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 of that order to have the Tribunal authorise the transfer of funds of the represented person into a trust.
The application for review was heard on 12 May 2010. The Tribunal adjourned for further written submissions to be filed on 25 May 2010 after which time the decision was reserved.
This written decision is produced pursuant to s 76 of the State Administrative Tribunal Act 2004 (WA).

Background

MD (represented person) is 73 year old retired business man. He is a widower and has three sons; G, A, and M.
In October 2008, an urgent application was made to the Tribunal by DF, the represented person's accountant (accountant), seeking the appointment of an administrator of the represented person's estate. Staff at the represented person's accountants had become concerned about his ability to make financial decisions. The firm had been alerted to large and uncharacteristic withdrawals from bank accounts of his family trust and family superannuation fund. Significant funds were said to have been transferred to a friend of the represented person, EL.
At the first hearing, the represented person denied he had any impairments of his memory or decisionmaking. He was accompanied to the first hearing by EL who said she was his fiancée and supported his view that he was able to make reasonable judgments about his estate.
Orders were first made appointing the accountant, then the Public Trustee and finally the sons of the represented person as the administrators of his estate. Specialist capacity assessments of the represented person had confirmed a diagnosis of dementia believed to be of the Alzheimer's type.
Some months after the appointment of the Public Trustee as administrator, two sons of the represented person, A and G sought review of that order and were subsequently appointed the joint plenary administrators of the estate of the represented person. The sons said their relationship with their father, which had become strained due to the application before the Tribunal, had been re-established and that he now wanted them to act as the administrators of his estate. The represented person confirmed this in the hearing. He had found the appointment of an administrator from outside his family intrusive and had become very distressed by it.
The Tribunal found that although there were potential conflicts to be managed these did not prevent the appointment of the sons as the administrators of the estate of their father. Although they must be 'suitable' there is no specific legislative prohibition in s 68(3) of the Guardianship and Administration Act 1990 (WA) (GA Act) for the appointment of an administrator in conflict with the represented person. This is in contrast to the provisions for the appointment of a guardian (s 44(1)(b)) where a guardian cannot be appointed if their interests conflict with or may conflict with those of the represented person. The distinction may reflect an appreciation of the innumerable, apparent and potential conflicts of interests within families. Although the sons were to replace their father as directors of his corporate entities and one son's company owed money to his father's company, the Tribunal found that the potential conflicts could be managed. The loan was documented and repayments were being made. It seems the family had always had intertwined business arrangements but all the sons acknowledged that the assets of the various entities reflected their father's personal wealth although not within his legal estate. The possible conflicts between the son's roles as administrators of the estate and as directors of those entities should be understood in the light of this understanding. The Tribunal found the sons were committed to acting in the best interests of their father and their appointment was his expressed wish. Additionally and importantly, the examination of accounts by the Public Trustee provided scrutiny of the management of the estate by the appointed administrators.

