Supreme Court of Tasmania|1998-10-21|Before: Underwood J

Public Trustee v Blackwood, John & King, Heather & Baxter, Tom [1998] TASSC 130 (21 October 1998)

Mental Health - Guardians, committee, administrators, managers and receivers - Appointment - Tasmania - Appeal against decision not to continue administration order - Relevant principles.

Re M & R & The Guardianship and Administration Board (1987) 2 VAR 213, referred to.

TOM BAXTER (in their capacity as members of the

The Guardianship and Administration Board ("the Board") is constituted by the Guardianship and Administration Act 1995 ("the Act"), s7. The Board has the power (inter alia) to make guardianship and administration orders with respect to persons under a disability and concerning the affairs of such persons. On 21 April 1998, the Board made orders with respect to the affairs of one M D. This appeal is brought by the Public Trustee against those orders, pursuant to the provisions of the Act, s76 which relevantly provides:

"76 -- (1) An appeal to the Court from a determination of the Board may be brought by a person --

(a) who appeared, or was entitled under section 73 to appear, before the Board at the relevant hearing; or

(b) who, with leave of the Board, would have been entitled to appear before the Board at the relevant hearing; or

(b) on any other question, only with the leave of the Court.

M D is 58 years of age and lives at Millbrook Rise, Royal Derwent Hospital. M D has lived there since he was 12 years old. He suffers from chronic schizophrenia and is unable to care for himself or look after his affairs. M D came to Tasmania from Poland after World War II, but the circumstances surrounding his migration here all those years ago is shrouded in mystery. He has no family in Australia but has siblings in Poland. Last year, M D became agitated when he became aware of a suggestion that a brother of his wanted to take him back to Poland to fulfil his mother's dying wish. Members of the Polish Club are M D's only visitors. His lifestyle is simple. He is described as a man of few words. He is given $10 per week pocket money which he spends as soon as he receives it at the local shop on cigarettes. A report before the Board stated with respect to M D, that "he has a lady friend at Millbrook Rise and he spends a lot of time doing things for her." The report continues, "He also helps around the home. Staff say that he is happy with his circumstances and content with his lot in life." M D's only sources of income are a Centrelink pension and income from invested capital.

In 1995, before the Act came into operation, an officer at the Royal Derwent Hospital asked the Public Trustee to administer M D's affairs by filing a certificate of disability in this Court. This was done on 31 November 1995 pursuant to the provisions of the Mental Health Act 1963, s88(2) and the Public Trustee thereupon became the committee of the estate of M D. At the time of filing the certificate of disability, M D had a credit balance in excess of $8,000 in a savings account at the Commonwealth Bank and $3,500 in the Royal Derwent Hospital trust account. M D's disability prevented him gaining access to his savings account and the rate of interest was, at that time, declining. Upon the Public Trustee becoming committee of M D's estate, all of the monies totalling just in excess of $12,000 were gathered in and invested in the Public Trustee's common fund. Since the commencement of the administration, the only payments made out of the fund on behalf of M D have been nursing home fees and "monthly comfort payments". There was another reason for the hospital's request in 1995 for intervention by the Public Trustee. Staff at Millbrook Rise had expressed concern about possible financial exploitation of M D by another Polish inmate at the hospital.

The Act commenced operation on 1 September 1997 (Statutory Rule 117/1997). By virtue of the Act, s90A, Sch4, cl 5, the certificate of disability is deemed to be an administration order made under the Act and the Public Trustee deemed to be the administrator of M D's estate.

The Act, s52 provides that an administration order lapses on the expiration of three years after the date on which it was made, unless it is continued under s68. Sections 67 and 68 provide:

(b) on application by, or on behalf of, a represented person; or

hold a hearing to review a guardianship order or administration order.

68 -- (1) On a review under section 67, the Board may vary or continue a guardianship order or administration order subject to any conditions or requirements it considers necessary or the Board may revoke the order.

(2) The Board may make such further orders as it considers necessary in order to give effect to an order made under subsection (1)."

On 11 March 1998, the appellant Public Trustee applied to the Board for a review of the administration order concerning M D. On 21 April 1998, the respondents, constituting the Board, considered the application. A number of persons were present, including an officer of the appellant. The Board received a number of reports with respect to M D. That day, the Board made the following orders (formal parts omitted):

"1 That the Public Trustee pay the balance of the represented person's funds and arrange for the transfer of the represented person's current disability pension to the Royal Derwent Hospital to hold on trust for the represented person.

2 That upon completion of the transfer of the said funds and pension the administration order is revoked.

THE BOARD RECOMMENDS that Royal Derwent Hospital liaise with the Public Guardian to develop a pro-active financial management plan for [M D]."

