Capacity Required for an Enduring Power of Guardianship

In order to validly execute an enduring power of guardianship (EPG) in Western Australia, the donor must have "full legal capacity" at the time of making the EPG (Guardianship and Administration Act 1990 (WA) s 110B).

As stated in RS and ANOR and DV [2011] WASAT 144 at [15], for a person to make a valid EPG appointment, he/she must understand "the nature and effect of the formal document he is signing and the nature and extent of the powers he is entrusting to his substitute decision-maker." More specifically, "A person with full legal capacity to make a valid EPG will have a clear understanding of the nature and effect of the document and its implications" (RS and ANOR and DV at [15]).

The question of whether a donor had requisite capacity is one of fact, to be determined based on the evidence in each case.

In RS and ANOR and DV, the Tribunal heard expert evidence that the donor, DV, suffered from chronic schizophrenia which impacted his capacity, as well as evidence that he had reduced intellectual functioning (RS and ANOR and DV at [16]-[20]).

The Tribunal also questioned DV directly about his understanding of the EPG, and determined from his answers that he did not adequately understand the document (RS and ANOR and DV at [22]).

Based on all the evidence, the Tribunal concluded that DV lacked capacity to make a valid EPG (RS and ANOR and DV at [23]).

The expert evidence indicated that DV's schizophrenia alone meant he lacked capacity (RS and ANOR and DV at [19]), citing Dr C's opinion.

This accords with the general principle from Re BKR [2009] WASAT 152 at [43] that "a person who suffers from such a mental illness as schizophrenia or dementia may lack capacity notwithstanding competency to manage his/her affairs on a day-to-day basis."

In summary, for an EPG to be valid under the laws of Western Australia the donor must have full legal capacity to understand the nature and effect of the document at the time of making the EPG. Determining capacity requires examining the specific circumstances of each individual donor.

Navigating Fiduciary Duties: Tribunal Directions for Attorneys Regarding Gifts from an Estate

In the case of DH [2020] WASAT 100, the applicant PE sought directions under section 109(2)(b) of the Guardianship and Administration Act 1990 (WA) regarding an enduring power of attorney (EPA) granted to him and his wife DE by his mother DH in January 2015.

DH had dementia and PE had recently begun managing her affairs.

PE proposed using the EPA to advance 50% of the value of bequests made to DH's six grandchildren in her 2016 will, in order to provide the adult grandchildren early access to part of their inheritance.

The issues centered on whether the attorneys could make such gifts under the EPA despite lack of express gifting authority, the impact on DH and other beneficiaries, and consistency with the attorneys' fiduciary obligations towards DH.

The Tribunal declined to provide the requested direction, finding that such affirmation of the gifting proposal would conflict with legislative protective intent and fiduciary duties requiring conservation of the represented person's estate for their welfare.

The attorneys thus retained discretion over whether to proceed, with the gifts' substantive merits distinguished from procedural propriety concerns underlying the dismissal.

Giving Directions to a Donee under an Enduring Power of Attorney

Under section 109(2)(b) of the Guardianship and Administration Act 1990 (WA) (GA Act), the donee of an enduring power of attorney (EPA) may apply to the State Administrative Tribunal (the Tribunal) for directions regarding matters connected with the exercise of the power or the construction of its terms.

Jurisdiction to Give Directions

The Tribunal's jurisdiction to give directions to a donee under an EPA derives from section 109(2)(b) of the GA Act, which states that the donee "may apply to the State Administrative Tribunal...for directions as to matters connected with the exercise of the power or the construction of its terms."

This provision allows a donee to seek clarification and advice when unsure if a proposed course of action falls within the permissible scope of authority granted by the EPA.

For example, in KS [2008] WASAT 29 at [50], Barker J stated that a donee could apply for "directions about how [they] should act in particular circumstances" such as whether the EPA authorises the sale of the donor's property or guidance on how "a condition or restriction in the enduring power of attorney is to be interpreted." Thus, section 109(2)(b) empowers the Tribunal to provide authoritative advice to donees regarding the proper interpretation and limits of an EPA. However, as noted in the decision at [26], the Tribunal's role is supervisory rather than directive. Per KS at [50], the Tribunal "cannot order [the donee] to sell the donor's property" or make other decisions on their behalf. The donee retains ultimate responsibility for exercising their powers appropriately after receiving clarification from the Tribunal.

Protective Intent and Fiduciary Duties

When determining whether to provide directions under section 109(2)(b), the Tribunal must consider the overarching protective intent and purpose of the GA Act as per EM Heenan J in Re The Full Board of the Guardianship and Administration Board [2003] WASCA 268 at [43]-[44].

As quoted at [47] of the decision, the GA Act aims to guard against "unscrupulous or ill advised influence" that could "jeopardise the financial security or interests" of adults with impaired decision-making capacity. The Tribunal articulated concerns that gifting estate assets could contravene this protective purpose "for conserving the property and financial resources of the disabled person" to meet their needs (at [47], citing Re The Full Board at [44]). Thus, directions that sanction depletion of the represented person's estate merit close scrutiny.

