KL and JC - [2006] WASAT 5

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: HUMAN RIGHTS

ACT: GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA)

CITATION: KL and JC [2006] WASAT 5

MEMBER: MS D DEAN (MEMBER)

HEARD: 12 OCTOBER 2005, 16 NOVEMBER 2005, 6 DECEMBER 2005

DELIVERED : 12 JANUARY 2006

FILE NO/S: GAA 1497 of 2005

BETWEEN: KL
Represented Person
AND
JC
Applicant

Catchwords:

Application for administration - Capacity - Mental illness - Need to protect jointly owned assets

Legislation:

Guardianship and Administration Act 1990 (1990), s 4(2), s 64(1), s 70

Result:

Niece appointed plenary administrator

Category: B

Representation:

Counsel:

Represented Person : Self-represented
Applicant: Self-represented

Solicitors:

Represented Person : Self-represented
Applicant: Self-represented

Case(s) referred to in decision(s):

Nil

Case(s) also cited:

Nil

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunals decision

In this case the applicant sought the appointment of an administrator for the represented person, a woman with a long-standing psychiatric disorder, living in a psychiatric hostel. The Tribunal was satisfied that the represented person was a person for whom an order could be made. The applicant proposed the appointment of the husband, who planned to sell the jointly owned family home and to purchase a unit for himself to live in. The Tribunal found that the husband had not always managed the joint assets and the represented person's pension income in the best interests of the represented person. The Tribunal's decision therefore, was to appoint the represented person's niece plenary administrator.

Background

On 25 August 2005 JC, a social worker, (the applicant), filed an application with the State Administrative Tribunal for the appointment of an administrator for KL, a woman in her sixties with a long-standing psychiatric illness.
KL lives in a psychiatric hostel and her husband lives in the family home which he plans to sell and to purchase a unit in the local town. The husband plans to live in the unit and have his wife visit on weekends.
The applicant nominated the husband as a suitable administrator to manage KL's share of the jointly owned monies and assets and to ensure that her interests were protected in the sale of the family home and subsequent purchase of the unit.

Relevant legislation

The principles to be observed by the Tribunal when making determinations in relation to applications are set out in s 4(2) of the Guardianship and Administration Act 1990 (WA) (the Act).
These principles are:
"(2)(a)     The primary concern of the State Administrative Tribunal 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 ¾
(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 State Administrative Tribunal.
(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 State Administrative Tribunal, 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 State Administrative Tribunal, 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 State Administrative Tribunal, 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 State Administrative Tribunal 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."
Section 64(1) of the Act states that before an administrator can be appointed the Tribunal must be satisfied the person:
"(a)is unable, by reason of a mental disability, to make reasonable judgments in respect of matters relating to all or any part of his estate; and
(b)is in need of an administrator of his estate."
Section 70 of the Act provides for the best interests of the represented person:
"(1)An administrator shall act according to his opinion of the best interests of the represented person.
(2)Without limiting the generality of subsection (1), an administrator acts in the best interests of a represented person if he acts as far as possible -
(a)as an advocate for the represented person in relation to the estate;
(b)in such a way as to encourage the represented person to live in the general community and participate as much as possible in the life of the community;
(c)in such a way as to encourage and assist the represented person to become capable of caring for himself and of making reasonable judgments in respect of matters relating to his person;
(d)in such a way as to protect the represented person from financial neglect, abuse or exploitation;
(e)in consultation with the represented person, taking into account, as far as possible, the wishes of that person as expressed, in whatever manner, or as gathered from the person's previous actions;
(f)in the manner that is least restrictive of the rights, while consistent with the proper protection, of the represented person;
(g)in such a way as to maintain any supportive relationships the represented person has; and
(h)in such a way as to maintain the represented person's familiar cultural, linguistic and religious environment."

