FV and Public Trustee
[2016] WASAT 86
•15 JULY 2016
FV and PUBLIC TRUSTEE [2016] WASAT 86
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2016] WASAT 86 | |
| GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) | |||
| Case No: | GAA:1972/2015 | DETERMINED ON THE DOCUMENTS | |
| Coram: | MR P McNAB (SENIOR MEMBER) | 15/07/16 | |
| 32 | Judgment Part: | 1 of 1 | |
| Result: | Administration orders confirmed for a further five years | ||
| A | |||
| PDF Version |
| Parties: | FV PUBLIC TRUSTEE |
Catchwords: | Guardianship and administration Review of administration order Superannuation Selfmanaged superannuation fund regulated under Commonwealth law Plenary administrators Rights, powers and duties Disposition of estate Transfers made by joint plenary administrators in good faith Transfers resulting in likely considerable financial advantage to represented person's estate Best interests of represented person Whether transfers ex gratia transactions Statutory construction of protective legislation Protective intent Payment of legal fees Words and Phrases: Ex gratia payments |
Legislation: | Guardianship and Administration Act 1990 (WA), s 43, s 64, s 71(3), s 72(1), s 72(3), s 80, s 80(1), s 90, Sch 2 Pt A Pt B Div 2 Pt 6 Superannuation Industry (Supervision) Act 1993 (Cth), s 10, s 17A |
Case References: | Ioppolo v Conti [2015] WASCA 45; (2015) 293 FLR 412 Perpetual Trustee Co Ltd v Cheyne [2011] WASC 225; (2011) 42 WAR 209 Perpetual Trustee Company Limited and MSC [2011] WASAT 127 Perpetual Trustees Ltd (WA) v Public Trustee [2009] WASAT 253; (2009) 68 SR (WA) 128 Public Trustee of Western Australia v VV [2012] WASAT 170; (2012) 82 SR (WA) 233 Re EH [2008] WASAT 222 Re Full Board of Guardianship and Administration Board (2003) 27 WAR 475 Re Hoang Minh Le; Ex parte Public Trustee [2012] WASC 31 Re MD [2010] WASAT 132; (2010) 73 SR (WA) 363 SQ and IQ [2012] WASAT 165 |
Summary | Acting on professional advice, and in good faith, but without either prior application to the Tribunal or prior discussions with the Public Trustee, the joint plenary administrators of the estate of a represented person purported to transfer a very large sum from the represented person's GESB superannuation account to a selfmanaged superannuation fund (SMSF). The joint plenary administrators fully cooperated with a comprehensive investigation into the transactions by the Public Trustee. This was after the dealings were transparently disclosed in the administrators' accounts filed with the Public Trustee.,The joint plenary administrators were the directors and shareholders of the corporate superannuation trustee. The represented person was the sole member of the superannuation fund. Importantly, the SMSF was regulated under Commonwealth law and there were significant tax advantages to the estate in that arrangement. It was accepted that the estate would most likely significantly benefit from the arrangements. The represented person suffered from multiple sclerosis and associated dementia and would require increasing and significant funds for her care into the future.,The joint plenary administrators accepted that the transfer of funds into the SMSF had the effect of reducing the represented person's personal estate. However, they had believed that because they were 'controlling' the corporate trustee of the SMSF and because the represented person was the sole member of the SMSF, they were acting in the represented person's best interests in the investment and management of her estate's assets.,A previous decision of the Tribunal, Re MD (2010) 73 SR (WA) 363, dealing with the proposed transfer of a represented person's remaining personal assets into a special purpose trust 'for asset protection and tax minimisation', appeared to suggest that such transactions might not be compatible with the Guardianship and Administration Act 1990 (WA) since they were ex gratia payments. However, since Re MD, the Supreme Court and the Tribunal had dealt with complex transactions involving regulated SMSFs. Those cases acknowledged not only the significant financial benefits flowing to represented persons' estates but the potential interlocking regulatory mechanisms under Commonwealth and particularly State law (that is, the Guardianship and Administration Act 1990) in relation to such arrangements.,The Public Trustee submitted that Re MD ought not to be followed, as traditional methods of protecting the interests of disabled persons could nowadays give way to other forms of protection if there were substantial benefits to be gained for the person's estate.,After examining at length those cases and the detailed submissions of the parties, the Tribunal agreed with the Public Trustee. The Guardianship and Administration Act 1990 ought to be interpreted in a manner that advanced the underlying purpose or object of the Act, namely the conservation of 'the property and financial resources of the disabled person'. Such an interpretation would, in effect, acknowledge the propriety of the transactions under review.,The current joint plenary administrators were thus confirmed in office for a further five years and no orders were made either affecting the current financial arrangements or for payment of costs. This was because such orders either were not needed, or because the Act did not address or permit the making of the same. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL ACT : GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) CITATION : FV and PUBLIC TRUSTEE [2016] WASAT 86 MEMBER : MR P McNAB (SENIOR MEMBER) HEARD : DETERMINED ON THE DOCUMENTS DELIVERED : 15 JULY 2016 FILE NO/S : GAA 1972 of 2015 BETWEEN : FV
- Represented Person
AND
PUBLIC TRUSTEE
Other Party
Catchwords:
Guardianship and administration Review of administration order Superannuation Selfmanaged superannuation fund regulated under Commonwealth law Plenary administrators Rights, powers and duties Disposition of estate Transfers made by joint plenary administrators in good faith Transfers resulting in likely considerable financial advantage to represented person's estate Best interests of represented person Whether transfers ex gratia transactions Statutory construction of protective legislation Protective intent Payment of legal fees Words and Phrases: Ex gratia payments
Legislation:
Guardianship and Administration Act 1990 (WA), s 43, s 64, s 71(3), s 72(1), s 72(3), s 80, s 80(1), s 90, Sch 2 Pt A Pt B Div 2 Pt 6
Superannuation Industry (Supervision) Act 1993 (Cth), s 10, s 17A
Result:
Administration orders confirmed for a further five years
Summary of Tribunal's decision:
Acting on professional advice, and in good faith, but without either prior application to the Tribunal or prior discussions with the Public Trustee, the joint plenary administrators of the estate of a represented person purported to transfer a very large sum from the represented person's GESB superannuation account to a selfmanaged superannuation fund (SMSF). The joint plenary administrators fully cooperated with a comprehensive investigation into the transactions by the Public Trustee. This was after the dealings were transparently disclosed in the administrators' accounts filed with the Public Trustee.
