SQ and IQ - [2012] WASAT 165

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: HUMAN RIGHTS

ACT: GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA)

CITATION: SQ and IQ [2012] WASAT 165

MEMBER: MS H LESLIE (SENIOR SESSIONAL MEMBER)

HEARD: 5 JUNE 2012

DELIVERED : 16 AUGUST 2012

FILE NO/S: GAA 1003 of 2012

BETWEEN: SQ
Applicant
AND
IQ
Represented Person

Catchwords:

Guardianship and administration - Enduring power of attorney - Administration - Discretionary family trust - Whether authority should be given to an administrator to exercise power as trustee - Appointor or guardian

Legislation:

Guardianship and Administration Act 1990 (WA), s 64, s 69, s 70, s 71, s 72, s 72(1), s 72(2), Pt 6, Div 1, Div 2, Sch 2 Pt B, Sch 2 Pt B(h)
Trustees Act 1962 (WA), s 4, s 6, s 7, s 53, s 77, s 77(1)

Result:

Request for administration order refused
Application dismissed

Category: B

Representation:

Counsel:

Applicant: Self-represented
Represented Person : N/A

Solicitors:

Applicant: N/A
Represented Person : N/A

Case(s) referred to in decision(s):

MD [2010] WASAT 132
MS and YS [2008] WASAT 72
Public Trustee and BG [2010] WASAT 195
Re DR SAT 273/2011, 12 December 2011
Re LDMcK SAT 360/2010, 24 July 2012
Re RPL SAT 119/2002, 16 February 2004
Re RPL SAT 119/2002, 31 March 2010
Re YS 2009, unreported decision, 19 May 2009
The Full Board of the Guardianship and Administration Board [2003] WASCA 268

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

The applicant sought to be appointed together with her sister as administrator of the estate of their father in an attempt to secure authority to act to manage the affairs of a discretionary family trust of which their incapable father was trustee, appointor and guardian. The sisters already held the enduring power of attorney for their father but had been unable to use that authority to deal with the affairs of the trust.
The Tribunal confirmed that an enduring power of attorney would not provide the authority needed but dismissed the application for administration on the basis that the authority of an administrator is limited to the estate of the person themselves and cannot extend to the exercise on behalf of an incapable person of the role of trustee, appointor or guardian entrusted to him under the terms of a discretionary family trust. The Tribunal took the view that the proper course was for the applicant to apply to the Supreme Court under the Trustees Act 1962 (WA) for appointment as substitute trustee and that Sch 2 Pt B subparagraph (h) of the Guardianship and Administration Act1990 (WA) ought not be used as an alternate mechanism either to give the applicant authority as trustee or any other form of authority to act with respect to the affairs of the discretionary family trust.

