SMC
[2015] WASAT 41
•15 APRIL 2015
SMC [2015] WASAT 41
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2015] WASAT 41 | |
| GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) | |||
| Case No: | GAA:3806/2014 | 28 OCTOBER 2014 | |
| Coram: | MR J MANSVELD (SENIOR MEMBER) | 15/04/15 | |
| 11 | Judgment Part: | 1 of 1 | |
| Result: | Administrators reappointed Ex gratia payment approved | ||
| B | |||
| PDF Version |
| Parties: | SMC |
Catchwords: | Guardianship and administration Administration Ex gratia payment Liberal view of best interests |
Legislation: | Guardianship and Administration Act 1990 (WA), s 4(2), s 71(5), s 72(3), s 72(3)(a), s 84, s 86, s 87, s 90, Pt 6 |
Case References: | Nil |
Summary | SMC was involved in a motor vehicle accident in 2008 in which she sustained serious orthopaedic and head injuries. Her disabilities meant that she would need fulltime care for the remainder of her life.,SMC's mother was appointed the administrator of her estate under the Guardianship and Administration Act 1990 (WA).,The mother aimed to care for SMC at home and required a building specially modified to enable SMC to receive the appropriate care. The mother had insufficient funds and sought the Tribunal's approval to use some of SMC's funds to pay for the modifications required for SMC's care.,The Tribunal approved the request and allowed the funds to be advanced to the mother as an interest free loan.,SMC eventually received substantial compensation for the injuries she sustained in the motor vehicle accident. A corporate trustee company was appointed the court trustee to manage the compensation and was also appointed SMC's limited administrator by the Tribunal to enable funds to be allocated to a superannuation fund.,SMC's mother then sought approval from the Tribunal to treat the interest free loan as an ex gratia payment from the estate of SMC.,The Tribunal considered the particular circumstances of SMC and taking a liberal view of her best interests, approved the mother's request. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL ACT : GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) CITATION : SMC [2015] WASAT 41 MEMBER : MR J MANSVELD (SENIOR MEMBER) HEARD : 28 OCTOBER 2014 DELIVERED : 15 APRIL 2015 FILE NO/S : GAA 3806 of 2014 MATTER : SMC
- Represented Person
Catchwords:
Guardianship and administration Administration Ex gratia payment Liberal view of best interests
Legislation:
Guardianship and Administration Act 1990 (WA), s 4(2), s 71(5), s 72(3), s 72(3)(a), s 84, s 86, s 87, s 90, Pt 6
Result:
Administrators reappointed
Ex gratia payment approved
Summary of Tribunal's decision:
SMC was involved in a motor vehicle accident in 2008 in which she sustained serious orthopaedic and head injuries. Her disabilities meant that she would need fulltime care for the remainder of her life.
SMC's mother was appointed the administrator of her estate under the Guardianship and Administration Act 1990 (WA).
The mother aimed to care for SMC at home and required a building specially modified to enable SMC to receive the appropriate care. The mother had insufficient funds and sought the Tribunal's approval to use some of SMC's funds to pay for the modifications required for SMC's care.
The Tribunal approved the request and allowed the funds to be advanced to the mother as an interest free loan.
SMC eventually received substantial compensation for the injuries she sustained in the motor vehicle accident. A corporate trustee company was appointed the court trustee to manage the compensation and was also appointed SMC's limited administrator by the Tribunal to enable funds to be allocated to a superannuation fund.
SMC's mother then sought approval from the Tribunal to treat the interest free loan as an ex gratia payment from the estate of SMC.
The Tribunal considered the particular circumstances of SMC and taking a liberal view of her best interests, approved the mother's request.
Category: B
Representation:
Counsel:
Represented Person : In person
Solicitors:
Represented Person : N/A
Case(s) referred to in decision(s):
Nil
Background
1 SMC is a 25 year old woman who sustained serious orthopaedic and head injuries in a motor vehicle accident in March 2008.