The Act, s74, obliges the Board to give written reasons for a decision upon the request of a person aggrieved by that decision made within twenty-eight days after the decision is handed down. The appellant made a request for written reasons. They were supplied by the Chairman of the Board who wrote to the appellant to the effect that he was doing so on a "one off basis" as he did not think that the appellant was a "person aggrieved" within the meaning of the Act, s74. Prima facie, I would have thought that the Public Trustee was clearly a person aggrieved by the order of the Board made on 21 April 1998. See McCarthy v Xiong (1993) 2 Tas R 290; Annetts v McCann [1990] HCA 57; (1990) 170 CLR 596; Haoucher v Minister for Immigration and Ethnic Affairs [1990] HCA 22; (1990) 169 CLR 648; Kioa v West [1985] HCA 81; (1985) 159 CLR 550.

The notice of appeal contains nine grounds. They allege misconstruction of the statute, misapplication of the facts to the statute, making a decision which no Board, properly instructed as to the law and acting reasonably, could have made and making orders that the Board had no jurisdiction to make. Before turning to examine the grounds of appeal, it is convenient to set out some statutory provisions and outline the Board's reasons for making the orders it did.

The Act, s6 sets out some general principles in the following terms:

"6 -- A function or power conferred, or duty imposed, by this Act is to be performed so that --

(a) the means which is the least restrictive of a person's freedom of decision and action as is possible in the circumstances is adopted; and

(b) the best interests of a person with a disability or in respect of whom an application is made under this Act are promoted; and

(c) the wishes of a person with a disability or in respect of whom an application is made under this Act are, if possible, carried into effect."

Section 51 confers the power to make an administration order. It provides:

"51 -- (1) If, after a hearing, the Board is satisfied that the person in respect of whom an application for an order appointing an administrator is made -

(b) is unable by reason of the disability to make reasonable judgements in respect of matters relating to all or any part of his or her estate; and

the Board may make an order appointing an administrator of that person's estate.

(2) In determining whether or not a person is in need of an administrator of his or her estate, the Board must consider whether the needs of the proposed represented person could be met by other means less restrictive of the person's freedom of decision and action.

(3) The Board must not make an order under subsection (1) unless it is satisfied that the order would be in the best interests of the proposed represented person.

(4) Where the Board makes an order appointing an administrator of a person's estate, the order is to be that which is the least restrictive of that person's freedom of decision and action as is possible in the circumstances.

Section 56 sets out the powers of an administrator. It is a long section. In essence, the administrator has complete possession and control of the estate of the person who is the subject of the order. The wide powers conferred by s56(1) and (2) may be curtailed, restricted or conditioned by order of the Board. See s56(3) and (4).

There was no doubt that M D did not have the capacity to manage his financial affairs. This is expressly stated in the written reasons. Those reasons refer to the provisions set out in s51 and the general principles enumerated in s6. The written reasons state with respect to the issue of continuation or revocation of the administration order, that the Board:

* "... should adopt means which are the least restrictive of the person's freedom of decision and action";

* should "... consider whether ... the continuation of the order is in the represented person's best interests"; and

* "... consider whether there is a need for an administrator".

"The Board determined that in this case there were alternatives that were less restrictive than a formal administration order and that the revocation of the order was in [M D's] best interests. The Board was satisfied that [M D's] financial affairs could be administered by the Royal Derwent Hospital through the Trust Account system currently administered by Mr Tony Nicholson. The Board was satisfied that the Royal Derwent Hospital had the authority and expertise to be responsible for client's money even of significant amounts. The Royal Derwent Hospital pays interest based on 90 day Treasury Bills currently at 4.2% and no levy, fees or other charges are currently made for this service. This compared to 5.7% interest paid on credit balances annually and a commission fee of 6% charged by The Public Trustee. The Board noted that since the commencement of the administration order in November 1995 fees of $2,950.47 had been charged to administer the estate while in the corresponding period $1,815.25 had accrued as interest."

The written reasons note that the Public Trustee makes monthly comfort payments to the hospital but that the distribution and spending of that money, and the handling of requests for additional expenditure, are all managed by the staff at the hospital. With respect to this, the Board's reasons state:

"The Board was satisfied that a sophisticated Trust Account and financial management system existed at the Royal Derwent Hospital, the system was accountable and certainly in [M D's] case less restrictive than a formal administration order."