Information before the Tribunal

Medical and other reports

According to the information provided in the application and the written reports received prior to the hearing, KL has a diagnosis of bi‑polar disorder with recurrent Lithium toxicity resulting in cognitive loss, occasional confusion, impaired judgment and limited insight. Because of her disabilities, KL is said to be incapable of making reasonable decisions in respect of financial affairs and is incapable of executing an enduring power of attorney. She is said to require an administrator to take over the management of her financial affairs.
Additional written information provided to the Tribunal from KL's treating psychiatrist states that, even when stable, as she was at the time of the hearings, KL continues to have "impaired understanding of her financial affairs and has not managed money for many years". "Even when well she lacks the capacity to deal with her financial affairs".
The psychiatrist reported that KL "had considerable concerns about her husband becoming her administrator as he has not dealt fairly with her financial affairs to date". KL had informed the doctor that she has limited pocket money to buy personal items or treats for herself and said that her husband had been inappropriately accessing a legacy from her mother of some $9000.
KL informed her psychiatrist that she was concerned that when the jointly owned family property had been subdivided some years previously the large sum of money received for this could not be accounted for.
The psychiatrist further informed the Tribunal that KL's husband had got her to sign an enduring power of attorney when she did not have the capacity to do so and indeed did not remember doing so. This document was never used as it was not executed correctly.

Hearings

This matter was heard at three hearings over a period of several weeks in October, November and December 2005 and was adjourned in the first instance to allow KL's son, sister and niece to be notified and to be given an opportunity to take part in the proceedings.
In the period between the first and second hearings, the Tribunal received correspondence from the applicant social worker stating that it had come to her attention that the husband of KL, who was currently managing the couple's finances and whom she had previously nominated as a suitable administrator, was not providing adequate funds to his wife to meet her "basic needs such as social outings outside the hostel and adequate and appropriate clothing". As a result of this correspondence the Tribunal referred the matter to the Public Advocate for investigation.
The second adjournment occurred to allow the Public Advocate to more fully investigate and provide a more detailed report to the Tribunal and to allow family members to consider nominating as administrators.

First hearing

The first hearing was attended by the proposed represented person, KL, her husband RL, the applicant JC, a friend of the couple, JK, and an observer who took no part in the proceedings.
At this hearing the husband, told the Tribunal that KL receives a pension of $634.50 a fortnight which he manages and out of which he pays the psychiatric hostel between $500 and $600 a fortnight for board. This figure includes a small amount for outings and other activities. A small and variable portion of the remainder is given to KL to spend as she wishes and the rest is used by the husband to "pay bills".
Despite lengthy discussion, the Tribunal was unable to obtain clear information about the extent of the couple's savings and investments other than that there is a fixed deposit of $9600 in the name of KL which the husband said he doesn't "touch".
The husband informed the Tribunal that he wished to sell the family home, which was valued at approximately $410 000, and to purchase a unit for $236 000 in the nearby town. KL confirmed, during the hearing, that she agreed with the proposed property sale and purchase but said that she wished to see the proposed new unit before a decision was made to purchase it.
JK, the friend of KL and her husband, informed the Tribunal that in her opinion "somebody who understands" KL's needs "a little bit more" than the husband would be appropriate as an administrator. JK cited the example of the clothes that KL wears, which had been bought for her by her husband several years previously, and which are very old‑fashioned. JK indicated that she felt it was in KL's best interests to have more freedom to purchase her own clothes, underwear and other personal items. This was endorsed by KL.
After hearing evidence from all parties except KL, the Tribunal had all other parties leave the room and took evidence from KL alone. During this session KL informed the Tribunal that her husband had a history during their marriage of spending money with no explanation to her of how much or on what.
She said she has a son, a sister and a niece who had not been notified of the hearing and whom she wished to have involved in the proceedings.
The Tribunal adjourned the hearing for the son, the sister and the niece to be notified and given the opportunity to attend the hearing.
The husband expressed considerable concern about the adjournment as he felt that the unit he wished to purchase might sell before the matter of the administration order was settled. The Tribunal explained that a new hearing time would be set as soon as possible to allow for the son, sister and niece to be located and notified of the hearing. Meanwhile, the husband could not proceed with either the sale of the jointly owned property or the purchase of the unit, which depended on the sale of the jointly owned property.