2 In June 2008, SMC's mother, DN, made an application for an administration order under the Guardianship and Administration Act 1990 (WA) (GA Act) in respect of SMC's estate and was appointed her plenary administrator on 2 July 2008.
3 On 7 August 2008, the Public Trustee was appointed SMC's interim trustee by the District Court in respect of a personal injuries claim made on her behalf concerning the 2008 motor vehicle accident.
4 In January 2012, the Public Trustee applied for review of the administration order pursuant to s 86 of the GA Act.
5 In the course of the review proceeding, DN sought the approval of the Tribunal to utilise funds invested in the name of SMC in the sum of $107,623.10 to assist in the construction costs of a home she was building for her and SMC, which was to include modifications to suit SMC's disability (the property). Those funds represented a payout of superannuation cover SMC had with her former employer and were needed to be able to proceed with the building of the home for SMC and DN.
6 A report from a medical practitioner at the time stated that SMC continued to be affected by the severe head injury, was wheelchair bound and that she would require full daily nursing care for the remainder of her life.
7 On 22 March 2012, the Tribunal reappointed DN as the plenary administrator of SMC's estate and authorised DN to use the funds as proposed on the basis that the funds would be advanced as an unsecured, interest free loan to DN, repayable in two years (interest free loan).
8 On 9 May 2014, SMC's personal injuries claim was settled and the compromise approved by the District Court. Judgment was entered for SMC in the sum of $9.9 million. Perpetual Trustee Company Limited (Perpetual) was appointed court trustee with the power to apply the judgment sum (less Medicare reimbursement) (court trust) for SMC's maintenance, welfare and advancement including applying those funds to superannuation.
9 In July 2014, Perpetual applied for review of the administration order pursuant to s 86 and s 87 of the GA Act. Perpetual sought to be appointed limited administrator of SMC's estate to enable it to advance monies from the court trust to a superannuation fund to enable SMC to benefit from the taxation treatment of superannuation.
10 Leave was granted on 24 July 2014 and the review was heard on 4 August 2014.
11 At the hearing on 4 August 2014, DN sought approval of the Tribunal to treat the interest free loan as an ex gratia payment from the estate of SMC.
12 DN was reappointed as plenary administrator of the estate of SMC, save for the function given to Perpetual and Perpetual was appointed limited administrator to enable funds from the court trust to be applied to a superannuation fund.
13 DN was directed to file a submission setting out why the interest free loan should be treated as an ex gratia payment.
14 The administration order was set for review in three months.
15 DN filed her written submission on 21 October 2014 and the review of the administration order was heard on 28 October 2014.
16 The review was adjourned to enable Perpetual to file a submission detailing the progress of the purchase of the property by the court trust; what (if any) payment had been made to DN for past gratuitous care of SMC and what (if any) payments were currently being made to DN for the care of SMC.
17 The Public Trustee was asked to provide details of any advance payments received on behalf of SMC as interim trustee and how those advances were expended.
18 Submissions were received from Perpetual and the Public Trustee in December 2014. A submission was also received from the Insurance Commission of Western Australia (ICWA).
19 Those submissions were provided to DN and she was given an opportunity to make a final submission on the application for an ex gratia payment by 15 January 2015.
20 No further submission was received from DN and the determination of the review of the administration order was reserved.
Relevant legislation
21 Section 4(2) of the GA Act states that the primary concern of the Tribunal shall be the best interests of the represented person.
22 Section 72(3)(a) of the GA Act states that an administrator shall not without the authority of the Tribunal under s 71(5), make a payment or disposition of a charitable, benevolent or ex gratia nature.
23 Section 71(5) of the GA Act states that in exercising its jurisdiction under Pt 6 (estate administration), the Tribunal may take a liberal view of the best interests of the represented person and in particular may empower an administrator to make a payment or enter into a transaction of a kind described in s 72(3) on behalf of the represented person.
24 Section 90 of the GA Act enables the Tribunal, upon review of an administration order, to amend the order, revoke the order or make a new order including revoking the appointment of any administrator or appointing a new or additional administrator.
