FG and WHR
[2009] WASAT 102
•22 MAY 2009
FG and WHR [2009] WASAT 102
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2009] WASAT 102 | |
| 22/05/2009 | |||
| GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) | |||
| Case No: | GAA:2217/2008 | 18 NOVEMBER 2008 AND 29 JANUARY 2009 | |
| Coram: | MR J MANSVELD (MEMBER) | 22/05/09 | |
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Remuneration is paid to the administrators | ||
| B | |||
| PDF Version |
| Parties: | FG BG WHR |
Catchwords: | Guardianship and administration Remuneration for administrators Size or complexity of the estate Remuneration may be warranted in circumstances where the estate is out of the ordinary or not typical |
Legislation: | Guardianship and Administration Act 1990 (WA), s 68(3), s 76, s 76(2) s 84, s 117, s 117(3)(a), s 118(1) Public Trustee Act 1941 (WA) State Administrative Tribunal (Conferral of Jurisdiction) Amendment and Repeal Act 2004 (WA), s 416 - s 466 |
Case References: | In the Will of Sheppard [1972] 2 NSWLR 714 Moore (decd), In re v Moore [1956] VLR 132 |
Orders | The joint adminsitrators of the estate of WHR be paid remuneration from his estate in the sume of $3 000 per annum to commence for the year 11 December 2007 to 12 December 2008 |
Summary | The joint administrators of the estate of WHR [his sister and brother in law] applied to the Tribunal that they be paid remuneration from his estate for their work as his administrators.,The administrators sought remuneration from the beginning of 2004 (when the sister was sole administrator; the joint administration only coming into force in October 2006), but it was not made clear why it should start for that date and not sooner (or later).,The administrators provided details of the hours spent on the administration from 2004 but their submissions were not entirely consistent. They said they were currently spending an average of seven hours a week on the administration of WHR's estate.,The administrators did not submit that if remuneration were to be paid, at what rate it should be paid. The Tribunal sought assistance from the Public Trustee to give an estimate of the fees he would charge the estate were he the administrator for WHR.,Under the relevant legislation (the Guardianship and Administration Act 1990 (WA)), remuneration could only be paid to an administrator, other than the Public Trustee, if the Tribunal considered that, because of the size and complexity of the estate, or both, remuneration should be paid. ,The Tribunal decided that remuneration should be paid to the administrators of the estate of WHR but only from 2007. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : HUMAN RIGHTS ACT : GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) CITATION : FG and WHR [2009] WASAT 102 MEMBER : MR J MANSVELD (MEMBER) HEARD : 18 NOVEMBER 2008 AND 29 JANUARY 2009 DELIVERED : 22 MAY 2009 FILE NO/S : GAA 2217 of 2008 BETWEEN : FG
- BG
Self-represented
AND
WHR
Proposed represented person
Catchwords:
Guardianship and administration - Remuneration for administrators - Size or complexity of the estate - Remuneration may be warranted in circumstances where the estate is out of the ordinary or not typical
Legislation:
Guardianship and Administration Act 1990 (WA), s 68(3), s 76, s 76(2) s 84, s 117, s 117(3)(a), s 118(1)
Public Trustee Act 1941 (WA)
(Page 2)
State Administrative Tribunal (Conferral of Jurisdiction) Amendment and Repeal Act 2004 (WA), s 416 - s 466
Result:
Remuneration is paid to the administrators
Category: B
Representation:
Counsel:
Self-represented : Self-represented
Proposed represented person : Self-represented
Solicitors:
Self-represented : Self-represented
Proposed represented person : Self-represented
Case(s) referred to in decision(s):
In the Will of Sheppard [1972] 2 NSWLR 714
Moore (decd), In re v Moore [1956] VLR 132
(Page 3)
Summary of Tribunal's decision
1 The joint administrators of the estate of WHR (his sister and brother in law) applied to the Tribunal that they be paid remuneration from his estate for their work as his administrators.
2 The administrators sought remuneration from the beginning of 2004 (when the sister was sole administrator; the joint administration only coming into force in October 2006), but it was not made clear why it should start from that date and not sooner (or later).
3 The administrators provided details of the hours spent on the administration from 2004 but their submissions were not entirely consistent. They said they were currently spending an average of seven hours a week on the administration of WHR's estate.
4 The administrators did not submit that if remuneration were to be paid, at what rate it should be paid. The Tribunal sought assistance from the Public Trustee to give an estimate of the fees he would charge the estate were he the administrator for WHR.
5 Under the relevant legislation, Guardianship and Administration Act 1990 (WA), remuneration could only be paid to an administrator, other than the Public Trustee, if the Tribunal considered that, because of the size and complexity of the estate, or both, remuneration should be paid.
6 The Tribunal decided that remuneration should be paid to the administrators of the estate of WHR but only from 2007.
Background
7 These reasons relate to an application made by the joint administrators of the estate of WHR to be remunerated for services rendered to him.
