BND (Review of Administration)
[2012] TASGAB 3
•13 March 2012
GUARDIANSHIP AND ADMINISTRATION BOARD
LAUNCESTON
Neutral citation: BND (Review of Administration) [2012] TASGAB 3
BND – Application for Review of Administration Order by MS and SD
REASONS FOR DECISION
Anita Smith (President)
Rodney Lester (Member)
Rowena Holder (Member)
Date of Review: 13 March 2012
Administration – review of order appointing Public Trustee – limits to Board’s obligations to review – statutory advantage of Public Trustee over private appointees – alternative courses for grievances against Public Trustee – consideration of alternative trustee company
Remuneration of proposed administrator - meaning of “carries on a business of, or including, the administration of estates, whether under this Act or otherwise”
Duration of orders made on review
Guardianship and Administration Act 1995 s 11, 17, 54, 55, 67
Ombudsman Act 1978 s 14
Singh (by her next friend Singh) v Calvary Hospital ACT Inc and Anor [No 2] [2009] ACTSC 57.
BND (the represented person) is an 81 year old woman who lives in an Aged Care Facility near Launceston. She has advanced dementia and was unable to participate in these proceedings due to her lack of understanding. She became the subject of an administration order pursuant to section 33 of the Powers of Attorney Act 2000 following a review of her enduring power of attorney on 27 August 2010. Whereas the enduring power of attorney appointed her three children (SD, DD and MS) as attorneys, the administration order appointed the Public Trustee as administrator until 27 August 2010. When the Board (differently constituted) made that administration order, it was satisfied that the represented person was a person with a disability, that her disability rendered her incapable of managing her estate, and that she was in need of an administrator. These findings were not challenged in the review. The review, pursuant to section 67 of the Guardianship and Administration Act 1995 (the Act), was conducted solely in relation to the the appointment of the Public Trustee as administrator.
The Board convened a review hearing on 13 March 2012 in Launceston. Some parties attended by telephone conference. In attendance were:
In person in Launceston:
DD (son)
KD (daughter in law)
Gregory Maloney (Public Trustee, Launceston Office Manager)
Timothy Levis (Public Trustee, Corporate Solicitor)
By telephone conference from interstate:
SD (applicant)
MS (applicant)
UC (solicitor for the applicants)
BC (represented person’s former accountant)
KP (nominee for appointment as administrator)
Role of the Board in Review Applications:
Although the Board did not write formal reasons for their decision in August 2010, members’ notes from the decision indicate a very poor relationship, and a lack of cooperation, between the attorneys who each live in different States. It is clear that the Board determined that an independent appointment would best suit the interests of the represented person at that time. It is also clear that the applicants have been unhappy with the appointment of the Public Trustee since that decision by the Board. A review does not take the place of an appeal pursuant to section 76 of the Act. Therefore the fact that some parties remain unhappy with the Board’s decision is not grounds for a review of itself.
The relevant powers of the Board upon review are as follows:
67. Review of orders
The Board may at any time –
…
(c) on the application of any other person –
hold a hearing to review a guardianship order or administration order.
68. Order after review
(1) On a review under section 67, the Board may vary or continue a guardianship order or administration order subject to any conditions or requirements it considers necessary or the Board may revoke the order.
(2) The Board may make such further orders as it considers necessary in order to give effect to an order made under subsection (1).
The Board took the view that an administration order made pursuant to section 33 of the Powers of Attorney Act 2000 is capable of review as an administration order for the purposes of section 67 of the Act.
The Board is not required to hear an application to review an order in all circumstances and is entitled to reject pursuant to section 11 of the Act:
11. Procedure of Board
11(13) The Board may reject an application under this Act at any stage of a proceeding if the Board is of the opinion that –
(a) the application is frivolous or vexatious or otherwise lacking in substance; or
(b) the subject matter has already been dealt with by the Board and there has been no subsequent change to any material fact.
11(14) If the Board rejects an application, the applicant may apply for a review of that decision by a division of the Board.
Much of the material provided in support of the application to review amounts to a grievance against the Public Trustee and its service standards. Grievances do not necessarily amount to a ground for review. Review applications made on that basis would often be rejected pursuant to section 11(13) of the Act. Generally, the role of a review hearing is to determine whether one of the elements in the Act has fundamentally altered since the making of the order, to such an extent that the order ought to be revoked or varied. As the applicants had made a fresh nomination for a new administrator who was not proposed at the last hearing, there existed the possibility of a change to the elements of the appointment, being elements set out in section 54 of the Act. Accordingly the application to review was not rejected.
