Johnson v Staniforth
[2002] WASCA 97
•24 APRIL 2002
| JURISDICTION | : | SUPREME COURT OF WESTERN AUSTRALIA |
TITLE OF COURT : THE FULL COURT (WA)
| CITATION | : | JOHNSON -v- STANIFORTH & ORS [2002] WASCA 97 |
| CORAM | : MURRAY J |
SCOTT J
ROBERTS-SMITH J
| HEARD | : 14 MARCH 2002 | ||
| DELIVERED | : 24 APRIL 2002 | ||
| FILE NO/S |
| ||
| MATTER |
| ||
| BETWEEN | : DONALD EDWIN JOHNSON |
Appellant (Plaintiff)
AND
WINNIE KATIE STANIFORTH
First Respondent (First Defendant)
WINNIE KATIE STANIFORTH
FIONA LISA STANIFORTHSecond Respondents (Second Defendants)
WINNIE KATIE STANIFORTH
Third Respondent (Third Defendant)
[2002] WASCA 97
Catchwords:
Wills, Probate and Letters of Administration - Making of will - Testator subject to administration order under Guardianship and Administration Act 1990 (WA) - Will made without authority of the administrator or consent of the Board - Whether invalid on that account
Mental health - Unsoundness of mind in relation to civil rights and duties - Effect upon testamentary capacity - Testator a represented person - Will made while administration order in force - No authority of administrator nor consent of Guardianship and Administration Board - Whether "disposition" in s 77(1) Guardianship and Administration Act 1990 (WA) includes a will
Costs - Probate action - Trial of preliminary issue - Principles
Legislation:
Guardianship and Administration Act 1990 (WA), s 4, s 45, s 64, s 69, s 71, s 77, s 82
Result:
Appeal allowed
Category: A
Representation:
Counsel:
| Appellant (Plaintiff) | : | Mr K E Yin |
| First Respondent (First Defendant) | : | Dr A F Dickey QC |
| Second Respondents (Second Defendants): | Dr A F Dickey QC | |
| Third Respondent (Third Defendant) | : | Dr A F Dickey QC |
Solicitors:
| Appellant (Plaintiff) | : | Frichot & Frichot |
| First Respondent (First Defendant) | : | Halperin Fleming Meertens |
| Second Respondents (Second Defendants): | Halperin Fleming Meertens | |
| Third Respondent (Third Defendant) | : | Halperin Fleming Meertens |
[2002] WASCA 97
Case(s) referred to in judgment(s):
Brown v McEnroe (1890) 11 LR (NSW) Eq 134
Cameron v Cameron (1968) 12 FLR 22
Carnley v Hoff [1942] 1 Ch 298
Carter v Carter (1896) 1 Ch 62
Clay v Karlson & Anor [2001] WASC 141
David by her Tutor the Protective Commissioner v David (1993)
30 NSWLR 417
Duke of Northumberland & Anor v Attorney-General [1905] AC 406
Federal Commissioner of Taxation v Henderson (1943) 68 CLR 29
Gibbons v Wright (1954) 91 CLR 423
Imperial Chemical Industries of Australia and New Zealand Limited v The
Federal Commissioner of Taxation (1972) 46 ALJR 35
In the Marriage of B J and T A Bassola (1985) 10 Fam LR 413
JNRD and the Protected Estates Act (1992) 28 NSWLR 728
Johnson v Staniforth & Ors [2002] WASCA 23
Johnson v Staniforth [2001] WASC 331
Lennon v Gibson & Howes Limited [1919] AC 709
Mitchell v Gard (1863) 3 SW & TR 275; 164 ER 1200
Perpetual Trustee Co Ltd v Fairlie-Cunninghame (1993) 32 NSWLR 377
Powell v Clelland [1948] 1 KB 262
Ramaciotti v Federal Commissioner of Taxation (1920) 29 CLR 49
Re Green [1969] WAR 67
Re Herbert (1990) 101 FLR 279
Re Marshall [1920] 1 Ch 284
Re Metropolitan Film Studios Limited's Application [1962] 1 WLR 1315
Re Walker [1905] 1 Ch 160
Case(s) also cited:
Hastilow v Stobie (1865) LR1P&D 64
In the Marriage of Hudson (1986) 11 Fam LR 189
Ord Forrest Pty Ltd v Federal Commissioner of Taxation (1974) 130 CLR 124
Re Cutcliffe's Estate [1959] P 6
[2002] WASCA 97
MURRAY J
MURRAY J: In this appeal I have had the considerable advantage of reading in draft the reasons to be published by Scott and Roberts-Smith JJ. Their Honours' scholarship and thoroughness have relieved me of the need to do more than state shortly my reasons for concluding that this appeal should be allowed both in respect of the question of interpretation of the Guardianship and Administration Act (1990) (WA), s 77, the subject of the first ground of appeal, and in respect of the issue of costs, the subject of the second ground.
2 As to the latter question, I may say at once that I agree with
Roberts-Smith J that the order of the trial Judge that the appellant should pay the respondents' costs of the trial of the preliminary issue to be taxed should be set aside and in lieu thereof an order that those costs be reserved to the Judge on the trial of the action should be made. I have nothing to add to his Honour's reasons in that regard, although they are given against the background of a different view about the preliminary issue to that to which I have come.
3 As to the substantive question whether the word "disposition" in
s 77(1)(a) includes a will, I commence by noting that the word is not defined in the Act and that there is nothing in the Act or in the general law to indicate that when the word "disposition" is used in respect of property or an interest in property, it is a word which bears a technical meaning distinct from its meaning in ordinary language. To dispose of something ordinarily connotes that an act is done or an arrangement is made in respect of the thing in a wide or general sense, not necessarily that it is alienated or conveyed away. That would include dealing with property by a will.
4 Nor does it mean, as the trial Judge supposed, "dealing with property
in a way that brings about an immediate result": Johnson v Staniforth [2001] WASC 331 at par [32]. The respondent, I note, did not seek to maintain the correctness of that view, suggesting that what his Honour intended to convey was that the word "disposition" in s 77(1)(a) "is confined to transactions which are intended irrevocably to alienate property, albeit that one or more steps must occur or a condition must be satisfied before the alienation has effect."
5 The question before his Honour in respect of which the appellant by
ground 1 argues that he erred, may therefore be framed to ask whether the term "disposition" in s 77(1)(a) was intended to bear a limited meaning which would exclude from it the making of a will. I note that as Scott J points out, the word "disposition" is defined in the different statutory
[2002] WASCA 97
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contexts of the Wills Act 1970 (WA), s 6, and the Property Law Act 1969 (WA), s 7, to include a gift, devise, bequest, or an appointment of property contained in a will.
6 The law recognises many forms of disposition in respect of property,
both realty and personalty, which are contingent in their form, whether effected by contract, gift, the making of a deed without the necessity for consideration or, as I would have it, by will. The disposition may take effect contingently upon any number of different events but, nonetheless, be properly described as a disposition in respect of property. Dispositions of a contingent kind which may take effect inter vivos, or which may only take effect inter vivos, may often affect existing and particular items of property but need not necessarily do so. I can see no reason why an individual may not commit himself or herself in a form recognised by the law as legally binding to acquire and hold property in trust to convey it ultimately to the benefit of another. Many forms of trust operate expressly in that way to affect after-acquired property.
7 To my mind then, it makes no point of difference in kind to say of a
disposition by will that it is ambulatory in effect, applying only upon the future event of the death of the testator, in respect of property which is part of the deceased's estate after the satisfaction of the deceased's liabilities at that time. I note that s 77(1)(a) does not speak of making a disposition of the estate, any part of the estate, or an interest in the estate of a represented person, but it provides that the represented person is "incapable of entering into any contract or making any disposition in respect of his estate or any part thereof or interest therein". (My emphasis).
8 Having reached the conclusion that the ordinary natural meaning of
the word "disposition" encompasses a disposition by will, before I find that that is the meaning to be given to the word in s 77(1)(a), I must answer the question whether there is anything in the statutory context, or by having regard to the objects and purposes of the Act, to indicate that a different, more limited meaning is to be given to the word. In that regard I must say that I have not been assisted by considering the history of the development of the law in respect of lunatics and the different treatment of idiots (as was the old terminology) in respect of the testamentary act, to which Roberts-Smith J has referred. It seems to me that at the time when the Guardianship and Administration Act was enacted, there was a recognition that the law, as developed by the courts and with statutory accretions from time to time, expressed no clear and satisfactory policy as
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to the way in which the affairs of persons under disability of the kind
under discussion were to be handled.9 Whilst I obtained no great assistance from the Second Reading
Speech of the Minister upon the enactment of this legislation, one thing is clear. The Act was intended to provide a comprehensive scheme, as the long title says, "for the guardianship of adults who need assistance in their personal affairs, [and] for the administration of the estates of persons who need assistance in their financial affairs".
10 The long title makes clear what the Act provides for by way of the
difference between guardianship and administration orders. Guided by the principles set out in s 4, it is for the Guardianship and Administration Board to determine when there is to be an intrusion upon the power of a person to look after himself, make judgments about his person, manage his own affairs and make judgments in respect of matters relating to his estate. Unless the contrary is established to the satisfaction of the Board there is a statutory presumption that a person is capable of doing all those things. It is upon established incapacity that the Board operates, and throughout, the policy of the Act is that the measure which imposes the least restrictions possible in the circumstances on the person's freedom of decision and action is that which is to be employed. The Board is to exercise its powers for the benefit of the individual concerned, described by the Act as the represented person or person in respect of whom an application is made.
11 There is a clear difference between guardianship orders and
administration orders, the latter being concerned with the property or estate of the represented person. A guardianship order is made under s 43. It is concerned with matters personal to the represented person. The most profound interference with the capacity of that person to deal with matters personal to him or her is the appointment of a plenary guardian. Section 45 makes it clear that such a guardian may in effect control almost every aspect of the represented person's life and may do things in respect of the represented person which that person himself could ordinarily do. Necessarily therefore, s 45(3)(b) addresses the capacity of a plenary guardian to "make a will or other testamentary instrument" on behalf of a represented person. The guardian may not do so, and the assumption of the Act is that neither will the represented person have the capacity to do so.
