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[2007] WASAT 324
General information, not legal advice.
State Administrative Tribunal (WA)
2008-01-09
Original judgment source is linked above.
Review of administration order - Incorrect assessment of assets and income - Underpayment of Centrelink Benefits and overpayment of nursing home fees - Unnecessary depletion of the represented person's estate - Public Trustee confirmed as plenary administrator
1 The background to the decision by the Tribunal is that in October 2000 an order was made by the Guardianship and Administration Board appointing the Public Trustee plenary administrator of the estate of the represented person with a direction that the administrator arrange a repayment program for loans made by the represented person to her sister RM.
2 This order was reviewed in May 2002 by the Guardianship and Administration Board. The appointment of the Public Trustee was confirmed, again with a direction that the repayment program be arranged.
3 The order made by the Guardianship and Administration Board was reviewed in June 2007 at which it transpired that a Deed of Agreement for repayment of the loan to RM had been entered into in September 2005. The Deed provided that the loan was to be repaid out of RM's share of the estate of her mother upon her death.
4 At the time of the hearings, the represented person was residing in a nursing home and her home unit was being rented to subsidise her nursing home fees. Evidence provided at the hearings indicated that although the Public Trustee was alerted by the nursing home that the represented person may have been incorrectly assessed by Centrelink for her pension and the Department for Health and Ageing for her nursing home fees, the Public Trustee had not investigated the matter. It was not until after the matter had been raised in the review hearing in June 2007 that the Public Trustee entered into negotiations with Centrelink resulting in the reinstatement of the full pension and the reduction of the nursing home fees. Reimbursement of the overpayment of fees was back dated a few weeks.
5 Because the incorrect assessment had occurred in July 2005 with changes in the relevant legislation, the Public Trustee appealed the decision in relation to backdating the reimbursement and agreed that if the appeals were not successful, the Office of the Public Trustee would guarantee reimbursement of the overpayment of fees to the estate of the represented person.
6 The Tribunal confirmed the appointment of the Public Trustee as plenary administrator for a further six months.
7 The represented person has a diagnosis of a schizo-affective disorder which makes her unable to make reasonable judgments in respect of her estate.
8 An administration order appointing the Public Trustee plenary administrator of her estate was made in October 2000.
9 The order was reviewed and confirmed in May 2002. Both of these orders directed the administrator to arrange repayment programs for loans made by the represented person to her sister RM.
10 These reasons relate to the decision made by the Tribunal when the administration order was reviewed over two hearings in June and October 2007.
Evidence available to the Tribunal prior to the hearing on 26 June 2007
Evidence provided to the Tribunal prior to the hearing on 29 October 2007
11 The matter was heard over two hearings, the first being adjourned in June for the Public Trustee to report to the Tribunal in relation to the nursing home fees and the Deed of Agreement for repayment of the debt owed to the represented person by her sister RM.
12 Prior to the second hearing, a referral was made by the Tribunal to the Public Advocate to investigate and report to the Tribunal in respect of "whether there is any person other than the Public Trustee who is suitable and willing to be appointed administrator".
13 The first hearing was attended by the represented person, her sister BB and PH, the represented person's son. A representative from the Office of the Public Trustee (Public Trustee) attended by telephone, as did the finance manager from the nursing home (MR) where the represented person currently lives.
14 The second hearing was attended by the represented person, her son, PH, and sister BB. Also in attendance were two representatives from the Office of the Public Trustee (Public Trustee), a representative from the Office of the Public Advocate (Public Advocate) and the finance manager from the nursing home (MR).
15 Evidence was provided by the represented person that she has a psychiatric illness. She "hears voices" and sometimes has "visions" and doesn't know if "they are true or false". She agreed with the medical reports that she suffered a stroke and that she has bipolar disorder which results in dramatic mood and behaviour swings. She advised that in addition to the above, she suffered brain damage as a result of an assault by her ex-husband.