The Board received and considered extensive written materials which were relevant to the applicants’ dissatisfaction with the Public Trustee. Those materials also noted that the same set of factual circumstances have been included in a complaint to the Tasmanian Ombudsman, who has powers to determine those concerns and is an appropriate body to do so. In the Act, the role of investigating a complaint against an administrator falls to the Public Guardian pursuant to section 17. However, in practice, the Public Guardian has not been known to perform this function and such a function does not exclude the powers of the Ombudsman pursuant to section 14 of the Ombudsman Act 1978.
Therefore, the Board took the view that the role of the review hearing was not to investigate or adjudicate grievances against the Public Trustee, but to assess why an alteration in the order would promote the best interests of the represented person. The grievances may be relevant to that issue, but did not need to be repeated at the hearing beyond written materials already received and considered. In essence the materials indicated that the applicants were concerned that in various activities in the estate, the Public Trustee had acted too slowly in administrative matters and in making a decision to rent or sell the represented person’s property.
The Board considered that in order to be successful in the review, the applicants needed to show that a change in administrator would better serve the best interests of the represented person than the current arrangement. While the grievances could be used as evidence that a change might benefit the represented person or her estate, the determination of the grievances is a matter for the Tasmanian Ombudsman except in circumstances where the Board convenes proceedings under section 63 of the Act (which has not arisen in this matter).
In considering a fresh nominee for appointment in a review hearing, the Board must assess the nominee against the criteria in section 54(1)(d) of the Act. However, the Public Trustee, as a statutory authority, does not require assessment against those criteria because their appointment is presumed to have approval pursuant to section 54(1)(a). Obviously this construction in the Act gives the Public Trustee (as well as the Public Guardian and Trustee Companies - also statutory authorities) an advantage over potential private appointees. Such an advantage is not accidental and has its origins in the parens patriae nature of this jurisdiction. Refshauge J. considered the reasons for this statutory advantage in Singh (by her next friend Singh) v Calvary Hospital ACT Inc and Anor [No 2] [2009] ACTSC 57.
Effect of the Grievances on the Represented Person’s Best Interests
The grievances raised against the Public Trustee were essentially about delay. Such delays included:
· Lack of repairs to a driveway in the represented person’s property
· Lack of repairs to interior walls of the property
· Risk of external damage to the property from vandalism due to being unrented
· Risk of the removal of chattels due to the property being unrented
· Non-payment of an account for legal services rendered to one of the applicants
· Failure to rent the property leading to a loss of between $7500 - $9300 in income to the estate
· Failure to address needs of the represented person such as a new chair and spectacles in a timely fashion
· The possible decision of the Public Trustee to sell rather than rent the property
· Late payment of accounts (chemist account $16.80) and late redirection of mail (MBF)
· Numerous changes in the allocation of the estate to a Client Account Manager
· Poor communication with the applicants when they raised the service standards issues.
The Public Trustee disputed some of the grievances, which seemed appropriate particularly regarding the payment of a third party’s legal costs. The applicants alleged that the delays in obtaining new spectacles and a new chair had increased the number of falls that the represented person has. However this was disputed by KD who apparently visits the represented person on a very frequent basis. CC and KD (who live locally, whereas the applicants live interstate) did not express concern about the actions or inactions of the Public Trustee and were ambivalent regarding their appointment as administrator. Many of the applicants’ grievances related to events that might have occurred but did not eventuate. Of all of the grievances, the potential loss of rental income was the most tangible in terms of the effect on the represented person’s best interests. In terms of her overall wellbeing the represented person is in an accredited Aged Care Facility and apparently receiving an appropriate level of care, assisted by regular visits from her family. Her estate is in credit and she has sufficient cash resources to meet any immediate needs.
The Board concluded that the major impact arising from the subject of the grievances upon the represented person was the loss of rental income.
The Assessment of Alternative Administrators and Remuneration:
The Board must be satisfied that a nominee for appointment of an administrator (other than an approved statutory authority):
(i) … will act in the best interests of the proposed represented person; and
(ii) … is not in a position where his or her interests conflict or may conflict with the interests of the proposed represented person; and
(iii) … is a suitable person to act as the administrator of the estate of the proposed represented person; and
(iv) … has sufficient expertise to administer the estate.
The applicants nominated KP as administrator for the represented person. As an alternative they also suggested Tasmanian Perpetual Trustees. KP was vigorously supported by the applicants and BC as an alternative administrator. KP is a tax agent and accountant with 25 years’ experience. He cited his CPA and IPA numbers in the application and noted that he had been an administrator appointed by the Victorian Guardianship Board. KP works in a building operated by BC where BC also works, and has an email address XXXX, but stated that he is not in partnership with BC and his business is entirely separate to BC’s. However, it is likely that KP would have met the requirements of section 54(1)(d), had he unconditionally consented to the appointment on a voluntary basis.
