SC and SAS
[2005] WASAT 255
•21 SEPTEMBER 2005
SC and SAS [2005] WASAT 255
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2005] WASAT 255 | |
| GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) | |||
| Case No: | GAA:1407/2005 | 14 JULY 2005 | |
| Coram: | MS F CHILD (MEMBER) | 21/09/05 | |
| 11 | Judgment Part: | 1 of 1 | |
| Result: | 1. Appointment of administrator confirmed 2. Remuneration ordered | ||
| B | |||
| PDF Version |
| Parties: | SC SAS |
Catchwords: | Guardianship and Administration Administration Rate of remuneration of administrator Section 117 |
Legislation: | Guardianship and Administration Act 1990 (WA), s 3, s 4(2)(f), s 16, s 44, s 51, s 68, s 70, s 72, s 76, s 80, s 99, s 117, s 118(1) Public Trustee Regulations 1942 (WA) Trustees Companies Act 1987 (WA) |
Case References: | Re E (1993) 12 SRWA Nil |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : HUMAN RIGHTS ACT : GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) CITATION : SC and SAS [2005] WASAT 255 MEMBER : MS F CHILD (MEMBER) HEARD : 14 JULY 2005 DELIVERED : 21 SEPTEMBER 2005 FILE NO/S : GAA 1407 of 2005 BETWEEN : SC
- Represented Person
AND
SAS
Applicant
Catchwords:
Guardianship and Administration Administration Rate of remuneration of administrator Section 117
Legislation:
Guardianship and Administration Act 1990 (WA), s 3, s 4(2)(f), s 16, s 44, s 51, s 68, s 70, s 72, s 76, s 80, s 99, s 117, s 118(1)
Public Trustee Regulations 1942 (WA)
Trustees Companies Act 1987 (WA)
(Page 2)
Result:
1. Appointment of administrator confirmed
2. Remuneration ordered
Category: B
Representation:
Counsel:
Represented Person : Self-represented
Applicant : Self-represented
Solicitors:
Represented Person : Self-represented
Applicant : Self-represented
Case(s) referred to in decision(s):
Re E (1993) 12 SRWA
Case(s) also cited:
Nil
(Page 3)
Summary
1 A solicitor appointed as administrator for a former client, now incapable of managing her affairs due to a stroke, sought remuneration at his normal charge out rate as a solicitor for the administration of her estate.
2 The Tribunal accepted that it was appropriate that the administrator be remunerated, but did not accept that the tasks to be performed by the administrator warranted the level of remuneration proposed, and so ordered a lower rate of remuneration and capped the total fees to be charged in any year.
3 These reasons relate to an application for remuneration by an administrator. The administrator was appointed with plenary powers following an application for review of an order in place for SC (the represented person). The Public Advocate applied for review of the administration order dated 30 August 2004, by which the late husband of the represented person was appointed her plenary administrator.
4 The husband of the represented person died on 20 May 2005. Pursuant to s 99 of the Guardian and Administration Act 1990 (WA) (the Act), the Public Advocate becomes the administrator immediately upon the death of a sole administrator.
5 At the review hearing, the Public Advocate (represented at the hearing by an officer from her office) did not object to the proposed appointment of SAS, a solicitor who is the executor of the will of the late husband of the represented person and trustee of a testamentary trust established in that will.
6 SAS was appointed administrator following the review hearing on 14 July 2005.
Background
7 In the weeks prior to his death on 20 May 2005, the late husband of the represented person sold their jointlyowned home and arranged for the proceeds of sale to be deposited in an account in his name. He closed their jointly held bank account and deposited the funds from that account into an account in his name alone. On 2 May 2005, he executed a will by which he created a testamentary trust in which the represented person is named as a, but not the only, beneficiary.
(Page 4)
8 It is accepted by the Tribunal that the represented person's husband, in the knowledge that he was gravely ill, was attempting, as he saw it, to make proper arrangements for his wife's care and financial support after his death by the creation of the testamentary trust.
9 While this was his intention, the effect of the transfer of the funds of the represented person to his bank account was a breach of his obligation as administrator to preserve the property of the represented person and not to dispose of the estate (s72 (3)).
