decision (March 2015 order) and to give advice about the options available to him.
X Legal reiterated its refusal to release any advice given to AM because it had not been authorised by him to do so, stating that AM was entitled to seek and obtain legal advice.
On 30 July 2015, the administrator wrote to X Legal reiterating that payment for legal fees could not be made unless they related to services that were determined to be 'necessary' for AM. The administrator advised that:
[L]egal costs incurred simply because [AM] wishes to talk to you which does not advance his interests or could not possibly advance his interests does not constitute a 'necessary' service[.]
The administrator also alleged that excessive handling of the same correspondence by X Legal mitigated against a view that the services provided had been 'necessary'.
On 15 December 2015, X Legal wrote to the administrator detailing AM's suggested annual budget (AM budget) which was calculated at $70,485 as against the proposed budget of $31,500.
X Legal detailed AM's concern about the proposed budget again noting the difficulties AM faced in engaging directly with the administrator on the budget process.
X Legal sought a further advance of funds on behalf of AM and proposed on AM's instructions that it attend with AM in a meeting with the administrator's trust manager in relation to AM's future needs.
X Legal confirmed its position that in the absence of a relevant Tribunal order, AM continued to have the capacity to instruct his legal representative and that those instructions included consulting with the administrator.
X Legal restated its view that AM could not be advised to waive his solicitor/client privilege for the purposes of justifying the payment of professional fees to the administrator. X legal considered that the provision of legal representation in these circumstances constituted a reasonable and necessary request for payment.
On 21 December 2015, the administrator wrote to X Legal advising that it considered many of the expenses in the AM budget to be grossly overstated. A schedule was included which increased the proposed budget to $45,264.
As regards the legal fees charged by X legal, the administrator stated that it was not appropriate for AM to instruct solicitors in circumstances where a declaration of incapacity had been made by the Tribunal, in that AM was found not to be able to make reasonable judgments in respect of matters relating to all of his estate.
The administrator advised that it was not open for X Legal to continue to act on behalf of AM:
[i]n respect of all attendances other than in those limited circumstances which might be considered 'necessary'[.]
The budget correspondence included copies of email exchanges between the administrator and X Legal on 21 and 22 December 2015. In one email dated 21 December 2015, the administrator's trust manager advised X Legal that she had been unsuccessful in contacting AM, and commented on budget matters including whether AM should be given extra funds. Another email was from X Legal to the administrator's trust manager advising that it has been engaged as AM's solicitor and was requesting funds urgently.
The submission of X Legal
X Legal is seeking an order from the Tribunal directing the administrator to pay outstanding legal fees amounting to $10,920.25 that relate to the period from 27 March 2015 to 3 December 2015.
In its submission, X Legal summarises the work done for AM including reviewing the Tribunal reasons in AM, telephone and personal attendance with AM to discuss the reasons and the provision of a letter of advice; dealing with the proposed budget and the AM budget and the preparation of AM's will.
X Legal refers to the power of the Tribunal under s 71(4) and s 72(2) of the GA Act to enable the direction to be given to the administrator.
X Legal submits that AM retained the capacity to give instructions notwithstanding the finding of incapacity made by the Tribunal pursuant to s 64(1)(a) of the GA Act. It was the case that AM was able (and entitled) to give instructions in the course of the Tribunal proceeding that resulted in the March 2015 order and in the s 86 review proceeding.
X Legal contends that it cannot be the case that AM lost the capacity to give instructions in the interim, especially where there was a continuity of representation.
X Legal submits that in making the March 2015 orders, the Tribunal acknowledged that AM had sufficient capacity to engage in a consultative process with the administrator and to manage some of his finances through a budget process. AM sought the assistance of X Legal in that process and in a situation where he was directly at odds with the administrator.
X Legal cites the decision in Nash v Inman [1908] 2 KB (Nash v Inman) for the proposition that the service provided by it to AM was 'necessary' and therefore was not subject to the prohibition in s 77 of the GA Act that AM, as a person for whom a declaration had been made that he was in need of an administrator, was incapable of entering into any contract: s 64(1), s 77(1)(a) and s 77(3)(a) of the GA Act.
X legal submits that in the circumstances of a discordant relationship between AM and the administrator, the nature and effect of AM's disability and the acknowledgment of X Legal as an ongoing support for AM, entitled AM to continue to engage X Legal in maintaining his standard of living or station in life.
X legal contends that it has at all times acted in the best interests of AM.
The submission of the administrator
The administrator submits that once a declaration had been made by the Tribunal under s 64(1) of the GA Act that AM was in need of an administrator, the operation of s 77(1)(a) of the GA Act meant that it was no longer open for AM to engage legal representation on his own behalf, except in certain defined circumstances. Any contract for legal services had to be entered into between the legal firm and the administrator.
