RK [2020] WASAT 99 (25 August 2020)

Guardianship and Administration Act 1990 (WA), s 4, s 17A, s 44(1)(b), s 44(3), s 64(1), s 84, Pt 6

Application for appointment of administrator dismissed

LS [2016] WASAT 89

RK [2020] WASAT 53

1. RK is 77 years of age. He has a diagnosis of a dementia syndrome. He lives in an aged care facility.
2. RK is married to CM. They have three adult children: AW (daughter); LK (son) and TK (daughter).
3. CM is RK's attorney under an enduring power of attorney made on 13 March 2018 (EPA).
4. On 28 January 2020 CM made an application for the appointment of a guardian for RK. The application was made under the Guardianship and Administration Act 1990 (WA) (GA Act).
5. On 4 March 2020 a single member of the Tribunal made an order appointing the Public Advocate as RK's limited guardian with the authority to make decisions concerning his accommodation, the services to which he should have access, what contact, if any, he should have with others and the extent of that contact and to give consent to his medical treatment (March orders).
6. At the hearing of the March orders, the single member accepted an oral application for the appointment of an administrator of RK's estate from RK's legal representatives said to be acting on his instructions (administration application).
7. On 19 March 2020 AW sought review of the March orders under s 17A of the GA Act.
8. On 12 May 2020 the Full Tribunal constituted by the President, myself and Senior Sessional Member Dr Fred Ng set aside the March 2020 orders and appointed CM as RK's limited guardian concerning his accommodation, the services to which he should have access and to consent to his medical treatment (May orders).
9. The May orders were set for review in the maximum period available under s 84 of the GA Act, five years.
10. The decision of the May orders was published as RK [2020] WASAT 53 (RK).
11. The administration application was heard before me on 21 May 2020. In attendance was CM and her legal representative, AW, LK and his legal representative, RL, daughter­in­law and BT from the Office of the Public Advocate.
12. The decision was reserved.

1. The making of administration orders is considered under Pt 6 of the GA Act.
2. The principles to be observed by the Tribunal are set out in s 4 of the GA Act.
3. Relevantly:
   • The primary concern of the Tribunal is the best interests of RK.
   • In considering the administration application the Tribunal shall, as far as possible, seek to ascertain the views and wishes of RK as expressed, in whatever manner at the time, or as gathered from his previous actions.
   • RK is presumed to be capable of managing his own affairs and making reasonable judgements in respect of matters relating to his estate, until the contrary is proved to the satisfaction of the Tribunal.
   • The Tribunal cannot consider appointing an administrator of the estate of RK unless it is satisfied on the evidence that by reason of a mental disability, he is unable to make reasonable judgments in respect of matters relating to all or any part of his estate.
   • Mental disability is defined in the GA Act to include an intellectual disability, psychiatric condition, an acquired brain injury and dementia.
   • If a finding of incapacity is made in respect to RK the Tribunal must further determine whether he is in need of an administration order. If the needs of RK can be met in a manner less restrictive of his freedom of decision and action then orders should not be made.
   • If the Tribunal decides that RK is in need of an administration order it must then decide what authority should be vested in the administrator, who the administrator should be and what review date should be set, given the requirement that orders must be reviewed at least once every five years.
   • If a limited administration order is made the order must place the least restriction necessary on RK.
   • In deciding who to appoint as administrator, the Tribunal must be satisfied that the adult person who proposes themselves (or corporate trustee, which includes the Public Trustee), will act in RK's best interests and be otherwise suitable to act as administrator of RK's estate.
   • In deciding suitability the Tribunal shall as far as possible take into account the following factors: 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; the wishes of that person; and whether the proposed appointee will be able to perform the functions proposed to be vested in the administrator.

1. In a document filed by CM in April 2020, she sets out her understanding of the estate of RK and the way she manages it under the EPA (April 2020 statement).
2. RK's estate is said to consist of:
   • 50% of the family home;
   • 50% of vacant land in the southwest of Western Australia;
   • 50% of a motel business (and manager's house) in the southwest of Western Australia;
   • 50% of vacant land in a metropolitan suburb;
   • 50 % of a joint bank account; and
   • a superannuation fund bank account
3. CM values RK's estate as a little over $1.5 million.
4. CM states that RK's only source of current income is a superannuation defined benefits pension paid monthly, equating to about $44,000 annually.
5. CM states that she has managed RK's estate at his request for several decades, including the payment of his accounts, managing his investments and the preparation of his income taxation returns.
6. CM states that she has been solely responsible for the motel business which had been trading profitably until the COVID-19 pandemic and has currently ceased trading. RK was being paid a pension from the motel business through his self-managed superannuation fund for which CM says she is trustee. By April 2020 income from that source had ceased.
7. CM states that RK has benefited significantly from these arrangements having not worked for 15 years and with CM having full responsibility for operating the motel business.
8. CM says lastly in the April 2020 statement that a plan is in place for RK to have his financial needs met without having to resort to a 'fire sale' of his assets at a time when they have lost value and would be difficult to sell.