10 At the hearing, the administrator agreed that the actions of the husband were outside his authority as administrator, and that the situation should be regularised.
11 At the review hearing, the administrator indicated that he wished to be remunerated for his services as administrator, and his appointment was conditional on him filing a submission regarding the rate of remuneration within 30 days of the date of the order. The administrator requested, and the Tribunal agreed, that the matter of remuneration could be dealt with "on the papers" without need for the hearing to be reconvened.
12 The administrator filed, with the submission in relation to his remuneration, an application under s 86 of the Act for review of the order, as is required if the order is to be varied to include the provision for remuneration.
Appointment of the administrator
13 In respect of the submissions made by the administrator, the Tribunal accepts that, as the represented person has no next of kin, there is no other person who seeks appointment, and it is appropriate that he, as the former solicitor for both the represented person and her late husband, be appointed administrator.
14 It is noted that there is a statutory preference for the appointment of individuals rather than institutional decisionmakers (see s 68(2) and s 44(5)). This legislative preference recognises that, primarily family members but friends and associates of represented persons as well, may be better placed to respond to that person's individual needs and wishes based on their prior knowledge of, and relationship with, the represented person before that person's loss of capacity. The Act places some prominence on the maintenance of supportive relationships of the represented person ( see s 70(2)(g) and s 51(2)(g)).
(Page 5)
15 The statutory preference of an individual over a corporate trustee for appointment as an administrator provided for in s 68(2) does not apply to the Public Trustee. Although the definition of corporate trustee in s 3 of the Act includes the Public Trustee, the Public Trustee is not a trustee company listed in the Schedule of the Trustees Companies Act 1987, and so the requirements of s 68(2)(a) or s 68(2)(b) of the Act do not apply.
16 Although it is apparent from the medical evidence before the Tribunal that the represented person has been severely disabled by strokes and is now not able to communicate her needs or express her wishes, the Tribunal considers the appointed administrator will have, through his knowledge of her, and past contact with the represented person and her late husband, a keener sense of her needs. It is likely that he will be better able to respond to those needs than a corporate trustee with many clients under administration.
17 Although the administrator advised in the hearing that he will maintain separate recording and file management for the administration of the represented person's estate and for the management of the trust, and it is acknowledged he will be required to discharge his obligations appropriately in both these separate roles, the merging of the roles in the one person must contribute to the efficient management of her estate.
18 Having considered the relevant provisions of s 68, the Tribunal determined that it was appropriate to appoint SAS administrator. There was no other person proposing appointment, and he is both suitable for and willing to be appointed, and it appears to the Tribunal that he will act in the best interests of the represented person. (s 68(1)(c) and s 68(1)(d)).
Remuneration
19 The authority in the Act for the fixing of remuneration is contained in s 117 which provides:
"(1) The State Administrative Tribunal may fix remuneration or a rate of remuneration and order that the same be paid to an administrator out of the estate of the represented person if the State Administrative Tribunal considers that, because of the size or complexity of the estate or both, remuneration should be paid to the administrator.
(2) A guardian, and except as provided in subsection (1) an administrator, shall not receive remuneration for services rendered to the represented person.
(Page 6)
- (3) Nothing in this section
(a) prevents the Public Trustee from receiving remuneration under the Public Trustee Act 1941; or
(b) limits the operation of section 16.
(4) Subject to subsection (3)(a), a corporate trustee shall only be entitled to commission in respect of the capital of the estate of a represented person to the extent that the Board expressly allows."
20 In Re E (1993) 12 SRWA, at 246, to which the administrator referred in his submissions, the Full Board (the Board) of the then Guardianship and Administration Board said:
"We observe from the provisions of this section that the Board has no authority to fix remuneration or a rate of remuneration and order the same to be paid where the size or complexity of the estate or both do not justify such a course."
21 The Board considered the other subsections of that provision, and also confirmed that the duties to be performed by the administrator in s 70 were relevant to that consideration of remuneration.
22 Section 70 has been amended since that case was decided, to expand the guidance given to administrators regarding the actions to be taken in the best interests of the represented person.