Compounding this concern, donees also owe fiduciary duties to donors as their agents, imposing higher standards of loyalty and care than apply to ordinary persons (at [34]). These duties persist after the donor loses capacity (at [36]) given their increased reliance on the donee's integrity. As articulated in Tobin v Broadbent (1947) 75 CLR 378 at 401 (quoted at [37]), powers of attorney should not be interpreted as authorising self-dealing or use of property for the donee's benefit absent explicit permission.

While the GA Act does not prohibit gifting outright (at [39]), section 107(1)(a) mandates donees exercise their powers with "reasonable diligence to protect the interests of the donor." Directing donees to make gifts seemingly in tension with fiduciary obligations merits cautious consideration.

Traditional Powers and Administration Orders Distinguished

Unlike administrators appointed by the Tribunal, EPAs and donees are not subject to section 72(3)(a) of the GA Act, which prohibits gifts absent express authorisation (at [40]). Nonetheless, as articulated in DW and JM [2006] WASAT 366 at [40]-[41] and cited at [39] herein, guidance on appropriate gifting considerations for administrators remain instructive when advising donees.

These factors, set out in section 5.17 of A Guide to Enduring Powers of Attorney in Western Australia, include the donor-beneficiary relationship, gift purpose, estate size, donor needs, donor's presumed wishes if capacitated, and equal treatment of those with similar relationships to the donor (at [26]). While not binding, prudence suggests donees consider these factors.

By contrast, directions under section 74(1) of the GA Act require administrators to comply with Tribunal guidance regarding estate property and management. As noted at [43], section 74 is analogous to the court's powers under section 92(1) of the Trustees Act 1962 (WA) to provide binding directions to trustees. Arguably, the discretionary term "may" in section 109(2) contemplates non-binding guidance. This accords with KS's description of the GA Act as largely protective of incapacitated adults (at [46]).

Considerations in This Application

Turning to the specific circumstances herein, the donees relied principally on the donor's consent in seeking authorisation to advance partial inheritance payments. However, while expressing wishes when capacitated can indicate likely intent, as the decision notes at [55]-[56], the donor's incapacity prevents her from directing the donees.

Nor do statutory powers expand upon incapacity merely due to compliance with execution formalities; rather, only express EPA terms govern donees after donor incapacity per section 105 of the GA Act (see decision at [29]-[30]). As no gifting provision was included, the donees' powers remain constrained by their overarching duties to the donor rather than any presumption of intent.

Lastly, the decision considered at length (at [46]-[48]) whether the proposed gifts properly constitute a "matter connected with the exercise of the power" under section 109(2)(b) as they do not involve power interpretation questions archetypically brought under that provision. Reading subsection (3) in context, which addresses document production and revocation, suggests a supervisory rather than prescriptive jurisdiction. This also accords with the protective motivations noted above.

Conclusion and Reasoning

For these reasons, while the Tribunal accepted that the gifts were unlikely to jeopardise the donor's care (at [52]), were not self-dealing (at [53]), aligned with previous generosity toward beneficiaries (at [54]), and permissive precedent exists (at [39]), nonetheless substantive concerns persisted regarding fidelity to legislative protective intent and fiduciary responsibilities.

The decision concludes at [57] that formally providing the requested authorisation direction conflicted with the GA Act's overarching purpose of conserving resources for protected persons' welfare and security. Moreover, absent an unambiguous gifting power, doubt existed whether donees could priortise beneficiaries' interests without breaching their duty of loyalty to the donor per section 107(1)(a).

While the Tribunal determined the gifts would likely represent no substantive hardship or wrong, procedural propriety and institutional integrity disfavoured sanctioning a course of action in tension with statutory and common law duties. Instead, at [58] the Tribunal advised donees to carefully weigh their obligations to the donor when deciding whether to proceed, emphasising this assessment as their own fiduciary responsibility rather than an endorsement. Substantive merits were distinguished from procedural concerns.

The protective conservation of resources and property for represented persons, secured through both legislative frameworks and equitable oversight mechanisms, thus represent guiding priorities when determining whether to formally provide directions endorsing acts with any potential for abuse or disproportionate dissipation. Absent unambiguous authority, donees' duties of loyalty militate against affirmative Tribunal authorisation of proposed self-dealing or preferential distribution conflicting with the donor's privileged interests. While necessity might justify certain acts if clearly proven, imperatives of transparency and accountability warrant conservative exercise of judicial and statutory discretion.

Navigating Section 109 of the Guardianship and Administration Act: Orders for Records, Accounts and Audits

Introduction to the Facts

In OR [2024] WASAT 2, heard before Ms R Bunney at the State Administrative Tribunal of Western Australia, a dispute arose under the Guardianship and Administration Act 1990 (WA) (GA Act), particularly focusing on the interpretation and application of section 109. The case involved OR, the donor, and VR, the donee, engaged in a series of financial transactions under an enduring power of attorney (EPA). OR, while retaining the capacity to make decisions, alleged that VR conducted significant financial transactions without his consent or knowledge, which were deemed against his interests.

Legal Framework under the GA Act

The GA Act, particularly section 109, governs the conduct and obligations of donees of enduring powers of attorney. This case hinges on the interpretation of section 109(1), which stipulates conditions under which a person may seek orders from the Tribunal regarding the actions of a donee. Key issues include whether the transactions were made ‘in connection with the power’ and whether OR, as the donor, had a ‘proper interest’ in the matter.

