PN
[2008] WASAT 309
•10 DECEMBER 2008
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: HUMAN RIGHTS
ACT: GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA)
CITATION: PN [2008] WASAT 309
MEMBER: MS J TOOHEY (SENIOR MEMBER)
MS F CHILD (MEMBER)
MS J STANTON (SENIOR SESSIONAL MEMBER)
HEARD: 10 SEPTEMBER 2008
DELIVERED : 10 DECEMBER 2008
FILE NO/S: GAA 680 of 2008
BETWEEN: PN
Represented Person
Catchwords:
Administration Represented person resident in accommodation managed by Disability Services Commission Finances managed by Disability Services Commission Internal and external procedures and controls Whether informal arrangement or administration order in best interests of represented person Relevant considerations Appointment of Public Trustee as plenary administrator in best interests in all the circumstances
Legislation:
Disability Services Act 1993 (WA)
Financial Management Act 2006 (WA)
Guardianship and Administration Act 1990 (WA), s 4, s 40, s 64, s 64(1), s 77(1), s 77(2)
State Administrative Tribunal Act 2004 (WA), s 78(1)
Result:
Public Trustee appointed plenary administrator for 12 months
Category: B
Representation:
Counsel:
Represented Person : N/A
Solicitors:
Represented Person : N/A
Case(s) referred to in decision(s):
PN [2008] WASAT 158
PN [2008] WASAT 32
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
The Public Advocate asked the Tribunal to appoint an administrator for PN, a 31‑year‑old man with an intellectual disability who lived in accommodation managed by the Disability Services Commission and whose financial affairs were managed by the Disability Services Commission.
The Disability Services Commission provided the Tribunal with extensive information about management of residents' finances, including about internal and external auditing procedures and recent changes to residents' bank accounts which enabled them to earn interest on their funds.
The Tribunal acknowledged the accountability measures implemented by the Disability Services Commission but considered that PN's best interests were served by the appointment of an administrator who was independent of his carers. Factors the Tribunal took into account included that PN had a relatively large bank balance; there was the potential for conflict of interest in decisions about matters such as holidays and overseas travel; and PN had no family who might provide some independent scrutiny of the informal management of his estate.
The Tribunal appointed the Public Trustee plenary administrator for PN. The Disability Services Commission indicated it would consider ways of dealing with potential conflicts of interest and so the Tribunal made the appointment reviewable in 12 months.
Background
PN is a 31‑year‑old man with an intellectual disability who lives in supported accommodation managed by the Disability Services Commission of Western Australia (Commission). His family has not contacted him for many years. He was brought up by foster parents who no longer have contact with him.
The Public Advocate was appointed limited guardian for PN in August 1997. In January 2008, the Public Advocate's appointment was revoked and ST, a community guardian recruited by the Public Advocate, was appointed in her place.
ST's initial appointment was as limited guardian with authority to consent to treatment within the meaning of the Guardianship and Administration Act 1990 (WA) (GA Act). The appointment was for three months pending further information as to whether ST needed additional authority in relation to medications used to restrain PN. The Tribunal's written reasons were published as PN [2008] WASAT 32.
On 27 May 2008, the Tribunal gave ST additional authority in relation to restraint. Its written reasons were published as PN [2008] WASAT 158.
In the course of the guardianship proceedings, questions arose as to how PN's finances were being managed and whether he was in need of an administrator. The Tribunal referred the matter to the Public Advocate for investigation and asked her, if necessary, to lodge an application for the appointment of an administrator.
On 27 March 2008, the Public Advocate lodged an application for the appointment of an administrator for PN, proposing the Public Trustee be appointed. The Tribunal subsequently made orders for the Commission, the Public Trustee and the Public Advocate to file written submissions about the management of PN's estate.
Following her investigation, the Public Advocate advised the Tribunal that she had obtained further information from the Commission about the management of PN's funds and she wished to reserve her recommendation as to whether an administrator should be appointed until after the Tribunal hearing when the Commission would be providing further information.
These written reasons are prepared at the request of the Public Advocate pursuant to s 78(1) of the State Administrative Tribunal Act 2004 (WA) and reflect brief oral reasons given at the conclusion of the hearing on 10 September 2008.
It should be noted that there have been substantial changes to interest rates since the Tribunal's decision on 10 September 2008.
