SC
[2018] WASAT 116
•1 NOVEMBER 2018
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA)
CITATION: SC [2018] WASAT 116
MEMBER: MS L EDDY (MEMBER)
HEARD: DETERMINED ON THE DOCUMENTS
DELIVERED : 1 NOVEMBER 2018
FILE NO/S: GAA 1899 of 2018
SC
Represented Person
DO & PO
Applicants
Catchwords:
Guardianship and administration - Application to set aside transaction - Costs - Turns on own facts
Legislation:
Guardianship and Administration Act 1990 (WA), s 16, s 16(4), s 16(5), s 82
State Administrative Tribunal Act 2004 (WA), s 87, s 87(1), s 87(2), Div 5 Pt 4
Result:
Application for costs dismissed
Category: B
Representation:
Counsel:
| Represented Person | : | N/A |
| Applicants | : | In Person |
Solicitors:
| Represented Person | : | N/A |
| Applicants | : | MGB Legal |
Case(s) referred to in decision(s):
Clifford and Shire of Busselton [2007] WASAT 89 (S); (2007) 52 SR (WA) 58
G and L and ANOR [2007] WASAT 232
Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32
REASONS FOR DECISION OF THE TRIBUNAL:
Background
On 11 June 2018 GC, one of the administrators of the estate of his mother, SC, lodged an application pursuant to s 82 of the Guardianship and Administration Act 1990 (WA) (GA Act) to set aside two transactions entered into by SC both stated as having occurred on 7 April 2018. While the other administrator, RC, is not named in the application, the application is expressed in terms of 'we' and 'our mother' and given that GC and RC are joint administrators, it must be in fact that GC and RC are both the applicants making the application. It seems the Tribunal named both GC and RC as applicants in the proceedings and there is no record of any objection to that approach.
The transactions the subject of the application were the entry into a contract by SC for the sale of property at 59 Eden Court Drive Southern River to DO and PO (the purchasers) on 7 April 2018 and the entry into a contract by SC to purchase property at 22 Silverwood Street, Morley from a company on 23 April 2018. Each of these contracts were subject to conditions, which were not fulfilled until later dates.
On 7 June 2018, the Tribunal had declared that SC was unable, by reason of a mental disability, to make reasonable judgments in respect of matters relating to all of her estate and is in need of an administrator of her estate.
The application was listed for a directions hearing before Senior Member Wallace on 3 July 2018. The applicants were not legally represented.
At that directions hearing, the Senior Member explained the matters that would have to be proved in order to get a transaction set aside under s 82 of the GA Act. In particular, she identified that it would be necessary to prove that the parties on the other side of each of the transactions did not act in good faith having no notice of the incapacity of SC and that the contract price in each case was not adequate: ts 3 and 10, 3 July 2018. It is apparent that the applicants were particularly aggrieved by the conduct of the real estate agent involved in both of the transactions and the Senior Member explained that any complaint about the real estate agent would have to be made to the appropriate government department and could not be dealt with by the Tribunal under s 82 of the GA Act: ts 5-6, 3 July 2018. GC told the Senior Member that he understood that 'the other parties probably weren't aware' (ts 10, 3 July 2018) and that he understood that the issue with the real estate agent was a separate matter. Nonetheless, GC also stated that the real estate agent was aware of SC's incapacity and that he could not understand how the parties to the contract would not have been told of that fact by the real estate agent. No discussion occurred concerning whether the applicants should obtain legal advice or should consider seriously whether or not to proceed with the application in light of GC's statement about the parties probably not being aware of SC's incapacity. The applicants were not warned that there could be cost consequences if they proceeded with the application if they did not have any evidence capable of establishing lack of good faith and knowledge of incapacity. Orders were made listing the matter to a final hearing, requiring notice of the hearing to be given to various parties and requiring any documents to be relied upon to be filed together with any submissions by a specified date.
On 19 July 2018 the applicants lodged with the Tribunal a 'Summary' explaining why they had lodged the application under s 82 of the GA Act and outlining what they hoped to achieve through the proceedings. Relevantly it is stated in this document:
…
•… Member Jack Mansfield [sic] had advised us … that there is a small window of opportunity for us (!), and that anything Mum has signed 2 months previous from the decision date is not valid.
•We then were advised some time later that we need to apply for a Section 82 which we did, and this has led us to where we are now, with a significant time lapse since the June 7th decision which we had considered the matter to be closed.