Examination of Specific Transactions

The Tribunal scrutinized four significant transactions conducted by VR. These included the transfer of funds, changes in the control of a family trust, and alterations to the beneficiary status within the trust. The critical analysis focused on whether these actions were in the best interests of OR and complied with the fiduciary duties expected under the GA Act.

Tribunal’s Findings

1. Proper Interest and Transactions In Connection with the Power: The Tribunal found OR had a proper interest under s 109(1), as he was the donor affected by transactions he was unaware of (BFO & ORS and KPW [2014] WASAT 68). The First and Second Transactions were directly connected to the EPA, as VR utilized it to affect these transactions. The Third and Fourth Transactions, although more complex, were also linked to the power granted under the EPA.

2. Duty of a Donee: The Tribunal highlighted the fiduciary nature of the donor-donee relationship, underscoring the duty to act in the donor’s best interests and avoid conflicts of interest (Dal Pont, Powers of Attorney; Butterworths, Australian Legal Dictionary). The donee’s actions must adhere to the 'conflict rule' and the 'profit rule', ensuring no personal gain at the expense of the donor (DW and JM [2006] WASAT 366).

3. VR's Compliance with Duties: The Tribunal concluded that VR’s actions did not align with the duty of protecting the donor’s interests. The transactions conducted were found to be against OR’s interests, thus failing to comply with section 107(1)(a) of the GA Act. This finding was pivotal in considering the application of section 109(1).

Tribunal’s Discretion under Section 109(1)

Despite the above findings, the Tribunal chose not to exercise its discretion under s 109(1)(a) and (b) to require VR to file and audit accounts of her transactions. This decision was based on the fact that OR had eventually received all necessary information through the Family Court proceedings, thus rendering the specific remedy sought under the GA Act redundant (EW [2010] WASAT 91; PT [2020] WASAT 147). The Tribunal’s decision underscores the importance of the Tribunal’s role in supervising the conduct of donees, while also recognizing the limitations of its jurisdiction when parallel legal proceedings provide sufficient remedies.

Applicable law

Section 109 of the Guardianship and Administration Act 1990 (GA Act) allows a person with "proper interest" to apply to the State Administrative Tribunal (Tribunal) for orders regarding an enduring power of attorney (EPA). This includes requiring the attorney (donee) to provide records and accounts of dealings made under the EPA and requiring an audit of those records [s109(1)(a)-(b)].

The Tribunal has supervisory jurisdiction over EPAs to ensure attorneys fulfil their legal obligations, even if the donor has capacity [para 5]. Attorneys owe fiduciary obligations to donors as the relationship is agential and fiduciary in nature [para 9, 14].

Key duties are to:

• Exercise powers under the EPA with reasonable diligence to protect the donor's interests [s107(1)(a), para 15]. Failing this exposes the attorney to liability for loss [s107(1)(a)].

• Avoid conflicts of interest and act in the donor's best interests, not the attorney's own interests [para 14, 17, 91]. This includes not profiting from transactions without the donor's fully informed consent [para 11, 17].

• Keep accurate records and accounts of dealings under the EPA [s107(1)(b)].

Breach of these duties constitutes grounds for Tribunal scrutiny and intervention [para 13, 71-75]. However, mere suspicion of breach is insufficient [para 7, 8].

The Tribunal has power to order attorneys to file all records and accounts regarding EPA dealings [s109(1)(a), para 18] and can appoint an auditor [s109(1)(b)]. However, these orders only compel production of existing records rather than creation of new records [para 19]. Any further remedies for breaches must be pursued in other jurisdictions [para 19].

In determining whether to order production of records or an audit, the Tribunal will consider if:

• The applicant has "proper interest" in the matter [para 20-21]. This usually requires a genuine concern regarding an attorney's compliance with duties [para 14, 20].

• The dealings were "in connection with" the EPA [para 22-25]. Even indirect connections can enliven Tribunal scrutiny where earlier connected dealings enabled the later dealings [para 23-25].

• There are grounds for suspecting breach of duties under the EPA [para 7-8, 13, 71-75]. Suspicion alone is insufficient [para 8].

If such factors are present, the Tribunal has discretion whether or not to make orders under s109(1)(a)-(b) based on the circumstances [para 87-90].

Other remedies may also be available in other jurisdictions [para 19, 89].

Key cases cited as authority:

• EW [2010] WASAT 91 at [94], [101]: mere suspicion of breach insufficient for Tribunal intervention

• KS [2008] WASAT 29 at [26], [47]-[59]: Tribunal has supervisory role regarding EPAs even if donor has capacity

• PT [2020] WASAT 147 at [33]: mere suspicion insufficient

• SMM [2020] WASAT 85: Tribunal will scrutinise dealings suggesting breach of attorney duties

• DW and JM [2006] WASAT 366 at [5], [40]: attorney's key duty to avoid conflicts of interest

• BFO & ORS and KPW [2014] WASAT 68 at [28]: applicant must have proper interest

Key legislation:

• GA Act s107(1)(a)-(b): attorney duties

• GA Act s109(1)(a)-(b): Tribunal powers re: records, accounts and audits

Appointing Research Decision-Makers for Represented Persons

Introduction

A research decision-maker may be appointed by the State Administrative Tribunal (Tribunal) under the Guardianship and Administration Act 1990 (WA) (GA Act) to make decisions about a represented person's participation in medical research. This appointment power was introduced by the Guardianship and Administration Amendment (Medical Research) Act 2020 (WA), which inserted Part 9E into the GA Act to regulate decision-making about medical research participation.

