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[2007] WASAT 127
State Administrative Tribunal (WA)
2007-05-25
Original judgment source is linked above.
Guardianship and administration - Application for legal costs from the represented person's estate under s 16(4) of the Guardianship and Administration Act 1990 (WA) - Principle that parties bear their own costs - That principle may be overturned when legal assistance is necessary for the Tribunal to make a determination in the best interests of the represented person - Party's ability to pay is not a relevant consideration - Deterrence from making future applications not a relevant consideration - Good intentions insufficient reason to make an award of costs - Balance of convenience is not a reason to make an award of costs
Guardianship and Administration Act 1990 (WA), s 16, s 16(4), s 97(1)(b), s 127, Sch 1 Pt B cl 13(2)(a)
Guardianship and Administration Act 1995(Qld), s 82, s 127
A and ES [2005] WASAT 279
GD and AD [2005] WASAT 203
Re ELF [2004] QGAAT 57
Re ERF [2005] QGAAT 62
1 The sister of an elderly woman who had suffered a stroke made an application for her legal costs to be paid from the woman's estate.
2 The sister had applied to the Tribunal for an administrator to be appointed for the woman, who because of the stroke, was now unable to make reasonable judgments about her estate. An application for administration and guardianship was already before the Tribunal.
3 The applications made to the Tribunal expressed a concern that the woman's estate was at risk and that she had executed an enduring power of attorney when she was incapable of doing so. As it emerged, there was no evidence or information presented to support an assertion that there had been misappropriation of the woman's estate.
4 In all the circumstances of the case, it could not be said that the legal assistance obtained by the sister justified her legal costs being paid from the woman's estate. The Tribunal did not doubt the intentions of the sister, but this was not sufficient to warrant an award of costs.
5 In dismissing the application for costs, the Tribunal took the view that it should not depart in this case from the principle that parties bear their own costs in proceedings.
6 These reasons relate to an application for costs under s 16(4) of the Guardianship and Administration Act 1990 (WA) (GA Act). The costs were incurred in the proceedings for guardianship and administration for JS (represented person), an 88-year-old woman who suffered a brain stem bleed in September 2006, as a consequence of which her cognition became impaired.
7 The application for costs has been made by the represented person's sister, LC, one of the applicants in the proceedings. LC, through her legal representative, lodged an application for administration in respect of the represented person in November 2006 proposing that MS, a friend of the represented person, be appointed her administrator. MS had herself earlier lodged applications for guardianship and administration in October 2006.
8 In November 2006, DM, another friend of the represented person, lodged with the Tribunal a form consenting to be her guardian and administrator. This occurred after the applications made by MS and LC.
9 The applications by MS and LC stated a concern that the represented person had executed an enduring power of attorney in October 2006 in favour of DM when she was not capable of doing so. The represented person had also made a will in October 2006 making various bequests, with the balance of the estate left to DM who is the appointed executor. There was, according to the application of MS, a " ... suspi[c]ion of financial abuse".
10 MS and LC were supported by another friend of the represented person, ML, who said that she had been the represented person's "guardian and carer" from about the middle of August 2004 to the middle of 2006 when there was a falling out. DM was supported by PB, who also had become acquainted with the represented person, and together they arranged for the represented person to move to a retirement village from the hostel that had been arranged for her by ML.
11 At various times, the represented person had become estranged from all the parties, including her sister.
12 DM disagreed with the allegations of MS and LC concerning the enduring power of attorney executed by the represented person on 18 October 2006 when she was in hospital after suffering the stroke. DM stated that the document had been witnessed by a hospital nurse and a priest. He said he asked the witnesses to confirm that this was the represented person's wish. DM stated that he attempted to use the enduring power of attorney to pay a telephone account for the represented person but was advised by the bank manager there were concerns about her signature. The manager required a statement from a medical practitioner. A hospital doctor agreed to write a letter to the bank and said he was amazed at the represented person's recovery. It was the next day that DM stated he was advised that the represented person did not have capacity and that MS was accusing him of "fraud". DM said that he had not attempted to use the enduring power of attorney after that time.
13 The Tribunal had before it a letter from a medical practitioner at Royal Perth Hospital dated 20 October 2006 and which stated: "[the represented person] was admitted to Royal Perth Hospital on 28/9/2006. In her present situation she does not have the capacity to sign legal documents. She is not currently competent to make legal decisions."
14 At the hearing on 8 December 2006, the represented person (through an interpreter) told the Tribunal she wanted her sister to help her, and that she did not want an independent person to be appointed to assist.