The joint plenary administrators were the directors and shareholders of the corporate superannuation trustee. The represented person was the sole member of the superannuation fund. Importantly, the SMSF was regulated under Commonwealth law and there were significant tax advantages to the estate in that arrangement. It was accepted that the estate would most likely significantly benefit from the arrangements. The represented person suffered from multiple sclerosis and associated dementia and would require increasing and significant funds for her care into the future.
The joint plenary administrators accepted that the transfer of funds into the SMSF had the effect of reducing the represented person's personal estate. However, they had believed that because they were 'controlling' the corporate trustee of the SMSF and because the represented person was the sole member of the SMSF, they were acting in the represented person's best interests in the investment and management of her estate's assets.
A previous decision of the Tribunal, Re MD (2010) 73 SR (WA) 363, dealing with the proposed transfer of a represented person's remaining personal assets into a special purpose trust 'for asset protection and tax minimisation', appeared to suggest that such transactions might not be compatible with the Guardianship and Administration Act 1990 (WA) since they were ex gratia payments. However, since Re MD, the Supreme Court and the Tribunal had dealt with complex transactions involving regulated SMSFs. Those cases acknowledged not only the significant financial benefits flowing to represented persons' estates but the potential interlocking regulatory mechanisms under Commonwealth and particularly State law (that is, the Guardianship and Administration Act 1990) in relation to such arrangements.
The Public Trustee submitted that Re MD ought not to be followed, as traditional methods of protecting the interests of disabled persons could nowadays give way to other forms of protection if there were substantial benefits to be gained for the person's estate.
After examining at length those cases and the detailed submissions of the parties, the Tribunal agreed with the Public Trustee. The Guardianship and Administration Act 1990 ought to be interpreted in a manner that advanced the underlying purpose or object of the Act, namely the conservation of 'the property and financial resources of the disabled person'. Such an interpretation would, in effect, acknowledge the propriety of the transactions under review.
The current joint plenary administrators were thus confirmed in office for a further five years and no orders were made either affecting the current financial arrangements or for payment of costs. This was because such orders either were not needed, or because the Act did not address or permit the making of the same.
Category: A
Representation:
Counsel:
Represented Person : Ms A Liston
Other Party : Mr M Bowyer
Solicitors:
Represented Person : Irdi Legal
Other Party : Public Trustee
Case(s) referred to in decision(s):
Ioppolo v Conti [2015] WASCA 45; (2015) 293 FLR 412
Perpetual Trustee Co Ltd v Cheyne [2011] WASC 225; (2011) 42 WAR 209
Perpetual Trustee Company Limited and MSC [2011] WASAT 127
Perpetual Trustees Ltd (WA) v Public Trustee [2009] WASAT 253; (2009) 68 SR (WA) 128
Public Trustee of Western Australia v VV [2012] WASAT 170; (2012) 82 SR (WA) 233
Re EH [2008] WASAT 222
Re Full Board of Guardianship and Administration Board (2003) 27 WAR 475
Re Hoang Minh Le; Ex parte Public Trustee [2012] WASC 31
Re MD [2010] WASAT 132; (2010) 73 SR (WA) 363
SQ and IQ [2012] WASAT 165
Introduction
1 Upon the review of orders previously made by the Tribunal concerning the confirmation or otherwise of the appointment of joint administrators of the estate of FV, the represented person in the proceedings (represented person), questions have arisen concerning the transfer of funds to certain superannuation funds, being moneys received into the estate of the represented person from an inheritance settlement.
2 After a comprehensive review by the Public Trustee of the administration of the estate, including these transactions, the Public Trustee concluded that the actions were done on professional advice and in good faith, and do not appear to have amounted to any 'loss' in the represented person's estate. In fact, such arrangements might well be beneficial to the estate.
3 It is clear that the motivation of the joint administrators taken, as I have said, on professional advice (which was also fully disclosed) was, as the Public Trustee submitted in his final submissions, 'designed to increase, rather than deplete, the money available to [the represented person]'.
4 Upon the review, the administrators, by their solicitors, sought various orders from the Tribunal, the effect of which, if made, would be to purportedly authorise the current arrangements.
5 The Public Trustee made general submissions and, in effect, sought clarification from the Tribunal whether various provisions of the Guardianship and Administration Act 1990 (WA) (GA Act), if narrowly interpreted, might be applicable to the circumstances of the case, so as to call into doubt the administrators' transactions and actions. The Tribunal's previous decision Re MD [2010] WASAT 132; (2010) 73 SR (WA) 363 (Re MD) was specially noticed.
6 The Tribunal accepted the submissions of the Public Trustee that the GA Act ought not to be interpreted in such a manner, and made orders reappointing the current joint plenary administrators.
Previous orders and orders on review
7 The represented person was diagnosed with 'severe multiple sclerosis' and dementia connected therewith. She was born in 1960. It appears that her condition has progressively worsened from around 2007. Her then neurologist, Dr P, said that as at June 2010, the represented person was 'bed bound' and 'delusional'.
8 On 22 June 2010, this Tribunal made certain orders concerning the represented person after considering:
a) Dr P's medical opinion;
b) some more equivocal medical evidence from two treating general practitioners;
c) and, it appears, some more up-to-date psychiatric medical evidence; and
d) the views of the represented person's partner (MH) and others.
9 These 2010 orders, made respectively under s 64 (dealing with administration orders) and s 43 (dealing with guardianship orders) of the GA Act, were as follows:
1. [MH, address redacted] and [WJ, address redacted] are appointed joint plenary administrators of the estate of the represented person with all the powers and duties conferred by the [GA Act].
2. This order is to be reviewed by 22 June 2015.
- And, so far as is relevant:
…
2. [MH] is appointed limited guardian of the represented person with the following functions:
(a) To decide where the represented person is to live, whether permanently or temporarily;
(b) To decide with whom the represented person is to live;
(c) Subject to Division 3 of Part 5 of the [GA Act], to consent to any treatment or health care of the represented person; and
(d) To determine the services to which the represented person should have access.
3. This order is to be reviewed by 22 June 2015.
MH is the represented person's partner of many years and WJ is the represented person's sister.
10 The statutory review of this last-mentioned guardianship order came before me and, on 10 July 2015, based upon up-to-date medical and other evidence, I confirmed the order pursuant to s 90 of the GA Act. A review date of 10 July 2020 was specified.
11 The represented person is receiving full-time care in a private care facility and is described by a social worker at that facility as 'no longer mobile' with 'care needs [that] are high'. The represented person's current general practitioner confirmed that the represented person has 'limited mobility', a 'poor memory [and] is confused at times'. The evidence indicates that the represented person will gradually need more resources over time to pay for care and treatment.
