TC
[2006] WASAT 369
•15 DECEMBER 2006
TC [2006] WASAT 369
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2006] WASAT 369 | |
| GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) | |||
| Case No: | GAA:1117/2006 | 1 AUGUST 2006, 13 SEPTEMBER 2006 | |
| Coram: | MS F CHILD (MEMBER) MR J MANSVELD (MEMBER) MR J JAMES (SENIOR SESSIONAL MEMBER) | 14/12/06 | |
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Administrators reappointed Remuneration ordered | ||
| B | |||
| PDF Version |
| Parties: | TC PERPETUAL TRUSTEES |
Catchwords: | Guardianship and administration Administration Review of administration order Remuneration of administrator |
Legislation: | Guardianship and Administration Act 1990 (WA), s 64, s 80, s 80(6), s 80(6)(a) s 117(1) |
Case References: | Nil Nil |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : HUMAN RIGHTS ACT : GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA) CITATION : TC [2006] WASAT 369 MEMBER : MS F CHILD (MEMBER)
- MR J MANSVELD (MEMBER)
MR J JAMES (SENIOR SESSIONAL MEMBER)
- Represented Person
PERPETUAL TRUSTEES
Administrator
Catchwords:
Guardianship and administration - Administration - Review of administration order - Remuneration of administrator
Legislation:
Guardianship and Administration Act 1990 (WA), s 64, s 80, s 80(6), s 80(6)(a) s 117(1)
Result:
Administrators reappointed
(Page 2)
Remuneration ordered
Category: B
Representation:
Counsel:
Represented Person : Unrepresented
Administrator : Mr M Fatharly
Solicitors:
Represented Person : No appearance
Administrator : Kott Gunning
Case(s) referred to in decision(s):
Nil
Case(s) also cited:
Nil
(Page 3)
Summary of Tribunal's decision
1 On review of an administration order appointing Perpetual Trustees as administrator for the estate of a young man with acquired brain injury, the State Administrative Tribunal (the Tribunal) confirmed the appointment and made an order for remuneration from the estate of the represented person.
2 The Public Trustee had sought review of the order, as the examination of the accounts submitted to the Public Trustee by the administrator had revealed that the estate had been charged fees that were not consistent with an order made for remuneration of the administrator.
3 By the time the matter had come on for hearing the administrator conceded that an error had been made in the calculation of fees and had agreed to reimburse the estate for the fees overcharged.
4 The administrator sought an adjustment to the remuneration charged as the "Additional Service charge" from that which had been proposed and accepted on their appointment in March 2005 to the published rate applicable at the time which was a higher figure.
5 The Tribunal decided that the remuneration by way of the commission in respect of the capital, the management fee, which was the negotiated fee should be fixed at the rate proposed and charged by the administrator from appointment in March 2005 but that the wording of original order appeared to contemplate a move in the Additional Service charge and so that the administrator was authorised to charge its published fee for that part of the remuneration from the date of the new order.
Background
6 These reasons relate to the review of an administration order dated 17 March 2005, by which Perpetual Trustees was appointed plenary administrator for the estate of TC (the represented person).
7 The administrator is a trustee company and was first appointed the administrator of the estate of the represented person in March 2005 on the declaration that he was a person for whom an administration order could be made pursuant to s 64 of the Guardianship and Administration Act 1990 (WA) (the GA Act).
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8 The application for the appointment of an administrator of the estate of the represented person was made by his mother who acted as his next friend in proceedings in the Supreme Court of New South Wales in respect of his claim for compensation for injuries he suffered at birth. Judgment was entered in early 2005 for the represented person in relation to that claim in the amount of $7 million with the funds to be released once an administrator was appointed.
