MJB and MMB

[2006] WASAT 154

MJB and MMB [2006] WASAT 154

Last Update :22/06/2006

Jurisdiction:	STATE ADMINISTRATIVE TRIBUNAL	Citation No:	[2006] WASAT 154
Published:
Act:	GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA)
Case No:	GAA:500/2006	Heard:	8 MAY 2006
Coram:	JUDGE J ECKERT (DEPUTY PRESIDENT), MS J TOOHEY (SENIOR MEMBER), MR M ALLEN (SENIOR MEMBER)	Delivered:	15/06/2006
No Pages:	13	Judgment Part:	1 of 1
Result:	The decision made on 16 March 2006 is affirmed
Category:	B

Parties & Catchwords


Judgment

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : HUMAN RIGHTS ACT : GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) CITATION : MJB and MMB [2006] WASAT 154 MEMBER : JUDGE J ECKERT (DEPUTY PRESIDENT)

MS J TOOHEY (SENIOR MEMBER)
MR M ALLEN (SENIOR MEMBER)

HEARD : 8 MAY 2006 DELIVERED : 15 JUNE 2006 FILE NO/S : GAA 500 of 2006 BETWEEN : MJB

Applicant

AND

MMB
Represented Person

Catchwords:

Guardianship and Administration – Administration – Application by husband to be appointed administrator of wife's estate – Review under s 17A of the Guardianship and Administration Act 1990 (WA) by Full Tribunal of decision by single member to appoint Public Trustee as plenary administrator and to revoke enduring power of attorney in favour of husband – Intention to borrow substantial amount of money secured over jointly owned property – Findings that wife is a person who cannot make reasonable judgments in respect of her estate and is in need of an administrator – Finding that husband has a conflict of

(Page 2)

interest between his desire to discharge an existing debt by further borrowings and the financial best interests of his wife – Decision of single member affirmed

Legislation:

Guardianship and Administration Act 1990 (WA), s 3(1), s 4(2), s 17A, s 64, s 64(1)(a), s 64(1)(b), s 64(2), s 68, s 68(1), s 68(1)(c), s 68(1)(d), s 68(3), s 69(3), s 70, s 70(2), s 70(2)(d), s 108(1a)
State Administrative Tribunal Act 2004 (WA), s 27, s 29

Result:

The decision made on 16 March 2006 is affirmed

Category: B

Representation:

Counsel:

Applicant : Mr J Skinner
Represented Person : N/A

Solicitors:

Applicant : Jackson MacDonald
Represented Person : N/A

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

Review of Guardianship and Administration Orders in Respect of MM, Re (2001) 28 SR (WA) 320

Case(s) also cited:

Nil

(Page 3)

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

1 This proceeding involved the review under s 17A of the Guardianship and Administration Act 1990 (WA) by a Full Tribunal (constituted by three members) of a decision of a single member to appoint the Public Trustee as the plenary administrator of the estate of MMB and to revoke an enduring power of attorney made by MMB in favour of her husband, MJB, who had applied to be appointed as the guardian and administrator of MMB. The single member had also dismissed an application by MJB to be appointed as guardian of MMB because there was no need for a guardian to be appointed, but that decision was not contested at the review hearing.

2 It was not in dispute, and the Tribunal found on the evidence, that MMB is a person who is unable, by reason of the mental disability of dementia, to make reasonable judgments in respect of her estate. The principal matters in issue were whether there is a need for an administrator and, if there is, whether MJB should be appointed.

3 The Tribunal decided that, in the light of MJB's desire to increase substantially the borrowings of MJB and MMB secured over the jointly owned home in order to discharge a debt due by MJB to the Australian Taxation Office rather than to realise some speculative share investments to discharge the debt, there was a need for an administrator. However, the Tribunal was not satisfied that MJB was a person who would act in MMB's best interests as required by s 68 of the Guardianship and Administration Act 1990 (WA).

4 The Tribunal affirmed the earlier decision appointing the Public Trustee as plenary administrator and revoking the enduring power of attorney.

Background

5 On 18 January 2006, MJB applied for orders that he be appointed as guardian and administrator for his wife, MMB, pursuant to the provisions of the Guardianship and Administration Act 1990 (WA) (GA Act).

6 The applications were heard on 9 March 2006, before a single member of the Tribunal and on that day the application for a guardianship order was dismissed. The member reserved his decision in respect of the application for an administration order and on 16 March 2006 delivered his decision on that matter.