12 There is no need for a similar provision in the case of a limited
guardian who will have such of the functions set out in s 45 as the Board
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MURRAY J
vests in that person by the guardianship order. In that context, by s 48 a guardian may on behalf of the represented person "execute such documents and do all such other things as are necessary for the performance of the functions vested in him." Such an action taken or thing done by a guardian in the performance of those functions "has effect as if it had been taken, made, given, executed or done by the represented person and he were of full legal capacity": s 50, the guardian being directed by s 51 always to act according to his opinion of the best interests of the represented person.
13 So far as the making of an administration order is concerned, the
spring board was, at the time relevant to this case, the formation by the Board of the opinion in s 64(1) that the person in respect of whom the application is made:
"(a) is unable, by reason of mental disorder, intellectual handicap, or other 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."
The section has now been amended to replace the concepts of intellectual handicap and mental disorder with the term "mental disability", defined in s 3(1) to include "an intellectual disability, a psychiatric condition, an acquired brain injury and dementia". That is of no moment for the purposes of this appeal.
14 It was and remains the case under s 64(1) that the spring board for
the making of the order is the Board's opinion that the person in respect of whom the application is made is incapable of making reasonable judgments in respect of matters relating to his estate. It is the nature of that incapacity which under the statute leads to the recognition of a need for an administrator of the estate to be appointed under s 64, subject to such conditions and restrictions as the Board thinks fit: s 64(3)(a). Under s 68, the preference of the Act is that the administrator will be a natural person rather than a corporate trustee, ie: a trustee company, and a guardian may be appointed as the administrator of the estate of the represented person.
15 The Board may vest plenary functions in the administrator of the
estate and in that case, as in the case of a plenary guardian, the administrator may perform in relation to the estate of the represented person, or any part of it, "any function that the represented person could
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himself perform, or refrain from performing, if he were of full legal capacity": s 71(2). Otherwise s 71 provides for limited administration confined to the performance of any functions specified by the order, including any of the functions set out in Part A of Schedule 2 to the Act. But in my opinion, whether the administration is of a plenary character or of a more limited kind, it is, in any event, predicated upon the lack of full legal capacity to which s 64 refers. The administration order will set out the functions vested in the administrator: s 69. By that section, the administrator may execute documents and do anything necessary for the performance of the functions vested in him. Anything he does in the performance of those functions has effect, as in the case of actions performed by a guardian, "as if it had been taken, made, given or done by the represented person and he were of full legal capacity": s 69(3). But the estate of the represented person, by s 69(4), does not vest in the administrator.
16 Under s 70 he is to act according to his opinion of the best interests
of the represented person and s 70 gives guidance about that matter. Related to that is the provision in s 71(5) that in exercising its jurisdiction in relation to the making of an administration order, the Board may take a liberal view of the best interests of the represented person and, in particular, under s 72(3), it may authorise the entry into a transaction by way of "a payment or disposition of a charitable, benevolent or ex gratia nature" or "a payment in respect of a debt or demand that the represented person is not obliged by law to pay."
17 In short, an administration order, even of a limited kind, may not be
made unless there is demonstrated to the Board the incapacity of the kind set out in s 64. Once that is established, then the scheme of the Act is that an administration order will be made, preferably of a limited kind rather than in a plenary form but, in any event, tailored to meet the particular requirements of the administration of the estate of the represented person with full power in respect of the functions conferred by the order to act for the represented person as if the administrator was that person, who is understood to lack full legal capacity to act for himself.
18 In my opinion, s 77 finds its place there. It is headed, "Represented
person incapable of dealing with estate". Scott and Roberts-Smith JJ have set out the terms of s 77(1). In my opinion, it is useful to have regard to the whole of the section. It is as follows:
[2002] WASCA 97
MURRAY J
"77. (1) So long as there is in force a declaration by the Board 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, 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 Board, in writing authorizes him to do so.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.
(2)
(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.
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."
(5)
19 In my opinion, in the manner that I have discussed, the Act is
designed to establish a comprehensive scheme in respect of the administration of estates of persons who are established to lack full
[2002] WASCA 97
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capacity to make reasonable judgments and act in the administration of their own financial affairs. Its protective terms should not be cut down in any way. The powers which a represented person would ordinarily have to administer his or her estate are vested to a greater or lesser extent in the administrator. The represented person may then only act to the extent that the administrator with the written consent of the Board authorises him to do so. If he attempts to do so without that authority, the administrator may sue to recover any money or property put at risk unless it is a case of a contract for necessaries or the interests of an innocent third party without notice that the person with whom he or she was dealing was a represented person, are affected. In my opinion, that the section was intended to have a broad operation is emphasised by s 77(5) which includes as a disposition the acceptance of payment of even the whole of a debt, presumably because the circumstances may nonetheless involve a compromise adverse to the best interests of the represented person.
20 All of that, to my mind, reinforces the conclusion that the word
"disposition" in s 77 is to be given its ordinary natural meaning which includes a testamentary disposition. The making of a will is no less an act adversely affected by the incapacity of the represented person upon which the making of the administration order is predicated than is the entry into a contract, the making of a gift inter vivos or the appointment of an attorney or agent. Control in this area of the administration of a represented person's estate is to my mind no less important for the protection of that person's interests than in respect of any other aspect of the administration of his or her estate.
21 If a need to make a will is perceived, accompanied by testamentary
capacity, the administrator, acting in the best interests of the represented person, with the consent of the Board, may authorise it to be done. Control of this aspect of dealing with a person's estate or financial affairs pursuant to the terms of the Act can only be for the protection and benefit of the represented person and can result in no adverse consequence to that person's best interests.
22 The statement of agreed facts set out by Roberts- Smith J reveals that
while an administration order was in effect, the respondent Winnie Staniforth being appointed as the administrator, the represented person made a will dated 25 March 1998 which appointed Winnie Staniforth as executor of the will and sole beneficiary under it. Whether or not the administrator purported to authorise the represented person to make the will does not appear, but it is clear that the Board did not give its consent.
[2002] WASCA 97
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SCOTT J
23 In my opinion, the result of the incapacity of the represented person
to act in that way under s 77(1) is that the act of making the will when performed was devoid of legal force and effect. For that reason, as a matter of law, the will is invalid and was so when it was made. That such is the effect of s 77 is to my mind made clear by its terms, particularly by s 77(2), and also by the provisions of s 82 to which Scott J has referred which would enable a transaction entered into by a person within two months prior to the declaration under s 64(1) being made to be set aside and the position or rights of those affected by the transaction adjusted accordingly.
24 Finally, I observe that my conclusion relies solely upon the statutory
provisions. It has nothing to say about whether under the general law at the time when the will was made the testator lacked testamentary capacity. Indeed, although it is not necessary to decide the point, it may be the case under the law in this State, as it has been held to be in NSW, that the statutory conclusion of incapacity to manage his affairs does not result in the testator being conclusively presumed to lack testamentary capacity, the tests for which, under the law, may be different. So much was held by Powell J in respect of the provisions of the Protected Estates Act 1983 (NSW) in Perpetual Trustee Co Ltd v Fairlie-Cunninghame (1993) 32 NSWLR 377. I would prefer to leave to another day consideration of the correctness of the view expressed by his Honour in that case, at least in respect of the law of this State. It is sufficient for present purposes to observe that the invalidity of the will in question derives from s 77 of the Act itself and does not depend upon any judgment about testamentary capacity at common law.
SCOTT J: This is an appeal against a decision of Hasluck J delivered 10 December 2001 following a trial of preliminary issues. Hasluck J ordered:
(1)
Judgment be entered in favour of the defendants in relation only to the issue tried at the trial of the preliminary issue held on 21 November 2001, it being determined that the will of the deceased made 25 March 1998 was not, by reason of s 77 of the Guardianship and Administration Act 1990 as amended, unenforceable or of no force and effect;
(2)
The plaintiff pay the defendants' costs at the trial of the preliminary issue, including the cost of the appearance on 23 July 2001 to be taxed.
[2002] WASCA 97
SCOTT J
26 On 31 January 2002, Hasluck J granted leave to appeal against his
decision and directed pursuant to O 63A(5)(iv) that the appeal be heard by a Full Court constituted by three Judges. As I understand his Honour's reasons for granting leave to appeal, he was of the view that the issue was of such significance as to justify a hearing before a full bench of three Judges so that a definitive ruling could be given. Under O 63A, as this was an appeal against an interlocutory decision, the appeal would otherwise have been heard by a panel of two Judges rather than three.
27 The central issue in the appeal can be expressed shortly. The
question is whether Hasluck J erred in law in holding that a will made by the applicant on 18 December 1996 was not a "disposition" within the meaning of that term for the purposes of s 77(1)(a) of the Guardianship and Administration Act 1990 (WA) ("The Guardianship Act").
28 The second ground of appeal challenges the order made by Hasluck J
that the plaintiff pay the defendants' costs of the trial of the preliminary
issue.29 Before dealing with the grounds of appeal it is necessary to explain
the background leading up to the trial of the preliminary issue. By application dated 2 February 1998 Donald Edwin Johnson, the appellant, made application to the Guardianship and Administration Board for an order that he be appointed as administrator of the estate of Michael Vranjican ("the deceased"). The application was supported by appropriate medical evidence. A second application by the first respondent, Winnie Katie Staniforth ("Mrs Staniforth"), proposed that she be appointed the administrator of Mr Vranjican's estate.
30 By order of the Guardianship and Administration Board of 9 March
1998 an administration order was made by that Board appointing the first respondent administrator of the estate of the deceased. The order recites that the represented person (Mr Vranjican, the deceased):
(a) is unable, by reason of mental disorder, to make reasonable judgments in respect of matters relating to all or any part of his estate; (b) is in need of an administrator of his estate; and (c) cannot have such needs met by other means less restrictive of his freedom of decision and action.
