LAM
[2007] WASAT 195
•31 JULY 2007
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: HUMAN RIGHTS
ACT: GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA)
CITATION: LAM [2007] WASAT 195
MEMBER: MR J MANSVELD (MEMBER)
HEARD: 18 MAY 2007
DELIVERED : 31 JULY 2007
FILE NO/S: GAA 616 of 2007
BETWEEN: LAM
Represented Person
Catchwords:
Guardianship and administration Review of administration order Application by administrator to make a gift to her siblings from the represented person's estate Discretion available under section 71(5) does not extend to a disposition (or partial disposition) of the person's estate according to the terms of their will
Legislation:
Guardianship and Administration Act 1990 (WA), s 4(2)(a), s 64, s 71(5), s 72(3)(a)
Result:
The application is not successful
Category: B
Representation:
Counsel:
Represented Person : Self-represented
Solicitors:
Represented Person : Self-represented
Case(s) referred to in decision(s):
LMM [2005] WASAT 232
Review of Administration Order in respect of Mrs M (Unreported, Guardianship and Administration Board; 13 June 2000)
Russell v Scott (1936) CLR 440
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
The daughter of an elderly woman suffering from dementia was appointed her administrator in 2005. The woman resided in a nursing home.
The elderly woman's spouse died in 1992. She had three children; a daughter and two sons.
In 2007, the daughter applied for a review of the administration order. She sought an authority to make a gift from her mother's estate to enable one of her brothers to be provided with his share of his mother's current estate in accordance with the woman's will. The other brother supported the gift.
Although the Guardianship and Administration Act 1990 (WA) allowed the Tribunal to take a liberal view of a person's best interests when considering whether to authorise an administrator to make a gift from the person's estate, it did not extend, in the Tribunal's view, to a disposition (or partial disposition) of the person's estate according to the terms of their will.
The Tribunal therefore decided to confirm the order made in 2005 appointing the daughter as the woman's administrator. The order did not include an authority to make a gift from the woman's estate.
Background
These reasons relate to an application for review of an administration order for LAM made by her daughter K, who was appointed her plenary administrator in 2005.
The administrator is seeking to have the Tribunal authorise her to make a gift from her mother's estate.
The relevant legislation is the Guardianship and Administration Act 1990 (WA) (GA Act).
LAM is an 87‑year‑old woman who suffers from dementia and who resides in an aged care facility.
LAM has three children; the daughter K and two sons, M and F.
K is seeking authorisation to make a gift from the estate of LAM in these terms:
"My brother [M] wishes to access his share of our Mum's estate; as he has brought [sic] a family home [and] he needs the money for this." (her application)
The application was heard on 18 May 2007. The applicant K attended as did her brother, M.
The Tribunal reserved its decision.
Decision of the Tribunal
On 25 May 2007 the Tribunal decided to confirm the order for administration made on 17 May 2005, appointing K as LAM's plenary administrator. This means that the request for gifting is not allowed.
Reasons for decision
The relevant legislation
Under s 72(3)(a) of the GA Act, an administrator is not permitted to make a payment or disposition of a charitable, benevolent or ex gratia nature from the estate of a represented person (in this case, LAM), without the authority of the Tribunal.
Whilst the primary concern of the Tribunal is the best interests of the represented person (s 4(2)(a)), s 71(5) of the GA Act allows the Tribunal to take a liberal view of the person's best interests, and if the circumstances so require, empower an administrator to make a payment of the type described in s 72(3)(a).
The legislation in respect of gifting was considered by the Full Board of the former Guardianship and Administration Board in Review of Administration Order in respect of Mrs M (Unreported, Guardianship and Administration Board; 13 June 2000) (hereinafter cited as Re Mrs M).
Although not bound by the decision in Re Mrs M, that case provides some guidance to the Tribunal in deciding whether to authorise an administrator to make a gift. The Full Board considered the following as some of the factors that are appropriate to take into account: the relationship between the represented person and the beneficiary of the gift; the extent of the estate of the represented person; the income and expenditure of the estate; the age and needs of the represented person; the purpose of the gift; the likelihood of the represented person acceding to the request if she had capacity; the alternatives open to the recipient; the attitude of those who are likely to benefit from the estate of the represented person on her death and the needs of any other person dependent upon the represented person.
Submission on the application of the factors in Re Mrs M
The recipient of the proposed gift is M, a son of LAM.
LAM is 87 years of age and a widow, her spouse having died in 1992. (T:18)
According to K, her mother's estate comprises an investment account with Colonial First State valued on 31 December 2006 at $221 557.57; an operating bank account with a balance of about $7000 and the balance of an accommodation bond paid to the aged care facility. LAM's income consists of a pension from the Department of Veterans' Affairs and the distribution from the investment account. (T:8-11)
K submits that her mother's income more than meets the cost of her care and other expenditure such as clothing, medications and incidentals. LAM uses a hearing aid, the maintenance cost of which is met by the Department of Veterans' Affairs. LAM does not currently have any other special needs. (T:11:12)
K says that she has not worked out the exact amount of the proposed gift. M expects it to be approximately $70 000 which is one-third of the investment with Colonial First State. K states that LAM's funeral costs will need to be paid from those funds. (T:6)
The background to the request for the gift is put by M as follows. He and his family have lived in rural Western Australia for the last 30 years. The family has just moved back to Perth; his children are at university, TAFE and at secondary school.