(Page 4)

7 In relation to the application for an administration order the member ordered that:

"1) The Public Trustee of 565 Hay Street, Perth, Western Australia be appointed plenary administrator for the estate of [MMB] with all the powers and duties conferred by the [GA] Act.

2) The enduring power of attorney (EPA), dated 11 June 2002, by which [MMB] appointed [MJB] to be her attorney be revoked.

3) This order is to be reviewed by 16 March 2008."

8 MJB subsequently informed the Tribunal that he wished to appeal from the decisions made and the matter proceeded as a review of a decision of a single member of the Tribunal pursuant to s 17A of the GA Act, to be undertaken by a Full Tribunal constituted by three members as defined by s 3(1) of the GA Act.

9 A review pursuant to s 17A falls within the Tribunal's review jurisdiction and is by way of a hearing de novo – the purpose of which is to produce the correct and preferable decision at the time of the decision upon the review: s 27 of the State Administrative Tribunal Act 2004 (WA) (SAT Act). The review is not confined to matters that were before the original decision-maker but may involve the consideration of new material. Upon a review the Tribunal may, under SAT Act s 29:

"(a) affirm the decision that is being reviewed;

(b) vary the decision that is being reviewed; or

(c) set aside the decision that is being reviewed and —

(i) substitute its own decision; or

(ii) send the matter back to the decision-maker for reconsideration in accordance with any directions or recommendations that the Tribunal considers appropriate,

and, in any case, may make any order the Tribunal considers appropriate."

(Page 5)

10 The review was heard on 8 May 2006. In submissions filed prior to that date by MJB's solicitors, the Tribunal was informed that no review was sought in relation to the dismissal of the application for a guardianship order. Accordingly, the review proceeded only in respect of the decision made on 16 March 2006 in respect of the appointment of an administrator for MMB.

11 The Tribunal had available to it all the documentary material that was available to the single member at the hearings on 9 March 2006 and 16 March 2006 as well as transcripts of the proceedings on those days. In addition, the Tribunal had the benefit of an affidavit sworn by MJB on 5 May 2006 and the attachments thereto, oral evidence given by MJB at the review hearing, and a report dated 26 April 2006, made by Mr Dennis, a trust manager at the office of the Public Trustee (the Public Trustee report). Mr Dennis also attended the review hearing.

12 At the conclusion of the review hearing the Tribunal announced its decision, which was that the orders made on 16 March 2006 should be affirmed. The following paragraphs are the Tribunal's reasons for that decision.

Consideration

13 Section 64 of the GA Act empowers the Tribunal to appoint a person to be the administrator of the estate of a person if the Tribunal is satisfied that the person:

"64(1)(a) is unable, by reason of a mental disability, to make reasonable judgments in respect of matters relating to all or any part of his estate; and

(b) is in need of an administrator of his estate".

14 The operation of s 64 is subject to the provisions of s 4(2) of the GA Act, which relevantly provides in relation to proceedings concerning the appointment of an administrator that the Tribunal shall observe the following principles:

"(a) The primary concern of the … Tribunal shall be the best interests of any represented person, or of a person in respect of whom an application is made.

(b) Every person shall be presumed to be capable of —

(Page 6)

…

(iii) managing his own affairs; and

(iv) making reasonable judgments in respect of matters relating to his estate, until the contrary is proved to the satisfaction of the … Tribunal.

(c) A[n] … administration order shall not be made if the needs of the person in respect of whom an application for such an order is made could, in the opinion of the … Tribunal, be met by other means less restrictive of the person's freedom of decision and action.

…

(e) An order appointing … an administrator for a person shall be in terms that, in the opinion of the … Tribunal, impose the least restrictions possible in the circumstances on the person’s freedom of decision and action.

(f) In considering any matter relating to a represented person or a person in respect of whom an application is made the … Tribunal shall, as far as possible, seek to ascertain the views and wishes of the person concerned as expressed, in whatever manner, at the time, or as gathered from the person's previous actions."

Capacity

15 MMB is presently 60 years of age and has been married to MJB for approximately 30 years. They have two adult sons, both of whom were notified of the making of the applications and of the review hearing. One son took no part in the hearing on 9 March 2006, but the second son participated by telephone from a prison in which he is serving a term of imprisonment for a breach of a violence restraining order taken out by MJB. That son's interest in the proceedings, as expressed by him on 9 March 2006, was limited to establishing that he could contact, and hopefully visit, his mother at the nursing home in which she has resided since September 2005.

