| JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : HUMAN RIGHTS ACT : GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) CITATION : ILS and SK [2012] WASAT 203 (S) MEMBER : MR J MANSVELD (MEMBER) HEARD : DETERMINED ON THE DOCUMENTS DELIVERED : 6 FEBRUARY 2013 FILE NO/S : GAA 458 of 2011 BETWEEN : PUBLIC TRUSTEE Catchwords: Administration - Loss to estate - Review of decision to determine loss on estate - Mediation - Respondent unnecessarily prolonged proceedingsand did not act reasonably in attempts to come to settlement - Costs awarded Legislation: Guardianship and Administration Act 1990 (WA), s 80, s 80(3), s 80(6a)
State Administrative Tribunal Act 2004 (WA), s 54(4), s 87
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Result: Costs awarded
Summary of Tribunal's decision: A daughter of a deceased woman had applied to the Tribunal for a review of a decision of the Public Trustee, in his role under s 80 of the Guardianship and Administration Act 1990 (WA), to determine a loss on the woman's estate when the daughter was her administrator.
The Tribunal varied the decision of the Public Trustee but held that a substantial loss had still occurred.
The Public Trustee applied to the Tribunal to have the daughter pay his costs in respect of the process of mediation which formed part of the Tribunal proceedings.
The Tribunal found that the daughter did not, in the conduct of the entire proceedings, genuinely attempt to assist the Public Trustee to make a decision on the merits. The mediation process was but one aspect of the proceedings, but it was considered to be an example where, in the Tribunal's view, the daughter, by her actions, unnecessarily prolonged the proceedings and did not act reasonably in the attempts to come to a settlement.
The Tribunal found that the Public Trustee had incurred costs which he might otherwise have avoided and should be compensated for the costs incurred.
The Tribunal ordered that the daughter pay those costs.
Category: B
Representation: Counsel:
Applicant : Ms C Lakewood
Respondent : N/A
Solicitors:
Applicant : State Solicitor's Office
Respondent : N/A
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Case(s) referred to in decision(s):
ILS and SK [2012] WASAT 203
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REASONS FOR DECISION OF THE TRIBUNAL:
Introduction 1 An application has been made by the Public Trustee (applicant) for costs in the proceeding ILS and SK [2012] WASAT 203 (ILS). 2 The Public Trustee is seeking costs against SK (respondent) that were incurred in relation to the mediation aspect of the proceedings in ILS. 3 The respondent had been the appointed administrator of the estate of her mother, ILS, who is deceased. 4 The proceeding in ILS dealt with an application made under s 80(6a) of the Guardianship and Administration Act 1990 (WA) (GA Act) which allows a person aggrieved by a decision of the Public Trustee under s 80(3) of the GA Act to apply to the Tribunal for a review of the decision. 5 Section 80(3) of the GA Act requires the Public Trustee to examine accounts lodged by an administrator of a person's estate and to decide whether to allow them; disallow any amount paid; determine that any amount or asset has been omitted; or that any loss has occurred. 6 The substantive proceeding inILS has a long history before the Tribunal. 7 The application under s 80(6a) of the GA Act was filed with the Tribunal by the respondent on 31 January 2011. On 18 March 2011 the Tribunal referred the application to mediation. The mediation process was unsuccessful and concluded on 9 August 2011. 8 The final hearing of the application under s 80(6a) of the GA Act was held on 7 May 2012 and the decision of the Tribunal delivered on 11 October 2012. 9 The order of the Tribunal on 11 October 2012 was that the decision of the Public Trustee of 29 December 2010 be varied so that the loss to the estate of ILS was determined as $158,747.73.