9 The mother and the solicitors acting for the represented person proposed the appointment of the administrator. The grandmother had proposed herself but later the Public Advocate's report on the Tribunal's file dated 16 March 2005 refers to her preference for the appointment of the Public Trustee. At the time of the hearing there was a report before the Tribunal which made a comparison between the fees charged by the administrator and those charged by the Public Trustee on an equivalent estate. The substance of that report is as follows:
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| $30 000.00 |
| $38 500.00 |
$68 500.00 |
Ongoing Management fee estimated $38 000 or less, calculated 0.55% pa calculated daily on the value of the assets of the trust and paid monthly in arrears |
(Page 5)
First Year: | |
| $87 500.00 |
| $2 750.00 |
$89 250.00 |
Annual Management fee thereafter fixed $2 750 pro rata basis first and final years of administration." |
10 On the appointment of the administrator, remuneration was authorised and the Tribunal sought details of the proposed fees to be charged by the administrator. A letter to the Tribunal from the client relationships manager of the administrator dated 22 March 2005 sets out the proposed fees.
"In response to the Tribunal's request for details of Perpetual Trustees' proposed fee for the administration of the estate of the represented person, [TC], as per point 3 of the Administration Order dated 17 March 2005, we advise the following:
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Note: All fees quoted are inclusive of GST.
These fees are in accordance with our letter dated 9 March 2005, addressed to Mr NP Dobree of Hoffmans Barristers & Solicitors, that was tabled at the hearing on 17 March 2005. They are at a significant discount to our advertised fees. (emphasis added)
We now seek approval from the Tribunal for Perpetual to charge the fees as outlined above."
11 An order dated 31 March 2005 provided for remuneration of the administrators in the following terms:
"Upon the applicant's application for remuneration pursuant to section 117(1) of the Guardianship and Administration Act 1990, it is ordered that the Tribunal approves that the administrator charge fees in relation to the estate of the represented person for the following services rendered at the following rate:
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The Application
12 The application for leave to apply and for review of the administration order was made by the Public Trustee. The reason given for the application is that the "Administrator is charging fees in excess of those authorised in the Order for Remuneration".
13 By way of background to the application, the Public Trustee exercises functions under the GA Act including the examination of accounts submitted by "private administrators" (that is, all administrators other than the Public Trustee or those administrators who have been exempted from submitting accounts (s 80)).
14 The administrator submitted a set of accounts, (Account Number 1 for the period 17 March 2005 to 16 March 2006) to the Public Trustee. It appears that following the examination of those accounts, the Public Trustee detected discrepancies in the accounts and sought review of the order.
15 The matter first came on for hearing on 1 August 2006. Leave was granted to the Public Trustee to apply for review of the order. Cross applications for the appointment of a guardian were received by the Tribunal from each of the parents of the represented person and a proposal from his paternal grandmother that she be appointed his guardian and administrator, were received just prior to the listed date.
16 There was no appearance of the administrator at the first hearing and the representative of the Public Trustee was asked to provide further
(Page 8)
- particulars of the application and to indicate the orders sought. The applications were all adjourned to a later date.
17 The Public Trustee later filed particulars to the effect that the management fee had been overcharged an amount of $3 243.48 for the three quarters reviewed and that a fee of $30 had been charged when a $5 Transaction Fee was more appropriate.
18 When the matter came on for hearing in September 2006 the applications for the appointment of a guardian were adjourned for further investigation by the Public Advocate. Those applications are still proceeding before the Tribunal.
19 The review of the administration order proceeded on that day.
Current Remuneration of the administrator
20 At the hearing, the Tribunal had before it correspondence from Public Trustee to the administrator, the accounts submitted by the administrator, and a report of the "Private Administrators Support Team" (PAS Team) of the Public Trustee dated 10 August 2006 regarding the accounts submitted. The Tribunal also had recourse to the previous file of the Tribunal dealing with the original appointment of the administrator.
21 The PAS team report sets out the issues identified in the calculation of the appropriate rate of the capital management fee and refers to the representations made by the administrator in relation to the imposition of GST on the fee. There was also a letter in response from the solicitors for the administrator dated 12 September 2006 conceding that an error had occurred in the calculation of the fees charged. It was noted that the management fee had been charged at 0.65% of the capital, not at the 0.55% as provided for in the order. It was stated that the overcharged fees of $3 243.48 would be reimbursed to the estate.