12 The review of the administration order also came before me and, after a series of adjournments and after considering various submissions (considered below), I indicated that, as recorded in an order dated 1 March 2016, I would also confirm the administration order in due course making, if necessary, any supplementary orders.
The Public Trustee's investigations
13 The explanation for these published reasons, and the delay in formally confirming the administration order, relates to, as has been mentioned, certain actions, undertaken in good faith, by the joint administrators, to 'place some of the [represented person's] money into superannuation' (particularly, the represented person's self-managed superannuation fund (SMSF), and the extensive investigations by the Public Trustee into the same. These transactions and investigations are set out in detail below.
14 Such investigations arose as follows.
15 In accordance with usual practice upon the review, in May 2015, the Public Trustee filed a copy of his interim report on the state of the administrators' accounts, as those accounts had been filed with the Public Trustee: see s 80(1) of the GA Act, reproduced below. In that report, the Public Trustee:
raise[d] for the Tribunal[']s attention … whether or not the administrator[s] would require the Tribunal's authority to transfer any assets held by the [represented person's] personal estate to the [represented person's SMSF].
16 Importantly, it was noted that otherwise obtaining such authority from the Tribunal:
those assets transferred may constitute a loss from the personal estate which in turn would be managed by the Trustees of the [represented person's SMSF] as assets of that fund and not the personal estate of [the represented person].
17 Section 80 of the GA Act provides as follows (emphasis added):
80. Accounts
(1) An administrator shall submit accounts to the Public Trustee as required by, or prescribed by regulations, except so far as the administrator is exempted from doing so by the Public Trustee.
…
(3) The Public Trustee shall examine any accounts lodged under subsection (1) or delivered under subsection (2) and may -
(a) allow them;
(b) disallow any amount paid;
(c) determine that any amount or asset has been omitted, or that any loss has occurred.
(4) Where the Public Trustee -
(a) disallows an amount paid or determines that an amount or asset has been omitted or that any loss has occurred; and
(b) determines that there has thereby been a loss to or diminution of the estate,
the administrator is liable to the estate for such loss or diminution, except to the extent that the Public Trustee relieves him of liability.
(5) Accounts that have been examined under this section and allowed by the Public Trustee are conclusive unless the administrator acted dishonestly, in bad faith or without reasonable cause.
(6) The Public Trustee shall issue a certificate as to any loss or diminution for which an administrator or his estate is liable under subsection (4), taking into account any relief allowed by the Public Trustee under that subsection, and the Public Trustee may recover the same from the administrator or his estate for the benefit or the estate of the represented person as a debt due in a court of competent jurisdiction.
18 The Public Trustee undertook a thorough investigation into all of the circumstances surrounding the management of the estate, an estate that is not insignificant in value. As at 30 June 2015, the represented person's personal assets and superannuation interests amounted to approximately $3.79 million.
19 The central question raised by the Public Trustee for the joint administrators was:
Do the joint administrators consider that there has been a diminution or a loss to [the represented person's] personal estate as a consequence of transferring assets from her personal estate to the [the represented person's] Superannuation Fund?
- Thus, information was sought by the Public Trustee on, inter alia, the following matters:
• What was the administrator's justification to transfer assets from the [represented person's] estate [to superannuation]?
• What were the authorities in which the administrators believed that they have acted under in doing so?
• What is the current full extent of those assets that have been transferred from the personal estate to the control of trustees of the [SMSF]?
• Who are the possible beneficiaries of [the represented person's] personal estate in the eventuality of her death?
• Who are the beneficiaries of the [SMSF]?
• Does [the represented person] have any known relatives who have not maintained contact with her?
• Are the administrators aware of the existence of any known Will made by [the represented person]?
• What is the extent of [the represented person's] family?
• Is [the represented person] currently married or is she divorced?
• Are there any matters currently before the Family Court regarding divorce proceedings of behalf of [the represented person] if she is currently married?
• If she was or is currently married does she have any children from this or any other previous marriages?
• Do the joint administrators consider that any other person could have a claim to any inheritance of [the represented person's] estate on her death?
Additionally, the Public Trustee sought the joint administrators' views on the following issue:
The joint administrator[s'] statement should refer to whether or not they consider that they are now acting in a conflict of interest in the capacity as joint administrators for [the represented person] as well as [being] the Directors of the trustee company for the [the represented person's] Superannuation Fund.
It is acknowledged by both the Public Trustee and the Tribunal that the joint administrators provided full disclosure in response to the Public Trustee's various queries set out above, in particular as to the entire circumstances of the transfers between the represented person's estate and the self-managed fund, and the justifications for the same. Indeed, the Public Trustee noted that:
[The represented person's joint] administrators … have been extremely open and cooperative. They have gone to considerable lengths to provide a wealth of information, in coherent form, to the Public Trustee and [to] the Tribunal.
a) During 2011, the represented person became entitled to an inheritance of approximately $1.6 million from the estates of her parents.
b) Consequently, there was executed in July 2011 a Deed of Family Arrangement entered into between the administrator of the parents' estates and the beneficiaries of the parents' estates. It was agreed that assets to the value of approximately $1.2 million would be distributed to the represented person.
c) The administration of the parents' estates has been completed and the estate assets have been distributed. The represented person has received the assets as agreed upon under the Deed of Family Arrangement.
d) The distribution included dividends from shares inherited by the represented person in a corporation that was subsequently voluntarily wound up and liquidated. The represented person received approximately $0.9 million from this distribution.
e) The administrators took professional advice from an established firm of financial advisors. The advice was sought, quite properly, in relation to 'the management and investment of [the represented person's] assets and strategies to potentially minimise her personal tax liability'.
f) During 2013 and 2014, a total of approximately $1.1 million was contributed to (invested in) the represented person's GESB West State (GESB) superannuation account. Such a superannuation fund, it may be noticed, is a 'constitutionally-protected' asset of the State of Western Australia, and thus different taxation arrangements apply because of its constitutional status.
g) The represented person's GESB superannuation account balance before this contribution (as at 1 January 2013) was approximately $33,000.
h) In October 2013, and again on advice, the represented person's SMSF was established under a Deed of Trust. The trustee of the SMSF is a corporation and the two joint plenary administrators are the directors and shareholders of the trustee company. The represented person 'is the sole member of the SMSF'.
i) Thereafter, in the 2015 financial year, approximately $0.94 million was rolled over from the represented person's GESB superannuation account to the SMSF.
j) The main reason for these decisions, taken on advice, 'was to reduce [the represented person's] personal tax liability from the investment of the funds and to secure [the represented person's] retirement'.
