LWL - [2009] WASAT 150

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: HUMAN RIGHTS

ACT: GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA)

CITATION: LWL [2009] WASAT 150

MEMBER: MR J MANSVELD (MEMBER)
MS J STANTON (SENIOR SESSIONAL MEMBER)
MS V O'TOOLE (SENIOR SESSIONAL MEMBER)

HEARD: 3 NOVEMBER 2008 AND 2 APRIL 2009

DELIVERED : 7 AUGUST 2009

FILE NO/S: GAA 2121 of 2008

BETWEEN: NM
Applicant
AND
LWL
Represented Person

Catchwords:

Guardianship and administration - Administration - Person unable to make reasonable judgments in respect of matters relating to all or any part of his estate - Person in need of an administrator - Suitability of the proposed appointees as administrators - Remuneration of an administrator

Legislation:

Guardianship and Administration Act 1990 (WA), s 3, s 4, s 64(1), s 68, s 68(3), s 80, s 84, s 90, s 117(1)

Result:

An administrator is appointed

Category: B

Representation:

Counsel:

Applicant: Selfrepresented
Represented Person : Selfrepresented

Solicitors:

Applicant: Self-represented
Represented Person : Self-represented

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

LWL [2008] WASAT 35

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

In November 2007, an administrator was appointed for the estate of an elderly man who, due to a number of strokes, had lost the ability to make his own decisions.
The appointed administrators were his accountant and his de facto partner.
Prior to the time when the order for administration was due for periodic review, a daughter of the man sought leave to have the order reviewed.
Another daughter and son of the man alleged that the administrators had not acted in the man's best interests and proposed that they be appointed to act jointly.
The Tribunal decided that the current administrators had conducted the administration in the man's best interests and should continue to act in that capacity. The Tribunal amended the order made in November 2007 to confirm the appointment of the joint administrators, to fix remuneration for the accountant administrator, to make financial provision for the man's disabled son and to direct the administrators to provide regular financial statements to the man's children.

Background

LWL is a 74yearold man who resides in a nursing home as a consequence of the effects of a number of strokes. He is significantly impaired both physically and cognitively and requires full support for his activities of daily living.
On 8 November 2007 (the 2007 proceedings), the Tribunal appointed LWL's accountant (BP) and his de facto partner (MYP) as his joint plenary administrators for a period of 18 months. The order was set to be reviewed by 8 May 2009.
The other significant parties in the 2007 proceedings were RGL (brother), SAL (daughter) and MIL (son).
The Tribunal's reasons for the November 2007 decision can be found at LWL [2008] WASAT 35 (LWL).
In early September 2008, NM, another daughter of LWL but not a party to the 2007 proceedings, sought leave to apply for a review of the order for administration.
In October 2008, NM sought leave to withdraw her application but her request was refused by the Tribunal.
The review application was initially heard on 3 November 2008 and adjourned so that the Tribunal could be provided with a report from the Public Trustee (in his statutory role) on the conduct of the administrators. The adjourned hearing was held on 2 April 2009.

The relevant legislation

The relevant legislation is the Guardianship and Administration Act 1990 (WA) (GA Act).
Before it can make an administration order, the Tribunal must be satisfied that the person is unable, by reason of a mental disability, to make reasonable judgments in respect of matters relating to all or any part of their estate and is in need of an administrator (s 64(1)).
Mental disability is defined to include dementia, acquired brain injury, psychiatric illness and intellectual disability (s 3 of the GA Act).
The determination of capacity and need is made subject to the principles of the GA Act as stated in s 4. They are, relevantly, that the primary concern of the Tribunal shall be the best interests of the person; that every person shall be presumed capable of making reasonable judgments in respect of matters relating to their estate until the contrary is proved to the satisfaction of the Tribunal; that an administration order shall not be made if the needs of the person can be met by other means less restrictive of the person's freedom of decision and action, and in considering any matter relating to the person, the Tribunal shall, as far as possible, seek to ascertain the view and wishes of the person.
If an administrator is to be appointed, the Tribunal needs to be satisfied that the proposed appointee will act in the best interests of the person and is otherwise suitable to act as administrator of the person's estate. In this determination, the Tribunal shall take into account, as far as possible, the compatibility of the proposed appointee with the person (and with the guardian of the person, if one is appointed), the wishes of the person and whether the proposed appointee will be able to perform the functions proposed to be vested in the administrator (s 68 of the GA Act).
Under s 90 of the GA Act, upon review of an administration order, the Tribunal may, as it considers necessary in the best interests of the represented person (the person for whom the order is made), confirm the order, amend the order or revoke the order and substitute another order for it.

