KNN (Review Administration)
[2012] TASGAB 13
•14 June 2012
GUARDIANSHIP AND ADMINISTRATION BOARD
HOBART
KNN – Review of Administration Order
Neutral citation: KNN (Review Administration) [2012] TASGAB 13
REASONS FOR DECISION
Anita Smith (President)
Grant Kingston (Member)
Abigail Bindoff (Member)
Date of hearing: 14 June 2012
Administration – Review of appointment of administrator – Obligations of administrator to provide accurate reports – Unauthorised gifts from estate – Wishes of represented person
Guardianship and Administration Act 1995 s. 51, 67, 73A
Holt v Protective Commissioner (1993) 31 NSWLR 227
KNN (KNN) has been the subject of an administration order since 28 January 2011 when the Board appointed his father, SN (SN), as his administrator for 12 months pursuant to Part 7 of the Guardianship and Administration Act 1995. Shortly prior to the expiry of the order, the Board commenced proceedings to review the administration order.
The first hearing:
On 12 November 2010 the Board received but declined an emergency administration application. On 23 November 2010 the Board received an application from Adult Community Mental Health Services for appointment of a guardian and administrator for KNN. The application states:
“KNN’s father manages his money, but very poorly. His father is supposed to pay and collect KNN’s medications which he is failing to do. KNN also has accumulating debts.”
And
“KNN is not having his money appropriately managed and never has any cash with him. He is vulnerable to financial abuse. He is not allowed to see his parents on Mondays, Tuesdays or Wednesdays which leaves him three days without money. He therefore bothers other tennents (sic) for money and cigarettes which is such a concern he may be evicted.
The application was supported by a pro forma Health Care Professional Report completed by Dr Rhona De Los Santos who confirmed that KNN has an intellectual disability which is static. Her report satisfied the Board that KNN is a person with a disability and is by reason of that disability incapable of making reasonable decisions about his estate.
The Board recorded in notes of their decision that KNN was opposed to the making of orders, but if orders were made he wished for continuing support from his father. The Board considered that SN would act in the best interests of KNN, but with regards to his suitability noted “Reservations – but considered worthy of the opportunity” and “Father considered to be genuinely supportive of son – therefore decision to appoint as administrator.”
The Board determined that the order would expire on 27 January 2012. The Board also appointed the Public Guardian as KNN’s guardian for the same period.
As with all private administrators, upon appointment, SN signed the following acknowledgement at the hearing:
“I SN of Devonport having been notified by the Guardianship and Administration Board (‘the Board’) of my appointment as administrator, acknowledge and accept the following responsibilities to the represented person and to the Board:
1.As an administrator appointed under Part 7 of the Guardianship and Administration Act 1995 (‘the Act’), I must at all times exercise the powers and duties set out in section 56 in the best interests of the represented person.
2.As administrator I am responsible for ensuring that the represented person’s funds and assets are applied for his or her benefit alone, except where I have obtained an order from the Board approving a gift or settlement pursuant to section 58 of the Act.
3.I am required to keep accurate records of receipts and expenses in the represented person’s estate and to submit an annual report in accordance with section 63 to the Board on the anniversary of the order and at any time ordered by the Board.
I acknowledge receipt of the booklet Information for Private Administrators – A Handbook for Private Administrators.”
Events following the first hearing:
On 30 November 2011, the Board’s Compliance Officer wrote to the administrator noting the imminent expiry of the order and the need to seek review of the order if it was to continue. The Compliance Officer attached to that letter an application to review the order, a blank Health Care Professional Report and Administrator’s Report and Financial Statement noting that these must be completed by 6 January 2012 otherwise the order would lapse on the expiry date. The Board did not receive any response to this letter.
However on 5 December 2011, the Public Guardian’s delegate applied to the Board for a review of both the administration and guardianship order. The Board then received unsolicited emails from staff members at the North West Regional Hospital and Mission Australia, who provide case management support for KNN, expressing ongoing concerns about the management of KNN’s funds. The Public Guardian’s report noted concerns also arising from Adult Community Mental Health services staff.
The Board convened a review hearing on 13 January 2012. At that hearing, the concerns of service providers were aired but rejected by the administrator. At that point the administrator denied having received the letter dated 30 November 2011. He tabled some documentation relating to financial management at the hearing, but it had not been collated into the format provided by the Compliance Officer. These documents consisted of numerous receipts randomly stapled into an exercise book.