Background

The applicant (SQ), and one of her two sisters (JH), are the attorneys appointed under the represented person's [IQ's] enduring power of attorney (EPA) dated 24 May 2003. The other sister, JQ, is the appointed substitute attorney. The applicant and JQ are IQ's plenary guardians pursuant to the order of the Tribunal dated 18 July 2011.
Notwithstanding the existence of the EPA, on 21 March 2012 the applicant applied to the Tribunal to be appointed jointly with JH as IQ's administrators. The application states that:
In 1989, [IQ] set up a discretionary trust, the [FRT], in which he is guardian, Trustee and Appointor of the trust. There is no specific provision in the Trust Deed for the replacement of appointor in the event that the appointor is legally incapacitated. His attorneys are unable to access the [FRT] account at [the bank]. …
[The bank's] legals are impervious to our requests to gain access to the FRT account. Also: someone to act as trustee required for TAX distributions[.]
The deeds that established the FRT, a deed dated 20 July 1989 (Deed) and a Deed of Variation dated 19 September 1997 (Variation), confirm that IQ is indeed the trustee, guardian and appointor of the FRT and that he and his children are the beneficiaries. The documents make provision for SQ, JH and JQ to act jointly as appointors and guardians of the FRT after IQ's death, if, at that time, he had not, by deed, made alternative arrangements. He has not done so to this point. It is not disputed that the FRT has considerable assets.
It is undisputed that IQ is now not capable of either managing his personal affairs or of capably acting in the role of guardian, appointor or trustee of the FRT. Clause 16(c) of the Deed provides that a trustee 'shall be disqualified from holding office and he shall immediately vacate the same if ... he becomes … of unsound mind …'. In the ordinary course, the appointor of a trust would then appoint a new trustee. However, in the case of the FRT, IQ is the appointor. No provision is made in either the Deed or the Variation for anyone to act in that role in the event of IQ's incapacity. Clause 16(a) of the Deed describes who appoints a new trustee if there is no appointor. As amended by the Variation, that clause states that '… if there is no Appointor, the statutory and other rights of removing and appointing a [new] trustee may be exercised by the Trustee or by the legal personal representative … of the last trustee'.
The applicant has received legal advice that this provision only applies where there is no appointor; that it cannot be used, as IQ is still the appointor even though he is incapable of acting. The advice is that it is not possible for a deed of appointment to be made to deal with this hiatus in the affairs of the FRT. The 'legal personal representative' is defined in s 6 of the Trustees Act 1962 (WA) (Trustees Act) to mean the executor or administrator of the estate of a deceased person. It does not include an attorney under an EPA.
The applicant made application to, and appeared before, the Tribunal in person. She made no particular reference to specific provisions of the relevant legislation in support of her application. Rather, she appeared to make application to the Tribunal for the appointment of an administrator in search of a solution to the following apparent issues:
1)the replacement of the trustee or the replacement of the appointor so that a new trustee may be validly appointed by a new appointee; or
2)some other mechanism to permit the operation of the FRT, to conduct its business, access its accounts and so on.
The evidence at the hearing was that the applicant and her sisters have been managing IQ's personal affairs since the execution of the EPA in consultation with IQ (whilst he had capacity) and at all times with the support of the family accountant.
The application appears to relate to the management of the affairs of the FRT generally. Access to the FRT accounts, as sought, bore no particular connection to a need for funds for use in the care and support of IQ. There was no evidence as to any other specific purpose for which access was sought to the funds of the FRT, or for whose benefit the funds might be used, or whether in fact there was a particular call for funds for any specific purpose at this time.
The position taken by the relevant bank is that an EPA allows the attorney to act with respect to the person's personal estate but not with respect to accounts controlled by the person in their capacity as trustee of a trust. The bank's letter of clarification (dated 1 June 2012), to the Tribunal states:
… attorneys do not have the authority to exercise powers on behalf of a Donor [of an EPA] where the Donor is the Trustee of a Trust, unless the Trustee has made specific provision for this in the Trust Deed. In the absence of such an authority, the bank will not allow [IQ's] attorneys to operate the account.
This is a position with which, with respect, I agree. It appears consistent with the view expressed by the Tribunal in MS and YS[2008] WASAT 72 (MS and YS) in which the Tribunal considered at [4] that:
… an existing enduring power of attorney, under which YS appointed a friend (BM) to manage her affairs, was not sufficient as it did not seem to enable the attorney to act as an ex officio trustee of the trust[.]
It is clearly settled law that an attorney, who is no more than a special type of agent, is bound by the rule against delegation of the exercise of discretion, perhaps best expressed as follows:
… an agent may be appointed for the purpose of doing any act on behalf of a principal which the principal might himself do, except for the purpose of exercising a power of authority conferred or performing a duty imposed on the principal personally, the exercise or performance of which involves discretion or skill or for the purpose of doing an act which the principal is required by or in pursuance to any statute to do in his own proper person … i.e. an incapacity to delegate … some duty of a personal nature requiring skill or discretion for its exercise[.] (Collier & Lindsay, Powers of Attorney in Australia and New Zealand (1992) at page 40).
My view is that an administration order, whether plenary or limited, could only ever have the same width of authority (that is, authority over a represented person's 'personal' estate only), bearing in mind the language of s 64 of the Guardianship and Administration Act 1990 (WA) (GA Act), and the other related sections of the GA Act which, in my view, reflect this.