8 The administrators are seeking an order for remuneration from 2004.
9 The relevant legislation is the Guardianship and Administration Act 1990 (WA) (GA Act).
Previous orders for WHR
10 WHR is a 67-year-old man who suffers from a chronic mental illness and who lives in supported accommodation.
(Page 4)
11 An order for administration was first made for WHR on 11 December 1997 by the former Guardianship and Administration Board (the Board). The Board appointed the sister of WHR (one of the current joint administrators) as his plenary administrator for 12 months.
12 On 15 January 1999 the Board confirmed the order for five years, the maximum period available under the GA Act, s 84.
13 In August 2003, the administrator sought review of the order, requesting that the Board approve certain gifts from the estate of WHR, including what was described by the Board, in the order that was made on 19 January 2004, as an 'advance on [her] inheritance'. The Board approved some gifts but not the one to the administrator. The review of the order was set for five years.
14 In May 2004 the administrator again sought review of the order requesting that the Board approve small one-off gifts to certain relatives of WHR and a gift of $65,000 to her and her husband (whom she had married in 2000) to payout a mortgage on their property. This was again characterised as an 'advance on inheritance'. The small gifts were approved by the Board on 5 July 2004 but not the gift to the administrator. The order for administration was otherwise confirmed for another five years.
15 In January 2005 this Tribunal took over most of the functions of the Board including the determination of reviews of administration orders (State Administrative Tribunal (Conferral of Jurisdiction) Amendment and Repeal Act 2004 (WA), s 416 - s 466).
16 On 27 October 2006 the Tribunal appointed the sister of WHR (who was then the sole administrator) and her husband as joint plenary administrators for a period of five years. Small annual gifts to the carers of WHR were approved by the Tribunal.
The application for remuneration
17 In their written application the administrators submit that remuneration should be paid for their role as administrators of the estate of WHR but do not specify from when that remuneration should apply. They provide information they say details the work and travelling they have undertaken in respect to the estate since January 2004.
(Page 5)
18 In their oral submissions they ultimately seek remuneration from 2004 to reflect the information they have provided but provide no rationale as to why it should apply from that date and not earlier (or later).
19 The application, therefore, is for a period when the sister of WHR was sole administrator (19 January 2004) and the period from when she and her husband were appointed joint administrators (27 October 2006).
20 The administrators state that in the 2004 calendar year, 168 hours and 45 minutes was spent on the administration in the form of travelling and the undertaking of tasks; in 2005, 163 hours and 45 minutes; in 2006, 42 hours and 45 minutes and in 2007, 52 hours and 15 minutes. The difference in times between 2004/2005 and 2006/2007 appears to reflect the fact that the administrator(s) were travelling to a farm and a rural town property in which WHR had an interest and which have been sold.
21 In the written application the administrators list some of the tasks which they say they carry out to deal with the financial affairs of WHR. They are: telephone calls; writing letters; checking all bills and ensuring they are paid on time; filing; keeping an account book up to date; checking the report received monthly from an investment portfolio managed by a bank; managing a cheque account and a term deposit account; managing shares and property trust investments; entering transactions monthly onto computer files; preparing documentation for the accountant and the Public Trustee which takes 'many days', and when the order for administration is reviewed, preparing the necessary documentation which takes seven to 10 days to complete. The administrators' state:
If you take the tasks as a whole, the time spent would be between 84 - 168 days per year (1 - 2 weeks per month).
22 When asked by the Tribunal to give an estimate of the average weekly hours currently spent on the estate of WHR, the administrators say seven hours.
23 The Tribunal has a report from the Public Trustee (to whom the administrators must report annually) which includes the accounts submitted by the administrators for the period 11 December 2006 to 10 December 2007.
24 The accounts show that WHR has an estate worth just over $1.5 million as at December 2007, comprising bank funds of $58,000; an investment portfolio with a bank of $717,000; other investments (shares and property trusts)
(Page 6)
- $505,000 and mortgage loans on the sale of farms $282,000.
25 The accounts show that WHR earned income from interest, dividends, property trust distributions, the sale of shares and farm mortgage payments. Expenditure was for personal maintenance, board and lodging, medical expenses, income taxation, funeral fund, computer warranty and repairs, telephone, fax, internet, stationary, postage, mortgage fees, mileage and fees to a financial planner.
26 The Public Trustee states in his report that the telephone, fax, internet, postage and mileage costs claimed by the administrators are higher than the previous year and that a vehicle log record was provided to account for the mileage.
27 The administrators state that the value of the investment portfolios has reduced significantly in the last 12 months due to general economic conditions, for example, the investment portfolio held by a bank by about $230,000.
28 The administrators do not submit at what rate remuneration should, in their view, be paid.
29 The Tribunal requested of the Public Trustee an estimate of what fees he would charge on the estate of WHR were he the appointed administrator. In response the Public Trustee states:
It is estimated that our fees would be in the order of $13,000 per annum. These would include management and audit fees, collection & income fees and a fee for the annual preparation of income tax returns. The collection fee relates to the recurring receipts for the contract of sale of the farm.
The relevant legislation
30 Section 117 of the GA Act relevantly states:
(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.
- (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.