KP’s consent to appointment pursuant to section 54(1)(d) was conditional upon the ability to charge professional fees for his work as administrator. He gave evidence that he would charge at $250 per hour and would obtain financial advice for decisions about rental versus sale of the property from a financial adviser which would involve additional cost.
KP’s nomination was not supported by any submissions to the Board for a determination pursuant to section 55 of the Act. Accordingly, the Board conducted an examination during the hearing of his qualifications regarding that provision. KP stated that, in addition to the qualifications set out above, he had been appointed as an administrator with remuneration by the Victorian Guardianship Board on 3 or 4 occasions. In 1998 the Victorian Guardianship Board was subsumed into the Victorian Civil and Administrative Tribunal (VCAT). KP confirmed that he has never held a paid appointment as administrator from VCAT. From this the Board deduced that he has not conducted any business as an administrator for approximately 14 years.
The Board considers that the phrase “carries on a business of, or including, the administration of estates, whether under this Act or otherwise” requires that a person does more than provide advice or services to other persons (as a tax agent or accountant might) regarding the administration of estates. The Board considers that this phrase would include persons who carry on a business of administering deceased estates, such as solicitors or fiduciaries who have been appointed as executors under a Will or persons who act as attorneys under a power of attorney on a professional (fee charging) basis, as well as administrators under the Act. The provision implies more than a business of providing advice and services to an administrator, executor or attorney and implies actually undertaking the decision making role itself. Additionally, it requires that one “carries” on such a business, giving the phrase a contemporaneous nature, suggesting that some historical experience of 14 years past would not qualify.
The Board was not satisfied on the material presented at the hearing that KP is a person who carries on a business of or including administration of estates. If the Board had been satisfied that he was such a person, an evaluation of the fees he would charge as against the likely costs of the current administrator would have been required. KP’s consent was conditional upon remuneration; he did not seek appointment as a volunteer administrator. Accordingly, having determined that he is not eligible for remuneration, the Board did not have the requisite consent for appointment required in section 54(1)(d) of the Act.
At the hearing (but not before) the applicants also nominated Tasmanian Perpetual Trustees as potential administrators. As statutory authorities, they are an approved administrator pursuant to section 54(1)(c) of the Act. However, the Board had two reservations about a change to Tasmanian Perpetual Trustees from the perspective of the represented person’s best interests:
Firstly, the Board has consulted Tasmanian Perpetual Trustees and the Public Trustee with regard to their fee structures in preparation of the Manual for Members of the Guardianship and Administration Board in two editions since 2003. In both editions, the set fees of Tasmanian Perpetual Trustees are at least double those of the Public Trustee for the management of an estate over a ten year period. From the written application it appears that the represented person’s estate has a value of approximately $250,000. However, at the hearing the applicants disputed their own valuation stating that the property was significantly undervalued, which would suggest that the estate is worth approximately $370,000. Regardless, the commission and fees charged by both trustee companies on an estate of this relative size are significant. In the case of the Public Trustees, such fees have already been levied and if the matter was transferred now, she may not reap the benefit of fees and commissions already paid before accruing new fees and commissions with a second trustee company which may be significantly higher.
Secondly, the evidence and submissions from the applicants relied strongly on the week-by-week losses arising from the failure to make a decision regarding the rental or sale of the represented person’s property. The Public Trustee indicated that it is very close to concluding a decision about the property and has all the requisite advice and appraisals to hand. The Board was concerned that a change of administrator would mean that, because of its fiduciary responsibilities, Tasmanian Perpetual Trustees could not rely upon the valuations and assessments made by the Public Trustee but would have to recommence the process, leading to further delays and therefore further loss of income.
For the reasons set out herein, the Board was not satisfied that the transfer of administration from the Public Trustee to Tasmanian Perpetual Trustees was in the best interests of the represented person.
The Public Trustee:
The relationship between the applicants and the Public Trustee is not good. However, the Board is concerned not with the relationship between third parties and the Public Trustee, but rather with the impact of administration upon the represented person. It appears that the animosity between the applicants and the Public Trustee has not impacted upon the represented person. The loss of rental income is regrettable, but it was explained at the hearing that some of that delay was due to the making of the application to review and the concern not to bind the represented person to any contracts for sale or rental if the identity of (and therefore the decisions of) the administrator may change. A request to delay sale came from UC. This was confirmed in an email exchange between UC, the Board’s Compliance Officer and Mr. Maloney on 19 January 2012. (Sadly, such a matter should have come to a Board member for advice and direction, rather than being determined at an administrative level.) However, it would have been impractical to offer the property for rental from that point until determination of the review application, so the Public Trustee appears to have been ‘between a rock and a hard place’ regarding any actions about sale or rental of the property since the review application was lodged on 13 December 2011.