Current review

At the time of this present review, the represented person has been admitted to a secure aged care facility because of deterioration in his functioning. As he can no longer live alone safely and his driver's licence has been suspended, the administrators arranged the sale of both his house and his car. The net proceeds of the sale of the house are $1.3 million after the payment of the residential care facility bond.
The sale proceeds of the house and car and superannuation funds in term deposits are the only assets of any significance which are outside company and trust structures established by the represented person while he was in business and prior to his loss of capacity.
The proposal from the administrators is that the administration order be varied to include the following:
That the administrators be authorised to transfer to the MD Maintenance Trust the proceeds from the sale of:
a)the represented person's residence;
b)the sale of the represented person's motor vehicle; and
c)withdrawal of superannuation entitlements from the D Family Superannuation Fund.
As described in the written submissions, the MD Maintenance Trust is a special purpose trust, the special beneficiaries of which are proposed to be the represented person and MD Nominees Pty Ltd which is a company, of which the represented person was a director (until replaced by one of his sons) and sole shareholder. It is intended that the interest income earned from the funds transferred to the trust are then distributed to both the represented person and to the company thereby reducing the represented person's personal income tax liability.
The administrators are proposed as appointors and trustees of the trust. During the represented person's lifetime, the income of the trust is to be applied solely to the represented person and MD Nominees Pty Ltd at the trustee's absolute discretion. The capital of the trust can only be applied to the represented person at the discretion of the trustees. It is said that during the represented person's lifetime the trust may not be terminated. On the represented person's death the trust is said to resemble a discretionary trust. The general beneficiaries include, but are not limited to, family members of the represented person.
It is submitted that the advantages of transferring the funds to the trust include the tax saving, said to be in the order of $44,000 over a period of four to five years and protection of the assets of the represented person.
Due to his condition and associated behavioural problems, the administrators are concerned that the represented person may be at risk of being sued if he injures another person. It is also said that he is vulnerable to poor financial decisionmaking and may be at risk of being 'hoodwinked'. The transfer of his remaining assets into the trust is intended to protect him from these possibilities.
The concerns of the administrators in respect of the protection of the represented person from poor financial decisionmaking must be seen in the context of the history of the original application brought as it was because of allegations of financial abuse of the represented person. In their further written submissions for the review, the administrators state that the estate of the represented person diminished by approximately $600,000 in the two years prior to the administration order and significant funds were transferred from the estate of the represented person to EL. However, the administrators say that they consider any future claims from EL on the estate to be unlikely and if made would be strenuously resisted by the administrators. Although there had been significant expenditure on her behalf, including cash payments, in the years prior to the administration order being made, the administrators report that the represented person's contact with EL diminished in the intervening period after the first hearing of the original application in 2008 and there is now little if any contact.
On review of any order, either a periodic review or on application as this one is, to make an administration order, the Tribunal must be satisfied that the represented person remains a person for whom an order can be made, that he is unable, by reason of a mental disability, of making reasonable judgments about his estate and is in need of an administrator of his estate.
The estate of the represented person, as reported in Form A and Account No 1 submitted to the Public Trustee, includes bank accounts, the represented person's house valued at $1.7 million (which has since been sold) furniture and personal effects, investments in the MD Family Trust, shares in MD Nominees Pty Ltd and BW Holdings Pty Ltd. The represented person is a beneficiary of the D Family Superannuation Fund. Total assets are reported as just under $4 million. The represented person's income is reported as pension payments from the D Family Super Fund. Other receipts reported in the period of Account No 1 include the proceeds of sale of the motor vehicle and loans from the MD Family Trust. In Form A submitted in July 2009, the liabilities of the represented person are noted as tax owing not yet assessed and a loan account to BW Holdings Pty Ltd.
No issue is taken with the represented person's incapacity or the need for administration of his estate. The only issue raised by the applicants for review is for the authorisation of the transactions as outlined.

Issues for determination

The issues for determination on the application for review are as follows:
•Are the proposed transactions of a kind which require the authority of the Tribunal because they come within the meaning of s 72(3) of the GA Act;
•If they are, should the Tribunal authorise them; and
•Is there any other provision by which the transactions may be authorised?

Are the proposed transactions of a kind which require the authority of the Tribunal because they come within the meaning of s 72(3)of the GA Act

The application for review has been brought by the administrators on the basis that the order prevents them from making the transfers to the trust as proposed.
The existing order provides pursuant to s 71(5) of the GA Act for the administrators to expend $1,000 on gifts on behalf of the represented person. The submission is that further authority of the Tribunal is required pursuant to s 71(5) to make the transfers to the special purpose trust.
Section 72(3) provides that an administrator shall not, without authority of the Tribunal, make a payment or disposition of a charitable benevolent or ex gratia nature; or make a payment in respect of a debt or demand that the represented person is not obliged by law to pay.
Section 71(5) provides that the Tribunal may take a liberal view of the best interests of the represented person and may, if the circumstances so require, empower an administrator to make a payment or enter into a transaction of a kind described in s 72(3) on behalf of the represented person.
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).
The Tribunal said at [20]:
The Public Trustee submits, and the Tribunal agrees, that the payments are not charitable. Leaving aside for now whether they are 'benevolent', there is scant authority on the meaning of an ex gratia payment and none that the Tribunal can find in the context of the GA Act. However, the Tribunal accepts the Public Trustee's submission that the payment made here are 'ex gratia' in nature. The Oxford English Dictionary defines ex gratia as:
Done, given etc as a favour or without (esp. legal) compulsion.
The Tribunal concluded that the administrators required the authority of the Tribunal under s 75(1) in order to make the payments made but the Tribunal could not authorise them retrospectively.
In FS [2007] WASAT 202, the Tribunal, after discussing the obligations of an administrator to act in the best interests of the represented person having regard to family and cultural circumstances in respect of expenditures from the estate, said at [141]:
It should be said that reading s 70 in this way cannot and does not weaken the provisions of s 72 of the GA Act. Whether a payment is characterised as of a charitable, benevolent or ex gratia nature, and therefore needs to be approved by the Tribunal, is determined ultimately by the facts of the particular case.
Later at [144]:
The Public Trustee can ultimately make application for gifting (ex gratia or benevolent payments) under s 72 of the GA Act should a payment, in his view not be able to be categorised in another way.
The transactions proposed in the present case are not dispositions of a charitable nature since the legal meaning of that word is settled. (The trust deed itself provides for 'any charity' and 'educational, religious or sporting institution or fund', which might have benevolent purposes, within the class of general beneficiaries but it is not suggested by the applicants that the trust is a charitable trust.)
There is no legal compulsion on the administrators to dispose of the funds in the way proposed. In this sense, the transactions fall within the broad range of dispositions which might be characterised as ex gratia in nature.
Any construction of the meaning of ex gratia in s 72(3) must occur in light of the purpose of that provision and any construction of the section must be consistent with the language and purpose of all of the provisions of the GA Act, Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 recently cited by Court of Appeal when considering the proper approach to statutory construction in The State of Western Australia -v- AH [2010] WASCA 172 per Martin CJ at 176. Further, at [177]:
By s 18 of the Interpretation Act 1984 (WA), in the interpretation of a provision of a written law, a construction that would promote the purpose or object underlying the written law (whether that purpose or object is expressly stated in the written law or not) shall be preferred to a construction that would not promote that purpose or object.