16 The represented person acknowledged that when she is unwell she spends money unwisely and referred an incident in the report from the Public Trustee where she requested $900 to buy a suit from David Jones. She said this was at a time when she was "quite sick".
17 The nursing home representative, MR, provided evidence that, some months prior to the hearing, she had informed the Public Trustee that she thought a mistake had been made in the assessment of the represented person's estate for the purpose of setting the nursing home fee. She explained that the represented person is being charged, in addition to the basic pensioner fee of $30.77 a day, a fee of $13.45 a day which is based on her income and an additional $2.42 a day because her income exceeds the allowable pensioner income.
18 MR advised that the Public Trustee had informed her that the represented person's pension has been reduced because of the rental income from the home unit which was previously her home. MR pointed out that the represented person is paying more in nursing home fees as well as having a reduced pension income because the rent from her unit is being included as income. MR said that the unit should not affect the assessment for nursing home fees and the rent should not be added to the represented person's income and therefore assessed by Centrelink as income.
19 MR said she telephoned and raised her concerns with the Public Trustee. She followed this telephone conversation with a letter referring to the telephone conversation and outlined her concerns. MR said that, in addition to the letter of concern she had also sent the Public Trustee, an application form for a hardship allowance in case this was applicable to the represented person. There had been no response to the letter. The Public Trustee advised the Tribunal that he was unable to recall receiving the telephone call, the letter of concern or the application form for a hardship allowance. Subsequent to the first hearing and prior to the second hearing, MR provided the Tribunal with a copy of her letter of concern to the Public Trustee.
20 The Public Trustee stated that he had not checked with Centrelink to see that the represented person had been correctly assessed for her pension and consequently for her nursing home fees, but would do so as a consequence of the concerns highlighted in the hearing. The Tribunal directed the Public Trustee to follow up with Centrelink and the Department of Health and Ageing in relation to the assessment, and to provide the Tribunal with a written report outlining the outcome of his investigation of this matter.
21 In response to questions about the action taken by the administrator in relation to the direction in the administration order made in October 2000 that the administrator follow up and arrange a repayment program for the loan to the sister of the represented person, the Public Trustee advised that the legal division of the Office of the Public Trustee had entered into a Deed of Agreement (Deed) which acknowledged the debt and agreed that the monies would be repaid out of the estate of the mother after her death. Meanwhile, the debt would accrue interest at the rate of 5% per annum from the date of the Deed (23 September 2005) until repayment. Neither the Tribunal nor the represented person had been provided with copies of this Deed. The Public Trustee agreed to provide these to both parties and did so prior to the second hearing.
22 The Public Trustee could not explain why the debt was not pursued as directed in the order of October 2000. The Public Trustee agreed to provide the Tribunal with a very brief chronology of the process whereby the decision was made to accept the Deed rather than to pursue repayment of the debt by other more timely means.
23 The first hearing was adjourned to allow the Public Trustee to investigate and provide the required reports to the Tribunal.
24 Prior to the second hearing in October, the Public Trustee provided the Tribunal with a brief chronology of events leading up to the signing of the Deed, a copy of the signed Deed and a report in relation to investigation of the Centrelink assessment, reduced pension and setting of the nursing home fees.
25 It appears from the evidence provided at the first hearing and from the information provided by the Public Trustee in his report of 30 July 2007 to the Tribunal, that the Public Trustee has not acted in a timely manner in respect of arranging repayment of the debt owed to the represented person by her sister RM. The administrator (Public Trustee) was directed by order on 31 October 2000 to ensure that "outstanding loans owed to [the represented person] by [RM] are acknowledged and a repayment program arranged".
26 The Public Trustee report dated 30 July 2007 indicates that it was a year before any action was taken in relation to the recovery of the debt and another two years before an offer was made by RM to repay the debt out of the estate of her mother after her death. A Deed to this effect was not signed by RM until September 2005 - almost five years after the original order and direction in relation to the recovery of the debt was made.
27 It appears that at no time during this process was there any discussion with the represented person about the proposal to defer repayment of the debt until the death of her mother.