With respect to the issue of possible financial exploitation of M D, which had been one of the two reasons for the filing of the certificate of disability in 1995, the notes of the hearing before the Board contain this reference:

"The question was raised regarding a Polish lady by the name of [W] who visited [M D]. Marie Woodhouse [Clinical Nurse Consultant at Millbrook Rise] advised that she was likely to take advantage of [M D] financially, given the opportunity. That was one of the reasons for the original application. This lady does not visit as often now but the situation and concern still exists."

The Board's reasons address this issue in the following terms:

"The Board was satisfied that provided the monies standing to the credit of [M D] at The Public Trustee were paid to the Royal Derwent Hospital in trust there was no possibility of exploitation of those resources which was one of the original grounds for the application."

The notes of the hearing before the Board disclose that the officer of the appellant present at the hearing, queried what would occur if there was no administration order and M D demanded all his money from the hospital. The notes state, "the Chairman commented that that would be a situation for the Trust Officer [at the Royal Derwent Hospital] to contact the Board for an emergency order." The written reasons conclude with this paragraph:

"The Board was advised that [M D] had been at the Royal Derwent Hospital for forty six years. That for most of those years his financial affairs had been handled by the Royal Derwent Hospital and staff without apparent difficulty. In late 1995 the need for the appointment of The Public Trustee as administrator appeared necessary but the Board was satisfied that the issues giving rise to that application, no longer existed. The Board concluded that the 'least restrictive alternative' principle combined with [M D's] best interests compelled the revocation of the administration order once the Board's directions had been complied with."

The first five grounds of the appeal were argued together. They are:

"1 The Board, in conducting a review under s 68 of the Guardianship and Administration Act 1995, erred in law not having regard to the provisions of s 51 of that Act.

2 The Board erred in law in that it misdirected itself with respect to the requirements of s 51 of the Guardianship and Administration Act; particularly in failing to consider adequately or at all issues of [M D's] freedom of decision and action.

3 The Board erred in law in that it misdirected itself with respect to the requirements of s.6 of the Guardianship and Administration Act; particularly in failing to consider adequately or at all issues of [M D's] freedom of decision and action.

4 The Board erred in law in that having determined that [M D] did not have the capacity to look after his financial affairs, purportedly determined that there were other means less restrictive of his freedom of decision and action than the administration order.

5 The Board erred in law in that having determined that [M D] did not have the capacity to look after his financial affairs, failed to properly consider whether the revocation administration order would be in his best interests."

A consideration pursuant to the Act, s68, whether to continue or revoke an administration order must have regard to (inter alia) s51. Subsection (1) sets out three conditions precedent, all of which must be satisfied before the Board can exercise its discretion to make an administration order. It was common ground that the first two conditions precedent were satisfied. It appears that the Board was not satisfied of the third, viz, that M D was "in need of an administrator of his ... estate." Consideration of "need" as enacted in subs(1), must take into account the provisions of subs(2), viz,

"(2) In determining whether or not a person is in need of an administrator of his or her estate, the Board must consider whether the needs of the proposed represented person could be met by other means less restrictive of the person's freedom of decision and action."

On behalf of the appellant, Mr Porter QC submitted that the Board had failed to properly construe the provisions of subs(2) in that they did not consider M D's need for an administrator, but instead considered the whole of the circumstances of his case. Mr Porter submitted that the expression "freedom of decision and action" in subs(2) must be read in the context of subss(1) and (2) and, if this was done, it was clear that the expression meant freedom of decision and action with respect to the management of his estate. I accept that proposition. Mr Porter's submission continued that as M D was totally unable to manage his estate (other than by way of an apparently satisfactory weekly visit to the local shop) his need was for an administrator to manage it for him. Mr Porter contended that once the need was properly identified, viz, for someone to manage, protect and control his estate, it followed that the need could not be met by anything less than the continuation of the administration order.

In my opinion, the word "need" and the word "needs" in s51(2) mean different things. The expression "needs of the proposed represented person" is of wide import and encompasses all the wants and necessaries of the proposed represented person. Such needs include food, clothing, housing, medical treatment and the like. One such need may be, and was in this case, to have someone to protect and manage the estate. This is the need firstly referred to in subs(2) as "the need for an administrator of his or her estate". In my opinion, acceptance of the construction contended for by Mr Porter, would do violence to the meaning and purpose of s51(1) and (2). If the only need in subs(2) is the need for an administrator, the provisions of subs(1)(c) and (2) would, in the vast majority of cases, be otiose. Once it was established in accordance with s51(1)(a) and (b), that the proposed person was under a disability and that he or she was, by reason thereof, unable to make reasonable judgments in respect of matters relating to all or part of his or her estate, it would almost invariably follow that there was a need for an administration order. In my view, Parliament, by enacting subs(2), directed the Board to consider, not only the need for an administrator to manage and protect the estate, but also all the other needs of the proposed represented person. If, having done this, the Board reaches the view that all the needs could be satisfied by means less restrictive of freedom of action and decision than would be the case if an administration order was made, then an administration order should not be made. This construction reflects the philosophy apparent in the Act and enacted in sections such as ss6, 51 and 57, that control over and restriction on a person under a disability is to be kept to a minimum. The provisions of the Act are to be contrasted with its predecessor as enacted in the Mental Health Act 1963, PtVI, "Management of Property and Affairs of Patients" in which the only condition precedent for the exercise of jurisdiction was incapacity by reason of "mental disorder" to manage property and affairs.