16 The evidence before the single member and the Tribunal at the review hearing, which was not in any way in dispute, was that MMB, after suffering a number of small strokes, was diagnosed in January 2002

(Page 7)

as suffering from early on-set dementia. The disease progressed such that, according to the application form lodged with the Tribunal by MJB, MMB had been incapacitated since June 2002 (in that she had been unable to comprehend details since that time) and unable to communicate orally since 2004.

17 The Tribunal notes that on 11 June 2002, MMB granted unlimited enduring power of attorney (the EPA) to MJB and made a will appointing MJB as her executor and sole beneficiary if he survived her for 30 days, failing which she appointed one of her sons as executor and her two sons as equal beneficiaries. Further reference to the EPA will be made below.

18 An application for residential care completed in August 2004 by her general practitioner at the time, stated that MMB was severely impaired in her ability to reason and communicate; she was very confused and had a profound memory loss. In a report made in January 2006, MMB's present general practitioner stated that she was incapable at that time of making reasonable decisions in relation to her personal healthcare, living situation and financial affairs because of poor cognition and because of being disoriented to time, place and person. The doctor stated that attending the Tribunal hearings would be detrimental to MMB's health because she was in a frail, confused state and a changing environment may cause her more agitation and stress, and that MMB was unable to communicate and was likely to make no contribution to any hearing.

19 For the purposes of s 64, a "mental disability" is defined in s 3(1) of the GA Act as including dementia. On the evidence referred to above, the Tribunal is satisfied, and finds, that by reason of the mental disability of dementia MMB is a person who is unable to make reasonable judgments in respect of matters relating to all of her estate.

Need for an administrator

20 It is well established that a person in respect of whom a finding has been made that she is unable to make reasonable judgments in respect of her estate will usually "need" an administrator – in the sense that there is a need for someone to have formal legal authority to make decisions in respect of the estate due to the person's inability to act on her own behalf: see the decision of the Full Board of the Guardianship and Administration Board in Review of Guardianship and Administration Orders in Respect of MM, Re (2001) 28 SR (WA) 320 (Re MM). However, as the Full Board pointed out, a finding that the person is not able to act on her own behalf in relation to her estate does not automatically mean that the

(Page 8)

person is "in need of an administrator" for the purposes of s 64(1)(b) and s 64(2) of the GA Act. There may be no need for a formal order of administration if, for example, there is "no live issue or foreseeable conflict" in relation to the person's estate, there may be no assets that require administration, or any assets may be managed under some other legal authority – such as an EPA, a formal trust or a court order: Re MM at page 330.

21 According to the Public Trustee report, MMB's estate presently consists of a home owned with MJB as joint tenants (the property), two bank accounts with a total of approximately $1200 credit, and furniture and effects valued at $10 000. She has no income and is reliant on MJB meeting all expenses of her residence at the nursing home. According to the Public Trustee report, the bank accounts are in joint names with MJB and are accessible with one signature, which the Tribunal understands to mean that MJB can solely operate those accounts.

22 The application form filed by MJB with the Tribunal in January 2006 showed that MMB also had investment income of $36 000 per annum, various shares to a value of $10 000, a liability of $51 700 owed to a bank pursuant to a mortgage over the property, and a credit card debt of $5225. The oral evidence of MJB at the hearing on 8 March 2006 was that the credit card debt amounted to approximately $9000. It would seem from the Public Trustee report that no part of that debt is due by MMB.

23 MJB's evidence to the Tribunal at the initial hearings and the review hearing was that since 2002, he has been unable to work because he suffers from depression brought about by MMB's progressive illness and his need to care for her. Accordingly, he has been able to claim on an income protection insurance policy that provides him with an annual income presently of approximately $86 000. The existence of MJB's illness is confirmed by a report dated 1 May 2006 from a medical practitioner (attachment MJB-3 to MJB's affidavit sworn on 5 May 2006).

