IL
[2006] WASAT 357
•7 DECEMBER 2006
IL [2006] WASAT 357
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2006] WASAT 357 | |
| GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) | |||
| Case No: | GAA:422/2006 | 18 MAY 2006 11 JULY 2006 | |
| Coram: | MS F CHILD (MEMBER) DR E LEIPOLDT (SENIOR SESSIONAL MEMBER) MS R CARROLL (SENIOR SESSIONAL MEMBER) | 6/12/06 | |
| 22 | Judgment Part: | 1 of 1 | |
| Result: | Administrator reappointed Remuneration ordered | ||
| B | |||
| PDF Version |
| Parties: | IL PERPETUAL TRUSTEES |
Catchwords: | Guardianship and administration Remuneration of the administrator Past unauthorised remuneration Rate of future remuneration Expenses |
Legislation: | Guardianship and Administration Act 1990 (WA), s 3, s 64, s 68, s 68(2)(a), s 68(2)(b), s 72, s 72(2), s 72(3), s 80, s 80(3), s 82, s 87, s 90, s 117, s 117(3), s 117(4), s 118 State Administrative Tribunal Act 2004 (WA), s 9, s 9(b), s 74(b), s 82 State Administration (Conferral of Jurisdiction) Amendment and Repeal Act 2004 (WA), s 443 Trustee Companies Act 1987 (WA), s 18 |
Case References: | Re E [1993] 12 SR (WA) 7246 SC and SAS [2005] WASAT 255 Nil |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : HUMAN RIGHTS ACT : GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) CITATION : IL [2006] WASAT 357 MEMBER : MS F CHILD (MEMBER)
- DR E LEIPOLDT (SENIOR SESSIONAL MEMBER)
MS R CARROLL (SENIOR SESSIONAL MEMBER)
- 11 JULY 2006
- Represented Person
PERPETUAL TRUSTEES
Administrator
Catchwords:
Guardianship and administration - Remuneration of the administrator - Past unauthorised remuneration - Rate of future remuneration - Expenses
Legislation:
Guardianship and Administration Act 1990 (WA), s 3, s 64, s 68, s 68(2)(a), s 68(2)(b), s 72, s 72(2), s 72(3), s 80, s 80(3), s 82, s 87, s 90, s 117, s 117(3), s 117(4), s 118
State Administrative Tribunal Act 2004 (WA), s 9, s 9(b), s 74(b), s 82
(Page 2)
State Administration (Conferral of Jurisdiction) Amendment and Repeal Act 2004 (WA), s 443
Trustee Companies Act 1987 (WA), s 18
Result:
Administrator reappointed
Remuneration ordered
Category: B
Representation:
Counsel:
Represented Person : No appearance
Administrator : Mr M Fatharly
Solicitors:
Represented Person : No appearance
Administrator : Kott Gunning
Case(s) referred to in decision(s):
Re E [1993] 12 SR (WA) 7246
SC and SAS [2005] WASAT 255
Case(s) also cited:
Nil
(Page 3)
Summary of Tribunal's decision
1 On review of an administration order the State Administrative Tribunal confirmed the appointment of Perpetual Trustees Australia Limited, a trustee company as administrator for an elderly woman suffering from dementia. The company had first been appointed as administrator in 2001 by the Guardianship and Administration Board.
2 Due to the size and complexity of the estate under administration the Tribunal ordered that future remuneration of the administrator be at the usual rate charged by the company for this size estate. As the order under review had not expressly provided for remuneration of the administrator, the Tribunal's order regularised the remuneration of the administrator under the Guardianship and Administration Act 1990 (WA) which requires express authority for remuneration.
3 The Tribunal also considered the past charges applied to the estate since 2001. The Tribunal found that the administrator had acted in good faith and in the mistaken belief it was entitled to be paid remuneration for administration of the estate. Most importantly, as the work had been done and the represented person had benefited from the administration of the estate, it was appropriate that remuneration be authorised for this period.
4 The Tribunal ordered remuneration for the period 3 April 2001 to 7 December 2006 equal to an amount which would have been charged had the remuneration been authorised and fixed at the rate charged by the administrator on the estate at the time of appointment. Thereafter the administrator was authorised to charge its published rate of fees for that size estate.
5 The review of the order in this case raised the same issues of principle as two other matters before the Tribunal, namely GAA 421/2006 and GAA 410/2006. All three cases were heard together and decisions reserved in each. Written decisions are delivered in those cases together with this one.
