GNH (Advice and Directions)

[2014] TASGAB 6

GUARDIANSHIP AND ADMINISTRATION BOARD
LAUNCESTON

GNH – Application for Advice & Directions

GNH (Advice and Directions) [2014] TASGAB 6

REASONS FOR DECISION
for the appointment of The Public Trustee as Administrator

Rodney Lester (Chair)
Rowena Holder (Member)
Grant Kingston (Member)

Date of hearing: 9^th May 2014

Advice and directions – administrator expertise – administrator suitability – conflict of interest – family conflict
Guardianship and Administration 1995 s.3(1), 54(2), (i)(a)(ii), (iii), 61(2), (3)(c)
Holt v Protective Commissioner (1993) 31 NSWLR 227

1. The hearing was in response to a request by the administrator for advice and direction in respect of the sale of some or all of the represented person’s real estate. The request was a direct result of the order appointing the administrator made by the Board on January 4^th, 2013 – Order 4 of 7 stated that ‘…the administrator is not to sell any of the represented person’s real estate without prior approval of the Board.’

2. Administrators are able to apply for advice and direction under section 61 of the Guardianship and Administration Act 1995, (the Act). The section gives the Board wide ranging powers with subsection (3) stating:

The Board may –

a)Approve or disapprove of any act proposed to be done by the administrator; and

b)Give such advice as it considers appropriate; and

c)Vary the administration order or make any other order that it could have made on the original application relating to the administration of the estate that it considers necessary.

Subsection (2) allows the Board to exercise its powers under section 61 without holding a hearing, however in this instance it was determined appropriate to have a hearing to consider the matter.

3. The hearing was held at the Magistrates Court in Launceston on Friday, May 9^th, 2014. It was attended by OG, the administrator and the represented person’s granddaughter; KI, the represented person’s solicitor and Michelle Knowles and Michael Walsh from the Public Trustee.

4. At the commencement of the hearing the Chairman outlined the powers of the Board under section 61 of the Act, and detailed some of the history of the existing administration order.

Background to the Advice and Direction

5. The first hearing in respect of GNH was held in Launceston on November 2^nd 2012. The Board comprised Philippa Whyte as Chairman and members Sue Hill and Rodney Lester. It was a result of two applications – the first was from Dr Alison Bleaney, GNH’s GP, seeking appointment of the Public Trustee as administrator and the Public Guardian as guardian. The second application was from GNH’s daughter, TH, who proposed herself as both administrator and guardian. Ultimately the Board came to the view at this hearing that they could not be satisfied that GNH lacked capacity, or indeed had a disability. The Board adjourned the applications but made an interim guardianship order appointing the Public Guardian for the sole purpose of facilitating specialist tests for GNH to ascertain her disability and capacity. This order lasted for 3 months, and when the further tests had been conducted it was anticipated that the hearing would be concluded. Notes from the hearing indicate that the Chairman foreshadowed that in the event of an appointment of an administrator or a guardian it is was unlikely that the appointment would go to a family member due to the level of conflict between family members and the obvious antagonism between some members of the family. This approach was consistent with the decision in Holt v Protective Commissioner (1993) 31 NSWLR 227.

6. The adjourned hearing resumed in Launceston on Friday January 4^th 2013. The Board comprised the same members that sat on the hearing in November. At this time further medical evidence was presented to the Board and it was satisfied that GNH had a disability as defined in section 3(1) of the Act, and that as a result of this disability GNH lacked the capacity to make reasonable decisions in relation to matters concerning her estate, her health care and the level of assistance that she should be prepared to receive. The Board was of the view that there was a clear need for a substitute decision maker for GNH in these areas and that it was appropriate to appoint an administrator and a guardian, with the guardian’s powers limited to the areas of health care and access to services. It was clear that GNH did not agree that there was any need for either an administrator or a guardian, however ultimately the Board determined that the weight of medical evidence was overwhelming, and it was clearly in GNH’s best interests to have the appointments. GNH also made it very clear that it was her strong desire to stay in her own home, and to protect and preserve the family farming property at XXXX.