The Tribunal has jurisdiction to appoint a research decision-maker where it is satisfied that the represented person lacks capacity to make their own decisions about participation in medical research and that there is a need to appoint a substitute decision-maker to make such decisions in the represented person's best interests (see DAH [2023] WASAT 102 at [13], [43], [138]-[139]).

This blog examines the statutory framework governing the appointment of research decision-makers and the principles derived from the leading Tribunal decision on research decision-maker appointments, DAH [2023] WASAT 102.

Statutory Framework

Part 9E of the GA Act establishes a regime for substitute decision-making regarding medical research participation. Key aspects of the legislative scheme are:

• The Tribunal may appoint a research decision-maker with the function of making 'research decisions' on behalf of a represented person who lacks capacity to make their own decisions about participation in medical research (see GA Act ss 43, 45(2)(i), 46(2)(i); DAH at [28]-[35]).

• A 'research decision' means a decision to consent or refuse consent to a person's participation in 'medical research' (see GA Act s 3).

• 'Medical research' is defined broadly, with limited exceptions, as research conducted with or about individuals in the field of medicine or health (see GA Act s 3AA; DAH at [38]-[41]).

• Certain criteria must be satisfied before a research decision-maker can consent to a represented person's participation in medical research (see GA Act ss 110ZR, 110ZU, 110ZW; DAH at [42]-[57]). These include:

• The research must be approved by a Human Research Ethics Committee (GA Act s 110ZR(1)(a));

• The represented person must be unable to make reasonable judgments about research participation (GA Act s 110ZR(1)(b));

• The research decision-maker must obtain a medical opinion that the represented person is unlikely to regain capacity within the research timeframe (GA Act s 110ZR(1)(c));

• An independent medical practitioner must determine that participation will be in the represented person's best interests or not adverse to their interests (GA Act ss 110ZR(2)(b), 110ZU); and

• The research decision-maker must be satisfied about the nature and risks of the research (GA Act s 110ZR(2)(c)).

Principles from DAH

The leading Tribunal decision on the appointment of research decision-makers is DAH [2023] WASAT 102. Some key principles derived from DAH regarding the appointment of research decision-makers are:

Jurisdiction

• The Tribunal has jurisdiction to appoint a research decision-maker where the represented person proposes to participate in medical research concerning a condition from which they do not suffer. While some provisions in Part 9E assume the research concerns a condition affecting the represented person, those provisions can be applied even if that is not the case (DAH at [58]-[75]).

• The definitions of 'research decision' and 'medical research' in the GA Act are broad and not limited to particular types of medical research. The absence of words limiting research to the represented person's own medical conditions indicates Parliament did not intend to impose such a limit (DAH at [63]-[65]).

• Construing Part 9E to apply even where the represented person does not have the relevant medical condition facilitates the protective purpose of guardianship laws (DAH at [75]).

Capacity

• The represented person must be unable to make reasonable judgments in their own best interests regarding participation in medical research in order for the Tribunal to appoint a research decision-maker (DAH at [125]-[127]).

• Informed consent requires the ability to understand complex information, ask appropriate questions, weigh alternatives and appreciate risks and benefits (DAH at [126]). Intellectual disability, comprehension and communication deficits may impede capacity for informed consent (DAH at [128]-[137]).

• The presumption of capacity in GA Act s 4 can be displaced by evidence of intellectual disability affecting functions like language, memory and concentration that are critical for research participation decisions (DAH at [128]-[137]).

Need

• The appointment of a research decision-maker must be needed to make decisions in the represented person's best interests about research participation. Need may arise where the represented person actively wishes to participate in research, has an intellectual disability, and is financially vulnerable such that participation may exploit that vulnerability (DAH at [140]-[144]).

• Appointment of a research decision-maker has a protective purpose by legally preventing participation where the represented person lacks capacity, even if they express willingness to participate (DAH at [143]).

Who may be appointed

• Consistent with guardianship laws, the Public Advocate may only be appointed as research decision-maker if there is no one else suitable and willing (DAH at [145]-[147]).

Best interests

• The independent medical practitioner advising on best interests is limited to considering medical interests, not financial interests (DAH at [78]-[84]).

• The research decision-maker should also give limited or no weight to financial benefits when deciding if participation is in the represented person's best interests (DAH at [80]-[84]).

Facts of the case

The applicant in this case was the support coordinator for DAH, a represented person under the Guardianship and Administration Act 1990 (WA) (GA Act). DAH, who was 23 years old at the time, had been subject to guardianship orders since she was 18 appointing the Public Advocate as her limited guardian to make decisions about the services she accesses.

The application concerned DAH's proposal to participate in medical research in return for payment. DAH had applied to take part in a trial conducted by a medical research company. The trial would involve 11 days of confinement in a clinic with medical testing and examinations. DAH was interested in participating to earn the payment offered, which was a substantial sum.