The capacity of LWL

It was common ground at the hearing that LWL remains unable to manage his financial affairs. The Tribunal had before it reports from LWL's general practitioner and from a registered nurse at his nursing home. The general practitioner stated that LWL has total expressive dysphasia and likely total receptive dysphasia which means that he can neither understand nor formulate language. The prognosis is that LWL will never regain any cognitive function beyond his current status. The registered nurse stated that LWL has significant cognitive deficits, impaired communication, is unresponsive and unable to read and write.
LWL has a large and complex estate. The Tribunal is satisfied that he is unable by reason of his mental disability (the acquired brain injury from the strokes) to make reasonable judgments in respect of matters relating to all of his estate.

The need for an administrator

It was also common ground at the hearing that LWL is in need of an administrator of his estate and that there are no less restrictive means of managing his financial affairs in his best interests.
The estate of LWL has been complicated by the fact that just prior to his incapacity (and the appointment of an administrator) the project manager for a unit development undertaken by LWL allegedly defrauded him of $400,000. This held up the development as it meant that building progress payments remained unpaid for a period of time and the project was put at some risk.
The estate of LWL has been further complicated by reason of the way he used to conduct his business affairs and some apparently poor investment decisions he made approaching the time he suffered the strokes. LWL was said by his accountant, BP, to be an idiosyncratic businessman; although he made successful investments over the years, he would sometimes act impulsively, paying in excess of the value of particular assets. At the end of a financial year LWL would present BP with a range of paperwork variably detailing the purchase and sales of properties and businesses for the year. These investments would be allocated to LWL solely and to the principal operating entities controlled by him (two proprietary limited companies). The allocation of investments would entail inter-entity loan accounts and other inter-entity book entries and would in part be based on income taxation implications. Whilst LWL was capable, these transaction could be managed according to his instructions; when he became incapable the untangling of the transactions proved difficult and even currently provide some uncertainty as to the exact ownership structure of his assets.
The administrators say that LWL holds in his own right, bank funds, a unit in which he resided prior to his illness, a vacant block of land, a superannuation investment, the balance of the accommodation bond paid to the aged care facility in which he resides and loans and shareholdings in the proprietary limited companies. The personal liabilities of LWL consist principally of a line of credit used to fund the unit development which itself is owned by one of the proprietary limited companies. The net assets of LWL at April 2009 are valued at approximately $7 million.
The administrators further say that the income from the superannuation investment is used to pay the interest on the line of credit. The money needed for LWL's care is taken from the existing cash funds. It is intended to sell some of the units in the unit development to payout the line of credit and to rent the remaining units. The former residence is already tenanted.
The Tribunal accepts that the current state of the estate of LWL requires active but prudent management, in particular to ensure that the unit development is completed and disposed of to the extent that his external liabilities (mainly the line of credit) can be settled. Once that is done the income stream from the superannuation will provide well in excess of his financial needs and the remaining property assets can either be held or disposed of at the appropriate time.
The Tribunal is satisfied that LWL is in need of an administrator to undertake these tasks and to manage and protect his estate in his best interests.

The submissions as to who should be the administrator for LWL?