Background
6 These reasons are published pursuant to s 74(b) of the State Administrative Tribunal Act 2004 (WA) where the Tribunal has reserved a decision and relate to decisions of the Tribunal in respect of the estate of IL, (the represented person).
(Page 4)
7 The represented person is a woman of 88 years who has a diagnosis of dementia and is resident in a nursing home. Although she has no family living in Australia, a long time friend of the represented person continues to visit her in the nursing home and is interested to continue to play a role in her life. The friend attended both hearings before the Tribunal.
Applications before the Tribunal
8 Applications are brought under the Guardianship and Administration Act1990 (WA) (GA Act) for leave to apply for review and an application for review of an administration order. The applicant is the Executive Officer of the State Administrative Tribunal.
9 Section 87 provides that:
"(1) Any person may request the State Administrative Tribunal for leave to apply for the review of a guardianship order or an administration order.
...
(5) The State Administrative Tribunal may -
(b) if it is satisfied that because of a change of circumstances or for any other reason a review should be held, grant, either unconditionally or subject to any condition, leave to the person to apply for the review."
11 The reason given by the applicant for leave to apply for the review is the ambiguity regarding the fees to be charged by the administrator. The ambiguity lies in the fact that remuneration is being charged, but not in accordance with orders made by the former Board, in circumstances where presumably it was expected that fees would be charged. It is
(Page 5)
- submitted by the applicant that it is not in the best interests of the represented person that there be ambiguity as to the authorised remuneration.
12 The jurisdiction and functions of the Board were absorbed by the State Administrative Tribunal from January 2005. The Public Trustee now has in his possession "Accounts" files that were previously held by the Board.
13 For the review hearing the Public Trustee provided a report regarding the estate of the represented person and one of his officers attended the hearings. Representatives of the administrator including the Trust Manager and the State Manager attended the hearings with counsel and provided submissions. The submissions of the Public Trustee and of counsel greatly assisted the Tribunal in considering the issues before it.
14 Leave was granted and the review proceeded. During the hearing it was evident that further information was required. The hearing was adjourned to 11 July 2006 for further information to be provided by the administrator to the Tribunal, in particular to itemise the fees charged during the period of the order, to differentiate the nature of the various charges which might be characterised either as remuneration or reimbursement of expenses, and for submissions as to the appropriate rate of remuneration to be ordered for services rendered by the administrator in the future.
15 The order for adjournment included the following:
"The administrator is to file with the Tribunal by close of business on the 30 June 2006 submissions which address the following:
(a) The current composition and value of the estate of the represented person as at June 2006;
(b) The full range of the charges currently applied to the represented person's estate, other charges previously but not currently applied, and the nature of the services provided for those charges;
(c) What is charged as expenses of the administration of the estate and during what time periods have those expenses been charged;
(Page 6)
- (d) Proposals for the rate of remuneration to be fixed by the Tribunal; and
(e) Any other matter the administrator considers relevant to these proceedings."
The Review
16 The powers of the Tribunal on review of an administration order are set out in s 90 of the GA Act:
"(1) Upon a review of a guardianship order or administration order, the State Administrative Tribunal may, as it considers necessary in the best interests of the represented person, confirm the order or by order -
(a) amend the order so as to make any provision that may be included in a guardianship order or administration order, as the case may be;
(b) revoke the order, or revoke the order and substitute another order for it; or
(c) without limiting paragraphs (a) and (b) -
(i) revoke the appointment of any guardian or administrator;
(ii) appoint a new or additional guardian or administrator;
(iii) appoint an alternate guardian.
Capacity
17 On the review of an order the Tribunal must consider whether the represented person remains a person for whom an order can be made, that is to whom s 64 applies.
18 Section 64 provides:
"(1) Subject to section 4, where the State Administrative Tribunal is satisfied that a person in respect of whom
- an application for an administration order is made under section 40 -
(a) is unable, by reason of a mental disability, to make reasonable judgments in respect of matters relating to all or any part of his estate; and
(b) is in need of an administrator of his estate".
19 At the time the orders the subject of this review were made, a report dated 7 February 2001 by a doctor from Royal Perth Hospital was before the Board noting that the represented person had a diagnosis of probable Alzheimer's disease. The report described a "progressive dementia with prominent deficits in memory and executive functioning" at that time.