22 It was noted that although authorised, the Transaction Fee had not been charged. Instead it appeared that items which the Public Trustee considered should attract the Transaction Fee of $5 had been charged at the Additional Service charge hourly fee.
23 Fees charged as the Additional Service charge had also been charged at $300 per hour, not the fee authorised in the order which was at the rate of $245. It was submitted that the proposal of this fee to the Tribunal had been an error on the part of the administrator, as the published rate at the time of the appointment had in fact been $300 per hour. The
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- administrator proposed to refund the estate the difference between the authorised amount (of $245) and the published fee (of $300) which had in fact been charged.
24 It is the Tribunal's role to authorise and set the rate of remuneration of an administrator.
25 The examination of the accounts and of particular payments made pursuant to an order for remuneration (or indeed an administration order itself) is a matter for the Public Trustee under s 80. If the Public Trustee detects unauthorised payments on examination of the accounts the Public Trustee will no doubt alert the administrator. It is open to the Public Trustee to certify a loss to the estate (s 80(6)). The administrator then may seek to exercise the right created under s 80(6)(a) to have that decision reviewed by the Tribunal.
26 The Public Trustee may also seek leave to apply for review of the order.
Review of an order-Appointment of the administrator-Remuneration
27 Counsel for the administrator submits that the administrator be entitled to charge the Additional Service Fee at the $300 published rate and that the existing order be adjusted to reflect this.
28 On review the Tribunal may confirm, vary or revoke an order and substitute another order as it considers necessary in the best interests of the represented person. The Public Trustee did not identify in the application made or in the later submission any orders sought. However the administrator sought a variation to allow it to charge the Additional Service Fee at $300.
29 On review Tribunal must be satisfied that the represented person is still a person for whom an administration order may be made; that he is unable by reason of mental disability of making reasonable judgements in relation to his estate, that he is in need of an administrator of his estate and there is no less restrictive alternative to the making of that order.
30 In this case we are satisfied that the represented person remains a person for whom an administration order can be made. This finding is based on the specialist medical reports before the Tribunal when the original order was made. Those reports confirm a significant brain injury which has resulted in ongoing medical problems and moderate intellectual disability. One report dated 2 June 2002 from a specialist in rehabilitation
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- medicine states, "He would be fully dependent on adults in respect of managing finances" and a range of other activities of daily living. The reports consider that his disabilities will be life-long.
31 Given the size of his estate, we conclude that the represented person is in need of an administrator of his estate. There is no less restrictive alternative to the appointment of an administrator.
32 When appointing an administrator, the Tribunal must be satisfied the appointee is suitable to act as the administrator of the estate of that person.
33 The Tribunal is directed to take into account, as far as is possible, the compatibility of the appointee with the represented person or with any guardian, the wishes of the represented person and whether the appointee will be able to perform the functions proposed to be vested in the administrator.
34 The Tribunal is satisfied that the current administrator's appointment should be confirmed. That position was supported by the parents of the represented person.
35 The decision to appoint the current administrator rather than the Public Trustee made in March 2005 was made with the information of the differing fee structures before the Tribunal. It is not considered appropriate or necessary to disturb this appointment, and this was not suggested by the representative of the Public Trustee.
36 The proposal by the grandmother of the represented person that she be appointed was considered and it is the conclusion of the Tribunal that in this case this would not be an appropriate appointment.
37 We accept that the grandmother is concerned for the wellbeing of the represented person. The issues she raises in relation to the performance of the administrator bear mainly on the guardianship issues, that is, where the represented person is to live and the care and services to which he should have access. The grandmother takes issue with the sale of the property purchased by the administrator on behalf of the represented person which is said to have resulted in a loss to his estate. In relation to this issue the mother of the represented person states through her solicitor that she asked that the house not be sold for a period of some months until the attempted reconciliation with the father of the represented person (and her other children) was settled. The concerns of the grandmother regarding this decision may be justified; however we do not accept that this is sufficient reason to revoke the appointment of the current
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- administrator. In determining who should be appointed administrator we must consider all the circumstances of the represented person and what is in his best interests in the longer term.