The Public Trustee's representative who attended the hearing, states that the accounts filed by the administrators for the year to 7 November 2008 have been passed under s 80 of the GA Act but that difficulties were experienced obtaining financial statements for the relevant period (which is different to the typical reporting period of July to June of each financial year) and concerns were raised about the ownership structure of LWL's estate and about some of the transactions he entered into prior to his incapacity.
The son and daughter of LWL (MIL and SAL) submit that the administrators have mismanaged the unit development, which should have been completed earlier (MIL says a year ago) and because it was not, its value is now reduced with the worsening economic conditions.
MIL and SAL (who propose themselves as joint administrators), acknowledge the accounting and financial expertise of BP but say that he does not have the property development experience which they have accumulated over many years including working for their father. They also say that he is too busy with his own practice to devote the necessary time to LWL's estate.
MIL and SAL submit (as they did in the 2007 proceedings) that MYP does not have the skills to be an administrator for LWL and had not been his partner for long enough to warrant becoming intimately involved in his affairs after he became incapable.
BP states that he and MYP work well together and he has always found her to act with integrity in her role as joint administrator. BP states that MYP has great affection of LWL and undertakes her role with that commitment and not for personal gain.
In respect to the unit development, BP states that initially it was critical to ensure the $400,000 allegedly stolen by the project manager had not in fact been paid to the builder. This was the subject of some dispute and needed to be investigated and settled. Legal advice was obtained and eventually it became apparent that significant costs would need to be expended to pursue the project manager (who is now overseas) with little prospect of success. The action to recover the funds was eventually abandoned.
BP states that possession of the units was secured in July or August 2008, at a time when it was very difficult to obtain tradesmen for the balance of the work to be done. The current situation is that the tiling has just been completed, the painting is nearly finished, some internal cleaning and curtain fitting still need to be done and the landscaping should soon be finished. The units will be strata titled and this process is underway. Advice is being obtained from real estate agents as to the best way the units should be sold (it is intended to sell three of the six units initially).
BP states that he will not consent to act as administrator with either MIL or SAL. He is of the view that they do not have the necessary financial expertise and in any case he and MYP have managed the estate of LWL appropriately and have protected and preserved his assets. In the practical operation of the estate, MYP is able to attend to matters onsite and BP deals with the accounting and financial aspects.
MYP proposes that the current order for administration be continued.
MIL says that he initially proposed himself solely as the administrator for LWL (see LWL at [69] to [77]) because his father had said to him (before the second stroke) that he should look after his financial affairs. LWL had also, over the years, given him rights to sign on his behalf in certain business ventures. MIL states that he has had legal advice that the Tribunal would continue to look favourably at a joint appointment given the size of LWL's estate and he has therefore proposed himself and SAL.
SAL said she had initially proposed herself solely because she had been advised to do so (see LWL at [55] to [68]). Both her and MIL, in the 2007 proceedings, had submitted against the appointment of the other (MIL had challenged SAL's assertion that she had played a significant role in LWL's financial affairs and SAL had questioned MIL's then availability to undertake the role of administrator).
SAL now states that she and MIL have worked together for a long time and get on well. She says that her brother and her have the family connection with LWL and are able to look after his interests. SAL says that despite the falling outs with LWL (which she says did not last a long time), she and MIL are close to him. She says she has never become wealthy because she has spent most of her life working for her father and making money for him.
NM and BW (another daughter and son of LWL) support the ongoing appointment of BP as administrator for LWL, BW submitting that his father had many falling outs with his children and that BP has been his accountant for ten years and has stated that he would look after the affairs of LWL as if they were his own.
RGL (brother of LWL) supports the ongoing appointment of BP as administrator because of the intimate knowledge he has of LWL's estate. He does not support the appointment of MYP.
In the 2007 proceedings, the purported wishes of LWL as to who should manage his estate were the subject of some discussion (see LWL at [110] to [116]).
In the current proceedings, the question of the wishes of LWL has again been raised. There is a general acknowledgement that LWL would change his views from time to time about whom he would allow access to his financial affairs. SAL says that she, for a time, lost favour with her father because she had married a person of whom he did not approve. When the marriage ended she says she regained his trust. BP states that LWL would make verbal statements to people and then repudiate those statements when it suited him. BP describes it as an '… impression that he [LWL] burnt people over time'.
BP further says that LWL told him that when he dies '… it's going to be an absolute nightmare because I've got all these family members'. LWL is said to have rejected a proposal to distribute some of his estate to his children before his death.
SAL is the appointed administrator for her disabled brother (a son of LWL). Provision was made in the order arising from the 2007 proceedings for LWL to contribute to the comforts of his disabled son. SAL proposes that this provision continue in the same form. There is no opposition to the proposal.