The applicants agreed at the hearing that their major concern was that the Public Trustee appeared to be heading down the path of selling the represented person’s property and that they wished to avoid this. The applicants argued that rental would provide a better return on the property and stated that they have no personal interest in retaining the property. To the Board it appeared that sale of the property would resolve all of the ongoing concerns about the need for repairs and the risks due to being empty. However, the Board was not privy to valuations and materials that the applicants apparently had in their possession (such as an independent valuation and Centrelink advice about the effect of sale on the represented person’s pension) which suggested that rental would provide better returns than sale. Partly because of this lack of disclosure, the Board is not satisfied that a decision to sell the represented person’s property is contrary to her best interests. It is not appropriate that the Board give directions about rental or sale without access to all available financial information.
Whether or not the Public Trustee could have avoided delays and handled these grievances better is a matter that the Board will leave to the determination of the Ombudsman. What the Board determines is that the represented person’s loss of possible rental income was partly caused by the filing of an application for review which left the represented person’s administrator with limited options to redress that issue. No other evidence supported a finding that the represented person’s interests are being adversely affected by the appointment of the Public Trustee.
The retention of the Public Trustee as administrator will mean that commission and fees will not need to be duplicated. It also means that advice sought and investigative work done so far on the question of whether the house should be rented or sold will not be duplicated. Subject to the directions in this order, which will give the applicants an opportunity to share with the Public Trustee the financial information that they have which leads them to believe that rental is a better option than sale, the Board considers that the appointment of the Public Trustee is sound and should continue.
Consequences of the Review:
In 2011 the Board sought an opinion from the Solicitor General regarding the terms of an order after a review hearing. The Solicitor General advised as follows:
“An administration order is an order of the Board made pursuant to S.51 whereby a person is appointed as an administrator of the estate of a person.
According to S.52, “an administration order lapses on the expiration of 3 years after the date on which it is made unless it is continued under section 68”.
Section 68 provides as follows:
(1) On a review under section 67, the Board may vary or continue a guardianship order or administration order subject to any conditions or requirements it considers necessary or the Board may revoke the order.
(2) The Board may make such further orders as it considers necessary in order to give effect to an order made under subsection (1).
As the word “continue” is not defined in the Act and does not have a particular legal meaning, it is to be given its ordinary dictionary meaning. According to the Macquarie Dictionary, “continue” is variously defined to mean, “to last or endure”, “to remain in a particular state or capacity”, “to cause to last or endure; maintain or retain, as in a position”, “prolong”.
Having regard to the dictionary meaning of “continue”, it is my opinion that the continuation of an order pursuant to S.68(1) does not amount to the making of a new guardianship or administration order. Rather, in my view, the existing order is simply continued (in the sense of its existence being maintained and its duration being prolonged) according to either its existing terms or upon terms varied by the Board.
In case the words “order made under subsection (1)” in S.68(2) give rise to any uncertainty in relation to the conclusion expressed above, I am of the view that those words do not refer to a guardianship order or administration order made afresh, but refer only to the order by which the existing guardianship order or administration order is continued, varied or revoked.”
The Board adopts this reasoning of the Solicitor General.
Conclusion:
AFTER hearing a review of an administration order made on 27 August 2010 in respect BND (hereinafter called the ‘represented person’)
THE Board was satisfied that the represented person
•is a person with a disability, and
•is unable by reason of the disability to make reasonable judgements in respect of her estate; and
•is in need of an administrator;
THE BOARD ORDERS
That The Public Trustee continue as the represented person’s administrator
That the powers and duties of the administrator be those conferred by Division 4 of Part 7 of the Guardianship and Administration Act 1995.
That the administrator is directed to seek the views of the represented person’s family regarding whether the represented person’s property is sold or rented and make a decision to either sell or rent the represented person’s property within 28 days. The administrator shall communicate that decision and the reasons for that decision to the represented person’s family members on the 28th day or as soon as possible thereafter. The administrator is further directed to refrain from advertising or contracting the property for rental or sale for a further 14 days from that communication to enable time to consider any further objection from the represented person’s family.
Anita Smith Rodney Lester Rowena Holder
PRESIDENT MEMBER MEMBER
Statement of Reasons Delivered 28 March 2012
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