The application for costs 10 The applicant submits that the respondent caused him to incur legal costs in relation to attendance at two mediations at which the respondent failed to negotiate in good faith, in that at both mediations she agreed (Page 5)
to a mediated resolution and later refused to sign the deed evidencing the agreement. The applicant says he incurred further legal costs by way of a preparation of a deed in the terms agreed to by the respondent. 11 The costs being sought amount to $3,295. 12 The applicant submits that these costs were incurred by him unnecessarily, as a result of the respondent's unreasonable behaviour and delay. 13 The evidence of the applicant is contained in an affidavit dated 14 June 2012 by the applicant's legal representative (legal representative). Relevantly, the chronology of events is described as follows. 14 The first mediation was conducted on 20 May 2011 with the relevant parties present. The respondent was not legally represented. At the end of that mediation, the legal representative says that a settlement was reached between the applicant and the respondent that was to be reduced to a deed of settlement. The mediation was adjourned to allow the parties to finalise the settlement deed. 15 On about 27 May 2011, the legal representative received notice from the Tribunal that a further mediation had been listed for 9 August 2011. 16 The legal representative states that on 3 June 2011 the respondent contacted her about the part of the settlement which involved an immediate payment to the applicant as administrator of the respondent's sister (immediate payment). The respondent is reported to have said that she could not raise the entire agreed amount. The applicant agreed to a variation to the settlement to account for a reduced amount. 17 On 14 July 2011, the legal representative says that she sent two copies of the Deed of Settlement (Deed) to the applicant together with a Minute of Proposed Consent Orders. 18 On 8 August 2011, the legal representative states that she discussed the Deed with the respondent. The respondent is alleged to have said that she would not sign the Deed because it evidenced her acknowledging a debt to her sister (the sister being a beneficiary of the late mother's estate) which she did not accept. The respondent is also reported to have said that she had further problems with the Deed and asked that it be written 'in plain English'. (Page 6)
19 The second mediation occurred on 9 August 2011. The respondent was not legally represented. The respondent is alleged to have initially confirmed her position that she would not sign the Deed because she did not acknowledge any debt to her sister. She also did not want to be charged with any interest on the delayed component of the settlement. She wanted the immediate payment to be paid into a general bank account where she believed it would earn a higher rate of interest than could be offered by the applicant. 20 The legal representative states that the mediation concluded after she had gone through the Deed with the respondent, clause by clause. She says that she made contemporaneous handwritten amendments to the draft Deed which is before the Tribunal. Relevantly, a handwritten amendment alters the statement that the respondent 'owes' an amount to her sister to one which states that she 'will pay' her sister the agreed sum. 21 The legal representative states that the respondent stated that she wanted the Deed to be provided to her lawyer. She wanted to know whether the applicant could make any further claim against her. 22 The legal representative states that she made contemporaneous notes of the mediation and these are before the Tribunal. The notes conclude with '[the respondent] I agree with terms of settlement'. 23 On 9 August 2011, the legal representative sent a copy of the Deed incorporating the amendments made at the mediation to the respondent's lawyer. 24 On 10 August 2011, the respondent's lawyer requested further amendments to the Deed prior to meeting with the respondent. The applicant accepted the amendments which, relevantly, included a statement by the respondent that she agreed to pay the agreed amount to her sister 'without any admission of liability' and that the applicant and the respondent would bear their own costs in respect to the Deed. The applicant also agreed not to make any further claim against the respondent. 25 The legal representative states that on 17 August 2011 she was advised by the respondent's lawyer that the lawyer had spoken with the respondent. The email communication, which is before the Tribunal, states: (Page 7)
… I have spoken with [the respondent] about the Deed and will follow her up again by email today. I do not believe that she will have any issue with you contacting her directly regarding this matter from here on in, but I will confirm that with her and revert to you. 26 Also, on 17 August 2011 the legal representative states that she sent the Deed and a Minute of Proposed Consent Orders together with a covering letter to the respondent. On 25 August 2011, the letter and documents were returned still within the envelope. The envelope, a copy of which is before the Tribunal, has hand written on it 'Not at this address. Retd to Sender'. 27 At a directions hearing on 22 August 2011, the legal representative states that the respondent stated that she was not willing to enter into any settlement with the applicant. The legal representative made an oral application for costs of the mediation which was reserved for determination at the final hearing.