The Board ordered that Mrs Staniforth be appointed limited administrator of the estate of Mr Vranjican with the following functions:
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(a) To operate all or any of the represented person's bank accounts; (b) To demand, receive and recover income of and moneys due or that become due to the represented person; (c) To pay any debts of, and settle or compromise any demand made by or against the represented person or against the estate; (d) To apply or expend moneys of the represented person, whether income or capital, for the maintenance, necessaries, comforts and benefits of the represented person, in such manner and to such extent as the administrator, having regard to the circumstances and the value of the estate of that person, considers proper and reasonable. (e) To sell, or grant an option to purchase, the property of the represented person namely 81 Fieldgate Square, Balga by public auction or private contract, in such manner and on such terms or conditions and for such purposes and price as the administrator thinks fit and to invest part of the net proceeds of the sale in any securities in which trustees may by law invest. (f) To repair, and effect any insurance necessary for the protection of, any of the property of the represented person.
The administration order was to be reviewed on 9 March 1999.
Mr Vranjican died on 2 August 1998 aged 86 and will be hereafter referred to as "the deceased".
34 The papers in the appeal book reveal that the deceased first made a
will on 26 May 1994 and by that will left his estate to Mrs Staniforth. The will directed that Mrs Staniforth could take such money as she felt was adequate for her services and help with the balance, if any, to be given to charities of her own choosing.
35 The next will contained in the appeal book is dated 18 December
1996. By that will the deceased gave his entire estate to the plaintiff
("Mr Johnson").36 The next will of the deceased was made on 23 October 1997. By
that will the deceased appointed Mrs Staniforth as his executrix and
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trustee and bequeathed his property to his trustee upon trust to distribute the same to herself and her daughter, Fiona Lisa Staniforth, as tenants in common in equal shares.
37 The final will of the deceased was made on 25 March 1998 (although
wrongly dated 1997 in error). By that will the deceased left his estate to Mrs Staniforth absolutely. That will has an endorsement at the foot which says:
"This document was read to the patient, Michael Vranjican, by
me, Dr P Foley, as he is too visually impaired to read."
It is common cause that the will made 25 March 1998 was executed after the administration order made on 2 February 1998.
39 The question for determination by Hasluck J was whether the will of
the deceased made 25 March 1998 was unenforceable or void or of no force and effect by reason of s 77 of the Guardianship Act. That section relevantly provides:
"77 Represented person incapable of dealing with estate
(1)
So long as there is in force a declaration by the Board 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, 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 Board, in writing authorizes him to do so."
40 The issue that therefore arose for determination before Hasluck J was
whether the will of the deceased of 25 March 1998 fell within the provisions of s 77 of the Guardianship Act so as to bring about its invalidation. It is common ground that the Guardianship and Administration Board neither consented nor authorised the deceased to execute the will.
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41 Hasluck J, in his decision, concluded that s 77 of the Guardianship Act had no application to the will of the deceased under consideration. In Johnson v Staniforth [2001] WASC 331 Hasluck J said at [32 - 34]:
"In my view, it is significant that the Guardianship and Administration Act in its terms does not purport to be dealing with the issue of testamentary capacity or the management of an estate after death. As I have already noted, it is significant that by s 69(4), nothing in the Act vests the estate of a represented person in an administrator. When the various provisions of the Act are considered in combination, they suggest that the Act is concerned with the administration of the affairs of a represented person during his lifetime. This, in turn, suggests that the term 'disposition' in s 77(1)(a) is confined to instruments or events which have the effect of alienating property immediately. This is consistent with the ordinary meaning of the word 'disposition' which relates to dealing with property in a way that brings about an immediate result. Property can be alienated by contractual arrangements or by an immediate physical delivery. In the case of a Will, however, which can be revoked at any time prior to death, the making of a Will cannot be said to have effected an alienation or disposition of property.
It follows that, in my view, the term 'disposition' contained in s 77(1)(a) of the Guardianship and Administration Act does not apply to the making of a Will. The consequence is that the third Will of the deceased, being the Will made on 25 March 1998 shortly after the making of the relevant administration order on 9 March 1998, cannot be regarded as unenforceable or as having no force and effect simply because the consent of the Board to the making of such an order had not been obtained."
42 As can be seen from the grounds of appeal outlined above, the
appellant challenges that ruling and the order for costs made by
his Honour in the Court below.43 The first matter that falls for consideration therefore is the meaning
to be assigned to the word "disposition" in s 77(1)(a) of the Guardianship
Act.44 It is to be noted that there is no definition of the word "disposition"
in the Guardianship Act. "Disposition" is defined in the Property Law Act
1969 as follows:
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"Disposition" includes a conveyance and also a devise, bequest or an appointment of property contained in a will; and "dispose of" has a corresponding meaning.
The word "disposition" is also defined in the Wills Act 1970:
"Disposition" includes a gift, devise, bequest or an appointment of
property contained in a will.I will later return to the significance to be attached to the definition of "disposition" in Acts of Parliament other than the Guardianship Act.
47 It is to be noted that Mrs Staniforth, who was appointed limited
administrator of the estate of the deceased, was the sole beneficiary of the deceased's estate under the will the subject of consideration. It should also be added that there is a separate challenge to the testamentary capacity of the deceased which does not fall for consideration on this preliminary issue.
48 The primary matter falling for consideration, as I have already
indicated, is the meaning to be assigned to the word "disposition" in
s 77(1)(a) of the Guardianship Act.
It is to be noted that the only reference to a testamentary instrument of a represented person to be found in the Guardianship Act is in Sch 2, Pt B(f) of the Act which empowers the Board to require the production of documents by calling for, and inspecting, any testamentary instrument of the represented person. The facts before us indicate that no such power has been exercised here.
The meaning of "disposition" was considered by the House of Lords in Duke of Northumberland & Anor v Attorney-General [1905] AC 406. In that case Lord MacNaghten said at 410:
"There are two things plain on the face of the Act. In the first place, it is clear that the terms 'disposition' and 'devolution' must have been intended to comprehend and exhaust every conceivable mode by which property can pass, whether by act of parties or by act of the law."
His Lordship went on to say at 411:
"In many cases the purpose of the Act would be defeated unless you give to the term 'disposition' the largest possible signification - not only so, but the Act shews on its face that the
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term 'disposition' includes a sale. Sect. 7 speaks of 'any disposition of property not being a bona fide sale.' And s. 17 is more significant still. It is to be inferred from it that the framers of the Act thought the expression 'disposition of property' wide enough even to include contracts for the payment of money on post obits and under policies of insurance."
The Earl of Halsbury and Lord Lindley agreed with the judgment of Lord MacNaghten. Lord Lindley said at 420:
"Until I had the advantage of reading the judgment of my noble and learned friend Lord MacNaghten, I felt more difficulty than I do now in dealing with some of the arguments addressed to your Lordships by the counsel for the appellants. But that judgment has put the matter so clearly that I will not trouble your Lordships with any additional observations on the construction of the Act."
53 A similarly wide view of the word "disposition" was taken by
Farwell J in Carnley v Hoff [1942] 1 Ch 298 at 298. That case involved the interpretation of the word "disposition" within the provisions of the Legitimacy Act of the United Kingdom of 1926. By s 11 of that Act, "disposition" was defined to mean "an assurance of any interest in property by any instrument whether inter vivos or by will". The question for consideration was whether the will of a deceased or a deed of appointment constituted the disposition by a testator. Farwell J said at 303:
"If the will itself is not the disposition the result would seem to be an odd one, because it would come to this, that the power of appointment was exercised in favour of a person who was not a person entitled in default of appointment except by reason of this Act; and to construe in that way the word 'disposition' could only result in the Act having the effect of altering the construction of the will itself, which is the disposition.
In my judgment the answer to this question is that the word 'disposition' as used in this section means the will of the testator, that is the will of William Hoff made in 1860, which came into effect upon his death in 1861, and on the true construction of the will the children of the connection between William Hoff and his housekeeper were not objects of the power of
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appointment, nor were they persons who could take in default of
appointment."
54 In relation to the Family Law Act 1975 (Cth), a similar wide view has been taken of the word "disposition" - see In the Marriage of B J and T A Bassola (1985) 10 Fam LR 413 per Connor J at 416 citing with approval Carter v Carter (1896) 1 Ch 62 at 67 where Stirling J said:
"The words 'dispose' and 'disposition' … are not technical words, but ordinary English words of wide meaning; and where not limited by context those words are sufficient to extend to all acts by which a new interest (legal or equitable) in property is effectively created."
55 It is, of course, necessary to construe each Act of Parliament with
reference to the particular provision in the context in which it occurs, although reference may be made to other comparable Statutes where the same term occurs providing the terms are in pari materiâ: see Ramaciotti v Federal Commissioner of Taxation (1920) 29 CLR 49 per Knox CJ at 53. In that respect it is to be noted that the long title to the Guardianship Act is:
"An Act to provide for the guardianship of adults who need assistance in their personal affairs, for the administration of the estates of persons who need assistance in their financial affairs, to establish a Board with jurisdiction in respect of guardianship and administration matters, to provide for the appointment of a public officer with certain functions relative thereto, to make provision for a power of attorney to operate after the donor has ceased to have legal capacity, and for connected purposes."
56 Pursuant to s 19 of the Interpretation Act 1984 ("the Interpretation Act") it is permissible for a Court to refer to a Second Reading Speech in order to construe a provision. In addition, under s 18 of the Interpretation Act a construction that will promote the purpose or object underlying an Act should be preferred to a construction that would not promote that purpose or object. In that respect, in the Second Reading Speech in the Legislative Assembly in Hansard of 6 June 1990 the Minister for Health said at 1916:
"The government recognises the predicament that many elderly, mentally ill and intellectually disabled people are in, and we are providing a mechanism for assisting them in a manner which will lease restrict their civil liberties. It includes legislative
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reform which will improve their lives and give them hope and direction, which is long overdue. Although this bill has emanated from agencies concerned with the intellectually handicapped, it can, and should, be extended to all persons who can benefit from it."
57 It is clear, in my opinion, from that Second Reading Speech that the
Guardianship Act was designed to protect people with disabilities of a type which prevented them from properly caring for themselves. In this case, in my view, the administration order to which I have earlier referred, and the terms of it, indicate that the Guardianship Board in this case was satisfied that Mr Vranjican was, as set out in the terms of the order, unable, by reason of mental disorder, to make reasonable judgments in respect of matters relating to all or any part of his estate.