PN's estate
PN's fortnightly income of approximately $750 comprises a disability support pension, mobility allowance and wages. Over the years, he has accumulated savings of approximately $14,500, which is now held in two Westpac accounts.
PN's bank accounts are held in his own name at the local Westpac branch. In accordance with Commission policy, all withdrawals require approval; the larger the withdrawal, the more senior the approving officer. For example, the Local Area Supervisor of PN's group home has authority to withdraw up to $500 on his behalf.
All purchases over $5 require a receipt. Records of receipts and cash transactions are kept on accounting software. Withdrawals are made on PN's behalf to meet costs relating to periodic accounts such as his share of a Foxtel subscription and cat food for the group home's pet cat, special one‑off purchases such as furniture and clothing, holidays, and board and lodging. PN also has access to up to $100 each week for personal expenses such as haircuts, dining out and entertainment. On important occasions like Christmas and Easter, gifts might be bought for other residents.
The Tribunal has heard that PN enjoys going on holidays. He has been on several trips within Western Australia and, in 2007, paid for a trip to Kuala Lumpur. Matters such as holidays are decided in the course of annual lifestyle planning reviews conducted by Commission staff for each resident.
In order for PN to travel overseas, the Commission obtained his birth certificate from the Registrar of Births, Deaths and Marriages and applied on his behalf to the Department of Foreign Affairs and Trade for a passport which the Commission holds for him. There is no suggestion that PN should not have gone on this trip but the Tribunal notes, firstly, that the Commission is able to obtain a passport without formal authority and, secondly, that the Public Advocate, who has the function of consenting to treatment for PN, was not aware that he was leaving the country or what arrangements might be made if he were to require treatment while overseas.
Management of DSC residents' funds
The Commission has provided the Tribunal with extensive written and oral evidence about how funds of residents in Commission accommodation are managed.
The Commission manages accounts for approximately 550 residents in accordance with policies and procedures aimed at ensuring compliance with the Financial Management Act 2006 (WA) and the Commission's Accounting Manual. Compliance is subject to regular internal and external audits. Bank statements and related documents are provided to interested family members.
Not all Commission residents have their finances managed in this way: some have their estates managed by the Public Trustee pursuant to an administration order. Circumstances where this might occur include where a large sum of money is involved, such as from an inheritance, or where family members are in conflict about the management of the estate and an independent administrator is considered desirable.
Until recently, those funds managed by the Commission were generally held in Bankwest savings accounts which did not attract account-keeping or other fees. The accounts were established to minimise costs to residents but had the drawback of attracting very low rates of interest, even where the balance was sizeable. After reviewing the arrangements, the Commission decided to transfer residents' funds to Westpac accounts where they would attract increased returns.
As a result of the Commission's review, residents, including PN, now have two Westpac accounts: a Deeming Account earning 1.00% interest on balances up to $2,000 and a Maxi Account (or E‑Saver Account) for balances over $2,000. Maxi Accounts attract interest at rates close to those offered to Westpac customers generally.
The Commission advises the Tribunal that management of residents' funds is guided by policies and procedures including:
(i)the Guardianship and Administration Act 1990 (WA), Disability Services Act 1993 (WA) and Financial Management Act 2006 (WA);
(ii)the Commission's Accounting Manual which sets out detailed procedures for various transactions and limits on authority of various Commission staff;
(iii)Commission policies and procedures including Policy on Employees Maintaining Professional Relationships with Clients, their Families and Carers (2005); Operational Procedures for Addressing Conflicts of Interests (2006); Dignity of Risk and Duty of Care (2005); Individual Service Planning (1999); Participation and Inclusion (2005); Valued Status Policy (1999); and Consumer Participation (1989).
Submissions by the Commission
The Commission submits that the existing arrangements are in PN's best interests and offer a less restrictive means of meeting his needs than an administration order.
The Commission submits that the current arrangement is flexible and responsive to PN's needs. It refers in particular to the following:
(i)the Commission does not charge fees for managing PN's funds and there are no fees for internal or external audits;
(ii)PN has access to a weekly allowance of up to $100 which allows him to make purchases such as personal items and toiletries and to participate in community activities such as shopping and buying himself a cup of coffee afterwards, or dining out;
(iii)the Commission's flexible and accountable administration enables PN increasingly to participate in the community by way of making his own purchases and decisions, and he has been able to take holidays within Western Australia and an overseas holiday to Malaysia in 2007;
(iv)the Commission operates separate 'Client Training accounts' with an upper limit of $500, taken from a person's savings account with approval of the Commission's Accommodation Manager, which can be used where a person needs training and support to exercise their financial responsibilities; this option would be available to PN if he becomes more independent.
