The Public Trustee v Baker - [2014] WASCA 23

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: THE PUBLIC TRUSTEE -v- BAKER [2014] WASCA 23

CORAM: NEWNES JA
MURPHY JA

HEARD: 4 NOVEMBER 2013

DELIVERED : 31 JANUARY 2014

FILE NO/S: CACV 72 of 2013

BETWEEN: THE PUBLIC TRUSTEE
Appellant
AND
INGRID TONI BAKER
First Respondent
MARIA GILGA BAKER
Second Respondent
HADLEIGH PETER REDGE BAKER
Third Respondent
MARIA GILGA BAKER (Executrix of the Will of Triadopulos)
Fourth Respondent

ON APPEAL FROM:
Jurisdiction              :  DISTRICT COURT OF WESTERN AUSTRALIA
Coram  :BOWDEN DCJ
Citation  :BAKER -v- MARIA GILGA BAKER AS EXECUTRIX OF THE WILL OF TRIFONAS TRIANDOPULOS (DECEASED) [2013] WADC 96
File No  :APP 4 of 2011

Catchwords:

Practice and procedure - Application to join former administrator/next friend of plaintiff at trial as party to appeal - Whether proceedings for possession properly brought on behalf of plaintiff - Whether administrator required to consult represented person before bringing proceedings - Guardianship and Administration Act 1990 (WA), s 70 - Whether administrator/next friend necessary party to appeal

Legislation:

Guardianship and Administration Act 1990 (WA), s 70
Rules of the Supreme Court 1971 (WA), O 18 r 6(2)(b)

Result:

Appeal allowed
Order that the Public Trustee be joined as respondent to the appeal be set aside

Category: B

Representation:

Counsel:

Appellant:     Mr B W Ashdown
First Respondent           :     Mr D L Armstrong
Second Respondent       :     Mr D L Armstrong
Third Respondent         :     Mr D L Armstrong
Fourth Respondent        :     Mr D L Armstrong

Solicitors:

Appellant:     Public Trustee (WA)
First Respondent           :     D L Armstrong
Second Respondent       :     D L Armstrong
Third Respondent         :     D L Armstrong
Fourth Respondent        :     D L Armstrong

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

Australia and New Zealand Banking Group Ltd v Dzienciol [2001] WASC 305 (S)
Baker v Maria Gilga Baker as Executrix of the Will of Trifonas Triandopulos (deceased) [2013] WADC 96

JUDGMENT OF THE COURT: This appeal arises out of an application to join the Public Trustee as a respondent to an appeal to the District Court against the decision of the Magistrates Court. The application was dismissed by a deputy registrar but that decision was set aside by Bowden DCJ, who ordered that the Public Trustee be joined as a respondent: Baker v Maria Gilga Baker as Executrix of the Will of Trifonas Triandopulos (deceased) [2013] WADC 96. The Public Trustee appeals to this court against his Honour's decision.