The submission of DN
25 DN states that she was in full-time employment when SMC had the motor vehicle accident. In the week of the accident, DN had been offered a permanent promotion to commence within the next three months. When DN realised the seriousness of SMC's injuries and the fact that she would be permanently disabled, DN states that she turned down the promotion and took leave for 12 months to care for SMC at home.
26 Although DN returned to her employment after 12 months, she states that she could not stay focused given the needs of SMC and her teenage son. She states that she recently resigned from her employment and is now part of the care team for SMC. DN states that her salary at the time was $86,000 gross per annum.
27 DN states that she provides 30 hours of care a week with the remainder of the fulltime care being provided by employed carers.
28 DN states that she does not receive a wage for her care of SMC but receives a household allowance.
29 DN states that her home has not been the same since SMC's accident and the resulting fulltime care that she requires. Because a carer is always present DN states her privacy is affected and her only means of privacy is to leave the home for a few days for respite. DN states that all of this also negatively impacted on her relationship with her son and that she was unable to spend the time she wanted with him.
30 DN states that at the time of the accident she was supporting SMC who was working parttime and studying four days a week. DN states that she continues to support SMC and that for the past six years she has been left substantially out of pocket.
31 DN states that the funds from the interest free loan have mostly been expended on the home and for furniture, equipment (including a special bed) and white goods for SMC's room which is approximately 25% of the home's total floor area and is furnished as if it were a selfcontained small flat. DN also states that because SMC can no longer regulate her body temperature she needs airconditioning most of the day which is costly. DN states that she has had a solar system installed to reduce costs.
32 DN states that the interest free loan has been fully expended but she submits that she has spent and will continue to spend more than the amount of the loan from her personal funds for the care of SMC.
The submission of Perpetual
33 At the time of its submission made in early December 2014, Perpetual states that the property had been valued at $600,000 and it was considering making an offer to purchase the property from DN.
34 DN states that she has a mortgage loan on the property, with a balance of $395,000.
35 Perpetual states that DN has been paid $40,000 from the court trust for past gratuitous care of SMC and that DN accepted this amount in full and final settlement of her claim (DN states that she distributed these funds to herself - $20,000 and $10,000 each to her parents and her son).
36 Perpetual states that DN is the sole director of a private company which provides care for SMC. Invoices and timesheets from the private company have been sighted and it is the understanding of Perpetual that DN does not receive any payment from the private company for her services.
37 Perpetual states that a weekly maintenance payment of $1,000 is paid to DN for household and personal expenses including the expenses she incurs on SMC's behalf.
The submission of the Public Trustee
38 The Public Trustee states that the amount that eventually comprised the interest free loan was $111,200.12, the increase from the $107,623.10 being interest earned on the funds then held in a term deposit.
39 The Public Trustee states that the funds it received from ICWA from 29 August 2008 to 11 March 2009 totalling approximately $32,000 were paid to DN as advances against a claim for past gratuitous services for the care of SMC. This was confirmed in the information received from ICWA.
The decision of the Tribunal
40 SMC suffered catastrophic injuries in a motor vehicle accident in March 2008 which left her significantly disabled and in need of permanent care.
41 I accept that from that point, DN was determined she would care for SMC and to achieve that aim it was necessary for her to have access to the interest free loan to ensure that a specially modified home could be built.
42 SMC and DN have been living in the property since that time. It is DN's intention that the current living arrangements continue.
43 At the time the Tribunal reserved its decision, it seemed likely that Perpetual, on behalf of SMC, would purchase the property from DN. The value of the property should include the cost of the modifications made to enable SMC to live in the home.
44 To the extent then that the interest free loan was expended on the structure of the home, DN is likely to receive the benefit of that expenditure from selling the property to Perpetual.
45 DN has also received payment for past gratuitous care.
46 On a simple reading of these facts, it might be argued that DN has not been financially disadvantaged and that in the normal course should repay the interest free loan to the estate of SMC.