Measures to ensure accountability for management of PN's funds by the Commission include the requirement that all handling of his accounts be documented and placed on file, signed by the Local Area Manager, and reviewed every three months. As well, each resident has an annual lifestyle planning review to set goals and make decisions in their 'major life areas' and the family, if there is one, as well as staff who work closely with the resident, are involved in the annual review.
Management by the Public Trustee
If the Tribunal determines it to be in PN's best interests that an administrator be appointed, then the administrator will inevitably be the Public Trustee. There is no‑one else in his life and the Commission is not proposing it be appointed.
The Public Trustee advises that, if appointed, his fees would be:
(i)an income fee of 3.3% on PN's pension, if collected by the Public Trustee;
(ii)an annual management fee of $165 (for assets of $15,000 ‑ $25,000);
(iii)an annual audit fee of $55 ($165 if assets exceed $20,000); and
(iv)a collection fee of 4.4% on any assets realised or collected by the Public Trustee other than the proceeds of a fund, cheque account or savings account held with a bank or other financial institution.
The Public Trustee advises that options for managing PN's affairs would include:
(i)allowing the Commission to collect his pension and apply it to his needs; remitting any surplus over $3,000 to the Public Trustee for investment in the Public Trustee's Common Fund; transferring funds in the Westpac Maxi Account to the Public Trustee's Common Account, currently paying 6.85% on balances up to $39,400; and
(ii)the Public Trustee collecting his pension and paying a 'comfort allowance' to PN, and board and lodging to the Commission; transferring funds in the Westpac Maxi Account to the Public Trustee's Common Account.
The Public Trustee advises that fees would be lower under the first option but, in any event, total fees would be at least $220 per year.
Prior to the hearing, information from the Commission was that interest payable on Westpac Maxi Saver balances under $20,000 was 5.25%, considerably lower than that payable on funds in the Public Trustee's Common Account. The Commission subsequently advised that the rate at 11 August 2008 was 7.05% and, from 11 September 2008, would be 6.80% on an E‑Saver Account, a new product which replaced the Maxi Saver Account. As a result, the difference earned in interest would be negligible as between Westpac and the Public Trustee Common Account.
The principal difference in financial terms between administration by the Commission and by the Public Trustee is that the latter would incur fees of at least $220 per year.
Submissions by the Public Advocate
The Public Advocate submits that, viewed in strictly financial terms, management of PN's funds by the Commission has the advantage of no management fees. It would also have the flexibility of management by people close to PN who are familiar with his needs and can respond readily to his requests.
However, the Public Advocate remains concerned at the potential conflict of interest between the Commission's roles as carer and financial manager. By way of example, if PN needs a carer to accompany him on holiday, with the cost to be met from PN's funds, Commission staff might be compromised in deciding whether someone, and who, should accompany him. A similar conflict could arise in decisions about spending on items for PN's group home.
While acknowledging the accountability measures instituted by the Commission, the Public Advocate remains concerned at the lack of formal legal authority on the part of the Commission when managing PN's affairs.
The Public Advocate submits that the first option suggested by the Public Trustee offers the protection of the lawful authority and formal accountability of an administration order, the flexibility of the current arrangement, with the added benefit of keeping fees to a minimum.
The Commission acknowledges the need to investigate any potential for conflict of interest in dealing with residents' funds and has undertaken to consider this aspect of its management of residents' funds further.
Relevant legislation
Section 64 of the GA Act provides that, where the Tribunal is satisfied that a person in respect of whom an application for an administration order is made under s 40 of that Act:
(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,
the Tribunal may by order declare the person to be in need of an administrator of his estate and, if it does so, shall appoint a person or persons to be his administrator or administrators.
A declaration under s 64(1) of the GA Act that a person is in need of an administrator renders them incapable of entering into any contract or making any disposition in respect of their estate, or of appointing an attorney or agent to act on their behalf except to the extent that the administrator, with the consent of the Tribunal, authorises them to do so: s 77(1) of the GA Act.
Any money or property the subject of an attempted dealing by the represented person contrary to s 77(1) of the GA Act may be recovered by the administrator in a court of competent jurisdiction: s 77(2) of the GA Act.