Background

Mr Triandopulos was the registered owner of a property in Chapman Road, Geraldton. In late 1996, at Mr Triandopulos' invitation, the first to third respondents, Ms Baker and her two children, Ingrid and Hadleigh Baker, (the Bakers) moved into the property. Ms Baker and her former husband had been friends of Mr Triandopulos for many years and Mr Triandopulos, who had no close relatives, asked Ms Baker and her children to move in to provide him with company and some domestic assistance, and to assist financially in the upkeep of the property.
In June 2004, Mr Triandopulos entered residential nursing care due to his declining health and the Bakers continued to reside at the property. Mr Triandopulos executed an enduring power of attorney in favour of Ms Baker in September 2004.
In February 2007, the State Administrative Tribunal ordered that the Public Trustee be appointed plenary administrator of the estate of Mr Triandopulos under the Guardianship and Administration Act 1990 (WA) (the Act) and that the enduring power of attorney granted to Ms Baker be revoked.
On or about 9 February 2009, the Public Trustee, as plenary administrator, served notices to quit on each of the Bakers, requiring them to deliver up vacant possession of the property by 9 March 2009.
The Public Trustee wrote to the Bakers' solicitors on 23 February 2009 saying that the Public Trustee considered it was in Mr Triandopulos' interest for the property to be sold. The Public Trustee said that Mr Triandopulos owed a debt to the nursing home where he was residing for his accommodation bond which could not be met from his pension and it was only due to the 'good graces' of the nursing home that Mr Triandopulos was permitted to stay there while the debt remained unpaid. The Public Trustee also said that the value of the property had the effect of reducing the amount of his pension, leaving little to meet his debts and needs. The absence of any rent payment by the Bakers exacerbated the problem of a lack of available funds to meet his needs. It said that if the Bakers did not vacate the property in accordance with the notices to quit, legal proceedings would be commenced against them for possession.
The Bakers did not vacate the property and, on 4 February 2010, proceedings were commenced in the Magistrates Court seeking orders for possession of the property and mesne rent from 13 March 2009 until the date of possession. The proceedings were commenced without the required affidavit identifying Mr Triandopulos as a represented person, a matter subsequently remedied. On 12 April 2011, the court amended the name of the claimant to 'Trifonas Triandopulos by his next friend the Public Trustee in and for the State of Western Australia'. It was not in issue that as next friend the role of the Public Trustee was simply a representative one and it was not a party to the action in its own right: Australia and New Zealand Banking Group Ltd v Dzienciol [2001] WASC 305 (S).
The matter proceeded to trial in the Magistrates Court. In their defence, the Bakers contended, in effect, that they were entitled to occupy the property for as long as Ms Baker wished to remain there. That claim appears to have been put on two bases: first, pursuant to an oral agreement with Mr Triandopulos prior to his admission to the nursing home in which it was allegedly agreed that in exchange for the right of occupation the Bakers would contribute to the outgoings of the property and keep it in a good state of maintenance and repair; and, secondly, that Ms Baker had an interest in the property arising from the funds that she had contributed to its maintenance and improvement since 1996, when she moved in. In the course of the hearing, the Bakers also asserted that in seeking possession the Public Trustee was not acting in Mr Triandopulos' best interests as it had not consulted him to ascertain his wishes and it was not his wish to breach the agreement he had made with the Bakers. That contention was apparently advanced in support of an argument that the proceedings were not properly brought.
The magistrate did not accept that the alleged oral agreement had been made, nor did he accept that the Bakers had any relevant interest in the property, finding that their occupation of the property was simply a domestic arrangement of convenience to both sides which was not intended to give rise to any legal rights or obligations. The magistrate was also not satisfied that Ms Baker had made all the financial improvements or contributions she claimed.
His Honour went on to say:
3.5.6 The argument that the Public Trustee is acting against the interests of Mr Triandopulos is contrary to the evidence. The Public Trustee, on taking over management of his financial affairs, soon realised there were insufficient funds coming in to the estate and insufficient funds held by the estate to meet recurrent expenditure. Clearly it had a responsibility to at least make ends meet and the only proper way was to see that the occupiers of his property made a financial contribution or otherwise the property (it seems the only asset of significance) sold to realise funds for the estate.
On 30 September 2011, orders were made that the Bakers vacate the property on 2 December 2011 and pay the sum of $100 per week by way of mesne profits from 13 March 2009 to the date upon which they vacated the property, an amount subsequently agreed at $14,200. The Bakers were ordered to pay the costs of the action.
On 19 October 2011, the Bakers filed an appeal notice in the District Court. Mr Triandopulos by his next friend the Public Trustee lodged a cross‑appeal against the amount of weekly rent ordered to be paid by way of mesne profits. The appeal and cross‑appeal are yet to be heard.
Mr Triandopulos died shortly afterwards, on 17 December 2011. Upon Mr Triandopulos' death, the administration order ceased to have effect: s 78(b) of the Act. Probate of Mr Triandopulos' will was granted to Ms Baker on 20 March 2012. Under the will, Ms Baker is the sole beneficiary of Mr Triandopulos' estate.
On 24 September 2012, the Bakers applied for orders that Ms Baker, in her capacity as executrix of the estate, be joined as the second appellant in the appeal and that the Public Trustee (in its own right) be joined as a respondent to the appeal in substitution for the Public Trustee as next friend of Mr Triandopulos. The Public Trustee opposed the application that it be joined as a party in its own right.
On 16 October 2012, Deputy Registrar Hewitt declined to make the orders sought by the Bakers. He instead ordered that Ms Baker, in her capacity as executrix of the estate, be substituted as the respondent to the appeal. He ordered the Bakers to pay the Public Trustee's costs of the application.
The consequence of the first of those orders is that the appeal against the magistrate's orders is brought by the Bakers, including Ms Baker in her personal capacity, against Ms Baker in her capacity as executrix of the estate. There is, of course, no legal difficulty in that: Trustees Act 1962 (WA), s 57. There are, however, obvious practical consequences which are likely to be unattractive to Ms Baker as the sole beneficiary of the estate.
The Bakers appealed against the decision of the deputy registrar to dismiss the application to join the Public Trustee and to order costs in favour of the Public Trustee. There was no appeal against the order that Ms Baker, in her capacity as executrix of the estate, be substituted as the respondent to the appeal.