58 Senior counsel for the respondents before us contended that s 77 of
the Guardianship Act only applies to dispositions inter vivos which have the effect of irrevocably alienating property conditionally or immediately. It was contended (and it is not in dispute) that the will of the deceased was not an inter vivos disposition of property. The alienation of property affected by the will was contingent and only took effect upon the death of the deceased. It follows that if the word "disposition" in s 77 is limited to instruments which alienate property immediately, then the will of the deceased would not come within that description. That indeed, was the view ultimately reached by the learned trial Judge.
59 If, on the other hand, the word "disposition" has the wider meaning
contended by counsel for the applicant, then the will of the deceased would come within that term and would suffer the adverse consequences of being caught by the provision.
60 In reaching this conclusion, I have taken into account the various
powers that may be vested in a guardian under the Guardianship Act. In particular, under Pt 5 of the Act guardians may be vested with differing powers. Under Div 2 provision is made for plenary guardians which vests in such guardians full powers to deal with the affairs of the represented person. Such powers were not applied for or granted in this case. The Guardianship Act also provides for the appointment of limited guardians whose functions are provided for under the Act. Again that provision has no application in this case. Div 3 of Pt 5 of the Guardianship Act expressly provides for limitations on sterilization of a person to whom the Act applies on restricted terms.
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61 In this case the terms of the appointment have been set out earlier in
these reasons. Other assistance with this difficult problem is to be found in the Guardianship Act itself. It is to be noted by s 45(3) that a plenary guardian (the guardianship with the widest powers under the Guardianship Act), by s 45(3)(b), is expressly precluded from making a will or other testamentary instrument.
In addition, assistance is to be found to resolve the present problem by reference to s 82 of the Guardianship Act which provides:
"82 Transactions may be set aside
(1)
Subject to subsection (2), where a person within 2 months before being declared under section 64(1) to be a person in need of an administrator of his estate has entered into a disposition of any property (including a gift) or taken on lease, mortgaged, charged, or purchased any property, or agreed to do so, the Supreme Court may, on the application of the administrator of that person's estate and on notice to such persons as the Court may direct, set aside the transaction and make such consequential orders as it thinks fit for the purpose of adjusting the position or rights of the parties and other persons.
(2) The Court shall not set aside any transaction
under this section where -
(b)
the Court is satisfied, in the case of a transaction that is not a gift, that-
(i)
the other party acted in good faith and without notice of any incapacity to which the represented person was then subject; and
(ii)
the consideration for the disposition was adequate or, in the case of a purchase, not excessive or, in the case of a lease taken, the rent is not excessive."
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63 The first thing to be noted about s 82 is the use of the word
"transaction" which is missing from s 77(1)(a) set out earlier in these reasons. In my view, where the Guardianship Act speaks of alienations inter vivos, the word "transaction" is used. It follows from that construction that dispositions inter vivos, which in terms of s 82 are referred to as "transactions", made within two months prior to the declaration under s 64(1) may be set aside. Other dispositions may not. The reason, in my opinion, why a will need not be set aside is because, if the testator lacked testamentary capacity, the will could be challenged and set aside in ordinary probate proceedings. It would not be necessary for the statute to do so.
64 Different considerations arise where the testamentary disposition is
effected after a declaration by the Board under s 64(1) so that if the administrator, with the consent of the Board in writing, has not obtained authorization, then the section itself would render the testamentary disposition of no force and effect. I would also note in passing that in Pt B of Sch 2 to the Guardianship Act under subpar (g) reference is again made to "disposition or transaction" for the purpose of empowering the Board to give directions for the purposes of s 72(1) of the Guardianship Act.
In Perpetual Trustee Co Ltd v Fairlie-Cunninghame (1993) 32 NSWLR 377 Powell J had occasion to consider the equivalent provisions in the Disability Services and Guardianship Act 1987 of New South Wales. In a very careful and thoroughly researched judgment his Honour came to the conclusion that under that statute the equivalent Board had jurisdiction to deal with dispositions inter vivos but no capacity to deal with testamentary dispositions. Powell J relied on the judgment of Vaughan Williams LJ in Re Walker [1905] 1 Ch 160 where his Lordship said at 172:
"As against this view it is said that if a lunatic is of sufficient mental capacity to do so he can execute a will, and that after his death the will can be proved, if the Court to which the application for probate is made is of the opinion that the testator at the time when he executed the will was of testamentary capacity and understood what he was doing. Of that there can no doubt.
Then it is said, if a lunatic has this capacity to make a will which can be proved after his death, why should he not also have power to execute a deed which on the face of it is only to
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take effect upon his death, and creates only reversionary interests arising after the death of the lunatic? It does certainly seem at first sight a little inconsistent that the law should recognize the capacity of the lunatic to make a will, and should refuse to recognise his capacity to execute a deed which is intended to take effect only after his death. But the answer to this is, that the beneficiaries under a will have no interest and no locus standi whatever until after the death of the testator. The will is ambulatory and may be revoked by the maker of it at any time before his death, and the result is that the execution of a will gives no immediate interest to the beneficiaries either in possession or in reversion. The will is of no effect until the death of the maker of it, and the consequence is that the making of it does not give rise to any conflict of control. The beneficiaries under such a will cannot, when orders are being made in respect of the lunatic's property, come forward and claim to interfere in any way, whereas those claiming under a deed could successfully insist upon a locus standi to be heard, and immediately thereupon a conflict of jurisdiction would arise."
66 In my view, the distinction between the Guardianship Act and the New South Wales position is evident from the provision of s 77 of the Guardianship Act set out earlier in these reasons. In my view, s 77 does not purport to take testamentary capacity away from the represented person. On the contrary, it expressly preserves that capacity. The provision is designed to protect the represented person to the extent that his or her capacity to make a will or other testamentary disposition can only be validly exercised with the written consent of the administrator and the Board. That provision formulated in that way, in my view, distinguishes the matter from the legislation under consideration in Perpetual Trustee Co Ltd v Fairlie-Cunninghame (supra) and distinguishes the common law position in Re Walker.
67 In my view, s 77 of the Guardianship Act is designed to preserve the testamentary capacity of the represented person in such a way as to protect that person from exploitation. That result is achieved by preserving in the Board, the residual power of approving the exercise of testamentary capacity in an appropriate case.
68 I would also add that, in my view, the opposing contention would
lead to the conclusion that a disposition inter vivos without the consent of the Board would be of no force and effect, but a testamentary disposition
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would not be caught by the provision. In my opinion, that is unlikely to have been the intention of the legislature for reasons I have expressed earlier. In addition, whilst a will does not affect the immediate disposition of property, it is a document of the utmost importance which in many instances is of far more significance than a disposition inter vivos. In my view, it would produce an absurd result if a testamentary disposition was not caught by the provision whilst a disposition inter vivos was.
69 In addition, I would add that the word "disposition" is commonly
used in testamentary documents. In the deceased's will of 18 December
1996 the will commences:"Michael Vranjican, pensioner of 81 Fieldgate Square, Balga in the State of Western Australia HEREBY REVOKE all former Wills and Testamentary dispositions made by me and DECLARE this alone to be my last Will and Testament."
70 It is to be noted that the testator in that document used the expression
"testamentary dispositions". That expression is commonly used in wills and understood by testators to mean that the will affects a disposition of property, albeit contingent upon the death of the testator. Such a meaning is consistent with the definition of "disposition" in the Wills Act to which I have earlier referred and, in my view, is apposite to the use of that word in s 77 of the Guardianship Act. To adopt the narrow meaning contended for by counsel for the respondent and as determined by Hasluck J could, in my opinion, bring about injustice. A person under disability, as Mr Vranjican was, is protected under the provisions of the Guardianship Act to the extent provided for in that legislation. To adopt the limited meaning of the word "disposition" contended for by counsel for the respondent would limit the scope of that protection. As is clear from the section set out earlier in these reasons, there is capacity in the administrator to apply to and obtain the consent of the Board in an appropriate case so that the represented person can exercise his testamentary capacity. In my view, that is an adequate safeguard to protect the testamentary capacity of a represented person in an appropriate case.
71 It is not necessary on the facts of this case to embark upon the
interesting question of whether the will of the deceased is void or voidable: David by her Tutor the Protective Commissioner v David (1993) 30 NSWLR 417; Gibbons v Wright (1954) 91 CLR 423 per Dixon CJ, Kitto and Taylor JJ at 439 and 443.
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It is sufficient to conclude that absent the consent of the Board (an agreed fact) the will of the deceased was of no force and effect.
73 As to the second ground of appeal, I have had the advantage of
reading in draft the reasons to be published by Roberts-Smith J. I agree with his Honour that the appeal against the costs order should be allowed for the reasons which his Honour expresses. I would also uphold the appeal on that ground and substitute the orders proposed by his Honour.
ROBERTS-SMITH J: This is an appeal by leave granted on 31 January 2002 by Hasluck J (Johnson v Staniforth & Ors [2002] WASCA 23) against an interlocutory judgment on a preliminary issue delivered by his Honour on 10 December 2001 (Johnson v Staniforth [2001] WASC 331).
75 The question raised by the preliminary issue was whether a will
made by a person who is the subject of an administration order of the Guardianship and Administration Board ("the Board"), without the knowledge or consent of the Board, was invalid for that reason. Hasluck J held that it was not. He ordered the appellant (plaintiff) to pay the respondents' (defendants') costs.
76 The point was carefully framed. His Honour's holding deliberately
did not touch upon the question whether or not the will was otherwise
valid.
The appeal is against both the finding on the preliminary issue and the order for costs.
For the purposes of this appeal, it is not necessary to go beyond the facts as set out in a Statement of Agreed Facts filed 7 September 2001. Those are that:
1.
the plaintiff made application seeking administration of the estate of Michael Vranjican under the provisions of the Guardianship and Administration Act 1990 WA ('the Act');
2.
a hearing was conducted on 9 March 1998 and an Administration Order pursuant to the Act was made by the Board in respect of Michael Vranjican on 9 March 1998 ("The Administration Order");
3.
the first defendant, first-named second defendant and the third defendant (being one and the same person) was appointed the
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administrator of the estate of Michael Vranjican pursuant to the
Administration Order;4. Michael Vranjican made a will on 25 March 1998; and
5. the will was made without the knowledge or consent of the Board. The point in issue turns upon the proper construction of s 77(1) of
79
the Act, which provides that:
"77. (1) So long as there is in force a declaration by the Board 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, 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 Board, in writing authorizes him to do so."