However, it emerged that DAH did not suffer from the medical condition that was the subject of the research. The applicant was concerned that DAH lacked capacity to make a decision in her own best interests regarding involvement in the trial. The applicant sought review of DAH's guardianship orders, requesting the Tribunal appoint the Public Advocate as DAH's research decision-maker with the function of making decisions about her participation in medical research.

The application required the Tribunal to consider whether DAH had capacity to decide on research participation herself and, if not, whether there was a need to appoint a substitute research decision-maker to make such decisions for DAH. The Tribunal had to interpret the scope of the provisions in Part 9E of the GA Act, which govern the appointment of research decision-makers, given DAH's situation.

Conclusion

The appointment of research decision-makers for represented persons who lack capacity is now an important aspect of guardianship law in Western Australia. DAH [2023] WASAT 102 provides authoritative guidance on the interpretation of Part 9E of the GA Act and how the Tribunal should approach the appointment of research decision-makers. Key considerations include whether the represented person has capacity for informed consent, whether there is a need for substitute decision-making, who is the appropriate decision-maker, and what factors determine the represented person's best medical interests.

To Name or Not to Name? An Analysis of Confidentiality Exceptions for Identifying Parties in Guardianship Proceedings

Introduction

The decision in Australian Broadcasting Corporation v Public Trustee [2022] WASC 85 concerned an application by the ABC under cl 12(8)(d) of sch 1 of the Guardianship and Administration Act 1990 (WA) (the Act) for a direction permitting it to publish reports about guardianship proceedings which identified the parties involved.

The facts concerned an application brought by one of AC's children resulting in orders appointing the daughter as AC's guardian and the Public Trustee as administrator of AC's financial affairs. AC died 15 months later.

The ABC sought to include AC's case in a Four Corners report on the Public Trustee system and public guardian nationally. The children of AC consented to being identified.

The key issue was the construction of cl 12(8)(d) and whether the court had a general discretion or whether exceptional circumstances had to be shown.

Facts

The facts are set out at [6]-[12].

In summary, the ABC was investigating the Public Trustee and public guardian systems nationally and sought to include AC's case as one of four case studies in a Four Corners report ([6]-[9]).

Orders were made in June 2015 appointing AC's daughter as guardian and the Public Trustee as administrator.

AC died 15 months later in September 2016 ([10]). AC's children consented to the application and being identified ([11]-[12]).

Law

The general position under the Act is confidentiality of proceedings, evidenced by ss 112-113 and sch 1 ([15]-[16]). The exceptions are set out in sch 1 cl 12(8), including cl 12(8)(d) which permits publication pursuant to a direction of the Tribunal or court ([16]).

The requirement for confidentiality is consistent with the protection afforded to vulnerable members of the community ([26]). However, statutes affecting open justice should be construed to minimise intrusion on that principle where possible: Hogan v Hinch [2011] HCA 4 at [27] ([28]).

In construing cl 12(8)(d), the ordinary meaning of "notice" and "report" should be adopted in the absence of any contrary intention ([29]-[30]). The clause confers a general discretion on the court, subject only to limits implied from the Act's scope and purpose: Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at [15] ([33]).

Guidance can be obtained from Family Court decisions on the identically worded Family Law Act provision: AH v SS (2005) 194 FLR 111 at [10]-[11] ([31]-[32]). However, there are no express constraints on the discretion and the court should not impose any not implied from the Act's scope and purpose ([37]).

All logically relevant factors should be considered including privacy, freedom of communication and the represented person's position ([37]).

Analysis

French CJ's statement in Hogan v Hinch supports a broad construction of cl 12(8)(d) to minimise intrusion on open justice ([28]).

The ordinary meaning of "notice" and "report" encompasses the proposed Four Corners program ([29]-[30]).

The clause confers an unconstrained discretion subject only to limits implied from the Act's scope and purpose ([33]).

While guidance can be obtained from Family Court decisions ([31]-[32]), no constraints on the discretion should be imposed other than those implied from the Act ([37]).

Logically relevant factors include privacy, freedom of communication and the represented person's position ([37]).

Here, AC was deceased and the children consented ([39]).

There was public interest in the Public Trustee's operations and the Act's operation ([40]).

The rights of AC and others would not be unduly infringed by the direction. In all the circumstances, the discretion should be exercised to permit identification ([41]).

Assessing Capacity: Independence of Decision-Making Under the GA Act

Introduction

This blog examines the issue of whether capacity under the Guardianship and Administration Act 1990 (WA) (GA Act) is assessed by reference to a represented person's ability to make decisions independently of others.

The analysis is based on the Western Australian State Administrative Tribunal decision in DL [2023] WASAT 66, which involved an application to review a decision to appoint a limited guardian for Mr L, a 59-year old man with an intellectual disability.

In submissions, it was argued on behalf of Mr L that he did not require a guardian as he had capacity to make simple everyday decisions, particularly with assistance from others.

Facts

In DL [2023] WASAT 66, the Tribunal reviewed a decision to appoint the Public Advocate as Mr L's limited guardian with authority over treatment decisions and service decisions.

Mr L opposed the appointment of a guardian, arguing he was capable of making simple everyday decisions with assistance and did not require a guardian [34].