20 In a recent medical report dated 8 April 2006, a diagnosis of Alzheimer's dementia is provided and the doctor preparing the report considers that the represented person is not able to make reasonable decisions in respect of her financial affairs.
21 Based on these reports we find that the represented person remains a person for whom an administrator may be appointed.
Need for an order
22 The administrator reports that the represented person's estate consists of a diversified investment portfolio valued in the order of $1.26 million. The represented person is incapable of managing her estate and we therefore find that she is in need of an administrator of her estate.
Appointment of an administrator
23 As to who may be appointed administrator, s 68 of the GA Act provides as follows:
"(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".
25 Consistent with s 68(2)(b) the administrator was appointed on 3 April 2001.
26 As the represented person remains a person for whom an administrator may be appointed, in that she lacks capacity to deal with her estate, is in need of an administrator and the administrator remains willing to act in that role and is suitable for appointment, the appointment of the administrator is confirmed.
(Page 9)
Remuneration of the administrator
27 Section 117 of the GA Act provides for the circumstances in which an administrator may be remunerated.
"(1) The State Administrative Tribunal may fix remuneration or a rate of remuneration and order that the same be paid to an administrator out of the estate of the represented person if the Tribunal considers that, because of the size or complexity of the estate or both, remuneration should be paid to the administrator.
(2) A guardian, and except as provided in subsection (1) an administrator, shall not receive remuneration for services rendered to the represented person.
(3) Nothing in this section -
(a) prevents the Public Trustee from receiving remuneration under the Public Trustee Act 1941; or
(b) limits the operation of section 16 of this Act or section 39, 87 or 88 of the State Administrative Tribunal Act 2004.
(4) Subject to subsection (3)(a), a corporate trustee shall only be entitled to commission in respect of the capital of the estate of a represented person to the extent that the State Administrative Tribunal expressly allows."
28 As noted above the administrator reports the represented person's estate is valued in the order of $1.26 million. The real property of the represented person has been sold and her assets are now held in a diversified investment portfolio managed by the administrator. The administrator submits that it should be remunerated for the administration of the estate of the represented person.
29 The Tribunal is satisfied that on the basis of the size and complexity of the estate of the represented person that remuneration should be paid to the administrator.
(Page 10)
Previous orders
Previous exemption from filing accounts
30 The order dated 3 April 2001 by which the administrator was first appointed plenary administrator provides for the exemption from filing accounts on condition that the administrator submits a statement of account and investment portfolio at least annually in the format produced by its accounting package. The absence of a requirement to file accounts means there has been no examination of accounts by either the former Board or by the Public Trustee.
31 Following the passage of the State Administrative (Conferral of Jurisdiction) Amendment and Repeal Act 2004 (WA) the functions of the former Board to order or to exempt the examination of accounts submitted by administrators passed to the Public Trustee by amendment of s 80 of the GA Act. (See s 443 of State Administrative (Conferral of Jurisdiction) Amendment and Repeal Act 2004). The Tribunal, therefore, can no longer exempt an administrator from filing accounts.
Previous provision for remuneration
32 The order makes no provision for remuneration of the administrator. Moreover in respect of requirements of s 117(4), there is no express provision in respect of commission on capital.
33 A review of the transcript of the hearing of 3 April 2001, conducted by a single member of the Board, which was attended by the represented person, a representative of the Public Advocate, the solicitor and Relationship Manager of the administrator among others, makes clear that the matter of remuneration was not canvassed. However, a letter dated 12 February 2001 to the Public Advocate from the administrator, which noted the proposed fees to be charged to the estate, including a discretionary portfolio management service fee and an establishment fee, was before the Board at the time of the hearing.
34 In a letter dated 25 May 2004 to the former Board, in response to an inquiry about fees being charged, the administrator confirmed that the fee schedules being applied to the represented person (and other clients also subject to administration orders) were "our standard published fees that were in existence at the time of our appointment".
35 On 5 July 2004 the administrator submitted a formal application to the Board for remuneration. At a hearing on 16 July 2004 a representative of the administrator stated:
(Page 11)
- "... We're not looking to increase the - even though our public advertised fees have increased since that time, we're not looking to increase the fees. We're just looking to, I guess, the Board to ratify previous charges and approve future charges based on our public rates at the time of the order." (Transcript p3)
36 The transcription of the word "public" in the transcript is no doubt more correctly "published".
37 Following that hearing an order was made authorising the administrator to charge such fees, in relation to the estate of the represented person, "as the Board may approve from time to time". No mechanism for establishing the rate of remuneration was fixed at this time by the Board.