The decision of the Tribunal
31 Section 117 of the GA Act reflects the general equitable rule that precludes the payment of remuneration to a person in a trustee relationship with another except in certain circumstances, one of which, as s 117 allows, is when remuneration is permitted by way of statutory provision. The Laws of Australia (Volume 15.14, page 93).
32 The starting position must therefore be that remuneration is not payable and that when, as in s 117 of the GA Act, exception is made for the size or complexity of an estate, the reference is to estates which sit outside the typical or ordinary situation.
33 Another exception is that of the Public Trustee who is able to be remunerated pursuant to the Public Trustee Act 1941 (WA) (s 117(3)(a) of the GA Act).
34 The GA Act does not prescribe what 'size or complexity' might mean, and permits the Tribunal to decide the matter according to the circumstances of the individual case. No doubt what defines the term will differ over time particularly if, as is likely, size refers to the value or quantum of an estate as well as its structure. Complexity is likely open to a more objective assessment but suffers from a relativity centred on the variable abilities of administrators.
35 The issue is arguably further complicated by the fact that administrators are permitted to employ agents to transact any business or to do any act required to be transacted or done in the management or administration of an estate (s 76 of the GA Act), and that employing agents has the potential to make the management of an otherwise complicated estate, less complicated. Whilst an administrator has the ultimate responsibility for what happens in an estate, he or she is not liable for any default on the part of an agent if the agent is employed in good faith and without negligence (s 76(2) of the GA Act).
(Page 8)
36 In addition, under s 118(1) of the GA Act, an administrator may reimburse him or herself for, or pay out of the estate of a represented person (a person for whom an order for administration has been made), all expenses reasonably incurred in or about the performance of his or her functions.
37 A common theme in the case law is the notion (that I have already referred to) that remuneration may be warranted in circumstances where the estate is out of the ordinary or not typical In the Will of Sheppard[1972] 2 NSWLR 714 at [720] - [721] andMoore (decd), In re v Moore[1956] VLR 132 at [134].)
38 When directed to the concept of 'size and complexity', what is required is a common sense approach to assess the estate in question against an estate that an ordinary person could be expected to manage with the usual difficulties; where an administrator can reimburse him or herself for expenses incurred and who, for more specialised tasks, can rely on the employment of agents. It is not unrelated to the idea that an estate to which 'size and complexity' can be applied so that remuneration should be allowed, requires more work, effort and is more onerous to manage than would ordinarily be expected of an administrator typically appointed under the GA Act. The typical or intended administrator is a person who is close to the represented person (s 68(3) of the GA Act).
39 I accept that the estate of WHR is of a size or complexity which sets it apart from the estate that typically comes before the Tribunal. I have come to this view because the bulk of the estate (over $1 million) is in the form of investments which regularly fluctuate in value and which require close monitoring and scrutiny.
If remuneration is to be paid what rate should be set and from when should it apply?
40 The difficulty I have is to come to a rate of remuneration with very limited relevant information and where the administrators have not submitted any proposal other than remuneration should be paid.
41 The administrators' calculation of time spent on the estate of WHR is not consistent. If I accept the seven hours a week as stated by the administrators that would amount to 364 hours annually, a figure which does not seem to
(Page 9)
- relate to the hours calculated for 2004, 2005, 2006 and 2007 (see above).
42 There is also not much I can take from the statement of the administrators that the time spent could be between 84 and 168 days per year.
43 The Public Trustee's estimate of what he would charge ($13,000 per annum) is of limited relevance because those fees include collection and income fees (fees charged as a set percentage of income and other funds collected on behalf of WHR) and are not directly related to tasks undertaken. The estimate of the Public Trustee would also include fees charged at professional rates for time spent on certain tasks.
44 If I discount the fees estimate of the Public Trustee by 50% to reflect these matters then an annual rate of remuneration for the administrators would be $6,500. If I further reduce the remuneration by the cost of the tasks undertaken by an external specialist that would otherwise fall to be done by the administrators (in the case of WHR that would be the financial planner cost of $3,850), then the annual rate stands at $2,650.
45 I am satisfied that in all the circumstances the rate of remuneration should be set at $3,000 per annum.
46 In setting this rate I have not set a value on the proposition (not in any case put by the administrators) that were the administrators to decide not to continue then it is likely that the Public Trustee would be appointed and the indicated fees of $13,000 charged to the estate of WHR.
47 I am mindful of the diminution in the value of the estate of WHR due to worsening economic conditions.
48 I am not convinced that I should use my discretion to allow remuneration from 2004 as the administrators have proposed, given the difficulties with the submissions by the administrators that I have already mentioned.
49 I therefore order that the administrators be remunerated in the sum of $3,000 per annum to commence for the year 11 December 2007 to 10 December 2008 being the accounting period described in the annual accounts filed by the administrators with the Public Trustee.
(Page 10)
Order
The joint administrators of the estate of WHR be paid remuneration from his estate in the sum of $3,000 per annum to commence for the year 11 December 2007 to 12 December 2008.
I certify that this and the preceding [49] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MR J MANSVELD, MEMBER
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