Medical evidence indicated Mr L had capacity to make simple decisions but not complex ones independently [13], [15]-[16].

The Tribunal found Mr L did not have capacity to make complex personal decisions independently and appointed Mr W as his limited guardian for service decisions [17], [29]-[30].

Law

Section 43(1)(b) of the GA Act provides that a guardian can be appointed for a person who is "unable to make reasonable judgments in respect of matters relating to his person".

Under section 4(3), an adult is presumed to have capacity to make decisions about personal matters until the contrary is proved.

Analysis

The Tribunal held that in assessing capacity under section 43(1)(b), it must consider a person's ability to make decisions independently of others [17]. While Mr L could make simple everyday decisions with support, he lacked capacity to make more complex decisions without assistance [16]-[17]. As Davis J said in RE QD [2019] WASAT 112 at [43], capacity under the GA Act is assessed by reference to an ability to make decisions independently.

The Tribunal cited medical evidence indicating Mr L could follow medical advice and make simple decisions, but could not understand complex illnesses or make complicated medical choices without oversight [12]-[15]. This aligned with evidence that Mr L would struggle with complex NDIS decisions [24]. The Tribunal accepted he could make simple choices with support, but the GA Act required consideration of his independent ability to make more complex personal decisions [17].

Although Mr L opposed the appointment of a guardian, the Tribunal held the presumption of capacity in section 4(3) was displaced by the evidence demonstrating he could not independently make reasonable judgments on complex matters relating to his person, meeting the test in section 43(1)(b) [16]-[17]. As Bell J said in RE GD [2018] WASAT 33 at [29], while views of the represented person must be considered, the Tribunal is not bound to accept those views if the evidence indicates otherwise.

Conclusion

The Tribunal in DL confirmed that in assessing capacity under section 43(1)(b) of the GA Act, the relevant consideration is whether the represented person can make reasonable judgments independently in relation to personal matters, not their ability to make decisions with assistance. The Tribunal will consider the represented person's views but does not have to accept those views if satisfied the test in section 43(1)(b) is met based on the evidence.

Awards of Costs in Guardianship Proceedings: Exceptions to the General Rule

Introduction

In CK [2023] WASAT 84, the State Administrative Tribunal considered whether to make a costs order in a guardianship and administration matter.

CK, an elderly man with dementia, was the subject of applications by his children P and V relating to the validity of enduring powers and the appointment of an administrator and guardian.

P sought an order that V or CK pay some or all of his legal costs.

The Tribunal held that the circumstances were not sufficiently exceptional to justify a departure from the starting position that parties bear their own costs.

Legal principles

The Tribunal's primary concern in guardianship and administration proceedings is the best interests of the person concerned (CK [2023] WASAT 84 at [15], citing Guardianship and Administration Act 1990 (WA) s 4(2)).

Under s 16(4) of the Guardianship and Administration Act 1990 (WA), the Tribunal has discretion to order costs be paid to a party by the represented person if satisfied the party acted in the represented person's best interests.

However, such awards are uncommon, generally only when the applicant's actions benefit the represented person (CK [2023] WASAT 84 at [16]-[17], citing Y and CO [2020] WASAT 166 at [32] and Re WA and IA Ex parte AA and JA [2011] WASAT 33 at [59]-[60]).

The starting point is that parties bear their own costs (CK [2023] WASAT 84 at [18]-[19], citing RK [2020] WASAT 53 (S) at [22] and State Administrative Tribunal Act 2004 (WA) s 87(1)).

Under s 87(3) of the State Administrative Tribunal Act 2004 (WA), the Tribunal may order a party to compensate another party's expenses resulting from the proceeding, although not to punish (CK [2023] WASAT 84 at [20], citing Blaskiewicz and The Owners of 7 Henderson Street Fremantle (Strata Scheme 74918) [2021] WASAT 56 at [61]).

The Tribunal has discretion to award costs in any proceeding, to be exercised based on the circumstances and whether it is fair and reasonable (CK [2023] WASAT 84 at [21], citing GD [2022] WASAT 33 at [59]).

Relevant considerations include whether a party unnecessarily prolonged the hearing, acted unreasonably, or caused increased costs through unreasonable conduct (CK [2023] WASAT 84 at [21], citing GD [2022] WASAT 33 at [59]).

Analysis

In CK's case, the Tribunal held the circumstances were not sufficiently exceptional to justify departing from the starting point that parties bear their own costs.

P argued legal representation was required due to the complexity and his fraught relationship with V. He was not precluded from applying without legal advice as he was an admitted but non-practicing lawyer.

The conflict and allegations were not unusually complex for guardianship proceedings (CK [2023] WASAT 84 at [27]-[33]).

Prior cases awarding costs involved greater incapacity uncertainty, property transactions by the represented person, or applicants unreasonably pursuing applications (CK [2023] WASAT 84 at [31]-[32], citing Re IO; Ex parte VK [2008] WASAT 8 and LC and JS [2007] WASAT 127).

Regarding V paying P's costs, the Tribunal held V's irrelevant evidence about P did not warrant compensation. P incurred further expense obtaining translations unnecessarily after investigations commenced (CK [2023] WASAT 84 at [37]-[40]). The flaws in V's submissions did not cause delay or obstruction (CK [2023] WASAT 84 at [41]-[42]).

