EH
[2008] WASAT 222
•23 SEPTEMBER 2008
EH [2008] WASAT 222
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2008] WASAT 222 | |
| GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) | |||
| Case No: | GAA:1436/2008 | 5 AUGUST 2008 | |
| Coram: | MS J TOOHEY (SENIOR MEMBER) MR J MANSVELD (MEMBER) MS S GILLETT (SENIOR SESSIONAL MEMBER) | 23/09/08 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | The application for review is dismissed | ||
| B | |||
| PDF Version |
| Parties: | CH and KC EH |
Catchwords: | Guardianship and Administration Act 1990 (WA) Administration Whether Tribunal can retrospectively authorise a payment or disposition of a charitable, benevolent or ex gratia nature Protective intent of legislation Tribunal's authority under s 71(5) prospective only No power to authorise payments retrospectively Public Trustee's authority to relieve administrator of liability Application dismissed |
Legislation: | Guardianship and Administration Act 1990 (WA), s 69, s 71, s 72, s 80, Pt 6 |
Case References: | Nil |
Summary | Joint plenary administrators sought an amendment to the order appointing them so as to include authorisation, after the event, of distributions from their mother's estate.,On advice from their mother's bank and Centrelink, the administrators had made two distributions of $10,000 equally between themselves and their four siblings. The purpose was to take advantage of Centrelink's 'gifting allowance' and minimise the effect of her cash asset on her pension and her nursing home payments. There was no suggestion that the administrators acted other than in what they believed were their mother's best interests.,Section 72(3) of the Guardianship and Administration Act 1990 (WA) (GA Act) prohibits an administrator from making a payment or disposition of a charitable, benevolent or ex gratia nature without the authority of the Tribunal. The Tribunal accepted that the payment in this case was ex gratia in nature. The issue was whether it could authorise a payment of this kind retrospectively.,The Tribunal found that its power under s 71(5) of the GA Act to allow an administrator to make a s 72(3) type payment is prospective and does not include the power to authorise retrospectively. An administrator's relief is by way of s 80 of the GA Act which gives the Public Trustee the function of examining accounts and the authority to relieve an administrator of liability for any certified loss.,The Tribunal dismissed the application. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : HUMAN RIGHTS ACT : GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) CITATION : EH [2008] WASAT 222 MEMBER : MS J TOOHEY (SENIOR MEMBER)
- MR J MANSVELD (MEMBER)
MS S GILLETT (SENIOR SESSIONAL MEMBER)
- Applicants
AND
EH
Represented Person
Catchwords:
Guardianship and Administration Act 1990 (WA) - Administration - Whether Tribunal can retrospectively authorise a payment or disposition of a charitable, benevolent or ex gratia nature - Protective intent of legislation - Tribunal's authority under s 71(5) prospective only - No power to authorise payments retrospectively - Public Trustee's authority to relieve administrator of liability - Application dismissed
(Page 2)
Legislation:
Guardianship and Administration Act 1990 (WA), s 69, s 71, s 72, s 80, Pt 6
Result:
The application for review is dismissed
Category: B
Representation:
Counsel:
Applicants : Selfrepresented
Represented Person : N/A
Solicitors:
Applicants : Self-represented
Represented Person : N/A
Case(s) referred to in decision(s):
Nil
(Page 3)
Summary of Tribunal's decision
1 Joint plenary administrators sought an amendment to the order appointing them so as to include authorisation, after the event, of distributions from their mother's estate.
2 On advice from their mother's bank and Centrelink, the administrators had made two distributions of $10,000 equally between themselves and their four siblings. The purpose was to take advantage of Centrelink's 'gifting allowance' and minimise the effect of her cash asset on her pension and her nursing home payments. There was no suggestion that the administrators acted other than in what they believed were their mother's best interests.
3 Section 72(3) of the Guardianship and Administration Act 1990 (WA) (GA Act) prohibits an administrator from making a payment or disposition of a charitable, benevolent or ex gratia nature without the authority of the Tribunal. The Tribunal accepted that the payment in this case was ex gratia in nature. The issue was whether it could authorise a payment of this kind retrospectively.
4 The Tribunal found that its power under s 71(5) of the GA Act to allow an administrator to make a s 72(3)-type payment is prospective and does not include the power to authorise retrospectively. An administrator's relief is by way of s 80 of the GA Act which gives the Public Trustee the function of examining accounts and the authority to relieve an administrator of liability for any certified loss.