•We have been advised that Mums estate now needs to pay legal fees for both represented parties plus penalties as Mum is being sued by both parties [in relation to failure to complete each of the contracts], which is a considerable amount from what we have been told, and it will leave her with nothing. If this is what's going to happen we request a significant reduction in penalties and fees, and Mums elderly age, her mental state, and the strokes she has had to date be a significant consideration in the final decision as it may impact the quality of her life and health, if what little money she has is taken away from her. Is it the intent of the tribunal to take a large portion of Mums estate away from her and leave here with little funds for the rest of her life to live off after penalties and legal fees are charged? This wasn't our understanding on the 7th of June when the subject of anything Mum did prior 2 months from the date was not valid.
…
•The real estate agent was aware of Mums state of Mind and continued to act for her when in good conscience he should have declined to represent her further.
…
•The issue noted fromm the directions hearing is the contracts have been entered into in good faith.
…
•To date ACCAT have not inspected any properties for suitability, including the property in Silverwood that the agent placed an offer on as they haven't been informed of this purchase.
•We have spoken to Mental health legal services and have been advised that this situation is peculiar and that the matter needs further investigation into Mums state of mind in relation to signing of contracts, especially whilst under the care of medical practitioners in hospital.
Patently the applicants were at this point confused about the Tribunal's role, their role and what the application was able to achieve. It seems, and this is reinforced by the submissions made in response to the costs application, that they believed that they were required to lodge the application under s 82 of the GA Act and to continue it in accordance with any orders made by the Tribunal. In the applicants' submissions in response to the costs application it is relevantly stated:
…
•We were advised by SAT that section 82 is our course of action and they would assist us?
…
•We went to the first directions hearing where SAT kept adjourning numerous times for various reasons. We were waiting for directions from SAT at this hearing, as that's what we were led to believe the whole process was about, to make a ruling under section 82.
•All we wanted was directions at the first hearing and we would have done as instructed.
…
•You instructed us to get legal advice around the time of mediation which we did.
•Shortly thereafter we made an appointment to settle at the first available time with the settlement agent.
On 25 July 2018 the representatives of the purchasers lodged with the Tribunal and served on the applicants a Statement of Issues Facts and Contentions (SIFC). In that document it is contended, amongst other things, that the transaction in relation to the Southern River property should not be set aside as the purchasers did not have any notice of SC's incapacity, had acted in good faith and had paid adequate consideration for the property.
A further directions hearing was held on 25 July 2018 before Deputy President, Judge Parry and Senior Member Jack Mansveld. Again the applicants were not legally represented. It is apparent from the statements of GC that the application under s 82 of the GA Act had been lodged by the administrators because they believed that they had been told to do so by the Tribunal member who appointed them as administrators: ts 4, 25 July 2018. In the course of that directions hearing the applicants were asked whether they intended obtaining legal advice, to which GC responded (ts 7, 25 July 2018):
We didn't realise we needed any legal advice, based on the decision that came down on 7 June and the comment that was made that as of that date, when the decision was made, that anything that mum had done two months prior wasn't considered. Or whatever the words used at that time were.
At that directions hearing, the Deputy President explained to the applicants that the Tribunal could not set aside a transaction if the other party acted in good faith and without notice of any incapacity to which the represented person was then subject and where the consideration was adequate. As at the earlier directions hearing, GC again pointed to the knowledge of the real estate agent of SC's incapacity. At which point the Deputy President said (ts 12, 25 July 2018):
… That's one of the reasons why you might need legal advice, because that's not the purchaser's agent. … I mean costs orders are unusual in the tribunal, but in cases where respondents are represented in proceedings like this, there may potentially be costs orders. And if you need to be aware of all the evidentiary and costs potentially consequences of this application.
So, I would really while people can represent themselves in this tribunal all the time, I do think that you should be considering getting some advice in relation to this matter. You've been now put on notice that the [purchasers] are saying that they're going to argue and I therefore presume present some evidence to show that they were unaware of any incapacity and that the amount that they paid or agreed to pay was a fair consideration[.]
There was no discussion about whether, if the applicants did not have any evidence to contest the purchasers' defence of lack of knowledge of any incapacity, the applicants should consider withdrawing the application. The Tribunal ordered that the matter be listed for mediation on 9 August 2018 and also for a further directions hearing on 17 August 2018.
An email to the Tribunal from the applicants dated 25 July 2018 indicated that the applicants were attempting to follow up with obtaining witness evidence in support of their application.
On 1 August 2018 the company lodged with the Tribunal and served on the applicants its SIFC. Amongst other things, the company asserted that it did not have notice of any incapacity of SC, that it acted in good faith and that the sale of the Silverwood Street property was for adequate consideration.
On 7 August 2018 a firm of lawyers lodged a notice of representation with the Tribunal indicating that they now represented GC and RC in the application.
By email dated 8 August 2018 at 12.19 pm, the applicants' representatives lodged with the Tribunal and served on the purchaser's representatives a letter in which it is stated that the applicants wish to withdraw the proceedings.
