JW
[2005] WASAT 249
•19 SEPTEMBER 2005
JW [2005] WASAT 249
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2005] WASAT 249 | |
| GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) | |||
| Case No: | BA:727/2004 | 29 AUGUST 2005 | |
| Coram: | MS F CHILD (MEMBER) MR S JONGENELIS (SENIOR SESSIONAL MEMBER) MS H LESLIE (SENIOR SESSIONAL MEMBER) | 19/09/05 | |
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Administrators reappointed Remuneration ordered | ||
| B | |||
| PDF Version |
| Parties: | JW |
Catchwords: | Guardianship and administration Administration Review of administration order Role of Tribunal on review Section 80 Examination of accounts by Public Trustee Certificate of Loss Remuneration of administrators |
Legislation: | Guardianship and Administration Act 1990 (WA), s 64, s 68, s 80, s 80(6a), s 90(1)(a), s 117(1) |
Case References: | Nil Nil |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : HUMAN RIGHTS ACT : GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) CITATION : JW [2005] WASAT 249 MEMBER : MS F CHILD (MEMBER)
- MR S JONGENELIS (SENIOR SESSIONAL MEMBER)
MS H LESLIE (SENIOR SESSIONAL MEMBER)
- Represented person
Catchwords:
Guardianship and administration - Administration - Review of administration order - Role of Tribunal on review - Section 80 - Examination of accounts by Public Trustee - Certificate of Loss - Remuneration of administrators
Legislation:
Guardianship and Administration Act 1990 (WA), s 64, s 68, s 80, s 80(6a), s 90(1)(a), s 117(1)
Result:
Administrators reappointed
Remuneration ordered
(Page 2)
Category: B
Representation:
Counsel:
Represented person : No appearance
Solicitors:
Represented person : N/A
Case(s) referred to in decision(s):
Nil
Case(s) also cited:
Nil
(Page 3)
REASONS FOR DECISION OF THE TRIBUNAL:
Summary
1 On review of an administration order appointing professional administrators for a woman suffering dementia, the State Administrative Tribunal (the Tribunal) confirmed the appointment and made an order for remuneration from the estate of the represented person, given the size and complexity of the estate.
2 The Tribunal confirmed that the report of the examination of accounts submitted by the administrators to, and examined by the Public Trustee was relevant to the question of their suitability for appointment as administrators, but that the Tribunal had no role in the examination of accounts as this was a function now performed by the Public Trustee.
Reasons of the Tribunal
3 These reasons relate to the review of an administration order dated 19 December 2003, by which DB and JM were appointed plenary administrators for Mrs JW (the represented person).
4 The administrators are accountants and had previously been engaged by the represented person prior to her loss of capacity and the declaration by the Guardianship and Administration Board (the Board) that she was a person for whom an administration order could be made pursuant to s 64 of the Guardianship and Administration Act 1990 (WA) (the Act).
5 One of the administrators had been the applicant when the application for appointment of an administration order had first been before the Board. That matter was contested and reasons delivered. (Unreported decision of the Guardianship and Administration Board F Child, Presiding member, L Goode, member and E Leipoldt, Member delivered 16 April 2004). The other administrator is the business partner of the first.
6 The order which appointed them was set down for periodic review on 19 December 2004. Orders dated 19 March 2005 made by the Board subsequent to the appointment of the administrators, provided for remuneration of the administrators in the following terms:
"The administrators are authorised to be paid remuneration for the administration of the represented person's estate on the following basis:
(Page 4)
- 1. To meet the fees charged for the provision of portfolio management and taxation services up to an amount of $14 500 per year.
2. To meet the ongoing costs as administrators of $19 500 per year."
7 Most of the jurisdiction and functions of the Board were absorbed by the State Administrative Tribunal from 24 January 2005. The jurisdiction to examine accounts under s 80 of the Act passed to the Public Trustee from that date.
8 There was some administrative and other delays in bringing the matter back for periodic review and the matter finally came back for formal hearing on the 29 August 2005.
9 At that hearing the Tribunal had before it the accounts submitted by the administrators to the Public Trustee, a report prepared by the Public Advocate dated 16 February 2005, the file provided by the Public Trustee of the accounts submitted by the administrators, a report of the Private Administrators Support Team of the Public Trustee regarding the accounts submitted and a letter from the Public Trustee addressed to the administrators dated 10 August 2005, to which we will refer later.
10 At the hearing the administrators and a long-time friend of the represented person TW and a representative of the Public Advocate attended. There was no representative of the Public Trustee in attendance.