Second hearing

The second hearing was reconvened five weeks after the first hearing and was attended by the represented person, her niece DG, her husband, the applicant, a solicitor representing the husband and an observer who took no part in the hearing. The Public Advocate was not able to attend the hearing but provided a report of her investigation into the matter.
As stated previously, between the first and second hearings the Tribunal received a letter from the applicant stating that, in light of new information, she now had "concerns and doubts about the suitability of" the husband as administrator of the estate of his wife. The applicant advised that the husband was not providing adequately for his wife who was "often deprived of her own funds for basic needs such as social outings outside the hostel, and adequate and appropriate clothing". The applicant requested that the Tribunal seek an investigation by, and the advice of, the Public Advocate to aid in the decision as to the most appropriate appointment to be made in the best interests of KL.
The Tribunal referred the matter to the Public Advocate for investigation and report back to the hearing. The report was tabled at the hearing. In her report the Public Advocate "concluded that the current financial management arrangements are not meeting [KL's] social care needs" such as "weekly Friday outings, hairdressing and possibly clothing". The husband had recently "provided some clothing and shoes for [KL] however, they were unsuitable in that they appeared to be in a used condition with the shoes being in a similar condition to those she currently has".
Staff advised that the husband had instructed that KL "should not be provided with hairdressing at [the hostel] and he would take her out for haircuts". Staff reported that this had not occurred and KL's hair "needed cutting".
Staff advised that KL often could not afford the regular Friday outings because of the small amount of cash provided by her husband resulting in staff, on occasions, funding her for these outings.
The Public Advocate was advised by staff that the husband had instructed that his wife was "not to receive extras or be provided with amenities". The Public Advocate proposed that if the husband planned to continue to informally manage KL's finances in the same manner as he had been he would not be suitable to be appointed administrator.
The Public Advocate recommended further exploration of the issues of the subdivision of the jointly owned property some years previously, the disbursement of the monies received at the time and the husband's plans for distribution of the monies to be received from the sale of the jointly owned property.
Between the first and second hearings the husband made an offer to purchase the unit. A copy of the offer and acceptance document to purchase the unit for $236 000 was received by the Tribunal. The offer was made in the name of the husband and or nominees. KL was the nominee. The offer was subject to finance being approved by 22 November 2005, one week after the date set for the second hearing, with a settlement date of 14 December 2005.
Additional medical reports were received which did not provide the Tribunal with any significant additional information in respect of KL's capacity.
In response to questions of clarification in respect of the $9600 fixed deposit mentioned in the previous hearing, the husband said that since the first hearing he had accessed "part of the money to pay the bills" leaving a balance of $9000.
The husband handed over a bank book with a balance of $440 into which KL's pension is paid. The account is in the name of KL and the husband has signing rights. The husband said "I don’t touch that" money but when questioned further as to why there was only $440 in the account when there was on average $80 per fortnight left from his wife's pension after payment of accommodation and the incidentals allowance, the husband said he had recently withdrawn $500 to pay to the hostel for his wife's allowance.
Further questioning about this account revealed that there are regular withdrawals by the husband which he said are to pay his wife's pharmacy account, podiatry and other incidentals. The husband was unable to account for the fact that it had been reported, by various parties, including KL herself, that she did not have enough money to pay for incidentals or outings which she sometimes missed out on through lack of funds.
During the discussion about the lack of funds provided for KL by her husband he handed to the Tribunal a small plastic bag of money which, when counted, amounted to $17.40. He said this was intended for this wife as her allowance for the week. When asked how he decided on the amount to give his wife each week, the husband said the amount varied from $15 to $20 a week and consisted of "the shrapnel" which he threw "into a dish and I add some notes to it". Throughout each of the hearings the husband frequently informed the Tribunal that he gives KL money out of his "own pocket".
The applicant informed the Tribunal that since the previous hearing she had had a telephone conversation with a friend of the couple who had known them for a long time and who informed her that the husband "spent money on alcohol and …only gave [KL] slim pickings of money".
Since that conversation the applicant had some concerns expressed by hostel staff and had consequently changed her mind about the husband as a suitable administrator. The applicant said that she had become concerned about the limited amount of money the husband provided to KL and the irregularity of these payments. The applicant said that she wanted to ensure that KL's money was more readily accessible to her and adequate for her needs.
It was agreed by all parties, except the husband, that the money being provided to KL by her husband was not adequate to meet her needs.
The husband said he had set up a direct debit to pay accommodation and incidentals. There was lengthy discussion about what incidentals were covered by the direct debit. It was clear from this discussion and a similar one in the first hearing that there was significant confusion about what was covered by the direct debit and indeed if there really was a direct debit system in place.
In an attempt to clarify the issue of the direct debit the Tribunal attempted unsuccessfully to contact the financial manager for the hostel during the hearing.
Part way through the hearing the husband handed over a letter written by KL's son and intended for the Tribunal, in which the son said he could not be involved in managing his mother's estate or attend the hearing as he lived and worked a long way from Perth. It was not clear from this letter whether the son knew that he could attend the hearing by telephone if he wished to do so.
The Tribunal attempted unsuccessfully during the hearing to contact the son by telephone.
There was some discussion in the hearing about the fact that the husband had made an offer on the unit in his name "and or nominees" which meant that if the sale went through a double lot of transfer fees would be incurred. The solicitor representing the husband informed the Tribunal that the reason the offer was made out "and or nominees" was because the husband wanted to secure the property but did not have the authority to do so in his wife's name until the administration order was made.
The offer was made subject to finance. The husband said he planned to borrow 100% bridging finance until the proceeds of the sale of the jointly owned property could be used.
There was some discussion about the husband's plans for distribution of the extra monies from the sale of the jointly owned property after the purchase of a replacement property. The proposal was to split the monies left over after the purchase of the replacement property with one half to KL and the other half to the husband.
Even after lengthy discussion about income and the number of bank accounts jointly held by the couple, the Tribunal was unable to gain a clear understanding of the extent of the joint estate. It was clear from information provided by the husband that the wife had never submitted her signature to the several banks and building societies which held the couple's funds and had therefore not operated these accounts.