In dealing with proceedings commenced under the GA Act, the Tribunal must observe the principles set out in s 4 of the GA Act. In administration proceedings, they are:
(i)the Tribunal's primary concern must be the best interests of the person whom the application concerns;
(ii)every person shall be presumed capable of managing their own affairs and making reasonable judgments in respect of matters relating to their estate until the contrary is proved to the satisfaction of the Tribunal;
(iii)an administration order shall not be made if the person's needs could, in the opinion of the Tribunal, be met by other means less restrictive of their freedom of decision and action;
(iv)an order appointing an administrator 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; and
(v)the Tribunal shall, as far as possible, seek to ascertain the views and wishes of the person as expressed, in whatever manner, at the time, or as gathered from their previous actions.
The issues
PN's need for someone to manage his estate for him is not in dispute. Reports from his doctors and carers in connection with the earlier guardianship proceedings establish that his intellectual disability is permanent and makes him unable to make reasonable judgments about any part of his estate.
The issues for determination are:
(i)whether PN is in need of an administrator or whether his need for someone to manage his estate can be met by a means less restrictive of his freedom of decision and action;
(ii)if he is in need of an administrator, what is the least restrictive form of order that will meet his needs; and
(iii)if he is in need of an administrator, who should be appointed.
Reasons for decision
The Tribunal has not found it easy to reach a determination in this matter. It raises some difficult questions about the balance between flexibility and freedom on the one hand, and protection and restriction on the other.
As far as it is able, the Tribunal must seek to ascertain the views and wishes of a person for whom it is asked to make orders. In this case, PN's intellectual disability means that it is not possible to ascertain his views and wishes in a meaningful way.
The Commission's recent review and changes to the management of residents' funds have clearly benefited residents. The Tribunal understands that few residents have large bank balances but the interest now earned on PN's balance of $15,000, even if modest, is a benefit he did not previously have. The Commission is also to be commended for the internal and external procedures and audits it has in place for management of residents' funds.
Management of PN's funds by Commission staff, who work closely with him, understand his needs and can respond quickly to his requests, has the advantage of flexibility. The fact that the Commission does not charge for managing funds is also a benefit of at least approximately $220 per year.
The option of the Commission continuing to manage PN's funds is less restrictive of his freedom of decision and action in the sense that he is not subject to the restrictions imposed by s 77(1) of the GA Act. On the other hand, s 77(1) of the GA Act operates to protect a represented person from entering contracts he does not understand, and from exploitation.
Each case must be decided on its merits. In this case, a combination of circumstances leads us to the conclusion that PN's best interests are served by the appointment of an administrator who is independent of his carers.
This is not a case in which the estate comprises only a pension which is applied to board and lodging and little else, leaving few decisions to be made. PN has a relatively large amount of cash in the bank which can be used in various ways. He has gone on holidays, including travelling overseas, and will likely do so again, in which case he will need to be accompanied by Commission staff. There is the potential, if small, of conflicts of interest in decisions to be made for him.
PN has no family who can be involved with him and, in effect, supervise the management of his financial affairs by asking to see records or questioning decisions about how his money is spent. Unfortunately, his guardian, ST, did not attend the hearing, and it has not been possible to determine whether he might perform this role.
On balance, the Tribunal finds that PN's needs can best be met by appointing the Public Trustee his plenary administrator and directing the Public Trustee to maintain the current arrangement as far as practicable. This arrangement will maintain the flexibility of management by the Commission and provide the protection of formal accountability.
The order will be reviewed in 12 months, during which time the Commission has indicated it will consider further ways of dealing with potential conflicts of interest in dealings with residents' funds, as well as accounting for any payments made to or for others by way of gifts.
Orders
The Tribunal makes the following orders.
1.The Public Trustee is appointed plenary administrator of the estate of PN with all the powers and duties conferred by the Guardianship and Administration Act 1990 (WA).
2.The Public Trustee is directed to maintain the current arrangements whereby:
(i)PN's disability support pension is collected and managed on his behalf by the Disability Services Commission; and
(ii)funds of up to $3,000 are held in a Westpac deeming account and managed by the Disability Services Commission.
3.This order is to be reviewed by 10 September 2009.
I certify that this and the preceding [55] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MS J TOOHEY, SENIOR MEMBER