The legislative intent of the GA Act was considered by EM Heenan J in the Full Board case. His Honour said at [43]:
In this regard it seems essential to appreciate that the Guardianship and Administration Act is intended to "provide for the guardianship of adults who need assistance in their personal affairs, for the administration of the estates of persons who need assistance in their financial affairs ... and to make provision for a power of attorney to operate after the donor has ceased to have legal capacity, and for connected purposes" (see the long title to the Act). From this, and an examination of the entire Act, it is obvious that the legislation is designed for the protection of adult persons whose faculties may be impaired, for any reason, and who are therefore in need of protection and assistance so as to ensure that their financial affairs and other welfare is not jeopardised by improvident, or ill-considered personal decisions or action, or by unscrupulous or ill-advised influence of relatives, friends and others who may deliberately or inadvertently exploit the vulnerability of the person in need of assistance and protection.
In Perpetual Trustees, the Full Tribunal analysed s 72(3) in light of the overall intention of the GA Act as a whole and referred to the Full Board case at 44 where His Honour states:
… The emphasis is on conserving the property and financial resources of the disabled person to ensure that they are available for his or her own needs, welfare and enjoyment and are not dissipated. These seem to be the primary objectives of the legislation and all the provisions of the Act can be seen to have meaning and effect as leading towards the achievement of those purposes. In the main, these will be accomplished by conserving the resources and property of the person under administration for use to his or her own advantage or, in cases where expenditure or imminent disposition of property are necessary or advantageous, by scrutinising the transaction to see that it is justifiable or provident having regard to all the circumstances, bearing always in mind the continuing and future needs of the person whose estate is under administration. (Emphasis added.)

The Full Tribunal went on to say at [61]:
Seen in that light, s 72(3) of the GA Act makes perfect sense. Its purpose is, as part of the Scheme of the GA Act, to preserve the represented person's estate, so as to ensure he has adequate means to maintain himself for his lifetime. The GA Act in general, and s 72(3) in particular, are to ensure that the represented person's estate is not "dissipated'' but ''conserved''. Although the GA Act gives a plenary administrator broad powers to act, an administrator must do so, subject to the GA Act and its general primary objective to ''conserve'' the represented person's estate, to apply it to the ''needs, welfare and enjoyment'' of the represented person, and not to ''dissipate'' the estate. In this way, with this restriction on what are otherwise broad powers, an administrator fulfils its duty under the GA Act to ensure, as best as the administrator possibly can, and within the context of the value of the represented person's estate, that the represented person has adequate means for their lifetime. (Emphasis added.)