The husband informed the Tribunal that the couple have a financial advisor who could provide much of the information sought by the Tribunal.
In response to questions about the subdivision and sale of part of the jointly owned property, the husband informed the Tribunal that the property had been subdivided 12 to 14 years previously but he was unable to provide a satisfactory account of the disbursement of the proceeds, said to be approximately $75 000, received for the seven and a half acres sold.
As in the previous hearing, the Tribunal had a session alone with KL who provided more of the psycho‑social history of the couple and some information about the distribution of monies received from the subdivision which she said was invested in "five companies" on the advise of their financial adviser at the time.
KL advised the Tribunal that she would be happy for her husband or her niece to manage her finances for her.
After the other parties rejoined the hearing, the husband confirmed the information provided by KL to the Tribunal about the five companies they had invested in but reminded his wife that she had signed papers at his request to allow him to draw money out of these investments to "pay bills" such as the "SEC", "telephone". It was pointed out to the husband that these bills were rightfully his as his wife did not live in the house and incur these bills.
The husband agreed to KL's suggestion that he arrange for her to see the proposed new unit before the purchase was finalised.
Several administration appointment options were discussed including the joint appointment of the husband and niece both of whom agreed they could work together. Another option was for the husband, niece and son to consider being appointed individually.
The hearing was adjourned for the Public Advocate to conduct further investigations, the represented person's son to be informed that he could attend the next hearing by telephone if he wished, family members to discuss and consider whether they wished to propose as administrators and for the husband to arrange and put in place a suitable fortnightly payment for KL which would allow her to decide on and purchase for herself, items she required.