The circumstances identified by the administrator include the challenging of the March 2015 order by AM. The administrator accepts that where a person opposes the making of orders or attempts to have the administration order set aside, then it is appropriate to make payment of the legal costs incurred by the person.
In the case of AM, the administrator states that in the Tribunal proceedings which led to the making of the March 2015 order, the Public Trustee, with the authority then given to it under s 65 of the GA Act, paid in excess of $50,000 in legal fees to X Legal to represent AM.
The administrator states that in respect to the s 86 review, X Legal was informed that AM's legal costs would be paid, if he was seeking revocation of the March 2015 order.
Another circumstance identified by the administrator in which a represented person under an administration order may be able to obtain legal services, is in the drafting of a will, provided it can be demonstrated that the person had testamentary capacity at the time the will was made (Re The Full Board of the Guardianship and Administration Board 2003 WASCA 268).
The administrator submits that fees for the drafting of a will for a person under an administration order can be considered 'necessary' under s 77(3) of the GA Act, which provides for exceptions to the prohibition of a person under an administration order from entering into a contract.
The administrator agrees that some assistance can be gained as to what constitutes 'necessaries' from the decision in Nash v Inman, however, submits that there is no indication that any of the attendances of X Legal with AM between those attendances that were involved in drafting the letters of 10 April 2015 and 15 December 2015 were 'necessary'. The administrator further submits that there is no indication that this level of professional attendance which resulted in fees of $8,720.25, necessarily advanced the interests of AM.
The administrator disputes the view of X Legal as to the difficult communication with the administrator. The administrator states that X Legal, in its letter dated 10 April 2015, responded in a manner which could only be designed to perpetuate 'discord'. The administrator states that it took eight months for X Legal, on behalf of AM, to submit the AM budget in response to the proposed budget which was first set in March 2015.
The administrator states that attempts to ascertain the nature of advice provided to AM by X Legal, so as to satisfy itself that the services were 'necessaries', have been refused. X Legal alleges that the solicitor/client privilege attached to this advice, which the administrator submits, is hard to comprehend in circumstances where the March 2015 order had been made, and there was at that stage no indication that AM was seeking to have the order revoked or varied.
The administrator states that attempts made to ascertain whether a costs agreement had been signed by AM was also refused. The administrator was informed by X Legal that costs disclosure had been given to AM prior to the March 2015 order being made and a Letter of Engagement drawn. This letter also was not provided to the administrator.
The administrator submits that X Legal has misconceived the effect of an administration order. It is not open to the AM to contract for legal services once the Tribunal has declared him incapable of managing his estate. Guardianship is not relevant to this consideration.
The administrator states that given the refusal by X Legal to provide details of the advice it provided to AM, the administrator cannot discharge its obligations by having the invoices submitted to it for payment. In addition, X Legal has not provided justification as to why five hours of professional time was required to draft a will for AM.
The administrator states that it takes issue with the submission of X Legal, that it was anticipated by the Tribunal that X Legal would continue to provide support to AM on an ongoing basis. The administrator submits that this constitutes a misreading of the decision of the Tribunal (AM at [121]).
The administrator accepts that the Senior Investigator did suggest that support from AM's legal advisor may be a less restrictive alternative to the appointment of an administrator, however, this recommendation was not adopted by the Tribunal.
Discussion
Whether the resolution of the legal fees matter is possible, or if possible, it is an appropriate use of the Tribunal's jurisdiction under the GA Act, is not at first glance, straightforward.
Section 77 of the GA Act is directly relevant to the issue before the Tribunal. It states:
(1)So long as there is in force a declaration by the State Administrative Tribunal under section 64(1) that a person is in need of an administrator of his estate, that person is
(a)incapable of entering into any contract or making any disposition in respect of his estate or any part thereof or interest therein; or
(b)subject to Part 9, appointing or conferring any power on an agent or attorney in respect thereof,
except to the extent that the administrator, with the consent of the Tribunal, in writing authorises him to do so.
(2)Any money or property the subject of an attempted dealing by a represented person contrary to subsection (1) may be recovered by the administrator in any court of competent jurisdiction.
(3)Nothing in this section affects
(a)any contract for necessaries entered into by a represented person; or
(b)any contract or disposition by a represented person made for adequate consideration with, or in favour of, any other person who proves that he acted in good faith and was unaware that that person was a represented person; or
(c)anything done under a power of attorney by a person who proves that he acted in good faith and was unaware that the donor of the power was a represented person.