To construe 'ex gratia' narrowly given the wide powers of a plenary administrator as provided for in s 71 would enable an administrator to make gifts to themselves (or others) without supervision of the Tribunal. Although on examination of the accounts under s 80, the Public Trustee may determine a loss or diminution of the estate for which the administrator is liable unless relieved of that liability by the Public Trustee, this would be after the event. It cannot have been intended that this was the only mechanism of restraint on such a transaction by the administrator. A narrow interpretation of 'ex gratia' is not consistent with the overall intention of the various provisions of the GA Act.
Gift is defined in the Oxford Dictionary as 'a thing given or a present'. The list in s 72(3) refers to the purpose of the thing given; be it for charitable, benevolent or ex gratia purpose. I consider that the meaning of ex gratia extends to all payments or dispositions of the represented person's property which are not compelled by law but are made at the choice of the administrator or where the represented person does not get financial value which are not characterised as benevolent or charitable.
When understood in this context the prohibition on the type of payments listed in s 72(3) is protective of the estate by preventing such payments or dispositions, whatever the purpose. There are few clues within the GA Act itself regarding the scope of the prohibited transactions. The reference to 'gift' in s 82(1) and 'consideration for a disposition being adequate' (in a case where a disposition was not a gift) in s 82(2)(b) in the provisions for setting aside transactions which the person has made during a time of deemed incapacity, suggests a wide scope to the meaning of ex gratia. The power in an administrator to give or receive money for equality of exchange or partition (Sch 2 Pt A cl 11 of the GA Act) also gives some support to the notion of the represented person receiving value in a transaction.
The transactions considered by the Tribunal in EH and in the Perpetual Trustees cases involve transfers of funds of the represented person to other persons. The represented person received no direct financial benefit in either case.
In the present case, the transfer proposed is to a trust where the represented person's transferred property vests in the trustees, for his beneficial interest as the beneficiary of the trust both personally and as the sole shareholder of MD Nominees Pty Ltd, the other income beneficiary. He will retain the beneficial interest in the funds transferred.
Although the represented person has an equity as a discretionary beneficiary of the trust, it is not a legal estate in the funds as at present. This is a lesser interest or perhaps in the language of s 80(4) of the GA Act a 'diminution' of his estate. The trustees have the discretion to apply the income and the capital to the represented person, but he has no right to the distribution.
Having considered the overall intention of the GA Act as outlined, I conclude that the proposed transfers are dispositions of an ex gratia nature and require the authority of the Tribunal pursuant to s 71(5).

Should the Tribunal exercise the discretion to authorise the proposed transactions pursuant to s 71(5)

In exercising this discretion, the Tribunal is to take a liberal view as to the best interests of the represented person and if the circumstances so require, make an order empowering an administrator to make a payment or enter into a transaction of the kind described in s 72(3).
One of the arguments in support of the proposal is that if the represented person, were capable of making this decision himself he would arrange his affairs to minimise his taxation liability in the way proposed. Section 70 obliges an appointed administrator to act in the bests interests of the represented person including but not limited to taking into account the represented person's wishes as expressed or gathered from the person's previous actions, and to act in manner which is least restrictive of his rights, while consistent with his proper protection.
The proposal is likely to be consistent with the past actions of the represented person in the arrangement of his affairs since these remaining funds, the subject of the proposal, are the only assets of any significance which remain outside trust or company structures. Although it should be noted that the represented person held those assets personally and there is no evidence he intended to place the assets in a trust structure prior to his incapacity. It is argued he will receive both protection from claims against his estate and a saving in personal tax liability.
It is argued that the funds of the represented person are in excess of those required to meet his needs. It is said that although the represented person has dementia, he should still have the flexibility to have his affairs managed in a tax effective way. There is a benefit to the represented person in the arrangement proposed but this is not the same as being in his best interests.
Although the represented person, while capable and while in business, arranged his financial affairs to minimise his taxation liability, he retained during that time effective control despite the legal fiction that his assets were controlled by others. This was agreed by the applicants in the hearing before the Tribunal prior to their appointment when they acknowledged the assets of various entities reflected, in fact, their father's personal wealth. These are common business arrangements entered into for tax minimisation purposes and despite the legal arrangements the 'controlling mind' exercises control over the assets. This is no longer the case. The represented person no longer has capacity to manage or determine his financial affairs either through the existing entities or through the proposed one. He is and will be reliant on the administrators and the trustees to protect his interests. It is accepted that his sons as directors of his companies and trustees of his family superannuation fund and his administrators will endeavour to act in his best interests even given the inherent conflicts which may arise in holding these multiple roles.
Having said that, the proposal is not necessary to protect the represented person from his own impaired financial decisionmaking since the administration order provides that protection for the represented person. The restrictions in the GA Act on the decision-making of the represented person as provided for in s 77 and the substitution of the authority of the administrator in s 71 provides that protection. Section 77 provides that so long as there is in force a declaration that the represented person is in need of an administrator of his estate he is incapable of entering into any contract or making any disposition in respect of his estate or part thereof.
Equally, the Tribunal was not persuaded that the remote risk of claims against the represented person's estate warrants the proposed transfer of his remaining assets from his legal estate.
In respect of other possible claims on his estate or deceased estate, the purpose of the administration order is the protection of the represented person's assets in his lifetime rather than defeating possible, if unlikely, claims on his deceased estate in the future.
The protective intent of the legislation is also provided through the annual examination of accounts of administrators filed with the Public Trustee pursuant to s 80 and the overall supervision of the administration order through review by the Tribunal of orders either periodically or on application (s 84, s 85 and s 86.) The disposition of the assets of the estate to the trust effectively ousts the protective regime provided for in the GA Act in respect of those assets.
Property transferred to a trust vests the legal estate in that property in the trustees who are subject to the provisions of the trust deed and ultimately to the supervision of the Supreme Court. The trust deed in this instance, for example, includes powers of delegation (cl 10.7) and limitation on liability (cl 11.3). These terms are in contrast with the nondelegable functions of administrators (although they may employ agents) and their strict liability to the estate as provided for in (s 80(4)). Although trustees are accountable to the Supreme Court for the management of a trust, in practical terms, the accountability mechanisms afforded by the administration order through the mandatory filing of annual accounts with the Public Trustee and the examination of the accounts provide greater protection for a represented person within that regime than as an incapable beneficiary of a trust.
In the current order, the Tribunal authorises the administrators to make gifts on behalf of the represented person up to an amount of $1,000 per year. Empowering administrators to make gifts to family members or friends in this way enables the represented person to continue a past practice on family or other occasions. This is considered a way in which the represented person can continue to participate in the life of the community (s 70(2)(b)) and consistent with the wishes of the represented person (s 70(2)(e)) which would otherwise be denied him or her because of the prohibition in s 72(3). The transactions proposed are of a different character and while I do not doubt the administrators propose the creation of the trust in what they regard as the best interests of their father, for the reasons set out above, the transactions proposed are inconsistent with the protective scheme of the GA Act. Therefore, it is not in the best interests of the represented person that the discretion be exercised for this purpose.