The undoubted provenance of the Act is the Guardianship and Administration Board Act 1986 (Vic). The relevant provisions are virtually identical to the provisions of the Tasmanian Act. The decision of the Administrative Appeals Tribunal (Vic) in Re M & R & The Guardianship and Administration Board (1987) 2 VAR 213 is instructive. The case concerned an elderly woman who was totally dependent on others for her every need. She was in a nursing home. She was incontinent. She was unable to feed herself. She was incapable of understanding what was said to her and appeared not to understand what her eyes could see. She was visited every day by the first applicant, who was her daughter, and she and her husband, the second applicant, attended to her every need. The applicants applied for a guardianship order on the basis that although "[t]o-date no matters have arisen with respect to the care of Mrs M where lack of legal guardianship has been a hindrance ... the applicants are concerned that lack of legal authority could be a difficulty in relation to medical treatment or a possible move to another nursing home." The Board held that there was no need for a guardianship order and the Tribunal upheld the decision. The President, his Honour Judge Jones, said at 219:

"In my view, it is the evident intent of the legislature that guardianship (particularly in its plenary form) should be the last resort to be utilised where no other viable, and less restrictive, protective means is available to meet the needs of the person. This involves considering whether the person to be represented is likely to benefit from guardianship as distinct from the person seeking to be appointed. Even where guardianship is considered necessary in the best interests of the person, it is the intention of the legislature that the least restrictive form available be applied."

The Tribunal held that the Board was correct to take the view that no order was needed because the applicants were "effectively fulfilling such a role without a guardianship order and will continue to do" (218), and that if a need arose for legal authority to be exercised "an urgent application could be made for a plenary or limited guardian to deal with the situation" (216). There was no doubt that there was a need for a guardianship order, but the Tribunal held that the Board was correct to refuse to make one because the "needs" of M were being catered for by means less restrictive of her freedom of action and decision. The Board took exactly the same approach in this case. It took into account, as did the Victorian Board in M's case, all the circumstances of the case including here, that for years prior to the filing of a certificate of disability, M D's needs were satisfied without the need for an administration order. The Board took into the account the fact that the only material needs of M D that required financing were payment of the nursing home fees and pocket money for small weekly purchases at the local shop. They also took into account the need to avoid the risk of M D being exploited by others and the need to maximise the earnings from his capital. In taking into account all those matters, there was no misconstruction of the statute or other error of law.

The expression "best interests" as enacted in ss6 and 51(3), does no more than reinforce the general concept that the paramount concern is the overall interest of the patient, just as in Family Law, the best interests of the children are the paramount concern in disputes involving their custody, care and management. The statute makes it clear that insofar as is possible, the preservation of the proposed represented person's freedom of action and decision is in their best interests and, as his Honour Judge Jones said in M's case, an order is the last resort.

"7 The Board erred in law in that no reasonable Tribunal could, on the material before it, determine that [M D] was not in need of an administrator."

It is well established that if a tribunal makes a decision that no tribunal, properly instructed as to the law and acting reasonably, could have made an error of law has occurred. See Mahony v Industrial Registrar (NSW) (1987) 8 NSWLR 1; May v Transport Commission [1989] VicRp 86; [1989] VR 981; Savage v Crimes Compensation Tribunal [1990] VicRp 9; [1990] VR 96.

Mr Porter submitted that M D's need for someone to protect and manage his estate was so clear that nothing short of an administration order would suffice to meet that need and no reasonable tribunal could have concluded otherwise. This submission flows from the one that underpinned the propositions argued in support of grounds 1 - 5. For the reasons given with respect to those grounds, this ground is not made out. It was open to the Board to conclude that M D's needs could be met by the hospital managing and controlling his assets. True, there remained the risk of exploitation, but apparently that was not as great as it had been. At the time the Board considered the matter, the reality was that M D's needs were largely satisfied by the actions of officers of the hospital. I do not accept Mr Porter's argument that the order of the Board did not increase M D's freedom of decision and action. It did, as he submitted, substitute the hospital for the Public Trustee. However, the hospital's control over M D's funds is not as restrictive as an administration order because the provisions of the Act, s56 have no operation. The Board was entitled to take the view that the necessary control over M D's money could be exercised by the hospital without it having the authority of an administration order and thus, one should not be made.