Review of an order
11 The powers of the Tribunal on review of an administration order are set out at s 90 of the Act.
12 In summary, the Tribunal may confirm, vary or revoke an order and substitute another order as it considers necessary in the best interests of the represented person. The Tribunal may amend the order so as to make any provision that may be included in administration order.
13 The tests to be applied on review of an administration order are the same as when making an original order for administration and are set out at s 64 of the Act. In summary, the Tribunal must be satisfied that the represented person is still a person for whom an administration order may be made; that she is unable by reason of mental disability of making reasonable judgements in relation to her estate, she is in need of an
(Page 5)
- administrator and there is no less restrictive alternative to the making of that order.
14 When appointing administrators, the Tribunal must be satisfied of the willingness of any proposed administrator to take on that role (s 68(1)), the willingness of the appointee to act in the best interests of the represented person (s 68(1)(c)), and that the appointee is otherwise suitable to act as the administrator of the estate of that person (s 68(1)(d)). The Tribunal is directed to take into account, as far as is possible, the compatibility of the appointee with the represented person or with any guardian, the wishes of the represented person and whether the appointee will be able to perform the functions proposed to be vested in the administrator.
15 In determining the suitability of the administrators to continue in that role, the Tribunal will consider the performance of the administrators, compliance with the order or any directions made and the obligations on the administrator to account under s 80.
16 The administrators have complied with the obligation to account, submitting accounts to the Public Trustee and then amended accounts to bring the presentation into line with the Public Trustee's requirement that the accounts be presented on a cash accounting basis.
17 The administrators submitted, and the Tribunal accepts, that the estate has been well managed during the period of their appointment.
18 The administrators outlined during the hearing the conservative risk management strategy employed by them in managing the represented person's affairs. The administrators supervise the services provided by the stockbrokers and some fee savings had been achieved by them through negotiations with the brokers. TW endorsed the approach taken by the administrators with regard to these matters. Other assets of the represented person have been reviewed and the represented person's house property has been repaired and it is intended that it will return a rental income. The personal maintenance needs of the represented person are reviewed regularly by the administrators, her accommodation and care needs have been dealt with by them through a change, which they instigated, in her accommodation and they have attended to requests for financial assistance for the needs of her adult children.
19 The Public Trustee's Private Administrators Support Team (PAST) report referred to the remuneration charged by the administrators and stated that it was not consistent with the terms of the order made for
(Page 6)
- remuneration. No adverse comment was made regarding the timeliness of the submission of accounts or other aspects of the performance of the administrators.
20 TW, the friend and former financial advisor supported the performance of the administrators when he referred to the quality of the advice provided to the represented person by the administrators.
21 The statement by the Public Trustee that the remuneration charged by the administrators was not consistent with the terms of the order for remuneration, could, in the submission of the administrators be explained as follows. The Public Trustee had counted the payment of the $21 388 debt to the accountants (now the administrators) as part of the annual remuneration charges of the administrators because it was a payment made during the reporting period. The administrators submitted that at the time of their appointment in December 2003, that the represented person owed them $21 388 for work done on her behalf as her accountants prior to their appointment. As such, they submitted that figure was a debt owed by her estate. The Tribunal accepts this explanation. The administrators submitted that, leaving out the payment of this debt, the remuneration charged by them during the period of their appointment was within the amount ordered.
22 The administrator advised that this liability was disclosed in the Form A required at that time to be submitted to the then Board under the Rules. Those documents now form part of the Public Trustee's Private Administrative Support Team File. That file was before the Tribunal at the review hearing.
23 Having considered the material before it, the Tribunal finds that the administrators continue to be suitable for appointment as administrators as they have acted in a prudent and professional manner in relation to management of the estate of the represented person in her best interests.
Certificate of Loss
24 At that hearing, a document was before the Tribunal being a letter from the Public Trustee dated the 10 August 2005 to each of the administrators which stated:
"The Public Trustee has completed an examination of Account No 1, lodged by you in respect of the estate of [the represented person].
(Page 7)
- The Public Trustee has allowed Account No 1 pursuant to the provisions of section 80 sub 3(a) of the Guardianship and Administration Act as amended.
- It is noted, however that whilst the joint administrators were authorised to pay themselves a total of $38 000 (one off payment of $4000 for costs, $14 500 per annum for portfolio management and $19 500 for administration), they actually paid themselves a total of $51 839.15 in the reporting period. The Public Trustee had found that, as a result, the estate of (the represented person) has suffered a loss of $13 839.15 for which the joint administrators are personally liable. The attached Certificate of Loss documents the Public Trustee's decision.
This issue has been reported to the State Administrative Tribunal which has advised that a review hearing on 29 August 2005. Consequently, the Public Trustee has decided to take no action in respect of the Certificate of Loss until such time as the Tribunal has made a ruling in relation to the payments."