The Tribunal's decision and reasons

The Tribunal has decided to confirm the appointment of BP and MYP as the joint plenary administrators of the estate of LWL.
Despite some complications in the presentation of the financial statements under s 80 of the GA Act, the accounts for the year to 7 November 2008 have been passed by the Public Trustee and the Tribunal is therefore satisfied that the reporting function of the administration (an important requirement), is in hand.
Whilst there is a difference of opinion as to how the administration has been conducted, especially in respect to the unit development, the Tribunal is satisfied that in the difficult circumstances in which the administrators found themselves, they have acted appropriately and in LWL's best interests.
There is support for BP continuing as administrator given his long unbroken association with LWL as his accountant. The Tribunal accepts that given the complexity of the ownership structure of LWL's estate, that BP is uniquely placed to deal with the financial issues as they continue to arise from the way LWL used to conduct his business affairs.
The Tribunal accepts that over the years LWL has had an upanddown relationship with his children, they finding themselves either in or out of favour in response to some impulse of his. It is therefore difficult to determine clearly what his wish might have been as to which of them might manage his estate when he became unable to do so himself. It can be said, however, as the Tribunal already has, that BP has remained a constant over the last decade as a confidante of LWL.
There has been a concern raised by some of the parties about whether MYP should remain as joint administrator for LWL, in particular, there is a question about her abilities to undertake the role. In this regard, the Tribunal accepts the view of BP that he and MYP have worked well together and that MYP has an enduring commitment to LWL's wellbeing.
The Tribunal is satisfied that BP and MYP are suitable to act as the joint administrators of the estate of LWL (s 68(3) of the GA Act) and that it is in the best interests of LWL that they remain in that role. As to the suitability of MIL and SAL, the Tribunal would have a concern about whether they could act jointly (they propose themselves jointly) given the views previously expressed by them about the other.
The Tribunal is satisfied that LWL would have wanted to continue to make some financial provision for his disabled son and the order for administration will reflect this commitment.
The Tribunal will also require the administrators to provide to the children of LWL, a copy of the financial statements or accounts required to be filed by them with the Public Trustee from time to time, as a reflection of the children's ongoing interest in their father's financial wellbeing.
The Tribunal will fix remuneration for BP's role as joint administrator at the same amount set in the order arising from the 2007 proceedings. The Tribunal accepts that an order for remuneration should continue to be made because of both the size and complexity of LWL's estate (s 117(1) of the GA Act).
Review of the order for administration is to be set for the maximum period available under the GA Act, namely five years (s 84). The medical evidence is clear that LWL will not regain his functioning and he will therefore require his estate to be managed on his behalf for an indefinite period.

Order

1.The order of 8 November 2007 is amended so that it now reads:
[MYP] and [BP] be appointed joint plenary administrators of the estate of [LWL] with all the powers and duties conferred by the Act.
2.The administrators are authorised to expend up to a total amount of $4,000 per annum for the comforts of [LWL]'s son, [GL].

3.[BP] in his role as joint administrator is authorised to be remunerated from the estate of [LWL] to an amount not exceeding $12,000 per annum.
4.The administrators are directed to provide [MIL], [SAL], [NM] and [BW] with a copy of the accounts (excluding any supporting documents) that are filed and passed by the Public Trustee from time to time.
5.This order is to be reviewed by 2 April 2014.

I certify that this and the preceding [56] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MR J MANSVELD, MEMBER