38 The applicant for review submits that while the Executive Officer of the former Board may have had authority to authorise the fees payable to an administrator, the Executive Officer of the Tribunal does not have that authority. We agree with his submission that remuneration can only be fixed by an order of the Tribunal and not in the manner expressed in the order of July 2004.
39 Having considered the nature of the estate as it existed at that time, the range of investments and the inclusion of real property, and its present value, this Tribunal considers that the size and complexity of the represented person's estate has always justified remuneration of the administrator. The issue that arises in these circumstances is what is the proper rate of remuneration to be charged.
The rate of future remuneration
40 The administrator is a trustee company whose activities, including the charging of fees, is regulated by the Trustee Companies Act 1987 (WA). That Act creates a regime for the remuneration of corporate trustees. As will be seen below, the Trustee Companies Act 1987 does not provide authority or fix a rate for fees applicable to represented estates under the GA Act.
41 The administrator seeks orders that fix the rate of remuneration at its published fees, as varied by notice from time to time. The effect will be that the rate of fees can be amended in accordance with the requirements in the Trustee Companies Act 1987.
(Page 12)
42 The charges that the administrator proposes fall into the following categories: (a) a "Portfolio Management Fee", (b) an "Additional Service Fee", including charges for the preparation and lodgement of taxation returns and (c) a fee on each transaction.
43 The rates published by the administrator as at 24 January 2005 include the following:
(a) Portfolio Management Fee
1.925% per annum on the gross value of assets up to $500 000
1.375% per annum on the gross value of assets over $500 000 up to $1 000 000
0.825% per annum on the gross value of assets over $1 000 000 up to $3 000 000
0.530% per annum on the gross value of assets over $3 000 000
This fee is calculated as a percentage on capital of the estate. It is in effect the commission on capital referred to in s 117(4) of the GA Act.
(b) Additional Service Fee charged at $300 per hour including the preparation of tax returns.
(c) Transaction Fee $5 per transaction.
44 A number of arguments were advanced during the hearing in support of the proposal to fix the rate of remuneration at the administrator's published fee. Reference was made to the Trustee Companies Act 1987 which provides the regime for the remuneration of corporate trustees. The requirement under that Act that fees be published provides transparency and certainty to the question of remuneration in respect of all estates under administration or management. Furthermore, counsel submitted that the administrator is a public company which provides its services to clients on a commercial basis and is not operating for charitable purposes.
45 Counsel submitted further that by fixing the remuneration to the published schedule the order will not need to be reviewed by the Tribunal if the rate changes. This will save resources both of the administrator (with costs that might in the future be passed on to the represented person) and the Tribunal by avoiding further review hearings. In this respect the
(Page 13)
- orders proposed by the administrator can be seen to be consistent with the objectives of the Tribunal as set out in s 9 of the State Administrative Tribunal Act 2004. Specifically s 9(b) provides that the Tribunal's main objectives include "to act as speedily and with as little formality and technicality as is practicable, and minimise the costs to parties …"
46 In contrast, there are arguments against the proposal. The current practice of the administrator of fixing the applicable fee at the rates applicable at the time of appointment provides certainty about the costs of administration for the represented person and for persons who might fall into the category of persons to whom s 68(2)(a) applies.
47 If the administrator's proposal is accepted, the effect will most likely be that there is an increase in the costs to the estate from now and in the future.
48 If the fee to be charged is fixed at the time of appointment the administrator will need to seek a review if it intends to change that rate. Although this may create some administrative burden (and added costs) there is no procedural barrier to this review as an administrator may apply for review of the order at any time. It can be argued that in this jurisdiction regular oversight by review of orders provides an appropriate level of protection for a person incapable of making reasonable judgments about her estate. Then again the role of the Public Trustee in examining accounts does provide an opportunity for review of administration orders by the Tribunal, on the application of the Public Trustee for leave if there are unexplained irregularities in the administration of the estate, including remuneration of the administrator.
49 The represented person has no family living in Australia who may wish to raise issues about any of the administrator's actions from time to time with regard to the represented person's needs.