25 As was pointed out in the hearing to the administrators, the Tribunal does not have a role to make "a ruling in relation to the payments" made by the administrators.
26 As stated above, the role of the Tribunal on review is to consider the continuing need for the order, the performance of the administrator, the terms of any order required to meet the needs of the represented person and if necessary to confirm revoke or vary an order by amendment of the order by the inclusion of any provision that may be included in an administration order (s 90(1)(a)).
27 Other related orders the Tribunal may make on review of an administration order may include orders for remuneration of administrators (s 117), the authorisation of gifting (s 71(5)) or in some circumstances declarations under s 111.
28 The powers of the Tribunal in relation to administration orders made under the Act does not include any power to order accounts or to examine them.
29 From amendments to s 80 of the Act which came into force from January 2005 the role of examination of accounts passed to the Public Trustee. That section provides:
(Page 8)
- "(1) An administrator shall submit accounts to the Public Trustee as required by, or prescribed by regulations, except so far as the administrator is exempted from doing so by the Public Trustee.
[(1a) repealed]
(2) When a sole administrator of the estate of a represented person dies, a person having possession of any books, papers or documents relating to that estate shall deliver them to the Public Trustee.
(3) The Public Trustee shall examine any accounts lodged under subsection (1) or delivered under subsection (2) and may -
(a) allow them;
(b) disallow any amount paid;
(c) determine that any amount or asset has been omitted, or that any loss has occurred.
(4) Where the Public Trustee -
(a) disallows an amount paid or determines that an amount or asset has been omitted or that any loss has occurred; and
(b) determines that there has thereby been a loss to or diminution of the estate,
- the administrator is liable to the estate for such loss or diminution, except to the extent that the Public Trustee relieves him of liability.
(5) Accounts that have been examined under this section and allowed by the Public Trustee are conclusive unless the administrator acted dishonestly, in bad faith or without reasonable cause.
(6) The Public Trustee shall issue a certificate as to any loss or diminution for which an administrator or his estate is liable under subsection (4), taking into account any relief allowed by the Public Trustee under that
(Page 9)
- subsection, and the Public Trustee may recover the same from the administrator or his estate for the benefit or the estate of the represented person as a debt due in a court of competent jurisdiction.
- (6a) A person aggrieved by a decision of the Public Trustee under subsection (3) may apply to the State Administrative Tribunal for a review of the decision."
30 As can be seen, the responsibility and jurisdiction in relation to the examination of accounts, the determination of losses to an estate and any relied for that loss given to an administrators is a matter for the Public Trustee.
31 The PAST report notes the loss determined by the Public Trustee said to have been found in respect of the estate and called for a SAT hearing "to authorise the additional administration expenses".
32 As the Tribunal does not have any jurisdiction in relation to the examination of accounts filed by the administrators with the Public Trustee, it cannot make any rulings or authorise past payments made by administrators.
33 As the administrators take issue with the finding of the loss by the Public Trustee, they are entitled to bring an application to the Tribunal for review of that decision. (s 80(6a)).
Remuneration of the administrators
34 As referred to above, the Tribunal is empowered to make prospective orders for remuneration of administrators.
35 In making such an order for remuneration, the Tribunal is bound to consider the terms of s 117(1) which states:
"(1) The State Administrative Tribunal may fix remuneration or a rate of remuneration and order that the same be paid to an administrator out of the estate of the represented person if the Tribunal considers that, because of the size or complexity of the estate or both, remuneration should be paid to the administrator."
36 In respect of this estate, the estate is large, having an approximate value of $7.5 million. The estate has some complexity in relation to the
(Page 10)
- range of assets managed by the administrators including a large share portfolio and real property.
37 The Tribunal accepts that the administrators provide a personal service to the represented person and also have a role of oversight of the stock brokers and other service providers.
38 It was suggested in the hearing that the costs of administration, if the estate were to be managed by a private trustee company or by other professional administrators, would be much greater than that charged by these administrators.
39 The Tribunal accepts that the rate of remuneration proposed to be charged by the administrators is reasonable in all the circumstances and that given the size and complexity of the estate it is appropriate that remuneration be ordered.
Orders
The order be revoked and an administration order in the following terms be substituted for it:
1. DB and JM be appointed joint plenary administrators of the estate of the represented person with all the powers and duties conferred by the Act.
2. The administrators are authorised to be paid remuneration for the administration of the represented person's estate in the amount of no more than $34 000 per annum to include portfolio management, taxation and all other services as administrators exclusive of GST.
3. This order is to be reviewed by 29 August 2010.
I certify that this and the preceding [39] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MS F CHILD, MEMBER
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