38 In confirming the appointment of the administrator we have had regard to the ability of the current administrator to perform the functions required in the management of this estate.
39 The represented person is a young man who will remain dependent on the care of others for his lifetime. It is essential that his estate, which is considerable, is well managed by professionals with the necessary expertise to make appropriate investment and other decisions on his behalf. The grandmother proposes that she, if appointed, would obtain investment advice from a member of the extended family however no details of the expertise or background of the proposed adviser are given.
40 Given the size of the estate of the represented person, the appointment of a corporate trustee rather than an individual is warranted.
Future rate of remuneration of the administrator
41 In making an order for remuneration of an administrator, the Tribunal is bound to consider the terms of s 117(1) which states:
"(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 Tribunal considers that, because of the size or complexity of the estate or both, remuneration should be paid to the administrator."
42 In respect of this estate, the estate is large, having an approximate value of $7 million. We conclude that, based on the size of the estate, it is appropriate that remuneration for the administration of the estate be ordered.
43 The question put by the administrator is whether the rate of remuneration should remain that ordered by the Tribunal on 31 March 2005 or whether the administrator be authorised to charge its published rate in respect of the Additional Service Fee as proposed in its submission of 12 September 2006 and at the hearing.
44 In the future the administrator seeks to charge the Additional Service Fee at the $300 published rate. It is noted that in the fee schedule of the
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- administrator that the Additional Services Fee is "Up to $300 per hour payable whenever charged".
45 The Tribunal reserved the decision in relation to the rate of remuneration in this case, as it was dealing with three other matters involving the appropriate rate of remuneration to be fixed in respect of estates under administration by the administrator. In those cases the rate of remuneration had not been fixed when the orders were first made. It was hoped that in the interest of transparency and certainty that the approach taken to the authorisation of fees be consistent as far as possible.
46 In this case the administrator proposed discounted fees in March 2005.
47 Both the letter in which the fees are proposed and the order made by the Tribunal note that the Additional Service Fee and the Transaction Fee are currently $245 and $5 respectively. This wording creates an ambiguity in the order. It is unclear what the word currently means. It seems to us that it might mean that the rate in respect of these fees was not fixed. However, the letter from the administrator of 22 March 2005 in which the fees are proposed might be interpreted to include all aspects of the fees to be charged as being at a discount.
48 The submission is made that the fee actually charged by the administrator at the time of appointment was $300 and that the $245 figure was an error or perhaps a discrepancy between fees charged in Perth and Sydney. Even so, the published schedule of the administrator refers to the Additional Service Fee being charged "up to an amount of $300" which itself implies that the fee may be negotiated.
49 Whatever the position the administrator may only charge the fees authorised and it is understood the administrator has reimbursed or proposes to reimburse the estate the difference between the $245 fee and the $300. However, the language of the order does lead to an ambiguity that must be resolved. We consider that on balance it is likely that the administrator intended to propose that it charge a discounted management fee but that its other fees were at its normal charge out rates and that this is what the Tribunal intended to order when remuneration was authorised.
50 To ensure certainty into the future the administrator is authorised to charge its published rate of fees other than the fee on capital which is fixed at 0.55%.
(Page 13)
Orders
51 On 13 September 2006 the administration order dated 17 March 2005 was revoked and an administration order in the following terms is substituted for it:
1. Perpetual Trustees WA Ltd of Level 29 Exchange Plaza, Western Australia be appointed plenary administrator of the estate of the represented person with all the powers and duties conferred by the Act.
2. The administrator is to be remunerated.
3. The rate of remuneration is reserved.
4. There be no order for costs.
5. This order is to be reviewed by 13 September 2011.
52 The question of the rate of remuneration is now determined and the Tribunal makes the following order.
1. Perpetual Trustees WA Limited of Level 29 Exchange Plaza, 2 The Esplanade, Perth, Western Australia, the plenary administrator, is authorised to receive remuneration for the administration of the estate of the represented person from the date of this order at its published rate of fees, other than the commission on capital which is fixed at 0.55%.
I certify that this and the preceding [52] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MS F CHILD, MEMBER