EGM (Administrator)
[2011] TASGAB 8
•20 June 2011
GUARDIANSHIP AND ADMINISTRATION BOARD
HOBART
EGM – Application for the appointment of an administrator by KX
Neutral citation: EGM (Administrator) [2011] TASGAB 8
REASONS FOR DECISION
Anita Smith (President)
Gerard Dibley (Member)
Elizabeth Love (Member)
Hearing 2 June 2011
Administration – suitability of proposed administrator - apparent conflict of interest
Guardianship and Administration Act 1995 section 51, 54
EGM is a 77 year old woman who has recently moved to a residential aged care facility. Her sister, KX, has applied for appointment as her administrator. Before appointing an administrator, the Board must be satisfied: that EGM is a person with a disability, that her disability renders her incapable of making reasonable judgments about her estate and that she is in need of an administrator. The Board must also be satisfied that the person appointed as administrator has appropriate expertise and will act in the best interests of EGM.
The Board heard the application on 2 June 2011. The applicant submitted that EGM was physically frail and too unwell to attend the hearing. The hearing was attended by:
KX – applicant
IX – brother in law
Ms. Megan Benier – Department of Health and Human Services
Mr. Phillip Heaton – The Public Trustee
Mr. Edmund Gale – GAB Investigator
Does the application meet the tests for disability, incapacity and need for an administrator?
Dr Mel Wuttke from the Department of Health and Human Services Geriatric Team completed a pro forma Health Care Professional Report on 14 April 2011 regarding EGM. She reported that she has dementia. She reported that EGM retains the ability to understand the nature and extent of her estate, but would have difficulty in making more complex decisions. She has a loss of short term memory and difficulties in planning activities of daily living. The applicant reported that EGM has good days and bad days. Given the complexities of EGM’s current situation brought about by the transition to full time care (explained below), the Board was satisfied that by reason of her dementia she lacks the capacity to make the reasonable judgments currently required of her.
The application noted a need for an administrator to manage EGM’s pension, make financial arrangements with Centrelink and MBF and also a need to assist the applicant with the cost of travel when visiting her. The main reason for the application, however, was to act upon an agreement between the applicant and EGM to sell a property jointly owned between them which they had inherited from their mother. This property had been EGM’s home until she moved to full time care and they had historically agreed that it would be sold when she moved.
Given the range of financial issues presented in the application, the Board was satisfied that EGM is in need of an administrator.
Who should have appointment as administrator?
As a routine part of the pre-hearing investigation, the Board’s Investigator searched the title to the joint property. This search revealed that the title was held as follows:
“Assent to EGM for an estate of freehold for life and EGM and KX for an estate in fee simple in remainder expectant upon the determination of the said life estate as tenants in common in equal shares”
Therefore, the holding of the property appeared more complex, following the search, than had been presented in the application. Had EGM and the applicant been outright joint owners in the property, the applicant had a possible conflict of interest, but this could be simply resolved by ensuring that proceeds of sale were divided equally between them. However, it appeared to the Board at the hearing that what was required for the sale of the property was a surrender of a life interest by the administrator on EGM’s behalf. The administrator stood to directly benefit from that proposed transaction.
At the hearing, the applicant stated that she believed that her late mother’s will had gifted EGM a right of residence only, meaning that the property was now eligible for sale and proceeds distributed without the requirement of a surrender. The Board did not have access to their mother’s will and, noting that the distribution of their late mother’s estate was overseen by experienced solicitors, accepted the notation of the title as evidence as to how interests in the property were allocated.
Appointment as an administrator imposes a fiduciary duty upon the person appointed that is, a duty to exercise rights and powers in good faith or for the benefit of the represented person. A person in a fiduciary position ought not to make a personal profit or to put herself in a position where her duty and her interest conflict.
The Board took the view that appointment of the applicant as administrator with responsibility to decide whether to surrender a life interest, resulting in her direct benefit, would be appointing her to role with a direct conflict of interest and was therefore inappropriate. The Board also noted a minor conflict of interests in the applicant seeking reimbursement from EGM’s estate for expenses in travelling to see EGM (although such conflicts can usually be resolved by the Board making a specific direction). The Board was, therefore, of the view that EGM needed the appointment of an independent administrator. The only available and suitable administrator then was the Public Trustee.
Post Script
Following the appointment of the Public Trustee, they informed the Board that they had been able to locate EGM’s late mother’s will. It was confirmed that the title was incorrectly noted, and EGM’s interest was a right of residence only. Because this constitutes fresh evidence and relates to a material fact that the Board considered, the applicant would be entitled to seek a review of the order by the Board. It would be advisable for the applicant to seek some advice about the skills required and the responsibilities of an administrator before doing so.
Anita Smith Elizabeth Love Gerard Dibley
PRESIDENT MEMBER MEMBER
Statement of reasons requested: 8 June 2011
Statement of reasons delivered: 22 June 2011
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