1. CM states that the making of the EPA was not a sudden decision by RK. She and RK had been discussing the possibility of an EPA from about July 2017 because of advice received in the context of RK's neurodegenerative disorder and the need to make an EPA whilst RK still had capacity to do so.
2. The decision to make the EPA came soon after RK was admitted to hospital in February 2018 for a trial of antiparkinsonian treatment which was not successful and which had as one of the side effects, mild confusion. The confusion resolved over a number of days and RK was discharged home on 9 March 2020. CM says that she considered it appropriate to revisit the need for an EPA at that time.
3. CM states that RK retained capacity throughout 2018 and had he wanted to revoke the EPA he could have done so. She alleges that revocation of the EPA was suggested to him multiple times by AW and LK.
4. In response to AW and LK's submissions about the extent of RK's estate with reference to the April 2020 statement and the June 2015 statement (see [33]), CM says:

[AW] has speculated on many things, resulting in multiple errors of fact. [LK] has also submitted a statement, but a more concise one. He has also speculated - he has speculated on the reasons behind, in particular, the financial decisions that [RK] and I have made over the years. Reasonably enough, the children, even as adults, have not been included in the reasoning behind these decisions. As a result, [LK's] submission contains multiple errors of fact as well. I do not stand to correct all of those errors.

(ts 11, 21 May 2020)

1. CM states that RK is currently accommodated in an aged care facility which in her opinion provides excellent care. The accommodation is permanent should it continue to give RK the care he needs. The nursing home has charged a Refundable Accommodation Deposit (RAD) of $650,000 (discounted from $900,000). CM states that she has made the financial decision in the current circumstances to pay the Daily Accommodation Payment on the unpaid RAD which has required her to draw on their joint finances.
2. CM states that the family was 'normal' until two and a half years ago (ts 12, 21 May 2020). She says some terrible things have happened not caused by her but have led to AW and LK trying to discredit her.
3. CM disputes the interpretation placed on RK's estate by AW and LK.
4. CM submits that the EPA should be permitted to be used as the means of managing RK's estate.

1. AW filed submissions in respect of the administration application. Relevantly AW states as follows:

1. AW has provided what she asserts is a copy of a statement of the financial position of RK and CM as at 30 June 2015 (June 2015 statement). She says the June 2015 statement was given to her by RK. It shows the net joint value of assets at $8.3 million. It lists real property that is not in the April 2020 statement and which purportedly is in CM's sole name and which AW describes as resulting in CM having an additional $3.5 million in real property value than RK. AW states that with the exception of the property in which RK was living the purchase of the property in CM's sole name only occurred after RK and CM separated (which she says last happened in 2007).
2. The vacant land in the southwest of Western Australia (April 2020 statement) although jointly owned and with a large mortgage was acquired by swapping two properties that were in the sole name of RK.
3. RK recently inherited a property in Germany.
4. RK has never lived in the 'family home' (April 2020 statement). AW further states that the vacant land in a metropolitan suburb (April 2020 statement) is not vacant but rather has two substantial dwellings on it.
5. AW is concerned that the necessary taxation returns for RK's self­managed superannuation fund have not been lodged with the Australian Taxation Office.

1. AW states that the EPA was signed by RK only four days after he was discharged from hospital after an admission for matters including confusion.
2. RK told her and LK that he was not happy in making the EPA and that he had been told by CM that she needed it to continue to manage the self-managed superannuation fund.
3. CM has refused to give RK a copy of the EPA.