50 The previous attitude in this jurisdiction to remuneration of an administrator is revealed in an early decision of the Guardianship and Administration Board. In Re E [1993] 12 SR (WA) 7246 the Full Board of the Guardianship and Administration Board considered the rate of remuneration of the administrator. The Board considered the types of remuneration which might be applied and received information of the approach taken in other jurisdictions. Having reviewed material from Victoria, the Board agreed with the Victorian Board's requirement "that financial reports be seen by a relative or close friend in order that there is observance of what the administrator is doing". The Board also agreed in
(Page 14)
- that case that the fee structure be "patent and predictable". The Board in that case accepted the submission of the administrator that income based and hourly charges were inappropriate. Hourly charging was seen as "fundamentally problematical in terms of its open ended nature potentially leading to 'an unknown quantum of costs'".
51 According to the reasons for decision in Re E the capital commission was said to cover all the functions which now attract the additional service charge which is charged at an hourly charge.
52 In this present case the argument was advanced in the hearing that the rates of remuneration under s 117 should be fixed in the same way as fees may be charged under the Trustee Companies Act 1987. The regime in s 18 of the Trustee Companies Act 1987, however, by its terms, provides for remuneration of the administrator for the provision of its services other than for appointments made pursuant to the GA Act. In respect to the appointment of an administrator under the GA Act, the provisions of s 117 of the GA Act apply. The terms of s 117 are specific in their application, are prescriptive and therefore the provisions of Trustee Companies Act 1987 do not have direct application. (The provisions of the Trustee Companies Act 1987 relating to fees and charges do, however, reflect parliament’s more general intention as to the proper way for trustee companies to charge fees for services rendered.)
53 It appears from s 117 of the GA Act that parliament’s intention was somewhat different for matters under this Act. That provision requires express authorisation in each case where there is to be management of the estate of an incapable person and remuneration for that service.
54 Reading s 117 with s 68 of the GA Act, we conclude that there is a statutory preference for an unpaid individual to act as administrator over a corporate trustee, where such a person who is suitable for such an appointment exists in the life of the represented person. The question of suitability would include consideration of the ability of a proposed administrator to perform functions of an administrator by reference to the nature and size of the estate.
55 The statutory preference of an individual over a corporate trustee as administrator does not apply to the Public Trustee. Although the definition of corporate trustee in s 3 of the Act includes the Public Trustee, the Public Trustee is not a trustee company listed in the Schedule of the Trustee Companies Act 1987, and so the requirements of s 68(2)(a)
(Page 15)
- or s 68(2)(b) of the Act do not apply to an appointment of the Public Trustee.
56 Having said that, we conclude that once the decision is made by the Tribunal, having regard to s 68 of the GA Act, that it is appropriate to appoint a private trustee company, the appointment must take into account the nature of the administrator and the services it provides, and contemplate the remuneration of that administrator on the usual commercial terms applicable to that organisation. Consequently great care needs to be taken to consider the financial implications to the estate in making such an appointment.
57 We have determined that the administrator's appointment should be confirmed and that the size and value of the estate justifies remuneration. Taking into account the arguments for and against authorising the published rate as amended from time to time in accordance with the Trustee Companies Act 1987, we conclude that it is, on balance, appropriate to fix the rate for future remuneration in those terms. We are persuaded that this approach provides for the necessary certainty and transparency in relation to the fees to be charged to the estate.
Past remuneration
58 The administrator seeks a further order authorising the retention of payments made to itself from the estate of the represented person in the mistaken belief that it was entitled to charge for the administration, notwithstanding an absence of an express order to that effect.
59 As set out in the letter of 25 May 2004 the administrator has charged fees to the represented person in line with its published schedule applicable at the time of appointment.
60 The written submission of the administrator submitted for the review hearing refers to the Trustee Companies Act 1987 and states that in the usual course matters committed to its management would attract the fees applicable under s 18 of that Act and that it mistakenly operated on the assumption that it was entitled to charge the published fee.
61 The written submission of the administrator does not address the provisions of s 117 but it was conceded by counsel during the hearing that s 117 of the GA Act is the relevant provision for the determination of the remuneration of an administrator appointed under the GA Act, not s 18 of the Trustee Companies Act 1987. It was submitted by counsel that the Trustee Companies Act 1987 provides a context in which to consider the
(Page 16)
- fees charged by an administrator generally acting under that Act but that it does not determine the remuneration of an administrator appointed pursuant to the provisions of the GA Act.
62 It was argued that despite the lack of authority to receive the fee the represented person has not suffered financially and is in the same position she would be in had the "appropriate order" been made.