Third Hearing

This hearing was attended by KL, her husband, her niece, the applicant, a representative of the Public Advocate and an observer who took no part in the hearing. During the hearing a representative from the psychiatric hostel was called and attended briefly by telephone.
Prior to the third hearing a comprehensive report was provided to the Tribunal by the Public Advocate along with a copy of a "statement of assets and liabilities" provided to the Public Advocate by the husband in which he detailed the family income and expenditure over many years.
The report from the Public Advocate was tabled at the hearing providing parties with an opportunity to read it. In her report, the Public Advocate advised that she had spoken with KL, a friend and several family members, including her son who informed the Public Advocate that he was happy for his mother's husband to be appointed joint administrator along with her niece.
KL "was quite varied at times in her opinion" informing the Public Advocate on one hand that she was concerned about her husband accessing her bank accounts stating she had never given him authority to do so and later stating that she had no problem with him using her money and that she had no doubt he spent it appropriately. KL informed the Public Advocate that she would be happy for her husband and her niece to jointly manage her financial affairs as she considered this would result in better decisions than if her husband was sole administrator.
Written information was provided by the financial advisor outlining the history of his management of the family finances since January 2002. In January 2002, they had investment funds of approximately $80 000 which were gradually drawn down until the full residual amount of $41 079.96 was withdrawn on 22 February 2005 and credited to the joint bank account managed by the husband. The couple still have jointly owned shares worth approximately $28 000.
An undisclosed sum from a property trust was deposited into the joint account on 23 November 2004. RL was unable to account to the Tribunal for the disposal of any of these funds.
At the commencement of the hearing, the husband informed the Tribunal that he had received an account for $1600 from the solicitor he had engaged to represent him at the previous hearing. The husband proposed paying the solicitor from the sale of the shares he jointly owned with KL. It was pointed out to the husband that 50% of the shares belonged to KL and it was not appropriate, or in her best interests to use the proceeds from the sale of the shares to pay for a solicitor engaged by RL to represent him at the hearing.
KL's niece informed the Tribunal that she was prepared to nominate as joint administrator with the husband who at this point informed the Tribunal that he was no longer willing to take on the role of administrator as he felt the task would be too onerous for a man of his age.
The husband informed the Tribunal that the unit, which he had hoped to purchase, had sold soon after his option to purchase lapsed.
KL's niece informed the Tribunal that if the husband was no longer prepared to nominate as administrator she was willing to nominate as sole administrator. This was greeted with approval by KL who expressed satisfaction with the idea that her niece be appointed sole administrator of her estate. This was reiterated by the Public Advocate who reported that the son had indicated that he would be happy for either RL or the niece to be appointed administrator.
When asked about the allowance he had agreed at the previous hearing to set up for KL, the husband informed the Tribunal that he had done this. KL said that she had no knowledge of the new allowance system and had not had access to any money. The husband said that he had not informed his wife about the new allowance as he wanted to inform the Tribunal first.
The husband was not able to clearly explain to the Tribunal details of the allowance he had set up other than the fact that three or four days prior to the hearing he had paid $500 to the hostel where his wife lived. In an attempt to clarify the system which had been put in place, the Tribunal had the hostel attend the hearing by telephone and was informed that the money had been put into a bond or trust account to pay for any extras for KL. This money would not be readily accessible to KL.
Hostel staff expressed surprise about the payment of the $500 as it had not been requested by them and indeed they saw it as unnecessary as the husband had recently set up, in consultation with the applicant, a direct debit system to pay for KL's outings, hairdressing, podiatry and pharmacy accounts.
The husband informed the Tribunal that he had arranged with the staff of the hostel to "buy her some things" to which KL responded with "Well, I like to buy ‑ choose my own clothes". After some discussion it was agreed that KL should have an account in her name that she can access for money to purchase her day‑to‑day items and clothes.
There was further discussion about the future sale of the jointly owned home and the purchase with the proceeds of this sale of a unit in joint names for the husband to live in and for KL to visit on weekends. KL expressed satisfaction with this plan provided she was given an opportunity to view the proposed new unit prior to purchase.
It was agreed that the balance of monies left after the purchase of the unit would be distributed equally between KL and the husband. This was seen as the easiest way for the husband to have access to his own money to spend as he wished.
The Public Advocate expressed concern about the information provided by the couple’s financial advisor that indicated that, the $80 000 of invested monies expended since 2002 had not been accounted for. The Public Advocate suggested that the investigation of the distribution of this money would be a task appropriate for the administrator to undertake.
The niece made it clear to the Tribunal that if appointed administrator she would pursue the matter of the $80 000 of invested monies and ensure that her aunt's interests were protected in that regard and in the future with any property sale or purchase and the distribution of funds.
Although there was no clarity of information in respect of the subdivision and sale of part of the jointly owned property some 14 years previously, the Tribunal accepted that, given the length of time that had elapsed since the transaction, and the lack of formal documentation available, this matter could not readily be tracked back and details of expenditure of the monies therefore could not be identified.