15 LC (sister) said that she was willing to be appointed the represented person's guardian and administrator, but needed assistance as her English was not strong. It was important, she said, that someone from the represented person's ethnic community be involved and nominated MS.
16 MS stated she was willing to be appointed. She would follow medical advice as to whether the represented person could return home to live (which was the wish of the represented person) and she would allow contact with the represented person's friends depending on what she wanted and her level of agitation. MS described her suitability to keep accounts for the administration on the basis of her work for her ethnic community.
17 DM said he was happy to see the represented person reunited with her sister, LC, after an estrangement. He said his actions were only ever at the behest of the represented person and in her best wishes. He was happy to "retire" from being attorney and said that the wills the represented person executed recently did not reflect a love for her family. DM supported the appointment of an independent person but acknowledged the current wish of the represented person.
18 ML said she would support the joint appointment of LC and MS.
19 BP proposed the appointment of an independent decision-maker.
20 A niece of the represented person, TS, said that MS saved her aunt's life and that MS consulted with her on matters concerning her aunt. She supported the joint appointment of LC and MS.
21 The Public Advocate, to whom the application had been referred by the Tribunal for investigation and report, emphasised the wish of the represented person to have her sister involved in her life.
22 The Tribunal decided to appoint LC and MS as joint plenary administrators of the represented person and her joint limited guardians to decide where and with whom she should live, to determine the services to which she should have access, to determine the extent of contact she should have with others and to consent to her medical treatment.
23 The Tribunal revoked the enduring power of attorney executed by the represented person on 18 October 2006 in favour of DM. No findings were made in respect of the enduring power of attorney but the Tribunal expressed concern that the instrument was executed at a time when hospital doctors were of the view that she was not capable of doing so. The Tribunal preferred the appointment of an administrator based on LC's current incapacity.
24 At the conclusion of the hearing, the legal representative of LC made an application for costs under s 16(4) of the GA Act. The decision was reserved and the legal representative requested to make a written submission on the matter. That submission was received by the Tribunal on 28 December 2006.
25 WA Legal Pty Ltd (counsel) represented LC in these proceedings. The submission for an award of costs under s 16(4) of the GA Act is framed as follows.
26 LC came to counsel's office with MS on 27 October 2006. Her instructions were that some strangers were trying to influence the represented person's decisions including making her sign an enduring power of attorney and a will. LC instructed counsel that MS had filed an application with the Tribunal but that " ... she needed a [sic] comprehensive legal advice to protect her sister's interests."
27 LC instructed that she could not speak English and had no legal knowledge about the proceedings. Counsel's practice had two solicitors who spoke her language and this made her comfortable to use the service.
28 The work carried out by counsel involved assisting LC " ... in preparation of her application, interviewing two witnesses, organising references for MS and advising her on the manner how [sic] to protect her sister against interference from strangers trying to influence her sister".
29 Counsel's submission states that at the initial interview with LC, she had expressed a concern about the legal costs. She needed to borrow to pay for the costs. Counsel promised to apply to the Tribunal for reimbursement of the costs. The submission is that the represented person " ... has a substantial cash deposit and on the balance of inconvenience [sic] it would be detrimental to [LC] not to be reimbursed for her costs for acting in the best interest of her sister".
30 Counsel's costs amount to $8640.65 represented by legal fees of $7695.60 and disbursements of $945.05. The legal fees have been charged at the rate of $363 an hour. A perusal of the itemised account shows the major time allocations as follows:
SAT forms, download, print, attending the client/draft form
31 The jurisdiction to make an order for costs in the matter before the Tribunal is found in the State Administrative Tribunal Act 2004 (WA) (SAT Act) and the GA Act. If the two acts are in conflict, the enabling Act prevails (s 5 of the SAT Act).
(1) Unless otherwise specified in this Act, the enabling Act, or an order of the Tribunal under this section, parties bear their own costs in a proceeding of the Tribunal.
(2) Unless otherwise specified in the enabling Act, the Tribunal may make an order for the payment by a party of all or any of the costs of another party or of a person required to produce a document or other material on the application of the party under section 35.
(3) The power of the Tribunal to make an order for the payment by a party of the costs of another party includes the power to make an order for the payment of an amount to compensate the other party for any expenses, loss, inconvenience, or embarrassment resulting from the proceeding or the matter because of which the proceeding was brought.