23 The Board considered that s 76 was relevant, as it provides that an administrator may employ agents. Section 76(1) provides:
"(1) An administrator may, instead of acting personally, employ and pay an agent, whether a solicitor, accountant, bank, stockbroker or other person, to transact any business or do any act required to be transacted or done in the management or administration of the estate, including the receipt and payment of money, and the keeping and audit of accounts."
24 The Board also noted that, under s 118(1) of the Act, an administrator may reimburse himself from the estate of the represented person, all expenses reasonably incurred in the administration of the estate. It also noted that s 117(3)(b) recognises that an administrator, as a
(Page 7)
- party to any proceedings, has a right to recover costs pursuant to s 16 of the Act.
25 In Re E (supra), the Board considered alternative fee bases, namely hourly charges and incomebased charges, and accepted, in that case, that a capitalbased percentage fee was the most appropriate basis for remuneration of the administrator, a trustee company.
26 In coming to that conclusion, the Board accepted the submission made that:
"charging by way of hourly charges is fundamentally problematical in terms of its openended nature so that it is likely to lead to an unknown quantum of cost."
The estate
27 Included with the proposals made by the administrator in relation to the rate of remuneration were proposals regarding the management of the estate of the represented person.
28 The administrator intends to invest a maximum amount of $160 000 of the funds of the represented person on term deposit and to hold $18 551 for emergency purposes for the represented person in his firm's trust account. The funds reflect the represented person's share of the proceeds of sale of the former property held in the joint names of the represented person and her husband and her share of the proceeds of the former joint bank account. These funds form the entire estate of the represented person, although it is noted that she is a beneficiary of her late husband's testamentary trust.
29 Many of the personal items, including artworks owned by the couple, were sold or donated by the husband to charity prior to his death. It seems that some of the artworks were donated to the facility in which the represented person lives. The administrator undertook to ascertain the extent of the estate of the represented person at the hearing at which he was appointed.
30 In the written submission of the administrator, the duties to be performed by him are set out:
"2.1.1 attending to [the represented person] including regular contact with carers and personnel at [deleted to preserve the privacy of the represented person] Nursing Home in
(Page 8)
- which [the represented person] resides to ensure [the represented person's] personal requirements are met;
- 2.1.2 payment of all expenses and recoupment of rebates for medical expenses from Medicare and/or private health insurers;
2.1.3 maintenance of the emergency account referred to in paragraph 1.4.3 above;
2.1.4 maintenance of annual taxation records for [the represented person] including engaging accountants as agents for the preparation and lodgment [sic] of annual taxation returns;
2.1.5 maintenance of appropriate records to facilitate effective management of [the represented person's] authorised trustee investments;
2.1.6 monitoring of authorised trustee investments and management of those investments including the accrual of all investment income and reconciliation of all income on receipt against capital and expectations;
2.1.7 safe custody of all associated documentation relating to [the represented person's] financial affairs;
2.18 attending to all Social Security issues in relation to attainment of benefits; and
2.19 attending to preparation and submission of annual accounts pursuant to s. 80 of the Guardianship and Administration Act 1990 (WA)(Act)".
31 In relation to the question of remuneration, the administrator has been appointed in his capacity as a solicitor, and so submits that he should be remunerated accordingly.
32 The Tribunal accepts the submission that the administrator will provide a direct and individual service to the represented person in contrast to that which may be provided by a corporate trustee.
33 In considering the rate of remuneration, the Tribunal's discretion to fix a rate or to fix remuneration is only enlivened when the Tribunal finds, on the basis of size or complexity, that remuneration should be paid.
(Page 9)
34 There is no guidance in Re E (supra) as to matter of size referred to in s 117(1). In respect of the size of this estate, although the funds now held by the administrator as trustee of the testamentary trust are significant, the estate of the represented person under administration is under $200 000. It must be said that this size estate is at the margins to meet the requirement that the estate be of sufficient size to warrant remuneration of the administrator, but for present purposes, the Tribunal accepts it is appropriate that the administrator be remunerated on the basis of the size of the estate.
35 The Tribunal does not accept that there is any great complexity in the estate as the evidence in the submissions of the administrator that the estate will compromise mainly cash. The Tribunal does not accept that the interest of the represented person under the testamentary trust of her late husband adds to the complexity of the administration of the estate.