Findings and Reasons

Capacity

It was clear from the evidence of the applicant, the medical evidence and the presentation of KL at the hearings that she was not capable of making reasonable decisions in respect of, or managing any aspect of, her financial affairs. She is, and has been for a substantial period, dependent on others, particularly her husband, for these matters. The Tribunal was therefore satisfied that KL was a person for whom an order could be made.

Need

As set out in the legislation, the appointment of an administrator requires the Tribunal to find there is a need for an order and that the needs of the person cannot be met by any means less restrictive of the person's freedom of decision and action.
In this case, KL is dependent on others for the management of her financial affairs that have been informally managed by her husband for many years. Unfortunately, the informal management of KL's money by her husband has resulted in KL being deprived of a regular, adequate allowance and therefore her right to make decisions, where possible, in regard to minor expenditure of her estate.
The Tribunal finds that there is a need for the appointment of an administrator who will provide independent, transparent and accountable management of the estate of KL.

Wishes of the represented person

KL informed the Tribunal and others that she accepted that she was in need of an administrator and was in agreement with her niece being appointed in that role. It was clear from evidence provided to the Tribunal, and from the presentation of both KL and her niece at the hearings, that they have a close, supportive and trusting relationship.

Best interests of the represented person

Based on the evidence, the Tribunal was satisfied that the husband had, for many years, managed the couple's money and considered it his right to spend this as he chose without the need to consult with, or account to, KL for his decisions in relation to expenditure. The Tribunal found that there were reasons to be concerned about this attitude on the part of the husband and that it was likely that in the past KL's best financial interests had not been addressed in these decisions.
The Tribunal was also concerned that the husband did not, as agreed in the second hearing, put in place an appropriate system for ensuring that KL received a regular adequate allowance, until a few days before the commencement of the third hearing. Without discussion or consultation with anyone, including KL, he paid $500 to the psychiatric hostel without informing KL he had done so. Further, this money could not be accessed by KL to spend as she wished.
The Tribunal found that it is in the best interests of KL to have her niece appointed to make financial decisions on her behalf. The niece made it clear at the hearings that she understands the principle of best interests and as such will ensure that her aunt's monetary rights are protected in the distribution of monies from the sale of the jointly owned property and the purchase of another property with the proceeds of the sale. In addition, the niece indicated that she intended to follow the trail of monies that have been withdrawn from the estate in the last three years and ensure that her aunt's interests are protected both historically and in the future. The Tribunal was confident that the niece was the person best placed to ensure that the represented person's interests were protected and that she would act in accordance with s 70 of the Act.

Decision

The Tribunal considered all the evidence available prior to, and at the hearings, and was satisfied that the represented person is a person for whom orders can be made. Further, the Tribunal was satisfied that it is in the represented person’s best interests, that an administration order be made.
The Tribunal made the following order:
1.The niece be appointed plenary administrator of the represented person's estate with all the power and duties conferred by the Act.
2.This order to be reviewed by 6 December 2010

I certify that this and the preceding [86] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MS D DEAN, MEMBER