- On this last-mentioned point as to the advantages and benefits flowing directly or indirectly to the represented person, the joint administrators submitted:
In summary, even though the investment of [the represented person's] superannuation in GESB shows a consistency in asset growth, [quoting professional advice] 'the long term benefits of investing the funds in the SMSF, in particular the taxation benefits and control aspects of the management of the fund, were considered to outweigh the benefit of asset growth in GESB['].
The investment of [the represented person's] funds in the SMSF reduced the value of her personal estate with the effect that her personal tax liability was reduced. [The represented person] may shortly commence a transition to retirement pension from the SMSF. The management of several pension accounts over time is simplified in the SMSF.
We now understand that a separate legal entity was created by forming the SMSF. We also now understand that the transfer of funds into the SMSF had the effect of reducing [the represented person]'s personal estate. However, because we were controlling the corporate trustee of the SMSF and because [the represented person] was the sole member of the SMSF, we believe that we are acting in [the represented person]'s best interest in the investment and management of her assets. We considered the assets of the SMSF as assets held for [the represented person] as administrators under the [Tribunal's] Administration Order.
22 As to the related questions of conflict of interest (if any) and external supervision, the joint administrators said:
We believe that we are authorised in our capacity as administrators for [the represented person] to act as the trustee of the SMSF and in compliance with [s] 17A(3)(b)(i) of the Superannuation Industry (Supervision) Act 1993 [Cth]. We are appointed as the directors of the Trustee Company in our capacity as administrators for [the represented person]. We do not have a personal interest in the Trustee Company or SMSF … We believe that we do not have a conflict of interest in acting as [the represented person]'s administrators and in acting as the directors of the Trustee Company.
The relevant legislation
23 Before turning to the relevant provisions of the GA Act, it is convenient to note the effect of the provisions of s 17A(3)(b)(i) of the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act) and related official advice relied upon by the joint administrators here. In Public Trustee of Western Australia v VV [2012] WASAT 170; (2012) 82 SR (WA) 233 (VV), this Tribunal (constituted by a panel including the former President, Chaney J, and Senior Member M Allen and Member S Gillett) said this of the SIS Act, at [10] - [13]:
A 'self managed superannuation fund' is a creature of the SIS Act. Section 17A(1) identifies the requirements necessary to qualify as a self managed superannuation fund where the fund has more than one member. Where, as in this case, the fund has only one member, the question as to whether or not it qualifies as a self managed superannuation fund is determined by s 17A(2), which provides:
(2) Subject to this section, a superannuation fund with only one member is a self managed superannuation fund if and only if:
(a) if the trustee of the fund is a body corporate:
(i) the member is the sole director of the body corporate; or
(ii) the member is one of only 2 directors of the body corporate, and the member and the other director are relatives; or
(iii) the member is one of only 2 directors of the body corporate, and the member is not an employee of the other director; and
(b) if the trustees of the fund are individuals:
(i) the member is one of only 2 trustees, of whom one is the member and the other is a relative of the member; or
(ii) the member is one of only 2 trustees, and the member is not an employee of the other trustee; and
(c) no trustee of the fund receives any remuneration from the fund or from any person for any duties or services performed by the trustee in relation to the fund;
(d) if the trustee of the fund is a body corporate - no director of the body corporate receives any remuneration from the fund or from any person (including the body corporate) for any duties or services performed by the director in relation to the fund.
(3) A superannuation fund does not fail to satisfy the conditions specified in subsection (1) or (2) by reason only that:
…
(b) the legal personal representative of a member of the fund is a trustee of the fund or a director of a body corporate that is the trustee of the fund, in place of the member, during any period when:
(i) the member of the fund is under a legal disability; or
(ii) the legal personal representative has an enduring power of attorney in respect of the member of the fund[.]
The expression 'legal personal representative' is defined in s 10 of the SIS Act as follows:
legal personal representative means the executor of the will or administrator of the estate of a deceased person, the trustee of the estate of a person under a legal disability or a person who holds an enduring power of attorney granted by a person.
The Australian Taxation Office has issued an interpretative decision referred to as ATO ID 2010/139 which concluded that:
… where a State or Territory administrative tribunal appoints an administrator to manage the estate of a person with a mental disability, that administrator will be a legal personal representative of that member who is under a legal disability. Consequently, under [s] 17A(3)(b)(i) the administrator can be appointed as a trustee of the superannuation fund in place of that member, enabling the fund to be an SMSF notwithstanding that one of the members is not a trustee of the superannuation fund.
25 A common theme underlying Cheyne (see at [43]); the earlier proceedings related to Cheyne in this Tribunal (Perpetual Trustee Company Limited and MSC [2011] WASAT 127 (MSC), see at [12]); VV, (see at [18]); and Re MD, (see at [18]) were attempts by administrators and trustees to use the tax advantages associated with trusts, and particularly superannuation investments, to significantly financially benefit the estate of a represented person or proposed represented person.
26 Division 2 of Pt 6 of the GA Act, dealing with the functions of administrators in relation to the administration of estates, contains a number of provisions which may be germane to the questions before the Tribunal. So far as relevant, they include the following (emphasis added):
68. Who may be appointed administrator
(1) An administrator (including a joint administrator) shall be -
(a) an individual of or over the age of 18 years; or
(b) a corporate trustee,
who has consented to act and who, in the opinion of the State Administrative Tribunal -
(c) will act in the best interests of the person in respect of whom the application is made; and
(d) is otherwise suitable to act as the administrator of the estate of that person.
(2) The State Administrative Tribunal shall not appoint as administrator a corporate trustee that is a trustee company under the Trustee Companies Act 1987 unless it is satisfied that -
(a) there is an individual who would otherwise be appointed as administrator and that individual has in writing requested the appointment of that trustee company; or
(b) the person in respect of whom the application is made has made a will appointing the trustee company as executor and the will remains unrevoked at the time of the appointment.
(3) For the purposes of subsection (1), the State Administrative Tribunal shall take into account as far as is possible -
(a) the compatibility of the proposed appointee with the person in respect of whom the application is made and with the guardian (if any) of that person;
(b) the wishes of that person; and
(c) whether the proposed appointee will be able to perform the functions proposed to be vested in the administrator.
(4) The fact that a person is the guardian of a person does not disqualify him from being appointed as the administrator of the estate of that person.
(5) [Circumstances where Public Advocate might be appointed as an administrator.]
69. Authority of administrator
(1) Subject to section 64(3)(a) [dealing with 'conditions and restrictions' on the appointment of an administrator], the administrator has, or the joint administrators have, in respect of the estate of the represented person, such of the functions provided for by this Act as the State Administrative Tribunal vests in him or them, or directs him or them to perform, in the administration order.