24 MJB's evidence at the initial hearing as to why he sought to be appointed as administrator of MMB's estate was to the effect that he had mistakenly believed that the income received by him under the insurance policy was not subject to income tax and that, consequently, he had omitted to make provision for tax – as a result of which he now had a debt to the Australian Taxation Office (ATO) of approximately $67 000. He wished to discharge that debt and for that purpose wished to borrow further money secured by the jointly owned property. However, his bank, to which was owed approximately $52 000 secured by a mortgage over

(Page 9)

the property, would not lend him further money and he had sought to borrow from a financier known as Pepper Corporation (Pepper). Pepper was prepared to lend him money, but only if MMB's name was removed from the Certificate of Title for the property so that MJB could grant a mortgage over the property in his name only. The amount to be borrowed from Pepper was approximately $155 000, which would be used as to approximately $52 000 to repay the amount presently owing to the bank, $57 000 to discharge the debt to the ATO, and the balance to be used to discharge the credit card debt and some other unspecified debts that MJB said he had. The Department of Land Administration had resisted an attempt by MJB to remove MMB's name from the Certificate of Title using the authority of the EPA.

25 The Public Trustee report stated that, since the first hearing, MJB had informed the Public Trustee that Pepper was willing to advance him the required funds, with the debt in his name only but with the names of both MJB and MMB remaining on the Certificate of Title.

26 However, Attachment MJB 1 to MJB's affidavit of 5 May 2006 is a document from Pepper to the mortgage broker dealing with MJB indicating that Pepper would be prepared to loan the amount of $155 895, with the borrowers being MJB and MMB, and with security by way of a first registered mortgage given by both MJB and MMB over the property.

27 MJB's evidence to the Tribunal at the review hearing was that borrowing the money from Pepper in the way he described in his evidence was an appropriate way to reorganise his and MMB's financial affairs so as to discharge the ATO debt. He said that he did not know when he might be fit to return to employment, the insurance policy would run until he reached the age of 65 (he is currently 55), and the amount received under the insurance policy would give him enough income to meet the monthly repayments to Pepper.

28 In the course of answering questions put to him by the Tribunal, MJB gave the following additional evidence:

a) MMB does not in fact own shares to the value of $10 000. Rather, the reference to that item in the application form was because MJB owns shares in his name to the value of approximately $20 000 and he regarded MMB as having a half share in them.

b) In addition, MJB owns other shares listed on the stock exchange to the value of approximately $60 000. MJB

(Page 10)

described these as "speculative" and said that he engaged in "day trading" of shares on the stock exchange. The Tribunal understands this to be a reference to short-term trading in shares that are expected to experience price movement to enable a profit to be made from a short-term holding.
c) MJB did not want to dispose of these shareholdings because he did not think that they had "matured" and he thought that profits could be made by holding them for the time being.

d) He did not think it desirable to sell the shares to raise funds to repay the ATO debt without any further borrowings. He said that strategy:

"… leaves me with no investment other than the family home … it makes me asset rich and cash poor … I am trying to juggle balls, as everyone does, without endangering things greatly … basically, I'm really just doing what I've been doing all my life, spending more than I earn and trying to balance it as best … as I can …".

29 It was submitted on behalf of MJB that on the evidence before the single member there was no "need" for an administrator and MJB's application should have been dismissed. Further, the revised proposal from Pepper now involves leaving MMB's name as one of the registered proprietors of the property and MJB would have the power to execute the loan documentation and grant the mortgage to secure the loan in MMB's name pursuant to his powers as donee of the EPA. Accordingly, it was submitted that there is no "live issue" or "conflict" in relation to MMB's personal affairs, in particular in relation to MMB's interest in the property and there is no need for the appointment of an administrator.

30 The Tribunal does not accept those submissions. Although the Tribunal does not need to resolve the point, we consider that there are issues arising from the evidence before us that raise concerns about the validity of the June 2002 EPA. The evidence indicates that MMB's condition was diagnosed in January 2002 and that, on MJB's assertion, she had been unable to comprehend details since that year. Further, the evidence is that by May 2002, MMB's situation had deteriorated such that MJB sought medical assistance because of his reaction to her deteriorating condition.

(Page 11)

31 Further, it is apparent that there is a live issue concerning MMB's interest in the property that must be resolved so that, if necessary, an administrator can either deal with that interest or take steps to protect it if that were thought necessary.

32 Finally, in light of the matters referred to above and because of the views expressed below concerning whether MJB would be an appropriate person to be appointed as MMB's administrator, the Tribunal considers that it would be inappropriate to have decisions made in relation to MMB's interest in the property regulated only by the EPA. We are satisfied that, in all of the current circumstances, there is a need for an administrator to be appointed in respect of MMB's estate.

Should MJB be appointed as administrator?

33 Section 68(1) of the GA Act requires that an administrator be an individual of or over the age of 18 years who has consented to act in that capacity. MJB satisfies those requirements.