The Chair of that hearing noted:
“SN’s capacity and ability undoubtedly limited to adequately manage [KNN]’s funds. However adjourn until qualitative and objective information can be obtained – in particular from service providers. Consider claims that he didn’t receive information requesting reports to be untrue – however he tabled all the appropriate documents – does he have the ability to collate? We will see. [KNN] is strong in his desire to retain his father as administrator.”
The Board directed the Compliance Officer to investigate the concerns of the service providers for greater specificity about their concerns regarding the administration order. The Board renewed the order for 3 months and ordered another review at that time.
In his report to the Board dated 12 April 2012, the Compliance Officer stated:
“I do not consider the financial report provided by the administrator to be satisfactory and have told him so via a telephone conversation. Leaving aside the standard of the report and the concerns raised by the service providers I consider that the administrator has contravened section 58 of the Act. I have marked the “account book” where a Centrelink loan of $1075.00 was taken on 17/01/202 (after the last review) and the amount loaned to KNN’s mother. This was not sanctioned by the Board. In the acknowledgement form signed by the administrator on 29/01/2012 paragraph 2 covers the issue. In addition pages 35 and 36 from the administrator’s handbook (included herewith) make it very clear that loans have to be sanctioned by the Board. In addition I contend that the administrator has breached section 56 of the Act. I do not see how the Centrelink loan is in the best interests of KNN. As indicated above I also think that the administrator’s report does not comply with section 63 of the Act.”
The Board convened again on 19 April 2012 to review the order made on 13 January 2012. On that occasion, the administrator sought an adjournment to seek legal advice. The Board ordered an adjournment for 2 months noting
“Order continues during adjournment with SN continuing as administrator.”
Technically that order was irregular, as section 73A only provides for the appointment of the Public Trustee as administrator under interim orders made on adjournment.
On 8 June 2012, following a telephone discussion between the Compliance Officer and the administrator, the Board received the Administrator’s Annual Report and Statement of Accounts completed on the pro forma supplied. However, it was not accompanied by the supporting documents, such as bank statements and receipts which are required to verify the statement (the exercise book had been handed back to the administrator after the hearing on 19 April 2012 so that he had information upon which to base the report. Sadly a copy of the exercise book was not kept by the Board).
The Statement of Accounts supplied appears to be in estimated form only. For instance the figures for “cash held in bank accounts” for two consecutive years are “400” and “800”. The following two tables submitted by the administrator in the report contradict each other:
Table A:
Payments/Outgoings: Rent, Mortgage etc. *$4472 ($72 per f/n) Insurance *$468 Personal Expenses $12,350 Purchase of assets Bike $1950
Lounge $500Loans $494 Total Payments/Outgoings *$17,784 Table B:
Payment Expense (per fortnight) Total Rent 174 4524* Food 140 3640 Loan 19 494 Insurance 20 442* Mediator 35 520 Power 100 910 Cigarettes 30 2600 Alcohol 40 780 Petrol 10 1040 Football Membership 100 260 Clothes and entertainment 2600 Total 17,810*
Because the figures are all rounded and because of the inconsistencies between the asterisked figures, the Statement gives more of an appearance of a budget or an estimate than an accurate record of expenses.
The hearing on 14 June 2012:
The Board resumed the hearing of this matter on 14 June 2012. That hearing was attended by:
KNN
SN – Administrator
Patricia Bock – Social Worker, Adult Community Mental Health
Sue Pallot – Mission Australia
Kylie Hillier – Office of Public Guardian
Graeme Stagg – Public Trustee.
The elements of appointing an administrator in section 51 of the Act were uncontested. The parties agreed that the only issue in contention was the administrator’s suitability for ongoing appointment.
The Chair outlined previous concerns about the administrator’s management of funds. Early concerns about lack of funds for pharmacy needs were explained by persons present as an administrative difficulty because the accounts were sent directly to KNN, who did not bring them to his father’s attention. Once brought to his attention, pharmacy expenses have been attended to promptly. Service providers for KNN noted difficulties because KNN lacks money for transport. The administrator explained that KNN gambles away money given to him for specific purposes, when he lacks money it is because he spends it gambling. The service providers noted that KNN spends a great deal of money also on cigarettes and warned the Board against acting in a way that diminished the relationship between KNN and his father.