The provisions of the GA Act

The relevant sections of the GA Act provide as follows:
64.Making of administration order
(1)Subject to section 4, where the State Administrative Tribunal is satisfied that a person in respect of whom an application for an administration order is made under section 40
(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
(c)a person to be the administrator; or
(d)persons to be joint administrators,
as the case may require, of the estate of the person in respect of whom the application is made.
(Emphasis added)
69.Authority of administrator
(1)Subject to section 64(3)(a), the administrator has, or the joint administrators have, in respect of the estate of the represented person, such of the functions provided for by this Act as the State Administrative Tribunal vests in him or them, or directs him or them to perform, in the administration order.
…
(Emphasis added)
70.Administrator to act in best interests of represented person
(1)An administrator shall act according to his opinion of the best interests of the represented person.
(2)Without limiting the generality of subsection (1), an administrator acts in the best interests of a represented person if he acts as far as possible
(a)as an advocate for the represented person in relation to the estate;
…
(Emphasis added)
71.Authority which may be conferred on administrator
(1)The State Administrative Tribunal may, under section 69, vest plenary functions in the administrator of the estate of a represented person.
(2)Where plenary functions are vested in an administrator he may perform, or refrain from performing, in relation to the estate of the represented person, or any part of the estate, any function that the represented person could himself perform, or refrain from performing, if he were of full legal capacity.
(2a)Despite subsection (2), a plenary administrator may not make a will or other testamentary disposition on behalf of a represented person, but this subsection does not affect the operation of section 111A.
(3)Where the State Administrative Tribunal does not under section 69 vest plenary functions in an administrator, it may, under that section, authorise the administrator to perform any specified function, including one or more of those set out in Part A of Schedule 2.
(4)The State Administrative Tribunal may require a function to be performed by an administrator and may give directions as to the time, manner or circumstances of the performance.
(5)In exercising its jurisdiction under this Part the State Administrative Tribunal may take a liberal view of the best interests of the represented person as mentioned in section 4(2), and in particular may, if the circumstances so require, empower an administrator to make a payment or enter into a transaction of a kind described in section 72(3) on behalf of the represented person.
(Emphasis added)

72.Further provisions as to authority of administrators
(1)The State Administrative Tribunal may give any direction, make any order or do any other thing provided for in Part B of Schedule 2.
(2)Without limiting this section or section 71, the State Administrative Tribunal may make any other order (whether or not of the same nature as those so provided for) that it thinks necessary or expedient for the proper administration of the estate of the represented person.
…

(Emphasis added)

The provisions of Sch 2 Part B of the GA Act, to which s 72(1) of the GA Act refers, also need to be considered and I will refer specifically to the same later in these reasons.

The provisions of the Trustees Act

The Trustees Act sets out the statutory provisions in relation to the operation of trusts in this State. It contains a mandated system by which trustees may be replaced or substituted including in circumstances of incapacity.
Section 7 of the Trustees Act sets out the ways and circumstances in which incapable trustees may be replaced without the need to apply to the Supreme Court.
Section 77 of the Trustees Act allows for an application to the Supreme Court for the appointment of a substitute trustee in circumstances of incapacity not otherwise provided for.
The relevant sections are set out hereafter:
6.Terms Used
…
personal representative means the executor, original or by representation, or an administrator for the time being of the estate of a deceased person[.]
… (Emphasis added)

7.New trustees, appointment of
(1)Where a trustee, whether original or substituted, and whether appointed by the Court or otherwise,
(a)is dead; or
(b)remains out of the State for more than one year without having properly delegated the execution of the trust; or
(c)seeks to be discharged from all or any of the trusts or powers reposed in or conferred on him; or
(d)refuses to act therein; or
(e)is unfit to act therein; or
(f)is incapable of acting therein; or
(g)is an infant; or
(h)being a corporation, has ceased to carry on business, is in liquidation or is dissolved,