5 The Tribunal dismissed the application.
Background
6 Joint plenary administrators seek a review of the order appointing them so that it authorises distributions of money from their mother's estate.
7 The background to the application is that, in July 2005, the Tribunal appointed CH and KC joint plenary administrators for their mother, EH. In September 2006, they lodged their first set of annual accounts with the Public Trustee as required by s 80(1) of the Guardianship and Administration Act 1990 (WA) (GA Act). The accounts showed a distribution in May 2006 of $10,000 from their mother's estate to themselves and their four siblings in equal shares.
(Page 4)
8 In about September 2007, the administrators lodged their second set of annual accounts which showed a second distribution of $10,000 in May 2007, also in equal shares between the six siblings.
9 Section 80(3) of the GA Act requires the Public Trustee to examine accounts lodged under s 80(1) and empowers him to allow or disallow them, and to determine that any loss has occurred. An administrator is liable for such loss except to the extent that the Public Trustee relieves him or her of liability: s 80(4).
10 The Public Trustee did not examine the accounts until January 2008. He noted that the two distributions appeared to be of the kind for which the authorisation of the Tribunal might be required by s 72(3) of the GA Act and advised the administrators to seek a review of the order appointing them with a view to it being amended to include retrospective authorisation of the 'gifts'.
11 The Tribunal listed the application for hearing and asked the Public Trustee for written submissions about the orders sought.
Relevant legislation
12 Part 6 of the GA Act concerns estate administration.
13 Section 71 sets out the authority which may be conferred on an administrator. The authority may be plenary or limited. A plenary administrator has wide powers and may perform, or refrain from performing, any function that the represented person could perform, or refrain from performing if of full legal capacity. A limited administrator has such authority as the Tribunal vests in him or her: s 71(1), (2) and (3).
14 Section 71(5) provides that, in exercising its jurisdiction under Pt 6, the Tribunal may take a liberal view of the best interests of the represented person and, in particular may, if the circumstances so require 'empower an administrator to make a payment or enter into a transaction of a kind described in s 72(3) on behalf of the represented person'.
15 Section 72(3) provides that, notwithstanding a plenary administrator's extensive authority and the liberal view permitted the Tribunal by s 71(5), an administrator shall not, without the authority of the Tribunal under s 71(5):
(a) make a payment or disposition of a charitable, benevolent or ex gratia nature; or
(Page 5)
- (b) make a payment in respect of a debt that the represented person is not obliged by law to pay.
Why were the payments made
16 At the hearing, the administrators told the Tribunal that they sold their mother's property in 2006 to pay for a nursing home bond. From the $315,000 proceeds they paid the bond of $128,000 and bought an annuity for their mother for $157,000. This left her around $30,000 in addition to which she had about $13,000 in a bank account.
17 The administrators consulted a financial adviser at their mother's bank about how they should arrange her accounts. His advice included to use the Centrelink 'gifting allowance' by 'gifting' $30,000 over five years to themselves, thereby reducing the effect of the asset on her pension and reducing her nursing home fees. The financial adviser suggested they confirm his advice with Centrelink which they did.
18 There is no argument that the administrators acted in good faith, even if they benefitted personally from the distribution, and it was done in a way consistent with what they believed their mother would have wished. (One administrator is also the executor of her will which leaves all her property equally between her six children.)
The issues
19 The issues for determination are:
1) Are the payments in this case of the kind which require the authority of the Tribunal because they come within the meaning of s 72(3);
2) If so, can the Tribunal give the administrators authority to make the payments after the event; and
3) If the Tribunal can authorise the administrators after the event, should it do so in this case?
Are the payments of the kind which require the authority of the Tribunal because they come within the meaning of s 72(3)?
20 The Public Trustee submits, and the Tribunal agrees, that the payments are not charitable. Leaving aside for now whether they are 'benevolent', there is scant authority on the meaning of an ex gratia payment and none that the Tribunal can find in the context of the GA Act. However, the Tribunal accepts the Public Trustee's submission that
(Page 6)
- the payment made here are 'ex gratia' in nature. The Oxford English Dictionary defines ex gratia as:
Done, given etc as a favour or without (esp. legal) compulsion.
If the payments require the authority of the Tribunal, can the Tribunal authorise the administrators after the event?
