HHM
[2005] WASAT 27
•15 MARCH 2005
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: HUMAN RIGHTS
ACT: GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA)
CITATION: HHM [2005] WASAT 27
MEMBER: DR A MCCUTCHEON (SENIOR SESSIONAL MEMBER)
HEARD: 23 NOVEMBER 2004, 21 DECEMBER 2004
DELIVERED : 15 MARCH 2005
FILE NO/S: BA 616 of 2004
BETWEEN: HHM
Applicant
Catchwords:
Guardianship and Administration - Matter commenced by the Guardianship and Administration Board and completed by the State Administrative Tribunal - Transitional provisions - Mandatory review of orders - Joint administrators guilty of neglect or misconduct - Administration order revoked - Public Trustee appointed
Legislation:
Guardianship and Administration Act 1990 (WA), s 68(3), s 72(3), s 80(5), s 86
State Administrative Tribunal (Conferral of Jurisdiction) Amendment and Repeal Act 2004 (WA)
State Administrative Tribunal Regulations 2004 (WA), s 52(4)
Result:
Revocation of an administration order and appointment of an administrator
Category: B
Representation:
Counsel:
Applicant: Self Represented
Solicitors:
Applicant:
Case(s) referred to in decision(s):
Nil
Case(s) also cited:
Nil
DR A MCCUTCHEON (SENIOR SESSIONAL MEMBER):
REASONS FOR DECISION
These are the reasons of the State Administrative Tribunal ("the Tribunal") for a decision handed down on 8 March 2005 whereby on review of an administration order dated 21 January 2004 in respect of HHM the order was revoked and the Public Trustee was appointed as plenary administrator of the estate of HHM.
It should be noted at the outset that although the administration order is dated 21 January 2004 the hearing was held on 27 January 2004, and the order was generated on that date but with a transcription error. In these reasons where appropriate the incorrect date that appears physically on the order will be quoted.
Jurisdiction
The matter was initially heard by the Guardianship and Administration Board ("the Board") prior to the transfer of Board powers to the Tribunal. The review commenced pursuant to s 86(1)(a) of the Guardianship and Administration Act 1990 (WA) ("the Act") and evidence was taken at Board hearings on 23 November 2004 and 21 December 2004.
At the conclusion of the latter hearing the Presiding Member adjourned the matter to obtain two pieces of written evidence to confirm verbal evidence from the administrators, and indicated that a determination of the matter would be made following receipt of the information sought and without reconvening the hearing. The material requested came to the attention of the Member on 25 January 2005.
On 24 January 2005 the State Administrative Tribunal (Conferral of Jurisdiction) Amendment and Repeal Act (2004) ("the Amendment Act") came into effect in respect of amendments to the Act, and most of the functions of the Board were taken over by the Tribunal. The functions of the Board with regard to Accounts submitted by administrators (s 80) were transferred to the Public Trustee.
The transitional provisions of the State Administrative Tribunal Regulations 2004 (WA), at s 52(4), state that:
"(4)If immediately before the commencement day the Guardianship and Administration Board is carrying out, but has not completed, a review under the GA Act section 85 or 86, on or after the commencement day the review is to be carried out and completed by the State Administrative Tribunal as if the application for the review had been made to it under the relevant section."
As has been mentioned above, the application was made under s 86(1)(a) of the Act by the Board of its own motion. In the Act as amended by the Amendment Act, s 86 no longer provides for instigation of a review of an administration order by the Tribunal of its own motion. As amended, s 86(1) states:
"(1)The State Administrative Tribunal may at any time on the application of ‑
(a) the Public Advocate;
(b)a represented person or a guardian or an administrator; or
(c)a person to whom leave has been granted under section 87,
review a guardianship order or an administration order."
Despite this, the proceedings had been initiated appropriately, the Presiding Member of the Board had completed the taking of evidence from the parties concerned, the written material sought was not in dispute, and the only function remaining to complete the matter was the determination based on the evidence. Accordingly, the Tribunal has formed the view that it is appropriate it should complete the proceedings. The same Board Member who has presided at all of the hearings involving HHM comprises the Tribunal making this determination, so that all of the evidence put before the Board is available to the Tribunal in arriving at its decision.
Background
On 7 May 2002 upon an application by MM, the son of HHM, the Board appointed MM and his sister, JO, as joint plenary administrators of the estate of HHM with a requirement to submit accounts annually to the Board. The Board accepted medical advice from HHM's local doctor and from the director of nursing at the nursing home that HHM had suffered a stroke in 1996 and was bed‑bound, confused, and incapable of making decisions in respect of her financial affairs.
