NSQ (Review Administration) - [2011] TASGAB 4

GUARDIANSHIP AND ADMINISTRATION BOARD
HOBART

NSQ – Rejection of application to review an administration order

REASONS FOR DECISION

Neutral citation: NSQ (Review Administration) [2011] TASGAB 4

Anita Smith (President)

Date of decision: 4 March 2011
Request for statement of reasons: 13 April 2011
Statement of reasons provided: 19 April 2011

Administration – rejection of application to review administration – tenants in represented person’s property complaining that administrator’s actions in charging market rental had detrimental impact on their wellbeing – whether administrator acting in accordance with duties

Guardianship and Administration Act 1995 sections 11, 51

On 27 November 2009, the Board appointed DC as administrator for the represented person, NSQ, for 3 years. On 25 February 2011 HLC and EKX applied to the Board for a review of the order on the grounds that the administrator was making unreasonable demands for money from HLC and CC who are tenants in a property owned by the represented person. HLC is the represented person’s mother and EKX is his sister.
In the original application, the administrator (who was also the applicant) noted that the represented person owned a property at North West, Tasmania valued at approximately $220,000.00 with a mortgage of approximately $123,800.00 and earning rental from HLC at $280.00 per fortnight. The applicant noted that the represented person had a strong desire to support his mother by housing her comfortably in the property. With his appointment as administrator, DC took over responsibilities as landlord for the property and has the same powers as the represented person would have, if he had capacity, to lease or sell the property. HLC supported DC’s appointment as administrator.
On 8 January 2010 the administrator wrote to the tenants confirming an agreement to increase rental to $170.00 per week. On 18 January 2010 the Board received a letter from the represented person’s partner, EN noting some financial difficulties experienced by her and the represented person. In particular, she noted that the shortfall between mortgage outlays of $500 per fortnight and rental income of $340 per fortnight was causing financial stress for the household. She also noted that the generous rental was struck by NSQ prior to his illness when both partners were working full time. On 5 February 2011, the tenant’s solicitor wrote to the administrator objecting to the rental increase and anticipating legal action if the rent is increased. The administrator kept the Board informed of all of these developments.
The administrator provided to the Board a cash flow forecast for 1 July 2010 to 30 June 2011 which notes that expected income to the estate is $24,386.00 (including the $7280.00 rental) and expenditure (including rates, insurance and water charges for the North West property) is $31,914.03.
The administrator has been successful in obtaining disability payments from the represented person’s superannuation policies and has been able to extinguish the represented person’s debts, which has eased his financial pressures to some extent. However, the shortfall of $7528.00 per annum between income and expenditure means that he is eroding the capital value of his estate.
An appraisal for the North West property notes that market rental would be about $220 to $240 per week. This means that while rental was $140 per week the represented person was subsidising HLC and CC to an annual value of between $4160.00 and $5200.00. That sum would go a long way towards addressing the shortfall of $7528.00 per annum and preserve the represented person’s capital for a much longer period. Once the capital is expended, the administrator will be required to sell the North West property. The administrator envisages that this will occur within the next 2 or more years.
The application for review states: “Unhappy with current administrator. Demanding large sums of money for NSQ’s care with no explanation.” “HLC and CC reside in the property owned by NSQ and pay rent. Since the current administrator DC has been appointed there have been constant demands for money from HLC and CC above rent agreed to by NSQ (before he took ill). (1) Demands for $20,000.00 cash (no reason given) (2) 6 months rent in advance and not able to say whether would still need to pay fortnightly also (3) Rent increase 40% from $140 p/w to $230 p/w. HLC and CC are pensioners and this would definately (sic) be against NSQ’s wishes. (4) Demand for $154.44 in transaction fees for Centrecare (sic) transactions.” The application does not nominate any substitute administrator.
By email dated 25 February 2011 to the Board, the administrator denied demanding $20,000.00 of the tenants. He agreed that he asked for rent in advance but once this was refused, he did not take any further action. He agreed that he had increased rent to a market rental. He indicated that the request for $154.44 was made but will not be pursued.
An administrator must balance the represented person’s wishes, his best interests and his freedom of decision and action. It is clear that his wishes were to house his mother at a reduced rental. Fundamental changes have occurred since he implemented those wishes. He is has lost capacity to make financial judgments, he no longer working full time and his finances are managed by an administrator. In this case, those historical wishes have less importance than financial necessity and his best interests.
None of the administrator’s actions raised by HLC and EKX are inconsistent with the represented person’s best interests, nor the responsibilities of an administrator. A request for $20,000.00 by an administrator, if made, seems somewhat bizarre but from the represented person’s perspective it is relatively harmless and, in any event, denied. The Board is not satisfied that HLC and EKX have made the application out of concern for the represented person’s best interests, but rather in HLC’s interests. The Board is not required to consider HLC’s interests, however, it is clear that the administrator’s actions have also served her interests, because while the property generates a market rental, the necessity to sell the property is delayed and she can remain in the property.
It is an ordinary part of being an administrator/landlord that DC should set a rental and the Board expects that, particularly where an estate is suffering financial stress, a property that can earn income should earn income at a market rate. Disputes about rent are not appropriately dealt with by this Board and should be addressed under the Residential Tenancy Act 1997. The subject matter in the application to review (the administrator’s role as landlord) was canvassed in the original application and there has not been any subsequent change to any material fact. It is appropriate to reject the application for a review pursuant to section 11(13)(a) of the Guardianship and Administration Act 1995.
Further or in the alternative, the application is lacking in substance. Ultimately the application is a grievance about the impact of the administrator’s regular actions upon a third party. It does not raise any changes with regard to the key elements of the order as set out in section 51(1) of the Act and does not demonstrate any inappropriate decision making by the administrator. It is appropriate to reject the application for a review pursuant to section 11(13)(b) of the Act.
HLC and EKX were advised of the Board’s determination by letter dated 8 March 2011. That letter also advised them of the ability to seek a review of this decision by a 3 member panel of the Board. On 18 March 2011 the Launceston Community Legal Centre wrote to the Board indicating that HLC was seeking a review by a 3 member panel but indicated that submissions would be tendered to support the application. Submissions have not been received. A further letter dated 13 April 2011 from the Hobart Community Legal Service indicates that they now have carriage of the matter to appeal the Board’s decision. HLC and EKX may either avail themselves of the option in section 11(14) of the Act to have my decision reviewed by a 3 member panel of the Board or appeal pursuant to section 76 of the Act to the Supreme Court.

Anita Smith
PRESIDENT