The findings of the primary judge

The primary judge found that O 18 r 6 and O 18 r 7 of the Rules of the Supreme Court 1971 (WA), dealing with the joinder of parties, apply to an appeal from the Magistrates Court to the District Court. His Honour declined, however, to join the Public Trustee as a party to the appeal under O 18 r 7(2) on the ground that 'the interest or liability of [a] party' (namely the Public Trustee) had not been 'assigned, or transmitted to or devolve[d] upon some person', as the Public Trustee was not a party to the action. It had only a representative function, which had ceased on Mr Triandopulos' death.
His Honour concluded, however, that the Public Trustee, in its own right, should be joined as a party to the appeal under O 18 r 6(2)(b), on the basis that it was a person whose presence before the court was 'necessary to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon'.
In that connection, his Honour considered that some of the matters raised at trial required the Public Trustee to be joined in its personal capacity before they could be properly litigated. Those matters included whether the Public Trustee had a right to bring the proceedings in the Magistrates Court, whether the proceedings were brought in accordance with law, and whether the Public Trustee was acting in the deceased's best interests. The primary judge said that whilst those matters might give rise to a separate cause of action against the Public Trustee, they were matters which had been raised before the magistrate and were raised on the appeal to the District Court.
The primary judge accordingly ordered that the Public Trustee be joined as a respondent to the appeal in its own capacity.

Grounds of appeal

The substantive issue on the appeal was whether the primary judge erred in finding that the Public Trustee, in its own right, was an appropriate or necessary party to the appeal to the District Court.