On 27 January 2004 the Board at its own instigation conducted a review of the order on the grounds of failure of the administrators to provide supplementary information to the Board in a timely manner. The Account No 1 had been due on 10 June 2003, a six‑week extension had been granted to the administrators at their request, and it was submitted, incomplete, in August 2003. It was resubmitted in November 2003 after correspondence from the Board, but further documentation was requested of the administrators and despite a reminder letter nothing was received.
At the hearing MM reported that HHM was "going downhill". He said that the delay in responding had been his fault due to business commitments and he promised to submit the documentation requested within the following week. The Board had received a letter from a grand‑daughter of HHM confirming the severity of HHM's incapacity and describing the loving care which her two children (the joint administrators) were providing to HHM. The Board canvassed the option of appointing the Public Trustee as Administrator if the accounting responsibilities were too onerous or distressing but both administrators rejected this option.
In appointing an administrator s 68(3) of the Act requires the Board to:
"[…] 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."
The two administrators are HHM's only children and professed to have their mother's best interests at heart. In view of MM's promised co‑operation the Board determined that HHM's best interests were better served by confirming the order of 7 May 2002 and thereby allowing her children to continue to act as her administrators.
This Application
On 13 October 2004 the Board of its own motion instigated a review of the administration order in respect of HHM dated 21 January 2004 on the grounds that the joint administrators failed to lodge Account No 2.
It is appropriate now to set out in summary form the chronology of events leading to this review.
The Grounds for Review
Following the review hearing on 27 January 2004 some documentation was provided to the Board, but a number of problems remained unresolved. MM attended the Board premises on 17 May 2004 to assist staff of the Board's Estate Management section with resolution of these. They included:
•The opening and closing balances of a term deposit in HHM's name were not reflected in Account No 1 and the interest therefrom was not shown. There was no explanation of whether and where the interest was transferred.
•No expenses relating to the house which HHM owned were shown. MM's daughter had been living rent-free in HHM's house and paying some of the expenses with MM contributing the rest personally.
•Withdrawal of $4,760 on 2 May 2003 was initially claimed by MM to be "personal, for me and my wife", but later was stated to be for "house expenses".
•Details of the sale and proceeds of sale of the house property of HHM were omitted from Account No 1.
MM informed the Board staff that a new Account No 1 would be lodged by the end of May 2004. This was received in final form on 16 August 2004 and passed by the Board on 27 August 2004. This account was accompanied by two separate affidavits, headed "Form C Affidavit Verifying Account", one signed by MM and the other by JO, for the period 7 May 2002 to 6 May 2003, each stating:
"[…] on oath: […]
3.The account contains a true and correct record of the income, expenditure, assets and liabilities of the estate of the represented person covered by the order of the Board during the period.
4.We have not made any gifts of cash, real property, personal property or other assets from the estate of the represented person. […]"
Account No 2 was due to be lodged by 18 July 2004, but despite multiple promises made by MM nothing was received, and on 13 October 2004 at the Board's instigation a new hearing to review the order was listed on the grounds that "the joint administrators have failed to lodge Account No 2."
The Hearing
Evidence was taken from MM, JO, and her husband PO. All agreed that the condition of HHM was variable, but that she was totally dependent physically, and did not always recognise family members. The Board accepted this evidence and found that HHM remained a person for whom an administration order could be made or confirmed.
MM and JO gave evidence of their emotional distress at the condition of their mother. MM also indicated that he did not enjoy trying to satisfy the Board's requirement for detailed paperwork as he was very busy with his own work. In such a situation the Board has available to it the option of appointing the Public Trustee as an independent administrator. None of the parties wanted the involvement of the Public Trustee in HHM's affairs. The Board took some time to explain in simple terms the responsibilities of administrators under the Act. MM indicated that the estate was a simple one, and the Account No 2 could be prepared and submitted within a few weeks.
The Board noted the discrepancy between MM's opinion of the simplicity of the estate and the apparent difficulty the administrators have had in satisfying accountability requirements under the Act. The Board acknowledged the emotional distress that HHM's illness and long period of survival with significant disability has had on the administrators. Nevertheless the Act requires that administrators fulfil their responsibilities and if they are unable to comply with requirements then the Board should consider revoking their authority.
Given that the administrators were of the opinion that the Account No 2 could be submitted within a few weeks, the Board adjourned the hearing to 21 December 2004 to allow the Administrators to submit Account No 2 and for the Board's Estate Management section to assess it.