(2) An administrator may on behalf of a represented person execute all such documents and do all such things as are necessary for the performance of the functions vested in him.
(3) An action taken, decision made, consent given or other thing done by an administrator in the performance of the functions vested in him has effect as if it had been taken, made, given or done by the represented person and he were of full legal capacity.
(4) Nothing in this Act vests the estate of a represented person in an administrator.
70. Administrator to act in best interests of represented person
(1) An administrator shall act according to his opinion of the best interests of the represented person.
(2) Without limiting the generality of subsection (1), an administrator acts in the best interests of a represented person if he acts as far as possible -
(a) as an advocate for the represented person in relation to the estate;
(b) in such a way as to encourage the represented person to live in the general community and participate as much as possible in the life of the community;
(c) in such a way as to encourage and assist the represented person to become capable of caring for himself and of making reasonable judgments in respect of matters relating to his person;
(d) in such a way as to protect the represented person from financial neglect, abuse or exploitation;
(e) in consultation with the represented person, taking into account, as far as possible, the wishes of that person as expressed, in whatever manner, or as gathered from the person's previous actions;
(f) in the manner that is least restrictive of the rights, while consistent with the proper protection, of the represented person;
(g) in such a way as to maintain any supportive relationships the represented person has; and
(h) in such a way as to maintain the represented person's familiar cultural, linguistic and religious environment.
(3) Nothing in subsection (2)(a) shall be read as authorising an administrator to act contrary to the Legal Profession Act 2008.
(4) Nothing in subsection (2) shall be read as restricting the functions of an administrator at common law or under any written law.
71. Authority which may be conferred on administrator
(1) The State Administrative Tribunal may, under section 69 [reproduced above], vest plenary functions in the administrator of the estate of a represented person.
(2) Where plenary functions are vested in an administrator he may perform, or refrain from performing, in relation to the estate of the represented person, or any part of the estate, any function that the represented person could himself perform, or refrain from performing, if he were of full legal capacity.
(2a) Despite subsection (2), a plenary administrator may not make a will or other testamentary disposition on behalf of a represented person, but this subsection does not affect the operation of section 111A [dealing with applications to the Supreme Court by an administrator where a represented person 'lacks testamentary capacity'].
(3) Where the State Administrative Tribunal does not under section 69 vest plenary functions in an administrator, it may, under that section, authorise the administrator to perform any specified function, including one or more of those set out in Part A of Schedule 2 [see below].
(4) The State Administrative Tribunal may require a function to be performed by an administrator and may give directions as to the time, manner or circumstances of the performance.
(5) In exercising its jurisdiction under [Pt 6 of the GA Act, dealing with estate administration] the State Administrative Tribunal may take a liberal view of the best interests of the represented person as mentioned in section 4(2) [obligating the Tribunal to have regard to the 'best interests' of a 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 section 72(3) on behalf of the represented person [dealing with certain specified payments and dispositions, see below].
71A. Amendment of order to confer particular function
(1) The State Administrative Tribunal may decline to authorise an administrator to perform a particular function but indicate that it will entertain a later application for the amendment of the administration order to confer that authority.
(2) If a later application is so made it is not necessary for the State Administrative Tribunal, in dealing with the application, to review the administration order under Part 7 [dealing with the periodic and other review of orders].
(3) Notice of an application under this section shall be given to any person to whom notice of the original application for an administration order was given.
72. Further provisions as to authority of administrators
(1) The State Administrative Tribunal may give any direction, make any order or do any other thing provided for in Part B of Schedule 2 [see below].
(2) Without limiting this section or section 71 [reproduced above], the State Administrative Tribunal may make any 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.
(3) Notwithstanding this section or section 71, an administrator shall not without the authority of the State Administrative Tribunal under section 71(5) -
(a) make a payment or disposition of a charitable, benevolent or ex gratia nature; or
(b) make a payment in respect of a debt or demand that the represented person is not obliged by law to pay.
…
74. Administrator may apply for directions
(1) Any administrator may apply to the State Administrative Tribunal for directions concerning any property forming part of the estate of the represented person, or the management or administration of such property, or the performance of any function, and the Tribunal may on any such application give to the administrator any direction not inconsistent with this Act.
(2) An administrator shall comply with any direction given to him under subsection (1).
…
…
77. Represented person incapable of dealing with estate
(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 [dealing with enduring powers of attorney], 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.
78. Cessation of authority of administrator
(1) A person ceases to be administrator of the estate of a represented person upon -
(a) the making of an order by the State Administrative Tribunal revoking his appointment or revoking a declaration under section 64(1) that the person is in need of an administrator of his estate; or
(b) the death of the represented person.
(2) Notwithstanding the death of a represented person or any revocation referred to in subsection (1) an administrator may continue to exercise and perform, in respect of the estate of the represented person, the powers and functions vested in him before the death or revocation until the administrator is satisfied that the person has died or, as the case may be, is served with a copy of the order of revocation.
(3) Subject to section 85 [dealing with circumstances where review of an order is mandatory], where joint administrators are in office, the surviving administrator or administrators may act on the death of any administrator.
79. Represented person bound by acts of administrator
(1) When a declaration under section 64(1) that a person is in need of an administrator of his estate is no longer in force, the person who was the represented person shall be bound by, and may take advantage of, any act lawfully done by the administrator as if it had been done by the person himself and he were of full legal capacity.
(2) Where a represented person dies, subsection (1) shall apply, with all necessary changes, to the personal representative of that person.
28 As also appears above, under s 72(1) of the GA Act, the Tribunal may, in relation to the '[f]urther … authority of administrators', also give 'any direction, make any order or do any other thing provided for in [Sch 2, Pt B]' of the GA Act. Such authority extends to the following potential conferral 'of the necessary power' as follows (emphasis added):
The State Administrative Tribunal may -
…
(g) where, in [the Tribunal's] opinion, any disposition or transaction is expedient in the administration of the estate of the represented person, or would be in that person's best interest, confer upon the administrator the necessary power for the purpose on such terms and subject to such conditions (if any) as the State Administrative Tribunal thinks fit[.]
Analysis of previous cases
29 In Re MD, the Tribunal (constituted by Member F Child) was dealing with an application brought by joint plenary administrators for authority for 'them to transfer [the represented person's] remaining personal assets into a special purpose trust [the 'MD Maintenance Trust'] for asset protection and tax minimisation' (at [1]). The Tribunal acknowledged, at [55], that '[t]here is a benefit to the represented person in the arrangement proposed but this is not [necessarily] the same as [it] being in his best interests'.