(4) Without limiting anything else that may be considered in making an order for the payment by a party of the costs of another party where the matter that is the subject of the proceeding comes within the Tribunal's review jurisdiction, the Tribunal is to have regard to -
(a) whether the party (in bringing or conducting the proceeding before the decision-maker in which the decision under review was made) genuinely attempted to enable and assist the decision-maker to make a decision on its merits;
(b) whether the party (being the decision-maker) genuinely attempted to make a decision on its merits.
(5) The rules may deal with the effect of certain offers to settle, and responses, if any, to the offer, on the making of an order for the payment by a party of the costs of another party.
(6) The Tribunal may order that the representative of a party, rather than the party, in the representative's own capacity compensate that or any other party for costs incurred because the representative acted in, or delayed, the proceeding in a way that resulted in unnecessary costs."
[(1) repealed]
(2) Where a person gives evidence or information -
(a) at the instigation of the State Administrative Tribunal; or
(b) at the instigation of a party and the State Administrative Tribunal considers that the circumstances are exceptional, the Tribunal may approve payment to him of such amount as it thinks fit in or towards defraying any costs and expenses incurred by him in doing so, and an amount so approved shall be paid from moneys appropriated by Parliament for that purpose.
[(3) repealed]
(4) The State Administrative Tribunal may, if it is satisfied that a party to proceedings commenced under this Act has acted in the best interests of the represented person or a person in respect of whom an application is made, order that such costs relative to those proceedings as the State Administrative Tribunal thinks fit be paid to that party by, or out of the assets of, that person.
(5) Nothing in this section limits any other power of the State Administrative Tribunal under the State Administrative Tribunal Act 2004."
33 The decision to make an order for costs is ultimately at the discretion of the Tribunal.
34 In respect of a costs application under s 16(4) of the GA Act, it might be argued that the requirement that a party act in the person's best interests is not a difficult threshold to cross. For the most part, parties act in what they believe to be in the best interests of the person for whom an application has been made. This could include the applicant and any other party who has the wellbeing of the person at heart and contributes in a helpful and positive way to the proceedings.
35 To read s 16(4) in this way, however, is to raise the possibility of an open-ended approach to awards of costs from the estate of a person for whom the GA Act applies which, in my view, is not the intent or scope of that section. The general discretion under s 16(4) should not be used independently of the cost regime provided for in the SAT Act and the overarching principle that parties bear their own costs. Section 16(4) should be read in light of the relevant provisions of the SAT Act.
36 In the sense that costs represent the legal costs of a party, the relevant question for the Tribunal to consider is under what circumstances is it appropriate for a party to seek legal advice and representation in contemplation of seeking recovery of costs against the estate of a represented person or a person for whom an application has been made (proposed represented person).
37 It is of course the right of any party to seek legal advice and representation in proceedings under the GA Act. When does a situation arise, however, when those costs are appropriately borne by the proposed represented person's estate?
38 In the answer to that question, consideration must first be given to the environment in which the Tribunal operates.
39 Section 9 of the SAT Act sets out the main objectives of the Tribunal. They are to achieve the resolutions of questions, complaints or disputes, and to make review decisions, fairly and according to the substantial merits of the case; to act as speedily and with as little formality and technicality as is practicable, and to minimise the costs to parties; and to make appropriate use of the knowledge and experience of Tribunal members.
40 The Tribunal is not bound by the rules of evidence and is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms (s 32(2)). The Tribunal may inform itself on any matter as it sees fit (s 32(4)). The Tribunal is bound by the rules of natural justice (s 32(1)).
41 The above are commonly described as representing the inquisitorial character common to tribunals. Factors which are said to signify this inquisitorial character include: a duty to inquire, the ability to inform itself, the power to compel the production of witnesses and documents, the discretion to determine its own procedure, the informality of the hearings, the absence of the obligation to abide by the rules of evidence, the requirement to provide fair process, the ability to make a decision on the papers, the need for the proceedings to be reasonably prompt, the absence of the burden of proof on the parties, the requirement for the standard of proof that the Tribunal be satisfied as to its decision and the absence of legal representation for parties and their right to selfrepresentation ("Inquisitorial Processes in Australian Tribunals", Narelle Bedford and Robin Creyke, The Australian Institute of Judicial Administration Incorporated: March 2006: 15).
42 The Tribunal aims to make proceedings as accessible as possible to the parties (see, for example, the Tribunal's Practice Note 9 "Proceedings under the Guardianship and Administration Act 1990"). Legal representation is not usually required at hearings of the Tribunal in the GA Act jurisdiction because the information necessary to make a determination is generally secured by the application and hearing processes alone. In the GA Act jurisdiction moreover, the Tribunal is able to refer an application to the Public Advocate for independent investigation, report and advocacy in the best interests of the person for whom the application is made (s 97(1)(b)).