7. The maintenance of the family farm, and with it GNH’s home, was a difficult issue. The farming business appeared to be marginal, although for quite a number of years the profitability had been underpinned by a lease of timber growing ground to Gunns Limited. At the time of the hearing Gunns Limited were in financial difficulties, and has ceased lease payments on the ground. Subsequently they went into administration and it is probable that no further lease payments will be received. GNH had a son and grandson living on the property, who were effectively reliant on GNH for their accommodation. The son, KI, pays no rent but helps out to some extent on the farm. His son has health issues of his own and it was not clear if he made any contribution to the operation of the farm. It appeared that KI had a good relationship with his mother, but his relationship with his siblings ranged from strained to openly hostile. It appeared to the Board that for the farming business to survive it would require some strategic changes to occur.

8. When considering the eligibility of people to act as administrators the Board must consider section 54 of the Act. Section 54 states in part:

1)The Board may appoint as an administrator of the estate of a proposed represented person –

a)The Public Trustee; or

b)The Public Guardian; or

c)A trustee company ….

d)Any other person, including the guardian of the proposed represented person, who consents to act as administrator if the Board is satisfied that –

i.The person will act in the best interests of the proposed represented person; and

ii.The person is not in a  position where his or her interests conflict or may conflict with the interests of the proposed represented person; and

iii.The person is a suitable person to act as the administrator of the proposed represented person; and

iv.The person has sufficient expertise to administer the estate.

2)In determining whether a person is suitable to act as an administrator of the estate of a proposed represented person, the Board must take into account –

a)The wishes of the proposed represented person, so far as they can be ascertained; and

b)The compatibility of the person proposed as administrator with the proposed represented person and with his or her guardian, if any.

9. In this instance the Board first considered the Public Trustee. When asked to explain to the hearing how they would see the management of GNH’s affairs the Public Trustee, after outlining their costs, explained that they were not really in the business of running businesses, rather their expertise was in the area of managing passive assets. It was clear that the costs of the Public Trustee alone would probably be enough to make what was already a marginal business unviable, and the inevitable consequence of appointing the Public Trustee would be the realisation of the farming assets. Whilst this ultimately may have been necessary, it was clearly completely contrary to the strongly expressed wishes of GNH, so the Board felt that they had an obligation to explore other options.

10. Secondly the Board considered the second applicant TH. Whilst TH had put her name forward as administrator it is clear from the Board notes from the hearing that she had some reservations about the position. During the process of the Board investigation prior to the hearing TH admitted that her mother was ‘… very hostile towards her …’, and when questioned at the hearing about how she would undertake the position whilst living in Melbourne she commented that ‘… she felt that the distance would impede her doing it properly.’ Along with this was the fact that she would have an expectation of being a significant beneficiary of what was a substantial estate, so the Board could not come to the conclusion that there would not, at least at some stage, be a conflict of interest between the administrator and the represented person. The wishes of the represented person were also considered. When speaking with a representative of the Board during the investigation process prior to the hearing GNH said ‘…she didn’t want TH managing her finances.’ The Board determined that TH could not satisfy the requirements of either subsection of section 54(2), which meant that she failed the test in section 54(1)(d)(iii), nor were they comfortable that she satisfied section 54(1)(d)(ii). Consequently the Board determined that TH was not eligible to act as administrator.

11. The final person considered was OG. OG was GNH’s granddaughter, and the daughter of QI, who lived close to the family farm at XXXX. OG lived in Launceston. She had the support of the family, seemingly both TH and KI, along with her father, in undertaking the role of administrator. GNH had agreed that it would be alright for OG to assist her with her finances. Whilst there was perhaps still some issue with conflicts of interest the Board was satisfied that it was not as real as the same issue had been with TH. OG also had some experience in the finance area and worked in that area at the University in Launceston. She was currently undertaking a Certificate III level course at TAFE in a business related discipline. Whilst OG satisfied most of the requirements of eligibility to act as administrator the Board had some reservations about her expertise, especially in the area of managing an operating business through a challenging period where some significant changes appeared likely to be necessary if it were to survive. On the positive side however she seemed to represent the only option which satisfied the eligibility criteria in section 54 whilst still giving the represented person’s strong desire to stay in their home some chance of being realised. The Board decided to appoint OG as her grandmother’s administrator, however with some strict conditions that it was hoped would address the reservations the Board had about her expertise.

