Re Fraser;
[2000] WASC 36
•25 JANUARY 2000
RE FRASER; EX PARTE THE PUBLIC TRUSTEE as MANAGER OF THE ESTATE OF ANNE VERONICA FRASER [2000] WASC 36
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2000] WASC 36 | |
| Case No: | CIV:2155/1999 | 25 JANUARY 2000 | |
| Coram: | McKECHNIE J | 25/01/00 | |
| 8 | Judgment Part: | 1 of 1 | |
| Result: | Question answered in the negative | ||
| PDF Version |
| Parties: | THE PUBLIC TRUSTEE as MANAGER OF THE ESTATE OF ANNE VERONICA FRASER |
Catchwords: | Public Trustee Powers Whether power to invest Incapable person Whether trust created |
Legislation: | Public Trustee Act 1941 (WA) Mental Health Act 1962 (WA) Mental Health Act 1981 (WA) |
Case References: | In re Brown (1895) 2 Ch 666 In re Knight [1898] 1 Ch 257 Larkman v The Public Trustee [1999] WASCA 93 Melbourne v Department of Social Security (1988) 20 FCR 496 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Estate of ANNE VERONICA FRASER of Franciscan House, 16 Hampton Street, Victoria Park, Western Australia
EX PARTE
THE PUBLIC TRUSTEE as MANAGER OF THE ESTATE OF ANNE VERONICA FRASER
Applicant
Catchwords:
Public Trustee - Powers - Whether power to invest - Incapable person - Whether trust created
Legislation:
Public Trustee Act 1941 (WA)
Mental Health Act1962 (WA)
Mental Health Act 1981 (WA)
(Page 2)
Result:
Question answered in the negative
Representation:
Counsel:
Applicant : Mr J D Allanson
Solicitors:
Applicant : Public Trustee
Case(s) referred to in judgment(s):
In re Brown (1895) 2 Ch 666
Case(s) also cited:
In re Knight [1898] 1 Ch 257
Larkman v The Public Trustee [1999] WASCA 93
Melbourne v Department of Social Security (1988) 20 FCR 496
(Page 3)
- McKECHNIE J:
Introduction
1 This is a request by the Public Trustee for the opinion of this Court as to whether in the circumstances the Public Trustee has authority to seek investment advice and where necessary reinvest the assets of an estate in accordance with that advice.
Factual circumstances
2 Ms Fraser was born on 13 September 1947 and is now aged 52. Regrettably, on 29 July 1981 she was declared incapable of managing her affairs. This declaration was made under the provisions of the Mental Health Act 1962 which was, a couple of months later, replaced by the Mental Health Act 1981, but the provisions were in similar form.
3 Her estate is valued at slightly over $1.12 million and consists of shares, real property and money held in the Public Trustee's common fund. The Public Trustee wishes to have the estate professionally reviewed to ensure that the risks pertaining to her assets are evenly balanced.
4 The question which arises is whether, on a proper construction of the Public Trustee Act there is power in the Public Trustee to expend money for the services of a professional investment adviser and whether there is power to change the mix of assets by investment.
Relevant statutory provisions
5 The statutory scheme for the management of the estates of incapable persons has changed over the years with advances in medicine and changes in social conditions. Presently the scheme for administering such estates is to be found within the provisions of the Guardianship and Administration Act 1990. That Act repealed and replaced the Public Trustee Act s 24 which at the time of the order in 1981 read as follows:
"24. (1) Subject to the succeeding subsections of this section, the Public Trustee has the care and management of the estate of every incapable patient and the provisions of section forty-nine of this Act apply to that care and management.
(Page 4)
- (2) This section does not apply in the case of an incapable patient whose property is vested in a curator, under, or by virtue of, section six hundred and eighty-four of The Criminal Code.
(3) The powers and duties of the Public Trustee under this section cease, when he is notified-
(a) that the incapable patient has died;
(b) that a manager of the estate of the incapable patient has been appointed, under the Mental Health Act, 1962; or
(c) by the superintendent, that the incapable patient-
(i) is recovered from his incapacity; or
(ii) is discharged.
(5) Where the Public Trustee pays moneys or hands over property pursuant to subsection (4) of this section the receipt of the incapable patient or other person therein mentioned is an absolute discharge to the Public Trustee, notwithstanding any informality in or about the discharge to after-care.
(6) Where the Public Trustee has paid moneys or handed over property, pursuant to subsection (4) of this section, and the incapable patient's discharge to after-care is rescinded, the Public Trustee may recover and take possession of any moneys or property of the incapable patient then remaining in the hands or possession of the incapable patient or of any other person on his behalf.
(Page 5)
- (7) On the happening of any event mentioned in subsection (3) of this section, the patient or his personal representative (as the case may be) is bound by, and may take advantage of, any act lawfully done by the Public Trustee in the name, and on behalf, of the incapable patient, as if the act has been done by the incapable patient while not subject to any incapacity."
6 These provisions continue except that the appointment of a manager is replaced by the making of an administration order under the Guardianship and Administration Act schedule 5.