36 Distributions from the discretionary trust are a matter for SAS in his capacity as trustee. The administrator of the represented person will receive, on her behalf, any distributions made. However, this does not involve any complexity in the administration of the estate.
37 It is noted that provision for remuneration of the trustee is made in cl 8.3(k) of the will of the late husband.
38 Nor does the Tribunal accept the proposition that it is appropriate for the administrator to be paid remuneration from the estate of the represented person, calculated at his current applicable hourly rate as a consultant of a law firm, in the sum of $350 per hour exclusive of GST.
39 The rate proposed is higher than the rate allowed for a senior practitioner under the Supreme Court scale, which is $341.
40 It is accepted that the administrator is a solicitor and a senior practitioner, but the work involved in the administration of the estate is not deserving of that level of remuneration.
41 The tasks outlined by the administrator in his submissions for the management of the estate do not involve complex legal decisionmaking or legal work of any kind.
42 As noted in Re E (supra), an administrator is entitled to employ agents for the provision of specialist tasks, such as the completion of a tax return, investment advice or any other specialist advice required by him in
(Page 10)
- the discharge of his functions including, if it were appropriate, the payment of legal fees for legal work.
43 An indication of a rate of remuneration may be to compare the rate payable to any agent employed by the administrator, such as a bookkeeper for recordkeeping or an accountant for completion of her taxation returns.
44 The Public Trustee Regulations 1942 Second Schedule provides for an annual management fee for estates between $100 001 $500 000 of $550 per year. This fee does not include any collection fees that would be charged if the assets of the represented person, including her term deposit and money in the solicitor's trust account, were brought into the Public Trustee's Common Fund. The Schedule refers, at item 2(1), to an asset realisation fee of 4.4 per cent charged by the Public Trustee on moneys collected. If all the funds of the represented person were brought into the Common Fund (from any term deposit established and from the solicitor's trust account), the cost to the represented person in the first year of any administration by the Public Trustee of an estate of this size and asset type would be $7832 in addition to the management fee. In following years, the fee would include the management fee of $550, with the addition of a cost for completion of a tax return at $110.00 per hour. There may be other fees for particular tasks to be performed.
45 The administrator's estimate of his fees for the administration of the estate, based on his hourly rate, is $7800 per year. The estimate is not a firm one, as the administrator proposes he will charge only for work done.
46 In dealing with any proceeding commenced under the Act, including determining the rate of remuneration under s 117 of the Act, the Tribunal is required to have regard to the principles set out in s 4(2) in which the primary concern of the Tribunal shall be the best interests of the represented person. That section also refers to s 4(2)(f), when considering any matter relating to the represented person, the Tribunal shall, as far as possible, seek to ascertain the views and wishes of the person concerned as expressed in whatever matter at the time or as gathered from the person's previous actions.
47 Based on this consideration, the Tribunal accepts that it is consistent with the past actions of the represented person and certainly those of her husband, that SAS act as her administrator. For the reasons set out above, that appointment rather that the appointment of the Public Trustee, which is apparently the only other option available, is the appropriate appointment and in her best interests.
(Page 11)
48 However, the Tribunal is not satisfied that the rate of remuneration proposed by the administrator to the estate is in the best interests of the represented person in a financial sense. In determining the rate of remuneration, the Tribunal may have regard to the duties to be carried out by the administrator and the nature and complexity of those tasks. The Tribunal is not satisfied that the rate proposed to be charged by the administrator for the administration tasks is appropriate, given the nature of the tasks to be performed.
49 The discretion to fix a rate of remuneration is a matter for the Tribunal. In my view, a more appropriate rate of remuneration, in light of the nature of the work to be done, is the rate for a professional officer at item 9D of the Schedule to the Public Trustees Regulations of $160 per hour.
Orders
50 On review of the administration order, the order is revoked and an administration order in the following terms is substituted for it:
1. That SAS be appointed plenary administrator of the estate.
2. The administrator is authorised to be paid remuneration for the administration of the represented person's estate at an hourly rate of $160 (exclusive of GST) up to an amount of $3680 per year.
3. The administrator is entitled to claim his legal costs for proceedings before the Tribunal in this matter pursuant to s 16(4) of the Act.
I certify that this and the preceding [50] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MS F CHILD, MEMBER