then the person nominated for the purpose of appointing new trustees by the instrument (if any) creating the trust, or if there is no such person or no such person able and willing to act, then the surviving or continuing trustee or trustees for the time being, or the personal representatives of the last surviving or continuing trustee, may by writing appoint a person or persons, whether or not being the person or persons exercising the power, to be a trustee or trustees in the place of the trustee first in this subsection mentioned.
… (Emphasis Added)
77.New trustees, Court may appoint
(1)The Court may, whenever it is expedient to appoint a new trustee or new trustees, and it is inexpedient, difficult or impracticable so to do without the assistance of the Court, make an order for the appointment of a new trustee or new trustees, either in substitution for, or in addition to, any existing trustee or trustees, or although there is no existing trustee.
(2)In particular, and without limiting the generality of the provisions of subsection (1), the Court may make an order appointing a new trustee in substitution for a trustee who
(a)desires to be discharged;
(b)has been held by the Court to have misconducted himself in the administration of the trust;
(c)is convicted of an indictable offence;
(d)is a person of unsound mind;
(e)is bankrupt; or
(f)is a corporation that has ceased to carry on business, or is in liquidation, or has been dissolved.

(3)An order under this section, and any consequential vesting order or conveyance, does not operate further or otherwise as a discharge to any discharged, former or continuing trustee than an appointment of new trustees under any power for that purpose contained in any instrument would have operated.
(4)Nothing in this section confers power to appoint an executor or administrator.
(5)Every trustee appointed by the Court has, as well before as after the trust property becomes by law or by assurance or otherwise vested in him, the same powers, authorities, and discretions, and may in all respects act, as if he had been originally appointed a trustee by the instrument (if any) creating the trust.
(Emphasis added)

Section 7 of the Trustees Act appears to provide for the appointment of new trustees by the 'personal representative' of the trustee where there is no appointor 'able ... to act' (Emphasis added). This section is constrained by the definition of 'personal representative' in s 4 of the Trustees Act and relates only to the personal representative of a deceased trustee. The word 'administrator', where it appears in the definition, does not refer to an administrator appointed under the GA Act but to an administrator appointed in the Supreme Court probate jurisdiction if there is no will or no properly appointed executor of an extant will. It does not allow for the appointment of a new trustee by any other sort of 'personal representative' of a surviving though incompetent trustee.
It thus appears that the legislature has provided a specific mechanism in the Trustees Act for the replacement of trustees by the Supreme Court in circumstance where a living trustee loses capacity.
The only constraint on that jurisdictional mechanism is contained in the initial words of s 77 of the Trustees Act which provide that the court 'may' act:
… whenever it is expedient to appoint a new trustee or new trustees, and it is inexpedient, difficult or impracticable so to do without the assistance of the Court …

The interplay of the two Acts

There appears little doubt in this case that it is expedient to appoint a new trustee. There appears to be noone who currently has authority to act.
Whether it is 'inexpedient, difficult or impracticable to do so without the assistance of the Court' is ultimately a matter for the Court, but needs to be considered by the Tribunal in this context. Given the existence of the abovementioned mechanism, the question of how Sch 2 Pt B(h) of the GA Act should be understood must be addressed. Does it provide a mechanism for the resolving of the hiatus in this case such that the Court would not exercise its discretion to act under s 77(1) of the Trustees Act?
It is clear to me that, without Sch 2 Pt B(h) of the GA Act, an administrator could not take on the role of a trustee. All of the provisions of the GA Act which relate to the role, functions and authority of administrators are couched in terms of 'the estate of [a] represented person'. It is in respect of that estate, and the property and rights that form part of it, that the administrator has authority to act. The authority relates to that estate, that is to say, the estate of the represented person, only. It does not, in my view, extend to the property (and associated rights) owned by any other individual person or entity. Nor does it, in my view, extend to the property (and associated rights) owned by any trust (on behalf of beneficiaries of that trust), even a trust of which the represented person is named as trustee. If property is held in the name of a trustee on behalf of a trust, that property is the property of the trust; it does not form part of the trustee's personal estate. Further, any rights/duties that fall to be exercised by the trustee are exercisable by the trustee on behalf of the trust and its beneficiaries, not in his personal capacity in a way in which the rights/duties would be seen as his personal rights.