When the Board questioned the administrator about the lack of compliance with accounting requirements, he stated that he had been given mixed messages from the Board about what constituted appropriate compliance. By his demeanour, the administrator gave the Board the impression that he considered concerns about his accounting to be trivial or nonsensical. He asked for more time to provide information to the Board. The Board denied a third adjournment. He also stated that he had had ‘a legal person’ complete the statement for him, implying that the Board should accept the information at face value.
When questioned about the Centrelink loans mentioned in the Compliance Officer’s report, the administrator stated that he had KNN’s consent to gift part of that loan for the purpose of contributing to expenses for his parent’s wedding anniversary celebrations. He denied despite the acknowledgement that he signed at the time, that the Board had told him that he was required to have Board approval to make a gift. As questioning in this regard continued, the administrator became increasingly hostile. When the Board suggested that he be replaced as administrator by the Public Trustee, because of the problems with reporting and with the loan, he verbally abused the Board and left the hearing with KNN.
Following the administrator’s departure from the hearing, the Public Guardian asked the Board to consider revoking the guardianship order. As the Board had insufficient material before it on this issue, the Board declined to consider that issue in favour of considering a review application after receiving the guardian’s next annual report in January 2013.
Consideration:
Since the first application was made to the Board in November 2010, witnesses have expressed concerns about SN’s management of KNN’s income. However, witnesses have also been equivocal about such evidence, seeming to be more prepared to criticise SN’s behaviour in his absence. SN vigorously challenges criticism of his management, resulting in witnesses making concessions in his favour. This means that the Board cannot come to any determination as to whether SN has misused KNN’s funds or not.
In appointing SN as KNN’s administrator, despite the rumblings of discontent, the Board gave SN an opportunity to prove that he was dealing appropriately with KNN’s funds and was accountable for expenditure. Sadly, he has not been capable of accounting for the expenditure of KNN’s income. The Board has afforded SN the same level of support as any other private administrator (or possibly more), such as: explanation at the time of appointment, supply of the Private Administrator’s Handbook, telephone support from the Compliance Officer and further explanations at each of the adjourned hearings. SN alternatively blames the Board for poor advice or KNN for misspending money. Similarly, SN placed responsibility for the gift of funds advanced from a Centrelink loan towards his parents upon KNN.
The legislation places upon the Board an ongoing responsibility to assure KNN’s best interests. The facility for monitoring KNN’s best interests is through the receipt and scrutiny of annual reports. If the Board does not have confidence that the reports represent an accurate picture of expenditure, the Board cannot be assured that KNN’s best interests have been assured.
The Board notes that evidence has been consistent over time that SN’s relationship with KNN is important for KNN. The Board remains cognizant of the reasoning expressed in Holt v Protective Commissioner (1993) 31 NSWLR 227, but in this case it has been proven that there is a need for prudent control over KNN’s estate. The approval of the ‘ingredient of love and affection and unquestioning devotion’ expressed by Kirby P in that case does not come at the expense of appointing a family member who lacks the skills to manage an estate.
For instance, if an administrator knows that when a represented person is regularly issued funds for a particular important or essential purpose, but that funds are diverted to non-essential purposes, an administrator would be expected to find alternative means to fund those, such as purchasing transport tickets directly, or issuing funds to a trusted third party to ensure that they are spent on the represented person’s needs.
The Board concludes that SN does not understand the role and responsibilities of an administrator. In particular, he does not understand the reporting requirements of an administrator and the requirement for precise records of expenditure. As part of that, he does not understand the authority of the Board or the need to comply with reporting requirements.
The Board considers that it is left with no option but to appoint the Public Trustee as administrator.
After hearing a review of an administration order made on 13 January 2012 in respect of KNN (hereinafter called the ‘represented person’)
The Board was satisfied that the represented person
•is a person with a disability, and
•is unable by reason of the disability to make reasonable judgments in respect of his estate, and
•is in need of an administrator;
THE BOARD ORDERS
That The Public Trustee be appointed as the represented person’s administrator in place of SN.
That the powers and duties of the administrator be those conferred by Division 4 of Part 7 of the Guardianship and Administration Act 1995.
That the order remains in effect to 13 June 2015.
Anita Smith Grant Kingston Abigail Bindoff
PRESIDENT MEMBER MEMBER
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