"8 The Board erred in law in that no reasonable Tribunal could, on the material before it determine that [M D's] interests were better served by having his financial affairs conducted by the Royal Derwent Hospital."

The argument in support of this ground also relied upon the propositions that underpinned the submissions made in support of grounds 1 - 5. Mr Porter submitted that M D's need for an administrator was so evident that any order short of continuing the administration would not be in the interests of M D. For the reasons already given, this ground also fails. I might add that I see no reason why the Board should not have taken into account the material before them which indicated that the value of M D's assets would be increased if the funds were transferred from the Public Trustee to the hospital. Minimisation of the costs of administering M D's affairs was in his "best interests" in the circumstances of this case.

"6 The Board erred in law in that it had no jurisdiction to order that the Administrator pay the balance of [M D's] funds and arranged for the transfer of his disability pension to the Royal Derwent Hospital to hold on trust for him."

The Act, s61, clearly confers a general power on the Board to control the manner in which an administrator discharges his statutory functions. Section 61 provides:

"61 -- (1) An administrator may apply to the Board for advice or directions on any matter relating to the scope of an administration order or the exercise of any power by the administrator under it.

(2) The Board may require notice of the application under subsection (1) to be given to any person that the Board directs and may exercise its powers under this section without a hearing.

(a) approve or disapprove of any act proposed to be done by the administrator; and

(b) give such advice as it considers appropriate; and

(c) vary the administration order or make any other order that it could have made on the original application relating to the administration of the estate that it considers necessary.

(4) The Board of its own motion may direct, or offer advice to, an administrator in respect of any matter.

As enacted in s61, subs(4) confers on the Board wide ranging powers to direct an administrator with respect to the administration. That part of the order which directed the Public Trustee to pay the balance of M D's funds and to arrange for the transfer of his disability pension to the Royal Derwent Hospital, was an exercise of the power conferred by s61(4). Mr Porter additionally submitted in support of ground 6 that the Public Trustee had no authority to comply with the Board's direction. I reject this submission. It is contrary to the provisions of the Public Trustee Act 1930, ss39 and 40.

"The Board erred in law in that it had no power to order that the administration order be revoked upon the occurrence of a future event."

"68 -- (1) On a review under section 67, the Board may vary or continue a guardianship order or administration order subject to any conditions or requirements it considers necessary or the Board may revoke the order.

(2) The Board may make such further orders as it considers necessary in order to give effect to an order made under subsection (1)."

Subsection (1) empowers the Board to vary or continue an administration order and to impose conditions or requirements on such variation or condition. It also empowers the Board to revoke an administration order. The subsection confers no power to impose conditions and/or requirements, either precedent or subsequent, in the case of revocation. There is, I think, good reason for this. A guardianship order and an administration order affect the status and legal capacity of a person in a fundamental way. There should be no uncertainty about whether a person's legal capacity is curtailed by an administration order or a guardianship order. If there was a power to revoke an order subject to compliance with a condition or conditions precedent, great uncertainty could arise over whether there had been compliance with a condition, or the date of compliance with such a condition. This could give rise to doubt about whether a person had full legal capacity or not. If, in cases such as the present one, the Board required the administrator to take some step before revoking the order, it can exercise its power of direction conferred by s61(4) and adjourn the review proceedings until there has been compliance. Upon resumption, the Board can then revoke the order pursuant to s68(1).

I have considered the provisions of s68(2) but I do not think they empower the imposition of conditions precedent to a revocation order. Subsection (2) is concerned with the making of orders subsequent to the making of an order pursuant to subs(1). Subsection (2) presupposes that an order has been made under s68(1) and some further consequential order desirable or necessary.

The impugned orders in this case purport to revoke the administration order upon compliance with the direction to transfer M D's funds to the Royal Derwent Hospital. I hold that the Act does not authorise the making of such an order.

Counsel agreed that should I reach the conclusion I have reached with respect to ground 9, I should give them an opportunity to be heard further before finally determining this appeal.

Administration Act 1995

Public Trustee v Blackwood, John & King, Heather & Baxter, Tom [1998] TASSC 130

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Judgment (86 paragraphs)

Public Trustee v Blackwood, John & King, Heather & Baxter, Tom [1998] TASSC 130 (21 October 1998)

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