80 It is important to approach the matter (as Hasluck J did) by
considering this provision in the context of the Act as a whole and the legislative object it seeks to achieve. As his Honour noted, s 18 of the Interpretation Act 1984 (WA) requires that in the interpretation of a written law, a construction that would promote the purpose or object underlying it shall be preferred to a construction that would not promote that purpose or object.
Accordingly I begin where his Honour did, namely with the long title to the Act. That states the Act is:
"... to provide for the guardianship of adults who need assistance in their personal affairs, for the administration of the estates of persons who need assistance in their financial affairs, to establish a Board with jurisdiction in respect of guardianship and administration matters, to provide for the appointment of a public officer with certain functions relative thereto, to make provision for a power of attorney to operate after the donor has ceased to have legal capacity, and for connected purposes."
The Board is established pursuant to s 5 of the Act.
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In the performance of its functions the Board must observe the principles set out in s 4(2) of the Act.
"(2) (a) The primary concern of the Board shall be the best interests of any represented person, or of a person in respect of whom an application is made.
(b) Every person shall be presumed to be capable of –
(i) looking after his own health and safety; (ii)
making reasonable judgments in respect of matters relating to his person;
(iii) managing his own affairs; and (iv)
making reasonable judgments in respect of matters relating to his estate,
until the contrary is proved to the satisfaction of the Board.
(c) A guardianship or administration order shall not be made if the needs of the person in respect of whom an application for such an order is made could, in the opinion of the Board, be met by other means less restrictive of the person's freedom of decision and action.
(d) A plenary guardian shall not be appointed under section 43(1) if the appointment of a limited guardian under that section would be sufficient, in the opinion of the Board, to meet the needs of the person in respect of whom the application is made.
(e) An order appointing a limited guardian or an administrator for a person shall be in terms that, in the opinion of the Board, impose the least restrictions possible in the circumstances on the person's freedom of decision and action.
(f) In considering any matter relating to a represented person or a person in respect of whom an application is made the Board shall, as far as possible, seek to ascertain the views and wishes of the person concerned as expressed, in whatever manner, at the time, or as gathered from the person's previous actions."
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Applications for guardianship and administration orders are made under Pt 4 of the Act.
85 Part 5 deals with guardianship. The Board may appoint a person to
be a plenary guardian or a limited guardian (s 43(1)). A person appointed as a guardian has functions in respect of the person of the individual in respect of whom the order is made ("the represented person" (s 45(1)).
86 It is to be noted that by subs (3) of s 45 a plenary guardian is
specifically precluded from doing certain things on behalf of the represented person, including making a will or other testamentary instrument.
Estate administration is dealt with in Pt 6 of the Act.
Section 64 provided at the relevant time that:
"64. (1) Subject to section 4, where the Board 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 mental disorder, intellectual handicap, or other 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, the Board may by order declare the person to be in need of an
administrator of his estate, and if it does so shall appoint –
(c) a person to be the administrator; or (d) persons to be joint administrators, as the case may require, of the estate of the person in respect of
whom the application is made.(2) Where under subsection (1) the Board declares that a person is in need of an administrator of his estate, it shall declare the matter or matters set out in paragraph (a) of that subsection of which it is satisfied.
(3) An appointment under subsection (1) –
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(a) may be made subject to such conditions and restrictions as the Board thinks fit; ..."
The functions of the Administrator are in respect of the estate of the represented person and are set out in s 69 as follows:
"69. (1) Subject to section 64(3)(a), 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 Board 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."
90 Section 71 of the Act authorises the Board under s 69 to vest plenary
functions in the Administrator of the estate of a represented person. Where that is done, the Administrator may perform in relation to the estate of the represented person or any part of it, any function that the represented person could themselves perform if of full legal capacity (s 71(2)).
91 Where the Board does not vest plenary functions in an Administrator
it may authorise the Administrator to perform any specified function
including one or more of those set out in Pt A of Schedule 2 (s 71(3)).
The Board itself may give any direction, make any order or do any other thing set out in Pt B of Schedule 2 (s 72(1)).
93 As required by s 64(2) of the Act, the Administration Order made by
the Board on 18 March 1998 specified that Mr Vranjican was unable, by reason of mental disorder, to make reasonable judgments in respect of matters relating to all or any part of his estate, was in need of an
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Administrator of his estate and could not have such need met by other means less restrictive of his freedom of decision and action.
The order appointed Mrs Staniforth as a limited administrator with specified functions, they being to:
(a) operate Mr Vranjican's bank accounts; (b)
demand, receive and recover income of and monies due or which became due to him;
(c)
pay any debts of and settle or compromise any demand made by or against him or against the estate;
(d)
apply or expend monies of his, whether income or capital for his maintenance, necessaries, comforts and benefits;
(e)
to sell or grant an option to purchase Mr Vranjican's residential property, and
(f) to repair and effect any insurance in respect of his property.
Ground 1: Error in holding s 77 of the Act did not apply to a will
95 The learned trial Judge saw it as significant that the Administration
Order in its terms did not purport to limit Mr Vranjican's capacity to execute a will. He also noted that the term "disposition" is not defined in the Act.
96 Pursuant to s 19 of the Interpretation Act his Honour had regard to the Second Reading Speech of the then Hon Attorney General on the Guardianship and Administration Bill 1990 ("the Second Reading Speech"), and concluded that the term "disposition" had to be read on the understanding that the various provisions of the Act are concerned with the administration of the affairs of a represented person during their lifetime.
97 The salient part of his Honour's reasoning, beginning with his
reference to the Second Reading Speech by the Hon Attorney General, is
as follows:"[The Minister] said that the framework of the Bill gives people the freedom to function independently if they have the competence. It recognises the existence of a wide spectrum of disabilities between what is judged to be absolute competence or absolute incompetence. The proposed legislation would encourage people, wherever possible, to develop skills for self-
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management and it would provide for guardians to act only in those areas where incapable persons are unable to look after themselves. There is no suggestion in the Second Reading Speech that the proposed legislation is directed to testamentary capacity or to a need for restrictions upon a person's capacity to make a Will.
In my view, it is significant that the Guardianship and Administration Act in its terms does not purport to be dealing with the issue of testamentary capacity or the management of an estate after death. As I have already noted, it is significant that by s 69(4), nothing in the Act vests the estate of a represented person in an administrator. When the various provisions of the Act are considered in combination, they suggest that the Act is concerned with the administration of the affairs of a represented person during his lifetime. This, in turn, suggests that the term 'disposition' in s 77(1)(a) is confined to instruments or events which have the effect of alienating property immediately. This is consistent with the ordinary meaning of the word 'disposition' which relates to dealing with property in a way that brings about an immediate result. Property can be alienated by contractual arrangements or by an immediate physical delivery. In the case of a Will, however, which can be revoked at any time prior to death, the making of a Will cannot be said to have effected an alienation or disposition of property.
It follows that, in my view, the term 'disposition' contained in s 77(1)(a) of the Guardianship and Administration Act does not apply to the making of a Will. The consequence is that the third Will of the deceased, being the Will made on 25 March 1998 shortly after the making of the relevant administration order on 9 March 1998, cannot be regarded as unenforceable or as having no force and effect simply because the consent of the Board to the making of such an order had not been obtained." (Emphasis added).
98 The appellant's essential submission is that the learned trial Judge
failed to give the term "disposition" the proper extent of its meaning, which encompasses every conceivable way by which property can pass, and so includes a testamentary disposition. It was submitted, for example, that his Honour's conclusion failed to acknowledge that s 77 of the Act makes no distinction between inter vivos or testamentary dispositions and that his Honour erred in concluding it applied only to the former. It was
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also submitted his Honour failed to take account of the fact that the test for testamentary capacity requires a higher degree of mental capacity than does the test for capacity to make an inter vivos disposition; thus it was said, if by the operation of s 77 a person was deemed to lack capacity to make an ordinary deed effecting an inter vivos disposition of property, then a fortiori it should operate to deem that person to have a lack of testamentary capacity. Other submissions were allied to this, such as that it would be inconsistent with the policy and objects of the Act were a person deemed unable to make an inter vivos disposition nonetheless able to dispose of his or her property by will. In addition, the appellant refers to the "logic" that persons to whom s 77 of the Act apply are likely to be old and frail and are therefore likely to need to make a will and so be in need of the protection of the Act. In this last regard, it is pointed out that s 77(1) would not prevent a person under administration from making a will, but would afford necessary protection to them by requiring the authority of the Administrator and the consent of the Board – which presumably would only be given in certain circumstances in which the making of the will would be less likely to lead to further dispute and litigation.
99 The appellant acknowledges that testamentary capacity is a common
law requirement which is not affected by the operation of s 77(1)(a) of the
Act.100 It is useful to remind oneself at the outset that the term "disposition",
considered at large, certainly may carry the wide meaning for which the appellant contends and which the appellant exemplifies by the expression "testamentary disposition". But that begs the question, which is in what sense and with what meaning has the legislature used it in this particular statutory provision.
101 The appellant points to the definition of "disposition" in s 7 of the
Property Law Act 1969 (WA) which states that the term includes a conveyance "... and also a devise, bequest or an appointment of property contained in a will...". However, as the introductory words of that section make clear (in the usual format) the definitions therein set out do no more than ascribe the meaning to be given to the defined terms in the Property Law Act itself.
102 Whilst, in the course of construing particular words in one statute,
authority allows recourse to the legislature's use of the same words in another statute, that will only be so where the two are in pari materia, that is where they relate to the same persons or subject matter (Lennon v
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Gibson & Howes Limited [1919] AC 709 at 711 – 712; Ramaciotti v Federal Commissioner of Taxation (1920) 29 CLR 49 per Knox CJ at 53; Imperial Chemical Industries of Australia and New Zealand Limited v The Federal Commissioner of Taxation (1972) 46 ALJR 35 per Walsh J at 41 – and see Gibbs J on appeal at (1972-73) ALR 715 at 730). In Re Metropolitan Film Studios Limited's Application [1962] 1 WLR 1315 the Leasehold Property Repairs Act 1938 (UK) was held to be in pari materia with certain provisions of the Law of Property Act 1925; but in Powell v Clelland [1948] 1 KB 262, the Rent Restrictions Acts were not. In Federal Commissioner of Taxation v Henderson (1943) 68 CLR 29 the High Court construed the word "mine" in the Commonwealth Income Tax Assessment Act 1936 consistently with the definition of that word in the Victorian Mines Act 1928.