7 Section 24 appears to be designed to provide for temporary rather than permanent administration. The statutory scheme which was in place included the provisions of the Mental Health Act 1962 Part VI entitled "Care and Management of Estates of Incapable Persons". Under that Part the superintendent of the mental hospital was obliged to have a patient examined by a psychiatrist for the specific purpose of ascertaining whether or not the patient was incapable of managing their affairs. If found to be incapable, a report was given to the Public Trustee.
8 There followed a procedure for the appointment by the court of a manager of the incapable person's affairs. It was envisaged that the Public Trustee would have a role to play. The Public Trustee was given power to make an application and if another person made an application notice had to be given to the Public Trustee who was entitled to be heard on the application.
9 Where a person, including the Public Trustee, was appointed to be a manager, the Mental Health Act 1962 authorised the Court to confer a range of powers on the manager under s 68. Relevantly for present purposes the Act, by s 68(1)(d), gave power to the court to permit a manager to invest any moneys forming part of the estate in any securities in which the trustees may by law invest.
10 The provisions of the Public Trustee Act s 24, to which I have referred direct attention to the general powers of the Public Trustee under s 49. These general powers do not appear to be limited to trusts under the control of the Public Trustee. The enumerated powers do not in express terms give power to invest moneys. It is submitted on behalf of the Public Trustee that such a power is derived from the general powers, specifically s 49(1)(e) and s 49(1)(r) which read as follows:
"49. General powers of Public Trustee
(Page 6)
- (1) The Public Trustee, for any of the purposes of this Act, unless expressly prohibited by or under an instrument or order of the Court may, at his discretion and in addition to and not in restriction of any other powers under this or any other Act, exercise the following powers -
…
(e) sell, exchange, realize, mortgage or charge any property. The Public Trustee, when acting under this paragraph as executor or administrator, shall be subject to the Administration Act 1903;
…
(r) generally do all acts and exercise all powers with respect to the estate or person as effectually and in the same manner as the person whom he represents himself might have done;"
12 The statutory scheme for dealing with the estates of incapable persons at the time when Ms Fraser became incapable did not act to vest the legal title of the estate in the Public Trustee so as to create a trust. The use of the expression "care and management" denote a different legal relationship.
13 This is confirmed by the court's power to appoint a manager. Construction of the statutory scheme is consistent with the construction applied to its predecessor and model: see In re Brown (1895) 2 Ch 666. In consequence the Public Trustee cannot exercise the powers, including the power to invest, under the Trustees Act 1962. Although the Public Trustee Act s 23 extends the power of the Public Trustee by incorporating the Trustees Act and other powers, s 28(3) is in Part II Division 3 entitled "Public Trustee as trustee". Furthermore, the Trustees Act powers were expressed only to apply to trusts: see Trustees Act s 6.
(Page 7)
14 Finally, in 1962 on the introduction of the Mental Health Act 1962 the Public Trustee Act 1941 was amended and a Division (4) "Powers and duties of Public Trustee with respect to Estates of Incapable Patients and of Infirm Persons" was added. New ss 24 to 34 were enacted. Section 28(2)(a) provided that nothing in the division vests in the Public Trustee the estate of an incapable patient.
15 I conclude therefore that the Public Trustee has an interest only as carer and manager, not as trustee. In the absence of appointment as manager the only source of power for the Public Trustee is s 49.
Construction of Public Trustee Act s 49
16 The first section for consideration is s 49(1)(e). Investment is usually understood as it is defined in Butterworth's "Australian Legal Dictionary":
"Investment: conversion of money or circulating capital and some species of property from which an income or profit is expected. It is spending which adds to the stock of capital, traditionally regarded as spending on capital goods such as machinery, factory buildings, information, technology and infrastructure. It also includes the purchase of securities and other financial instruments."
17 I do not consider that in its ordinary meaning s 49(e) is intended to cover the power to invest. Each of the transactions itemised therein have specific meanings at law. Overall s 49(e) comprehends the realisation of a capital asset into money, but does not extend to the conversion of that money into other assets.
18 This interpretation gains force from s 49(ea) which allows for the purchase of land, but only in restricted circumstances.
19 The second section for consideration is s 49(r). These words are of wide import, but, coming at the end of a long list of enumerated powers and just before the necessary and incidental power, must be read ejusdem generis. If this were otherwise, there would be no purpose in the Court granting specific powers under the Mental Health Act or in current times the Guardianship and Administration Board when making an order for administration, conferring authority, either plenary or limited, on the Public Trustee as administrator.
(Page 8)
Conclusion
20 In my opinion, having regard to the overall statutory scheme which I have outlined, including the power in the Public Trustee to apply to the Court (now to the Guardian and Administration Board) for managerial powers, the specific power in the Court (and now the Board) to grant investment powers, the proper construction of the Public Trustee Act s 49 does not allow the Public Trustee to invest moneys as it would propose. In consequence there is no point in appointing an investment adviser; nor is there any particular power to do so.
21 Therefore I declare that the Public Trustee does not have authority under s 49 of the Public Trustee Act 1941 to realise assets, including existing share investments in the estate of Anne Veronica Fraser, and to reinvest moneys so realised other than in the common fund under s 40 of the Act. I would order that the costs of this application be paid from the estate of Anne Veronica Fraser.
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