M
[2007] WASAT 201
•7 AUGUST 2007
M [2007] WASAT 201
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2007] WASAT 201 | |
| GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) | |||
| Case No: | GAA:308/2007 | 28 MARCH 2007 | |
| Coram: | MR J MANSVELD (MEMBER) MS C HILL (SENIOR SESSIONAL MEMBER) MS M JORDAN (SENIOR SESSIONAL MEMBER) | 7/08/07 | |
| 11 | Judgment Part: | 1 of 1 | |
| Result: | The application is not successful | ||
| B | |||
| PDF Version |
| Parties: | M |
Catchwords: | Guardianship and administration Review of administration order Application by administrator to make a gift to himself and siblings from the represented person’s estate Discretion available under section 71(5) should not be used in this case |
Legislation: | Guardianship and Administration Act 1990 (WA), s 4(2)(a), s 64, s 71(5), s 72(3)(a), s 74, s 74(5), s 80 |
Case References: | Ex tempore decision of the Guardianship and Administration Board made on 16 October 2002, Application No PA020299 Review of Administration Order in respect of Mrs M (Unreported decision delivered 13 June 2000) |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : HUMAN RIGHTS ACT : GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) CITATION : M [2007] WASAT 201 MEMBER : MR J MANSVELD (MEMBER)
- MS C HILL (SENIOR SESSIONAL MEMBER)
MS M JORDAN (SENIOR SESSIONAL MEMBER)
- Represented Person
Catchwords:
Guardianship and administration - Review of administration order - Application by administrator to make a gift to himself and siblings from the represented person’s estate - Discretion available under section 71(5) should not be used in this case
Legislation:
Guardianship and Administration Act 1990 (WA), s 4(2)(a), s 64, s 71(5), s 72(3)(a), s 74, s 74(5), s 80
Result:
The application is not successful
(Page 2)
Category: B
Representation:
Counsel:
Represented Person : Self-represented
Solicitors:
Represented Person : Self-represented
Case(s) referred to in decision(s):
Ex tempore decision of the Guardianship and Administration Board made on 16 October 2002, Application No PA020299
Review of Administration Order in respect of Mrs M (Unreported decision delivered 13 June 2000)
(Page 3)
Summary of Tribunal's decision
1 The son of an elderly woman, suffering from dementia, was appointed her administrator in 2003. The woman resided in a nursing home.
2 The elderly woman's spouse died in 2006.
3 In 2007, the son applied for a review of the administration order. He sought an authority to make a gift from his mother's estate of approximately $258 000.
4 The son's submission was that the gift represented the expression of his late father's wishes. He was the executor of his late father's estate.
5 The son submitted that when the jointly owned family home was sold it was expected that the proceeds be split between the mother and father's estates. This did not occur as it was found administratively simpler to invest the proceeds in a joint investment account. When the father died the investment account became wholly the property of the mother.
6 The son submitted that his father wanted his share of the property proceeds to be distributed to his surviving children upon his death. This could now only be achieved by making a gift from the mother's estate.
7 The Tribunal was not satisfied the proposed gift was in the best interests of the woman. It could not be said, for the purposes of a gifting application under the Guardianship and Administration Act 1990 (WA), that half the proceeds of the sale of the property did not really belong in the estate of the woman but belonged to the father and should be distributed according to his wishes.
8 The other reasons put by the son and his brother of why the gift should have been allowed, were in the Tribunal's view, subsidiary to the main purpose just described and were not of themselves fully formed or costed to satisfy the Tribunal that the gift should be authorised.
9 The Tribunal therefore decided to confirm the order made in 2003 appointing the son as the woman's administrator. The order did not include an authority to make a gift from the woman's estate.
(Page 4)
Background
10 These reasons relate to an application for review of an administration order for M made by her son R, who was appointed her plenary administrator in 2003 by the former Guardianship and Administration Board.
11 The Tribunal took over the functions of the Board in January 2005.
12 The administrator is seeking to have the Tribunal authorise him make a gift from the estate of the represented person.
13 The relevant legislation is the Guardianship and Administration Act 1990 (WA) (GA Act).
14 M is a 79 year old woman who suffers from dementia and who requires nursing home care. Her husband died in June 2006. She has three surviving children, two sons and a daughter, another daughter having died some years ago.
15 R initially made an application for directions pursuant to s 74 of the GA Act. This application was dismissed by the Tribunal on 28 February 2007 as it was not considered the appropriate section of the GA Act to make an application for gifting (see Ex tempore decision of the Guardianship and Administration Boardmade on 16 October 2002, Application No PA020299). R had earlier been invited by the Tribunal to make an application for review of the administration order which he did and which was heard by a single member on 28 February 2007.
16 The application for review of the administration order (to consider the gifting request) was adjourned to enable R to make further submissions to the Tribunal.
17 The matter was heard by the Tribunal, constituted by three members, on 28 March 2007. Present at the hearing was R who also provided a written submission, and his brother, G. The Public Trustee was represented by an officer from the Private Administrators' Support Team (Public Trustee).