103 In my view an Act, the purpose of which is to provide a regime of
protection in the conduct of the affairs of adults and the administration of the estates of persons who need assistance in their financial affairs, cannot be regarded as being in pari materia with an (earlier) Act, the object of which is to consolidate the law relating to property. They are, I think, of a wholly distinct and different character. I therefore do not consider recourse can properly be had to the definition of "disposition" in the Property Law Act for the ascertainment of the meaning of that term as used in the Guardianship and Administration Act.
The description that the word "disposition" exhausts every conceivable mode by which property can pass is drawn from the speech of Lord McNaghten in Duke of Northumberland & Anor v Attorney-General [1905] AC 406 where at 410 – 411 his Lordship said (speaking of the Succession Duty Act 1853 (UK)) that:
"There are two things plain on the face of the Act. In the first place, it is clear that the terms 'disposition' and 'devolution' must have been intended to comprehend and exhaust every conceivable mode by which property can pass, whether by act of parties or by act of the law."
However, that comment was obiter, the case turning on the words 'successor' and 'predecessor'.
106 In the end as I understand it, Mr Yin puts it no higher than
submitting that Duke of Northumberland and other authorities in which the word "disposition" is given an extended meaning simply illustrate that for this Court to give that word the meaning for which the appellant
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contends in the context of s 77 of the Act, would not involve any stretching of the ordinary meaning of the word. That may be so, but as I have said, it begs the question – the short point here is that which I have already made above, namely it may be accepted that the word is clearly capable of having that extended meaning, but the question is whether the legislature intended it to have that meaning in s 77 of the Act.
107 A similar observation may be made about Cameron v Cameron (1968) 12 FLR 22 upon which the appellant also relies. That case concerned s 120 of the Matrimonial Causes Act 1959 (Cth).
There the respondent had signed a sale note of 7 November 1967. Lush J held the appellant had failed to show that at that time the respondent did so with intent to defeat a maintenance order. However, he further held that on the proper construction of s 120, it extended to cover a disposition carried out by a sequence of transactions, such as a sale of land, and to cover each and all of the steps in that sequence. Thus, as the appellant had proved the respondent had that intention at the later stage of settlement of the transaction, the proceeds of sale were the proceeds of a disposition to which s 120 applied.
109 The present appellant contends Cameron is authority going against the conclusion of the learned trial Judge that the term "disposition" in s 77(1)(a) is confined to instruments or events which have the effect of alienating property immediately, that is to say in a way which brings about an immediate result. He argues (and I think correctly) there are many instances of contracts or dispositions inter vivos which do not have the effect of alienating property immediately, such as conditional gifts or transactions conditional upon the approval of finance and the like – and which on his Honour's interpretation would not be governed by s 77 of the Act.
110 In his submissions, Dr Dickey QC for the respondents, effectively
conceded this, but contended that what his Honour intended to say was that the term "disposition" in s 77(1)(a) is confined to transactions which are intended irrevocably to alienate property, albeit that one or more steps must occur, or a condition must be satisfied, before the alienation has effect. Dr Dickey submitted that put like that, the formulation would cover conditional gifts, but not disposition by will. With respect, I do not think his Honour did intend to say what is now postulated by Dr Dickey. His Honour's meaning is to be gleaned from what he actually said and I think we are obliged to deal with it on that basis. I shall return to this below.
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111 Remaining for the moment with the decision in Cameron, I observe that that was of course a decision of a single Judge upon a very different statutory provision. I do not find it of assistance in resolving the issue here. It may also be noted that Lush J expressed an alternate line of reasoning by which the same result could be reached. He expressed that at p 28 ibid. The alternative reasoning was that up to the time of settlement of the contract of sale, the respondent had vested in him the legal estate in the land. The transfer of the legal estate effected at settlement was a disposition of property. Given the evidence that at that time the mode by which it was carried out was influenced by an intention to defeat the maintenance order, the transaction was a "disposition" within the meaning of s 120 of the Matrimonial Causes Act. That reasoning would not assist the appellant here and indeed tends against Mr Yin's argument.
112 In his outline of submissions, Mr Yin relied upon Perpetual Trustee Co Ltd v Fairlie-Cunninghame (1993) 32 NSWLR 377, although only on the question of costs. I have found the decision of Powell J in that case of greater assistance on the substantive issue. However, before turning to that, it is convenient to refer to an earlier decision of the Full Court of the Supreme Court of New South Wales, David by her Tutor the Protective Commissioner v David (1993) 30 NSWLR 417.
113 In David the New South Wales Guardianship Board, although declining to make a guardianship order under s 17A(1) of the Protected Estates Act 1983 (NSW), did order that Mrs David's estate be subject to management by the Protective Commissioner. Mrs David nonetheless purported to transfer land owned by her to a company which was trustee of the David family trust. The Protective Commissioner applied to the court for a declaration that the transfers were void. Windeyer J at first instance held in the negative. Powell J gave leave to appeal, holding that whilst such an administration order is in force, the subject person is to be conclusively presumed, in law, incapable of performing any act which affects their estate or affairs (JNRD and the Protected Estates Act (1992) 28 NSWLR 728, 733).
On the appeal the majority (Priestley and Sheller JJA, Kirby P dissenting) agreed with Powell J.
115 The statutory provision in that case is quite different from that with
which the present case is concerned. It is best I set it out. Section 26 of
the Protected Estates Act provided that:
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"(1) For the purposes of managing the estate of a protected person, the Protective Commissioner shall have, and may exercise, all such functions as the protected person has and can exercise or would have and could exercise if under no incapacity.
(2) For the purpose of exercising a function of a protected person as referred to in subsection (1), the Protective Commissioner may, in the name and on behalf of the protected person, execute and sign deeds, instruments, transfers of shares, receipts, releases and all other documents which shall be as effective as if they were executed and signed by the protected person and, to the extent to which the protected person has no capacity to execute and sign any such document, as if the protected person were under no such incapacity and any such document shall be acted upon accordingly."
116 Priestley JA was in agreement with Sheller JA, but added some short
reasons of his own. Both saw the answer to lie in the notion of conflicting control. Thus, Priestley JA thought it clear the power of management of a person's estate, conferred because of that person's incapacity to manage their affairs, must necessarily be the sole power of management and sale of property of the estate (ibid 434).
117 Sheller JA referred (at 437 ibid) to Gibbons v Wright (1954) 91 CLR 423 in which the High Court held that a conveyance executed by a person incapable of understanding its effect (in the sense of its general purport) is not for that reason void, but if voidable for incapacity, is valid unless and until avoided by that person or their representative. Sheller JA quoted (at 437) the following passage from the judgment of the High Court at 91 CLR 439 – 440:
"The law relating to persons who are lunatics so found must be put on one side at the outset. Such a person is held incompetent to dispose of his property, not because of any lack of understanding (indeed he remains incompetent even in a lucid interval), but because the control, custody and power of disposition of his property has passed to the Crown to the exclusion of himself. Accordingly his disposition is completely void: Re Walker (1905) 1 Ch 160."
The High Court was there referring to an inter vivos conveyance.
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118 In David the management of the property purportedly transferred by Mrs David had previously been entrusted to the Protective Commissioner pursuant to s 22A of the Protected Estates Act and so he had the statutory power, authority and duty to manage the property. Sheller JA saw that situation as akin to the situation of a committee in respect of the property of a lunatic under the Lunacy Act 1890 (UK). He set out (at 438 ibid) a passage of the judgment of Eve J in Re Marshall [1920] 1 Ch 284, 289 in which the point was made that the effect of an order made by a Judge under s 120 of the Lunacy Act directing the committee to do all or any one of a number of things in respect of the property of a person of unsound mind, is to suspend the right of such person to manage their own affairs. According to Eve J (ibid):
"If this were not so, this unsatisfactory result would follow, that affairs of the person of unsound mind, although put under the control of one person, the receiver, would in fact be controlled by two persons – namely, the person of unsound mind and the receiver. That is a state of things which the Court ought not to recognize if it can be avoided, ..."
119 Having set out that passage, Sheller JA concluded that the same
result inevitably followed from the committal of the management of the property to the Protective Commissioner and the vesting in him of the power, authority and duty to manage it, namely that the right of the protected person to deal with the property is suspended. His Honour said (David, 438):
"To construe the Act as enabling the protected person to continue to deal with property the management of which is committed to the Protective Commissioner is to deny the plain meaning of s 22A, s 24 and s 26. Parliament cannot have intended, contrary to the language used, to give the Protective Commissioner the power, authority and duty to manage the estate and, at the same time, leave in the protected person a right to defy that authority."
120 Although Kirby P was in dissent in that case, his Honour did set out
a particularly useful summary of the historical position relating to the protective jurisdiction of the court in respect of persons of unsound mind or under other incapacity.
121 In his discussion of the historical development of disability and
protection law, Kirby P drew extensively on a paper by Powell J, "Mental
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Health Law: The Development of the Law and the Changes in Context", unpublished paper for the University of New South Wales Law Faculty, Continuing Legal Education Conference, "Madness in the Law", Sydney, 12 May 1990. His Honour noted that in English law, from feudal times, the Royal Prerogative protected children and the mentally ill. The latter were eventually regarded as either "idiots" or "natural fools", or lunatics. The Crown's duty differed according into which category the subject fell. In the case of an "idiot" the sovereign could retain that surplus income of the subject which remained after the subject and his family had been provided for. In the case of a "lunatic" the sovereign could take nothing for the sovereign's own use and the surplus income had to be retained and delivered to the subject when he regained his sanity or to his "right heirs" upon his death. As Powell J explained, in the following passage quoted by Kirby P at 421 ibid:
"The probable explanation for this differing treatment is that, whereas the 'idiot' was to be regarded as totally incapable of ever fulfilling his feudal duties to the sovereign, the 'lunatic' was, at least in theory, to be regarded as capable of regaining his sanity and of being capable, thereafter, of fulfilling his duties to his sovereign."