Prior cases awarding costs involved more sustained unreasonableness or inappropriate conduct (CK [2023] WASAT 84 at [43]-[45], citing Re WA and IA Ex parte AA and JA [2011] WASAT 33, PJC and RJC [2008] WASAT 224 and WD [2022] WASAT 12 (S)).

Conclusion

The circumstances did not justify departing from the starting position that parties bear their own costs. Awards of costs in guardianship and administration proceedings remain exceptional.

Assessing Capacity: Weighing the Evidence in Guardianship and Administration Proceedings

A key issue in guardianship and administration proceedings is assessing whether the person has capacity to make reasonable judgments about personal, medical and financial matters. The State Administrative Tribunal must be satisfied the person lacks capacity in the relevant domain before making guardianship or administration orders (Guardianship and Administration Act 1990 (WA), ss 43, 64).

The Tribunal's primary consideration is the best interests of the person (s 4(2)). Every person is presumed capable until proven otherwise (s 4(3)). Orders should not be made if less restrictive alternatives are available (s 4(4)). The person's views and wishes must be ascertained and considered (s 4(7)).

In the decision of NB [2023] WASAT 88, the State Administrative Tribunal considered an application to appoint an administrator for NB due to concerns about her vulnerability to financial scams.

NB and her husband LB had inherited around $700,000. However, over a short period NB spent or committed to spend all but $75,000 - $80,000 of her share through involvement in an online romance scam. Despite strong evidence she was being defrauded, NB persisted in sending money for a car she believed was gifted by a famous musician she was in contact with online.

NB relied on financial help from family for living expenses while providing money to scammers. Medical evidence indicated NB had mild cognitive impairment affecting financial judgement.

The Tribunal weighed all evidence in concluding NB lacked capacity for financial matters and required an administrator to protect her estate.

A finding of incapacity must be based on evidence, not assumptions. As stated in XYZ (Guardianship) [2007] VCAT 1196 at [69], cognitive tests like the Mini Mental State Examination can place too much weight on language, education and cultural factors. Direct observation of functioning may be more insightful (XYZ at [66]).

The definition of 'mental disability' is inclusive, not exhaustive, and does not require a medical diagnosis (FY [2019] WASAT 118 at [32]). The cause may be unclear but the disability evident. The key issue is whether the person can make reasonable judgments in the relevant domain.

Medical evidence will often be important. In NB [2023] WASAT 88, greater weight was placed on evidence of a consultant physician over a GP. MRI and PET scans showed mild cerebral abnormalities but no neurodegenerative dementia. However, the doctor considered the represented person still had some vulnerability to financial scams and uncertainty judging complex finances (NB at [25]-[27]).

Non-medical evidence provided further proof of incapacity. The represented person's persistent vulnerability to scams, inability to critically evaluate fraud warnings, dismissiveness of family advice, anger at their interventions, and continuing belief she was in contact with a famous musician she admired showed lack of insight and judgement (NB at [29]-[40]).

Assessing capacity requires analysing and weighing all evidence. Medical evidence alone may not indicate incapacity, especially if the person functions highly in other respects. But corroborating non-medical evidence of impaired functioning in daily life can prove incapacity.

Tribunals must evaluate the person's ability to make reasonable judgements in the relevant domain - personal/lifestyle, medical, financial and legal affairs. Financial capacity requires balancing income against necessary living expenses and financial goals, devising a budget, assessing contracts and expenditure, meeting debts, and resolving problems (FY at [53]).

In NB, despite intelligence and past financial responsibility, the represented person lacked reasonable financial judgement. She relied on family for living expenses while sending money to scammers, wanted to spend most of a sizeable inheritance on a luxury car, and would likely deplete remaining funds rapidly without prudent management (NB at [42]-[46]). This demonstrated inability to budget, prioritise essentials, understand contracts and expenditure implications, and meet debts.

The Intersection of Ademption and Guardianship: A Detailed Exploration

In guardianship law in Western Australia, the intersection of the principle of ademption and the provisions of guardianship and administration sometimes give rise to complex legal issues.

Ademption: An Overview

Ademption is a legal principle that, in essence, stipulates that a specific gift in a will ceases to exist, or is 'adeemed', if the asset or property is disposed of prior to the death of the testator.

This results in the intended beneficiary neither receiving the specific item nor any substitution. However, exceptions to this principle exist in instances of fraud or if the disposal lacked appropriate legal authority.

The Case "ISH [2021] WASAT 169" in Context

ISH [2021] WASAT 169 is a case wherein the principle of ademption was central to the Tribunal's deliberation.

The issue involved potential sale of a house that had been bequeathed in a will purportedly executed in 2007. The crux of the matter was the appropriate treatment of the sale proceeds: should these be merged with the general estate or held separately to uphold the intended bequest?

Interplay with Guardianship and Administration Act 1990 (WA)

The Guardianship and Administration Act 1990 (WA) (the GA Act) proved instrumental in this case.

Section 72 and certain parts of Schedule 2 of the GA Act provide the Tribunal with wide-ranging discretionary powers to maintain the nature or quality of any property within an estate.