Should the Tribunal make an order pursuant to s 72(2) permitting the transfer as necessary or expedient for the proper administration of the estate?

Section 72(2) provides that the Tribunal may make any other order that it thinks necessary and expedient for the proper administration of the estate of the represented person.
Whether the proposed disposition could be sanctioned under this provision or not, it is useful to ask what would be required in the proper administration of the estate if and when the proposed transactions took place. The funds the subject of the proposed transfer are the only assets of any significance left in the estate. Following the proposed transfers, the remaining legal estate under administration would be the income received (payable at the discretion of the trustees) and the personal effects of the represented person. The result of the proposed transfer of the remaining assets in the estate of the represented person to the trust effectively leaves him with little estate requiring management by an administrator under the GA Act.
The fact that in this case, the administrators and the trustees are the same persons; the sons of the represented person, may obscure the fact that the property the subject of the transfer has passed out of the legal estate of the represented person putting it beyond the control of the administrators. Such a transaction could not be described as necessary or expedient for the proper administration of the estate.
Clause (g) of Part B of Schedule 2 of the GA Act states that the Tribunal may, where in its opinion any disposition or transaction is expedient in the administration of the estate of the represented person, or would be in that person's best interest, confer upon the administrator the necessary power for the purpose on such terms and conditions (if any) the Tribunal thinks fit.
It might be argued that the transactions proposed are expedient, to arrange the represented person's affairs in the way proposed but they do not come within an order which might be made pursuant to this provision since it requires that the transaction be expedient in the administration of the estate. The same analysis applied to the whether the transactions could be authorised pursuant to s 72(2) is applicable here. The transactions propose to take the funds the subject of the transactions out of the legal estate of the represented person. In such circumstances the transactions are neither necessary nor expedient in the proper administration of the estate.
For these reasons the application for authority of the Tribunal pursuant to s 71(5) to transfer funds of the represented person as proposed is refused.

Order

On review of an order dated 29 March 2009 determined by Member F Child on 17 September 2010, it is ordered that:
The order be revoked and an order in the following terms be substituted for it:
1.GWD of [address deleted] and ALD of [address deleted] be appointed joint plenary administrators of the estate of the represented person with all the powers and duties conferred by the Guardianship and Administration Act 1990.
2.The administrators are authorised to expend up to an amount of $1,000 per annum on gifts on behalf of the represented person.
3.The order is to be reviewed by 17 September 2015.

I certify that this and the preceding [69] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MS F CHILD, MEMBER