47 I accept that SMC's circumstances are not as straightforward as they first appear to be.
48 It is the case that the lives of SMC and her family changed irrevocably after the accident in 2008.
49 Until recently DN was in full-time employment earning $86,000 per annum.
50 DN has forgone the future benefits of her previous employment, both financially and socially.
51 From the time of the accident in 2008, I accept that DN has made great sacrifices to ensure SMC lives in the community within, as much as that is possible, her family environment.
52 SMC has a court trust of substantial value established to meet her care needs for the rest of her life.
53 In my view it is important for the wellbeing of SMC that DN continues to be present as her mother and as a carer. DN will require a level of financial security to enable her to continue in those roles.
54 For these reasons, when I consider the overall wellbeing of SMC and in so doing take a liberal view of her best interests, I am satisfied that the interest free loan made to DN should now be approved to be deemed to be an ex gratia payment from the estate of SMC and does not need to be repaid.
55 I will so order and otherwise confirm the appointments of DN and Perpetual made on 4 August 2014.
56 I will set the review of the order in five years, the maximum period available under s 84 of the GA Act.
Orders
On the application for review under s 84 of the Guardianship and Administration Act 1990 (WA) of an order dated 4 August 2014 concerning SMC, heard by Senior Member J Mansveld on 28 October 2014 and reserved from 15 January 2015,
the Tribunal declares that SMC;
(a) is unable, by reason of a mental disability, to make reasonable judgments in respect of matters relating to all of her estate; and
(b) is in need of an administrator of her estate,
and the Tribunal orders that:
The order is amended so that it now reads:
1. DN of [address] is appointed plenary administrator of the estate of the represented person with all the powers and duties conferred by the Act, save and except for the function given to Perpetual Trustee Company Limited.
2. The interest free loan made to DN from the estate of the represented person first approved by the Tribunal on 22 March 2012, is now approved to be deemed to be an ex gratia payment from the estate of the represented person to DN. The amount of the ex gratia payment is $111,200.12.
3. Perpetual Trustee Company Limited of Level 29, Exchange Plaza, 2 The Esplanade, Perth, Western Australia is appointed limited administrator of the estate of the represented person with the following powers:
(a) From time to time, to call upon funds from the compensation court trust established for the benefit of the represented person for placement into an appropriate superannuation fund for the benefit of the represented person;
(b) To act on behalf of the represented person with respect to that superannuation investment;
(c) From time to time, to call for funds from the said superannuation investment for the represented person's benefit;
(d) To receive such funds and to apply and expend the sum for the maintenance, necessaries, comforts and benefits of the represented person in such a manner and to such extent as the administrator, having regard to the circumstances and the value of the represented person's estate, consider proper and reasonable, including the option of depositing such funds back into the compensation court trust on the represented person's behalf; and
(e) To liaise with and give instructions to the Australian Taxation Office, Centrelink and Medicare on behalf of the represented person, including the authority to sign the represented person's taxation returns.
4. Perpetual may be remunerated for the performance of its functions as limited administrator on the following terms:
(a) For the purpose of calculating the fees, any superannuation investment will form part of the total assets administered by Perpetual as trustee of the compensation court trust;
(b) For the performance of its functions as limited administrator pursuant to this order, Perpetual shall be entitled to be remunerated to pay by way of commission in respect of capital at the same rate of commission that applied to the ongoing management fees for the administration of the compensation court trust;
(c) Perpetual is authorised to, and shall, calculate the fee for acting as administrator under this order as part of the total fee for the administration of the compensation court trust and (to the extent that is permitted pursuant to the District Court Order) to deduct the fee for acting as administrator under this order from the funds within the compensation court trust. For the avoidance of doubt, the intention of this provision is that Perpetual shall be entitled to only one fee for administering the superannuation investment under this order and the compensation court trust pursuant to the District Court Order.
5. This order is to be reviewed by 15 April 2020.
I certify that this and the preceding [56] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR J MANSVELD, SENIOR MEMBER
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