Further, it seems to me too much of a stretch, especially given the existing provisions of the GA Act and the Trustees Act, for one to say that the rights and duties to act that go with the role of a trustee of a trust themselves form part of a trustee's 'personal estate' such that the exercise of them is a task for an administrator under s 64 of the GA Act. They may be rights/duties exercisable by the trustee, but they are of a fiduciary nature, exercisable for the benefit of others; they are not personal rights in that sense and, in my view, where the trustee is, or could be, a represented person, the rights/duties should not be considered to form part of the estate of the represented person.
It also seems to me that, given the fiduciary nature of a trustee's role and the fiduciary nature of those rights and duties in particular, the exercise of such rights and duties is non-delegable and, for that reason also, is not something that it is appropriate for an appointed administrator, or an attorney under an EPA, to exercise or perform. This is particularly so in relation to the exercise of discretionary judgments by the trustee (such as happens regularly within the operations and scheme of a discretionary family trust.)
The general rule has been that, however much advice trustees take before reaching a decision, trustees must not delegate their duties or powers (refer Jacob's Law of Trusts in Australia (7th edition, 2006) (Jacob's Law) at [1723]. There are clear circumstances in which some aspects can be delegated in limited and specified circumstances (s 53 of the Trustees Act). However, in Jacob's Law at [1731] it seems clear that:
… The discretions of a trustee range over a great number of varying matters of varying importance. Trustees would not be justified in delegating discretionary powers expressly given to them under the trust instrument[.]
It seems to me unlikely that the legislature would have intended that such a core principle be overturned without making its intention much more discernable from the legislation.

Sch 2 Pt B(h) of the GA Act

Sch 2 Pt B(h) of the GA Act provides that:
where a power is vested in a represented person in the character of a trustee or guardian, or the consent of a represented person to the exercise of a power is necessary in a similar character or as a check upon the undue exercise of the power, the State Administrative Tribunal may, upon the application of the administrator or any person interested in the exercise of the power or the giving of the consent, authorise the administrator to exercise the power or give the consent in such manner as the Tribunal directs. (Emphasis added)
Does this provision provide a mechanism by which the Tribunal could or should appoint an administrator effectively to take over the full role of the trustee of a discretionary family trust without him or her having to apply to the Supreme Court? In other words, was the provision intended to be an alternative to s 77(1) of the Trustees Act (or was the provision inserted in the schedule for some other or lesser purpose)?
In my view, this provision was not ever intended to be used as an alternative to s 77(1) of the Trustees Act for this purpose.
The section in the body of the GA Act that takes one to Sch 2 Pt B(h) is s 72(1). As set out above, s 72(1) and s 72(2) of the GA Act provide, under the heading 'Further provisions as to authority of administrators', as follows:
(1)The State Administrative Tribunal may give any direction, make any order or do any other thing provided for in Part B of Schedule 2.
(2)Without limiting this section or section 71, the State Administrative Tribunal may make any other order (whether or not of the same nature as those so provided for) that it thinks necessary or expedient for the proper administration of the estate of the represented person.
(Emphasis added)