The respondent's evidence and submissions 28 The respondent has made a written submission to the Tribunal. 29 The respondent relevantly states: … With regard to me not signing the deed, I felt very pressured during mediation and did not fully realise how the outcome would affect my financial situation, and I really wanted this over more than anything. When studying the terms of the deed I realised that within a short time at an interest rate of 6% (and please note that the PT only pay [the sister]'s estate a rate of 2%) [the sister] would own more of my house than I did. I have worked very hard all my life to keep up mortgage payments and raise children with very little financial contribution from my late husband. I am not denying I did agree to sign but only I wanted the situation over, as I am too tired and stressed over the whole situation and it has had an extremely detrimental effect on my health. The next point I would like to raise is that my understanding of the 'Certificate of Loss' is that any money that is deemed that I am due to pay, is to the estate of [ILS the late mother]. Most recent paperwork seems to indicate that the money is owed to [the sister]. I understood that any money paid to the estate of [ILS] would have to be divided equally between [the sister] and myself as we should be equal sisters, and with that her share of anything due to [the sister] from mum's estate should reflect that [the sister] has already received $30,000.00 from the sale of the house and has received slightly more than half the funds that remained in the estate when mum passed away. (Page 8)
30 The respondent makes reference in her submission to paperwork from the office of the legal representative as being wrongly addressed and returned by a neighbour 'who would have no knowledge of my surname. Again, not my fault'. 31 The respondent concludes by stating: I am also asking you to consider seriously my requests for costs against the PT. … 32 The respondent does not provide any detail.
The relevant legislation 33 The application for costs in this matter is governed by s 87 of the State Administrative Tribunal Act 2004 (SAT Act), which reads: (1) Unless otherwise specified in this Act, the enabling Act, or an order of the Tribunal under this section, parties bear their own costs in a proceeding of the Tribunal. (2) Unless otherwise specified in the enabling Act, the Tribunal may make an order for the payment by a party of all or any of the costs of another party or of a person required to produce a document or other material on the application of the party under section 35. (3) The power of the Tribunal to make an order for the payment by a party of the costs of another party includes the power to make an order for the payment of an amount to compensate the other party for any expenses, loss, inconvenience, or embarrassment resulting from the proceeding or the matter because of which the proceeding was brought. (4) Without limiting anything else that may be considered in making an order for the payment by a party of the costs of another party where the matter that is the subject of the proceeding comes within the Tribunal's review jurisdiction, the Tribunal is to have regard to - (Page 9)
(5) The rules may deal with the effect of certain offers to settle, and responses, if any, to the offer, on the making of an order for the payment by a party of the costs of another party. (6) The Tribunal may order that the representative of a party, rather than the party, in the representative's own capacity compensate that or any other party for costs incurred because the representative acted in, or delayed, the proceeding in a way that resulted in unnecessary costs.
The decision of the Tribunal 34 Section 87(1) of the SAT Act makes clear that the starting proposition in the Tribunal is that parties bear their own costs in proceedings. However, s 87(2) of the SAT Act gives the Tribunal discretion to award costs against a party. 35 The relevant principles on how this discretion might be exercised are set out in the Guide to Proceedings in the WA State Administrative Tribunal at pages 190 - 193. The indication is that costs will only be awarded in 'special circumstances' (page 190). 36 The application made under s 80(6a) of the GA Act, determined in ILS and to which the cost application refers, was heard under the Tribunal's review jurisdiction. Section 87(4) of the SAT Act is therefore relevant to the exercise of the Tribunal's discretion. 37 The purpose of mediation is to achieve the resolution of the matters by a settlement between the parties (s 54(4) of the SAT Act). The applicant submits that the terms of a settlement were established with the respondent at the mediation and that the Deed reflected the matters agreed to. 38 I accept the submission of the applicant. The respondent herself admits that she agreed to sign the Deed, albeit that she says she agreed to do so because she wanted the proceedings to finish. The evidence demonstrates that the mediation process was thorough and involved (Page 10)
the consideration of the Deed not only by the respondent but also by her lawyer. 39 Although I accept that the process would have been very stressful for the respondent and that any mediation involves parties adjusting their positions in the course of negotiations, on the evidence before the Tribunal, the applicant was entitled to believe at the end of the mediation and after discussion with the respondent's lawyer that the matter had settled. 40 In light of my findings on the represented person's credibility in the determination of the application under s 80(6a) of the GA Act (ILS at [187] – [219]) and in the context of the evidence before me in this matter, I am satisfied that the respondent did not, in the conduct of the entire proceedings, genuinely attempt to assist the applicant to make a decision on the merits. The mediation process was but one aspect of the proceedings, but is an example where, in my view, the respondent, by her actions, unnecessarily prolonged the proceedings and did not act reasonably in the attempts to come to a settlement. 41 The applicant incurred costs which he might otherwise have avoided and should be compensated for the costs incurred.
Order 42 For the above reasons, I make the following order: 1. The respondent pay to the applicant the sum of $3,295 by way of costs in the proceedingsILS and SK [2012] WASAT 203. |