63 Information regarding the fees charged by the administrator to the estate of the represented person since the appointment as plenary administrator 3 April 2001 was provided to the Tribunal as follows:
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65 The following questions arise in respect of this application. Firstly, does the Tribunal have the power to order remuneration for services provided that were not authorised at the time of the payments? Secondly, if s 117 does provide for authorisation of remuneration for past services should the Tribunal make such an order and if so what amount by way of remuneration should be ordered to be paid out of the represented person's estate?
66 In respect of the first question, whether the Tribunal has the power to make the order sought, s 117(3) provides that a corporate trustee is not entitled to remuneration unless the State Administrative Tribunal
(Page 17)
- expressly allows. It does not follow from this that an administrator who has not been entitled to remuneration (as there was no express provision for it) could not at a later time become entitled to remuneration once an order to that effect is made. The section gives the Tribunal (and formerly the Board) the discretion to order remuneration be paid to an appointed administrator. Counsel submits that there is nothing in the language of the section or in the Act that requires that such an order be made at the time of the appointment. Indeed it may be the case that an administrator who seeks to be paid for services may be asked to submit a proposal for remuneration following his or her appointment and that the Tribunal will later make orders fixing the remuneration. Counsel referred to a case in his submissions regarding whether remuneration should be ordered where just this situation arose. (SeeSC and SAS [2005] WASAT 255) In that case an individual proposed himself as administrator and was appointed by the Tribunal. He sought remuneration and was asked to submit a proposal outlining his proposed fees. On review of the order the appointment of the administrator was confirmed and remuneration was ordered as an annual figure.
67 Pursuant to s 82 of the State Administrative Tribunal Act 2004, a decision comes into effect immediately after it is given or at such later time as is specified (emphasis added.) This implies that orders of the Tribunal should not operate retrospectively. This is consistent with the general principle against retrospective operation of legislation. For this reason we reject the proposal of the administrator in its written submission dated 30 June 2006 that the "tribunal make an order altering the terms of the 2001 administration order to confirm the validity of the fees charged by Perpetual to date…" (emphasis added).
68 It can be argued, however, that an order setting remuneration or a rate of remuneration for a period of an administration order which includes a period in the past would authorise receipt of past payment and have a retrospective effect but would not be an order that is retrospective in operation.
69 Even if s 117 does not operate so as to allow for payment for services rendered in the past, s 72 of the Act gives wide ranging powers to the Tribunal to make orders necessary for the proper administration of an estate. Section 72 provides:
"(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.
(Page 18)
- (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."
71 The question of ex gratia payments is dealt with separately in s 72(3) and prohibits "gifting" without authority of the Tribunal. The examination of accounts by the Public Trustee is relevant to this issue. Section 80(3) of the Act provides:
"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."
72 Any payment not authorised by an order such as an unauthorised gift or a payment in outside the scope of an order may be an amount disallowed by the Public Trustee on examination of the accounts. As noted above the administrator was not subject to an order requiring accounts to be filed in respect of the estate of the represented person.
73 We do not consider that the unauthorised payments received by the administrator fall into the category prohibited by s 72(3). The distinguishing feature of the payments here is that they are a fee for
(Page 19)
- services rendered, and not a gratuity. In commercial terms, the administrator has not benefited at the expense of the represented person, as the fees charged are directly related to the benefit of the services received by the represented person for the administration of her estate.
74 We conclude that on the basis of s 117 of the GA Act and the other sections referred to, that nothing in the Act precludes the Tribunal from ordering that the administrator receive payment for remuneration for past services where those services can be quantified and where there is a good reason for doing so. In this case, because no express order was sought or made but it can safely be assumed that there was an expectation on the part of the applicant, the administrator and indeed the Board itself that remuneration would be charged by the administrator consistent with past practice, and work on behalf of the represented person has been performed by the administrator in the period, it is appropriate that an order for remuneration be made.
75 Having decided that remuneration can be ordered for the period of the order the next issue is what amount by way of remuneration should be ordered to be paid out of the represented person's estate for the period?
76 We consider that, in all the circumstances, the amount of remuneration which should be fixed for the period of the administration up to the date of the making of this order is equivalent to the amount which would have been charged during the period, if charged at the rate of remuneration existing at the time of the initial appointment of the administrator, both in respect of the portfolio management fee and the other fees applicable at that time.
77 Our reason for deciding the issue in this way is that we consider that this best reflects the position regarding the charging of fees put by the administrator in the earlier hearings before the Board and the Tribunal and what can be assumed was the understanding of those involved in the application. Until that position was reviewed we consider that the administrator is confined to that rate of remuneration.