30 The Tribunal noted the consistent position of the Tribunal (based upon well-established authority: see, for example, Re Full Board ofGuardianship and Administration Board (2003) 27 WAR 475 (Re Full Board)) that the 'protective intent' of the GA Act and the jurisdiction conferred thereby justified, in effect, a very cautious approach; this applies to both the interpretation of an administrator's powers and to the exercise of any statutory discretion given to the Tribunal. Re MD was cited and followed on this construction point in SQ and IQ [2012] WASAT 165, at [37].
31 The Tribunal held, at [45] and [46] of Re MD, that the proposed transfer would be an ex gratia payment within the meaning of s 72(3) of the GA Act (emphasis added):
To construe 'ex gratia' narrowly, given the wide powers of a plenary administrator as provided for in s 71 [of the GA Act], would enable an administrator to make gifts to themselves (or others) without supervision of the Tribunal. Although on examination of the accounts under s 80 [of the GA Act], the Public Trustee may determine a loss or diminution of the estate for which the administrator is liable unless relieved of that liability by the Public Trustee, this would be after the event. It cannot have been intended that this was the only mechanism of restraint on such a transaction by the administrator. A narrow interpretation of 'ex gratia' is not consistent with the overall intention of the various provisions of the GA Act.
'Gift' is defined in the Oxford Dictionary as 'a thing given or a present'. The list in s 72(3) [of the GA Act] refers to the purpose of the thing given, be it for [a] charitable, benevolent or [an] ex gratia purpose. I consider that the meaning of ex gratia extends to all payments or dispositions of the represented person's property which are not compelled by law but are made at the choice of the administrator or where the represented person does not get financial value which are not characterised as benevolent or charitable.
- Thus, the Tribunal in Re MD went on to hold, at [47] - [51] (emphasis added), that:
When understood in this context [that is, bearing in mind the 'protective intent'] the prohibition on the type of payments listed in s 72(3) [payments or disposition of a 'charitable, benevolent or ex gratia nature'] is protective of the estate by preventing such payments or dispositions, whatever the purpose …
The transactions considered by the Tribunal in [other cases, decided prior to this case in 2010] involve[d] transfers of funds of the represented person to other persons. The represented person received no direct financial benefit in either case.
In the present case, the transfer proposed is to a trust where the represented person's transferred property vests in the trustees, for his beneficial interest as the beneficiary of the trust both personally and as the sole shareholder of MD Nominees Pty Ltd, the other income beneficiary ['MD Maintenance Trust' was 'a special purpose trust, the special beneficiaries of which are proposed to be the represented person and MD Nominees Pty Ltd which is a company, of which the represented person was a director (until replaced by one of his sons) and sole shareholder']. [The represented person] will retain the beneficial interest in the funds transferred.
Although the represented person has an equity as a discretionary beneficiary of the trust, it is not a legal estate in the funds as at present. This is a lesser interest or perhaps in the language of s 80(4) of the GA Act [see above] a 'diminution' of his estate. The trustees have the discretion to apply the income and the capital to the represented person, but he has no right to the distribution.
Having considered the overall intention of the GA Act as outlined, I conclude that the proposed transfers are dispositions of an ex gratia nature and require the authority of the Tribunal pursuant to s 71(5) [of the GA Act, which authorises the Tribunal to empower an administrator to make a payment or enter into a transaction of a kind described in s 72(3) of the GA Act, see above, on behalf of the represented person's estate].
On this issue of whether the Tribunal should so empower the administrators to make a payment or disposition of, relevantly, an ex gratia nature (as described in s 72(3) of the GA Act), the Tribunal in Re MD concluded, at [60] - [62], as follows (emphasis added):
The protective intent of the legislation is … provided through the annual examination of accounts of administrators filed with the Public Trustee pursuant to s 80 [of the GA Act] and the overall supervision of the administration order through review by the Tribunal of orders either periodically or on application (ss 84, 85 and 86 [of the GA Act]).
The disposition of the assets of the estate to the ['MD Maintenance Trust'] effectively ousts the protective regime provided for in the GA Act in respect of those assets. Property transferred to a trust vests the legal estate in that property in the trustees who are subject to the provisions of the trust deed and ultimately to the supervision of the Supreme Court. The trust deed in this instance, for example, includes powers of delegation (cl 10.7) and limitation on liability (cl 11.3). These terms are in contrast with the non-delegable functions of administrators (although they may employ agents) and their strict liability to the estate as provided for in (s 80(4)). Although trustees are accountable to the Supreme Court for the management of a trust, in practical terms, the accountability mechanisms afforded by the administration order through the mandatory filing of annual accounts with the Public Trustee and the examination of the accounts provide greater protection for a represented person within that regime than as an incapable beneficiary of a trust.
In the current order, the Tribunal authorises the administrators to make gifts on behalf of the represented person … The transactions proposed [by the joint plenary administrators] are of a different character and while I do not doubt the administrators propose the creation of the trust in what they regard as the best interests of their father, for the reasons set out above, the transactions proposed are inconsistent with the protective scheme of the GA Act. Therefore, it is not in the best interests of the represented person that the discretion be exercised for this purpose.
Section 72(2) provides that the Tribunal may make any other order that it thinks necessary and [sic, 'or'] expedient for the proper administration of the estate of the represented person.
Whether the proposed disposition could be sanctioned under this provision or not, it is useful to ask what would be required in the proper administration of the estate if and when the proposed transactions took place. The funds the subject of the proposed transfer are the only assets of any significance left in the estate. Following the proposed transfers, the remaining legal estate under administration would be the income received (payable at the discretion of the trustees) and the personal effects of the represented person. The result of the proposed transfer of the remaining assets in the estate of the represented person to the trust effectively leaves him with little estate requiring management by an administrator under the GA Act.
The fact that, in this case, the administrators and the trustees are the same persons, the sons of the represented person, may obscure the fact that the property the subject of the transfer has passed out of the legal estate of the represented person putting it beyond the control of the administrators. Such a transaction could not be described as necessary or expedient for the proper administration of the estate.
Clause (g) of Pt B of Sch 2 of the GA Act [see above] states that the Tribunal may, where in its opinion any disposition or transaction is expedient in the administration of the estate of the represented person, or would be in that person's best interest, confer upon the administrator the necessary power for the purpose on such terms and conditions (if any) the Tribunal thinks fit.
It might be argued that the transactions proposed are expedient, to arrange the represented person's affairs in the way proposed but they do not come within an order which might be made pursuant to this provision since it requires that the transaction be expedient in the administration of the estate. The same analysis applied to the whether the transactions could be authorised pursuant to s 72(2) is applicable here. The transactions propose to take the funds the subject of the transactions out of the legal estate of the represented person. In such circumstances the transactions are neither necessary nor expedient in the proper administration of the estate.