1. CM and RK are separated and have been so (there were earlier occasions of separation) since 2007. The separation is not limited to living in different accommodation. CM and RK have not undertaken leisure, recreational or travel activities together since their separation.
2. RK has, since 2018, stated to his lawyers, doctors, social workers and psychologists that he does not want CM to manage his financial affairs.
3. AW has provided a letter dated 5 November 2018 to a family therapist purportedly written by CM (it is on CM's letterhead) and in a diagram of a family tree there is a notation next to RK and CM of 'separated Dec 2017' (November 2018 letter).
4. RK has been subject to increasing amounts of elder abuse including financial abuse.
5. RK has had a lack of money to pay for things, has lacked control over his finances and has not been asked to provide input into financial decisions.
6. RK is in need of an administrator however should retain control of his possessions which he is concerned CM has been disposing.
7. AW does not agree with CM's position concerning the disposal of assets. She submits that as RK is 77 years of age and suffering from a neurodegenerative condition, he should be able to benefit from his assets to enable him to have the best care possible consistent with his wishes on how he wants to live.
8. AW initially proposed herself and LK to be appointed joint administrators of RK's estate but in a later submission proposes the appointment of a corporate trustee, Australian Executor Trustees Limited (AET). AET has consented to its appointment subject to due diligence. AW states that she continues to be willing to be appointed administrator if that is considered the more viable option.
9. If appointed administrator AW states that her approach will be to develop a financial plan in consultation with an accountant and CM and to consider mediation in order for RK to have access to his funds.
10. CM is not suitable to manage RK's estate because she does not respect or take into account his views; she is in a position of a conflict of interest because of her own financial interests; she has financially abused RK by not giving him sufficient funds to meet his basic needs and to engage in the community; she does not provide RK with financial information; and CM has created conflict in the family.

1. AW states that she accepts the medical evidence before the Tribunal in the RK proceedings in that RK is no longer capable of managing his financial affairs.
2. AW submits that RK would benefit from the appointment of an administrator, either herself and/or LK or as proposed, AET.
3. AW states that RK has said to her many times, more so in last few years, that he wanted AW and LK to look after his interests and that he wanted to regain control of his financial affairs. He told AW after the guardianship hearing before the single member how scared he was to speak up for himself.

1. LK filed a submission in respect of the administration application. Relevantly LK states as follows.
2. The administration application was made because of concerns that CM had abused her power under the EPA by making transactions that preferred her interests over those of RK.
3. RK and CM have not led a relatively normal married life. At para 6 of the submission LK states:

... [CM] and [RK] had in fact separated on multiple occasions before the most recent separation [footnote: in 1991 and 1996], and the relationship between them was, [LK] submits, a difficult one.

1. LK accepts on the medical evidence before the Tribunal in RK that RK is a person for whom an administration order can be made.
2. The Public Trustee should be appointed the plenary administrator of RK's estate.
3. Alternatively the Public Trustee should be appointed limited administrator to decide whether any action should be taken (and if necessary to take that action) to secure RK's interest in the marital assets.
4. RK can afford the best possible care (whether in home or residential care) and his estate should be used to that end. CM is likely to make decisions for RK influenced by her desire to maintain the marital assets rather than what is in RK's best interests.
5. It is unfortunate that the decision to appoint a guardian and the subsequent review by the Full Tribunal captured in RK were determined before the administration application because they did not involve a forensic examination of RK's estate and the transactions concerning it.
6. The finding in RK at [74] that as guardian and attorney under the EPA, CM would not be in a position of conflict failed to take into account the administration application that was on foot.
7. If CM is appointed administrator of RK's estate, LK will be excluded from all decision­making and a there will be a lack of transparency which would not be the case if the Public Trustee is appointed.
8. The April 2020 statement is inaccurate and does not reflect RK's asset position. The following matters are raised:
   • RK's share of the manager's house is shown as 50% in the April 2020 statement whereas in the June 2015 statement the relative proportions in dollar value suggests that RK's share is 59%.
   • Up until around 2019 a suburban property (not noted in the April 2020 statement) was RK's home. The property had been purchased by CM and RK in 1976 when they were together. It was renovated in the 1980s using funds of RK and CM. The property is in CM's sole name, however RK has an interest in it.
   • RK has an interest in three properties (other than those already mentioned) listed in the June 2015 statement but not in the April 2020 statement having contributed to their purchase or to their development or maintenance.
   • As of 4 February 2020 there was no mortgage registered on the motel business. However the April 2020 statement shows a mortgage valued at $400,157. This may not be in RK's best interests.
   • The vacant land in the southwest of Western Australia (April 2020 statement) was listed by CM for sale in March 2020 for $975,000 and removed from listing in April 2020. The value placed on this land by CM in the April 2020 statement is only $650,000.
   • The land in a metropolitan suburb (April 2020 statement) is not vacant and has two significant buildings constructed on it.
   • The April 2020 statement does not reflect RK's bank account in Germany valued at 30,000 euros; the property owned by RK in Germany or director's fees received by RK believed to be around $10,000 per month.
   • For several years CM has been attempting to develop a resort in the southwest of Western Australia. This will likely need significant capital and there is the concern that CM might be unwilling to dispose of the assets mentioned in the April 2020 statement because of the possibility of using those assets as security for capital loans.
   • Although RK formally retired from his employment in 2005, CM is wrong to say he has not worked for 15 years given that he continued to work in the motel business until around 2011.