18 The Tribunal reserved its decision and asked R to provide it with a copy of the "Statement of Assets and Liabilities" lodged with the Probate Division of the Supreme Court of Western Australia in respect of the estate of his late father. R also filed a copy of M's will executed on 12 August 1999.
(Page 5)
Decision of the Tribunal
19 On 5 April 2007, the Tribunal decided to confirm the order for administration made on 12 June 2003, appointing R as M's plenary administrator. This means that the request for gifting is not allowed.
Reasons for Decision
20 It is common ground that M 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).
21 The question for the Tribunal is whether the administrator should be authorised to make a proposed gift of about $258 000 from the estate of the represented person. The matter is complicated by the submission of R that the proposed gift reflects the wishes of his late father, N as to how his estate is to be distributed. N's will, for which probate was granted in November 2006, provides for particular items to be distributed to his three surviving children and those children then to be given the residue of the estate in equal shares. No provision is made for the family of the deceased child, the will having been executed after her death.
22 The submission of R relies on the premise that it was always accepted by N that an asset, jointly held by N and M at the death of N, was intended to be held by them individually in equal shares. The asset is an investment portfolio, valued in February 2007 at about $516 000.
23 While it is acknowledged by R that the investment account now forms part of M's estate, it is his submission that half of the investment account should be gifted to him and his two surviving siblings, thereby fulfilling N's wishes in respect of his estate, which if matters had been dealt with differently, would have included half the share of the investment account.
24 How this came about is put by R as follows.
25 R was appointed M's administrator in 2003. M could no longer be cared for at home and it was decided that she be placed in an aged care hostel. An accommodation bond of $107 000 was required to be paid to secure the hostel place for M. (T:3:4)
26 At that time the family home was held jointly by M and N. It was initially determined that the house would need to be sold to raise the accommodation bond monies but another reason for selling the property, according to R, was that N wanted to "move on". (T:9)
(Page 6)
27 An administrator was required for M to manage her estate and more specifically to deal with the sale of the jointly owned property. At about the same time N appointed R as his attorney under an enduring power of attorney. (T:5)
28 The proceeds of the sale of the jointly owned property, about $370 000, was at first placed in an investment account solely in the name of N. R states that this was likely to have occurred because N wanted to manage things by himself; that N took the view that there was no point in the investment also being in M's name because she was unable to manage her own affairs. (T:6)
29 When R lodged financial statements for M's estate with the Public Trustee, pursuant to s 80 of the GA Act, the Public Trustee advised him that the interest of M in the investment account should be reflected in how the account was being held. There were effectively two options available, the first was to sever the investment so that half of the proceeds would be distributed to M and N and an account be opened for M solely for her share. The other option was to have the investment held jointly. R says that the investment company advised him that it would be administratively simpler to change the investment into the joint names of M and N and this was the option taken for that reason alone, not appreciating at the time that upon N's death his estate would not have the benefit of half of the investment account. (T:12)
30 R states that the proceeds of the sale of the property were not ultimately needed to pay the accommodation bond, it was discovered that N had surplus funds and these were used to pay the debt on behalf of M. (T:9)
31 R states that aside from the jointly owned property (and subsequent investment account), M and N kept their financial affairs separate. They had their own bank accounts and share portfolios and they considered their affairs private.
The estate of N
32 The affidavit and statement of assets and liabilities filed by R as executor of N's estate, shows N's assets as at the time of his death as the balance of the accommodation bond paid on behalf of M, bank funds and a portfolio of shares. The investment account is not shown and the explanation given by R in the documents provided to the Tribunal is that:
(Page 7)
- "Probate did not include proportion of [investment account] as this had become part of my mother's [M] estate under the 'survivor in joint' ruling."
The estate of M
33 The estate of M appears to comprise of the following: the previously held joint investment account (value as at February 2007, $516 000), another investment account (value as at February 2007, $49 000) and a number of bank accounts totalling $19 000.
34 The financial statements for the period 12 June 2005 to 30 June 2006, filed by R with the Public Trustee for M's estate, shows income from a veterans affairs pension, superannuation and interest amounting to approximately $26 000.
35 M's expenses as they relate to her residency at the aged care facility amount to about $20 500.
36 The statements also show M having received, $46 967.75 as a refund of the accommodation bond. It is not clear how that relates to the asset shown on the probate form for N, but it is not of consequence in the matter before the Tribunal.
The relevant law
37 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, M), without the authority of the Tribunal.
38 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).
39 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 decision delivered 13 June 2000), Mr Keith Chapman, President, Ms Pamela Eldred, Deputy President and Mr John James, Member) (hereinafter cited as Re: Mrs M).
(Page 8)
40 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
41 R states that there are three surviving children of M, himself, his brother, G and a sister, K. A sister (twin sister of G), is deceased. She has two surviving children, a son and daughter.