(4)Nothing in this section affects any legal incapacity attaching to a represented person by reason of infancy.
(5)For the purpose of this section the acceptance of payment of the whole or any part of a debt shall be deemed to be a disposition in respect of the estate.
On 10 March 2015, the Tribunal made a declaration that AM was in need of an administrator pursuant to s 64(1) of the GA Act.
A plain reading of s 77(1)(a) of the GA Act meant that from the time that declaration was made, AM was deemed to be incapable of entering into any contract or making any disposition in respect of his estate, other than by way of the exceptions contained in s 77(3) of the GA Act.
I do not accept the contention of X Legal, except in a limited sense, that there was a continuity of legal representation from the time before the declaration was made under s 64(1), and subsequent to it, so that a contract for legal services remained in force. Once a declaration was made under s 64(1), new arrangements needed to be entered into with the administrator of AM's estate.
An exception might have been if AM had challenged the declaration made in the March 2015 order, by way of a review by the Full Tribunal under s 17A of the GA Act. Legal fees incurred in this way may have been considered a necessary pursuant to s 77(3)(a) of the GA Act. (McLaughlin v Freehill (1908) 5 CLR 858 and see also generally the comments by Heenan J in S v State Administrative Tribunal of Western Australia [No2] [2012] WASC 306 where a represented person contested the finding of incapacity made by the Tribunal)
The obvious course of action available to X Legal in taking the position that fees had been lawfully incurred by AM, was to sue for recovery of the alleged debt from the administrator of his estate in a court of competent jurisdiction. The status of any contract for legal services and if such a contract existed, whether the services rendered by X Legal were in the nature of necessaries, would be appropriately dealt with in that jurisdiction.
Other than s 77(1)(b) which refers to enduring powers of attorney, s 77 of the GA Act does not confer any jurisdiction on the Tribunal in deciding matters of a contractual nature in which a represented person might transact. These matters are appropriately left to administrators (s 71 of the GA Act).
The Tribunal has, however, been given wide power to make directions in respect to administration orders (see s 71(4) and s 72(2) of the GA Act generally and s 74 when an administrator applies for directions).
X Legal is seeking an exercise of the direction power in respect of the legal fees matter.
The Tribunal should be cautious in directing an administrator in the ordinary conduct of the management of a represented person's estate. As Blow J said in Public Guardian v Guardianship and Administration Board [2011] TASSC 31 at [29]:
Those cases [referred to in par 26 and 28 of the decision] related to questions as to when a court should, not could, exercise its powers. However they illustrate the proposition that statutory powers to give directions are generally conferred with a view to their being used only in unusual situations, involving real doubt or difficulty. That suggests the statutory provisions empowering the Board to give directions and advice to guardians and administrators, including s 31(4), were intended to be invoked when directions or advice were desirable in unusual situations of doubt or difficulty, rather than for the purpose of exercising control in relation to routine guardianship matters.
In the determination of the legal fees matter, it is relevant in my view that it is not the administrator who is seeking directions from the Tribunal but X Legal, which simply purports to be a creditor of AM's estate.
The way in which X Legal has introduced its grievance concerning the legal fees matter has been by way of the s 86 review.
There is a question then as to the standing of X Legal to have introduced the legal fees matter.
Even if it could be said that once the legal fees matter came to the attention of the Tribunal, then jurisdiction was enlivened by the direction power in s 71(4) and s 72(2) of the GA Act, it is in my view not appropriate to exercise that jurisdiction for the reasons already indicated.
The Tribunal should proceed with caution before interfering in the daytoday management of a represented person's estate by an administrator, but is more likely to consider a direction when sought by the administrator which even then may or may not be given (s 74 of the GA Act).
As a claimed creditor of AM's estate, X Legal is able in the normal course to take action for recovery of the debt in the same way as any other creditor.
For these reasons I decline to make the direction sought by X Legal.
That being the case, it is not necessary for me to consider the meaning of a 'contract for necessaries' in the particular circumstances of AM (s 77(3) of the GA Act.
Orders
The Tribunal declares that the represented person, AM:
a)is unable, by reason of a mental disability, to make reasonable judgments in respect of matters relating to all of his estate; and
b)is in need of an administrator of his estate,
and the Tribunal orders that:
The administration order dated 10 March 2015 is revoked and an order in the following terms is substituted for it:
1.The Public Trustee of 553 Hay Street, Perth, Western Australia is appointed plenary administrator of the estate of the represented person with all the powers and duties conferred by the Act.
2.The administration order is to be reviewed by 20 February 2022.
I certify that this and the preceding [124] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MR J MANSVELD, SENIOR MEMBER
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