1. LK accepts that RK is a person for whom an administrator can be appointed and that he now lacks the capacity to manage his estate.
2. LK alleges that CM has preferred her own interests over those of RK and that her statement of RK's financial position is not correct. LK says that he would favour the appointment of an independent administrator.
3. Counsel for LK expanded on this proposal stating that CM had not provided details of RK's whole estate which would include an interest in all the marital assets including assets and property held in CM's sole name. Counsel submitted that an alternative to the appointment of the Public Trustee in a plenary capacity would be to appoint the Public Trustee in a limited capacity to determine the size of RK's estate given that on the documents there is a significant difference of values between $1.5 million and $5 million.
4. Citing my decision in LS [2016] WASAT 89 (LS) in support of this limited appointment counsel for LK stated the appointment of the Public Trustee would also include the authority to consider what (if any) action should be taken for RK in respect to a division of the marital assets.

1. BT, investigator with the Public Advocate states that she did not get the opportunity to speak with RK in person. However, BT was able to speak with the social worker at RK's former transitional care placement. The social worker reported to BT that at the time RK did not understand that he was the applicant in the administration application.
2. BT submits that it is not unusual for a person to appoint his or her spouse as attorney under an EPA. She considers many of the allegations of AW and LK are not relevant to the appointment of an administrator.

1. It is common ground that RK is a person for whom an administrator could be appointed. In the language of the GA Act, RK is unable by reason of a mental disability (the dementia syndrome) to make reasonable judgments in respect of matters relating to all of his estate: s 64(1)(a) of the GA Act.
2. The medical evidence supporting such a finding is summarised in RK at [29] to [35].
3. It is also common ground that RK is in need of someone to manage and make decisions concerning his estate.
4. The issue in dispute is whether that should be by way of the EPA or by way of an administration order. If an administration order is made the question then is who should be appointed and what should be the scope of the order.
5. A continuing feature of the submissions of AW and LK (particularly AW) is the view that RK and CM are separated. The reference to the marital assets when discussing RK's estate and the proposed appointment of the Public Trustee as administrator to take necessary action to secure RK's interests in the marital assets reinforce that position.
6. It does not seem to be in dispute that that there have been times of separation in the relationship of RK and CM, for example as indicated in the November 2018 letter. However there is no material evidence before the Tribunal to show that is the case currently. The evidence of CM which I accept is that she continues to be deeply engaged with RK's needs as demonstrated by his transition to nursing home care the costs of which are being met through the joint assets.
7. I see no reason to deviate from the finding of the Full Tribunal in RK at [41] which describes and summarises the relationship between RK and CM. It remains a trite observation that there has been no formal separation with a view to divorce and no action for a formal separation of the marital assets by either CM or RK.
8. The reference to the decision in LS does not assist LK as that case involved a couple who had been separated for thirty years.
9. A similar line of argument runs through the submissions concerning CM's description of RK's estate in the April 2020 statement and its comparison by AW and LK with the June 2015 statement. I prefer the evidence of CM in this regard. There is a five year period between the two statements and any number of financial decisions made by RK and CM in that time to make the comparison as AW and LK have done of little probative value.
10. There no suggestion that RK was not capable for the majority of the time (that is until recently) to make his own decisions regarding his estate and to be a party to the way in which the joint assets have been managed.
11. The same can be said for the EPA. There is no material evidence before the Tribunal to rebut the presumption that RK was capable of executing the EPA and no evidence of a formal revocation of the instrument.
12. A submission put by LK is that the finding of the Full Tribunal in RK concerning the suitability of CM to act as RK's guardian did not have the benefit of the evidence in these proceedings as to the alleged mismanagement of RK's estate by CM and her decisions to preference her interests over those of RK.
13. I have already dealt with the submissions on CM's management of RK's estate which includes jointly held assets.
14. I note further that under s 44(1)(b) of the GA Act, the Tribunal, in appointing a guardian, must be satisfied that the person proposed to be appointed is not in a position where his or her interests conflict or may conflict with the interests of the person (subject to s 44(3) which makes the appropriate allowance that just by virtue of being a relative of the person does not place the proposed appointee in a position of conflict).
15. It was open, in my view, for AW and LK to test the purported conflict of interest of CM in the contest of the guardianship application by reference to the allegations made in these proceedings on RK's financial matters. They did not do so.
16. I see no reason to revisit the findings in RK at [73] and [74] as support for the view that CM should be permitted to continue to manage RK's estate through the operation of the EPA.
17. For all the above reasons I dismiss the administration application.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.