43 Another important aspect of the environment in which the Tribunal operates in the GA Act jurisdiction is that the proceedings are not in the nature of a civil dispute between parties (although there may be conflict between parties), but rather the most common question to be decided is whether the person the subject of the application is in need of a substitute decision-maker; a guardian for personal decision-making and an administrator for financial decision-making. The focus of the proceedings is the best interests of that person, and if there is conflict or differing opinions, then it is generally about matters such as the facts of the application, the person's capacity and/or the suitability of proposed guardians and administrators. There may also be situations where a party will wish to respond to adverse allegations made by another party.
44 This being the case, those aspects of the common law in civil disputes that refer to principle of the "cost following the event" are of limited application.
45 What relevance does all of this have to an application for costs under s 16(4) of the GA Act. The starting position is that a person should be able to make an application for guardianship and administration under the GA Act for another person without legal representation, with a reasonable belief that the Tribunal's processes as they play out in the GA Act jurisdiction enable a best interests determination to be made. Even if such a determination cannot be made at a first hearing, the Tribunal can adjourn to seek further information from the parties, third parties (s 35 of the SAT Act) or the Public Advocate.
46 It is nevertheless the case that the GA Act contemplates the possibility of an order for costs from the estate of a proposed represented person. If the above reasoning is correct, then the circumstances in which such an order is likely to be made would be when an application falls outside the area of expectation that the Tribunal, by the inquisitorial nature of its proceedings, is able to make a correct and preferable decision in the best interests of the person under disability, without parties requiring professional legal input. Given what I have described above as the Tribunal's processes, those circumstances should occur infrequently.
47 The decided cases are few. In GD and AD [2005] WASAT 203, the Tribunal, in deciding not to approve the payment of legal costs from the estate of the represented person, found that the "good intentions" of the parties seeking costs was insufficient reason to make an order. In exercising its discretion, the Tribunal considered the following at [69]:
48 In A and ES [2005] WASAT 279, the Tribunal made a costs order under s 16(4) because it was satisfied that the applications were made in the best interests of the represented person and "... [because of] the circumstances surrounding the revocation of the joint EPA, and the size and complexity of the estate" ([21]). The award of costs was for a "reasonable amount for obtaining advice and being represented at the ... hearing". The Tribunal did not consider it appropriate to allow costs incurred " ... in negotiating with the other parties, and preparing for and attending the subsequent mediation and hearings" ([23]).
49 The Tribunal found, with which I agree, that a party's financial ability to pay is not a relevant consideration under s 16(4) (at [18]), and that a costs order under s 16(4) should not be influenced by the consideration of whether a party should be "deterred" from making future applications as this can be dealt with under s 87 of the SAT Act (at [19]).
50 There is no exact equivalent to s 16(4) in other Australian jurisdictions. There is, however, a recently decided case by the Queensland Guardianship and Administration Tribunal in which legal costs were allowed from the estate of a represented person. The case, Re ERF [2005] QGAAT 62, provides some insight into what factors might be taken into account when contemplating such a costs order.
51 Under s 127 of the Guardianship and Administration Act 2000 (Qld) (Queensland Act), each party must bear their own costs unless there are exceptional circumstances such that an applicant should pay an active party's costs and the costs of the Tribunal. In the departure from this regime in Re ERF, the Tribunal used its discretion under s 82 of the Queensland Act which allows it to make declarations, orders or recommendations or give directions or advice in relation to administrators ([18]).
52 In exercising its discretion to award costs, the Queensland Tribunal considered whether there was an obligation to use ERF's funds to reimburse the applicant for legal costs incurred.
53 In respect of this question, the Tribunal found that the application was complex with substantial conflict between the applicant daughter and son of ERF, the latter being his attorney for personal and financial matters until revoked by the Tribunal ([8] and [22]). The level of conflict was " ... at the extreme end of the range normally experienced by the Tribunal in its work. Both parties' cases were enhanced at the hearing by presentation through legal representation" ([7]).
54 The Tribunal found that in making the applications and bringing to the attention of the Tribunal the actions of the then financial attorney [the son], the applicant had conferred a significant benefit on ERF by having the son's appointment terminated. ERF had also been accorded a significant financial benefit as a consequence of the applications and Tribunal decision [the Tribunal had earlier found that there had been a diminution of ERF's estate while under the management of the son (see Re ELF [2004] QGAAT 57).