33 In Perpetual Trustees Ltd (WA) v Public Trustee [2009] WASAT 253; (2009) 68 SR (WA) 128, a Full Tribunal panel, including a former Deputy President (Eckert DCJ), followed Re EH [2008] WASAT 222, and concluded that such powers as are available to the Tribunal under s 72(3) of the GA Act are only prospective in nature. The Tribunal said, at [83]:
In our view, to find that the power of the Tribunal to authorise the nominated transactions in s 72(3) as being prospective only, clearly facilitates the protective nature of the GA Act and generally furthers its scheme and objects.
34 VV was a case where the represented person was the sole member and joint trustee of a self-managed superannuation fund established by deed in 2007 to comply with the SIS Act. The Public Trustee was, it appears, appointed the sole plenary administrator of the represented person's estate in 2012. The Tribunal considered that, notwithstanding the self-executing rules of the superannuation deed, and the savings operation of s 17A(3) of the SIS Act (see above), it would still be appropriate to act as follows, at [31]:
It is clearly in the interest of the represented person that the Public Trustee exercises the powers of trustee of the fund so as to preserve its status as a self-managed superannuation fund. Whether or not it is strictly necessary, it is prudent that the Public Trustee satisfies itself that it will not exceed the authority given to it by its appointment as plenary administrator by seeking the express authority of the Tribunal to act as trustee of the fund. We consider that, in those circumstances, it is appropriate that the orders appointing the Public Trustee as plenary administrator be amended so as to specify that authority under [cl] (h) of Pt B of Sch 2 of the GA Act [dealing with cases where 'a power is vested in a represented person in the character of a trustee'].
- The Tribunal in VV declined to read this empowering provision, cl (h), narrowly saying that a literal reading of the provision might defeat the underlying purpose or object of the GA Act ('The [GA Act] is designed to conserve the property and financial resources of the disabled person', at [29], citing Re Full Board).
35 Cheyne and the related proceedings in this Tribunal, MSC, dealt with attempts by the Perpetual Trustee Co Ltd (Perpetual) to:
… become a limited administrator for the estate of a represented person so as to transfer the bulk of trust money that it held as trustee under a compensation court trust to superannuation for the represented person: MSC at [1].
36 The Tribunal in MSC said, at [23] and [24]:
The 'primary concern' in the administration jurisdiction of the Tribunal is 'the best interests of [the] represented person': s 4(2) of the GA Act. Ordinarily, this consideration would be satisfied where the represented person would be substantially better off financially in consequence of a contemplated administration order [as was common ground in MSC].
In this case, however, we are not satisfied that the best interests of the represented person would be served by the making of the order proposed, because the contemplation in the making of the order is that the vast bulk of the trust fund would be removed from the protective jurisdiction of the court, without the court having made any direction to that effect, or having amended or varied the terms of the trust.
37 In Cheyne, Edelman J noted Perpetual's motivations for its application to the Tribunal, which his Honour described as a 'prudent course to take', as follows, at [21]:
… If the [Tribunal's administration] orders are made then [Perpetual], as a limited administrator of all [the represented person's] rights in relation to the transferred funds, will be subject to the direction of the [Tribunal] (including the power of removal). [Perpetual] will also be subject to ongoing supervision under [s 80, GA Act]. The motive for [Perpetual] to pursue the orders before the [Tribunal] was therefore to ensure that in relation to the proposed transfer to Perpetual Superannuation there was additional protection for the interests of [the represented person].
38 His Honour agreed that the transfer of trust funds to the superannuation fund could not be regarded as an 'investment' under the law relating to trustee's powers 'because [Perpetual] will not receive anything in return': see Cheyne at [56]. Cheyne was followed by Beech J in Re Hoang Minh Le; Ex parte Public Trustee [2012] WASC 31.
39 Presumably, it would also be doubtful whether an administrator, acting under the authority of the GA Act, has power, without the authority of the Tribunal, to likewise 'invest' a represented person's estate in superannuation: cf s 71(3)'s 'specified function' (found in Pt A, Sch 2 cl 4) '[t]o invest any moneys forming part of the estate in any securities in which trustees may by law invest'.
40 In the result, after an adjournment which resulted in the Supreme Court making directions to the effect 'that it [was] lawful for [Perpetual] to transfer $5 million [in] trust funds to Perpetual Superannuation on terms that [Perpetual] will act as the limited administrator of [the represented person's] rights in relation to those funds' (Cheyne at [65]), the Tribunal thereupon appointed Perpetual, amongst other things, 'to exercise all powers as if [it were] the plenary administrator of the represented person, but limited to matters and dealings in connection with any superannuation investment held for the benefit of the represented person': paragraph (d) of the final orders of the Tribunal made on 29 August 2011 (Parry DCJ and Members J Mansveld and F Child).
41 Edelman J indicated his conclusion 'that the removal of the trust funds by the transfer to [Perpetual would] not detract from the benefit to [the represented person]' (at [46]) and that he was, in the circumstances, also satisfied that 'the conclusion of [Perpetual was] correct' as to the issue of whether the proposed transfer was 'considered necessary' under the terms of the Court Compensation Trust (at [49]). Perpetual's position, accepted by his Honour, was that the proposal was 'necessary so as to maximise savings on taxation and the return on the growth of the fund to provide for the maintenance, welfare and advancement of [the represented person] and for his benefit' (at [48]).
42 Importantly, in his Honour's view, the 'removal of the trust funds by transfer' would be subject to 'scrutiny and protection' having regard to, so far as is relevant, the 'statutory control of the [Tribunal]' under s 71, s 71A and s 72 of the GA Act (see [46]). Further:
… provided that the [Tribunal] makes the orders sought appointing [Perpetual] as a limited administrator, [Perpetual] will be required to file annual accounts with the Public Trustee. Those accounts can be surcharged or falsified and [Perpetual] could be held personally liable for any defalcation: [GA Act] s 80 and Perpetual Trustees WA Limited and the Public Trustee [2009] WASAT 253; (2009) 68 SR (WA) 128.
- Thus, the statutory regimes regulating superannuation funds (under Commonwealth law) and administrators under the GA Act (see [46]), combined with a direction to the trustee by the court (see above) achieved by, in effect, interlocking orders of the Tribunal, meant that the administrator's purpose of substantially benefiting the estate of the represented person could be properly and lawfully implemented.
43 The source of the Tribunal's final orders in MSC was not specified, but presumably one or more powers under s 72 of the GA Act had been invoked. It will be recalled that that provision provides as follows:
72. Further provisions as to authority of administrators
(1) The State Administrative Tribunal may give any direction, make any order or do any other thing provided for in Part B of Schedule 2.