122 Experience showed that as a consequence of this different treatment,
juries in the 18th century demonstrated consistent refusal to determine
that subjects fell into the category of "idiot".123 Kirby P went on to trace the statutory history of legislation dealing
with legal disability or incapacity in New South Wales, culminating in the Mental Health Act 1990 (NSW). He noted the end result was a "disharmonious collection of statutes" (ibid 422), so described because they reflected the ebb and flow of public policy concerning people with mental illness or other disabilities thought to require protection, supervision of their person, estate and affairs, and control of their property. His Honour observed that the legislative history revealed a tension between a paternalistic (protective) approach on the one hand and a minimalist approach which allowed the least interference with, or control over the subject as possible, on the other.
124 Similar changing philosophies had been evident in Western Australia
and as appears from the Second Reading Speech, led to a comprehensive review of mental health legislation in 1983 and 1984. The Guardianship and Administration Bill 1990 incorporated recommendations made by the Mental Health Legislation Review Committee in 1984.
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125 As the Hon Attorney General explained, the then current legislative
scheme allowed mental competence to be assessed only in one of two ways: the person was judged to be competent or incompetent. The law dealt with absolutes. The Bill was intended to provide a more flexible system wherein the nature and degree of control to be exercised over the subject or in respect of their person and affairs could be tailored so as to constitute the minimum degree of interference and control necessary, having regard to the nature and extent of their actual incapacity. Furthermore, as the Hon Attorney put it:
"The Bill replaces an overemphasis of concern for property with a recognition of personal needs as well as the safeguard of property"
(Hansard WA Legislative Council, 11 July 1990, p 3610 - 3611) and
significantly:"The framework of the Guardianship and Administration Bill gives people the freedom to function independently if they have the competence. It recognises the existence of a wide spectrum of disabilities between what is judged to be absolute competence or absolute incompetence. It will encourage them, wherever possible, to develop skills for self-management, and it will provide for guardians to act only in those areas where incapable persons are unable to look after themselves. ..."
And on the same page:
"Varying degrees of incompetence are acknowledged. Personal and individual independence will be encouraged for those who suffer from only slight mental handicap. Limited, as well as plenary, guardianship and administration orders can be applied for. This will enable orders to be made accommodating individual circumstances. The scheme contemplates that the Board will appoint a guardian only where it is established that a person lacks a decision-making ability. The principle of the least restrictive alternative is followed in the Bill providing for the appointment of guardians and administrators."
I return to the judgment of Powell J in Perpetual Trustee Co Ltd v Fairlie-Cunninghame.
127 Unlike David, which concerned purported inter vivos conveyances by a person subject to an administration order, Fairlie-Cunninghame concerned a will made by such a person. Powell J held that a person who
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makes a will while subject to such an order is not conclusively presumed
to have lacked testamentary capacity at the date of making the will.
Argument in Fairlie-Cunninghame had been adjourned pending the delivery of the judgment in David by the Full Court.
129 Powell J concluded there was a "curious little paradox in this area of
the law". This was that, although the majority judgments in David, coupled with the fact that, although a will does not operate until death, testamentary capacity is to be determined as at the date of execution of the will, would suggest that if a protected person is conclusively to be presumed to be lacking capacity to manage their affairs so also must they conclusively be presumed to be lacking testamentary capacity, the law was otherwise.
130 His Honour noted that it had long been established that a different
approach was to be taken to a protected person's dealing inter vivos with their property on the one hand and wills made by that person on the other. He referred to a number of authorities dating back to the 19th century, recognising the capacity of a lunatic to make a valid will, even while under the supervision of a committee. The rationale appears to have been that if the lunatic appeared to be in a period of lucidity, they would have testamentary capacity and should not be prevented from making a will – the point being that the will could not have effect until the lunatic's death and its validity could be tested before it would be admitted to probate.
131 His Honour observed (381 ibid) that the proposition was so well recognised, that by no later than 1900, the Commissioners in Lunacy had issued a circular giving directions as to the execution of documents affecting the property or income of patients, enjoining superintendents and other persons in charge of patients, to prevent the execution or signature by any patient of any document affecting their property or income, other than a will or codicil. The circular advised that:
"They except the case of a will or codicil, because testamentary dispositions made during lucid intervals by persons of unsound mind are held to be valid; and they are always open to be contested before being rendered operative by probate."
132 Powell J remarked that this continued to be the law and practice in
England even after the introduction in 1969 of amendments to the Mental Health Act 1959 (UK) enabling the court to make a "statutory will" for a patient.
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133 In this regard it is interesting to read of the practice to be followed in
the execution of a testamentary disposition by a patient as set out in Heywood & Massey "Court of Protection Practice", 10th ed, (1978) at 187 (reproduced in Fairlie-Cunninghame at 382), in the context of the submissions made by Dr Dickey QC in the present case to the effect that s 77 could not apply to a will because it would be inappropriate for the Board and the Administrator to give consent to a person to make a will. Dr Dickey submitted that it is not for the Board (nor the Administrator) to determine testamentary capacity, who should draft or witness a will and a fortiori the appropriate persons to whom the protected person's property should pass upon death.
134 It seems to me that long-standing practice recognises that it could be
quite appropriate for the Board or Administrator to make an appropriate assessment of the protected person's testamentary capacity before giving consent. The process could be similar to that described in Heywood & Massey. I therefore do not see this argument as militating against the notion that "disposition" in s 77 could encompass a testamentary instrument (although I come to the conclusion it does not, for other reasons which I set out below).
135 The "curious paradox" which his Honour discerned therefore was the
existence of two divergent approaches – namely that a lunatic or person under an administration order had no capacity to make an inter vivos disposition but could make a will. He thought the paradox was resolved when it was recognised that the powers being exercised derived from the Royal Prerogative and were exercisable only during the life of the subject (whether "idiot" or "lunatic") – their property passing, on death, to their "right heirs".
136 Powell J first referred in this connection to a passage from the
judgment of Vaughan Williams LJ in Re Walker [1905] 1 Ch 160 at 171 - 172 in which his Lordship explained that as the Crown has control of the property of a lunatic to be exercised in the interests and for the benefit of the lunatic, it must necessarily be the case that such control must be exclusive, otherwise there would be a conflict of control – which the law could not allow.
Finally, Powell J adopted the reasoning of his Lordship at 172 – 173 as to the question why, if a lunatic has capacity to make a will which can proved after death, should he not also have power to execute a deed which on the face of it is only to take effect upon his death and create only reversionary interests. His Lordship said (ibid 384):
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"It does certainly seem at first sight a little inconsistent that the law should recognise the capacity of the lunatic to make a will, and should refuse to recognise his capacity to execute a deed which is intended to take effect only after his death. But the answer to this is, that the beneficiaries under a will have no interest and no locus standi whatever until after the death of the testator. The will is ambulatory and may be revoked by the maker of it at any time before his death, and the result is that the execution of a will gives no immediate interest to the beneficiaries either in possession or in reversion. The will is of no effect until the death of the makers of it, and the consequence is that the making of it does not give rise to any conflict of control. The beneficiaries under such a will cannot, when orders are being made in respect of the lunatic's property, come forward and claim to interfere in any way, whereas those claiming under a deed could successfully insist upon a locus standi to be heard, and immediately thereupon a conflict of jurisdiction would arise."
138 The concern of conflicting control, which mandates a represented
person's incapacity to make inter vivos dispositions, has no application to
the making of a will.
The Act expressly provides that nothing in it vests the estate of a represented person in an administrator (s 69(4)).
140 In the present case the Administrator was given only limited powers.
They were only such as were necessary to enable her to perform the specific functions set out in the Administration Order. This was not a plenary appointment and so what the implications of such an appointment might have been with respect to the making of a will need not be determined here.
141 Applying the "control" test articulated in the authorities and texts, the
scope of the Administration Order as formulated by the Board, consistently with the principles mandated in s 4(2) and the expressed legislative intent, the Act would operate so as to prevent Mr Vranjican doing only those things specifically stipulated as being the functions of the Administrator – and he could even have done any of those to the extent the Administrator, with the consent of the Board, authorised him to do so. Beyond those constraints, he retained his own freedom to act.
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142 I respectfully agree with the observation of Scott J that the Act is
intended to protect people with disabilities of a type which prevent them from properly caring for themselves – but it is a feature of the Act that it recognises degrees of disability and further, that it reflects the minimalist approach to which I have referred above.
143 Both the various provisions of the Act itself (most importantly the
principles articulated in s 4(2) – and see in particular s 4(2)(e), which stipulates that an order appointing an administrator for a person shall be in terms that, in the opinion of the Board, impose the least restrictions possible on the person's freedom of decision and action) and the Second Reading Speech, make it clear beyond doubt that the Act was intended to allow for the protection of persons requiring it, but only in a way and to an extent which would least interfere with or restrict the person's rights and freedoms.
144 As the learned trial Judge observed, neither in the Second Reading
Speech nor the terms of the Act is there any express reference indicating a legislative intention to limit a represented person's testamentary capacity or to deal with the management of their estate after death.
145 The only express reference in the Act to the making of a will by a
represented person is to be found in s 45(3), which provides that a plenary guardian may not make a will or other testamentary instrument for a represented person. The Act recognises an important distinction between the roles of guardian and administrator. Subject to s 43(3), a person appointed as plenary guardian has all of the functions in respect of the person of the represented person that a guardian of a child would have under s 34(1) and (2) of the Family Law Act 1975 (WA), except the right to chastise or punish (s 45(1) of the Act). The functions of a plenary guardian therefore, are in respect of the person him or herself. That is further apparent from the other functions (or rights) which are adumbrated in s 45(3) as things a plenary guardian may not do on behalf of a represented person: vote in an election (s 45(3)(a)); consent to the adoption of a child or of the represented person (s 45(3)(c)); or consent to the marriage of a minor, sign a notice of intended marriage or take part in the solemnisation of a marriage (s 45(3)(d)). By including the right to make a will or other testamentary instrument in s 45(3) of the Act the legislature is clearly categorising that as a right relating to the person, not the estate or property of the person per se.