Application of the Principles

It is clear to me that, without Sch 2 Pt B(h) of the GA Act, an administrator could certainly not take on the role of a trustee. My view is that, even with Sch 2 Pt B(h), he or she cannot do so except in very limited circumstances.
As was the Tribunal in Public Trustee and BG [2010] WASAT 195 (Public Trustee and BG) (in which the Tribunal considered what jurisdiction it had to make the orders under s 72(1) and Sch 2 Pt B(e) and (f) of the GA Act), I am mindful of the explanation of the purpose of the GA Act given by EM Heenan J (with whom the four other members of the Full Court of the Supreme Court agreed) in Re The Full Board of the Guardianship and Administration Board [2003] WASCA 268 (Re The Full Board) at [43] [44], where his Honour, under the heading 'Legislative Intention' said:
… In this regard it seems essential to appreciate that the Guardianship and Administration Act is intended to 'provide for the guardianship of adults who need assistance in their personal affairs, for the administration of the estates of persons who need assistance in their financial affairs … and to make provision for a power of attorney to operate after the donor has ceased to have legal capacity, and for connected purposes' (see the long title to the Act). From this, and an examination of the entire Act, it is obvious that the legislation is designed for the protection of adult persons whose faculties may be impaired, for any reason, and who are therefore in need of protection and assistance so as to ensure that their financial affairs and other welfare is not jeopardised by improvident, or ill-considered personal decisions or action, or by unscrupulous or illadvised influence of relatives, friends and others who may deliberately or inadvertently exploit the vulnerability of the person in need of assistance and protection.
These ends can be achieved, when it comes to dealings with the property and financial affairs of the person in need of assistance, by ensuring that any financial, property or commercial transactions which would, or might, jeopardise the financial security or interests of the disabled person, are only effective when performed by a properly appointed administrator and with the Board's consent. The emphasis is on conserving the property and financial resources of the disabled person to ensure that they are available for his or her own needs, welfare and enjoyment and are not dissipated. These seem to be the primary objectives of the legislation and all the provisions for the Act can be seen to have meaning and effect as leading towards the achievement of those purposes. In the main, these will be accomplished by conserving the resources and property of the person under administration for use to his or her own advantage or, in cases where expenditure or imminent disposition of property are necessary or advantageous, by scrutinising the transaction to see that it is justifiable or provident having regard to all the circumstances, bearing always in mind the continuing and future needs of the person whose estate is under administration.
(Emphasis added)
Further, in MD [2010] WASAT 132 (MD) the Tribunal expressed the view at [42] that:
Any construction of the meaning of [a term used in s 72(3)] must occur in light of the purpose of that provision and any construction of the section must be consistent with the language and purpose of all of the provisions of the GA Act, Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 recently cited by Court of Appeal when considering the proper approach to statutory construction in The State of Western Australia v AH [2010] WASCA 172 per Martin CJ at 176. Further, at [177]:
By s 18 of the Interpretation Act 1984 (WA), in the interpretation of a provision of a written law, a construction that would promote the purpose or object underlying the written law (whether that purpose or object is expressly stated in the written law or not) shall be preferred to a construction that would not promote that purpose or object.
Despite the apparent width and scope of the s 72 provisions upon an initial reading, it is clear, in my view, from the particular content of the section, particularly the provisions of s 72(2), and from the context provided by the surrounding sections in Div 1 and Div 2 of Pt 6 of the GA Act which, in many places, contain the limiting references to 'the estate of the represented person', that the intention of the legislature was that an administrator would have authority only in respect of the estate of the represented person and that s 72(1) of the GA Act should not be understood as extending the authority beyond those limits.
This is consistent with the stated intention of the legislation as framed in the long title of the GA Act, namely 'An Act to provide for the ... administration of the estates of persons who need assistance in their financial affairs ...' and as interpreted by the Full Court in Re The Full Board.
There is little by way of guidance in the parliamentary debates as to the purpose for which the provision was designed or the uses to which it was intended to be put. There is little, if any, binding authority on Sch 2 Pt B(h) of the GA Act provision.
The question of the use of Sch 2 Pt B(h) of the GA Act came up directly in MS and YS (above), and in Re RPL SAT 119/2002, 16 February 2004. The former is a case similar to the present case in that the trustee of a discretionary family trust was found to be incapable. The trust had substantial invested funds and there were issues relating to the status of beneficiaries and the entitlement to distributions, amongst other things. The latter, as is described later herein, involved less complex issues, though it seems to me, similar principles.