By email dated 8 August 2018 at 1.31 pm the purchaser's representatives advised the Tribunal and the applicant's representatives that they objected to the withdrawal of the proceeding on the basis that they wished to pursue 'full recovery of costs'.
The Tribunal granted leave to withdraw the application and advised the purchaser's representatives to lodge any written application for costs with supporting submissions and a bill of costs. This was done on 24 August 2018.
The applicants object to the application for costs and state that at all times they were simply doing what the Tribunal advised them to do.
Principles
The application for costs does not identify under what provision costs are sought. Given that the application in relation to which costs are sought was made under the GA Act, it is possible for costs to be obtained either under s 16 of the GA Act or s 87 of the State Administrative Tribunal Act 2004 (WA) (SAT Act).
Section 16 of the GA Act provides:
…
(4)The State Administrative Tribunal may, if it is satisfied that a party to proceedings commenced under this Act has acted in the best interests of the represented person or a person in respect of whom an application is made, order that such costs relative to those proceedings as the State Administrative Tribunal thinks fit be paid to that party by, or out of the assets of, that person.
(5)Nothing in this section limits any other power of the State Administrative Tribunal under the State Administrative Tribunal Act 2004.
As the application for costs seeks costs to be paid by SC's administrators, it appears that s 16 of the GA Act is not being relied upon.
As can be seen from the terms of s 16(5) of the GA Act quoted above, the discretion to order costs under s 16 does not limit any other power of the Tribunal under the SAT Act. It is widely accepted in the Tribunal that this means that the discretion to award costs under Div 5 of Pt 4 of the SAT Act applies to proceedings under the GA Act (see, for example, G and L and ANOR [2007] WASAT 232).
Section 87 of the SAT Act provides that:
(1)Unless otherwise specified in this Act, the enabling Act, or an order of the Tribunal under this section, parties bear their own costs in a proceeding of the Tribunal.
(2)Unless otherwise specified in the enabling Act, the Tribunal may make an order for the payment by a party of all or any of the costs of another party or of a person required to produce a document or other material on the application of the party under section 35.
These provisions, when read together, mean that the Tribunal is generally a 'costs-neutral tribunal': Clifford and Shire of Busselton [2007] WASAT 89 (S); (2007) 52 SR (WA) 58 at [39].
Section 87 of the SAT Act 'requires the Tribunal to exercise the discretion which it confers taking into account all the circumstances of the particular case, including the nature of the jurisdiction which the Tribunal has been called upon to exercise, and any rules which have been promulgated by the Tribunal, but starting from the presumption that no order for costs will be made': Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32 (Questdale) at[9]. The question of whether to award costs under s 87 of the SAT Act is 'whether, in the particular circumstances of the case, it is fair and reasonable that a party should be reimbursed for the costs it incurred. The onus is on the party seeking an order in its favour': Questdale at [51]
The Tribunal may order costs under s 87(2) of the SAT Act against an applicant who withdraws its proceedings: Questdale at [64]. There is no onus on the withdrawing party to show why it should not pay the other parties costs: Questdale at [65].
Determination
It is apparent from the transcripts and from the documents filed by the applicants that the applicants, as summarised previously, are somewhat unsophisticated in relation to legal matters and are by no means familiar with legal processes.
The applicants plainly believed that they were required to lodge the s 82 of the GA Act application because the Tribunal told them to. They then attended when required and carried out, or attempted to carry out, any instructions they were given by the Tribunal.
While the applicants were told about the test to be applied before a transaction would be set aside under s 82 of the GA Act at the directions hearing on 3 July 2018, they were not told, and it is plain that they did not comprehend, what this meant in relation to the possible consequences of their continuation of the proceedings.
The applicants were not warned, until 25 July 2018, that there could be cost consequences of proceeding with the application.
There is no evidence that the representatives of the purchasers requested the applicants to withdraw the application or warned them that they would be seeking costs if they did not do so.
Having been advised to obtain legal advice on 25 July 2018, the applicants did obtain advice and a notice of representation was lodged with the Tribunal on 8 August 2018. This was a period of nine working days.
According to the bill of costs submitted on behalf of the purchasers, no legal work was undertaken, other than the drawing of the bill of costs, after 25 July 2018.
The Tribunal is not satisfied that the applicants behaved unreasonably in lodging or continuing the application under s 82 of the GA Act in all of the circumstances. In the circumstances, it is not fair and reasonable that the applicants pay the purchaser's costs of the application.
Orders
The Tribunal orders that:
1.The purchaser's application for costs is dismissed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MS L EDDY, MEMBER
1 NOVEMBER 2018
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