42 The extent of M's estate and her income and expenditure is described above [see par 33 - 36]. R states he has not had to access the capital of the investment account for M's needs for the previous four years. He says that M is invoiced by the nursing home for her daily care fees, medicines and personal needs. The only additional costs are for clothing and for outings. M spends about 60 per cent of the day in bed; she is occasionally taken outside into the sunshine and infrequently leaves the nursing home for family events. M has had a specially designed wheelchair purchased for her.
43 M's income is in excess of the cost of her care needs.
44 As already mentioned in these reasons, the purpose of the gift as submitted by R is to satisfy the wish of his late father as expressed in his will. R puts it this way in a letter to the Tribunal dated 25 March 2007.
"My father and mother always had separate financial dealings. They had separate bank accounts, separate share portfolios, etc.
My mother developed dementia and unfortunately had to move to a nursing home where she has been for many years now. Dad was fine and wanted to make a new will in which he decided to provide for his children directly.
He did this in the belief that Mum was well provided for and given her situation did not need much. This was his will and I
(Page 9)
- feel that the approval of a gift would complete his wishes in this respect. He knew we would always look after mum in all ways no matter what.
When the house was sold the funds were put into an account in his name so he could manage it. When it was pointed out to me that this not was [sic] really the proper thing to do I arranged for a change of details.
The Public Trustee suggested that half the proceeds of the sale of the house be placed into an account in my mother's name or all of the proceeds be placed into a joint account in both names.
I discussed this with [the investment company] and administratively it was simply easier to change the account to joint names. This was subsequently completed.
However, dad passed away and his will revealed his particular wishes. The complication arose as under the law all monies in joint names automatically go to the survivor, something that was never known.
The proceeds of the sale of the house were invested in a separate account with [the investment company] … therefore it is requested that the Tribunal allow one half of this account to be distributed to the three children.
Hence, this approval of this gift would complete the process."
45 R states a further reason for seeking the gift from his mother's estate. He says that he has an intellectually disabled son, aged 21 years. The son lives in a group home which R regards as unsuitable. R says he would like would like to try and use some of the gift to explore the possibility of his son accessing therapies which might help alleviate his condition such as "deep brain stimulation." (T27:28)
46 G states that he would use the gift in part to visit his daughter and grandchildren who live in regional Western Australia. He says he does not see them very often because his financial resources are limited. (T:37)
47 In respect of the sister, K, R states that he is not aware that she is in a position " … where she desperately needs the money." (T:29)
48 R is of the view that M would have wanted the gift to be allowed, that she would have said that she could not use the money and that her
(Page 10)
- children should improve their lives in some way with the gift. M is said to have been a person who lived for her family, for example, she worked outside of the family home primarily to put her children into private schools. R says that when he first married, his parents lent him some money which he subsequently repaid. G says he also was able to borrow from his parents when it was needed. He says his father would write down the loan details in a book. (T29:32)
49 R does not see any alternative open to the recipients other than the making of the gift (his letter of 21 March 2007).
50 R, G and K support the making of the gift.
51 There is no person financially dependent on M.
The Tribunal's decision
52 The Tribunal is satisfied that M 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).
53 M is no longer able to express her wish in respect of the gift that is proposed to be made from her estate.
54 The Tribunal accepts on the evidence that the financial needs of M would not be disadvantaged by the making of the gift. M has assets in excess of $550 000. Her current income exceeds the cost of her care and it is not anticipated that will change. The proposed gift of about $258 000 to M's three surviving children would still leave her with sufficient funds to meet her future care needs.
55 The Tribunal is not satisfied, however, that it is in M's best interests that the gift proposed by R be made from her estate.
56 It is the view of the Tribunal that the principal purpose of the gift as it is articulated by R, namely the carrying out of his father's wishes, is a matter to be resolved in the late father's estate and not the estate of M.
57 R accepts, and this is evidenced in the affidavit and statement of assets and liabilities he lodged with the Supreme Court as executor of his late father's estate, that the investment account, which represents the proceeds of the sale of the jointly owned property, became wholly the property of M on her husband's death.
(Page 11)
58 Whatever the father's intent and however it was expected that the sale proceeds were to be invested, the fact is that the proceeds were ultimately placed in the joint ownership of M and N which reflected how they had owned the property.
59 It cannot now be said, for the purposes of a gifting application under the GA Act, that half the proceeds of the sale of the property do not really belong in the estate of M but belong to the father and should be distributed according to his wishes.
60 The other reasons put by R and G of why the gift should be allowed, are in the Tribunal's view, subsidiary to the main purpose just described and are not of themselves fully formed or costed to satisfy the Tribunal that the gift should be authorised.
61 The remaining 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 made by R.
62 For these reasons the application by R 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.
63 The Tribunal has therefore decided to confirm the order made on 12 June 2003 appointing R as M's administrator. The order does not include an authority to make a gift from the estate of M.
I certify that this and the preceding [63] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR J MANSVELD, MEMBER
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