(2) Without limiting this section or section 71, the State Administrative Tribunal may make any 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.
(3) Notwithstanding this section or section 71, an administrator shall not without the authority of the State Administrative Tribunal under section 71(5) -
(a) make a payment or disposition of a charitable, benevolent or ex gratia nature; or
(b) make a payment in respect of a debt or demand that the represented person is not obliged by law to pay.
…
The State Administrative Tribunal may -
…
(g) where, in [the Tribunal's] opinion, any disposition or transaction is expedient in the administration of the estate of the represented person, or would be in that person's best interest, confer upon the administrator the necessary power for the purpose on such terms and subject to such conditions (if any) as the State Administrative Tribunal thinks fit[.]
45 With great respect to my colleague who decided Re MD (Member Child), the result in Cheyne and MSC (and, I note, that the author of Re MD participated in the making of the final orders in MSC), if not a significant part of the assumptions,if not the actual reasoning, undertaken by Edelman J in Cheyne, appear to be inconsistent with the inhibitions that might be thought to flow from Re MD for the actors in this case. It is true that there were material factual differences between Cheyne and Re MD, but I think that Mr Bowyer, counsel for the Public Trustee, was correct to make the following observations, after noting Cheyne and MSC:
If the test in Re MD were applied, any non-compulsory payment to a superannuation fund would be an 'ex gratia' payment under s 72(3)(a) [of the GA Act] and therefore require the prior approval of the Tribunal. The Public Trustee respectfully submits that 'ex gratia' should not be construed as broadly as this. If the Tribunal had to approve every non-compulsory payment of superannuation, it would add considerably to the role of the Tribunal, given the increasing prevalence of superannuation.
46 Developing this theme of the beneficial impact that nowadays superannuation may have in relation to the administration of estates, the Public Trustee submitted:
The upshot is that traditional methods of protecting the interests of disabled people can give way to other forms of protection if there are substantial benefits to be gained … [Here, the represented person] has multiple sclerosis. The self-managed superannuation fund is said to provide tax benefits to her. That could in turn mean that more money is available for her care … the Tribunal indirectly retains some power over who manages the self-managed superannuation fund. Superannuation is a highly regulated area, as the volume of documents before the Tribunal might indicate.
47 The Tribunal respectfully agrees with these observations and submissions. A construction of the relevant provisions of the GA Act which, amongst other things, allows the substantial benefits permitted by regulated superannuation to flow to a represented person's estate in the circumstances of a case like the present is to be preferred to one that does not. Such a reading of the GA Act would advance the underlying purpose or object of the Act ('The [GA Act] is designed to conserve the property and financial resources of the disabled person': VV at [29]).
Orders sought and the Public Trustee's response
48 The solicitors for the represented person sought various supplementary orders to those already indicated. The substance of those draft orders, and the Public Trustee's response to each point was as follows:
(a) That the Administration order be granted for a further period of five years.
The Public Trustee respectfully would support that the administration order be renewed, with a five year review.
(b) Consent [by the Tribunal] to the creation of the SMSF and [the] continued investment of [the represented person's] assets in the SMSF.
The Public Trustee respectfully does not consider that the Tribunal has the power to consent to or authorise, retrospectively, the creation of the self-managed superannuation fund. There is a question as to the Tribunal's ability to consent to or authorise what happens to assets already in the self-managed superannuation. In any event, for the reasons [given in the Public Trustee's submissions, considered above], consent or authorisation is not needed.
The Tribunal may have the power to authorise the administrators to place further assets into the self-managed superannuation fund, but the Public Trustee respectfully considers that this is also not necessary.
(c) Consent to [redacted] Pty Ltd to remain [as] the trustee of the SMSF.
The Public Trustee respectfully does not consider that the Tribunal has the direct power to order who or what should be the trustee. If [the current joint plenary administrators] are removed as administrators of [the represented person], this could impact on who could be the trustee or the directors of a corporate trustee.The Public Trustee does not, however, advocate their removal.
(d) Consent to [the joint plenary administrators] to remain as directors of [redacted] Pty Ltd.
The Public Trustee respectfully does not consider that the Tribunal has the power to consent to who should be the directors [of the corporate trustee of the SMSF]. If [the joint plenary administrators] remain as administrators, then the consent would not be needed in any event.
(e) Payment of [the] legal and accounting costs from the estate of [the represented person].
There may be two types of costs here. First, the legal costs and disbursements of the review of this administration order. There is a question whether lay administrators need an order of the Tribunal.
Sections 16(4) [dealing with orders by the Tribunal for payment of costs 'out of the assets' of the represented person], 76 [employment and payment of agents, including solicitors and accountants] and 118(1) [reimbursement of an administrator's 'reasonably incurred expenses] of the [GA Act] and s 87 [dealing with costs, from a 'no costs' starting point] of the State Administrative Tribunal Act 2004 [WA] are not, with respect, the easiest to reconcile (see Perpetual Trustees (WA) Limited and BW [2012] WASAT 106).
The Public Trustee respectfully submits that it was reasonable for the administrators to incur legal costs and disbursements here. They had acted properly. The case has raised important questions of law. Provided that the amounts are reasonable, the costs of the administrators should be paid from the estate of [the represented person] without a need for an order of the Tribunal.
Secondly, other legal and accounting costs incurred to date. [These costs] would be covered by s 76 and s 118(1) of the [GA Act]. If they have already been paid, then the Public Trustee respectfully submits that the Tribunal has no power to authorise them retrospectively. Again, provided that the amounts are reasonable, the costs of the administrators should be paid from the estate of [the represented person] without a need for an order of the Tribunal.
50 It would be acting in the best interests of the represented person for the current administration orders to be confirmed.
Final declarations and orders
51 For the reasons given above, the Tribunal therefore makes the following final orders:
1. Further to the Tribunal's orders dated 1 March 2016, the Tribunal's administration order dated 22 June 2010 is confirmed as follows.
2. The Tribunal declares that the represented person:
(a) is unable by reason of a mental disability to make reasonable judgments in respect of matters relating to all of her estate; and
(b) is in need of an administrator of her estate.
3. MH of [redacted] and WJ of [redacted] are appointed joint plenary administrators of the estate of the represented person with all the powers and duties conferred by the Guardianship and Administration Act 1990 (WA).
4. The administrators are authorised to expend up to a total amount of $1,000 per annum on gifts on behalf of the represented person.
5. This order is to be reviewed by 10 July 2020.
I certify that this and the preceding [51] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR P McNAB, SENIOR MEMBER
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