Disposition of the appeal

Ground 1

It was common ground between the parties that the substantive appeal to the District Court now serves no practical purpose, Ms Baker being entitled to the property under the terms of Mr Triandopulos' will. As the primary judge observed, the appeal is in truth about costs. According to his Honour, at the time of the appeal against the orders of the deputy registrar the Public Trustee's costs were in the order of $40,000 to $45,000 and the Bakers' costs were in the order of $32,000 plus GST and disbursements. No doubt those figures are now significantly greater. We understand that the Bakers have not yet paid to the Public Trustee the costs of the action in the Magistrates Court.
We were informed that the Bakers' objective in pursuing the substantive appeal is to have the decision in the Magistrates Court reversed in order to recover their costs of the action and the appeal from the Public Trustee. The Bakers' counsel said that, as executrix of the estate, Ms Baker also intends to contest the Public Trustee's right to be indemnified by the estate for its costs on the ground that the action in the Magistrates Court was improperly brought.
In our view, the primary judge erred in concluding that it was necessary for the purposes of O 18 r 6(2)(b) to join the Public Trustee.
The Bakers' claim that under the Act the Public Trustee was not entitled to bring the proceedings as the next friend of Mr Triandopulos is misconceived. The Public Trustee was vested with plenary powers when appointed administrator of Mr Triandopulos' estate. A plenary administrator will only be appointed if a person 'is unable, by reason of a mental disability, to make reasonable judgments in respect of matters relating to … his estate … and is in need of an administrator of his estate': s 64(1)(a) ‑ (b) of the Act. The consequence of its appointment was that the Public Trustee was entitled to perform any function that Mr Triandopulos could have performed if he were of full legal capacity: s 71(2) of the Act. That included instituting legal proceedings.
The contention that the proceedings were not properly brought because the Public Trustee had not first consulted Mr Triandopulos to ascertain his wishes in the matter and did not act having regard to his previously expressed wishes was, and is, a false issue. The respondents' underlying proposition that an act of an administrator is lawful only if it is made after consultation with the represented person and having regard to the wishes of that person, is based on a misunderstanding of the Act.
Section 70(1) of the Act requires an administrator to 'act according to his opinion of the best interests of the represented person' (emphasis added). It is unnecessary to consider how, if at all, s 70(1) bears upon the validity of the acts of an administrator. It was never the Bakers' case that the Public Trustee did not act according to its opinion of the best interests of Mr Triandopulos. Nor, we might add, was there any evidence to that effect. Indeed, the evidence did not suggest that, objectively viewed, it was not in Mr Triandopulos' best interests for the proceedings for possession to be brought. The Bakers' case seemed to be simply that they were not consistent with Mr Triandopulos' previously expressed wish that the Bakers live in the house.
Section 70(2)(e), on which the Bakers rely, does not support their contention that before bringing the proceedings the Public Trustee had first to consult Mr Triandopulos to ascertain his wishes in the matter and to act having regard to those wishes. What s 70(2)(e) in fact provides is that:
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 -
…
(e)in consultation with the represented person, taking into account, as far as possible, the wishes of that person as expressed, in whatever manner, or as gathered from the person’s previous actions;
Plainly, in any particular instance the fact that an administrator has not consulted the represented person before taking some action will not establish that in taking the action the administrator did not act in the best interests of that person. Moreover, as s 70(2) clearly recognises, whether it is appropriate to consult the represented person, and the extent to which any wishes the person may have manifested can be taken into account, will depend upon the particular circumstances, including the nature and purpose of the contemplated action and the capacity of the represented person to participate in any consultation. There will inevitably be many cases where the mental capacity of the represented person is such that consultation would be impossible. There will also inevitably be cases where the circumstances are such that the wishes of the represented person cannot be acted upon.
In that connection we should mention that the evidence at trial was that it was necessary to sell the property in order to provide the funds necessary for Mr Triandopulos' care and that based on enquiries the Public Trustee had made about Mr Triandopulos at the nursing home where he was living it decided not to attempt to consult him.
The real issues on the appeal to the District Court are the magistrate's findings that there was no oral agreement as alleged by the Bakers and that the Bakers did not have any relevant interest in the property. The matters referred to by the Public Trustee and relied upon by the Bakers in this appeal provide no basis for the conclusion that it is necessary for the Public Trustee to be a party to the appeal in order for those issues to 'be effectually and completely determined and adjudicated upon' (O 18 r 6(2)(b)).
Any questions which have arisen or might arise as to the entitlement of the Public Trustee to be indemnified from the estate of Mr Triandopulos for costs it has incurred in the proceedings, or any claim which Ms Baker, as executrix of the estate, might wish to bring on behalf of the estate against the Public Trustee in connection with the costs of the proceedings, are not matters to be determined on the appeal. Their resolution is a separate matter.
A number of other issues were raised on the appeal, including the power of the District Court to join a person who was not a party to the action as a party to the appeal and whether O 18 r 6 and O 18 r 7 applied to an appeal to the District Court. It is unnecessary to consider those issues.
In our respectful view, it was neither necessary nor appropriate for the Public Trustee to be made a party to the appeal and the primary judge erred in finding to the contrary.

Conclusion

The appeal should be allowed and the orders of the primary judge set aside.