WANDTKE v WANDTKE - [2009] SASC 212

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
WANDTKE v WANDTKE
[2009] SASC 212
Judgment of Judge Withers a Master of the Supreme Court
23 July 2009
MENTAL HEALTH - MANAGEMENT AND ADMINISTRATION OF PROPERTY - PROTECTION ORDERS
MENTAL HEALTH - GUARDIANS, COMMITTEES, ADMINISTRATORS, MANAGERS AND RECEIVERS - OTHER MATTERS
D'Ercole v Wood [2005] SASC 57, applied.

WANDTKE v WANDTKE
[2009] SASC 212

JUDGE WITHERS. By an order made on 5 October 1983 pursuant to the Aged and Infirm Persons’ Property Act 1940 (“AIPP Act”) the plaintiff was appointed manager of the estate and affairs of the defendant, who was and is the plaintiff’s wife. The defendant was then 45 years old and is now 71.
The defendant was injured on 1 April 1979 in a motor vehicle accident. These injuries included injuries to her brain. She was significantly disabled as a result of those injuries. In 1983, the plaintiff attested that the defendant was still unable to read or write and that she was unable to properly dress herself or care for herself. The defendant was due to receive an amount of $222,591.74, being the proceeds of the damages claim arising out of her motor vehicle accident injuries. The plaintiff and defendant have six children who all agreed that it was in the defendant’s best interests that the plaintiff be appointed manager of her estate.
A perusal of the file indicates that the plaintiff has carefully and responsibly managed the estate of the defendant since that time. He has, from time to time, sought direction from the Court. Annual reports have been filed with the Court.
By an interlocutory application filed on 18 December 2008, the plaintiff sought in general terms the following orders and directions:
1.That he be empowered to carry out repairs to their home at 3 Whitmore Street, Redwood Park, involving the replacement of a pergola and the installation of a laundry cupboard and that those costs be paid from the assets of the defendant.
2.That he be empowered to repair the defendant’s unit at 36 Flinders Street, Kent Town, and thereafter sell same.
3.That he be empowered to purchase from the assets of the defendant a 2008 Fiat Ducato/Jayco FD.23-1HR motorhome for the sum of $98,167.
The application was supported by an affidavit of the plaintiff, noting that he and the defendant had been married for 51 years. They were then both 70 years old. He attested that the defendant was able to communicate and express an opinion and function quite normally, but remained vulnerable to undue influence. Their home at 3 Whitmore Street, Redwood Park, needed some repairs, and there were no available funds to carry out those repairs. Exhibited to his affidavit were quotations for the cost of the repairs, being $18,600 to replace a pergola and $2,343 to install a laundry cupboard.
The plaintiff indicated that to get the funds to do the repair work, it would be necessary to sell the defendant’s investment unit at Kent Town. He exhibited appraisals showing the unit had an approximate value of $320-$330,000. The investment unit had been the source of some difficulties for the plaintiff and defendant. Recent tenants had ransacked it and then left. Flowing from that event there was a repair bill of $8,540.40 that the plaintiff would meet, but he sought to be reimbursed. He noted that he had also paid $1,900 for new carpets, $398 for a vanity unit and $480 for a shower screen. Verifying receipts were attached.
The plaintiff sought permission to sell the unit and to recoup his costs, and authority to repair the house property in which they lived, and to purchase a mobile home.
The plaintiff attested that their present interests were fishing and travelling. They wished to travel around Australia, particularly to Queensland and the Northern Territory, and to spend time fishing and camping. They wanted to keep their house at Redwood Park as a base to which to return. The plaintiff had retired from his occupation in mid 2008.
The plaintiff attested that he had no assets in his own name, except a small amount of superannuation and a campervan, which had a value of about $18,500. He exhibited a quote for the cost of a mobile home to be a replacement for the campervan.
The plaintiff’s application was supported by an affidavit of the plaintiff’s solicitor. He attested that he had met with the defendant on 12 January 2009 and that he had spoken to her on a number of occasions since about 1999. This was the duration of the period that he had been acting for the plaintiff. He attended the defendant alone on 12 January 2009 and discussed the plaintiff’s applications with her. He asserted that she presented as mentally competent and was able to converse capably. She knew all about the applications, which she said had been made after discussions between her and the plaintiff, and she fully agreed with the orders he sought. When asked if any of her children had any concerns about the matter, she was asserted to have replied that they had no such concerns and that their view was that she and the plaintiff should be able to travel around Australia while they were able and while their health permits.
The matter first came before the Court on 16 January 2009 when I indicated that I proposed to appoint a litigation guardian for the defendant and to direct that notice be given of the application and supporting affidavits to the children. On 27 March 2009 Leonie Millard was appointed to act as litigation guardian of the protected person.
On 2 June 2009 Ms Millard filed an affidavit setting out the inquiries she had made since her appointment. Those enquiries resulted in information largely in accord with the material put forward by the plaintiff. She noted that if the Court approved the plaintiff’s application for sale of the investment unit and the expenditure of funds on repairs and purchase of a motor home, a net amount of approximately $200,000 would be left. She exhibited some recommendations from Australian Executor Trustees Limited, which was a company already managing a small investment amount for the defendant. The return indicated by that organisation from an investment of $200,000 was likely to be in the region of $10,279 per annum, which would be greater than the current net return from the investment unit.
Ms Millard exhibited a letter from the defendant’s medical practitioner indicating that the defendant’s physical health was unlikely to present any significant problems in the foreseeable future and that she was physically fit to undertake the travel that she and the plaintiff desired to do. Ms Millard noted that she had personally conferred with the defendant. The defendant told her that the plaintiff had retired from his work in June 2008 and that they wanted to take the opportunity to travel together in Australia. The present campervan was too small for her needs, whereas the proposed motor home would be very suitable. The defendant was enthusiastic about the proposed travel venture and getting rid of the investment unit with its attendant difficulties.