28 After receipt of the reports from the Public Trustee, the Tribunal made a referral to the Public Advocate to investigate and report back to the Tribunal as to whether there is any person other than the Public Trustee who is suitable and willing to be appointed administrator.
29 At the second hearing, the Public Trustee advised that his investigation and actions since the first hearing had resulted in the represented person's full pension being restored and a small back payment to 2 May 2007 had been paid. He further advised that the Public Trustee is in the process of appealing the Centrelink decision in relation to the payment of the arrears with a view to getting it backdated to 1 July 2005. On 1 July 2005, legislative changes resulted in rent from a home no longer being assessed as income if that rent was used to pay for nursing home accommodation.
30 The difference between the full pension which the represented person had been entitled to and the amount she actually received in the period 1 July 2005 to 2 May 2007 is in the order of $2031.38.
31 The Public Trustee advised that, based on the new information, the nursing home fee has been reduced with an overpayment arrears of $245.22 having being repaid to the estate of the represented person but, like the pension adjustment, this only covers the period back to 2 May 2007 and should be backdated to 1 July 2005. Depending on the outcome of the Centrelink appeal, further reimbursement to the estate for overpayment of nursing home fees back to 1 July 2005 in the order of $1700 may be paid.
32 If the appeal to have the arrears backdated to 1 July 2005 is not successful, the Public Trustee advised that reimbursement would be made to the represented person's estate by the Office of the Public Trustee.
33 The Public Advocate reported that her investigation revealed that there are no suitable or willing persons other than the Public Trustee to be appointed administrator. Further, she reported that parties agree that the Public Trustee should continue in the role of administrator.
34 The Public Advocate advised the Tribunal of her investigations in respect of an alternative administrator given that there is currently a potential conflict of interest and an independent advocate may be required to ensure that the represented person's estate is fully and appropriately reimbursed for any loss suffered as a result of any oversight in management by the Public Trustee.
35 The Public Trustee agreed, after some discussion with parties in the hearing, that he would instigate a reassessment of the appropriateness of the Deed in relation to the outstanding loan to the represented person's sister and ascertain if there was any other proposal that might result in an outcome more suitable to the represented person's current needs.
36 In accordance with s 84 of the Guardianship and Administration Act 1990 (WA), the Tribunal must review an order within a specified period not exceeding five years from the date of making the order.
37 Under s 90 of the GA Act, the Tribunal may, upon a review of an administration order, confirm, revoke or amend the order. The Tribunal may substitute another order for the revoked order. A review of an administration order is a de novo hearing, that is, the matter is heard again from the beginning.
38 In deciding whether to appoint an administrator and in reviewing the appointment of an administrator the Tribunal is required, by the provisions of the GA Act, to again make findings about the person's capacity and the need for an administrator as detailed in s 64:
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
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 -
as the case may require, of the estate of the person in respect of whom the application is made.
Where under subsection (1) the State Administrative Tribunal declares that a person is in need of an administrator of his estate, it shall declare the matter or matters set out in paragraph (a) of that subsection of which it is satisfied.
(a) may be made subject to such conditions and restrictions as the State Administrative Tribunal thinks fit;
(b) may, subject to section 51 of the Public Trustee Act 1941, include requirements as to the giving of security to the executive officer and the manner in which it is to be given."
39 If an appointment is made or confirmed, s 68 details who may be appointed as an administrator:
An administrator (including a joint administrator) shall be
(a) an individual of or over the age of 18 years; or
who has consented to act and who, in the opinion of the State Administrative Tribunal -
(c) will act in the best interests of the person in respect of whom the application is made; and
(d) is otherwise suitable to act as the administrator of the estate of that person.
The State Administrative Tribunal shall not appoint as administrator a corporate trustee that is a trustee company under the Trustee Companies Act 1987 unless it is satisfied that -
(a) there is an individual who would otherwise be appointed as administrator and that individual has in writing requested the appointment of that trustee company; or
(b) the person in respect of whom the application is made has made a will appointing the trustee company as executor and the will remains unrevoked at the time of the appointment.