146 The functions of an administrator are, by s 69(1), such functions in respect of the estate of the represented person provided for by the Act and
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as the Board vests in him or her. In my opinion, a reading of the Act as a whole leads to the conclusion that all of these functions are confined to inter vivos dealings with the estate of the represented person.
147 The power in s 82(1) of the Act of the administrator to apply to the
Supreme Court to set aside a transaction made by the represented person within two months prior to the making of an administration order, plainly refers only to inter vivos transactions, even though it uses the expression "... disposition of any property (including a gift) ..."
The word "disposition" is used again in the same sense in item (g) of Part B of the Schedule 2 to the Act.
149 The only functions the Board may vest in an administrator are those
specifically listed in the Act. It follows that any function or right outside those listed must perforce remain in the represented person and not be subject to the interference of nor control by the Board. The authorised functions of an administrator are set out in Parts A and B of Schedule 2 to the Act. None of them relate to testamentary dispositions.
150 Item (g) provides that where, in the opinion, "any disposition or
transaction" is expedient in the administration of the estate of the represented person, or would be in their best interest, the Board may confer on the administrator the necessary power to effect it. The word "disposition" there clearly does not include a testamentary disposition. The words "disposition" and "transaction" in that context are in my view apt only to comprehend inter vivos dealings with the estate of the represented person.
151 Although, as I acknowledged at the outset, the ordinary meaning of
the word "disposition" is wide enough to cover testamentary dispositions, the question is what Parliament intended it to mean in this Act. The legislature is to be taken as having used the word in the same sense throughout the Act. There is nothing in s 77(1) to show it was to have a different meaning in that provision.
Against the background of long authority recognising the traditionally different approaches to the legal capacity of a protected person to make a disposition of property inter vivos on the one hand, or to make a will, on the other; having regard to the clear intent of the legislature that the statutory provisions restrict or limit a protected person's right to the least extent possible; and recognising that a will cannot have effect until death and its validity can then be tested before probate, I have come to the conclusion that on a proper construction the
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word "disposition" in s 77(1) of the Act was not intended to, and does not,
encompass a testamentary instrument.153 As I have already intimated, I would not be prepared to hold (as
his Honour did) that in s 77(1) of the Act the term "disposition" is confined to instruments or events which have the effect of alienating property immediately, that is to say, dealings with property which bring about an immediate result. But in the event that does not affect the ultimate conclusion, because for the reasons set out above, I consider the word "disposition" in s 77(1) of the Act means dispositions inter vivos, whether conditional or otherwise, but does not extend to encompass the making of a will or other testamentary instrument.
The learned trial Judge was correct in so holding and I would accordingly dismiss the appeal on that ground.
| Costs | |
| 155 | By ground 2 of the notice of appeal the appellant claims that the |
| learned trial Judge erred in law in ordering the appellant to pay the respondents' costs of the trial of the preliminary issue in that: |
"(a) having identified (at p 52 of the transcript dated 10 December 2001) the difficult nature of the question of statutory interpretation that faced the parties, then failed to take that into account in deciding the question of costs;
(b) failed to consider the specific considerations that are uniquely applicable to a question of costs in the Probate Division of this Honourable Court, namely, that his Honour failed to take account of the policy that where there are reasonable grounds for challenging a will, a party who so challenges ought not be subjected to an order for costs simply because he has failed, if his suit was justified by good and sufficient grounds for doubt; and (c) failed to have regard to the proposition that at the least the appellant (plaintiff) should not be condemned in costs for having raised this issue for the attention of the court."
156 When his Honour delivered his reasons for judgment on the
preliminary issue on 10 December 2001, counsel then appearing for the appellant (plaintiff) submitted the situation fell into a category of
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exceptions to the general rule that costs follow the event, namely that the circumstances afforded reasonable grounds for opposing the will. It was submitted that costs should be borne out of the estate or alternatively reserved to the outcome of the trial.
157 Counsel for the respondent (defendants) made a brief submission that
the issue had been a discrete one, had been disposed of by the trial of it as
a preliminary issue and costs should follow the event.158 His Honour then gave his ruling on the costs application. He
recognised (t 52) that the matter involved a difficult point of statutory interpretation which it might be said in a general sense the plaintiff should not be criticised for wishing to contest and acknowledged there was wisdom in having it resolved as a preliminary issue. Nonetheless, his Honour pointed out it is not unusual for difficult points to require resolution and the ordinary rule is that costs follow the event unless there are "good and persuasive reasons" why some other order should be made. He concluded that as the defendants had succeeded in respect of the trial of the discrete issue they should have their costs.
159 There then followed some discussion between his Honour and
counsel about the form of orders to be made, in the course of which counsel for the respondents also sought an order for the costs of an earlier chambers application. Counsel for the appellant took that opportunity to revisit the issue of costs generally.
160 Counsel reiterated his reliance on the exception as it had been
expressed to Hasluck J that where a person supporting a will is a principal beneficiary and (sic: the testator) has by unreasonable or improper conduct induced litigation which the court considers reasonable, the costs should come out of the estate (t 54). He pointed out that the relevant will was dated 25 March 1998 and that although the appellant had lodged a caveat to protect his interests in October 1998 the primary respondent took no steps to prove that will. It was for the appellant to attempt to prove an earlier will made in 1996 and that action was only commenced in January 2000, nearly 18 months after Mr Vranjican's death (I take this to mean the appellant had delayed his action to prove the 1996 will to give the primary respondent an opportunity to prove the 1998 will, but she failed to do so). Counsel reiterated his submission that in these circumstances, the appellant, having raised what his Honour had acknowledged was a difficult point of statutory construction, should have his costs.
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161 Counsel for the respondents submitted there could be no suggestion
of neglect or delay on their part, and merely said he relied on his earlier submissions both as to the trial of the preliminary issue and the earlier chambers appearance.
162 Hasluck J ruled the plaintiff had not identified any conduct by the
defendants which would justify a departure from the usual rules, adhered to his earlier holding and ordered the plaintiff to pay the defendants' costs of both the trial of the preliminary issue and the earlier chambers appearance on 23 July 2001.
It was the appellant's position on the appeal that the costs should come out of the estate, or alternatively, be costs in the cause.
164 For the respondents it was put simply that costs are discretionary, the
appellant was wholly unsuccessful on the trial of the preliminary issue and there was nothing in the conduct of the deceased that would warrant costs being paid from the estate.
165 The appellant relied on Fairlie-Cunninghame, but only because the order made there was that the costs of the preliminary issue be costs in the proceedings. There were no reasons given for that order. Mr Yin's submission was that the appropriateness of that order was "taken as read". I do not see anything more in that case than an exercise of discretion on its particular facts.
166 The general rule in probate actions is that costs follow the event.
That is subject to two exceptions. The general rule may be departed from where the litigation has been brought about by the conduct of the testator, or where the parties who have failed have reasonably been led into the litigation (per Wolff CJ in Re Green [1969] WAR 67, 83; and see Re Herbert (1990) 101 FLR 279).
Despite a lack of fault in the testator or beneficiaries, a court may relieve the losing party from costs:
""... if chargeable with no other blame than that of having failed in a suit which was justified by good and sufficient grounds for doubt."
(per Sir James Wilde (as he then was) in Mitchell v Gard (1863) 3 SW &
TR 275; 164 ER 1200.The principles applicable were stated by Owen J in Brown v McEnroe (1890) 11 LR (NSW) Eq 134 as follows:
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"The principles governing the adjudication as to costs in [probate] suits appear to be that, where the litigation is caused by the conduct of the testator, the estate must bear all the costs of both parties. Where neither the testator nor the persons interested in the residue are to blame, and the defendant has reasonable ground for impeaching the will, no order will be made as to costs, but where there is no reasonable ground for impeaching the will the defendant will be ordered to pay the costs."
(and see also Williams, Mortimer and Sunnucks: "Executors, Administrators and Probate", Stevens & Sons, London, 17th ed, 1993 at p 437 – 444).
169 I had occasion to consider these and other authorities relating to costs
in probate actions in Clay v Karlson & Anor [2001] WASC 141 at [147] – [158]. I will not now repeat what I said there. However I did accept there (ibid, [158]) the formulation by Kearney J, in Herbert, supra, at 305, as the appropriate standard. This was that it would be sufficient for a party seeking to bring themself into one of the exceptions to the general rule, to show "adequate reason for an order of a different character."
170 The learned trial Judge here made no particular reference to the
different considerations which may apply to probate actions, and his requirement that the appellant show "good and persuasive reasons" why some order other than the ordinary order that costs follow the event should be made, in my respectful view puts the standard too high.
But I think there is a more basic difficulty with the costs order made
by his Honour.
172 True it is that the preliminary issue was a discrete one and that issue
was finally disposed of by his Honour's determination of it, but it was incidental to, and arose directly out of, the appellant's substantive challenge to the March 1998 will. It was necessary to have the trial of the preliminary issue only because of the difficult question of statutory interpretation raised by s 77 of the Act – which the appellant should not be criticised for wishing to contest. If, at the conclusion of the trial proper, the appellant were to succeed, then he would presumably get his costs. Had Hasluck J not made this order, it would then also be necessary to determine whether some other order should be made in respect of the trial of the preliminary issue on which the appellant was unsuccessful. He might then be able to show himself within one or both of the exceptions. If he were to fail on the trial proper, the question would then arise as to
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whether he could bring himself within one of the exceptions, in any event. Either way, that, it seems to me, would turn on considerations going to his reasons for bringing the action and the circumstances in which he did so. Those things will not be apparent until after trial. If he were then found to have shown "adequate reason for an order of a different character" then in fairness and logic it could well apply to the costs of the trial of the preliminary issue (and the associated chambers appearance) as much as to the costs of the substantive action. The point is, I think, that it was not possible for any order properly to be made on 10 December 2001 other than an order that costs be in the cause or that they be reserved, because not all considerations bearing on that determination were then known.
173 For these reasons I have come to the conclusion that the exercise of
his Honour's discretion as to costs miscarried. I would uphold the appeal on that ground, set aside the order for costs and substitute for it an order that the costs of the trial of the preliminary issue and the associated chambers appearance on 23 July 2001 be reserved.
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