55 The applicant daughter was found to have secured no pecuniary advantage from the proceedings and in fact had put herself at financial risk in making the application ([25], [26] and [29]).
56 It seems to me that what can be derived from costs regime envisaged by the SAT Act and GA Act read together with the decided cases (although of variable relevance) is the articulation of a number of areas of consideration for the Tribunal when using its discretion in the making a determination under s 16(4) of the GA Act. This may include situations where:
57 These areas of consideration provide some guide to what "best interests" might include in the context of a determination by the Tribunal under s 16(4) of the GA Act. They cannot, however, provide a fetter on the ultimate discretion of the Tribunal to make a decision about costs on the facts of the particular case.
58 At the time LC sought legal advice, an application for guardianship and administration had already been filed with the Tribunal by MS. This was known to LC and counsel. In my view, a second application for administration was not necessary.
59 It is my further view, referring to the Tribunal's inquisitorial nature, that the completion and filing of an application form is not work that requires specialist legal skills. The form is designed to be able to be completed by lay persons, and when filed, simply alerts the Tribunal in the first instance that there is a person under disability who might be in need of a guardian and/or administrator. The applicant is not required to formally plead the matter or at that stage of the proceedings present any particularised grounds for the appointment of a substitute decision-maker that he or she will be held to in the course of the proceedings. In most applications, applicants make general statements (usually without supporting evidence) expressing their concerns about the proposed represented person.
60 I accept that LC, given her circumstances as an elderly person from a non-English speaking background, only settled in Australia for 10 years and the concerns about her sister, might seek legal assistance for herself to traverse a system foreign to her. I am not satisfied, however, that the cost of this advice should be borne by the represented person. There was already an application on foot and the matter had been referred to the Public Advocate by the Tribunal on 9 November 2006 which was prior to LC lodging her application (22 November 2006). Section 97(1)(b) of the GA Act sets out the statutory obligations of the Public Advocate in respect of hearings before the Tribunal and this includes advancing the best interests of the person to whom the proceedings relate.
61 In respect of a language barrier, the Tribunal makes available (at the Tribunal's costs) interpreters for hearings.
62 The applications presented allegations of a "suspicion" of financial abuse and the Tribunal expressed a concern at the execution of an enduring power of attorney at a time when the evidence shows the represented person was likely incapable. A will was also executed at this time which favoured DM but it must be said that an earlier will which also favoured DM (September 2006) was made prior to the represented person suffering the stroke. DM contested the allegations, stating that the enduring power of attorney had been witnessed by a hospital nurse and priest and that apart from attempting to pay a telephone bill (which was not successful), he did not use the instrument for any other purpose. The applicants did not provide anything further in support of the contention that financial abuse had occurred.
63 Whilst it might be argued that it was reasonable for the applicants to be concerned at the events both before and after the represented person suffered the stroke, it is the case that the represented person was estranged for a time from both applicants and ML, the other friend who had previously helped her. The circumstances of the represented person cannot be said to be at the extreme end of allegations of abuse, or for that matter, conflict between the parties. As to the latter, the two "sides" of the argument, that represented by LC, MS and ML on the one hand, and DM and BP on the other, were coherently argued before the Tribunal and although LC might have had some comfort at having legal assistance, her case, in my view, could have been made to the Tribunal without that representation, given that it was substantially in accord with that of MS.
64 The applications were not unique nor raised a point of law that was argued before the Tribunal.
65 Counsel's submission that on the "balance of convenience" the represented person's estate should bear LC's legal costs, presumably on the basis that there is less of a detriment to her estate than that of LC, cannot succeed. The fact that the represented person has a larger estate than LC is not reason for her to meet the latter's legal costs.
66 In all the circumstances of the case, it cannot be said that the legal assistance obtained by LC warranted an award of costs from the estate of the represented person. The Tribunal does not doubt the intentions of LC; however, merely having the best interests of the represented person at heart is not sufficient (see GD and AD above).
67 The application for costs must therefore be dismissed.
68 It should be said that it is crucial for the legal profession to advise clients of the principle in the Tribunal's jurisdiction that parties bear their own costs and that an award of costs is the exception rather than the rule. This is no less so in an application for costs against a disabled person's estate as it is in an application for "party to party" costs. In this respect, the scope of s 16(4) of the GA Act, which on its face appears to have a wide reach, must be read down to reflect that principle.
I certify that this and the preceding [68] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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