22 The GA Act is protective in purpose and intent. Protective measure found in the Act include the following provisions:
• An administrator has only such functions as are vested in him or her by the Tribunal (s 69);
• Administrators are required to keep records and accounts and submit them annually to the Public Trustee for examination and may be personally liable for any certified loss (s 80); and
• Although a plenary administrator has all the powers that the represented person would have if capable, he or she shall not make payments or dispositions of a charitable, benevolent or ex gratia nature without the approval of the Tribunal (s 72(3)).
23 The GA Act does not specify that approval is required prior to making a s 72(3) disposition. However, it is inherent in the notion of protection that it have effect before, rather than after, the event. This may be especially so where dispositions of money are involved because it might not be possible to recover unauthorised payments after the event.
24 Section 71(5) provides that, in exercising its jurisdiction under Pt 6, the Tribunal may take a liberal view of the best interests of the represented person and may, in particular, if the circumstances require, empower an administrator to make a payment or enter a transaction of the kinddescribed in s 72(3) on behalf of the represented person.
25 The language of s 71(5) is clear: the Tribunal's authority to empower an administrator to make a s 72(3) payment or disposition is prospective: there is no lawful authority until conferred on an administrator by the Tribunal. It
(Page 7)
- follows that any power to authorise a payment after the event, if it exists, cannot be found in s 71(5).
26 The question arises whether a s 72(3) payment or disposition can be authorised retrospectively under any other provision in the GA Act.
27 Section 72(2) provides that, without limiting s 71 or s 72, the Tribunal may make:
[A]ny 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.
28 The power in s 72(2) is broad, but not so broad as to displace the intention of s 72(3) or the effect of s 71(5).
29 'The proper administration of the estate' involves all the protection intended by the GA Act including prior authority for s 72(3) payments and dispositions.
30 It is not necessary to authorise a payment retrospectively. What follows from an unauthorised payment is that the Public Trustee, on examining the accounts, may certify that a loss has been incurred and the administrator may be personally liable to make good that loss. However, having certified a loss, the Public Trustee has the power to relieve an administrator of liability: s 80(4).
31 It might be expedient to make the order sought but, if so, it would be expedient for the administrator; it is difficult to see how such an order could be for the 'proper administration of the estate of the represented person'.
32 The prospective nature of the Tribunal's power can be tested by asking: what order would the Tribunal make? It cannot 'authorise the administrator to make the payment' because the payment has already been made. It cannot give approval to or 'allow' the payment as that function is vested in the Public Trustee by s 80(3). It cannot relieve the administrator of personal liability for the same reason (see s 80(4)).
33 The Public Trustee submits that there are times when it might be in the best interests of a represented person for the Tribunal to approve a payment retrospectively, for instance when an unpaid member of a wealthy represented person, who is doing an excellent job as administrator, makes a small payment to a charity that the represented person has always supported. The Public Trustee says an administrator in this situation should have the benefit of
(Page 8)
- retrospective approval by the Tribunal rather than having a certificate of loss raised against them with the stigma that attaches to it.
34 The Public Trustee further submits that, while the Tribunal has the power, under s 80(6a) of the GA Act, to review a decision by the Public Trustee to allow or disallow accounts, there is no provision for review of a decision by the Public Trustee not to relieve an administrator of liability for a loss; an administrator's only recourse is to the Supreme Court with all that entails.
35 For these reasons, the Public Trustee submits that, without the benefit of retrospective approval of the payment, family members might decline to be appointed or might not want to continue in the role and the represented person might suffer as a result.
36 There is something to this argument but the scheme and intent of the GA Act are clear. An administrator requires the authority of the Tribunal under s 71(5) to make a payment or disposition of a s 72(3) nature. The Tribunal's power to authorise a payment is prospective. Parliament has given to the Public Trustee and not the Tribunal the function of examining any accounts lodged with him, disallowing any amount paid and of determining that any loss has occurred: s 80(3). It has also given to the Public Trustee the unqualified discretion in s 80(4) of the GA Act to relieve an administrator for personal liability for any certified loss.
37 It might appear anomalous that Parliament has given the Tribunal the power to review a decision of the Public Trustee under s 80(3) but not the power to review a decision as to whether an administrator should be relieved of liability for a loss or diminution of the estate. However, that is a matter for Parliament.
38 In the Tribunal's view, it does not have the power to make the order sought.
If the Tribunal can authorise the administrators after the event, should it do so in this case?
39 As the Tribunal does not have jurisdiction to make the order sought, this question does not arise.
Order
40 The application for review is dismissed.
(Page 9)
- I certify that this and the preceding [40] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MS J TOOHEY, SENIOR MEMBER
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