MD - [2010] WASAT 132

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: HUMAN RIGHTS

ACT: GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA)

CITATION: MD [2010] WASAT 132

MEMBER: MS F CHILD (MEMBER)

HEARD: 12 MAY 2010

DELIVERED : 17 SEPTEMBER 2010

FILE NO/S: GAA 838 of 2010

BETWEEN: MD
Represented Person
GD
Applicants

Catchwords:

Guardianship and administration - Review of an administration order - Represented person with dementia- Application by administrators for authority to the transfer personal assets of the represented person into a trust - Whether a disposition under s 72(3) of the Guardianship and Administration Act 1990 (WA) - Ex gratia - Authority refused as proposed transaction not consistent with the protective intent of the legislation

Legislation:

Guardianship and Administration Act 1990 (WA), s 44(1)(b), s 68(3), s 69(4), s 70(2)(b), s 70(2)(e), s 71, s 71(2), s 71(2a), s 71(5), s 72(2), s 72(3), s 72(3), s 72(3)(a), s 72(3)(b), s 77, s 80, s 80(4), s 82(1), s 82(2)(b), s 84, s 85, s 86, Sch 2 Pt A cl 11, Sch 2 Pt B cl (g)
State Administrative Tribunal Act 2004 (WA), s 76

Result:

Application dismissed

Category: B

Representation:

Counsel:

Represented Person : N/A
Applicants: Mr D Fry

Solicitors:

Represented Person : N/A
Applicants: Norton & Smailes

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

FS [2007] WASAT 202
Perpetual Trustees WA LTD and the Public Trustee [2009] WASAT 253
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355
Re the Full Board of the Guardianship and Administration Board [2003] WASCA 268
The State of Western Australia -v- AH [2010] WASCA 172

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

The sons of an elderly man with a diagnosis of dementia sought review and an amendment of the order which appointed them as the administrators of his estate to authorise them to transfer his remaining personal assets into a special purpose trust for asset protection and tax minimisation.
Because of the provisions of the Guardianship and Administration Act 1990 (WA) his administrators were prohibited from making a payment or disposition of a charitable, benevolent or ex gratia nature from his estate without the authority of the Tribunal. The Tribunal found that the proposed transaction was caught by this provision as an ex gratia disposition of his estate.
The Tribunal decided not to give the authority sought. Although the Tribunal accepted that the proposed transfer might well have been the wish of the represented person based on his past actions, because he had lost capacity and was subject to an administration order, both he and the administrators were subject to the protective regime of the Guardianship and Administration Act1990. The proposed transfer of the assets of the represented person from his legal estate was not consistent with the scheme of the legislation.

The application

The applicants for review are sons of the represented person who were appointed the joint plenary administrators of his estate by order dated 26 March 2009. They seek review…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: MD [2010] WASAT 132
Case: [2010] WASAT 132
Decision Date: 17 SEPTEMBER 2010

CaseChat Overview and Summary

The case involves the application by the joint administrators of the estate of a represented person with dementia for authority to transfer the personal assets of the represented person into a trust. The application was heard in the Supreme Court of Western Australia. The administrators sought authorisation to transfer the assets to the trust, claiming the transaction was ex gratia and not a disposition under s 72(3) of the Guardianship and Administration Act 1990 (WA).

The court was required to determine whether the proposed transactions constituted a disposition of the represented person's estate under s 72(3) of the Act, and if so, whether the transactions were charitable, benevolent, or ex gratia in nature. The court considered the ordinary and wide meaning of the term 'disposition' and examined whether the transfer of the represented person's funds to the trust created a new interest in the property, effectively reducing the represented person's interest in the funds.

The court found that the proposed transactions were clearly dispositions of the estate of the represented person. The court noted that if the funds were transferred to the trust as proposed, the represented person would have a lesser interest in the funds than the legal estate they currently hold. The court also considered the authority conferred on an administrator under s 71 of the GA Act, which provides that a plenary administrator has wide powers and may perform any function that the represented person could perform if of full legal capacity. However, the court found that if the transfers came within the prohibited transaction in s 72(3), the administrators required the authorisation of the Tribunal. The court held that the disposition of the funds to the trust as proposed was a disposition or payment of a charitable, benevolent, or ex gratia nature, and thus, the administrators could not make the payment without the Tribunal's authorisation.

The court refused the application for authority to transfer the personal assets of the represented person into a trust. The court held that the proposed transactions were clearly dispositions of the estate of the represented person, and as such, the administrators required the authorisation of the Tribunal to make the payment. The court noted that the transactions were not consistent with the protective intent of the legislation and that the represented person's interests were not being adequately protected.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The transactions proposed are clearly dispositions of the estate of the represented person. See for example the consideration of disposition in s 77 of the GA Act in Re the Full Board of the Guardianship and Administration Board [2003] WASCA 268 (the Full Board case), per McClure J at [16]:I see no reason in principle why the word disposition should not be given its ordinary and wide meaning. Subject to one caveat, I agree with the statement of Stirling J in Carter v Carter [1896] 1 Ch 62 at 67 that:"The words 'dispose' and 'disposition' … are not technical words, but ordinary English words of wide meaning; and where not limited by context those words are sufficient to extend to all acts by which a new interest (legal or equitable) in the property is effectually created." If his funds are transferred to the trust as proposed, the represented person will have a lesser interest in the funds than the legal estate which he now holds. A legal estate in the funds is created in the trustees in whom the property vests. (This contrasts with s 69(4) of the GA Act which provides that nothing in the GA Act vests the estate of the represented person in an administrator.) Section 71 of the GA Act sets out the authority which may be conferred on an administrator. In the present case, the joint administrators are appointed with plenary powers. A plenary administrator has wide powers and may perform, or refrain from performing, any function that the represented person could perform, or refrain from performing if of full legal capacity (s 71(2)). An administrator may not make a will or other testamentary disposition and the administrators say that the transaction they propose is not such a disposition (s 71(2a)). This is accepted despite what might be its eventual testamentary effect. On one reading of s 71, a plenary administrator has the necessary authority to structure the affairs of the represented person in the way proposed; to do anything the represented person could do if he were of full legal capacity. However, if the transfers come within the prohibited transaction is s 72(3), the administrators require the authorisation of the Tribunal. The question is whether the disposition of the funds to the trust as proposed is a disposition or payment of a charitable, benevolent or ex gratia nature. In Perpetual Trustees WA LTD and the Public Trustee [2009] WASAT 253 (Perpetual Trustees), the Tribunal did not consider the payment of legal fees of the represented person's mother from his estate as falling within s 72(3)(a) but rather that the payments were a payment of a debt or demand that the represented person was not obliged by law to pay pursuant to s 72(3)(b). Either way, the result is the same; the administrators cannot make the payment without the Tribunal's authorisation. In EH [2008] WASAT 222 (EH), the Tribunal considered the application of s72 (3) to payments made as gifts by administrators to family members (including to themselves) from the estate of the represented person which had been disallowed by the Public Trustee pursuant to s 80(4).