The Account No 2 was lodged and at the hearing on 21 December 2004 it was clear from the initial analysis by Board staff that the administrators had not fulfilled their obligations under the Act appropriately or honestly. Three of the problems identified were:
•Unauthorised loans: The Account included two loans which had not been authorised by the Board. These were recorded as being for the sum of $100,000.00 to JO and for the sum of $113,671.72 to MM. These loans were not recorded as assets of the estate on the Account.
•Additional bank account unreported: The balances of two bank accounts in the name of HHM were listed, one of $119,708.72 and one of $1000, but neither account corresponded to the account to which it appeared the interest from the term deposit was being paid.
•Incomplete accounts and false affidavits: There had been two additional withdrawals during the period covered by Account No 1 which had not been declared to the Board on that Account.
Unauthorised Loans
The bank book of HHM's main account shows the following withdrawals or transfers from the account which are not accounted for by receipts or invoices and which have been acknowledged by the administrators as having been paid to, or on behalf of, JO and MM:
02.05.2003
5,211.45
06.05.2003
78,712.97
19.05.2003
15,000.00
22.05.2003
11,610.00
23.05.2003
200.00
16.06.2003
100,000.00
29.08.2003
15,000.00
TOTAL
$225,734.42
The administrators have identified in Account No 2 loans to themselves totalling $219,708.72. At the hearing MM indicated he was aware that he had "done wrong" but that he felt his mother would have wanted him and his sister to share in the estate. JO indicated that her loan of $100,000 was on the basis of 3 per cent interest per annum, but that over 18 months she had not made any attempt to pay back interest into her mother's account.
The administrators said they were the executors and sole beneficiaries of HHM's will, and that her estate could easily stand the reduction in principal without affecting her in any way. The Board has subsequently sighted a copy of HHM's will which confirms the former claim. MM said that the loans had come about through ignorance of the law.
Under s 72(3) of the Act administrators:
"(3)[…] shall not without the authority of the Board 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 Tribunal finds that the administrators have breached their obligations under s 72(3).
Additional Bank Account Unreported
The administrators were unable to identify the owner of the account into which the interest from HHM's term deposit was being paid. Enquiries set in train by Board staff following adjournment for determination of the December 2004 hearing have found that the account in question is in the name of HHM and represents a third account in her name and which does not appear in either of the Accounts submitted by the administrators.
The Tribunal finds that the administrators have failed to disclose the full extent of the estate of their mother as required under the then existing Rules of the Board.
Incomplete Accounts and False Affidavits
The administrators led Board staff to believe that the withdrawal of $4670 on 2 May 2003 was the final entry for the period covered by Account No 1. The submission of copies of bank-book pages accompanying Account No 2 show that two further withdrawals from the account totalling $83,924.42 were made in the period covered by Account No 1 as detailed above. It follows that the affidavits accompanying Account No 1 are both false as the accompanying pages do not contain a true and correct record of expenditure from the estate, and gifts of cash have been made from the estate.
Account No 1 was passed by the Board in August 2004. Under the section of the Act dealing with Accounts, s 80(5) states –
"(5)Accounts that have been examined under this section and allowed by the Board are conclusive unless the administrator acted dishonestly, in bad faith or without reasonable cause."
Remedies open to the Board in respect of accounts in default or where a loss has occurred, such as issuing certificates of loss, are not available to the Tribunal following the Amendment Act, as the Public Trustee now has the function of examining accounts.
The Tribunal finds that the administrators have acted dishonestly in attempting to conceal the withdrawals from their mother's account from the Board, and in the swearing of false affidavits.
Determination of the Tribunal
The Tribunal finds on the evidence before it in this matter that the administrators have been guilty of such neglect or misconduct or of such default as renders them unfit to continue as administrators. There is no evidence that there has been a deleterious effect on the well‑being of HHM, and it is unlikely from accounts of her disabilities that she has any awareness of the actions of her administrators. Even if so, that does not excuse the actions of the administrators who at their appointment were charged with acting in her best interests and were provided with information which specifically set out their obligations.
The Tribunal orders that:
1.The Administration order dated 21 January 2004 is revoked.
2.The Public Trustee of 565 Hay St Perth is appointed Plenary Administrator of the estate of HHM for a period of 5 years.
3.The Public Trustee is directed to take all necessary steps to recover from the former administrators, MM and JO, monies owing to the estate of HHM.
I certify that this and the preceding ten pages comprise the reasons for decision of the State Administrative Tribunal.
________________________
Dr A McCutcheon
Member
0
0
3