The Tribunal, in the former case, did not specifically address any of the questions of statutory interpretation, width of authority or legislative intent referred to above. At [43], it simply recited that:
… By virtue of s 72(1) of the GA Act, the Tribunal may by order authorise an administrator to exercise a power vested in a represented person in the character of a trustee.
The Tribunal then went straight on to find that:
Accordingly, the powers exercisable by YS as a trustee of the family trust could be exercised by an administrator if the Tribunal so authorised.
Having then determined that the existing EPA did not provide a sufficient means of managing the represented person's financial affairs for the foreseeable future and that an administration order was the appropriate means to achieve that objective, and having determined the appropriate appointees, it made an order appointing joint plenary administrators and further authorised them 'to exercise the power vested in [the represented person] in the character of a trustee of the discretionary family trust'.
Subsequently, one of the administrators sought to withdraw from the role. Upon review, the Public Trustee was appointed in a plenary capacity for five years (without any additional authority to act as trustee being included at that time, although it is unclear if this was deliberate or an oversight). Within a year, the Public Trustee sought a review of the order to include authority to exercise the powers the represented person had had as trustee of the trust (as had been granted to the previous joint administrators).
On 19 May 2009, the order was amended by the Tribunal to add to the plenary authority, the authority 'to exercise all of the powers vested in the RP as trustee of the [family trust] by the trust deed of [the relevant date]': (see Re YS 2009, unreported decision, 19 May 2009) (Re YS). (This extant order is due for review in 2013). On the occasion of this review, it appears that the Tribunal did not specifically address any of the questions of statutory interpretation, width of authority or legislative intent referred to above either. Written reasons were not prepared.
It appears that in both instances, the Tribunal has interpreted Sch 2 Pt B(h) of the GA Act as essentially permitting trustee substitution.
The same appears to have been the case in Re RPL, both when it was initially decided and upon review in March 2010, as described below. In neither instance were written reasons prepared.
As I have said, in my view, in the context of discretionary family trusts, s 72(1) and Sch 2 Pt B(h) of the GA Act were not ever intended to be used as an alternative to s 77(1) of the Trustees Act. To that extent, I respectfully disagree with the decisions made by the three member panel of the Tribunal on 3 April 2008 in MS and YS and by the Tribunal sitting singly to review the matter on 19 May 2009 in Re YS and by the three member panel of the Tribunal on 3 April 2008 in Re RPL and by the Tribunal sitting singly to review that matter on 31 March 2010.
The application before me relates to the broad powers that go with being a trustee of a wealthy trust and with the ability to significantly affect the rights of beneficiaries. It is a role that is a continuing one, presumably until the vesting and or winding up of the Trust. It does not relate to a minor or 'one-off' exercise of an insignificant aspect of discretion.
It seems to me that if it was the legislature's intention to supplant the role of the Supreme Court in the substitution of trustees in circumstances where they become incapable, it is unlikely that this would have been done by the insertion of such a provision in the GA Act. In my view, given the significance of such a substitution decision and the significant potential consequences for beneficiaries, it is more likely that legislative provisions specifically referring to such an expansion of the role of an administrator (to include potentially taking over a represented person's full role as trustee of a trust) would have been specifically included in the main body of the legislation in the form of substantive provisions, not included merely by reference and as the eighth and last item in the second of five schedules of the GA Act. It appears from a consideration of the language of Sch 2 Pt B(a) to (g) of the GA Act, that all of these other subparagraphs are provisions that allow the Tribunal to make directions or make orders that concern particular aspects of the management or status of the property or estate of the represented person (see Public Trustee and BG in respect of subparagraphs (e) and (f) particularly). In that respect, subparagraph (h) is a provision that is fundamentally different in character to all of the other subparagraphs in the schedule, in that it appears to allow an administrator potentially to venture into decisionmaking regarding property not forming part of the estate of the represented person.
I also think that the wording of Sch 2 Pt B(h) where it refers to 'a power ... vested in the represented person in the character of a trustee' envisages the performing of a single act or a oneoff exercise of power rather than the adopting of an ongoing role encompassing many and varied decisions into the future and with the ability to significantly affect the rights of beneficiaries.