On 9 June 2009, a further affidavit was filed by the plaintiff, setting out an updated Statement of Assets and Liabilities. On my calculation, taking the defendant’s home at its historical value and applying the actual market value to the investment unit, the assets of the defendant are in the region of $750,000. The affidavit exhibited correspondence to the children of the parties and their responses. It provided evidence as to the cost of hiring a similar motor home. Further evidence was provided as to the parties’ past engagement in travelling and fishing.
Section 13 of the AIPP Act provides power to the manager to repair any part of the estate. Section 16 of that Act provides power to the Court to, among other things, direct the sale or disposition of the whole or any part of the protected estate and the Court may confer that power upon the manager.
At the outset, counsel for the plaintiff acknowledged that his client, as manager, had a conflict in this matter. Even if the plaintiff had the power as manager to undertake some or all of the intended activities, it would be appropriate to seek the Court’s approval and obtain directions before exercising that power in view of the conflict.
Counsel argued that orders under the AIPP Act commonly apply to two different types of people. One group are those who have lost a substantial part of their mental capacity and need care, and the other group are those who are not wholly incapable but rather remain in the community but need protection from undue influence.
A protected person living in the community is expected to live as a member of that community. The manager has a responsibility to protect the estate, but also to look after and cater for the ordinary developments of that protected person’s life. In Lunn’s Civil Procedure South Australia at 6R 309.10 the learned author says:
Although managers are not trustees, their position can be analogous to that of trustees, and they have fiduciary duties to ensure that the assets of the protected estate are invested and managed in the best interests of the protected person: D’Ercole v Wood [2005] SASC 57.
Section 18 of the AIPP Act provides that a manager is deemed to be a trustee for the purposes of the Trustee Act 1936.
Where an infant is declared to be a protected person under the AIPP Act, invariably an order will be made that the manager can apply funds from the protected person’s estate for the maintenance, advancement or education of that infant. Just as an infant requires the provision of funds to enable that infant to fully participate, to the extent that he or she can, in community life and in his or her reasonable development and experience of life, so it is reasonable that an elderly person, subject to the protection of the AIPP Act, might also require funds to enable them to participate, so far as they reasonably can, in the development and enjoyment of his or her life.
Section 25 of the AIPP Act provides:
Where any right or power is or would be exercisable by a protected person if that person were sui juris, whether for his own benefit or in the character of a trustee, guardian or in any other fiduciary character, and it appears to the Court to be expedient that that right or power should be exercised the manager may in the name or on behalf of the protected person and with the sanction of the order of the Court made on his own application or on the application of any person interested exercise that right or power in such manner as the order directs.
I was also referred by counsel for the plaintiff to the United Nations Convention on the Rights of Persons With Mental Disability. In my view, it is not necessary to have to resort to that Convention.
In considering an application by a manager for the expenditure of funds from a protected estate for an essentially recreational or leisure purpose where the application of those funds will result in a resource that will diminish in financial value but will provide significant personal value and pleasure to the protected person, the Court must exercise a balancing act. Some of the factors that will need to be considered include the size of the estate of the protected person, the age, the amount and purpose of the proposed expenditure, and the family circumstances and past activities of the protected person. The views of his or her immediate family ought be taken into account. The attitude of family members to the proposed expenditure is relevant, although not determinative. Also to be taken into account is the attitude of the protected person where his or her disability does not prevent that attitude being determined. Where it appears that the protected person is able to participate to a relatively full extent in ordinary community life, his or her view will be a matter of significant importance. At the end of the day, such an expenditure will be permissible if it is in the “best interests” of the protected person.
On the evidence in this matter, I am satisfied that it is appropriate to authorise the repair of the investment unit and its sale for a price within the range contemplated. I am also satisfied that it is appropriate to authorise that the plaintiff be reimbursed from the protected person’s estate the funds that he has spent on the investment unit.
I am further satisfied that it is appropriate to authorise the repairs to the home of the protected person as set out earlier in these reasons. Those repairs should be paid for from the funds in the protected estate.
Finally, I am satisfied that it is in the best interests of the protected person to authorise the purchase of the proposed motorhome for the recreational use of the protected person and the plaintiff. Several of the children of the parties suggested that it would be appropriate for that motor home to be sold if the protected person were to be placed in residential care such that she could no longer benefit from it. In my view, that would be a matter for the manager exercising his responsibilities under the AIPP Act.
For the foregoing reasons, there will be an order in terms of amended minutes initialled by me on the date of publication of these reasons giving effect to the orders discussed.
I note that the manager has approved the costs claimed by the litigation guardian. I have perused the bill of costs of the plaintiff’s solicitor and have approved his costs as sought. Orders for costs are included in the minutes.