This includes directing that the sale proceeds of an asset be placed in a separate bank account.

The Implication in "ISH [2021] WASAT 169"

In ISH [2021] WASAT 169, these provisions were invoked to safeguard the proceeds from the sale of the represented person's house from being amalgamated with the general estate.

This potential amalgamation may have impaired the applicant's claim to these proceeds, thereby potentially contravening the testator's intent.

The Tribunal's handling of the law of ademption in an earlier case, JEB [2016] WASAT 65, underscored a degree of uncertainty in the law's status in Western Australia.

However, in ISH [2021] WASAT 169, the Tribunal circumvented this uncertainty by utilising the extensive powers granted under the GA Act to issue the directions sought by the applicant.

The Best Interest Principle

The Tribunal also reiterated its obligation to act in the best interests of the represented person, which encompasses the consideration of the person's expressed or inferred wishes.

Enshrined under section 4(7) of the GA Act, this principle underscores the importance of acknowledging the autonomy and preferences of the represented person.

Key Take-Aways

• The Tribunal's handling of ademption involves the intricate balance of rigid legal principles and the discretionary powers under the GA Act.

• This approach illustrates a pragmatic response to the complexities that arise in guardianship and administration matters.

Addressing Conflicts of Interest in Guardianship and Administration Appointments: IC [2023] WASAT 33

Guardianship and administration matters often involve complex legal issues and require careful consideration of the best interests of the represented person.

One such issue that frequently arises is the potential for conflicts of interest when deciding whether someone should be appointed as an administrator.

In this blog post, I discuss conflicts of interest in guardianship and administration cases and explore how the law addresses this issue when a proposed appointee is otherwise suitable for the role.

Conflicts of Interest in Guardianship and Administration

Conflicts of interest can arise when a proposed administrator has personal or financial interests that may not align with the best interests of the represented person.

This can become a significant concern in cases where the administrator is responsible for making important decisions about the represented person's estate, including potential legal claims or the management of assets.

An example of such a conflict can be found in IC [2023] WASAT 33, a recent Western Australia State Administrative Tribunal (WASAT) case, where the proposed administrator was the sister of the represented person and also a beneficiary of their mother's estate.

The Tribunal had to consider whether the sister's dual roles as administrator and beneficiary would create a conflict of interest that could compromise her ability to act in her brother's best interests.

The sister (VC) was the primary beneficiary of their mother's estate, which included the family home.

This created a conflict of interest because her brother (IC), for whom she was proposed to act as an administrator due to his mental disability, was apparently left out of their mother's will.

In other words, he was not set to inherit anything from the mother's estate.

VC stated that she intended to ensure that IC could continue to live in the family home for the rest of his life, which was also their mother's wish.

However, this intention was not legally secured as part of the mother's will.

The inherent conflict of interest lay in the fact that VC, as the beneficiary of the estate, could not act against her own interests and bring a claim on IC's behalf against the mother's estate, as it would potentially reduce the value of the estate she was set to receive.

While VC had the best intentions of providing for IC and ensuring his well-being, the law, unfortunately, has seen many instances where promises made cannot be kept in the future, regardless of the initial good intentions.

This highlighted a clear need for legal intervention to ensure IC's rights and interests were properly protected.

The conflict of interest was particularly significant because it could potentially affect IC's right to housing, given that the family home was part of the mother's estate.

It underscored the importance of considering potential conflicts of interest when appointing an administrator, particularly when the proposed administrator stands to benefit from the estate of the person they are set to represent.

Dealing with Conflicts of Interest

The Guardianship and Administration Act 1990 (WA) (GA Act) provides guidelines for determining the suitability of a proposed administrator, taking into account factors such as the compatibility of the proposed appointee with the represented person and the wishes of the represented person (s 68(3) GA Act).

In cases where a conflict of interest is identified, the Tribunal has several options to address the issue.

One option is to appoint a different individual or organization, such as the Public Trustee, to act as the administrator. This can help ensure that the represented person's best interests are protected by an independent party.

In IC [2023] WASAT 33, the Tribunal took this approach, appointing the Public Trustee as a limited administrator with specific responsibilities related to potential legal claims against the mother's estate. The sister was appointed as plenary administrator, save for this limited function given to the Public Trustee. This approach mitigates the conflict, by separating the roles and responsibilities that could potentially clash.

Lessons Learned

Cases like the one underscore the complexity of guardianship and administration matters, and the importance of identifying and properly addressing potential conflicts of interest.

They also highlight the need for legal professionals to be vigilant in spotting these issues and advising their clients accordingly.

The legal framework, including the GA Act and the Family Provision Act 1972 (WA), provide mechanisms to safeguard the best interests of the represented person, but they require careful navigation.

In cases where potential conflicts of interest arise, it's essential to consider all possible solutions - be it appointing a different administrator, creating a limited administration, or separating roles and responsibilities between multiple parties.

Key Take-Aways

• While conflicts of interest in guardianship and administration matters can be complex, they are not insurmountable.

• With careful planning, legal guidance, and the flexibility provided by our legal system, it is possible to ensure that the best interests of represented persons are protected, even in situations where conflicts of interest exist.

• It's a reminder of the importance of specialist legal advice in navigating these challenging situations.