It is not clear to me, given the reservations I have expressed herein, as to authority of an administrator being limited to the estate of a represented person and as to the nature of the rights/duties of a trustee, in what circumstances the legislature envisaged even such a oneoff exercise of power occurring. Clearly the provision was intended to have a purpose and has to be used by the Tribunal in appropriate circumstances. The following few cases that I have been able to locate in which the subparagraph has been used by the Tribunal may serve as examples. My reservations remain in relation to the administrator acting in the role of trustee of a discretionary trustee of the family trust in Re RPL notwithstanding the more limited scope of actions required in that case.
In Re RPL (unreported, (SAT 119/2002), 16 February 2004), the then Guardianship and Administration Board (GAB) authorised the administrator pursuant to subparagraph (h)
… to exercise the powers of the represented person as trustee of [the RP's family discretionary trust].
The Public Trustee had been appointed plenary administrator of a complex estate in conflictual circumstances and, as administrator, had, within the first year of appointment, sought this authority for the purpose of 'fully investigating the assets of [RP]' including (one assumes) his interest, if any, in the trust. It appears from the various reports made by the Public Trustee on the matter at subsequent reviews that the affairs of the trust were not significant. It had a small bank account which was closed, balance sheet debts and was considered insolvent, and, 'there [being] no further funds remaining in the Trust, it [was] the Public Trustee's intention to have the Trust vested'. One assumes on the basis of that intention, the Tribunal on review on 31 March 2010 continued the authority under Sch 2 Pt B(h) along with the plenary administration order. Those orders are for further review in 2015 (refer Re RPL SAT 119/2002, 31 March 2010).
In Re DR SAT 273/2011, 12 December 2011, the Public Trustee sought authority under Sch 2 Pt B(h) to exercise the powers of the represented person (RP) as the surviving trustee of the estate of her late mother. In that case the RP held a life interest in her late mother's estate with the estate passing upon her death to her two daughters. The estate essentially comprised the house that was the RP's home. The RP was no longer able to live in her home and had moved with the agreement of all to live with one of the two daughters. It was agreed in negotiations between all the parties, including the Public Trustee acting as plenary administrator for the RP, that the home be sold and the proceeds divided in an agreed manner between the RP and her two daughters. The Public Trustee needed to be able to exercise the RP's power of sale over the property as surviving trustee and to otherwise act to give effect to the agreement. The Tribunal authorised the administrator pursuant to Sch 2 Pt B(h)
to exercise the powers of the represented person as an executor named in the will of [the late mother] for these purposes.
In Re LDMcK SAT 360/2010, 24 July 2012, there was no formal trust arrangement or documentation but it was common ground, and was accepted by the Tribunal, that the RP held a parcel of shares in trust for her grandchildren. All parties, including the administrator, wished this arrangement to continue and in order to enable the administrator to manage the shareholding appropriately, an authority under Sch 2 Pt B(h) was sought and granted in the following terms:
[T]he administrator is authorised to exercise the power of a trustee vested in the represented person in respect of the following property: (a) shares in [A Limited] as trustee for K; and (b) shares in [T Limited] as trustee for K, T and P.

Decision

In my view, the scope of the tasks of administration ought generally be limited to the estate of the represented person.
In the circumstances I have outlined, the applicant seeks to be appointed IQ's administrator in order to conduct the affairs of the FRT effectively 'in the shoes of' IQ who is the trustee of that trust.
In my view, none of the provisions of the GA Act including Sch 2 Pt B(h) permit me to:
a)appoint the applicant as administrator to act in place of IQ with respect to the assets of the FRT or with respect to the general management and decision-making role of IQ as the trustee of the FRT; or
b) to otherwise authorise her (under Sch 2 Pt B(h) specifically had she sought it) as administrator, to act with respect to the assets of, and general management and decisionmaking of, the FRT (had she been appointed administrator and then sought this).
The Trustee Act in s 77 allows for an application to the Supreme Court for the appointment of a substitute trustee in circumstances of incapacity not otherwise provided for, and this seems to me the appropriate mechanism for the parties in this case. I do, of course, respectfully acknowledge that, ultimately, whether or not the Supreme Court will exercise its discretionary jurisdiction under s 77 in this way is a matter for the Court.

Order:

1.The request for an administration order is refused and the application is dismissed.

I certify that this and the preceding [61] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MS H LESLIE, SENIOR SESSIONAL MEMBER