M has purchased a property in Perth for $450 000. He has paid a deposit of $90 000 and those funds came from his late mother-in-law's estate. M has secured a mortgage of $340 000. After stamp duty costs, he still needs about $40 000 for the property. He expects moving costs to be $2000 and also wants to repay a loan on a motor vehicle of $16 000. M would use his share of his mother's estate to meet these costs totalling about $58 000. (T:12:13:19)
K puts it this way:
"Also I think what [M] was thinking of too [sic] the fact that a third of mum's estate, so that basically he was saying to us that once ‑ you know, if it did come to that and he did get a third of mum's share then he will have no claim to mum's share, that he has got his share now and he needs it." (T:19)
K also says that when M first put to her his need for funds she contacted the Public Trustee and was advised " … the only way that you can like divide an estate is if your mother happens to pass then it automatically is divided." This advice confirmed her initial understanding. (T:15)
K received further advice about the possibility of gifting from her mother's estate and from that decided to lodge the current application for review (T:16:17). M states that he made an offer on the property which is due for settlement in early June 2007, when he found out that gifting was an option. He purchased the property on the expectation that the gift would be approved but on the understanding that authorisation would be required from the Tribunal (T:23:24). M states:
"After talking to my sister and my brother … I didn't think it would be a problem. I thought, yeah that would be okay." (T:24)
Both K and M state that their mother would have approved of the gift had she the capacity to do so. She had not hesitated in the past to advance money to her children should they need it but when that happened it was generally in the form of a loan.
If the gift is not approved M states he does not know what will happen. He might lose the deposit on the property if he cannot go ahead with the purchase (T:15). When asked whether he could obtain the funds from elsewhere he states:
" … I have got a couple of friends who are fairly sort ‑ they could afford to ‑ you know, sort of they are friends and I would hate to have to go to them and ask them. I don't know what I would do … well the extreme situation is that I would have to go to a friend which I really wouldn't want to do." (T:19)
Both K and her other brother, F, support the making of the gift to M. F submitted a letter to the Tribunal which states in part:
" … I have no objection to my brother [M] accessing his share of moneys held in trust. If my mother was able to administer her estate she would not hesitate in giving [M] the money to purchase a family home."
There is no person financially dependent on LAM.
The Tribunal's decision
The Tribunal is satisfied that LAM remains a person for whom an administrator could be appointed and that she is in need of an administrator (s 64 of the GA Act). LAM suffers from moderate to severe dementia with attendant memory loss. (GP report dated 4 April 2007)
LAM is no longer able to express her wish in respect of the gift that is proposed to be made from her estate.
The Tribunal is not satisfied that it is in LAM's best interests that the gift proposed by K, in the form in which it has been put to the Tribunal, be made from her estate.
K's submission is that M, her brother, be given his share of LAM's estate as it currently stands. The amount of $70 000 is mentioned by M as comprising his share although it appears to the Tribunal that this figure is not an accurate reflection of the current value of LAM's estate. It does not, for example, include LAM's interest in the accommodation bond paid by her to the aged care facility in which she resides.
In her evidence K is not able to quantify the gift.
M submits that his financial needs; the balance of the property purchase costs, the payout of a motor vehicle and moving costs, amounts to about $58 000 (as calculated by the Tribunal). He has not, however, submitted that this is the quantum of the proposed gift. The proposed gift is his current share of his mother's estate.
K confirms this is how the gift should be authorised when she says that if the gift is made, then M forgoes any further entitlement to LAM's estate.
Although the GA Act allows the Tribunal to take a liberal view of a person's best interests when considering whether to authorise an administrator to make a gift from the person's estate, it does not extend, in the Tribunal's view, to a disposition (or partial disposition) of the person's estate according to the terms of their will.
The object of a will can be stated as follows:
"A will in the physical sense is an expression of intention with respect to matters taking effect on death. In A-G v Jones and Bartlett (1817) 3 Price 368 [146 ER 291], Graham B stated the principle as follows:
[I]n order to constitute the essence of a will, it must be an instrument which a man voluntarily makes: it is an expression of his will, and it is an expression of his will touching the disposition of his property at the time of his death, and only at the time of his death." (The Laws of Australia; Volume 36 page 29)
And further, citing Dixon and Evatt JJ in Russell v Scott (1936) CLR 440 [ALJ 211; 36 SR (NSW) 454 53 WN (NSW) 178];
"Succession post mortem is not the same as testamentary succession. But what can be accomplished only by a will is the voluntary transmission on death of an interest which up to the moment of death belongs absolutely and indefeasibly to the deceased." (The Laws of Australia, Volume 36, page 30)
The Tribunal cites with approval the reasoning in LMM [2005] WASAT 232, which, in respect of an application for gifting, states:
"As can be seen the legislation [GA Act] provides for the proper management of estates of incapable persons during the lifetime of that person. It was not intended that it be a mechanism which would allow the distribution or partial distribution of the estate prior to her death. The proposal that the Tribunal, in effect, authorise the applicant to receive part of his inheritance prior to the represented person's will coming into effect, is not consistent with the primary obligation of the Tribunal set out in s 4 of the Act, to act in her best interests." [par 29]
The factors in Re Mrs M fall away once the fundamental purpose of the gift has not been accepted by the Tribunal as is the case in the application by made by K.
For these reasons the application by K cannot succeed. It is not, in the view of the Tribunal, appropriate to use the discretion available under s 71(5) of the GA Act in this case.
The Tribunal has therefore decided to confirm the order made on 17 May 2005 appointing K as LAM's administrator. The order does not include an authority to make a gift from the estate of LAM.
I certify that this and the preceding [46] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR J MANSVELD, MEMBER
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