34 However, s 68(1) also requires that before appointing a person as an administrator the Tribunal must be satisfied that the person:

"(c) will act in the best interests of the person in respect of whom the application is made; and

(d) is otherwise suitable to act as the administrator of the estate of that person."

35 Section 69(3) also requires the Tribunal to take into account, as far as possible, in relation to determining who should be appointed as administrator, the compatibility of the proposed appointee with the proposed represented person, the wishes of that person, and whether the proposed appointee will be able to perform the functions proposed to be vested in the administrator.

36 In considering whether it is satisfied of the matters referred to in s 68(1)(c) and s 68(1)(d), and in taking into account the matters referred to in s 68(3), the Tribunal is conscious that it has not been able to ascertain the present wishes or views of MMB because of her medical condition; that MJB was her principal carer until her admission to the nursing home in September 2005 and still visits her daily; and that in 2002, MMB appointed MJB her attorney under the EPA and the executor and sole beneficiary of her estate – but subject to the reservations the Tribunal has expressed above regarding the circumstances that prevailed at that time.

(Page 12)

37 Nevertheless, the Tribunal's assessment of the evidence is that MJB has not been entirely candid in his evidence to the Tribunal about his financial position, and that he has found himself in a position of a conflict of interest between his desire to fund the payment of the ATO debt in a particular way and the need to protect MMB's interest in the property. Although MJB said that he was conscious of the conflict of interest and that he had tried to manage it, the Tribunal is not satisfied that he has succeeded in resisting the temptation to put his interests ahead of MMB's in this respect. On his evidence, $60 000 of the share investments are held in speculative mining companies with some element of risk that their value may fall. The Tribunal was provided with no medical evidence as to what MMB's life expectancy may be and is not prepared to accept MJB's evidence that her life expectancy was from one to five years from the date of diagnosis – that is, 2002. In the circumstances, the Tribunal considers MMB's overall situation is somewhat precarious and that her interest in the property needs to be protected. A conservative approach to the asset is, in the Tribunal's opinion, justified.

38 Section 70 of the GA Act requires an administrator "… to act according to his opinion of the best interests of the represented person". Section 70(2) sets out a number of matters that are illustrative of how an administrator may act in a person's best interests. Section 70(2)(d) refers to acting as far as possible " … in such a way as to protect the represented person from financial neglect, abuse or exploitation". The Tribunal does not consider that MJB has in any way attempted to act other than in MMB's best interests in relation to her day-to-day needs. To the contrary, the evidence (which the Tribunal accepts) indicates that he has been diligent and devoted in caring for MMB over the course of her illness. Nevertheless, the Tribunal considers that this is a case in which other options to raise the money to discharge MJB's debt are reasonably available, and that MJB has paid insufficient regard to MMB's position in relation to the property and has devised a solution to his debt problem that meets his needs rather than MMB's.

39 For the reasons set out above, the Tribunal is not satisfied that MJB is a person who will act in MMB's best interests in relation to the property and, accordingly, it would not be appropriate to appoint MJB as the administrator of MMB's estate.

40 The Tribunal considers that it is appropriate that the Public Trustee be appointed as the plenary administrator of MMB's estate for the time being. We observe that such an appointment does not rule out forever any transaction that might involve MMB's interest in the property. It will

(Page 13)

always be open to MJB to present proposals to the Public Trustee to deal with their overall financial position and it would be open to the Public Trustee to independently assess the merits of any such proposal in the light of further information that will be available regarding MMB's financial needs and life expectancy.

41 Section 108(1a) of the GA Act requires the Tribunal, when the continued operation of an enduring power of attorney would be inconsistent with the functions of an appointed administrator, to revoke the power of attorney or vary it to remove the inconsistency. Having appointed the Public Trustee as plenary administrator of MMB's estate, the continued operation of the EPA in favour of MJB would be inconsistent with that appointment and it is, therefore, necessary to revoke the EPA.

42 The Tribunal's conclusion is that the orders made on 16 March 2006 should be affirmed.

Orders

43 The orders made by the Tribunal on 16 March 2006 are affirmed and are as follows:

1. the Public Trustee of 565 Hay Street, Perth, Western Australia be appointed plenary administrator of the estate of the represented person with all the powers and duties conferred by the Act;

2. the enduring power of attorney dated 11 June 2002, by which MMB appointed MJB to be her attorney, be revoked; and

3. this order is to be reviewed by 16 March 2008.

I certify that this and the preceding [43] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

___________________________________

JUDGE J ECKERT, DEPUTY PRESIDENT