12. These conditions required the administrator to submit a report to the Board within 4 months, prepared in conjunction with the represented person’s accountant, looking at the ongoing viability of the business, and the administrator was precluded from selling any of the represented person’s real estate without the prior approval of the Board. The administration order was for 18 months.

13. Within 6 months of the order being made, on July 2^nd 2013, the represented person was moved into residential care at Medea Park in St Helens. At this stage the administrator requested advice from the Board about how to proceed with obtaining permission for the sale of the farming land at
    XXXX. The administrator had not prepared the financial report required by the Board within 4 months of the order in early January when contact was made in early July.

14. Correspondence between the administrator and the Board appears to have continued on reasonably regular basis from this time until the hearing on May 9^th 2014. The basis of the correspondence has been the process necessary to allow the sale of the property. At the time of the hearing on May 9^th the financial report required by the Board in its order of January 2013 had not been received.

Advice and Directions Hearing

15. At the advice and directions hearing the Board was advised that the represented person’s disability was deteriorating and her capacity had probably diminished since the order in early 2013. The administrator also confirmed that there was still a significant level of conflict within the family about GNH’s care and estate.

16. Some financial accounts were presented to the Board that indicated the farming business was still struggling, and due to the level of her assets GNH was required to pay around $50,000 per annum for her residential care in St Helens. It was evident that, under current circumstances, the farming business could not generate sufficient funds to cover this cost.

17. The Board raised with the administrator the matter of the administrator’s non-compliance with the order, and stated that this non-compliance had in some ways negated the aims of the Board in appointing her as administrator. The Board also acknowledged that the task facing the administrator had been significant and that complexities of the business combined with the family dynamics may have meant that the outcome which now appeared likely had always been inevitable.

18. The Board considered the current circumstances. The complexities of the situation had not lessened, the financial strain on the business had increased, and the represented person’s desire to stay on the property was now clearly impractical. It appeared that the relationships between family members had not improved. The requirements for the management of the estate had changed from one where the operation and improvement of the business were paramount, to one where the orderly realisation of assets and investment and protection of the proceeds were necessary. The Board felt it was necessary to revisit the issue surrounding eligibility to act as administrator before it looked at the advice and direction that had been requested by the administrator.

19. When it looked at the requirements of section 54 the Board formed the view that the current administrator did not possess sufficient expertise to manage the estate through its current phase. Whilst it was agreed that the administrator had put a great deal of effort into the administration over the previous 16 months her non-compliance with the order was a concern, and it was unclear that she would have the time available to properly deal with the relatively complex issues that were likely to be encountered when realising the business assets. Furthermore, with a cash surplus in excess of $2 million appearing likely on realisation of the assets, the Board members were not comfortable that the current administrator had the expertise necessary to manage those funds in a manner which best catered for the interests of the represented person. The Board came to the conclusion that the current administrator was no longer eligible to act as administrator of the represented person’s estate.

20. Under section 61(3)(c) of the Act the Board has the power to ‘…make any other order that could have been made on the original application relating to the administration of the estate that it considers necessary.’ When considering the original application the Board was presented with two other options for administrator. The Board at this hearing revisited those options. It concurred with the original decision that TH was ineligible due to the action of section 54 of the Act. Again the conflict of interest issue in section 54(1)(d)(ii) was a concern as was the issue of suitability in section 54(1)(d)(iii).

21. The Board came to the view that with the represented person’s desire to preserve the family farm now evidently impractical her best interest were served by appointing the Public Trustee as administrator. The Board was satisfied that the administration order required variation, and that the following orders could have been made on the original application.

22. Consequently the Board ordered as follows:

1)That The Public Trustee be appointed as administrator of the estate of the represented person.

2)That the powers and duties of the administrator be those conferred by Division 4 of Part 7 of the Guardianship and Administration Act 1995

3)That the administrator report to the Board within 6 months outlining a plan for the management and/or realisation of the represented person’s assets.

1. That the order remains in effect until 8 May 2017.

RODNEY LESTER             ROWENA HOLDER          GRANT KINGSTON

CHAIRMEMBER  MEMBER

Reasons delivered 4^th June 2014