78 Any adjustment for overpayment of the administrator must be remitted to the estate.
Recovery of expenses by the administrator
79 Provision is also made in the GA Act for the reimbursement by an administrator of expenses reasonably incurred. Section 118 provides:
(Page 20)
- "(1) An administrator may re-imburse himself for or pay out of the estate of the represented person all expenses reasonably incurred in or about the performance of his functions."
80 At the first hearing there was some uncertainty as to whether the transaction fee applied to the estate on each transaction should be regarded as a recoupment of out of pocket expenses and as such an expense or should more properly be seen as an element of the remuneration of the administrator. At the second hearing this aspect was clarified and the submission of counsel on behalf of the administrator was that the transaction fee did constitute an aspect of the remuneration.
81 Whether a charge imposed by an administrator is in effect remuneration of the administrator is a matter for the Tribunal and subject to the terms of s 117. Counsel agreed that there would have been expenses incurred such as real estate agents' commissions and other disbursements. These were not itemised but would properly be recoverable under s 118.
82 After the decision in this matter was reserved, counsel for the administrator made known, by letter dated 8 August 2006, to the Tribunal that contrary to his submissions in the hearing, the administrator treats the fixed rate transaction fee as an expense recovery fee, that is, it is an amount paid to the administrator by way of expenses and disbursements on transactions. A further submission filed on 15 September 2006 refers to the transaction fee in the following terms:
"Perpetual Trustees maintain that the purpose of the $5 transaction fee is to recoup out of pocket expenses rather than a form of remuneration. Given the nature of the expenses referred to in our letter of 8 August 2006, such as postage, couriers, photocopying, bank charges, telecommunication charges and settlement fees, it would be impractical and administratively far more difficult to precisely cost out every out of pocket expense in relation to each transaction. Those expenses, which are not necessarily expenses incurred to third parties, but operational costs in undertaking transactions, are offset by the $5 transaction fee and by the retaining of interest as specified in our letter."
83 In the submission of the Public Trustee the transaction fee was more properly to be regarded as a form of remuneration:
(Page 21)
- "If Perpetual were to directly recover from the personal estate of the represented person the costs of postages, courier fees, bank charges and telecommunications expenses then the Public Trustee would readily agree that these were out of pocket expenses, as envisaged by the provisions of section 118 of the Guardianship and Administration Act 1990. However, that is not the case and it is the Public Trustee's view that the $5.00 Transaction Fee is a form of remuneration, which requires the Tribunal's authority, pursuant to the provisions of section 117 of the Act.
It appears that the transaction fee is often raised where Perpetual incur no external expenses, such as crediting the receipt of interest or dividends."
84 Having considered the submissions of the administrator and the further submission of the Public Trustee we conclude, by majority, that the $5 transaction fee is a form of remuneration. Although we accept that a component of the fee is for the recovery of expenses of the administration, the administrator has noted the difficulty in precisely identifying out of pocket expenses in each transaction and that the $5 transaction fee includes a component of "operational costs in undertaking transactions".
85 We note that whether an "expense", properly construed, is reasonably incurred by an administrator, is a matter for consideration when the accounts are examined by the Public Trustee.
Orders
86 On 11 July 2006 the administration order dated 3 April 2001 was revoked and an administration order in the following terms was substituted for it:
1. Perpetual Trustees WA Limited of Level 29 Exchange Plaza, 2 The Esplanade, Perth, Western Australia is appointed plenary administrator of the estate of the represented person with all the powers and duties conferred by the Act.
2. Remuneration of the administrator is authorised.
3. The decision in relation to the rate of remuneration and the application in respect of past unauthorised payments is reserved.
(Page 22)
87 On 7 December 2006 it is ordered that:
1. Perpetual Trustees WA Limited of Level 29 Exchange Plaza, 2 The Esplanade, Perth, Western Australia, the plenary administrator, is authorised to receive remuneration for the administration of the represented person's estate at its published rate of fees as notified at 1 January 2005 and as changed from time to time from the date of this order.
2. The administrator is authorised to receive remuneration for the administration of the estate for the period 3 April 2001 to 7 December 2006 in an amount equivalent to the fees that would have been charged on the estate had the fees been charged at the rate existing for remuneration at the time the order was made.
3. This order to be reviewed by 6 December 2011.
I certify that this and the preceding [87] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MS F CHILD, MEMBER
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