For the purposes of subsection (1), the State Administrative Tribunal shall take into account as far as is possible -
(a) the compatibility of the proposed appointee with the person in respect of whom the application is made and with the guardian (if any) of that person;
(c) whether the proposed appointee will be able to perform the functions proposed to be vested in the administrator.
The fact that a person is the guardian of a person does not disqualify him from being appointed as the administrator of the estate of that person.
Except where he is appointed to act jointly with another person or other persons, the State Administrative Tribunal shall not appoint the Public Advocate as an administrator unless there is no other individual or corporate trustee who is suitable and willing to act."
40 The principles to be observed by the Tribunal when making determinations in relation to the review of an administration order are the same as those applied in relation to an application for an administration order and are set out in s 4 of the GA Act_._
42 Section 70 provides for the administrator to act in the best interests of the represented person
An administrator shall act according to his opinion of the best interests of the represented person.
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;
(b) in such a way as to encourage the represented person to live in the general community and participate as much as possible in the life of the community;
(c) in such a way as to encourage and assist the represented person to become capable of caring for himself and of making reasonable judgments in respect of matters relating to his person;
(d) in such a way as to protect the represented person from financial neglect, abuse or exploitation;
(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;
(f) in the manner that is least restrictive of the rights, while consistent with the proper protection, of the represented person;
(g) in such a way as to maintain any supportive relationships the represented person has; and
(h) in such a way as to maintain the represented person's familiar cultural, linguistic and religious environment.
Nothing in subsection (2)(a) shall be read as authorising an administrator to act contrary to the Legal Practice Act 2003.
Nothing in subsection (2) shall be read as restricting the functions of an administrator at common law or under any written law."
Capacity of the represented person to make decisions for herself
43 The Tribunal is satisfied on all the evidence available to it, both from the written reports and the evidence provided at the hearing by parties including the represented person herself, that the represented person satisfies the criteria in s 64 of the GA Act and is a person for whom an administration order can be made.
44 As set out in the legislation, the appointment of an administrator requires the Tribunal to find there is a need for an order and that the needs of the person cannot be met by any means less restrictive of the person's freedom of decision and action.
45 In this case, the represented person has been dependent on an administrator for the management of her financial affairs for some years and, by her own admission, continues to need an administrator.
46 The Tribunal finds that there continues to be a need for an administrator to manage the home unit which is currently rented, to make decisions in relation to paying accounts and to manage the appeals which are currently in progress in relation to the reimbursement of lost pension payments and overpayment of nursing home fees.
47 The represented person was able to articulate her concerns and wishes to the Tribunal. She recognises that she needs an administrator and, provided the Public Trustee follows up on the outcomes agreed in the hearings, she is satisfied that the Public Trustee continues in the role of administrator of her estate.
48 An order was made confirming the appointment of the Public Trustee for a period of six months. The administrator agreed to provide to the Tribunal a proposal as to how the represented person's estate is to be suitably reimbursed for the loss incurred in respect of the underpayment of the Centrelink benefit and the overpayment of nursing home fees. The administrator agreed to ascertain whether the Deed is in the best interests of the represented person or whether the debt should be repaid by some other means. The administrator agreed to provide the Tribunal information as to the outcome of the appeals to the Social Security Appeals Tribunal and the Department for Disability and Aging.
49 The Tribunal finds that, at this point, it is in the best interests of the represented person that the status quo remains. The Public Trustee has already commenced the appeal process in relation to the underpayment of the Centrelink pension and the overpayment of nursing home fees. In addition, the Public Trustee has agreed to re-assess the Deed and ascertain if there is a possible alternative way of managing the repayment of the loan. It would be an unnecessarily onerous task for a new administrator to take on the role at this time. Further, investigation by the Public Advocate found that there are no other parties willing to take on the role of administrator.
50 The Tribunal confirmed the appointment of the Public Trustee for a further six months.
I certify that this and the preceding [50] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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